Federal Reserve Bulletin, 1987-11

VOLUME 73 • NUMBER 11 • NOVEMBER 1987 FEDERAL RESERVE Vol V* \U 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 • Donald L. Kohn • Michael J. Prell • 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 839 DAYLIGHT OVERDRAFTS AND Changes in Board staff, including the cre- PAYMENTS SYSTEM RISK ation of a new organizational unit, the Division of Monetary Affairs. This article reviews the operation of largedollar payments systems and the public Proposal to amend Regulation Z to implepolicy concerns associated with daylight ment a provision of the Competitive Equalioverdrafts, summarizes the main compo- ty Banking Act of 1987 regarding adjustnents of the Federal Reserve's policy on able-rate mortgages; proposal to permit payments system risk, and describes the bank holding companies to acquire healthy initial experience with that policy. thrift institutions. Admission of five state banks to member- 853 STAFF STUDIES ship in the Federal Reserve System. In "The Funding of Private Pension Plans," the author briefly reviews the regulatory, 862 RECORD OF POLICY ACTIONS OF THE institutional, and economic factors relevant FEDERAL OPEN MARKET COMMITTEE to pension plan obligations; surveys the literature on the appropriate conceptual At the conclusion of its meeting on August framework for measuring pension obliga- 18, 1987, the Committee approved a directions; and describes, on reported and tive that called for no change, at least adjusted bases, the recent funded status initially, in the degree of pressure on re- (measured by the ratio of assets to liabil- serve positions. With regard to possible ities) of a large sample of private pension adjustments during the intermeeting period, plans. the members indicated that somewhat greater reserve restraint would be accept- 855 INDUSTRIAL PRODUCTION able, while slightly lesser reserve restraint might be acceptable, depending on develop- Industrial production increased an estimatments relating to inflation, the strength of ed 0.3 percent in August. the business expansion, the performance of the dollar in foreign exchange markets, 857 STATEMENT TO CONGRESS while also taking account of the behavior of Wayne D. Angell, Member, Board of Gov- the monetary aggregates. Unchanged conernors, comments on proposals to estab- ditions of reserve availability were expectlish, for farm mortgage loans, a secondary ed to be consistent with growth in M2 and market backed by a government guarantee, M3 at annual rates of around 5 percent for before the House Committee on Banking, the three-month period from June to Sep- Finance and Urban Affairs, September 30, tember; given its performance in July, ex- 1987. pansion in M3 was expected to be somewhat less than had been anticipated at the time of the July meeting. Because the be- 860 ANNOUNCEMENTS havior of Ml was still subject to unusual Meeting of the Consumer Advisory Coununcertainty, the Committee decided to concil. tinue the practice of not specifying a numerical expectation for its short-run growth. Amendment to Regulation U. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The members agreed that the intermeeting A69 GUIDE TO TABULAR PRESENTATION, range for the federal funds rate, which STATISTICAL RELEASES, AND SPECIAL provides a mechanism for initiating consul- TABLES tation of the Committee when its boundaries are persistently exceeded, should be A76 BOARD OF GOVERNORS AND STAFF left unchanged at 4 to 8 percent. A78 FEDERAL OPEN MARKET COMMITTEE 869 LEGAL DEVELOPMENTS AND STAFF; ADVISORY COUNCILS Various bank holding company, bank ser- A80 FEDERAL RESERVE BOARD vice corporation, and bank merger orders; PUBLICATIONS and pending cases. A83 INDEX TO STATISTICAL TABLES Ai FINANCIAL AND BUSINESS STATISTICS A3 Domestic Financial Statistics A84 FEDERAL RESERVE BANKS, BRANCHES, A44 Domestic Nonfinancial Statistics AND OFFICES A53 International Statistics A86 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Daylight Overdrafts and Payments System Risk Terrence M. Belton, formerly of the Board's The Federal Reserve Banks operate the Fed- Division of Research and Statistics; Matthew D. wire funds transfer system. Participants in this Gelfand, of the Board's Division of Research and system send to and receive from each other Statistics; David B. Humphrey, of the Federal payment messages or "wire transfers" via com- Reserve Bank of Richmond; and Jeffrey C. Mar- puter and other communications links with their quardt, of the Board's Division of International Reserve Banks. However, only institutions with Finance, prepared this article. Nancy E. Bowen, reserve or clearing accounts have direct links to Oscar B. Barnhardt, and Elaine J. Peterson Reserve Banks. A Fedwire funds payment is final provided technical and research assistance. when the destination Reserve Bank notifies the Notes appear at the end of the article. receiving depository institution of the transfer; at this time funds are credited to the clearing or reserve account of the receiving institution. In March 1986, the Federal Reserve implemented Meanwhile, the institution initiating the payment a policy designed to reduce the risk associated is responsible for covering the amount of this with daylight overdrafts on large-dollar payments payment when it sends the wire transfer to its systems. Since then, the growth in daylight over- Reserve Bank. Daylight overdrafts will occur draft volume has slowed, and the ability of whenever the funds in the reserve or clearing Federal Reserve Banks and depository institu- account of the sending institution are insufficient tions to monitor and control risk in the payments to cover a payment at the time of the transfer. system has improved. This article reviews the CHIPS is owned and operated by the New operation of large-dollar payments systems and York Clearing House, a private-sector instituthe public policy concerns associated with day- tion. On this system, participants send and relight overdrafts, summarizes the main compo- ceive electronic payment messages during the nents of the Federal Reserve's policy on pay- day through a central computer. Unlike the case ments system risk, and describes the initial of Fedwire, however, no funds are transferred experience with that policy. In addition, the nor are funds accounts debited or credited at the article briefly surveys methods for further reduc- time CHIPS payment messages are exchanged. ing the risk associated with daylight overdrafts. Instead, net obligations are settled at the end of the day using a special account at the New York Reserve Bank under procedures established by THE OPERATION OF LARGE-DOLLAR the New York Clearing House and the Federal PA YMENTS S YS TEMS Reserve. The procedures are complex; in essence, participants that have sent and received Two systems for the electronic transfer of large- payment messages resulting in net debit positions dollar payments operate in the United States at the end of the day transfer funds for these net today: the Fedwire funds transfer system and the amounts to institutions in net credit positions. Clearing House Interbank Payments System In CHIPS, potential credit exposures vis-a-vis (CHIPS). In addition a "book-entry securities all other CHIPS participants occur whenever a system" for the electronic transfer of U.S. gov- participant initiates payments whose total value ernment, agency, and other securities operates exceeds the value of payments received up to that on Fedwire. time. In this end-of-day settlement system, all Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

840 Federal Reserve Bulletin • November 1987 participants begin daily operations with zero credit settlement date. However, the buyer is not reand debit positions. Payment messages are sent quired to take delivery and make payment until and received throughout the day; however, be- the full amount of the securities involved in a cause messages sent and received by individual transaction is actually delivered. When a seller participants typically are unequal in value, intraday fails to make timely and proper delivery of all net debit and credit positions are necessarily a part securities in a transaction, the seller or its clearof normal operations. Although net debit positions ing bank typically incurs the cost of financing the on CHIPS are often called daylight overdrafts, securities overnight but must pass on all of the technically no overdrafting of any funds account accrued interest to the buyer. Hence, a failed occurs. delivery causes the seller to lose interest for one day. Because this interest cost increases with the Practices Leading size of the transaction, sellers have an incentive to Daylight Overdrafts to build intraday securities positions so they will be able to complete delivery of their largest On a typical day, about 1,100 depository institu- orders first. In building such positions, clearing tions in the United States incur daylight over- banks make payments for securities they receive drafts totaling more than $80 billion on the two on behalf of themselves and dealer customers. large-value funds transfer systems. These over- These payments result in substantial amounts of drafts last anywhere from several minutes to daylight overdrafts on the reserve accounts of nearly all day. On an average day, another $60 the clearing banks; the overdrafts remain until billion of overdrafts result from transfers over securities held in position are delivered against the Federal Reserve's book-entry securities payment in the late morning or afternoon. transfer system. Daylight overdrafts exist, in part, because of Payments Systems in Other Countries market conventions for particular types of financial transactions. For example, in the markets for The experience in other industrial countries has federal funds, Eurodollars, commercial paper, been somewhat different from that of the United and large certificates of deposit, borrowers com- States. Within the past five years, the United monly repay funds in the morning but do not Kingdom, France, Germany, Switzerland, the receive newly borrowed funds until later the Netherlands, and Sweden have installed elecsame day. Repayments frequently occur even if a tronic systems for the interbank transfer of payborrower renews, or "rolls over," a maturing ments in their respective currencies. Japan is money market obligation with the same lender actively planning a wire transfer system. Morefor an identical amount. Because the sum of such over, a group of commercial banks from counrepayments can exceed an institution's reserve tries in the European Community have impleaccount balance, this institutional practice often mented a fully automated system for the creates a daylight overdraft that might last for interbank transfer of private ECU (European three hours or more. A similar pattern—pay- Currency Unit) payments, for which the Bank for ments made in anticipation of funds to be re- International Settlements provides settlement. ceived later the same day—is associated with All but the sterling and ECU systems are similar certain types of third party payments. This pat- to Fedwire in that payments are made through tern has evolved, in part, because depository reserve or clearing accounts at the country's institutions in the United States are not required, central bank during the business day. Almost all and many institutions have little incentive, to central banks involved in operating these sysmaintain positive reserve account balances dur- tems prohibit uncollateralized daylight overing the day. drafts. However, most central banks do make Another convention leading to daylight over- collateralized lines of credit available to system drafts exists in the government securities market. participants, often in connection with overnight A buyer of government securities receives the and short-term financing that is provided at rates accrued interest as of the originally scheduled and on conditions set by the central bank. This Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Daylight Overdrafts and Payments System Risk 841 credit can be drawn upon during the day to avoid has the potential to create large unanticipated daylight overdrafts. changes in the net settlement positions of other Like CHIPS, the sterling and ECU electronic participants, who in turn might be unable to transfer systems operate on the principle of end- cover their (recalculated) settlement obligations. of-day net settlement. These systems cannot The potential magnitude of systemic risk on produce daylight overdrafts in reserve or clearing private wire transfer networks is illustrated in a accounts because no intraday debiting or credit- simulation study of an unexpected settlement failing of such accounts is used to complete pay- ure on CHIPS.1 Based on transaction data for a ments. However, intraday net debit and credit randomly selected day in January 1983, the anal- "positions" indicating final settlement obliga- ysis demonstrates that the unexpected settlement tions are generated by participants as they make failure of one large CHIPS participant on that day and receive payments. Therefore, as with could have resulted in an increase in the net debit CHIPS, daylight exposures are created as part of positions of each of 49 other CHIPS participants normal operations. by an amount greater than each of their total capital. These institutions represented almost one-half of all CHIPS participants, and their pay- POLICY CONCERNS ments constituted one-third of the dollar value of all CHIPS payments sent that day. Similar results The Federal Reserve's concern with daylight were obtained when the simulation used data for overdrafts stems from its roles as a provider of other days and different institutions to investigate payment services, as a banking supervisor, and the effects of hypothetical settlement failures. as a lender of last resort. The direct financial risk incurred by the Fed- Payments made on Fedwire are final in the eral Reserve on Fedwire and the systemic risk on sense that a Federal Reserve Bank irrevocably private wire networks have been two major pubcredits the account of an institution receiving a lic policy concerns associated with daylight overpayment once the Reserve Bank has notified the drafts. A related concern of the Federal Reserve receiver of the sender's payment message. As a has been to ensure the effective functioning of result, if the sending institution with a daylight the payments system. After several years of overdraft were unable to cover the overdraft by study by the Federal Reserve and banking industhe end of the day, the Federal Reserve Bank try groups, the Federal Reserve Board adopted a would absorb any resulting loss. Fedwire finality policy in May 1985 aimed at addressing these has the benefit of insulating the banking system concerns. All features of that policy were put as a whole from the potential consequences of into effect by March 1986. The Federal Deposit the settlement failure of the sending institution. It Insurance Corporation, the Office of the Comphas the disadvantage, however, of removing the troller of the Currency, the Federal Home Loan incentive for receiving banks to monitor the Bank Board, and the National Credit Union creditworthiness of sending banks that incur day- Administration have all supported the Federal light overdrafts. This lack of incentive for private Reserve's payments risk policy and, along with institutions likely contributes to the magnitude of state banking supervisors, cooperate with the their daylight overdrafts on Fedwire. Federal Reserve in administering it. The Federal Reserve also has been concerned about "systemic risk" on private wire transfer systems, the possibility that one institution's THE FEDERAL RESERVE S POLICY inability to settle could cause other institutions to ON PA YMENTS S YSTEM RISK fail to settle. If an institution with a net debit position on CHIPS were unable to settle at the The Federal Reserve's current policy to limit risk end of the day, CHIPS rules currently allow for in the payments system has three major deleting from the end-of-day settlement all pay- components.2 ment messages involving that institution during (1) All private, large-dollar transfer networks the day. However, deletion of payment messages obtaining Federal Reserve net settlement ser- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

842 Federal Reserve Bulletin • November 1987 vices must require each participant to establish a operating system automatically rejects the paylimit on its net daylight exposure to each other ment. participant ("bilateral net credit limits"). These In setting individual bilateral credit limits, networks also must adopt limits on the intraday CHIPS participants currently have some incennet debit positions of each participant vis-a-vis tive to monitor the creditworthiness of other all other participants as a group ("network participants because of costs they might incur in sender net debit caps"). a settlement failure. These costs presumably (2) Each depository institution participating in would be related to their bilateral exposures to a private large-dollar transfer network or incur- the participant that failed to meet its settlement ring daylight overdrafts on Fedwire must estab- obligations. However, the presence of systemic lish a limit on its combined overdrafts on all large risk—the chance that one participant's settledollar networks ("cross-system sender net debit ment failure could trigger such failures by other caps"). participants—implies that bilateral caps may not (3) Daylight overdrafts resulting from transfers fully reflect all the costs of a settlement failure. of U.S. government and agency securities In accordance with the Board's policy, CHIPS through the Federal Reserve book-entry system also implemented network sender net debit caps are exempt from sender net debit caps. How- in October 1985. Although the Board's policy ever, effective January 14, 1988, the Federal does not stipulate a specific method for setting Reserve has established a $50 million limit for these caps, their purpose is to limit the aggregate each transfer of securities processed on its book- amount of daylight overdrafts that any one parentry system. ticipant can incur on an individual private net- The Federal Reserve monitors on an ex post work. On CHIPS, the cap is defined for each basis the level of overdrafts of all participants in participant as 5 percent of the sum of all bilateral all wire systems subject to its policy and counsels credit limits set for that participant by all other those institutions whose overdrafts exceed their CHIPS participants. For purposes of this sum cross-system limits. However, the Federal Re- only, the individual bilateral credit limits are serve imposes real-time controls on reserve ac- confined to a maximum of $1 billion each. The 5 count overdrafts of troubled institutions. Re- percent figure was established using historical serve Banks may ask such institutions to post data on the average amount by which all particcollateral for daylight overdrafts and may delay ipants in CHIPS used their bilateral credit limits Fedwire payments that would lead to overdrafts during a test period in 1985. The sum of all in excess of collateral values. bilateral credit limits measures the extent to which, in the aggregate, other institutions in the network are willing to extend daylight credit to Private Networks the participant whose cap is being established. However, because they are based on individually The bilateral net credit limits required of each determined bilateral credit limits, the network participant on a private network establish a ceil- sender net debit caps themselves may not coming on the net value of payments that a given pletely reflect the costs due to systemic risk. participant is willing to receive from each other As with payments that exceed bilateral net participant on the network at any time of the day. credit limits, the CHIPS system will reject any CHIPS, which is currently the only private, payment that would cause a participant to breach large-dollar wire transfer network that receives its network sender net debit cap. For each parnet settlement from the Federal Reserve, estab- ticipant, this cap on any day is based on the total lished such bilateral credit limits in October 1984. of bilateral limits existing for that participant at Participants can set their limits for any dollar the end of the preceding day. Thus, unlike bilatamount and may change these limits at any time eral limits, this cap cannot be changed during a during the business day. If a participant attempts given day; but a participant's sender net debit to make a payment that would cause it to exceed cap can change from one day to another if, on a receiver's net bilateral credit limit, the CHIPS balance, other participants changed the total of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Daylight Overdrafts and Payments System Risk 843 the bilateral credit limits they set for the partici- tem and providing depository institutions an oppant in question. portunity to gain experience with the daylight overdraft program. In July 1987, the Federal Cross-System Caps Reserve adopted a 25 percent reduction in cap levels, to be phased in with a 15 percent reduc- In addition to private network caps, the Federal tion on January 14, 1988, and the balance of the Reserve's policy calls for each depository insti- reduction on May 19, 1988 (table 1). tution to adopt a cross-system sender net debit About 3,000 depository institutions have concap to limit the net volume of daylight funds ducted a self-assessment and established positive overdrafts it may incur across all wire transfer cap levels (table 2). An additional 3,000 institusystems combined, including Fedwire. The se- tions have zero caps either as a result of selflection of a cap level is based on Federal Reserve assessments or because their supervisors or Reguidelines and involves an institution's self-as- serve Banks assigned such caps. About 700 sessment of its creditworthiness, credit policies, institutions have no cap on file, yet incurred and operational controls and procedures. Five overdrafts in the period considered. In all, 370 different ratings are possible under the Federal institutions, or approximately 6 percent, have Reserve's self-assessment procedure. A pair of rated themselves in the highest cap category cap levels expressed as multiples of the institu- under the Federal Reserve's guidelines. Howtion's adjusted primary capital corresponds to ever, large institutions exhibit a greater tendency each rating:3 a daily cap and a cap on average to place themselves in the highest category, and daily overdrafts over any two-week reserve they account for a significant share of daylight maintenance period. For example, if an institu- overdraft volume. Thus, the highest cap institution rated itself as average under the Federal tions account for nearly 55 percent of the aggre- Reserve's guidelines, the cross-system sender gate volume of daylight overdrafts due to funds net debit cap currently would require that day- transfers, called "funds overdrafts." light overdrafts not exceed 1.5 times that institu- Of those institutions with daylight overdrafts, tion's adjusted primary capital on any single day a relatively large number are small depository and that the average daily overdraft not exceed institutions that incur minor amounts of over- 1.0 times its capital on average over any two- drafts on an infrequent basis. These institutions week reserve maintenance period (table 1). present little credit risk to Reserve Banks and are The Federal Reserve set initial cross-system unlikely to create systemic risk. To reduce costs sender net debit caps with the intention of mini- both to the Federal Reserve and to these institumizing possible disruptions to the payments sys- tions, the Federal Reserve decided in the sum- 1. Cross-system sender net debit cap Multiple of adjusted primary capital Current policy Policy effective January 14, 1988 Policy effective May 19, 1988 Self-assessment category Two-week Two-week Two-week Single day Single day Single day average average average High 2.0 3.0 1.70 2.55 1.50 2.25 Above average 1.5 2.5 1.275 2.125 1.125 1.875 Average 1.0 1.5 .85 1.275 .75 1.125 Limited1 .5 .5 .425 .425 .375 .375 No cap2 .0 .0 .0 .0 .0 .0 MEMO: De minimis3 .2 .2 •2 .2 .2 .2 1. Institutions with negative adjusted primary capital. Caps shown 3. The cap shown cannot exceed $500,000, regardless of an instifor these institutions are expressed as multiples of unadjusted primary tution's level of adjusted primary capital. Incorporated into the capital. Effective January 1, 1989, the special cap category for these Federal Reserve's policy in the summer of 1987 and available for use institutions will be dropped. at all Reserve Banks no later than December 4, 1987. 2. Institutions with zero cap or no cap on file. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

844 Federal Reserve Bulletin • November 1987 2. Frequency distribution of self-assessment categories1 All institutions Institutions with assets in excess of $1 billion SSeellff--aasssseessssmmeenntt MMEEMMOO:: PPeerrcceenntt ooff ccaatteeggoorryy oovveerrddrraafftt vvoolluummee Number Percent Number Percent High 370 5,5 122 19.8 54.5 Above average 1,126 16.7 209 34.0 29.4 Average 1,513 22.5 155 25.2 15.8 Limited 19 .3 8 1.3 .0 Zero cap 3,001 44.6 107 17.4 .1 No cap on file 702 10.4 14 2.3 .1 Total 6,731 100 615 100 100 1. Institutions with cap on file and those institutions with no cap on file but which incur overdrafts, as of July 1, 1987. mer of 1987 to allow institutions that meet rea- objectives for monetary policy and the soundsonable performance standards to incur "de ness of the financial system. minimis" amounts of daylight overdrafts. The de It has been difficult to develop methods for minimis cap allows depository institutions to reducing risk from book-entry overdrafts that incur occasional daylight overdrafts on Fedwire would avoid disrupting the execution of moneup to the lesser of 20 percent of adjusted primary tary policy while maintaining low trading costs capital or $500,000 without conducting a self- for market participants. The Federal Reserve assessment. therefore decided in July 1987 to continue the exemption of book-entry related overdrafts from Book-Entry Securities Transfers direct quantitative limits and to examine alternatives for reducing risk due to these overdrafts. At The Federal Reserve is especially concerned that that time, however, the Federal Reserve also its payments risk policy avoid disrupting the amended its original policy on payments system market for U.S. government securities, which risk to address more immediately the risks in include issues of the U.S. Treasury and of federal book-entry operations. Effective January 14, and federally sponsored agencies and certain 1988, all Reserve Banks will impose a $50 million other securities. Its policy therefore currently par-value limit on the size of individual transfers imposes no quantitative restrictions on those of book-entry government securities other than overdrafts resulting from book-entry transfers of those resulting from allocations of new issues to such securities. The Federal Reserve hopes to dealers or from redemptions of maturing issues. avoid disrupting the government securities mar- This limit should reduce incentives for position ket for two major reasons. building and could induce dealers to deliver First, the Federal Reserve Bank of New York securities earlier in the day and to operate with implements monetary policy through transac- lower levels of book-entry overdrafts. tions with primary dealers in government securi- Under the amended policy, the Federal Reties. Restrictions on book-entry overdrafts could serve Bank of New York will monitor primary limit the amount of trading that primary dealers dealers, while all Reserve Banks are to monitor would be able to conduct at a given moment and depository institutions in their own districts that thus could hinder the timely execution of open are major users of the book-entry system. The market operations. purpose of this monitoring is to ensure that Second, in operating the securities portion of participants establish policies and follow procethe transfer system, the Federal Reserve Banks dures for controlling risk associated with bookact on behalf of the U.S. Treasury. In this entry overdrafts. If a Reserve Bank finds such capacity, the Federal Reserve seeks to minimize actions to be inadequate in controlling risk, the the Treasury's borrowing costs by keeping trans- Reserve Bank may take steps such as requiring actions costs for market trading of book-entry collateral or monitoring overdrafts in real time to securities as low as possible, subject to meeting limit its own risk exposure. By the first quarter of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Daylight Overdrafts and Payments System Risk 845 1989, all Reserve Banks are to implement real- June 1987, these overdrafts in the aggregate time monitoring of book-entry overdrafts—in averaged $50 billion per day and were on a which overdrafts are measured as they are cre- moderate upward trend (chart 1). In this period, ated—to replace the current system in which CHIPS overdrafts initially fell considerably beoverdrafts are measured at a later time. Real- low their levels preceding the introduction of time monitoring will increase the flexibility of the cross-system caps but have been on a slight Federal Reserve Banks in dealing with the small upward trend since that time. Meanwhile, booknumber of institutions whose levels of book- entry overdrafts, which remain exempt from entry overdrafts warrant attention. quantitative limits, have increased steadily from a low of about $35 billion per day in early 1985 to a peak of $67 billion in February 1987. EXPERIENCE WITH THE POLICY Cross-system funds overdrafts for an individ- ON PA YMENTS RISK ual depository institution are the combined funds overdrafts on Fedwire and private wire systems In response to the introduction of bilateral net for the institution at a given time of day. For the credit limits and sender net debit caps, deposi- purposes of this measure, a net credit on one tory institutions have instituted a variety of mea- system at a particular time is treated as a credit sures to control their own overdrafts. These against any overdraft that occurs at the same measures have noticeably slowed the growth of time on another system. Therefore, an instituaggregate overdraft levels, apparently without tion's maximum cross-system overdraft generlimiting the growth of underlying payments. ally will be smaller than the sum of its separate maximum Fedwire and CHIPS overdrafts, which Aggregate Overdrafts may occur at different times. Similarly, the agand Payments Activity gregate cross-system funds overdraft, which is the sum of individual maximums, generally is The Federal Reserve measures the daily aggre- smaller than the sum of separate Fedwire and gate overdraft level on each wire transfer system CHIPS aggregate net debits. Aggregate maxiby summing the maximum overdraft position for mum cross-system funds overdrafts averaged each depository institution on that day, regard- about $79 billion per day during the period March less of the time of day that the maximum position 1986 to June 1987, compared with an average of occurs or its duration. The biweekly average $77 billion per day during the five quarters preoverdraft for each institution is the average of ceding implementation of the policy (chart 2). daily maximum overdrafts for the institution for The sum of cross-system funds overdrafts and all business days in the two-week period, again book-entry overdrafts for individual institutions regardless of the time of day each maximum is calculated in a manner similar to that of occurs or its duration. Aggregate biweekly over- cross-system funds overdrafts alone. In the agdrafts, which are the sum of these individual gregate, this sum averaged $125 billion per day in biweekly averages, provide summary measures the last year. The level has increased considerof maximum overdraft levels of individual insti- ably over time, reflecting the increases in booktutions, which are a principal focus of the Federal Reserve's policy. 1. Overdrafts, by transfer system The Federal Reserve System has collected Billions of dollars, biweekly average data on overdrafts by individual institutions on all large-dollar payment systems since December 1984. Overdrafts due to Fedwire funds transfers—and other debits to reserve and clearing accounts for check, automated clearinghouse (ACH), and other settlements—have been subject to cross-system sender net debit caps since March 1986. During the period March 1986 to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

846 Federal Reserve Bulletin • November 1987 meaningful context (chart 4). Since caps on 2. Cross-system overdrafts CHIPS and Fedwire funds overdrafts have been Billions of dollars, biweekly average in effect, overdrafts as a share of the value of payments transferred have declined. For Fedwire, the reduction in this ratio was from 11 percent on average before daylight overdraft limits went into effect, to 9 percent on average during the following year, a reduction of nearly one-fifth. For CHIPS, the reduction between these same periods was from 17 percent to 8 percent, a fall of more than half. Book-entry 1985 1986 1987 overdrafts have been exempt from quantitative entry overdrafts, which have not been con- limits. Nevertheless, overdrafts as a share of strained by the Federal Reserve's policy. book-entry securities transfers have fallen some- The aggregate value of wire transfer payments what, from nearly 23 percent in the second has also grown considerably. The value of funds quarter of 1986 to about 19 percent a year later, transactions on Fedwire averaged $460 billion a reduction of about one-sixth. per day in 1985 and 1986 and reached a peak of Data on the intraday time of payment origina- $602 billion per day in the second quarter of 1987 tions provides additional information on the ef- (chart 3). The dollar value of transfers on CHIPS, fect of the payments risk policy (chart 5). One historically smaller than those on Fedwire, has concern is that institutions might slow their outgrown relatively fast, and the volumes of activity going payments in order to remain within caps, on the two systems are now comparable. Pay- possibly causing other receiving institutions to ments resulting from book-entry securities trans- experience higher overdraft levels. The dollar fers also grew during this period to about $300 share of a day's total transactions originated by a billion per day in 1987. However, they remain certain hour of the day has fluctuated at times. significantly smaller in aggregate value than However, since the implementation of caps, neifunds transfers. Smaller still is the value of ther Fedwire nor CHIPS has experienced an transactions using checks and other minor com- overall shift of traffic to a later time. ponents of the payments system; although comprehensive data are unavailable, various esti- Overdrafts by Individual Depository mates suggest that the value of these transactions Institutions totaled about $200 billion on an average business day in 1986 (not shown). Small institutions as a group incur a minor por- Comparing overdrafts to the value of the un- tion of total overdrafts (chart 6). Larger U.S. derlying transfers places these trends in a more commercial banks (defined here as those with 3. Average daily payments volume1 Billions of dollars 1985 1986 1987 1. Book-entry data are not available for 1985 and exclude original issues and redemptions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Daylight Overdrafts and Payments System Risk 847 4. Overdrafts as share of payments1 Percent, daily average 1985 1986 1987 1. Book-entry data are not available for 1985 and exclude original issues and redemptions. more than $10 billion in assets) and U.S. offices usage rates show (table 4), a majority of instituof foreign banks, although relatively few in num- tions use less than 50 percent of their current ber, generally account for about 80 percent of all caps, while on average about 70 percent of all cross-system funds overdrafts. Book-entry over- overdrafts are incurred by institutions with cap drafts are more highly concentrated; indeed the usage ratios at or below this level. This pattern four major clearing banks, which clear securities suggests that a significant number of major instifor dealers and others, account for more than 75 tutions will continue to have low individual usage percent of all book-entry overdrafts (chart 7). rates after the 1988 cap reductions. A comparison of daylight funds overdrafts The duration of daylight overdrafts, or the with cross-system caps illustrates the possible average number of hours during the day that constraining influence of policy guidelines. Ag- institutions remain in overdraft, is another digregate funds overdrafts have equaled only 16 percent of cross-system overdraft caps even during the two-week period when funds overdrafts 5. Dollar share of originations, by time of day for were at their greatest since measurement of selected weeks1 overdrafts began (table 3). Among larger U.S. Fedwire Percent commercial banks, this "cap usage rate," or the | Open-noon | | Noon-3 p.m Jf|3-4 p.m portion of caps actually used, averaged less than 40 percent. Of course, as caps are reduced in two steps during the first half of 1988 by a total of one-fourth of their current levels, cap usage rates likely will rise. Nevertheless, the aggregate cap usage rate may be expected to remain moderate. If overdrafts remain unchanged, the aggregate cap usage rate would rise from about 16 percent to 22 percent and, for larger U.S. banks, from 40 to 50 percent when the full reductions of caps are implemented. However, some institutions that use their overdraft caps more intensively will have to reduce their overdrafts as caps are lowered in 1988. In a limited number of cases, these reductions could be substantial. Possible methods for accomplishing this task are discussed below. 1. Data available for weeks ended Oct. 11, 1985; Jan. 10, Mar. 14, Apr. 18, May 16, June 20, Sept. 19, and Dec. 19, 1986; and Feb. 27, But, as data on the distribution of individual cap Mar. 20, and June 19, 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

848 Federal Reserve Bulletin • November 1987 6. Funds overdrafts, by type of institution 3. Aggregate funds overdraft capacity and usage rates Billions of dollars, biweekly average Percent of Percent of Number cross- total of cap usage Type of institution system funds institu- rate capacity overdrafts tions (percent)2 Domestic, by asset size (billions of dollars) Less than 1 5.3 2.0 1,432 6.2 1-5 7.0 6.5 186 15.1 5-10 5.9 8.8 48 24.3 More than 10 20.8 49.6 36 38.5 61.0 33.0 88 8.7 All 100 100 1,790 16.2 1. For the two weeks ending May 20, 1987, total funds overdraft 1. Banks with more than $10 billion in assets. capacity was $552 billion and actual funds overdrafts were $88 billion. 2. U.S. agencies and branches of foreign banks. The table excludes institutions with negative adjusted primary capital 3. Domestic banks with less than $10 billion in assets, all thrift or zero or no caps on file. Such institutions accounted for about 0.3 institutions, and other types of institutions. percent of cross-system overdrafts. 2. Total cross-system funds overdrafts for size class as percent of total cross-system caps for size class. 3. U.S. agencies and branches of foreign banks. The cross-system mension of risk in the payment system. The level overdraft capacity of these institutions is based on worldwide capital. of risk an institution creates because of over- However, their uncollateralized Fedwire capacity is based on the smaller measure of 5 percent of their U.S. third party liabilities ($28 drafts is related to the size of the overdraft and to billion). In addition, 17 foreign institutions have established a the length of time the institution incurs a given small amount of collateralized lines of credit for using Fedwire ($3 billion). In general, CHIPS caps are much smaller than cross-system level of overdraft. Thus, the amount of risk caps. created might change little if institutions reduced their peak overdrafts but remained near those amounts, has also remained steady. This stability peaks for longer periods of time as they redistrib- is also exhibited by larger U.S. commercial uted their payment flows. In addition, fluctua- banks with more than $10 billion in assets and by tions in overdraft duration over time could serve foreign banks, the two groups responsible for as an indicator of possible disruptive effects of most funds overdrafts. daylight credit restrictions on the orderly flow of payments. Responses to the Payments Risk Policy Chart 8 shows the duration of funds overdrafts has varied by less than an hour out of an average The Federal Reserve's payments system risk of 6 hours per day, even with the introduction of policy provides depository institutions with caps in early 1986. The "peak duration," defined here as the period during which individual over- 4. Distribution of biweekly cross-system funds overdrafts by cap usage rates1 drafts remain above 90 percent of their peak Distribution of Cap usage rate2 Number of cross-system funds institutions overdrafts 7. Book-entry overdrafts by largest clearers (percent) Billions of dollars, biweekly average Greater than 100 4 .4 -*-Effective date of policy 90-100 5 2.6 80-90 8 4.2 70-80 5 7.5 75 60-70 9 8.5 50-60 15 7.1 Total Less than 50 1,741 69.4 1,316 .3 50 All 3,103 100 Four largest clearers 1. Average for second quarter 1987. Cross-system funds overdrafts 25 averaged $85.5 billion per business day over this period. 2. Cross-system funds overdrafts of an individual institution as a Others percent of its cap. i i 3. Institutions with negative adjusted primary capital or zero cap or 1985 1986 1987 no cap on file. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Daylight Overdrafts and Payments System Risk 849 guidelines for conducting self-assessment ratings In addition to changing their internal policies and establishing cross-system overdraft caps. To and procedures, some depository institutions obtain the better ratings, institutions should have have altered the payment services they provide well-structured credit management policies, have and their prices. In rare cases, institutions have up-to-date operational procedures, and be in announced a special fee for customers' priority sound financial condition. To obtain such ratings, payments, which must be transferred by a certain most depository institutions with large overdrafts time of the day. Meanwhile, an institution may have implemented new internal credit policies for release nonpriority payments any time during the extending daylight overdraft facilities to custom- day at its own discretion, typically at times when ers and other banks and have improved their overdrafts are relatively low. operating procedures to track customer and in- In isolated cases, institutions with excess interbank daylight exposures. traday funds—or with no excess funds but with The largest institutions typically have installed excess overdraft capacity—have offered intraday automated monitoring and control systems. Such credit to other depository institutions that might systems can track an institution's own interbank be approaching their overdraft caps. However, overdraft position in real time during the day and no borrowers have been known to accept this can automatically slow the processing of outgoing type of intraday credit. Although intraday lendpayments when overdrafts approach a specified ing might not reduce the aggregate level of overlimit, usually some portion of its cap. Normal drafts at a given time of day, it would redistribute payments operations can be resumed when over- overdrafts toward institutions that have a greater drafts decline as a result of incoming payments or capacity for managing such exposures. This at the discretion of the operations manager or a greater capacity exists for some institutions eimore senior credit officer. More sophisticated ther because their payments activities lead to systems can also perform similar tasks in real time small amounts of overdrafts relative to their on individual customer accounts. capital or because these institutions were able to establish self-assessment ratings that are higher than for other, similarly positioned institutions. 5. Duration of cross-system funds overdrafts1 A redistribution of overdrafts toward institu- Hours per day, biweekly average tions with greater capacity could occur by means All institutions other than explicit intraday lending. A small number of commercial banks have explored the Duration feasibility of pricing customers' overdrafts on their own books. If pricing of customer daylight overdrafts were instituted, then customers would Effective date of policy- — have some incentive to use those service provid- Peak duration ers that supplied intraday credit at the lowest - « i prices, other things equal. Institutions with the Major banks2 lowest prices likely would be those with the most excess overdraft capacity. A redistribution of U.S. duration payments volume toward these institutions could result. Foreign duration Effective date of policy Even in the absence of explicit pricing, customers may have an incentive to shift some U.S. peak duration Foreign peak duration / business away from their primary banking institution to other institutions in the event that the 1985 t 1986 ! 1987 primary provider was constrained and unable to guarantee processing of a time-critical payment. 1. Duration is number of hours per day in overdraft. Peak duration is hours per day within 90 percent of peak overdraft. Some institutions have marketed payments ser- 2. Major U.S. banks are those with more than $10 billion in assets. vices as "backup" providers. Major foreign banks are U.S. agencies and branches of foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

850 Federal Reserve Bulletin • November 1987 OTHER METHODS FOR REDUCING ment failure on privately operated wire transfer PAYMENTS SYSTEM RISK networks could be reduced further if procedures were developed to assure the finality of settle- The Federal Reserve is currently reviewing its ments. Finality would protect participants on risk reduction program in order to evaluate private payments networks, and perhaps their longer-term policy goals and strategies. The re- customers, from the disruptive effects of a reverview will include a consideration of several pol- sal of payments in the event that one or more icy options, including further reducing caps, re- participants failed to settle. quiring clearing balances or collateral to cover To achieve settlement finality, some or all daylight overdrafts, and pricing overdrafts; and participants would need to stand ready to proof institutional changes such as the adoption of vide the funds necessary to assure settlement in settlement finality on private networks and the the event of one participant's settlement failure. use of new funding and netting techniques. The In one such arrangement, all network particireview will draw on an analysis by staff members pants, as a group, would be prepared to provide of the Federal Reserve System as well as that of extra funds to cover the total net debit position of the Board's Large Dollar Payments System Ad- a participant that failed to settle. A formula for visory Group, a committee of senior executives calculating such contributions could involve of foreign and domestic commercial banks and equal shares, proportionate shares based on the thrift institutions. value of the net credit exposures each institution had with the failed party, or shares devised in Settlement Finality on Private Networks some other manner. In addition, these contributions by participants could be reduced, for exam- Reserve Banks provide net settlement services to ple, if each participant had previously posted depository institutions participating in a number collateral in proportion to the size of the net of private-sector clearing arrangements. These debits it typically incurred on the system. A arrangements include wire transfer networks; failing institution's collateral then could be used check clearing; automated clearinghouses to reimburse other participants that provided the (ACH); and automated teller machine (ATM), funds necessary to assure settlement finality. The credit card, and point-of-sale (POS) networks. New York Clearing House, which operates Wire transfers are estimated to account for up to CHIPS, has decided to adopt some form of 85 percent of the value of all payments other than settlement finality as soon as certain operational those involving currency or those associated and legal issues can be resolved. with securities transfers, and check payments The adoption of settlement finality need not account for almost all of the balance. The value imply that customers could obtain irrevocable of ACH, ATM, POS, and credit card payments credits to their deposit accounts for payments together account for perhaps 2 percent of the received before end-of-day settlements. Indeed, total value. Because systemic risk is closely in the event of a settlement failure, settlement related to the value of overdrafts on a network, finality could be obtained by requiring customers which in turn appears to be related to the dollar receiving payments from a failed sending instituvolume of payments on the network, wire trans- tion and obtaining provisional credits to their fer payments currently entail the most significant accounts during a given day to reimburse their amount of risk. depository institutions for losses related to these The Federal Reserve's risk reduction program payments. The uncertainties with respect to the now calls for limits on the daylight overdrafts of consequences of a settlement failure thus have each participant in a private wire system that led to proposals that private networks adopt uses a Reserve Bank to effect net settlements. As receiver finality, which would give customers long as daylight overdrafts exist, some level of irrevocable credit for payments received. systemic risk remains because some participants In one version of receiver finality, only paycould fail to meet their settlement obligations and ments credited to customer accounts and made cause others to fail to settle. The risk of settle- available for their use before end-of-day settle- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Daylight Overdrafts and Payments System Risk 851 ment would be treated as irrevocable credits. In funds, no funds are transferred except the initial another version, all payments to customers of borrowing, the final repayment, and the accrued network participants would become irrevocable interest, which might be paid each day. Thus, credits when received by the participant, regard- rollovers also can eliminate a number of daily less of when participants irrevocably credit cus- funds transfers and the associated daylight overtomer accounts. Such proposals may be more drafts. A similar technique is a continuing conrisky for network participants but safer for cus- tract, in which differing amounts of daily funds tomers than settlement finality. A major rationale borrowings are renegotiated with the same seller in support of receiver finality, however, is that from day to day. Only net borrowings or repayreallocating more of the total risk to network ments, and perhaps interest, are transferred each participants gives them a greater incentive to day. Because net changes in borrowings are less monitor and control this risk and thereby lower than the gross amounts borrowed, the size of systemic risk. overdrafts should fall compared to their size when gross amounts are returned and reborrowed each Netting and Other Institutional Changes day. Another technique is netting by novation, in As already noted, overnight federal funds pur- which gross bilateral payment obligations bechases (and purchases of other money market tween two institutions are replaced by a new instruments) often are negotiated in the morning, contractual obligation for the net amount due. with the funds actually being sent in the early This net obligation may change continuously as afternoon. This practice leaves a midday gap of payment messages are sent and received during three or more hours between the morning repay- the day. For example, agreements providing for ment of previously borrowed funds and the re- netting by novation in the London forward foreign ceipt of that same day's new borrowing, often exchange market are now being used by some from the same lender and for the same amount. It banks. This adjustment of contractual obligations is during this gap that borrowers often incur allows two parties to transfer only net amounts daylight overdrafts. Arrangements for the intra- due, thus reducing both the risk that each party day netting of payments and receipts could be imposes on the other and daylight overdrafts. used to reduce payment time gaps and daylight The potential for reducing daylight overdrafts overdrafts. using these and other netting arrangements may Depository institutions could use numerous be significant. Earlier Federal Reserve staff analfunding techniques to reduce daylight overdrafts. yses suggest that if large banks shifted a portion of First, they could borrow term or multiday funds their interbank overnight borrowing to rollovers, instead of overnight funds. Since repayments of continuing contracts, or term funds, then virtually the borrowed term funds occur at the end of the all their daylight overdrafts in reserve or clearing term periods, which are longer than one day, no accounts could be eliminated. The size of the funds transfers are necessary in the intervening necessary shift was estimated to range from 13 to days. Therefore, measured daylight overdrafts 50 percent, depending on the pattern of the bank's would fall. Second, institutions could cover day- payments and funding. 4 light overdrafts through intraday funding, for example by borrowing overnight funds for deliv- Pricing Fedwire Daylight Overdrafts ery in the morning and reselling these funds in the afternoon of the same day. However, depos- Pricing of Fedwire overdrafts could provide deitory institutions may prefer generally less ex- pository institutions with additional incentives to pensive alternatives to term funds and intraday reduce daylight overdrafts by placing the cost of funding. Examples of these techniques are rollo- overdrafts on the banks and payment system vers and continuing contracts. users that create and benefit from overdrafts. In a rollover, the same amount of overnight (or Pricing could be implemented within the existing longer-term) funds borrowing is renegotiated each policy framework of cross-system and network day with the same seller. As in the case of term sender net debit caps. Sender net debit caps seek Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

852 Federal Reserve Bulletin • November 1987 to limit maximum daylight overdrafts and there- to depositors, creditors, and shareholders of defore impose an "implicit price" on overdrafts pository institutions. But, to the extent that that would otherwise be above this limit. Explicit deposits are federally backed, the risk borne by pricing would discourage overdrafts that occur the federal safety net might be substantially within these caps. Operational problems at the unaltered. Reserve Banks would be an important practical difficulty to overcome if pricing were adopted. For example, Reserve Bank computer problems CONCLUSION can delay the receipt of incoming payments and hence increase measured overdrafts at some de- The Federal Reserve System's initial policy for pository institutions through no fault of their reducing payments system risk has slowed the own. growth of daylight overdrafts, especially considering the more rapid growth of the dollar volume Establishment of Liquidity Reserves of payments. The policy has focused the attention of the financial industry and its customers on The establishment of liquidity reserves to cover the risks inherent in the use of daylight overdaylight overdrafts on Fedwire, or even on pri- drafts and has led institutions to exercise better vate systems like CHIPS, is another possible control of daylight exposures to financial risk. method for reducing payment system risk. Cash Nevertheless, the magnitude of daylight overor very close substitutes could be held in special drafts remains sizable. The Federal Reserve is accounts at Reserve Banks or at a special-pur- currently analyzing longer-term policies for the pose institution to cover some or all overdrafts. management of the risk associated with these Liquidity reserves might also earn interest at overdrafts. rates approaching those for overnight or other short-term funds available in the market. In essence such liquidity reserves would ensure that payment or settlement defaults would not occur, NOTES in much the same way as the posting of collateral provides security against defaults. 1. See David B. Humphrey, "Payments Finality and Risk of Settlement Failure," in Anthony Saunders and Lawrence One potential advantage of cash or near-cash White, eds., Technology and the Regulation of Financial reserves over less liquid forms of collateral Markets (Lexington Books, 1986). would be that settlement could be assured in the 2. The policy is described in 50 Fed. Reg. 21,120 (May 22, 1985) and 52 Fed. Reg. 29,255 (August 6, 1987). event of defaults with little or no disruption of 3. Adjusted primary capital for U.S. chartered banks is the financial markets. By contrast, if less liquid sum of primary capital (including common stock, perpetualforms of collateral were held, disruptive large- preferred stock, surplus, undivided profits, contingency and other capital reserves, qualifying mandatory convertible inscale sales might be required to raise the funds struments, allowances for possible loan and lease losses, and needed to assure settlements. On the other hand, minority interests in equity accounts of consolidated subsidliquidity reserves would likely be financed in iaries) less all intangible assets and deferred net losses on loans and other assets sold. Comparable definitions apply for large part by increased deposits or by sales of thrift institutions, Edge and agreement corporations, and some of a depository institution's assets, which other types of depository institutions. are already financed largely by deposits. In ef- 4. See David B. Humphrey, David Mengle, Oliver Ireland, and Alisa Morgenthaler, "Pricing Fedwire Daylight Overfect, payments system risk borne by the federal drafts" (Board of Governors of the Federal Reserve System, safety net would be shifted more explicitly January 13, 1986), p. 17. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

853 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 THE FUNDING OF PRIVATE PENSION PLANS Mark J. Warshawsky—Staff, Board of Governors Prepared as a staff study in the winter of 1986 The ability of private pension plans to pay prom- be given more accurate and comparable informaised retirement benefits to employees has been tion about the obligations of plan sponsors and the focus of considerable interest in the arenas of the assets set aside to discharge those obligapublic policy and financial accounting standards. tions. The Employee Retirement Income Security Act Concerns about the security of pension plans of 1974 mandates minimum funding standards for have increased recently. Responding to excellent most privately sponsored pension plans. The act investment performance in the stock and bond requires the reporting of extensive information markets, many pension sponsors have reduced about plan assets, liabilities, and fund manage- funding contributions and some have even termiment to give regulatory authorities and plan nated their plans to recapture assets in excess of participants the ability to judge the financial liabilities. On the other hand, some sponsors in security of a pension plan. The act also estab- troubled industries have had their badly underlished the Pension Benefit Guaranty Corpora- funded plans terminated, burdening the Pension tion, financed by premium payments from pen- Benefit Guaranty Corporation (PBGC) with large sion plans, to ensure that a minimum level of liabilities. The exit of healthy overfunded plans retirement benefits would be paid even if a plan and the continued existence of financially weak sponsor were to go bankrupt and assets were underfunded plans has increased the risk expoinsufficient to fund obligations. More recently, sure of the PBGC. the Financial Accounting Standards Board has Any analysis of the financial health of pension set uniform standards for reporting pension ex- plans and of appropriate regulatory responses penses, liabilities, and assets in financial state- depends critically on accurate information about ments. The users of financial statements, in the nature and amount of plan liabilities. This particular the investor community, will thereby study briefly reviews the regulatory, institution- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

854 Federal Reserve Bulletin • November 1987 al, and economic factors relevant to pension plan lowed arbitrary interest rates to be used in the obligations. It surveys the literature on the ap- valuation process; and they did not include in propriate conceptual framework for measuring any liability calculation partial cost-of-living adpension obligations and summarizes financial justments to future benefits paid to retired emaccounting standards for calculating and report- ployees, a reasonable expectation under many ing the liability of a pension plan. The study plans. When reported liabilities are adjusted for describes, on reported and adjusted bases, the these considerations, the resulting funded ratios recent funded status (measured by the ratio of indicate that pension plans are, on average, assets to liabilities) of a large sample of private underfunded and that their financial health has pension plans. And it explains how minimum and improved only slightly over the 1981-85 period, maximum funding standards are calculated under despite the strong rally in security prices. rules set forth by the Employee Retirement In- A detailed examination of the distribution of come Security Act (ERISA), how these stan- adjusted funded ratios of pension plans reveals a dards determine funded ratios, and how some wide range in their financial health. Some plans recent proposals could change funding stan- have funded ratios under 50 percent, while othdards. The study focuses on defined benefit ers have ratios higher than 200 percent. In generplans—pensions under which the benefit level is al, large plans and steel industry plans are poorly predetermined and employer contributions are funded. Despite the minimum funding standards adjusted to meet anticipated liabilities. Defined imposed by ERISA, plan sponsors still have contribution plans—pensions under which the considerable discretion in funding contributions. contribution rate is predetermined and benefits Sponsors may choose among many allowable depend on investment performance—by defini- actuarial cost methods and assumptions; they are tion have a matched asset-liability status and allowed to create large supplemental liabilities pose no risk either to their sponsor or to the with long amortization schedules; and they may PBGC. obtain waivers of minimum funding require- A major finding of the study is that the general ments. Furthermore, sudden and adverse shifts perception of an ongoing and robust improve- in business conditions in an industry that cause ment in the financial health of private pension massive layoffs can quickly increase the pension plans is incorrect. True, the ratios of fund assets liability per active plan participant. Required to plan liabilities (funded ratios) reported in contributions increase only slowly, however. As financial statements indicate that pension plans a result, many plans are poorly funded even were fully funded in 1981 and overfunded by while remaining within ERISA guidelines, and 1985. However, the financial accounting meth- underfunded plans pose considerable risk to the ods used before 1987 to calculate pension liabil- PBGC. The accumulated large pools of assets in ities mismeasured, and generally understated, other plans have a negative side too: because the the ongoing obligation of plan sponsors. The earnings on assets held in a pension fund are accounting standards gave no consideration to largely exempt from corporate taxes, overfunded future increases in the level of compensation on plans represent a loss of tax revenues to the which retirement benefits are based; they al- government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

855 Industrial Production Released for publication September 16 In market groups, output of consumer goods was up about one-quarter of a percent despite a Industrial production increased an estimated 0.3 sharp reduction in auto assemblies from an annupercent in August, after gains of 0.8 percent in July al rate of 6.7 million units in July to a rate of 5.9 and 0.7 percent in both June and May. The busi- million in August. A further surge in light truck ness equipment sector posted the largest increases production, of which a large proportion is for in August, while output of materials and consumer consumer use, more than offset the decline in goods edged up further. At 130.7 percent of the auto assemblies. The cutback in autos reflected 1977 average, the total index in August was 4.5 an attempt to reduce inventory levels as well as percent higher than it was a year earlier. reported parts shortages. Output of goods for the Ratio scale, 1977= 100 1981 1983 1985 1987 1981 1983 1985 1987 All series are seasonally adjusted. Latest figures: August. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

856 Federal Reserve Bulletin • November 1987 1977 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, Group 1987 1987 AAAuuuggg... 111999888666 tttooo AAAuuuggg... July Aug. Apr. May June July Aug. 111999888777 Major market groups Total industrial production 130.3 130.7 .1 .7 .7 .8 .3 4.5 Products, total 138.9 139.4 -.4 1.1 .6 .6 .4 4.2 Final products 137.3 138.0 -.4 1.0 .6 .5 .5 4.1 Consumer goods 129.3 129.5 -.7 1.2 .4 .5 .2 3.5 Durable 120.1 120.5 -2.6 1.8 -.5 .4 .3 4.1 Nondurable 132.8 132.9 .0 1.0 .6 .6 .1 3.4 Business equipment.. 143.8 145.2 .0 .7 1.3 .1 1.0 4.2 Defense and space... 186.3 186.8 -.3 .2 -.4 .3 .3 3.2 Intermediate products.. 144.2 144.1 -.4 1.6 .5 1.0 -.1 4.5 Construction supplies 130.8 130.9 -.9 .8 .9 1.1 .1 4.4 Materials 118.6 118.9 .8 .1 .8 1.1 .2 5.0 Major industry groups Manufacturing 135.0 135.4 .6 .4 4.6 Durable 132.1 132.7 .6 .3 4.1 Nondurable 139.0 139.2 .7 .7 1.0 5.3 Mining 98.6 98.6 1.0 .8 .2 2.3 Utilities 113.9 114.3 2.2 1.7 .5 5.5 NOTE. Indexes are seasonally adjusted. home increased slightly, but, on balance, has Materials output rose 0.2 percent after having been sluggish throughout this year. Production of risen on average about 1 percent in the preceding nondurable consumer goods changed little in two months. Production of durable materials—in August. Output of business equipment, which particular, equipment parts and metals—inhas grown rapidly this year, rose sharply further creased in August. Output of nondurable materiin August with increases in all major compo- als was up fractionally to a level more than 7 nents; the most significant gains so far this year percent higher than it was a year earlier. Energy have occurred in manufacturing and commercial materials were unchanged during the month. equipment, apparently reflecting improvement in In industry groups, manufacturing production both domestic and foreign demand. Output of increased 0.3 percent in August, with durable intermediate products—supplies for both con- goods up 0.5 percent and total nondurables about struction and business—was about unchanged in unchanged. Mining output was unchanged over- August following several months of solid gains. all, but oil and gas extraction increased moder- Recent strength in construction supplies, partic- ately. Production by utilities rose an estimated ularly lumber, may reflect, in part, the improved 0.4 percent. trade situation. In October revised indexes of industrial production will be issued for the period from January 1985 through mid-1987. The revision is based on data unavailable at the time the original Total industrial production—Revisions estimates were made and also incorporates up- Estimates as shown last month and current estimates dated seasonal adjustment factors developed Percentage change from data through 1986. "Industrial Produc- Index (1977=100) from previous MMoonntthh months tion," the October Federal Reserve statistical release, G.12.3 will contain the revised indexes Previous Current Previous Current both in seasonally adjusted and not seasonally May 128.3 128.4 .7 .7 adjusted form. June 128.8 129.2 .4 .7 July 129.8 130.3 .8 .8 August 130.7 .3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

857 Statement to Congress Statement by Wayne D. Angell, Member, Board adjustable-rate mortgages. The ability to transfer of Governors of the Federal Reserve System, fixed-rate loans to investors via a secondary before the Committee on Banking, Finance and market will allow banks to serve long-term credit Urban Affairs, U.S. House of Representatives, needs without undue exposure to the associated September 30, 1987. risks posed by unexpected changes in either interest rates or the profitability of farming. I am pleased to appear before the House Com- A private secondary market, therefore, would mittee on Banking, Finance and Urban Affairs in be a very positive development for both farm response to your request that the Board of Gov- borrowers and lenders. Before discussing how ernors of the Federal Reserve System provide current legislation could usefully facilitate the comments on proposals to establish, for farm development of such a private market, however, mortgage loans, a secondary market backed by a I want to address the adverse effects of establishgovernment guarantee. ing the market via the easy route of providing a Secondary markets for private debt instru- guarantee on its offerings. ments, broadly defined as mechanisms whereby The introduction of a government guarantee loans are resold in the national financial market, on the debt of a particular sector, whether placed perform a function of growing importance in our directly on the individual loans or on secondaryeconomy. Because of inherent factors such as market securities representing such loans, is a their remote geographic location or the small size very serious step. In taking such action, the of their individual credit needs, borrowers in Congress, in effect, overrides the judgment of the some sectors lack direct access to the national market and moves the credit rating of that sector credit market. When their loans are securitized to the top rank, above that of all the other sectors or repackaged for that market, borrowers in such to which government backing has not been granta sector are more likely to obtain credit in ed. The sector awarded such government backamounts and at interest rates that truly reflect the ing is virtually assured of ample funds at relativerelative creditworthiness of that sector, as deter- ly favorable interest rates. The problems of the mined in the national marketplace. Consequent- Farm Credit System in this decade provide a ly, the nation's capital resources are more likely compelling demonstration of the grave conseto be allocated to the more productive uses, quences that can follow excessive lending and promoting economic progress as well as equity. investment stimulated by artificially low interest Besides improving the credit-market access of rates. farm borrowers, substantial benefits could flow To be certain, in the past the nation deemed to farm lenders from the establishment of a the market's allocation of funds to be inapproprisecondary market for their mortgage loans. Rural ate. In these rare instances, legislation delibercommercial banks, for example, would be en- ately altering the decision of the market was abled to become truly "full service" farm lend- justified by an overwhelming public interest to ers, making long-term farm real estate loans as encourage additional borrowing for a specified well as the operating, machinery, and livestock purpose or by a particular group. Government loans that constitute the major part of their backing increased borrowing for the construction current farm loan business. It is relatively risky and purchase of homes. Similarly, government for a small bank to hold a large amount of fixed- guarantees helped college students to finance rate, long-term loans in its own portfolio. Hence, their higher education. For both of these purmany rural banks have had to restrict such poses, the Congress found increased debt-filending, relying instead on greater amounts of nanced investment to be so much in the national Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

858 Federal Reserve Bulletin • November 1987 interest that it substituted the creditworthiness of leverage can be extremely dangerous—as has the nation for the original creditworthiness of the been painfully demonstrated during the past 10 targeted borrowers. years. In the case of housing, the goal was to increase Despite these problems, within certain limits, homeownership; for student loans, to increase agriculture already is among the sectors for the number of college-educated citizens. And which government-backed credit traditionally now, in turn, farm mortgage loan subsidies has been legislated. Programs of the Farmers would stimulate investment in farm productive Home Administration promote borrowing by capacity. Capital improvements, machinery, and farmers with limited means, and in the past have operating expenses would tend to be funded from promoted borrowing by farmers that encounthe lower-cost mortgage funds, increasing the tered natural disasters or economic emergencies. amounts of these items. The resulting expansion In addition, credit markets have long regarded in agricultural production would be contrary to the Farm Credit System, which represents one the aim of existing farm programs, which attempt type of secondary-market mechanism, as having to curtail production. Should greater productive the implied standby backing of the government. potential be stimulated at this time by a public Implicit guarantees are called on to be made already shouldering much of the financial burden explicit from time to time, as illustrated by the of present farm productive capacity? And in assistance being requested by the Farm Credit what other sectors would credit use and invest- System. Over the long term, it would be in the ment be curtailed? Only a limited volume of public interest to phase out these implicit and savings is available to be channeled into invest- other guarantees provided for farm lending. Inment and to the extent that funds are diverted to stead, it is now proposed that the government agriculture, some other potential investment is extend explicit backing, via a guarantee for mortdenied—perhaps the sort of productivity-en- gage-backed securities, to the farm mortgage hancing investment our business sector needs so loans of all lenders. badly to compete effectively in the international Indeed, concern for financially distressed farm arena. borrowers and lenders other than those in the In addition, the investment stimulus of subsi- Farm Credit System appears to have been part of dized, lower-priced mortgage credit could well the motivation behind proposals for the governbe manifested by driving up land prices; that is, ment-backed secondary market. Initially, some the cost advantage secured by farm borrowers lenders may have envisioned the government will tend to be capitalized in the price of land. purchasing their weak loans at face value, just as Ironically, because about two-fifths of farmland they proposed that the government purchase and is owned by nonfarmers, only three-fifths of this "warehouse" the farmland they had already capital gain will accrue to farmers. Furthermore, acquired through foreclosure. Similarly, some to the extent that the interest rate advantage is troubled borrowers may have hoped that the capitalized, only current landowners benefit. For government would acquire their loans and then the next generation of farmers, the higher price exercise forbearance in the fashion of the Farmof the land will offset the lower interest rate. ers Home Administration. It is clear that the For a land buyer to capture the benefit of the secondary market now being proposed accomrelatively lower, subsidized mortgage interest modates neither of these ends. It will serve only rate, he must be a borrower. Thus the availability borrowers who are financially strong when the of government-backed credit will tend to in- loans are made, because the originating lender crease the degree of leverage employed by farm- will retain exposure to the first portion of any ers as well as by nonfarm investors in farmland; eventual loss. indeed, as we have seen, the thought behind If, by introducing and maintaining high quality providing government-backed credit is to in- standards, credit markets can be assured that the crease the use of debt for specified purposes. But loans are strong, a secondary market could exist in an industry such as agriculture, which is without a government guarantee. Its developsubject to sharp financial swings arising from ment, however, is considerably more difficult, both natural and economic causes, high debt because a securitizing or pooling agency must be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 859 established, credit quality standards promulgat- government sponsorship is not seen as an impliced, implemented, and enforced, and so forth. it government guarantee. Past experience sug- Legislation could establish an agency that would gests that a guarantee intended just to help get develop such a market, probably as an entity of the market started would be almost impossible to the Farm Credit System. Government assistance withdraw because borrowers would loathe to to this venture that stops short of a guarantee give up the considerable interest rate advantage. could be very helpful in the developmental phase It would seem best to face forthrightly the estabof a secondary market, particularly in view of the lishment of a private market at the very begintechnical challenge presented by the diversity of ning. • farming. But, we should be very careful that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

860 Announcements MEETING OF The new division will have responsibility for CONSUMER ADVISORY COUNCIL the analysis of monetary policy issues and for liaison with the Open Market Desk of the Federal The Federal Reserve Board announced that its Reserve Bank of New York and with other Consumer Advisory Council met on October 22 government agencies on matters pertaining to and 23, in sessions open to the public. monetary policy operations and the government The Council's function is to advise the Board securities market. It will be composed primarily on the exercise of the Board's responsibilities of staff drawn from the Division of Research and under the Consumer Credit Protection Act and Statistics, including the banking section and on other matters on which the Board seeks its members of the government finance and of the advice. econometrics and computer applications sections. Also assigned to the new division are the REGULATION U: AMENDMENT following: David E. Lindsey, Deputy Director, formerly Associate Director in the Division of The Federal Reserve Board on September 16, Research and Statistics; Richard D. Porter, As- 1987, adopted an amendment to Regulation U sistant Director, formerly Assistant Director in (Credit by Banks for the Purpose of Purchasing the Division of Research and Statistics; and or Carrying Margin Stock) that will reduce the Normand R.V. Bernard, Special Assistant to the paperwork burden for banks that take margin Board, who transferred from the Office of Board stocks as collateral for loans. The amendment is Members. effective September 23. The action no longer requires banks to use Form FR U-l for loans of $100,000 or less that are secured directly or indirectly by margin PROPOSED ACTIONS stock. The Federal Reserve Board requested comment on a proposed amendment to Regulation Z CHANGES IN BOARD STAFF (Truth in Lending) to implement a provision of the Competitive Equality Banking Act of 1987 The Board announced on October 1, 1987, the regarding adjustable-rate mortgage caps. The establishment of a new organizational unit, the provision would require creditors to include a Division of Monetary Affairs, and named Donald limit on the maximum interest rate that may be L. Kohn Director. At the same time, the Board charged on certain adjustable-rate transactions. appointed Michael J. Prell Director of the Divi- Comments should be received by the Board on sion of Research and Statistics. this matter by October 14, 1987. Mr. Kohn was previously Deputy Director The Federal Reserve Board also requested (Monetary Policy and Financial Markets) in the comment on whether it should permit bank hold- Division of Research and Statistics and, before ing companies to acquire healthy thrift instituthat, Deputy Director for Monetary and Finan- tions and the terr™ ™"ditions under which cial Policy. Mr. Prell most recently served as such acquisitions ermitted. Comment Deputy Director of Research and Statistics. is requested by > ), 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

861 SYSTEM MEMBERSHIP: Oklahoma ADMISSION OF STATE BANKS Oklahoma City Central Bank of Oklahoma City The following state banks were admitted to mem- Texas bership in the Federal Reserve System during the Sanger Sanger Bank period August 1 through August 31, 1987: Virginia Richmond United Virginia Bank Florida Tampa Terrance Bank of Florida Maryland Upper Marlboro United Bank & Trust Company of Maryland Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

862 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON AUGUST 18, 1987 Retail sales posted large increases in June and July, after a period of relatively sluggish growth 1. Domestic Policy Directive earlier in the year. Automotive dealers and gasoline stations recorded sizable sales gains in July, The information reviewed at this meeting sug- although spending also increased at most other gested that economic activity has continued to types of stores. Upward revisions to data for expand at a moderate pace in the current quarter. earlier months suggested that nominal spending Labor demand has been strong and the unem- had been well maintained recently at stores speployment rate has declined further. The indus- cializing in general merchandise, apparel, and trial sector apparently has benefited from in- certain durable goods. creased international competitiveness. In addi- Housing activity has leveled off in recent tion, spending by domestic sectors has continued months after declining earlier. Total starts were to advance with spending on business equipment at an annual rate of 1.61 million units in July, remaining strong and retail sales picking up in essentially unchanged from the pace in May and recent months. Price increases, although still June. During the month an increase in singleappreciable, have been somewhat smaller than in family starts offset a decline in multifamily units. the early part of the year, and wage inflation has Despite the rise in July, single-family homebuildheld at about the same slow pace as in 1986. ing remained significantly below the robust pace Household employment surged in July, and recorded during the early months of the year the civilian unemployment rate edged down 0.1 when mortgage rates were at a nine-year low. percentage point to 6.0 percent, bringing the The decline in multifamily starts reflected the cumulative decline so far this year to 0.7 percent- continuing influence of high vacancy rates and age point. Payroll employment registered a siz- tax law changes. able increase in July, after two months of slower Capital spending appeared to be strengthening, growth. Hiring remained strong in services, but especially for equipment. Real outlays for promanufacturing employment recorded its largest ducers' durable goods rebounded in the second monthly gain in three years, and construction quarter, after a steep tax-related decline in the employment was essentially unchanged in July first quarter. In addition, recent data on new following earlier declines. orders suggested further gains in spending on Gains in employment were associated with a equipment in the period ahead. Outlays for nonstrong increase in industrial production in July. residential construction were little changed in the The industrial production index rose 0.8 percent second quarter after sharp declines over most of and was revised upward for the previous two the preceding two years; office building continmonths. Advances in July were widespread ued to decline in the second quarter, but spendamong products and materials. Output of con- ing was firm in most other sectors, especially in sumer goods rose noticeably with large increases petroleum drilling, which rose for a third consecin production of light trucks and consumer non- utive quarter. durables. Output of business equipment also Nonfarm inventory investment apparently registered a strong increase as a result of contin- slowed in the second quarter as auto dealers' ued sharp advances for construction and mining, inventories leveled off after a rapid first-quarter manufacturing, and commercial equipment. accumulation. Stockbuilding at nonauto trade Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

863 establishments picked up fairly sharply in April lesser reserve restraint would be acceptable deand May, although serious inventory imbalances pending on indications of inflationary pressures were not evident. In manufacturing, inventories and on developments in foreign exchange marincreased slightly in the second quarter, but the kets, as well as on the behavior of the monetary inventory-sales ratio at the end of June fell to the aggregates and the strength of the business exlowest level of the current expansion. pansion. M2 and M3 were expected to grow at The U.S. merchandise trade deficit in current annual rates of 5 and IV2 percent respectively, dollars was higher in June than in any previous from June through September, while growth in month of 1987, but it appeared to have changed Ml was expected to remain below its pace in little on average between the first and second 1986 but to pick up from recent levels. The quarters in nominal terms on a balance of pay- intermeeting range for federal funds was left ments basis. In real terms, the deficit recorded a unchanged at 4 to 8 percent. further improvement in the second quarter de- Growth in M2 picked up a little in July but spite an increase in the quantity of imports of remained sluggish; for the year through July petroleum and petroleum products. Available cumulative M2 growth fell further below the 5Vi data indicated some improvement in economic percent lower bound of the range established by activity in foreign industrial countries in the the Committee for 1987. The slightly faster second quarter, compared with the generally growth of M2 reflected a turnaround in Ml, weak first-quarter results. Indicators of econom- which edged up in July; demand deposits conic activity in the United Kingdom suggested tracted, albeit less than in June, while other broad-based strength. German construction ac- checkable deposits rose moderately. M3 expandtivity rebounded from its first-quarter drop, al- ed at only a 2 percent rate in July as banks, though other indicators of German economic experiencing low loan demand, ran off large activity showed less strength. In Japan, signs CDs; in July this aggregate was somewhat below were mixed, but growth in the consumer and the growth cone associated with the Committee's housing sectors seemed more robust in the latter 5Vi to 8V2 percent range for this year. Total part of the quarter. reserves continued to decline in July, but at a Inflation rates have slowed in recent months reduced rate; the decline largely reflected weakbut have continued to run above the pace in ness in transactions deposits and decreases in 1986. The recent slowdown has been concentrat- excess reserves. Adjustment plus seasonal bored among items other than food and energy; after rowing at the discount window averaged $466 increasing rapidly in the first four months of the million for the three reserve maintenance periods year, the CPI excluding food and energy rose 0.3 that ended since the meeting of the Committee percent in May and 0.2 percent in June. Consum- on July 7. er food prices rose sharply in May and June; Federal funds traded generally at 6V2 to 63/4 however, farm commodity prices have fallen percent during the intermeeting period. Most recently. Upward pressures on energy prices other private, short-term rates were essentially have persisted, partly reflecting heightened ten- unchanged, but rates on Treasury bills backed up sions in the Persian Gulf, which pushed crude oil considerably, particularly after legislative action prices up further in July. Prices of imports other to raise the debt ceiling permitted a resumption than oil rose sharply in the second quarter for a of auctions. At the same time, pay downs of bills fairly wide range of intermediate materials and in weekly auctions slowed from the pace earlier products. In addition, domestic producers have in the year. In the longer-term markets, yields on raised prices for materials. Wage inflation re- Treasury and corporate bonds rose 25 to 35 basis mained comparatively moderate in the first half points since the July meeting. The pressures on of 1987. prices of petroleum coupled with relatively At its meeting on July 7, the Committee adopt- strong economic data appeared to increase coned a directive that called for maintaining the cerns about inflation and credit demands in the existing degree of pressure on reserve positions. future. Even so, stock prices increased apprecia- The members decided that somewhat greater or bly over the intermeeting period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

864 Federal Reserve Bulletin • November 1987 The dollar was about unchanged on balance expansion would be sustained. Indeed, in the since the July meeting of the Committee in terms view of several members, the chances of any of a weighted average of other G-10 currencies. deviation from such expectations were on the It rose substantially through much of the period, side of faster economic growth with attendant primarily in response to the tensions in the risks of intensifying inflationary pressures. Oth- Middle East and the relative strength of the U.S. ers, stressing the uncertainties that continued to economy, but it subsequently fell back after the cloud the outlook for economic activity, viewed publication of the June trade figures in mid the likelihood of a deviation from a moderate August. The dollar was stronger against the mark growth scenario as more evenly balanced and the than against the yen, perhaps reflecting a rela- risks of inflation as less worrisome. tively sluggish outlook for the German economy. During the Committee's discussion several Money market conditions tightened somewhat in members reported that local business conditions Germany and more in the United Kingdom and appeared to have strengthened, including eviremained unchanged in Japan. Long-term rates dence that some previously depressed manufacrose significantly in all these countries, with the turing industries and also oil drilling and agricullargest rise occurring in Japan. The increase in ture had tended to stabilize or were showing Japanese rates was attributed to signs of stronger increased signs of recovery. Business optimism economic activity and concerns about the infla- also was reported to have improved recently in tion implications of Mideast tensions. many areas. With regard to the outlook for The staff projections suggested that real GNP investment, it was noted that a number of recent would grow at a moderate rate through the end of statistical indicators pointed on balance to stron- 1988. Improvement in the external sector was ger business capital spending. Other favorable expected to provide substantial impetus for real developments cited in this connection included growth, as changes in the foreign exchange value the surge in stock prices, indications of potentialof the dollar helped to boost U.S. exports and ly sizable profit gains in some sectors of the damp import growth. In contrast, growth in economy, and the prospect that with the deprecidomestic spending was anticipated to be relative- ation of the dollar a larger share of the demand ly subdued. Rising import prices associated with for business equipment was likely to be met by the fall in the value of the dollar were likely to domestic producers. Some members commented limit increases in real income and consumer that consumer spending probably would be reaspending; budgetary pressures would constrain sonably well maintained, if not robust, in light of government purchases; and the rise in mortgage the impact of income tax changes on disposable interest rates and high vacancy rates were ex- incomes, the strength of the stock market, and pected to curtail construction activity. Business other factors. On the negative side, it was sugequipment spending, however, should rise at a gested that the growth in consumer expenditures moderate pace in coming quarters. After slowing might be relatively restrained, in part because in the second half of the year, inflation was sales of automobiles were likely in this view to expected to move back up in 1988 reflecting remain weak on balance despite the temporary pressures from non-oil import prices. Moreover, fillip from sales incentive programs. Some memwith the civilian unemployment rate projected to bers also referred to the emergence of unusually remain around 6 percent, slack in the labor conservative attitudes among business borrowmarket would not have much of a damping ers and farmers, at least in some parts of the influence on wages. As a result, compensation country. increases were expected to rise noticeably next The members continued to view an improveyear. ment in the trade balance as a key factor but also In the Committee's discussion of the economic as a major uncertainty in the outlook for economsituation and outlook, members commented that ic expansion; in particular, a number of members recent indicators of business activity had a rela- again questioned whether such improvement tively strong tone and tended to reinforce earlier would be substantial enough to provide more expectations that a moderate rate of economic than very modest support to the expansion. In Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 865 this view relatively sluggish growth in the econo- including the moderate growth in the monetary mies of major trading partners and the persis- aggregates this year and an ample availability of tence of numerous trade barriers pointed to labor and productive capacity, especially for relatively limited gains in net exports, at least basic commodities, in world markets. All of the over the quarters immediately ahead. Other members agreed that a critical element in the members were somewhat more optimistic about inflation outlook was the potential for rising the outlook for trade despite recently disappoint- prices to be reflected at some point in rising ing trade data. They felt that the depreciation of wages. Such a development would represent a the dollar and ongoing increases in the prices of dangerous setback in the fight against inflation many imports had strengthened the competitive and would greatly increase the costs of bringing position of U.S. firms in both domestic and inflation under control. foreign markets. Such competitive gains were At its meeting in July, the Committee had already reflected in the stronger performance of reviewed the basic policy objectives established many domestic manufacturing industries and re- in February for growth of the monetary and debt ports of increasing export opportunities were aggregates in 1987 and had set tentative objecmultiplying. tives for growth in 1988. For the period from the The members expressed some divergence of fourth quarter of 1986 to the fourth quarter of views with regard to the outlook for inflation, but 1987, the Committee had reaffirmed the ranges they generally agreed that domestic pressures on established in February for growth of 5'/2 to 8V2 prices did not appear to be intensifying currently percent for both M2 and M3. The Committee and that wage increases had remained moderate agreed that growth in these aggregates around despite the faster rise in prices experienced earli- the lower ends of their ranges might be approprier in the year. Nonetheless, several members ate, depending on the circumstances. The monistressed the risks of greater inflation over the toring range for expansion in total domestic next several quarters, particularly if the expan- nonfinancial debt also was left unchanged at 8 to sion in economic activity proved to be on the 11 percent for 1987. For 1988 the Committee had high side of their current expectations. These agreed on tentative objectives for monetary members were concerned that the economy growth that included reductions of V2 percentage might be at or near the point where relatively point to ranges of 5 to 8 percent for both M2 and rapid growth would result in more inflation, M3. The Committee had also reduced the associgiven the substantial drop in unemployment to a ated range for growth in total domestic nonfinanrelatively low level this year; long-term debt cial debt by Vi percentage point to IVi to IOV2 markets already reflected heightened inflationary percent for 1988. With respect to Ml, the Comexpectations. Another substantial increase in en- mittee had decided at the July meeting not to set ergy prices clearly would exacerbate the infla- a specific target for growth over the remainder of tionary pressures, but the outlook for energy was 1987 or to establish a tentative range for 1988. It highly uncertain. was understood that all the ranges for 1988 were Other members agreed that inflation was a provisional and that they would be reviewed potentially serious problem, but they saw a less- early next year in the light of intervening develer risk of intensifying inflationary pressures. opments. The issues involved with establishing a These members tended to emphasize the possi- target for Ml would be carefully reappraised at bility that economic growth would remain rela- the beginning of 1988. tively moderate or that gains would tend to be In the Committee's discussion of policy impleconcentrated in previously depressed industries mentation for the weeks immediately ahead, a that had greater margins of available labor and majority of the members favored unchanged conproduction capacity. Moreover, business manag- ditions of reserve availability, at least initially ers were likely to persist in their efforts to cut during the intermeeting period, but some indicatcosts and improve operating efficiencies, as evi- ed a preference for a modest firming. The memdenced by recent labor negotiations. Reference bers recognized that monetary policy exerted its also was made to broadly deflationary factors effects with a lag and that inflationary forces Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

866 Federal Reserve Bulletin • November 1987 should not be allowed to gather momentum. aggregates from their 1987 ranges, a number of However, several stressed the uncertainties that members indicated that they would find acceptsurrounded the outlook for prices and wages, able somewhat faster growth in these aggregates and in the view of a majority, more evidence of than was currently projected, provided that price sustained strength in the economy or of intensi- pressures did not appear to be worsening and the fying inflation was needed before action toward dollar was not subject to substantial weakness. firmer reserve conditions should be taken, par- The members differed to some extent in their ticularly in the context of relatively slow mone- views regarding the emphasis that should be tary expansion. Some of these members also given to various factors that might trigger intercommented that the Committee would have an meeting adjustments, if any, in the degree of opportunity to review its decision within a few pressure on reserve positions. Most felt that weeks, given the relatively short interval until policy implementation should be especially alert the next scheduled meeting. Other members to developments that might call for somewhat gave somewhat greater emphasis to the potential firmer reserve conditions, particularly if the for more inflation. In this view some slight Committee decided against any initial firming in firming at this point would have a favorable those conditions. Other members believed that effect on inflationary expectations and would there should be no presumptions about the likely incur very little recessionary risk. Moreover, direction of any intermeeting adjustments, but such a move could be readily reversed if chang- they could accept a directive that looked to ing conditions seemed to warrant such a step firming action as the more likely direction of any later. adjustment. The members generally agreed that In their review of the outlook for monetary developments relating to the outlook for inflation growth, the members took account of a staff should continue to receive important weight in analysis that suggested that monetary expansion judging the need for any policy changes during was likely to accelerate from its sluggish pace in the intermeeting period. There was also considrecent months, assuming that interest rates re- erable sentiment in favor of giving increased mained around their current levels. The analysis attention to the overall performance of the econcontemplated that growth in the broader aggre- omy in this period, given the recent signs of gates would return to a pace closer to that in strength. In addition, several members comnominal GNP as the interactive effects of earlier mented that a possible weakening of the dollar in increases in interest rates and the lagged adjust- the foreign exchange markets might call for a ments in offering rates on various types of inter- policy response in the period ahead, but some est-bearing deposits abated. Recent monetary other members cautioned that dollar developdata tended to support that expectation. It was ments would need to be interpreted with particunoted, however, that such faster monetary lar care. It was noted in this regard that the dollar growth was still likely to leave cumulative expan- was still appreciably above the lows it had sion in the broad aggregates through September reached in the spring, and in this view a judgment below the Committee's ranges for the year, espe- would need to be made as to whether any weakcially in the case of M2. Some members com- ness in the dollar related more to uncertainties mented that relatively slow monetary growth about oil market developments than to fundaappeared appropriate in light of the higher infla- mental concerns about underlying inflationary tion and the increase in inflationary expectations pressures in the economy. Nevertheless, Comexperienced this year. The latter had contributed mittee members generally remained sensitive to to higher market interest rates, which had curbed developments relating to the dollar. demand for assets in the monetary aggregates At the conclusion of the Committee's discusand had raised velocity. The possibility of some sion, all of the members indicated that they further rise in velocity implied that limited mone- favored or could accept a directive that called for tary expansion might remain consistent with no change, at least initially, in the degree of satisfactory economic performance. However, pressure on reserve positions. With regard to given the shortfall in the growth of the broader possible adjustments during the intermeeting pe- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 867 riod, the members indicated that somewhat ports. Wage increases have remained relatively modgreater reserve restraint would be acceptable, erate in recent months. In foreign exchange markets, the trade-weighted while slightly lesser reserve restraint might be value of the dollar in terms of the other G-10 currenacceptable, depending on developments relating cies was unchanged on balance since the meeting of to inflation, the strength of the business expan- the Committee on July 7. In the second quarter the sion, the performance of the dollar in foreign merchandise trade deficit in current dollars was about exchange markets, while also taking account of the same as in the first quarter. The monetary aggregates grew slowly in July. For the behavior of the monetary aggregates. Un- 1987 through July, expansion of both M2 and M3 has changed conditions of reserve availability were been below the lower ends of the ranges established by expected to be consistent with growth in M2 and the Committee for the year, while growth in Ml has M3 at annual rates of around 5 percent for the been well below its pace in 1986. Expansion in total three-month period from June to September; domestic nonfinancial debt has moderated this year. Most long-term interest rates have risen somewhat given its performance in July, expansion in M3 since the July meeting; in short-term markets, Treawas expected to be somewhat less than had been sury bill rates also have increased somewhat while anticipated at the time of the July meeting. Over private rates are little changed. Stock prices have risen the same period growth in Ml was expected to substantially since the latest meeting. pick up from its average pace over the past The Federal Open Market Committee seeks moneseveral months but to remain well below its rate tary and financial conditions that will foster reasonable price stability over time, promote growth in output on of expansion in 1986. Because the behavior of a sustainable basis, and contribute to an improved Ml was still subject to unusual uncertainty and in pattern of international transactions. In furtherance of keeping with the decision not to set a longer-run these objectives the Committee agreed at its meeting target for Ml, the Committee decided to contin- in July to reaffirm the ranges established in February ue the practice of not specifying a numerical for growth of 5lA to 8'A percent for both M2 and M3, measured from the fourth quarter of 1986 to the fourth expectation for its short-run growth. The memquarter of 1987. The Committee agreed that growth in bers agreed that the intermeeting range for the these aggregates around the lower ends of their ranges federal funds rate, which provides a mechanism may be appropriate in light of developments with for initiating consultation of the Committee when respect to velocity and signs of the potential for some its boundaries are persistently exceeded, should strengthening in underlying inflationary pressures, provided that economic activity is expanding at an be left unchanged at 4 to 8 percent. acceptable pace. The monitoring range for growth in At the conclusion of the meeting the following total domestic nonfinancial debt set in February for domestic policy directive was issued to the Fed- the year was left unchanged at 8 to 11 percent. eral Reserve Bank of New York: For 1988, the Committee agreed on tentative ranges of monetary growth, measured from the fourth quarter of 1987 to the fourth quarter of 1988, of 5 to 8 percent The information reviewed at this meeting suggests for both M2 and M3. The Committee provisionally set on balance that economic activity is expanding at a the associated range for growth in total domestic moderate pace in the current quarter. In July, total nonfinancial debt at lx/z to IOV2 percent. nonfarm payroll employment rose considerably fur- With respect to Ml, the Committee recognized that, ther; the increase included continuing large gains in based on experience, the behavior of that aggregate the service-producing sector and a sizable advance in must be judged in the light of other evidence relating to manufacturing. The civilian unemployment rate fell economic activity and prices; fluctuations in Ml have slightly further to 6.0 percent. Industrial production become much more sensitive in recent years to increased strongly in July after rising moderately on changes in interest rates, among other factors. Bebalance in the first half of the year. Consumer spend- cause of this sensitivity, which has been reflected in a ing grew at a reduced pace earlier in the year but retail sharp slowing of the decline in Ml velocity over the sales posted large increases in June and July. Housing first half of the year, the Committee again decided at starts were unchanged in July and remained at their the July meeting not to establish a specific target for reduced second-quarter level. Recent indicators of growth in Ml over the remainder of 1987 and no business capital spending point to some strength, tentative range was set for 1988. The appropriateness particularly in equipment outlays. The rise in consum- of changes in Ml this year will continue to be evaluater and producer prices has been moderate in recent ed in the light of the behavior of its velocity, developmonths, but for the year to date prices generally have ments in the economy and financial markets, and the risen more rapidly than in 1986, primarily reflecting nature of emerging price pressures. The Committee sizable increases in prices of energy and non-oil im- welcomes substantially slower growth of Ml in 1987 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

868 Federal Reserve Bulletin • November 1987 than in 1986 in the context of continuing economic 2. Authorization for expansion and some evidence of greater inflationary Domestic Open Market Operations pressures. The Committee in reaching operational decisions over the balance of the year will take ac- Effective August 19, 1987, the Committee apcount of growth in Ml in the light of circumstances then prevailing. The issues involved with establishing proved a temporary increase of $6 billion, to $12 a target for Ml will be carefully reappraised at the billion, in the limit between Committee meetings beginning of 1988. on changes in System Account holdings of U.S. In the implementation of policy for the immediate government and federal agency securities specifuture, the Committee seeks to maintain the existing fied in paragraph 1(a) of the Authorization for degree of pressure on reserve positions. Somewhat greater reserve restraint would, or slightly lesser re- Domestic Operations. The increase was effective serve restraint might, be acceptable depending on for the intermeeting period ending with the close indications of inflationary pressures, the strength of of business on September 22, 1987. the business expansion, developments in foreign exchange markets, as well as the behavior of the aggre- Votes for this action: Messrs. Greenspan, Corrigates. This approach is expected to be consistent with gan, Angell, Boehne, Boykin, Heller, Johnson, growth in M2 and M3 over the period from June Keehn, Kelley, Ms. Seger, and Mr. Stern. Votes through September at annual rates of around 5 peragainst this action: None. cent. Growth in Ml, while picking up from recent levels, is expected to remain well below its pace during 1986. The Chairman may call for Committee consulta- This action was taken on the recommendation tion if it appears to the Manager for Domestic Opera- of the Manager for Domestic Operations. The tions that reserve conditions during the period before Manager had advised that the normal leeway of the next meeting are likely to be associated with a $6 billion for changes in the System's account federal funds rate persistently outside a range of 4 to 8 percent. would not be sufficient over the intermeeting period because a large buildup in the Treasury Votes for this action: Messrs. Greenspan, Corri- cash balance at Federal Reserve Banks was gan, Angell, Boehne, Boykin, Heller, Johnson, expected after the September tax date. Keehn, Kelley, Ms. Seger, and Mr. Stern. Votes against this action: None. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

869 Legal Developments AMENDMENT TO REGULATION U PREEMPTION DETERMINATION UNDER REGULATION B The Board of Governors is amending 12 C.F.R. Part 221, its Regulation U, by issuing a final rule that The Board of Governors has determined that certain exempts banks, when making loans of $100,000 or provisions of the Family Code of Wisconsin are not less, from the requirement of executing Federal Re- inconsistent with the Equal Credit Opportunity Act or serve Form U-l. Regulation B. This determination is made under au- Effective September 23, 1987, 12 C.F.R. Part 221 is thority delegated to the Director of the Division of amended as follows: Consumer and Community Affairs. Effective November 1, 1987, the Board has determined that the provisions in the Family Code of Part 221—Credit by Banks for the Purpose of Wisconsin specified below are not preempted by 12 Purchasing or Carrying Margin Stock C.F.R. Part 202. 1. The authority citation for 12 C.F.R. Part 221 contin- Part 202—Equal Credit Opportunity ues to read as follows: 1. The authority citation for 12 C.F.R. Part 202 contin- Authority: 15 U.S.C. §§ 78c, 78g, 78h and 78w. ues to read as follows: 2. Part 221 is amended by revising paragraph 221.3(b), Authority: 15 U.S.C. 1691 et seq. redesignating (c)(i) and (c)(ii) as (c)(1) and (c)(2), and revising (c)(1) as follows: 2. The Board examined Wisconsin Statutes sections 766.56(2)(d), 766.56(3)(b), and 766.565(5) to determine Section 221.3—General Requirements whether requirements imposed by these sections are inconsistent with the Equal Credit Opportunity Act or Regulation B, which implements that Act. As to sections 766.56(2)(d) and 766.56(3)(b), dealing with (b) Purpose statement. Except for credit extended marital status and other inquiries, no inconsistency under paragraph (c) of this section, whenever a bank was found with federal law. As to section 766.565(5), extends credit secured directly or indirectly by any an inconsistency was found with federal law; however, margin stock, in an amount exceeding $100,000, the the Board has determined not to preempt that section bank shall require its customer to execute Form FR based on section 705(b) of the Equal Credit Opportuni- U-l (OMB No. 7100-0115), which shall be signed and ty Act implementing section 202.6(c) of Regulation B, accepted by a duly authorized officer of the bank which allows creditors to take into account state acting in good faith. property laws that directly or indirectly affect creditworthiness. (c) Purpose statement for revolving-credit or multipledraw agreements. POLICY STATEMENT REGARDING FEDERAL (1) If a bank extends credit, secured directly or RESERVE BANK SERVICES indirectly by any margin stock, in an amount exceeding $100,000, under a revolving-credit or other Effective September 18, 1987, the Board of Governors multiple-draw agreement, Form FR U-l can either adopts the following factors that it will consider when be executed each time a disbursement is made under reviewing prosposals to consolidate Federal Reserve the agreement, or at the time the credit arrangement Bank priced services across District lines, is originally established. a. Maintenance or improvement of cost recovery in a service. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

870 Federal Reserve Bulletin • November 1987 b. Improvement of the efficiency of Federal Reserve in the state.1 Bank is the 118th largest banking organi- Bank operations. zation in Michigan and controls total deposits of $34.0 c. Maintenance of improvement of the level or million, representing less than 0.1 percent of the total quality of service. deposits in commercial banks in the state. Upon d. Responsiveness to changes in the financial ser- consummation of the proposed transaction, Applicant vices industry. will become the 62nd largest banking organization in e. Effect on private sector providers of the service. Michigan, with total deposits of $77.3 million, repref. Effect on users of the service. senting approximately 0.1 percent of total deposits in The Board will use the following procedures when the state. Consummation of this proposal would not implementing consolidation of Federal Reserve Bank have any significant adverse effect on the concentrapriced services across District lines: tion of banking resources in Michigan. 1. Public comment will be solicited when changes Applicant and Bank compete directly in the Calumet in fees and service arrangements are proposed banking market.2 Applicant is the third largest of six that would have significant longer-run effects on commercial banking organizations in the market, with the nation's payments mechanism. Public com- total deposits of $43.3 million, representing 18.5 perment will also be solicited the first time any cent of the deposits in commercial banks in the mar- Reserve Bank priced service is proposed for con- ket. Bank is the fourth largest commercial banking solidation across District lines. organization in the market, with deposits of $34.0 2. Advance notice prior to implementing an inter- million, representing 14.5 percent of the deposits in district consolidation will be at least 60 days and commercial banks in the market. After consummation may be longer to enable private-sector users and of the proposal, Applicant's share of the deposits in providers of the service a reasonable amount of commercial banks in the market would be 33.0 pertime to adjust to the change. cent. The Calumet banking market is considered highly concentrated with a four-firm concentration ratio of 83.6 percent which, upon consummation, would increase to 92.1 percent. The Herfindahl-Hirschman ORDERS ISSUED UNDER BANK HOLDING Index ("HHI") would increase by 538 points to 2505.3 COMPANY ACT, BANK MERGER ACT, BANK Although consummation of the proposal would elim- SERVICE CORPORATION ACT, AND FEDERAL inate some existing competition between Applicant RESERVE ACT and Bank in the Calumet banking market, numerous Orders Issued Under Section 3 of the Bank other depository institutions would remain as competi- Holding Company Act tors in the market. In addition, the Board has considered the presence and competition provided by thrift Houghton Financial, Inc. institutions in the market.4 The largest depository Houghton, Michigan institution in the market is a thrift institution that controls 52.8 percent of the market's total deposits. The thrift institution exerts a considerable competitive Order Approving Acquisition of a Bank influence in the market as a provider of NOW accounts and consumer loans, holding nearly one-fourth Houghton Financial, Inc., Houghton, Michigan, a bank holding company within the meaning of the Bank Holding Company Act (12 U.S.C. § 1841 et seq. (the 1. Banking data are as of December 31, 1986. "Act")), has applied for the Board's approval under 2. The Calumet banking market is approximated by Baraga, section 3 of the Act (12 U.S.C. § 1842) to acquire Houghton, and Keweenaw Counties, Michigan. Commercial National Bank, L'Anse, Michigan 3. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), any market in which the post- ("Bank"). merger HHI is above 1800 is considered highly concentrated. The Notice of the application, affording interested par- Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors ties an opportunity to submit comments, has been indicating anticompetitive effects) unless the post-merger HHI is at given in accordance with section 3(b) of the Act (52 least 1800 and the merger increases the HHI by at least 200 points. Federal Register 26,083 (1987)). The time for filing The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects comments has expired, and the Board has considered implicitly recognizes the competitive effect of limited-purpose lenders the application and all comments received in light of and other nondepository financial entities. the factors set forth in section 3(c) of the Act. 4. The Board has previously indicated that thrift institutions have become, or have the potential to become, major competitors of Applicant, the 96th largest commercial banking or- commercial banks. National City Corporation, 70 FEDERAL RESERVE ganization in Michigan, controls one subsidiary bank BULLETIN 743 (1984); NCNB Bancorporation, 70 FEDERAL RESERVE BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL with $43.3 million in total deposits, representing less RESERVE BULLETIN 802 (1983); and First Tennessee National Corpothan 0.1 percent of total deposits in commercial banks ration, 69 FEDERAL RESERVE BULLETIN 298 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 871 of the consumer loans and 14 percent of the transac- has considered the application and all comments retion accounts in the market. Based upon the above ceived in light of the factors set forth in section 3(c) of considerations, the Board concludes that consumma- the Act (12 U.S.C. § 1842(c)). tion of the proposal is not likely to substantially lessen Applicant, with total unconsolidated assets equivacompetition in the Calumet banking market.5 lent to approximately $100.2 billion, ranks as the third The financial and managerial resources of Appli- largest of eight trust banks in Japan.1 Worldwide, cant, its subsidiary bank, and Bank are consistent with Applicant ranks as the 19th largest bank. Applicant approval. Considerations relating to the convenience operates 55 branches in Japan as well as four foreign and needs of the communities to be served are also branches and agencies and six representative offices. consistent with approval. Based on the foregoing and In addition, Applicant engages worldwide in banking other facts of record, the Board has determined that and nonbanking financial activities through six wholly consummation of the proposed transaction would be in owned subsidiaries located outside Japan.2 the public interest and that the application should be, In the United States, Applicant operates a branch in and hereby is approved. New York, New York, with total assets of $4.7 billion3 On the basis of the record, the application is ap- and an agency in Los Angeles, California, with total proved for the reasons summarized above. The trans- assets of $1.9 billion.4 Applicant has selected New action shall not be consummated before the thirtieth York as its home state under the Board's Regulation K calendar day following the effective date of this Order, (12 C.F.R. 211.22(b)). Bank will be located in Applior later than three months after the effective date of cant's home state. Accordingly, the Board concludes this Order, unless such period is extended for good that the acquisition of Bank by Applicant is consistent cause by the Board or by the Federal Reserve Bank of with Section 5 of the International Banking Act of 1978 Minneapolis pursuant to delegated authority. (12 U.S.C. § 3103). By order of the Board of Governors, effective Bank, a de novo institution, is being organized as a September 25, 1987. state-chartered nonmember bank. It will serve the Metropolitan New York—New Jersey banking mar- Voting for this action: Chairman Greenspan and Governors ket5 and will place primary emphasis on providing Johnson, Seger, Angell, Heller, and Kelley. trust-related services to Applicant's customers not currently available through Applicant's existing U.S. JAMES MCAFEE branch and agency. In view of the de novo status of [SEAL] Associate Secretary of the Board Bank and based upon the facts of record, the Board concludes that the proposed transaction will have no Mitsui Trust & Banking Company, Limited Tokyo,Japan 1. Banking data are as of March 31, 1987, and reflect the yen/dollar exchange rate as of that date. Rankings are as of December 31, 1986. 2. Mitsui Trust Finance (Hong Kong) Ltd., Hong Kong (merchant Order Approving Formation of a Bank Holding banking); Mitsui Trust Bank (Europe) S.A., Brussels, Belgium (merchant banking); Mitsui Trust Finance (Switzerland) Ltd., Zurich, Company Switzerland (merchant banking); Mitsui Trust Finance (Australia) Ltd., Sydney, Australia (commercial banking); Mitsui Trust Interna- Mitsui Trust & Banking Company, Limited, Tokyo, tional Ltd., London, England (underwriting and dealing in securities); and Mitsui Trust do Brasil S/C Ltda., Sao Paulo, Brazil (characterized Japan, has applied for the Board's approval under under Brazilian law as a representative office). section 3(a)(1) of the Bank Holding Company Act (the 3. Banking data for branch and agency are as of March 31, 1987. 4. Applicant owns a minority interest in two companies that in turn "Act") (12 U.S.C. § 1842(a)(1)) to become a bank have wholly owned subsidiaries engaged in business in the United holding company by acquiring 100 percent of the States. Mitsui Soko Co., Ltd., a warehousing and leasing company, voting shares of Mitsui Trust Bank (U.S.A.), New owns 100 percent of Mitsui-Soko (U.S.A.), which engages in shipping, trucking, and warehousing. Mitsui Leasing & Development, Ltd., York, New York ("Bank"), a de novo bank. engages in industrial and commercial leasing and installment sales and Notice of the application, affording opportunity for financing. Its wholly owned subsidiary, Mitsui Leasing (U.S.A.) Inc., holds a 70 percent interest in Mitsui Leasing of America Inc. Both are interested persons to submit comments, has been engaged in the same line of business as their parent companies and given in accordance with section 3(b) of the Act. The account for substantially less than 50 percent of the parent companies' time for filing comments has expired, and the Board total assets and revenues. These investments meet the criteria for an exemption under sections 211.23(f)(5)(i) and (ii) of Regulation K (12 C.F.R. 211 et seq.). In addition, Japan's Anti-Trust Law will require Applicant to reduce its holdings in the two companies to 5 5. If 50 percent of deposits held by thrift institutions in the Calumet percent or less by December 31, 1987. banking market were included in the calculation of market concentra- 5. The Metropolitan New York—New Jersey market is defined to tion, the share of total deposits held by the four largest organizations include New York City and Long Island, New York; Putnam, in the market would be 52.4 percent. Applicant would control 11.6 Sullivan, Westchester, Rockland, and Orange Counties in New York; percent of the market's deposits and Bank would control 9.1 percent Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, of the market's deposits. The HHI would increase by 212 points to Ocean, Passaic, Somerset, Sussex, Union, and Warren Counties in 2220. New Jersey; and portions of Fairfield County in Connecticut. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

872 Federal Reserve Bulletin • November 1987 significant adverse effects on existing or probable ences in accounting and regulatory practices. After future competition, and will not significantly increase certain adjustments to account for Japanese banking the concentration of resources in any relevant market. and accounting practices, including consideration of a Thus, competitive considerations are consistent with modest portion of the unrealized appreciation in Appliapproval of the application. cant's portfolio of equity securities (after taking into Section 3(c) of the Act requires the Board in every account possible fluctuations in valuation and the case to consider the financial resources of an applicant effects of taxation), Applicant's capital ratio more organization and the bank or bank holding company to nearly approximates U.S. standards. The Board also be acquired. The Board previously has stated that it has considered additional factors that mitigate its believes that the principles of national treatment and concern. The Board has placed considerable emphasis competitive equity require, in general, that foreign on the fact that Applicant will establish Bank de novo, banks seeking to establish or acquire banking organi- and that Bank will be strongly capitalized and small in zations in the United States meet the same general relation to Applicant. The Board notes further that standards of strength, experience, and reputation as Applicant is in compliance with the capital and other are required of domestic banking organizations and financial requirements of Japanese banking organizathat foreign banks be able to serve on a continuing tions, and that Applicant has given the Board certain assurances regarding its capital. basis as a source of strength to their banking operations in the United States.6 The Board is also aware The Board expects that Applicant will maintain that foreign banks operate outside the United States in Bank as among the more strongly capitalized banking accordance with different regulatory and supervisory organizations of comparable size in the United States. requirements, accounting principles, asset quality Based on these and other facts of record, including standards, and banking practices and traditions, and certain commitments made by Applicant, the Board that these differences make it difficult to compare the concludes that financial and managerial factors are capital positions of domestic and foreign banks. consistent with approval of this application to acquire The appropriate balancing of these concerns raises a Bank. Considerations relating to the convenience and number of complex issues which the Board believes needs of the communities to be served are also consisrequire careful consideration and that the Board con- tent with approval. tinues to have under review. In this regard, the Board Based upon the foregoing and other facts of record, recently has announced a proposal to supplement its the Board has determined that consummation of the consideration of capital adequacy with a risk-based transaction would be in the public interest and that the system that is simultaneously being proposed by the application should be, and hereby is, approved. The Bank of England and the other domestic federal bank- transaction shall not be consummated before the thirtiing agencies. 52 Federal Register 9,304 (1987). The eth calendar day following the effective date of this Board considers this proposal an important step to- Order, or later than three months after the effective ward a more consistent and equitable international date of this Order, and Bank must open for business norm for assessing capital adequacy. While the Board not later than six months after the effective date of this will continue to apply a case-by-case approach during Order. The latter two periods may be extended for the pendency of discussions regarding this proposal, good cause by the Board or the Federal Reserve Bank once such a system is adopted, applications by foreign of New York, pursuant to delegated authority. banks seeking to make acquisitions in the United By order of the Board of Governors, effective States would be judged in the context of such guide- September 2, 1987. lines. Voting for this action: Chairman Greenspan and Governors In the present instance, the primary capital ratio of Johnson, Angell, and Kelley. Absent and not voting: Gover- Applicant, as publicly reported, is well below the nors Seger and Heller. Board's capital adequacy guidelines.7 In similar cases, the Board has considered mitigating factors, including JAMES MCAFEE [SEAL] Associate Secretary of the Board adjustments to an applicant's capital to reflect differ- NewMil Bancorp, Inc. 6. See Ljubljanska Banka-Associated Bank, 72 FEDERAL RESERVE New Milford, Connecticut BULLETIN 489 (1986); The Mitsubishi Trust and Banking Corporation, 72 FEDERAL RESERVE BULLETIN 256 (1986); The Industrial Bank of Japan, Ltd., 72 FEDERAL RESERVE BULLETIN 71 (1986); The Mitsubi- Order Approving Formation of a Bank Holding shi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984). See also Policy Statement on Supervision and Regulation of Foreign- Company Based Bank Holding Companies, Federal Reserve Regulatory Service 11 4-835 (1979). NewMil Bancorp, Inc., New Milford, Connecticut, 7. Capital Adequacy Guidelines, 50 Federal Register 16,057 (1985), 71 FEDERAL RESERVE BULLETIN 445 (1985). has applied for the Board's approval under section Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 873 3(a)(1) of the Bank Holding Company Act ("BHC The financial and managerial resources of Applicant Act" or "Act") (12 U.S.C. § 1842(a)(1)), to become a and Bank are consistent with approval. Considerations bank holding company by acquiring New Milford relating to the convenience and needs of the communi- Savings Bank, New Milford, Connecticut ("Bank").1 ties to be served are also consistent with approval. Notice of the application, affording opportunity for Based on the foregoing and all the facts of record, interested persons to submit comments, has been the Board has determined that the application should given in accordance with section 3(b) of the Act (52 be and hereby is approved. The transaction shall not Federal Register 23,891 (1987)). The time for filing be consummated before the thirtieth calendar day comments has expired, and the Board has considered following the effective date of this Order, or later than the application and all comments received in light of three months after the effective date of this Order, the factors set forth in section 3(c) of the Act unless such period is extended for good cause by the (12 U.S.C. § 1842(c)).2 Board or by the Federal Reserve Bank of Boston Applicant is a nonoperating corporation formed for pursuant to delegated authority. the purpose of acquiring Bank. Upon consummation By order of the Board of Governors, effective of the proposal, Applicant will control total deposits of September 17, 1987. approximately $240.3 million, representing less than one percent of total deposits in commercial banking Voting for this action: Chairman Greenspan and Governors organizations in the state, and would become the 42nd Johnson, Seger, Angell, Heller, and Kelley. largest commercial banking organization in the state.3 Based on all the facts of record, the Board believes JAMES MCAFEE that consummation of the proposal would have no [SEAL] Associate Secretary of the Board significantly adverse effect on the concentration of banking resources in Connecticut. Further, because this proposal represents the re- Yasuda Trust & Banking Company, Limited structuring of Bank's ownership into corporate form, Tokyo,Japan consummation of this proposal would not result in any significantly adverse effect on existing or potential Order Approving Formation of a Bank Holding competition, nor would it increase the concentration Company of banking resources in any relevant banking market. Thus, competitive factors are consistent with ap- Yasuda Trust & Banking Company, Limited, Tokyo, proval. Japan, has applied for the Board's approval under section 3(a)(1) of the Bank Holding Company Act (the "Act") (12 U.S.C. § 1842(a)(1)) to become a bank holding company by acquiring 100 percent of the 1. Applicant also would indirectly acquire Bank's noncontrolling interests in 10 other depository organizations: 9.96 percent of Bran- voting shares of Yasuda Bank & Trust Company, New ford Savings Bank, Branford, Connecticut; 6.93 percent of Brooklyn York, New York ("Bank"), a de novo bank. Savings Bank, Danielson, Connecticut; 5.29 percent of Central Bank Notice of the application, affording opportunity for for Savings, Meriden, Connecticut; 9.99 percent of City Savings Bank, Meriden, Connecticut; 6.3 percent of Derby Savings Bank, interested persons to submit comments, has been Derby, Connecticut; 9.38 percent of Great Country Bank, Ansonia, given in accordance with section 3(b) of the Act. The Connecticut; 9.98 percent of Peoples Savings Bank of New Britain, New Britain, Connecticut; 9.52 percent of West Newton Savings time for filing comments has expired, and the Board Bank, West Newton, Massachusetts; 9.99 percent of MidConn Bank, has considered the application and all comments re- Kensington, Connecticut; and 7.2 percent of West Mass Bankshares, ceived in light of the factors set forth in section 3(c) of Greenfield, Massachusetts. 2. Comments were submitted by The Independent Insurance the Act (12 U.S.C. § 1842(c)). Agents of America, The National Association of Casualty and Surety Applicant, with total unconsolidated assets equiva- Agents, National Association of Life Underwriters, National Association of Professional Insurance Agents, and National Association of lent to approximately $89.3 billion, ranks as the fifth Surety Bond Producers (collectively, "Protestants"). Protestants largest of eight trust banks in Japan.1 Worldwide, claim that the savings bank life insurance ("SBLI") activities con- Applicant ranks as the 25th largest bank. Applicant ducted by bank are prohibited under section 4 of the Act. The Board has considered these comments in conjunction with all the facts of operates 54 branches in Japan as well as seven foreign record, including the recently enacted Competitive Equality Banking branches and agencies and five foreign representative Act of 1987. Pub. L. No. 100-86 (enacted August 10, 1987) offices. In addition, Applicant engages worldwide in ("CEBA"). Section 101(d) of CEBA specifically authorizes the conduct of SBLI activities by a qualified savings bank subsidiary of a banking and nonbanking financial activities through savings bank holding company under the limitations set forth in CEBA. The Board has determined that Bank is a qualified savings bank under CEBA, and Applicant has committed to conduct Bank's SBLI activities in accord with the limitations set forth in that act. Accordingly, Bank may continue to engage in SBLI activities upon consummation of the proposal. 1. Banking data are as of March 31, 1987, and reflect the yen/dollar 3. Banking data are as of March 31, 1987. exchange rate as of that date. Rankings are as of December 31, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

874 Federal Reserve Bulletin • November 1987 four wholly owned subsidiaries located outside Ja- standards, and banking practices and traditions, and pan.2 that these differences make it difficult to compare the In the United States, Applicant operates a branch in capital positions of domestic and foreign banks. New York, New York, with total assets of $4.0 billion3 The appropriate balancing of these concerns raises a and an agency in Los Angeles, California, with total number of complex issues that the Board believes assets of $2.0 billion. Applicant has selected New require careful consideration and that the Board con- York as its home state under the Board's Regulation K tinues to have under review. In this regard, the Board (12 C.F.R. 211.22(b)). Bank will be located in Appli- recently has announced a proposal to supplement its cant's home state. Accordingly, the Board concludes consideration of capital adequacy with a risk-based that the acquisition of Bank by Applicant is consistent system that is simultaneously being proposed by the with Section 5 of the International Banking Act of 1978 Bank of England and the other domestic federal bank- (12 U.S.C. § 3103). ing agencies. 52 Federal Register 9,304 (1987). The Bank, a de novo institution, is being organized as a Board considers this proposal an important step tostate-chartered nonmember bank. It will place primary ward a more consistent and equitable international emphasis on providing trust-related services, and will norm for assessing capital adequacy. While the Board also provide a full range of commercial banking ser- will continue to apply a case-by-case approach during vices in the Metropolitan New York—New Jersey the pendency of discussions regarding this proposal, banking market.4 In view of the de novo status of Bank once such a system is adopted, applications by foreign and based upon the facts of record, the Board con- banks seeking to make acquisitions in the United cludes that the proposed transaction will have no States would be judged in the context of such guidesignificant adverse effects on existing or probable lines. future competition, and will not significantly increase In the present instance, the primary capital ratio of the concentration of resources in any relevant market. Applicant, as publicly reported, is well below the Thus, competitive considerations are consistent with Board's capital adequacy guidelines.6 In similar cases, approval of the application. the Board has considered mitigating factors, including Section 3(c) of the Act requires the Board in every adjustments to an applicant's capital to reflect differcase to consider the financial resources of the appli- ences in accounting and regulatory practices. After cant organization and the bank or bank holding compa- certain adjustments to account for Japanese banking ny to be acquired. The Board has previously stated and accounting practices, including consideration of a that it believes that the principles of national treatment modest portion of the unrealized appreciation in Appliand competitive equity require, in general, that foreign cant's portfolio of equity securities (after taking into banks seeking to establish or acquire banking organi- account possible fluctuations in valuation and the zations in the United States should meet the same effects of taxation), the capital ratio of Applicant more general standards of strength, experience, and reputa- nearly approximates U.S. standards. The Board has tion as are required of domestic banking organizations also considered additional factors that mitigate its and that foreign banks be able to serve on a continuing concern. The Board has placed considerable emphasis basis as a source of strength to their banking opera- on the fact that Applicant will establish Bank de novo, tions in the United States.5 The Board is also aware and that Bank will be strongly capitalized and small in that foreign banks operate outside the United States in relation to Applicant. The Board notes further that accordance with different regulatory and supervisory Applicant is in compliance with the capital and other requirements, accounting principles, asset quality financial requirements of Japanese banking organizations, and that Applicant has given the Board certain 2. Yasuda Trust and Finance (Hong Kong) Limited (financial assurances regarding its capital. services), Yasuda Trust Europe Limited (securities underwriting), The Board expects that Applicant will maintain Yasuda Trust Finance (Switzerland) Ltd. (merchant banking), and Bank as among the more strongly capitalized banking Yasuda Trust Australia Ltd. (banking). 3. Banking data for branch and agency are as of March 31, 1987. organizations of comparable size in the United States. 4. The Metropolitan New York—New Jersey market is defined to Based on these and other facts of record, including include New York City and Long Island, New York; Putnam, certain commitments made by Applicant, the Board Sullivan, Westchester, Rockland, and Orange Counties in New York; Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, concludes that the financial and managerial factors are Ocean, Passaic, Somerset, Sussex, Union, and Warren Counties in consistent with approval of this application. Consider- New Jersey; and portions of Fairfield County in Connecticut. ations relating to the convenience and needs of the 5. See Ljubljanska Banka-Associated Bank, 72 FEDERAL RESERVE BULLETIN 489 (1986); The Mitsubishi Trust and Banking Corporation, community to be served also are consistent with 72 FEDERAL RESERVE BULLETIN 256 (1986); The Industrial Bank of approval. Japan, Ltd., 72 FEDERAL RESERVE BULLETIN 71 (1986); The Mitsubishi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984). See also Policy Statement on Supervision and Regulation of Foreign- Based Holding Companies, Federal Reserve Regulatory Service 1 4- 6. Capital Adequacy Guidelines, 50 Federal Register 16,057 (1985), 835 (1979). 71 FEDERAL RESERVE BULLETIN 445 (1985). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 875 Based upon the foregoing and other facts of record, Incorporated and Bankers Trust New York Corporathe Board has determined that consummation of the tion, 73 FEDERAL RESERVE BULLETIN 473 (1987) ("Citransaction would be in the public interest and that the ticorp/Morgan!Bankers Trust"). The proposed new application should be, and hereby is, approved. The underwriting and dealing activities would be provided transaction shall not be consummated before the thirti- in addition to the above activities. eth calendar day following the effective date of this Morgan, with consolidated assets of $74.7 billion, is Order, or later than three months after the effective the fifth largest banking organization in the nation. It date of this Order, and Bank shall be open for business operates two subsidiary banks and engages directly not later than six months after the effective date of this and through subsidiaries in a broad range of permissi- Order. The latter two periods may be extended for ble nonbanking activities.1 good cause by the Board or the Federal Reserve Bank Notice of the application, affording interested perof New York, pursuant to delegated authority. sons an opportunity to submit comments on the pro- By order of the Board of Governors, effective posal, has been published (52 Federal Register 27,583 September 2, 1987. (1987)). The time for filing comments has expired, and the Board has considered the application and all Voting for this action: Chairman Greenspan and Governors comments received in light of the factors set forth in Johnson, Angell, and Kelley. Absent and not voting: Gover- section 3(c) of the Act (12 U.S.C. § 1842(c)). nors Seger and Heller. On July 14, the Board approved applications by several bank holding companies to underwrite and JAMES MCAFEE deal in CRRs through their bank-eligible securities [SEAL] Associate Secretary of the Board underwriting subsidiaries, limited to securities representing an interest in or backed by a diversified pool of loans to or receivables from individuals, for the pur- Orders Issued Under Section 4 of the Bank pose of financing the purchase of consumer goods and Holding Company Act services (such as auto loans or personal credit card accounts). Chemical New York Corporation, et al., 73 J.P. Morgan & Co. Incorporated FEDERAL RESERVE BULLETIN 731 (1987). The Board New York, New York concluded that the underwriting subsidiaries would not be "engaged principally" in underwriting and Order Approving Application to Engage in Limited dealing in securities within the meaning of section 20 Underwriting and Dealing in Consumer-Receivable- of the Glass-Steagall Act2 provided they derived no Related Securities more than 5 percent of their total gross revenues from underwriting and dealing in approved bank-ineligible J.P. Morgan & Co. Incorporated ("Morgan"), New securities, including CRRs, over any two-year period York, New York, a bank holding company within the and their underwriting and dealing activities did not meaning of the Bank Holding Company Act ("BHC exceed 5 percent of the market during the previous calendar year for each particular type of security Act"), has applied for the Board's approval under involved.3 The Board further found that, subject to the section 4(c)(8) of the BHC Act (12 U.S.C. prudential framework of limitations established in the § 1843(c)(8)) and section 225.23 of the Board's Regula- Citicorp/Morgan/Bankers Trust and Chemical Orders tion Y (12 C.F.R. § 225.23) to engage de novo through to address the potential for conflicts of interest, un- J.P. Morgan Securities Inc. ("Company") in undersound banking practices or other adverse effects, the writing and dealing in, on a limited basis, consumerproposed underwriting and dealing activities were so receivable-related securities ("CRRs"). closely related to banking as to be a proper incident Company currently underwrites and deals in securities that state member banks are permitted to underwrite and deal in under the Glass-Steagall Act (hereinafter "bank-eligible securities"), as permitted by section 225.25(b)(16) of Regulation Y (12 C.F.R. 1. Banking data are as of June 30, 1987. 2. Section 20 of the Glass-Steagall Act (12 U.S.C. § 377) prohibits § 225.25(b)(16)). Company has also previously received the affiliation of a member bank with "any corporation . . . engaged Board approval under section 4(c)(8) of the BHC Act principally in the issue, flotation, underwriting, public sale, or distrito underwrite and deal in commercial paper, 1-4 bution at wholesale or retail or through syndicate participation of stocks, bonds, debentures, notes, or other securities . . . ." family mortgage-related securities and certain munici- 3. As noted in the Board's Chemical Order, the Board believes it is pal revenue bonds (including "public ownership" in- appropriate to treat CRRs and 1-4 family mortgage-related securities dustrial development bonds) (hereinafter "bank-ineli- as a single category for the time being, in view of the similarity between CRRs and these mortgage-related securities. 73 FEDERAL gible securities"). Citicorp, J.P. Morgan & Co. RESERVE BULLETIN at 734 n.5. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

876 Federal Reserve Bulletin • November 1987 thereto within the meaning of section 4(c)(8) of the The Board notes that the court has stayed the effec- BHC Act. tiveness of these Board Orders pending judicial re- For the reasons set forth in the Board's Citicorp/ view. In light of the pendency of this litigation, the Morgan/Bankers Trust and Chemical Orders, the Board has determined that this Order should be stayed Board concludes that Applicant's proposal to engage for such time as the stay of the prior decisions is through Company in underwriting and dealing in CRRs effective. will not result in a violation of section 20 of the Glass- By order of the Board of Governors, effective Steagall Act and is closely related and a proper inci- September 8, 1987. dent to banking within the meaning of section 4(c)(8) of the BHC Act, provided Company's activities are con- Voting for this action: Vice Chairman Johnson and Goverducted in accordance with the limitations established nors Seger, and Heller. Voting against this action: Governor Angell. Absent and not voting: Chairman Greenspan and in those Orders. Accordingly, the Board has deter- Governor Kelley. mined to approve the application subject to all of the terms and conditions established in the Citicorp/Mor- JAMES MCAFEE gan/Bankers Trust and Chemical Orders. The Board [SEAL] Associate Secretary of the Board hereby adopts and incorporates herein by reference the reasoning and analysis contained in those Orders. The Board's approval of this application extends Dissenting Statement of Governor Angell only to activities conducted by Company within the limitations of the Citicorp/Morgan/Bankers Trust and For the reasons set forth in my dissenting statement in Chemical Orders, including the Board's reservation of the Chemical Order, I regret I am unable to join the authority to establish additional limitations to ensure majority in approving this application. that the subsidiary's activities are consistent with safety and soundness, conflict of interest and other September 8, 1987 relevant considerations under the BHC Act. Underwriting or dealing in CRRs in any manner other than as Merchants National Corporation approved in those Orders is not within the scope of the Indianapolis, Indiana Board's approval and is not authorized for Company. The Board's determination is subject to all of the Order Regarding Insurance Agency Activities conditions set forth in the Board's Regulation Y, Conducted By Banking Subsidiaries including those in sections 225.4(d) and 225.23(b), and to the Board's authority to require modification or Merchants National Corporation, Indianapolis, Inditermination of the activities of a bank holding compa- ana ("Merchants"), a bank holding company within ny or any of its subsidiaries as the Board finds the meaning of the Bank Holding Company Act necessary to assure compliance with, and to prevent ("BHC Act") (12 U.S.C. § 1841 et seq.), has applied evasion of, the provisions of the BHC Act and the under section 4(c)(8)(D) of the BHC Act (12 U.S.C. Board's regulations and orders issued thereunder. § 1843(c)(8)(D)) and section 225.25(b)(8)(iv) of Regula- The Board notes that Title II of the Competitive tion Y (12 C.F.R. § 225.25(b)(8)(iv)), for permission Equality Banking Act of 1987, enacted on August 10, for its wholly owned subsidiary, the Anderson Bank- 1987, prohibits the Board from authorizing a bank ing Company, Anderson, Indiana ("Anderson holding company to engage in underwriting or dealing Bank"), to resume the conduct of certain insurance in securities under the "engaged principally" provi- agency activities authorized for state banks under sion of the Glass-Steagall Act, unless the effective Indiana law.1 Alternatively, Merchants seeks a Board date of the Order is delayed until the expiration of a determination that the nonbanking prohibitions of secmoratorium time period established under the Act.4 tion 4 of the BHC Act do not apply to activities Accordingly, the Board has determined to delay the conducted directly by banking subsidiaries of a bank effective date of this Order until the moratorium ends holding company, thereby permitting Anderson Bank on March 1, 1988. and another of Merchants's state bank subsidiaries, In addition, the Board notes that the SIA has sought Mid State Bank of Hendricks County, Danville, Indijudicial review in the U.S. Court of Appeals for the ana ("Mid State Bank"), to resume insurance agency Second Circuit of the Citicorp!Morgan!Bankers Trust and the Chemical Orders to which this Order pertains. 1. Ind. Code § 28-1-11-2 provides that "any bank or trust company shall have power ... to solicit and write insurance as agent or broker for any insurance company authorized to do business in this 4. Pub. L. No. 100-86, §§ 201-02 (1987). state, other than a life insurance company." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 877 activities. In both cases the insurance agency activities ment, protestants contend that the terms and legislawould be conducted directly by the banks and not tive history of the BHC Act, especially the legislative through subsidiaries of the banks.2 history of Title VI of the Garn-St Germain Act, On October 29, 1986, the Board approved applica- indicate that the nonbanking and insurance provisions tions by Merchants under section 3 of the BHC Act to of section 4 of the BHC Act apply to all bank holding acquire Anderson Bank and Mid State Bank. 72 FED- company activities, including activities conducted by a ERAL RESERVE BULLETIN 838 (1986). The applications subsidiary bank of the holding company. In proteshad been protested by various insurance industry tants' view, a bank holding company's activities, trade groups on the ground that, as subsidiaries of a whether conducted directly by the holding company or bank holding company, the insurance agency activities by any of its subsidiaries, including bank subsidiaries, then being conducted by the banks pursuant to Indiana are limited by the terms of the BHC Act to "banking" law would be prohibited under section 4 of the BHC activities and activities permitted under the closely- Act, as amended by Title VI of the Garn-St Germain related to banking standard in section 4(c)(8) of the Depository Institutions Act of 1982.3 As discussed BHC Act (or one of the other specific exemptions in below, the Garn-St Germain Act amended section the BHC Act, none of which are relevant here). 4(c)(8) of the BHC Act to provide that, with seven Protestants argue that because the Anderson and Mid specific exceptions, insurance activities are not close- State Banks' insurance activities are not "banking" ly related to banking, thereby removing the Board's and do not qualify under any of the insurance exempdiscretion to authorize insurance activities as a per- tions to section 4(c)(8) of the BHC Act as closely missible nonbanking activity for bank holding compa- related to banking, Merchants may not engage in the nies under the closely related to banking standard of activities through the banks.5 section 4(c)(8) of the BHC Act. After considering the comments of all interested In response to the protests, Merchants committed parties and for the reasons set forth below, the Board that, unless it received Board approval in the mean- has determined to grant Merchants' request for relief time for the banks to retain their insurance activities, it from its earlier commitments on the alternative would cause the banks to divest the insurance agency grounds advanced by Merchants, thereby permitting activities within two years and, in the interim, to Anderson Bank and Mid State Bank to resume the refrain from the sale of any new insurance policies insurance agency activities they terminated when they except for the renewal of existing policies. Merchants were acquired by Merchants in 1986. has now sought the Board's approval for these banks Initially, the Board has determined that Anderson to resume their insurance activities. Bank and Mid State Bank do not qualify under section Notice of the application, affording interested per- 4(c)(8)(D), the grandfather provision of the Garn-St sons an opportunity to submit comments on the pro- Germain Act (hereinafter "exemption D"), to engage posal, has been published (52 Federal Register 8,966 in insurance agency activities. Exemption D permits a (1987)). The time for filing comments has expired, and bank holding company or any of its subsidiaries to the Board has considered the application and all engage in any insurance agency activity in which the comments received, including those of various insur- bank holding company or subsidiary was engaged on ance trade associations ("protestants").4 May 1, 1982, subject to certain geographic and func- Protestants contend that the banks do not qualify tional limitations. Exemption D, however, applies under any of the seven exemptions to the insurance only to entities that were bank holding companies or provisions in the Garn-St Germain Act and that, therefore, they may not resume their insurance agency activities. With respect to Merchants' alternative argu- 5. Protestants also argue that Merchants should be bound by its earlier commitments to divest the banks' insurance activities because Merchants voluntarily offered the commitments with full knowledge 2. The record shows that Anderson Bank, prior to its acquisition by of their limitations and that, in any event, the commitments preclude Merchants, engaged directly in insurance agency activities since the Merchants from arguing that the provisions of section 4 of the BHC bank's incorporation in 1916, and that Mid State Bank acquired an Act do not apply to the direct activities of the banks. insurance agency in 1985. Prior to consummation of this proposal, Mid In the Board's view, however, the commitments contemplated that State Bank will transfer the insurance activities of the subsidiary to Merchants could request Board relief from the commitments. While the bank itself, which will thereafter conduct the activities directly. couched in terms of seeking Board approval on the Board's applica- Anderson Bank and Mid State Bank would act as agent for a full line tion Form Y-4, the commitments did not represent a concession by of property and casualty coverage. Merchants that section 4 applied to the direct activities of the banks. 3. Pub. L. No. 97-320, codified at 12 U.S.C. § 1843(c)(8). Rather, the application would provide a forum for evaluating the 4. The Board has received comments protesting the application issues and arguments raised by the proposal apart from Merchants' from the National Association of Life Underwriters, National Associ- earlier application to acquire the banks. Accordingly, the Board does ation of Professional Insurance Agents, Independent Insurance not consider that the commitments limit either the right of Merchants Agents of America, Inc., National Association of Casualty and Surety to request relief or the arguments Merchants may put forward in Agents, and National Association of Surety Bond Producers. support of that relief. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

878 Federal Reserve Bulletin • November 1987 subsidiaries of bank holding companies on May 1, vestments of bank holding companies. With respect to 1982. The record shows that on May 1, 1982, Ander- investments, section 4 prohibits, with certain specific son Bank was not a subsidiary of a bank holding exceptions, a bank holding company from acquiring or company and, therefore, does not qualify under Ex- retaining, directly or indirectly, voting shares of any emption D. Similarly, Mid State Bank does not qualify company except a bank.10 The principal exception to under Exemption D because it did not commence this prohibition is for shares of companies engaged in selling insurance until after the May 1, 1982 grandfa- activities that the Board has determined are closely ther date.6 related to banking. By its terms, this restriction in Accordingly, the Board has considered Merchants's section 4 does not apply to shares of a company which alternative grounds for relief. On the basis of the is a bank. Thus, a bank holding company that controls record before it and the comments received, the Board an institution that qualifies as a "bank" under the has determined that the direct insurance activities of definition in the Act is not required, in order to acquire Anderson and Mid State Banks are not limited by the or retain the shares of the institution, to limit the nonbanking provisions of section 4 of the BHC Act or, institution's activities to those permitted under the consequently, the insurance provisions of the Garn-St closely related to banking standard of section 4 (or one Germain Act.7 In the Board's view, the nonbanking of the other limited exceptions in the BHC Act), provisions of section 4, do not apply to limit the direct except where the record demonstrates an evasion of activities of holding company banks, except where the the BHC Act, such as presented in the Citicorp/South Dakota case. It is only companies that do not qualify record demonstrates the type of evasion described in the Citicorp!South Dakota case,8 a situation not pre- as "banks" under the BHC Act that must limit their sent in the instant case.9 The Board believes this view nonbanking activities to those permitted under the closely related to banking standard in section 4(c)(8) of is consistent with the terms and purposes of the BHC the BHC Act (or qualify under some other exception) Act and the Board's prior interpretations and longin order to be acquired or retained directly or indirectstanding practice. ly by a bank holding company. Section 4 of the BHC Act contains two provisions that together limit the nonbanking activities and in- In addition to the above limitation, section 4 of the BHC Act provides that a bank holding company may not "engage in any activities other than (A) those of banking or of managing or controlling banks and other 6. Mid State Bank appears to qualify for the exemption provided in subsidiaries authorized under the Act" and activities section 4(c)(8)(C) of the BHC Act for insurance agency activities the Board has determined to be closely related to conducted in a town of less than 5,000 inhabitants. In this application, Merchants initially had proposed that Mid State Bank conduct the banking. 12 U.S.C. § 1843(a)(2). Protestants contend insurance agency activities through a wholly owned subsidiary under that this provision applies not only to activities conexemption C. Merchants, however, subsequently withdrew that reducted directly by a bank holding company, but also to quest and amended the proposal to conduct the insurance activities directly by Mid State Bank on the basis discussed below that the activities conducted indirectly through any subsidiary nonbanking provisions of the BHC Act do not apply to the direct of the bank holding company, including a subsidiary activities of holding company banks. bank. 7. As noted, Title VI of the Garn-St Germain Act does not establish a prohibition on the conduct of insurance activities by bank holding The Board has not, however, since enactment of the companies separate from or in addition to the general nonbanking BHC Act read this or any other portion of the nonprohibitions of section 4 of the BHC Act. Rather, Title VI limits the Board's discretion to authorize bank holding companies to conduct banking prohibitions of section 4 as applying to the these activities under the exception to the nonbanking provisions of direct activities of holding company banks, nor, as the Act for activities that the Board determines are closely related to discussed below, does the legislative history of the banking under section 4(c)(8) of the Act. Thus, the provisions of the Garn-St Germain Act have no applicability where the nonbanking BHC Act provide any indication that Congress intendprovisions of section 4 of the Act do not apply. ed the Board to do so. Moreover, the structure of the 8. 71 FEDERAL RESERVE BULLETIN 798 (1985). In that case, the Board found, based on the structure of the South Dakota statute, the operating plans of Citicorp, and the fact that the bank would serve primarily as an insurance subsidiary of Citicorp and would conduct only insignificant banking activities, that the acquisition of the bank was primarily, if not solely, for the purpose of enabling Citicorp to engage through the bank in various insurance activities. The Board did 10. Section 4(a) of that Act provides: not address the question raised in this case regarding whether the Except as otherwise provided in this Act, no bank holding company prohibitions of section 4 of the Act apply to the direct activities of shall holding company banks where no evidence of evasion is presented. (1). . . acquire direct or indirect ownership or control of any voting shares of 9. In this case, the record does not show that the banks would be any company which is not a bank, or (2) ... retain direct or indirect operated by Merchants predominantly as insurance agencies or that ownership or control of any voting shares of any company which is not a bank the acquisition of the banks is a device to enable the applicant to or bank holding company or engage in any activities other than (A) those of banking or of managing or controlling banks and other subsidiaries authorized engage in insurance activities. Rather, the record shows that the under this Act. . and (B) those permitted under paragraph (8) of subsection insurance activities of the banks are incidental and small relative to (c) of this section [the closely-related to banking exception] . . . (emphasis their banking operations. supplied) 12 U.S.C. § 1843(a). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 879 BHC Act indicates that this provision of section 4(a)(2) designed to fit. At the time Congress enacted the BHC was intended to apply to the activities of bank holding Act in 1956, as today, banks were examined and companies themselves, many of which are operating regulated by the federal or state bank chartering companies engaged directly in nonbanking activities as authority. Congress enacted the BHC Act not to well as in controlling banks and companies engaged in address concerns regarding the activities permitted by permissible nonbanking activities.11 This reading har- the chartering authority for national and state banks, monizes the provisions of section 4 of the BHC Act, but rather to address the adverse effects Congress with one provision limiting the types of companies the discerned in the affiliation of banks with companies shares of which a bank holding company may acquire engaged in nonbanking activities, directly or indirectand retain (banks and other companies authorized ly. Congress deliberately did not disturb the existing under the BHC Act), and the second limiting in a bank regulatory framework, and intended for the OCC similar manner the activities in which the bank holding and the state banking authorities to remain as the company itself may engage to banking, managing and primary regulatory authorities responsible for their controlling banks and authorized nonbank companies, respective institutions, national banks and state-charand activities closely related to banking. tered banks.12 There is no indication in the BHC Act's legislative history that the nonbanking provisions of The Board notes that, just as is the case with respect the BHC Act were intended to regulate the direct to the BHC Act's limitations on the acquisition of activities of banks acquired by bank holding compavoting shares of any company, the limitation in section nies.13 4(a)(2) of the BHC Act on the activities of the bank holding company also differentiates between banks For the foregoing reasons, the Board has deterand other types of companies. Section 4(a)(2) of the mined that section 4 of the BHC Act does not limit the BHC Act permits a bank holding company to control sale of insurance directly by Anderson Bank and Mid banks without any limitation on their activities, but State Bank within the banks as proposed, and that the provides that a bank holding company may control banks may, therefore, insofar as the BHC Act is other companies only if their activities are authorized under the closely related to banking or other nonbanking exceptions in the BHC Act. The reading suggested by the protestants, on the 12. See S. Rep. No. 1095, Part 2, 84th Cong., 2d Sess. 5 (1956). The BHC Act does, however, provide the Board with certain supervisory other hand, would make the provision restricting the authority over holding company banks. For example, the Board may types of companies that may be controlled by bank examine any bank that is a subsidiary of a bank holding company (12 U.S.C. § 1844(c)), and is required to evaluate the management and holding companies to banks and authorized nonbanks financial condition of any bank that a bank holding company proposes superfluous. If a bank holding company is deemed to to acquire (12 U.S.C. § 1842(c)). be engaged in each activity in which a company it 13. H. Rep. No. 387, 91st Cong., 1st Sess. 15 (1969); 115 Cong. Rec., E 9016-17 (daily ed. October 28, 1969) (statement of Rep. controls is engaged, as the protestants suggest, the Brown); 115 Cong. Rec., H 10503 (daily ed. November 4, 1969)(stateother provision of section 4 prohibiting a bank holding ment of Rep. Stanton).5(7/^ to Amend the Bank Holding Company Act company from controlling nonbank companies unless of 1956: Hearings on S. 1052, S. 1211, S. 1664, S. 3823, andH.R. 6778 Before the Senate Comm. on Banking and Currency, 91st Cong., 2nd engaged in permissible activities would be unneces- Sess. 144, 157-158 (1970) (statement of Arthur Burns, Chairman of the sary. Accordingly, the Board believes that the provi- Federal Reserve Board) (hereinafter cited as 1970 Senate hearings); sion of section 4(a)(2) of the BHC Act limiting the 1970 Senate Hearings at 179-81 (Colloquy between Senator Packwood and Frank Willie, Chairman of the FDIC). activities in which a bank holding company may The Board has considered protestants' references to language from "engage" applies only to the activities of the bank the Senate Conference Report on Title VI of the Garn-St Germain Act (S. Rep. No. 97-641, 97th Cong. 2d Sess. 91 (1982)), which states that holding company itself, and that activities of subsidiar- Title VI would prohibit "bank holding companies and their subsidiaries of the bank holding company are regulated through ies" from selling and underwriting insurance. In the Board's view, in provisions limiting the companies that a bank holding the context of the terms of the Act, the purpose of the Garn-St Germain Act and the longstanding practice of not applying the company may invest in and control to banks and other nonbanking provisions of the Act to the direct activities of holding companies engaged in activities permitted for bank company banks, the reference in the report to subsidiaries was meant holding companies under the BHC Act. to refer to nonbanking subsidiaries. The Board notes that references in earlier reports on the Title VI This reading of the BHC Act is consistent with the legislative history indicate that section 4 and thus the proposed regulatory framework within which the BHC Act was legislation would apply to bank holding companies and their "nonbank subsidiaries." S. Rep. No. 96-923, 96th Cong., 2d Sess. 2 (1980); S. Rep. No. 97-536, 97th Cong., 2d Sess. 36, 38-40 (1982). See also, H. Rep. No. 96-845, 96th Cong., 2d Sess. 2-3 (1980) ("the BHC Act generally prohibits a bank holding company from owning the shares of 11. The portion of section 4 that authorizes a bank holding compa- any company that is not a bank.") There is no indication of any ny to engage in "banking" is intended to provide for those few Congressional intent in the Title VI amendments to section 4(c)(8) of situations that existed in 1956 in which the bank holding company was the Act to extend the coverage of the nonbanking prohibitions of itself a bank. See Heller, Federal Bank Holding Company Law, section 4(a) of the Act to the direct activities of holding company § 4.02(1). banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

880 Federal Reserve Bulletin • November 1987 concerned, resume within the banks the sale of insur- In December 1986, in light of the trend to expand ance as permitted under Indiana law. significantly the real estate development powers of The Board notes that its views regarding the cover- state banks, the Board asked for comment on whether age of section 4 have not been the same where the to amend this regulation to prohibit holding company insurance activities are conducted by companies con- banks from acquiring or retaining voting shares or trolled by holding company banks. Under the BHC control of companies engaged in real estate develop- Act, shares of a company held by a holding company ment activities or to limit such acquisitions to those bank are deemed to be indirectly held by the parent situations which the Board proposed to permit for holding company (12 U.S.C. § 1841(g)) and, therefore, bank holding companies. 52 Federal Register 543, 551 under the terms of the Act, their ownership or control (1987). In its request, the Board noted the questions by a bank holding company must qualify under the raised by commenters in response to an earlier request closely related to banking or one of the other excep- for comment on the real estate activities of bank tions in section 4 of the BHC Act.14 The Board holding companies concerning the coverage of the adopted this view in 1956,15 which was confirmed by nonbanking provisions of section 4 of the BHC Act to the Congress in 1966 with the enactment of section a wholly owned subsidiary of a holding company state 2(g)(1) of the BHC Act.16 bank that engages only in activities the bank may conduct directly. The Board summarized the argu- In this regard, however, in 1971 the Board adopted ments advanced by commenters in support of and in section 225.22(d)(2) of Regulation Y (formerly section opposition to the view that the nonbanking provisons 225.4(e)), which authorizes a state bank owned by a of the BHC Act applied to such subsidiaries, and bank holding company to acquire and retain all (but indicated it would consider any further comments in not less than all) of the voting shares of a company, connection with the rulemaking on the real estate without Board approval under the BHC Act, so long as investment proposal. the company engages solely in activities the parent bank may conduct directly and at locations at which The Board received numerous comments on this the bank could conduct the activities. 12 C.F.R. issue, including comments from the protestants in this 225.22(d)(2).17 The Board adopted this regulation in case reiterating the views they have advanced in this order to permit holding company state banks to com- and other cases regarding the coverage of section 4 of pete on equal footing with state banks that are not in a the BHC Act to holding company state banks and their holding company system and in the absence of evi- subsidiaries. As the Board has previously stated, the dence that such acquisitions were resulting in evasions Board intends to decide the issue of the applicability of of the BHC Act. At that time, however, the Board the nonbanking provisions of the BHC Act to wholly stated that it would review the merits of the decision owned subsidiaries of holding company state banks in from time to time in light of its experience in adminis- connection with the real estate investment rulemaking tering the Act.18 in which it has had the benefit of extensive public participation. The Board intends to complete that rulemaking within the next six months, or by March 1, 1988. 14. Similarly, a bank holding company is deemed to control any company that is controlled by the holding company's subsidiaries. 12 U.S.C. § 1841(a)(2). Under section 4(a)(2) of the BHC Act, in order Effect of the Competitive Equality Banking Act of 1987 for the holding company to maintain control of such a company, the company must be a "bank" or a company whose activities qualify under one of the Act's nonbanking exceptions. 12 U.S.C. Title II of the Competitive Equality Banking Act of § 1843(a)(2). 1987 ("CEBA") prohibits the Board, except in certain 15. 12 C.F.R. § 225.101. See Security Pacific Corporation, 72 limited circumstances not relevant here, from approv- FEDERAL RESERVE BULLETIN 800, 801 (1986); Citicorp 71 FEDERAL RESERVE BULLETIN 789, 791 n.6 (1985). ing from March 6, 1987, until March 1, 1988, the 16. S. Rep. No. 1179, 89th Cong., 2d Sess. 8 (1966). See also 1970 acquisition by a bank holding company of any compa- Senate Hearings at 198 (Statement of William B. Camp, U.S. Comptroller of the Currency) ("There is no legal doubt that any acquisition ny, including a state-chartered bank, unless the bank by the national bank subsidiary would be an indirect acquisition by the holding company agrees to limit the Insurance activione-bank holding company.") ties of the company in the United States to those 17. Section 225.22(d)(1) of Regulation Y authorizes a national bank to acquire and retain voting shares of a company in accordance with permitted for bank holding companies under section the rules of the Comptroller of the Currency. 12 C.F.R. 225.22(a)(1). 4(c)(8) of the BHC Act.19 As protestants point out, the 18. The Board stated: Conference Report on CEBA states that this provision The Board should not at this time apply the [nonbanking] restrictions [of the BHC Act] to subsidiaries of banks. This decision is believed was intended to close the so-called "South Dakota warranted by considerations of equity between banks that are and are not members of bank holding companies and by the absence of evidence that acquisition by holding company banks are resulting in evasions of the purpose of the Act. The merits of this decision will be reviewed by the Board from time to time in light of its experience in 19. Pub. L. No. 100-86, section 201(b)(4), 101 Stat. 552, 581-3 administering the Act. (36 Federal Register 9292 (May 22, 1971)). (1987), to be codified at 12 U.S.C. § 1841 note. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 881 loophole" during the moratorium period.20 Under the activities pending Board resolution of the questions South Dakota loophole, a bank holding company raised by protestants were not required by the BHC would acquire a state bank for the purpose of enabling Act, but were provided only to expedite consideration the bank holding company to engage in insurance of the bank applications. The Board's decision to grant activities through the state bank.21 This section of Title relief from the commitments, thus, does not constitute II, however, by its terms only prohibits Board approv- the authorization of any activity under the BHC Act. al for acquisitions during moratorium. In this case, the In this regard, the Board notes that Title II provides Board approved Merchants' acquisition of the banks that the existence of the moratorium shall not be in question in October 1986, prior to the commence- construed "to increase, decrease, or affect in any way ment of the moratorium on March 6, 1987. the authority of State-chartered bank subsidiaries of Title II also imposes a moratorium on any Federal bank holding companies with respect to insurance banking agency action — whether by rule, regulation, activities."23 Title II also provides that it shall not be or order — that "would have the effect of increasing "construed to increase or reduce the insurance authorthe insurance powers" of banks or bank holding ity of bank holding companies or banking or nonbankcompanies or of banking or nonbanking subsidiaries ing subsidiaries thereof or of national banks under thereof, either with respect to specific banks or bank current law."24 holding companies, beyond the insurance powers per- For the foregoing reasons, the Board has determitted for bank holding companies under section mined not to delay the effective date of its decision 4(c)(8) of the BHC Act, unless the effective date of the granting the relief requested by Merchants until the action is delayed until the expiration of the moratori- moratorium established by Title II of CEBA expires um.22 The Board believes that this provision of Title II on March 1, 1988. also would not prohibit the Board's grant of the relief By order of the Board of Governors, effective sought by Merchants in this case because that action September 10, 1987. would not have the effect of increasing the "insurance powers" of the banks. The banks already have these Voting for this action: Chairman Greenspan and Governors powers by virtue of state law and those powers are not Johnson, Angell, and Heller. Absent and not voting: Goverand have never been limited by the BHC Act. nors Seger and Kelley. In the Board's view, the terms and structure of Title II demonstrate that this provision was directed at JAMES MCAFEE situations where a federal banking agency proposes to [SEAL] Associate Secretary of the Board authorize additional insurance powers pursuant to statutory authority administered by the agency. In this regard, section 202 of Title II indicates that the Title II moratorium provisions were directed at a federal Orders Issued Under Sections 3 and 4 of the banking agency's exercise of "its legal authority . . . Bank Holding Company Act to expand the securities, insurance, or real estate powers of banks or bank holding companies that are First Interstate Bancorp subject to the moratorium established under section Los Angeles, California 201 . . ." 101 Stat, at 584. As discussed above, the Board's decision in this Order Approving Acquisition of a Bank Holding case does not involve the exercise of any authority it Company has under the BHC Act to permit or to prohibit the conduct by banks or bank holding companies of insur- First Interstate Bancorp, Los Angeles, California, a ance activities. The Board's action merely represents bank holding company within the meaning of the Bank a reaffirmation of its consistent view that the nonbank- Holding Company Act (12 U.S.C. § 1841 et seq.) (the ing prohibitions of section 4 of the BHC Act do not "Act"), has applied for the Board's approval under apply to limit the direct activities or powers of holding section 3 of the Act (12 U.S.C. § 1842) to acquire company banks, except in cases of evasion. The Allied Bancshares, Inc., Houston, Texas ("Compacommitments offered by Merchants in connection with ny"), and thereby indirectly to acquire the bank its acquisition of the banks to suspend their insurance subsidiaries of Company listed in Appendix A to this 20. H. Rep. No. 100-261, 100th Cong., 1st Sess. 148 (1987). 21. See, e.g., Citicorp!South Dakota, supra. 23. Section 201(e)(2), 101 Stat, at 583. 22. Sections 201(b)(3) and 202, 101 Stat, at 582 and 584. 24. Section 201(d), 101 Stat, at 583. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

882 Federal Reserve Bulletin • November 1987 Order.1 Applicant also has applied under section bank holding companies.5 The Texas Banking Depart- 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and sec- ment has informed the Board that it has no objection to tion 225.23(a)(2) of Regulation Y (12 C.F.R. this proposal. Based on its review of the record, the § 225.23(a)(2)) to acquire the nonbanking subsidiaries Board has determined that the proposed acquisition is of Company.2 specifically authorized by the statute laws of Texas Notice of the applications, affording opportunity for and thus that Board approval of the application is not interested persons to submit comments, has been prohibited by the Douglas Amendment. published (52 Federal Register 27,056 (1987)). The The Board has considered the effects of the proposal time for filing comments has expired, and the Board upon competition in the relevant banking markets. has considered the applications and all comments Because Applicant does not operate a bank in any received in light of the factors set forth in sections 3(c) market in which Company operates a banking subsidand 4(c)(8) of the Act. iary, consummation of the proposal would not elimi- Applicant is the fourth largest commercial banking nate significant existing competition in any relevant organization in California with deposits in California of banking market. Consummation of the proposed transapproximately $14.8 billion, representing approxi- action also would not have any significant adverse mately 7.6 percent of the total deposits in commercial effect on probable future competition in any relevant banks in that state.3 Company is the fifth largest banking market. commercial banking organization in Texas with do- In evaluating these applications, the Board has mestic deposits of approximately $8.1 billion, repre- considered the financial resources of Applicant and senting approximately 5.3 percent of the total deposits the effect on those resources of the proposed acquisiin commercial banks in Texas. tion. The Board has stated and continues to believe Section 3(d) of the Act, 12 U.S.C. § 1842(d), the that capital adequacy is an especially important factor Douglas Amendment, prohibits the Board from ap- in the analysis of bank holding company proposals, proving an application by a bank holding company to particularly in transactions, such as this, involving the acquire a bank located outside of the bank holding acquisition of a large organization experiencing financompany's home state, unless the acquisition is "spe- cial difficulties. cifically authorized by the statute laws of the state in In this regard, the Board expects that banking which such bank is located, by language to that effect organizations experiencing substantial growth interand not merely by implication."4 nally and by acquisition, such as Applicant, should Effective January 1, 1987, Texas enacted an inter- maintain a strong capital position substantially above state banking statute that permits, subject to certain the minimum levels specified in the Board's Capital limitations, out-of-state bank holding companies, such Adequacy Guidelines.6 The Board will carefully anaas Applicant, to acquire established Texas banks and lyze the effect of expansion proposals on the preservation or achievement of such capital positions. This acquisition has been structured as an exchange of shares, and Applicant will not incur any debt to effect the proposal. Nevertheless, the proposal will reduce Applicant's tangible primary capital ratio, al- 1. Applicant will acquire Company through a merger of Company though Applicant's capital position upon consummawith First Interstate Bancorp of Texas, Inc., Los Angeles, California tion will continue to be well above the minimum ("FI-Texas"), a wholly owned subsidiary of Applicant organized by requirements under the Board's Capital Guidelines. Applicant to effect the acquisition. In connection with this application, FI-Texas has applied to become a bank holding company and acquire The Board also notes that Applicant's existing and the banking and nonbanking subsidiaries of Company. projected consolidated earnings and parent cash flow 2. These are: Allied Bancshares Brokerage, Inc., Houston, Texas; appear sufficient to provide flexibility, if pro forma Allied Bancshares Leasing, Inc., Houston, Texas; Allied Life Insurance Company of Texas, Houston, Texas; and Allied Trust Company, earnings are lower than anticipated. Further, the Houston, Texas. By separate application, Applicant has applied under section 4(c)(8)(D) to acquire Allied Agency, Inc., Houston, Texas, a company engaged in acting as managing general agent for the vendor single interest programs of the subsidiary banks of Company. This application will be acted on separately by the Board. 5. Tex. Rev. Civ. Stat. Ann. art. 342-916 (Vernon 1986). The Board 3. Data are as of June 30, 1986. Applicant also operates banks in the previously has approved the acquisition of a Texas bank by an out-ofstates of Oregon, Washington, Arizona, Nevada, Colorado, Utah, state bank holding company. State First Financial Corporation, 73 Idaho, New Mexico, Wyoming, Montana, and Alaska. FEDERAL RESERVE BULLETIN 307 (1987); Chemical New York Corpo- 4. A bank holding company's home state for purposes of the ration , 73 FEDERAL RESERVE BULLETIN 378 (1987). Douglas Amendment is that state in which the total deposits of its 6. Capital Adequacy Guidelines, 50 Federal Register 16,057, banking subsidiaries were largest on July 1, 1966, or on the date it 16,066-67 (April 24, 1985) (71 FEDERAL RESERVE BULLETIN 445 became a bank holding company, whichever date is later. 12 U.S.C. (1985)); National City Corporation, 70 FEDERAL RESERVE BULLETIN § 1842(d). 743, 746 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 883 Board notes that the proposed acquisition will tants generally allege that certain of Applicant's and strengthen the condition of Company not only by the Company's subsidiary banks have failed to meet the removal from Company of a substantial portion of credit needs of the low- and moderate-income areas in Company's nonperforming loans but also by granting the communities the banks serve. In addition, some of greater access for Company to sources of funding and the protestants allege that the banks involved do not expanded banking services. meet the credit needs of minority areas in the commu- After a review of Applicant's proposal in light of nities they serve. Further, the protestants allege that Company's financial condition and on the basis of the the banks are not making special efforts, such as above considerations and Applicant's continuing steps communication, marketing, or special programs, to to strengthen its capital position, the Board concludes ascertain or to meet the credit needs of these commuthat financial factors are consistent with approval of nities. the proposal. The Board notes that the proposed In accordance with the Board's practice and procetransaction represents another significant step in the dure for handling protested applications,10 the Federal process of resolving the financial difficulties associa- Reserve Banks of San Francisco, Kansas City, Minneted with the weak Southwestern regional economy. apolis, and Dallas assisted in arranging meetings be- The Board also finds that the managerial resources tween the parties in the majority of the protests to of Applicant, Company, and their respective banking clarify the issues under the CRA and to provide a subsidiaries are satisfactory. In reaching this decision, forum to resolve the concerns raised by the protests.11 the Board has considered certain violations by Appli- The parties, however, were unable to come to a cant and Company of the Currency and Foreign Trans- resolution of their differences. actions Reporting Act ("CFTRA").7 The Board notes Initially, the Board notes that Applicant's subsidiary that Applicant and Company have now established banks have received satisfactory CRA assessments comprehensive policies and procedures to ensure fu- from their primary supervisory agencies. Applicant ture compliance with the CFTRA. Examiners from the has met with all but one of the groups which protested primary regulators of the banks involved have re- its applications and has offered to address many of the viewed the sufficiency of these compliance procedures concerns raised by the protests.12 and their efficacy in correcting the deficiencies. The In addition, on September 18, 1987, Applicant Board has also consulted with appropriate enforce- adopted a corporate CRA Policy Statement which ment agencies, and has considered Applicant's and establishes a committee of members from Applicant's Company's past record of compliance with the law. Managing Committee that will review the CRA pro- In considering the convenience and needs of the grams and practices of its subsidiary banks and report communities to be served, the Board has taken into to Applicant's Chairman on that performance. As a account the records of the subsidiary banks of Appli- subsidiary of Applicant, Company would be subject to cant and Company under the Community Reinvest- Applicant's CRA program. In response to the public ment Act ("CRA"), 12 U.S.C. § 2901 et seq* The comments as well as supervisory comments regarding Board has received comments from a number of Company's CRA performance (made in connection groups regarding the CRA records of the subsidiary banks of both Applicant and Company.9 The protes- Alliance, Oklahoma City, Oklahoma, has protested the CRA performance of First Interstate Bank of Oklahoma, N.A. The Houston Reinvestment Alliance and the Houston branch of the N.A.A.C.P., 7. 31 U.S.C. § 5311 et seq., 31 C.F.R. § 103. both of Houston, Texas, have protested the CRA performance of 8. The CRA requires the Board, in its evaluation of a bank holding Allied Bank of Texas, Houston, Texas. South Dallas/Fair Park Inner company application, to take into account the record of applicant's City Development Corporation, Dallas, Texas, has protested the CRA subsidiary banks in meeting the credit needs of the entire community, performance of Allied Bank of Dallas and Allied Bank of OakclifiF, including the low- and moderate-income neighborhoods, as reflected both in Texas. in the examinations by the bank's primary federal banking regulator. 10. See 12 C.F.R. § 262.25(c). 12 U.S.C. § 2903. 11. A private meeting was not held in the NTIC protest. 9. The Fresno Organizing Project, Fresno, California, the National 12. For example, with regard to a protest concerning Fresno, Training and Information Center, Chicago, Illinois, and the Pomona California, First Interstate Bank of California has indicated to the Valley branch of the N.A.A.C.P., Pomona, California, have protested Federal Reserve Bank of San Francisco that the bank will advertise in the CRA performance of First Interstate Bank of California, in West local media and conduct community seminars to raise the awareness Fresno, Los Angeles and San Diego, and Pomona, respectively. (The in the West Fresno area of the bank's credit services, actively seek Pomona Valley branch of the N.A.A.C.P. withdrew its protest on small business loans, continue to be involved in and support commu- September 24, 1987.) Salt Lake Citizens Congress, Salt Lake City, nity activities that assist low income residents of Fresno, and continue Utah, has protested the CRA performance of First Interstate Bank of dialogue and discussions with community groups in Fresno. Further, Utah, N.A.; South End Seattle Community Organization, Seattle, First Interstate of California has recently approved a $1 million grant Washington, has protested the CRA performance of First Interstate to Local Initiatives Support Corporation ("LISC") and has reached a Bank of Washington, N.A.; Montana Peoples Action, Great Falls, substantial oral agreement with the Housing Development Depart- Montana, has protested the CRA performance of First Interstate Bank ment of the City of Fresno on a block grant program for low- and of Great Falls, Montana; and the Oklahoma City Reinvestment moderate-income housing. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

884 Federal Reserve Bulletin • November 1987 with a recent examination), Company, on September In evaluating the convenience and needs factors in 16, 1987, also adopted its own broad corporate CRA this case, the Board has considered as the overriding Policy Statement and Affirmative Action Plan. Under factor in this case the fact that the proposal will this program, Company commits to, among other provide the capital and financial support to Company things, emphasize and devote special efforts to making that should enable its subsidiary banks to continue to and marketing in low- and moderate-income areas serve their customers in numerous banking markets in housing and small business loans, and consistent with Texas. In view of this substantial benefit to the convesafe and sound banking practices, to endeavor to nience and needs of the many Texas communities increase the number and dollar amount of loans which served by Company and the CRA programs adopted previously have been made in those areas, including in by Applicant and Company, as well as the overall particular housing-related and small business loans. satisfactory CRA record of Applicant's existing sub- Company will also continue to offer basic banking sidiary banks, the Board concludes that convenience services and to waive, consistent with safe and sound and needs considerations in this case are consistent banking practices, the minimum balance requirement with approval of the application.14 to open such accounts for depositors from low- and As indicated earlier, Applicant also has applied, moderate-income areas. pursuant to section 4(c)(8), to acquire certain non- Under the CRA, the Board is required to take the banking subsidiaries of Company. Both Applicant and CRA record of an applicant's subsidiary bank into Company have nonbanking subsidiaries that offer disaccount as part of the Board's assessment of the count brokerage services and credit life, accident and convenience and needs of the community in acting on health insurance. In view of the small market shares of certain bank holding company expansion proposals. In Applicant and Company in those geographic areas in this case, the Board has evaluated Applicant's record which they compete for these services, the Board under the CRA, as reflected in the examinations of its concludes that the proposal would not have any signifsubsidiary banks as well as those of Company, the icant adverse effect on existing or probable future comments of interested parties, Applicant's responses competition in any relevant market. to these comments, and the adoption by Applicant and There is no evidence in the record to indicate that Company of CRA Policy Statements as outlined approval of this proposal would result in decreased above. The Board's review indicates that Company competition in other areas or in undue concentration needs to improve its CRA performance and that there of resources, unfair competition, conflicts of interests, are areas in which certain of Applicant's subsidiary unsound banking practices, or other adverse effects on banks could strengthen their performance. As noted, the public interest. Accordingly, the Board has deter- Company has adopted a program which will place mined that the balance of public interest factors it must special emphasis on increasing its lending in low- and consider under section 4(c)(8) of the Act is favorable moderate-income areas. Applicant has also adopted a and consistent with approval of the applications to CRA program and its subsidiary banks have indicated acquire Company's nonbanking subsidiaries and activthey would initiate certain measures in response to the ities. public comments. In order to monitor implementation Based on the foregoing and other facts of record, the of Applicant's and Company's CRA programs, the Board has determined that the applications should be, Board requires that Applicant submit to the Federal and hereby are, approved. The acquisition of Compa- Reserve Bank of San Francisco within 6 months of ny shall not be consummated before the thirtieth consummation of the acquisition and semiannually thereafter, as well as where requested by the System in connection with future expansion applications by 14. A majority of the protestants also requested that the Board Applicant, a report on the progress of its subsidiary order a public meeting. Under the Board's rules, the Board may hold a banks in implementing the policies outlined in Appli- public meeting on an application to clarify factual issues related to the cant's CRA Policy Statement and that of Company.13 application and to provide an opportunity for testimony, if appropriate. 12 U.S.C. § 262.25(d). In this case, the Reserve Banks have These reports should include, for example, descriparranged private meetings for this purpose. Moreover, in view of the tions of actions taken by Applicant's and Company's Board's finding regarding the substantial benefits to the convenience subsidiary banks in determining and helping to meet and needs of the public from this proposal and the other facts of record, the Board has determined that a public meeting would serve community credit needs, particularly the credit needs no useful purpose. Accordingly, the requests for public meetings are of consumers and small businesses in low- and moder- denied. ate-income areas. Some of the protestants also requested that the Board order a hearing. Although section 3(b) of the Act does not require a formal hearing in this instance, the Board may, in any case, order an informal or formal hearing. In light of all of the facts of record, the Board has 13. The reports must be filed until such time as the Reserve Bank is determined that a hearing would serve no useful purpose. Accordingsatisfied that Applicant's policy has been successfully implemented. ly, the requests for a hearing are denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 885 calendar day following the effective date of this Order, Texas; Allied Bank-Interstate 10, Houston, Texas; or later than three months after the effective date of Allied Jetero Bank, Houston, Texas; Allied Bank this Order, unless such period is extended for good Memorial, Houston, Texas; Allied Mercantile Bank, cause by the Board or by the Federal Reserve Bank of Houston, Texas; Allied Mission Bend Bank, Houston, San Francisco, acting pursuant to delegated authority. Texas; Allied Bank Missouri City, Missouri City, The determinations as to Applicant's nonbanking ac- Texas; Allied Bank North Belt, N.A., Houston, Textivities are subject to all of the conditions contained in as; Allied Pasadena National Bank, Pasadena, Texas; Regulation Y, including those in sections 225.4(d) and Allied Seabrook Bank, Seabrook, Texas; Allied Bank 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)), Southwest Freeway, Houston, Texas; Allied Spring and to the Board's authority to require such modifica- Bank, Spring, Texas; Allied Bank of Texas, Houston, tion or termination of the activities of a holding Texas; Allied Bank West, Houston, Texas; Allied company or any of its subsidiaries as the Board finds Bank Longview, Longview, Texas; Allied Marshall necessary to assure compliance with the provisions Bank, Marshall, Texas; Allied American Bank of San and purposes of the Act and the Board's regulations Antonio, San Antonio, Texas; Allied Bank Northwest, and orders issued thereunder, or to prevent evasion N.A., San Antonio, Texas; Allied Live Oak Bank, thereof. Rockport, Texas; and Allied Texas Bank, Jackson- By order of the Board of Governors, effective ville, Texas. September 28, 1987. Voting for this action: Chairman Greenspan and Governors Johnson, Seger, and Angell. Abstaining from this action: People's Mutual Holdings Governor Kelley. Absent and not voting: Governor Heller. Bridgeport, Connecticut JAMES MCAFEE Order Approving Applications to Become a Bank [SEAL] Associate Secretary of the Board Holding Company and to Engage in Certain Nonbanking Activities Appendix A People's Mutual Holdings, Bridgeport, Connecticut, has applied under section 3(a)(1) of the Bank Holding Allied Bank Austin, Austin, Texas; Allied Bank North Company Act of 1956 (12 U.S.C. 1842(a)(1)) (the Austin, Austin, Texas; Allied Bank South Austin, "BHC Act") to become a bank holding company by Austin, Texas; Allied Bank of Marble Falls, Marble acquiring People's Bank, Bridgeport, Connecticut Falls, Texas; Allied Bank Beaumont, N.A., Beau- ("New Bank"), a proposed state-chartered stock savmont, Texas; Allied Merchants Bank, Port Arthur, ings bank to be insured by the Federal Deposit Insur- Texas; Allied Nederland Bank, Port Arthur, Texas; ance Corporation ("FDIC").1 The proposal represents Allied American Bank of Dallas, N.A., Dallas, Texas; a reorganization under which People's Bank, Bridge- Allied Bank Arlington, Arlington, Texas; Allied Bank port, Connecticut, an existing FDIC-insured, state Bedford, Bedford, Texas; Allied Bank Cedar Hill, chartered mutual savings bank, will transform itself into a mutual bank holding company. The proposal N.A., Cedar Hill, Texas; Allied Bank of Dallas, Dalwill be effected by People's Bank forming a stock las, Texas; Allied First National Bank of Mesquite, savings bank, New Bank, to which it will transfer Mesquite, Texas; Allied Bank Fort Worth, Fort substantially all of People's Bank's assets and liabil- Worth, Texas; Allied Bank Irving, Irving, Texas; Allied Bank Keller, N.A., Keller, Texas; Allied Bank Mockingbird, Dallas, Texas; Allied Bank North Central, N.A., Dallas, Texas; Allied Northeast Bank, N.A., Fort Worth, Texas; Allied Bank Oak Cliff, 1. Under the BHC Act, as amended by the Competitive Equality Dallas, Texas; Allied Bank Piano, N.A., Piano, Texas; Banking Act of 1987 ("CEBA"), the term "bank" for the purposes of Allied Bank Waxahachie, N.A., Waxahachie, Texas; the BHC Act includes an insured bank as defined in section 3(h) of the Federal Deposit Insurance Act. Competitive Equality Banking Act of Allied Addicks Bank, Houston, Texas; Allied Beltway 1987, Pub. L. No. 100-86, 101 Stat. 552, 554 (1987) (to be codified at Bank, Houston, Texas; Allied Champions Bank, 12 U.S.C. 1841(c)). Bank qualifies as an insured bank under that Houston, Texas; Allied Conroe Bank, Conroe, Texas; section. Accordingly, Bank is a "bank" for purposes of the BHC Act. In addition, as authorized under CEBA Applicant has not filed an Allied Cypress Bank, Houston, Texas; Allied Deer application with the Federal Home Loan Bank Board for Bank to be Park Bank, Deer Park, Texas; Allied Fairbanks Bank, treated as an "insured institution" under the National Housing Act Houston, Texas; Allied First National Bank, Angle- and, thereby, no longer be regulated under the BHC Act. Competitive Equality Banking Act of 1987, Pub. L. No. 100-86, 101 Stat. 552, 574 ton, Texas; Allied Bank Gulf Freeway, Houston, (1987) (to be codified at 12 U.S.C. 1730a). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

886 Federal Reserve Bulletin • November 1987 ities. New Bank will be controlled by People's Bank, not have any adverse effect upon competition or which will be renamed People's Mutual Holdings. increase the concentration of resources in the Bridge- Applicant has also applied under section 4(c)(8) of port, Connecticut, banking market. the BHC Act (12 U.S.C. § 1843(c)(8)) and section The Board has indicated previously that a bank 225.23 of the Board's Regulation Y (12 C.F.R. holding company should serve as a source of financial § 225.23) for New Bank to retain Guardian Federal and managerial strength for its subsidiary bank. In Savings & Loan Association, Bridgeport, Connecti- CEBA, Congress amended the BHC Act to permit cut, which had been acquired in a supervisory acquisi- mutual savings banks to reorganize into mutual bank tion. In addition, Applicant has applied for New Bank holding companies provided that the specific financial, to retain a 33.3 percent ownership interest in Cadre, managerial and other statutory criteria that the Board Inc., Avon, Connecticut. This company engages in must consider under section 3 of the BHC Act have data processing activities that have been determined been satisfied.6 The financial condition and manageby the Board to be permissible for bank holding ment of People's Bank are satisfactory. Accordingly, companies under section 225.25(b)(7) of the Board's the Board concludes that the financial and managerial Regulation Y (12 C.F.R. § 225.25(b)(7)). resources of Applicant and New Bank are consistent Notice of the applications, affording opportunity for with approval. Considerations relating to the conveinterested persons to submit comments and views, has nience and needs of the community to be served also been given in accordance with sections 3 and 4 of the are consistent with approval. BHC Act (52 Federal Register 23,891 (1987)). The time Applicant also has applied under section 4(c)(8) of for filing comments and views has expired and the the BHC Act for New Bank to retain control of Board has considered the applications and all com- Guardian Federal Savings & Loan Association, ments received, including comments in opposition to Bridgeport, Connecticut ("Guardian"), a thrift instituthe application from certain insurance industry tion that was acquired by the predecessor to People's groups,2 in light of the factors set forth in section 3(c) Bank in a supervisory acquisition. Although the Board of the BHC Act (12 U.S.C. § 1842(c)) and the consid- has determined, as a general matter, that operating a erations specified in section 4(c)(8) of the BHC Act. thrift institution is not a proper incident to banking, the People's Bank, with $4.4 billion in deposits, ranks Board has determined in several instances involving third in the state of Connecticut among bank and thrift failing thrift institutions that such activities are a institutions, controlling 7.8 percent of total deposits in proper incident to banking7 and has permitted, with banks and thrifts in the state.3 Upon consummation of certain commitments,8 the acquisition of failing thrifts. this proposal, Applicant would continue to be the third The Board has permitted such acquisitions on the largest depository institution among banks and thrifts basis that the public benefits outweigh the potential in the state, with no change in its market share or adverse effects of affiliation between thrifts and bank deposit size. Thus, consummation of this proposal holding companies. In the Society Corporation Orwould have no effect on the concentration of banking der,9 the Board permitted a bank holding company resources in Connecticut. that had acquired a failing thrift to retain the institution People's Bank operates in the Bridgeport, Connecti- when the bank holding company was acquired subsecut, banking market,4 where it is the largest of 28 bank quently by another bank holding company. Appliand thrift institutions in the market and controls $2.1 cant's proposal to reorganize into a bank holding billion in deposits, which represents 33.1 percent of company and to retain ownership of a previously the total deposits in banks and thrifts in the market.5 In failing thrift institution subject to certain commitments view of the fact that this proposal represents a reorga- is consistent with the decision in the Society Corporanization of existing ownership interests, the Board tion Order. In view of these facts, including the concludes that consummation of this proposal would commitments made by Applicant, and consistent with the Board's precedent, the Board does not believe that it would be appropriate or consistent with its current 2. The Independent Insurance Agents of America, Inc., National Association of Casualty & Surety Agents, National Association of Life Underwriters, National Association of Professional Insurance Agents and National Association of Surety Bond Producers (' 'Protes- 6. Competitive Equality Banking Act of 1987, Pub. L. No. 100-86, tants") have submitted comments protesting the insurance activities 101 Stat. 552, 579 (1987) (to be codified at 12 U.S.C. 1842). that Bank proposes to engage in after consummation of this proposal. 7. See e.g., Old Stone Corporation, 69 FEDERAL RESERVE BULLE- 3. State deposit data are as of December 31, 1986. TIN 812 (1983); Citicorp/Fidelity Federal Savings and Loan Associa- 4. The Bridgeport, Connecticut, banking market consists of Bridge- tion, 68 FEDERAL RESERVE BULLETIN 656 (1982). port, Easton, Fairfield, Monroe, Shelton, Stratford and Trumbull, all 8. Applicant has committed to comply with the Board's restrictions in Fairfield County, and Ansonia, Beacon Falls, Derby, Milford, on tandem operations between a savings and loan subsidiary of a bank Oxford and Seymour, all in New Haven County. holding company and its affiliates. 5. Market data are as of June 30, 1985. 9. 70 FEDERAL RESERVE BULLETIN 388 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 887 policy regarding bank/thrift affiliation to require dives- sound banking practices, or other adverse effects on titure of Guardian. the public interest. Accordingly, the Board has deter- In addition, Applicant has applied for New Bank to mined that the balance of the public interest factors it retain a 33.3 percent ownership interest in Cadre, Inc., must consider under section 4(c)(8) of the BHC Act is Avon, Connecticut. This company engages in the type favorable and consistent with approval of the applicaof data processing activities that have been determined tions. by the Board to be permissible for bank holding Based on the foregoing and other facts of record, the companies under section 225.25(b)(7) of the Board's Board determined that the applications under sections Regulation Y (12 C.F.R. § 225.25(b)(7)). 3 and 4 of the BHC Act should be, and hereby are, People's Bank engages in the business of selling approved. The banking acquisition shall not be consavings bank life insurance ("SBLI") and Applicant summated before the thirtieth calendar day following has expressed its intention for New Bank to continue the effective date of this Order, and neither the bankselling SBLI after the reorganization. Generally, the ing acquisition nor the nonbanking acquisition shall sale of life insurance is impermissible under section 4 occur later than three months after the effective date of of the BHC Act. The protestants have filed comments this Order, unless the latter period is extended for in opposition to this application and have requested good cause by the Board or by the Federal Reserve the Board to impose a requirement that Applicant Bank of New York, acting pursuant to delegated divest of the SBLI activities within two years. Howev- authority. The determination with respect to Applier, these comments were filed prior to the passage of cant's acquisition of New Bank's nonbanking subsid- CEBA. In CEBA, Congress amended the BHC Act to iaries is subject to all of the conditions set forth in permit savings banks, subject to certain requirements, Regulation Y, including sections 225.4(d) and to engage in the sale and underwriting of SBLI.10 225.23(b) (12 C.F.R. §§ 225.4(d) and 225.23(b)), and to Because New Bank meets the requirements of the the Board's authority to require such modifications or BHC Act, as amended by CEBA, New Bank may termination of activities of a holding company or any continue to engage in the sale of SBLI as a permissible of its subsidiaries as the Board finds necessary to nonbanking activity under the BHC Act. assure compliance with the provisions and purposes of In view of the facts of record, the Board concludes the BHC Act and the Board's regulations and orders that Applicant's acquisition of New Bank's nonbank- issued thereunder, or to prevent evasion thereof. ing subsidiaries would not significantly affect competi- By order of the Board of Governors, effective tion in any relevant market. Furthermore, there is no September 21, 1987. evidence in the record to indicate that approval of this proposal would result in undue concentration of re- Voting for this action: Vice Chairman Johnson and Goversources, unfair competition, conflicts of interest, un- nors Seger, Angell, Heller, and Kelley. Absent and not voting: Chairman Greenspan. JAMES MCAFEE 10. Competitive Equality Banking Act of 1987, Pub. L. No. 100-86, 101 Stat. 552, 562 (1987) (to be codified at 12 U.S.C. 1842). [SEAL] Associate Secretary of the Board ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Altenburg Bancorp, Inc. Bank of Altenburg St. Louis September 3, 1987 Altenburg, Missouri Altenburg, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

888 Federal Reserve Bulletin • November 1987 Section 3—Continued . ~ ,, . Reserve Effective Applicant Bank(s) Bank date Andover Bancorp, Inc. Andover Savings Bank Boston September 4, 1987 Andover, Massachusets Andover, Massachusetts Bancorp Hawaii, Inc. First National Bank of Arizona San Francisco September 22, 1987 Honolulu, Hawaii Phoenix, Arizona Bank of New Hampshire The Suncook Bank Boston September 15, 1987 Corporation Suncook, New Hampshire Manchester, New Hampshire Banterra Corp, Egypt Bancorp, Inc. St. Louis August 27, 1987 Eldorado, Illinois Marion, Illinois Benton Bancorp, Inc. Calvert Bank St. Louis September 17, 1987 Benton, Kentucky Calvert City, Kentucky CeeVeeTee Limited Partnership FCB Bancshares, Inc. Kansas City September 4, 1987 Shawnee Mission, Kansas Overland Park, Kansas Community Bank System, Inc. The Nichols National Bank New York August 31, 1987 DeWitt, New York Nichols, New York Country Bancorp, Inc. Montgomery County National St. Louis August 31, 1987 Mt. Olive, Illinois Bank Hillsboro, Illinois Elcho Bancorporation, Inc. State Bank of Elcho Chicago August 28, 1987 Altoona, Iowa Elcho, Wisconsin Exchange International Farmers' State Bank of Sheffield Chicago September 8, 1987 Corporation Sheffield, Illinois Chicago, Illinois FCB Bancshares, Inc. First Continental Bank and Trust Kansas City September 4, 1987 Overland Park, Kansas Overland Park, Kansas Fidelcor, Inc. Fidelity Bank Delaware Philadelphia September 17, 1987 Philadelphia, Pennsylvania New Castle County, Delaware Financial Trust Corp. Firstway Financial, Inc. Philadelphia September 22, 1987 Carlisle, Pennsylvania Waynesboro, Pennsylvania Fir-Ban, Inc. Verona Bank Cleveland September 17, 1987 Verona, Kentucky Verona, Kentucky First Illinois Bancorp, Inc. Lindell Trust Company St. Louis September 17, 1987 East St. Louis, Illinois St. Louis, Missouri L.T. Interim Bank East St. Louis, Illinois First Park County Bancshares, First National Park Bank in Minneapolis September 15, 1987 Inc. Livingston Livingston, Montana Livingston, Montana Garden Banc Shares, Inc. Southwest Kansas Banc Shares, Kansas City September 1, 1987 Hutchinson, Kansas Inc. Hutchinson, Kansas Great Bay Bankshares, Inc. Southeast Bank for Savings Boston September 18, 1987 Dover, New Hampshire Dover, New Hampshire Green County Bancshares, Inc. Greensburg Deposit Bank St. Louis September 18, 1987 Corbin, Kentucky Greensburg, Kentucky Hoff Investment Corporation First Nebraska Bancs, Inc. Kansas City September 1, 1987 Lisco, Nebraska Lisco, Nebraska 215 Holding Co. First Bank Luverne, N.A. Minneapolis September 1, 1987 Minneapolis, Minnesota Luverne, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 889 Section 3—Continued Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date Mercer County State Bancorp, Mercer County State Bank Cleveland September 2, 1987 Inc. Sandy Lake, Pennsylvania Sandy Lake, Pennsylvania The First National Bank of Stoneboro Stoneboro, Pennsylvania Merrimack Bancorp, Inc. Lowell Institution for Savings Boston September 4, 1987 Lowell, Massachusetts Lowell, Massachusetts Miles Bancshares, Inc. The First National Bank of Lerna St. Louis August 31, 1987 Advance, Missouri Lerna, Illinois Mission Hills Bancshares, Inc. Mission Hills Bank, N.A. Kansas City September 15, 1987 Mission Woods, Kansas Mission Woods, Kansas Morgan Community Bancorp, Morgan County Community Bank St. Louis August 26, 1987 Inc. Jacksonville, Illinois Jacksonville, Illinois Security Banco, Inc. Security State Bank of Adams Minneapolis September 23, 1987 Adams, North Dakota Adams, North Dakota Shoreline Financial Corporation Inter-City Bank Chicago September 16, 1987 Benton Harbor, Michigan Benton Harbor, Michigan Citizens Trust and Savings Bank South Haven, Michigan South Branch Valley Bancorp, South Branch Valley National Richmond September 23, 1987 Inc. Bank of Moorefield Moorefield, West Virginia Moorefield, West Virginia Southern Bancshares, Ltd. First National Bank and Trust St. Louis September 4, 1987 Carbondale, Illinois Company Carbondale, Illinois Spring Bancorp, Inc. Bank of Springfield Chicago September 16, 1987 Springfield, Illinois Springfield, Illinois Staun Bancorp, Inc. First Community State Bank St. Louis September 2, 1987 Springfield, Illinois Staunton, Illinois Texas Gulf Coast Bancorp, Inc. Dickinson State Bank Dallas September 23, 1987 Houston, Texas Dickinson, Texas Tri City Bankshares Tri City National Bank of Chicago September 3, 1987 Corporation Menomonee Falls Oak Creek, Wisconsin Menomonee Falls, Wisconsin Vidor Bancshares, Inc. Plaza National Bank Dallas September 18, 1987 Vidor, Texas Beaumont, Texas W.T.B. Financial Corporation Norban Financial Group Inc. San Francisco September 4, 1987 Spokane, Washington Coeur d'Alene, Idaho The Waltham Corporation Waltham Savings Bank Boston August 25, 1987 Waltham, Massachusetts Waltham, Massachusetts Weakley County Bancshares, Weakley County Bank St. Louis September 2, 1987 Inc. Dresden, Tennessee Dresden, Tennessee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

890 Federal Reserve Bulletin • November 1987 Section 4 Nonbanking/ Company Reserve Effective Applicant Activity Bank date Bank of Montreal Fahnestock Asset Management, Chicago September 17, 1987 Quebec, Canada Inc. New York, New York Charter Bank Group, Inc. Charter Group, Inc. Chicago September 16, 1987 Northfield, Illinois Northfield, Illinois First Colonial Bankshares Mid-States Financial Corporation Chicago August 31, 1987 Corporation Schaumburg, Illinois Chicago, Illinois The Hongkong and Shanghai IRFC Leasing 3 Corporation New York September 10, 1987 Banking Corporation Woodcliff Lake, New Jersey Hong Kong Manufacturers Hanover BarclaysAmerican/Financial Inc. New York September 4, 1987 Corporation Colorado Springs, Colorado New York, New York Otto Bremer Foundation Bremer First American Life Minneapolis September 9, 1987 St. Paul, Minnesota Insurance Company St. Paul, Minnesota Valley Bancorporation Valley Bancard, Inc. Chicago September 10, 1987 Appleton, Wisconsin Madison, Wisconsin Sections 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Manufacturers National Affiliated Banc Group, Inc. Chicago September 9, 1987 Corporation Morton Grove, Illinois Detroit, Michigan ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Farmers & Merchants Bank Security State Bank Minneapolis September 23, 1987 Huron, South Dakota Doland, South Dakota First Illinois Bancorp, Inc. Lindell Trust Company St. Louis September 17, 1987 East St. Louis, Illinois St. Louis, Illinois L. T. Interim Bank East St. Louis, Illinois Norstar Bank of Upstate NY United National Bank New York September 22, 1987 Albany, New York Callicoon, New York The Provident Bank The Midwest Bank & Trust Cleveland September 23, 1987 Cincinnati, Ohio Company Cleveland, Ohio Second BNH Acquisition Bank The Suncook Bank Boston September 15, 1987 Manchester, New Hampshire Suncook, New Hampshire Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 891 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, Inc. v. Independent Community Bankers Association of Board of Governors, No. 87-4118 (2d Cir., filed South Dakota v. Board of Governors, No. 86-5373 Sept. 17, 1987). (8th Cir., filed Oct. 3, 1986). Citicorp v. Board of Governors, No. 87-1475 (D.C. Jenkins v. Board of Governors, No. 86-1419 (D.C. Cir. filed Sept. 9, 1987). Cir., filed July 18, 1986). Securities Industry Association v. Board of Gover- Securities Industry Association v. Board of Governors, No. 87-4115 (2d Cir. filed Sept. 9, 1987) nors, No. 86-1412 (D.C. Cir., filed July 14, 1986). Board of Trade of the City of Chicago, et al. v. Board Optical Coating Laboratory, Inc v. United States, No. of Governors, No. 87-2389 (7th Cir. filed Sept. 1, 288-86C (U.S. Claims Ct., filed May 6, 1986). 1987). CBC, Inc. v. Board of Governors, No. 86-1001 (10th Barrett v. Volcker, No. 87-2280 (D.D.C., filed August Cir., filed Jan. 2, 1986). 17, 1987). Myers, et al. v. Federal Reserve Board, No. 85-1427 Northeast Bancorp v. Board of Governors, No. 87- (D. Idaho, filed Nov. 18, 1985). 1365 (D.C. Cir., filed July 31, 1987). Souser, et al. v. Volcker, et al., No. 85-C-2370, et al., National Association of Casualty & Insurance Agents (D. Colo., filed Nov. 1, 1985). v. Board of Governors, Nos. 87-1354, 87-1355 (D.C. Podolak v. Volcker, No. C85-0456, et al., (D. Wyo., Cir., filed July 29, 1987). filed Oct. 28, 1985). The Chase Manhattan Corporation v. Board of Gover- Kolb v. Wilkinson, et al., No. C85-4184 (N.D. Iowa, nors, No. 87-1333 (D.C. Cir., filed July 20, 1987). filed Oct. 22, 1985). Securities Industry Association v. Board of Gover- Farmer v. Wilkinson, et al., No. 4-85-CIVIL-1448 (D. nors, Nos. 87-4091, 87-4093, 87-4095 (2d Cir., filed Minn., filed Oct. 21, 1985). July 1 and July 15, 1987). Kurkowski v. Wilkinson, et al., No. CV-85-0-916 (D. Lewis v. Board of Governors, Nos. 87-3455, 87-3545 Neb., filed Oct. 16, 1985). (11th Cir., filed June 25, August 3, 1987). Alfson v. Wilkinson, et al., No. Al-85-267 (D. N.D., Securities Industry Association v. Board of Gover- filed Oct. 8, 1985). nors, et al., No. 87-4041 and consolidated cases (2d Independent Community Bankers Association of Cir., filed May 1, 1987). South Dakota v. Board of Governors, No. 84-1496 Securities Industry Association v. Board of Gover- (D.C. Cir., filed Aug. 7, 1985). nors, et al., No. 87-1169 (D.C. Cir., filed April 17, Urwyler, et al. v. Internal Revenue Service, et al., No. 1987). 85-2877 (9th Cir., filed July 18, 1985). Bankers Trust New York Corp. v. Board of Governors, Wight, et al. v. Internal Revenue Service, et al., No. No. 87-1035 (D.C. Cir., filed Jan. 23, 1987). 85-2826 (9th Cir., filed July 12, 1985). Securities Industry Association v. Board of Gover- Lewis v. Volcker, et al., No. 86-3210 (6th Cir., filed nors, et>al., No. 87-1030 (D.C.Cir., filed Jan. 20, Jan. 14, 1985). 1987). Brown v. United States Congress, et al., No. 84-2887- Grimm v. Board of Governors, No. 87-4006 (2d Cir., 6(IG) (S.D. Cal., filed Dec. 7, 1984). filed Jan. 16, 1987). Melcher v. Federal Open Market Committee, No. 84- Independent Insurance Agents of America, et al. v. 1335 (D.D.C., filed Apr. 30, 1984). Board of Governors, Nos. 86-1572, 1573, 1576 (D.C. Cir., filed Oct. 24, 1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

57 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 A6 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 A7 Federal Reserve Bank interest rates A8 Reserve requirements of depository institutions A9 Federal Reserve open market transactions FEDERAL FINANCE A28 Federal fiscal and financing operations FEDERAL RESERVE BANKS A29 U.S. budget receipts and outlays A30 Federal debt subject to statutory limitation A10 Condition and Federal Reserve note statements A30 Gross public debt of U.S. Treasury—Types and All Maturity distribution of loan and security ownership holdings A31 U.S. government securities dealers— Transactions A32 U.S. government securities dealers—Positions MONETAR Y AND CREDIT AGGREGATES and financing A33 Federal and federally sponsored credit A12 Aggregate reserves of depository institutions agencies—Debt outstanding and monetary base A13 Money stock, liquid assets, and debt measures A15 Bank debits and deposit turnover A16 Loans and securities—All commercial banks SECURITIES MARKETS AND CORPORATE FINANCE COMMERCIAL BANKING INSTITUTIONS A34 New security issues—State and local governments and corporations A17 Major nondeposit funds A35 Open-end investment companies—Net sales and A18 Assets and liabilities, last-Wednesday-of-month asset position series A35 Corporate profits and their distribution Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • November 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 REPORTED BY BANKS IN THE UNITED STATES REAL ESTATE 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 foreigners CONSUMER INSTALLMENT CREDIT A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined A40 Total outstanding and net change domestic offices and foreign branches A41 Terms REPORTED BY NONBANKING BUSINESS FLOW OF FUNDS ENTERPRISES IN THE UNITED STATES A42 Funds raised in U.S. credit markets A63 Liabilities to unaffiliated foreigners A43 Direct and indirect sources of funds to credit A64 Claims on unaffiliated foreigners markets SECURITIES HOLDINGS AND TRANSACTIONS Domestic Nonfinancial Statistics A65 Foreign transactions in securities A66 Marketable U.S. Treasury bonds and notes— SELECTED MEASURES Foreign transactions A44 Nonfinancial business activity—Selected measures INTEREST AND EXCHANGE RATES A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization A67 Discount rates of foreign central banks A47 Industrial production—Indexes and gross value A67 Foreign short-term interest rates A49 Housing and construction A68 Foreign exchange rates A50 Consumer and producer prices A51 Gross national product and income A52 Personal income and saving A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables International Statistics SPECIAL TABLES SUMMARY STATISTICS A70 Assets and liabilities of commercial banks, A53 U.S. international transactions—Summary March 31, 1987 A54 U.S. foreign trade A74 Pro forma balance sheet and income statements A54 U.S. reserve assets for priced service operations, June 30, 1987 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 1986 1987 1987 Q3 Q4 Q1 Q2 Apr. May June' Julyr Aug. Reserves of depository institutions2 1 Total 21.0 24.3 16.4 8.0 23.3 8.2 -13.3 -2.2 6.0 2 Required 21.9 22.8 16.5 8.4 25.5 3.1 -15.9 6.9 .4 3 Nonborrowed 21.3 25.3 18.5 5.4 13.6 7.5 -8.1 0.0 6.6 4 Monetary base 9.7 11.0 11.3 6.8 9.9 8.7 .5 4.7 6.4 Concepts of money, liquid assets, and debt4 5 Ml 16.5 17.0 13.1 6.4 17.5 4.5 -10.4 1.6 5.1 6 M2 10.6 9.2 6.3 2.3r 5.6r .3 .6 2.5 5.9 7 M3 9.7 8.0 6.4 3.8r 5.3r 4.6r 4.8 1.7 7.5 8 L 8.1 8.2 6.4 2.9r 3.C 8.7r 2.5 -3.1 n.a. 9 Debt 12.5 12.1 10.4 9.3r io.cr 10.5r 10.1 8.1 n.a. Nontrqnsaction components 10 In M2y 8.6 6.6 4.0 ,8r 1.4' -l.lr 4.7 2.8 6.1 11 In M3 only6 6.2 3.2 6.4 10 4.0r 21.9^ 21.2 -1.5 14.2 Time and savings deposits Commercial banks 12 Savings 25.0 36.9 37.3 24.1 27.8 16.0 6.9 7.5 9.5 13 Small-denomination time -7.5 -10.7 -4.9 -4.6r -8.3 -1.3 10.1 11.0 6.3 14 Large-denomination time ' -1.5 .1 9.7 18.3 27.7 18.8 16.2 -5.3 .4 Thrift institutions 15 Savings 21.0 23.2 27.3 25.9 30.5 17.4 12.6 2.0 9.5 16 Small-denomination time -3.4 -6.4 -4.3 y .r -.5 9.9 12.7 12.8 17 Large-denomination time 2.8 -7.0 -9.5 -8.4 -19.1 2.4 8.9 8.8 14.3 Debt components4 18 Federal 14.7 11.5 9.7 9.6 8.4 15.1 14.9 4.4 n.a. 19 Nonfederal 11.9 12.3 10.6 9.2' 10.4 9.1r 8.6 9.2 n.a. 20 Total loans and securities at commercial banks 10.6 9.1r 10.1 7.0 11.9 7.4 3.6 1.3 10.8 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 discon- amounts of $100,000 or more) issued by commercial banks and thrift institutions, tinuities 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 the amount of vault cash holdings of thrift institutions that is included in the is a consolidation adjustment that represents the estimated amount of overnight currency component of the money stock plus, for institutions not having required RPs 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. AH 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 Financial Statistics • November 1987 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of Weekly averages of daily figures for week ending daily figures Factors 1987 1987 June July Aug. July 15 July 22 July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 235,851 233,463 231,606 234,054 232,936 230,331 233,122 231,532 230,970 230,986 2 U.S. government securities1 210,941 208,364 206,708 209,239 208,503 205,452 207,781 206,676 205,769 206,390 3 Bought outright 208,728 208,258 206,187 209,239 208,503 205,452 206,010 206,676 205,283 205,870 4 Held under repurchase agreements.... 2,213 106 521 0 0 0 1,771 0 486 520 5 Federal agency obligations 8,030 7,690 7,764 7,683 7,657 7,623 8,163 7,623 7,717 7,747 6 Bought outright 7,683 7,660 7,623 7,683 7,657 7,623 7,623 7,623 7,623 7,623 7 Held under repurchase agreements 347 30 141 0 0 0 540 0 94 124 8 Acceptances 0 0 0 0 0 0 0 0 0 0 9 Loans 737 673 630 673 507 796 557 571 525 912 10 Float 724 979 702 669 619 527 609 451 874 519 11 Other Federal Reserve assets 15,419 15,757 15,802 15,790 15,649 15,933 16,012 16,211 16,085 15,417 12 Gold stock2 11,069 11,069 11,068 11,069 11,069 11,069 11,069 11,069 11,069 11,069 13 Special drawing rights certificate account.. 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 14 Treasury currency outstanding 17,866 17,878' 17,930 17,871' 17,881' 17,891' 17,902 17,916 17,930 17,944 ABSORBING RESERVE FUNDS 15 Currency in circulation 214,465 216,361' 216,805 217,205' 216,163' 215,423' 216,189 217,283 217,318 216,530 16 Treasury cash holdings 507 486 471 490 486 479 470 473 473 471 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 8,776 5,140 3,409 5,685 5,316 3,872 5,261 3,106 3,174 3,116 18 Foreign 246 258 237 271 249 254 253 218 260 252 19 Service-related balances and adjustments 2,072 2,200 1,937 2,072 2,418 2,060 2,071 1,960 1,923 1,960 20 Other 404 352 331 405 334 325 282 275 359 352 21 Other Federal Reserve liabilities and capital 6,814 6,664 6,667 6,771 6,724 6,599 6,504 6,617 6,746 6,704 22 Reserve balances with Federal Reserve Banks 36,520 35,966 35,765 35,115 35,214 35,297 36,080 35,604 34,733 35,629 End-of-month figures Wednesday figures 1987 1987 June July Aug. July 15 July 22 July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 239,216 234,310 231,689 232,395 233,865 231,830 232,760 231,641 230,358 237,247 24 U.S. government securities1 212,306 208,170 207,238 207,460 209,230 206,296 207,080 205,688 206,288 209,448 25 Bought outright 210,248 204,871 207,238 207,460 209,230 206,296 207,080 205,688 206,288 205,809 26 Held under repurchase agreements 2,058 3,299 0 0 0 0 0 0 0 3,639 27 Federal agency obligations 8,679 8,553 7,623 7,683 7,623 7,623 7,623 7,623 7,623 8,493 28 Bought outright 7,683 7,623 7,623 7,683 7,623 7,623 7,623 7,623 7,623 7,624 29 Held under repurchase agreements.... 996 930 0 0 0 0 0 0 0 869 30 Acceptances 0 0 0 0 0 0 0 0 0 0 31 Loans 972 634 566 723 497 1,613 439 1,291 502 2,973 32 Float 1,579 507 510 789 646 163 1,218 490 715 714 33 Other Federal Reserve assets 15,680 16,446 15,752 15,740 15,869 16,135 16,400 16,549 15,230 15,619 34 Gold stock2 11,069 11,069 11,068 11,069 11,069 11,069 11,069 11,069 11,069 11,068 35 Special drawing rights certificate account.. 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 36 Treasury currency outstanding 17,889 17.90C 17,956 17,880' 17,89c 17,90c 17,914 17,928 17,942 17,956 ABSORBING RESERVE FUNDS 37 Currency in circulation 215,201 215,898' 216,471 216,929' 215,845' 215,682' 216,840 217,616 217,145 216,415 38 Treasury cash holdings2 492 470 463 490 483 470 470 473 473 468 Deposits, other than reserve balances, with Federal Reserve Banks 39 Treasury 13,774 5,365 3,763 3,351 6,038 4,711 4,5% 3,514 3,112 3,955 40 Foreign 318 262 295 381 283 244 187 279 188 217 41 Service-related balances and adjustments 1,775 1,747 1,709 1,779 1,762 1,762 1,747 1,747 1,697 1,698 42 Other 458 281 284 618 286 342 210 281 312 486 43 Other Federal Reserve liabilities and capital 6,847 6,520 6,964 6,592 6,539 6,422 6,280 6,591 6,525 6,658 44 Reserve balances with Federal Reserve Banks 34,327 37,754 35,782 36,225 36,606 36,184 36,427 35,154 34,936 41,392 1. Includes securities loaned—fully guaranteed by U.S. government securities stock. Revised data not included in this table are available from the Division of pledged with Federal Reserve Banks—and excludes any securities sold and Research and Statistics, Banking Section. scheduled to be bought back under matched sale-purchase transactions. 3. Excludes required clearing balances and adjustments to compensate for 2. Revised for periods between October 1986 and April 1987. At times during float. this interval, outstanding gold certificates were inadvertently in excess of the gold 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 1984 1985 1986 1986 1987 Dec. Dec. Dec. Dec. Feb. Mar. Apr. May June July 1 Reserve balances with Reserve Banks1 21,738 27,620 37,360 37,360 33,625 35,318 37,807 36,466 36,309 36,110 2 Total vault cash 22,313 22,953 24,071 24,071 25,889 23,759 23,353 23,693 24,380 24,631 3 Vault1 18,958 20,522 22,199 22,199 23,435 21,743 21,587 21,873 22,475 22,728 4 Surplus4. 3,355 2,431 1,872 1,872 2,454 2,016 1,767 1,820 1,905 1,903 5 Total reserves 40,696 48,142 59,560 59,560 57,060 57,061 59,393 58,339 58,784 58,838 6 Required reserves 39,843 47,085 58,191 58,191 55,849 56,146 58,566 57,260 57,594 58,078 7 Excess reserve balances at Reserve Banks 853 1,058 1,369 1,369 1,211 916 827 1,079 1,190 761 8 Total borrowings at Reserve Banks 3,186 1,318 827 827 556 527 993 1,035 776 672 9 Seasonal borrowings at Reserve Banks 113 56 38 38 71 91 120 196 259 283 10 Extended credit at Reserve Banks 2,604 499 303 303 283 264 270 288 273 194 Biweekly averages of daily figures for weeks ending 1987 May 6 May 20 June 3 June 17 July 1 July 15 July 29 Aug. 12" Aug. 26p Sept. 9" 11 Reserve balances with Reserve Banks1 37,612 36,327 36,018 37,145 35,475 37,083 35,221 35,850 35,173 36,295 12 Total vault cash2 23,289 23,552 24,094 23,668 25,215 24,238 25,029 24,306 25,074 24,288 13 Vault5 21,519 21,801 22,158 21,972 23,092 22,470 23,002 22,439 23,115 22,444 14 Surplus4... ^ 1,770 1,751 1,936 1,696 2,123 1,769 2,027 1,867 1,959 1,844 15 Total reserves 59,131 58,128 58,176 59,117 58,567 59,553 58,223 58,289 58,288 58,738 16 Required reserves 58,115 57,066 57,042 58,313 56,947 59,081 57,240 57,488 57,116 57,545 17 Excess reserve balances at Reserve Banks 1,016 1,063 1,134 804 1,620 472 983 801 1,173 1,194 18 Total borrowings at Reserve Banks 1,410 830 1,094 635 856 696 652 564 719 647 19 Seasonal borrowings at Reserve Banks .. 159 190 226 230 298 271 294 289 286 241 20 Extended credit at Reserve Banks 299 276 297 254 289 261 133 120 128 173 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 maintenance period at institutions having no required reserve balances. to 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • November 1987 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Member Banks1 Averages of daily figures, in millions of dollars 1987 week ending Monday MMaattuurriittyy aanndd ssoouurrccee Apr. 2T May 4r May llr May 18 May 25 June 1 June 8 June 16 June 22 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 72,584 74,879 72,230 74,185r 70,799 71,703 74,810 72,633 68,755 2 For all other maturities 8,870 8,890 9,282 9,341 9,586 9,567 9,362 9,325 8,719 From other depository institutions, foreign banks and foreign official institutions, and United States government agencies 3 For one day or under continuing contract 35,868 36,651 37,765 34,183 34,329 34,356 35,114 34,380 31,698 4 For all other maturities 8,314 9,951 9,969 9,731 9,654 9,008 8,503 8,508 8,378 Repurchase agreements on U.S. government and federal agency securities in immediately available funds Brokers and nonbank dealers in securities 5 For one day or under continuing contract 12,203 12,510 11,105 11,404 11,482 10,800 10,497 10,459 9,664 6 For all other maturities 12,872 14,338 14,320 15,298 15,980 14,975 14,421 14,413 13,794 All other customers 7 For one day or under continuing contract 25,607 24,307 23,679 24,329 24,777 25,068 24,985 25,470 24,139 8 For all other maturities 8,863 8,591 8,552 8,678 8,561 8,741 8,561 8,289 8,882 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 29,541 32,437 27,312 29,112' 26,927r 29,051' 28,335 25,945 26,899 10 To all other specified customers2 13,656 12,864 11,449 13,004 13,353 13,481 13,857 14,117 14,685 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. 2. Brokers and nonbank dealers in securities; other depository institutions; foreign banks and official institutions; and United States government agencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels AAddjjuussttmmeenntt CCrreeddiitt Extended Credit2 aanndd FFFeeedddeeerrraaalll RRReeessseeerrrvvveee SSeeaassoonnaall CCrreeddiitt11 First 30 days of Borrowing After 30 days of Borrowing3 BBBaaannnkkk On Effective Previous On Effective Previous On Effective Previous 9/23/87 Date Rate 9/23/87 Date Rate 9/23/87 Date Rate Effective Date Boston 6 9/9/87 5 Vi 6 9/9/87 5Vi 7.45 9/10/87 7.25 8/27/87 New York 9/4/87 9/4/87 9/10/87 8/27/87 Philadelphia 9/4/87 9/4/87 9/10/87 8/27/87 Cleveland 9/4/87 9/4/87 9/10/87 8/27/87 Richmond 9/5/87 9/5/87 9/10/87 8/27/87 Atlanta 9/4/87 9/4/87 9/10/87 8/27/87 Chicago 9/4/87 9/4/87 9/10/87 8/27/87 St. Louis 9/9/87 9/9/87 9/10/87 8/27/87 Minneapolis 9/8/87 9/8/87 9/10/87 8/27/87 Kansas City 9/4/87 9/4/87 9/10/87 8/27/87 Dallas 9/11/87 9/11/87 9/10/87 8/27/87 San Francisco ... 6 9/9/87 5Vi 6 9/9/87 5V>> 7.45 9/10/87 7.25 8/27/87 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba of n k Banks N.Y. Banks N.Y. Banks N.Y. IV2 In effect Dec. 31, 1973 7Vi 1978—Aug. 21 73/4 73/4 1982—Aug. 2 ll-llVi-12 11 1974—Apr. 25 7Vi-8 Sept. 22 8 8m 3 11 11 3 0 8 Oct. 16 8-m8V 2 16 10 Vi lOVi Dec. 9 73/4-8 73/4 20 8V>> 27 lO-lOVi 10 16 73/4 73/4 Nov. 1 8^2W-91i/2 9 Vi 30 10 10 1V*-VA 3 9 Vi Oct. 12 9Vi-10 9Vi 1975—Jan. 6 73/4 13 9Vi 9Vi 10 7V4-7V4 7V4 1979—July 20 10 10 Nov. 22 9-9Vi 9 Feb. 2 5 4 634 7 - V 7 4 1 /4 6 7 3 V /4 4 Aug. 2 17 0 lO1-l0OVVi 2 l l O O V V i i Dec. 1 2 4 6 8V 9 i -9 9 9 7 63/4 63/4 Sept. 19 10Vi-ll 11 15 8Vi-9 8Vi Mar. 1 1 0 4 6Wm-63 /4 6 6V ^4 4 Oct. 2 8 1 11 1 - 1 1 2 1 1 1 2 17 8Vi 8Vi May 16 6-6V4 6 10 12 12 1984—Apr. 9 8Vi-9 9 23 6 6 13 9 9 1980—Feb. 15 12-13 13 Nov. 21 8Vi-9 8Vi 1976—Jan. 19 5Vi-6 5Vi 19 13 13 26 8 Vi 8Vi 23 5 Vi 5Vi May 29 12-13 13 Dec. 24 8 8 Nov. 2 2 2 6 5V 5 4 ! - / 5 4 Vi 5 5 V !/4 4 June 1 3 1 3 0 6 11 1 1 - 2 1 1 2 1 1 1 1 2 1 1985—May 2 2 0 4 7V 7 i V -8 i m IV i 1977—Aug. 3 3 0 1 5 5 V V 4 4 - - 5 5 3 3 / / 4 4 5 5 V 3/4 4 July 2 2 8 9 10 1 - 0 1 1 1 1 0 0 1986—Mar. 7 7-7 Vi 1 1 Sept. 2 53/4 53/4 Sept. 26 11 11 10 7 Oct. 26 6 6 Nov. 17 12 12 Apr. 21 6Vi-7 6Vi Dec. 5 12-13 13 23 6Vi 6 Vi 1978—Jan. 9 6-6 Vl 6 Vi 8 13 13 July 11 5Y62 - 6 20 6Vi 61 V i Aug. 21 6 5 Vi May 11 6Vi-7 1 1981—May 5. 13-14 14 22 5Vi 5Vi 12 7 8 14 14 July 3 7-7W 7V4 Nov. 2 13-14 13 1987—Sept. 4 5V2-6 6 July 10 7V4 7V4 6 13 13 11 6 6 Dec. 4 12 12 IInn eeffffeecctt SSeepptteemmbbeerr 2233,, 11998877 .... 6 6 1982—July 20. llV Ii-V12i llV Vi i 23 1 11 1. Adjustment credit is available on a short-term basis to help depository somewhat above rates on market sources of funds ordinarily will be charged, but institutions meet temporary needs for funds that cannot be met through reason- in no case will the rate charged be less than the basic discount rate plus 50 basis able alternative sources. After May 19,1986, the highest rate established for loans points. The flexible rate is re-established on the first business day of each to depository institutions may be charged on adjustment credit loans of unusual two-week reserve maintenance period. At the discretion of the Federal Reserve size that result from a major operating problem at the borrower's facility. Bank, the time period for which the basic discount rate is applied may be Seasonal credit is available to help smaller depository institutions meet regular, shortened. seasonal needs for funds that cannot be met through special industry lenders and 4. For earlier data, see the following publications of the Board of Governors: that arise from a combination of expected patterns of movement in their deposits Banking and Monetary Statistics, 1914-1941, and 1941-1970; Annual Statistical and loans. A temporary simplified seasonal program was established on Mar. 8, Digest, 1970-1979. 1985, and the interest rate was a fixed rate Vi percent above the rate on adjustment In 1980 and 1981, the Federal Reserve applied a surcharge to short-term credit. The program was re-established on Feb. 18, 1986 and again on Jan. 28, adjustment credit borrowings by institutions with deposits of $500 million or more 1987; the rate may be either the same as that for adjustment credit or a fixed rate that had borrowed in successive weeks or in more than 4 weeks in a calendar Vi percent higher. quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7, 2. Extended credit is available to depository institutions, where similar assis- 1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was tance is not reasonably available from other sources, when exceptional circum- adopted; the surcharge was subsequently raised to 3 percent on Dec. 5,1980, and stances or practices involve only a particular institution or when an institution is to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective experiencing difficulties adjusting to changing market conditions over a longer Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981 the period of time. formula for applying the surcharge was changed from a calendar quarter to a 3. For extended-credit loans outstanding more than 30 days, a flexible rate 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

A8 Domestic Nonfinancial Statistics • November 1987 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Depository institution requirements after implementation of the Type of deposit, and Monetary Control Act deposit interval Effective date Net transaction accounts $0 million-$36.7 million 12/30/86 More than $36.7 million ... 12/30/86 Nonpersonal time deposits5 By original maturity Less than 1 Vi years 10/6/86 IV2 years or more 10/6/83 Eurocurrency liabilities All types 11/13/80 1. Reserve requirements in effect on Dec. 31,1986. Required reserves must be with those with the highest reserve ratio. With respect to NOW accounts and held in the form of deposits with Federal Reserve Banks or vault cash. other transaction accounts, the exemption applies only to such accounts that Nonmembers may maintain reserve balances with a Federal Reserve Bank would be subject to a 3 percent reserve requirement. indirectly on a pass-through basis with certain approved institutions. For previous 3. Transaction accounts include all deposits on which the account holder is reserve requirements, see earlier editions of the Annual Report and of the permitted to make withdrawals by negotiable or transferable instruments, pay- FEDERAL RESERVE BULLETIN. Under provisions of the Monetary Control Act, ment orders of withdrawal, and telephone and preauthorized transfers in excess of depository institutions include commercial banks, mutual savings banks, savings three per month for the purpose of making payments to third persons or others. and loan associations, credit unions, agencies and branches of foreign banks, and However, MMDAs and similar accounts subject to the rules that permit no more Edge corporations. than six preauthorized, automatic, or other transfers per month, of which no more 2. The Garn-St. Germain Depository Institutions Act of 1982 (Public Law than three can be checks, are not transaction accounts (such accounts are savings 97-320) requires that $2 million of reservable liabilities (transaction accounts, deposits subject to time deposit reserve requirements). nonpersonal time deposits, and Eurocurrency liabilities) of each depository 4. The Monetary Control Act of 1980 requires that the amount of transaction institution be subject to a zero percent reserve requirement. The Board is to adjust accounts against which the 3 percent reserve requirement applies be modified the amount of reservable liabilities subject to this zero percent reserve require- annually by 80 percent of the percentage increase in transaction accounts held by ment each year for the succeeding calendar year by 80 percent of the percentage all depository institutions, determined as of June 30 each year. Effective Dec. 30, increase in the total reservable liabilities of all depository institutions, measured 1986, the amount was increased from $31.7 million to $36.7 million. on an annual basis as of June 30. No corresponding adjustment is to be made in 5. In general, nonpersonal time deposits are time deposits, including savings the event of a decrease. On Dec. 30, 1986, the exemption was raised from $2.6 deposits, that are not transaction accounts and in which a beneficial interest is million to $2.9 million. In determining the reserve requirements of depository held by a depositor that is not a natural person. Also included are certain institutions, the exemption shall apply in the following order: (1) net NOW transferable time deposits held by natural persons and certain obligations issued accounts (NOW accounts less allowable deductions); (2) net other transaction to depository institution offices located outside the United States. For details, see accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting section 204.2 of Regulation D. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1987 TTyyppee ooff ttrraannssaaccttiioonn 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May June July U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 20,036 22,214 22,602 997 191 1,062 4,226 1,697 575 575 2 Gross sales 8,557 4,118 2,502 583 3,581 0 653 0 22 912 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 7,700 3,500 1,000 0 800 0 0 0 0 4,572 Others within 1 year 5 Gross purchases 1,126 1,349 190 0 0 0 1,232 0 535 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shift 16,354 19,763 18,673 611 1,855 1,762 1,375 4,063 1,715 1,437 8 Exchange -20,840 -17,717 -20,179 0 -4,954 -1,799 -522 -1,336 -1,812 -613 9 Redemptions 0 0 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 1,638 2,185 893 0 0 0 3,642 0 1,394 0 11 Gross sales 0 0 0 0 252 0 0 0 0 200 12 Maturity shift -13,709 -17,459 -17,058 -591 -1,650 -1,762 -1,373 -1,804 -1,715 -1,397 13 Exchange 16,039 13,853 16,984 0 4,354 1,799 522 1,111 1,812 613 5 to 10 years 14 Gross purchases 536 458 236 0 0 0 914 0 312 0 15 Gross sales 300 100 0 0 0 0 0 0 0 0 16 Maturity shift -2,371 -1,857 -1,620 -20 -204 0 -3 -2,259 0 -40 17 Exchange 2,750 2,184 2,050 0 400 0 0 150 0 0 Over 10 years 18 Gross purchases 441 293 158 0 0 0 669 0 251 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -275 -447 0 0 0 0 0 0 0 0 21 Exchange 2,052 1,679 1,150 0 200 0 0 75 0 0 All maturities 22 Gross purchases 23,776 26,499 24,078 997 191 1,062 10,683 1,697 3,066 575 23 Gross sales 8,857 4,218 2,502 583 3,833 0 653 0 22 1,112 24 Redemptions 7,700 3,500 1,000 0 800 0 0 0 0 4,572 Matched transactions 25 Gross sales 808,986 866,175 927,997 63,865 82,086 72,306 83,822 91,642 87,228 80,304 26 Gross purchases 810,432 865,968 927,247 65,145 81,387 73,476 82,494 92,137 87,128 80,037 Repurchase agreements^ 27 Gross purchases 127,933 134,253 170,431 36,373 0 5,657 37,653 59,340 24,167 3,298 28 Gross sales 127,690 132,351 160,268 46,897 3,168 5,657 23,881 73,111 22,108 2,058 29 Net change in U.S. government securities 8,908 20,477 29,989 -8,830 -8,307 2,231 22,474 -11,580 5,002 -4,136 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 256 162 398 110 0 0 37 * 0 59 Repurchase agreements2 33 Gross purchases 11,509 22,183 31,142 4,714 0 897 9,265 16,071 3,907 929 34 Gross sales 11,328 20,877 30,522 6,171 857 897 5,908 19,428 2,910 996 35 Net change in federal agency obligations -76 1,144 222 -1,567 -857 0 3,320 -3,357 997 -126 BANKERS ACCEPTANCES 36 Repurchase agreements, net -418 0 0 0 0 0 0 0 0 0 37 Total net change in System Open Market Account 8,414 21,621 30,211 -10,397 -9,165 2,231 25,794 -14,936 5,999 -4,262 1. Sales, redemptions, and negative figures reduce holdings of the System Open 2. In July 1984 the Open Market Trading Desk discontinued accepting bankers Market Account; all other figures increase such holdings. Details may not add to acceptances in repurchase agreements, totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • November 1987 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1987 1987 July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 June July Aug. Consolidated condition statement ASSETS 1 Gold certificate account 11,069 11,069 11,069 11,069 11,068 11,069 11,069 11,068 2 Special drawing rights certificate account 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 3 Coin 646 640 637 441 442 451 647 446 Loans 4 To depository institutions 1,613 439 1,291 502 2,973 972 634 566 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Federal agency obligations / Bought outright 7,623 7,623 7,623 7,623 7,624 7,683 7,623 7,623 8 Held under repurchase agreements 0 0 0 0 869 996 930 0 U.S. Treasury securities Bought outright 9 Bills 103,950 104,729 103,338 103,937 103,458 107,702 102,526 104,888 10 Notes 75,322 75,327 75,327 75,252 75,252 75,522 75,322 75,252 11 Bonds 27,024 27,024 27,023 27,099 27,099 27,024 27,023 27,098 12 Total bought outright 206,2% 207,080 205,688 206,288 205,809 210,248 204,871 207,238 13 Held under repurchase agreements 0 0 0 0 3,639 2,058 3,299 0 14 Total U.S. Treasury securities 206,296 207,080 205,688 206,288 209,448 212,306 208,170 207,238 15 Total loans and securities 215,532 215,142 214,602 214,413 220,914 221,957 217,357 215,427 16 Items in process of collection 5,542 7,737 6,182 6,635 6,401 9,801 5,575 5,025 17 Bank premises 685 686 686 691 687 683 687 686 Other assets 18 Denominated in foreign currencies3 7,804 7,667 7,988 8,029 8,064 7,782 7,666 8,244 19 All other 7,648 8,047 7,875 6,510 6,868 7,183 8,096 6,822 20 Total assets 253,944 256,006 254,057 252,806 259,462 263,944 256,115 252,736 LIABILITIES 21 Federal Reserve notes 198,898 200,040 200,799 200,116 199,369 119988,,225555 119999,,111155 119999,,442244 12D eposits To depository institutions 37,950 38,174 36,901 36,633 43,090 36,102 39,501 37,491 23 U.S. Treasury—General account 4,711 4,596 3,514 3,112 3,955 13,774 5,365 3,763 24 Foreign—Official accounts 244 187 279 188 217 318 262 295 25 Other 342 210 281 312 486 458 281 284 26 Total deposits 43,247 43,167 40,975 40,245 47,748 50,652 45,409 41,833 27 Deferred credit items 5,379 6,519 5,692 5,920 5,687 8,190 5,071 4,515 28 Other liabilities and accrued dividends5 2,186 2,187 2,330 2,276 2,398 2,356 2,341 2,280 29 Total liabilities 249,710 251,913 249,796 248,557 255,202 259,453 251,936 248,052 CAPITAL ACCOUNTS 30 Capital paid in 1,970 1,970 1,974 1,977 1,983 1,961 1,970 1,984 31 Surplus 1,873 1,874 1,874 1,874 1,874 1,873 1,872 1,874 32 Other capital accounts 391 249 413 398 403 657 337 826 33 Total liabilities and capital accounts 253,944 256,006 254,057 252,806 259,462 263,944 256,115 252,736 34 MEMO: Marketable U.S. Treasury securities held in custody for foreign and international account 176,935 178,970 176,490 179,475 182,077 183,125 176,181 183,931 Federal Reserve note statement 35 Federal Reserve notes outstanding issued to bank 247,480 248,010 248,758 249,343 250,039 244,360 247,656 250,354 36 LESS: Held by bank 48,582 47,970 47,959 49,227 50,670 46,105 48,541 50,930 37 Federal Reserve notes, net 198,898 200,040 200,799 200,116 199,369 119988,,225555 119999,,111155 119999,,442244 Collateral held against notes net: 38 Gold certificate account 11,069 11,069 11,069 11,069 11,068 11,069 11,069 11,068 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. Treasury and agency securities 182,811 183,953 184,712 184,029 183,283 182,168 183,028 183,338 42 Total collateral 198,898 200,040 200,799 200,116 199,369 198,255 199,115 199,424 1. Some of these data also appear in the Board's H.4.1 (503) release. For 4. Includes special investment account at the Federal Reserve Bank of Chicago address, see inside front cover. in Treasury bills maturing within 90 days. 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities 5. Includes exchange-translation account reflecting the monthly revaluation at pledged with Federal Reserve Banks—and excludes securities sold and scheduled market exchange rates of foreign-exchange commitments. to be bought back under matched sale-purchase transactions. 3. Valued monthly at market exchange rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity groupings 1987 1987 July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 June 30 July 31 1 Loans—Total 1,613 439 1,291 502 2,973 972 634 2 Within 15 days 1,582 257 1,120 476 2,948 887 503 3 16 days to 90 days 31 182 171 26 25 85 131 4 91 days to 1 year 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 0 0 0 0 0 6 Within 15 days 0 0 0 0 0 0 0 7 16 days to 90 days 0 0 0 0 0 0 0 8 91 days to 1 year 0 0 0 0 0 0 0 9 U.S. Treasury securities—Total .. 206,2% 207,080 205,688 206,288 209,447 212,306 208,170 10 Within 15 days1 12,059 13,895 9,970 13,179 15,880 8,789 12,461 11 16 days to 80 days 45,756 47,494 47,224 46,152 46,470 51,563 49,845 12 91 days to 1 year 67,809 65,751 68,554 67,841 67,982 70,995 65,929 13 Over 1 year to 5 years 41,709 40,977 40,977 40,579 40,579 41,956 40,972 14 Over 5 years to 10 years 14,702 14,702 14,702 14,201 14,200 14,742 14,702 15 Over 10 years 24,261 24,261 24,261 24,336 24,336 24,261 24,261 16 Federal agency obligations—Total 7,623 7,623 7,623 7,623 8,493 8,679 8,553 17 Within 15 days1 164 40 50 295 1,184 1,229 1,093 18 16 days to 90 days 843 983 933 688 618 614 843 19 91 days to 1 year 1,307 1,291 1,351 1,351 1,462 1,449 1,307 20 Over 1 year to 5 years 3,741 3,741 3,706 3,706 3,663 3,814 3,741 21 Over 5 years to 10 years 1,288 1,288 1,303 1,303 1,286 1,293 1,289 22 Over 10 years 280 280 280 280 280 280 280 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • November 1987 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1987 IItteemm 1983 1984 1985 1986 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July Aug. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS1 1 Total reserves2 36.16 39.51 46.06 56.17 56.88 56.87 56.85 57.95 58.35 57.71 57.60' 57.89 2 Nonborrowed reserves 35.38 36.32 44.74 55.34 56.30 56.32 56.32r 56.96 57.32 56.93 56.93 57.24 3 Nonborrowed reserves plus extended credit3 35.38 38.93 45.24 55.64 56.53 56.60 56.59 57.23 57.60 57.20 57.12 SIM 4 Required reserves 35.59 38.66 45.00 54.80 55.82 55.66 55.94 57.13 57.27 56.52 56.84 56.86 5 Monetary base4 185.38 199.20 217.32 239.51 242.43 243.97 244.56 246.59 248.37 248.48 249.46 250.79 Notseasonallyadjusted 6 Total reserves2 36.87 40.57 47.24 57.64 58.73 56.09 56.07 58.37 57.30 57.63 57.74 57.40 7 Nonborrowed reserves 36.09 37.38 45.92 56.81 58.15 55.53 55.54 57.38 56.26 56.85 57.07 56.76 8 Nonborrowed reserves plus extended credit 36.10 39.98 46.42 57.11 58.38 55.81 55.80 57.65 56.55 57.12 57.27 56.89 9 Required reserves 36.31 39.71 46.18 56.27 57.66 54.88 55.15 57.54 56.22 56.43r 56.98 56.37 10 Monetary base 188.65 202.34 220.82 243.63 243.42 240.82 241.92' 246.07 246.83 249.29 251.42 251.42 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 11 Total reserves2 38.89 40.70 48.14 59.56 59.67 57.06 57.06 59.39 58.34 58.78 58.84 58.38 12 Nonborrowed reserves 38.12 37.51 46.82 58.73 59.09 56.50 56.53 58.40 57.30 58.01 58.17r 57.73 13 Nonborrowed reserves plus extended credit3 38.12 40.09 47.41 59.04 59.32 56.74 56.82 58.19 58.03 58.34 58.37 57.77 14 Required reserves 38.33 39.84 47.08 58.19 58.60 55.85 56.15 58.57 57.26 57.59 58.08 57.34 15 Monetary base4 192.26 204.18 223.53 247.71 246.75 244.22 244.98 249.24 249.94 252.54 254.67 254.36 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 requirements (CRR), currency and vault cash figures are measured over the discontinuities in the monetary base, required clearing balances and adjustments weekly computation period ending Monday. to 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 held during the lagged adjusted series consists of seasonally adjusted total reserves, which include computation period by institutions having required reserve balances at Federal excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted Reserve Banks plus the amount of vault cash equal to required reserves during the currency component of the money stock and the remaining items seasonally maintenance period at institutions having no required reserve balances. adjusted as a whole. 3. Extended credit consists of borrowing at the discount window under the 5. Reflects actual reserve requirements, including those on nondeposit liabiliterms and conditions established for the extended credit program to help ties, with no adjustments to eliminate the effects of discontinuities associated with depository institutions deal with sustained liquidity pressures. Because there is implementation of the Monetary Control Act or other regulatory changes to not the same need to repay such borrowing promptly as there is with traditional reserve requirements. short-term adjustment credit, the money market impact of extended credit is NOTE. Latest monthly and biweekly figures are available from the Board's similar to that of nonborrowed reserves. H.3(502) statistical release. Historical data and estimates of the impact on 4. The monetary base not adjusted for discontinuities consists of total reserves required reserves of changes in reserve requirements are available from the plus required clearing balances and adjustments to compensate for float at Federal Banking Section, Division of Research and Statistics, Board of Governors of the Reserve Banks and the currency component of the money stock less the amount Federal Reserve System, Washington, D.C. 20551. 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 1987 IItteemm11 D 19 e 8 c 3 . D 19 e 8 c 4 . D 19 e 8 c 5 . D 19 e 8 c 6 . May June July' Aug. Seasonally adjusted 1 Ml 526.9 557.5 627.0 730.5 753.1 746.6 747.6 750.9 ? M2 2,184.6 2,369.1 2,569.5 2,801.2r 2,840.4' 2,841.9' 2,848.0 2,862.2 M3 2,692.8 2,985.4 3,205.2' 3,492.3' 3,559.9' 3,576.7' 3,583.2 3,605.7 4 L 3,154.6 3,529.0 3,838.6' 4,144.2' 4,220.9' 4,232.4' 4,223.3 n.a. 5 Debt 5,206.2 5,946.2 6,774.9 7,630.4 7,914.2' 7,980.5' 8,034.3 n.a. Ml components 6 Currency 148.3 158.5 170.6 183.5 190.2 191.1 192.1 193.2 7 Travelers checks 4.9 5.2 5.9 6.4 6.7 6.8 6.8 6.9 8 Demand deposits 242.3 248.3 272.2 308.3 303.9 297.4 296.2 296.4 9 Other checkable deposits5 131.4 145.5 178.3 232.2 252.2 251.2 252.5 254.5 Nontransactions components 10 In M2 ... 1,657.7 1,811.5 1,942.5 2,070.8' 2,087.3' 2,095.4' 2,100.4 2,111.3 11 In M3 only' 508.2 616.3 635.7' 691.1' 719.5' 734.8' 735.2 743.4 Savings deposits8 1? Commercial Banks 133.2 122.2 124.6 154.5 174.5 117755..55 117766..66 117788..00 13 Thrift institutions 173.0 166.6 179.0 211.8 237.2 239.7 240.1 242.0 Small denomination time deposits9 14 Commercial Banks 350.9 386.6 383.9 364.7 357.1 360.1' 363.4 365.3 15 Thrift institutions 432.9 498.6 500.3 488.7 485.9 489.9 495.1 500.3 Money market mutual funds 16 General purpose and broker/dealer 138.2 167.5 176.5 207.6 209.1 210.2 210.4 213.4 17 Institution-only 43.2 62.7 65.1 84.1 81.8 81.3 83.4 83.4 Large denomination time deposits10 18 Commercial Banks 1 230.0 269.6 284.1 291.8 310.7 314.9 313.7 313.8 19 Thrift institutions 96.2 147.3 152.1 155.3 149.0 150.1 151.2 152.9 Debt components 70 Federal debt 1,170.5 1,365.3 1,584.6 1,804.5 1,864.2 11,,888877..44 11,,889944..44 n.a. 21 Nonfederal debt 4,035.7 4,580.9 5,190.3 5,825.9 6,050.0' 6,093.1' 6,139.9 n.a. Not seasonally adjusted ?.? Ml 538.3 570.3 641.0 746.5 744.9 749.1 751.5 749.3 23 M2 2,191.6 2,378.3 2,580.5 2,814.7' 2,829.4' 2,843.1' 2,855.1 2,860.3 24 M3 2,702.4 2,997.2 3,218.4' 3,507.5' 3,550.1' 3,574.5' 3,583.0 3,601.2 75 L 3,163.1 3,539.7 3,850.4r 4,157.6' 4,205.4' 4,231.7' 4,223.6 n.a. 26 5,200.7 5,940.6 6,768.3 7,623.1 7,877.8' 7,938.7' 7,992.8 n.a. Ml components 27 Currency 150.6 160.8 173.1 186.2 190.2 191.9 193.8 194.1 2.8 Travelers checks 4.6 4.9 5.5 6.0 6.5 7.1 7.7 7.9 29 Demand deposits 251.0 257.2 282.0 319.5 298.8 298.8 298.7 294.8 30 Other checkable deposits 132.2 147.4 180.4 235.0 249.4 251.3 251.3 252.5 Nontransactions components 31 M2® 1,653.3 1,808.0 1,939.5 2,068.2' 2,084.4' 2,094.C 2,103.6 2,111.0 32 M3 only7 510.8 618.9 637.9r 692.8' 720.7' 731.5' 727.9 740.9 Money market deposit accounts 33 Commercial Banks 230.4 267.4 332.5 379.0 368.9 367.6 365.2 364.0 34 Thrift institutions 148.5 150.0 180.7 192.4 188.3 185.9 182.8 179.5 Savings deposits8 35 Commercial Banks 132.2 121.4 123.9 153.8 174.8 176.6 178.4 178.2 36 Thrift institutions 172.4 166.2 178.8 211.8 237.8 240.8 241.9 240.1 Small denomination time deposits9 37 Commercial Banks 351.1 386.7 383.8 364.4 355.7 359.7 363.9 366.7 38 Thrift institutions 433.5 499.6 501.5 489.8 482.6 487.1 494.7 499.5 Money market mutual funds 39 General purpose and broker/dealer 138.2 167.5 176.5 207.6 209.1 210.2 210.4 213.4 40 Institution-only 43.2 62.7 65.1 84.1 81.8 81.3 83.4 83.4 Large denomination time deposits10 41 Commercial Banks11 231.6 271.2 285.6 293.2 309.2 311.8 310.4 313.2 42 Thrift institutions 96.3 147.3 151.9 154.9 149.0 149.7 150.6 153.1 Debt components 43 Federal debt 1,170.2 1,364.7 1,583.7 1,803.3 1,857.8 1,869.1 1,872.4 n.a. 44 Nonfederal debt 4,030.5 4,575.8 5,184.5 5,819.8 6,020.0' 6,069.6' 6,120.4 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • November 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 government, and foreign banks and official institutions less cash items in the nonbank issuers. Travelers checks issued by depository institutions are included process of collection and Federal Reserve float; and (4) other checkable deposits in 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. Smnall-denomination time deposits—including retail RPs—are those issued money market funds, and foreign banks and official institutions. Also subtracted in amounts of less than $100,000. All individual retirement accounts (IRA) and is a consolidation adjustment that represents the estimated amount of overnight Keogh accounts at commercial banks and thrifts are subtracted from small time RPs 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. 1987 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 1199884411 1199886611 Jan. Feb. Mar. Apr. May June DEBITS TO Seasonally adjusted Demand deposits2 1 All insured banks 128,440.8 154,556.0 189,534.1 210,574.2 211,169.4 217,019.7 224,603.0 222,774.5 212,202.0 2 Major New York City banks 57,392.7 70,445.1 91,212.9 99,357.1 98,712.3 104,224.5 107,159.2 106,599.1 100,320.9 3 Other banks 71,048.1 84,110.9 98,321.4 111,217.1 112,457.1 112,795.2 117,443.7 116,175.4 111,881.1 4 ATS-NOW accounts3 1,588.7 1,920.8 2,351.1 2,255.7 2,306.0 2,344.6 2,384.7 2,425.1 2,437.0 5 Savings deposits 633.1 539.0 410.9' 459.2 477.7 468.6 528.0 508.9 568.2 DEPOSIT TURNOVER Demand deposits2 All insured banks 434.4 496.5 561.8 580.3 594.7 613.8 627.0 613.0 594.9 7 Major New York City banks 1,843.0 2,168.9 2,460.6 2,426.4 2,461.0 2,707.8 2,711.5 2,660.3 2,713.7 8 Other banks 268.6 301.8 327.4 345.5 357.0 358.0 368.5 359.3 349.9 9 ATS-NOW accounts3 15.8 16.7 16.8 13.4 13.5 13.6 13.6 13.9 14.0 10 Savings deposits4 5.0 4.5 3.1 2.9 2.9 2.8 3.1 2.9 3.3 DEBITS TO Not seasonally adjusted Demand deposits2 11 All insured banks 128,059.1 154,108.4 189,443.3 216,638.7 191,572.9 222,532.0 229,095.0 209,229.8 224,042.8 12 Major New York City banks 57,282.4 70,400.9 91,294.4 102,274.2 89,866.7 106,161.2 108,597.8 98,828.3 106,422.2 13 Other banks 70,776.9 83,707.8 98,149.0 114,364.5 101,706.2 116,370.8 120,497.3 110,401.5 117,620.6 14 ATS-NOW accounts3 1,579.5 1,903.4 2,338.4 2,679.2 2,173.2 2,422.7 2,735.8 2,420.5 2,617.4 15 MMDA5 848.8 1,179.0 1,599.3 1,913.3 1,600.7 1,754.4 2,071.1 1,786.2 1,901.2 16 Savings deposits 632.9 538.7 404.3 499.0 434.6 476.2 570.8 492.4 571.5 DEPOSIT TURNOVER Demand deposits2 17 All insured banks 433.5 497.4 564.0 579.9 550.0 641.0 635.1 582.7 630.0 18 Major New York City banks 1,838.6 2,191.1 2,494.3 2,345.5 2,273.2 2,742.6 2,755.6 2,496.3 2,816.8 19 Other banks 267.9 301.6 327.9 346.6 329.4 377.3 375.0 345.6 370.1 70 ATS-NOW accounts3 15.7 16.6 16.8 15.7 12.9 14.1 15.2 14.0 15.1 71 MMDA 3.5 3.8 4.5 5.1 4.3 4.7 5.6 4.9 5.2 22 Savings deposits4 5.0 4.5 3.1 3.1 2.7 2.9 3.4 2.8 3.3 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 are of Research and Statistics, Board of Governors of the Federal Reserve System, available beginning December 1978. Washington, D.C. 20551. 4. Excludes ATS and NOW accounts, MMDA and special club accounts, such These data also appear on the Board's G.6 (406) release. For address, see inside as Christmas and vacation clubs. front cover. 5. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • November 1987 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1986 1987 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June' July Aug. Seasonally adjusted 1 Total loans and securities2 2,044.6 2,052.4 2,063.5 2,089.8 2,118.3 2,119.7 2,126.2 2,147.3 2,160.6 2,167.1 2,169.5' 2,189.1 2 U.S. government securities 294.9 299.6 304.1 309.9 316.3 315.2 314.3 315.8 320.1 316.9 319.8' 328.7 3 Other securities 204.2 199.8 197.9 196.9 190.2 193.8 195.5 197.2 197.6 198.5 196.9 195.0 4 Total loans and leases2 1,545.4 1,553.0 1,561.5 1,583.0 1,611.8 1,610.7 1,616.4 1,634.3 1,642.9 1,651.7 1,652.8' 1,665.5 5 Commercial and industrial ..... 517.3 520.0 525.7 541.4 554.1 553.8 551.7 553.9 555.9 558.0 555.5' 555.7 6 Bankers acceptances held ... 6.6 6.7 6.4 6.4 6.8 6.8 6.2 6.5 6.8 6.8 6.7 7.5 7 Other commercial and industrial 510.7 513.3 519.2 535.0 547.2 546.9 545.5 547.4 549.0 551.2 548.8' 548.1 8 U.S. addressees4. 501.7 504.6 510.7 525.7 537.8 537.9 536.9' 539.0' 540.9' 542.8 540.6 540.0 9 Non-U.S. addressees 9.0 8.8 8.5 9.3' 9.4' 9.0' 8.6' 8.4' 8.1' 8.4 8.3 8.1 10 Real estate 468.9 474.2 479.6 489.0 499.2 504.0 511.0 517.9 526.3 537.2 544.1' 551.4 11 Individual 309.9 311.2 312.6 314.2 314.9 315.2 315.7 316.6 316.7 314.5 314.6' 316.9 12 Security 42.8 39.1 40.1 38.7' 37.7 38.5 38.3 43.6 42.0 4422..22 4411..77 4444..00 13 Nonbank financial institutions 34.9 35.5 34.9 35.2 35.7 34.7 35.0 35.4 35.4 33.9 31.9 30.9 14 Agricultural 32.7 32.4 32.2 31.8 31.4 30.8 30.0 29.8 29.9 29.9 30.0 30.2 15 State and political subdivisions 60.0 59.3 58.7 57.9 57.8 57.2 56.9 56.0 55.2 54.4 53.2 52.6 16 Foreign banks 10.1 10.0 10.0 10.4 10.6 10.3 9.7 9.9 9.9 10.3 9.4 9.5 17 Foreign official institutions 6.0 6.0 5.9 5.8 5.9 6.1 6.7 6.7 5.8 5.3 5.2 5.1 18 Lease financing receivables .... 21.1 21.8 22.0 22.2 22.1 22.2 22.3 22.6 22.9 23.1 23.2 23.3 19 All other loans 41.8 43.4 39.9 36.4 42.4 38.0 38.9 41.9 43.1' 42.8 44.(y 46.1 Not seasonally adjusted 20 Total loans and securities2 2,042.3 2,044.0 2,064.2 2,105.2 2,123.7 2,121.6 2,127.8 2,148.4 2,157.9 2,166.8 2,164.5r 2,180.5 21 U.S. government securities 293.8 296.1 303.2 308.3 314.6 318.9 317.2 317.7 319.7 317.4 321.0' 327.6 22 Other securities 205.0 200.1 198.3 198.1 193.7 194.1 194.4 195.2 196.8 197.1 194.8 195.3 23 Total loans and leases2 1,543.5 1,547.8 1,562.6 1,598.7 1,615.4 1,608.6 1,616.2 1,635.4 1,641.4 1,652.4 1,648.7' 1,657.7 24 Commercial and industrial 516.1 517.8 525.2 544.3 552.4 551.7 554.5 556.5 557.5 559.1 554.6' 552.7 25 Bankers acceptances held3... 6.7 6.6 6.6 6.7 6.7 6.7 6.2 6.4 6.7 6.9 6.8 7.4 26 Other commercial and industrial 509.4 511.2 518.5 537.6 545.8 545.0 548.3 550.0 550.8 552.3 547.8' 545.3 27 U.S. addressees4. 500.2 502.1 509.5 528.8 537.1 536.3 539.9 541.6 542.5' 543.7 539.0' 536.8 28 Non-U.S. addressees 9.2 9.1 9.1 8.8 8.7 8.7 8.4 8.4 8.3' 8.6 8.8 8.5 29 Real estate 469.9 475.1 480.7 489.9 499.3 503.1 509.8 516.7 525.4 536.8 544.3' 551.5 30 Individual 310.8 312.3 313.7 317.8 317.9 314.7 313.3 314.4 314.8 313.2 313.5' 316.7 31 Security 41.3 37.8 40.4 41.0' 39.4 37.5 38.6 45.1 42.(f 43.0 40.9 41.5 32 Nonbank financial institutions 35.6 35.6 35.4 36.3' 35.7 33.8 33.8 34.8 34.9 33.9 31.9 31.1 33 Agricultural 33.7 33.1 32.3 31.5 30.7 29.9 29.1 29.1 29.7 30.3 3300..77 31.0 34 State and political subdivisions 60.0 59.3 58.7 57.9 57.8 57.2 56.9 56.0 55.2 54.4 53.2 52.6 35 Foreign banks 10.3 10.0 10.1 10.9 10.7 10.5 9.7 9.5 9.6 10.0 9.4 9.3 36 Foreign official institutions 6.0 6.0 5.9 5.8 5.9 6.1 6.7 6.7 5.8 5.3 5.2 5.1 37 Lease financing receivables .... 21.0 21.5 21.8 22.2 22.4 22.4 22.5 22.7 22.9 23.2 23.1 23.1 38 All other loans 39.0 39.1 38.5 41.2 43.1 41.5 41.2 43.9 43.6' 43.2 42.0' 42.9 1. These data also appear in the Board's G.7 (407) release. 3. Includes nonfinancial commercial paper held. 2. Excludes loans to commercial banks in the United States. 4. United States includes the 50 states and the District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions All 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1986 1987 SSoouurrccee Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.' May June July Aug. Total nondeposit funds 1 Seasonally adjusted 143. V 141.4' 145.4' 146.6' 155.3' 159.6' 164.1' 160.9 169.6' 116655..99'' 115588..55'' 116644..11 2 Not seasonally adjusted 142.4' 140.4' 146.9' 146.7' 154.8' 162.3' 166.5' 161.0 170.3' 163.1' 155.3' 164.2 Federal funds, RPs, and other borrowings from nonbanks 3 Seasonally adjusted 167.5' 168.7' 167.2' 165.6' 170.9' 171.5' 170.3' 171.2 169.6' 167.7' 116666..11'' 116655..44 4 Not seasonally adjusted 166.7' 167.7' 168.8' 165.7' 170.4' 174.2' 172.7' 171.3 170.4' 165.0' 162.9' 165.5 5 Net balances due to foreign-related institutions, not seasonally adjusted -24.3 -27.3 -21.8 -19.0 -15.6 -11.9 --66..22 --1100..33 00..00 --11..99 --77..66 --11..33 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -29.2 -31.9 -28.7 -30.6 -26.1 -23.7 -21.1 -23.0 -15.6 --1155..66 --2222..22 --1177..77 7 Gross due from balances 74.0 73.5 70.8 73.3 71.5' 68.3 66.C 70.5 68.4' 67.1 66.4' 64.5 8 Gross due to balances 44.8 41.6 42.1 42.7 45.4' 44.5' 44.9' 47.5 52.9 51.5' 44.2 46.8 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted5 4.9 4.6 6.9 11.6 10.5 11.8 14.9 1122..77 1155..55 1133..77 1144..66 1166..44 10 Gross due from balances 67.9 68.2 68.7 70.8 75.0 72.9 71.1 72.6 75.4 77.1 77.1 77.4 11 Gross due to balances 72.7 72.9 75.6 82.5 85.5 84.7 86.0 85.3 90.9 90.8 91.7 93.8 Security RP borrowings 12 Seasonally adjusted 96.4' 97.9' 98.1R 98.5' 101.1' 97.7' 95.1' 98.6 9999..22'' 110011..55'' 110022..11'' 110033..77 13 Not seasonally adjusted 95.7' 97.0' 99.7' 98.6' 100.6' 100.4' 97.4' 98.7 100.0' 98.7' 98^ 103.8 U.S. Treasury demand balances 14 Seasonally adjusted 16.5 17.1 23.2 21.2 21.3 23.2 17.7 2200..77 2266..11 2277..99 2244..77 2299..11 15 Not seasonally adjusted 18.2 15.3 15.3 19.2 27.5 28.6 17.1 21.6 30.8 25.5 26.6 21.6 Time deposits, $100,000 or more8 16 Seasonally adjusted 344.1 342.5 343.2 345.6 350.1 351.1 354.1 335599..88 336666..22 337722..99 337711..88 337700..88 17 Not seasonally adjusted 345.5 343.7 343.9 347.0 351.3 353.2 356.4 357.2 364.8 369.8 368.5 370.2 1. Commercial banks are those in the 50 states and the District of Columbia banks, term federal funds, overdrawn due from bank balances, loan RPs, and with national or state charters plus agencies and branches of foreign banks. New participations in pooled loans. York investment companies majority owned by foreign banks, and Edge Act 4. Averages of daily figures for member and nonmember banks. corporations owned by domestically chartered and foreign banks. 5. Averages of daily data. 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from 6. Based on daily average data reported by 122 large banks. nonbanks and not seasonally adjusted net Eurodollars. 7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at 3. Other borrowings are borrowings on any instrument, such as a promissory commercial banks. Averages of daily data. note or due bill, given for the purpose of borrowing money for the banking 8. Averages of Wednesday figures. business. This includes borrowings from Federal Reserve Banks and from foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • November 1987 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series1 Billions of dollars 1986 1987 AAccccoouunntt Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Juner July' Aug. ALL COMMERCIAL BANKING INSTITUTIONS2 1 Loans and securities 2,183.2 2,227.3 2,314.3 2,284.8 2,279.4 2,279.2 2,306.2 2,318.9 2,313.4 2,324.3 2,342.2 2 Investment securities 471.9 475.4 479.6 482.2 484.7 486.2 492.5 495.4 493.2 497.7 501.7 3 U.S. government securities 282.8 287.3 292.6 296.1 298.8 299.5 305.1 307.0 303.4 308.2 312.7 4 Other 189.1 188.0 187.0 186.1 185.9 186.7 187.5 188.4 189.8 189.4 189.0 5 Trading account assets 26.0 28.1 27.8 26.4 29.0 25.2 23.3 21.4 20.2 20.4 20.0 6 Total loans 1,685.3 1,723.8 1,807.0 1,776.3 1,765.6 1,767.8 1,790.3 1,802.1 1,800.0 1,806.2 1,820.5 7 Interbank loans 141.2 154.7 168.9 160.1 156.7 154.3 151.8 160.4 150.9 157.5 162.5 8 Loans excluding interbank 1,544.1 1,569.1 1,638.1 1,616.2 1,608.9 1,613.5 1,638.5 1,641.7 1,649.1 1,648.7 1,658.0 9 Commercial and industrial 517.2 524.9 568.2 551.1 551.5 555.3 555.5 558.2 558.0 551.8 551.6 10 Real estate 476.2 481.8 497.5 499.9 503.5 510.7 519.0 527.4 539.1 547.3 552.7 11 Individual 312.8 314.1 320.4 317.0 314.7 313.1 315.2 314.8 312.6 314.5 317.2 12 All other 237.8 248.2 252.0 248.3 239.2 234.4 248.9 241.3 239.5 235.2 236.6 13 Total cash assets 203.5 227.0 273.7 214.4 206.3 203.8 209.7 230.8 213.1 207.1 209.3 14 Reserves with Federal Reserve Banks. 31.6 32.2 41.2 33.4 28.4 31.1 29.8 37.9 33.8 32.8 37.6 15 Cash in vault 23.5 22.2 25.7 23.7 23.5 22.9 24.0 25.1 24.2 24.4 24.6 16 Cash items in process of collection ... 66.2 86.5 111.3 74.5 71.4 68.1 74.5 81.3 74.4 68.6 65.6 17 Demand balances at U.S. depository institutions 33.1 38.3 43.3 34.0 33.0 32.7 33.9 37.2 31.1 31.6 31.4 18 Other cash assets 49.0 47.9 52.3 48.8 50.1 49.0 47.5 49.3 49.7 49.6 50.0 19 Other assets 198.6 202.2 224.8 201.3 201.1 202.1 204.0 208.7 203.8 189.0 190.7 20 Total assets/total liabilities and capital.... 2,585.3 2,656.5 2,812.8 2,700.5 2,686.8 2,685.2 2,719.9 2,758.3 2,730.4 2,720.4 2,742.2 21 Deposits 1,847.1 1,900.2 2,018.0 1,898.3 1,895.5 1,899.6 1,919.5 1,939.1 1,923.4 1,924.6 1,926.4 22 Transaction deposits 548.8 596.3 691.1 577.8 569.2 568.8 590.7 596.9 578.2 573.7 572.6 23 Savings deposits 516.0 522.9 535.0 532.3 535.9 539.7 535.1 538.6 535.0 536.0 535.2 24 Time deposits 782.2 781.1 791.9 788.2 790.3 791.2 793.6 803.6 810.1 814.9 818.6 25 Borrowings 383.3 397.4 414.5 432.7 425.6 414.9 422.7 435.6 428.3 424.0 435.1 26 Other liabilities 175.7 180.0 199.6 188.0 184.6 188.7 195.2 200.3 201.3 201.1 209.2 27 Residual (assets less liabilities) 179.2 178.9 180.6 181.5 181.2 181.9 182.5 183.3 177.4 170.7 171.4 MEMO 28 U.S. government securities (including trading account) 299.5 304.8 308.4 314.5 320.1 316.7 318.9 320.6 315.8 322.6 326.3 29 Other securities (including trading account) 198.4 198.8 198.9 194.1 193.7 194.7 196.9 196.1 197.6 195.5 195.4 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 2,052.1 2,094.7 2,154.4 2,136.7 2,130.3 2,121.7 2,146.9 2,156.2 2,151.9 2,157.7 2,174.9 31 Investment securities 452.9 457.1 459.3 461.5 463.3 463.6 470.0 471.5 469.8 473.8 478.1 32 U.S. Treasury securities 273.6 279.0 283.0 286.8 289.2 289.4 295.2 296.7 294.0 298.4 302.7 33 Other 179.3 178.2 176.3 174.8 174.1 174.2 174.8 174.8 175.9 175.4 175.3 34 Trading account assets 26.0 28.1 27.8 26.4 29.0 25.2 23.3 21.4 20.2 20.4 20.0 35 Total loans 1,573.2 1,609.5 1,667.3 1,648.8 1,638.0 1,632.9 1,653.6 1,663.3 1,661.8 1,663.5 1,676.9 36 Interbank loans 118.8 133.0 137.9 134.3 130.5 124.1 124.2 128.6 121.5 122.9 129.5 37 Loans excluding interbank 1,454.3 1,476.4 1,529.5 1,514.5 1,507.5 1,508.8 1,529.3 1,534.7 1,540.4 1,540.6 1,547.4 38 Commercial and industrial 449.0 455.7 488.2 475.5 474.1 474.6 473.5 475.3 471.7 466.0 464.7 39 Real estate 470.0 475.1 490.3 493.2 497.0 504.1 512.0 520.3 532.1 539.9 544.9 40 Individual 312.5 313.8 320.1 316.7 314.4 312.7 314.9 314.5 312.3 314.2 316.8 41 All other 222.7 231.8 230.9 229.2 221.9 217.4 229.0 224.7 224.3 220.6 221.0 42 Total cash assets 185.6 210.0 253.5 196.6 188.9 186.5 192.5 213.2 195.3 189.1 190.1 43 Reserves with Federal Reserve Banks. 29.7 29.8 39.7 31.2 27.1 29.7 27.2 35.9 32.1 31.4 36.2 44 Cash in vault 23.5 22.2 25.7 23.6 23.5 22.8 24.0 25.0 24.1 24.4 24.6 45 Cash items in process of collection ... 65.6 86.1 110.9 74.0 71.0 67.7 74.0 80.9 73.9 68.1 65.1 46 Demand balances at U.S. depository institutions 31.3 36.3 40.8 32.2 31.1 31.1 31.9 35.1 29.3 29.8 29.8 47 Other cash assets 35.5 35.6 36.4 35.6 36.4 35.2 35.4 36.2 35.9 35.4 34.4 48 Other assets 141.0 141.6 165.0 141.5 144.0 143.4 144.4 143.1 134.4 121.8 121.5 49 Total assets/liabilities and capital 2,378.7 2,446.3 2,572.8 2,474.8 2,463.2 2,451.5 2,483.8 2,512.5 2,481.5 2,468.7 2,486.5 50 Deposits 1,792.8 1,844.8 1,957.0 1,840.8 1,838.2 1,840.7 1,857.1 1,876.5 1,861.5 1,863.9 1,864.7 51 Transaction deposits 540.9 588.2 682.2 569.4 561.3 560.5 582.2 588.4 569.7 565.6 564.3 52 Savings deposits 514.1 520.8 533.0 530.3 533.9 537.7 533.1 536.6 533.0 533.9 533.0 53 Time deposits 737.7 735.8 741.8 741.1 743.0 742.5 741.8 751.4 758.8 764.4 767.3 54 Borrowings 301.3 314.1 322.9 341.7 336.1 319.1 328.2 337.1 328.6 321.1 335.8 55 Other liabilities 108.6 111.7 115.5 114.0 110.8 113.0 119.1 118.8 117.1 116.1 117.6 56 Residual (assets less liabilities) 176.0 175.8 177.5 178.3 178.1 178.8 179.4 180.2 174.3 167.6 168.3 1. Data have been revised because of benchmarking to new Call Reports and condition report data. Data for other banking institutions are estimates made for new seasonal factors beginning July 1985. Back data are available from the the last Wednesday of the month based on a weekly reporting sample of Banking Section. Board of Governors of the Federal Reserve System, Washing- foreign-related institutions and quarter-end condition reports. ton, D.C., 20551. 2. Commercial banking institutions include insured domestically chartered Figures are partly estimated. They include all bank-premises subsidiaries and commercial banks, branches and agencies of foreign banks, Edge Act and other significant majority-owned domestic subsidiaries. Loan and securities data Agreement corporations, and New York State foreign investment corporations. for domestically chartered commercial banks are estimates for the last Wednes- 3. Insured domestically chartered commercial banks include all member banks day of the month based on a sample of weekly reporting banks and quarter-end and insured nonmember banks. 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 1987 July 1 July 8 July 15 July 22 July 29 Aug. 5 Aug. 12 Aug. 19 1 Cash and balances due from depository institutions 122,818 96,723 108,152 %,111 %,917' 99,746 95,270 98,164 2 Total loans, leases and securities, net 1,012,496" 9%,034' 1,003,109" 988,267' 992,805' 997,855 999,692 998,601 3 U.S. Treasury and government agency 109,325 110,947 114,002 114,942 113,702 118,689 116,954 118,413 4 Trading acount 12,577 13,253 15,890 15,520 14,359 18,513 16,111 17,200 5 Investment account, by maturity 96,748 97,695 98,112 99,421 99,343 100,176 100,842 101,212 6 One year or less 16,772 16,722 16,230 16,291 16,096 16,490 16,704 16,744 7 Over one through five years 42,466 42,684 42.995 43,928 44,254 44,874 45,352 45,606 8 Over five years 37,511 38,288 38,888 39,202 38,993 38,812 38,787 38,863 9 Other securities 67,814' 66,767 66,874 67,121 67,544 67,162 67,351 67,582 10 Trading account 3,922 2,873 2,890 3,001 3,335 2,960 3,083 3,209 11 Investment account 63,892r 63,894 63,984 64,120 64,209 64,203 64,267 64,373 12 States and political subdivisions, by maturity 49,853 49,831 49,856 49,945 49,983 49,790 49,846 49,765 13 One year or less 5,486 5,545 5,602 5,597 5,691 5,764 5,555 5,520 14 Over one year 44,367 44,286 44,254 44,348 44,292 44,026 44,290 44,245 15 Other bonds, corporate stocks, and securities 14,039' 14,063 14,127 14,175 14,226 14,413 14,421 14,608 16 Other trading account assets 3,468 3,034 2,789 2,432 2,697 2,748 2,999 2,735 17 Federal funds sold1 74,688 63,448 69,700 59,563 63,556 62,858 66,323 64,290 18 To commercial banks 44,429 38,716 42,651 34,480 36,710 36,680 39,612 37,725 19 To nonbank brokers and dealers in securities 22,701 19,102 18.996 18,184 19,721 18,646 21,305 18,923 20 To others 7,558 5,630 8,053 6,899 7,125 7,532 5,406 7,643 21 Other loans and leases, gross 795,825' 790,358' 788,326' 782,901' 783,9%' 785,269 784,906 784,464 22 Other loans, gross 776,976' 771,477' 769,407' 763,961' 765,037' 766,305 765,936 765,482 23 Commercial and industrial 277,198' 274,032' 273,137' 271,1%' 269,419' 269,668 269,618 269,141 24 Bankers acceptances and commercial paper 2,449 2,281 2,247 2,247 2,275 2,375 2,350 2,226 25 All other 274,749' 271,751' 270,890' 268,949' 267,145' 267,292 267,268 266,915 26 U.S. addressees 271,721' 268,748' 267,8%' 265,997' 264,088' 264,201 264,218 263,818 27 Non-U.S. addressees 3,028' 3,002' 2,994' 2,952' 3,056 3,091 3,050 3,0% 2 2 3 4 3 3 3 3 3 3 3 3 3 4 4 4 8 9 3 3 0 1 2 4 5 6 7 8 9 0 1 2 A L L O E l e t l h S a o e S s T T T T F T R e A r t : h o o o o o o e l l L U f l C e N B r o a i r f f i s d o l n n o a o a n o o i p t e a a e n n t a m a n e d n r u n p h n s a s a t e s k i b r m o e e c s r v t n i s c a a a s r a g n s e i i c h e n n n n d i n t t i e e e a r t s n a d d g k u d o c n s g a a l i r f d i r l l d o g o i y a l o n e e e s n e l v r a g r a c a p c i p e n a e f s e s c b o o i o o s e n a r e i u a l g m n v r d n s i s l n n r t , i d m a t e p i e t k u f b c o c n e s s i e r c a l n o r e e r a n e l a y s t i a l r u s t r n o v s n s n r p a e n u c y t t r n a b a h r i i o d n a i n l e d e d l d g i s e o u v U i x o n t s c i n h p s e f s t f i i i e c t e o t o i i r u n e c t n n u d r d i f s a i t i i t i l n t S i o u a e i t n n s n r a s e s c t s t e i i a s t l u t i i n o s n t s i tutions 2 7 1 1 2 2 3 5 1 3 2 3 5 4 1 3 1 4 5 4 1 0 5 2 5 2 0 4 0 7 8 1 , , , , , , , , , , , , , , , , 7 6 1 5 3 6 6 9 5 2 1 4 8 1 2 0 0 7 8 6 0 2 6 8 7 9 4 2 3 7 2 0 1 1 8 9 2 0 0 6 8 2 9 8 3 9 0 3 " ' ' ' ' ' ' ' ' 2 7 1 1 2 3 5 2 1 3 5 1 1 3 4 2 2 4 1 4 4 0 5 5 2 2 8 1 8 4 0 6 , , , , , , , , , , , , , , , , 0 8 1 2 5 9 8 6 6 6 1 8 9 9 2 0 6 7 8 9 8 3 1 1 5 1 8 4 1 3 6 0 1 3 5 2 8 8 9 1 1 6 4 2 6 7 6 4 ' ' ' ' ' ' ' ' 2 7 1 1 3 5 2 2 3 4 1 1 3 4 1 2 4 4 2 1 4 1 5 2 2 4 8 9 4 0 8 6 , , , , , , , , , , , , , , , , 6 2 1 5 3 9 5 2 0 9 1 7 0 9 1 7 2 6 0 0 2 8 7 2 0 1 4 4 7 7 5 6 6 1 4 8 8 0 9 1 0 8 4 6 6 7 4 6 ' ' ' ' ' ' ' ' 2 7 1 1 4 2 2 3 1 3 1 3 4 4 1 2 4 1 9 2 4 1 1 3 1 5 3 8 4 4 7 3 , , , , , , , , , , , , , , , , 6 5 0 8 5 1 9 5 4 0 1 8 9 1 2 3 3 7 4 3 3 4 2 9 6 7 3 2 4 8 6 1 4 6 7 7 9 8 5 0 1 1 0 4 0 5 0 6 ' ' ' ' ' 2 7 1 1 4 2 2 3 3 1 1 3 4 4 1 1 4 1 2 4 9 3 1 1 4 5 1 8 4 5 7 9 , , , , , , , , , , , , , , , , 8 9 8 4 5 6 5 8 0 8 9 9 3 1 4 7 9 2 6 7 3 4 9 6 3 6 5 0 0 3 4 1 7 0 7 0 2 2 8 0 3 4 9 2 7 9 6 7 " ' ' ' ' ' ' ' ' ' 2 7 1 1 3 5 2 2 4 1 3 1 3 4 1 2 4 2 2 2 4 3 0 6 8 1 4 3 5 1 8 1 , , , , , , , , , , , , , , , , 3 9 2 9 3 9 2 6 4 6 3 5 2 6 7 4 9 8 6 9 0 1 3 0 5 9 9 7 5 2 1 6 5 8 4 7 6 4 8 8 0 4 8 8 1 9 1 0 2 7 1 1 4 2 3 4 2 1 3 3 4 1 1 1 4 2 9 2 3 6 5 2 4 3 4 1 1 9 8 8 , , . , , , , , , , , , , , , , 4 2 9 8 1 8 8 0 1 6 3 6 5 3 0 % 8 4 4 7 2 6 3 6 6 5 2 0 2 9 1 9 5 6 7 2 2 6 8 6 0 4 9 3 4 0 1 2 1 7 1 4 3 2 2 1 3 4 4 1 3 2 1 9 4 3 3 4 5 2 4 2 1 2 8 5 4 1 7 , , , , , , , , , , , , , , , , 3 1 4 1 0 2 0 9 6 5 8 6 0 5 3 2 0 0 6 0 8 7 6 4 6 2 0 8 0 8 5 1 5 4 9 7 2 4 0 1 7 9 2 8 0 0 6 8 44 Total assets 1,265,623' 1,218,969" 1,238,028' 1,208,208' 1,209,439" 1,219,060 1,213,986 1,217,853 45 Demand deposits 265,626' 222,834' 240,069" 215,380 215,240" 224,498 216,703 219,009 46 Individuals, partnerships, and corporations 203,012' 174,041' 185,952' 167,504' 166,312" 172,479 171,530 170,586 47 States and political subdivisions 6,878 5,092 6,095 5,437 5,192 5,567 4,616 5,097 48 U.S. government 1,708 2,698 4,294 2,400 2,768 4,461 2,695 4,039 49 Depository institutions in United States 33,062' 23,869' 27,322' 23,114' 23,159" 24,590 22.867 23,003 50 Banks in foreign countries 7,151 6,501 6,342 6,210 7,032 6.511 5,443 5,844 51 Foreign governments and official institutions 1,213 1,028 1,105 1,023 1,014 1,377 1,061 978 52 Certified and officers' checks 12,601 9,606 8,957 9,691 9,763 9.512 8,490 9,462 53 Transaction balances other than demand deposits 60,909 61,098 60,439 59,826 59,387 61,794 60,818 60,770 54 Nontransaction balances 527,345' 528,382 530,220 526,663 526,104' 527,258 526,682 526,371 55 Individuals, partnerships and corporations 489,655' 490,754 493,120 489,569 489,016' 490,644 490,180 489,750 56 States and political subdivisions 26,266 26,253 25,788 25,815 25,664 25,488 25,546 25,611 57 U.S. government 908 922 928 915 896 891 892 882 58 Depository institutions in the United States 9,678 9,665 9,602 9,541 9,700 9,437 9,268 9,335 59 Foreign governments, official institutions and banks ... 837' 788 783 823 828 797 796 794 60 Liabilities for borrowed money 251,997' 249,426' 251,358 247,663 247,027 247,313 249,108 251,081 61 Borrowings from Federal Reserve Banks 0 0 21 0 982 0 785 0 62 Treasury tax-and-loan notes 19,006 20,594 19,655 21,062 11,783 9,131 10,545 15,279 63 All other liabilities for borrowed money 232,991' 228,832' 231,681 226,600 234,262 238,182 237,778 235,802 64 Other liabilities and subordinated note and debentures . 84,157r 80,902' 79,569" 82,475' 85,603' 81,703 83,670 83,958 65 Total liabilities 1,190,034' 1,142,642' 1,161,654' 1,132,007' 1,133,362' 1,142,566 1,136,981 1,141,189 66 Residual (total assets minus total liabilities)3 75,59c 76,327' 76,374' 76,201' 76,077" 76,494 77,006 76,664 MEMO 67 Total loans and leases (gross) and investments adjusted . 984,920' 973,778' 976,779' 970,902' 972,883' 977,652 976,673 977,700 68 Total loans and leases (gross) adjusted4 804,312' 793,029' 793,114' 786,408' 788,940' 789,052 789,370 788,969 69 Time deposits in amounts of $100,000 or more 163,581' 165,580' 165,645' 165,003' 164,876' 164,738 164,273 164,340 70 Loans sold outright to affiliates—total5 1,785 1,723 1,690 1,719 1,682 1,660 1,652 1,702 71 Commercial and industrial 1,222 1,126 1,124 1,139 1,127 1,105 1,097 1,158 72 Other 564 598 566 580 556 556 555 545 73 Nontransaction savings deposits (including MMDAs) 232,878 231,266 232,795 229,503 228,913 229,602 229,416 229,053 1. Includes securities purchased under agreements to resell. 4. Exclusive of loans and federal funds transactions with domestic commercial 2. Includes federal funds purchased and securities sold under agreements to banks. repurchase; for information on these liabilities at banks with assets of $1 billion or 5. Loans sold are those sold outright to a bank's own foreign branches, more on Dec. 31,1977, see table 1.13. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 3. This is not a measure of equity capital for use in capital-adequacy analysis or not a bank), and nonconsolidated nonbank subsidiaries of the holding company. for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • November 1987 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures except as noted 1987 AAccccoouunntt July 1 July 8 July 15 July 22 July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 1 Cash balances due from depository institutions 38,582 22,074 29,764 23,823 23,208 23,543 21,626 24,404 26,054 2 Total loans, leases and securities, net1 217,606' 208,595 213,756 206,393 211,225 208,496 211,188 211,169 216,115 Securities 3 U.S. Treasury and government agency 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 13,751 13,783 13,844 13,948 13,914 13,985 14,131 14,214 13,753 6 One year or less 1,642 1,673 1,632 1,678 1,700 1,744 1,874 1,902 1,935 7 Over one through five years 5,125 5,093 5,253 5,372 5,372 5,356 5,387 5,542 4,988 8 Over five years 6,984 7,016 6,959 6,897 6,840 6,885 6,870 6,771 6,830 9 Other securities 0 0 0 0 0 0 0 0 0 10 Trading account2 0 0 0 0 0 0 0 0 0 11 Investment account 16,179 16,228 16,260 16,294 16,401 16,319 16,516 16,571 16,537 12 States and political subdivisions, by maturity 13,474 13,506 13,510 13,517 13,593 13,541 13,662 13,688 13,674 13 One year or less 984 1,021 1,006 939 1,061 960 961 979 1,008 14 Over one year 12,490 12,485 12,504 12,578 12,532 12,580 12,701 12,709 12,666 15 Other bonds, corporate stocks and securities 2,705 2,722 2,750 2,777 2,808 2,778 2,853 2,882 2,862 16 Other trading account assets2 0 0 0 0 0 0 0 0 0 Loans and leases 17 Federal funds sold3 30,713 23,829 30,135 24,557 28,124 26,954 30,039 29,994 32,910 18 To commercial banks 10,988 9,482 13,908 10,121 12,010 11,054 13,377 13,439 14,970 19 To nonbank brokers and dealers in securities 14,873 11,146 11,279 10,003 11,240 10,711 13,172 10,863 11,060 20 To others 4,853 3,201 4,948 4,433 4,874 5,189 3,490 5,692 6,880 21 Other loans and leases, gross 172,783' 170,515 169,293 167,354 168,542 167,031 166,319 166,202 168,737 22 Other loans, gross 168,016' 165,733 164,502 162,530 163,732 162,204 161,478 161,359 163,880 23 Commercial and industrial 59,610 58,713 58,496 57,932 57,142 56,538 56,553 56,408 56,415 24 Bankers acceptances and commercial paper 556 465 503 437 479 568 478 421 426 25 All other 59,054 58,248 57,992 57,495 56,664 55,970 56,075 55,987 55,990 26 U.S. addressees 58,560 57,754 57,521 57,045 56,214 55,487 55,646 55,497 55,508 27 Non-U.S. addressees 494 493 472 449 450 482 428 490 481 28 Real estate loans 43,662 43,560 43,423 43,484 44,176 44,076 44,045 44,248 44,226 29 To individuals for personal expenditures 20,884 20,895 20,968 21,046 21,247 21,244 21,371 21,487 21,553 30 To depository and financial institutions 21,527 21,007 20,322 19,696 19,887 19,700 19,240 18,882 20,202 31 Commercial banks in the United States 12,126 11,607 11,294 11,200 10,883 10,698 10,704 10,851 11,084 32 Banks in foreign countries 3,022 3,090 2,744 2,636 2,896 2,789 2,362 1,941 3,038 33 Nonbank depository and other financial institutions 6,380 6,309 6,284 5,861 6,108 6,214 6,173 6,090 6,081 34 For purchasing and carrying securities 6,502' 6,186 6,481 5,698 6,895 6,012 5,577 5,857 6,481 35 To finance agricultural production 275 276 250 252 289 320 321 300 318 36 To states and political subdivisions 7,758 7,831 7,869 7,860 7,838 7,769 7,784 7,784 7,769 37 To foreign governments and official institutions 800 788 838 871 713 814 687 659 845 38 All other 6,998 6,477 5,855 5,689 5,544 5,730 5,900 5,733 6,071 39 Lease financing receivables 4,767 4,782 4,791 4,825 4,811 4,828 4,841 4,843 4,857 40 LESS: Unearned income 1,493 1,502 1,512 1,511 1,519 1,497 1,507 1,514 1,518 41 Loan and lease reserve 14,327 14,258 14,264 14,250 14,237 14,297 14,310 14,299 14,304 42 Other loans and leases, net 156,963' 154,754 153,518 151,594 152,787 151,237 150,502 150,389 152,914 43 All other assets4 62,888' 61,445 63,727 62,759 58,424 62,522 58,422 60,911 55,943 44 Total assets 319,077' 292,114 307,248 292,976 292,858 294,560 291,237 296,484 298,112 Deposits 45 Demand deposits 80,738' 55,983' 66,458 57,165 55,828 57,563 53,548 58,174 55,076 46 Individuals, partnerships, and corporations 55,558' 38,576' 46,043 39,358 37,324 39,190 37,424 40,814 36,296 47 States and political subdivisions 1,197 877 1,591 867 674 703 660 719 708 48 U.S. government 176 476 825 411 537 889 464 691 393 49 Depository institutions in the United States 11,113 5,547 8,181 5,615 5,761 5,748 5,883 5,891 6,505 50 Banks in foreign countries 5,917 5,379 5,113 5,156 5,928 5,318 4,320 4,716 5,550 51 Foreign governments and official institutions 1,024 879 975 834 871 1,222 921 842 1,175 52 Certified and officers' checks 5,752 4,249 3,730 4,924 4,732 4,493 3,875 4,501 4,448 53 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers) 8,090 8,120 8,037 8,007 7,932 8,117 7,976 8,011 7,956 54 Nontransaction balances 100,088 99,749 101,245 99,689 99,534 100,446 99,604 99,859 99,675 55 Individuals, partnerships and corporations 91,354 90,836 92,450 90,915 90,709 91,676 90,815 91,067 90,891 56 States and political subdivisions 6,790 6,975 6,828 6,795 6,883 6,824 6,868 6,800 6,746 57 U.S. government 25 58 59 60 56 55 56 57 60 58 Depository institutions in the United States 1,473 1,470 1,500 1,512 1,478 1,499 1,475 1,549 1,583 59 Foreign governments, official institutions and banks 447 410 407 406 408 392 390 386 395 60 Liabilities for borrowed money 75,150' 74,253' 78,089 73,688 73,346 74,631 74,885 75,135 77,091 61 Borrowings from Federal Reserve Banks 0 0 0 0 900 0 725 0 1,814 62 Treasury tax-and-loan notes 4,563 4,727 4,536 4,799 2,594 1,958 2,419 3,875 3,844 63 All other liabilities for borrowed money 70,587' 69,526' 73,553 6688,,888899 69,852 72,673 71,741 71,260 71,433 64 Other liabilities and subordinated note and debentures 33,618 32,014 31,460 3322,,559944 34,477 31,801 32,977 33,180 36,315 65 Total liabilities 297,685' 270,119 285,289 271,143 271,116 272,558 268,989 274,360 276,112 66 Residual (total assets minus total liabilities)6 21,392 21,994 21,959 21,833 21,741 22,002 22,248 22,124 22,000 MEMO 67 Total loans and leases (gross) and investments adjusted • 210,313' 203,266 204,330 200,833 204,088 202,538 202,924 202,692 205,884 68 Total loans and leases (gross) adjusted 180,383' 173,254 174,226 170,591 173,774 172,234 172,277 171,907 175,594 69 Time deposits in amounts of $100,000 or more 35,883 36,914 36,910 36,998 36,848 37,387 36,856 37,081 36,931 1. Excludes trading account securities. 6. Not a measure of equity capital for use in capital adequacy analysis or for 2. Not available due to confidentiality. other analytic uses. 3. Includes securities purchased under agreements to resell. 7. Exclusive of loans and federal funds transactions with domestic commercial 4. Includes trading account securities. banks. 5. Includes federal funds purchased and securities sold under agreements to NOTE. These data also appear in the Board's H.4.2 (504) release. For address, repurchase. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS1 Assets and Liabilities Millions of dollars, Wednesday figures 1987 AAccccoouunntt July 1 July 8 July 15 July 22 July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 1 Cash and due from depository institutions ... 9,582 10,499' 10,508' 10,492 10,399 10,301 10,746 10,569 11,252 2 Total loans and securities 94,026 91,277r 94,152' 94,514' 94,826 92,238 93,722 93,771 95,251 3 U.S. Treasury and govt, agency securities... 6,612 6,462 6,527 6,801 6,754 6,946 6,860 6,977 6,853 4 Other securities. 8,306r 8,317' 8,312' 8,280' 8,276' 8,218 8,211 8,216 8,069 5 Federal funds sold 6,601 5,089 7,267 7,651 7,937 5,935 7,499 6,936 9,186 6 To commercial banks in the United States . 6,003 4,544 6,649 7,024 7,124 4,978 6,499 5,664 7,938 7 To others 598 545 618 627 812 957 1,000 1,272 1,248 8 Other loans, gross 72,507' 71,409' 72,046' 71,782' 71,859' 71,139 71,152 71,640 71,143 9 Commercial and industrial 46,175 45,576r 45,525' 45,528' 45,762 46,390 46,611 46,576 46,101 10 Bankers acceptances and commercial paper 3,241 3,092 3,232 3,323 3,603 3,751 33,,778833 33,,993355 33,,885566 11 All other 42,933 42,484' 42,292' 42,204' 42,159 42,639 42,828 42,640 42,245 12 U.S. addressees 40,118 39,476' 39,499' 39,543' 39,491 40,048 40,312 40,130 39,788 13 Non-U.S. addressees 2,815 3,008 2,794 2,661 2,668 2,590 2,515 2,510 2,458 14 To financial institutions 16,988' 17,116' 17,628' 17,424' 17,333' 16,070 15,877 16,088 15,713 15 Commercial banks in the United States.. 13,311 13,594 13,967 13,850 13,772 12,526 12,245 12,407 12,102 16 Banks in foreign countries 1,094' 958' 1,035' 893' 957' 923 996 983 951 17 Nonbank financial institutions 2,583 2,564 2,626 2,680 2,604 2,622 2,635 2,698 2,660 18 To foreign govts, and official institutions .. 342 333 410 287 277 265 370 371 362 19 For purchasing and carrying securities 2,860 2,304 2,259 2,155 2,019 2,022 1,910 2,275 2,265 20 All other 6,142 6,080 6,223 6,388 6,468 6,392 6,385 6,331 6,701 21 Other assets (claims on nonrelated parties) .. 26,835 27,053' 27,141' 27,068' 26,974 27,351 27,735 27,806 27,866 22 Net due from related institutions 17,905 17,589 18,283 16,152 15,934' 17,648 18,560 17,211 16,843 23 Total assets 148,348 146,418' 150,084' 148,226' 148,133' 147,538 150,763 149,357 151,212 24 Deposits or credit balances due to other than directly related institutions 42,184 42,132 42,142 41,810 41.95C 42,637 43,005 4422,,660099 4433,,111100 25 Transaction accounts and credit balances . 3,271 3,183 3,667 3,245 3,024' 3,286 3,376 3,322 3,414 26 Individuals, partnerships, and corporations 1,967 2,016 2,015 2,032 1,992 2,266 22,,118855 22,,116600 22,,118877 27 Other 1,304 1,167 1,652 1,212 1,032' 1,020 1,191 1,162 1,227 28 Nontransaction accounts 38,913 38,948 38,474 38,565 38,926 39,351 39,629 39,287 39,696 29 Individuals, partnerships, and corporations 31,257r 31,465r 31,201r 31,140' 31,646 32,019 32,198 3311,,994488 3322,,223300 30 Other 7,655r 7,484' 7,273' 7,426' 7,280 7,332 7,430 7,339 7,466 31 Borrowings from other than directly related institutions 59,054 58,802 60,717 58,176 57,345 58,072 58,297 5566,,338833 5577,,000000 32 Federal funds purchased5 27,046 27,389 29,515 26,973 25,432 27,235 27,999 26,739 27,201 33 From commercial banks in the United States 16,649 16,110 19,516 14,755 13,508 14,982 16,231 14,720 1155,,993311 34 From others 10,397 11,280 9,999 12,218 11,924 12,253 11,767 12,019 11,271 35 Other liabilities for borrowed money 32,008 31,412 31,201 31,202 31,913 30,836 30,298 29,644 29,798 36 To commercial banks in the United States 26,220 26,169 26,093 25,185 26,135 25,551 24,434 23,941 2233,,998844 37 To others 5,788 5,243 5,108 6,017 5,778 5,285 5,864 5,703 5,814 38 Other liablities to nonrelated parties 30,186 30,395' 30,399 30,308' 30,544' 31,047 31,732 32,193 31,212 39 Net due to related institutions 16,924 15,089' 16,826' 17,932' 18,294 15,782 17,729 18,172 19,890 40 Total liabilities 148,348 146,418' 150,084' 148,226' 148,133' 147,538 150,763 149,357 151,212 MEMO 41 Total loans (gross) and securities adjusted6 .. 74,712 73,139' 73,536' 73,64c 73,930 74,734 74,978 75,699 7755,,221111 42 Total loans (gross) ajdusted6 59,794r 58,36c 58,697' 58,559' 58,899^ 59,570 59,906 60,505 60,289 1. Effective Jan. 1, 1986, the reporting panel includes 65 U.S. branches and 4. Includes savings deposits, money market deposit accounts, and time deposagencies of foreign banks that include those branches and agencies with assets of its. $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 • November 1987 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1 Billions of dollars, estimated daily-average balances, not seasonally adjusted Commercial banks TTyyppee ooff hhoollddeerr 1986 1987 11998822 11998833 11998844 11998855 DDeecc.. DDeecc.. DDeecc.. DDeecc..5544 Mar. June Sept. Dec. Mar. Junep 1 All holders—Individuals, partnerships, and corporations 291.8 293.5 302.7 321.0 307.4 322.4 333.6 363.6 335.9 340.2 2 Financial business 35.4 32.8 31.7 32.3 31.8 32.3 35.9 41.4 35.9 36.6 3 Nonfinancial business 150.5 161.1 166.3 178.5 166.6 180.0 185.9 202.0 183.0 187.2 4 Consumer 85.9 78.5 81.5 85.5 84.0 86.4 86.3 91.1 88.9 90.1 5 Foreign 3.0 3.3 3.6 3.5 3.4 3.0 3.3 3.3 2.9 3.2 6 Other 17.0 17.8 19.7 21.2 21.6 20.7 22.2 25.8 25.2 23.1 Weekly reporting banks 1986 1987 11998822 11998833 11998844 11998855 DDeecc.. DDeecc.. DDeecc..22 DDeecc..33''44 Mar. June Sept. Dec. Mar. June 7 All holders—Individuals, partnerships, and corporations 144.2 146.2 157.1 168.6 159.7 168.5 174.7 195.1 178.1 179.3 8 Financial business 26.7 24.2 25.3 25.9 25.5 25.7 28.9 32.5 28.7 29.3 9 Nonfinancial business 74.3 79.8 87.1 94.5 86.8 93.1 94.8 106.4 94.4 94.8 10 Consumer 31.9 29.7 30.5 33.2 32.6 34.9 35.0 37.5 36.8 37.5 11 Foreign 2.9 3.1 3.4 3.1 3.3 2.9 3.2 3.3 2.8 3.1 12 Other 8.4 9.3 10.9 12.0 11.5 11.9 12.8 15.4 15.5 14.6 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 such deposits for December 1984 is $5.0 billion at all insured commercial banks of 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; gross demand deposits have been redefined to exclude demand deposits due to nonfinancial 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 1987 IInnssttrruummeenntt DD 1199 ee 88 cc 22 .. DD 1199 ee 88 cc 33 .. DD 1199 ee 88 cc 44 .. DD 1199 ee 88 cc 55 .. DD 1199 ee 88 cc 66 .. Feb. Mar. Apr. May June July Commercial paper (seasonally adjusted unless noted otherwise) 11 AAllll iissssuueerrss 166,436 187,658 237,586 300,899 331,016 336,677 338,797 346,769 354,249 348,741 348,247 FFiinnaanncciiaall ccoommppaanniieess33 DDeeaalleerr--ppllaacceedd ppaappeerr 22 TToottaall 34,605 44,455 56,485 78,443 100,207 102,939 102,889 103,957 105,397 108,691 107,709 33 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 2,516 2,441 2,035 1,602 2,265 2,174 2,116 2,307 2,429 2,430 2,311 DDiirreeccttllyy ppllaacceedd ppaappeerr 44 TToottaall 84,393 97,042 110,543 135,504 152,385 158,955 159,333 163,421 169,225 161,921 162,185 55 BBaannkk--rreellaatteedd ((nnoott sseeaassoonnaallllyy aaddjjuusstteedd)) 32,034 35,566 42,105 44,778 40,860 45,722 46,634 48,604 48,401 47,862 46,354 66 NNoonnffiinnaanncciiaall ccoommppaanniieess 47,437 46,161 70,558 86,952 78,424 74,784 76,575 79,391 79,627 78,129 78,353 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 79,543 78,309 78,364 68,413 64,974 65,144 66,125 66,660 67,765 69,622 68,495 Holder 8 Accepting banks 10,910 9,355 9,811 11,197 13,423 11,828 12,294 11,118 11,201 11,234 10,664 9 Own bills 9,471 8,125 8,621 9,471 11,707 10,006 10,516 9,721 9,569 9,661 9,630 10 Bills bought 1,439 1,230 1,191 1,726 1,716 1,821 1,730 1,396 1,631 1,573 1,035 Federal Reserve Banks 11 Own account 1,480 418 0 0 0 0 0 0 0 0 0 12 Foreign correspondents 949 729 671 937 1,317 1,230 1,453 1,519 1,547 1,717 1,463 13 Others 66,204 67,807 67,881 56,279 50,234 52,087 52,255 54,024 55,017 56,671 56,367 Basis 14 Imports into United States 17,683 15,649 17,845 15,147 14,670 14,615 14,711 15,095 15,361 16,179 17,431 15 Exports from United States 16,328 16,880 16,305 13,204 12,960 12,876 13,083 13,826 14,028 14,161 14,659 16 All other 45,531 45,781 44,214 40,062 37,344 37,654 38,159 37,800 38,376 39,281 36,405 1. Effective Dec. 1, 1982, there was a break in the commercial paper series. 4. Includes all financial company paper sold by dealers in the open market. The key changes in the content of the data involved additions to the reporting 5. As reported by financial companies that place their paper directly with panel, 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 7. Beginning October 1984, the number of respondents in the bankers accepto nonfinancial and to dealer-placed financial paper. tance 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 financ- of total acceptances activity. ing; 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 Average Effective Date rate 10.50 1986—July 11 8.00 1985—Jan. 10.61 1986—May . 10.00 Aug. 20 7.50 Feb. 10.50 June 9.50 Mar. 10.50 July . 1987—Apr. 1 7.75 Apr. 10.50 Aug. 9.00 1986—May 1. 8.00 May 10.31 Sept. 8.50 15. 8.25 June 9.78 Oct. . July 9.50 Nov. Aug. 9.50 Dec. Sept. 9.50 Oct. 9.50 1987—Jan. . Nov. 9.50 Feb. Dec. 9.50 Mar. Apr. 1986—Jan. . 9.50 May . Feb. 9.50 June Mar. 9.10 July . Apr. 8.83 Aug. NOTE. These data also appear in the Board's H.15 (519) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • November 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. 1987 1987, week ending IInnssttrruummeenntt 11998844 11998855 11998866 May June July Aug. July 31 Aug. 7 Aug. 14 Aug. 21 Aug. 28 MONEY MARKET RATES 1 Federal funds1,2 10.22 8.10 6.80 6.85 6.73 6.58 6.73 6.63 6.75 6.58 6.74 6.76 2 Discount widow borrowing • ' 8.80 7.69 6.33 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 Commercial paper • 3 1-month 10.05 7.94 6.62 6.83 6.86 6.57 6.62 6.56 6.63 6.59 6.60 6.64 4 10.10 7.95 6.49 6.93 6.92 6.65 6.71 6.65 6.74 6.68 6.67 6.72 5 6-month 10.16 8.01 6.39 7.04 7.00 6.72 6.81 6.75 6.82 6.76 6.77 6.83 Finance paper, directly placed • 6 99..9977 77..9911 66..5588 66..7788 66..8800 66..5533 6.56 6.53 6.61 6.53 6.51 6.56 7 9.73 7.77 6.38 6.74 6.77 6.48 6.49 6.48 6.52 6.46 6.40 6.55 8 6-month 9.65 7.75 6.31 6.47 6.50 6.35 6.34 6.33 6.34 6.32 6.33 6.36 Bankers acceptances 6 9 3-month 10.14 77..9922 6.39 6.91 6.83 6.59 6.64 6.62 6.65 6.58 6.61 6.69 10 6-month 10.19 7.96 6.29 7.03 6.91 6.65 6.75 6.71 6.73 6.67 6.72 6.83 Certificates of deposit, secondary market7 11 1100..1177 77..9977 66..6611 66..8811 6.84 6.60 6.63 6.58 6.65 6.58 6.61 6.65 1? 3-month 10.37 8.05 6.52 6.99 6.94 6.70 6.75 6.72 6.78 6.70 6.72 6.77 13 10.68 8.25 6.51 7.24 7.15 6.87 7.02 6.94 7.04 6.96 6.98 7.05 14 Eurodollar deposits. 3-month 10.73 8.28 6.71 7.25 7.11 6.87 6.91 6.90 6.94 6.83 6.86 6.91 U.S. Treasury bills5 Secondary market9 15 3-month 99..5522 77..4488 55..9988 5.66 5.67 5.69 6.04 5.94 5.87 5.94 6.05 6.24 16 9.76 7.65 6.03 6.05 5.99 5.76 6.15 6.10 6.10 6.05 6.18 6.25 17 1-year 9.92 7.81 6.08 6.52 6.35 6.24 6.54 6.40 6.49 6.47 6.53 6.65 Auction average 18 99..5577 77..4499 55..9977 55..7755 55..6699 55..7788 5.96 6.14 5.96 5.93 5.97 6.12 19 9.80 7.66 6.02 6.11 5.99 5.86 6.15 6.20 6.15 6.14 6.12 6.16 20 1-year 9.91 n.a. n.a. 6.56 6.54 6.22 n.a. n.a. 6.52 n.a. n.a. n.a. CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities 71 10.89 8.43 6.46 7.00 6.80 6.68 7.03 6.88 6.96 6.93 7.01 7.16 ?? 11.65 9.27 6.87 7.76 7.57 7.44 7.75 7.62 7.69 7.67 7.73 7.89 ?3 3-year 11.89 9.64 7.06 8.02 7.82 7.74 8.03 7.91 8.02 7.93 7.98 8.13 74 5-year 12.24 10.13 7.31 8.26 8.02 8.01 8.32 8.18 8.30 8.24 8.30 8.41 75 7-year 12.40 10.51 7.55 8.47 8.27 8.27 8.59 8.45 8.56 8.51 8.55 8.67 76 10-year 12.44 10.62 7.68 8.61 8.40 8.45 8.76 8.62 8.75 8.68 8.71 8.85 77 20-year 12.48 10.97 7.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 78 30-year 12.39 10.79 7.80 8.78 8.57 8.64 8.97 8.86 8.98 8.90 8.92 9.04 Composite13 29 Over 10 years (long-term) 1111..9999 1100..7755 88..1144 88..7799 8.63 8.70 8.97 8.89 8.99 8.88 8.92 9.04 State and local notes and bonds Moody's series14 30 AAaaaa 9.61 8.60 6.95 7.61 7.48 7.18 7.24 7.20 7.30 7.20 7.25 7.20 31 BBaaaa 10.38 9.58 7.76 8.78 8.68 8.37 8.31 8.30 8.40 8.25 8.30 8.30 32 Bond Buyer series15 10.10 9.11 7.32 8.00 7.79 7.72 7.81 7.73 7.86 7.79 7.81 7.80 Corporate bonds Seasoned issues 33 All industries 13.49 12.05 9.71 9.82 9.87 9.92 10.24 10.04 10.13 10.12 10.13 10.14 34 12.71 11.37 9.02 9.33 9.32 9.42 9.67 9.56 9.65 9.63 9.68 9.70 35 Aa 13.31 11.82 9.47 9.59 9.65 9.64 9.86 9.77 9.84 9.87 9.87 9.86 36 A 13.74 12.28 9.95 9.83 9.98 10.00 10.20 10.10 10.10 10.21 10.21 10.19 37 Baa 14.19 12.72 10.39 10.51 10.52 10.61 10.80 10.74 10.84 10.76 10.77 10.82 38 A-rated, recently-offered utility bonds17 13.81 1122..0066 9.61 10.05 10.05 10.17 10.37 10.44 10.45 10.24 10.34 10.42 MEMO: Dividend/price ratio18 39 Preferred stocks 1111..5599 1100..4499 88..7766 88..4411 88..3311 8.25 8.32 8.18 8.30 8.28 8.33 8.38 40 Common stocks 4.64 4.25 3.48 3.02 2.92 2.83 2.69 2.78 2.78 2.66 2.68 2.64 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 15. General obligations only, with 20 years to maturity, issued by 20 state and 150-179 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 in an investment 16. Daily figures from Moody's Investors Service. Based on yields to maturity yield 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 1987 IInnddiiccaattoorr 11998844 11998855 11998866 Dec. Jan. Feb. Mar. Apr. May June July Aug. Prices and trading (averages of daily figures) Common slock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 92.46 108.09 136.00 142.12 151.17 160.23 166.43 163.88 163.00 169.58 174.28 184.18 2 Industrial 108.01 123.79 155.85 163.85 175.60 189.17 198.95 199.03 198.78 206.61 214.12 226.49 3 Transportation 85.63 104.11 119.87 121.26 126.61 135.49 138.55 137.91 141.30 150.39 157.49 164.02 4 Utility 46.44 56.75 71.36 76.07 78.54 78.19 77.15 72.74 71.64 74.25 74.18 78.20 5 Finance 89.28 114.21 147.19 144.29 153.32 158.41 162.41 150.52 145.97 152.73 152.27 160.94 6 Standard & Poor's Corporation (1941-43 = 10) 160.50 186.84 236.34 248.61 264.51 280.93 292.47 289.32 289.12 301.36 310.09 329.36 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 207.96 229.10 264.38 264.65 289.02 315.60 332.55 330.65 328.77 334.49 348.68 361.52 Volume of trading (thousands of shares) 8 New York Stock Exchange 91,084 109,191 141,385 148,228 192,419 183,478 180,251 187,135 170,898 163,380 180,356 193,477 9 American Stock Exchange 6,107 8,355 11,846 12,272 14,755 14,962 15,678 14,420 11,655 12,813 12,857 13,604 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers 22,470 28,390 36,840 36,840 34,960 35,740 38,080 39,820 38,890 38,420 40,250 41,640 Free credit balances at brokers* 11 Margin-account 1,755 2,715 4,880 4,880 5,060 4,470 4,730 4,660 4,355 3,680 4,095 4,240 12 Cash-account 10,215 12,840 19,000 19,000 17,395 17,325 17,370 17,285 16,985 15,405 15,930 16,195 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance "margin securities" (as defined in the regulations) when such credit is companies. With this change the index includes 400 industrial stocks (formerly collateralized by securities. Margin requirements on securities other than options 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 are the difference between the market value (100 percent) and the maximum loan financial. value of collateral as prescribed by the Board. Regulation T was adopted effective 2. Beginning July 5, 1983, the American Stock Exchange rebased its index Oct. 15, 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. effectively cutting previous readings in half. 11, 1968; and Regulation X, effective Nov. 1, 1971. 3. Beginning July 1983, under the revised Regulation T, margin credit at On Jan. 1, 1977, the Board of Governors for the first time established in broker-dealers includes credit extended against stocks, convertible bonds, stocks Regulation T the initial margin required for writing options on securities, setting acquired through exercise of subscription rights, corporate bonds, and govern- it at 30 percent of the current market-value of the stock underlying the option. On ment securities. Separate reporting of data for margin stocks, convertible bonds, Sept. 30,1985, the Board changed the required initial margin, allowing it to be the and subscription issues was discontinued in April 1984. same as the option maintenance margin required by the appropriate exchange or 4. Free credit balances are in accounts with no unfulfilled commitments to the self-regulatory organization; such maintenance margin rules must be approved by brokers and are subject to withdrawal by customers on demand. the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC 5. New series beginning June 1984. approved new maintenance margin rules, permitting margins to be the price of the 6. These regulations, adopted by the Board of Governors pursuant to the option plus 15 percent of the market value of the stock underlying the option. Securities Exchange Act of 1934, limit the amount of credit to purchase and carry Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • November 1987 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1986 1987 AAccccoouunntt 11998844 11998855 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Savings and loan associations 1 Assets 903,488 948,781 965,032 957,229 961,894 964,096 963,316 935,516 936,918 939,904 944,296 952,674 949,099 2 Mortgage-backed securities .... 97,303 113,621 117,617 121,606 122,682 123,257 129,340 128,857 129,283 134,750 141,047 140,454 3 Cash and investment securities1 124,801 126,712 138,863 138,619 138,213 141,510 142,700 132,733 135,890 138,729 136,372 138,290 137,974 4 Other 223,396 238,833 259,726 261,415 250,781 250,297 251,769 261,869 263,782 266,508 274,781 283,696 285,578 5 Liabilities and net worth 903,488 948,781 965,032 957,229 961,894 964,0% 963,316 935,516 936,918 939,904 944,296 952,674 949,099 6 Savings capital 725,045 750,071 749,020 743,518 742,747 740,066 741,081 721,759 722,294 722,603 716,828 718,662 715,570 7 Borrowed money 125,666 138,798 148,541 155,748 152,567 156,920 159,742 153,373 152,161 158,170 165,892 171,276 175,123 8 FHLBB 64,207 73,888 75,594 80,364 75,295 75,626 80,194 75,552 75,673 76,469 77,875 78,583 79,184 9 Other 61,459 64,910 72,947 75,384 77,272 81,294 79,548 77,821 76,488 81,701 88,017 92,693 95,939 10 Other 17,944 19,045 24,706 15,461 23,255 24,078 20,071 19,773 21,814 18,916 20,778 22,546 19,577 11 Net worth2 34,833 41,064 42,764 42,503 43,326 43,034 42,423 40,606 40,661 40,213 40,805 40,180 38,822 FSLIC-insured federal savings banks 12 Assets 98,559 131,868 186,810 196,225 202,106 204,918 210,562 235,428 235,762 241,419 246,277 253,006 264,023 13 Mortgages 57,429 72,355 103,019 108,627 110,826 112,117 113,638 136,770 136,489 138,705 140,861 144,588 150,431 14 Mortgage-backed securities .... 9,949 15,676 24,097 26,431 27,516 28,324 29,766 33,570 34,634 36,104 37,511 39,382 41,191 15 Other 10,971 11,723 17,056 18,509 18,697 19,266 19,034 15,769 16,059 16,739 17,032 17,201 17,945 16 Liabilities and net worth 98,559 131,868 186,810 196,225 202,106 204,918 210,562 235,428 235,762 241,419 246,277 253,006 264,023 17 Savings capital 79,572 103,462 142,858 149,074 152,834 154,447 157,872 176,741 177,359 178,691 180,642 182,805 190,018 18 Borrowed money 12,798 19,323 29,390 32,319 33,430 33,937 37,329 40,614 39,777 43,915 46,125 49,896 53,161 19 FHLBB 7,515 10,510 16,123 16,853 17,382 17,863 19,897 20,730 20,226 21,104 21,718 22,788 24,486 20 Other 5,283 8,813 13,267 15,466 16,048 16,074 17,432 19,884 19,551 22,811 24,407 27,108 28,675 21 Other 1,903 2,732 4,914 4,666 5,330 5,652 4,263 5,304 5,480 5,250 5,543 6,041 5,963 22 Net worth 4,286 6,351 9,647 10,165 10,511 10,883 11,098 12,774 13,151 13,564 13,977 14,272 14,886 Savings banks 23 Assets 203,898 216,776 227,011 228,854 230,919 232,577 236,866 235,603 238,074 240,739 243,454 245,906 243,529 Loans 24 Mortgage 102,895 110,448 113,265 114,188 116,648 117,612 118,323 119,199 119,737 121,178 122,769 124,936 127,041 25 Other 2244,,995544 3300,,887766 3377,,335500 3377,,229988 3366,,113300 3366,,114499 3355,,116677 3366,,112222 37,207 3388,,001122 3377,,113366 3377,,331133 35,317 Securities 26 U.S. government 14,643 13,111 12,043 12,357 12,585 13,037 14,209 13,332 13,525 13,631 13,743 13,650 13,810 27 Mortgage-backed securities .. 19,215 19,481 21,161 23,216 23,437 24,051 25,836 26,220 26,893 27,463 28,700 28,739 27,643 28 State and local government .. 2,077 2,323 2,400 2,407 2,347 2,290 2,185 2,180 2,168 2,041 2,063 2,053 2,059 29 Corporate and other 23,747 21,199 20,602 20,902 21,156 20,749 20,459 19,795 19,770 19,598 19,768 19,956 18,990 30 Cash 4,954 6,225 5,018 4,811 5,195 5,052 6,894 5,239 5,143 5,703 5,308 5,176 4,917 31 Other assets 11,413 13,113 13,172 13,675 13,421 13,637 13,793 13,516 13,631 13,713 13,967 14,083 13,754 32 Liabilities 203,898 216,776 227,011 228,854 230,919 232,577 236,866 235,603 238,074 240,739 243,454 245,906 243,529 33 Deposits 180,616 185,972 189,937 190,210 190,334 190,858 192,194 191,441 192,559 193,693 193,347 194,742 192,873 34 Regular3 177,418 181,921 184,764 185,002 185,254 185,958 186,345 186,385 187,597 188,432 187,791 189,048 187,261 35 Ordinary savings 33,739 33,018 34,530 35,227 36,165 36,739 37,717 38,467 39,370 40,558 41,326 41,967 41,707 36 Time 104,732 103,311 102,668 102,191 101,125 101,240 100,809 100,604 100,922 100,896 100,308 100,607 100,637 37 Other 3,198 4,051 5,173 5,208 5,080 4,900 5,849 5,056 4,962 5,261 5,556 5,694 5,612 38 Other liabilities 12,504 17,414 21,360 21,947 23,319 24,254 25,274 24,710 25,663 27,003 29,105 30,436 29,860 39 General reserve accounts 10,510 12,823 15,427 16,319 16,896 17,146 18,105 18,236 18,486 18,830 19,423 19,603 19,473 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37—Continued 1986 1987 AAccccoouunntt 11998844 11998855 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Credit unions4 40 Total assets/liabilities and capital. 93,036 118,010 139,233 140,496 143,662 145,653 147,726 149,383 149,751 153,253 154,549 156,086 41 Federal 63,205 77,861 90,367 91,981 93,257 94,638 95,483 96,801 96,753 98,799 99,751 100,153 42 State 29,831 40,149 48,866 48,515 50,405 51,015 52,243 52,586 52,998 54,454 54,798 55,933 43 Loans outstanding 62,561 73,513 80,656 81,820 83,388 84,635 86,137 85,984 85,651 86,101 87,089 87,765 n a. 44 Federal 42,337 47,933 52,007 53,042 53,434 53,877 55,304 55,313 54,912 55,118 55,740 55,952 45 State 20,224 25,580 28,649 28,778 29,954 30,758 30,833 30,671 30,739 30,983 31,349 31,813 46 Savings 84,348 105,963 126,268 128,125 130,483 131,778 134,327 135,907 136,441 138,810 140,014 146,437 47 Federal 57,539 70,926 83,132 84,607 86,158 87,009 87,954 89,717 89,485 91,042 92,012 97,189 48 State 26,809 35,037 43,136 43,518 44,325 44,769 46,373 46,130 46,956 47,768 48,002 49,248 Life insurance companies 49 Assets 722,979 825,901 887,255 892,304 860,682 910,691 920,771 931,962 943,421 955,269 Securities 50 Government 63,899 75,230 79,188 81,636 82,047 84,858 85,849 85,000 87,678 90,699 51 United States5 42,204 51,700 54,487 56,698 57,511 59,802 61,494 61,014 63,580 66,577 52 State and local 8,713 9,708 10,472 10,606 10,212 10,712 10,267 10,048 10,264 10,423 53 Foreign6 12,982 13,822 14,229 14,332 14,324 14,344 14,088 13,938 13,834 13,699 n a. n. a. n.a. 54 Business 359,333 423,712 463,135 462,540 467,433 473,860 474,485 487,837 497,143 501,622 55 Bonds 295,998 346,216 374,670 378,267 381,381 386,293 386,994 395,994 401,231 404,112 56 Stocks 63,335 77,496 88,465 84,273 86,052 87,567 87,491 91,843 95,912 97,510 57 Mortgages 156,699 171,797 183,943 185,268 186,976 189,460 192,975 193,395 193,957 194,689 58 Real estate 25,767 28,822 31,844 31,725 31,918 32,184 32,079 32,229 32,061 31,875 59 Policy loans 54,505 54,369 54,247 54,273 54,199 54,152 54,016 53,692 53,696 53,580 60 Other assets 63,776 71,971 74,898 76,862 77,798 76,177 81,367 79,809 78,886 82,804 1. Holdings of stock of the Federal Home Loan Banks are in "other assets." Savings banks: Estimates by the National Council of Savings Institutions for all 2. Includes net undistributed income accrued by most associations. savings banks in the United States and for FDIC-insured savings banks that have 3. Excludes checking, club, and school accounts. converted to federal savings banks. 4. Data include all federally insured credit unions, both federal and state Credit unions: Estimates by the National Credit Union Administration for chartered, serving natural persons. federally chartered and federally insured state-chartered credit unions serving 5. Direct and guaranteed obligations. Excludes federal agency issues not natural persons. guaranteed, which are shown in the table under "Business" securities. Life insurance companies: Estimates of the American Council of Life Insurance 6. Issues of foreign governments and their subdivisions and bonds of the for all life insurance companies in the United States. Annual figures are annual- International Bank for Reconstruction and Development. statement asset values, with bonds carried on an amortized basis and stocks at NOTE: Savings and loan associations: Estimates by the FHLBB for all year-end market value. Adjustments for interest due and accrued and for associations in the United States based on annual benchmarks for non-FSLIC- differences between market and book values are not made on each item separately insured associations and the experience of FSLIC-insured associations. but are included, in total, in "other assets." FSLIC-insured federal savings banks: Estimates by the FHLBB for federal savings banks insured by the FSLIC and based on monthly reports of federally insured institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • November 1987 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1987 111999888444 111999888555 111999888666 Mar. Apr. May June July Aug. U.S. budget1 1 Receipts, total 666,457 734,057 769,091 56,515 122,897 47,691 82,945 64,223 60,213 2 On-budget 500,382 547,886 568,862 38,469 99,083 30,205 64,222 47,880 43,511 3 Off-budget 166,075 186,171 200,228 18,046 23,814 17,486 18,723 16,343 16,703 4 Outlays, total 851,781 946,316 989,815 84,527 84,240 83,435 83,366 86,491 81,940 5 On-budget 685,968 769,509 806,318 67,872 69,215 66,389 66,221 70,806 65,071 6 Off-budget 165,813 176,807 183,498 16,655 15,025 17,046 17,145 15,685 16,869 7 Surplus, or deficit (-), total -185,324 -212,260 -220,725 -28,012 38,657 -35,744 -420 -22,268 -21,727 8 On-budget -185,586 -221,623 -237,455 -29,403 29,867 -36,184 -1,998 -22,926 -21,561 9 Off-budget 262 9,363 16,371 1,391 8,790 440 1,578 658 -166 Source of financing (total) 10 Borrowing from the public 170,817 197,269 236,284 7,884 9,075 13,005 9,655 -3,103 33,060 11 Operating cash (decrease, or increase (-k 6,631 13,367 -14,324 15,846 -46,775 22,638 -6,966 20,655 -3,219 12 Other2 7,875 1,630 -1,235 4,506 -543 -1,478 -2,801 4,716 -8,115 MEMO 13 Treasury operating balance (level, end of period) 30,426 17,060 31,384 8,969 55,744 33,106 40,072 19,417 22,635 14 Federal Reserve Banks 8,514 4,174 7,514 3,576 29,688 6,383 13,774 5,365 3,764 15 Tax and loan accounts 21,913 12,886 23,870 5,394 26,056 26,723 26,298 14,052 18,872 1. In accordance with the Balanced Budget and Emergency Deficit Control Act miscellaneous liability (including checks outstanding) and asset accounts; of 1985, all former off-budget entries are now presented on-budget. The Federal seigniorage; increment on gold; net gain/loss for U.S. currency valuation adjust- Financing Bank (FFB) activities are now shown as separate accounts under the ment; net gain/loss for IMF valuation adjustment; and profit on the sale of gold. agencies that use the FFB to finance their programs. The act has also moved two Reflecting the change in Monthly Treasury Statement classification, Table 2, social security trust funds (Federal old-age survivors insurance and Federal monthly data as well as fiscal year data now include monetary assets other than disability insurance trust funds) off-budget. operating cash with "other", sources of financing, (line 12). 2. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. international monetary fund; other cash and monetary assets; accrued interest Government" and the Budget of the U.S. Government. payable to the public; allocations of special drawing rights; deposit funds; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr 1985 1986 1987 1987 111999888555 111999888666 H2 HI H2 HI June July Aug. RECEIPTS 1 All sources 734,057 769,091 364,790 394,345 387,524 447,282 82,945 64,223 60,213 2 Individual income taxes, net 334,531 348,959 169,987 169,444 183,156 205,157 40,521 31,889 26,884 3 Withheld 298,941 314,838 155,725 153,919 164,071 156,760 25,525 31,596 25,008 4 Presidential Election Campaign Fund 35 36 6 31 4 30 4 2 1 5 Nonwithheld 101,328 105,994 22,295 78,981 27,733 112,421 16,574 2,452 3,108 6 Refunds 65,743 71,873 8,038 63,488 8,652 64,052 1,583 2,160 1,233 Corporation income taxes 7 Gross receipts 77,413 80,442 36,528 41,946 42,108 52,396 13,572 3,812 2,549 8 Refunds 16,082 17,298 7,751 9,557 8,230 10,881 2,599 1,454 983 9 Social insurance taxes and contributions, net 265,163 283,901 128,017 156,714 134,006 163,519 24,712 23,346 25,712 10 Employment taxes and contributions 234,646 255,062 116,276 139,706 122,246 146,6% 23,981 20,890 21,447 11 Self-employment taxes and contributions 10,468 11,840 985 10,581 1,338 12,020 1,612 155 0 12 Unemployment insurance 25,758 24,098 9,281 14,674 9,328 14,514 315 2,038 3,912 13 Other net receipts 4,759 4,742 2,458 2,333 2,429 2,310 416 417 354 14 Excise taxes 35,992 32,919 18,470 15,944 15,947 15,845 3,099 2,908 2,698 15 Customs deposits 12,079 13,323 6,354 6,369 7,282 7,129 1,415 1,420 1,370 16 Estate and gift taxes 6,422 6,958 3,323 3,487 3,649 3,818 507 671 587 17 Miscellaneous receipts 18,539 19,887 9,861 10,002 9,605 10,299 1,719 1,631 1,3% OUTLAYS 18 All types 946,316 989,815 487,188 486,037 506,739R 503,338 83,366 86,491 81,940 19 National defense 252,748 273,369 134,675 135,367 138,544 142,846 24,694 24,126 24,387 20 International affairs 16,176 14,471 8,367 5,384 8,876 4,420 1,068 1,145 146 21 General science, space, and technology .... 8,627 9,017 4,727 12,519 4,594 4,324 836 836 823 22 Energy 5,685 4,792 3,305 2,484 2,735 2,335 598 256 341 23 Natural resources and environment 13,357 13,508 7,553 6,245 7,141 6,179 1,176 1,392 1,075 24 Agriculture 25,565 31,169 15,412 14,482 16,160 11,824 -342 1,462 1,336 25 Commerce and housing credit 4,229 4,258 644 860 3,647 4,889 703 232 355 26 Transportation 25,838 28,058 15,360 12,658 14,745 12,113 2,539 2,289 2,405 27 Community and regional development 7,680 7,510 3,901 3,169 3,494 3,108 584 603 464 28 Education, training, employment, social services 29,342 29,662 14,481 14,712 15,268 14,182 2,143 1,854 2,757 29 Health 33,542 35,936 17,237 17,872 19,814 20,318 3,525 3,466 3,419 30 Social security and medicare 254,446 268,921' 129,037 135,214 138,296 142,864 26,339 23,991 22,929 31 Income security 128,200 120,686 59,457 60,786 59,628 62,248 7,931 11,460 8,788 32 Veterans benefits and services 26,352 26,614 14,527 12,193 14,497 12,264 2,440 3,368 1,121 33 Administration of justice 6,277 6,555 3,212 3,352 3,360 3,626 690 754 634 34 General government 5,228 6,796 3,634 3,566 2,786 3,238 1,448 209 598 35 General-purpose fiscal assistance 6,353 6,430 3,391 2,179 2,767 455 54 167 62 36 Net interest5 129,436 135,284 67,448 68,054 66,77c 70,110 10,010 11,711 13,064 37 Undistributed offsetting receipts -32,759 -33,244 -17,953 -17,193 -17,426 -18,005 -3,069 -2,831 -2,764 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. SOURCES. U.S. Department of the Treasury, "Monthly Treasury Statement of 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous Receipts and Outlays of the U.S. Government," and the U.S. Office of Managereceipts. ment and Budget. Budget of the U.S. Government, Fiscal Year 1988. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • November 1987 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1985 1986 1987 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 1,779.0 1,827.5 1,950.3 1,991.1 2,063.6 2,129.5 2,218.9 2,250.7 2,313.1 2 Public debt securities 1,774.6 1,823.1 1,945.9 1,986.8 2,059.3 2,125.3 2,214.8 2,246.7 2,309.3 3 Held by public 1,460.5 1,506.6 1,597.1 1,634.3 1,684.9 1,742.4 1,811.7 1,839.3 1,871.1 4 Held by agencies 314.2 316.5 348.9 352.6 374.4 382.9 403.1 407.5 438.1 5 Agency securities 4.4 4.4 4.4 4.3 4.3 4.2 4.0 4.0 3.8 6 Held by public 3.3 3.3 3.3 3.2 3.2 3.2 3.0 2.9 2.7 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 1,775.3 1,823.8 1,932.4 1,973.3 2,060.0 2,111.0 2,200.5 2,232.4 2,295.0 9 Public debt securities 1,774.0 1,822.5 1,931.1 1,972.0 2,058.7 2,109.7 2,199.3 2,231.1 2,293.7 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 1,823.8 1,823.8 2,078.7 2,078.7 2,078.7 2,111.0 2,300.0 2,300.0 2,320.0 1. Includes guaranteed debt of Treasury and other federal agencies, specified SOURCES. Treasury Bulletin and Monthly Statement of the Public Debt of the participation certificates, notes to international lending organizations, and District United States. of Columbia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period Type and holder 1983 1985 1986 Q3 Q4 Q1 Q2 1 Total gross public debt 1,410.7 1,663.0 1,945.9 2,214.8 2,125.3 2,214.8 2,246.7 2,309.3 By type 2 Interest-bearing debt 1,400.9 1,660.6 1,943.4 2,212.0 2,122.7 2,212.0 2,244.0 2,306.7 3 Marketable 1,050.9 1,247.4 1,437.7 1,619.0 1,564.3 1,619.0 1,635.7 1,659.0 4 Bills 343.8 374.4 399.9 426.7 410.7 426.7 406.2 391.0 5 Notes 573.4 705.1 812.5 927.5 896.9 927.5 955.3 984.4 6 Bonds 133.7 167.9 211.1 249.8 241.7 249.8 259.3 268.6 7 Nonmarketable1 350.0 413.2 505.7 593.1 558.4 593.1 608.3 647.7 8 State and local government series 36.7 44.4 87.5 110.5 102.4 110.5 118.5 125.4 9 Foreign issues 10.4 9.1 7.5 4.7 4.1 4.7 4.9 5.1 10 Government 10.4 9.1 7.5 4.7 4.1 4.7 4.9 5.1 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes 70.7 73.1 78.1 90.6 85.6 90.6 93.0 95.2 13 Government account series^ 231.9 286.2 332.2 386.9 365.9 386.9 391.4 421.6 14 Non-interest-bearing debt 9.8 2.3 2.5 2.8 2.6 2.8 2.7 2.6 By holder4 15 U.S. government agencies and trust funds 236.3 289.6 348.9 403.1 382.9 403.1 407.5 438.1 16 Federal Reserve Banks 151.9 160.9 181.3 211.3 190.8 211.3 n.a. 212.3 17 Private investors 1,022.6 1,212.5 1,417.2 1,602.0 1,553.3 1,602.0 1,641.4 1,657.7 18 Commercial banks 188.8 183.4 192.2 232.lr 212.5 232.1' 232.0 237.1 19 Money market funds 22.8 25.9 25.1 28.6 24.9 28.6 18.8 20.6 20 Insurance companies 56.7 76.4 95.8 106.9 100.9 106.9 n.a. n.a. 21 Other companies 39.7 50.1 59.0 68.8 65.7 68.8 72.1 n.a. 22 State and local Treasurys 155.1 179.4 n.a. n.a. n.a. n.a. n.a. n.a. Individuals 23 Savings bonds 71.5 74.5 79.8 92.3 87.1 92.3 94.7 96.8 24 Other securities 61.9 69.3 75.0 65.6' 68.7' 65.6' 63.3' 63.4 25 Foreign and international 166.3 192.9 212.5r 251.5'" 253.2' 251.5' 260.4' 269.9 26 Other miscellaneous investors6 259.8 360.6 n.a. n.a. n.a. n.a. n.a. 1. Includes (not shown separately): Securities issued to the Rural Electrifica- 5. Consists of investments of foreign and international accounts. Excludes tion Administration; depository bonds, retirement plan bonds, and individual non-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. Treasury deposit accounts, and federally-sponsored agencies. 3. Held almost entirely by U.S. Treasury agencies and trust funds. SOURCES. Data by type of security, U.S. Treasury Department, Monthly 4. Data for Federal Reserve Banks and U.S. Treasury agencies and trust funds Statement of the Public Debt of the United States; data by holder. Treasury 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 Transaction1 Par value; averages of daily figures, in millions of dollars 1987 1987 IItteemm 11998844 11998855 11998866 June July' Aug. July 22 July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 Immediate delivery2 1 U.S. Treasury securities 52,778 75,331 95,447 110,375 91,110 105,013 85,256r 81,501' 114,790 94,659 117,201 9922,,332299 By maturity ? Bills 26,035 32,900 34,249 35,309 32,548 35,784 26,712' 26,112 51,400 33,155 33,040 31,229 3 Other within 1 year 1,305 1,811 2,115 3,446 3,575 2,937 2,846 4,050 3,568 2,927 2,953 2,552 4 1-5 years 11,733 18,361 24,667 26,593 22,149 28,355 21,387 19,434 27,464 23,668 32,181 29,010 5 5-10 years 7,606 12,703 20,455 27,509 19,422 20,419 20,421 18,083 18,979 20,442 21,237 15,845 6 Over 10 years 6,099 9,556 13,961 17,518 13,415 17,519 13,890 13,823' 13,378 14,467 27,791 13,693 By type of customer 7 U.S. government securities dealers 2,919 3,336 3,646 2,822 2,406 3,082 2,193' 1,554 4,381 22,,664477 22,,992277 22,,995522 8 U.S. government securities brokers 25,580 36,222 49,368 58,797 48,825 57,432 46,787' 45,987 6622,,554422 4499,,993344 6655,,331122 5511,,009977 All others3 24,278 35,773 42,218 47,962 39,070 43,823 36,274' 33,960' 47,866 42,077 48,961 38,280 10 Federal agency securities 7,846 11,640 16,746 18,625 17,938 16,164 19,083' 13,042 13,535 12,957 21,090 16,863 11 Certificates of deposit 4,947 4,016 4,355 3,973 3,938 3,475 3,813 3,523 3,652 3,495 3,219 3,357 1? Bankers acceptances 3,243 3,242 3,272 2,740 3,143 2,765 2,897 2,733 2,817 2,900 2,947 2,328 13 Commercial paper 10,018 12,717 16,660 17,227 17,882 15,606 16,645 15,576 17,313 14,857 15,639 14,313 Futures contracts 14 Treasury bills 6,947 5,561 3,311 2,810 2,091 2,786 1,777 2,527' 2,390 2,231 22,,770022 22,,886688 15 Treasury coupons 4,533 6,085 7,175 8,001 6,821 8,967 6,350 7,198' 8,012 6,651 10,677 8,389 16 Federal agency securities 264 252 16 13 6 10 0 21 4 1 0 0 Forward transactions 17 U.S. Treasury securities 1,364 1,283 1,876 1,869 819 1,699 781 653 750 1,561 1,884 2,422 18 Federal agency securities 2,843 3,857 7,830 9,875 9,854 8,486 11,277 7,603 5,718 7,792 12,119 8,614 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. Treasury 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 Treasury securities (Treasury bills, notes, and 2. Data for immediate transactions do not include forward transactions. bonds) or after 30 days for mortgage-backed agency issues. 3. Includes, among others, all other dealers and brokers in commodities and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • November 1987 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Averages of daily figures, in millions of dollars 1987 1987 IItteemm 11998844 11998855 11998866 June July" Aug. July 29 Aug. 5 Aug. 12 Aug. 19 Aug. 26 Positions Net immediate2 1 U.S. Treasury securities 5,429 7,391 13,055 -8,006 -8,871 -10,664 -15,566" -12,252 -9,209 -5,932 -14,032 2 Bills 5,500 10,075 12,723 2,240 5,041 5,605 657 3,527 8,124 7,351 4,491 3 Other within 1 year 63 1,050 3,699 2,106 1,259 461 1,228 346 336 816 713 4 1-5 years 2,159 5,154 9,297 371 -2,328 -6,002 -4,937 -3,304 -3,022 -4,851 -10,622 5 5-10 years -1,119 -6,202 -9,504 -7,525 -7,000 -5,722 -7,271 -7,182 -7,880 -4,400 -4,892 6 Over 10 years -1,174 -2,686 -3,161 -5,197 -5,843 -5,006 -5,243" -5,638 -6,768 -4,848 -3,722 7 Federal agency securities 15,294 22,860 33,066 32,014 33,180 33,313 31,817" 32,315 33,540 34,712 33,497 8 Certificates of deposit 7,369 9,192 10,533 8,612 7,414 7,862 7,093 7,994 7,969 7,943 7,606 9 Bankers acceptances 3,874 4,586 5,535 3,777 3,151 3,444 2,689 3,083 3,935 3,823 3,053 10 Commercial paper 3,788 5,570 8,087 7,202 6,462 5,800 6,393 6,993 5,958 5,081 5,100 Futures positions 11 Treasury bills -4,525 -7,322 -18,062 -585 916 -2,013 90 99 -2,475 -3,635 -2,826 12 Treasury coupons 1,794 4,465 3,489 3,181 6,194 6,299 7,326 7,005 6,184 5,699 5,670 13 Federal agency securities 233 -722 -153 -100 -96 -95 -96 -93 -96 -96 -96 Forward positions 14 U.S. Treasury securities -1,643 -911 -2,304 -921 -1,759 -1,869 -2,419 -1,962 -1,881 -1,753 -1,768 15 Federal agency securities -9,205 -9,420 -11,909 -19,241 -20,187 -22,419 -18,837" -20,081 -22,382 -24,657 -22,450 Financing3 Reverse repurchase agreements4 16 Overnight and continuing 44,078 68,035 98,954 100,701 124,938 n.a. 133,211 130,281 125,398 130,403 n.a. 17 Term agreements 68,357 80,509 108,693 149,724 150,323 n.a. 156,483 157,532 164,936 151,459 n.a. Repurchase agreements 18 Overnight and continuing 75,717 101,410 141,735 172,523 168,870 n.a. 166,552 175,074 170,987 177,641 n.a. 19 Term agreement 57,047 70,076 102,640 121,818 120,198 n.a. 129,083 126,690 131,989 116,343 n.a. 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. Treasury 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. Treasury and federal agency securithe number of trading days in the period. Positions are net amounts and are shown ties, 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 5. Includes both repurchase agreements undertaken to finance positions and a 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 1987 AAggeennccyy 11998844 11998855 11998866 Feb. Mar. Apr. May June July 1 Federal and federally sponsored agencies 271,220 293,905 307,361 305,603 305,033r 306,909 308,547 323,735 2 Federal agencies 35,145 36,390 36,958 37,073 36,660 36,531 36,587 36,968 3 Defense Department 142 71 33 27 24 23 21 20 4 Export-Import Bank2'3 15,882 15,678 14,211 14,211 13,813 13,813 13,813 13,416 5 Federal Housing Administration 133 115 138 147 158 165 168 169 n. a. 6 Government National Mortgage Association participation certificates 2,165 2,165 2,165 2,165 2,165 1,965 1,965 1,965 7 Postal Service6 1,337 1,940 3,104 3,104 3,104 3,104 3,104 3,718 8 Tennessee Valley Authority 15,435 16,347 17,222 17,334 17,311 17,376 17,431 17,595 9 United States Railway Association6 51 74 85 85 85 85 85 85 10 Federally sponsored agencies7 237,012 257,515 270,553 268,530 266,948 270,378 271,960 286,767 11 Federal Home Loan Banks 65,085 74,447 88,752 91,313 92,087 94,606 95,931 99,680 100,976 12 Federal Home Loan Mortgage Corporation 10,270 11,926 13,589 13,847 13,074 14,850 14,637 12,309 n. a. 13 Federal National Mortgage Association 83,720 93,896 93,563 91,522 91,618 89,741 90,514 91,039 91,637 14 Farm Credit Banks 72,192 68,851 62,478 59,367 57,613 57,251 56,648 56,648 55,715 15 Student Loan Marketing Association 5,745 8,395 12,171 12,481 12,556 13,930 14,230 27,091 28,583 MEMO 16 Federal Financing Bank debt9 145,217 153,373 157,510 157,724 157,012 157,177 157,331 157,506 n. a. Lending to federal and federally sponsored 17 Export-Import Bank3 15,852 15,670 14,205 14,205 13,807 13,807 13,807 13,410 18 Postal Service6 1,087 1,690 2,854 2,854 2,854 2,854 2,854 3,468 19 Student Loan Marketing Association 5,000 5,000 4,970 4,970 4,970 4,970 4,970 4,970 20 Tennessee Valley Authority 13,710 14,622 15,797 15,954 15,931 15,996 16,051 16,215 n. a. 21 United States Railway Association6 51 74 85 85 85 85 85 85 Other Lending10 22 Farmers Home Administration 58,971 64,234 65,374 65,374 65,224 65,254 65,304 65,199 23 Rural Electrification Administration 20,693 20,654 21,680 21,749 21,473 21,487 21,525 21,539 24 Other 29,853 31,429 32,545 32,533 32,668 32,724 32,735 32,620 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 (FFB). 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 Admin- 10. Includes FFB purchases of agency assets and guaranteed loans; the latter istration; Department of Health, Education, and Welfare; Department of Housing contain loans guaranteed by numerous agencies with the guarantees of any and Urban Development; Small Business Administration; and the Veterans particular agency being generally small. The Farmers Home Administration item Administration. consists exclusively of agency assets, while the Rural Electrification Administra- 6. Off-budget. tion entry contains both agency assets and guaranteed loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 DomesticN onfinancial Statistics • November 1987 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1987 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May June July' Aug. 1 AU issues, new and refunding1 106,641 214,189 147,011 7,343 8,969 14,591 6,708 6,037 10,718 6,967 6,002 Type of issue 2 General obligation 26,485 52,622 46,346 1,100 3,643 3,853 3,363' 2,872 3,329 2,238 2,036 3 Revenue 80,156 161,567 100,664 6,243 5,325 10,738 3,345' 3,165 7,389 4,729 3,966 Type of issuer 4 State 9,129 13,004 14,474 153 1,364 1,217 419' 1,001 1,138' 834 398 5 Special district and statutory authority 63,550 134,363 89,997 5,275 5,825 10,004 4,665' 3,019 6,453 3,951 4,117 6 Municipalities, counties, townships 33,962 78,754 42,541 1,915 1,781 3,370 1,624 2,017 3,127 2,182 1,488 7 Issues for new capital, total 94,050 156,050 83,490 1,930 2,774 4,480 3,237 3,848 7,552 4,478 4,899 Use of proceeds 8 Education 7,553 16,658 16,948 452 448 659 774 789 1,554 773 839 9 Transportation 7,552 12,070 11,666 92 145 111 98 194 705 647 158 10 Utilities and conservation 17,844 26,852 35,383 681 482 444 571 561 1,410 835 392 11 Social welfare 29,928 63,181 17,332 380 527 991 468 454 1,082 465 901 12 Industrial aid 15,415 12,892 5,594 38 89 368 33 161 401 457 181 13 Other purposes 15,758 24,398 47,433 286 1,084 1,907 1,295 1,689 2,399 1,301 2,428 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 U.S. Corporations Millions of dollars 1986 1987 Type of issue or issuer, or use Dec. Jan. Feb. Apr. May Juner July 1 AU issues 132,531 201,269 423,726' 27,206 24,168 27,048 37,953 23,735 19,969 28,445 27,102 2 Bonds2 109,903 165,754 355,293'' 20,958 21,253 23,281 28,143 19,518 13,431 22,093 21,859 Type of offering 3 Public, domestic 73,579 119,559 231,936' 18,920 20,250 20,274 23,388 17,634 11,394 20,564 18,833 4 Private placement, domestic3 . 36,324 46,195 80,761 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5. Sold abroad 42,596 2,038 1,003 3,007 4,755 1,884 2,037 1,530 3,026 Industry group 6 Manufacturing 24,607 52,128 91,548' 4,153 4,638 4,253 7,180 2,734 5,035 4,104 5,532 7 Commercial and miscellaneous 13,726 15,140 40,124' 2,432 1,253 1,884 4,261 1,683 754 2,061 1,005 8 Transportation 4,694 5,743 9,971' 70 0 176 521 168 21 0 343 9 Public utility 10,679 12,957 31,426' 2,498 1,491 2,715 794 1,370 572 2,091 1,644 10 Communication 2,997 10,456 16,659' 776 65 410 710 175 138 205 119 11 Real estate and financial 53,199 69,332 165,564' 11,029 13,806 13,844 14,678 13,389 6,912 13,632 13,217 12 Stocks3 22,628 35,515 68,433 6,248 2,915 3,767 9,810 4,217 6,538 6,352 5,243 Type 13 Preferred 4,118 6,505 11,514 1,293 429 905 2,257 526 1,170 1,202 1,154 14 Common 18,510 29,010 50,316 4,955 2,486 2,862 7,553 3,691 5,368 5,150 4,089 15 Private placement3 6,603 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 16 Manufacturing 4,054 5,700 15,027 1,781 365 814 2,016 653 1,066 1,438 1,087 17 Commercial and miscellaneous 6,277 9,149 10,617 709 148 437 2,366 2,203 1,516 1,353 879 18 Transportation 589 1,544 2,427 183 0 191 299 230 3 492 366 19 Public utility 1,624 1,966 4,020 873 237 509 907 297 374 329 459 20 Communication 419 978 1,825 101 16 9 57 18 200 199 306 21 Real estate and financial 9,665 16,178 34,517 2,601 2,149 1,807 4,165 816 3,379 2,541 2,146 1. Figures, which represent gross proceeds of issues maturing in more than one 2. Monthly data include only public offerings. year, are principal amount or number of units multiplied by offering price. 3. Data are not available on a monthly basis. Excludes secondary offerings, employee stock plans, investment companies other SOURCES. IDD Information Services, Inc., U.S. Securities and Exchange than closed-end, intracorporate transactions, equities sold abroad, and Yankee Commission and the Board of Governors of the Federal Reserve System. bonds. Stock data include ownership securities issued by limited partnerships. 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 1987 IItteemm 11998855 11998866 Dec. Jan. Feb. Mar. Apr. May June' July INVESTMENT COMPANIES1 1 Sales of own shares2 222,670 411,483 44,796 50,116 36,307 40,378 42,857 28,295 28,637 27,956 2 Redemptions of own shares3 132,440 239,394 34,835 26,565 21,576 24,730 37,448 23,453 23,693 22,817 3 Net sales 90,230 172,089 9,961 23,551 14,731 15,648 5,409 4,842 4,944 5,139 4 Assets4 251,695 424,156 424,156 464,415 490,643 506,752 502,487 500,634 516,866 530,885 20,607 30,716 30,716 34,098 35,279 37,090 43,009 39,158 41,467 42,276 6 Other 231,088 393,440 393,440 430,317 455,364 469,662 459,478 461,476 475,099 488,609 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. 1985 1986 1987 AAccccoouunntt 11998844 11998855 11998866 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2' 1 Corporate profits with inventory valuation and capital consumption adjustment 266.9 277.6 284.4 292.8 277.8 288.0 282.3 286.4 281.1 294.0 296.8 2 Profits before tax 239.9 224.8 231.9 230.2 233.5 218.9 224.4 236.3 247.9 257.0 268.7 3 Profits tax liability 93.9 96.7 105.0 100.5 99.1 98.1 102.1 106.1 113.9 128.0 134.2 4 Profits after tax 146.1 128.1 126.8 129.7 134.4 120.9 122.3 130.2 134.0 129.0 134.5 5 Dividends 79.0 81.3 86.8 81.2 81.7 84.3 86.6 87.7 88.6 90.3 92.4 6 Undistributed profits 67.0 46.8 40.0 48.5 52.7 36.6 35.7 42.5 45.4 38.7 42.1 7 Inventory valuation -5.8 -.8 6.5 6.5 -9.8 17.8 11.3 6.0 -8.9 -11.3 -20.0 8 Capital consumption adjustment 32.8 53.5 46.0 56.0 54.2 51.3 46.7 44.0 42.1 48.2 48.0 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 DomesticN onfinancial Statistics • November 1987 1.49 NONFINANCIAL CORPORATIONS Assets and Liabilities1 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 1,565.9 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 ratio2 1.492 1.462 1.459 1.487 1.464 1.467 1.466 1.455 1.447 1.469 1. For a description of this series, see "Working Capital of Nonfinancial 2. Ratio of total current assets to total current liabilities. Corporations" in the July 1978 BULLETIN, pp. 533-37. Data are not currently SOURCE. Federal Trade Commission and Bureau of the Census, available after 1986:1. 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment • Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1986 1987 IInndduussttrryy 11998855 11998866RR 11998877''''11 Ql Q2 Q3 Q4 Ql Q2 Q31 Q41 1 Total nonfarm business 387.13 379.47 389.07 380.04 376.21 375.50 386.09 374.23 377.65 398.04 406.37 Manufacturing 2 Durable goods industries 73.27 69.14 71.23 68.71 68.56 69.42 69.87 70.47 68.76 73.24 72.44 3 Nondurable goods industries 80.21 73.56 75.17 76.39 73.62 70.01 74.20 70.18 72.03 77.23 81.22 Nonmanufacturing 4 Mining 15.88 11.22 10.75 13.13 1111..2299 10.14 10.31 10.31 11.02 11.06 10.60 Transportation 5 Railroad 7.08 6.66 6.29 6.50 6.70 7.02 6.41 5.55 5.77 6.79 7.05 6 Air 4.79 6.26 6.70 6.53 5.87 5.78 6.84 7.46 5.72 6.62 7.02 7 Other 6.15 5.89 6.52 5.47 5.83 6.01 6.25 5.97 6.19 7.05 6.88 Public utilities 8 Electric 36.11 33.91 31.96 34.25 33.77 33.81 33.78 30.85 31.13 32.93 32.95 9 Gas and other 12.71 12.47 12.56 12.92 12.66 12.00 12.34 12.75 12.35 12.66 12.49 10 Commercial and other2 150.93 160.38 167.89 156.14 157.91 161.31 166.08 160.70 164.69 170.46 175.70 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 1986 1987 AAccccoouunntt 11998822 11998833 11998844 11998855 Q1 Q2 Q3 Q4 Qi Q2 ASSETS Accounts receivable, gross 1 Consumer 75.3 83.3 89.9 113.4 117.2 125.1 137.1 136.5 133.9 136.9 2 Business 100.4 113.4 137.8 158.3 165.9 167.7 161.0 174.8 182.8 189.0 3 Real estate 18.7 20.5 23.8 28.9 29.9 30.8 32.1 33.7 35.1 36.3 4 Total 194.3 217.3 251.5 300.6 312.9 323.6 330.2 345.0 351.8 362.1 Less: 5 Reserves for unearned income 29.9 30.3 33.8 39.2 40.0 40.7 42.4 41.4 40.4 41.2 6 Reserves for losses 3.3 3.7 4.2 4.9 5.0 5.1 5.4 5.8 5.9 6.2 7 Accounts receivable, net 161.1 183.2 213.5 256.5 268.0 277.8 282.4 297.8 305.5 314.8 8 AH other 30.4 34.4 35.7 45.3 48.8 48.8 59.9 57.9 59.0 57.0 9 Total assets 191.5 217.6 249.2 301.9 316.8 326.6 342.3 355.6 364.5 371.8 LIABILITIES 10 Bank loans 16.5 18.3 20.0 20.6 19.0 19.2 20.2 22.2 17.3 17.2 11 Commercial paper 51.4 60.5 73.1 99.2 104.3 108.4 112.8 117.8 119.1 118.7 Debt 12 Other short-term 11.9 11.1 12.9 12.5 13.4 15.4 16.0 17.2 21.6 24.2 13 Long-term 63.7 67.7 77.2 93.1 101.0 105.2 109.8 115.6 118.4 120.4 14 All other liabilities 21.6 31.2 34.5 40.9 42.3 40.1 44.1 43.4 46.3 48.1 15 Capital, surplus, and undivided profits 26.4 28.9 31.5 35.7 36.7 38.4 39.4 39.4 41.8 43.1 16 Total liabilities and capital 191.5 217.6 249.2 301.9 316.8 326.6 342.3 355.6 364.5 371.8 NOTE. Components may not add to totals because of rounding. 1.52 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted AAAccccccooouuunnntttsss Changes c e in iv a a c b c le o unts re- Extensions Repayments rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuutttssstttaaannndddiiinnnggg 1987 1987 1987 JJJuuulllyyy 333111,,, 111999888777111 May June July May June July May June July 1 Total 189,356 2,904 1,714 3,403 28,101 30,390 29,883 25,197 28,677 26,480 Retail financing of installment sales 2 Automotive (commercial vehicles) 30,359 739 691 879 1,507 1,259 1,318 768 568 438 3 Business, industrial, and farm equipment 23,891 310 623 502 1,460 1,699 1,865 1,150 1,076 1,363 Wholesale financing 4 Automotive 27,817 1,133 298 -173 10,709 11,701 10,704 9,577 11,404 10,877 5 Equipment 5,523 -16 115 94 513 591 624 530 476 530 6 All other 8,478 75 -256 127 2,964 3,246 3,186 2,889 3,502 3,059 Leasing 7 Automotive 20,876 -78 3 410 1,455 1,171 1,357 1,533 1,168 947 8 Equipment 40,041 182 -14 332 838 1,019 1,128 655 1,033 796 9 Loans on commercial accounts receivable and factored commercial accounts receivable 17,363 96 -117 853 7,262 8,150 8,344 7,166 8,268 7,490 10 All other business credit 15,008 464 371 379 1,394 1,554 1.358 929 1,183 979 These data also appear in the Board's G.20 (422) release. For address, see 1. Not seasonally adjusted, inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • November 1987 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1987 IItteemm 11998844 11998855 11998866 Feb. Mar. Apr. May June' July Aug. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms 1 Purchase price (thousands of dollars) 96.8 104.1 118.1 135.6' 130.2' 136.9' 132.9' 131.8 134.6' 141.2 2 Amount of loan (thousands of dollars) 73.7 77.4 86.2 99.1' 95.C 100.9' 99.0' 97.5 99.4' 102.6 3 Loan/price ratio (percent) 78.7 77.1 75.2 75.3' 74.3' 75.2' 76.1' 75.9 75.4' 75.0 4 Maturity (years) 27.8 26.9 26.6 27.6' 27.1' 27.1' 28.0' 28.0 27.9' 27.8 5 Fees and charges (percent of loan amount)2, 2.64 2.53 2.48 2.21' 2.2(y 2.23' 2.26' 2.40 2.42' 2.19 6 Contract rate (percent per annum) 11.87 11.12 9.82 8.87' 8.77' 8.84' 8.99' 9.05 9.01' 9.01 Yield (percent per year) 7 FHLBB series3 12.37 11.58 10.25 9.23' 9.14' 9.21' 9.37' 9.45 9.41' 9.38 8 HUD series4 13.80 12.28 10.07 9.04' 9.19' 10.11' 10.44' 10.29 10.22' n.a. SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series) 13.81 12.24 9.91 8.81 8.94 10.02 10.61 10.33 10.38 n.a. 10 GNMA securities6 13.13 11.61 9.30 8.28 8.18 8.85 9.40 9.50 9.59 9.77 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 83,339 94,574 98,048 95,514 95,140 94,404 94,064 94,064 94,154 94,600 12 FHA/VA-insured 35,148 34,244 29,683 22,063 21,843 21,765 21,999 21,892 21,730 21,555 13 Conventional 48,191 60,331 68,365 73,451 73,297 72,639 72,065 72,173 72,424 73,045 Mortgage transactions (during period) 14 Purchases 16,721 21,510 30,826 979 1,435 2,118 1,718 1,690 1,569 1,613 Mortgage commitments1 15 Contracted (during period) 21,007 20,155 32,987 912 2,805 3,208 1,726 1,745 2,373 2,276 16 Outstanding (end of period) 6,384 3,402 3,386 2,175 3,539 4,421 4,410 4,448 5,071 5,690 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 9,283 12,399 13,517 12,911 12,940 12,492 12,442 12,598 i 18 FHA/VA 910 841 746 722 717 708 688 382 T| T 19 Conventional 8,373 11,559 12,771 12,189 12,223 11,784 11,754 11,903 1 Mortgage transactions (during period) 20 Purchases 21,886 44,012 103,474 7,961 9,394 9,777 7,995 7,864 n.a. n.a. 21 Sales 18,506 38,905 100,236 7,840 9,143 9,848' 7,767 7,447 1 1 22 M Co o n rt t g r a a g c e te d ( c d o u m ri m ng it m p e e n r t i s o 9 d ) 32,603 48,989 110,855 9,197 9,669 8,408 7,182 7,330 t • 1. Weighted averages based on sample surveys of mortgages originated by 6. Average net yields to investors on Government National Mortgage Associmajor institutional lender groups; compiled by the Federal Home Loan Bank ation guaranteed, mortgage-backed, fully modified pass-through securities, as- Board in cooperation with the Federal Deposit Insurance Corporation. suming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying 2. Includes all fees, commissions, discounts, and "points" paid (by the 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 OUTSTANDING1 Millions of dollars, end of period 1986 1987 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11998844 11998855 11998866 Q2 Q3 Q4 Q1 Q2 1 All holders 2,035,238 2,269,173 2,565,867 2,386,022 2,471,574 2,565,867 2,658,942r 2,744,930' 2 1- to 4-family 1,318,545 1,467,409 1,666,357 1,544,392 1,607,799 1,666,357 1,709,863' 1,770,953' 3 Multifamily 185,604 214,045 246,879 229,405 237,661 246,879 259,309' 266,913' 4 Commercial 419,444 482,029 555,825 511,038 526,535 555,825 596,507' 615,264' 5 111,645 105,690 96,806 101,187 99,579 %,806 93,263' 91,800' 6 Selected financial institutions 1,269,702 1,390,394 1,506,422 1,435,437 1,464,213 1,506,422 1,557,014' 1,600,779' 7 Commercial banks2 379,498 429,1% 502,534 456,163 474,658 502,534 517,271 542,575 8 1- to 4-family 196,163 213,434 235,814 221,640 228,593 235,814 241,512 251,701 9 Multifamily 20,264 23,373 31,173 26,799 28,623 31,173 31,745 33,585 10 Commercial 152,894 181,032 222,799 195,484 204,9% 222,799 230,771 243,399 11 Farm 10,177 11,357 12,748 12,240 12,446 12,748 13,243 13,890 17 Savings institutions3 709,718 760,499 777,312 768,435 772,175 777,312 809,967 823,217 13 1- to 4-family 528,791 554,301 558,412 556,039 557,938 558,412 557,065 567,262 14 Multifamily 75,567 89,739 97,059 92,563 94,227 97,059 103,698 105,649 15 Commercial 104,896 115,771 121,236 119,195 119,406 121,236 148,688 149,804 16 Farm 464 688 605 638 604 605 516 502 17 Life insurance companies 156,699 171,797 192,975 180,041 185,269 192,975 194,689' 198,089' 18 1- to 4-family 14,120 12,381 12,763 12,608 12,927 12,763 12,832' 12,832' 19 Multifamily 18,938 19,894 20,847 20,181 20,709 20,847 20,82C 20,820' 20 Commercial 111,175 127,670 148,367 135,924 140,213 148,367 150,592' 154,192' 21 Farm 12,466 11,852 10,998 11,328 11,420 10,998 10,445' 10,245' 22 Finance companies 23,787 28,902 33,601 30,798 32,111 33,601 35,087 36,898 23 Federal and related agencies 158,993 166,928 203,800 161,398 159,505 203,800 199,509 196,498' 24 Government National Mortgage Association 2,301 1,473 889 876 887 889 687 665 25 1- to 4-family 585 539 47 49 48 47 46 45 26 Multifamily 1,716 934 842 827 839 842 641 620 27 Farmers Home Administration- 1,276 733 48,421 570 457 48,421 48,203 48,085 78 1- to 4-family 213 183 21,625 146 132 21,625 21,390 21,157 29 Multifamily 119 113 7,608 66 57 7,608 7,710 7,808 30 Commercial 497 159 8,446 111 115 8,446 8,463 8,553 31 Farm 447 278 10,742 247 153 10,742 10,640 10,567 32 Federal Housing and Veterans Administration 4,816 4,920 5,047 5,094 4,966 5,047 5,177 5,254 33 1- to 4-family 2,048 2,254 2,386 2,449 2,331 2,386 2,447 2,504 34 Multifamily 2,768 2,666 2,661 2,645 2,635 2,661 2,730 2,750 35 Federal National Mortgage Association 87,940 98,282 97,895 97,295 97,717 97,895 95,140 94,064 36 1- to 4-family 82,175 91,966 90,718 90,460 90,508 90,718 88,106 87,013 37 Multifamily 5,765 6,316 7,177 6,835 7,209 7,177 7,034 7,051 38 Federal Land Banks 52,261 47,498 39,984 43,369 42,119 39,984 37,362 35,833' 39 1- to 4-family 3,074 2,798 2,353 2,552 2,478 2,353 2,198 2,108' 40 Farm 49,187 44,700 37,631 40,817 39,641 37,631 35,164 33,725' 41 Federal Home Loan Mortgage Corporation 10,399 14,022 11,564 14,194 13,359 11,564 12,940 12,597' 42 1- to 4-family 9,654 11,881 10,010 11,890 11,127 10,010 11,774 11,172' 43 Multifamily 745 2,141 1,554 2,304 2,232 1,554 1,166 1,425' 44 Mortgage pools or trusts6 332,057 415,042 529,763 475,615 522,721 529,763 571,705 612,408' 45 Government National Mortgage Association 179,981 212,145 260,869 229,204 241,230 260,869 277,386 290,512 46 1- to 4-family 175,589 207,198 255,132 223,838 235,664 255,132 271,065 283,892 47 Multifamily 4,392 4,947 5,737 5,366 5,566 5,737 6,321 6,620 48 Federal Home Loan Mortgage Corporation 70,822 100,387 171,372 125,903 146,871 171,372 186,295 200,284' 49 1- to 4-family 70,253 99,515 166,667 123,676 143,734 166,667 180,602 194,238' 50 Multifamily 569 872 4,705 2,227 3,137 4,705 5,693 6,046' 51 Federal National Mortgage Association 36,215 54,987 97,174 72,377 86,359 97,174 107,673 121,270 52 1- to 4-family 35,965 54,036 95,791 71,153 85,171 95,791 106,068 119,540 53 Multifamily 250 951 1,383 1,224 1,188 1,383 1,605 1,730 54 Farmers Home Administration 45,039 47,523 348 48,131 48,261 348 351 342 55 1- to 4-family 21,813 22,186 142 21,987 21,782 142 154 149 56 Multifamily 5,841 6,675 n.a. 7,170 7,353 n.a. n.a. n.a. 57 Commercial 7,559 8,190 132 8,347 8,409 132 127 126 58 Farm 9,826 10,472 74 10,627 10,717 74 70 67 59 Individuals and others7 274,486 296,809 325,882 313,572 325,135 325,882 330,714 335,245 60 1- to 4-family 154,315 165,835 180,896 175,107 183,255 180,8% 179,517 180,442 61 Multifamily 48,670 55,424 66,133 61,198 63,886 66,133 70,146 72,809 62 Commercial 42,423 49,207 54,845 51,977 53,396 54,845 57,866 59,190 63 Farm 29,078 26,343 24,008 25,290 24,598 24,008 23,185 22,804 1. Based on data from various institutional and governmental sources, with 5. FmHA-guaranteed securities sold to the Federal Financing Bank were some quarters estimated in part by the Federal Reserve. Multifamily debt refers reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986: 4, to loans on structures of five or more units. because of accounting changes by the Farmers Home Administration. 2. Includes loans held by nondeposit trust companies but not bank trust 6. Outstanding principal balances of mortgage pools backing securities insured departments. or guaranteed by the agency indicated. 3. Includes savings banks and savings and loan associations. Beginning 1987:1, 7. Other holders include mortgage companies, real estate investment trusts, data reported by FSLlC-insured institutions include loans in process and other state and local credit agencies, state and local retirement funds, noninsured contra assets. pension funds, credit unions, and other U.S. agencies. 4. Assumed to be entirely 1- to 4-family loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • November 1987 1.55 CONSUMER INSTALLMENT CREDIT1-4 Total Outstanding, and Net Change, seasonally adjusted Millions of dollars 1986 1987 Nov. Dec. Jan. Feb. Mar. Apr. May June" July Amounts outstanding (end of period) 1 Total 522,805 577,784 577,656 577,784 578,578 579,591 579,913 583,595 583,276 587,821 591,276 By major holder 2 Commercial banks 242,084 261,604 262,949 261,604 261,694 262,105 261,933 263,433 263,463 264,3% 264,9% 3 Finance companies 113,070 136,494 136,314 136,494 135,802 136,009 136,050 137,091 136,398 138,038 138,745 4 Credit unions 72,119 77,857 77,508 77,857 78,284 78,492 78,569 79,255 79,476 80,585 81,682 3 Retailers 38,864 40,586 40,496 40,586 40,617 40,644 40,469 40,467 40,318 40,287 40,364 6 Savings institutions 52,433 58,037 57,168 58,037 58,906 59,031 59,488 59,826 60,045 60,983 61,910 7 Gasoline companies 4,235 3,205 3,221 3,205 3,276 3,311 3,405 3,522 3,576 3,532 3,580 By major type of credit 8 Automobile 208,057 245,055 243,005 245,055 245,472 246,064 246,290 247,663 247,578 250,130 251,081 9 Commercial banks 93,003 100,709 100,221 100,709 101,389 101,688 101,528 101,781 102,189 102,810 102,834 10 Credit unions 35,635 39,029 38,854 39,029 39,243 39,347 39,386 39,730 39,841 40,396 40,946 11 Finance companies 70,091 93,274 92,188 93,274 92,617 92,780 93,032 93,738 93,089 94,270 94,455 12 Savings institutions 9,328 12,043 11,742 12,043 12,223 12,249 12,344 12,414 12,459 12,654 12,846 13 Revolving 122,021 134,938 134,391 134,938 134,916 135,663 135,166 136,706 136,869 137,401 138,704 14 Commercial banks 75,866 85,652 85,426 85,652 85,395 86,053 85,567 86,929 87,133 87,590 88,643 15 Retailers 34,695 36,240 36,137 36,240 36,277 36,308 36,141 36,139 36,009 35,971 36,021 16 Gasoline companies 4,235 3,205 3,221 3,205 3,276 3,311 3,405 3,522 3,576 3,532 3,580 17 Savings institutions 5,705 7,713 7,529 7,713 7,829 7,845 7,906 7,951 7,980 8,105 8,228 18 Credit unions 1,520 2,128 2,078 2,128 2,139 2,145 2,147 2,166 2,172 2,202 2,232 19 Mobile home 25,488 25,710 25,731 25,710 25,852 25,789 25,614 2255,,662266 25,542 25,685 25,858 20 Commercial banks 9,538 8,812 8,951 8,812 8,787 8,739 8,725 88,,669988 8,615 8,609 8,624 21 Finance companies 9,391 9,028 9,091 9,028 9,077 9,045 8,823 8,816 8,785 8,807 8,839 22 Savings institutions 6,559 7,870 7,689 7,870 7,988 8,005 8,067 8,112 8,142 8,269 8,395 23 Other 167,239 172,081 174,529 172,081 172,338 172,076 172,844 173,600 173,287 174,605 175,633 24 Commercial banks 63,677 66,431 68,351 66,431 66,122 65,625 66,113 66,026 65,527 65,387 64,895 25 Finance companies 33,588 34,192 35,035 34,192 34,108 34,183 34,196 34,537 34,524 34,%2 35,452 26 Credit unions 34,964 36,700 36,576 36,700 36,901 36,999 37,036 37,359 37,463 37,986 38,503 27 Retailers 4,169 4,346 4,359 4,346 4,340 4,336 4,327 4,328 4,310 4,315 4,343 28 Savings institutions 30,841 30,412 30,208 30,412 30,867 30,932 31,172 31,349 31,463 31,955 32,441 Net change (during period) 29 Total 76,622 54,979 782 128 794 1,013 322 3,682 -319 4,545 3,455 By major holder 30 Commercial banks 32,926 19,520 2,009 -1,345 90 411 -172 1,500 30 933 600 31 Finance companies 23,566 23,424 -1,724 180 -692 207 41 1,041 -693 1,640 707 32 Credit unions 6,493 5,738 513 349 427 208 77 686 221 1,109 1,097 33 Retailers 1,660 1,722 -69 90 31 27 -175 -2 -149 -31 77 .34 Savings institutions 12,103 5,604 122 869 869 125 457 338 219 938 927 35 Gasoline companies -126 -1,030 -68 -16 71 35 94 117 54 -44 48 By major type of credit 36 Automobile 35,705 36,998 -395 2,050 417 592 226 1,373 -85 2,552 951 37 Commercial banks 9,103 7,706 836 488 680 299 -160 253 408 621 24 38 Credit unions 5,330 3,394 257 175 214 104 39 344 111 555 550 39 Finance companies 17,840 23,183 -1,598 1,086 -657 163 252 706 -649 1,181 185 40 Savings institutions 3,432 2,715 110 301 180 26 95 70 45 195 192 41 Revolving 22,401 12,917 575 547 -22 747 -497 1,540 163 532 1,303 42 Commercial banks 17,721 9,786 558 226 -257 658 -486 1,362 204 457 1,053 43 Retailers 1,488 1,545 -53 103 37 31 -167 -2 -130 -38 50 44 Gasoline companies -126 -1,030 -68 -16 71 35 94 117 54 -44 48 45 Savings institutions 2,771 2,008 84 184 116 16 61 45 29 125 123 46 Credit unions 547 608 54 50 11 6 2 19 6 30 30 47 Mobile home 778 222 -53 -21 142 -63 -175 12 -84 143 173 48 Commercial banks -85 -726 -74 -139 -25 -48 -14 -27 -83 -6 15 49 Finance companies -405 -363 -58 -63 49 -32 -222 -7 -31 22 32 50 Savings institutions 1,268 1,311 79 181 118 17 62 45 30 127 126 51 Other 17,738 4,842 655 -2,448 257 -262 768 756 -313 1,318 1,028 52 Commercial banks 6,187 2,754 689 -1,920 -309 -497 488 -87 -499 -140 -492 53 Finance companies 6,131 604 -69 -843 -84 75 13 341 -13 438 490 54 Credit unions 616 1,736 202 124 201 98 37 323 104 523 517 55 Retailers 172 177 -16 -13 -6 -4 -9 1 -18 5 28 56 Savings institutions 4,632 -429 -151 204 455 65 240 177 114 492 486 1. The Board's series cover most short- and intermediate-term credit ex- 2. More detail for finance companies is available in the G.20 statistical release, tended to individuals that is scheduled to be repaid (or has the option of 3. Excludes 30-day charge credit held by travel and entertainment companies, repayment) in 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 1987 IItteemm 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May June July INTEREST RATES Commercial banks1 1 48-month new car2 13.71 12.91 11.33 n.a. 10.35 n.a. n.a. 10.23 n.a. n.a. 2 24-month personal 16.47 15.94 14.82 n.a. 14.10 n.a. n.a. 14.00 n.a. n.a. 3 120-month mobile home2 15.58 14.96 13.99 n.a. 13.42 n.a. n.a. 13.23 n.a. n.a. 4 Credit card 18.77 18.69 18.26 n.a. 18.10 n.a. n.a. 17.92 n.a. n.a. Auto finance companies 5 New car 14.62 11.98 9.44 11.65 10.78 10.59 10.81 10.69 10.64 10.52 6 Used car 17.85 17.59 15.95 14.62 14.56 14.40 14.49 14.45 14.47 14.53 OTHER TERMS3 Maturity (months) 7 New car 48.3 51.5 50.0 53.8 53.6 53.7 54.3 53.5 5533..66 53.4 8 Used car 39.7 41.4 42.6 44.8 44.7 44.9 45.0 45.2 45.4 45.5 Loan-to-value ratio 9 New car 88 91 91 94 94 94 94 93 93 93 10 Used car 92 94 97 98 99 99 98 98 98 98 Amount financed (dollars) 11 New car 9,333 9,915 10,665 10,902 10,602 10,641 10,946 11,176 11,214 11,267 12 Used car 5,691 6,089 6,555 7,067 7,075 7,145 7,234 7,373 7,479 7,527 1. Data for midmonth of quarter only. 3. At auto finance companies. 2. Before 1983 the maturity for new car loans was 36 months, and for mobile NOTE. These data also appear in the Board's G.19 (421) release. For address, home loans was 84 months. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • November 1987 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1984 1985 1986 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998811 11998822 11998833 11998844 11998855 1986 HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors 375.8 387.4 548.8 756.3 869.3 834.0 727.8 784.8 732.6 1,006.1 706.0 962.5 By sector and instrument ? U.S. government 87.4 161.3 186.6 198.8 223.6 214.3 181.3 216.3 201.8 224455..55 221111..33 221177..55 Treasury securities 87.8 162.1 186.7 199.0 223.7 214.7 181.5 216.4 201.9 245.5 211.4 218.0 4 Agency issues and mortgages -.5 -.9 -.1 -.2 -.1 -.3 -.2 -.1 -.1 -.1 -.1 -.5 S Private domestic nonfinancial sectors 288.5 226.2 362.2 557.5 645.7 619.6 546.5 568.5 530.8 760.6 494.7 745.0 6 Debt capital instruments 155.5 148.3 252.8 314.0 461.7 461.7 298.4 329.6 355.4 568.0 392.3 531.2 7 Tax-exempt obligations 23.4 44.2 53.7 50.4 152.4 49.5 42.8 58.0 67.5 237.3 15.9 83.0 8 22.8 18.7 16.0 46.1 73.9 113.7 31.2 61.1 72.7 75.1 137.0 90.4 9 109.3 85.4 183.0 217.5 235.4 298.5 224.5 210.5 215.2 255.7 239.3 357.7 10 Home mortgages 72.2 50.5 117.1 129.9 150.3 199.2 135.2 124.7 133.1 167.5 156.1 242.3 11 Multifamily residential 4.8 5.4 14.1 25.1 29.2 33.0 27.5 22.7 24.6 33.7 30.8 35.1 1? Commercial 22.2 25.2 49.0 63.3 62.4 73.7 62.9 63.7 60.3 64.4 59.7 87.7 13 Farm 10.0 4.2 2.8 -.8 -6.4 -7.4 -1.1 -.5 -2.8 -10.0 -7.4 -7.4 14 Other debt instruments 133.0 77.9 109.5 243.5 184.0 157.9 248.1 238.9 175.4 192.6 102.4 213.9 15 Consumer credit 22.6 17.7 56.8 95.0 96.6 65.8 98.7 91.3 97.3 95.9 70.6 61.6 16 Bank loans n.e.c 57.0 52.9 25.8 80.1 41.3 71.0 91.9 68.4 24.9 57.7 17.6 124.4 17 Open market paper 14.7 -6.1 -.8 21.7 14.6 -9.3 24.8 18.7 12.3 16.9 -15.7 -3.0 18 Other 38.7 13.4 27.7 46.6 31.4 30.3 32.7 60.5 40.9 22.0 29.9 30.7 19 By borrowing sector 288.5 226.2 362.2 557.5 645.7 619.6 546.5 568.5 530.8 760.6 494.7 745.0 70 State and local governments 6.8 21.5 34.0 27.4 107.8 59.4 25.2 29.6 56.8 158.7 35.7 83.2 71 121.4 88.4 188.0 239.5 295.0 282.1 232.8 246.2 253.6 336.4 222.4 342.3 ?? 16.6 6.8 4.3 .1 -13.6 -14.4 -.4 .5 -5.9 -21.3 -15.1 -13.7 ?3 Nonfarm noncorporate 38.5 40.2 76.6 97.1 92.8 114.6 101.4 92.7 85.6 99.9 94.4 134.7 24 Corporate 105.2 69.2 59.3 193.4 163.7 178.0 187.4 199.5 140.7 186.8 157.3 198.6 75 Foreign net borrowing in United States 23.5 16.0 17.4 6.1 1.7 9.7 35.5 -23.3 -4.1 7.5 24.3 -5.0 ?6 Bonds 5.4 6.7 3.1 1.3 4.0 3.2 1.1 1.5 5.5 2.6 7.1 -.8 77 Bank loans n.e.c 3.0 -5.5 3.6 -6.6 -2.8 -1.0 -2.2 -11.1 -6.1 .4 1.4 -3.5 78 Open market paper 3.9 1.9 6.5 6.2 6.2 11.5 18.0 -5.6 4.2 8.2 20.6 2.4 29 U.S. government loans 11.1 13.0 4.1 5.3 -5.7 -4.0 18.7 -8.1 -7.8 -3.6 -4.8 -3.1 30 Total domestic plus foreign 399.3 403.4 566.2 762.4 871.0 843.6 763.3 761.5 728.4 1,013.5 730.3 957.6 Financial sectors 31 Total net borrowing by financial sectors 101.9 90.1 94.0 139.0 186.9 248.4 134.2 143.8 154.8 218.9 185.9 310.9 By instrument V U.S. government related 47.4 64.9 67.8 74.9 101.5 173.7 69.8 80.0 92.9 110.2 129.5 217.8 Sponsored credit agency securities 30.5 14.9 1.4 30.4 20.6 12.6 29.1 31.8 25.3 15.9 4.4 20.8 34 Mortgage pool securities 15.0 49.5 66.4 44.4 79.9 161.4 40.7 48.2 67.6 92.1 124.3 198.6 1.9 .4 1.1 -.4 2.2 .8 -1.5 36 Private financial sectors 54.5 25.2 26.2 64.i 85.3 74.8 64.4 63.8 61.9 108.8 56.4 93.1 37 Corporate bonds 4.4 12.5 12.1 23.3 36.5 26.6 17.3 29.3 35.3 37.7 25.5 27.7 38 Mortgages * .1 .4 .1 .1 .4 .4 * .1 .6 -.4 39 Bank loans n.e.c 1.2 1.9 -.1 .7 2.6 4.0 -.1 1.4 .9 4.2 2.4 5.6 40 Open market paper 32.7 9.9 21.3 24.1 32.0 24.2 31.1 17.0 13.9 50.1 14.4 34.1 41 Loans from Federal Home Loan Banks 16.2 .8 -7.0 15.7 14.2 19.8 15.7 15.7 11.7 16.7 13.5 26.2 By sector 42 Sponsored credit agencies 32.4 15.3 1.4 30.4 21.7 12.2 2299..11 31.8 2255..33 18.1 55..22 1199..33 43 15.0 49.5 66.4 44.4 79.9 161.4 40.7 48.2 67.6 92.1 124.3 198.6 44 Private financial sectors 54.5 25.2 26.2 64.1 85.3 74.8 64.4 63.8 61.9 108.8 56.4 93.1 45 Commercial banks 11.6 11.7 5.0 7.3 -4.9 -3.6 15.4 -.9 -9.2 -.6 -6.7 -.5 46 9.2 6.8 12.1 15.6 14.5 4.5 23.7 7.5 13.7 15.3 1.7 7.4 47 Savings and loan associations 15.5 2.5 -2.1 22.7 22.3 29.2 20.2 25.1 12.1 32.6 23.1 35.3 48 Finance companies 18.5 4.3 11.4 17.8 52.8 44.1 4.3 31.3 44.8 60.9 37.5 50.6 49 REITs -.2 -.2 .8 .5 .6 .8 .8 .5 .5 .9 .3 AH sectors 50 Total net borrowing 501.3 493.5 660.2 901.4 1057.8 1092.1 897.5 905.3 833.3 1,232.4 916.2 1268.5 51 U.S. government securities 133.0 225.9 254.4 273.8 324.2 388.4 251.2 296.4 294.8 353.5 340.0 436.9 5? State and local obligations 23.4 44.2 53.7 50.4 152.4 49.5 42.8 58.0 67.5 237.3 15.9 83.0 53 Corporate and foreign bonds 32.6 37.8 31.2 70.7 114.4 143.5 49.6 91.9 113.5 115.3 169.6 117.4 54 109.2 85.4 183.0 217.8 235.4 298.6 224.8 210.8 215.2 255.7 239.9 357.3 55 Consumer credit 22.6 17.7 56.8 95.0 96.6 65.8 98.7 91.3 97.3 95.9 70.6 61.6 56 Bank loans n.e.c 61.2 49.3 29.3 74.2 41.0 74.0 89.6 58.8 19.8 62.3 21.4 126.6 57 Open market paper 51.3 5.7 26.9 52.0 52.8 26.4 73.8 30.1 30.4 75.2 19.3 33.4 58 68.0 27.6 24.8 67.6 41.0 45.8 67.1 68.1 44.8 37.3 39.4 52.3 External corporate equity funds raised in United States 50 Total new share issues -3.3 33.6 67.0 -31.1 37.5 119.5 -40.1 -22.2 33.3 41.6 146.8 92.3 60 Mutual funds 6.0 16.8 32.1 38.0 103.4 191.7 39.3 36.6 93.6 113.1 198.7 184.6 61 All other -9.3 16.8 34.9 -69.1 -65.9 -72.1 -79.4 -58.8 -60.4 -71.5 -52.0 -92.3 67, Nonfinancial corporations -11.5 11.4 28.3 -77.0 -81.6 -80.8 -84.5 -69.4 -75.7 -87.5 -68.7 -92.7 63 Financial corporations 1.9 4.0 2.7 6.7 11.7 7.0 5.9 7.6 11.0 12.4 8.3 5.7 64 Foreign shares purchased in United States .3 1.5 3.9 1.2 4.0 1.6 -.7 3.0 4.3 3.6 8.5 -5.3 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. 1984 1985 1986 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998811 11998822 11998833 11998844 11998855 11998866 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 375.8 387.4 548.8 756.3 869.3 834.0 727.8 784.8 732.6 1,006.1 706.0 996622..55 By public agencies and foreign ? Total net advances 104.4 115.4 115.3 154.6 203.3 311.1 113322..55 176.6 220011..88 220044..99 226677..66 335544..55 3 U.S. government securities 17.1 22.7 27.6 36.0 47.2 87.8 26.8 45.2 53.1 41.3 85.4 90.1 4 Residential mortgages 23.5 61.0 76.1 56.5 94.6 158.5 52.7 60.2 85.6 103.7 121.0 196.0 5 FHLB advances to savings and loans 16.2 .8 -7.0 15.7 14.2 19.8 15.7 15.7 11.7 16.7 13.5 26.2 6 Other loans and securities 47.7 30.8 18.6 46.5 47.3 45.0 37.5 55.5 51.4 43.2 47.7 42.3 Total advanced, by sector 7 U.S. government 24.0 15.9 9.7 17.4 17.8 10.9 9.0 25.7 28.8 6.7 12.9 99..00 8 Sponsored credit agencies 48.2 65.5 69.8 73.3 101.5 176.6 74.0 72.5 98.2 104.9 135.3 217.9 9 Monetary authorities 9.2 9.8 10.9 8.4 21.6 30.2 8.8 8.0 23.7 19.5 9.8 50.6 10 Foreign 23.0 24.1 24.9 55.5 62.4 93.4 40.7 70.4 51.0 73.8 109.7 77.1 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 47.4 64.9 67.8 74.9 101.5 173.7 69.8 80.0 92.9 110.2 112299..55 221177..88 12 Foreign 23.5 16.0 17.4 6.1 1.7 9.7 35.5 -23.3 -4.1 7.5 24.3 -5.0 Private domestic funds advanced 13 Total net advances 342.3 352.9 518.7 682.7 769.2 706.2 700.5 664.9 619.6 918.8 559922..11 882200..99 14 U.S. government securities 115.9 203.1 226.9 237.8 277.0 300.6 224.4 251.2 241.7 312.2 254.5 346.8 15 State and local obligations 23.4 44.2 53.7 50.4 152.4 49.5 42.8 58.0 67.5 237.3 15.9 83.0 16 Corporate and foreign bonds 19.8 14.8 14.6 32.6 41.2 79.0 25.6 39.6 49.7 32.7 104.2 53.9 17 Residential mortgages 53.5 -5.3 55.0 98.5 84.8 73.7 109.9 87.0 72.0 97.5 65.9 81.4 18 Other mortgages and loans 145.9 96.9 161.5 279.1 228.1 223.2 313.6 244.7 200.4 255.9 165.0 281.9 19 LESS: Federal Home Loan Bank advances 16.2 .8 -7.0 15.7 14.2 19.8 15.7 15.7 11.7 16.7 13.5 26.2 Private financial intermediation 70 Credit market funds advanced by private financial institutions 320.2 261.9 391.9 550.5 554.4 647.9 581.8 519.1 471.3 637.4 572.4 724.0 ?1 Commercial banking 106.5 110.2 144.3 168.9 186.3 194.8 184.2 153.5 133.8 238.8 106.9 283.0 7? Savings institutions 26.2 21.8 135.6 149.2 83.4 105.3 173.5 124.9 63.0 103.9 101.4 109.3 73 Insurance and pension funds 93.5 86.2 97.8 124.0 141.0 137.2 144.5 103.5 121.8 160.1 128.6 145.9 24 Other finance 94.0 43.7 14.1 108.3 143.6 210.5 79.5 137.2 152.7 134.5 235.6 185.8 75 Sources of funds 320.2 261.9 391.9 550.5 554.4 647.9 581.8 519.1 471.3 637.4 572.4 724.0 76 Private domestic deposits and RPs 214.5 195.2 212.2 317.6 204.8 242.3 300.2 334.9 203.0 206.6 224.5 260.3 27 Credit market borrowing 54.5 25.2 26.2 64.1 85.3 74.8 64.4 63.8 61.9 108.8 56.4 93.1 78 Other sources 51.2 41.5 153.4 168.8 264.2 330.8 217.2 120.4 206.5 322.0 291.5 370.5 79 Foreign funds -23.7 -31.4 16.3 5.4 17.7 12.4 3.0 7.8 11.2 24.3 .9 24.0 30 Treasury balances -1.1 6.1 -5.3 4.0 10.3 1.7 -.1 8.2 14.4 6.1 -5.5 9.0 31 Insurance and pension reserves 89.6 92.5 110.6 112.5 107.0 120.0 146.5 78.5 97.4 116.6 104.5 135.5 32 Other, net -13.6 -25.7 31.8 46.8 129.2 196.6 67.8 25.9 83.5 175.0 191.5 202.1 Private domestic nonfinancial investors 33 Direct lending in credit markets 76.6 116.3 153.0 196.4 300.2 133.1 183.1 209.6 210.2 390.2 76.1 119900..00 34 U.S. government securities 37.1 69.9 95.5 132.9 150.9 81.0 142.2 123.6 130.8 171.0 41.4 120.9 35 State and local obligations 11.1 25.0 39.0 29.6 59.2 17.8 25.0 34.3 20.5 98.0 -21.8 57.4 36 Corporate and foreign bonds -4.0 2.0 -12.7 -3.4 13.2 12.3 -26.8 19.9 25.4 1.0 49.3 -24.7 37 Open market paper 1.4 -1.3 15.1 8.9 51.8 1.4 15.7 2.2 7.3 96.3 -13.8 16.7 38 Other 31.0 20.6 16.2 28.3 25.1 20.6 26.9 29.7 26.3 24.0 21.0 19.8 39 Deposits and currency 222.4 204.5 229.7 321.1 215.1 262.7 311.3 330.9 215.9 214.3 241.6 284.0 40 Currency 9.5 9.7 14.3 8.6 12.4 14.4 13.1 4.1 15.8 9.0 10.9 17.9 41 Checkable deposits 18.5 18.6 28.8 27.8 42.0 99.4 29.4 26.3 18.2 65.8 83.1 115.9 47 Samll time and savings accounts 47.3 135.7 215.3 150.7 137.5 123.1 136.4 164.9 167.1 108.0 119.5 126.7 43 Money market fund shares 107.5 24.7 -44.1 47.2 -2.2 20.8 30.2 64.2 4.2 -8.6 29.0 12.7 44 Large time deposits 36.0 5.2 -6.3 84.9 14.0 -8.2 93.4 76.5 -.8 28.9 .9 -17.3 45 Security RPs 5.2 11.1 18.5 7.0 13.4 7.2 10.8 3.1 14.3 12.5 -7.9 22.3 46 Deposits in foreign countries -1.7 -.4 3.1 -5.1 -2.1 6.0 -2.0 -8.2 -2.9 -1.3 6.2 5.7 47 Total of credit market instruments, deposits and currency. 299.0 320.7 382.7 517.4 515.3 395.8 494.4 540.5 426.0 604.5 317.8 474.0 48 Public holdings as percent of total 26.2 28.6 20.4 20.3 23.3 36.9 17.4 23.2 27.7 20.2 36.6 37.0 49 Private financial intermediation (in percent) 93.6 74.2 75.5 80.6 72.1 91.7 83.1 78.1 76.1 69.4 96.7 88.2 50 Total foreign funds -.7 -7.3 41.3 60.9 80.1 105.8 43.7 78.2 62.2 98.1 110.5 101.1 MEMO: Corporate equities not included above 51 Total net issues -3.3 33.6 67.0 -31.1 37.5 119.5 -40.1 -22.2 33.3 41.6 146.8 92.3 5? Mutual fund shares 6.0 16.8 32.1 38.0 103.4 191.7 39.3 36.6 93.6 113.1 198.7 184.6 53 Other equities -9.3 16.8 34.9 -69.1 -65.9 -72.1 -79.4 -58.8 -60.4 -71.5 -52.0 -92.3 54 Acquisitions by financial institutions 19.9 27.6 46.8 8.2 33.3 25.2 -4.1 20.6 54.0 12.6 35.4 15.1 55 Other net purchases -23.2 6.0 20.2 -39.4 4.1 94.3 -36.0 -42.7 -20.7 29.0 111.4 77.2 NOTES BY LINE NUMBER. 31. Excludes net investment of these reserves in corporate equities. 1. Line 1 of table 1.57. 32. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 33. Line 13 less line 20 plus line 27. 6. Includes farm and commercial mortgages. 34-38. Lines 14-18 less amounts acquired by private finance plus amounts 11. Credit market funds raised by federally sponsored credit agencies, and net borrowed by private finance. Line 38 includes mortgages. issues of federally related mortgage pool securities. 40. Mainly an offset to line 9. 13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. 47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46. Also 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, outstanding may be obtained from Flow of Funds Section, Division of Research less claims on foreign affiliates and deposits by banking in foreign banks. and Statistics, Board of Governors of the Federal Reserve System, Washington, 30. Demand deposits and note balances at commercial banks. D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • November 1987 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures1 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1986 1987 MMeeaassuurree 11998844 11998855 11998866 Dec. Jan. Feb. Mar. Apr. May' June' July' Aug. 1 Industrial production 121.4 123.8 125.1 126.7 126.5 127.2 127.3 127.4 128.4 129.2 130.3 130.7 Market groupings 2 Products, total 126.7 130.8 133.2 135.0 134.9 136.1 136.2 135.7 137.2 138.0 138.9 139.4 3 Final, total 127.3 131.1 132.3 133.7 133.6 135.0 135.0 134.5 135.8 136.6 137.3 138.0 4 Consumer goods 118.0 120.2 124.5 127.2 126.8 127.5 127.5 126.6 128.2 128.6 129.3 129.5 5 Equipment 139.6 145.4 142.7 142.2 142.8 144.9 145.0 144.9 145.8 147.1 147.9 149.3 6 Intermediate 124.7 130.0 136.4 139.7 139.1 139.7 140.4 139.9 142.1 142.8 144.2 144.1 7 Materials 114.2 114.2 113.9 115.2 115.2 115.1 115.2 116.2 116.3 117.2 118.6 118.9 Industry groupings 8 Manufacturing 123.4 126.4 129.1 131.1 131.1 132.0 132.3 132.4 133.3 133.8 135.0 135.4 Capacity utilization (percent)2 9 Manufacturing 80.5 80.1 79.8 80.0 79.9 80.3 80.3 80.2 80.5 80.7 81.2 81.3 10 Industrial materials industries 82.0 80.2 78.5 78.9 78.8 78.7 78.7 79.2 79.2 79.8 80.6 80.7 11 Construction contracts (1982 = 100)3 135.0 148.0 155.0 155.0 155.0 151.0 165.0 162.0 149.0 161.0 163.0 175.0 12 Nonagricultural employment, total4 114.6 118.3 120.8 121.9 122.4 122.7 122.9 123.2 123.3 123.5 123.8 124.0 13 Goods-producing, total 101.6 102.4 102.4 101.2 101.5 101.6 101.7 101.7 101.7 101.7 102.1 102.1 14 Manufacturing, total 98.4 97.8 96.5 96.4 96.3 96.4 96.5 96.6 96.6 96.6 97.0 97.0 15 Manufacturing, production-worker.... 94.1 92.9 91.2 91.3 91.1 91.4 91.4 91.5 91.6 91.6 92.1 92.1 16 Service-producing 120.0 125.0 128.9 130.6 131.1 131.5 131.8 132.2 132.4 132.6 132.9 133.2 17 Personal income, total 193.4 207.0 219.9 224.8 225.9 228.4 229.1 230.3R 230.7 231.1 232.2 233.3 18 Wages and salary disbursements 185.0 198.7 210.2 214.8 216.3 218.0 218.6 219.5 220.7 221.2 222.1 224.1 19 Manufacturing 164.6 172.8 176.4 177.7 178.5 179.1 179.2 178.9 179.9 180.0 180.1 181.5 20 Disposable personal income 193.5 206.0 219.1 222.7 224.3 227.5 228.1 222.5R 229.6 228.9 229.9 230.7 21 Retail sales® 179.0 190.6 199.9 211.8 196.8 206.3 206.8 207.4 207.3 209.6 210.8 213.5 Prices7 22 Consumer (1967 = 100) 311.1 322.2 328.4 331.1 333.1 334.4 335.9 337.7 338.7 340.1 340.8 342.7 23 Producer finished goods (1967 = 100) ... 291.1 293.7 289.6 290.4 291.8 292.3 292.3 294.9 296.3 296.8 297.8 297.2 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. 1987 CCaatteeggoorryy 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May Juner Julyr Aug. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 178,602 180,440 182,822 184,092 184,259 184,436 184,597 184,777 184,941 185,127 185,264 2 Labor force (including Armed Forces)1 115,763 117,695 120,078 121,299 121,610 121,479 121,588 122,237 121,755 122,194 122,564 3 Civilian labor force 113,544 115,461 117,834 119,034 119,349 119,222 119,335 119,993 119,517 119,952 120,302 4 Nonagricultural industries 101,685 103,971 106,434 107,866 108,146 108,084 108,545 109,112 109,079 109,508 109,989 5 Agriculture 3,321 3,179 3,163 3,145 3,236 3,284 3.290 3,335 3,178 3,219 3,092 Unemployment 6 Number 8,539 8,312 8,237 8,023 7,967 7,854 7,500 7,546 7,260 7,224 7,221 7 Rate (percent of civilian labor force).... 7.5 7.2 7.0 6.7 6.7 6.6 6.3 6.3 6.1 6.0 6.0 8 Not in labor force 62,839 62,745 62,744 62,793 62,649 62,957 63,009 62,540 63,186 62,933 62,700 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 94,496 97,519 99,610 100,919 101,150 101,329 101,598 101,708 101,818 102,114 102,270 10 Manufacturing 19,378 19,260 18,994 18,956 18,986 18,995 19,011 19,018 19,015 19,106 19,101 11 Mining 966 927 783 718 719 722 729 735 738 743 749 12 Contract construction 4,383 4,673 4,904 5,034 5,038 5,032 5,019 4,999 5,008 5,008 5,007 13 Transportation and public utilities 5,159 5,238 5,244 5,304 5,315 5,333 5,348 5,344 5,350 5,360 5,376 14 Trade 22,100 23,073 23,580 23,821 23,897 23,902 23,969 23,980 24,007 24,067 24,046 IS Finance 5,689 5,955 6,297 6,480 6,501 6,526 6,558 6,576 6,586 6,607 6,630 16 Service 20,797 22,000 23,099 23,670 23,759 23,842 23,926 24,025 24,083 24,198 24,287 17 Government 16,023 16,394 16,710 16,936 16,935 16,977 17,038 17,031 17,031 17,025 17,074 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • November 1987 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1986 1987 1986 1987 1986 1987 SSeerriieess Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2' Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 125.0 126.0 127.0 127.8 157.9 158.8 159.6 160.5 79.1 79.3 79.6 79.9 2 Mining 96.6 96.6 96.6 97.1 131.9 131.7 131.3 130.7 73.2 73.3 73.6 74.9 3 Utilities 108.8 110.4 109.5 110.5 137.5 138.1 138.7 139.3 79.1 79.9 79.0 79.8 4 Manufacturing 129.4 130.4 131.8 132.6 162.4 163.4 164.4 165.5 79.7 79.8 80.2 80.5 5 Primary processing 112.1 114.0 115.1 116.5 134.6 135.1 135.9 136.5 83.3 84.3 84.8 85.4 6 Advanced processing 139.7 140.4 141.8 142.4 179.1 180.4 181.7 183.0 78.0 77.8 78.1 78.3 7 Materials 113.4 ' 114.3 115.1 116.5 145.3 145.8 146.3 146.8 78.1 78.4 78.7 79.4 8 Durable goods 118.8 120.1 121.2 122.1 161.5 162.2 163.0 163.6 73.6 74.0 74.4 74.7 9 Metal materials 73.1 75.7 75.5 77.1 114.0 113.4 112.7 111.7 64.2 66.7 67.0 69.3 10 Nondurable goods 119.7 121.1 122.8 125.7 139.9 140.4 141.0 142.0 85.6 86.4 87.1 88.4 11 Textile, paper, and chemical .. 120.4 122.4 124.2 127.2 139.2 139.6 140.4 141.4 86.5 87.6 88.5 89.6 1? 135.1 136.0 136.4 138.9 139.7 140.8 97.3 97.3 96.9 96.5 13 117.7 120.1 122.5 144.7 145.0 145.6 81.4 82.8 84 1 85 1 14 Energy materials 98.6 98.2 97.8 98.7 121.4 121.6 121.6 121.5 81.2 80.7 80.5 81.6 Previous cycle1 Latest cycle2 1986 1986 1987 High Low High Low Aug. Dec. Jan. Feb. Mar. Apr. May' June' July' Aug. Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 79.2 79.6 79.4 79.7 79.6 79.5 80.0 80.3 80.9 81.0 16 Mining 92.8 87.8 95.2 76.9 73.1 73.8 73.9 73.3 73.6 74.2 75.0 75.7 75.7 75.8 17 Utilities 95.6 82.9 88.5 78.0 78.8 79.5 79.1 79.0 78.9 78.4 79.9 81.2 81.5 81.7 18 Manufacturing 87.7 69.9 86.5 68.0 79.7 80.0 79.9 80.3 80.3 80.2 80.5 80.7 81.2 81.3 19 Primary processing.... 91.9 68.3 89.1 65.1 83.2 85.0 84.8 84.7 84.8 85.3 85.4 85.6 87.1 87.1 20 Advanced processing.. 86.0 71.1 85.1 69.5 78.0 77.9 77.8 78.3 78.1 77.9 78.4 78.5 78.6 78.6 21 Materials 92.0 70.5 89.1 68.4 77.9 78.9 78.8 78.7 78.7 79.2 79.2 79.8 80.6 80.7 22 Durable goods 91.8 64.4 89.8 60.9 73.5 74.3 74.0 74.6 74.7 74.8 74.3 74.9 75.7 75.9 23 Metal materials 99.2 67.1 93.6 45.7 63.8 66.5 65.9 67.3 68.0 68.5 68.9 70.5 73.2 74.6 24 Nondurable goods .... 91.1 66.7 88.1 70.6 85.5 87.7 87.5 86.8 86.8 88.5 88.3 88.4 89.6 89.7 25 Textile, paper, and chemical 92.8 64.8 89.4 68.6 86.5 89.2 89.3 88.1 88.1 89.9 89.5 89.4 91.1 91.1 •>6 98.4 70.6 97.3 79.9 97.9 100.2 98.3 97.1 95.4 95.8 96.6 97.1 98.9 77 92.5 64.4 87.9 63.3 81.2 84.3 84.9 83.7 83.7 85.2 85.4 84.6 85.9 28 Energy materials 94.6 86.9 94.0 82.2 80.6 81.2 81.3 80.3 79.8 80.3 81.7 82.7 83.0 83.0 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 • Monthly data are seasonally adjusted 1977 1986 1987 1986 GGrroouuppss por- aavvgg.. tion Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Mayr June JJuullyy"" Aug.e Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 125.0 125.1 124.9 125.3 126.0 126.7 126.5 127.2 127.3 127.4 128.4 129.2 130.3 130.7 7 57.72 133.2 133.8 133.3 134.0 134.5 135.0 134.9 136.1 136.2 137.2 137.2 138.0 138.9 139.4 3 44.77 132.3 132.6 132.2 132.7 133.1 133.7 133.6 135.0 135.0 134.5 135.8 136.6 137.3 138.0 4 25.52 124.5 125.1 124.2 124.7 125.6 127.2 126.8 127.5 127.5 126.6 128.2 128.6 129.3 129.5 19.25 142.7 142.5 142.8 143.3 143.1 142.2 142.8 144.9 145.0 144.9 145.8 147.1 147.9 149.3 6 Intermediate products 12.94 136.4 137.8 137.0 138.7 139.2 139.7 139.1 139.7 140.4 139.9 142.1 142.8 144.2 144.1 7 42.28 113.9 113.2 113.5 113.3 114.3 115.2 115.2 115.1 115.2 116.2 116.3 117.2 118.6 118.9 8 Durable consumer goods 6.89 116.2 115.7 117.4 116.3 118.4 121.5 120.0 122.4 121.2 118.1 120.2 119.6 112200..11 112200..55 9 Automotive products 2.98 115.1 114.5 117.0 112.7 114.6 117.7 117.6 123.5 121.2 115.7 118.0 114.9 117.1 117.6 10 Autos and trucks 1.79 112.9 110.4 116.8 107.7 107.6 115.6 117.9 125.2 121.6 111.5 113.1 107.7 111.5 112.7 11 Autos, consumer 1.16 97.3 87.8 96.2 91.9 92.3 99.5 94.3 105.3 100.9 91.8 91.0 87.9 86.1 76.5 17 Trucks, consumer .63 141.8 152.4 155.1 137.1 136.0 145.6 161.9 162.1 159.9 148.1 154.2 144.4 13 Auto parts and allied goods 1.19 118.4 120.7 117.3 120.1 125.2 120.8 117.1 121.0 120.5 121.9 125.3 125.8 125.5 125.0 14 3.91 117.1 116.7 117.7 119.0 121.2 124.4 121.9 121.6 121.2 119.9 121.8 123.2 122.4 122.7 15 Appliances, AJC and TV 1.24 139.5 139.4 141.2 142.6 148.1 153.2 146.9 145.2 142.9 137.7 142.2 143.8 139.9 140.3 16 Appliances and TV 1.19 141.6 142.5 143.5 144.3 150.0 155.1 148.9 146.7 143.8 139.2 142.3 144.4 140.8 17 Carpeting and furniture .96 125.8 125.8 126.2 128.8 131.1 132.0 129.1 130.8 131.3 133.5 133.3 135.1 136.1 18 Miscellaneous home goods 1.71 96.0 95.1 96.0 96.5 96.3 99.4 99.8 99.3 99.8 99.4 100.7 101.7 102.1 19 Nondurable consumer goods 18.63 127.5 128.6 126.7 127.8 128.3 129.4 129.2 129.4 129.8 129.8 131.1 132.0 132.8 132.9 ?N 15.29 97.0 135.5 133.6 134.4 135.0 136.0 135.9 135.9 136.5 136.4 137.7 138.5 139.3 139.5 71 Consumer foods and tobacco 7.80 134.1 133.2 131.0 131.6 132.6 133.9 132.9 134.0 134.8 134.4 135.6 136.1 137.0 77 Nonfood staples 7.49 131.9 137.9 136.3 137.2 137.4 138.2 139.0 137.9 138.2 138.5 139.9 141.0 141.7 141.8 73 Consumer chemical products 2.75 136.5 163.4 161.1 161.7 161.0 163.1 165.9 164.7 165.7 164.7 165.9 166.4 166.3 74 Consumer paper products 1.88 161.2 147.7 145.7 150.3 151.5 150.1 149.4 147.8 147.5 148.9 152.9 154.1 155.5 75 Consumer energy 2.86 147.4 107.1 106.3 105.2 105.5 106.4 106.3 105.7 105.8 106.5 106.4 108.0 109.0 76 Consumer fuel 1.44 105.7 94.9 92.0 90.8 91.7 92.2 95.0 92.5 94.1 94.5 92.1 91.7 92.9 27 Residential utilities 1.42 92.8 119.6 120.9 119.8 119.6 120.8 117.8 119.2 117.7 118.7 121.0 124.7 Equipment 78 Business and defense equipment 18.01 147.1 147.8 148.0 148.4 148.1 147.0 147.7 150.1 150.1 150.0 150.8 115522..22 115522..44 115533..66 79 Business equipment 14.34 138.6 139.3 139.3 139.1 138.6 137.1 138.1 140.8 140.8 140.8 141.7 143.6 143.8 145.2 30 Construction, mining, and farm 2.08 59.8 58.3 58.1 58.0 56.6 58.2 57.2 56.8 58.1 58.6 61.2 64.0 65.3 31 Manufacturing 3.27 112.0 113.3 113.0 112.7 109.6 108.8 110.1 111.5 110.9 111.1 111.5 113.9 116.4 117.7 37 1.27 81.6 81.7 80.3 80.5 79.5 80.2 79.6 81.2 81.7 82.4 84.0 83.8 82.2 82.6 33 5.22 214.6 217.5 215.1 215.4 217.3 213.7 215.9 218.4 219.7 220.9 222.0 225.8 224.9 226.6 34 2.49 109.2 106.9 113.3 111.8 110.7 108.9 109.5 117.4 114.0 110.4 110.1 107.3 106.8 108.2 35 Defense and space equipment 3.67 180.3 181.0 182.0 184.6 184.9 185.8 185.2 186.5 186.6 186.1 186.5 185.8 186.3 186.8 Intermediate products 36 Construction supplies 5.95 124.7 125.4 125.9 126.3 126.8 127.9 128.3 128.4 128.5 112277..33 128.3 112299..44 113300..88 113300..99 37 Business supplies 6.99 146.4 148.4 146.4 149.3 149.7 149.8 148.3 149.4 150.5 150.5 153.8 154.2 155.6 38 General business supplies 5.67 150.6 152.5 151.2 154.1 153.7 154.3 153.3 154.1 155.2 155.5 158.2 159.0 160.7 39 Commercial energy products 1.31 128.3 130.6 125.8 128.8 132.4 130.3 126.8 128.8 130.3 129.0 135.0 133.5 133.7 Materials 40 Durable goods materials 20.50 119.7 118.8 118.9 119.2 120.4 120.7 120.5 121.5 121.8 122.2 121.6 122.7 124.2 112244..66 41 Durable consumer parts 4.92 98.5 95.2 95.3 97.0 98.0 98.8 99.0 100.0 98.9 96.2 95.2 95.1 94.6 94.8 47 Equipment parts 5.94 153.9 155.6 154.8 153.5 154.5 154.2 154.0 155.6 155.8 157.1 156.0 157.0 159.2 160.1 43 Durable materials n.e.c 9.64 109.4 108.1 108.8 109.4 110.7 111.2 110.8 111.5 112.6 114.1 113.9 115.6 117.7 118.0 44 Basic metal materials 4.64 80.0 76.9 78.4 78.8 82.1 80.3 79.2 80.3 80.8 81.8 81.9 84.1 87.1 45 Nondurable goods materials 10.09 118.3 119.7 120.6 120.3 120.2 123.2 123.2 122.5 122.8 125.4 125.3 125.8 127.8 128.1 46 Textile, paper, and chemical 7.53 118.9 120.5 121.8 121.3 121.0 124.7 125.0 123.6 124.0 126.9 126.5 126.7 129.4 112299..77 47 Textile materials 1.52 110.6 113.4 116.0 114.3 115.6 116.1 116.5 115.8 118.5 125.0 48 Pulp and paper materials 1.55 132.1 136.0 133.7 133.5 134.2 140.2 137.9 136.7 134.7 137.4 137.4 138.6 141.6 49 Chemical materials 4.46 117.1 117.5 119.7 119.5 118.5 122.3 123.4 121.8 122.1 125.0 125.0 124.0 126.1 50 Miscellaneous nondurable materials ... 2.57 116.5 117.2 117.1 117.5 117.6 118.5 118.0 119.0 119.2 121.1 122.0 122.9 51 Energy materials 11.69 99.9 97.9 98.0 96.9 98.7 98.8 98.9 97.6 97.0 97.5 99.3 100.4 100.7 100.7 57 Primary energy 7.57 105.5 103.7 103.8 102.7 104.8 105.1 104.1 102.6 101.5 102.3 103.6 104.3 103.8 53 Converted fuel materials 4.12 89.6 87.3 87.4 86.2 87.6 87.3 89.4 88.5 88.9 88.7 91.4 93.3 95.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • November 1987 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1977 1986 1987 Groups c S o I d C e p p r o o r - - 1 av 98 g 6 . tion Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Mayr June Julyp Aug Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 103.4 100.9 100.8 100.7 102.6 101.9 101.9 101.3 101.4 101.5 103.0 104.2 104.3 2 Mining 9.83 99.6 96.4 96.2 95.6 97.4 96.7 97.2 96.2 96.5 97.0 98.0 98.7 98.6 3 Utilities 5.96 109.6 108.3 108.3 109.3 111.2 110.6 109.5 109.6 109.5 109.0 111.3 113.3 113.9 4 Manufacturing 84.21 129.1 129.5 129.5 129.9 130.3 131.1 131.1 132.0 132.3 132.4 133.3 133.8 135.0 5 Nondurable 35.11 130.9 132.2 131.4 132.3 132.7 133.7 134.1 134.3 134.8 135.8 136.8 137.7 139.0 6 Durable 49.10 127.9 127.5 128.1 128.1 128.6 129.2 129.0 130.4 130.5 130.0 130.8 131.1 132.1 Mining 7 Metal 10 .50 70.9 70.7 68.5 68.3 73.5 72.1 72.0 71.6 66.7 71.7 70.1 8 Coal 11.12 1.60 124.2 122.2 120.8 117.6 130.1 124.3 133.5 127.7 121.8 121.6 126.6 130.1 126.9 9 Oil and gas extraction 13 7.07 94.7 90.7 91.0 90.5 90.4 90.9 89.9 89.5 91.0 92.0 91.7 91.9 92.0 10 Stone and earth minerals 14 .66 113.9 114.8 111.7 116.4 115.2 109.6 107.1 110.0 113.1 114.4 115.5 117.2 119.6 Nondurable manufactures 11 Foods 7.96 133.6 135.1 133.7 134.4 135.3 135.3 135.7 136.1 136.1 137.1 137.8 138.8 12 Tobacco products .62 96.6 97.1 100.1 96.8 92.9 89.1 98.7 100.7 99.4 107.8 107.0 13 Textile mill products 2.29 113.2 114.7 116.0 116.1 117.8 118.4 118.0 118.4 119.3 122.9 122.1 123.6 125.2 14 Apparel products 2.79 103.6 102.5 102.7 104.2 105.1 107.2 107.4 107.1 106.6 108.1 109.0 15 Paper and products 3.15 136.4 138.6 136.9 137.8 139.5 141.6 139.8 140.5 139.2 139.9 141.1 141.9 145.2 16 Printing and publishing 4.54 163.4 164.6 163.0 167.8 168.5 167.7 168.1 166.7 168.2 171.4 174.4 175.5 175.7 17 Chemicals and products 8.05 133.0 134.4 133.9 133.9 132.3 134.6 137.4 137.7 138.3 138.2 138.0 138.9 140.3 18 Petroleum products 2.40 92.1 94.0 93.3 91.1 92.0 92.5 94.7 91.9 91.4 94.0 92.6 91.7 92.0 19 Rubber and plastic products 2.80 153.3 155.5 154.9 157.6 159.0 160.7 158.1 159.2 161.3 163.8 165.4 168.2 171.8 20 Leather and products .53 61.3 62.0 59.4 60.2 61.3 59.4 58.3 59.6 59.1 59.3 60.6 60.1 59.9 Durable manufactures 21 Lumber and products 24 2.30 123.4 122.5 125.0 125.9 129.5 133.1 130.2 130.0 129.5 128.9 130.6 132.0 134.1 22 Furniture and fixtures 25 1.27 146.7 148.3 147.7 149.2 148.6 150.5 148.7 151.8 153.4 155.9 156.2 161.9 162.6 23 Clay, glass, stone products 32 2.72 120.2 119.7 121.6 118.1 120.6 121.7 122.8 121.5 122.7 122.9 120.9 119.4 119.5 24 Primary metals 33 5.33 75.8 73.4 74.1 74.2 76.8 73.5 73.6 76.3 77.5 76.8 77.6 78.1 81.7 25 Iron and steel 331.2 3.49 63.4 60.8 61.1 62.2 64.8 60.5 60.2 63.1 65.1 65.0 65.7 66.8 26 Fabricated metal products 34 6.46 107.4 105.9 107.3 108.3 107.1 108.3 108.0 108.2 108.8 108.6 107.9 108.9 109.7 27 Nonelectrical machinery 35 9.54 141.9 142.6 140.9 142.2 141.2 139.9 140.3 142.3 143.7 145.2 147.1 148.8 150.0 28 Electrical machinery 36 7.15 166.5 167.2 166.9 167.7 168.3 170.2 169.2 169.3 167.6 166.5 168.8 169.4 169.4 29 Transportation equipment 37 9.13 125.8 125.1 127.7 125.2 125.6 127.0 128.1 131.8 130.6 127.1 127.4 125.1 125.8 30 Motor vehicles and parts 371 5.25 110.9 108.2 112.2 107.1 107.9 111.2 112.2 117.8 115.5 109.3 110.1 106.6 108.0 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 146.1 148.0 148.7 149.7 149.6 148.4 149.6 150.7 151.2 151.3 151.0 150.2 150.0 32 Instruments 38 2.66 141.3 142.0 141.7 140.3 141.1 142.4 142.5 143.3 142.0 144.1 143.5 145.1 146.1 33 Miscellaneous manufactures 39 1.46 99.3 98.3 97.7 99.0 98.9 103.1 101.8 101.1 101.4 100.0 101.5 99.9 99.9 Utilities 34 Electric 122.2 122.4 122.8 123.8 125.1 123.5 121.7 122.3 123.3 123.4 129.1 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKET 35 Products, total. 517.5 1,702.2 1,681.3 1,677.8 1,683.9 1,690.8 1,701.9 1,707.1 1,721.4 1,724.3 1,713.3 1,728.0 1,726.8 1,729.9 1,737.7 36 Final 405.7 1,314.5 1,292.6 1,292.3 1,292.5 1,297.6 1,306.7 1,315.1 1,331.9 1,330.5 1,320.1 1,327.9 1,326.4 1,325.8 1,333.6 37 Consumer goods. 272.7 853.8 846.9 839.8 839.3 847.2 860.5 865.5 869.7 870.0 863.0 867.2 863.2 866.6 867.3 38 Equipment 133.0 458.2 445.7 452.5 453.2 450.4 446.2 449.6 462.2 460.4 457.1 460.7 463.2 459.3 466.4 39 Intermediate 111.9 387.6 388.7 385.5 391.4 393.2 395.3 391.9 389.5 393.9 393.3 400.1 400.4 404.0 404.1 • A major revision of the industrial production index and the capacity (July 1985), pp. 487-501. The revised indexes for January through June 1985 were utilization rates was released in July 1985. See "A Revision of the Index of shown in the September BULLETIN. Industrial Production" and accompanying tables that contain revised indexes NOTE. These data also appear in the Board's G.12.3 (414) release. For address, (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1986 1987 IItteemm 11998844 11998855 11998866 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Mayr Juner July Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,682 1,733 1,750 1,664 1,667 1,862 1,652 1,676 1,719 1,598 1,493 1,517 1,487 7 922 957 1,071 1,036 1,028 1,184 1,085 1,204 1,150 1,058 1,009 1,039 993 3 2-or-more-family 759 111 679 628 639 678 567 472 569 540 484 478 494 4 Started 1,749 1,742 1,805 1,657 1,637 1,813 1,816 1,838 1,730 1,643 1,606 1,586 1,606 5 1,084 1,072 1,179 1,114 1,129 1,233 1,253 1,303 1,211 1,208 1,130 1,088 1,150 6 2-or-more-family 665 669 626 543 508 580 563 535 519 435 476 498 456 7 Under construction, end of period1 1,051 1,063 1,074 1,142 1,125 1,104 1,089 1,096 1,085 1,070 1,061 1,062 1,063 8 556 539 583 625 619 610 609 621 618 623 621 623 632 9 2-or-more-family 494 524 490 518 506 494 480 476 467 446 441 439 430 10 1,652 1,703 1,756 1,745 1,774 1,894 1,956 1,726 1,689 1,830 1,621 1,591 1,652 11 1,025 1,072 1,120 1,165 1,158 1,184 1,217 1,107 1,141 1,148 1,158 1,091 1,081 12 2-or-more-family 627 631 637 580 616 710 739 619 548 682 463 500 571 13 Mobile homes shipped 296 284 244 241 237 251 242 231 228 227 222 231 245 Merchant builder activity in 1-family units 14 639 688 748 675 691 768 712 740 720 773333 664433 665500 665533 15 Number for sale, end of period 358 350 361 357 353 357 358 358 358 359 356 359 359 Price (thousands of dollars)2 16 Units sold 80.0 84.3 92.2 96.4 94.0 95.0 98.5 95.2 98.4 96.5r 110055..00 110088..00 110077..00 Average 17 Units sold 97.5 101.0 112.2 114.9 113.6 118.9 122.1 121.3 119.5 118. V 126.9 135.9 129.2 EXISTING UNITS (1-family) 18 Number sold 2,868 3,217 3,566 3,760 3,850 4,060 3,480 3,690 3,680 3,560 3,770 3,500 3,430 Price of units sold (thousands of dollars)2 19 72.3 75.4 80.3 79.4 80.4 80.8 82.1 85.0 8855..66 8855..00 8855..22 8855..22 8866..22 20 Average 85.9 90.6 98.3 97.3 99.1 100.6 100.1 104.3 104.9 105.0 106.3 106.0 107.6 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 328,643 355,995 388,815 394,871 390,646 380,175 384,716 401,644 388,303 397,136 397,652 392,391 391,809 ?? 270,978 291,665 316,589 322,929 320,417 306,826 310,170 326,453 312,203 320,841 322,701 320,048 318,605 73 153,849 158,475 187,147 192,592 194,463 181,682 187,813 203,115 190,812 199,523 195,871 198,311 198,195 74 Nonresidential, total 117,129 133,190 129,442 130,337 125,954 125,144 122,357 123,338 121,391 121,318 126,830 121,737 120,410 Buildings 75 13,746 15,769 13,747 14,634 13,404 13,207 12,094 12,112 11,354 11,504 13,349 12,086 1111,,228822 76 Commercial 39,357 51,315 48,592 56,121 54,193 54,809 50,881 53,071 52,285 50,920 53,359 49,602 48,007 T7 Other 12,547 12,619 13,216 13,820 13,787 14,231 14,755 14.776 15,143 14,989 14,857 14,749 15,207 28 Public utilities and other 51,479 53,487 53,887 45,762 44,570 42,897 44,627 43,379 42,609 43,905 45,265 45,300 45,914 79 Public 57,662 64,326 72,225 71,942 70,229 73,348 74,546 75,191 76,100 76,295 74,951 72,343 73,204 30 2,839 3,283 3,919 3,566 4,007 4,313 4,100 2,806 3,893 3,749 4,129 4,116 4,316 31 Highway 18,772 21,756 23,360 22,643 19,958 21,935 23,508 23,260 23,575 22,703 22,629 21,688 21,847 37 Conservation and development 4,654 4,746 4,668 4,726 4,647 4,954 5,155 4,883 4,792 5,649 4,819 5,425 5,412 33 Other 31,397 34,541 40,278 41,007 41,617 42,146 41,783 44,242 43,840 44,194 43,374 41,114 41,629 1. Not at annual rates. NOTE. Census Bureau estimates for all series except (1) 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 (2) sales and prices comparable with data in prior periods because of changes by the BureaU of the of 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 the originating agency. Permit Construction Reports (C-30-76-5), issued by the Bureau in July 1976. authorizations are those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • November 1987 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted Change from 12 Change from 3 months earlier months earlier (at annual rate) Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm AAAuuuggg... 1986 1987 1987 111999888777 11998866 11998877 (((111999666777 AAuugg.. AAuugg.. === 111000000)))111 Sept. Dec. Mar. June Apr/ May June July Aug. CONSUMER PRICES2 1 All items 1.6 4.3 2.0 2.5 6.2 4.6 .4 .3 .4 .2 .5 342.7 2 Food 4.2 3.4 8.4 4.1 2.5 6.5 .3 .5 .7 -.2 .0 333.8 3 Energy items -17.3 8.4 -21.0 -9.9 26.1 7.9 .3 .2 1.5 .1 1.7 388.9 4 All items less food and energy 4.0 4.2 3.7 3.7 5.2 4.0 .5 .3 .2 .3 .4 341.7 5 Commodities 1.6 3.0 2.6 1.4 5.1 3.8 .6 .3 .0 .3 .1 270.9 6 Services 5.4 4.8 4.3 5.1 5.3 3.8 .4 .3 .2 .4 .5 418.3 PRODUCER PRICES 7 Finished goods -1.8 3.2 -.4 1.8 4.3 4.7 .5 ,4R .2 .2 .0 297.2 8 Consumer foods 5.7 -.1 11.2 1.0 -6.7 14.3 1.4 1.4 .5 -.6 -1.3 283.6 9 Consumer energy -36.6 17.1 -42.7 -12.5 59.8 10.9 .9 .8' .9 1.5 1.5 534.0 10 Other consumer goods 2.2 2.9 2.3 4.4 4.2 -.3 .1 - .y .1 .3 .3 265.9 11 Capital equipment 1.7 1.9 2.0 3.4 .4 1.4 .3 ,i .0 .1 .2 312.1 12 Intermediate materials3 -4.5 4.6 -1.5 -1.2 7.8 5.2 .3 .y .6 .8 .5 324.2 13 Excluding energy -.4 3.2 1.5 1.2 3.3 4.5 .3 .4 .5 .5 .3 314.0 Crude materials 14 Foods 7.7 .8 18.1 -2.7 -10.3 34.0 4.4 4.4r -1.4 -2.0 .1 240.1 15 Energy -30.0 21.6 -19.6 -.5 50.0 15.8 .7 2.2' .9 2.8 .5 632.6 16 Other -4.0 18.7 -24.1 8.5 15.9 33.7 .7 2.5r 4.2 2.9 1.0 280.0 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. 1986 1987 AAccccoouunntt 11998844 11998855 11998866 Q2 Q3 Q4 Ql Q2 GROSS NATIONAL PRODUCT 1 3,772.2 4,010.3 4,235.0 4,211.6 4,265.9 4,288.1 4,377.7 4,445.1 By source 7 Personal consumption expenditures 2,430.5 2,629.4 2,799.8 2,765.8 2,837.1 2,858.6 2,893.8 2,943.7 Durable goods 335.5 368.7 402.4 386.4 427.6 419.8 396.1 409.0 4 Nondurable goods 867.3 913.1 939.4 934.3 940.0 946.3 969.9 982.1 5 1,227.6 1,347.5 1,458.0 1,445.1 1,469.5 1,492.4 1,527.7 1,552.6 6 Gross private domestic investment 664.8 641.6 671.0 679.4 660.8 660.2 699.9 702.6 7 Fixed investment 597.1 631.6 655.2 651.9 657.3 666.6 648.2 662.3 8 Nonresidential 416.0 442.6 436.9 433.8 433.5 439.7 422.8 434.6 9 Structures 141.1 152.5 137.4 135.9 131.1 132.9 128.7 129.7 10 Producers' durable equipment 274.9 290.1 299.5 297.9 302.4 306.7 294.1 304.9 11 Residential structures 181.1 189.0 218.3 218.1 223.8 226.9 225.4 227.7 1? Change in business inventories 67.7 10.0 15.7 27.5 3.5 -6.4 51.6 40.3 13 Nonfarm 60.5 13.6 16.8 24.5 -.9 5.1 48.7 27.3 14 Net exports of goods and services -58.9 -79.2 -105.5 -100.8 -110.5 -116.9 -112.2 -118.4 15 383.5 369.9 376.2 371.3 376.6 383.3 397.3 416.5 16 Imports 442.4 449.2 481.7 472.1 487.1 500.2 509.5 534.8 17 Government purchases of goods and services 735.9 818.6 869.7 867.2 878.5 886.3 896.2 917.1 18 310.5 353.9 366.2 368.4 371.2 368.6 366.9 379.6 19 State and local 425.3 464.7 503.5 498.8 507.3 517.7 529.3 537.6 By major type of product 70 3,704.5 44,,000000..33 4,219.3 4,184.0 44,,226622..44 44,,229944..66 44,,332266..00 44,,440044..88 71 1,581.3 1,637.9 1,693.8 1,689.9 1,703.6 1,698.9 1,738.7 1,763.5 ?? Durable 681.5 704.3 726.8 717.0 735.8 737.3 747.0 756.7 73 899.9 933.6 967.0 972.9 967.8 961.6 991.7 1,006.8 74 1,813.9 1,969.2 2,116.2 2,097.9 2,136.6 2,160.0 2,212.0 2,252.2 25 Structures 376.9 403.1 425.0 423.8 425.7 429.3 426.9 429.4 76 Change in business inventories 67.7 10.0 15.7 27.5 3.5 -6.4 51.6 40.3 77 Durable goods 40.2 7.3 4.8 10.1 -12.1 -4.5 35.2 22.1 28 Nondurable goods 27.5 2.7 10.9 17.5 15.6 -1.9 16.5 18.2 79 MEMO Total GNP in 1982 dollars 3,501.4 3,607.5 3,713.3 3,704.7 3,718.0 3,731.5 3,772.2 33,,779955..33 NATIONAL INCOME 30 3,028.6 3,229.9 3,422.0 3,414.1 3,438.7 3,471.0 3,548.3 3,593.3 31 Compensation of employees 2,213.9 2,370.8 2,504.9 2,487.6 2,515.1 2,552.0 2,589.9 2,623.4 37 Wages and salaries 1,838.8 1,974.7 2,089.1 2,074.6 2,097.9 2,128.5 2,163.3 2,191.4 33 Government and government enterprises 346.1 372.3 394.8 391.6 397.7 403.8 412.2 418.1 34 Other 1,492.5 1,602.6 1,694.3 1,683.0 1,700.2 1,724.7 1,751.1 1,773.3 35 Supplement to wages and salaries 375.1 396.1 415.8 413.0 417.2 423.5 426.6 432.0 36 Employer contributions for social insurance 192.2 203.8 214.7 213.1 214.9 219.1 220.0 222.5 37 Other labor income 182.9 192.3 201.1 199.8 202.3 204.4 206.7 209.5 38 Proprietors'income1 234.5 257.3 289.8 298.1 292.5 297.8 320.9 323.1 39 Business and professional 204.0 227.6 252.6 250.1 256.2 261.2 269.7 275.8 40 Farm1 30.5 29.7 37.2 48.1 36.3 36.6 51.3 47.3 41 Rental income of persons2 8.5 9.0 16.7 17.4 17.2 18.4 20.0 18.9 47 Corporate profits1 266.9 277.6 284.4 282.3 286.4 281.1 294.0 296.8 43 Profits before tax3 240.0 224.8 231.9 224.4 236.3 247.9 257.0 268.7 44 Inventory valuation adjustment -5.8 -.7 6.5 11.3 6.0 -8.9 -11.3 -20.0 45 Capital consumption adjustment 32.7 53.5 46.0 46.7 44.0 42.1 48.2 48.0 46 Net interest 304.8 315.3 326.1 328.7 327.5 321.7 323.6 331.1 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • November 1987 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1986 1987 Account 11998844 11998855 11998866 Q2 Q3 Q4 Q1 Q2' PERSONAL INCOME AND SAVING 1 Total personal income 3,108.7 3,327.0 3,534.3 3,526.6 3,553.6 3,593.6 3,662.0 3,708.6 2 Wage and salary disbursements 1,838.6 1,974.9 2,089.1 2,074.6 2,097.9 2,128.5 2,163.3 2,191.4 3 Commodity-producing industries 577.6 609.2 623.3 621.2 622.8 628.4 632.9 635.0 4 Manufacturing 439.1 460.9 470.5 468.7 470.0 474.5 477.2 479.0 5 Distributive industries 442.8 473.0 497.1 493.7 498.6 504.7 511.5 518.9 6 Service industries 472.1 520.4 573.9 568.1 578.8 591.6 606.7 619.3 7 Government and government enterprises 346.1 372.3 394.8 391.6 397.7 403.8 412.2 418.1 8 Other labor income 182.9 192.3 201.1 199.8 202.3 204.4 206.7 209.5 9 Proprietors' income1 234.5 257.3 289.8 298.1 292.5 297.8 320.9 323.1 10 Business and professional1 204.0 227.6 252.6 250.1 256.2 261.2 269.7 275.8 11 Farm1 30.5 29.7 37.2 48.1 36.3 36.6 51.3 47.3 12 Rental income of persons2 8.5 9.0 16.7 17.4 17.2 18.4 20.0 18.9 13 Dividends 75.5 76.3 81.2 81.0 82.1 82.9 84.5 86.3 14 Personal interest income 444.7 476.5 497.6 500.0 498.1 496.8 499.8 506.3 15 Transfer payments 456.6 489.7 518.3 514.5 523.6 526.6 533.7 541.5 16 Old-age survivors, disability, and health insurance benefits 235.7 253.4 269.2 266.4 272.4 273.5 278.0 282.3 17 LESS: Personal contributions for social insurance 132.7 148.9 159.6 158.8 160.1 161.8 166.7 168.4 18 EQUALS: Personal income 3,108.7 3,327.0 3,534.3 3,526.6 3,553.6 3,593.6 3,662.0 3,708.6 19 LESS: Personal tax and nontax payments 440.2 485.9 512.2 504.2 515.3 532.0 536.1 578.0 20 EQUALS: Disposable personal income 2,668.6 2,841.1 3,022.1 3,022.4 3,038.2 3,061.6 3,125.9 3,130.6 21 LESS: Personal outlays 2,504.5 2,714.1 2,891.5 2,856.4 2,929.4 2,952.6 2,987.5 3,037.4 22 EQUALS: Personal saving 164.1 127.1 130.6 166.0 108.9 109.0 138.4 93.2 MEMO Per capita (1982 dollars) 23 Gross national product 14,770.6 15,073.7 15,368.3 15,353.0 15,369.9 15,387.6 15,523.4 15,586.4 24 Personal consumption expenditures 9,488.6 9,830.2 10,141.9 10,088.2 10,241.8 10,228.8 10,188.9 10,215.6 25 Disposable personal income 10,419.0 10,622.0 10,947.0 11,024.0 10,968.0 10,956.0 11,008.0 10,865.0 26 Saving rate (percent) 6.1 4.5 4.3 5.5 3.6 3.6 4.4 3.0 GROSS SAVING 27 Gross saving 568.5 531.3 532.0 538.7 516.2 515.3 554.3 551.3 28 Gross private saving 673.5 664.2 679.8 713.7 660.4 653.4 683.8 639.9 29 Personal saving 164.1 127.1 130.6 166.0 108.9 109.0 138.4 93.2 30 Undistributed corporate profits1 94.0 99.6 92.6 93.6 92.6 78.5 75.6 70.1 31 Corporate inventory valuation adjustment -5.8 -.7 6.5 11.3 6.0 -8.9 -11.3 -20.0 Capital consumption allowances 32 Corporate 254.5 269.1 282.8 280.9 284.3 289.3 291.8 294.5 33 Noncorporate 160.9 168.5 173.8 173.2 174.6 176.6 178.0 182.1 34 Government surplus, or deficit (-), national income and product accounts -105.0 -132.9 -147.8 -175.0 -144.1 -138.1 -129.5 -88.6 35 Federal -169.6 -196.0 -204.7 -230.2 -203.7 -188.7 -170.5 -139.2 36 State and local 64.6 63.1 56.8 55.1 59.6 50.6 41.0 50.6 37 Gross investment 573.9 525.7 527.1 539.6 510.1 503.7 552.1 548.1 38 Gross private domestic 664.8 641.6 671.0 679.4 660.8 660.2 699.9 702.6 39 Net foreign -90.9 -115.9 -143.9 -139.8 -150.7 -156.5 -147.7 -154.5 40 Statistical discripancy 5.4 -5.6 -4.9 .9 -6.1 -11.6 -2.2 -3.1 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 1986 1987 Item credits or debits 1984 1985 1986 Q2 Q3 Q4 Q1 Q2" 1 Balance on current account -107,013 -116,394 -141,352 -33,755 -36,583 -37,977 -36,784 -41,097 2 Not seasonally adjusted -34,634 -40,230 -36,398 -33,435 -41,956 3 Merchandise trade balance2 -112,522 -122,148 -144,339 -33,651 -37,115 -38,595 -38,757 -39,525 4 Merchandise exports 219,900 215,935 224,361 56,928 56,534 57,021 56,992 59,975 5 Merchandise imports -332,422 -338,083 -368,700 -90,579 -93,649 -95.616 -95,749 -99,500 6 Military transactions, net -1,942 -3,338 -3,662 -1,054 -815 -495 -37 111 7 Investment income, net3 18,490 25,398 20,844 4,587 5,339 4,492 5,500 1,608 8 Other service transactions, net 1,138 -1,005 1,463 530 342 759 -387 -387 9 Remittances, pensions, and other transfers -3,637 -4,079 -3,885 -918 -875 -1,151 -1,017 -913 10 U.S. government grants (excluding military) -8,541 -11,222 -11,772 -3,249 -3,459 -2,987 -2,086 -1,991 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -5,476 -2,831 -1,920 -242 -1,454 15 225 -182 12 Change in U.S. official reserve assets (increase, -) -3,130 -3,858 312 16 280 132 1,956 3,419 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -979 -897 -246 -104 163 -31 76 -171 15 Reserve position in International Monetary Fund -995 908 1,500 366 508 283 606 335 16 Foreign currencies -1,156 -3,869 -942 -246 -391 -120 1,274 3,255 17 Change in U.S. private assets abroad (increase, -)3 -13,685 -24,711 -94,374 -25,303 -23,304 -32,351 13,352 -24,747 18 Bank-reported claims -11,127 -1,323 -59,039 -14,734 -18,878 -31,800 25,686 -20,195 19 Nonbank-reported claims 5,019 1,361 -3,986 -1,894 685 170 -1,163 20 U.S. purchase of foreign securities, net -4,756 -7,481 -3,302 -1,149 620 3,113 -1,345 " "93" 21 U.S. direct investments abroad, net3 -2,821 -17,268 -28,047 -7,526 -5,731 -3,834 -9,826 -4,645 22 Change in foreign official assets in the United States (increase, +) 2,987 -1,140 34,698 15,568 15,551 1,003 13,953 9,389 23 U.S. Treasury securities 4,690 -838 34,515 14,538 12,167 4,572 12,145 11,082 24 Other U.S. government obligations 13 -301 -1,214 -644 -276 -117 -62 256 25 Other U.S. government liabilities4 586 823 1,723 925 999 -607 -1,381 -1,501 26 Other U.S. liabilities reported by U.S. banks 555 645 554 1,280 2,963 -2,435 3,611 -135 27 Other foreign official assets -2,857 -1,469 -531 -302 -410 -360 -313 28 Change in foreign private assets in the United States (increase, +r 99,481 131,012 178,689 33,475 54,040 57,428 12,802 35,661 29 U.S. bank-reported liabilities 33,849 41,045 77,350 3,899 30,360 34,604 -13,614 15,150 30 U.S. nonbank-reported liabilities 4,704 -450 -2,791 -1,553 -80 1,035 1,761 31 Foreign private purchases of U.S. Treasury securities, net 23,001 20,433 8,275 3,705 609 -3,074 -1,570 '-2,562 32 Foreign purchases of other U.S. securities, net 12,568 50,962 70,802 22,888 17,074 12,269 18,499 15,858 33 Foreign direct investments in the United States, net3 25,359 19,022 25,053 4,536 6,077 12,594 7,726 7,215 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 26,837 17,920 23,947 10,241 -8,530 11,750 -5,504 17,557 36 Owing to seasonal adjustments -2,044 -4,153 3,904 2,652 -1,987 37 Statistical discrepancy in recorded data before seasonal adjustment 26,837 17,920 23,947 12,285 -4,377 7,846 -8,156 19,544 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -3,130 -3,858 312 16 280 132 1,956 3,419 39 Foreign official assets in the United States (increase, +) excluding line 25 2,401 -1,963 32,975 14,643 14,552 1,610 15,334 10,890 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) -4,504 -6,709 -8,508 -2,166 -3,023 -5,195 -2,901 -2,626 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 153 46 101 11 19 53 26 1. Seasonal factors are not calculated for lines 6,10, 12-16, 18-20, 22-34, and 4. Primarily associated with military sales contracts and other transactions 38-41. arranged with or through foreign official agencies. 2. Data are on an international accounts (IA) basis. Differs from the Census 5. Consists of investments in U.S. corporate stocks and in debt securities of basis data, shown in table 3.11, for reasons of coverage and timing. Military private corporations and state and local governments. exports are excluded from merchandise data and are included in line 6. NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business 3. Includes reinvested earnings. (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • November 1987 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data are not seasonally adjusted. 1987 IItteemm 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May June July 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments, f.a.s. value 223,976 218,815 226,808 16,755 19,360 21,776 20,496 20,784 21,126 21,008 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses, c.i.f. value .... 346,364 352,463 382,964 28,692 33,725 34,694 33,459 34,822 36,838 37,483 3 Trade balance -122,389 -133,648 -156,156 -11,937 -14,365 -12,918 -12,963 -14,039 -15,711 -16,475 1. The Census basis data differ from merchandise trade data shown in table tions; military payments are excluded and shown separately as indicated above. 3.10, U.S. International Transactions Summary, for reasons of coverage and As of Jan. 1, 1987 census data are released 45 days after the end of the month. timing. On the export side, the largest adjustment is the exclusion of military sales Total exports and the trade balance reflect adjustments for undocumented exports (which are combined with other military transactions and reported separately in to Canada. the "service account" in table 3.10, line 6). On the import side, additions are made SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade" for gold, ship purchases, imports of electricity from Canada, and other transac- (Department of Commerce, Bureau of the Census). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1987 Type 1985 1986 Feb. Mar. Apr. May June July Aug.' 1 Total 34,934 43,186 48,517 49,358 48,824 46,591 45,913 45,140 44,318 45,944 2 Gold stock, including Exchange Stabilization Fund1 11,096 11,090 11,064 11,085 11,081 11,076 11,070 11,069 11,069 11,068 3 Special drawing rights2'3. 5,641 7,293 8,395 8,615 8,740 8,879 8,904 8,856 8,813 9,174 4 Reserve position in International Monetary Fund 11,541 11,947 11,730 11,699 11,711 11,745 11,517 11,313 10,964 11,116 5 Foreign currencies4 6,656 12,856 17,328 17,959 17,292 14,891 14,422 13,902 13,472 14,586 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 1987 AAsssseettss 11998844 11998855 11998866 Feb. Mar. Apr. May June July Aug." 1 Deposits 267 480 287 255 268 342 319 318 261 294 Assets held in custody 2 U.S. Treasury securities 118,000 121,004 155,835 160,942 167,423 172,929 175,849 176,657 171,269 179,484 3 Earmarked gold2 14,242 14,245 14,048 14,046 14,036 14,031 14,031 14,034 14,010 14,022 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 1987 AAsssseett aaccccoouunntt 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May June Julyp All foreign countries 1 Total, all currencies 453,656 458,012 456,628 458,305' 457,819 457,007 485,166 487,436 475,068 470,234 2 Claims on United States 113,393 119,706 114,685 116,039' 114,450 112,094 128,069 126,916 123,335 123,593 Parent bank 78,109 87,201 83,492 83,96C 82,588 81,677 93,753 92,218 89,395 89,800 4 Other banks in United States 13,664 13,057 13,685 12,714 13,158 13,044 15,277 16,990 15,956 14,207 5 Nonbanks 21,620 19,448 17,508 19,365 18,704 17,373 19,039 17,708 17,984 19,586 6 Claims on foreigners 320,162 315,676 312,833 309,881' 310,687 310,819 321,699 328,087 319,872 313,612 7 Other branches of parent bank 95,184 91,399 96,281 92,515' 89,656 89,200 93,669 101,309 101,232 96,582 8 Banks 100,397 102,960 105,237 105,386' 109,748 109,580 115,561 113,971 107,130 110,069 9 Public borrowers 23,343 23,478 23,584 22,573 22,418 22,666 22,765 23,295 22,684 21,412 10 Nonbank foreigners 101,238 97,839 87,731 89,407 88,865 89,373 89,704 89,512 88,826 85,549 11 Other assets 20,101 22,630 29,110 32,385' 32,682 34,094 35,398 32,433 31,861 33,029 12 Total payable in U.S. dollars 350,636 336,520 317,487 309,719' 311,669 306,431 329,259 336,235 329,380 322,130 n Claims on United States 111,426 116,638 110,742 111,371' 110,011 107,245 122,278 121,458 118,346 118,453 14 Parent bank 77,229 85,971 82,082 82,198' 81,029 79,817 91,798 90,182 87,559 87,786 15 Other banks in United States 13,500 12,454 12,830 11,531 12,102 11,907 13,468 15,354 14,644 12,682 16 Nonbanks 20,697 18,213 15,830 17,642 16,880 15,521 17,012 15,922 16,143 17,985 17 Claims on foreigners 228,600 210,129 194,941 186,521' 189,205 185,541 192,715 201,261 198,412 190,531 18 Other branches of parent bank 78,746 72,727 72,197 66,704' 64,550 63,983 66,916 75,014 75,771 72,515 19 Banks 76,940 71,868 66,421 63,610' 68,320 65,997 69,808 69,395 66,877 65,618 20 Public borrowers 17,626 17,260 16,586 16,457 16,320 16,347 16,512 16,812 16,271 15,062 21 Nonbank foreigners 55,288 48,274 39,737 39,750 40,015 39,214 39,479 40,040 39,493 37,336 22 Other assets 10,610 9,753 11,804 11,827' 12,453 13,645 14,266 13,516 12,622 13,146 United Kingdom 23 Total, all currencies 144,385 148,599 140,917 144,093 146,188 145,486 149,998 154,371 146,678 149,760 24 Claims on United States 27,675 33,157 24,599 28,720 28,851 28,503 31,001 34,427 30,859 32,694 25 Parent bank 21,862 26,970 19,085 23,330 23,326 23,303 25,315 28,935 25,944 27,288 26 Other banks in United States 1,429 1,106 1,612 1,220 1,258 1,288 1,564 1,507 1,194 1,536 27 Nonbanks 4,384 5,081 3,902 4,170 4,267 3,912 4,122 3,985 3,721 3,870 28 Claims on foreigners 111,828 110,217 109,508 108,720 110,274 109,297 111,113 112,997 107,789 108,328 29 Other branches of parent bank 37,953 31,576 33,422 30,218 29,575 28,782 29,936 33,412 32,641 31,241 30 Banks 37,443 39,250 39,468 40,677 43,189 42,537 42,961 41,241 37,181 41,219 31 Public borrowers 5,334 5,644 4,990 4,942 4,983 4,897 4,964 5,234 4,684 4,617 32 Nonbank foreigners 31,098 33,747 31,628 32,883 32,527 33,081 33,252 33,110 33,283 31,251 33 Other assets 4,882 5,225 6,810 6,653 7,063 7,686 7,884 6,947 8,030 8,738 34 Total payable in U.S. dollars 112,809 108,626 95,028 95,359 97,568 95,319 99,398 104,622 97,672 99,170 35 Claims on United States 26,868 32,092 23,193 27,070 27,290 26,665 29,066 32,542 29,252 31,076 36 Parent bank 21,495 26,568 18,526 22,673 22,749 22,662 24,689 28,228 25,286 26,661 37 Other banks in United States 1,363 1,005 1,475 996 1,061 980 1,192 1,157 950 1,293 38 Nonbanks 4,010 4,519 3,192 3,401 3,480 3,023 3,185 3,157 3,016 3,122 39 Claims on foreigners 82,945 73,475 68,138 65,022 66,872 64,466 66,257 68,469 64,676 64,024 40 Other branches of parent bank 33,607 26,011 26,361 22,720 22,578 21,785 22,339 25,921 25,409 23,827 41 Banks 26,805 26,139 23,251 23,629 25,685 24,225 24,962 23,263 20,998 22,975 42 Public borrowers 4,030 3,999 3,677 3,681 3,716 3,660 3,712 3,785 3,470 3,400 43 Nonbank foreigners 18,503 17,326 14,849 14,992 14,893 14,796 15,244 15,500 14,799 13,822 44 Other assets 2,996 3,059 3,697 3,267 3,406 4,188 4,075 3,611 3,744 4,070 Bahamas and Caymans 45 Total, all currencies 146,811 142,055 142,592 135,627' 133,229 134,189 146,776 141,668 142,048 140,355 46 Claims on United States 77,296 74,864 78,170 73,418' 68,873 67,586 78,248 73,351 72,476 72,678 47 Parent bank 49,449 50,553 54,575 48,811' 44,759 44,502 52,086 46,486 45,910 46,279 48 Other banks in United States 11,544 11,204 11,156 10,625 10,924 10,855 12,649 14,494 13,659 11,713 49 Nonbanks 16,303 13,107 12,439 13,982 13,190 12,229 13,513 12,371 12,907 14,686 50 Claims on foreigners 65,598 63,882 59,883 57,05C 59,036 60,766 62,770 63,021 65,224 62,965 51 Other branches of parent bank 17,661 19,042 17,296 15,483' 15,481 16,529 16,562 15,775 18,873 17,493 52 Banks 30,246 28,192 27,476 26,366' 28,139 28,568 30,917 31,352 30,934 30,317 53 Public borrowers 6,089 6,458 6,929 7,026 6,974 7,038 7,120 7,304 7,025 7,046 54 Nonbank foreigners 11,602 10,190 8,182 8,175 8,442 8,631 8,171 8,590 8,392 8,109 55 Other assets 3,917 3,309 4,539 5,159' 5,320 5,837 5,758 5,296 4,348 4,712 56 Total payable in U.S. dollars 141,562 136,794 136,813 129,474' 126,605 127,160 138,784 133,323 135,204 131,482 1. Beginning with June 1984 data, reported claims held by foreign branches from $50 million to $150 million equivalent in total assets, the threshold now have been reduced by an increase in the reporting threshold for "shell" branches applicable to all reporting branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • November 1987 3.14 Continued 1987 LLiiaabbiilliittyy aaccccoouunntt 11998855 Jan. Feb. Mar. Apr. May June July" All foreign countries 57 Total, all currencies 453,656 458,012 456,628 458,305r 457,819 457,007 485,166 487,436 475,068 470,234 58 Negotiable CDs2 37,725 34,607 31,629 33,395 36,074 34,873 33,155 34,360 31,776 32,823 59 To United States 147,583 155,538 151,632 140,391 140,341 141,693 152,698 149,979' 149,970 143,267 60 Parent bank 78,739 83,914 82,561 70,071 73,095 71,092 75,080 74,551 78,369 71,670 61 Other banks in United States 18,409 16,894 15,646 15,051 13,602 13,695 16,913 16,898' 16,560 14,980 62 Nonbanks 50,435 54,730 53,425 55,269 53,644 56,906 60,705 58,530 55,041 56,617 63 To foreigners 247,907 245,939 253,775 263,759r 261,649 260,659 278,022 284,136' 274,085 274,587 64 Other branches of parent bank 93,909 89,529 95,146 90,303' 88,524 87,867 94,590 101,777 100,760 95,376 65 Banks 78,203 76,814 77,809 88,495r 86,037 84,976 92,704 90,246' 81,619 87,904 66 Official institutions 20,281 19,520 17,835 19,532 19,818 20,591 21,293 23,058 21,965 21,528 67 Nonbank foreigners 55,514 60,076 62,985 65,429 67,270 67,225 69,435 69,055 69,741 69,779 68 Other liabilities 20,441 21,928 19,592 20,760' 19,755 19,782 21,291 18,961 19,237 19,557 69 Total payable in U.S. dollars 367,145 353,712 336,406 323,900' 326,319 321,706 340,408 347,150 340,851 334,061 70 Negotiable CDs2 35,227 31,063 28,466 29,921 32,407 31,148 29,505 30,763 27,929 28,781 71 To United States 143,571 150,162 143,650 131,876 131,912 132,765 141,465 141,077' 141,508 134,564 72 Parent bank 76,254 80,888 78,472 65,443 68,540 65,981 68,403 70,067 74,225 67,001 73 Other banks in United States 17,935 16,264 14,609 14,047 12,505 12,593 15,455 15,732' 15,348 13,870 74 Nonbanks 49,382 53,010 50,569 52,386 50,867 54,191 57,607 55,278 51,935 53,693 75 Xo foreigners 178,260 163,583 156,806 154,887' 154,416 149,949 161,216 167,674' 163,530 162,776 76 Other branches of parent bank 77,770 71,078 71,181 64,380" 63,640 62,172 67,278 74,769 74,136 70,911 77 Banks 45,123 37,365 33,850 36,864 36,816 35,116 39,111 36,226' 32,202 35,250 78 Official institutions 15,773 14,359 12,371 13,688 13,189 13,392 14,318 16,068 15,687 15,806 79 Nonbank foreigners 39,594 40,781 39,404 39,955 40,771 39,269 40,509 40,611 41,505 40,809 80 Other liabilities 10,087 8,904 7,484 7,216' 7,584 7,844 8,222 7,636 7,884 7,940 United Kingdom 81 Total all currencies 144,385 148,599 140,917 144,093 146,188 145,486 149,998 154,371 146,678 149,760 82 Negotiable CDs2 34,413 31,260 27,781 29,432 32,233 30,968 29,311 30,226 27,511 28,590 83 To United States 25,250 29,422 24,657 19,465 22,501 21,433 23,936 26,291 24,512 24,347 84 Parent bank 14,651 19,330 14,469 10,004 12,735 12,332 13,170 15,145 14,745 14,012 85 Other banks in United States 3,125 2,974 2,649 2,154 2,154 1,816 2,205 2,273 2,109 2,019 86 Nonabnks 7,474 7,118 7,539 7,307 7,612 7,285 8,561 8,873 7,658 8,316 87 To foreigners 77,424 78,525 79,498 86,229 82,418 83,723 87,381 89,673 86,041 87,942 88 Other branches of parent bank 21,631 23,389 25,036 23,595 21,230 21,371 22,421 26,367 25,350 23,572 89 Banks 30,436 28,581 30,877 36,479 35,434 35,971 37,562 35,282 32,334 35,647 90 Official institutions 10,154 9,676 6,836 8,484 7,832 7,827 8,871 10,004 9,450 9,241 91 Nonbank foreigners 15,203 16,879 16,749 17,671 17,922 18,554 18,527 18,020 18,907 19,482 92 Other liabilities 7,298 9,392 8,981 8,967 9,036 9,362 9,370 8,181 8,614 8,881 93 Total payable in U.S. dollars 117,497 112,697 99,707 98,741 101,971 98,967 101,793 106,093 100,031 101,593 94 Negotiable CDs2 33,070 29,337 26,169 27,701 30,175 28,868 27,189 28,345 25,695 26,397 95 To United States 24,105 27,756 22,075 16,829 19,894 18,940 21,144 23,561 21,850 21,689 96 Parent bank 14,339 18,956 14,021 9,451 12,157 11,606 12,352 14,528 14,252 13,401 97 Other banks in United States 2,980 2,826 2,325 1,887 1,926 1,602 2,021 2,027 1,899 1,774 98 Nonbanks 6,786 5,974 5,729 5,491 5,811 5,732 6,771 7,006 5,699 6,514 99 To foreigners 56,923 51,980 48,138 51,174 48,610 47,531 49,708 51,029 49,089 50,294 100 Other branches of parent bank 18,294 18,493 17,951 16,386 14,691 14,471 14,367 18,430 17,654 16,171 101 Banks 18,356 14,344 15,203 18,626 18,207 18,027 19,498 15,555 13,864 16,330 102 Official institutions 8,871 7,661 4,934 6,096 5,176 4,924 5,786 7,214 6,985 7,203 103 Nonbank foreigners 11,402 11,482 10,050 10,066 10,536 10,109 10,057 9,830 10,586 10,590 104 Other liabilities 3,399 3,624 3,325 3,037 3,292 3,628 3,752 3,158 3,397 3,213 Bahamas and Caymans 105 Total, all currencies 146,811 142,055 142,592 135,627' 133,229 134,189 146,776 141,668 142,048 140,355 106 Negotiable CDs2 615 610 847 995 855 813 883 1,092 1,067 949 107 To United States 102,955 103,813 105,248 99,052 95,516 98,912 107,367 101,532' 102,875 99,073 108 Parent bank 47,162 44,811 48,648 40,869 40,409 39,851 43,315 40,052 43,503 39,967 109 Other banks in United States 13,938 12,778 11,715 11,687 10,151 10,568 13,345 13,175' 13,143 11,966 110 Nonbanks 41,855 46,224 44,885 46,496 44,956 48,493 50,707 48,305 46,229 47,140 111 To foreigners 40,320 35,053 34,400 33,536' 34,758 32,501 36,491 36,835' 36,014 38,168 112 Other branches of parent bank 16,782 14,075 12,631 12,323' 12,972 11,673 13,891 13,359 14,023 14,803 113 Banks 12,405 10,669 8,617 8,107' 8,070 8,140 9,452 9,895' 7,954 9,565 114 Official institutions ,... 2,054 1,776 2,719 2,808 3,013 2,836 2,937 3,072 3,185 3,263 115 Nonbank foreigners 9,079 8,533 10,433 10,298 10,703 9,852 10,211 10,509 10,852 10,537 116 Other liabilities 2,921 2,579 2,097 2,044' 2,100 1,963 2,035 2,209 2,092 2,165 117 Total payable in U.S. dollars 143,582 138,322 138,774 131,572' 129,183 129,400 140,796 136,679 137,628 135,219 2. 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 1987 IItteemm 11998855 11998866 Jan. Feb. Mar. Apr. May June Julyf 1 Total1 178,380 211,706 213,416 215,512 227,043 235,937 236,217r 237,940 231,830 By type 2 Liabilities reported by banks in the United States 26,734 27,626 27,629 29,438 31,237 32,661 31,501r 31,103 30,853 3 U.S. Treasury bills and certificates3 53,252 75,650 75,718 75,434 79,629 84,640 81,553 80,663 73,435 U.S. Treasury bonds and notes 4 Marketable 77,154 91,534 93,032 93,866 99,703 102,192 106,638 110,357 112,610 5 Nonmarketable 3,550 1,300 1,300 1,300 1,300 1,300 1,300 700 500 6 U.S. securities other than U.S. Treasury securities 17,690 15,596 15,737 15,474 15,174 15,144 15,225 15,117 14,432 By area 7 Western Europe1 74,447 88,289 89,681 90,914 99,711 105,720 108,171r 110,643 106,768 8 Canada 1,315 2,004 3,383 3,761 5,110 3,922 3,482 3,502 3,559 9 Latin America and Caribbean 11,148 8,367 7,680 7,425 8,241 9,290 7,923 7,519 7,920 10 86,448 106,024 107,448 108,886 108,662 109,991 109,641 108,831 105,948 11 1,824 1,503 1,300 1,164 1,192 1,284 1,628 1,405 1,590 12 Other countries6 3,199 5,519 3,926 3,362 4,127 5,728 5,372 6,040 6,044 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 Currencies1 Millions of dollars, end of period 1986 1987 IItteemm 11998833 11998844 11998855 Sept. Dec. Mar. June 1 Banks' own liabilities 5,219 8,586 15,368 29,467 29,404 36,319 35,817 2 Banks' own claims 7,231 11,984 16,294 24,124 25,150 32,261 32,762 3 Deposits 2,731 4,998 8,437 13,220 13,173 13,722 10,884 4 Other claims 4,501 6,986 7,857 10,904 11,977 18,539 21,878 5 Claims of banks' domestic customers1 1,059 569 580 1,597 2,508 2,034 889 1. Data on claims exclude foreign currencies held by U.S. monetary author- States that represent claims on foreigners held by reporting banks for the accounts ities. of the domestic customers. 2. Assets owned by customers of the reporting bank located in the United Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • November 1987 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1987 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May June July" 1 All foreigners 407,306 435,726 538,895 525,505 522,597 524,768 552,326 556,659' 541,043 536,616 2 Banks' own liabilities 306,898 341,070 404,760 392,094 388,147 389,715 412,186 416,649' 401,866 403,458 3 Demand deposits 19,571 21,107 23,788 22,490 22,449 22,303 22,174 22,973 23,221 20,536 4 Time deposits 110,413 117,278 131,136 125,207 125,728 125,129 132,702 133,144' 133,031 134,910 J Other. 26,268 29,305 40,880 39,549 40,611 42,458 46,034 46,547' 41,676 42,613 6 Own foreign offices 150,646 173,381 208,956 204,848 199,359 199,825 211,275 213,985' 203,938 205,400 7 Banks' custody liabilities4 100,408 94,656 134,134 133,411 134,450 135,054 140,141 140,010 139,178 133,158 8 U.S. Treasury bills and certificates5 76,368 69,133 90,257 89,278 90,695 9933,,004488 9977,,778899 9955,,995599 9933,,668888 8888,,119933 9 Other negotiable and readily transferable instruments 18,747 17,964 16,523 14,656 13,839 14,744 14,625 15,953 16,414 15,488 10 Other 5,293 7,558 27,354 29,477 29,916 27,262 27,727 28,098 29,076 29,477 11 Nonmonetary international and regional organizations7 4,454 5,821 4,699 5,081 4,520 3,889 7,344 4,422' 3,979 5,664 12 Banks' own liabilities 2,014 2,621 2,850 3,732 2,193 2,510 5,750 2,758' 2,489 2,085 13 Demand deposits 254 85 199 183 157 246 159 106 72 78 14 Time deposits 1,267 2,067 2,066 2,515 1,488 1,230 3,100 960 967 584 15 Other2 493 469 584 1,034 548 1,033 2,490 1,693' 1,451 1,422 16 Banks' custody liabilities4 2,440 3,200 1,849 1,349 2,326 1,379 1,594 1,664 1,490 3,579 17 U.S. Treasury bills and certificates 916 1,736 259 86 11,,221133 154 428 440 266 22,,333399 18 Other negotiable and readily transferable instruments6 1,524 1,464 1,590 1,261 1,112 1,225 1,152 1,224 1,224 1,240 19 Other 0 0 0 2 1 0 14 0 0 0 20 Official institutions8 86,065 79,985 103,275 103,346 104,872 110,866 117,302 113,054' 111,766 104,288 21 Banks' own liabilities 19,039 20,835 25,134 25,403 26,880 28,103 29,675 28,639' 27,713 27,689 22 Demand deposits 1,823 2,077 2,267 1,487 1,513 1,923 1,829 2,089 1,745 1,713 23 Time deposits 9,374 10,949 10,752 11,335 11,385 11,135 12,527 11,077' 12,626 13,493 24 Other2 7,842 7,809 12,115 12,580 13,982 15,044 15,318 15,473' 13,342 12,483 25 Banks' custody liabilities4 67,026 59,150 78,142 77,944 77,992 82,763 87,627 84,415 84,052 76,599 26 U.S. Treasury bills and certificates5 59,976 53,252 75,650 75,718 75,434 7799,,662299 8844,,664400 8811,,555533 8800,,666633 7733,,443355 Other negotiable and readily transferable instruments6 6,966 5,824 2,347 2,158 2,418 3,001 2,832 2,715 3,141 2,944 28 Other 84 75 145 69 140 132 154 147 248 220 29 Banks9 248,893 275,589 350,491 339,648 335,517 334,231 350,499 359,172' 347,483 349,863 30 Banks' own liabilities 225,368 252,723 309,928 297,037 293,144 295,092 311,360 319,410' 306,302 308,182 31 Unaffiliated foreign banks 74,722 79,341 100,971 92,189 93,785 95,268 100,084 105,425' 102,364 102,783 32 Demand deposits 10,556 10,271 10,303 10,434 10,103 9,510 9,781 10,558 10,301 8,588 ii Time deposits 47,095 49,510 64,245 57,912 60,007 61,856 64,926 68,063' 67,548 67,757 34 Other2 17,071 19,561 26,424 23,844 23,675 23,902 25,378 26,804' 24,515 26,438 35 Own foreign offices3 150,646 173,381 208,956 204,848 199,359 199,825 211,275 213,985' 203,938 205,400 36 Banks' custody liabilities4 23,525 22,866 40,563 42,611 42,373 39,138 39,140 39,761 41,181 41,681 37 U.S. Treasury bills and certificates 11,448 9,832 9,962 9,826 10,486 99,,774444 99,,553388 99,,777744 99,,006666 99,,114422 38 Other negotiable and readily transferable instruments6 7,236 6,040 5,513 5,433 4,340 4,367 4,256 4,376 5,653 5,697 39 Other 4,841 6,994 25,089 27,352 27,547 25,026 25,346 25,611 26,462 26,841 40 Other foreigners 67,894 74,331 80,430 77,429 77,688 75,783 77,181 80,011 77,815 76,801 41 Banks' own liabilities 60,477 64,892 66,849 65,923 65,929 64,009 65,401 65,841 65,361 65,502 42 Demand deposits 6,938 8,673 11,019 10,386 10,676 10,623 10,405 10,220 11,104 10,157 43 Time deposits 52,678 54,752 54,073 53,446 52,848 50,908 52,148 53,043 51,889 53,075 44 Other2. 861 1,467 1,757 2,091 2,405 2,479 2,848 2,578 2,367 2,270 45 Banks' custody liabilities4 7,417 9,439 13,580 11,507 11,759 11,773 11,780 14,169 12,454 11,299 46 U.S. Treasury bills and certificates 4,029 4,314 4,387 3,648 3,563 33,,552200 33,,118833 44,,119922 33,,669944 33,,227766 47 Other negotiable and readily transferable instruments6 3,021 4,636 7,074 5,804 5,969 6,150 6,385 7,638 6,395 5,607 48 Other 367 489 2,120 2,055 2,227 2,103 2,212 2,340 2,366 2,415 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,476 9,845 7,343 7,191 7,722 7,694 7,976 8,694' 7,356 6,307 1. Excludes negotiable time certificates of deposit, which are included in securities, held by or through reporting banks. "Other negotiable and readily transferable instruments." 5. Includes nonmarketable certificates of indebtedness and Treasury bills 2. Includes borrowing under repurchase agreements. issued to official institutions of foreign countries. 3. U.S. banks: includes amounts due to own foreign branches and foreign 6. Principally bankers acceptances, commercial paper, and negotiable time subsidiaries consolidated in "Consolidated Report of Condition" filed with bank certificates of deposit. regulatory agencies. Agencies, branches, and majority-owned subsidiaries of 7. Principally the International Bank for Reconstruction and Development, and foreign banks: principally amounts due to head office or parent foreign bank, and the Inter-American and Asian Development Banks. foreign branches, agencies or wholly owned subsidiaries of head office or parent 8. Foreign central banks and foreign central governments, and the Bank for foreign bank. International Settlements. 4. Financial claims on residents of the United States, other than long-term 9. Excludes central banks, which are included in "Official institutions." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.17 Continued 1987 AArreeaa aanndd ccoouunnttrryy 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May June July" 1 407,306 435,726 538,895 525,505 522,597 524,768 552,326 556,659" 541,043 536,616 2 Foreign countries 402,852 429,905 534,196 520,424 518,077 520,879 544,982 552,237" 537,064 530,953 3 Europe 153,145 164,114 180,871 179,253 181,082 182,527 191,655 206,723" 204,145 198,547 4 Austria 615 693 1,186 972 928 798 1,057 921 974 795 5 Belgium-Luxembourg 4,114 5,243 6,788 6,729 7,587 7,230 7,904 9,335 9,558 9,140 6 Denmark 438 513 485 449 520 623 425 459 425 486 7 Finland 418 496 580 565 762 937 942 909 616 467 8 France 12,701 15,541 22,850 21,372 22,654 23,835 27,399 27,858 27,947 25,454 9 Germany 3,358 4,835 5,823 6,813 5,907 7,412 6,419 10,229" 8,024 6,958 10 Greece 699 666 706 745 749 641 601 643 691 667 11 Italy 10,762 9,667 10,875 9,375 8,489 10,101 11,337 11,726 11,943 10,019 1? Netherlands 4,731 4,212 5,558 5,155 5,354 4,968 5,967 5,442 4,787 5,101 13 Norway 1,548 948 737 678 554 495 567 571 502 581 14 Portugal 597 652 700 657 709 689 660 607 704 586 IS Spain 2,082 2,114 2,393 2,238 2,333 2,224 2,233 2,194 2,322 2,105 16 Sweden 1,676 1,422 889 884 1,062 1,065 1,251 1,4% 1,2% 1,235 17 Switzerland 31,740 29,020 30,967 28,913 27,555 27,544 26,500 27,054" 28,243 25,798 18 Turkey 584 429 454 375 359 412 833 378 455 369 19 United Kingdom 68,671 76,728 85,352 87,911 90,105 88,390 91,765 102,308 99,701 102,073 70 Yugoslavia 602 673 631 554 565 564 526 429 433 459 71 Other Western Europe 7,192 9,635 3,117 4,309 4,319 3,902 4,572 3,594" 4,818 5,049 77 U.S.S.R 79 105 80 21 23 30 32 37 36 555 23 Other Eastern Europe2 537 523 702 535 546 669 665 532" 671 647 24 Canada 16,059 17,427 26,256 26,105 25,189 26,553 25,294 24,522 21,913 21,216 75 Latin America and Caribbean 153,381 167,856 208,949 195,666 191,636 195,412 206,806 204,810" 195,666 199,430 76 Argentina 4,394 6,032 4,754 4,499 4,668 4,725 4,406 4,7%" 4,795 6,060 71 Bahamas 56,897 57,657 73,267 64.998 62,970 62,581 72,101 69,418" 69,330 61,479 78 Bermuda 2,370 2,765 2,951 2,282 2,506 2,293 2,180 2,594 2,172 2,400 79 Brazil 5,275 5,373 4,321 3,813 3,797 3,693 3,616 3,960 3,673 3,780 30 British West Indies 36,773 42,674 71,151 66,775 65,509 69,860 69,213 70,471" 65,306 72,311 31 Chile 2,001 2,049 2,053 2,208 2,046 2,060 2,253 2,034 1,972 2,041 37 Colombia 2,514 3,104 4,281 4,273 4,268 4,271 4,349 4,289 4,363 4,430 33 Cuba 10 11 7 6 7 6 6 6" 8 8 34 Ecuador 1,092 1,239 1,235 1,049 1,120 1,014 1,044 1,093 1,121 1,090 35 Guatemala 896 1,071 1,122 1,124 1,081 1,082 1,164 1,167 1,122 1,110 36 183 122 136 149 145 230 149 189 158 146 37 Mexico 12,303 14,060 13,631 13,584 13,423 13,207 15,053 13,955" 13,857 14,563 38 Netherlands Antilles 4,220 4,875 4,914 5,593 5,652 5,643 5,706 5,171 5,760 5,155 39 Panama 6,951 7,514 6,865 7,361 6,475 6,664 7,091 7,341 7,125 6,983 40 Peru 1,266 1,167 1,163 1,110 1,131 1,062 1,086 1,095 1,137 1,145 41 Uruguay 1,394 1,552 1,537 1,609 1,583 1,630 1,520 1,507 1,504 1,536 4? Venezuela 10,545 11,922 10,452 10,494 10,362 10,365 10,587 10,292 10,170 10,089 43 Other Latin America and Caribbean 4,297 4,668 5,109 4,741 4,894 5,026 5,280 5,432 5,097 5,104 44 71,187 72,280 108,969 112,058 113,439 108,942 112,345 107,784 106,701 102,702 China 45 Mainland 1,153 1,607 1,476 2,046 1,650 1,973 1,899 1,842 1,737 1,744 46 Taiwan 4,990 7,786 18,903 19,553 21,127 20,106 19,460 17,333 16,308 16,421 47 Hong Kong 6,581 8,067 9,518 9,388 9,329 9,160 9,357 9,365 9,122 8,592 48 India 507 712 673 663 686 500 526 569 714 572 49 Indonesia 1,033 1,466 1,548 1,410 1,591 1,414 1,460 1,243 1,773 1,404 50 Israel 1,268 1,601 1,890 1,761 1,892 1,666 1,302 1,084 1,229 928 51 21,640 23,077 47,437 49,997 50,921 48,983 53,392 50,434 49,494 46,506 57 Korea 1,730 1,665 1,141 1,058 1,017 1,129 1,177 1,343 1,397 1,410 53 Philippines 1,383 1,140 1,865 1,811 1,779 1,737 1,426 1,312 1,222 1,144 54 Thailand 1,257 1,358 1,120 1,282 1,224 1,235 1,131 1,174 1,144 1,093 55 Middle-East oil-exporting countries 16,804 14,523 12,356 12,322 12,104 11,581 11,399 10,870" 11,450 11,672 56 Other Asia 12,841 9,276 11,042 10,768 10,120 9,456 9,816 11,214" 11,111 11,215 57 Africa 3,396 4,883 4,019 3,661 3,499 3,457 3,702 4,003 3,757 4,007 58 Egypt 647 1,363 706 607 791 753 847 1,052 1,009 1,103 59 Morocco 118 163 92 74 76 99 101 86 106 75 60 South Africa 328 388 271 341 201 178 287 198 188 229 61 153 163 74 54 42 40 39 74 58 64 67 Oil-exporting countries4 1,189 1,494 1,518 1,336 1,156 1,108 1,212 1,267 1,111 1,275 63 Other Africa 961 1,312 1,358 1,248 1,233 1,278 1,216 1,326 1,286 1,261 64 Other countries 5,684 3,347 5,131 3,680 3,232 3,988 5,179 4,394 4,881 5,051 65 Australia 5,300 2,779 4,209 2,683 2,465 3,027 4,292 3,589 4,113 4,333 66 All other 384 568 922 997 767 960 888 805 768 718 67 Nonmonetary international and regional organizations 4,454 5,821 4,699 5,081 4,520 3,889 7,344 4,422" 3,979 55,,666644 68 International 3,747 4,806 3,512 3,958 3,606 2,897 6,075 2,940" 2,577 4,204 69 Latin American regional 587 894 1,033 960 762 788 850 994 1,047 1,075 70 Other regional5 120 121 154 164 152 204 420 488 356 384 1. Includes the Bank for International Settlements. Beginning April 1978, also United Arab Emirates (Trucial States). includes Eastern European countries not listed in line 23. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German 5. Asian, African, Middle Eastern, and European regional organizations, Democratic Republic, Hungary, Poland, and Romania. except the Bank for International Settlements, which is included in "Other 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and Western Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • November 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 1987 AArreeaa aanndd ccoouunnttrryy 11998844 11998855 11998866 Jan. Feb. Mar. Apr. May June July" 1 Total 400,162 401,608 444,257 421,086 417,258 414,321 439,040 438,358' 433,330 423,295 2 Foreign countries 399,363 400,577 441,273 421,017 417,081 413,777 434,309 437,528' 431,198 421,852 3 Europe 99,014 106,413 107,347 100,775 102,234 99,393 108,154 116,651' 114,196 108,372 4 Austria 433 598 728 641 549 660 750 673' 762 702 5 Belgium-Luxembourg 4,794 5,772 7,503 7,556 8,905 8,083 8,544 9,956 9,777 10,194 6 Denmark 648 706 692 650 624 651 574 569 744 642 7 Finland 898 823 947 797 1,050 1,003 1,127 1,046 1,046 1,048 8 France 9,157 9,124 11,369 9,058 9,960 9,858 10,816 12,076 12,037 11,771 9 Germany 1,306 1,267 1,818 2,269 1,725 1,632 1,371 1,508' 1,548 2,008 10 Greece 817 991 648 635 634 535 460 457 456 433 11 Italy 9,119 8,848 9,042 7,898 7,337 6,991 7,536 8,331 8,406 6,770 12 Netherlands 1,356 1,258 3,299 2,077 2,090 2,371 3,075 2,989 5,794 4,482 13 Norway 675 706 654 741 766 667 683 776 774 830 14 Portugal 1,243 1,058 706 677 679 737 615 641 659 645 15 Spain 2,884 1,908 1,459 1,479 1,637 1,768 1,977 2,107 1,848 1,822 16 Sweden 2,230 2,219 1,945 2,280 2,422 2,464 2,417 2,618 2,333 2,290 17 Switzerland 2,123 3,171 3,049 2,622 2,413 2,338 2,905 3,593 2,611 2,459 18 Turkey 1,130 1,200 1,541 1,469 1,436 1,577 1,559 1,623 1,785 1,761 19 United Kingdom 56,185 62,566 58,282 55,856 56,387 54,035 59,864 64,001' 59,705 56,733 20 Yugoslavia 1,886 1,964 1,836 1,775 1,769 1,840 1,763 1,803 1,755 1,762 21 Other Western Europe1 596 998 540 522 477 781 670 515 581 601 22 U.S.S.R 142 130 345 396 401 367 375 357 582 420 23 Other Eastern Europe2 1,389 1,107 944 1,379 971 1,032 1,073 1,012 993 999 24 Canada 16,109 16,482 20,958 20,749 19,186 19,829 20,225 19,340' 19,071 18,652 25 Latin America and Caribbean 207,862 202,674 208,852 195,571 196,337 199,037 209,196 204,286' 202,311 200,554 26 Argentina 11,050 11,462 12,089 12,114 12,211 12,162 12,129 12,335 12,256 12,172 27 Bahamas 58,009 58,258 59,547 52,090 52,952 53,679 62,639 58,328' 56,809 52,884 28 Bermuda 592 499 418 415 376 532 740 592' 302 387 29 Brazil 26,315 25,283 25,666 25,798 25,810 26,082 25,986 25.67C 25,478 25,975 30 British West Indies 38,205 38,881 46,306 41,128 41,074 42,774 43,256 44,343' 43,571 44,347 31 Chile 6,839 6,603 6,543 6,475 6,603 6,412 6,412 6,323' 6,554 6,490 32 Colombia 3,499 3,249 2,819 2,801 2,743 2,692 2,686 2,650 2,649 2,743 33 Cuba 0 0 0 10 1 6 9 9 0 337 34 Ecuador 2,420 2,390 2,449 2,425 2,422 2,338 2,381 2,372 2,354 2,396 35 Guatemala3 158 194 140 133 145 135 120 115 109 107 36 Jamaica 252 224 198 199 199 192 189 184 182 268 37 Mexico 34,885 31,799 30,607 30,289 29,999 29,817 30,119 30,056' 30,297 31,072 38 Netherlands Antilles 1,350 1,340 1,039 960 945 992 1,202 1,072 1,364 1,118 39 Panama 7,707 6,645 5,434 5,270 5,204 5,543 5,771 4,730' 4,948 4,631 40 Peru 2,384 1,947 1,643 1,635 1,626 1,593 1,601 1,599 1,565 1,567 41 Uruguay 1,088 960 940 937 932 959 957 962 950 949 42 Venezuela 11,017 10,871 11,078 11,028 11,185 11,282 11,089 11,046 11,032 11,245 43 Other Latin America and Caribbean 2,091 2,067 1,938 1,864 1,910 1,845 1,910 1,900 1,890 1,868 44 66,316 66,212 96,198 95,989 91,767 87,783 8888,,999900 8899,,556644'' 8877,,991144 8866,,997700 China 45 Mainland 710 639 787 983 873 1,373 1,360 1,175 993 935 46 Taiwan 1,849 1,535 2,675 2,617 2,890 2,910 3,278 3,592 3,313 2,487 47 Hong Kong 7,293 6,797 8,300 8,443 9,225 8,254 7,931 7,727' 7,646 7,416 48 India 425 450 321 333 325 486 314 379 429 417 49 Indonesia 724 698 718 699 679 652 627 657 677 639 50 Israel 2,088 1,991 1,635 1,601 1,521 1,545 1,509 1,459 1,445 1,559 51 Japan 29,066 31,249 59,852 58,319 55,594 52,267 54,292 55,172' 55,108 54,960 52 Korea 9,285 9,226 7,159 6,783 6,161 6,011 5,352 6,076' 5,314 5,010 53 Philippines 2,555 2,224 2,208 2,154 2,127 2,282 2,121 2,064 2,109 2,210 54 Thailand 1,125 845 577 521 557 492 461 540 552 565 55 Middle East oil-exporting countries4 5,044 4,298 4,122 5,483 4,892 5,150 4,598 3,697 3,808 3,913 56 Other Asia 6,152 6,260 7,845 8,053 6,922 6,362 7,148 7,009 6,518 6,858 57 Africa 6,615 5,407 4,621 4,618 4,678 4,853 4,795 4,876' 4,711 4,703 58 Egypt 728 721 567 577 593 618 574 585 599 571 59 Morocco 583 575 598 590 585 584 565 566 563 568 60 South Africa 2,795 1,942 1,531 1,534 1,548 1,550 1,578 1,598' 1,506 1,479 61 Zaire 18 20 28 36 42 42 41 43 39 38 62 Oil-exporting countries 842 630 688 725 743 856 801 840 818 866 63 Other 1,649 1,520 1,208 1,156 1,168 1,204 1,236 1,246' 1,187 1,182 64 Other countries 3,447 3,390 3,297 3,316 2,878 2,882 2,949 2,828 2,996 2,601 65 Australia 2,769 2,413 1,952 2,081 1,902 1,990 2,065 1,897 1,980 1,693 66 All other 678 978 1,345 1,235 976 892 884 931 1,016 908 67 Nonmonetary international and regional organizations6 800 1,030 2,983 69 178 544 4,731 830' 2,132 1,443 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 1987 TTyyppee ooff ccllaaiimm 11998844 11998855 11998866 Jan. Feb. Mar. Apr. Mayr June July" 11 TToottaall 444444333333333333,,,,,,000000777777888888 444444333333000000,,,,,,444444888888999999 444444777777888888,,,,,,222222222222111111 421,086 417,258 444444444444555555,,,,,,888888999999999999'''''' 439,040 438,358 444444666666666666,,,,,,444444333333666666 423,295 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 444444000000000000,,,,,,111111666666222222 444444000000111111,,,,,,666666000000888888 444444444444444444,,,,,,222222555555777777 421,086 417,258 444444111111444444,,,,,,333333222222111111 439,040 438,358 444444333333333333,,,,,,333333333333000000 423,295 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 666666222222,,,,,,222222333333777777 666666000000,,,,,,555555000000777777 666666333333,,,,,,999999555555000000 61,794 61,709 666666222222,,,,,,777777333333777777 65,706 62,896 666666333333,,,,,,666666444444000000 63,678 44 OOwwnn ffoorreeiiggnn ooffffiicceess 111111555555666666,,,,,,222222111111666666 111111777777444444,,,,,,222222666666111111 222222111111111111,,,,,,777777555555999999 192,595 190,911 111111999999000000,,,,,,000000777777000000 206,944 203,652 222222000000000000,,,,,,222222000000222222 190,535 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111222222444444,,,,,,999999333333222222 111111111111666666,,,,,,666666555555444444 111111222222222222,,,,,,777777444444777777 121,036 120,287 111111111111777777,,,,,,000000666666333333 121,747 127,319 111111222222555555,,,,,,222222333333999999 124,113 66 DDeeppoossiittss 444444999999,,,,,,222222222222666666 444444888888,,,,,,333333777777222222 555555777777,,,,,,222222999999999999 54,376 55,526 555555333333,,,,,,666666555555222222 57,394 61,693 666666000000,,,,,,333333888888111111 59,194 77 OOtthheerr 777777555555,,,,,,777777000000666666 666666888888,,,,,,222222888888222222 666666555555,,,,,,444444444444777777 66,660 64,760 666666333333,,,,,,444444111111111111 64,353 65,626 666666444444,,,,,,888888555555888888 64,919 88 AAllll ootthheerr ffoorreeiiggnneerrss 555555666666,,,,,,777777777777777777 555555000000,,,,,,111111888888555555 444444555555,,,,,,888888000000111111 45,662 44,352 444444444444,,,,,,444444555555000000 44,643 44,491 444444444444,,,,,,222222444444999999 44,969 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22...... 333333222222,,,,,,999999111111666666 222222888888,,,,,,888888888888111111 333333333333,,,,,,999999666666444444 333333111111,,,,,,555555777777888888'''''' 333333333333,,,,,,111111000000666666 333333,,,,,,333333888888000000 333333,,,,,,333333333333555555 444444,,,,,,444444111111333333 333333,,,,,,444444000000222222 333333,,,,,,444444777777444444 11 Negotiable and readily transferable 222222333333,,,,,,888888000000555555 111111999999,,,,,,333333333333222222 222222444444,,,,,,000000444444444444 222222000000,,,,,,555555555555111111 222222111111,,,,,,333333888888444444 12 Outstanding collections and other 555555,,,,,,777777333333222222 666666,,,,,,222222111111444444 555555,,,,,,555555000000888888 777777,,,,,,666666222222555555'''''' 888888,,,,,,222222444444999999 13 MEMO: Customer liability on 333333777777,,,,,,111111000000333333 222222888888,,,,,,444444888888777777 222222555555,,,,,,666666111111666666 222222555555,,,,,,444444444444999999 222222333333,,,,,,444444444444999999 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States4 .... 40,714 38,102 43,994 46,583 49,528 44,404R 45,675' 44,844 38,008 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, p. and foreign branches, agencies, or wholly owned subsidiaries of head office or 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 States that represent claims on foreigners held by reporting banks for the account a 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 1986 1987 MMaattuurriittyy ;; bbyy bboorrrroowweerr aanndd aarreeaa 11998833 11998844 11998855 Sept. Dec. Mar. June'' 1 Total 243,715 243,952 227,903 224,754 231,413 225,211 234,704 By borrower 2 Maturity of 1 year or less 176,158 167,858 160,824 155,258 159,909 153,302 165,552 3 Foreign public borrowers 24,039 23,912 26,302 22,528 24,921 22,411 23,360 4 All other foreigners 152,120 143,947 134,522 132,731 134,988 130,891 142,192 5 Maturity over 1 year 67,557 76,094 67,078 69,496 71,504 71,909 69,152 6 Foreign public borrowers 32,521 38,695 34,512 38,350 39,783 41,005 40,173 7 All other foreigners 35,036 37,399 32,567 31,145 31,722 30904 28,979 By area Maturity of 1 year or less 8 Europe 56,117 58,498 56,585 59,428 61,227 57,806 67,811 9 Canada 6,211 6,028 6,401 6,199 5,840 5,504 5,531 10 Latin America and Caribbean 73,660 62,791 63,328 58,212 56,050 54,078 55,282 11 Asia 34,403 33,504 27,966 26,505 29,476 29,538 30,594 12 Africa 4,199 4,442 3,753 3,071 2,858 3,145 2,978 13 All other2 1,569 2,593 2,791 1,845 4,458 3,231 3,355 Maturity of over 1 year 14 Europe 13,576 9,605 7,634 7,230 6,826 6,954 6,558 15 Canada 1,857 1,882 1,805 1,930 1,930 1,936 1,632 16 Latin America and Caribbean 43,888 56,144 50,674 54,137 56,337 56,623 55,361 17 Asia 4,850 5,323 4,502 3,976 4,081 4,197 3,442 18 Africa 2,286 2,033 1,538 1,479 1,534 1,626 1,522 19 All other2 1,101 1,107 926 744 795 573 638 1. Remaining time to maturity. 2. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • November 1987 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks12 Billions of dollars, end of period 1985 1986 1987 AArreeaa oorr ccoouunnttrryy 11998844 11998855 June Sept. Dec. Mar. June Sept. Dec. Mar. Junep 1 Total 405.7 391.9 396.8 394.9 391.9 393.1 389.9 389.5 390.0 396.3 388.2 2 G-10 countries and Switzerland 148.1 148.5 146.7 152.0 148.5 156.6 159.8r 158.7r 157.8r 163.6r 158.5 3 Belgium-Luxembourg 8.7 9.3 8.9 9.5 9.3 8.3 9.0 8.5 8.4 9.1 8.4 4 France 14.1 12.3 13.5 14.8 12.3 13.8 15.1 14.7 13.8 13.4 12.6 5 Germany 9.0 10.5 9.6 9.8 10.5 11.3 11.5 12.5 11.7 12.2 11.0 6 Italy 10.1 9.8 8.6 8.4 9.8 8.5 9.3 8.1 9.0 8.6 7.5 7 Netherlands 3.9 3.7 3.7 3.4 3.7 3.5 3.4 3.9 4.6 4.4 7.3 8 Sweden 3.2 2.8 2.9 3.1 2.8 2.9 2.9 2.7 2.4 3.0 2.4 9 Switzerland 3.9 4.4 4.0 4.1 4.4 5.4 5.6 4.8 5.5 5.8 5.7 10 United Kingdom 60.3 64.6 65.7 67.1 64.6 68.6 69.0 70.1 71.8 74.7r 72.4 11 Canada 7.9 7.0 8.1 7.6 7.0 6.3 6.9 6.1 5.4 5.2 4.6 12 Japan 27.1 24.2 21.7 24.3 24.2 28.0 27. r 2i.y 25.2r 27.2 26.4 13 Other developed countries 33.6 30.4 32.3 32.0 30.4 31.6 30.6 29.4 26.0 26.C 25.7 14 Austria 1.6 1.6 1.6 1.7 1.6 1.6 1.7 1.7 1.7 1.9 1.9 15 Denmark 2.2 2.4 1.9 2.1 2.4 2.5 2.4 2.3 1.7 1.8 1.6 16 Finland 1.9 1.6 1.8 1.8 1.6 1.9 1.6 1.7 1.4 1.4 1.5 17 Greece 2.9 2.6 2.9 2.8 2.6 2.5 2.6 2.3 2.3 2.1 2.0 18 Norway 3.0 2.9 2.9 3.4 2.9 2.7 3.0 2.7 2.4 2.2' 2.2 19 Portugal 1.4 1.3 1.3 1.4 1.3 1.1 1.0 1.0 .8 .9 .8 20 Spain 6.5 5.8 5.9 6.1 5.8 6.4 6.4 6.7 5.8 6.2 6.0 21 Turkey 1.9 1.9 2.0 2.1 1.9 2.3 2.5 2.1 2.0 1.9 2.1 22 Other Western Europe 1.7 2.0 1.8 1.7 2.0 2.4 2.1 1.6 1.4 1.5r 1.5 23 South Africa 4.5 3.2 3.9 3.3 3.2 3.2 3.1 3.1 3.0 3.1 3.1 24 Australia 6.0 5.0 6.2 5.6 5.0 4.9 4.2 4.1 3.5 3.2 3.1 25 OPEC countries3 24.9 21.6 22.8 22.7 21.6 20.7 20.6 20.0 19.6 20.4r 19.2 26 Ecuador 2.2 2.1 2.2 2.2 2.1 2.2 2.1 2.2 2.2 2.1 2.1 27 Venezuela 9.3 8.9 9.3 9.0 8.9 8.7 8.8 8.7 8.6 8.7 8.7 28 Indonesia 3.3 3.0 3.1 3.1 3.0 3.3 3.0 2.8 2.5 2.4r 2.2 29 Middle East countries 7.9 5.5 6.1 6.2 5.5 4.7 5.0 4.6 4.5 5.5 4.5 30 African countries 2.3 2.0 2.2 2.3 2.0 1.8 1.7 1.7 1.7 1.6 1.7 31 Non-OPEC developing countries 111.8 105.1 110.0 107.8 105.1 103.8 101.7 99.9 99.5 100. V 100.5 Latin America 32 Argentina 8.7 8.9 8.6 8.9 8.9 8.9 9.2 9.3 9.5 9.5 9.5 33 Brazil 26.3 25.6 26.6 25.5 25.6 25.7 25.4 25.3 25.3 25.6r 24.5 34 Chile 7.0 7.0 6.9 6.6 7.0 7.0 7.1 7.2 7.1 7.3 7.5 35 Colombia 2.9 2.7 2.7 2.6 2.7 2.3 2.2 2.0 2.1 2.0 2.0 36 Mexico 25.7 24.2 25.3 24.4 24.2 24.1 23.9 23.9 23.9 23.9 25.3 37 Peru 2.2 1.8 2.1 1.9 1.8 1.7 1.6 1.5 1.4 1.4 1.4 38 Other Latin America 3.9 3.4 3.7 3.5 3.4 3.3 3.3 3.3 3.1 3.0 3.0 Asia China 39 Mainland .7 .5 .3 1.1 .5 .6 .6 .6 .4 .9 .6 40 Taiwan 5.1 4.5 5.5 5.1 4.5 4.3 3.7 4.3 4.9 5.5r 6.6 41 India .9 1.2 .9 1.1 1.2 1.2 1.3 1.3 1.2 1.7 1.7 42 Israel 1.8 1.6 2.3 1.5 1.6 1.3 1.6 1.4 1.5 1.4 1.3 43 Korea (South) 10.6 9.4 10.0 10.4 9.4 9.5 8.7 7.3 6.7 6.2 5.7 44 Malaysia 2.7 2.4 2.8 2.7 2.4 2.2 2.0 2.1 2.1 1.9 1.7 45 Philippines 6.0 5.7 6.0 6.0 5.7 5.6 5.7 5.4 5.4 5.4 5.4 46 Thailand 1.8 1.4 1.6 1.7 1.4 1.3 1.1 1.0 .9 .9 .8 47 Other Asia 1.1 1.0 .9 .9 1.0 .9 .8 .7 .7 .6 .8 Africa 48 Egypt 1.2 1.0 1.0 1.0 1.0 .9 .9 .7 .7 .6 .6 49 Morocco .8 .9 .8 .9 .9 .9 .9 .9 .9 .9 .9 >0 Zaire .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 51 Other Africa4 2.1 1.9 2.0 2.0 1.9 1.9 1.7 1.6 1.6 1.4 1.3 52 Eastern Europe 4.4 4.2 4.3 4.6 4.2 4.0 4.0 3.4 3.2 3.1 3.4 53 U.S.S.R .1 .1 .3 .2 .1 .3 .3 .1 .1 .1 .3 54 Yugoslavia 2.3 2.2 2.2 2.4 2.2 2.0 2.0 1.9 1.7 1.6 1.7 55 Other 2.0 1.8 1.8 1.9 1.8 1.7 1.7 1.4 1.4 1.3 1.4 56 Offshore banking centers 65.6 65.4 63.9 58.8 65.4 60.1 56.3 61.0 64.2 65.4 62.5 57 Bahamas 21.5 21.4 21.1 16.6 21.4 21.5 17.3 20.0 22.5 23.8 19.6 58 Bermuda .9 .7 .9 .8 .7 .7 .5 .4 .7 .8 .6 59 Cayman Islands and other British West Indies 11.8 13.4 12.1 12.3 13.4 11.3 13.0 13.2 14.5 13.1 14.7 60 Netherlands Antilles 3.4 2.3 3.2 2.3 2.3 2.3 2.3 1.9 1.8 1.7 1.3 61 Panama5 6.7 6.0 5.4 6.1 6.0 4.4 4.2 5.1 4.1 5.5 5.3 62 Lebanon .1 .1 .1 .0 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 11.4 11.5 11.4 11.4 11.5 11.5 9.5 10.5 11.2 11.5 12.5 64 Singapore 9.8 9.9 9.7 9.4 9.9 8.4 9.3 9.7 9.3 8.8 8.4 65 Others6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated7 17.3 16.9 16.9 17.3 16.9 16.3 16.8r 17.2r 19.7'' 17.7 18.4 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 Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) as well another foreign branch of the same banking institution. The data in this table as Bahrain and Oman (nor formally members of OPEC). combine foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the 4. Excludes Liberia. claims of U.S. offices in table 3.18 (excluding those held by agencies and branches 5. Includes Canal Zone beginning December 1979. of 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 1986 1987 Type, and area or country 11998833 11998844 11998855 Mar. June Sept. Dec. Mar. 1 Total 25,346 29,357 27,685 26,346 24,848 25,183 25,385 25,580 2 Payable in dollars 22,233 26,389 24,296 22,589 21,162 21,240 21,541 20,028 3 Payable in foreign currencies 3,113 2,968 3,389 3,757 3,686 3,943 3,844 5,551 By type 4 Financial liabilities 10,572 14,509 13,460 13,017 11,728 12,285 12,134 12,686 5 Payable in dollars 8,700 12,553 11,257 10,750 9,637 9,908 9,694 9,983 6 Payable in foreign currencies 1,872 1,955 2,203 2,267 2,091 2,376 2,440 2,703 7 Commercial liabilities 14,774 14,849 14,225 13,329 13,120 12,899 13,250 12,894 8 Trade payables 7,765 7,005 6,685 5,618 5,472 5,723 6,289 6,072 9 Advance receipts and other liabilities .. 7,009 7,843 7,540 7,711 7,648 7,175 6,961 6,822 10 Payable in dollars 13,533 13,836 13,039 11,839 11,525 11,331 11,847 10,046 11 Payable in foreign currencies 1,241 1,013 1,186 1,490 1,595 1,567 1,404 2,848 By area or country Financial liabilities 12 Europe 5,742 6,728 7,560 7,456 7,046 7,678 7,891 7,929 13 Belgium-Luxembourg 302 471 329 440 390 424 245 205 14 France 843 995 857 851 686 501 737 702 15 Germany 502 489 434 388 280 319 372 368 16 Netherlands 621 590 745 630 635 708 701 690 17 Switzerland 486 569 620 636 505 636 714 817 18 United Kingdom 2,839 3,297 4,254 4,167 4,252 4,660 4,830 4,886 19 Canada 764 863 839 832 367 362 402 431 20 Latin America and Caribbean 2,596 5,086 3,184 2,810 2,463 2,283 1,969 2,366 21 Bahamas 751 1,926 1,123 958 874 863 621 668 22 Bermuda 13 13 4 4 14 4 4 0 23 Brazil 32 35 29 26 27 28 32 26 24 British West Indies 1,041 2,103 1,843 1,639 1,406 1,270 1,160 1,544 25 Mexico 213 367 15 20 30 18 22 30 26 Venezuela 124 137 3 3 3 5 3 3 27 Asia 1,424 1,777 1,815 1,874 1,735 1,881 1,792 1,869 28 Japan 991 1,209 1,198 1,267 1,264 1,446 1,377 1,459 29 Middle East oil-exporting countries2 . 170 155 82 78 43 3 8 7 30 Africa 19 14 12 12 12 4 1 3 0 0 0 0 0 2 1 1 31 Oil-exporting countries 27 41 50 32 104 76 79 88 32 All other4 Commercial liabilities 3,245 4,001 4,074 3,925 3,817 4,367 4,420 4,454 33 Europe 62 48 62 66 58 75 99 85 34 Belgium-Luxembourg 437 438 453 382 358 370 338 281 35 France 427 622 607 546 561 637 693 602 36 Germany 268 245 364 545 586 613 493 374 37 Netherlands 241 257 379 261 284 361 384 483 38 Switzerland 732 1,095 976 957 864 1,104 1,279 1,320 39 United Kingdom 40 Canada 1,841 1,975 1,449 1,445 1,367 1,312 1,386 1,350 41 Latin America and Caribbean 1,473 1,871 1,088 1,107 1,242 846 850 1,165 42 Bahamas 1 7 12 26 10 37 19 28 43 Bermuda 67 114 77 218 294 172 132 294 44 Brazil 44 124 58 64 45 43 59 81 45 British West Indies 6 32 44 7 35 45 48 88 46 Mexico 585 586 430 256 235 197 210 182 47 Venezuela 432 636 212 364 488 207 215 316 48 Asia 6,741 5,285 6,046 5,384 5,075 4,807 5,011 4,931 49 Japan 1,247 1,256 1,799 2,039 2,100 2,136 2,046 2,443 50 Middle East oil-exporting countries2,3 4,178 2,372 2,829 2,171 1,787 1,492 1,666 1,175 51 Africa 553 588 587 486 567 585 619 520 52 Oil-exporting countries 167 233 238 148 215 176 197 170 53 All other4 921 1,128 982 983 1,053 982 963 475 1. For a description of the changes in the International Statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. July 1979 BULLETIN, p. 550. 4. Includes nonmonetary international and regional organizations. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 5. Revisions include a reclassification of transactions, which also affects the United Arab Emirates (Trucial States). totals for Asia and the grand totals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • November 1987 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1986 1987 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998833 11998844 11998855 Mar. June Sept. Dec. Mar. 1 Total 34,911 29,901 28,760 31,404 33,869 33,879 32,839 34,492 2 Payable in dollars 31,815 27,304 26,457 29,217 31,687 31,186 30,245 31,426 3 Payable in foreign currencies 3,096 2,597 2,302 2,187 2,182 2,693 2,594 3,067 By type 4 Financial claims 23,780 19,254 18,774 22,017 24,726 24,666 23,251 24,063 5 Deposits 18,496 14,621 15,526 18,633 21,418 19,262 18,167 18,239 6 Payable in dollars 17,993 14,202 14,911 18,176 20,863 18,698 17,614 17,491 7 Payable in foreign currencies 503 420 615 457 555 564 553 748 8 Other financial claims 5,284 4,633 3,248 3,384 3,308 5,404 5,083 5,824 9 Payable in dollars 3,328 3,190 2,213 2,291 2,287 4,042 3,799 4,481 10 Payable in foreign currencies 1,956 1,442 1,035 1,093 1,021 1,362 1,284 1,343 11 Commercial claims 11,131 10,646 9,986 9,387 9,142 9,213 9,588 10,429 12 Trade receivables 9,721 9,177 8,696 8,087 7,802 8,030 8,442 9,407 13 Advance payments and other claims 1,410 1,470 1,290 1,300 1,341 1,183 1,146 1,022 14 Payable in dollars 10,494 9,912 9,333 8,750 8,537 8,445 8,832 9,453 15 Payable in foreign currencies 637 735 652 637 606 767 756 976 By area or country Financial claims 16 Europe 6,488 5,762 6,812 7,204 10,155 10,452 8,656 9,265 17 Belgium-Luxembourg 37 15 10 10 11 67 41 15 18 France 150 126 184 217 257 418 131 167 19 Germany 163 224 223 174 148 129 91 140 20 Netherlands 71 66 61 61 17 44 87 70 21 Switzerland 38 66 74 166 177 138 134 74 22 United Kingdom 5,817 4,864 6,007 6,331 9,328 9,429 7,925 8,437 23 Canada 5,989 3,988 3,260 4,020 4,429 3,956 4,056 3,828 24 Latin America and Caribbean 10,234 8,216 7,846 10,073 9,258 9,353 9,110 9,521 25 Bahamas 4,771 3,306 2,698 3,516 3,315 2,884 2,539 3,945 26 Bermuda 102 6 6 2 17 19 13 3 27 Brazil 53 100 78 77 75 105 67 72 28 British West Indies 4,206 4,043 4,571 6,034 5,402 5,949 6,057 5,099 29 Mexico 293 215 180 178 176 173 173 164 30 Venezuela 134 125 48 43 42 40 24 23 31 Asia 764 961 731 619 776 740 1,317 1,220 32 Japan 297 353 475 350 499 390 986 957 33 Middle East oil-exporting countries 4 13 4 2 2 2 11 11 34 Africa 147 210 103 87 89 84 85 84 35 Oil-exporting countries3 55 85 29 27 25 18 28 19 36 All other4 159 117 21 14 20 81 27 145 Commercial claims 37 Europe 3,670 3,801 3,533 3,390 3,304 3,385 3,520 3,618 38 Belgium-Luxembourg 135 165 175 148 131 126 127 143 39 France 459 440 426 384 391 415 387 418 40 Germany 349 374 346 399 418 401 428 454 41 Netherlands 334 335 284 221 230 184 199 163 42 Switzerland 317 271 284 247 228 233 213 195 43 United Kingdom 809 1,063 898 795 674 853 820 1016 44 Canada 829 1,021 1,023 1,061 965 950 909 1,821 45 Latin America and Caribbean 2,695 2,052 1,753 1,592 1,611 1,687 1,861 1,704 46 Bahamas 8 8 13 27 24 29 29 11 47 Bermuda 190 115 93 82 148 132 158 127 48 Brazil 493 214 206 217 193 207 229 211 49 British West Indies 7 7 6 7 29 23 55 22 50 Mexico 884 583 510 388 323 316 388 415 51 Venezuela 272 206 157 172 181 192 219 157 52 Asia 3,063 3,073 2,982 2,609 2,574 2,487 2,619 2620 53 Japan 1,114 1,191 1,016 801 845 792 840 936 54 Middle East oil-exporting countries 737 668 638 630 622 600 506 466 55 Africa 588 470 437 491 450 469 464 425 56 Oil-exporting countries3 139 134 130 167 170 168 134 141 57 All other4 286 229 257 244 237 234 215 241 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 1987 1987 Transactions, and area or country 1985 1986 Jan.- Jan. Feb. Mar. Apr. May June July" July U.S. corporate securities STOCKS 1 Foreign purchases 81,995 148,090 144,019 17,628 20,704 23,066 20,704 19,603 18,682 23,632 2 Foreign sales 77,054 129,382 123,846 15,964 17,599 18,003 17,392 15,952 17,054 21,883 3 Net purchases, or sales (-) 4,941 18,708 20,173 1,664 3,105 5,063 3,312 3,651 1,628 1,749 4 Foreign countries 4,857 18,916 20,319 1,744 3,204 5,026 3,250 3,687 1,673 1,735 S 2,057 9,559 8,565 1,061 1,786 1,841 1,027 1,478 669 704 6 -438 459 1,870 140 446 656 332 123 107 66 7 Germany 730 341 -137 62 16 19 -101 118 -155 -96 8 Netherlands -123 936 842 53 91 69 124 120 232 153 9 Switzerland -75 1,560 749 101 100 177 306 351 -206 -80 10 United Kingdom 1,665 4,826 4,575 647 996 783 181 675 671 621 11 356 807 643 100 -118 343 252 48 -238 255 1? Latin America and Caribbean 1,718 3,029 2,058 308 331 372 36 334 290 387 13 Middle East1 238 976 -1,278 136 -175 -230 21 -90 -26 -913 14 Other Asia 296 3,876 9,656 91 1,153 2,638 1,790 1,686 1,009 1,290 15 24 297 76 -1 15 1 59 45 -30 -14 16 Other countries 168 373 599 49 212 61 65 185 -1 28 17 Nonmonetary international and regional organizations 84 -208 -147 -80 -100 3377 6622 --3366 --4455 1144 BONDS2 18 Foreign purchases 86,587 122,953 68,054 9,308 8,021 12,117 9,873 8,963 10,364 9,407 19 42,455 72,499 49,112 7,180 5,457 8,281 6,559 6,823 8,305 6,507 20 Net purchases, or sales (—) 44,132 50,454 18,942 2,127 2,565 3,836 3,314 2,140 2,060 2,900 21 Foreign countries 44,227 49,607 18,655 2,216 2,179 3,994 3,138 2,270 1,968 2,891 ?? Europe 40,047 39,126 15,472 1,372 1,402 3,600 2,864 1,682 2,204 2,348 73 210 389 198 6 17 81 -22 7 43 65 24 Germany 2,001 -251 176 -213 145 198 -121 -29 80 116 75 Netherlands 222 387 89 -7 -29 69 47 38 37 -65 26 Switzerland 3,987 4,529 1,286 66 78 558 50 182 105 247 77 United Kingdom 32,762 33,706 13,591 1,389 1,178 2,931 2,839 1,544 1,795 1,914 28 190 548 770 -103 364 190 161 23 49 87 29 Latin America and Caribbean 498 1,468 944 103 98 65 123 254 -4 305 30 Middle East1 -2,648 -2,961 -381 -57 -139 -12 62 59 -128 -166 31 6,091 11,270 1,865 917 469 169 -73 252 -169 300 3? Africa 11 16 22 0 1 3 1 7 8 1 33 Other countries 38 139 -37 -16 -16 -22 0 -6 8 15 34 Nonmonetary international and regional organizations -95 847 287 -88 386 -157 117766 --113300 9922 9 Foreign securities 35 Stocks, net purchases, or sales (-) -3,941 -1,912 -2,183 -204 -561 -708 -1,160 636' -257 70 36 Foreign purchases 20,861 48,787 51,594 4,906 7,175 7,015 7,120 8,016' 8,778 8,584 37 Foreign sales 24,803 50,699 53,777 5,110 7,736 7,722 8,280 7,380' 9,035 8,514 38 Bonds, net purchases, or sales (-) -3,999 -3,361 -276 319 -70 -545 -579 -1,112' 2,271 -558 39 Foreign purchases 81,216 166,781 125,078 11,427 15,822 16,650 19,012 20,049' 25,788 16,332 40 Foreign sales 85,214 170,142 125,354 11,108 15,891 17,195 19,591 21,161' 23,517 16,890 41 Net purchases, or sales (-), of stocks and bonds -7,940 -5,273 -2,459 114 -631 -1,253 -1,739 -476' 2,014 -488 42 Foreign countries -9,003 -6,357 -2,870 -27 -711 -1,520 1,874 -494' 1,970 -215 43 Europe -9,887 -17,893 -7,319 -226 -1,219 -682 -2,682 -1,990' -31 -489 44 -1,686 -875 -2,666 -3% -566 -202 -3 -418' -489 -592 45 Latin America and Caribbean 1,797 3,479 587 389 104 -416 259 204 107 -60 46 659 10,858 7,337 168 925 306 636 1,697' 2,502 1,104 47 75 52 42 4 0 -1 8 20 6 5 48 Other countries 38 -1,977 -851 34 45 -524 -91 -8' -124 -182 49 Nonmonetary international and regional organizations 1,063 1,084 411 142 80 267 113355 1188 4444 --227744 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, ties sold abroad by U.S. corporations organized to finance direct investments Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). abroad. 2. Includes state and local government securities, and securities of U.S. government agencies and corporations. Also includes issues of new debt securi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • November 1987 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1987 1987 Country or area 1985 1986 Jan- Jan. Feb. Mar. Apr. May June July'' July Transactions, net purchases or sales (-) during period1 1 Estimated total2 29,208 20,061 17,474 -436 961 7,028 -2,990 -248 12,281 878 2 Foreign countries2 28,768 21,164 21,225 580 1,846 4,145 -1,405 3,731 8,648 3,680 3 Europe2 4,303 16,866 19,189 1,376 1,751 5,832 375 1,695 3,640 4,519 4 Belgium-Luxembourg 476 349 317 59 211 -35 -35 4 58 54 5 Germany 1,917 7,531 9,413 581 1,118 2,141 1,106 1,417 1,534 1,516 6 Netherlands 269 1,283 109 -366 41 -212 -22 352 111 204 7 Sweden 976 132 304 -229 440 334 32 -166 -183 76 8 Switzerland2 773 310 4,141 -135 473 1,641 652 413 585 512 9 United Kingdom -1,810 4,648 1,660 1,227 -15 328 -1,089 -524 617 1,115 10 Other Western Europe 1,701 2,613 3,276 236 -518 1,635 -230 198 913 1,042 11 Eastern Europe 0 0 -31 3 0 0 -40 1 5 0 12 Canada -188 881 2,944 846 -416 709 703 37 413 654 13 Latin America and Caribbean 4,315 875 -1,660 -1,006 -290 -62 -30 -381 782 -673 14 Venezuela 248 -95 92 -33 18 102 14 11 -17 -4 15 Other Latin America and Caribbean 2,336 1,128 -1,203 -445 373 -156 -176 -302 -512 15 16 Netherlands Antilles 1,731 -159 -549 -528 -682 -8 133 -90 1,311 -684 17 19,919 1,341 46 -922 1,231 -2,378 -2,880 2,136 3,531 -671 18 Japan 17,909 -77 -267 -76 1,767 -2,457 -2,561 -541 4,199 -597 19 112 -54 -17 6 -34 12 -15 11 -18 20 20 Allother 308 1,255 724 280 -396 32 442 233 300 -168 21 Nonmonetary international and regional organizations 442 -1,105 -3,752 -1,016 -885 2,883 -1,585 -3,980 3,633 -2,802 22 International -436 -1,430 -2,944 -1,070 -886 2,833 -1,347 -3,114 3,515 -2,875 23 Latin American regional 18 157 13 0 0 11 0 0 3 0 Memo 24 Foreign countries2 28,768 21,164 21,225 580 1,846 4,145 -1,405 3,731 8,648 3,680 25 Official institutions 8,135 14,380 21,076 1,498 834 5,837 2,489r 4,447 3,719 2,253 26 Other foreign 20,631 6,787 149 -918 1,012 -1,691 -3,894r -715 4,929 1,426 Oil-exporting countries 2.7 Middle East3 -1,547 -1,473 -1,686 -721 -962 226 -120 636 -857 112 28 Africa4 7 5 20 1 1 17 0 0 1 0 1. Estimated official and private transactions in marketable U.S. Treasury 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and securities with an original maturity of more than 1 year. Data are based on United Arab Emirates (Trucial States). monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and 4. Comprises Algeria, Gabon, Libya, and Nigeria, notes held by official institutions of foreign countries. 2. Includes U.S. Treasury notes publicly issued to private foreign residents denominated in foreign currencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest and Exchange Rates A67 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Aug. 31, 1987 Rate on Aug. 31, 1987 Rate on Aug. 31, 1987 Country Country Country Month Month Month effective effective Percent effective Austria.. 3.5 Jan. 1987 France 7.5 July 1987 Norway 8.0 June 1983 Belgium . 7.25 July 1987 Germany, Fed. Rep. of, 3.0 Jan. 1987 Switzerland 3.5 Jan. 1987 Brazil ... 49.0 Mar. 1981 Italy 12.0 Aug. 1987 United Kingdom Canada.. 9.24 Aug. 1987 Japan 2.5 Feb. 1987 Venezuela 8.0 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 comdiscounts Treasury bills for 7 to 10 days. mercial banks or brokers. For countries with more than one rate applicable to 2. Minimum lending rate suspended as of Aug. 20, 1981. such 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 1987 CCoouunnttrryy,, oorr ttyyppee 11998844 11998855 11998866 Feb. Mar. Apr. May June July Aug. 1 Eurodollars 10.75 8.27 6.70 6.32 6.37 6.73 7.25 7.11 6.87 6.91 2 United Kingdom 9.91 12.16 10.87 10.79 9.90 9.72 8.79 8.85 9.17 9.95 3 Canada 11.29 9.64 9.18 7.44 7.14 7.62 8.22 8.40 8.61 9.11 4 Germany 5.96 5.40 4.58 3.94 3.97 3.85 3.73 3.67 3.83 3.93 5 Switzerland 4.35 4.92 4.19 3.58 3.93 3.65 3.63 3.77 3.60 3.55 6 Netherlands 6.08 6.29 5.56 5.31 5.38 5.31 5.11 5.15 5.21 5.27 7 France 11.66 9.91 7.68 8.36 7.85 7.87 8.09 8.18 7.83 7.88 8 Italy 17.08 14.86 12.60 11.13 10.65 10.03 10.15 10.67 10.92 11.96 9 Belgium 11.41 9.60 8.04 7.75 7.49 7.21 7.13 6.78 6.54 6.55 10 Japan 6.32 6.47 4.96 3.98 4.00 3.92 3.77 3.71 3.74 3.71 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • November 1987 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1987 Country/currency 1984 1985 1986 Mar. Apr. May June July Aug. 1 Australia/dollar 87.937 70.026 67.093 68.17 71.19 71.42 71.79 70.79 70.72 2 Austria/schilling 20.005 20.676 15.260 12.905 12.739 12.574 12.793 12.996 13.041 3 Belgium/franc 57.749 59.336 44.662 38.029 35.562 37.091 37.712 38.329 38.528 4 Canada/dollar 1.2953 1.3658 1.3896 1.3194 1.3183 1.3411 1.338 1.3262 1.3256 5 China, P.R./yuan 2.3308 2.9434 3.4615 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 6 Denmark/krone 10.354 10.598 8.0954 6.9166 6.8388 6.7333 6.8555 7.0179 7.1279 7 Finland/markka 6.0007 6.1971 5.0721 4.5102 4.4227 4.3604 4.4281 4.4882 4.5017 8 France/franc 8.7355 8.9799 6.9256 6.1091 6.0332 5.9748 6.0739 6.1530 6.1934 9 Germany/deutsche mark 2.8454 2.9419 2.1704 1.8355 1.8125 1.7881 1.8189 1.8482 1.8553 10 Greece/drachma 112.73 138.40 139.93 134.68 133.502 133.35 136.06 139.313 140.63 11 Hong Kong/dollar 7.8188 7.7911 7.8037 7.8017 7.8023 7.8049 7.8080 7.8090 7.8091 12 India/rupee 11.348 12.332 12.597 12.924 12.8224 12.666 12.837 13.01 13.085 13 Ireland/pound1 108.64 106.62 134.14 145.54 147.49 149.59 147.25 144.99 144.18 14 Italy/lira 1756.10 1908.90 1491.16 1305.90 1292.96 1290.80 1316.50 1337.96 1344.18 15 Japan/yen 237.45 238.47 168.35 151.43 143.00 140.48 144.55 150.29 147.33 16 Malaysia/ringgit 2.3448 2.4806 2.5830 2.5230 2.4861 2.4759 2.5078 2.5414 2.5361 17 Netherlands/guilder 3.2083 3.3184 2.4484 2.0731 2.0447 2.0154 2.0490 2.0814 2.0903 18 New Zealand/dollar1 ... 57.837 49.752 52.456 56.333 57.751 57.639 58.686 59.644 58.923 19 Norway/krone 8.1596 8.5933 7.3984 6.9335 6.7781 6.6632 6.7147 6.7632 6.7911 20 Portugal/escudo 147.70 172.07 149.80 141.48 140.339 139.18 142.12 144.51 145.57 21 Singapore/dollar 2.1325 2.2008 2.1782 2.1418 2.1350 2.1202 2.1176 2.1183 2.1082 22 South Africa/rand1 69.534 45.57 43.952 48.21 49.55 49.87 49.41 48.52 48.16 23 South Korea/won 807.91 861.89 884.61 856.11 845.00 832.53 818.39 811.81 811.87 24 Spain/peseta 160.78 169.98 140.04 128.86 126.975 125.28 126.33 126.97 125.57 25 Sri Lanka/rupee 25.428 27.187 27.933 28.823 28.902 28.988 29.171 29.405 29.643 26 Sweden/krona 8.2706 8.6031 7.1272 6.4202 6.3210 6.2606 6.3482 6.4466 6.4898 27 Switzerland/franc 2.3500 2.4551 1.7979 1.5391 1.4968 1.4705 1.5085 1.5365 1.5364 28 Taiwan/dollar 39.633 39.889 37.837 34.681 33.863 32.354 31.226 31.114 30.290 29 Thailand/baht 23.582 27.193 26.314 25.881 25.695 25.629 25.779 26.041 25.926 30 United Kingdom/point1 . 133.66 129.74 146.77 159.23 162.99 166.66 162.88 160.90 159.96 MEMO 31 United States/dollar2 ... 112.22 96.05 97.78 99.36 99.43 1. Value in U.S. cents. 3. Currency reform. 2. Index of weighted-average exchange value of U.S. dollar against the NOTE. Averages of certified noon buying rates in New York for cable transfers. currencies of 10 industrial countries. The weight for each of the 10 countries is the Data in this table also appear in the Board's G.5 (405) release. For address, see 1972-76 average world trade of that country divided by the average world trade of inside front cover. all 10 countries combined. Series revised as of August 1978 (see FEDERAL RESERVE BULLETIN, vol. 64, August 1978, p. 700). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) .... Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases June 1987 A89 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference Assets and liabilities of commercial banks, June 30, 1986 June 1987 A76 Assets and liabilities of commercial banks, September 30, 1986 July 1987 A70 Assets and liabilities of commercial banks, December 31, 1986 July 1987 A76 Assets and liabilities of commercial banks, March 31, 1987 October 1987 A70 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1986 March 1987 A70 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1986 May 1987 A76 Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1987 August 1987 A70 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1987 November 1987 A70 Terms of lending at commercial banks, August 1986 December 1986 A70 Terms of lending at commercial banks, November 1986 February 1987 A70 Terms of lending at commercial banks, February 1987 May 1987 A70 Terms of lending at commercial banks, May 1987 September 1987 A70 Pro forma balance sheet and income statements for priced service operations, June 30, 1987 November 1987 A74 Special tables begin on next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • November 1987 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, June 30, 19871 Millions of dollars All states2 New York California Illinois Item in T c I l B o u t F d a s i l n g o IB nl F y s 3 inc T IB l o u F t d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 in T c IB l o u t F d a s i l n g o IB nl F y s 3 1 Total assets4 427,353 214,061 315,832 170,859 64,980 27,404 27,252 10,152 2 Claims on nonrelated parties 391,802 183,467 290,690 145,499 58,123 25,174 27,252 9,912 3 Cash and balances due from depository institutions 105,304 88,174 88,219 73,647 9,589 8,832 6,146 4,946 4 Cash items in process of collection and unposted debits 442 0 415 0 5 0 9 00 5 Currency and coin (U.S. and foreign) 37 n.a. 30 n.a. 2 n.a. 2 n.a. 6 Balances with depository institutions in United States 55,116 41,781 45,034 33,870 5,769 5,095 3,659 2,573 7 U.S. branches and agencies of other foreign banks (including their IBFs) 47,801 38,956 39,089 31,380 5,185 4,908 3,095 22,,444422 8 Other depository institutions in United States (including their IBFs) 7,315 2,825 5,944 2,490 584 188 556644 113311 9 Balances with banks in foreign countries and with foreign central banks 47,128 46,393 40,372 39,777 3,753 3,737 2,398 2,373 10 Foreign branches of U.S. banks 2,705 2,601 2,524 2,446 87 86 61 54 11 Other banks in foreign countries and foreign central banks 44,423 43,793 37,848 37,331 3,666 3,651 2,336 2,319 12 Balances with Federal Reserve Banks 2,581 n.a. 2,368 n.a. 60 n.a. 79 n.a. 13 Total securities and loans 236,795 91,036 163,830 68,752 39,676 15,661 19,773 4,653 14 Total securities, book value 32,379 8,915 26,138 6,716 4,136 1,873 1,042 217 15 U.S. Treasury 6,527 n.a. 6,154 n.a. 167 n.a. 110 n.a. 16 Obligations of U.S. government agencies and corporations 2,729 n.a. 22,,668800 n.a. 4422 n.a. 00 n.a. 17 Other bonds, notes, debentures and corporate stock (including state and local securities) 23,123 8,915 17,303 6,716 3,928 1,873 932 217 18 Federal funds sold and securities purchased under agreements to resell 11,522 1,323 10,345 949 436 114 396 132 19 U.S branches and agencies of other foreign banks .... 8,442 756 7,685 508 263 109 237 22 20 Commercial banks in United States 1,582 144 1,388 144 77 0 41 0 21 Other 1,498 423 1,273 297 96 5 119 110 22 Total loans, gross 204,618 82,203 137,826 62,094 35,598 13,811 18,737 4,436 23 Less: Unearned income on loans 202 82 134 58 58 24 6 0 24 Equals: Loans, net 204,415 82,121 137,692 62,036 35,540 13,787 18,731 4,436 Total loans, gross, by category 25 Real estate loans 9,786 89 3,815 4477 22,,552299 3366 11,,771177 00 26 Loans to depository institutions 68,852 48,521 50,818 33,605 11,979 10,057 4,624 3,776 27 Commercial banks in United States (including IBFs) . 37,331 19,317 26,889 11,754 7,189 5,350 2,944 2,130 28 U.S. branches and agencies of other foreign banks . 33,500 17,692 23,410 10,223 6,963 5,267 2,884 2,119 29 Other commercial banks in United States 3,831 1,625 3,479 1,531 226 83 60 11 30 Other depository institutions in United States (including IBFs) 97 25 43 11 16 3 25 0 31 Banks in foreign countries 31,423 29,180 23,886 21,841 4,774 4,705 1,655 1,646 32 Foreign branches of U.S. banks 1,148 1,113 915 880 220 220 10 10 33 Other banks in foreign countries 30,275 28,067 22,971 20,961 4,554 4,485 1,645 1,636 34 Other financial institutions 5,250 762 3,149 676 853 47 1,068 28 35 Commercial and industrial loans 97,798 17,756 60,605 14,836 18,132 2,267 10,850 354 36 U.S. addressees (domicile) 75,763 241 42,707 183 15,500 58 10,409 0 37 Non-U.S. addressees (domicile) 22,035 17,515 17,898 14,653 2,632 2,209 441 354 38 Acceptances of other banks 675 12 542 6 96 0 17 6 39 U.S. banks 273 0 166 0 89 0 1 0 40 Foreign banks 401 12 376 6 7 0 16 6 41 Loans to foreign governments and official institutions (including foreign central banks) 16,627 14,727 14,247 12,669 1,383 1,349 330066 227700 42 Loans for purchasing or carrying securities (secured and unsecured) 3,344 34 22,,777755 2277 553311 00 2 2 43 All other loans 2,286 301 1,875 227 95 55 153 0 44 All other assets 38,181 2,934 28,296 2,151 8,421 567 937 180 45 Customers' liability on acceptances outstanding 28,052 n.a. 20,352 n.a. 7,010 n.a. 447 n.a. 46 U.S. addressees (domicile) 18,154 n.a. 11,581 n.a. 6,033 n.a. 438 n.a. 47 Non-U.S. addressees (domicile) 9,898 n.a. 8,770 n.a. 977 n.a. 9 n.a. 48 Other assets including other claims on nonrelated 10,128 2,934 7,945 2,151 1,411 567 490 180 49 Net due from related depository institutions5 35,551 30,594 25,142 25,360 6,857 2,230 0 240 50 Net due from head office and other related depository institutions5 35,551 n.a. 25,142 n.a. 6,857 n.a. 0 n.a. 51 Net due from establishing entity, head offices, and other related depository institutions5 n.a. 30,594 n.a. 2255,,336600 n.a. 22,,223300 n.a. 224400 52 Total liabilities4 427,353 214,061 315,832 170,859 64,980 27,404 27,252 10,152 53 Liabilities to nonrelated parties 373,703 183,983 288,901 148,141 58,058 23,702 15,326 6,828 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A71 4.30 Continued Millions of dollars All states2 New York California Illinois IItteemm ex T c IB l o u F t d a s i l ng o IB nl F y s 5 ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T c IB l o u F t d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l ng o IB nl F y s 3 54 Total deposits and credit balances 56,550 147,811 48,017 131,460 1,801 8,862 2,789 2,872 55 Individuals, partnerships, and corporations 43,214 13,748 35,553 10,322 1,695 340 2,176 95 56 U.S. addressees (domicile) 33,847 232 29,097 229 508 0 1,994 0 57 Non-U.S. addressees (domicile) 9,367 13,516 6,456 10,093 1,186 340 182 95 58 Commercial banks in United States (including IBFs) . 8,560 52,030 7,891 45,114 49 4,630 594 1, 486 59 U.S. branches and agencies of other foreign banks . 4,481 44,910 3,945 38,550 6 4,244 524 1,391 60 Other commercial banks in United States 4,079 7,119 3,946 6,564 44 386 71 95 61 Banks in foreign countries 1,773 75,415 1,700 69,579 14 3,667 2 1,259 62 Foreign branches of U.S. banks 249 8,313 249 6,999 0 916 0 163 63 Other banks in foreign countries 1,523 67,101 1,452 62,580 14 2,751 2 1,096 64 Foreign governments and official institutions (including foreign central banks) 1,034 6,057 985 5, 884 16 44 2 3322 65 All other deposits and credit balances 1,525 562 1,504 561 5 0 2 0 66 Certified and official checks 444 383 22 13 67 Transaction accounts and credit balances (excluding IBFs) 5,654 4,725 242 219 68 Individuals, partnerships, and corporations 3,623 2,867 208 201 69 U.S. addressees (domicile) 2,318 1,837 158 197 70 Non-U.S. addressees (domicile) 1,305 1,030 51 4 71 Commercial banks in United States (including IBFs) . 379 366 3 0 72 U.S. branches and agencies of other foreign banks . 144 144 0 0 73 Other commercial banks in United States 235 n.a. 222 n.a. 3 n.a. 0 n. a. 74 Banks in foreign countries 789 741 4 11 75 Foreign branches of U.S. banks 13 12 0 00 76 Other banks in foreign countries 776 729 4 1 77 Foreign governments and official institutions (including foreign central banks) 336 330011 1 2 78 All other deposits and credit balances 84 67 3 1 79 Certified and official checks 444 383 22 13 80 Demand deposits (included in transaction accounts and credit balances) 4,450 3,780 % 205 81 Individuals, partnerships, and corporations 2,984 2,473 66 187 82 U.S. addressees (domicile) 1,870 1,575 33 183 83 Non-U.S. addressees (domicile) 1,114 898 33 4 84 Commercial banks in United States (including IBFs) . 139 130 3 0 85 U.S. branches and agencies of other foreign banks . 65 64 0 0 86 Other commercial banks in United States 74 n.a. 66 n.a. 3 n a. 0 n.a. 87 Banks in foreign countries 620 573 3 11 88 Foreign branches of U.S. banks 1 0 0 00 89 Other banks in foreign countries 619 573 3 1 90 Foreign governments and official institutions (including foreign central banks) 210 117755 11 2 91 All other deposits and credit balances 53 45 00 1 92 Certified and official checks 444 383 22 13 93 Non-transaction accounts (including MMDAs, excluding IBFs) 50,896 43,292 1,559 2,571 94 Individuals, partnerships, and corporations 39,592 32,686 1,486 1,975 95 U.S. addressees (domicile) 31,530 27,260 350 1,797 % Non-U.S. addressees (domicile) 8,062 5,426 1,136 178 97 Commercial banks in United States (including IBFs) . 8,181 7,525 46 594 98 U.S. branches and agencies of other foreign banks. 4,337 3,801 6 524 99 Other commercial banks in United States 3,844 n.a. 3,724 n.a. 40 n. a. 70 n a. 100 Banks in foreign countries 984 960 10 1 101 Foreign branches of U.S. banks 237 237 0 0 102 Other banks in foreign countries 747 723 10 1 103 Foreign governments and official institutions (including foreign central banks) 698 668844 1144 00 104 All other deposits and credit balances 1,441 1,437 3 1 105 IBF deposit liabilities 147,811 131,460 8,682 2,872 106 Individuals, partnerships, and corporations 13,748 10,322 340 95 107 U.S. addressees (domicile) 232 229 0 0 108 Non-U.S. addressees (domicile) 13,516 10,093 340 95 109 Commercial banks in United States (including IBFs) . 52,030 45,114 4,630 1,486 110 U.S. branches and agencies of other foreign banks . 44,910 38,550 4,244 1,391 111 Other commercial banks in United States n.a. 7,119 n.a. 6,564 n a. 386 n.a. 95 112 Banks in foreign countries 75,415 69,579 3,667 1,259 113 Foreign branches of U.S. banks 8 313 6,999 916 163 114 Other banks in foreign countries 67,101 62,580 2,751 1,096 115 Foreign governments and official institutions (including foreign central banks) 6,057 5,884 4444 3322 116 All other deposits and credit balances 562 561 0 0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • November 1987 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, June 30, 1987'—Continued Millions of dollars All states2 New York California Illinois IItteemm inc T I l B o u F t d a s i l n g o IB nl F y s 3 inc T I l B o u F t d a s i l n g o IB nl F y s 3 inc T IB l o u F t d a s i l n g o IB nl F y s 3 inc T IB l o u F t d a s i l n g o IB nl F y s 3 117 Federal funds purchased and securities sold under agreements to repurchase 44,835 2,018 32,698 1,136 9,317 832 2,097 12 118 U.S. branches and agencies of other foreign banks ... 11,624 1,163 7,502 516 3,276 616 662 0 119 Other commercial banks in United States 16,477 148 11,088 78 3,782 /0 1,150 0 170 Other 16,734 706 14,108 542 2,259 146 285 12 121 Other borrowed money 85,252 31,764 47,200 13,755 29,753 13,788 6,773 3,791 122 Owed to nonrelated commercial banks in United States (including IBFs) 57,723 12,447 31,532 3,697 21,996 7,772 2,946 680 123 Owed to U.S. offices of nonrelated U.S. banks 25,992 2,455 16,512 927 7,572 1,267 1,130 65 124 Owed to U.S. branches and agencies of nonrelated foreign banks 31,731 9,992 15,020 2,770 14,424 6,505 1,816 615 125 Owed to nonrelated banks in foreign countries 17,861 17,346 8,575 8,153 5,976 5,975 3,124 3,086 126 Owed to foreign branches of nonrelated U.S. banks .. 2,372 2,325 630 593 1,432 1,432 263 257 127 Owed to foreign offices of nonrelated foreign banks... 15,448 15,021 7,944 7,559 4,543 4,543 2,861 2,829 128 Owed to others 9,668 1,971 7,094 1,906 1,782 41 703 25 129 All other liabilities 39,256 2,390 29,526 1,791 8,505 400 795 153 130 Branch or agency liability on acceptances executed and outstanding 31,252 n. a. 22,895 n a. 7,638 n.a. 446600 n a. 131 Other liabilities to nonrelated parties 8,004 2,390 6,632 1,791 868 400 335 153 132 Net due to related depository institutions5 53,650 30,078 26,931 22,718 6,922 3,703 11,926 3,324 133 Net due to head office and other related depository institutions5 53,650 n.a. 26,931 n.a. 6,922 n.a. 11,926 n.a. 134 Net due to establishing entity, head office, and other related depository institutions5 n.a. 30,078 n.a. 22,718 n.a. 3,703 n.a. 3,324 MEMO 135 Non-interest bearing balances with commercial banks in United States 2,215 4 1,900 4 180 0 66 0 136 Holding of commercial paper included in total loans .... 484 334 51 90 137 Holding of own acceptances included in commercial and industrial loans 2,615 1,583 832 8833 138 Commercial and industrial loans with remaining maturity of one year or less 55,256 31,904 11,695 6,875 139 Predetermined interest rates 34,544 n.a. 18,996 n a. 8,697 n.a. 4,239 n.a. 140 Floating interest rates 20,713 12,908 2,999 2,636 141 Commercial and industrial loans with remaining maturity of more than one year 42,542 28,701 6,436 3,975 142 Predetermined interest rates 14,257 8,662 3,043 1,815 143 Floating interest rates 28,285 20,038 3,393 2,160 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A73 4.30 Continued Millions of dollars All states2 New York California Illinois IItteemm ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l n g o IB nl F y s 3 ex T c IB l o u t F d a s i l ng o IB nl F y s 3 111144444444 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiii nnnn nnnn oooo cccc nnnn lllluuuu ttttrrrr dddd aaaa eeee nnnn dddd ssss aaaa iiii cccc nnnn tttt iiii tttt oooo oooo nnnn ttttaaaa aaaa llll llll dddd aaaa eeee cccc pppp cccc oooo oooo ssss uuuu iiii nnnn ttttssss tttt ssss aaaa ,,,, nnnn iiii dddd nnnn cccc cccc lllluuuu rrrreeee dddd dddd iiiinnnn iiiitttt gggg bbbb IIII aaaa BBBB llllaaaa FFFF nnnn ssss cccc eeeessss ooooffff 64,038 t 56,748 t 1,398 t 2,818 t 111144445555 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 38,737 33,031 1,044 2,140 111144446666 OOOOtttthhhheeeerrrr ttttiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee n.a. n.a. 111144447777 TTTTiiiimmmmeeee wwww CCCC iiiitttt DDDD hhhh ssss rrrr eeee iiii mmmm nnnn aaaa dddd iiii eeee nnnn nnnn iiiinnnn oooo gggg mmmm iiii mmmm nnnn aaa aaaa attt tttt tuuu iiii u oooo rrrr nnnn iiiitttt ssss yyyy oooo oooo ffff ffff $$$$ mmmm 11110000 oooo 0000 rrrreeee ,,,,0000 0000 tttthhhh 0000 aaaa nnn oooo n rrrr mmmmoooorrrreeee 8,567 n 1 .a. 8,119 I 212 n 1 .a. 197 J 11112222 mmmmoooonnnntttthhhhssss 16,734 15,598 142 480 All states2 New York California Illinois in T c I l B o u t F d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g o IB nl F y s 3 111144448888 MMMMaaaarrrrkkkkeeeetttt vvvvaaaalllluuuueeee ooooffff sssseeeeccccuuuurrrriiiittttiiiieeeessss hhhheeeelllldddd 3333,,226611 10,533 2277,,333399 8,468 33,,882266 1,740 11,,004422 217 111144449999 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 5544,,442277 n.a. 2299,,992200 n.a. 2211,,007744 n.a. 22,,550066 n.a. 449933 222244 112211 4499 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, that no IBF data are reported for that item, either because the item is not an "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign eligible IBF asset or liability or because that level of detail is not reported for Banks." Details may not add to totals because of rounding. This form was first IBFs. From December 1981 through September 1985, IBF data were included in used for reporting data as of June 30, 1980, and was revised as of December 31, all applicable items reported. 1985. From November 1972 through May 1980, U.S. branches and agencies of 4. Total assets and total liabilities include net balances, if any, due from or due foreign banks had filed a monthly FR 886a report. Aggregate data from that report to related banking institutions in the United States and in foreign countries (see were available through the Federal Reserve statistical release G. 11, last issued on footnote 5). On the former monthly branch and agency report, available through July 10, 1980. Data in this table and in the G.ll tables are not strictly comparable the G.l 1 statistical release, gross balances were included in total assets and total because of differences in reporting panels and in definitions of balance sheet liabilities. Therefore, total asset and total liability figures in this table are not items. comparable to those in the G.ll tables. 2. Includes the District of Columbia. 5. "Related banking institutions" includes the foreign head office and other 3. Effective December 1981, the Federal Reserve Board amended Regulations U.S. and foreign branches and agencies of the bank, the bank's parent holding D and Q to permit banking offices located in the United States to operate company, and majority-owned banking subsidiaries of the bank and of its parent International Banking Facilities (IBFs). As of December 31, 1985, data for IBFs holding company (including subsidiaries owned both directly and indirectly). are reported in a separate column. These data are either included in or excluded 6. In some cases two or more offices of a foreign bank within the same from the total columns as indicated in the headings. The notation "n.a." indicates metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • November 1987 4.31 Pro forma balance sheet for priced services of the Federal Reserve System Millions of dollars Item June 30, 1987 June 30, 1986 Short-term assets1 Imputed reserve requirement on clearing balances 232.0 221.5 Investment in marketable securities 1,701.0 1,624.5 Receivables 50.9 50.9 Materials and supplies 4.9 5.0 Prepaid expenses 7.7 6.0 Net items in process of collection 928.1 214.6 Total short-term assets 2,924.7 2,122.6 Long-term assets2 Premises 214.5 191.0 Furniture and equipment 112.8 114.2 Leases and leasehold improvements 3.4 2.2 Prepaid pension costs 9.3 Total long-term assets 340.0 307.4 Total assets 3,264.6 2,430.0 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 2,861.1 2,060.6 Short-term debt 63.5 62.0 Total short-term liabilities 2,924.7 2,122.6 Long-term liabilities Obligations under capital leases 1.4 .3 Long-term debt 104.7 97.6 Total long-term liabilities 106.1 97.9 Total liabilities 3,030.8 2,220.5 Equity 233.9 209.4 Total liabilities and equity3 3,264.6 2,430.0 Details may not add to totals because of rounding. the gross amount of items in the process of collection and of 1. Short-term Assets. The accounts "imputed reserve requirement deferred-availability items. However, because the gross amounts have on clearing balances" and "investment in marketable securities" no implications for income, costs, or the private sector adjustment reflect the Federal Reserve's treatment of clearing balances that factor (PSAF), and because the inclusion of these amounts could lead depository institutions maintain on deposit with the Reserve Banks. to distortions and misinterpretations of the assets employed in the For balance sheet and income statement presentation, clearing bal- provision of priced services that must be financed, only the net ances are reported in a manner comparable to the way correspondent amount is shown. That amount represents the assets that involve a banks report compensating balances that respondent institutions hold financing cost. with them: These respondent balances are subject to a reserve 2. Long-Term Assets. Long-term assets reflected on the balance requirement established by the Federal Reserve, which must be sheet have been allocated to priced services using a direct determinasatisfied either with vault cash or with nonearning balances main- tion basis. That method uses the Federal Reserve's Planning and tained at a Reserve Bank. Following this model, clearing balances Control System to ascertain directly the value of assets used solely in maintained with Reserve Banks for priced-service purposes are sub- priced services operation and to apportion the value of jointly used ject to imputed reserve requirements. Therefore, a portion of the assets between priced and nonpriced services. In addition, an estimate clearing balances held with the Federal Reserve is classified on the of the assets of the Board of Governors directly involved in the asset side of the balance sheet as required reserves and is reflected in development of priced services is included in long-term assets in the a manner similar to vault cash and due-from-bank balances normally premises account. shown on a correspondent bank's balance sheet. The remainder of The category long-term assets also includes an allocation of prepaid clearing balances is assumed to be available for investment. For these pension costs associated with priced services. The Federal Reserve purposes, the Federal Reserve assumes that all such balances are Banks implemented Financial Accounting Standards Board Statement invested in three-month Treasury bills. No. 87—Employers' Accounting for Pensions, effective January 1, The amount of "net items in the process of collection" represents 1987. In accordance with the statement's terms, the Reserve Banks float as of the balance sheet date and is the difference between the recognized a credit to expenses and an increase in this long-term asset value of items in the process of collection (including checks, coupons, account. securities, wire transfers, and automated clearinghouse (ACH) trans- 3. Liabilities and Equity. A matched-book capital structure for actions) and the value of deferred-availability items. The cost base for those assets that are not "self-financing" has been used to determine providing services that must be recovered under the Monetary Con- the liability and equity amounts. Short-term assets are financed with trol Act includes the cost of float incurred by the Federal Reserve short-term debt. Long-term assets are financed with long-term debt during the period valued at the federal funds rate. Conventional and equity in a proportion equal to the ratio of long-term debt and accounting procedures would call for inclusion on a balance sheet of equity of the bank holding companies used in the PSAF model. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks A75 4.32 Pro forma income statement for priced services of the Federal Reserve System1 Millions of dollars Quarter ending June 30 Six months ending June 30 IItteemm 1987 1986 1987 1986 Income2 Services provided to depository institutions 162.5 157.1 320.5 308.7 Expenses3 Production expenses 124.5 121.6 247.4 243.8 Income from operations 38.1 35.5 73.1 64.9 Imputed costs4 Interest on float 5.6 4.3 10.6 11.4 Interest on debt 4.0 3.3 8.1 6.7 Sales taxes 1.8 1.7 3.4 3.6 FDIC insurance .4 11.8 .3 9.6 .9 23.0 .7 22.3 Income from operations after imputed costs 26.3 25.8 50.1 42.6 Other income and expenses3 Investment income 29.3 28.8 55.6 59.7 Earnings credits 28.5 .7 26.5 2.2 55.0 .6 54.9 4.8 Income before income taxes 27.0 28.1 50.8 47.4 Imputed income taxes6 9.2 10.4 17.2 17.5 Net income 17.9 17.7 33.6 29.2 Targeted return on equity6 7.3 6.8 14.7 13.7 Details may not add to totals because of rounding. In the table, unrecovered float includes float generated in providing 1. The income statement reflects income and expenses for priced services to government agencies or in other central bank services. services. Included in these amounts are imputed float costs, imputed Float recovered through income on clearing balances represents financing costs, and income related to clearing balances. increased investable clearing balances as a result of reducing imputed 2. Income. Income represents charges to depository institutions for reserve requirements through the use of a CIPC deduction for float priced services. This income is realized through one of two methods: when calculating the reserve requirement; this income then reduces direct charges to an institution's account, or charges against accumu- float required to be recovered through other means. As of adjustments lated earnings credits. Income includes charges for per-item fees, to the institution's reserve or clearing balance, or valuing the float at fixed fees, package fees, explicitly priced float, account maintenance the federal funds rate and billing the institution directly, are ways of fees, shipping and insurance fees, and surcharges. recovering midweek closing float and interterritory check float from 3. Production Expenses. Production expenses include direct, indi- depositing institutions. The float recovered through per-item fees is rect, and other general administrative expenses of the Federal Re- valued at the federal funds rate and has been added to the cost base serve Banks for providing priced services. Also included are the subject to recovery in the second quarter of 1987. expenses of the staff of the Board of Governors working directly on Also included in imputed costs is the interest on debt assumed the development of priced services, which in both years amounted to necessary to finance priced-service assets and the sales taxes and $0.4 million in the second quarter and $0.9 million in the first six FDIC insurance assessment that the Federal Reserve would have paid months. had it been a private business firm. 4. Imputed Costs. Imputed float costs represent the value of float to 5. Other Income Expenses. The category "Other income and be recovered, either explicitly or through per-item fees, during the expenses" is comprised of income on clearing balances and the cost of period. Float costs cover float incurred on checks, book-entry secu- earnings credits granted to depository institutions on their clearing rities, noncash collection, ACH transactions, and wire transfers. balances. Income on clearing balances represents the average coupon- The following table reports the Federal Reserve's daily average equivalent yield on three-month Treasury bills applied to the total float performance and float recovery for the second quarter of 1987: clearing balance maintained, adjusted for the effect of reserve requirements on clearing balances. Expenses for earnings credits are derived In millions of dollars by applying the average federal funds rate to the required portion of Total float $657.1 clearing balances, and are adjusted for the net effect of reserve Unrecovered float 62.2 requirements on clearing balances. Float subject to recovery 595.0 6. Income Taxes and Return on Equity. Imputed income taxes are Sources of float recovery calculated at the effective tax rate derived from a model consisting of Income on clearing balances 74.4 the 25 largest bank holding companies. As of adjustments 290.5 The targeted return on equity represents the after-tax rate of return Direct charges 108.6 on equity that the Federal Reserve would have earned had it been a Per-item fees 121.5 private business firm based on the bank holding company model. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Board of Governors ALAN GREENSPAN, Chairman MARTHA R. SEGER MANUEL H. JOHNSON, Vice Chairman WAYNE D. ANGELL OFFICE OF BOARD MEMBERS DIVISION OF INTERNATIONAL FINANCE JOSEPH R. COYNE, Assistant to the Board EDWIN M. TRUMAN, Staff Director DONALD J. WINN, Assistant to the Board LARRY J. PROMISEL, Senior Associate Director LYNN SMITH FOX, Special Assistant to the Board CHARLES J. SIEGMAN, Senior Associate Director BOB S. MOORE, Special Assistant to the Board DAVID H. HOWARD, Deputy Associate Director ROBERT F. GEMMILL, Staff Adviser DONALD B. ADAMS, Assistant Director LEGAL DIVISION PETER HOOPER III, Assistant Director KAREN H. JOHNSON, Assistant Director MICHAEL BRADFIELD, General Counsel RALPH W. SMITH, JR., Assistant Director J. VIRGIL MATTINGLY, JR., Deputy General Counsel RICHARD M. ASHTON, Associate General Counsel OLIVER IRELAND, Associate General Counsel DIVISION OF RESEARCH AND STATISTICS RICKI R. TIGERT, Assistant General Counsel MARYELLEN A. BROWN, Assistant to the General Counsel MICHAEL J. PRELL, Director EDWARD C. ETTIN, Deputy Director OFFICE OF THE SECRETARY JARED J. ENZLER, Associate Director ELEANOR J. STOCKWELL, Associate Director MARTHA BETHEA, Deputy Associate Director WILLIAM W. WILES, Secretary BARBARA R. LOWREY, Associate Secretary THOMAS D. SIMPSON, Deputy Associate Director LAWRENCE SLIFMAN, Deputy Associate Director JAMES MCAFEE, Associate Secretary PETER A. TINSLEY, Deputy Associate Director SUSAN J. LEPPER, Assistant Director DIVISION OF CONSUMER MARTHA S. SCANLON, Assistant Director AND COMMUNITY AFFAIRS JOYCE K. ZICKLER, Assistant Director LEVON H. GARABEDIAN, Assistant Director (Administration) GRIFFITH L. GARWOOD, Director GLENN E. LONEY, Assistant Director ELLEN MALAND, Assistant Director DOLORES S. SMITH, Assistant Director DIVISION OF MONETARY AFFAIRS DONALD L. KOHN, Director DIVISION OF BANKING DAVID E. LINDSEY, Deputy Director SUPERVISION AND REGULATION RICHARD D. PORTER, Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board WILLIAM TAYLOR, Staff Director FRANKLIN D. DREYER, Deputy Director1 DON E. KLINE, Associate Director OFFICE OF THE INSPECTOR GENERAL FREDERICK M. STRUBLE, Associate Director WILLIAM A. RYBACK, Deputy Associate Director BRENT L. BOWEN, Inspector General 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 1. On loan from the Federal Reserve Bank of Chicago. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 and Official Staff H. ROBERT HELLER EDWARD W. KELLEY, JR. 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 PORTIA W. THOMPSON, Equal Employment Opportunity Programs Officer DIVISION OF FEDERAL RESERVE BANK OPERATIONS DIVISION OF PERSONNEL CLYDE H. FARNSWORTH, JR., Director ELLIOTT C. MCENTEE, Associate Director DAVID L. SHANNON, Director DAVID L. ROBINSON, Associate Director JOHN R. WEIS, Assistant Director C. WILLIAM SCHLEICHER, JR., Associate Director CHARLES W. WOOD, Assistant Director CHARLES W. BENNETT, Assistant Director JACK DENNIS, JR., Assistant Director EARL G. HAMILTON, Assistant Director OFFICE OF THE CONTROLLER JOHN H. PARRISH, Assistant Director FLORENCE M. YOUNG, Adviser GEORGE E. LIVINGSTON, Controller DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director OFFICE OF THE EXECUTIVE DIRECTOR FOR INFORMATION RESOURCES MANAGEMENT ALLEN E. BEUTEL, Executive Director STEPHEN R. MALPHRUS, Associate 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 • November 1987 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL H. ROBERT HELLER EDWARD W. KELLEY, JR. EDWARD G. BOEHNE MANUEL H. JOHNSON MARTHA R. SEGER ROBERT H. BOYKIN SILAS KEEHN GARY H. STERN ALTERNATE MEMBERS ROBERT P. BLACK ROBERT P. FORRESTAL W. LEE HOSKINS ROBERT T. PARRY THOMAS M. TIMLEN STAFF DONALD L. KOHN, Secretary and Staff Adviser DAVID E. LINDSEY, Associate Economist NORMAND R.V. BERNARD, Assistant Secretary MICHAEL J. PRELL, Associate Economist ROSEMARY R. LONEY, Deputy Assistant Secretary ARTHUR J. ROLNICK, Associate Economist MICHAEL BRADFIELD, General Counsel HARVEY ROSENBLUM, Associate Economist JAMES H. OLTMAN, Deputy General Counsel KARL A. SCHELD, Associate Economist EDWIN M. TRUMAN, Economist (International) CHARLES J. SIEGMAN, Associate Economist PETER FOUSEK, Associate Economist THOMAS D. SIMPSON, Associate Economist RICHARD W. LANG, 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 JOHN G. MEDLIN, JR., President JULIEN L. MCCALL, Vice President JOHN F. MCGILLICUDDY, DEWALT H. ANKENY, JR., AND F. PHILLIPS GILTNER, Directors JOHN P. LA WARE, First District CHARLES T. FISHER, III, Seventh District JOHN F. MCGILLICUDDY, Second District DONALD N. BRANDIN, Eighth District SAMUEL A. MCCULLOUGH, Third District DEWALT H. ANKENY, JR., Ninth District JULIEN L. MCCALL, Fourth District F. PHILLIPS GILTNER, Tenth District JOHN G. MEDLIN, JR., Fifth District GERALD W. FRONTERHOUSE, Eleventh District BENNETT A. BROWN, Sixth District JOHN D. MANGELS, 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 EDWARD N. LANGE, Seattle, Washington, Chairman STEVEN W. HAMM, Columbia, South Carolina, Vice Chairman EDWIN B. BROOKS, JR., Richmond, Virginia JOHN M. KOLESAR, Cleveland, Ohio JONATHAN A. BROWN, Washington, D.C. ALAN B. LERNER, Dallas, Texas JUDITH N. BROWN, Edina, Minnesota FRED S. MCCHESNEY, Chicago, Illinois MICHAEL S. CASSIDY, New York, New York RICHARD L. D. MORSE, Manhattan, Kansas THERESA FAITH CUMMINGS, Springfield, Illinois HELEN E. NELSON, Mill Valley, California RICHARD B. DOBY, Denver, Colorado SANDRA R. PARKER, Richmond, Virginia RICHARD H. FINK, Washington, D.C. JOSEPH L. PERKOWSKI, Centerville, Minnesota NEIL J. FOGARTY, Jersey City, New Jersey BRENDA L. SCHNEIDER, Detroit, Michigan STEPHEN GARDNER, Dallas, Texas JANE SHULL, Philadelphia, Pennsylvania KENNETH A. HALL, Picayune, Mississippi TED L. SPURLOCK, Dallas, Texas ELENA G. HANGGI, Little Rock, Arkansas MEL R. STILLER, Boston, Massachusetts ROBERT J. HOBBS, Boston, Massachusetts CHRISTOPHER J. SUMNER, Salt Lake City, Utah RAMON E. JOHNSON, Salt Lake City, Utah EDWARD J. WILLIAMS, Chicago, Illinois ROBERT W. JOHNSON, West Lafayette, Indiana MICHAEL ZOROYA, St. Louis, Missouri THRIFT INSTITUTIONS ADVISORY COUNCIL MICHAEL R. WISE, Denver, Colorado, President JAMIE J. JACKSON, Houston, Texas, Vice President GERALD M. CZARNECKI, Mobile, Alabama DONALD F. MCCORMICK, Livingston, New Jersey JOHN C. DICUS, Topeka, Kansas JANET M. PAVLISKA, Arlington, Massachusetts BETTY GREGG, Phoenix, Arizona HERSCHEL ROSENTHAL, Miami, Florida THOMAS A. KINST, Hoffman Estates, Illinois WILLIAM G. SCHUETT, Milwaukee, Wisconsin RAY MARTIN, Los Angeles, California 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, payment should accompany request and be made to the $13.50 each. Board of Governors of the Federal Reserve System. Payment FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updatfrom foreign residents should be drawn on a U.S. bank. ed at least monthly. (Requests must be prepaid.) Stamps and coupons are not accepted. Consumer and Community Affairs Handbook. $75.00 per year. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- Monetary Policy and Reserve Requirements Handbook. TIONS. 1984. 120 pp. $75.00 per year. ANNUAL REPORT. Securities Credit Transactions Handbook. $75.00 per year. ANNUAL REPORT: BUDGET REVIEW, 1986-87. Federal Reserve Regulatory Service. 3 vols. (Contains all FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or three Handbooks plus substantial additional material.) $2.00 each in the United States, its possessions, Canada, $200.00 per year. and Mexico; 10 or more of same issue to one address, Rates for subscribers outside the United States are as $18.00 per year or $1.75 each. Elsewhere, $24.00 per follows and include additional air mail costs: year or $2.50 each. Federal Reserve Regulatory Service, $250.00 per year. BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint Each Handbook, $90.00 per year. of Part I only) 1976. 682 pp. $5.00. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A BANKING AND MONETARY STATISTICS. 1941-1970. 1976. MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. 1,168 pp. $15.00. WELCOME TO THE FEDERAL RESERVE. ANNUAL STATISTICAL DIGEST PROCESSING AN APPLICATION THROUGH THE FEDERAL RE- 1974-78. 1980. 305 pp. $10.00 per copy. SERVE SYSTEM. August 1985. 30 pp. 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. $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. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- RIES OF CHARTS. Weekly. $21.00 per year or $.50 each in CONSUMER EDUCATION PAMPHLETS the United States, its possessions, Canada, and Mexico; Short pamphlets suitable for classroom use. Multiple copies 10 or more of same issue to one address, $19.50 per year are available without charge. or $.45 each. Elsewhere, $26.00 per year or $.60 each. THE FEDERAL RESERVE ACT, and other statutory provisions affecting the Federal Reserve System, as amended Consumer Handbook on Adjustable Rate Mortgages through April 20, 1983, with Supplements covering Consumer Handbook to Credit Protection Laws amendments through August 1986. 576 pp. $7.00. Fair Credit Billing Federal Reserve Glossary REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- ERAL RESERVE SYSTEM. A Guide to Business Credit and the Equal Credit Opportunity ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Act Regulation Z) Vol. I (Regular Transactions). 1969. 100 Guide to Federal Reserve Regulations pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each How to File A Consumer Credit Complaint volume $2.25; 10 or more of same volume to one If You Borrow To Buy Stock address, $2.00 each. If You Use A Credit Card FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY Series on the Structure of the Federal Reserve System UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one The Board of Governors of the Federal Reserve System address, $1.50 each. The Federal Open Market Committee THE BANK HOLDING COMPANY MOVEMENT TO 1978: A Federal Reserve Bank Board of Directors COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to Federal Reserve Banks one address, $2.25 each. Organization and Advisory Committees 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 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT A Financial Perspective on Agriculture. 1/84. PRICING FROM 1983 THROUGH 1985, by Patrick I. Survey of Consumer Finances, 1983. 9/84. Mahoney, Alice P. White, Paul F. O'Brien, and Mary Bank Lending to Developing Countries. 10/84. M. McLaughlin. January 1987. 30 pp. Survey of Consumer Finances, 1983: A Second Report. 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A 12/ 84. REVIEW OF THE LITERATURE, by Mark J. War- Union Settlements and Aggregate Wage Behavior in the shawsky. April 1987. 18 pp. 1980s. 12/84. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis The Thrift Industry in Transition. 3/85. and Alice P. White. September 1987. 14 pp. A Revision of the Index of Industrial Production. 7/85. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF Financial Innovation and Deregulation in Foreign Industrial PROPOSED CEILINGS ON CREDIT CARD INTEREST Countries. 10/85. RATES, by Glenn B. Canner and James T. Fergus. Recent Developments in the Bankers Acceptance Market. October 1987. 26 pp. 1/ 86. The Use of Cash and Transaction Accounts by American Families. 2/86. REPRINTS OF BULLETIN ARTICLES Financial Characteristics of High-Income Families. 3/86. Prices, Profit Margins, and Exchange Rates. 6/86. Most of the articles reprinted do not exceed 12 pages. Agricultural Banks under Stress. 7/86. Foreign Lending by Banks: A Guide to International and U.S. Statistics. 10/86. Limit of 10 copies Recent Developments in Corporate Finance. 11/86. Foreign Experience with Targets for Money Growth. 10/83. U.S. International Transactions in 1986. 5/87. Intervention in Foreign Exchange Markets: A Summary of Measuring the Foreign-Exchange Value of the Dollar. 6/87. Ten Staff Studies. 11/83. Turning the Corner on Troubled Farm Debt. 7/87. 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 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 8 Federal Reserve System, 74-75 Reserves and related items, 3, 4, 5, 12 Financial institutions, 26 Deposits (See also specific types) Foreign banks, U.S. branches and agencies, 21, 70-73 Banks, by classes, 3, 18-20, 21 Nonfinancial corporations, 36 Federal Reserve Banks, 4, 10 Automobiles Turnover, 15 Consumer installment credit, 40, 41 Discount rates at Reserve Banks and at foreign central Production, 47, 48 banks and foreign countries (See Interest rates) Discounts and advances by Reserve Banks (See Loans) Dividends, corporate, 35 BANKERS acceptances, 9, 23, 24 EMPLOYMENT, 45 Bankers balances, 18-20 (See also Foreigners) Eurodollars, 24 Bonds (See also U.S. government securities) New issues, 34 FARM mortgage loans, 39 Rates, 24 Federal agency obligations, 4, 9, 10, 11, 31, 32 Branch banks, 21, 55, 70-73 Federal credit agencies, 33 Business activity, nonfinancial, 44 Federal finance Business expenditures on new plant and equipment, 36 Debt subject to statutory limitation, and types and Business loans (See Commercial and industrial loans) ownership of gross debt, 30 Receipts and outlays, 28, 29 Treasury financing of surplus, or deficit, 28 Treasury operating balance, 28 CAPACITY utilization, 46 Federal Financing Bank, 28, 33 Capital accounts Federal funds, 6, 17, 19, 20, 21, 24, 28 Banks, by classes, 18 Federal Home Loan Banks, 33 Federal Reserve Banks, 10 Federal Home Loan Mortgage Corporation, 33, 38, 39 Central banks, discount rates, 67 Federal Housing Administration, 33, 38, 39 Certificates of deposit, 24 Federal Land Banks, 39 Commercial and industrial loans Commercial banks, 16, 19, 73 Federal National Mortgage Association, 33, 38, 39 Weekly reporting banks, 19-21 Federal Reserve Banks Commercial banks Condition statement, 10 Assets and liabilities, 18-20 Discount rates (See Interest rates) Commercial and industrial loans, 16, 18, 19, 20, 21 U.S. government securities held, 4, 10, 11, 30 Consumer loans held, by type, and terms, 40, 41 Federal Reserve credit, 4, 5, 10, 11 Loans sold outright, 19 Federal Reserve notes, 10 Nondeposit funds, 17 Federal Reserve System Balance sheet for priced services, 74 Real estate mortgages held, by holder and property, 39 Condition statement for priced services, 75 Time and savings deposits, 3 Federal Savings and Loan Insurance Corporation insured Commercial paper, 23, 24, 37 institutions, 26 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 33 Construction, 44, 49, Finance companies Consumer installment credit, 40, 41 Assets and liabilities, 37 Consumer prices, 44, 50 Business credit, 37 Consumption expenditures, 51, 52 Loans, 40, 41 Corporations Paper, 23, 24 Nonfinancial, assets and liabilities, 36 Financial institutions Profits and their distribution, 35 Loans to, 19, 20, 21 Security issues, 34, 65 Selected assets and liabilities, 26 Cost of living (See Consumer prices) Float, 4, 75 Credit unions, 26, 40. (See also Thrift institutions) Flow of funds, 42, 43 Currency and coin, 18 Currency in circulation, 4, 13 Foreign banks, assets and liabilities of U.S. branches and Customer credit, stock market, 25 agencies, 21, 70-73 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 19, 20 Foreign exchange rates, 68 DEBITS to deposit accounts, 15 Foreign trade, 54 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 55, 57, 60, 61, 62, 64 Banks, by classes, 18-21 Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 GOLD Real estate loans—Continued Certificate account, 10 Financial institutions, 26 Stock, 4, 54 Terms, yields, and activity, 38 Government National Mortgage Association, 33, 38, 39 Type of holder and property mortgaged, 39 Gross national product, 51 Repurchase agreements, 6, 17, 19, 20, 21 Reserve requirements, 8 HOUSING, new and existing units, 49 Reserves Commercial banks, 18 INCOME, personal and national, 44, 51, 52 Depository institutions, 3, 4, 5, 12 Industrial production, 44, 47 Federal Reserve Banks, 10 Installment loans, 40, 41 U.S. reserve assets, 54 Insurance companies, 26, 30, 39 Residential mortgage loans, 38 Interest rates Retail credit and retail sales, 40, 41, 44 Bonds, 24 Consumer installment credit, 41 Federal Reserve Banks, 7 SAVING 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, 26, 39, 40, 42. (See also Mortgages, 38 Thrift institutions) Prime rate, 23 Savings banks, 26, 39, 40 International capital transactions of United States, 53-67 Savings deposits (See Time and savings deposits) International organizations, 57, 58, 60, 63, 64 Securities (See specific types) Inventories, 51 Federal and federally sponsored credit agencies, 33 Investment companies, issues and assets, 35 Foreign transactions, 65 Investments (See also specific types) New issues, 34 Banks, by classes, 18, 19, 20, 21, 26 Prices, 25 Commercial banks, 3, 16, 18-20, 39 Special drawing rights, 4, 10, 53, 54 Federal Reserve Banks, 10, 11 State and local governments Federal Reserve System, 74-75 Deposits, 19, 20 Financial institutions, 26, 39 Holdings of U.S. government securities, 30 New security issues, 34 LABOR force, 45 Ownership of securities issued by, 19, 20, 26 Life insurance companies (See Insurance companies) Rates on securities, 24 Loans (See also specific types) Stock market, selected statistics, 25 Banks, by classes, 18-20 Stocks (See also Securities) Commercial banks, 3, 16, 18-20 New issues, 34 Federal Reserve Banks, 4, 5, 7, 10, 11 Prices, 25 Federal Reserve System, 74-75 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 and Savings Capacity utilization, 46 and loan associations) Production, 46, 48 Time and savings deposits, 3, 13, 17, 18, 19, 20, 21 Margin requirements, 25 Trade,foreign, 54 Member banks (See also Depository institutions) Treasury cash, Treasury currency, 4 Federal funds and repurchase agreements, 6 Treasury deposits, 4, 10, 28 Reserve requirements, 8 Treasury operating balance, 28 Mining production, 48 Mobile homes shipped, 49 Monetary and credit aggregates, 3, 12 UNEMPLOYMENT, 45 Money and capital market rates, 24 U.S. government balances Money stock measures and components, 3, 13 Commercial bank holdings, 18, 19, 20 Mortgages {See Real estate loans) Treasury deposits at Reserve Banks, 4, 10, 28 Mutual funds, 35 U.S. government securities Mutual savings banks, (See Thrift institutions) Bank holdings, 18-20, 21, 30 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 OPEN market transactions, 9 Outstanding, by type and holder, 26, 30 Rates, 24 PERSONAL income, 52 U.S. international transactions, 53-67 Prices Utilities, production, 48 Consumer and producer, 44, 50 Stock market, 25 Prime rate, 23 VETERANS Administration, 38, 39 Producer prices, 44, 50 Production, 44, 47 WEEKLY reporting banks, 19-21 Profits, corporate, 35 Wholesale (producer) prices, 44, 50 REAL estate loans Banks, by classes, 16, 19, 20, 39 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 R. Opel E. Gerald Corrigan Virginia A. Dwyer Thomas M. Timlen Buffalo 14240 Mary Ann Lambertsen John T. Keane PHILADELPHIA 19105 Nevius M. Curtis Edward G. Boehne George E. Bartol III William H. Stone, Jr. CLEVELAND* 44101 Charles W. Pairy W. Lee Hoskins John R. Miller William H. Hendricks Cincinnati 45201 Owen B. Butler Charles A. Cerino1 Pittsburgh 15230 James E. Haas Harold J. Swart1 RICHMOND* 23219 Leroy T. Canoles, Jr. Robert P. Black Robert A. Georgine Jimmie R. Monhollon Baltimore 21203 Gloria L. Johnson Robert D. McTeer, Jr.1 Charlotte 28230 Wallace J. Jorgenson Albeit D. Tinkelenberg1 Culpeper Communications John G. Stoides1 and Records Center 22701 ATLANTA 30303 Bradley Currey, Jr. Robert P. Forrestal Larry L. Prince Jack Guynn Delmar Harrison1 Birmingham 35283 A. G. Trammell Fred R. Herr1 Jacksonville 32231 Andrew A. Robinson James D. Hawkins1 Miami 33152 Robert D. Apelgren Patrick K. Barron1 Nashville 37203 C. Warren Neel Donald E. Nelson New Orleans 70161 Caroline K. Theus Henry H. Bourgaux CHICAGO* 60690 Robert J. Day Silas Keehn Marcus Alexis Daniel M. Doyle Detroit 48231 Robert E. Brewer Roby L. Sloan1 ST. LOUIS 63166 W.L. Hadley Griffin Thomas C. Melzer Robert L. Virgil, Jr. Joseph P. Garbarini Little Rock 72203 James R. Rodgers John F. Breen Louisville 40232 Raymond M. Burse James E. Conrad Memphis 38101 Katherine H. Smythe Paul I. Black, Jr. MINNEAPOLIS 55480 John B. Davis, Jr. Gary H. Stern Michael W. Wright Thomas E. Gainor Helena 59601 Warren H. Ross Robert F. McNellis KANSAS CITY 64198 Irvine O. Hockaday, Jr. Roger Guflfey Robert G. Lueder Henry R. Czerwinski Denver 80217 James E. Nielson Enis Alldredge, Jr. Oklahoma City 73125 Patience S. Latting William G. Evans Omaha 68102 Kenneth L. Morrison Robert D. Hamilton DALLAS 75222 Bobby R. Inman Robert H. Boykin Hugh G. Robinson William H. Wallace Tony J. Salvaggio1 El Paso 79999 Mary Carmen Saucedo Sammie C. Clay Houston 77252 Walter M. Mischer, Jr. Robert Smith, III1 San Antonio 78295 Robert F. McDermott Thomas H. Robertson SAN FRANCISCO 94120 Fred W. Andrew Robert T. Parry Robert F. Erburu Carl E. Powell Los Angeles 90051 Richard C. Seaver Thomas C. Warren2 Portland 97208 Paul E. Bragdon Angelo S. Carella1 Salt Lake City 84125 Don M. Wheeler E. Ronald Liggett1 Seattle 98124 John W. Ellis Gerald R. Kelly1 •"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 1F. RSAenSiEorR V ice President. http://fraser.s2.t loEuxiescfeutdiv.oe rgV/i ce President. Federal Reserve Bank of St. Louis

A86 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories April 1984 1 / 1 1 ALASKA 1 1 ** 1 1 1 © \ 1 Z /p •AN LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch * Federal Reserve Branch Cities Territories • Federal Reserve Bank Facility © Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis