Federal Reserve Bulletin, 1988-05

VOLUME 74 • NUMBER 5 • MAY 1988 FEDERAL RESERVE •Vv' 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 ••-r. ' ... ' 1- lit 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 279 U.S. INTERNATIONAL framework put forward by Secretary of the TRANSACTIONS IN 1987 Treasury Baker in Seoul, before the Subcommittees on International Development For 1987 as a whole, the U.S. external deficit Institutions and Finance and on Internawidened further, although exports advanced tional Finance, Trade and Monetary Policy rapidly and the trade deficit showed signs of of the House Committee on Banking, Fihaving leveled off during the year. nance and Urban Affairs, March 9, 1988. 289 STAFF STUDIES 301 Chairman Greenspan discusses the current economic situation and the outlook for 1988 In "International Banking Trends for U.S. including, In particular, the process of ex- Banks and Banking Markets," the author ternal-adjustment that is aow under way discusses the ways in which banks conduct and the challenge that it poses to our econtheir international banking activities, the omy, before the Joint Economic Committee nature and size of their business, and the of the CONGRESSMAN 15, 1988. extent to which they have penetrated key markets. The study provides much data not 304 William Taylor, Staff Director of the easily obtained from other sources. Board's Division of Banking Supervision and Regulation, discusses the Real Estate 291 INDUSTRIAL PRODUCTION Reform Act of 1987, an act that would establish a federal interagency council Industrial production increased an esticharged with the mission of promoting mated 0.2 percent in February. throughout the United States real estate appraisals formulated by qualified apprais- 293 STATEMENTS TO CONGRESS ers in accordance with high industry stan- Alan Greenspan, Chairman, Board of Gov- dards, before the Subcommittee on Comernors, discusses further actions in support merce, Consumer and Monetary Affairs of of a long-term policy of reducing budget the House Committee on Government Opdeficits and the associated claims on the erations, March 15, 1988. nation's supply of saving and says that the benefit from taking credible actions to curb 307 Martha R. Seger, Member, Board of Govfederal outlays and related demands will be ernors, discusses the Community Reinvestenormous, before the Senate Committee on ment Act and the role that the Federal the Budget, March 2, 1988. (Chairman Reserve has played in administering it, be- Greenspan presented identical testimony fore the Senate Committee on Banking, before the House Budget Committee on Housing, and Urban Affairs, March 23, March 3, 1988.) 1988. 297 Manuel H. Johnson, Vice Chairman, Board 312 Chairman Greenspan reviews initiatives to of Governors, assesses the international strengthen financial markets in response to debt situation in light of recent develop- the events of last October and says that it is ments and says that he sees no alternative essential to have as clear an understanding to the case-by-case approach of dealing as possible of what happened last October with international debt problems in the and why before taking action, before the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Senate Committee on Banking, Housing, gates. The reserve conditions contemplated and Urban Affairs, March 31, 1988. by the Committee were expected to be consistent with growth in both M2 and M3 over 317 ANNOUNCEMENTS the period from November through March at annual rates of about 6 to 7 percent. The Issuance of staff commentaries on Regula- Committee decided not to indicate any expections B, E, and Z. tation regarding the growth of Ml over the Proposal regarding risk-based capital guide- months ahead. The members agreed that the lines for U.S. banking organizations. intermeeting range for the federal funds rate should be left unchanged at 4 to 8 percent. Admission of one state bank to membership in the Federal Reserve System. 327 LEGAL DEVELOPMENTS 318 RECORD OF POLICY ACTIONS OF THE Various bank holding company, bank ser- FEDERAL OPEN MARKET COMMITTEE vice corporation, and bank merger orders; and pending cases. At its meeting on February 9-10, 1988, the Committee established ranges of 4 to 8 345 DIRECTORS OF FEDERAL RESERVE percent for growth in both M2 and M3 for BANKS AND BRANCHES the year. No range was set for Ml, while the monitoring range for growth in total List of directors by Federal Reserve Disdomestic nonfinancial debt was set at 7 to trict. 11 percent for the year. In carrying out policy the Committee would continue to Ai FINANCIAL AND BUSINESS STATISTICS judge the behavior of the monetary aggregates against the background of develop- A3 Domestic Financial Statistics ments in the economy and financial mar- A44 Domestic Nonfinancial Statistics kets, including attention to the sources and A53 International Statistics extent of price pressures in the economy, the performance of the dollar in foreign A69 GUIDE TO TABULAR PRESENTATION, exchange markets, and other indicators of STATISTICAL RELEASES, AND SPECIAL the impact of monetary policy. TABLES With regard to the implementation of policy for the period immediately ahead, the A76 BOARD OF GOVERNORS AND STAFF Committee adopted a directive that called for maintaining the slightly easier degree of re- A78 FEDERAL OPEN MARKET COMMITTEE serve pressure that had been sought recently. AND STAFF; ADVISORY COUNCILS It was understood that some flexibility might continue to be needed in the conduct of open A80 FEDERAL RESERVE BOARD market operations. Taking account of condi- PUBLICATIONS tions in financial markets, somewhat less or somewhat more reserve restraint would be A83 INDEX TO STATISTICAL TABLES acceptable, depending on the strength of the business expansion, indications of inflation, A85 FEDERAL RESERVE BANKS, BRANCHES, the performance of the dollar in foreign ex- AND OFFICES change markets, with consideration also given to the behavior of the monetary aggre- A86 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1987 William R. Melick, of the Board's Division of nificant further increase in net payments on port- International Finance, prepared this article. folio investment income and in U.S. net foreign indebtedness. In 1987, the U.S. external deficit increased for the sixth year in a row. Both the merchandise - -V trade and the current account balances, mea- INFLUENCES ON U.S. INTERNATIONAL sures of the deficit, deteriorated. Even though TRANSACTIONS the growth of non-oil imports slowed, because it started from a larger base, it offset the rapid In recent years, U.S. international transactions growth of exports. have responded both to relative rates of growth Over the course of 1987, however, the down- in income at home and abroad and to changes in ward trend in the trade balance leveled off; and in U.S. international price competitiveness. As inthe fourth quarter, the current account deficit come growth differentials have narrowed, the narrowed (chart 1). These developments in the importance of that factor has diminished. For nominal balances, bolstered by the sustained most of 1982-85, the economy of the United reduction in the real external deficit, laid the States grew much more rapidly than the econofoundation for an improvement in the current mies of the rest of the world combined, a situaaccount deficit in 1988. tion that helped widen the U.S. external deficit Extending developments that began in 1986, significantly. Since HfcBSj'h6WeVer, U.S. growth net capital inflows, which were the counterpart rates have been close to average foreign growth to the 1987 current account deficit, included rates. In 1987, the economies of Canada, Japan, heavier purchases of U.S. assets by official mon- and the United Kingdom grew more rapidly than etary authorities. Foreign acquisitions of U.S. that of the United States; but those of Germany, plant and equipment and other direct invest- S l ^ l ^^ ltaly grew -more slowly. In lite past ments increased strongly, and by slightly more nomic activity fir the less-developed than U.S. direct investments abroad. The mag- continued to expand, as the rapid nitude of the current account deficit and the the newly industrialized countries in associated net capital inflows constituted a sig- nated the slow growth in Latin Amer- 2). 1. U.S. trade and current account balances, 1980-871 As one measure of international price compet- Billions of dollars itiveness, the real exchange value of the dollar can help explain much of the recent behavior of the U.S. external accounts. From its peak in early 1985 through 1986, the dollar depreciated sharply in real terms (adjusted with consumer price indexes) against the currencies of most foreign industrial countries, a small amount against the Canadian dollar, and not at all against the currencies of developing countries (chart 3). As the dollar declined further during 1987, the 1981 1983 1985 1987 disparity of changes across currencies diminished considerably: for the first time since the SOURCE. U.S. Department of Commerce, Bureau of Economic dollar peaked against the currencies of the other Analysis, U.S. International Transactions Accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

280 Federal Reserve Bulletin • May 1988 2. Growth of real GNP, 1980-871 the dollar's real depreciation, but the volume of Percentage change from previous year2 imports continues to grow. This continued growth has remained something of a puzzle. To a • United States — • Foreign industrial countries — 8 certain extent this growth reflects special factors • Developing countries H| that are further discussed below. Part of the explanation, however, is that a real depreciation is not sufficient by itself to reduce the volume of imports. Two more conditions must be met. - 2 First, foreign firms must pass through the dollar's I + 1— 0 depreciation by raising the dollar price of their products. The actual amount of dollar deprecia- 1980-82 1983-85 1986 1987 tion that is passed through depends on a number 1. The GNP of foreign industrial countries is the weighted average of factors that influence the costs and the pricing GNP of the Group of Ten countries excluding the United States. The decisions of foreign firms. Second, higher prices GNP for developing countries is the weighted average GNP for Brazil, Hong Kong, Korea, Malaysia, Mexico, the Philippines, Singapore, of imports in dollars must induce U.S. consumand Taiwan. Weights are proportional to each country's share in ers and producers to shift from purchases of world exports plus imports during 1972-76. 2. For periods of more than one year, percentage changes are imported goods. In making their purchasing deciaveraged. sions, consumers and producers may be influenced significantly by factors other than relative Group of Ten (G-10) countries in early 1985, it prices. depreciated in real terms against the currencies For the depreciation to reduce the value of of developing countries on average. By early imports, the decline in the volume of imports 1988, the dollar's real exchange rate had returned must be proportionally greater than the increase to about its 1980 level in terms of a weighted in the prices of imports. Time lags between average of the currencies of ten industrial counchanges in prices and changes in volumes can tries and eight developing countries. In real actually cause the value of imports initially to terms, the strongest increase against the dollar in increase following a currency depreciation—the 1987 was shared by the Japanese yen and the well-known J-curve effect. Before even these pound sterling among the currencies of industrial negative J-curve effects can take place, however, countries, while the currencies of Taiwan, Brathe change in the exchange rate must be passed zil, and Korea shared the largest appreciation through into higher import prices. among those of the developing countries. Since early 1985, a 25 percent decline in the Despite the sharp decline in the exchange real value of the dollar on average against the value of the dollar, the U.S. external deficit has currencies of foreign industrial and developing persisted. Exports have responded strongly to countries has been followed thus far by only a 15 percent increase in the price of non-oil imports— 3. Real exchange value of the dollar against selected countries, 1980-871 as measured by the fixed-weight, non-oil price index in the national income and product (GNP) "index, 1980=100 accounts. This disparity between movements in the dollar and movements in the prices of imports is considered in more detail below. / V, MERCHANDISE TRADE For 1987, the U.S. deficit on merchandise trade reached $159 billion, $15 billion more than in 1981 1983 1985 1987 1986 (table 1). The deficit widened despite a 1. Weighted nominal exchange rates are adjusted using weighted noticeably more rapid growth of exports than of consumer prices. Weights in indexes are based on bilateral non-oil import trade shares with the United States for the years 1978-83. imports, because imports started from a much Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1987 281 1. U.S. merchandise trade, 1985-871 Billions of dollars, seasonally adjusted at annual rates 1986 1987 IItteemm 11998855 11998866 11998877 Q4 Q1 Q2 Q3 Q4 Merchandise exports 214.4 224.4 250.8 228.1 227.1 239.5 260.4 276.2 Agricultural 29.6 27.0 29.5 28.1 25.7 28.3 33.3 30.9 Nonagricultural 184.8 197.3 221.3 200.0 201.4 211.2 227.2 245.3 Merchandise imports 338.9 368.7 410.0 382.5 382.8 398.5 421.9 436.9 Oil 50.5 33.8 42.3 32.0 34.7 39.8 50.4 44.4 Non-oil 288.3 334.9 367.7 350.4 348.1 358.7 371.4 392.6 Trade balance -124.4 -144.3 -159.2 -154.4 -155.7 -159.0 -161.5 -160.7 1. Details may not add to totals because of rounding. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S. International Transactions Accounts. higher level. From the fourth quarter of 1986 to wan, and Korea), and Western Europe (table 2). the fourth quarter of 1987, the value of exports Given the regional pattern of dollar depreciation increased 20 percent, while imports climbed 14 since early 1985, this result is not surprising, percent; but at the end of 1986, the level of except perhaps for the growth of exports to imports was 68 percent higher than that of ex- Asian countries other than Japan. The increase in ports. The deficit, as revealed by movements in the value of exports to these Asian countries quarterly data, did level off during the course of more likely derives from the rapid rates of eco- 1987, and excluding oil imports it actually nomic growth in these countries than from movenarrowed during the first three quarters of the ments in exchange rates. year. Like exports, imports from Western Europe, A regional analysis of U.S. merchandise trade Japan, and other Asian countries increased shows that, in both 1986 and 1987, exports to all greatly in value in 1987. The results for Western regions of the world increased substantially. Europe and Japan, again given the amount of Growth was strongest in exports to Japan, other dollar depreciation since 1985, are somewhat Asian countries (Hong Kong, Singapore, Tai- surprising. J-curve effects may well help to ex- 2. Changes in U.S. merchandise trade, by selected regions, 1981-87 Percent, change from previous year Year World Western Europe Canada Latin America1 Japan Selec A te s d ia 2 o ther Exports 1981 5.7 -3.7 10.5 10.2 4.8 3.0 1982 -10.9 -8.3 -14.8 22.5 -5.1 2.2 1983 -4.4 -7.1 13.5 22.7 5.3 9.1 1984 9.0 2.6 19.2 16.1 6.7 7.0 1985 -1.8 -1.5 4.4 3.4 -4.7 -7.2 1986 3.9 8.3 2.9 .3 19.0 6.8 1987 11.8 13.6 8.4 13.6 4.8 31.8 Non-oil imports 1981 9.9 5.0 13.6 6.0 20.5 16.6 1982 -.5 -.2 .6 -3.9 .2 7.5 1983 14.8 9.4 14.4 16.5 13.7 29.0 1984 28.6 31.1 22.4 23.4 40.5 30.7 1985 4.6 11.2 2.4 -2.0 9.0 -.9 1986 16.4 19.2 4.1 12.6 23.1 23.7 1987 9.8 7.7 4.4 13.0 4.7 25.4 i-: 1. Western Hemisphere excluding Canada. SOURCE. U.S. Department of Commerce, Bureau of Economic 2. Hong Kong, Korea, Singapore, and Taiwan. Analysis, U.S. International Transactions Accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

282 Federal Reserve Bulletin • May 1988 plain the increase in the value of imports from Both types of index have drawbacks. A fixedthese two regions. weight index tends to overstate price increases and understate price decreases because constant weights do not allow for substitution, over two Measures of Import Prices periods, away from goods whose prices have risen relative to the prices of other goods. A Part of the increase in the value of total non-oil deflator, while capturing the effects of such subimports shown in table 1 reflects higher prices, stitution, makes historical comparisons difficult but the size of that part depends on which because changes in weights between two periods measure of prices of imports is used. Three imply that the average price of a different bundle commonly used measures are the implicit de- of goods is being compared from period to peflator from the GNP accounts, the GNP fixed- riod. weight price index, and the Bureau of Labor A combination of (1) the effects of substitution Statistics (BLS) price index, which is also a away from goods whose prices are rising relafixed-weight index. (The analysis in this article tively rapidly and (2) different measures of the does not directly make use of the Census Bu- prices of imports of basic commodities and busreau's unit-value index.) Of these three mea- iness machines (office machines and computers sures, the GNP implicit deflator shows the small- used for business applications) explains why the est rate of increase in non-oil import prices. The increase in the prices of non-oil imports is small- BLS price index shows the largest rate of in- est in the GNP deflator, intermediate in the GNP crease, while the GNP fixed-weight index gives fixed-weight index, and largest in the BLS price an intermediate measure of the rate of increase index. Because of measurement differences, the (chart 4). Understanding why these indexes yield prices of imports of business machines have been such disparate measures of changes in prices of falling in the two GNP indexes while rising in the non-oil imports is useful. BLS index. The two GNP indexes use a hedonic- In the construction of an aggregate price index, model approach, which attempts to measure the each individual price is multiplied by a particular price of performance characteristics (such as weight. The weighted prices are then summed, computing speed and storage capacity). The apand the sum is expressed as a percentage of the proach is applied to the price of domestically corresponding sum from a base period. If the produced business machines, and this domestic weight used to multiply each price remains the price is taken to be equal to the price of both same as that used in the base year, then the index exports and imports of business machines. The is called a fixed-weight, or base-weight, price BLS price index uses a matched-model apindex. If the weight used to multiply each price proach, which attempts to measure the price changes over time, the index is called a current- change of the overall product from one period to weight price index, or a deflator. the next. The shift in commodity composition in the GNP deflator toward the relatively inexpensive business machines has caused the weight 4. Changes in prices of non-oil imports, 1984-87 given to business machines in that deflator to increase from 3 percent in 1982 (the weight it Percentage change, Q4 to Q4 receives in the GNP fixed-weight index) to 13 • GNP implicit deflator percent in 1987. Q GNP fixed-weight price index An indication of the effect that changes in prices of imporfcrof^isiness machines havejpl on the GNP deflator is given in chart 5. Comparing the top and bottom panels of the chart, one can see that the decreasing price of business machines partially offsets a fairly substantial increase in the prices of other non-oil imports, 1984 1985 1986 1987 producing the modest 4 percent increases, in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1987 283 5. U.S. non-oil imports, 1980-87 on foreign costs. If a foreign firm's costs are falling, the firm does not need to match increases in domestic prices to maintain a given profit margin. In the foreign G-10 countries, average labor and material costs have risen much less than CPIs in recent years, partly because of substantial declines in the prices of oil and other commodities, which are more important as inputs into the production of goods than they are as part of total consumption. The bottom panel of chart 6 shows the ratio of the import price to the foreign cost measure. (The ratio is expressed as an index and is calculated from two of the indexes depicted in the top panel of the chart.) In theory, this curve would be horizontal if foreign firms matched every change in cost with a change in price to preserve an existing profit margin. 6. Prices of U.S. imports, costs of foreign 1. Derived from the National Income and Product Accounts, tables production, and foreign profit margins, 1977-87 4.3 and 4.4. 2. Seasonally adjusted at annual rates. 1986 and 1987, for total non-oil imports illustrated in chart 4. Yet changes in the price of imports of business machines only partially explain the relatively small increases in prices of imports overall. By any of the price measures discussed above, it is clear that the price of imports other than business machines has risen much less than the dollar has fallen. A closer examination of the pricing behavior of foreign firms offers another explanation of why the dollar prices of imports have not responded fully to the dollar's depreciation. The passthrough of changes in exchange rates into import prices will vary depending on a firm's costs and its willingness to sacrifice profit margins. If foreign firms completely and simultaneously passed through a depreciation in the dollar and raised their prices to keep up with their domestic rates 1 i 1 1 1 1 1 1 1 1 i of inflation, an index of prices of imports would 1977 1979 1981 1983 1985 1987 closely track movements in foreign consumer 1. Weighted average of CPIs for the foreign G-10 countries multiprice indexes measured in dollars, as it did in plied by weighted average exchange value of the dollar against those 1977-82 (see chart 6). However, the GNP fixed- countries (the weights are shares in U.S. non-oil imports). 2. Foreign costs cover unit labor costs and costs of raw materials weight price index for non-oil imports shows weighted for each country by its own input-output weights. The that, since early 1985, prices of imports have average for the foreign G-10 countries is then formed using weights based on their shares in U.S. non-oil imports. diverged markedly from movements in foreign 3. GNP fixed-weight index. CPIs expressed in dollars. Whether this failure to 4. Ratio was calculated with the fixed-weight index of non-oil import prices and the index of foreign costs shown in the top panel. track indicates declining profit margins depends The ratio is expressed as an index. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

284 Federal Reserve Bulletin • May 1988 That the ratio has been falling since 1985, after 3. Changes in the volume of U.S. merchandise exports, 1980-87' having risen earlier (while the dollar was appreciating), suggests that foreign firms have been Percent, annual rate sacrificing profit margins built up earlier to hold 1980:4- 1985:4- 1986:4down their dollar prices. This ratio probably End-use category 1985:4 1986:4 1987:4 overstates the actual decline in foreign profit Total merchandise exports -.5 10.3 18.9 margins since it does not take into account the relatively lower costs in developing countries, Foods, feeds, and beverages 4.9 7.0 10.6 whose currencies have fallen much less against Industrial supplies and materials -1.4 9.2 9.1 the dollar than the G-10 currencies have. Capital goods -.1 13.1 26.4 The volume of total U.S. non-oil imports, Business machines 25.9 30.6 49.5 excluding business machines, has been rising Excluding business machines . -5.9 4.0 11.4 since 1980, with the rates of growth, which were Automobiles and products .7 -.9 21.4 rapid in 1983-85, slowing in 1986-87 (top panel Consumer goods -4.7 14.5 21.3 of chart 5). In 1987, increases in the volume of Durables -8.7 24.1 22.4 Nondurables -1.0 7.8 21.7 imports of machinery and automobiles were par- All other 11.0 14.4 22.1 tially offset by decreases in the volume of imports of consumer durables and apparel. The 1. Seasonally adjusted data. SOURCE. U.S. Department of Commerce, Bureau of Economic behavior of the volume of imports of business Analysis, National Income and Product Accounts. machines is somewhat different. Since 1982, imports of business machines have increased at a Changes in U.S. Exports rapid pace (bottom panel of chart 5); and by the fourth quarter of 1987, they composed about 13 Unlike the situation with imports, the depreciapercent of the volume of non-oil imports. tion of the dollar has been passed through fairly completely into lower foreign-currency prices of U.S. exports, and the volume of exports has responded strongly in the expected direction (top panel of chart 7). Increases in the dollar prices of 7. U.S. exports, 1980-87 U.S. exports since early 1985 have been only Index, 1982 = 100 Billions of 1982 dollars marginally larger than the increases in the prices Nonagricultural of similar domestic goods in the United States, a situation that implies a sizable decline in the price of U.S. exports in terms of the currencies of industrial countries. Since 1985, the volume of exports has been increasing rapidly despite only moderate economic growth abroad, on average. The gain in U.S. price competitiveness associated with the declines in the dollar has clearly been the force behind the expansion of exports. Agricultural As indicated in table 3, the expansion has been widespread across categories of commodities. Within the category of industrial supplies and materials, exports of lumber and paper products and semifinished iron and steel showed rapid growth. Among consumer durables, exports of household electrical appliances and recreational equipment such as toys and sporting goods showed the most dramatic growth in volume. 1. GNP implicit deflator, derived from National Income and Prod- After two years of decline, in 1987 the volume uct Accounts, tables 4.3 and 4.4. 2. Seasonally adjusted at annual rates. of agricultural exports recovered to its 1984 level Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1987 285 (bottom panel of chart 7). Two-thirds of the in 1987, both absolutely and in comparison with increase is attributable to two factors: (1) large that in less trade-sensitive industries (table 4). increases in the volume of corn exports resulting Such a surge would be expected to increase from lower loan rates and payments in kind to pressures on costs to the extent that the increase farmers and (2) the re-entry of the Soviet Union in demand would raise capacity utilization rates and China into the U.S. wheat market. The in these trade-sensitive industries. Capacity uti- Export Enhancement Program stimulated U.S. lization rates for broader categories of industries sales to these countries. These U.S. subsidy suggest that rates in the chemical, textile, and programs, however, helped to depress the aver- pulp and paper industries already are historically age price of agricultural exports. The unit value high. Whether other industries encounter presof corn exports fell 19 percent, while the unit sures on capacity in 1988 and beyond depends on value of wheat exported to the Soviet Union and the ability and willingness of firms to expand China was 25 percent lower than that for wheat output capacity and on the size and timing of exported to the rest of the world. further increases in the demand for their goods at home and abroad. To date, pressures on domestic prices associ- RESULTANT PRESSURES ON THE ated with the decline in the dollar have been U.S. ECONOMY limited; however, prices have increased substantially since late 1986 for a broad range of primary The recent increase in real net exports, along commodities. In 1987, increases in the prices of with prospects of substantial further gains, has industrial materials were particularly sharp raised questions about how the resulting reallo- (chart 8), with the prices of several commodities cation of U.S. rescHii^^^w^mi^ternal demand in$g&asing 30 fjtasepiti^g^jpe. during the year. will affect domestic inflation and capacity pres- The inflationary consequences of such increases sures in the U.S. manufacturing sector. Members are not clear-cut. For most of manufacturing, of the staff of the Federal Reserve Board's Divi- labor—not raw materials—accounts for the largsion of Research and Statistics have developed a est portion of total costs. Yet, other things being preliminary classification of industries based on equal, these increases in prices do suggest at the ratio of exports and imports to production in least the potential for upward pressures on coneach industry. The classification suggests that sumer prices. production in trade-sensitive industries swelled Rising prices of imports can also put pressure 4. Changes in industrial production in trade-sensitive U.S. industries, 1985-871 Percent, change from previous year MEMO: Percentage of Industry 1985 1986 1987p 1977 value added in industrial production Chemicals 2.6 5.0 8.0 9.6 Apparel 2.0 1.8 4.1 3.3 Instruments .8 .1 5.1 3.2 Metalworking and industrial machinery 0 4.6 5.3 3.1 Construction and allied equipment... -6.1 -2.0 10.9 2.0 Miscellaneous textiles 7.4 3.5 7.5 1.8 Office and computing machinery 3.7 -3.2 8.5 1.7 Pulp and paper .6 7.3 3.7 1.5 Electronic components -17.9 .8 9.7 1.5 Special industry machinery -8.0 -1.1 10.1 .8 Industries with above-average trade sensitivity 1.2 1.3 7.3 52.2 Industries with below-average trade sensitivity 2.9 3.5 4.6 47.8 p Preliminary. SOURCE. Federal Reserve Board, Division of Research and Statis- 1. Industries determined by preliminary analysis of 1985 data on tics, Industrial Output Section, exports, imports, and plant shipments by industry. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

286 Federal Reserve Bulletin • May 1988 8. World commodity prices, 1980-871 the effect of the dollar depreciation this time may x,' 1980=100 be smaller and last longer than in the past. IOO SERVICES ACCOUNT Five years of increasing deficits in the U.S. 80 current account have had significant effects on the U.S. net international investment position and on the associated income flows recorded in 1981 1983 1985 1987 current account transactions other than trade 1. Excludes petroleum and petroleum products. (table 5). According to available data, the United SOURCE. "Economic and Financial Indicators," The Economist, States has become a substantial net debtor, parvarious issues. ticularly in portfolio assets. Net receipts of income from portfolio investment have fallen on the U.S. inflation rate. Historical relation- sharply in recent years. This decline would have ships suggest that a 10 percent decline in the been even greater if the rate of return paid on value of the dollar against the currencies of the U.S. portfolio liabilities to foreigners had not other G-10 countries raises the level of U.S. remained below the rate of return earned on U.S. consumer prices by 1 to 1 Vi percent over three portfolio assets held abroad. In 1987, increasing years or more. The effect can vary depending on net portfolio payments, combined with a negathe degree to which importers and foreign ex- tive trend in unilateral transfers, pushed the porters pass through changes in exchange rates balance on nontrade current account transacand on the prevailing rates of labor force and tions into deficit for the first time in more than overall capacity utilization. Caution should be three decades. exercised in applying this historical rule of In contrast to net payments on portfolio investthumb, especially to the recent dollar deprecia- ments, net receipts on direct investments retion. Rarely has such a large fall in the exchange mained positive in 1987. U.S. direct investment value of the dollar against the currencies of the holdings abroad continue to exceed, by a signifother G-10 countries occurred; nor have other icant margin, foreign direct investments in the factors, such as the price of oil and the behavior United States. Moreover, returns on U.S. holdof the currencies of non-G-10 countries, re- ings abroad have surged as the effects of a mained constant. Moreover, the previously dis- depreciating dollar have added to the dollar value cussed behavior of foreign firms indicates that of U.S. direct investments abroad as well as to 5. Service and transfer transactions in the U.S. current account, 1983-871 Billions of dollars Account 1983 1984 1985 1986 1987 Total, nontrade current account 20.8 5.5 5.8 3.0 -5.7 Service transactions, net 30.3 17.7 21.1 18.6 7.6 Investment income, net 24.9 18.5 25.4 20.8 8.4 Direct investment income, net 14.9 12.0 26.6 30.9 29.2 Portfolio investment income, net 10.0 6.5 -1.2 -10.0 -20.7 Military, net -.2 -1.9 -3.3 -3.7 -.5 Other services, net 5.7 1.1 -1.0 1.5 -.3 Unilateral transfers -9.5 -12.2 -15.3 -15.7 -13.4 Private transfers -1.0 -1.4 -1.9 -1.7 -1.2 U.S. government grants and pensions .. -8.5 -10.7 -13.4 -14.0 -12.1 1. Details may not add to totals because of rounding. SOURCE. U.S. Deartment of Commerce, Bureau of Economic Analysis, U.S. International Transactions Accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1987 287 foreign currency earnings on these investments. from placements by official monetary authorities. On balance, capital gains and losses in 1987, Inflows through securities transactions were largely the result of foreign currency fluctua- down sharply from 1986. On the one hand, tions, added $11 billion to net direct investment private foreigners were net sellers of U.S. Treaincome receipts. sury securities, and their net purchases of U.S. corporate bonds also contracted. On the other hand, private foreign net purchases of U.S. cor- CAPITAL ACCOUNT porate stocks were up sharply in the first 10 months of the year. Net sales late in the year, Recorded net capital inflows, the statistical dis- however lleld the total for 1987 slightly below crepancy, and the deficit in the current account that for 1986. are presented in table 6. U.S. and foreign holders Table 7 presents an estimate of the recent of official reserves accounted for $55 billion of increase in the recorded U.S. net international the net capital inflow in 1987, up from $33 billion investment position, which reached about $400 in 1986; in the preceding years official flows were btffioil the end of 4987<.;This measure of negligible. However, foreign official holdings in the net international investment position is the United States increased by only a fraction of only a rough indicator, since many assets and the increase in total official reserves of these liabilities are not valued at market prices and countries in 1987, as a substantial part of the since the positive and large statistical discrepdollar proceeds of intervention in foreign ex- ancy in the recent U.S. international transchange markets by several countries was appar- actions accounts indicates substantial unrecorently invested in the Euromarkets. ded transactions. If much of the statistical Private capital flows in 1987 were dominated discrepancy represents unrecorded accumulaby net inflows reported by banks, particularly tions of claims by foreigners, the U.S. net through interbank transactions. These inflows international investment position by the end probably reflected indirectly the increase in the of 1987 would have been as large as $600 availability of funds in the Euromarkets resulting billion. 6. U.S. capital account transactions, 1983-87' VJ i.O.Jf Billions of dollars Type of transaction 1983 1984 1985 1986 1987 Official capital, net -.2 -5.6 -8.0 33.1 54.7 Private capital, net 35.7 84.7 102.7 84.3 84.1 Inflows reported by U.S. banks, net 20.4 22.7 39.7 18.3 44.4 Securities, net 13.4 32.4 60.4 75.8 32.4 Net purchases by private foreigners 20.4 37.5 68.4 79.1 36.1 U.S. Treasuries 8.7 23.1 20.5 8.3 -6.1 U.S. corporate bonds 5.3 15.4 43.0 53.8 26.7 U.S. corporate stocks ... 6.4 -.9 4.9 17.0 15.4 U.S. net purchases of foreign securities -7.0 -5.1 -8.0 -3.3 -3.7 Direct investment, net 8.5 19.8 2.1 -3.0 2.4 Foreign direct investment in the United States... 11.9 25.4 17.9 25.1 40.6 U.S. direct investment abroad -3.5 -5.6 -15.8 -28.0 -38.2 Other -6.6 9.8 .5 -6.8 4.9 Statistical discrepancy 11.1 27.3 23.0 23.9 21.9 Memo: Current account .-46.6 -106.5 -117.7 -141.4 -160.7 1. A minus sign indicates an outflow. Details may not add to totals SOURCE. U.S. Department of Commerce, Bureau of Economic because of rounding. Analysis, U.S. International Transactions Accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

288 Federal Reserve Bulletin • May 1988 7. Net international investment position of the United States, 1983—87' Billions of dollars Item 1983 1984 1985 1986 1987® Net international investment position .... 90 4 -112 -264 -403 U.S. assets abroad 874 8% 949 1,068 1,132 Government 113 120 130 138 128 Private 761 776 819 930 1,004 Direct investment 207 211 230 260 298 Other 554 565 589 670 706 Foreign assets in the United States 784 892 1,061 1,331 1,535 Official 194 199 203 241 285 Private 590 693 859 1,091 1,249 Direct investment 137 164 185 209 250 Other 453 529 674 882 999 e Estimate. statistical discrepancies, and the like. 1. Details may not add to totals because of rounding. All data SOURCES. 1983-86, net recorded position—Survey of Current Busexcept those for 1987 include estimates for gains and losses on assets iness, vol. 67 (June 1987), p. 38; other data from the U.S. Department denominated in foreign currency due to their revaluation at current of Commerce, Bureau of Economic Analysis. All data for 1987 are exchange rates, as well as estimates for price changes in stocks, estimates by Federal Reserve staff based on preliminary 1987 flows. bonds, and other assets held by foreigners in the United States. Other Estimates do not include valuation adjustments (see note 1). adjustments to the value of assets relate to changes in coverage, ; - r ... . : ' the first year since 1981 in which the current Much concern has been expressed about the account in nominal terms shows some improvegrowing net debtor position of the United States ment. Continued gains in real net exports could and, in particular, about the expansion in foreign lay the foundation for some narrowing of the ownership of U.S. productive resources. Foreign current account deficit. Another year of strongdirect investment in the United States again growth in the volume of exports is likely to be an reached record levels, but it is still smaller than important element in this improvement. Also, as U.S. direct investment abroad. Direct investforeign firms find further compression of their ment abroad measured in dollars also continued profit margins increasingly difficult, the decline to increase in 1987, by about as much as foreignof the dollar during 1987 should translate into direct investment in the United States, although higher prices of imports. In the short run, these the accounting effects of dollar depreciation exhigher prices may boost the value of imports, but plained roughly one-third of the increase in U.S. over time they should also bring about a compenholdings abroad. sating decline in their volume. However, the current account deficit is likely to shrink less OUTLOOK FOR 1988 than the U.S. trade deficit in 1988 because the increasing payments associated with the expand- The U.S. current account balance appears to ing debtor position of the United States will have have bottomed out during 1987, and 1988 may be a negative effect on the current account. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

289~ Staff Studies The staff's of the Board of Governors of the indicate concurrence by the Board of Governors, Federal Reserve System and of the Federal Re- by the Federal Reserve Banks, or by the memserve Banks undertake studies that cover a wide bers of their staffs. range of economic and financial subjects. From Single copies of the full text of each of the time to time the results of studies that are of studies or papers summarized in the BULLETIN general interest to the professions and to others are available without charge. The list of Federal are summarized in the FEDERAL RESERVE BUL- Reserve Board publications at the back of each LETIN. 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 INTERNATIONAL BANKING TRENDS FOR U.S. BANKS AND BANKING MARKETS James V. Houpt—Staff, Board of Governors Prepared as a staff study in the spring of 1988 U.S. international banking activity has grown of 1987. The share of all domestic banking assets rapidly during recent decades in response to controlled by foreigners grew accordingly—by growing international trade, international shifts one measure, from 3.6 percent in 1972 to almost of wealth, and regulatory and market incentives. 20 percent in 1987. These assets, however, in- Assets of foreign offices of U.S. banks, for clude a much higher percentage of interbank and example, grew from less than $5 billion in 1960 to international assets than do those of other domore than $500 billion at the end of 1987 and mestic banking offices, and market shares can be represented a broad array of financial services— misleading. The foreign banks' penetration of the including some not permissible to banks in the domestic consumer market is much less, while United States. However, the pace of interna- their share of domestic commercial lending is tional lending and the expansion of foreign offices larger. by U.S. banks has slowed in recent years, partly Branching is usually the preferred form of because of the problems of many heavily in- market entry for both U.S. and foreign banks, debted countries and partly because of other and branches account for most international factors. banking assets. Nevertheless, legal and regula- The assets of U.S. banking offices of foreign tory restrictions, tax laws, and market practicabanks and foreign nonbank investors have also lities make other forms of entry attractive as grown rapidly, but the pace of this growth shows well. Locally incorporated and controlled subsidfew signs of slowing. From less than $30 billion in iaries, as well as joint ventures and institutions 1970, these assets climbed to $229 billion within specific to the United States, such as Edge a decade and to more than $600 billion by the end corporations and international banking facilities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

290 Federal Reserve Bulletin • May 1988 (IBFs), all have their advantages and perform nificant U.S. legislation directed toward foreign important roles in the international activities of banks, however, has limited their authority to some banks. operate in this country by reducing earlier advan- The international banking laws, regulations, tages they held over domestic banks. Combined, and supervisory policies of the United States and these shifts reflect the underlying desire by most its banking agencies have evolved along with authorities and market participants to create a market practices and structures. The trend has "more level playing field." The extent to which generally been to grant U.S. banks slightly banks are able to compete effectively both at broader powers, so that they can continue to home and abroad helps to measure whether that compete abroad with institutions that may offer a goal is being met. wider range of financial services. The most sig- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

291 Industrial Production Released for publication March 16 slightly. At the same time, production of materials, which had advanced rapidly during the sec- Industrial production rose 0.2 percent in Febru- ond half of last year, edged down for a second ary, following a revised gain of 0.3 percent in month. At 134.4 percent of the 1977 average, the January. Further strong increases in the output total index in February was 5.8 percent higher of business equipment as well as gains in the than it was a year earlier. production of construction and business supplies In market groups, production of consumer were the main contributors to growth in Febru- goods rose 0.2 percent in February as increases ary. Output of durable consumer goods dropped in the output of nondurable goods more than Ratio scale, 1977= 100 TOTAL INDEX 140 Products 120 Materials 100 80 J I L MANUFACTURING 140 MATERIALS Nondurable Durable 120 100 - INTERMEDIATE PRODUCTS Business supplies y Construction supplies 120 240 IRON AND STEEL FINAL PRODUCTS 100 Defense and space 200 160 80 140 120 60 Consumer goods 100 40 80 1982 1984 1986 1988 1982 1984 1986 All figures are seasonally adjusted. Latest figures: February. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

292 Federal Reserve Bulletin • May 1988 1977 = 100 Percentage change from preceding month Percentage cchhaannggee,, Group 1988 1987 1988 FFeebb.. 11998877 ttoo FFeebb.. 11998888 Jan. Feb. Oct. Nov. Dec. Jan. Feb. Major market groups Total industrial production 134.2 134.4 1.1 .5 .5 .3 .2 5.8 Products, total 141.9 142.4 1.1 .1 .0 .6 .4 4.8 Final products 140.5 140.9 1.1 -.1 .3 .6 .3 4.5 Consumer goods 130.4 130.6 1.1 .3 .0 .7 .2 3.3 Durable 121.3 121.1 4.8 -.4 -2.9 .9 -.2 .1 Nondurable 133.7 134.1 -.2 .5 1.1 .6 .3 4.5 Business equipment... 150.8 151.8 1.6 -.2 .9 .7 .7 7.1 Defense and space 190.0 189.9 .3 -.8 .1 .6 -.1 .5 Intermediate products... 146.9 147.7 .9 .8 -.7 .4 .5 5.5 Construction supplies. 133.8 134.9 .8 .7 -.4 .1 .8 3.8 Materials 123.6 123.4 1.3 1.1 1.1 -.2 -.2 7.4 Major industry groups Manufacturing 139.1 139.3 1.2 .4 .6 .2 .2 5.9 Durable 137.5 137.9 2.3 -.1 .5 .1 .2 5.4 Nondurable 141.2 141.4 -.3 1.1 .8 .4 .1 6.5 Mining 103.7 102.9 1.7 1.0 -.1 -.7 -.8 4.2 Utilities 114.2 115.0 .8 1.0 -.9 1.8 .7 6.0 NOTE. Indexes are seasonally adjusted. offset declines among durables. Auto assemblies month. The expansion in production of business were little changed in February at an annual rate equipment reflected widespread gains in all subof 6.1 million units versus 6.0 million units for the sectors except transit equipment. The index for previous month. However, production of light- total materials fell slightly further in February weight trucks fell, and the output of home goods, after a downward revised decline of 0.2 percent which includes appliances, edged down last in January. Both durable and nondurable materials have shown small declines in January and February after vigorous output gains last year. Total industrial production—Revisions The recent slowdown in materials production has been widespread, with particular weakness evi- Estimates as shown last month and current estimates dent in textiles and steel. Percentage change In industry groups, manufacturing output in- Index (1977=100) from previous MMoonntthh months creased 0.2 percent in February. Durable manufacturing output, which is the larger component, Previous Current Previous Current increased 0.2 percent, while nondurable manu- November 133.0 133.2 .4 .5 facturing was little changed. Production at utili- December 133.6 133.8 .4 .5 ties was up 0.7 percent, and mining output de- January 133.8 134.2 .2 .3 February 134.4 .2 clined 0.8 percent as coal production slackened. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

293~ Statements to Congress Statement by Alan Greenspan, Chairman, Board This turnaround in the external sector also has of Governors of the Federal Reserve System, contributed to better balance across domestic before the Committee on the Budget, U.S. Sen- industries and regions of the country. In particate, March 2, 1988. ular, output in the manufacturing sector has picked up appreciably, in response to both stronger orders from abroad and higher levels of I appreciate the opportunity to appear before this capital spending at home. Improvement also was committee today, as you begin your deliberations apparent among domestic energy producers and on the budget for fiscal year 1989. The Summit in agriculture, two sectors that had lagged con- Agreement reached with the administration in siderably in recent years. November, if fully implemented, should maintain On the negative side, virtually all broad meapressure on the deficit this year and next. But it sures of price inflation rebounded somewhat, is crucial that further actions in support of a after dropping sharply in 1986. And although long-term policy of reducing budget deficits and wage increases remained restrained, we clearly the associated claims on the nation's supply of need sustained effort to bring about price stabilsaving be implemented. This morning, after a ity. brief review of the current economic situation, I As we move into 1988, members of the Federal would like to address some of these longer-run Reserve Board and the Reserve Bank Presidents fiscal concerns. look for a moderate rise in real GNP over the As I reported to the Banking Committees last course of this year, on the order of 2 to 2Vi week, 1987 generally was a good year for the percent. The stock market plunge has added U.S. economy. Real GNP rose nearly 4 percent, continued uncertainty to the outlook, and activalmost twice the pace of the previous year, and ity in the near term may be restrained somewhat unemployment continued to decline. In January by efforts to bring inventories into better balance of this year, the civilian jobless rate stood at 5.8 with sales. However, such an inventory-induced percent, nearly a percentage point below its slowdown almost surely would be reflected first year-earlier level. in shortfalls in manufacturers' orders, and for the Especially encouraging was the improvement moment at least, order books remain impresin the balance between domestic spending and sively solid. In general, there are few signs of the domestic production. Although it is not yet evi- imbalances that typify the late stages of a busident in the nominal figures, there has been a ness-cycle expansion. Moreover, the external marked turnaround in real net exports. Our in- sector is expected to provide considerable supternational competitiveness has been enhanced port to domestic production throughout the year. by the success of business and labor in increasing Inflation, meanwhile, is anticipated to fall within productivity and restraining cost pressures. In a range of V/A to 33/4 percent, similar to the 1987 addition, the lower level of the dollar on foreign pace. The "central tendency" of our projections exchange markets, because much of it was not for real GNP growth this year encompasses the passed through into wages and other costs do- administration forecast, but is somewhat stronmestically, also helped our firms price more ger than that of the Congressional Budget Office competitively in foreign markets and compete (CBO); we also are a bit more optimistic on with imports at home. As a result, exports have prospects for price inflation. However, the difbeen soaring in real terms and the growth of ferences are not large. imports has slowed. In this context, the Federal Open Market Com- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

294 Federal Reserve Bulletin • May 1988 mittee (FOMC), at its meeting last month, set examination of the historical record reveals that ranges of 4 to 8 percent for growth of M2 and M3. it has been the exceptional industrialized country Expansion of money within these ranges, whose that has been able to attract large capital inflows midpoints are 1 percentage point lower than on an extended basis in the past quarter century. those of last year, is expected to support contin- In this regard, the lesson for the United States is ued economic growth at a pace that is consistent clear. The widely anticipated improvement in the with sustained external adjustment and progress nation's current account balance will provide over time toward price stability. Given the large considerable benefits to the overall economy, but movements of money relative to income in recent also will result in diminished capital inflows to years and the unusual degree of uncertainty in the United States. the economic outlook, the FOMC widened the The record also shows that the relatively ranges for money growth to 4 percentage points healthy share of gross investment in GNP in the and will continue to assess the behavior of the 1980s has masked a perceptible decline in the aggregates in light of information about the pace investment share measured net of depreciation— of business activity and the source and strength that is, the portion of investment spending that of price pressures, with particular attention to actually increases the nation's capital stock, the performance of the dollar on foreign ex- rather than merely replacing worn-out equipment change markets and other indicators of the im- and structures. This divergence reflects a continpact of monetary policy. ued shift in the composition of investment away Looking beyond 1988, prospects for maintain- from long-lived assets, such as structures, ing balanced growth, as well as continued im- toward high-technology and other shorter-lived provement in our external accounts, will depend equipment, which has raised the share of depreimportantly on developments in the federal bud- ciation in gross investment. get. It is encouraging that the latest figures from Achieving adequate investment rates— the Congressional Budget Office show the base- whether measured in gross or net terms—is critline deficit on a declining trend into the early ical if we are to equip the nation's productive 1990s, especially when you recall that, as re- facilities with the state-of-the-art technology and cently as 1985, such projections approached $300 machinery necessary to enhance our internabillion, or more than 5 percent of GNP. None- tional competitiveness. This will require steppedtheless, the deficits as currently estimated remain up domestic saving to compensate for the anticsizable, as a share of GNP as well as in absolute ipated slowing in capital inflows. terms. Moreover, relatively small changes in the It is difficult to explain why saving by houseassumptions underlying budget deficit projec- holds and businesses has fallen to such low tions can alter them quite radically, as recent levels, and there is considerable uncertainty history demonstrates. about the outlook for saving in coming years. Throughout most of the postwar period, gross Some arguments, such as the association beprivate domestic saving and investment were tween lower saving and the surging stock market roughly in balance, at slightly more than 15 of the mid-1980s, suggest that the low saving rate percent of GNP. Budget deficits generally were is a temporary aberration. But other factors that small, at least by today's standards, and the are believed by some analysts to have depressed United States showed a positive—and gradually private saving, such as a diminished need to save increasing—net foreign investment position. In for emergencies because of improvements in the 1980s, the pattern changed dramatically, as disability and life insurance coverage and the total domestic saving fell well below investment, easier financing of "big-ticket" items, are likely reflecting not only the enormous federal deficits, to persist. In any event, despite numerous initibut also a large drop in the private saving rate. atives, public policy has had little effect on That gap between domestic saving and invest- private saving. Indeed, over the years, we have ment has been filled by capital inflows from enacted significant tax changes designed to proabroad. This is neither a satisfactory nor a sus- vide incentives to saving, but the evidence of tainable solution over the longer run. Indeed, an most economic studies suggests that the net Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 295 effect has been to shift saving from one pile to For example, I have long urged the consideranother, without much impact on the total. Thus, ation of a sizable increase in the federal gasoline the surest way to overcome our shortage of tax. A hike of 15 cents per gallon, for example, aggregate domestic saving is through sizable re- could raise close to $15 billion in revenues, while ductions in budget deficits. Such steps are essen- retail gasoline prices still would be well below the tial if we are to avoid greater pressures on levels of the early 1980s. And if energy use is financial and foreign exchange markets. restrained at all, there is a further benefit. The importance of taking actions to make a But on the whole, deficit-reduction efforts sizable dent in the budget deficit during periods must of necessity focus on the expenditure side of satisfactory economic performance becomes of the budget. Over the past three decades, we even more apparent when we recognize the likely have seen marked shifts in the composition of effects on revenues and outlays of a future eco- federal spending, accompanied by a distinct upnomic slowdown, if one were to occur. While we trend in its ratio to nominal GNP. That ratio, all seek to avoid recessions, the Congress cannot which reached 24 percent of GNP in the midcount on indefinitely sustaining federal revenues 1980s, has edged off in the past few years, in part by a growing economy. because the administration and the Congress The achievement of meaningful deficit reduc- have been relatively successful in holding the line tion undoubtedly will require that some hard on new programs. decisions are made. The adoption of the Gramm- I do not underestimate the difficulty of the task Rudman-Hollings approach, and its reaffirmation of further reducing the ratio of federal outlays to last year, highlight all too vividly the extraordi- GNP. Several rounds of deficit-reduction efforts nary difficulty of making such choices. There are already have taken care of the "easy" cuts. no easy answers or magic formulas. Nonethe- Partly as a result, the composition of the budget less, economic logic and historical experience has shifted toward those categories that are less can provide a framework for analyzing the range amenable to control, at least in the short run. In of possible options. particular, interest payments were nearly $140 I suspect that in the long run there are upside billion last year, and in light of prospective limits to the share of income that can be taxed. deficits, are likely to grow even larger in coming For several decades, the overall federal tax bite years. The way to control these payments, and to has been fairly flat, at a bit less than 20 percent of get a handle on the scale of federal debt relative GNP, and under current tax laws will remain in to GNP, is to concentrate on the remainder of this range into the 1990s. This stability over time federal spending and on the so-called "primary is not a coincidence, but is indicative of the deficit"—that is, the deficit excluding interest public's aversion to rising tax burdens. That payments (net of taxes on interest). sentiment was reflected in the many small tax Looking at the programmatic part of spending, changes in the 1970s, as inflation pushed many it is apparent that demographic trends, especially taxpayers into higher brackets, and in the large the shifting age profile of the population, will put reductions that were enacted in the early 1980s. substantial pressure on outlays in the years Of course, no one likes higher taxes, but I also ahead. At present, 38 million Americans, or sense a more sophisticated awareness of the about 15 percent of the population, are collecting disincentives and economic inefficiencies that social security retirement or disability benefits; seem to grow disproportionately along with the most of them are insured under medicare as well. size of the tax burden. And people are skeptical That figure will rise appreciably over the next that tax increases will translate fully into smaller decade. deficits, given the reduced pressure to control Controlling the growth of outlays is crucial and spending that would result. will require close scrutiny of virtually all pro- This does not mean, however, that revenue grams. Such control, in the face of demographic changes should be dismissed out of hand. Some pressures, will demand a willingness to take specific taxes may serve other desirable objec- bold, controversial actions. It is essential that tives, while also bringing in needed receipts. this committee focus on those changes that will Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

296 Federal Reserve Bulletin • May 1988 result in significant saving, not just this year or that could be transferred out of the federal secnext, but on a lasting basis. tor. I believe this emphasis is appropriate and It would be inappropriate for me to offer deserves careful consideration on its own merits. suggestions on specific program actions to re- But I would stress that the resulting asset sales duce the deficit. You know all the alternatives. should not obscure the more fundamental bud- The choices are political, not economic. But getary issue. Indeed, I would be troubled by the simple arithmetic points clearly to those areas extensive use of asset sales as a long-run deficitwhere the scope for action is greatest. In this reduction strategy. Merely shifting the ownercontext, entitlement programs offer substantial ship of an asset from the government to the opportunities for long-term budgetary savings, private sector has little effect on overall credit since they currently account for nearly half of demands; moreover, it produces only a one-time total outlays. And with the base of expenditures budget saving. certain to expand in conjunction with the in- I also would be disturbed by the greater use of crease in the beneficiary population during the federal credit guarantees, as a substitute for next few decades, the deficit-reduction benefits on-budget outlays. Such a substitution may of changes in the law today will accumulate over lower the measured budget deficit, but it does not time, leading to much larger savings in the reduce the federal presence in credit markets. year 1995 and beyond than in, say, 1990 or Both the administration and the CBO have long 1991. argued that current budgetary procedures give a Leaving aside the serious questions of evalu- misleading impression of federal credit activity. ating military adequacy, the budgetary arithmetic In this regard, the administration's proposals for of cutting defense spending is considerably less reform, which call for the explicit recognition favorable. In part, this is because the Summit and better measurement of the subsidy value of Agreement already has solidified a recent trend credit programs, point in the right direction. toward reductions in appropriations from Presi- A smaller public sector would carry significant dent Reagan's original overall defense plan. But benefits in terms of improved efficiency of the more fundamentally, defense programs are es- overall economy. The relationship between the sentially lumpy. A large share of spending in the size of the government and economic perforearly and mid-1980s went to build up our military mance is complex, and depends—among other asset base. But as we reach the requisite number things—on the mix of consumption and investof F-16 wings, air carrier groups, missile deploy- ment in government spending. Moreover, budget ments, and the like, expenditures will fall back figures do not capture the full scope of governtoward maintenance levels, which are signifi- mental activities on real resource allocation; the cantly lower in real terms than the huge outlays effects of government economic regulation on of the past few years. Accordingly, reductions in private activity may be sizable. defense procurement programs are not translat- International comparisons inevitably are diffiable, as they are in entitlement programs, into cult, and the empirical evidence is only roughly very much larger cuts in the future. suggestive of broad trends. But the disappointing As for discretionary domestic spending, these macroeconomic performance of many industrialprograms are a small and shrinking share of the ized countries over the past few decades, in the total, and many provide services that enjoy face of rapidly expanding public sectors, does broad support. Moreover, in a number of areas, raise questions about the true costs and benefits such as law enforcement, environmental protec- of large government expenditures. Indeed, in tion, and air traffic safety, there are few feasible several European countries with sizable public alternatives to the federal programs. outlays on income maintenance, education, and There are, however, areas in which the private health care, those programs are coming under sector probably can provide services more effi- increased scrutiny, in part because of a percepciently, and at lower cost, than the government. tion that some of them have had detrimental The President's Budget placed a high priority on effects on individual incentives and resource "privatization," and suggested several activities allocation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 297 To sum up, the benefit from taking credible ments, where the savings tend to grow over actions to curb federal outlays and related credit time. I should note too that, in my view, you run demands will be enormous. Over the longer run, little risk of setting deficit-reduction objectives lower deficits will absorb less of our private that would be excessive in macroeconomic saving and, all else equal, allow private invest- terms, given the broad constraints of political ment to flourish. Moreover, a clear demonstra- feasibility. And at some point in the future, it tion to the financial markets that the current probably will be desirable to aim—not just for services budget has been set permanently on a smaller deficits—but for outright budgetary surmore favorable track will have a handsome pay- pluses. off currently in terms of lower real interest rates. In closing, let me commend the Congress for As I stated earlier, one way to achieve that initiating the National Economic Commission. outcome is to exploit the "wedge effect" arising The Commissioners face an extremely difficult from reductions in programs such as entitle- challenge, and I wish them well. • Chairman Greenspan presented identical testimony before the House Committee on the Budget, March 3, 1988. Statement by Manuel H. Johnson, Vice Chair- countries. Above all, it has laid the foundation man, Board of Governors of the Federal Reserve for borrowing countries to resume sustainable System, before the Subcommittee on Interna- economic growth while maintaining orderly debt tional Development Institutions and Finance and servicing. the Subcommittee on International Finance, Trade and Monetary Policy of the Committee on Banking, Finance and Urban Affairs, U.S. ROLE OF BORROWING COUNTRIES House of Representatives, March 9, 1988. Many of the borrowing countries have shown I am pleased to have this opportunity to appear constructive responses in the face of adversity. before these two subcommittees and to assess They have demonstrated the political capacity the international debt situation in light of recent and the will to pursue sound economic policies, developments. despite at times facing adverse external develop- At the outset, let me state that despite occa- ments. In contrast to the "inward" looking polsional setbacks I see no workable alternative to icies followed by many of these countries in the the case-by-case approach of dealing with inter- fiscal, monetary, exchange rate, and structural national debt problems in the framework that areas for several years before the onset of the Secretary Baker put forward in Seoul. This ap- debt crisis, many of these countries have adopted proach has achieved considerable progress, for stabilization programs in recent years that repremore than many observers have given it credit. sent a distinct change from the past. That basic framework has involved a cooperative Moreover, many leaders of borrowing counenterprise by the borrowing countries, the indus- tries have recognized the need to restructure trial countries, the international lending institu- their economies by correcting economic and fitions, and the commercial banks. nancial distortions. They also have acknowl- The ongoing efforts to deal with the interna- edged the benefit of greater emphasis on the tional debt problem have been far from static. private sector in development. In several bor- Over time, the various aspects of these efforts rowing countries, incentives to private industry have been modified. The approach to the debt have been strengthened by the removal of price problem has been adaptive and has allowed for controls, reduction of trade barriers, and the differences in the circumstances of individual simplification of regulations and licensing re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

298 Federal Reserve Bulletin • May 1988 quirements. Similarly, some public enterprises ROLE OF INDUSTRIAL COUNTRIES have been privatized or the scope and operation of state-owned enterprises have been rational- A favorable economic, financial, and trade enviized. ronment in industrial countries is essential for the Some positive results of this shift in policy borrowing countries to continue their progress. emphasis are already evident in many of the Economic policies in industrial countries need to borrowing countries—a resumption of economic continue to be directed at achieving sustainable growth, a dramatic improvement in external ac- economic growth, while at'the same time seeking counts, and lower public sector deficits. Changes to correct large global payments imbalances. The in the economic policy environment also have need for adjustment and sound economic manled to more efficient utilization of domestic re- agement is not only a prescription for developing sources and have improved the incentives to countries but applies equally to industrial counsave domestically. The establishment of confi- tries. dence among local citizens has led to a halt The slow growth and high levels of unemployand even a reversal of capital flight and should ment in several Western European countries and lead to increased confidence by nonresident in- persistent large external imbalances in the vestors. United States have generated political pressures Not all of the borrowing countries have partic- for trade protection as an expedient way to ipated evenly in this policy reorientation. Those resolve these problems. Besides being an inefficountries that have been in the forefront in cient policy tool to deal with the problems facing pursuing sounder macroeconomic stabilization these countries, protectionist policies hit the policies and that have adopted structural adjust- developing countries particularly hard. To allow ment policies have shown better results than these countries to grow out of debt, it is essential others that have been reluctant to embrace that their access to the markets of industrial change. For example, several borrowing coun- countries remain open and be allowed to expand. tries that have adopted realistic exchange rates In this connection, it is noteworthy that imports have recorded impressive gains in their exports by Japan and by Western European countries in recent years, particularly of nontraditional from the main borrowing countries are relatively exports, while those countries that have main- small and have shown little or no growth in tained overvalued exchange rates have experi- recent years. enced stagnant export growth. The maintenance of orderly debt servicing has been a challenge for many of the borrowing ROLE OF INTERNATIONAL LENDING countries. Despite political pressures to take INSTITUTIONS unilateral actions regarding debt-servicing obligations, responsible leaders of these countries The third component in the cooperative effort to have recognized the benefits to be derived from deal with the international debt problem involves being a functioning participant in the interna- the international lending institutions. The Intertional financial system. Trying to withdraw from national Monetary Fund (IMF) and the World the system could be costly. Brazilian leaders Bank have played constructive roles in assisting have recently acknowledged that Brazil's inter- the borrowing countries. In the period ahead, ests were not served or attained by last year's these institutions will continue to be relied upon debt-servicing moratorium. The normalization of to act as catalysts in mobilizing financial support Brazil's relations with its creditors, which ap- by other creditors and to help guide the adjustpears to be proceeding in a constructive manner, ment and structural reform policies of the bornot only promises to restore orderly debt-ser- rowing countries. vicing arrangements for Brazil and access to The IMF has played a major role in arranging international credit markets but also can facili- financing arrangements for the borrowing countate Brazil's achievement of its immense poten- tries. The recent approval of the Enhanced tial. Structural Adjustment Facility and current ef- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 299 forts to modify the Fund's lending programs debtor countries that have been endorsed by the illustrate a willingness to strengthen the capacity IMF. However, the amount of net external fiof this important institution to adapt to changing nancing provided by banks in recent years is circumstances. considerably less than the gross figures indicate, The financial assistance of the World Bank and because some outstanding debts to banks have that institution's role in contributing to structural been repaid. adjustment programs being introduced in a num- Debt retirement—either outright via amortizaber of borrowing countries have taken on greater tion or through conversion into alternative finanimportance in recent years. The recent agree- cial instruments—is in general not a substitute ment in the World Bank Executive Board to for new money. But some elements of the recommend a sizable General Capital Increase, "menu" approach (proposed by Secretary Baker if approved by national authorities, should assist last year) can be useful in reducing the outstandthe World Bank to play a key role in continu- ing debts of borrowing countries, thereby iming to assist the developing countries in the proving their financial position. The innovative future. Prompt congressional approval of legisla- talents of bankers have not yet been tapped fully, tion for this capital increase when it is sub- and I expect that we shall see additional techmitted to the Congress will provide assurance niques developed in the period ahead. that the World Bank will be able to fulfill its role in this area. In assisting the borrowing countries, the inter- RESERVING BY BANKS national lending institutions must be sensitive to the circumstances of these countries. As we have I believe that actions by certain U.S. banks to learned from experience in recent years, the increase their reserves against loans to developstabilization and structural adjustment programs ing countries have been overinterpreted by the arranged under the auspices of the IMF and the market, and perhaps by some officials of debtor World Bank will be more effective if they are countries. A decision by a bank to establish a "home grown" and have domestic support. reserve may reflect the judgment of that bank's management on the ultimate collectability of some part of its loan portfolio. However, that ROLE OF COMMERCIAL BANKS decision may also reflect a bank's plans for adjusting its loan portfolio by disposing of certain Commercial banks have a substantial stake in the loans, perhaps over a considerable period. Under success of adjustment by the debtor countries. generally accepted accounting principles, once a For the largest international banks, their stake decision is made to dispose of loans the net derives from their long-term business strategy as carrying value of those loans must be adjusted to worldwide multinational banks. Multinational fair market value. Because reserving is an indibanks have an interest in finding ways to reward vidual decision, made in light of the bank's own and reinforce good policies in debtor countries, circumstances and its overall business strategy, since it is ultimately through sound economic differences among banks regarding reserving are policies that the adjustment will occur. to be expected. A return to sound policies should be accompa- That is particularly true for international crednied by continued availability of new external its because there are greater differences between financing. Commercial banks, to whom the bor- banks' judgments and strategies on these credits rowing countries owe a major portion of their than on problem domestic credits. It is generally external debt, continue to have a self-interest in easier to assess the financial prospects of a helping the borrowing countries restore an or- commercial concern than of a sovereign country derly debt-servicing capability. Over the past few when the outcome will depend importantly on years, banks have provided new funds, gen- the policies of the country concerned. Judgments erally through so-called concerted lending in on present and future policies are likely to differ connection with stabilization efforts by the widely, especially when banks have limited in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

300 Federal Reserve Bulletin • May 1988 ternational experience. Similarly, strategies vary tages for all parties. Thus, the Mexican exchange among banks, depending on their overall com- offer appears to have been a useful effort to mitments to international lending and the time reduce marginally the outstanding stock of Mexframes in which they envision working out their ican debt and to permit banks to adjust their positions. portfolios. The significance of bank decisions to set up Another technique that has contributed to reserves depends on the actions that are associ- ameliorating debt problems has been debt-forated with reserving. Some U.S. regional banks equity swaps. As you are aware, the Federal coupled reserving actions in late 1987 with sales Reserve recently further liberalized its regulaof loans in the secondary market. In total, sales tions to enable bank holding companies to make announced by regional banks amounted to a few investments in up to 40 percent of the shares of hundred million dollars of market value. any private sector company in a heavily indebted U.S. international banks that have established country, and also substantially lengthened the reserves have engaged in debt-for-equity swaps permissible holding period for investments made as well as other loan swaps and exchanges, through debt-for-equity swaps. In a number of including the recent Mexican exchange offer. countries, debt conversions have resulted in re- These transactions have been relatively small in ductions in outstanding debts of the countries comparison with the exposure of the major concerned. But the contribution that these swaps banks. Moreover, these banks have not with- can make to helping investment in the debtor drawn from participating in the overall adjust- countries may be as important as the impact on ment process through new money packages. the level of outstanding debt, since it is ulti- The Federal Reserve and other federal bank mately through investment and reallocation of supervisors have strongly encouraged banks in resources in the debtor countries that the adjustrecent years to strengthen their capital positions. ment process must take place. This can occur in the form of retained earnings, including net additions to reserves, or from the proceeds of security issues. Within broad limits, CONCLUSION decisions on how best to add to capital and strengthen the financial resources of banks are Despite the considerable progress achieved over appropriately left to the individual banks. How- the past six years in dealing with debt problems, ever, because of the great attention that has been we have a way to go before being able to declare focused on reserving actions, we must recognize that these problems are behind us. The dimenthat there is a systemic risk if officials of debtor sions are complex and of a long-term nature. countries interpret additions to bank reserves as The current approach, which allows for differpresaging a withdrawal by these banks from the ences in the circumstances of particular counadjustment process. tries, offers the best prospects for continued As part of the menu approach, banks can adjustment and resumed access to external fiwithdraw from new money packages via exit nance by the borrowing countries. The search for instruments, and this may be particularly appro- a universal solution to the international debt priate for those smaller banks that have no real problem that will be demonstrably preferable to long-term interest or expertise to be part of the the flexible case-by-case approach currently beinternational lending market. Some banks have ing followed appears to be elusive. At the same taken advantage of the opportunity to do so time, we need to continue to be ready to adapt through the Mexican exchange offer. Slimming the current approach in light of changing circumdown the number of banks involved in new stances and new opportunities. An open mind money packages in ways such as this offers should be kept for all options that may prove promise of simplifying the process, with advan- applicable to specific situations. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 301 Statement by Alan Greenspan, Chairman, Board added to the general uncertainty regarding longof Governors of the Federal Reserve System, er-run price prospects. before the Joint Economic Committee, March For much of the year, Federal Reserve policy 15, 1988. leaned in the direction of countering potential inflationary tendencies in the economy, while I am pleased to appear before this committee to seeking to maintain a monetary and financial discuss the current economic situation and the environment compatible with sustainable outlook for 1988. As you know, the Federal growth. The discount rate was raised on one Reserve submitted its semiannual report on mon- occasion, and growth in M2 ran lower than the etary policy to the Congress about three weeks target range that the Federal Open Market Comearlier. That report and the accompanying testi- mittee had established early in the year. In view mony discussed in some detail the monetary of the very rapid money growth of 1986, the policy developments of 1987 and the Federal perceived inflation risks, the strength in the real Open Market Committee's (FOMC's) policy tar- economy, and the marked variations in money gets for 1988. Today, I would like to summarize velocity in recent years, modest growth of the briefly the main points of those reports and then monetary aggregates was viewed as acceptable turn to some more general considerations, par- and appropriate. ticularly the process of external adjustment that The stock market crash of late October shifted is now under way and the challenge that it poses the balance of risks, and the Federal Reserve to our economy. modified its approach to monetary policy accord- The overall record shows 1987 to have been an- ingly. In particular, we took steps to ensure other year of significant economic progress. Real adequate liquidity in the financial system during gross national product rose nearly 4 percent over the period of serious turmoil, and we encouraged the course of the year, job growth totaled 3 million, some decline in short-term interest rates as a and the unemployment rate declined to 53A per- precaution against the possibility of a significant cent, its lowest level of the current decade. retrenchment by households and businesses. Some sectors that had lagged earlier in the While some uneasiness still is apparent in the recovery exhibited particular strength last year. financial markets, the situation has calmed con- Buoyed by rising exports and a pickup in capital siderably since October. Interest rates have spending, industrial production in manufacturing come down noticeably, and exchange rate pressurged 5Vz percent over the 12 months of 1987, sures have moderated. In the real economy a and capacity utilization rose to its highest level buildup in business inventories late last year, in nearly 8 years. Capacity use in the steel coupled with the possibility that effects of the business was about 90 percent at the end of 1987, stock market crash might still be working up from 65 percent a year earlier. Improvement through, suggested at the turn of the year that the also was evident in mining, oil extraction, and growth of real GNP might slow in the first part of agriculture. 1988. However, employment has continued to The year, however, was not without its set- advance early this year, and at present, deep or backs. Inflation, which had dropped sharply in prolonged cutbacks in production do not seem 1986, increased in 1987, owing to the bounceback likely. Consumer spending seems to be holding in oil prices and to the effects of the dollar's its own, export prospects remain favorable, and decline on prices of imported goods and their capital goods orders have been strong. Overall, domestic substitutes. Concerns that these one- the chances appear relatively good for maintaintime price changes might trigger a more pro- ing the current expansion through another year. nounced and more deeply rooted upswing in As of mid-February, the central tendency of the inflation persisted through late summer, surfac- forecasts of FOMC members and other Reserve ing, at one time or another, in the form of upward Bank presidents was for growth of real GNP of pressures on commodity prices or rising long- about 2 to 2Vi percent from the fourth quarter of term interest rates. Under these conditions, fur- 1987 to the fourth quarter of 1988; this is a slower ther declines in the exchange value of the dollar rate of growth than in 1987, but is probably close Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

302 Federal Reserve Bulletin • May 1988 to what the economy can maintain on a long-run being the firm down the road or in the next city or basis. Exports seem likely to provide a major state, not the producer on the other side of the impetus for growth in 1988, while the growth in world. We recognized, of course, that American domestic demand may be relatively slow. economic activity and policies materially af- With respect to inflation, price increases have fected the rest of the world. Developments outpicked up in some markets this past year. How- side our borders, however, appeared to have ever, in general, business and labor still seem to little impact on economic activity in this country. be exercising a considerable degree of restraint in This has all changed in recent years. Our their wage and price-setting behavior, and bot- economy today is being driven by external forces tlenecks are not a serious problem at the present and is coming to resemble more nearly the open, time. Should the FOMC's forecasts of moderate trade-based economies of Europe than the insugrowth of real GNP over the coming year be lated economy of our own past. We are increasrealized, this situation is not likely to change ingly affected by developments outside our bormuch. The central-tendency forecast of the ders and need to learn to do business there. FOMC was for a rise in prices, as measured by Despite the attendant complications, our own the GNP deflator, of about 3!/4 to 33A percent in policies are going to have to be shaped with close 1988—similar to the inflation performance in surveillance of what is happening in the rest of most recent years. the world. The central tendency of our projections for Particularly striking evidence of a changed real growth of GNP encompasses the administra- economic climate was the deterioration of our tion forecast that you are reviewing today; the external balance over the first half of the 1980s, a central-tendency range for inflation is slightly period in which import growth far outpaced the below the administration forecast, but the differ- rise in exports. The causes of this imbalance ence is not significant. were complex, but its effects on consumers and In formulating its policy objectives for 1988, businesses were relatively clear. Consumers benthe Federal Open Market Committee, at its mid- efited from having access to a broad range of February meeting, established monetary target good-quality imports, while the producing secranges of 4 to 8 percent for both M2 and M3 over tors that are heavily affected by foreign trade the four quarters of 1988. Expansion of money suffered a loss of market share, both domestiwithin these ranges is expected to support con- cally and worldwide. In manufacturing, which tinued economic growth at a pace that is consis- accounts for nearly two-thirds of our exports, tent with progress over time toward price stabil- production was sluggish, layoffs mounted, and ity. In recent years, of course, the relation of pressures for protectionism rose. Agriculture money to income has not been very stable. also suffered as the export boom of the 1970s Accordingly, as the coming year unfolds, we will turned into the export bust of the 1980s. Overall, continue to keep a close eye not only on the from mid-1980 to the summer of 1986, real net behavior of the aggregates but also on the overall exports of goods and services fell by an amount performance of the economy. equal to 6 percent of real GNP. Although the near-term prospects thus look Fortunately, this situation has started to reasonably encouraging, major uncertainties re- change. In volume terms, our external sector has main and we should not be complacent about the been improving and accounted for nearly Vi of a nation's economic future. To a considerable ex- percentage point of GNP growth over the four tent, we still are sailing in uncharted waters and quarters of 1987. As I noted earlier, manufacturare facing adjustments that have no precedent in ing growth was especially robust last year, and our recent history. A couple of decades earlier, the current backlog of orders suggests that facwe still viewed our economy as being relatively tory output should be well maintained over the self-contained. We thought of business cycles near term. largely in terms of domestic spending, invento- However, just as the deterioration of our exries, and production; foreign trade did not play a ternal account created serious dislocations for major role. Businesses saw their competition as the domestic economy in recent years, the swing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 303 back toward better balance also may create dif- prices. Ideally, one can conceive of a strengthficulties, though of a different nature. These ening of exports meshing neatly with a slowing of adjustments—and the way that we deal with domestic spending in such a way as to maintain them—will go far toward shaping the economic utilization levels for labor and capital without outlook for several years to come. overheating. Certainly, if, as I noted earlier, Let me illustrate by drawing some compari- growth is moderate in the period ahead, bottlesons between the current situation and other necks should not be a serious problem. Realistiepisodes from our recent economic history. cally, however, one has to recognize that events When real exports bottomed out in the summer in the real world may not mesh as neatly as of 1986, the nation's total spending for goods and contemplated and that the adjustment may not services, including inventory investment, ex- proceed as smoothly as we would like. ceeded the comparable domestic production of Although the exact path of adjustment cannot goods and services by about 4lA percent, a gap be predicted with precision, we know that there unprecedented for the postwar period. By com- are several actions that can be taken to help parison, production and spending were closely make the process smoother than would othermatched throughout much of the 1950s and wise be the case. 1960s; and even in the more volatile decade of Monetary policy needs to remain supportive of the 1970s, spending did not depart from produc- the expansion but also alert to the possibility of a tion by more than a couple of percentage points. reemergence of inflation. Policymakers must be Those smaller gaps of the 1970s eventually especially mindful that the cost of temporizing in closed, largely because of growth in the volume the face of accumulating price pressures would of exports. But the transitions back toward ex- be a far more serious and painful adjustment ternal balance were not smooth, either in the down the road. early part of the decade or in the late 1970s. After several years of debate, the Congress is Rather, the transitions were marked by strongly understandably tired of wrestling with the budget competing demands on domestic resources, an deficit issue. The temptation is great to lay it overheating of product markets, and widespread aside for a year or permit small retreats from the inflationary pressures. real progress that has been achieved to date. Of course, history does not have to repeat However, there are risks in delaying or retreatitself, and in harkening back to these past epi- ing, even a little, on an issue of such great sodes, I do not mean to suggest that the economy importance. It is urgent that the Congress fully will inevitably follow a similar path in the years implement the deficit-reduction measures agreed immediately ahead. Indeed, the world is more to in December and continue to consider addicompetitive than it was 10 or 15 years earlier, and tional measures that might be taken to lock in recognition by business and labor of the need to further progress in the out years. stay competitive may help to quell whatever As part of the coming adjustment, this nation latent inflationary tendencies arise. must find ways of generating sufficient domestic What is clear is that a major adjustment is saving to finance investment and maintain the under way. As part of the move back toward productivity gains that are needed to keep us external balance, export growth could place competitive in world markets. Over the course of stronger demands on a domestic resource base the expansion, the adverse implications of a low that already is operating at high levels of utiliza- domestic saving rate have been temporarily obtion in some areas. To date, lead times in the scured, as a large inflow of capital from abroad deliveries of production materials remain moder- has made it possible to finance a large federal ate, implying for the moment little pressure from deficit and a high level of consumption and capacity restraints. Nevertheless, our experience investment spending without undue pressures on from the 1970s, when smaller external adjust- the credit markets. However, there are limits to ments took place, should make us cautious about how long a country can depend upon savings thinking that this adjustment can be accom- from abroad, and at some point we will have to plished without some upward pressures on revert to financing our future from our own Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

304 Federal Reserve Bulletin • May 1988 resources. Indeed, the pressures experienced in verse. Other countries need to promote growth in the foreign exchange and financial markets last their economies, reduce trade barriers, and in year suggest that those limits are closer than they general ensure receptive markets for exports were before. from the United States and elsewhere. The Nor can we count on a major pickup in private chances of attaining access to markets abroad saving. We have endeavored in recent decades to would be damaged, of course, if the United implement tax policies to augment household and States itself were to embrace greater protectionbusiness saving; however, these policies have ism, a temptation that I earnestly hope we will not been demonstrably successful. Accordingly, avoid. it will become doubly important for the federal Let me conclude by saying that I view the government to reduce its demands on the credit outlook as satisfactory, but not without risks. markets by cutting the budget deficit. Indeed, as Our economy was dealt a potentially severe I have suggested previously, we may have to shock last October, and, at present, we seem to consider at some point whether the nation's in- be weathering that shock perhaps better than ability to boost private saving argues for a might have been expected. Looking ahead, we federal budget policy aimed at generating sur- know that the economy will be heavily influenced pluses. by the ongoing correction of fundamental inter- Foreign governments also must play a part if nal and external imbalances. However, the broad the adjustment process is to work smoothly in contours of the coming adjustment are relatively the context of a growing world economy. During clear and should not come to us as a surprise. most of this expansion, the purchases of goods Although our place in the world is changing, the by U.S. businesses and households have pro- future can be prosperous if we remain attentive vided a strong impetus for production gains to the course of events and take those actions abroad. Now that process must work in re- that we know are needed. • Statement by William Taylor, Staff Director, funds. The Federal Reserve thus concurs in Division of Banking Supervision and Regulation, the subcommittee's conclusion that this ap- Board of Governors of the Federal Reserve Sys- praisal record stands in need of improvetem, before the Subcommittee on Commerce, ment. Consumer, and Monetary Affairs of the Commit- Faulty and fraudulent real estate appraisals are tee on Government Operations, U.S. House of but one of the elements responsible for the Representatives, March 15, 1988. serious dislocations that have developed in real estate markets over the present decade. Indeed, I am pleased to appear before this subcommittee the most important such elements are the fundatoday to discuss the Real Estate Reform Act of mental changes that have occurred in economic 1987 (H.R. 3675), an act that would establish a conditions. One such change has been the sharp federal interagency council charged with the mis- and unexpected shift from high and accelerating sion of promoting throughout the United States conditions of inflation that had prevailed in the real estate appraisals formulated by qualified late 1970s to the relatively stable price conditions appraisers in accordance with high industry stan- of the 1980s. Another change has been the dards. marked weakening in the energy and agricultural As the work of this subcommittee and its staff sectors, which has had especially severe consehas extensively documented, there have been quences in certain states and regions. As a result far too many appraisals prepared in either a of this confluence of developments, real estate markets that once offered what seemed to be faulty or fraudulent way over this decade, and unlimited promise have been dampened by harsh that has resulted in substantial costs to lenders, economic realities. Real estate projects that had investors, and the federal deposit insurance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 305 been planned and constructed on the expectation RESPONSES TO THE PROBLEM of continued prosperity accompanied by booming demand have come to fruition in markets As a response to the substantial problems in the afflicted with high vacancy rates and no percep- real estate markets, there have been widespread tible prospects for a significant near-term turn- efforts to review appraisal procedures and poliaround. As a consequence, real estate prices cies with the objectives of promoting more accuhave declined substantially, and cash flows, in all rate valuation and more effective lending stantoo many cases, have failed to match projections, dards. The federal banking regulators have an making it necessary for lenders to renegotiate important role to play in these efforts. Assessing loan terms or to take over underlying collateral. loan quality is, as you know, a critical compo- And, of course, the depressed conditions in nent of the examination process. As regulators, the agriculture sector generated similar pres- we understand the necessity of accurate valuasures on prices of agricultural land, and also tions of underlying collateral, and have emphamade it necessary for lenders to make adjust- sized to banking organizations and to our examments to the terms and conditions of loans on iners the need for effective appraisal policies and farmland. practices. Deficient real estate lending practices and pro- Over the past two years, the banking regulacedures have also played an important contrib- tors have undertaken a thorough review of their uting role in real estate problems experienced policies governing the supervision of real estate over the decade. Lenders, caught up in the lending procedures. As a result of this review, optimism of the times, extended loans under very the banking agencies have issued uniform guideliberal terms and conditions relative to time- lines for the examiners and the institutions they tested standards. Too great a dependence was supervise. placed on collateral backing a real estate loan In 1986, the Federal Reserve issued guidelines without careful and appropriate regard given to for its bank examiners that reiterate and emphathe ability of the borrower to repay. And, judg- size important steps that should be followed in ments on the quality of collateral rested too reviewing and classifying troubled real estate heavily on an expected general rise in real estate loans. The guidelines set down a list of warning values rather than on a careful assessment of the signs to help examiners to identify problems in potential for individual properties to generate the real estate loan portfolios of banks. The cash flows under prevailing economic conditions guidelines also stressed that examiners should adequate to cover debt-servicing costs and other pay particular attention to assumptions and proexpenses. jections that underlie an appraisal's estimation of As this committee has documented, apprais- property value to make sure that they are coners—certainly not the majority but a significant sistent with current market conditions. minority—have also failed to carry out their Last December, the banking agencies jointly responsibilities in accordance with long-recog- issued guidelines on real estate appraisal policies nized principles of valuation. In some cases, and review procedures for the boards of directors appraisers allowed themselves to become overly of banks that they supervise. A major objective influenced by the general optimism of the times of these guidelines is to emphasize the fundamenin reaching estimates of cash flow and resultant tal responsibility of boards of directors both to property values; in other cases, to maintain or establish a well-defined and effective real estate attract new business, they yielded to pressures appraisal policy consistent with industry stanfrom developers and lenders to value properties dards and to put into place procedures to assure without proper respect for the realistic cash flow adherence to that policy. By way of direction to potential of the project. And, in some cases, assist in carrying out those responsibilities, the appraisers stepped beyond the line of utilizing guidelines stress that such policies should require sloppy procedures and loose assumptions and that appraisals be prepared in accordance with colluded fraudulently with borrowers and lenders recognized industry standards by qualified perin the overstatement of property values. sons that are independent of—that is have no Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

306 Federal Reserve Bulletin • May 1988 financial or other relevant interest in—the prop- tives, of course, would be fostered with the erty they are appraising. The guidelines also enactment of H.R. 3675. And so, the bill has a specify the important need to have procedures in very obvious appeal. At the same time, however, place that will assure a routine review of apprais- the bill would establish yet another federal als when economic conditions are deteriorating. agency. And, moreover, the agency would be As I have indicated, many other entities have composed of many existing federal agencies, also taken action over the recent past for the each with disparate missions and procedures. purpose of strengthening policies and procedures Thus, it would appear that the decision process pertaining to real estate appraisals. The Federal of the council might prove cumbersome and Home Loan Bank System, for example, after a time-consuming and result in the issuance of long period of extensive review and evaluation of rules and regulations not sufficiently flexible to its policies and procedures, recently adopted a be readily adoptable to practices and procedures new regulation and a supplementary policy state- particular to local real estate markets. ment pertaining to real estate appraisals that are consistent with those of the banking agencies. Also deserving of mention are actions that finan- SUMMARY cial institutions have initiated to strengthen their own policies and procedures, actions that are And so, in summary, it is clear from the work of best understood as being a reaction to the disci- this subcommittee and from our own experience pline that market forces have been imposing in that there have been abuses in the appraisal recent years on lenders that failed to follow industry—some abuses of judgment and some sound policies and practices. abuses of character. Thus the need for actions to And last, but not least, one should mention the strengthen the appraisal process has been clearly important progress that the appraisal industry demonstrated. Moreover, I might note that the has made to upgrade real estate appraisal prac- growing trend toward securitization of real estate tices. The eight major appraisal societies have loans places an added emphasis on the need to recently formed a foundation to establish com- strengthen standards because the success of this monly accepted standards for real estate apprais- process relies so heavily on objective and profesals and qualifications for real estate appraisers. sional assessments of collateral values. The foundation, moreover, has already success- Much has been done to respond to the need for fully promulgated standards for real estate ap- improved appraisal practices and procedures. praisals and, I understand, is well on the way We at the federal banking agencies, with this toward specifying qualifications that persons subcommittee's urging, have reviewed, updated, should meet to become certified appraisers. The and standardized our policy on real estate ap- Appraisal Foundation also has developed model praisals. Other federal agencies and private lendlegislation for the consideration by the states, ers have also taken important steps to encourage and a number of states have such legislation more effective appraisal practices and proceunder active consideration. The suggested legis- dures. And, the various associations of profeslation places the function of certification of ap- sional appraisers have banded together to uppraisers with the states and provides for the state grade the product and reputation of their to enforce adherence to sound appraisal policies. profession through the formation of the Ap- There would seem to be clear benefits to be praisal Foundation. The foundation has already gained if appraisers in each state in the nation issued uniform appraisal standards, is now develwere required to meet the high qualification oping certification criteria for appraisers, and has standards that recent experience has demon- drafted model implementation legislation for enstrated is needed. There also appear to be clear actment by state legislatures. All of these efforts advantages in having the states play a more are positive and responsive to the problems that active role in on-the-scene administering and have been identified in real estate appraisal acenforcing of appraisal standards and appraiser tivities over the decade. Thus, while we support certification. Each of those very desirable objec- the basic objectives embodied in H.R. 3675—the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 307 establishment of high appraisal standards and ment of private-sector solutions as put forth by certification criteria for appraisers—it seems the Appraisal Foundation rather than by the preferable to encourage the continued develop- formation of a new federal agency. • Statement by Martha R. Seger, Member, Board • That the agencies assess the community of Governors of the Federal Reserve System, lending records of the institutions they supervise before the Committee on Banking, Housing, and as part of their examinations. Urban Affairs, U.S. Senate, March 23, 1988. • That the agencies take the institution's record into account when considering certain applications. I am pleased to be here today to discuss the The Federal Reserve thus has a three-part Community Reinvestment Act (CRA) and the program in place to address these mandates. I role that the Federal Reserve has played in propose to discuss the various elements of our administering it. A good deal of time, thought, program in my testimony today, as well as to and effort has been invested by both the Board discuss some of the issues that we have conand the Reserve Banks in trying to carry out our fronted over the years in dealing with CRA. In CRA responsibilities effectively and fairly. As doing so, I may touch upon the questions you the Board member responsible for our proraised in your letters of October 22, 1987, and gram of compliance with the CRA and the other December 23, 1987. In the interest of time, I do consumer protection laws, these issues have not propose to respond in detail to those quesreceived a great deal of my own thought and tions in my statement since that was done in attention. I believe that it is appropriate, even Chairman Greenspan's letter of January 27 to essential, that we periodically stop and reflect you. I will, however, be pleased to take any on what we have been doing with respect questions you may have regarding either my to this law, as well as the other laws for testimony or the material that was submitted in which we are responsible. Consequently, I am response to your letters. very interested in learning what we might do to improve in the future. I compliment the committee for holding these hearings. I believe THE FEDERAL RESERVE S OVERALL that they are timely and will help us all do a PROGRAM better job of administering this important law. The Federal Reserve's overall program for deal- As stated in the statute, the CRA was enacted ing with its CRA responsibilities consists of a in the belief that financial institutions have a compliance examination program, a community responsibility to meet the credit needs of their affairs program, and a program for dealing with entire local communities, including the low- and applications by banks and holding companies moderate-income neighborhoods, consistent when CRA issues arise. In 1978 the Board and with the safe and sound operation of the institu- the other agencies published Regulation BB to tion. The act's mandates are, however, directed implement the statute. The regulation sets out in the first instance at the federal financial super- several specific requirements that financial instivisory agencies. In their most basic terms they tutions must address, such as the requirement are the following: that the institution delineate its community, de- • That the agencies encourage the financial velop a CRA statement that indicates the types of institutions they supervise to meet the credit lending the institution is prepared to extend in its needs of the communities they serve, including community, provide a CRA public notice, and the low-and moderate-income neighborhoods in maintain a public comment file. It also sets out those communities. the criteria that the agencies will use in reviewing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

308 Federal Reserve Bulletin • May 1988 CRA performance, including evidence of the cialization and that the knowledge and expertise institution's efforts to assess its community's necessary to deal effectively with these laws needs, its marketing of credit services to the require it. entire community, and its efforts to ensure that Our examiners are hired and managed by each lending programs do not improperly exclude any Reserve Bank and participate in the examinageographic areas or illegally discriminate. The tions of state member banks in their own Disassessment factors also include a bank's record tricts. The Board here in Washington sets policy of opening and closing offices, its participation in for the program and also provides oversight and community development projects and in govern- support for the Reserve Banks. The Board also ment-guaranteed or sponsored loan programs, organizes the uniform training program for the and the bank's residential, small business, and examiners, although most of the Reserve Banks small farm lending programs. We also review the also provide more individualized and localized extent that the institution's board of directors training, as well. participates in formulating its CRA policies and When the program was begun, we examined in overseeing their implementation. In fact, I each state member bank at least once a year. believe that the overall intent of these assess- Over the years we have increased the interval ment criteria is to make the CRA process an between examinations so that at present banks integral part of the institution's management and with a rating that is better than satisfactory are operational decisionmaking. generally examined every 18 months. Some of The criteria do not, however, set standards for the best-performing banks may have as many as the type and amount of lending that should be 24 months between examinations. Banks with done, nor do they favor one form of lending over less satisfactory records are examined at a oneanother. This is important to keep in mind since year interval or more frequently, however. I am concerned that the CRA has become, over These changes in the frequency of examination the years, synonymous with home lending in the were prompted by two primary factors. First, we minds of many. The regulation, however, does found that after some years at the shorter internot reflect such a leaning. It reflects the very val, a longer period between examinations strong belief that a long list of other forms of proved sufficient to assure an adequate level of lending are just as important to the communities oversight. After several examinations, an 18of this nation. This is particularly critical to the month interval between examinations enabled us Federal Reserve, since many banks, which are to see and measure progress or change within a the institutions we supervise, have not chosen to particular bank in the great majority of cases. specialize in home lending, preferring not to Second, the Board committed to observe the engage heavily in the long-term mortgage mar- "spirit" of Gramm-Rudman-Hollings, and the ket. We believe, however, that these banks still compliance program, like virtually all of the Sysplay a valuable part in meeting other needs of tem's programs, had to share in the resulting cuts. their communities. Despite fine-tuning such as this over the years, our compliance examination program has re- THE COMPLIANCE EXAMINATION PROGRAM tained its essentially specialized character, and our goal has been to maintain a solid and profes- The Federal Reserve's compliance examination sional program. We try to produce an examinaprogram was begun in 1977.1 want to emphasize tion report that is useful to the bank's managethat, within the Federal Reserve System, this is a ment by pointing out both its strengths and specialized program that is carried out by exam- weaknesses and by suggesting how to enhance iners who are specifically trained in consumer the former and to minimize the latter. Our examcompliance and CRA issues and whose primary iners have contacted thousands of members of job is to conduct reviews and to produce reports the communities in which they have conducted that deal exclusively with consumer compliance examinations—everyone from local government and with the CRA. We believe that the impor- agencies to small businesses to grassroots community organizations—in an attempt to undertance of this program warrants this kind of spe- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 309 stand the needs of the community that the bank Banks have undertaken additional initiatives, serves. With this information, we try to encour- such as publishing periodicals that deal with age the bank to meet those needs. We believe community lending subject matter; producing that our examiners' efforts have been significant, resource books on the programs for community evenhanded, and useful to the banks and their development lending in which a bank might wish local communities. to participate; forming community lender forums in communities in their Districts to provide mu- THE COMMUNITY AFFAIRS PROGRAM tual education about community development opportunities and techniques; and producing As an outgrowth of our experience in dealing community profiles designed to help lenders and with the CRA, we have developed one particu- others in the community know what the needs larly noteworthy area of special expertise to are, what resources are available, and what conwork with and encourage the banks. That is, in tribution the various interests might make. All of 1980 the Board began its formal community these efforts are, we believe, consistent with the affairs program. We have learned that commu- act's mandate that we "encourage" financial instinity development lending, when done properly, tutions to meet the credit needs of their communican benefit both the bank and the community. ties. The attachments to my testimony provide However, many banks have been hesitant about more specific information about these and other involving themselves in the more complicated activities of our community affairs program.1 I programs and techniques demanded by economic have also brought some other materials that repredevelopment lending. This hesitancy has been sent these activities that I would like to have caused primarily, we believe, by a lack of edu- included in the record of these hearings. cation. We have also found that many members I would like to take just a moment to speak of the communities that the banks served, includ- about three areas of endeavor by the Federal ing many of the local governmental lenders, were Reserve and the other agencies in which I am unaware of the productive ways that a bank particularly interested. First, for about a year could leverage its resources in a public-private now it has been my privilege to chair the Board partnership to benefit all parties concerned. The of Directors of the Neighborhood Reinvestment main purpose of the Community Affairs program, Corporation. As you are no doubt aware, this therefore, is to develop our own expertise in the organization helps to set up and support the methods and techniques of sound community many Neighborhood Housing Services (NHS) development lending to be able to serve as a corporations around the country. Many members resource for banks and members of the commu- of the Federal Reserve's community affairs pronities in the various Federal Reserve Districts in grams in the Reserve Banks have also particimatters pertaining to safe, sound, productive, pated heavily in this program. and thoughtful community development lending. The second activity that I would like to men- It is the goal of the System's community affairs tion is our work with community development program to become familiar with the credit needs corporations. Since well before the advent of the of the cities, towns, and rural areas in the Federal CRA, the Federal Reserve and the Comptroller Reserve Districts through outreach to those ar- of the Currency have allowed and encouraged eas. Once having identified these needs, our the creation of bank holding company and nacommunity affairs officers try in a variety of ways tional bank community development corporation to work with interested parties to address them. subsidiaries. Community development corpora- For example, over the past three years alone the tions—or "CDCs" as they are called—are corprogram has sponsored 89 conferences and sem- porations chartered to bring the lending, financial inars on opportunities and techniques for com- packaging, and other special talents of the banker munity development lending and other related subjects. On numerous occasions, the Commu- 1. The attachments to this statement are available on nity Affairs staff has also served as speakers at request from Publications Services, Board of Governors of conferences sponsored by others. The Reserve the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

310 Federal Reserve Bulletin • May 1988 to bear on specific community projects. CDCs THE APPLICATIONS PROCESS may focus, for example, on special community needs such as low-income housing or small bus- The third part of the Federal Reserve's program iness revitalization. These corporations have the for responding to the CRA's mandates that I potential for making important contributions to would like to discuss is our process for taking the community revitalization in part because they CRA record of banks and holding companies into are given unusual authority, for example, to take account when considering certain applications. equity positions or own real estate. The Federal When reviewing an application, for example, by Reserve and the Comptroller's office cospon- a holding company to acquire a bank, it is the sored a conference in August 1987 dealing Board's responsibility to see that the applicant with CDCs. The conference was attended by meets numerous criteria. The Board must see to about 200 bankers, and the program has elicited it that all relevant financial and other safety and a good deal of interest among the partici- soundness requirements are met, that the necespants. sary managerial ability will be brought to bear, 1 believe that CDCs and the NHS programs are that no competitive problems would bar aptwo examples of the kind of activity in which proval, and that the convenience and needs of financial institutions can usefully and safely en- the institution's community will be served. The gage as part of an overall CRA-related effort. requirement to serve the community's conve- They are also the kind of thing that we, as nience and needs predates the CRA. Therefore, regulators, can responsibly encourage financial when the CRA was enacted, the analysis it institutions to explore. They represent vehicles, required was logically made a part of the convealready in place, that financial institutions can nience and needs assessment already required by use to engage in public-private partnerships to statute. The CRA analysis thereby became part leverage their resources, both financial and man- of the normal applications processing procedures agerial, to the greatest benefit in pursuit of the of the Federal Reserve System. goals of the CRA. I believe that we, as regula- Dealing with the CRA in the context of the tors, can best use our resources by encouraging applications process has been the part of the the institutions that we supervise to explore program that has raised the most serious conthese and other similar avenues of potential cerns for the Federal Reserve, the financial insticommunity involvement. If we are successful in tutions, and the community groups who have encouraging this type of long-range activity, we claimed a large stake in the process. Frankly, it stand a much better chance of getting ongoing has often been a contentious process and has lending for high quality community development been of great concern to me personally. One rather than instant, and perhaps short-lived, pro- reason for this is simply the sheer numbers of grams calculated to win approval of a particular protests in the past few years. In the CRA's early application. days, the protests were a small part of our work; The final special project that I would like to usually only a handful of cases were handled mention is our work to advise women and minor- each year. However, in recent years the number ities regarding their rights and responsibilities of protested applications has increased markunder the Equal Credit Opportunity Act when edly. In 1987, for example, there were thirty-five, applying for business credit. I believe that when just three years previously, in 1984, there women and minorities are important actors in the were three. business life of our nation's communities, and I In addition, the cases have become more comam particularly proud of the work that we have plex. For example, more applications now indone to help educate them on this important volve interstate acquisitions. The applications subject. In particular, I am proud of the brochure have more frequently involved multiple protests entitled A Guide to Business Credit and the in several cities, often crossing our Federal Re- Equal Credit Opportunity Act that we produced serve District lines. Obviously, that is of little in conjunction with several other public and intrinsic interest to the applicant and the protesprivate organizations and agencies. tant, but it does increase the logistical difficulties Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 311 of gathering the necessary facts and otherwise raised. Typically, it will involve a review of the coordinating the case, especially when significant Home Mortgage Disclosure Act data, any data issues surface. available in Reserve Bank examination files, in- To try to expedite the process and minimize formation supplied by other examining agencies these difficulties, in 1981 the Board published an (including, on occasion, state agencies), any data information statement explaining how it would supplied by the protestant, and information supdeal with CRA issues that were likely to surface plied by the financial institution in response to in the applications process. It has published the protest or in response to a request for inforjointly with the other agencies a Citizens Guide mation from us. The Board considers the types of to CRA to help interested members of the public lending being done in the context of the communknow how to involve themselves in the applica- ity's needs. Consequently, although we believe tions process. The Board has also made adjust- home mortgage lending is important, small busiments to its notice, comment, and public meeting ness, agricultural, and other types of lending are rules to try to assure that interested parties who also ways of meeting important community wish to participate in the applications process needs, as well. can do so. These rules, however, are not rules Our purpose in each case, however, is to conrelating only to the CRA. They are rules that sider all of the facts and exercise our own judgment apply to applications generally and to any com- about the merits of the matter. This has led us to ments by the public they might elicit, no matter approve applications over the objection of proteswhat their subject might be. tants when we believed that the applicant's record Obviously, the ultimate resolution of cases was already consistent with approval. It has also that raise CRA issues has required the Board to led us to obtain commitments for improvement exercise a great deal of judgment because no two when no member of the public objected to the cases present identical facts or issues of policy. application. I believe that that is the essence of The Board chose in the early years of the law's what the law tells us we should do—that is to existence to emphasize obtaining commitments conduct our own review and reach our own confor future improvements when presented with a clusion about the merits of the matter. record that had specific areas of weakness. Of All of this takes time, and time is often the the 112 cases involving CRA protests that the point of contention between the applicant, the Board reviewed between 1978 and 1987, 28 have protesting group, and the Federal Reserve. Many resulted in the applicant committing to the Board of these applications are very time sensitive, and to take specific future actions to correct prob- delay can increase the applicant's costs substanlems with its record. It has been the Board's tially or may cause the deal to fall through. We belief that, as a general matter, working in a feel that we have to be fair to the applicant and to positive vein with these institutions, rather than the protestant. To the extent possible, we try to simply turning down the application, was consis- meet our own processing goals, which have long tent with the law's mandate that we encourage been public and which are designed to address these institutions to meet the credit needs of their other goals of the Board, including timely proccommunities. Moreover, it was not always clear essing of all applications, whether or not the in these cases that the applicant's CRA record CRA is involved. By the same token, we believe was poor enough to deny the application. that we must give thorough consideration to the Of course, we have not always waited for a protestant's substantive concerns, and, if we find protest to prompt a close review of an applicant's problems, that we must take the action we berecord. When we have found problems in an lieve is appropriate. applicant's CRA examination record, either We believe that our processing period is long through our own examiners or those of another enough for all parties to get a fair review of their agency, we have conducted the same kind of views. To help speed this process we urge groups review that we conduct in a protested case. to communicate concerns to the applicants and The type of review conducted in these cases to the Federal Reserve on an ongoing basis, not varies with the circumstances and the issues just when an application is filed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

312 Federal Reserve Bulletin • May 1988 One procedure that has been used to deal with can be in supplying guidance on our expectations the CRA issues that arise in the context of in today's environment, I have asked our staff to applications has been to provide a forum for review our programs, policies, and procedures, protestants and applicants to sit down together in and in particular the 1981 information statement private meetings and to discuss the issues be- to see where we can improve our program, tween themselves. Sometimes these meetings provide the necessary guidance, and make sure have resulted in agreements between the parties. that it is up to date. These agreements are essentially private mat- Nonetheless, I think that we have had, and will ters. We do not believe that the law authorizes us continue to have, a solid, professional, and reto direct banks to make loans of certain types, sponsible program in place to deal with the CRA. with specific terms, in particular amounts, or to Obviously, we can all improve at what we do. specified locations. We believe that lending deci- But I believe that our program of education and sions are best left to the informed judgment of the review of applicants' CRA records and examinalender, taking into account the market situation, tions has been totally consistent with what the the lenders' own business plans and strengths, law told us we should be doing. I expect to go on and all of the credit demands of its community, trying to improve that program and believe we which is consistent with the Community Rein- will thereby help achieve what we all seek—and vestment Act. that is responsible, safe, and sound involvement Obviously, a good deal has changed in the by financial institutions in their communities on a financial world since the CRA was enacted. day-to-day basis. Influences such as interstate compacts, changes I appreciate the opportunity to appear before in technology, and the Monetary Control Act this committee today to discuss this important have significantly affected the way business is subject. I will be pleased to take any questions done. To be sure that we are as responsible as we that the committee might have. • Statement by Alan Greenspan, Chairman, Board there is a pervasive and legitimate sense that of Governors of the Federal Reserve System, acting hastily could inadvertently destabilize the before the Committee on Banking, Housing, and markets, creating the very type of episode that Urban Affairs, U.S. Senate, March 31, 1988. we are endeavoring to avoid. Before taking actions, it is essential that we have as clear an understanding as possible of I appreciate the opportunity to appear once again what happened last October and why. Only when before the Banking Committee today to discuss we have identified the structural problems that initiatives to strengthen financial markets in re- contributed to the severity and rapidity of the sponse to the events of last October. I know that market break can we judge whether or not varithere is some developing impatience in the Con- ous proposed actions in fact address those probgress with respect to the speed with which prog- lems. We must carefully distinguish those probress has been made in formulating proposals to lems that are self-correcting, or can be addressed deal with the questions raised by the October within existing regulatory frameworks, from market crash. Let me say initially, though, that those that will require more fundamental, perwhile the various reports that have analyzed the haps legislative, solutions. crash are extremely helpful, they are limited in As I indicated in my testimony before this addressing some very complex matters. We are committee on February 2, I believe that the caught in the dilemma of concern that latent severity and rapidity of the plunge on October structural defects will not be quickly addressed 19th were, in a sense, the outcome of a confronand hence, under a repeat of circumstances of tation between dramatically changing computer last October, similar outcomes would obtain. Yet and telecommunications technology and un- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 313 changing human nature. The new technology has importantly, to strengthen the financial position enabled market participants around the world to of participants in the clearing and settlement respond almost instantaneously both to changing process so that arbitrage will not be inhibited. external events and to the internal price dynam- Specifically, there is no substitute for ample ics of stock and derivative-products markets. In capital to allay fears of potential insolvency of a market of rapid and large price movements, the principals on the other side of a contemplated heightened uncertainty and fear lead people to trade. pull back—to disengage, to withdraw from, or to avoid commitments. When the consolidated positions of all market participants are net long, FINANCIAL DEVELOPMENTS such as in equities, disengagement means net SINCE LAST OCTOBER sales, and hence lower prices. On October 19th and immediately thereafter, The immediate uncertainty and fear that surone could observe the interaction between tech- rounded us in mid-October have eased. The nology and human nature quite clearly: the news passage of time has provided us the opportunity of sharply falling stock prices, communicated to assess developments in securities markets and instantly to a sensitive investment community, the reactions of the private sector to the lessons triggered an avalanche of sell orders on both of "Black Monday." As a result, it is becoming futures and stock exchanges. The overloading of possible to distinguish better the self-correcting the execution systems then induced breakdowns problems from those that will require more funthat dramatically further increased uncertainty damental changes in financial markets. among investors, which in turn accelerated the Our economy has not fallen into recession, as bunching of sell orders. some had predicted; indeed, it has shown con- Before the availability of sophisticated tele- siderable resilience. This, of course, has had a communications, it took hours, sometimes days, positive effect on attitudes of investors in private for the news of a price decline to be transmitted securities. The volatility in securities prices has to all market participants. This allowed the self- moderated, and the premia that investors require feeding dynamics of falling prices to be stretched in yields on private sector debt above yields on out over a longer time period, reducing the shock Treasury debt have narrowed from the wide effect of an unexpected price decline and soften- levels that developed immediately following the ing some of its secondary consequences. stock market plunge. This improvement has been To a significant degree, the uncertainties after most noticeable in the short-term markets for the crash of last October reflected increasing bank certificates of deposit (CDs) and commerconcerns about the solvency of the participants cial paper, but it also has been apparent in in the markets, including, in particular, the vari- longer-term corporate markets. ous clearinghouses. The extraordinary discount Even the market for low-rated corporate debt of prices of stock-index futures relative to prices has rebounded. Current risk premia on such of stocks indicates an unwillingness on the part bonds average roughly 4V2 percentage points of arbitrageurs to buy futures and to sell stocks. above Treasuries, a range that is well below the Doubts about the ability to execute trades at 6 to 7 points observed in the weeks immediately reported prices may have contributed to this after the crash. As these interest rate spreads unwillingness. In addition, however, many arbi- have narrowed, new issues of low-rated compatrageurs evidently feared that potential profits nies have reappeared in the public bond market, would not be realized because of defaults by one along with those of higher-rated firms. or more participants in the complex clearing and Although investor fears have receded, securisettlement systems for stocks and stock-index ties markets—especially equity-related marfutures. kets—still retain the imprints of the October This points clearly to the need to create real- shock. Corporations have not returned to equity time information systems for monitoring credit markets to raise capital, despite the reduction in exposures that arise from stock trading and, most stock price volatility. The volume of new stock Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

314 Federal Reserve Bulletin • May 1988 issued by nonfinancial firms in January and Feb- ers with roughly comparable protection against ruary was the lowest total for these two months credit losses stemming from adverse price movein almost a decade. ments. Lower margins on futures can provide Activity in stock-index futures and options equal protection because margin payments are markets also has been reduced. Trading in the required much more frequently than in the cash Standard and Poor's futures contract recently markets and because stock index prices tend to has been 30 percent or more below average daily be less volatile than prices of individual stocks. volumes in precrash months. Although the finan- The regulation of margins clearly is a controcial integrity of these markets was maintained versial issue. Some industry experts, federal during the crisis, many participants sustained regulators, and members of the Congress have, large losses or experienced close calls. Investors of course, made quite different recommendations who were engaged in trading stock-index prod- for reform. This lack of consensus appears priucts appear to have adopted a more cautious marily to reflect differences in objectives. Most attitude since the crash. people agree that margins should be, at a mini- One area in which greater caution has been mum, sufficient to ensure the integrity of the especially evident is in sharply reduced reliance markets by limiting credit exposures of clearingon portfolio insurance strategies. The use of houses and of brokers, banks, and other lenders portfolio insurance by large institutional inves- to whom the clearinghouses are directly or inditors is thought by many to have contributed both rectly exposed. But there is much disagreement to the high level of share prices reached in late about the need for, or effectiveness of, higher summer and to the heavy selling pressures in margins to control speculation and limit stock mid-October. These strategies presume a high price volatility. If margins are deemed important degree of market liquidity and quick execution of to control leveraged speculation, this implies a purchase or sale orders near prevailing prices. much different structure for the levels and con- October demonstrated clearly that such liquidity sistency of margin requirements across markets will not be there in extreme situations. As a than if the objective is simply protection of the result, the use of portfolio insurance reportedly market. The appropriate objective of margin reghas been scaled back dramatically. Unless mem- ulation is an issue that needs to be considered ories prove exceptionally short, this is one prob- carefully before any regulatory reforms are imlem, if it is one, that should be self-correcting. I plemented. suspect—though I cannot prove—that the Octo- The steps taken to strengthen margins, as well ber experience has had similar effects on the as other steps under active consideration, are attitudes of investors about the degree to which indications of the serious and widespread effort they can lock in gains by using stop loss or limit by the private sector to identify and correct orders, whose execution can have the same weaknesses. As a general principle, it is in the effects on the markets. self-interest of the exchanges and associations of Meanwhile, the futures and options exchanges market makers to protect and enhance the integhave acted to reduce their risk exposure in the rity of their markets. They also have superior event of large price moves. Several exchanges knowledge of their own markets. Thus, we have expanded their use of intraday margin calls, should rely when possible on the private organiand the major exchanges now have in place zations to correct the problems that were evident procedures to pay out intraday margins, thereby last October. limiting one source of liquidity pressures that However, there are some areas in which indewas evident last fall. Most importantly, virtually pendent actions by private organizations may be all the exchanges have raised the margin levels counterproductive and in which vehicles for deapplicable to stock-index futures and options. sired joint action do not exist. In this regard, I Although margin levels for these derivative prod- would suggest that the unilateral efforts that we ucts remain significantly below margin levels in have seen to impose circuit breakers, for examthe cash markets for equities, they may now ple, pose potential problems. The recent studies generally provide clearinghouses and other lend- underscore that stocks and stock-index futures Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 315 and options products are all components of what than it is today. We also need to frame our is effectively one market valuation system. Such regulatory system to deal with the structure of linkage implies the need for a regulatory ap- financial organizations—a particularly important proach on intermarket issues that is coordinated issue today, with repeal of the Glass-Steagall Act across markets. Price limits in futures markets, if on the table. And we need to address the issues they become binding, will tend to push traders of the comparative virtues of, and the possible and investors to the cash market unless similar melding of, functional regulation and oversight of restraints are in force there. Likewise, trading consolidated entities. The Congress may decide halts in the cash markets may impair the ability that partial adjustments may nonetheless be apto carry on hedging strategies in derivative mar- propriate. But it should do so with the underkets and derail arbitrage activities. standing that further restructuring requirements In a similar manner, markets for equity-related remain on the table. products are linked across countries. Many large Second, restructuring should be carefully definancial intermediaries operate across several signed to avoid adversely affecting the efficiency national markets, and in some instances, their of existing agencies. I am concerned that some ownership is international. Shares of large Amer- existing proposals for restructuring may not satican firms often are listed on foreign exchanges, isfy this criterion. For example, the proposed and foreign firms are listed on ours. Indeed many Intermarket Coordination Act of 1988 seeks to of the world's larger companies trade on a near- address intermarket issues by forming a commit- 24-hour basis on exchanges around the world. tee composed of the Chairmen of the Commodity Trading hours on domestic markets have been Futures Trading Commission, the Securities and extended to overlap with activity in other time Exchange Commission, and the Federal Reserve zones, and some exchanges have established Board. This committee is intended to serve as a formal trading links. At every step, communica- forum for regulatory cooperation on circuit tions systems have facilitated these develop- breakers, margins, contingency planning, informents. The forces moving us in the direction of mation collection, clearance and settlement, and further domestic and international market inte- so forth. However, the prospect of such a comgration are irresistible. Coping with such change mittee raises several questions that need to be may be challenging, but we should view the considered carefully. A particularly thorny issue process as offering the opportunity for better concerns the role of the board members and economic performance here and abroad. commissioners, other than the chairmen, of the constitutent agencies. It is not hard to imagine a situation in which these individuals have differing PROPOSALS FOR RESTRUCTURING positions from their chairman. Their ability to SECURITIES INDUSTRY REGULATION affect decisions of the Intermarket Committee might be limited; yet they could be asked to Many people have already concluded that the implement these decisions and perhaps be placed events of last October reveal a need for funda- in ambiguous legal positions. Another question mental restructuring of federal regulation of the to be resolved concerns the scope of authority of securities industry. I believe that we need to the Intermarket Committee. By nature, interproceed cautiously in this area. There are two market issues cut across the interests and policriteria that any such restructuring should sat- cies of existing regulatory bodies. Some mechaisfy. First, restructuring should allow for the nism will have to be devised for appropriately continued evolution of financial markets. The delimiting the Intermarket Committee's powers, lest the burden of the committee becomes too regulatory structure should be appropriate not great or the existing regulatory bodies become only to the world as we know it today, but, if redundant. possible, to that world likely to exist in, say, 1995 and beyond. In particular, the structure must be Answers to many of the questions that I have appropriate in an environment in which cross- posed may be suggested by our experience with border financial activity is even more important the Presidential Working Group on Financial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

316 Federal Reserve Bulletin • May 1988 Markets. This group should provide a forum for Board's view, however, specific legislative proaddressing concerns outlined in the proposed posals mandating a new regulatory structure ap- Intermarket Coordination Act, and it should in- pear premature. dicate the feasibility of such an approach to Once again, let me stress that I sympathize regulatory issues that cut across markets. I am with the concerns of the Congress at the slow optimistic that members of the group will work pace at which a clear legislative agenda is develclosely with each other and with the private oping. As I have pointed out, however, market sector to achieve the goals stated by the Presi- participants have already taken some useful dent. It would seem appropriate to attempt first steps. At the same time, the Working Group has to solve our problems in the context of the begun the task of producing a report, including existing regulatory framework. Nonetheless, it is any necessary recommendations for legislation, quite possible that efforts of the group will reveal within the 60-day deadline imposed by the Presa need for some legislative changes. In the ident. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

317~ Announcements STAFF COMMENTARIES ISSUED FOR itors to provide consumers with more REGULATIONS B, E, ANDZ information regarding closed-end, variable-rate mortgage loans secured by the consumer's prin- The Federal Reserve Board published on April 1, cipal dwelling. 1988, official staff commentaries for three of its consumer credit protection regulations—Regulation B (Equal Credit Opportunity), Regulation E PROPOSED ACTION (Electronic Fund Transfers), and Regulation Z (Truth in Lending). The Federal Reserve Board requested comment The final revisions to the staff commentary for on a revised risk-based capital guidelines pro- Regulation B address issues concerning consid- posal for U.S. banking organizations. The proeration of age in evaluating creditworthiness, posal is based on a framework developed by the signature requirements, record retention, and Basle Committee on Banking Regulations and collection of monitoring information. Supervisory Practices. The Basle Committee in- The final revisions to the staff commentary for cludes supervisory authorities from 12 major Regulation E clarify the amendments adopted by industrial countries. the Board in August 1987 concerning point-of- The revised proposal for U.S. banking organisale/automated clearinghouse services. The revi- zations was developed in conjunction with the sions deal with issues such as institutions' re- Office of the Comptroller of the Currency and the sponsibilities concerning periodic statements, Federal Deposit Insurance Corporation. card issuance, and error resolution. Comments should be received by the Board on Revisions to the staff commentary for Regula- this matter by May 13, 1988. tion Z address disclosure questions raised by the emergence of conversion features in adjustablerate mortgages and the imposition of fees that are SYSTEM MEMBERSHIP: considered finance charges at the same time a ADMISSION OF STATE BANKS credit card plan is renewed. Commentary is also included that interprets the Board's rule imple- The following state bank was admitted to memmenting the requirement of the Competitive bership in the Federal Reserve System during the Equality Banking Act that adjustable-rate mort- period March 1 through March 31, 1988. gages contain a maximum interest rate. The Board also issued an official staff commen- Illinois tary to Regulation Z that interprets an amend- Oakbrook Exchange Bank ment, issued December 22, 1987, requiring cred- of Dupage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

318~ Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON FEBRUARY 9-10,1988 Consumer spending remained sluggish in recent months. Excluding motor vehicles, real outlays on goods and services were essentially Domestic Policy Directive unchanged during the last three months of 1987. Sales of new automobiles improved after incen- The information reviewed at this meeting indi- tives were reintroduced in mid-November, but cated that economic activity continued to expand dealer inventories remained high. With consumer rapidly in the fourth quarter, although gains in spending weak and growth in disposable income output appeared to have moderated around year- stronger in the fourth quarter, the saving rate end. Over the quarter as a whole, manufacturing rose considerably to 4.9 percent. output recorded a sizable further increase, sup- Housing starts fell to an annual rate of 1.37 ported by continued strong demands for exports. million units in December, reflecting a sharp Domestic final sales weakened, however, with drop in the multifamily sector after a surge in consumption outlays and business fixed invest- November and some decline in the single-family ment declining, and much of the rise in produc- area. Sales of new and existing homes also tion apparently went into inventories. The rate of decreased in late 1987. For the fourth quarter inflation was held down late in the year by as a whole, total starts were down appreciably declines in energy prices, while wage trends from their averages in the previous two quarshowed little change. ters. Industrial production rose considerably over Business fixed investment fell somewhat in the the fourth quarter, but the increase slowed in fourth quarter, after an exceptionally large rise in November and moderated further in December. the previous quarter. Spending on information- Output of consumer goods, which changed little processing equipment, which earlier had grown in both months, was held down by reductions in rapidly, appeared to slow, and business purautomobile assemblies. Also, output of business chases of motor vehicles declined. At the same equipment edged lower after substantial growth time, expenditures for industrial equipment conover the summer and early autumn. Nonfarm tinued to expand as did spending for nonresidenpayroll employment grew at a brisk pace in tial construction, including sizable increases in the fourth quarter, but slowed substantially in outlays for office structures and other commer- January. In manufacturing, employment gains cial buildings. New orders for nondefense capital moderated in January as sizable increases in a goods, excluding aircraft, were little changed in few industries were partly offset by layoffs the fourth quarter, after appreciable gains earlier elsewhere. In contrast to the payroll survey, in the year, while new building commitments total employment as measured by the house- continued to increase. hold survey was up sharply in January, bringing Inventory investment rose strongly in October the rise over the past four months into line with and November. The increase was concentrated the advance in payroll employment. The growth in the trade sector, particularly at automobile in the labor force about matched the rise in dealers and merchant wholesalers. Stocks at household employment in January, and the civil- nonauto retailers also continued to expand at a ian unemployment rate was unchanged at 5.8 faster rate than sales, especially at general merpercent. chandise, apparel, and furniture stores. In con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

319~ trast, manufacturers' inventories remained low Louvre accord. The G-7 authorities released a relative to shipments. statement in late December reaffirming the objec- Increases in consumer prices moderated in late tives and economic policy commitments of the 1987, reflecting a decline in retail energy prices in Louvre accord, and the dollar retraced its decline response to earlier decreases in crude oil prices. in early January when heavy intervention by The consumer price index was up only slightly in central banks associated with the G-7 statement December, when prices of consumer goods also became particularly visible. The dollar strengthwere held down by extensive markdowns on ened further in mid-January following the release holiday merchandise and by the latest round of of better-than-expected data for the U.S. trade incentives for automobile sales. At the producer balance in November. level, prices of finished goods fell somewhat in At its meetings on December 15-16, 1987, and late 1987. Hourly compensation in the private January 5, 1988,1 the Committee adopted direcnonfarm sector increased at a moderate pace tives that called for maintaining the existing over recent months, little changed from earlier degree of pressure on reserve positions. In Detrends. cember, the Committee recognized that still sen- The nominal deficit in U.S. merchandise trade sitive conditions in financial markets and uncerwas estimated to have increased slightly over tainties in the economic outlook might continue October and November from the average rate in to require a special degree of flexibility in the the third quarter, but in real terms the trade conduct of open market operations. In early deficit as measured in the GNP accounts ap- January, the Committee agreed that the passing peared to have narrowed further. Nonagricul- of time and of year-end pressures in the money tural exports rose somewhat over the first two market should permit further progress toward months of the quarter, but agricultural exports restoring a normal approach to open market fell slightly. Non-oil imports rose considerably in operations. At the same time the members recthe October-November period from the third- ognized that some flexibility might continue to be quarter pace, with the increases widespread. Oil needed in the conduct of operations. At both imports, however, fell somewhat as both price meetings, the Committee decided that, taking and volume declined. The increases in prices of account of conditions in financial markets, someexports and of non-oil imports accelerated in the what lesser or somewhat greater reserve restraint fourth quarter to rates experienced in the first would be acceptable, depending on the strength two quarters of 1987, reversing the slower in- of the business expansion, indications of inflacreases in the third quarter. Recent indicators of tionary pressures, developments in the foreign economic performance in major foreign indus- exchange markets, as well as the behavior of the trial nations were mixed, after strong growth of monetary aggregates. The intermeeting range for real GNP in most of those countries in the third the federal funds rate was left unchanged at 4 to quarter of 1987. Data continued to suggest rela- 8 percent. tively vigorous growth in Japan, the United Over the course of the intermeeting period and Kingdom, and Canada. In contrast, expansion especially after early January, the conduct of appeared to have slowed during the fourth quar- open market operations involved placing more ter in Germany, France, and Italy. emphasis on reserve positions and correspond- The weighted-average foreign exchange value ingly less on influencing money market condiof the dollar in terms of the other G-10 currencies tions on a day-to-day basis. Even so, adjustincreased about 3 percent over the period since ments in the provision of reserves were made on the December meeting. The dollar rose about IV2 a number of occasions during the intermeeting percent in terms of the yen and about 4 percent in period in light of unusual developments affecting terms of the mark during the intermeeting period. reserve and money market conditions. Those Early in the period, the dollar fell sharply owing developments included heavy borrowing over to heightened concerns about prospects for adjustment of U.S. external imbalances and reports that G-7 authorities no longer supported the 1. Meeting via telephone conference. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

320 Federal Reserve Bulletin • May 1988 the four-day New Year's weekend and sizable declining in late 1987. Demand deposits were borrowing subsequently stemming from a data particularly weak in late 1987, possibly reflecting processing problem at a large bank. In the ensu- in part incentives to adjust compensating baling reserve maintenance period, demands for ances downward before year-end, but other discount credit were very limited. In late January checkable deposits also fell in November and and early February, with incoming data suggest- December without a corresponding increase in ing some weakening in the economic expansion other M2 deposits. The strengthening of money and in the context of a more stable dollar in growth in January was spread widely over variforeign exchange markets, some easing was ous components of the monetary aggregates and sought in the degree of pressure on reserve appeared to be related in part to the general positions. Thus far in the current maintenance decline in interest rates since mid-October. period, borrowing had remained relatively low. The staff projection for economic activity con- Total reserves contracted in December, reflect- tinued to suggest relatively sluggish growth in ing continued weakness in transactions deposits, output in the first half of 1988 and a pickup later but rebounded strongly in January as most cate- in the year. This pattern primarily reflected varigories of reservable deposits grew rapidly and ations in the growth of inventories. A sharp excess reserves also increased. slowing in the pace of investment in nonfarm The federal funds rate averaged 6.82 percent inventories, notably automobile inventories, was over the three complete reserve maintenance expected early in the year following the buildup periods since the December meeting; in recent in the fourth quarter. Final domestic demand was days, the rate moved down toward 6V2 percent. projected to expand sluggishly in 1988, given an Year-end pressures in the money market were erosion in the growth of real income associated in much milder than most market participants had part with higher import prices and a moderately expected, partly because of a greatly reduced restrained fiscal policy. Over 1988 as a whole, the need for funds compared with that a year earlier, primary impetus to growth was anticipated to more planning in advance by banks and others, come from further strong demand for U.S. exand a relatively generous provision of reserves. ports. Prices were projected to rise at a moderate With the easing of concerns about year-end pres- rate during the year. Prices of nonpetroleum sures, rates on private money market instru- imports were believed likely to increase substanments fell sharply in late December. Yields on tially, but the price of imported petroleum was Treasury securities of all maturities and on longer- assumed to rise only slowly. Nominal gains in term debt of private borrowers changed little on compensation were expected to pick up, as wage balance over the first several weeks of the inter- demands responded to increases in consumer meeting period. More recently, such rates de- prices. With unemployment rates remaining near clined as the dollar tended to stabilize and eco- current levels, however, labor market condinomic data were viewed as pointing to a softer tions were not expected to put much additional economy, more subdued inflation, and easier pressure on wage rates, especially in light of monetary policy. Early in February, banks low- uncertainties about the economic outlook and ered their prime rate. Broad indexes of stock continuing efforts by businesses to improve comprices increased somewhat on balance since mid- petitiveness. December, though price fluctuations were rela- In the Committee's discussion, members emtively large on occasion. phasized that the economic outlook was subject Preliminary data showed that money growth to a great deal of uncertainty under prevailing rebounded strongly in January after the marked circumstances. They noted that it was especially weakening in November and December. For difficult to evaluate the outlook for an economy 1987 as a whole, M2 expanded at a rate well that appeared to be in transition from a consumerbelow the 5l/2 percent lower boundary of the driven to an export-driven expansion. Another target range that the Committee had established area of uncertainty related to the decline in for the year. M3 growth was at the lower end of equity prices. The latter did not appear to have its range. Ml grew sharply in January, after had a substantial impact on consumer or business Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 321 spending to date, judging from currently avail- inventories might be relatively limited and ecoable data, but more repercussions might be felt nomic growth in the first half somewhat stronger later. In addition, financial markets, including the than projected by the staff, especially in light of foreign exchanges, were still relatively sensitive, the strength of orders for capital goods on the and many financial institutions had been weak- books of manufacturing firms. Others anticipated ened by serious debt repayment difficulties a sharper inventory correction but one that among their domestic and foreign borrowers. would probably be over by midyear. The outlook Several members commented that the staff pro- for the second half was particularly uncertain, jection remained a reasonable expectation but and views differed regarding the likelihood and that the risks of a different outcome were sub- potential strength of a rebound. Conditions in stantial. Others saw somewhat greater or some- financial markets would have an important influwhat lesser economic growth as more likely for ence on business conditions, and any major new the year ahead. The members generally agreed, disturbances in those markets could have a neghowever, that the major risks to the economy ative effect on both consumer and business over the longer run appeared to be in the direc- spending. Some members could see few signs in tion of more inflation. the domestic economy that pointed to a resur- In conformance with the usual practice at gence in business activity later in the year. Other meetings when the Committee considers its long- members viewed the prospects as more promisrun objectives for monetary growth, the mem- ing, and some did not rule out the possibility that bers of the Committee and the Federal Reserve the expansion might in fact tend to be more Bank presidents not currently serving as mem- vigorous than was desirable in a period when bers had prepared specific projections of eco- increasing domestic production needed to be nomic activity, the rate of unemployment, and diverted to export markets. All of the members the overall level of prices. For the period from agreed that the rate of economic expansion over the fourth quarter of 1987 to the fourth quarter of the next several quarters would depend to a 1988, the forecasts for growth of real GNP had a substantial extent on the rate of improvement in central tendency of 2 to 2Vi percent and a full the nation's balance of trade. range of Vi to 3 percent. Forecasts of nominal In the discussion of the outlook for trade, a GNP centered on growth rates of 514 to 6 percent number of members observed that sizable further and ranged from 4 to 6Vi percent. Estimates of gains in exports were a reasonable expectation, the civilian rate of unemployment in the fourth but the rate of increase would probably diminish quarter of 1988 were concentrated in a range of from the very rapid pace in recent quarters. 53/4 to 6 percent with a full range of 5Vi to 63/4 Among the factors tending to inhibit export percent. With regard to the rate of inflation, as growth, they cited the possibility that expansion indexed by the GNP deflator, the projections in major industrial nations, as a group, might be centered on rates of 3!/4 to 33/4 percent and had an relatively limited. On balance, while the extent of overall range of 2Vi to 4 percent for the year. In the improvement in trade was uncertain and making these forecasts, the members took ac- might well prove to be relatively slow and uncount of the Committee's objectives for mone- even, most members saw favorable prospects for tary growth in 1988. They also assumed that continuing gains of appreciable magnitude over future fluctuations in the foreign exchange value the year ahead. of the dollar would not be of sufficient magnitude Turning to the outlook for inflation, the memto have any significant effect on the projections. bers generally agreed that the risks over time In their assessment of specific developments were in the direction of greater inflation. They bearing on the economic outlook, members gave emphasized that relatively rapid growth in overconsiderable attention to the recent buildup of all demands, including that for exports, could inventories and the related possibility of some trigger inflationary pressures in a period when correction that would tend to depress overall the utilization of productive resources was algrowth in business activity during the first half of ready relatively high and comparatively little the year. Several believed that the adjustment in leeway appeared to exist for growth in excess of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

322 Federal Reserve Bulletin • May 1988 the moderate pace projected by most members. risks to the business expansion and of the pro- The recent behavior of broad price indexes did spective relationship of monetary growth to satnot suggest any acceleration in the overall rate of isfactory economic performance, members exinflation, but several members saw evidence in pressed some divergence of views with regard to local economies that price pressures might be how much the ranges should be reduced. Several intensifying. Business contacts were reporting indicated a preference for confirming the ranges that some firms were successful in selective for 1988 that the Committee had established on a efforts to pass through rising costs by raising tentative basis in July. Those ranges involved product prices. And, in one view, the behavior of reductions of Vi percentage point from 1987. key commodity prices raised concern about more Others favored lower ranges with midpoints that inflation. Some members also indicated that ris- were reduced by a full percentage point. The ing import prices were tending to put upward latter included a proposal, which received conpressure on competing products that were man- siderable support, for wider ranges of 4 to 8 ufactured domestically. In general, increases in percent for both M2 and M3. The members noted wages remained moderate, but members ex- that monetary expansion in 1988 at rates around pressed concern that, given the reduced level of the midpoints of the ranges under consideration, unemployment, rising prices would tend to be which they generally viewed as a reasonable translated into higher wages at some point. It was expectation, would represent some acceleration noted that the key to avoiding both more inflation from the relatively modest expansion in 1987, or a recession in a period of major adjustments in especially in the case of M2. the trade balance would be the difficult task of Further discussion focused on the desirability maintaining restrained growth in domestic de- of widening the ranges for growth of the broader mands over an extended period. aggregates to 4 to 8 percent. Such a range was Against that background the Committee at this deemed to be warranted by the experience of meeting completed the review, begun at the recent years when more marked variability had meeting in December, of the ranges for growth in emerged in the relationship between monetary the monetary and debt aggregates in 1988; those expansion and ultimate policy objectives such as ranges had been established on a tentative basis prices and output. That variability stemmed from in July 1987 in keeping with the requirements of a number of sources, but prominent among them the Full Employment and Balanced Growth Act was the course of interest rates; a level of rates of 1978 (the Humphrey-Hawkins Act). The ten- consistent with satisfactory economic perfortative ranges included growth of 5 to 8 percent mance would depend on the underlying strength for both M2 and M3 for the period from the of demands in the economy and on emerging fourth quarter of 1987 to the fourth quarter of price pressures. In that context, an uncertain 1988. A monitoring range of 8 to 11 percent had outlook for the economy and inflation suggested been set on a provisional basis for growth of total to several members the need for somewhat wider domestic nonfinancial debt in 1988. With regard ranges than had been used in the past. A range of to Ml, the Committee had decided in July not to 4 percentage points would provide more room for set a tentative range for 1988 but to reappraise at appropriate policy responses to unanticipated this meeting the issues relating to the establish- economic and financial developments and would ment and use of such a target. encompass more fully the possible outcomes for All of the members favored some reduction in monetary growth that might prove consistent with the ranges for growth of M2 and M3 in 1988. acceptable economic performance in 1988. Some Such a reduction would help to focus attention members expressed reservations about the desiron the need for relatively restrained expansion in ability of wider ranges. They acknowledged that domestic demand to accommodate the adjust- ranges of 4 percentage points might reflect more ment in the nation's external accounts and would adequately the various uncertainties that were inunderscore the Committee's commitment to volved, but they were concerned that widening the achieving reasonable price stability over time. ranges could be viewed as a further retreat from However, given their differing assessments of the effective monetary targeting. Moreover, the nar- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 323 rower ranges imposed a desirable discipline by the prospects for debt growth in 1988, and Comrequiring a more prompt reappraisal of policy as mittee members endorsed a proposal to widen the their limits were approached or exceeded. monitoring range for total domestic nonfinancial The members also considered proposals for us- debt to 7 to 11 percent, a reduction of 1 percentage ing a different base than the actual fourth-quarter point from the lower limit of the 1987 range. level of the aggregates as the starting point for the At the conclusion of the Committee's consid- 1988 ranges. In support of this view, some mem- eration of the ranges for 1988, all of the members bers argued that the depressed levels of the aggre- indicated that they could support ranges of 4 to 8 gates in late 1987, which may have reflected in part percent for growth in both M2 and M3 for the some special factors, together with the reduced year. No range was established for Ml for the ranges under consideration implied a quite substan- year, while the monitoring range for growth in tial lowering of the Committee's objectives for total domestic nonfinancial debt was set at 7 to 11 monetary growth. Several members were opposed percent. In keeping with the Committee's usual to a change in the Committee's procedures, espe- procedures under the Humphrey-Hawkins Act, cially on an ad hoc basis. A number expressed their the ranges would be reviewed at midyear, or willingness to consider at a later time proposals for sooner if deemed necessary. It was understood a regularized procedure that would take account of that in carrying out policy the Committee would overshoots or of shortfalls in the previous year. continue to judge the behavior of the monetary Others believed that it would be preferable to aggregates against the background of developadjust the new ranges themselves each year, rather ments in the economy and financial markets, than the base, if the Committee concluded that it including attention to the sources and extent of was desirable to compensate for excessive or inad- price pressures in the economy, the performance equate monetary growth in the previous year. of the dollar in foreign exchange markets, and No member supported the reestablishment of a other indicators of the impact of monetary policy. target range for Ml in 1988, but a few favored the The following paragraphs relating to the 1988 use of a monitoring range for this aggregate. The ranges were approved for the domestic policy behavior of Ml had become highly sensitive to directive: changes in interest rates, among other factors, in recent years, as reflected in sharp swings in its The Federal Open Market Committee seeks monevelocity. It remained particularly difficult to in- tary and financial conditions that will foster reasonable price stability over time, promote growth in output on terpret the relationship between growth in Ml a sustainable basis, and contribute to an improved and the performance of the economy. In light of pattern of international transactions. In furtherance of its unpredictable behavior, a narrow range for these objectives, the Committee at this meeting estab- Ml could easily trigger an inappropriate response lished growth ranges of 4 to 8 percent for both M2 and M3, measured from the fourth quarter of 1987 to the of monetary policy to unexpected developments fourth quarter of 1988. The monitoring range for in the economy. On the other hand, a range wide growth in total domestic nonfinancial debt was set at 7 enough to reasonably encompass possible ac- to 11 percent for the year. ceptable growth in Ml over the year would be of With respect to Ml, the Committee again decided not little use in guiding the conduct of monetary to establish a specific target for 1988. The behavior of policy or in communicating the Committee's this aggregate in relation to economic activity and prices has become very sensitive to changes in interest rates, policy intentions to the public. among other factors, as evidenced by sharp swings in its The members anticipated some further slowing velocity in recent years. Consequently, the appropriatein the growth of nonfinancial debt in 1988, fol- ness of changes in Ml this year will continue to be lowing a marked slowdown in 1987, but the rate evaluated in the light of the behavior of its velocity, developments in the economy and financial markets, and of growth this year appeared likely to remain well the nature of emerging price pressures. above that of nominal GNP. A key factor bearing on the outlook for debt expansion was the expec- Votes for this action: Messrs. Greenspan, Corritation of some reduction in government borrow- gan, Angell, Boehne, Boykin, Heller, Johnson, ing. However, as in the case of the monetary Keehn, Kelley, Ms. Seger, and Mr. Stern. Votes aggregates, considerable uncertainty surrounded against this action: None. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

324 Federal Reserve Bulletin • May 1988 In the Committee's discussion of policy imple- to the weakness in late 1987. According to a staff mentation for the period immediately ahead, all analysis prepared for this meeting, expansion in of the members indicated that they favored or M2 and M3 could be expected to strengthen a could accept a directive that called for maintain- little over the balance of the first quarter from the ing the slightly reduced degree of pressure on average pace in December and January, assumreserve positions that had been sought recently. ing unchanged conditions of reserve availability. While some members expressed reservations More generally, somewhat faster growth was about that easing, a few indicated a preference projected in the current quarter than had ocfor easing marginally further. Members com- curred in the second half of 1987, as increased mented during the discussion that policy imple- demands for money balances in response to the mentation faced the special challenge of balanc- decline in interest rates since mid-October more ing the risks of a potentially softer economy over than offset the expected effects of slower income the nearer term while also remaining positioned growth. The growth in Ml might also strengthen to achieve the Committee's anti-inflationary ob- over the first quarter, but the near-term behavior jectives over the longer run. Accordingly, de- of this aggregate remained subject to a high spite shadings of opinion, the members were in degree of uncertainty. broad agreement that any substantial change in During this meeting further consideration was policy, in either direction, was not warranted given to the Committee's operating procedures. under prevailing economic and financial condi- In keeping with the Committee's decision in tions. A tightening move would not be appropri- early January, continuing progress had been ate at a time when the expansion was showing made toward restoring the Committee's previous some signs of slackening, and against this back- focus on reserve positions in the day-to-day ground such a policy course might well have a implementation of policy. At this meeting the disruptive impact on financial markets, which members expressed differing views about remained somewhat fragile. On the other side, whether that process should now be completed. policy should not overreact to recent indications Several felt that the approach originally adopted of a more sluggish business expansion because at a time of crisis in financial markets was no any policy easing now would tend to have its longer warranted, even in attenuated form, and major impact later in the year when, in the view that the previous approach to reserve manageof many members, a stronger economic expan- ment provided a better basis for guiding the sion was likely to emerge. Moreover, while the conduct of monetary policy because it allowed dollar had tended to stabilize recently in the greater scope for changes in supply and demand foreign exchange markets, members were con- forces to be reflected in the money market. On cerned that appreciable further easing, especially the other hand, a majority of the members preif it was seen as leading to a lower discount rate, ferred to retain for now a directive that called for could have highly adverse repercussions on the some flexibility in the approach to open market dollar. It might also have unsettling effects on operations. These members emphasized that fifinancial markets more generally if it was not nancial market conditions still exhibited some viewed by market participants as warranted by degree of fragility and, against the background of substantial new evidence of a weaker economy. substantial uncertainty in the economic outlook, The slight easing that had already been under- unanticipated developments might well continue taken did not appear to put significant downward to warrant occasional departures from the focus pressure on the dollar, and it provided greater on reserve objectives for the purpose of moderassurance that the expected strengthening of the ating temporary fluctuations in money market business expansion would in fact materialize conditions. A number of these members also later in the year. commented on the need for flexibility because a In the course of the Committee's discussion, relatively normal or predictable relationship bemembers referred to the rebound in the growth of tween the provision of reserves and money mar- M2 and M3 in January, but they noted that the ket conditions had not yet emerged. stronger growth needed to be viewed in relation The members expressed some shadings of opin- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 325 ion with regard to possible adjustments in policy growth over the months ahead. The members during the intermeeting period. A majority felt that agreed that the intermeeting range for the federal there should be no presumptions about the likely funds rate, which provides one mechanism for direction of any such adjustments, especially in initiating consultation of the Committee when its light of the consensus at this meeting for maintain- boundaries are persistently exceeded, should be ing reserve conditions that were consistent with the left unchanged at 4 to 8 percent. slight easing that had been sought since late Janu- At the conclusion of the meeting the following ary. Some members believed, however, that policy domestic policy directive was issued to the Fedimplementation should be especially alert to devel- eral Reserve Bank of New York: opments that might point to somewhat easier reserve conditions, particularly because of the risks The information reviewed at this meeting indicated that economic activity continued to expand rapidly in that they saw of a weaker economy than was the fourth quarter but that the advance reflected a currently projected. In the view of some members, build-up in inventories as domestic final demands further easing might also be appropriate if mone- weakened. The growth in output appeared to have tary growth fell appreciably short of current expec- slowed around year-end. Total nonfarm payroll emtations. Several members cautioned that any deci- ployment rose much less in January than on average over the previous three months; the manufacturing sion to ease should take careful account of the sector also recorded reduced employment growth in potential impact on the dollar in foreign exchange January. The civilian unemployment rate, at 5.8 permarkets. While the dollar had tended to stabilize cent in January, was unchanged from December. recently, it could be vulnerable to a further decline. Growth in industrial production moderated further in December. Retail sales picked up in December, At the conclusion of the Committee's discusbuoyed by improved auto sales, but remained below sion, all of the members indicated their acceptlevels reached during the summer. Indicators of busiance of a directive that called for maintaining the ness capital spending were mixed late in the year. slightly easier degree of reserve pressure that had Housing starts fell markedly in December, and were been sought recently. With regard to the Com- down somewhat on balance in the fourth quarter from the average pace in the second and third quarters. The mittee's operating procedures, a majority ennominal U.S. merchandise trade deficit declined subdorsed the view that some flexibility might constantially in November. For October and November tinue to be needed in the conduct of open market combined, the deficit rose slightly from the average operations in light of the still somewhat unsettled rate in the third quarter, but in real terms the deficit conditions in financial markets, the uncertainties was estimated to have narrowed further. The rise in consumer prices slowed and producer prices fell in late in the relationship between reserve and money 1987, reflecting declines in energy prices; wage trends market conditions, and the substantial risks of have shown little change in recent months. unanticipated economic and financial develop- Most interest rates were down substantially on ments. Taking account of conditions in financial balance since the Committee's meeting in mid-Demarkets, the members indicated that somewhat cember. In the Treasury securities market, long-term less or somewhat more reserve restraint would yields fell considerably more than short-term rates. Broad indexes of stock prices rose somewhat on be acceptable, depending on the strength of the balance over the intermeeting period in still relatively business expansion, indications of inflation, the volatile trading. The trade-weighted foreign exchange performance of the dollar in foreign exchange value of the dollar in terms of the other G-10 currenmarkets, with consideration also given to the cies declined further in the second half of December behavior of the monetary aggregates. The re- but recovered after the turn of the year and has increased moderately on balance since the December serve conditions contemplated by the Committee meeting. were expected to be consistent with growth in Growth of M2 and M3 strengthened substantially in both M2 and M3 over the four-month period from January after slowing over November and December. November through March at annual rates of For 1987 as a whole, expansion of M2 fell considerably about 6 to 7 percent. Because of the unusual below the lower end of the range established by the Committee for the year, while growth of M3 was at the uncertainty relating to the behavior of Ml and in lower end of its range. Growth of Ml surged in keeping with the decision not to set a longer-run January following two months of declines. For the target for this aggregate, the Committee decided year 1987, Ml growth was marginally below that of not to indicate any expectation regarding its nominal GNP, and expansion in total domestic nonfi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

326 Federal Reserve Bulletin • May 1988 nancial debt was at the midpoint of the Committee's in recent days. The Committee agrees that the current monitoring range for the year. more normal approach to open market operations The Federal Open Market Committee seeks mone- remains appropriate; still sensitive conditions in finantary and financial conditions that will foster reasonable cial markets and uncertainties in the economic outlook price stability over time, promote growth in output on may continue to call for some flexibility in operations. a sustainable basis, and contribute to an improved Taking account of conditions in financial markets, pattern of international transactions. In furtherance of somewhat lesser reserve restraint or somewhat greater these objectives, the Committee at this meeting estab- reserve restraint would be acceptable depending on lished growth ranges of 4 to 8 percent for both M2 and the strength of the business expansion, indications of M3, measured from the fourth quarter of 1987 to the inflationary pressures, developments in foreign exfourth quarter of 1988. The monitoring range for change markets, as well as the behavior of the monegrowth in total domestic nonfinancial debt was set at 7 tary aggregates. The contemplated reserve conditions to 11 percent for the year. are expected to be consistent with growth in both M2 With respect to Ml, the Committee again decided and M3 over the period from November through not to establish a specific target for 1988. The behavior March at annual rates of about 6 to 7 percent. The of this aggregate in relation to economic activity and Chairman may call for Committee consultation if it prices has become very sensitive to changes in interest appears to the Manager for Domestic Operations that rates, among other factors, as evidenced by sharp reserve conditions during the period before the next swings in its velocity in recent years. Consequently, meeting are likely to be associated with a federal funds the appropriateness of changes in Ml this year will rate persistently outside a range of 4 to 8 percent. continue to be evaluated in the light of the behavior of its velocity, developments in the economy and financial markets, and the nature of emerging price pressures. Votes for this action: Messrs. Greenspan, Corri- In the implementation of policy for the immediate gan, Angell, Boehne, Boykin, Heller, Johnson, future, the Committee seeks to maintain the slightly Keehn, Kelley, Ms. Seger, and Mr. Stern. Votes reduced degree of pressure on reserve positions sought against this action: None. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

327~ Legal Developments AMENDMENT TO RULES REGARDING DELEGATION OF AUTHORITY (b)*** (12) With the concurrence of the Staff Director of The Board of Governors is amending 12 C.F.R. Part the Division of Banking Supervision and Regulation 265, its Rules Regarding Delegation of Authority, to to take, or to authorize other designated persons to delegate to the General Counsel (with the concurrence take, such actions as are permitted pursuant to of the Staff Director of the Division of Banking Super- sections 8(n) and 10(c) of the Federal Deposit Insurvision and Regulation) the authority, in connection ance Act, as amended (12 U.S.C. 1818(n) and with any proceeding under section 8 of the Federal 1820(c)), and section 5(f) of the Bank Holding Com- Deposit Insurance Act, as amended (12 U.S.C. 1818), pany Act of 1956, as amended (12 U.S.C. 1844(f)), any examination or investigation under section 10(c) including administering oaths and affirmations, takof the Federal Deposit Insurance Act, as amended ing depositions, and issuing, revoking, quashing or (12 U.S.C. 1820(c)), or any application, examination, modifying subpoenas and subpoenas duces tecum. investigation or other proceeding under the provisions of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 1841 et seq.), to administer oaths and affirmations, to take or cause to be taken deposi- AMENDMENT TO RULES REGARDING tions, and to issue, revoke, quash, or modify subpoe- DELEGATION OF AUTHORITY nas and subpoenas duces tecum and to exercise such other powers as are permitted by law in matters The Board of Governors is amending 12 C.F.R. Part involving the conduct of the affairs of State member 265, its Rules Regarding Delegation of Authority, to banks, bank holding companies and persons associ- delegate to the Federal Reserve Banks the authority to ated with them and to designate representatives to stay, modify, terminate or suspend final cease-andundertake such actions pursuant to 12 U.S.C. desist orders issued by the Board upon the prior 1818(n), 1820(c) and 1844(f). It is expected that this approval of the Staff Director of the Board's Division delegation of authority will relieve the Board from of Banking Supervision and Regulation and the Genhaving to act on matters that are more efficiently and eral Counsel of the Board. It is expected that this effectively handled by Board staff. amendment will relieve the Board from having to act Effective April 7, 1988, 12 C.F.R. Part 265 is on routine matters that are more efficiently and effecamended as follows: tively handled by the Federal Reserve Banks. Effective February 19, 1988, 12 C.F.R. Part 265 is Part 265—Rules Regarding Delegation of amended as follows: Authority 1. The authority citation for 12 C.F.R. Part 265 Part 265—Rules Regarding Delegation of continues to read as follows: Authority Authority: Sec. ll(k), 38 Stat. 261 and 80 Stat. 1314 1. The authority citation for 12 C.F.R. Part 265 (12 U.S.C. 248(k). continues to read as follows: 2. Section 265.2(b) is amended by adding new subpa- Authority: Sec. ll(k), 38 Stat. 261 and 80 Stat. 1314 ragraph (12) to read as follows: (12 U.S.C. 248(k). Section 265.2—Specific functions delegated to Board employees and to Federal Reserve 2. Section 265.2(f)(26) is amended by removing "and" Banks. after the semicolon in (a), removing the period after (b) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

328 Federal Reserve Bulletin • May 1988 and inserting; "and" after (b) and adding new subdi- state. Upon consummation of this proposal, Union vision (iii) read as follows: would become the 54th largest commercial banking organization in Missouri, controlling deposits of $85.0 Section 265.2—Specific functions delegated to million, representing less than 1.0 percent of the total Board employees and the Federal Reserve deposits in the state. Accordingly, consummation of Banks. this proposal would not have any significant adverse effect on the concentration of banking resources in the state. (f)*** Union competes directly with Boatmen's Bank in (26)(iii) To stay, modify, terminate or suspend an the Clinton banking market.2 Union is the largest of 11 outstanding cease-and-desist order that has be- commercial banking organizations, controlling deposcome final pursuant to 12 U.S.C. 1818(b) and (k). its of $46.7 million, representing 21.9 percent of the total deposits in the market. Boatmen's Bank is the second largest commercial banking organization in the market, controlling deposits of $38.4 million, representing 18.0 percent of the total deposits in the market. ORDERS ISSUED UNDER BANK HOLDING Upon consummation of this proposal, Union would COMPANY ACT control deposits of $85.0 million, representing 39.9 percent of the total deposits in the market. The four- Orders Issued Under Section 3 of the Bank firm concentration ratio would increase by 11.2 per- Holding Company Act centage points to 80.8 percent, and the Herfindahl- Hirschman Index ("HHI") would increase by 789 Union State Bancshares, Inc. points to 2252.3 Clinton, Missouri Although consummation of this proposal would eliminate some existing competition in the Clinton Order Approving Acquisition of a Bank banking market, numerous other commercial banks would continue to operate in the market after consum- Union State Bancshares, Inc., Clinton, Missouri mation of this proposal. In addition, the Board has ("Union"), a bank holding company within the considered the presence of thrift institutions in the meaning of the Bank Holding Company Act ("Act"), banking market in its analysis of this proposal.4 Two 12 U.S.C. § 1841 et seq., has applied for the Board's thrift institutions operate in the market, controlling approval under section 3 of the Act to acquire 100 deposits of $134.3 million, representing 38.7 percent of percent of the voting shares of Boatmen's Bank of the total deposits among banks and thrifts in the Clinton, Clinton, Missouri ("Boatmen's Bank"). market. One of the thrifts is the largest depository Notice of the application, affording an opportunity institution in the market and would remain the largest for interested persons to submit comments, has been depository organization upon consummation of this duly published (52 Federal Register 46,004 (1987)). proposal. Based upon the size and market share of The time for filing comments has expired, and the Board has considered the application and all comments received in light of the factors set forth in 2. The Clinton banking market is approximated by Henry County and St. Clair County, Missouri, except the town of Appleton City. section 3(c) of the Act. 3. Under the revised Department of Justice Merger Guidelines, 49 Union is a one-bank holding company by virtue of Federal Register 26,823 (June 29, 1984), a market in which the its control of Union State Bank of Clinton, Clinton, post-merger HHI is above 1800 is considered highly concentrated. In such markets, the Department is likely to challenge a merger that Missouri. Union is the 99th largest commercial bank- increases the HHI by more than 50 points. The Department has ing organization in Missouri, controlling deposits of informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticom- $46.7 million, representing less than 1.0 percent of petitive effects) unless the post-merger HHI is at least 1800 and the total deposits in commercial banking organizations in merger increases the HHI by at least 200 points. The Justice Departthe state.1 Boatmen's Bank is among the smaller ment has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recogcommercial banking organizations in the state, connizes the competitive effect of limited-purpose lenders and other trolling deposits of $38.4 million, representing less non-depository financial entities. than 1.0 percent of the total deposits in commercial 4. The Board has previously indicated that thrift institutions have become, or have the potential to become, major competitors of banking organizations (hereinafter "deposits") in the commercial banks. National City Corporation, 70 FEDERAL RESERVE BULLETIN 743 (1984); NCNB Bancorporation, 70 FEDERAL RESERVE BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL RESERVE BULLETIN 802 (1983); and First Tennessee National Corpo- 1. All banking data are as of December 31, 1986. ration, 69 FEDERAL RESERVE BULLETIN 298 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 329 thrift institutions in the market, the Board has con- the meaning of the Bank Holding Company Act cluded that thrift institutions exert a significant com- ("Act"), 12 U.S.C. § 1841 et seq., has applied purpetitive influence that mitigates the anticompetitive suant to section 4(c)(8) of the Act and section 225.23(a) effects of this proposal in the Clinton banking market.5 of the Board's Regulation Y, 12 C.F.R. § 225.23(a), to On the basis of the foregoing and other facts of engage de novo through its subsidiary, Havens & record, the Board concludes that consummation of the Company, Inc., Radnor, Pennsylvania ("Havens"), in proposal would not have a substantial adverse effect loan marketing and advisory services. on existing competition in the Clinton banking Notice of the application, affording interested permarket.6 sons an opportunity to submit comments, has been The financial and managerial resources of Union, its duly published (53 Federal Register 1,063 (1988)). The subsidiaries and Boatmen's Bank are consistent with time for filing comments has expired, and the Board approval. Considerations relating to the convenience has considered the application and all comments reand needs of the communities to be served are also ceived in light of the public interest factors set forth in consistent with approval. section 4(c)(8) of the Act. Based on the foregoing and other facts of record, the Bryn Mawr, a one-bank holding company by virtue Board has determined that the application should be, of its control of The Bryn Mawr Trust Company, and hereby is, approved. The acquisition of Boatmen's controls total deposits of $235.8 million, representing Bank shall not be consummated before the thirtieth less than 1.0 percent of the total deposits in commercalendar day following the effective date of this Order, cial banking organizations in Pennsylvania.1 or later than three months after the effective date of Bryn Mawr proposes to establish Havens as a this Order, unless such period is extended for good de novo subsidiary that will engage in providing: cause by the Board or by the Federal Reserve Bank of (1) advice concerning marketing of loans and other Kansas City acting pursuant to delegated authority. extensions of credit, including, but not limited to, By order of the Board of Governors, effective permanent residential mortgage loans, real estate March 7, 1988. construction loans, secured and unsecured consumer paper, consisting of both two party consumer loans and three party consumer paper contracts, and Voting for this action: Vice Chairman Johnson and Governors Seger, Angell, Heller, and Kelley. Absent and not participations; and voting: Chairman Greenspan. (2) assistance to any person in selling and purchasing such loans and other extensions of credit (col- JAMES MCAFEE lectively "loan marketing and advisory services"). Associate Secretary of the Board Havens will provide these loan marketing and advis- Orders Issued Under Section 4 of the Bank ory services to Bryn Mawr's subsidiary, The Bryn Holding Company Act Mawr Trust Company, and to other institutions and business entities. Havens will not purchase, under- Bryn Mawr Bank Corporation write, guarantee or take any position in connection Bryn Mawr, Pennsylvania with the loans it markets. Bryn Mawr's proposed activities are encompassed Order Approving Application to Engage in Loan within the authorization in the Board's Regulation Y Marketing and Advisory Services for bank holding companies to make, acquire or service loans, 12 C.F.R. § 225.25(b)(1). The Board has Bryn Mawr Bank Corporation, Bryn Mawr, Pennsyl- previously approved applications by bank holding vania ("Bryn Mawr"), a bank holding company within companies to act as an agent, broker or advisor with respect to commercial loans and other extensions of credit, an activity essentially identical to Bryn Mawr's 5. If 50 percent of deposits held by thrift institutions in the Clinton proposed activity.2 Accordingly, Bryn Mawr's activibanking market were included in the calculation of market concentra- ties are closely related to banking and permissible for tion, the share of total deposits held by the four largest organizations bank holding companies. in the market would be 71.9 percent. Union would control 16.6 percent of the market's deposits and Boatmen's Bank would control 13.7 percent of the market's deposits. The HHI would increase by 456 points to 1687. 6. The Board has received comments from two individuals and one 1. Banking data are as of December 31, 1987. banking organization asserting that consummation of the proposal 2. Sovran Financial Corporation, 73 FEDERAL RESERVE BULLETIN would substantially lessen competition in the Clinton banking market. 939 (1987); Post-och Kreditbanken, PKbanken, 68 FEDERAL RESERVE For the reasons discussed above, the Board has determined that the BULLETIN 787 (1982); and Societe Generate, 67 FEDERAL RESERVE comments do not warrant denial of the application. BULLETIN 453 (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

330 Federal Reserve Bulletin • May 1988 In order to approve this application, the Board also The Citizens and Southern Corporation must find that the performance of the proposed activ- Atlanta, Georgia ity can reasonably be expected to produce benefits to the public, such as greater convenience, increased Citizens and Southern Georgia Corporation competition, or gains in efficiency, that outweigh pos- Atlanta, Georgia sible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts Order Approving the Acquisition of Factoring Assets of interests, or unsound banking practices. Although Bryn Mawr proposes to engage in loan The Citizens and Southern Corporation ("C&S"), and marketing and advisory services primarily in the Phil- its wholly owned subsidiary Citizens and Southern adelphia area, the market for such services is national Georgia Corporation ("C&S Georgia"), both of Atin scope. In addition, the Board expects that the lanta, Georgia (collectively "Applicant"), bank holdde novo entry of Bryn Mawr into the market for these ing companies within the meaning of the Bank Holding services will increase the level of competition among Company Act (the "Act") (12 U.S.C. § 1841 etseq.), providers of these services. Bryn Mawr's provision of have applied for the Board's approval under section loan marketing and advisory services will enhance the 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section liquidity of the loan market and facilitate the entry of 225.23(a)(2) of the Board's Regulation Y (12 C.F.R. small institutions into the secondary loan market. § 225.23(a)(2)) to acquire all the factoring assets of Accordingly, the Board concludes that this proposal Chemical Bank and Chemical Business Credit Corpowould have no adverse effect on competition. ration, both of New York, New York (collectively There is no evidence in the record to indicate that "Chemical Factoring"). Applicant will effect the ac- Bryn Mawr's proposed activity would lead to any quisition through its subsidiary, C&S Business Credit, undue concentration of resources, decreased or unfair Inc., Tucker, Georgia ("C&S Credit"). Chemical Faccompetition, unsound banking practices, or other ad- toring provides financial services for factoring activiverse effects. Public benefit factors, therefore, favor ties primarily in the apparel and textile industries. approval of the proposal. In addition, the financial and These activities have been determined by the Board to managerial resources of Bryn Mawr are also consis- be closely related to banking and permissible for bank tent with approval. holding companies or their subsidiaries (12 C.F.R. § 225.25(b)(1)).1 Based upon the foregoing and all the facts of record, the Board has determined that the balance of the Notice of the application, affording interested perpublic interest factors that it is required to consider sons an opportunity to submit comments and views, under section 4(c)(8) is favorable. Accordingly, the has been duly published (52 Federal Register 47,973 application is hereby approved. This determination is (1987)). The time for filing comments and views has subject to all of the conditions set forth in Regulation expired, and the Board has considered the application Y, including sections 225.4(d) and 225.23(b) of the and all comments received in light of the factors Board's Regulation Y, 12 C.F.R. §§ 225.4(d) and specified in section 4(c)(8) of the Act. 225.23(b), and to the Board's authority to require such C&S, with consolidated assets of approximately modification or termination of the activities of a bank $20.5 billion,2 operates three subsidiary banks in Georholding company or any of its subsidiaries as the gia, Florida, and South Carolina, which together con- Board finds necessary to assure compliance with the trol $14.8 billion in deposits. C&S also engages provisions and purposes of the Act and the Board's through its nonbank subsidiaries in various nonbankregulations and orders issued thereunder, or to pre- ing activities, such as providing investment or financial vent evasion thereof. advice, discount brokerage services, leasing, and data This activity shall not be commenced later than processing. These activities are conducted primarily in three months after the effective date of this Order, the states of Georgia, Florida, and South Carolina. unless such period is extended for good cause by the Applicant currently provides factoring services pri- Board or by the Federal Reserve Bank of Philadelphia, marily for the carpeting and home furnishings induspursuant to delegated authority. tries through five offices located in California, Georgia, By order of the Board of Governors, effective March 22, 1988. 1. C&S's indirect subsidiary, Citizens and Southern Commercial Corporation, acquired the factoring assets of Chemical Bank and Voting for this action: Chairman Greenspan and Governors Chemical Business Credit in December 1987, through a cash payment Johnson, Seger, Angell, Heller, and Kelley. by the Citizens and Southern National Bank to Chemical Bank. This application represents a corporate reorganization whereby C&S JAMES MCAFEE Credit will acquire these factoring assets. Associate Secretary of the Board 2. All banking data are as of December 31, 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 331 New York and North Carolina. Applicant is the ninth ing company or any of its subsidiaries as the Board largest factor in the United States, with year-end finds necessary to assure compliance with the provireceivables of $1.8 billion, and controls 4.6 percent of sions and purposes of the Act and the Board's regulathe market for factoring services in the United States. tions and orders issued thereunder, or to prevent Prior to the acquisition by C&S, Chemical Factoring evasion thereof. was the 11th largest factor in the United States, with The transaction shall be made not later than three year-end receivables of $1.7 billion, and controlled 4.2 months after the effective date of this Order, unless percent of the market for factoring services. Chemical such period is extended for good cause by the Board or Factoring provided factoring services primarily in the by the Federal Reserve Bank of Atlanta, pursuant to apparel and textile industries and operated three of- delegated authority. fices located in California and New York. After the By order of the Board of Governors, effective acquisition of Chemical Factoring, Applicant became March 21, 1988. the third largest factor in the United States, with an 8.8 percent market share. Voting for this action: Chairman Greenspan and Governors The Board has previously stated that the market for Johnson, Seger, Angell, Heller, and Kelley. factoring services is nationwide.3 The market is considered unconcentrated, with a four-firm concentra- JAMES MCAFEE tion ratio of 41.7 percent. The Herfindahl-Hirschman Associate Secretary of the Board Index ("HHI") of the market is 773 and would increase by 39 points to 812 upon consummation of this First Interstate Bancorp proposal.4 Although the acquisition of Chemical Fac- Los Angeles, California toring eliminated some existing competition between Applicant and Chemical Factoring, numerous other First Interstate Bancorp of Texas factors continue to operate in the market. Accord- Los Angeles, California ingly, consummation of this proposal would not have a significant adverse effect on competition in the factor- Order Affirming Earlier Approval of Acquisition of ing market. Insurance Agency The public will benefit from the proposal through maintenance of a source of funding for the apparel and First Interstate Bancorp and First Interstate Bancorp textile industries. Chemical Factoring has indicated its of Texas, both of Los Angeles, California (together, desire to discontinue these services. Moreover, there "Applicants"), previously have applied1 under secis no evidence in the record that consummation of this tion 4(c)(8)(D) of the Bank Holding Company Act proposal would result in adverse effects such as un- ("BHC Act") (12 U.S.C. § 1843(c)(8)(D)) and section sound banking practices, unfair competition, conflicts 225.25(b)(8)(iv) of Regulation Y (12 C.F.R. of interest, or an undue concentration of resources. In § 225.25(b)(8)(iv)), for permission to acquire Allied addition, financial and managerial resources are con- Agency, Inc., Houston, Texas ("Agency"), and sistent with approval of this application. thereby to engage in acting as managing general agent Based upon the foregoing and other considerations for the vendor single interest programs of the subsidreflected in the record, the Board has determined that iary banks of Allied Bancshares, Inc., Houston, Texas the balance of the public interest factors that the Board ("Allied"). On October 28, 1987, the Secretary of the is required to consider under section 4(c)(8) is favor- Board, acting pursuant to authority delegated by the able. Accordingly, the application is hereby approved. Board, approved the application. This determination is subject to the conditions set Due to a procedural problem, however, the National forth in Regulation Y, including sections 225.4(d) and Association of Life Underwriters, the National Asso- 225.23(b), and to the Board's authority to require such ciation of Professional Insurance Agents, the Indepenmodification or termination of the activities of a hold- dent Insurance Agents of America, Inc., the National Association of Casualty and Surety Agents, and the National Association of Surety Bond Producers ("Petitioners"), did not receive a copy of the application in 3. See e.g., CoreStates Financial Corp., 72 FEDERAL RESERVE BULLETIN 143 (1986); Manufacturers Hanover Corporation, 70 FED- time to make timely comments, although they had ERAL RESERVE BULLETIN 452 (1984); Security Pacific Corporation, 70 requested a copy of the application within the relevant FEDERAL RESERVE BULLETIN 370 (1984). 4. Under the revised Department of Justice Merger Guidelines (49 comment period. On this basis, Petitioners have re- Federal Register 26,823 (June 29, 1984)), any market in which the post-merger HHI is below 1000 is considered unconcentrated, and the Department will not challenge a merger with a post-merger HHI below 1000, except in extraordinary circumstances. 1. Applicants submitted their application on September 17, 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

332 Federal Reserve Bulletin • May 1988 quested that the Board reconsider and deny the appli- Agency qualifies for grandfather privileges under excation. Petitioners claim that Allied's grandfather emption D. rights to engage in insurance activities through Agency In keeping with its precedent, the Board observes terminate upon Applicants' acquisition of Allied. that upon its recent acquisition by Applicants, Allied In view of the circumstances surrounding Petition- remains as a separate bank holding company and ers' inability to obtain a copy of the application during Agency will be retained as a separate nonbank subsidthe relevant comment period, the Board has decided to iary of Allied. As a consequence, Agency's grandfagrant Petitioners' request for reconsideration. After thered insurance activities will be wholly self-conconsidering the comments of the Petitioners, and for tained and isolated from the operations of other of the reasons set forth below, however, the Board has Applicants' subsidiaries. The Board, therefore, condecided to affirm the Secretary's earlier decision. cludes that Agency may retain its exemption D grand- Title VI of the Garn-St Germain Act amended the father privileges even after its purchase by another nonbanking prohibitions in section 4 of the BHC Act non-grandfathered banking firm. to provide that insurance agency and underwriting Geographic Scope of Activities. Under the terms of activities are not permissible for bank holding compa- section 4(c)(8)(D), however, Agency may conduct nies. Title VI provided seven specific exceptions to grandfathered insurance activities only in Texas, this prohibition, however, including grandfather rights states adjacent thereto, or states in which it lawfully under one of the exemptions for "any insurance activ- engaged in insurance activities on May 1, 1982. ity which was engaged in by the bank holding company 12 U.S.C. § 1843(c)(8)(D). or any of its subsidiaries on May 1, 1982" (hereinafter In considering any application under section 4(c)(8) "exemption D"), 12 U.S.C. § 1843(c)(8)(D).2 of the BHC Act, the Board must determine whether The Board previously has determined that any com- the proposed activity is a proper incident to banking; pany entitled to engage in insurance agency activities that is, whether performance of the activity can reaunder exemption D does not lose those rights upon its sonably be expected to produce benefits to the public acquisition by another non-grandfathered banking that outweigh possible adverse effects. As a result of firm, provided that the grandfathered entity retains it Applicants' proposal, consumers in Texas and adjaseparate corporate structure and its insurance activi- cent states would benefit from ongoing access to ties are not conducted by other companies within the Agency as a source of insurance products and seracquiring banking organization.3 Applicants claim that vices. The continuation of grandfathered operations Agency was engaged lawfully in general insurance by Agency thus would serve to maintain existing activities on May 1, 1982, the grandfather date under business relationships and expectations, and also exemption D, and that Agency therefore could retain would preserve Agency as a viable competitor in the its exemption D rights after its acquisition by Appli- insurance agency industry. Conversely, there is no cants. Petitioners argue that the Board should reverse evidence to suggest that Applicants' proposal would its position that exemption D rights do not expire upon result in undue concentration of resources, unfair or the acquisition of a grandfather company by another decreased competition, conflicts of interest or other bank holding company. adverse effects. The balance of public interest factors Eligibility under Exemption D. The record demon- therefore weighs in favor of Applicants' ability to strates that Agency has lawfully engaged in acting as retain indirect control of a company such as Agency managing general agent for the vendor single interest that engages in exemption D grandfathered insurance programs of the subsidiary banks of Allied since July activities. 1, 1979.4 On this basis, the Board concludes that Based on the foregoing and other facts of record, the Board has determined that the application under section 4 should be, and hereby is, approved. This determination is subject to all of the conditions set forth in Regulation Y, and provided that the insurance activi- 2. On October 3, 1986, the Board amended Regulation Y to include the insurance agency activities delineated in the seven exemptions to ties are conducted solely by Agency, which must the Gam-St Germain Act in the list of activities that the Board has remain an independent subsidiary of Applicants. It is found to be closely related to banking within the meaning of section also subject to the Board's authority to require such 4(c)(8) of the Act and thus permissible for bank holding companies. 51 Federal Register 36,201 (1986), codified at 12 C.F.R. § 225.25(b)(8) modifications or termination of activities of the bank (1987). holding company or any of its subsidiaries as the 3. See, e.g., Sovran Financial Corp., 73 FEDERAL RESERVE BUL- Board finds necessary to assure compliance with, and LETIN 672 (1987). 4. Agency received approval from the Federal Reserve Bank of prevent evasions of, the provisions and purposes of Dallas, by letter dated March 9, 1979, to commence this activity on the BHC Act and the Board's regulations and orders April 23, 1979. By letter dated March 14, 1979, the Texas Department issued thereunder. of Banking also approved the activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 333 By order of the Board of Governors, effective tion of the proposed activities to banking and on the March 16, 1988. balance of public interest factors, has been duly published (53 Federal Register 2,093 (1988)). The time for filing comments has expired, and the Board has con- Voting for this action: Chairman Greenspan and Governors sidered the application and all comments received in Johnson, Seger, Angell, Heller, and Kelley. light of the public interest factors set forth in section 4(c)(8) of the Act. WILLIAM W. WILES Northern Trust, with total consolidated assets of Secretary of the Board $8.1 billion, is the fourth largest banking organization in Illinois.1 Northern Trust operates eight subsidiary banks and engages through certain of its subsidiaries in Northern Trust Corporation a variety of nonbanking activities. NFC is a futures Chicago, Illinois commission merchant ("FCM") registered with the Commodity Futures Trading Commission ("CFTC") that engages in the execution and clearance of futures Order Approving Application to Execute and Clear contracts and options on futures contracts for bullion, Futures Contracts on Stock Indexes and Futures foreign exchange, government securities, certificates Contracts on a Municipal Bond Index, and Options of deposit, and other money market instruments that a on such Futures Contracts bank may buy or sell in the cash market for its own account, pursuant to section 225.25(b)(18) of the Northern Trust Corporation, Chicago, Illinois Board's Regulation Y, 12 C.F.R. § 225.25(b)(18). ("Northern Trust"), a bank holding company within NFC also provides investment advice on financial the meaning of the Bank Holding Company Act, futures and options on futures pursuant to sec- 12 U.S.C. § 1841 et seq. ("Act"), has applied tion 225.25(b)(19) of Regulation Y, 12 C.F.R. pursuant to section 4(c)(8) of the Act (12 U.S.C. § 225.25(b)(19).2 § 1843(c)(8)) to engage de novo through its wholly The Board has previously determined that the exeowned subsidiary, Northern Futures Corporation, cution and clearance of futures contracts and options Chicago, Illinois ("NFC"), in the execution and clear- on futures contracts based on stock indexes, and of ance, on major commodity exchanges, of futures con- futures contracts on a municipal bond index are tracts on stock indexes, futures contracts on a munic- closely related to banking. (J.P. Morgan & Co. Incoripal bond index, and options on such futures contracts. porated, 71 FEDERAL RESERVE BULLETIN 251 (1985); NFC proposes to execute and clear: Bankers Trust New York Corporation, 71 FEDERAL (1) the Standard & Poor's 500 Stock Price Index RESERVE BULLETIN 111 (1985)). The proposed activifutures contract ("S&P 500") and options on the ties of NFC are essentially identical to those activities S&P 500 futures contract, which are currently previously approved by the Board.3 Thus, the Board traded on the Index and Option Division of the concludes that Northern Trust's proposal to execute Chicago Mercantile Exchange; and clear futures contracts on the proposed stock (2) the Bond Buyer Municipal Bond Index futures indexes and municipal bond index, and options contract, the Major Market Index futures contract, thereon, is closely related to banking. and options on the Bond Buyer Municipal Bond Under section 4 of the Act, the Board is also Index futures contract, all of which are currently required to determine that the performance of the traded on the Chicago Board of Trade; and (3) the New York Stock Exchange ("NYSE") Composite Index futures contract, and options on the 1. As of June 30, 1987. NYSE Composite Index futures, both of which are 2. In November 1987, Northern Trust received permission from the currently traded on the New York Futures Ex- Federal Reserve Bank of Chicago, acting pursuant to delegated authority under 12 C.F.R. § 225.23(a)(1), for NFC to engage in these change, a subsidiary of the New York Stock Ex- activities. change. 3. The Board has previously approved the execution and clearance of futures contracts and options on those futures contracts on all of the indexes being applied for by Northern Trust with the exception of Northern Trust proposes to offer these services options on futures contracts on the Bond Buyer Municipal Bond throughout the United States to major domestic and Index. The options on futures contracts on the Bond Buyer Municipal Bond Index have essentially the same terms and serve the same foreign financial institutions, pension funds, and other functions as the options on futures contracts for other indexes for sophisticated customers. which execution and clearance has been approved by the Board. Therefore, the Board has determined that the execution and clearance Notice of the application, affording interested perof options on futures contracts on this additional index is closely sons an opportunity to submit comments on the rela- related to banking. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

334 Federal Reserve Bulletin • May 1988 proposed activities by applicant "can reasonably be The Royal Bank of Canada expected to produce benefits to the public . . . that Montreal, Canada outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair com- Order Approving Application to Engage in Securities petition, conflicts of interests, or unsound banking and Financial Advisory Activities practices." 12 U.S.C. § 1843(c)(8). Consummation of Northern Trust's proposal would The Royal Bank of Canada, Montreal, Canada ("Approvide added convenience to its clients. The Board plicant"), a foreign bank subject to the Bank Holding expects that the de novo entry of Northern Trust into Company Act ("BHC Act"), 12 U.S.C. § 1841 the market for these services would increase the level et seq., has applied for the Board's approval under of competition among providers of these services section 4(c)(8) of the BHC Act, 12 U.S.C. already in operation. Accordingly, the Board con- § 1843(c)(8), and section 225.21(a) of the Board's cludes that the performance of the proposed activities Regulation Y, 12 C.F.R. § 225.21(a), to acquire Doby Northern Trust can reasonably be expected to minion Securities Corporation, New York, New York provide benefits to the public. ("Company"), and thereby engage in: Moreover, there is no evidence in the record that (1) providing advice in connection with mergers and consummation of the proposed FCM activities would acquisitions, divestitures, loan syndications, interresult in any adverse effects such as undue concentraest rate swaps, interest rate caps and similar transtion of resources, decreased or unfair competition, actions to unaffiliated financial and nonfinancial inconflicts of interests, or unsound banking practices. In stitutions; addition, the Board has taken into account and has (2) providing securities brokerage and investment relied on the regulatory framework established pursuadvisory services on a combined basis to instituant to law by the CFTC for the trading of futures. tional customers and affiliates; and The financial and managerial resources and future (3) providing financial advice to the Canadian fedprospects of Applicant are considered consistent with eral, provincial and municipal governments, such as approval. Based upon a consideration of all the relewith respect to the issuance of their securities in the vant facts, the Board concludes that the balance of the U.S.1 public interest factors that it is required to consider under section 4(c)(8) is favorable. Accordingly, based on all the facts of record and the commitments made Company currently engages in a wide range of by Applicant, and subject to the conditions in this securities underwriting, dealing, brokerage and advis- Order, the Board has determined that the proposed ory activities.2 Applicant has committed to limit Com application should be, and hereby is, approved. This determination is subject to all of the conditions set forth in Regulation Y, including sections 225.4(d) and 1. Applicant has also applied to engage in providing discount 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)), brokerage services to non-institutional customers as well as securities and to the Board's authority to require such modifica- credit services pursuant to the Board's Regulation T (12 C.F.R. Part 220); furnishing general economic information and advice, general tion or termination of the activities of a bank holding economic statistical forecasting services and industry studies to company or any of its subsidiaries as the Board finds institutional customers and Company's affiliates; providing portfolio investment advice and research to institutional customers; and undernecessary to assure compliance with, or to prevent writing and dealing in obligations of the United States, general evasion of, the provisions and purposes of the Act and obligations of states and their political subdivisions, and other obligathe Board's regulations and orders issued thereunder. tions that state member banks are authorized to underwrite and deal in under 12 U.S.C. §§ 24 and 335. The Board has previously found these The transaction shall be made not later than three activities, as proposed here, to be closely related to banking and a months after the effective date of this Order, unless proper incident thereto. 12 C.F.R. §§ 225.25(b)(15), (4)(iv), (4)(iii) such period is extended for good cause by the Board or and (16), respectively. 2. Company' s current activities consist of providing brokerage and by the Federal Reserve Bank of Chicago, pursuant to incidental services, including securities borrowing and lending to delegated authority. institutional customers; providing investment advice and research to institutional customers; underwriting and dealing in Canadian federal, By order of the Board of Governors, effective provincial and municipal government securities; underwriting and March 3, 1988. dealing in U.S. government and agency securities, securities of states and their subdivisions, securities of certain supranational organizations (such as the World Bank), bankers acceptances and certificates Voting for this action: Chairman Greenspan and Governors of deposit, including related futures and options; underwriting and Johnson, Seger, Angell, Heller, and Kelley. dealing in U.S. and Canadian corporate debt and equity securities; providing financial advice to the Canadian federal, provincial and municipal governments, such as with respect to the issuance of their JAMES MCAFEE securities in the U.S.; acting as agent in the private placement of Associate Secretary of the Board corporate securities; and acting as a dealer in commercial paper. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 335 pany to those activities for which it seeks approval Circuit in its affirmance of the Board's NatWest here. Order.4 Notice of the application, affording interested per- Applicant has proposed to conduct its brokerage sons an opportunity to submit comments, has been activity in accordance with all of the limitations apduly published (53 Federal Register 1,51 A (1988)). The proved by the Board in NatWest and Bank of Nova time for filing comments has expired, and the Board Scotia.5 As in Bank of Nova Scotia, Applicant prohas considered the application and all comments re- poses that Applicant, a foreign bank, be permitted to ceived in light of the public interest factors set forth in have management interlocks with Company. No ofsection 4(c)(8) of the BHC Act. ficers of Applicant will serve as officers of Company Applicant, with total consolidated assets equivalent and no directors of Applicant will serve as directors of to approximately $76.5 billion, is the 43rd largest Company. Applicant has further committed that Combanking organization in the world.3 Applicant owns a pany will not have officer or director interlocks with its bank subsidiary in San Juan, Puerto Rico, and main- U.S. bank subsidiaries, branches or agencies. tains branches in New York, Portland and San Juan and an agency in Miami. Applicant also owns RBC III. Financial Advisory Services to Canadian Holdings (USA) Inc., New York, New York, and its Governmental Entities bank subsidiary, The Royal Bank and Trust Company, New York, New York. Applicant engages in various In Bank of Nova Scotia, the Board approved the activities in the United States under sections 4(c)(8) activity of providing financial advice to the Canadian and 4(c)(9) of the BHC Act and the Board's Regula- federal and provincial governments, such as with tions Y and K (12 C.F.R. Parts 225 and 211, respec- respect to the issuance of their securities in the U.S. tively). Applicant's proposal differs from this activity only in that Applicant proposes to provide financial advice to I. Merger and Acquisition Advice to Canadian municipal governments in addition to Cana- Unaffiliated Financial and Nonfinancial dian federal and provincial governments. Institutions Applicant contends that the skills and factors necessary to conduct the proposed activity are virtually Applicant has proposed that Company engage in cer- indistinguishable from other activities that the Board tain financial advisory activities for unaffiliated finan- has previously approved as appropriate for a bank cial and nonfinancial institutions. The Board previ- holding company subsidiary. In addition, Applicant ously has determined that, subject to certain states that Company has a long-standing relationship limitations, these financial advisory activities are per- with Canadian federal, provincial and municipal govmissible nonbanking activities for bank holding com- ernments and has developed special expertise in adpanies. Signet Banking Corporation, 73 FEDERAL RE- vising such entities, particularly with respect to the SERVE BULLETIN 59 (1987). Applicant has committed issuance of their securities in the United States. to limit Company's financial advisory activities as set forth in that Order. 4. Securities Industry Ass'n v. Board of Governors, 821 F.2d 810 (D.C. Cir. 1987), cert, denied, 56U.S.L.W. 3451 (U.S. Jan. 11, 1988) II. Providing Investment Advice and Securities (No. 87-562). 5. Under this proposal, Company will not act as principal or take Brokerage on a Combined Basis a position (i.e., bear the financial risk) in any securities it brokers or recommends except bank-eligible securities. Where Company provides investment advice on any bank-eligible securities that it is at the The Board previously has determined that the comsame time carrying for its own account, Company will disclose such bined offering of investment advice with securities fact to its customers in accordance with prior Board decisions. See, brokerage services to institutional customers is a per- Manufacturers Hanover Corporation, 70 FEDERAL RESERVE BULLE- TIN 661,662 (1984). As in Bank of Nova Scotia, Company will execute missible nonbanking activity and does not violate the a transaction only at the direction of a customer and will not exercise Glass-Steagall Act. See, e.g., National Westminster discretion with respect to any customer account. Company will not execute any transaction where an affiliate exercises investment dis- Bank PLC, 12 FEDERAL RESERVE BULLETIN 584 cretion without customer authorization. Company will offer invest- (1986) ("NatWest"); and The Bank of Nova Scotia, 74 ment advice, as well as provide securities execution services, to FEDERAL RESERVE BULLETIN 249 (1988) ("Bank of institutional customers on an integrated basis, i.e., Company will not charge an explicit fee for the investment advice and will receive fees Nova Scotia"). That position has been upheld by the only for transactions executed for customers. If Company offers its U.S. Court of Appeals for the District of Columbia advisory services for a separate fee, it will not require its advisory customers to use its brokerage services. In addition, as in Bank of Nova Scotia, Company will employ a $1 million threshold in determining institutional customers and will share customer lists with its affiliates, but not confidential information obtained from its cus- 3. Asset data are as of January 31, 1987. Banking data are as of tomers. December 31, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

336 Federal Reserve Bulletin • May 1988 The Board believes that the slight modification Orders Issued Under Sections 3 and 4 of the proposed by Applicant to the activity previously ap- Bank Holding Company Act proved by the Board in Bank of Nova Scotia does not alter the activity to render it less closely related to First City Acquisition Corporation banking. Moreover, Applicant's modification would Houston, Texas not appear to alter the activity such that the public benefits stemming from this proposal, such as in- Order Approving Formation of a Bank Holding creased competition, customer convenience and effi- Company ciency, would be outweighed by adverse effects. Applicant has also requested permission for Com- First City Acquisition Corporation, Houston, Texas, pany to continue to engage in underwriting and dealing has applied for the Board's approval under section in Canadian government debt obligations. These are 3(a)(1) of the Bank Holding Company Act (the "Act") activities that are not permitted for U.S. bank holding (12 U.S.C. § 1842(a)(1)) to become a bank holding companies and the Board does not propose to autho- company by acquiring the assets and assuming the rize such activities at this time. In light of the fact that liabilities of First City Bancorporation of Texas, Inc., the acquisition of Company is only a small part of a Houston, Texas ("FCB"), thereby acquiring all of larger transaction in Canada, however, and in order to FCB's subsidiary banks, which are listed in the Appermit an orderly transition, the Board under section pendix to this Order.1 Applicant also has applied for 4(c)(9) has determined that Company may continue to the Board's approval under section 4(c)(8) of the Act engage in such activities with respect to Canadian (12 U.S.C. § 1843(c)(8)) to acquire the nonbanking government debt obligations for six months, after companies of FCB.2 Applicant also has provided nowhich time the activities must be conformed to the tice to the Board under section 25(a) of the Federal requirements of the BHC Act. Reserve Act and 12 C.F.R. § 211.4(b)(3) of its intention to acquire indirectly control of First City Interna- Consummation of the proposal is not likely to result tional Corporation of Texas, an Edge Act corporation. in decreased or unfair competition, conflicts of interest, unsound banking practices, concentration of re- Notice of the applications, affording opportunity for sources, or other adverse effects. Based on the fore- interested persons to submit comments and views, has going and other facts of record, the Board has been duly published (53 Federal Register 3,454, 4,074 determined that the balance of public interest factors it (1988)). The time for filing comments has expired, and must consider under section 4(c)(8) of the BHC Act is the Board has considered the applications and all favorable. Accordingly, the Board has determined that comments received in light of the factors set forth in the application should be, and hereby is, approved. sections 3(c) and 4(c)(8) of the Act. This determination is further subject to all of the Applicant is a nonoperating corporation formed for conditions set forth in the Board's Regulation Y, the purpose of acquiring the banking and nonbanking including those in sections 225.4(d) and 225.23(b), and subsidiaries of FCB. Together, the banking subsidiarto the Board's authority to require modification or ies to be acquired are the fourth largest commercial termination of the activities of the holding company or banking organizations in Texas, with deposits of apany of its subsidiaries as the Board finds necessary to proximately $10.6 billion, representing approximately assure compliance with the provisions and purposes of 7.0 percent of the total deposits in commercial banks the BHC Act and the Board's regulations and orders issued thereunder, or to prevent evasion thereof. This transaction shall not be consummated later than three months after the effective date of this 1. After consummation of this proposal, Applicant will operate under the name of First City Bancorporation of Texas, Inc. Order, unless such period is extended for good cause 2. Applicant proposes to acquire: Central Texas Insurance Agency, by the Board, or by the Federal Reserve Bank of New Inc., Houston, Texas, and thereby engage in acting as a managing general agent with respect to insurance for Applicant's banking York, pursuant to delegated authority. subsidiaries and credit-related life, health, property and casualty By order of the Board of Governors, effective insurance; First City Life Insurance Company, Houston, Texas, and March 28, 1988. thereby engage in underwriting credit life and credit accident and health insurance directly related to extensions of credit by creditgranting subsidiaries of Applicant; First City Energy Finance Com- Voting for this action: Vice Chairman Johnson and Gover- pany, Houston, Texas, and thereby engage in making and acquiring loans and extensions of credit, both secured and unsecured, which nors Seger, Angell, Heller, and Kelley. Absent and not relate to energy development, exploration and energy support voting: Chairman Greenspan. projects; and First City Financial Corporation, Houston, Texas, and thereby engage in making and servicing loans, and leasing personal and real property. These activities are authorized for bank holding JAMES MCAFEE companies pursuant to the Board's Regulation Y, 12 C.F.R. Associate Secretary of the Board §§ 225.25(b)(1), (5), (8)(i), (8)(iv), and (8)(v). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 337 in Texas.3 Accordingly, consummation of the proposal of Applicant's nonvoting junior convertible participatwould not increase the concentration of banking re- ing preferred stock. In addition, a group of new sources in Texas. outside investors will provide approximately $500 mil- Section 3(d) of the Act (12 U.S.C. § 1842(d)), the lion of new capital. This increase in primary capital is Douglas Amendment, prohibits the Board from ap- considered to be a significant factor weighing in favor proving any application by a bank holding company to of the proposal. acquire control of any bank located outside of the After a review of this proposal in light of the holding company's home state,4 unless such acquisi- financial assistance by the FDIC, the substantial caption is "specifically authorized by the statute laws of ital injection by outside investors, and other facts of the State in which [the] bank is located, by language to record, the Board concludes that the financial rethat effect and not merely by implication." One of the sources of Applicant, FCB, and its subsidiary banks banks Applicant proposes to acquire is First City are consistent with approval of this application. Con- Bank, Sioux Falls, N.A., Sioux Falls, South Dakota venience and needs considerations also are consistent ("Bank"). Effective February 17, 1988, South Dakota with approval. law permits an out-of-state banking organization to As indicated earlier, Applicant also has applied, acquire a bank located in South Dakota if the acquisi- pursuant to section 4(c)(8), to acquire the leasing, tion is part of an FDIC-assisted transaction.5 The lending, and insurance subsidiaries of FCB. Because South Dakota Banking Commission approved Appli- Applicant is a nonoperating corporation formed for the cant's acquisition of Bank on February 24, 1988. purpose of acquiring the banking and nonbanking Based on the foregoing factors and its own review of subsidiaries of FCB, Applicant does not operate any the record, the Board has determined that the pro- nonbanking subsidiaries that compete with these composed acquisition is specifically authorized by the panies. Further, there is no evidence in the record to statute laws of South Dakota, and thus Board approval indicate that approval of this proposal would result in is not prohibited by the Douglas Amendment. undue concentration of resources, decreased or unfair FCB's banks operate in 20 banking markets in competition, conflicts of interests, unsound banking Texas.6 Principals of Applicant are not affiliated with practices, or other adverse effects on the public interany other depository institution in these markets. est. Accordingly, the Board has determined that the Accordingly, the Board has determined that the pro- balance of public interest factors it must consider posal would not have a significant adverse effect on under section 4(c)(8) of the Act is favorable and competition in these markets. consistent with approval of the application to acquire In evaluating this application, the Board has consid- the nonbanking subsidiaries and activities. ered the effect of the proposed acquisition on Appli- Applicant has requested the Board's authorization cant and FCB. This proposal is part of an FDIC- to retain the insurance agency activities of FCB's assisted reorganization designed to address the wholly owned subsidiary, Central Texas Insurance financial condition of FCB and its subsidiary banks. Agency, Inc. ("Agency"), which engages in acting as As part of this proposal, FCB will transfer approxi- a managing general agent with respect to (i) insurance mately $1.8 billion in low-quality assets from its sub- for FCB's banking subsidiaries, and (ii) credit-related sidiary banks to Collecting Bank, a national bank in life, health, property, and casualty insurance. The liquidation. In exchange, the subsidiary banks will former of these activities is permissible pursuant to the receive $764 million in notes of the Collecting Bank Board's Regulation Y, 12 C.F.R. 225.25(b)(8)(V). The and $970 million in notes from the FDIC. The FDIC latter activity is permissible pursuant to exemption D also has agreed to purchase approximately $43 million of the Garn-St Germain Depository Institutions Act of 1982 (the "Garn Act").7 Exemption D of the Garn Act permits a bank holding company to engage in "any 3. Banking data are as of June 30, 1987. insurance activity which was engaged in by the bank 4. A bank holding company's home state is that state in which the holding company or any of its subsidiaries on May 1, operations of the bank holding company's banking subsidiaries were 1982." principally conducted on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. On August 22, 1980, FCB obtained approval for 5. An Act to permit reciprocal interstate banking and to declare an Agency to act as managing general agent for the sale of emergency, S.D. House Bill No. 1314 (to be codified at S.D. Laws Ann. § 51-16-40 (1988)). credit-related life, health, property, and casualty in- 6. These markets are: Austin RMA, Beaumont/Port Arthur RMA, Dallas banking market, Ft. Worth banking market, Houston RMA, San Antonio RMA, Beaumont/Port Arthur MSA, Brazoria MSA, Bryan/College Station MSA, Corpus Christi MSA, El Paso MSA, 7. 12 U.S.C. § 1843 (c)(8)(D). Such activities may be conducted in McAUen/Edinburg/Mission MSA, Midland MSA, San Angelo MSA, the grandfathered company's home state, states adjacent thereto or Tyler MSA, Angelina County, Austin County, Jim Wells County, any state where the company was authorized to operate an insurance Madison County, and Young County. business before the grandfather date. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

338 Federal Reserve Bulletin • May 1988 surance, and Agency was engaged in those activities JAMES MCAFEE on the grandfathered date. Accordingly, Agency is Associate Secretary of the Board entitled to continue this activity under exemption D. The Board has previously determined in Sovran APPENDIX Financial Corporation, 73 FEDERAL RESERVE BULLE- TIN 672 (1987), that an insurance agency which is entitled to continue to sell insurance under exemption (Subsidiary Banks of FCB) D does not lose its grandfathered rights if the agency is acquired by another bank holding company provided First City National Bank of Houston, Houston, Texas; the agency maintains its separate corporate structure First City Bank - Almeda Genoa, Houston, Texas; and its insurance activities are not extended to other First City Bank - Bear Creek, Houston, Texas; First subsidiaries within the acquiror's banking organiza- City Bank - Bellaire, N.A., Bellaire, Texas; First City tion. Agency will remain a separate subsidiary of Bank - Clear Lake, Houston, Texas; First City Bank - Applicant, and its insurance activities will not be Fondren South, Houston, Texas; First City Bank conducted by any of Applicant's subsidiaries. Accord- Gulfgate, Houston, Texas; First City Bank of Highingly, the Board has determined to permit Agency to land Village, Houston, Texas; First City Bank of continue to engage in insurance activities following its Humble, Humble, Texas; First City Bank - Inwood acquisition by Applicant.8 Forest, N.A., Houston, Texas; First City Bank - Lake The Board also has considered the notice of Appli- Jackson, Lake Jackson, Texas; First City Bank cant's acquisition of control of First City International Medical Center, N.A., Houston, Texas; First City Corporation of Texas under the Edge Act. Based on Bank - North Belt, N.A., Houston, Texas; First City the facts of record, the Board has determined that Bank - Northchase, N.A., Houston, Texas; First City disapproval of the proposed investment is not war- Bank - Northeast, N.A., Houston, Texas; First City ranted. Bank - Northline, Houston, Texas; First City National Based on the foregoing and other facts of record, the Bank of Richmond, Richmond, Texas; First City Board has determined that the applications should be, Bank - Westwood, N.A., Houston, Texas; First City and hereby are, approved. The acquisition of the Bank - Westheimer, N.A., Houston, Texas; First City banks listed in the Appendix to this Order shall not be Bank - Westheimer Plaza, N.A., Houston, Texas; consummated before the fifth calendar day following First City Bank of Dallas, Dallas, Texas; First City the effective date of this Order, or later than three National Bank of Arlington, Arlington, Texas; First months after the effective date of this Order, unless City Bank - Central Arlington, N.A., Arlington, such period is extended for good cause by the Board or Texas; First City National Bank of Colleyville, Colby the Federal Reserve Bank of Dallas, acting pursu- ley ville, Texas; First City Bank - East Dallas, Dallas, ant to delegated authority. The determinations as to Texas; First City Bank - Farmers Branch, Farmers Applicant's nonbanking activities are subject to all of Branch, Texas; First City Bank - Forest Hill, Fort the conditions contained in Regulation Y, including Worth, Texas; First City National Bank of Fort those in sections 225.4(d) and 225.23(b)(3) (12 C.F.R. Worth, Fort Worth, Texas; First City Bank of Gar- §§ 225.4(d) and 225.23(b)(3)), and to the Board's au- land, N.A., Garland, Texas; First City National Bank thority to require such modification or termination of of Grand Prairie, Grand Prairie, Texas; First City the activities of a holding company or any of its Bank of Lancaster, Lancaster, Texas; First City Bank subsidiaries as the Board finds necessary to assure of Lewis ville, Lewis ville, Texas; First City Bank compliance with the provisions and purposes of the Market Center, N.A., Dallas, Texas; First City Bank Act and the Board's regulations and orders issued of Piano, N.A., Piano, Texas; First City Bank of thereunder, or to prevent evasion thereof. Richardson, Richardson, Texas; First City Bank - By order of the Board of Governors, effective Valley View, Dallas, Texas; First City National Bank March 3, 1988. of Bryan, Bryan, Texas; First City National Bank of El Paso, El Paso, Texas; First City National Bank of Midland, Midland, Texas; First City National Bank of Voting for this action: Chairman Greenspan and Governors Johnson, Seger, Angell, and Heller. Abstaining from this Tyler, Tyler, Texas; First City National Bank of action: Governor Kelley. Austin, Austin, Texas; First City Bank - Northwest Hills, N.A., Austin, Texas; First City National Bank of Beaumont, Beaumont, Texas; First City Bank - Central, Beaumont, Texas; First City Bank - Gateway, 8. Pursuant to exemption D, Agency may sell insurance only in the N.A., Beaumont, Texas; Graham National Bank, Grahome state of FCB under the Douglas Amendment, and states adjacent to Texas. ham, Texas; First City Bank of Kountze, Kountze, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 339 Texas; First City National Bank of Lufkin, Lufkin, Sealy, Texas; and First City Bank, Sioux Falls, N.A., Texas; First City National Bank of Madisonville, Sioux Falls, South Dakota. Madisonville, Texas; First City National Bank of Orange, Orange, Texas; First City National Bank of Concurring Statement of Governor Angell San Angelo, San Angelo, Texas; First City Bank of Sour Lake, Sour Lake, Texas; First City Bank of Although I join the majority in approving these appli- Alice, Alice, Texas; First City Bank of Aransas Pass, cations, I would like to express my concern generally Aransas Pass, Texas; First City Bank of Corpus that the structure of the proposal makes it difficult for Christi, Corpus Christi, Texas; First City the Board to assess adequately the financial condition Bank - Central Park, San Antonio, Texas; First City and future prospects of the resulting organization and Bank - Forum, N.A., San Antonio, Texas; First City its subsidiary banks. On balance, however, I would Bank - Windsor Park, San Antonio, Texas; McAllen agree that the proposal represents the best available State Bank, McAllen, Texas; Citizens State Bank, alternative under the circumstances. March 3, 1988 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 . .. r. w \ Reserve Effective Applicant Bank(s) Bank date Bank Maryland Corp., Bank of Maryland-Harford Richmond March 24, 1988 Towson, Maryland County, Bel Air, Maryland B/W Bancshares, Inc., Morehead National Bank, Cleveland March 8, 1988 Lexington, Kentucky Morehead, Kentucky Cadiz Bancorp, Inc., Bank of Cadiz and Trust St. Louis March 22, 1988 Cadiz, Kentucky Company, Cadiz, Kentucky Capron Bancorp, Inc., Capron State Bank, Chicago March 11, 1988 Capron, Illinois Capron, Illinois Cascade State Corp., Cascade State Bank, Chicago February 26, 1988 Cascade, Iowa Cascade, Iowa CeeBee Corporation, The Citizens Bank, Atlanta March 18, 1988 Prattville, Alabama Prattville, Alabama Commercial National Commercial National Bank, Chicago March 18, 1988 Financial Corporation, Alma, Michigan Ithaca, Michigan Dominion Bankshares Greene County Bancshares, Richmond February 25, 1988 Corporation, Inc., Roanoke, Virginia Greene ville, Tennessee Eastcorp, Inc., Eastbank, National Association, New York March 30, 1988 New York, New York New York, New York Farmers Bancshares, Inc., State Bank of Breese, St. Louis March 4, 1988 Valmeyer, Illinois Breese, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

340 Federal Reserve Bulletin • May 1988 Section 3—Continued .. T. i / N Reserve Effective Applicant Bank(s) Bank date Fidelity Company, Cascade State Corp., Chicago February 26, 1988 Dyersville, Iowa Cascade, Iowa Fifth Third Bancorp, C&H Bancorp, Cleveland February 29, 1988 Cincinnati, Ohio Piqua, Ohio First of America Bank Rensselaer Financial Corporation, Chicago February 26, 1988 Corporation, Rensselaer, Indiana Kalamazoo, Michigan First of America Bancorporation- Indiana, Kalamazoo, Michigan First Commercial Bancshares, The Bank of Tuscaloosa, Atlanta March 3, 1988 Inc., Tuscaloosa, Alabama Jasper, Alabama First United Bancorp, Inc., First United Bank, Chicago February 25, 1988 Middletown, Indiana Middletown, Indiana Fort Worth State Bancshares, Fort Worth State Bank, Dallas March 10, 1988 Inc., Fort Worth, Texas Fort Worth, Texas Georgetown Bancorp, Inc., Georgetown Bank & Trust Cleveland March 17, 1988 Georgetown, Kentucky Company, Georgetown, Kentucky Greater Pacific Bancshares, Bank of Whittier, N.A., San Francisco February 26, 1988 Whittier, California Whittier, California Homestate Bancorp, Inc., Salem Bancorp, Inc., St. Louis March 11, 1988 Indianapolis, Indiana Salem, Indiana Landmark Financial Corporation, SBT Corp., Boston February 29, 1988 Hartford, Connecticut Old Saybrook, Connecticut Liberty National Bancorp, Inc., Bank of Shelbyville, St. Louis March 18, 1988 Louisville, Kentucky Shelby ville, Kentucky Northern Missouri Bancshares, Farmers Bank of Union ville, Kansas City March 18, 1988 Inc., Unionville, Missouri Unionville, Missouri Northern of Tennessee Corp., Stewart County Bancorp, Inc., Atlanta February 26, 1988 Clarksville, Tennessee Dover, Tennessee Owenton Bancorp, Inc. Employee Owenton Bancorp, Inc., St. Louis March 9, 1988 Stock Ownership Trust, Owenton, Kentucky Owenton, Kentucky Pioneer Bancorporation, Inc., City Center National Bank, Kansas City March 10, 1988 Aurora, Colorado Aurora, Colorado Powell Valley Bankshares, Inc., Powell Valley National Bank, Richmond February 29, 1988 Jones ville, Virginia Jones ville, Virginia Public National Bank The First National Bank of Monroe Atlanta March 18, 1988 Corporation, County, Key Largo, Florida Key Largo, Florida Security Bank F. M. Bank Security Bank, Dallas March 3, 1988 Shares, Flower Mound, Texas Flower Mound, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 341 Section 3—Continued . „ , , . Reserve Effective Applicant Bank(s) Bank date Somers Bancorporation, Somers Savings Bank, Chicago March 10, 1988 Des Moines, Iowa Somers, Iowa South Holland Bancorp, Inc., First Dolton Corp., Chicago February 26, 1988 South Holland, Illinois Dolton, Illinois SouthTrust Corporation, Melton's Bank, Atlanta February 25, 1988 Birmingham, Alabama Liberty, Tennessee State Bancshares, Inc., Jefferson Bank of New Jersey, Philadelphia March 18, 1988 Haverford, Pennsylvania Mount Laurel, New Jersey Stockton Bancshares, Inc., Farmers and Merchants Bank Kansas City February 23, 1988 Stockton, Kansas of Hill City, Hill City, Kansas Traer Shares, Inc., Brenton Bank & Trust Company Chicago February 25, 1988 Traer, Iowa of Vinton, Vinton, Iowa Union Planters Corporation, CBC Bancorp, Inc., St. Louis March 18, 1988 Memphis, Tennessee Cooke ville, Tennessee Union Planters — CBC Bancorp Acquisition Company, Memphis, Tennessee United Bankshares, Inc., Heritage Bancorp, Inc., Richmond March 23, 1988 Charleston, West Virginia Glenville, West Virginia United Bankshares, Inc., Ohio Valley National Bank of Richmond March 23, 1988 Charleston, West Virginia Vienna, Vienna, West Virginia United Bankshares, Inc., Webster County National Bank, Richmond March 23, 1988 Charleston, West Virginia Webster Springs, West Virginia USA Bancorp, Inc., Olympic International Bank & Boston February 22, 1988 Boston, Massachusetts Trust Company, Boston, Massachusetts West Coast Bancorp, Inc., First National Bank of Southwest Atlanta March 9, 1988 Cape Coral, Florida Florida, Cape Coral, Florida Section 4 Reserve Effective Applicant Nonbanking Activity/Company Bank date AmeriTrust Corporation, engage in the purchase and sale of Cleveland March 22, 1988 Cleveland, Ohio gold and silver bullion and gold coins underwrite and deal in government obligations and money market instruments and provide financial and investment advice in relation thereto Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

342 Federal Reserve Bulletin • May 1988 Section 4—Continued Reserve Effective Applicant Nonbanking Activity/Company Bank date First American Bank Corporation, Midwest Data Pro, Inc., Chicago March 10, 1988 Elk Grove Village, Illinois Kansas City, Missouri First Tennessee National GulfNet, Inc., St. Louis March 4, 1988 Corporation, New Orleans, Louisiana Memphis, Tennessee Sections 3 and 4 * Banks(s)/ Reserve Effective Nonbanking Company Bank date First Financial Services of Moose First National Bank of Moose Lake, Minneapolis March 4, 1988 Lake, Inc., Moose Lake, Minnesota Moose Lake, Minnesota First National Agency of Moose Lake, Inc., Moose Lake, Minnesota ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date Chemical Bank Bay Area, KawKawlin Michigan Branch of Chicago March 18, 1988 Bay City, Michigan Chemical Bank and Trust Company, Midland, Michigan Citizens Bank and Trust First American Bank & Trust of Dallas March 11, 1988 Company, Bay town, Bay town, Texas Bay town, Texas The Commercial Bank of Marine American National Bank Chicago March 18, 1988 Champaign, of Champaign, Champaign, Illinois Champaign, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 343 ORDERS APPROVED UNDER BANK SERVICE CORPORATION ACT By Federal Reserve Banks Reserve Effective Applicant Corporation Bank date National Bank of Commerce of NBC Service Corporation, St. Louis March 23, 1988 Mississippi, Starkville, Mississippi Starkville, Mississippi 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. Bonilla v. Board of Governors, No. 88-1464 (7th Cir., Northeast Bancorp v. Board of Governors, No. filed March 11, 1988). 87-1365 (D.C. Cir., filed July 31, 1987). Cohen v. Board of Governors, No. 88-1061 (D.N.J., National Association of Casualty & Insurance Agents filed March 7, 1988). v. Board of Governors, Nos. 87-1354, 87-1355 (D.C. Irving Bank Corporation v. Board of Governors, No. Cir., filed July 29, 1987). 88-1176 (D.C. Cir., filed March 1, 1988). The Chase Manhattan Corporation v. Board of Gov- Stoddard v. Board of Governors, No. 88-1148 (D.C. ernors, No. 87-1333 (D.C. Cir., filed July 20, 1987). Cir., filed Feb. 25, 1988). Securities Industry Association v. Board of Gover- Securities Industry Association v. Board of Gover- nors, Nos. 87-4091, 87-4093, 87-4095 (2d Cir., filed nors, No. 87-4161 (2d Cir., filed Dec. 15, 1987). July 1 and July 15, 1987). Independent Insurance Agents of America, Inc. v. Lewis v. Board of Governors, Nos. 87-3455, 87-3545 Board of Governors, No. 87-1686 (D.C. Cir., filed (11th Cir., filed June 25, Aug. 3, 1987). Nov. 19, 1987). Securities Industry Association v. Board of Gover- National Association of Casualty and Surety Agents, nors, et al., No. 87-4041 and consolidated cases (2d et al., v. Board of Governors, Nos. 87-1644, Cir., filed May 1, 1987). 87-1801, 88-1001 88-1206, 88-1245 (D.C. Cir., filed Securities Industry Association v. Board of Gover- Nov. 4, Dec. 21, 1987, Jan. 4, March 18, March 30, nors, et al., No. 87-1169 (D.C. Cir., filed April 17, 1988). 1987). Teichgraeber v. Board of Governors, No. 87-2505-0 Independent Insurance Agents of America, et al. v. (D. Kan., filed Oct. 16, 1987). Board of Governors, Nos. 86-1572, 1573, 1576 Securities Industry Association v. Board of Gover- (D.C. Cir., filed Oct. 24, 1986). nors, No. 87-4135 (2d Cir., filed Oct. 8, 1987). Independent Community Bankers Association of Independent Insurance Agents of America, Inc. v. South Dakota v. Board of Governors, No. 86-5373 Board of Governors, No. 87-4118 (2d Cir., filed (8th Cir., filed Oct. 3, 1986). Sept. 17, 1987). Jenkins v. Board of Governors, No. 86-1419 (D.C. Citicorp v. Board of Governors, No. 87-1475 (D.C. Cir., filed July 18, 1986). Cir., filed Sept. 9, 1987). CBC, Inc. v. Board of Governors, No. 86-1001 (10th Securities Industry Association v. Board of Gover- Cir., filed Jan. 2, 1986). nors, No. 87-4115 (2d Cir., filed Sept. 9, 1987) Melcher v. Federal Open Market Committee, No. Barrett v. Volcker, No. 87-2280 (D.D.C., filed Aug. 87-1546 (S.Ct., filed April 30, 1984). 17, 1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

345 Directors of Federal Reserve Banks and Branches Regional decentralization and a combination of gov- chosen without discrimination as to race, creed, color, ernmental and private characteristics are important sex, or national origin. hallmarks of the uniqueness of the Federal Reserve Class A directors of each Reserve Bank represent System. Under the Federal Reserve Act, decentrali- the stockholding member banks of the Federal Rezation was achieved by division of the country into 12 serve District. Class B and Class C directors represent regions called Federal Reserve Districts and the es- the public and are chosen with due, but not exclusive, tablishment in each District of a separately incorpo- consideration to the interests of agriculture, comrated Federal Reserve Bank with its own board of merce, industry, services, labor, and consumers; they directors. The blending of private and governmental may not be officers, directors, or employees of any characteristics is provided through ownership of the bank. In addition, Class C directors may not be stock of the Reserve Bank by member banks in its stockholders of any bank. The Board of Governors District, who also elect the majority of the board of designates annually one Class C director as chairman directors, and by the general supervision of the Re- of the board of directors of each District Bank and serve Banks by the Board of Governors, an agency of designates another Class C director as deputy chairthe federal government. The Board also appoints a man. minority of each board of directors. Thus, there are Each of the 25 Branches of Federal Reserve Banks essential elements of regional participation and coun- has a board of either seven or five directors, a majority sel in the conduct of the System's affairs for which the of whom are appointed by the parent Federal Reserve Federal Reserve relies importantly on the contribu- Bank; the others are appointed by the Board of Govtions of the directors of the Federal Reserve Banks ernors. One of the Board's appointees is designated and Branches. annually as chairman of the board of that Branch in a The following list of directors of Federal Reserve manner prescribed by the parent Federal Reserve Banks and Branches shows for each director the class Bank. of directorship, the principal business affiliation, and The names of the chairman and deputy chairman of the date the current term expires. Each Federal Re- the board of directors of each Reserve Bank and of the serve Bank has nine members on its board of direc- chairman of each Branch are published monthly in the tors: the member banks elect the three Class A and FEDERAL RESERVE BULLETIN.1 three Class B directors, and the Board of Governors appoints the three directors in Class C. Directors are 1. The current list appears on page A85 of this BULLETIN. DISTRICT 1—BOSTON Class A Chairman and President, Merrill Bankshares Company, Bangor, 1988 William C. Bullock, Jr. Maine Chairman and Chief Executive Officer, Shawmut Corporation, 1989 John P. LaWare Boston, Massachusetts President and Chief Executive Officer, The National Iron Bank, 1990 Richard D. Wardell Salisbury, Connecticut Class B Matina S. Horner President, Radcliffe College, Cambridge, Massachusetts 1988 Richard M. Oster President and Chief Executive Officer, Cookson America, Inc., 1989 Providence, Rhode Island Stephen R. Levy Chairman and Chief Executive Officer, Bolt Beranek and Newman, 1990 Inc., Cambridge, Massachusetts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin • May 1988 DISTRICT 1—Continued Term expires Class C Dec. 31 George N. Hatsopoulos Chairman of the Board and President, Thermo Electron 1988 Corporation, Waltham, Massachusetts Richard N. Cooper Maurits C. Boas Professor of International Economics, Harvard 1989 University, Cambridge, Massachusetts Richard L. Taylor President, Taylor Properties, Inc., Boston, Massachusetts 1990 DISTRICT 2—NEW YORK Class A John F. McGillicuddy Chairman of the Board and Chief Executive Officer, Manufacturers 1988 Hanover Trust Company, New York, New York Alberto M. Paracchini Chairman of the Board and President, Banco de Ponce, Ponce, 1989 Puerto Rico J. Kirby Fowler President and Chief Executive Officer, The Flemington National 1990 Bank and Trust Company, Flemington, New Jersey Class B Richard L. Gelb Chairman and Chief Executive Officer, Bristol-Myers Company, 1988 New York, New York John A. Georges Chairman and Chief Executive Officer, International Paper 1989 Company, New York, New York John F. Welch, Jr. Chairman and Chief Executive Officer, General Electric Company, 1990 Fairfield, Connecticut Class C John Brademas President, New York University, New York, New York 1988 John R. Opel Chairman of the Executive Committee, International Business 1989 Machines Corporation, Armonk, New York Ellen V. Futter President, Barnard College, Columbia University, New York, 1990 New York —BUFFALO BRANCH Appointed by the Federal Reserve Bank R. Carlos Carballada President and Chief Executive Officer, Central Trust Company, 1988 Rochester, New York Donald I. Wickham President, Tri-Way Farms, Inc., Stanley, New York 1988 Harry J. Sullivan President, Salamanca Trust Company, Salamanca, New York 1989 Norman W. Sinclair President and Chief Executive Officer, Lockport Savings Bank, 1990 Lockport, New York Appointed by the Board of Governors Mary Ann Lambertsen Vice President, Human Resources, The Quaker Oats Company, 1988 Fisher-Price Division, East Aurora, New York Matthew Augustine President and Chief Executive Officer, Eltrex Industries, Inc., 1989 Rochester, New York Paul E. McSweeney Executive Vice President, United Food and Commercial Workers, 1990 District Union Local One, AFL-CIO, Buffalo, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 347 DISTRICT 3—PHILADELPHIA Term expires Dec. 31 Class A Clarence D. McCormick President, The Farmers and Merchants National Bank, 1988 Bridgeton, New Jersey George A. Butler Chairman and Chief Executive Officer, First Pennsylvania Bank, 1989 N.A., Philadelphia, Pennsylvania Constantinos I. Costalas Chairman, President, and Chief Executive Officer, Glendale 1990 National Bank of New Jersey, Voorhees, New Jersey Class B Nicholas Riso President and Chief Executive Officer, Giant Food Stores, Inc., 1988 Carlisle, Pennsylvania Carl E. Singley Partner, White, McClelland and Singley, Philadelphia, 1989 Pennsylvania Charles F. Seymour Chairman, Jackson-Cross Company, Philadelphia, Pennsylvania 1990 Class C Nevius M. Curtis Chairman and Chief Executive Officer, Delmarva Power, 1988 Wilmington, Delaware Peter A. Benoliel Chairman of the Board, Quaker Chemical Corporation, 1989 Conshohocken, Pennsylvania Jane G. Pepper President, The Pennsylvania Horticultural Society, 1990 Philadelphia, Pennsylvania DISTRICT 4—CLEVELAND Class A William A. Stroud Chairman, First-Knox National Bank, Mount Vernon, Ohio 1988 Frank Wobst Chairman and Chief Executive Officer, Huntington Bancshares 1989 Incorporated, Columbus, Ohio William H. May Chairman and President, First National Bank of Nelsonville, 1990 Nelsonville, Ohio Class B Daniel M. Galbreath President, John W. Galbreath, Columbus, Ohio 1988 Laban P. Jackson, Jr. Chairman of the Board, International Spike, Inc., 1989 Lexington, Kentucky Verna K. Gibson President, The Limited Stores, Inc., Columbus, Ohio 1990 Class C John R. Miller Former President and Chief Operating Officer, The Standard Oil 1988 Company (Ohio), Cleveland, Ohio Charles W. Parry Director, and Former Chairman and Chief Executive Officer, 1989 Aluminum Company of America, Pittsburgh, Pennsylvania Robert D. Storey Partner, Burke, Haber and Berick, Cleveland, Ohio 1990 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin • May 1988 DISTRICT 4—Continued Term expires Dec. 31 —CINCINNATI BRANCH Appointed by the Federal Reserve Bank Robert A. Hodson President and Chief Executive Officer, 1st Security Bank, 1988 Hillsboro, Ohio Robert M. Duncan President and Chief Executive Officer, First National Bank of 1989 Louisa, Louisa, Kentucky Jack W. Buchanan President, Sphar and Company, Inc., Winchester, Kentucky 1990 Jerry L. Kirby Chairman of the Board and President, Citizens Federal Savings and 1990 Loan Association, Dayton, Ohio Appointed by the Board of Governors Kate Ireland National Chairman, Frontier Nursing Service, Wendover, 1988 Kentucky Owen B. Butler Chairman of the Board (Retired), The Procter and Gamble 1989 Company, Cincinnati, Ohio Marvin Rosenberg Partner, Towne Properties, Ltd., Cincinnati, Ohio 1990 —PITTSBURGH BRANCH Appointed by the Federal Reserve Bank Lawrence F. Klima President, The First National Bank of Pennsylvania, 1988 Erie, Pennsylvania Thomas G. Dove Chairman of the Executive Committee and Chief Executive 1989 Officer, Wheeling Dollar Bank, Wheeling, West Virginia George A. Davidson, Jr. Chairman and Chief Executive Officer, Consolidated Natural Gas 1990 Company, Pittsburgh, Pennsylvania Stephen C. Hansen President and Chief Executive Officer, Dollar Bank, F.S.B., 1990 Pittsburgh, Pennsylvania Appointed by the Board of Governors James E. Haas President and Chief Operating Officer, National Intergroup, Inc., 1988 Pittsburgh, Pennsylvania Karl M. von der Hey den Senior Vice President-Finance and Chief Financial Officer, 1989 H.J. Heinz Company, Pittsburgh, Pennsylvania Milton A. Washington President and Chief Executive Officer, Allegheny Housing 1990 Rehabilitation Corporation, Pittsburgh, Pennsylvania DISTRICT 5—RICHMOND Class A K. Donald Menefee Chairman of the Board and Chief Executive Officer, Madison 1988 National Bank, and Chairman of the Board and President, James Madison Limited, Washington, D.C. Chester A. Duke President and Chief Executive Officer, Marion National Bank, 1989 Marion, South Carolina John F. McNair III President and Chief Executive Officer, Wachovia Bank and Trust 1990 Company, N.A., and The Wachovia Corporation, Winston- Salem, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 349 DISTRICT 5—Continued Term expires Dec. 31 Class B Edward H. Covell President, The Covell Company, Easton, Maryland 1988 Thomas B. Cookerly President, Broadcast Division, Allbritton Communications, 1989 Washington, D.C. Jack C. Smith Chairman of the Board and Chief Executive Officer, K-VA-T Food 1990 Stores, Inc., Grundy, Virginia Class C Robert A. Georgine President, Building and Construction Trades Department, 1988 AFL-CIO, Washington, D.C. Leroy T. Canoles, Jr. President, Kaufman and Canoles, Norfolk, Virginia 1989 Hanne M. Merriman President and Chief Executive Officer, Honeybee, Inc., 1990 New York, New York —BALTIMORE BRANCH Appointed by the Federal Reserve Bank H. Grant Hathaway Chairman of the Board, Equitable Bank, N.A., Baltimore, 1988 Maryland Joseph W. Mosmiller Chairman of the Board, Loyola Federal Savings and Loan 1988 Association, Baltimore, Maryland Charles W. Hoff III President and Chief Executive Officer, Farmers and Mechanics 1989 National Bank, Frederick, Maryland Raymond V. Haysbert, Sr. President and Chief Executive Officer, Parks Sausage Company, 1990 Baltimore, Maryland Appointed by the Board of Governors Thomas R. Shelton President, Case Foods, Inc., Salisbury, Maryland 1988 John R. Hardesty, Jr. President, Preston Energy, Inc., Kingwood, West Virginia 1989 Gloria L. Johnson Regional Vice President and Director of Stores, Bloomingdale's 1990 Department Stores, Kensington, Maryland —CHARLOTTE BRANCH Appointed by the Federal Reserve Bank J. Donald Collier President and Chief Executive Officer, Orangeburg National Bank, 1988 Orangeburg, South Carolina James G. Lindley Chairman and Chief Executive Officer, South Carolina National 1988 Corporation, and Chairman, President, and Chief Executive Officer, The South Carolina National Bank, Columbia, South Carolina John A. Hardin Chairman of the Board and President, First Federal Savings Bank, 1989 Rock Hill, South Carolina James M. Culberson, Jr. Chairman and President, The First National Bank of Randolph 1990 County, Asheboro, North Carolina Appointed by the Board of Governors G. Alex Bernhardt President, Bernhardt Industries, Inc., Lenoir, North Carolina 1988 Anne M. Allen Vice President and General Manager, Merrill Lynch Realty, 1989 Greensboro, North Carolina William E. Masters President, Perception, Inc., Easley, South Carolina 1990 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin • May 1988 DISTRICT 6—ATLANTA Term expires Dec. 31 Class A Virgil H. Moore, Jr., Chairman and Chief Executive Officer, First Farmers and 1988 Merchants National Bank, Columbia, Tennessee Mary W. Walker Vice Chairman, The National Bank of Walton County, 1989 Monroe, Georgia E.B. Robinson, Jr. Chairman and Chief Executive Officer, Deposit Guaranty National 1990 Bank and Deposit Guaranty Corporation, Jackson, Mississippi Class B Bernard F. Sliger President, Florida State University, Tallahassee, Florida 1988 Paul W. Green President and Chief Executive Officer, American Cast Iron Pipe 1989 Company, Birmingham, Alabama Gary J. Chouest President, Edison Chouest Offshore, Inc., Galliano, Louisiana 1990 Class C Larry L. Prince President and Chief Operating Officer, Genuine Parts Company, 1988 Atlanta, Georgia Bradley Currey, Jr. President, Rock-Tenn Company, Norcross, Georgia 1989 Edwin A. Huston Senior Executive Vice President-Finance, Ryder System, Inc., 1990 Miami, Florida —BIRMINGHAM BRANCH Appointed by the Federal Reserve Bank William F. Childress President, First American Federal Savings and Loan Association, 1988 Huntsville, Alabama Milton A. Wendland Owner-Operator, Autauga Farming Company, Autaugaville, 1988 Alabama John H. Newman President and Chief Executive Officer, First National Bank of 1989 Scottsboro, Scottsboro, Alabama Harry B. Brock, Jr. Chairman and Chief Executive Officer, Central Bank of the South, 1990 Birmingham, Alabama Appointed by the Board of Governors Roy D. Terry President and Chief Executive Officer, Terry Manufacturing 1988 Company, Inc., Roanoke, Alabama Nelda P. Stephenson President, Nelda Stephenson Chevrolet, Inc., Florence, Alabama 1989 A.G. Trammell President, Alabama Labor Council, AFL-CIO, Birmingham, 1990 Alabama —JACKSONVILLE BRANCH Appointed by the Federal Reserve Bank Robert R. Deison Chairman of the Board and President, Andrew Jackson State 1988 Savings and Loan Association, Tallahassee, Florida George W. Gibbs III President, Atlantic Dry Dock Corporation, Jacksonville, Florida 1988 A. Bronson Thayer Chairman and Chief Executive Officer, First Florida Banks, Inc., 1989 Tampa, Florida Buell G. Duncan, Jr. Chairman, President, and Chief Executive Officer, Sun Bank, 1990 N.A., Orlando, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 351 DISTRICT 6—Continued Term —JACKSONVILLE BRANCH—Continued ^xpires, Dec. 331 Appointed by the Board of Governors E. William Nash, Jr. President, South-Central Operations, The Prudential Insurance 1988 Company of America, Jacksonville, Florida Saundra H. Gray Co-Owner, Gemini Springs Farm, DeBary, Florida 1989 Vacancy 1990 —MIAMI BRANCH Appointed by the Federal Reserve Bank William H. Losner President and Chief Executive Officer, The First National Bank of 1988 Homestead, Homestead, Florida James H. Robinson President, Sun Bank/South Florida, N.A., Fort Lauderdale, 1989 Florida Robert M. Taylor Chairman and Chief Executive Officer, The Mariner Group, Inc., 1990 Fort Myers, Florida Frederick A. Teed President and Chief Executive Officer, Community Savings, F.A., 1990 Riviera Beach, Florida Appointed by the Board of Governors Sue McCourt Cobb Attorney, Greenberg, Traurig, Askew, Hoffman, Lipoff, Rosen, 1988 and Quentel, P.A., Miami, Florida Jose L. Saumat President, Kaufman and Roberts, Inc., Miami, Florida 1989 Robert D. Apelgren President, Apelgren Corporation, Pahokee, Florida 1990 —NASHVILLE BRANCH Appointed by the Federal Reserve Bank W.L. Calloway, Jr. Chairman, Quality Lawn Systems, Inc., Nashville, Tennessee 1988 Shirley A. Zeitlin President, Shirley Zeitlin and Co. Realtors, Nashville, Tennessee 1988 Vacancy 1989 Lawrence A. Roseberry Chairman, First National Bank and Trust Company, and Chairman 1990 and Chief Executive Officer, First Franklin Bancshares, Inc., Athens, Tennessee Appointed by the Board of Governors Condon S. Bush President, Bush Brothers and Company, Dandridge, Tennessee 1988 Patsy R. Williams Partner, Rhyne Lumber Company, Newport, Tennessee 1989 Vacancy 1990 —NEW ORLEANS BRANCH Appointed by the Federal Reserve Bank Alan R. Barton President and Chief Executive Officer, Mississippi Power 1988 Company, Gulfport, Mississippi Robert M. Shofstahl President and Chief Executive Officer, Pelican Homestead and 1988 Savings Association, Metairie, Louisiana Robert S. Gaddis President and Chief Executive Officer, Trustmark National Bank, 1989 Laurel, Mississippi Ronald M. Boudreaux President and Chief Executive Officer, First National Bank of 1990 St. Landry Parish, Opelousas, Louisiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin • May 1988 DISTRICT 6—Continued Term —NEW ORLEANS BRANCH—Continued *xpir1s, Dec. 31 Appointed by the Board of Governors Sharon A. Perlis President, Sharon A. Perlis, (APLC), Metairie, Louisiana 1988 James A. Hefner President, Jackson State University, Jackson, Mississippi 1989 Caroline G. Theus President, Inglewood Land and Development Company, 1990 Alexandria, Louisiana DISTRICT 7—CHICAGO Class A John W. Gabbert President and Chief Executive Officer, First of America Bank- 1988 La Porte, N.A., La Porte, Indiana B.F. Backlund President and Chief Executive Officer, Bartonville Bank, 1989 Bartonville, Illinois Barry F. Sullivan Chairman of the Board and Chief Executive Officer, First National 1990 Bank of Chicago, Chicago, Illinois Class B Max J. Nay lor Farmer, Jefferson, Iowa 1988 Paul J. Schierl President and Chief Executive Officer, Fort Howard Paper 1989 Company, Green Bay, Wisconsin Edward D. Powers Chairman of the Board, Mueller Company, Decatur, Illinois 1990 Class C Charles S. McNeer Chairman of the Board and Chief Executive Officer, Wisconsin 1988 Electric Power Company, Milwaukee, Wisconsin Robert J. Day Chairman and Chief Executive Officer, USG Corporation, Chicago, 1989 Illinois Marcus Alexis Dean, College of Business Administration, University of Illinois at 1990 Chicago, Chicago, Illinois —DETROIT BRANCH Appointed by the Federal Reserve Bank Donald R. Mandich Chairman and Chief Executive Officer, Comerica Bank-Detroit, 1988 Detroit, Michigan Ronald D. Story Chairman and President, The Ionia County National Bank of Ionia, 1989 Ionia, Michigan James A. Aliber Chairman of the Board and Chief Executive Officer, First Federal 1990 of Michigan, Detroit, Michigan Frederik G.H. Meijer Chairman of the Board, Meijer, Inc., Grand Rapids, Michigan 1990 Appointed by the Board of Governors Phyllis E. Peters Director, Professional Standards Review, Touche Ross and 1988 Company, Detroit, Michigan Richard T. Lindgren President and Chief Executive Officer, Cross and Trecker 1989 Corporation, Bloomfield Hills, Michigan Beverly Beltaire President, P R Associates, Inc., Detroit, Michigan 1990 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 353 DISTRICT 8—ST. LOUIS Term expires Class A Dec. 31 Robert E. Menz Chairman of the Board and President, The First National Bank of 1988 Highland, Highland, Illinois David W. Kemper II Chairman and Chief Executive Officer, Commerce Bank of 1989 St. Louis, N.A., Clayton, Missouri, and President and Chief Executive Officer, Commerce Bancshares, Inc., Kansas City, Missouri H.L. Hembree III Chairman of the Board and Chief Executive Officer, Arkansas Best 1990 Corporation, Fort Smith, Arkansas Class B Robert J. Sweeney Consultant, Murphy Oil Corporation, El Dorado, Arkansas 1988 Frank M. Mitchener, Jr. President, Mitchener Farms, Inc., Sumner, Mississippi 1989 Roger W. Schipke Senior Vice President, GE Appliances, General Electric Company, 1990 Louisville, Kentucky Class C Robert L. Virgil, Jr. Dean, John M. Olin School of Business, Washington University 1988 in St. Louis, St. Louis, Missouri H. Edwin Trusheim Chairman, President, and Chief Executive Officer, General 1989 American Life Insurance Company, St. Louis, Missouri Janet McAfee Weakley President, Janet McAfee, Inc., Clayton, Missouri 1990 —LITTLE ROCK BRANCH Appointed by the Federal Reserve Bank Robert C. Connor, Jr. President, Union National Bank of Little Rock, 1988 Little Rock, Arkansas Patricia M. Townsend President, Townsend Company, Stuttgart, Arkansas 1989 David Armbruster President, First America Federal Savings Bank, 1990 Fort Smith, Arkansas W. Wayne Hartsfield President and Chief Executive Officer, First National Bank, 1990 Searcy, Arkansas Appointed by the Board of Governors James R. Rodgers Airport Manager, Little Rock Regional Airport, Little Rock, 1988 Arkansas L. Dickson Flake President, Barnes, Quinn, Flake and Anderson, Inc., Little Rock, 1989 Arkansas William E. Love President, Sound-Craft Systems, Inc., Morrilton, Arkansas 1990 —LOUISVILLE BRANCH Appointed by the Federal Reserve Bank Allan S. Hanks Director, The Anderson National Bank, Lawrenceburg, Kentucky 1988 Morton Boyd President, First Kentucky National Corporation, Louisville, 1989 Kentucky Irving W. Bailey II President and Chief Operating Officer, Capital Holding 1990 Corporation, Louisville, Kentucky Wayne G. Overall, Jr. President, First Federal Savings Bank, Elizabethtown, Kentucky 1990 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin • May 1988 DISTRICT 8—Continued TERM expires —LOUISVILLE BRANCH—Continued DEC. n Appointed by the Board of Governors Lois H. Gray Chairman of the Board, James N. Gray Construction Company, 1988 Inc., Glasgow, Kentucky Thomas A. Alvey Delegate, Owensboro Council of Labor, Owensboro, Kentucky 1989 Raymond M. Burse President, Kentucky State University, Frankfort, Kentucky 1990 —MEMPHIS BRANCH Appointed by the Federal Reserve Bank William H. Brandon, Jr. President, First National Bank of Phillips County, 1988 Helena, Arkansas Michael J. Hennessey President, Munro and Company, Inc., Wynne, Arkansas 1989 Thomas M. Garrott President and Chief Operating Officer, National Bank of Commerce 1990 and National Commerce Bancorporation, Memphis, Tennessee Larry A. Watson Chairman of the Board and President, Liberty Federal Savings 1990 Bank, Paris, Tennessee Appointed by the Board of Governors Katherine Hinds Smythe President, Memorial Park, Inc., Memphis, Tennessee 1988 Sandra B. Sanderson President and Chief Executive Officer, Sanderson Plumbing 1989 Products, Inc., Columbus, Mississippi Seymour B. Johnson Owner, Kay Planting Company, Indianola, Mississippi 1990 DISTRICT 9—MINNEAPOLIS Class A Duane W. Ring President, Norwest Bank La Crosse, N.A., La Crosse, Wisconsin 1988 Charles W. Ekstrum President and Chief Executive Officer, First National Bank, Philip, 1989 South Dakota Joel S. Harris President, Yellowstone Holding Company, Columbus, Montana 1990 Class B Richard L. Falconer District Staff Manager, Northwestern Bell, Minneapolis, Minnesota 1988 Bruce C. Adams Partner, Triple Adams Farms, Lansford, North Dakota 1989 Earl R. St. John, Jr. President and Owner, St. John Forest Products, Inc., Spalding, 1990 Michigan Class C John A. Rollwagen Chairman and Chief Executive Officer, Cray Research Inc., 1988 Minneapolis, Minnesota Michael W. Wright Chairman and Chief Executive Officer, Super Valu Stores, Inc., 1989 Minneapolis, Minnesota Delbert W. Johnson President and Chief Executive Officer, Pioneer/Norelkote, 1990 Minneapolis, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 355 DISTRICT 9—Continued Term expires Dec. 31 —HELENA BRANCH Appointed by the Federal Reserve Bank Noble E. Vosburg President and Chief Executive Officer, Pacific Hide and Fur 1988 Corporation, Great Falls, Montana Robert H. Waller President and Chief Executive Officer, First Interstate Bank of 1988 Billings, N.A., Billings, Montana F. Charles Mercord President and Managing Officer, First Federal Savings Bank of 1989 Montana, Kalispell, Montana Appointed by the Board of Governors Marcia S. Anderson President, Bridger Canyon Stallion Station, Inc., Bozeman, 1988 Montana Warren H. Ross President, Ross 8-7 Ranch, Inc., Chinook, Montana 1989 DISTRICT 10—KANSAS CITY Class A Robert L. Hollis Chairman of the Board and Chief Executive Officer, First National 1988 Bank and Trust Co., Okmulgee, Oklahoma Harold L. Gerhart, Jr. President and Chief Executive Officer, First National Bank, 1989 Newman Grove, Nebraska Roger L. Reisher Co-Chairman, FirstBank Holding Company of Colorado, 1990 Lakewood, Colorado Class B Jerry D. Geist Chairman and President, Public Service Company of New Mexico, 1988 Albuquerque, New Mexico Richard D. Harrison Chairman and Chief Executive Officer, Fleming Companies, Inc., 1989 Oklahoma City, Oklahoma S. Dean Evans, Sr. Partner, Evans Grain Company, Salina, Kansas 1990 Class C Irvine O. Hockaday, Jr. President and Chief Executive Officer, Hallmark Cards, Inc., 1988 Kansas City, Missouri Fred W. Lyons, Jr. President and Chief Executive Officer, Marion Laboratories, Inc., 1989 Kansas City, Missouri Thomas E. Rodriguez President and General Manager, Thomas E. Rodriguez and 1990 Associates, P.C., Aurora, Colorado —DENVER BRANCH Appointed by the Federal Reserve Bank George S. Jenks President and Chief Executive Officer, Sunwest Financial Services, 1988 Inc., Albuquerque, New Mexico W. Richard Scarlett III President, Jackson State Bank, Jackson Hole, Wyoming 1988 Henry A. True III Partner, True Companies, Casper, Wyoming 1989 Junius F. Baxter Chairman of the Board and Chief Executive Officer, Bank Western 1990 Federal Savings Bank, Denver, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin • May 1988 DISTRICT 10—Continued Term expires —DENVER BRANCH—Continued Dec. 31 Appointed by the Board of Governors Anthony W. Williams Attorney, Williams, Turner, and Holmes, P.C., Grand Junction, 1988 Colorado James C. Wilson Management Consultant, Longmont, Colorado 1989 Gilbert Sanchez President, New Mexico Highlands University, Las Vegas, 1990 New Mexico —OKLAHOMA CITY BRANCH Appointed by the Federal Reserve Bank William O. Alexander Chairman, Continental Federal Savings and Loan Association, 1988 Oklahoma City, Oklahoma W. Dean Hidy Chairman of the Board, Triad Bank, N.A., Tulsa, Oklahoma 1988 William H. Crawford Chairman and Chief Executive Officer, First National Bank and 1989 Trust Company, Frederick, Oklahoma Appointed by the Board of Governors John F. Snodgrass President and Trustee, The Samuel Roberts Noble Foundation, 1988 Inc., Ardmore, Oklahoma Patience S. Latting Oklahoma City, Oklahoma 1989 —OMAHA BRANCH Appointed by the Federal Reserve Bank John R. Cochran President and Chief Executive Officer, Norwest Bank Nebraska, 1988 N.A., Omaha, Nebraska John T. Selzer President, Scottsbluff National Bank and Trust Company, 1989 Scottsbluff, Nebraska Charles H. Thorne Chairman of the Board and Chief Executive Officer, First Federal 1989 Savings and Loan Association of Lincoln, Lincoln, Nebraska Appointed by the Board of Governors Janice D. Stoney President and Chief Executive Officer, Northwestern Bell 1988 Telephone Company, Omaha, Nebraska Kenneth L. Morrison President, Morrison Enterprises, Hastings, Nebraska 1989 DISTRICT 11—DALLAS Class A Charles T. Doyle Chairman and Chief Executive Officer, Gulf National Bank, 1988 Texas City, Texas Robert G. Greer Chairman of the Board, Tanglewood Bank, N.A., Houston, Texas 1989 T. C. Frost Chairman of the Board, The Frost National Bank, San Antonio, 1990 Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 357 DISTRICT 11—Continued Term expires Dec. 31 Class B Robert Ted Enloe III President, Lomas and Nettleton Financial Corporation, 1988 Dallas, Texas Gary E. Wood Director of Governmental Relations, Baylor University, 1989 Waco, Texas Rancher, San Angelo, Texas 1990 Robert L. Pfluger Class C Hugh G. Robinson President, Cityplace Development Corporation, Dallas, Texas 1988 Leo E. Linbeck, Jr. Chairman and Chief Executive Officer, Linbeck Construction 1989 Corporation, Houston, Texas Bobby R. Inman Chairman of the Board and Chief Executive Officer, Westmark 1990 Systems Inc., Austin, Texas —EL PASO BRANCH Appointed by the Federal Reserve Bank Humberto F. Sambrano Partner, Urban General Contractors, Inc., El Paso, Texas 1988 David L. Stone President, The Portales National Bank, Portales, New Mexico 1989 Henry B. Ellis President, MBank El Paso, N.A., El Paso, Texas 1990 Ethel Ortega Olson Chairman of the Board and Chief Executive Officer, Otero Savings 1990 and Loan Association, Alamogordo, New Mexico Appointed by the Board of Governors Peyton Yates President, Yates Drilling Company, Artesia, New Mexico 1988 John R. Sibley President, Tri-Mountain Enterprises, Carlsbad, New Mexico 1989 Diana S. Natalicio Interim President and Vice President for Academic Affairs, 1990 The University of Texas at El Paso, El Paso, Texas —HOUSTON BRANCH Appointed by the Federal Reserve Bank Jeff Austin, Jr. President, First National Bank of Jacksonville, Jacksonville, Texas 1988 Jenard M. Gross Chairman of the Board and Chief Executive Officer, United 1989 Savings Association of Texas, Houston, Texas Clive Runnells President and Director, Runnells Cattle Company, Bay City, Texas 1990 David E. Sheffield Director, First Victoria National Bank, Victoria, Texas 1990 Appointed by the Board of Governors Gilbert D. Gaedcke, Jr. Chairman of the Board and Chief Executive Officer, Gaedcke 1988 Equipment Company, Houston, Texas Walter M. Mischer, Jr. President, The Mischer Corporation, Houston, Texas 1989 Andrew L. Jefferson, Jr. Attorney, Jefferson, Mims, and Plummer, Houston, Texas 1990 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin • May 1988 DISTRICT 11—Continued Term expires Dec. 31 —SAN ANTONIO BRANCH Appointed by the Federal Reserve Bank Jane Flato Smith Investor and Rancher, San Antonio, Texas 1988 C. Ivan Wilson Chairman of the Board and Chief Executive Officer, First City 1989 Bank of Corpus Christi, Corpus Christi, Texas Robert T. Rork Chairman of the Board and Chief Executive Officer, First 1990 RepublicBank Austin, Austin, Texas Sam R. Sparks President, Sam R. Sparks, Inc., Progreso, Texas 1990 Appointed by the Board of Governors Robert F. McDermott Chairman of the Board and President, United Services Automobile 1988 Association, San Antonio, Texas Lawrence E. Jenkins Vice President, Austin Division, Lockheed Missiles and Space Co., 1989 Inc., Austin, Texas Ruben M. Garcia Chief Executive Officer, Modern Machine Shop, Inc., Laredo, 1990 Texas DISTRICT 12—SAN FRANCISCO Class A Spencer F. Eccles Chairman and Chief Executive Officer, First Security Corporation, 1988 Salt Lake City, Utah Rayburn S. Dezember Chairman, President, and Chief Executive Officer, Central Pacific 1989 Corporation, and Chairman, American National Bank, Bakersfield, California R. Blair Hawkes President and Chief Executive Officer, Ireland Bank, Malad City, 1990 Idaho Class B Togo W. Tanaka Chairman, Gramercy Enterprises, Inc., Los Angeles, California 1988 John C. Hampton President, Willamina Lumber Company, Portland, Oregon 1989 John N. Nordstrom Co-Chairman of the Board, Nordstrom, Inc., Seattle, Washington 1990 Class C Carolyn S. Chambers President and Chief Executive Officer, Chambers Communications 1988 Corporation, Eugene, Oregon Robert F. Erburu Chairman of the Board and Chief Executive Officer, The Times 1989 Mirror Company, Los Angeles, California Cordell W. Hull Executive Vice President and Director, Bechtel Group, Inc., 1990 San Francisco, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 359 DISTRICT 12—Continued Term —Los ANGELES BRANCH expires Dec. 31 Appointed by the Federal Reserve Bank Howard C. McCrady Chairman of the Board and Chief Executive Officer (Retired), 1988 Valley National Bank of Arizona, Phoenix, Arizona William L. Tooley Chairman, Tooley and Company, Investment Builders, 1988 Los Angeles, California Fred D. Jensen Chairman of the Board, President, and Chief Executive Officer, 1989 National Bank of Long Beach, Long Beach, California Ross M. Blakely Chairman of the Executive Committee of the Board, Coast Savings 1990 and Loan, Los Angeles, California Appointed by the Board of Governors Thomas R. Brown, Jr. Chairman of the Board, Burr-Brown Corporation, Tucson, Arizona 1988 Yvonne Brathwaite Burke Partner, Jones, Day, Reavis and Pogue, Los Angeles, California 1989 Richard C. Seaver Chairman, Hydril Company, Los Angeles, California 1990 —PORTLAND BRANCH Appointed by the Federal Reserve Bank Herman C. Bradley, Jr. President and Chief Executive Officer (Retired), Tri-County 1988 Banking Company, Junction City, Oregon Wayne E. Phillips, Jr. Vice President, Phillips Ranch, Inc., Baker, Oregon 1989 Stephen G. Kimball President and Chief Executive Officer, Baker Boyer Bancorp, 1990 Walla Walla, Washington G. Dale Weight Chairman of the Board and Chief Executive Officer, Benjamin 1990 Franklin Savings and Loan Association, Portland, Oregon Appointed by the Board of Governors G. Johnny Parks Former Northwest Regional Director, International 1988 Longshoremen's and Warehousemen's Union, Portland, Oregon Paul E. Bragdon President, Reed College, Portland, Oregon 1989 Sandra A. Suran Small Business Advocate, Oregon Economic Development 1990 Department, Salem, Oregon —SALT LAKE CITY BRANCH Appointed by the Federal Reserve Bank Gerald R. Ghristensen Chairman and President, First Federal Savings and Loan 1988 Association, Salt Lake City, Utah Ronald S. Hanson President, Zions First National Bank, Salt Lake City, Utah 1989 Curtis H. Eaton President and Vice Chairman of the Board, Twin Falls Bank and 1990 Trust Company, Twin Falls; Idaho Virginia P. Kelson Executive Director, Phoenix Institute, Salt Lake City, Utah 1990 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin • May 1988 DISTRICT 12—Continued Term —SALT LAKE CITY BRANCH—Continued DEC™ Appointed by the Board of Governors D.N. Rose President and Chief Executive Officer, Mountain Fuel Supply 1988 Company, Salt Lake City, Utah Robert N. Pratt President and Chief Operating Officer, Bonneville Pacific 1989 Corporation, Salt Lake City, Utah Don M. Wheeler President, Wheeler Machinery Company, Salt Lake City, Utah 1990 —SEATTLE BRANCH Appointed by the Federal Reserve Bank W.W. Philip Chairman of the Board, President, and Chief Executive Officer, 1988 Puget Sound Bancorp, Tacoma, Washington H.H. Larison President, Columbia Paint and Coatings, Spokane, Washington 1989 B.R. Beeksma Chairman of the Board and Chief Executive Officer, InterWest 1990 Savings Bank, Oak Harbor, Washington William S. Randall Chairman, President, and Chief Executive Officer, First Interstate 1990 Bank of Washington, N.A., Seattle, Washington Appointed by the Board of Governors Byron I. Mallott Chief Executive Officer, Sealaska Corporation, Juneau, Alaska 1988 Carol A. Nygren Partner, Laventhol and Horwath, Seattle, Washington 1989 lima Goertzen Administrator, University Hospital, University of Washington, 1990 Seattle, Washington Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A19 All reporting banks A20 Banks in New York City A21 Branches and agencies of foreign banks MONEY STOCK AND BANK CREDIT A22 Gross demand deposits—individuals, partnerships, and corporations A3 Reserves, money stock, liquid assets, and debt measures A4 Reserves of depository institutions, Reserve FINANCIAL MARKETS Bank credit A5 Reserves and borrowings—Depository A23 Commercial paper and bankers dollar institutions acceptances outstanding 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 A26 Selected financial institutions—Selected assets POLICY INSTRUMENTS 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 A29 U.S. budget receipts and outlays FEDERAL RESERVE BANKS A30 Federal debt subject to statutory limitation A30 Gross public debt of U.S. Treasury—Types and A10 Condition and Federal Reserve note statements ownership All Maturity distribution of loan and security A31 U.S. government securities dealers— holdings Transactions A32 U.S. government securities dealers—Positions and financing MONETAR Y AND CREDIT AGGREGATES A3 3 Federal and federally sponsored credit agencies—Debt outstanding A12 Aggregate reserves of depository institutions and monetary base A13 Money stock, liquid assets, and debt measures SECURITIES MARKETS AND A15 Bank debits and deposit turnover CORPORATE FINANCE A16 Loans and securities—All commercial banks A34 New security issues—State and local governments and corporations COMMERCIAL BANKING INSTITUTIONS A35 Open-end investment companies—Net sales and asset position A17 Major nondeposit funds A35 Corporate profits and their distribution A18 Assets and liabilities, last-Wednesday-of-month A36 Nonfinancial corporations—Assets and series liabilities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • May 1988 A36 Total nonfarm business expenditures on new A55 Foreign branches of U.S. banks—Balance sheet plant and equipment data A37 Domestic finance companies—Assets and A57 Selected U.S. liabilities to foreign official liabilities and business credit institutions REAL ESTATE REPORTED BY BANKS IN THE UNITED STATES A38 Mortgage markets A57 Liabilities to and claims on foreigners A39 Mortgage debt outstanding A58 Liabilities to foreigners A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on CONSUMER INSTALLMENT CREDIT foreigners A61 Banks' own claims on unaffiliated foreigners A40 Total outstanding and net change A62 Claims on foreign countries—Combined A41 Terms domestic offices and foreign branches FLOW OF FUNDS REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES A42 Funds raised in U.S. credit markets A43 Direct and indirect sources of funds to credit A63 Liabilities to unaffiliated foreigners markets A64 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SECURITIES HOLDINGS AND TRANSACTIONS A65 Foreign transactions in securities SELECTED MEASURES A66 Marketable U.S. Treasury bonds and notes— Foreign transactions A44 Nonfinancial business activity—Selected measures A45 Labor force, employment, and unemployment INTEREST AND EXCHANGE RATES A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value A67 Discount rates of foreign central banks A49 Housing and construction A67 Foreign short-term interest rates A50 Consumer and producer prices A68 Foreign exchange rates A51 Gross national product and income A52 Personal income and saving A69 Guide to Tabular Presentation, Statistical Releases, and Special International Statistics Tables SUMMARY STATISTICS SPECIAL TABLES A53 U.S. international transactions—Summary A70 Assets and liabilities of commercial banks, A54 U.S. foreign trade September 30, 1987 A54 U.S. reserve assets A54 Foreign official assets held at Federal Reserve Banks 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)' IItteemm 1987 1987 1988 Q1 Q2 Q3 Q4 Oct. Nov. Dec. Jan.' Feb. Reserves of depository institutions 1 Total 16.4 8.0 -1.6 1.4 13.9 -10.4 -11.4 18.4 2.6 2 Required 16.5 8.4 -.5 .3 7.1 -6.4 -13.8 13.0 6.0 i Nonborrowed 18.5 5.4 -.4 1.2 14.1 -4.0 -14.7 12.2 17.0 4 Monetary base3 11.1 6.9 5.1 7.7 11.0 6.9 3.1 16.6 4.7 Concepts of money, liquid assets, and debt4 5 Ml 13.2 6.6 .8 4.0r 14.0 -5.6 -2<f 12.8 1.1 6 M2 6.5 2.7' 2.8 4.0 6.0 1.0 1.8 10.0 9.1 7 M3 6.5 4.6' 4.5 5.5 i.y 5.V 1.4' 8.2 10.1 8 L 6.2r 4.1 4.2 6.(K 8.3' 3.7' 1.6' 11.5 n.a. 9 Debt 10.8' 8.y 8.2' 9.8' 9.7' 11.6r 8.7' 8.0 n.a. Nontrgnsaction components 10 InM25 .... 4.2 1.3' 3.5 4.0 3.1r 3.4' 3.6' 9.0 11.8 11 In M3 only6 6.7 12.7r io.y 11.2' 12.8' 20.2r -.3' 1.1 14.0 Time and savings deposits Commercial banks 12 Savings' 35.2 22.4 10.1 .7 -2.0 -1.3 .0 5.4 13.4 13 Small-denomination time -5.6 -2.7 7.4 14.8 19.2 23.7 9.4 10.6 17.3 14 Large-denomination time9,10 8.7 17.1 6.8 10.5 14.1 18.1 4.5 -12.2 13.9 Thrift institutions 15 Savings' 25.4 19.2 7.0 -3.8 -7.0 -9.1 -4.1 -3.6 -.5 16 Small-denomination time -4.2 1.2 9.3 16.0 12.6 25.9 19.4 18.6 27.3 17 Large-denomination time9 -12.6 -5.1 9.9 22.2 26.1 25.6 23.5 10.4 17.0 Debt components4 18 12.2 8.8 5.9 7.5 3.9 12.6 8.0 5.1 n.a. 19 Nonfederal 10.4' 9.<y 9.V 10.6' 11.5' 11.3' i.y 8.9 n.a. 20 Total loans and securities at commercial banks 10.4 8.2 6.2 5.8 7.0 2.6 -1.0 5.9 8.3 1. Unless otherwise noted, rates of change are calculated from average institutions and money market funds. Also excludes all balances held by U.S. amounts outstanding in preceding month or quarter. commercial banks, money market funds (general purpose and broker-dealer), 2. Figures incorporate adjustments for discontinuities associated with the foreign governments and commercial banks, and the U.S. government. implementation of the Monetary Control Act and other regulatory changes to M3: M2 plus large-denomination time deposits and term RP liabilities (in reserve requirements. To adjust for discontinuities due to changes in reserve amounts of $100,000 or more) issued by commercial banks and thrift institutions, requirements on reservable nondeposit liabilities, the sum of such required term Eurodollars held by U.S. residents at foreign branches of U.S. banks reserves is subtracted from the actual series. Similarly, in adjusting for discon- worldwide and at all banking offices in the United Kingdom and Canada, and tinuities in the monetary base, required clearing balances and adjustments to balances in both taxable and tax-exempt, institution-only money market mutual compensate for float also are subtracted from the actual series. funds. Excludes amounts held by depository institutions, the U.S. government, 3. The monetary base not adjusted for discontinuities consists of total money market funds, and foreign banks and official institutions. Also subtracted reserves plus required clearing balances and adjustments to compensate for float is the estimated amount of overnight RPs and Eurodollars held by institution-only at Federal Reserve Banks plus the currency component of the money stock less money market mutual funds. the amount of vault cash holdings of thrift institutions that is included in the L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term currency component of the money stock plus, for institutions not having required Treasury securities, commercial paper and bankers acceptances, net of money reserve balances, the excess of current vault cash over the amount applied to market mutual fund holdings of these assets. satisfy current reserve requirements. After the introduction of contemporaneous Debt: Debt of domestic nonfinancia) sectors consists of outstanding credit reserve requirements (CRR), currency and vault cash figures are measured over market debt of the U.S. government, state and local governments, and private the weekly computation period ending Monday. nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- Before CRR, all components of the monetary base other than excess reserves sumer credit (including bank loans), other bank loans, commercial paper, bankers are seasonally adjusted as a whole, rather than by component, and excess acceptances, and other debt instruments. The source of data on domestic reserves are added on a not seasonally adjusted basis. After CRR, the seasonally nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt adjusted series consists of seasonally adjusted total reserves, which include data are based on monthly averages. Growth rates for debt reflect adjustments for excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted discontinuities over time in the levels of debt presented in other tables. currency component of the money stock plus the remaining items seasonally 5. Sum of overnight RPs and Eurodollars, money jnarket fund balances adjusted as a whole. (general purpose and broker-dealer), MMDAs, and savings and small time 4. Composition of the money stock measures and debt is as follows: deposits less the estimated amount of demand deposits and vault cash held by Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults thrift institutions to service their time and savings deposit liabilities. of depository institutions; (2) travelers checks of nonbank issuers; (3) demand 6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents, deposits at all commercial banks other than those due to depository institutions, money market fund balances (institution-only), less a consolidation adjustment the U.S. government, and foreign banks and official institutions less cash items in that represents the estimated amount of overnight RPs and Eurodollars held by the process of collection and Federal Reserve float; and (4) other checkable institution-only money market mutual funds. deposits (OCD) consisting of negotiable order of withdrawal (NOW) and auto- 7. Excludes MMDAs. matic transfer service (ATS) accounts at depository institutions, credit union 8. Small-denomination time deposits—including retail RPs—are those issued share draft accounts, and demand deposits at thrift institutions. 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.Ex- official institutions. cludes individual retirement accounts (IRA) and Keogh balances at depository 11. Changes calculated from figures shown in table 1.23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • May 1988 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 1988 1988 Dec. Jan. Feb. Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 245,975 246,090 238,789 247,132 244,506 244,769 242,404 236,517 239,738 238,397 2 U.S. government securities1 219,761 219,855 214,625 220,074 218,734 219,489 218,129 212,727 212,608 215,898 3 Bought outright 218,734 219,069 214,625 219,578 218,734 218,988 218,129 212,727 212,608 215,898 4 Held under repurchase agreements 1,027 786 0 4% 0 501 0 0 0 0 5 Federal agency obligations 8,062 7,806 7,402 7,815 7,534 7,627 7,414 7,402 7,402 7,402 6 Bought outright 7,559 7,503 7,402 7,553 7,534 7,423 7,414 7,402 7,402 7,402 7 Held under repurchase agreements 503 303 0 262 0 204 0 0 0 0 8 Acceptances 0 0 0 0 0 0 0 0 0 0 9 Loans 836 1,028 353 981 593 422 293 280 509 340 10 Float 1,545 1,784 1,627 2,737 1,855 1,464 997 739 3,920 617 11 Other Federal Reserve assets 15,771 15,617 14,782 15,524 15,790 15,767 15,570 15,369 15,299 14,141 12 Gold stock2 11,080 11,074 11,065 11,076 11,074 11,071 11,068 11,066 11,065 11,064 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 18,153 18,205 18,265 18,193 18,207 18,221 18,235 18,249 18,263 18,277 ABSORBING RESERVE FUNDS 15 Currency in circulation 227,366 226,414 224,337 227,843 225,981 224,244 223,410 224,308 225,042 224,506 16 Treasury cash holdings2 454 441 449 438 446 436 439 445 448 452 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,209 5,774 3,711 3,871 2,521 8,941 8,125 3,723 3,425 4,111 18 Foreign 233 274 241 235 347 226 291 227 230 240 19 Service-related balances and adjustments 2,168 2,233 2,301 2,278 2,101 2,697 2,085 2,601 2,002 2,193 20 Other 366 432 335 254 329 383 334 294 321 296 21 Other Federal Reserve liabilities and capital 7,443 7,432 7,303 7,522 7,548 7,618 6,987 6,846 8,193 7,166 22 Reserve balances with Federal Reserve Banks3 37,986 37,389 34,461 38,981 39,533 34,534 35,054 32,406 34,424 33,793 End-of-month figures Wednesday figures 1987 1988 1988 Dec. Jan. Feb. Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 251,883 242,517 239,795 246,529 249,362 245,867 240,870 231,461 242,390 237,250 24 U.S. government securities' 222,551 218,411 216,891 219,332 218,442 220,282 215,648 207,371 217,534 214,901 25 Bought outright 218,906 218,411 216,891 219,332 218,442 218,892 215,648 207,371 217,534 214,901 26 Held under repurchase agreements 3,645 0 0 0 0 1,390 0 0 0 0 27 Federal agency obligations 8,869 7,423 7,402 7,553 7,423 8,034 7,402 7,402 7,402 7,402 28 Bought outright 7,553 7,423 7,402 7,553 7,423 7,423 7,402 7,402 7,402 7,402 29 Held under repurchase agreements 1,316 0 0 0 0 611 0 0 0 0 30 Acceptances 0 0 0 0 0 0 0 0 0 0 31 Loans 3,815 333 336 2,717 450 363 202 336 462 253 32 Float 811 396 897 1,204 7,381 943 1,610 687 2,804 433 33 Other Federal Reserve assets 15,837 15,954 14,269 15,723 15,666 16,245 16,008 15,665 14,188 14,261 34 Gold stock2 11,078 11,068 11,063 11,075 11,072 11,071 11,067 11,065 11,065 11,063 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 18,177 18,233 18,289 18,205 18,219 18,233 18,247 18,261 18,275 18,289 ABSORBING RESERVE FUNDS 37 Currency in circulation 230,213 223,188 223,615 227,031 225,640 223,650 223,793 224,843 225,292 224,027 38 Treasury cash holdings 446 438 457 448 436 437 440 448 451 456 Deposits, other than reserve balances, with Federal Reserve Banks 39 Treasury 5,313 10,276 2,472 3,421 3,859 9,481 3,432 2,845 4,986 2,505 40 Foreign 244 343 343 212 231 220 213 270 243 206 41 Service-related balances and adjustments 1,687 1,674 1,658 1,687 1,681 1,677 1,674 1,673 1,681 1,681 42 Other 1,027 315 438 289 358 383 330 314 314 274 43 Other Federal Reserve liabilities and capital 7,129 6,926 7,139 7,438 7,300 7,459 6,704 6,875 6,874 6,997 44 Reserve balances with Federal Reserve Banks 40,097 33,664 38,043 40,302 44,167 36,882 38,617 28,537 36,908 35,475 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 AS 1.12 RESERVES AND BORROWINGS Depository Institutions Millions of dollars Monthly averages8 Reserve classification 1985 1986 1987 1987 1988 Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. 1 Reserve balances with Reserve Banks' 27,620 37,360 37,673 36,110 35,616 36,685 37,249 37,453 37,673 37,485 2 Total vault cash2 22,953 24,079 26,155 24,613 24,644 24,854 25,587 25,431 26,155 26,919 3 Vault 20,522 22,199 24,449 22,728 22,745 23,128 23,857 23,752 24,449 25,155 4 Surplus4..., 2,431 1,879 1,706 1,885 1,899 1,726 1,730 1,679 1,706 1,764 5 Total reserves 48,142 59,560 62,123 58,838 58,361 59,813 61,106 61,205 62,123 62,640 6 Required reserves 47,085 58,191 61,094 58,078 57,329 59,020 59,977 60,282 61,094 61,345 7 Excess reserve balances at Reserve Banks 1,058 1,369 1,029 761 1,032 793 1,129 923 1,029 1,295 8 Total borrowings at Reserve Banks 1,318 827 777 672 647 940 943 625 777 1,082 9 Seasonal borrowings at Reserve Banks .. 56 38 93 283 279 231 189 126 93 59 10 Extended credit at Reserve Banks 499 303 483 194 132 409 449 394 483 372 Biweekly averages of daily figures for weeks ending 1987 1988 Nov. 18 Dec. 2 Dec. 16 Dec. 30 Jan. 13 Jan. 27 Feb. 10 Feb. 24 Mar. 9 Mar. 23 11 Reserve balances with Reserve Banks' 37,525 37,069 38,272 37,055 39,175 37,002 33,691 34,087 35,577 35,761 12 Total vault cash2 25,188 25,802 25,372 26,960 26,566 26,533 29,417 27,954 25,987 26,224 13 Vault1 23,622 23,999 23,824 25,105 24,937 24,840 26,965 25,673 23,999 24,330 14 Surplus ... t 1,566 1,803 1,549 1,855 1,629 1,694 2,452 2,282 1,988 1,894 15 Total reserves 61,147 61,068 62,095 62,160 64,112 61,842 60,656 59,759 59,576 60,091 16 Required reserves 60,665 59,855 60,890 61,354 62,805 60,554 59,368 58,688 58,600 59,188 17 Excess reserve balances at Reserve Banks 492 1,213 1,206 806 1,307 1,288 1,288 1,071 976 903 18 Total borrowings at Reserve Banks 561 683 815 671 1,945 508 287 425 537 1,924 19 Seasonal borrowings at Reserve Banks 125 114 83 102 66 54 55 77 111 123 20 Extended credit at Reserve Banks 334 465 653 316 485 332 144 232 255 1,685 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 institutions having no required reserve balances. not the same need to repay such borrowing promptly as there is with traditional 4. Total vault cash at institutions having no required reserve balances less the short-term adjustment credit, the money market impact of extended credit is amount of vault cash equal to their required reserves during the maintenance similar to that of nonborrowed reserves. period. 8. Before February 1984, data are prorated monthly averages of weekly 5. Total reserves not adjusted for discontinuities consist of reserve balances averages; beginning February 1984, data are prorated monthly averages of with Federal Reserve Banks, which exclude required clearing balances and biweekly averages. adjustments to compensate for float, plus vault cash used to satisfy reserve NOTE. These data also appear in the Board's H.3 (502) release. For address, see requirements. Such vault cash consists of all vault cash held during the lagged inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • May 1988 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Member Banks1 Averages of daily figures, in millions of dollars 1987 week ending Monday Maturity and source Aug. 31 Sept. 7 Sept. 14 Sept. 21 Sept. 28 Oct. 5 Oct. 12 Oct. 19 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 70,480 75,786 75,048 70,262 66,374 74,386 76,610 75,793 2 For all other maturities 9,442 9,171 8,848 8,888 9,170 8,209 8,611 9,040 From other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 3 For one day or under continuing contract 30,994 29,160 30,085 27,159 25,696 25,513 26,970 24,791 4 For all other maturities 6,622 6,160 6,560 6,895 6,773 5,978 6,562 7,056 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 13,002 13,332 13,966 13,289 13,685 15,505 14,4% 15,254 6 For all other maturities 13,619 13,880 13,827 15,032 15,720 12,059 11,934 11,053 All other customers 7 For one day or under continuing contract 27,128 26,288 26,501 26,808 26,957 27,240 26,338 26,758 8 For all other maturities 9,657 9,120 9,036 8,943 8,891 8,054 8,611 7,761 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 29,053 30,568 28,193 30,303 29,348 33,209 30,926 33,064 10 To all other specified customers 14,024 14,062 14,067 14,172 14,600 14,751 12,971 13,429 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. 2. Brokers and nonbank dealers in securities; other depository institutions; These data also appear in the Board's H.5 (507) release. For address, see inside foreign banks and official institutions; and United States government agencies, front cover. 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 ccrreeddiitt First 30 days of borrowing After 30 days of borrowing3 BBBaaannnkkk 3/3 O 1 n /8 8 Ef d fe a c te ti ve Pre ra v t i e o us 3/3 O 1 n /8 8 Ef d fe a c te ti ve Pre r v at i e o us 3/3 O 1 n /8 8 Ef d fe a c te ti ve Pre ra v t i e o us Effective date Boston 6 9/9/87 5 Vl 6 9/9/87 5 Vi 7.10 3/24/88 7.10 3/10/88 New York 9/4/87 9/4/87 3/24/88 3/10/88 Philadelphia 9/4/87 9/4/87 3/24/88 3/10/88 Cleveland 9/4/87 9/4/87 3/24/88 3/10/88 Richmond 9/5/87 9/5/87 3/24/88 3/10/88 Atlanta 9/4/87 9/4/87 3/24/88 3/10/88 Chicago 9/4/87 9/4/87 3/24/88 3/10/88 St. Louis 9/9/87 9/9/87 3/24/88 3/10/88 Minneapolis 9/8/87 9/8/87 3/24/88 3/10/88 Kansas City 9/4/87 9/4/87 3/24/88 3/10/88 D Sa a n ll a F s r ancisco ... 6 9 9 / / 1 9 1 / / 8 8 7 7 5 Vl 6 9 9 /1 /9 1 / / 8 8 7 7 5 Vi 7.10 3 3 / / 2 2 4 4 / / 8 8 8 8 7.10 3 3 / / 1 1 0 0 / / 8 8 8 8 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 o n f k Banks N.Y. Banks N.Y. Banks N.Y. I 1 n 9 7 e 8 ff — ec M J t a D a n y . e c. 2 1 9 1 0 3 1 , 1977. 6 ( 6 M -6 6 V V r l l - l 6 7 6 6 V V 2 i 1980— N S Ju e o l p y v t . . 2 2 1 2 8 9 7 6 10 1 1 1 - 0 1 2 1 1 1 1 1 1 0 0 1 2 1984— N A o p v r. . 2 2 1 1 9 6 3 i 8 V 8 W 9 V - i 9 - l 9 8 9 9 8 W V i 12 7-7 7 1 /4 7 Dec. 5 12-13 13 Dec. 24 8 8 J A u u ly g . 2 1 1 3 0 7 W 3/4 * 7 77 V Vy 4 44 1981—May 8 5 13 1 - 4 1 4 1 1 4 4 1985—May 2 2 0 4 7V I S V -8 i I I V V i i O S N e c o p t v . t . . 2 2 1 2 6 3 1 0 & 8 V - 9 8 8 i 8 V - W W 9V l i 8 8 9 9 m V V V i i l 1982—J D N u e o ly c v . . 2 4 2 6 0 ll 1 V 3 1 1 i - 3 2 - 1 1 4 2 1 1 1 1 3 3 2 \ Vi 1986— J A M u p l a y r r . . 2 1 1 7 1 1 0 ( 1 s - 6 7V 1 l V -1 i 6 6 7 7 Vi 23 11 Vl 11 Vl Aug. 12 5Vi-6 5 Vi 1979— A S Ju e u l p y g t . . 2 2 1 1 0 9 7 0 l 1 O 0 \ - V 0 1 lO 0 V i V -l i i l \ 1 1 io W 1 ^ 0 > i Aug. 2 1 2 7 3 6 1 1 0 1 1 - - 1 0 1 1 0 1 V 1 V V 5 i i l 1 1 1 O 0 1 1 tt 1987—Sept. 2 1 2 4 1 5 S V 6 V i- i 6 6 6 5 Vi 21 11 11 30 10 10 Oct. 1 8 0 11 1 - 2 1 2 1 1 2 2 Oct. 1 1 2 3 9V 9 i V -10 i 9 9 W V i IInn eeffffeecctt MMaarrcchh 3311,, 11998888 ,, 6 6 Nov. 22 9-9 V2 9 1980—Feb. 15 12-13 13 26 9 9 May 3 2 1 0 9 9 12 1 1 - 2 3 1 3 1 1 1 2 3 3 Dec. 1 1 1 4 5 7 8 8 8 V V ^ i i ! - - 9 9 8 9m V l June 13 11-12 11 16 11 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 reestablished 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 Vl percent above the rate on adjustment In 1980 and 1981, the Federal Reserve applied a surcharge to short-term credit. The program was reestablished 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 assist- 1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was ance 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 moving 13-week period. The surcharge was eliminated on Nov. 17, 1981. 3. For extended-credit loans outstanding more than 30 days, a flexible rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • May 1988 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-$40.5 million 12/15/87 More than $40.5 million ... 12/15/87 Nonpersonal time deposits5 By original maturity Less than 1 Vi years 10/6/83 \V2 years or more 10/6/83 Eurocurrency liabilities All types 11/13/80 1. Reserve requirements in effect on Dec. 31, 1987. Required reserves must be other transaction accounts, the exemption applies only to such accounts that held in the form of deposits with Federal Reserve Banks or vault cash. Nonmem- would be subject to a 3 percent reserve requirement. bers may maintain reserve balances with a Federal Reserve Bank indirectly on a 3. Transaction accounts include all deposits on which the account holder is pass-through basis with certain approved institutions. For previous reserve permitted to make withdrawals by negotiable or transferable instruments, payrequirements, see earlier editions of the Annual Report and of the FEDERAL ment orders of withdrawal, and telephone and preauthorized transfers in excess of RESERVE BULLETIN. Under provisions of the Monetary Control Act, depository three per month for the purpose of making payments to third persons or others. institutions include commercial banks, mutual savings banks, savings and loan However, MMDAs and similar accounts subject to the rules that permit no more associations, credit unions, agencies and branches of foreign banks, and Edge than six preauthorized, automatic, or other transfers per month, of which no more corporations. than three can be checks, are not transaction accounts (such accounts are savings 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law deposits subject to time deposit reserve requirements). 97-320) requires that $2 million of reservable liabilities (transaction accounts, 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. 15, increase in the total reservable liabilities of all depository institutions, measured 1987 for institutions reporting quarterly and Dec. 29, 1987 for institutions on an annual basis as of June 30. No corresponding adjustment is to be made in reporting weekly, the amount was increased from $36.7 million to $40.5 million. the event of a decrease. On Dec. 15, 1987, the exemption was raised from $2.9 5. In general, nonpersonal time deposits are time deposits, including savings million to $3.2 million. In determining the reserve requirements of depository deposits, that are not transaction accounts and in which a beneficial interest is institutions, the exemption shall apply in the following order: (1) net NOW held by a depositor that is not a natural person. Also included are certain accounts (NOW accounts less allowable deductions); (2) net other transaction transferable time deposits held by natural persons and certain obligations issued accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting to depository institution offices located outside the United States. For details, see with those with the highest reserve ratio. With respect to NOW accounts and section 204.2 of Regulation D. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 l. 17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1987 1988 TTyyppee ooff ttrraannssaaccttiioonn 11998855 11998866 11998877 July Aug. Sept. Oct. Nov. Dec. Jan. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 22,214 22,602 18,983 575 499 4,528 1,095 33,,338888 115500 00 7 Gross sales 4,118 2,502 6,050 912 0 0 300 0 0 49 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 3,500 1,000 9,029 4,572 0 3,657 0 0 0 600 Others within 1 year 5 Gross purchases 1,349 190 3,658 0 0 443 300 667700 447799 00 6 Gross sales 0 0 300 0 0 300 0 0 0 0 7 Maturity shift 19,763 18,673 21,502 1,437 2,723 1,500 816 2,247 1,400 950 8 Exchange -17,717 -20,179 -20,388 -613 -1,787 -917 -1,178 -3,728 -1,742 -754 9 Redemptions 0 0 70 0 0 0 70 0 0 1 to 5 years 10 Gross purchases 2,185 893 10,231 0 5 2,551 0 5500 22,,558899 00 11 Gross sales 0 0 452 200 0 0 0 0 0 0 17 Maturity shift -17,459 -17,058 -17,974 -1,397 -2,122 -1,500 -761 -1,900 -1,400 -840 13 Exchange 13,853 16,984 18,938 613 1,612 917 1,178 3,278 1,742 749 5 to 10 years 14 Gross purchases 458 236 2,441 0 0 661199 0 00 55%% 00 15 Gross sales 100 0 0 0 0 0 0 0 0 0 16 Maturity shift -1,857 -1,620 -3,529 -40 -601 0 -55 -347 0 -110 17 Exchange 2,184 2,050 950 0 100 0 0 300 0 5 Over 10 years 18 Gross purchases 293 158 1,858 0 0 449933 0 00 444455 00 19 Gross sales 0 0 0 0 0 0 0 0 0 0 70 Maturity shift -447 0 0 0 0 0 0 0 0 0 21 Exchange 1,679 1,150 500 0 75 0 0 150 0 0 All maturities ?? Gross purchases 26,499 24,078 37,171 575 504 8,633 1,395 4,108 44,,225599 00 73 Gross sales 4,218 2,502 6,802 1,112 0 300 300 0 0 49 24 Redemptions 3,500 1,000 9,099 4,572 0 3,657 0 70 0 600 Matched transactions 71 866,175 927,997 950,923 80,304 60,731 61,321 77,497 85,288 110044,,883333 7788,,335588 26 Gross purchases 865,968 927,247 950,935 80,037 62,594 61,347 73,779 85,494 105,917 78,513 Repurchase agreements2 77 Gross purchases 134,253 170,431 314,620 3,298 9,013 34,080 6655,,667755 1155,,885533 2233,,551122 1100,,559911 28 Gross sales 132,351 160,268 324,666 2,058 12,311 34,080 57,380 18,751 25,264 14,237 29 Net change in U.S. government securities 20,477 29,989 11,235 -4,136 -931 4,702 5,673 1,346 3,591 -4,140 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 00 00 00 00 00 00 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 162 398 276 59 0 0 56 1 13 131 Repurchase agreements2 33 Gross purchases 22,183 31,142 80,353 929 2,369 77,,117744 1188,,552233 66,,778866 99,,771188 44,,004422 34 Gross sales 20,877 30,522 81,351 9% 3,298 7,174 15,607 7,425 10,679 5,357 35 Net change in federal agency obligations 1,144 222 -1,274 -126 -929 0 2,860 -640 -975 -1,446 36 Total net change in System Open Market 21,621 30,211 9,961 -4,262 -1,861 4,702 88,,553333 770066 22,,661177 --55,,558866 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 • May 1988 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1988 1987 1988 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 Dec. Jan. Feb. Consolidated condition statement ASSETS 1 Gold certificate account 11,071 11,067 11,065 11,065 11,063 11,078 11,068 11,063 2 Special drawing rights certificate account 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 3 Coin 465 483 494 503 513 408 478 517 Loans 4 To depository institutions 363 202 336 462 253 3,815 333 336 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 7 Bought outright 7,423 7,402 7,402 7,402 7,402 7,553 7,423 7,402 8 Held under repurchase agreements 611 0 0 0 0 1,316 0 0 U.S. Treasury securities Bought outright 9 Bills 107,677 104,783 97,131 107,294 104,661 107,691 107,196 106,651 10 Notes 82,973 82,623 81,998 81,923 81,923 82,973 82,973 81,923 11 Bonds 28,242 28,242 28,242 28,317 28,317 28,242 28,242 28,317 12 Total bought outright 218,892 215,648 207,371 217,534 214,901 218,906 218,411 216,891 13 Held under repurchase agreements 1,390 0 0 0 0 3,645 0 0 14 Total U.S. Treasury securities 220,282 215,648 207,371 217,534 214,901 222,551 218,411 216,891 15 Total loans and securities 228,679 223,252 215,109 225,398 222,556 235,235 226,167 224,629 16 Items in process of collection 7,086 8,051 5,842 11,625 5,967 7,990 6,489 5,197 17 Bank premises 704 709 708 707 710 705 705 712 Other assets 18 Denominated in foreign currencies 7,371 6,715 6,717 6,720 6,724 7,773 6,714 6,635 19 All other4 8,170 8,584 8,240 6,761 6,827 7,359 8,535 6,922 20 Total assets 268,564 263,879 253,193 267,797 259,378 275,566 265,174 260,693 LIABILITIES 21 Federal Reserve notes 206,319 206,468 207,524 207,970 206,706 212,890 220055,,887711 220066,,330000 Deposits 22 To depository institutions 38,559 40,291 30,210 38,589 37,156 41,784 35,338 39,701 23 U.S. Treasury—General account 9,481 3,432 2,845 4,986 2,505 5,313 10,276 2,472 24 Foreign—Official accounts 220 213 270 243 206 244 355 343 25 Other 383 330 314 314 274 1,027 315 438 26 Total deposits 48,643 44,266 33,639 44,132 40,141 48,368 46,284 42,954 27 Deferred credit items 6,143 6,441 5,155 8,821 5,534 7,179 6,093 4,300 28 Other liabilities and accrued dividends 3,020 2,529 2,422 2,434 2,540 3,035 2,654 2,558 29 Total liabilities 264,125 259,704 248,740 263,357 254,921 271,472 260,902 256,112 CAPITAL ACCOUNTS 30 Capital paid in 2,060 2,062 2,064 2,066 2,076 2,047 2,062 2,075 31 Surplus 2,047 2,035 2,047 2,047 2,047 2,047 2,042 2,047 32 Other capital accounts 332 78 342 327 334 0 168 459 33 Total liabilities and capital accounts 268,564 263,879 253,193 267,797 259,378 275,566 265,174 260,693 34 MEMO: Marketable U.S. Treasury securities held in custody for foreign and international account 210,231 212,987 215,565 216,053 220,601 198,288 210,410 220,250 Federal Reserve note statement 35 Federal Reserve notes outstanding issued to bank 253,163 253,318 253,853 254,116 254,410 253,313 253,303 254,289 36 LESS: Held by bank 46,844 46,850 46,329 46,146 47,704 40,423 47,432 47,989 37 Federal Reserve notes, net 206,319 206,468 207,524 207,970 206,706 212,890 205,871 206,300 Collateral held against notes net: 38 Gold certificate account 11,071 11,067 11,065 11,065 11,063 11,078 11,068 11,063 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 190,230 190,383 191,441 191,887 190,625 196,794 189,785 190,219 42 Total collateral 206,319 206,468 207,524 207,970 206,706 212,890 205,871 206,300 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 TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1988 1987 1988 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 Dec. 31 Jan. 29 Feb. 29 1 Loans—Total 363 202 336 462 253 3,815 333 336 2 Within 15 days 362 194 324 443 236 3,806 326 303 3 16 days to 90 days 1 8 12 19 17 9 7 33 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 0 0 0 0 0 0 6 Within 15 days 0 0 0 0 0 0 0 0 7 16 days to 90 days 0 0 0 0 0 0 0 0 8 91 days to 1 year 0 0 0 0 0 0 0 0 9 U.S. Treasury securities—Total 220,282 215,648 207,371 217,534 214,901 222,551 218,411 216,891 10 Within 15 days1 9,123 10,456 8,112 14,687 8,948 11,363 4,402 5,411 11 16 days to 90 days 52,598 48,006 43,209 52,430 52,416 46,112 55,664 57,207 12 91 days to 1 year 70,519 69,484 68,973 63,139 66,259 76,827 70,303 67,016 13 Over 1 year to 5 years 47,410 47,070 46,620 47,583 47,583 47,512 47,410 47,562 14 Over 5 years to 10 years 15,208 15,208 15,033 14,1% 14,1% 15,313 15,208 14,1% 15 Over 10 years 25,424 25,424 25,424 25,499 25,499 25,424 25,424 25,499 16 Federal agency obligations—Total 8,034 7,402 7,402 7,402 7,402 8,868 7,423 7,402 17 Within 15 days' 781 25 0 289 364 1,560 170 364 18 16 days to 90 days 886 1,016 1,016 737 662 691 886 710 19 91 days to 1 year 1,538 1,532 1,572 1,562 1,562 1,653 1,538 1,609 20 Over 1 year to 5 years 3,323 3,323 3,298 3,298 3,298 3,416 3.323 3,203 21 Over 5 years to 10 years 1,317 1,317 1,327 1,327 1,327 1,358 1,317 1,327 22 Over 10 years 189 189 189 189 189 190 189 189 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 DomesticN onfinancial Statistics • May 1988 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE Billions of dollars, averages of daily figures 1987 1988 IItteemm 1984 1985 1986 1987 Dec. Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS1 1 Total reserves2 39.91 46.06 56.17 57.44 57.60 57.88 57.83 58.50 57.99 57.44 58.32 58.44 2 Nonborrowed reserves 36.72 44.74 55.34 56.66 56.93 57.23 56.89 57.55 57.36 56.66 57.23r 58.04 3 Nonborrowed reserves plus extended credit3 39.33 45.24 55.64 57.14 57.12 57.36 57.29 58.00 57.76 57.14 57.61 58.25 4 Required reserves 39.06 45.00 54.80 56.41 56.84 56.84 57.03 57.37 57.06 56.41 57.02 57.30 5 Monetary base4 199.60 217.34 239.52 256.68 249.51 251.00 252.25 254.56 256.02 256.68 260.24' 261.26 Not seasonally adjusted 6 Total reserves2 40.94 47.24 57.64 58.96 57.74 57.39 57.50 58.04 58.09 58.96 60.17 57.65 7 Nonborrowed reserves 37.75 45.92 56.81 58.19 57.07 56.74 56.56 57.09 57.47 58.19 59.09 57.25 8 Nonborrowed reserves plus extended credit3 40.35 46.42 57.11 58.67 57.27 56.88 56.96 57.54 57.86 58.67 59.46 57.46 9 Required reserves 40.08 46.18 56.27 57.94 56.98 56.36 56.70 56.91 57.17 57.94 58.88 56.51 10 Monetary base 202.70 220.82 243.63 261.21 251.42 251.42 251.60 253.29 256.82 261.21 261.20r 258.19 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS3 11 Total reserves2 40.70 48.14 59.56 62.12 58.84 58.36 59.81 61.11 61.20 62.12 62.64 60.05 12 Nonborrowed reserves 37.51 46.82 58.73 61.35 58.17 57.71 58.87 60.16 60.58 61.35 61.56 59.65 13 Nonborrowed reserves plus extended credit3 40.09 47.41 59.04 61.86 58.37 57.76 58.85 61.22 60.79 61.86 62.12r 59.82 14 Required reserves 39.84 47.08 58.19 61.09 58.08 57.33 59.02 59.98 60.28 61.09 61.34 58.91 15 Monetary base4 204.18 223.53 247.71 266.16 254.67 254.36 255.69 258.08 261.67 266.16 265.79 262.60 1. Figures incorporate adjustments for discontinuities associated with the 4. The monetary base not adjusted for discontinuities consists of total reserves implementation of the Monetary Control Act and other regulatory changes to plus required clearing balances and adjustments to compensate for float at Federal reserve requirements. To adjust for discontinuities due to changes in reserve Reserve Banks and the currency component of the money stock plus, for instirequirements on reservable nondeposit liabilities, the sum of such required tutions not having required reserve balances, the excess of current vault cash over reserves is subtracted from the actual series. Similarly, in adjusting for disconti- the amount applied to satisfy current reserve requirements. Currency and vault nuities in the monetary base, required clearing balances and adjustments to cash figures are measured over the weekly computation period ending Monday. compensate for float also are subtracted from the actual series. The seasonally adjusted monetary base consists of seasonally adjusted total 2. Total reserves not adjusted for discontinuities consist of reserve balances reserves, which include excess reserves on a not seasonally adjusted basis, plus with Federal Reserve Banks, which exclude required clearing balances and the seasonally adjusted currency component of the money stock and the remainadjustments to compensate for float, plus vault cash held during the lagged ing items seasonally adjusted as a whole. computation period by institutions having required reserve balances at Federal 5. Reflects actual reserve requirements, including those on nondeposit liabili- Reserve Banks plus the amount of vault cash equal to required reserves during the ties, with no adjustments to eliminate the effects of discontinuities associated with maintenance period at institutions having no required reserve balances. implementation of the Monetary Control Act or other regulatory changes to 3. Extended credit consists of borrowing at the discount window under the reserve requirements. terms and conditions established for the extended credit program to help NOTE. Latest monthly and biweekly figures are available from the Board's depository institutions deal with sustained liquidity pressures. Because there is H.3(502) statistical release. Historical data and estimates of the impact on not the same need to repay such borrowing promptly as there is with traditional required reserves of changes in reserve requirements are available from the short-term adjustment credit, the money market impact of extended credit is Monetary and Reserves Projections Section, Division of Monetary Affairs, Board similar to that of nonborrowed reserves. of Governors of the 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 1988 IItteemm11 D 19 e 8 c 4 . D 19 e 8 c 5 . D 19 e 8 c 6 . D 19 e 8 c 7 . Nov. Dec. Jan.' Feb. Seasonally adjusted 1 Ml 551.9 620.1 725.4 750^ 752.7 750.9' 758.9 759.6 7 M2 2,363.6 2,562.6 2,807.8 2,902.1' 2,897.6' 2,902.1' 2,926.3 2,948.4 M3 2,978.3 3,196.4r 3,491.5r 3,662.5r 3,658.2' 3,662.5' 3,687.5 3,718.5 4 L 3,519.4 3,825.9r 4,135.2' 4,330.7' 4,325.0' 4,330.7' 4,372.3 n.a. 5 5,932.6' 6,749.4' 7,607.1' 8,319.1' 8,259.0' 8,319.1' 8,374.6 n.a. Ml components 6 Currency 156.1 167.7 180.4 196.5 195.0 196.5 198.4 199.3 7 Travelers checks 5.2 5.9 6.5 7.1 7.0 7.1 7.2 7.3 8 Demand deposits 244.1 267.2 303.3 288.0 291.3 288.0 289.9 287.8 9 Other checkable deposits 146.4 179.2 235.2 259.3 259.5' 259.3 263.4 265.1 Nontransactions components 10 In M2 .... 1,811.7 1,942.5 2,082.4 2,151.3' 2,144.9' 2,151.3' 2,167.4 2,188.8 11 In M3 only 614.7 633.8' 683.7' 760.4' 760.6' 760.4' 761.1 770.0 Savings deposits8 12 Commercial Banks 122.6 124.8 155.5 178.2 178.2 117788..22 179.0 118811..00 13 Thrift institutions 162.9 176.6 215.2 236.0 236.8 236.0 235.3 235.2 Small denomination time deposits9 14 Commercial Banks 386.3 383.3 364.6 384.6 381.6 384.6 388.0 393.6 15 Thrift institutions 497.0 496.2 488.6 528.5 520.1 528.5 536.7 548.9 Money market mutual funds 16 General purpose and broker-dealer 167.5 176.5 208.0 222.2 220.9 222.2 226.2 223322..22 17 Institution-only 62.7 64.5 84.4 89.6 89.5 89.6 94.4 98.7 Large denomination time deposits10 18 Commercial Banks 270.2 284.9 288.9 323.5 322.3 323.5 320.2 332233..99 19 Thrift institutions 146.8 151.6 150.3 161.2 158.1 161.2 162.6 164.9 Debt components 20 Federal debt 1,365.3 1,584.3 1,804.5 1,952.4 1,939.5 11,,995522..44 1,960.8 n.a. 21 Nonfederal debt 4,567.3'' 5,165.r 5,802.6' 6,366.7' 6,319.6' 6,366.7' 6,413.8 n.a. Not seasonally adjusted 7,7. Ml 564.5 633.5 740.6 765.9 756.0 765.9 764.8 745.1 73 M2 2,373.2 2,573.9 2,821.5 2,915.8' 2,901.1' 2,915.8' 2,938.6 2,935.8 74 M3 2,991.4 3,211.0' 3,508.3' 3,679.1' 3,665.5' 3,679.1' 3,700.0 3,707.0 7.5 L 3,532.7 3,841.4' 4,153.2' 4,348.8' 4,334.8' 4,348.8' 4,391.1 n.a. 26 5,927.1 6,740.6 7,592.8' 8,302.8' 8,233.2' 8,302.8' 8,356.5 n.a. Ml components 27 Currency 158.5 170.2 183.0 199.4 195.9 199.4 197.1 197.2 28 Travelers checks 4.9 5.5 6.0 6.5 6.6 6.5 6.6 6.8 29 Demand deposits 253.0 276.9 314.4 298.5 294.1 298.5 295.8 279.1 30 Other checkable deposits 148.2 180.9 237.3 261.5 259.3 261.5 265.3 261.9 Nontransactions components 31 M26 1,808.7 1,940.3 2,080.8 2,149.9' 2,145.1' 22,,114499..99'' 2,173.8 2,190.7 32 M3 only7 618.2 637.1' 686.8' 763.3' 764.4' 763.3' 761.3 771.2 Money market deposit accounts 33 Commercial Banks 267.4 332.8 379.6 358.2 358.1 358.2 358.9 359.0 34 Thrift institutions 149.4 180.8 192.9 167.0 169.6 167.0 165.2 163.6 Savings deposits8 35 Commercial Banks 121.5 123.7 115544..22 176.7 117777..55 117766..77 178.2 117799..55 36 Thrift institutions 161.5 174.8 212.9 233.3 235.7 233.3 233.0 232.8 Small denomination time deposits9 37 Commercial Banks 386.9 384.0 365.3 385.2 382.6 385.2 389.4 394.0 38 Thrift institutions 498.2 497.5 489.7 529.3 521.1 529.3 540.2 551.5 Money market mutual funds 39 General purpose and broker-dealer 167.5 176.5 208.0 222.2 220.9 222.2 226.2 232.2 40 Institution-only 62.7 64.5 84.4 89.6 89.5 89.6 94.4 98.7 Large denomination time deposits10 41 Commercial Banks" 270.9 285.4 289.1 323.6 322.4 323.6 321.3 324.2 42 Thrift institutions 146.8 151.9 150.7 161.7 159.0 161.7 163.8 166.0 Debt components 43 Federal debt 1,364.7 1,583.7 1,804.0 11,,995511..99'' 1,935.2' 11,,995511..99rr 1,959.4 n.a. 44 Nonfederal debt 4,562.4 5,156.9 5,788.8' 6,350.9' 6,298.0' 6,350.9' 6,397.0 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • May 1988 NOTES TO TABLE 1.21 1. Composition of the money stock measures and debt is as follows: acceptances, and other debt instruments. The source of data on domestic Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt of depository institutions; (2) travelers checks of nonbank issuers; (3) demand data are based on monthly averages. deposits at all commercial banks other than those due to depository institutions, 2. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of the U.S. government, and foreign banks and official institutions less cash items in depository institutions. the process of collection and Federal Reserve float; and (4) other checkable 3. Outstanding amount of U.S. dollar-denominated travelers checks of nondeposits (OCD) consisting of negotiable order of withdrawal (NOW) and auto- bank issuers. Travelers checks issued by depository institutions are included in matic transfer service (ATS) accounts at depository institutions, credit union demand deposits. share draft accounts, and demand deposits at thrift institutions. 4. Demand deposits at commercial banks and foreign-related institutions other M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) than those due to depository institutions, the U.S. government, and foreign banks issued by all commercial banks and overnight Eurodollars issued to U.S. residents and official institutions less cash items in the process of collection and Federal by foreign branches of U.S. banks worldwide, MMDAs, savings and small- Reserve float. denomination time deposits (time deposits—including retail RPs—in amounts of 5. Consists of NOW and ATS balances at all depository institutions, credit less than $100,000), and balances in both taxable and tax-exempt general purpose union share draft balances, and demand deposits at thrift institutions. and broker-dealer money market mutual funds. Excludes individual retirement 6. Sum of overnight RPs and overnight Eurodollars, money market fund accounts (IRA) and Keogh balances at depository institutions and money market balances (general purpose and broker-dealer), MMDAs, and savings and small funds. Also excludes all balances held by U.S. commercial banks, money market time deposits. funds (general purpose and broker-dealer), foreign governments and commercial 7. Sum of large time deposits, term RPs, and term Eurodollars of U.S. banks, and the U.S. government. residents, money market fund balances (institution-only), less the estimated M3: M2 plus large-denomination time deposits and term RP liabilities (in amount of overnight RPs and Eurodollars held by institution-only money market amounts of $100,000 or more) issued by commercial banks and thrift institutions, funds. term Eurodollars held by U.S. residents at foreign branches of U.S. banks 8. Savings deposits exclude MMDAs. worldwide and at all banking offices in the United Kingdom and Canada, and 9. Small-denomination time deposits—including retail RPs—are those issued balances in both taxable and tax-exempt, institution-only money market mutual in amounts of less than $100,000. All individual retirement accounts (IRA) and funds. Excludes amounts held by depository institutions, the U.S. government, Keogh accounts at commercial banks and thrifts are subtracted from small time money market funds, and foreign banks and official institutions. Also subtracted deposits. is the estimated amount of overnight RPs and Eurodollars held by institution-only 10. Large-denomination time deposits are those issued in amounts of $100,000 money market mutual funds. or more, excluding those booked at international banking facilities. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term 11. Large-denomination time deposits at commercial banks less those held by Treasury securities, commercial paper and bankers acceptances, net of money money market mutual funds, depository institutions, and foreign banks and market mutual fund holdings of these assets. official institutions. Debt: Debt of domestic nonfinancial sectors consists of outstanding credit NOTE. Latest monthly and weekly figures are available from the Board's H.6 market debt of the U.S. government, state and local governments, and private (508) release. Historical data are available from the Banking Section, Division of nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- Research and Statistics, Board of Governors of the Federal Reserve System, sumer credit (including bank loans), other bank loans, commercial paper, bankers Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 1.22 BANK DEBITS AND DEPOSIT TURNOVER1 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 1199887722 July Aug. Sept. Oct. Nov. Dec. DEBITS TO Seasonally adjusted Demand deposits3 1 All insured banks 156,091.6 188,345.8 217,115.9 219,501.3 221,729.0 219,182.9 234,398.3 219,386.1 203,290.6 7 Major New York City banks 70,585.8 91,397.3 104,496.3 106,428.9 109,062.5 105,149.4 110,833.6 103,693.6 92,640.1 3 Other banks 85,505.9 96,948.8 112,619.6 113,072.3 112,666.5 114,033.4 123,564.6 115,692.5 110,650.5 4 ATS-NOW accounts4 1,823.5 2,182.5 2,402.7 2,498.7 2,333.1 2,349.0 2,591.3 2,536.1 2,525.7 5 Savings deposits 384.9 403.5 526.5 548.2 518.8 524.0 582.4 570.8 556.0 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 500.3 556.5 612.1 628.6 623.3 625.3 654.9 619.0 590.4 7 Major New York City banks 2,196.9 2,498.2 2,670.6 2,837.4 2,718.2 2,715.1 2,744.7 2,620.2 2,608.1 8 Other banks 305.7 321.2 357.0 362.8 357.0 365.7 389.1 367.4 358.3 9 ATS-NOW accounts4 15.8 15.6 13.8 14.3 13.2 13.2 14.4 14.2 14.2 10 Savings deposits 3.2 3.0 3.1 3.1 3.0 3.0 3.3 3.3 3.2 DEBITS TO Not seasonally adjusted Demand deposits3 11 All insured banks 156,052.3 188,506.4 217,124.8 228,764.2 214,145.9 216,728.0 233,999.8 202,230.1 222,338.9 17 Major New York City banks 70,559.2 91,500.0 104,518.6 111,157.7 103,822.8 104,234.0 111,398.9 96,035.9 102,548.7 13 Other banks 85,493.1 97,006.6 112,606.1 117,606.5 110,323.1 112,494.0 122,600.8 106,194.2 119,790.3 14 ATS-NOW accounts4 1,826.4 2,184.6 2,404.8 2,466.0 2,226.4 2,414.9 2,577.7 2,375.8 2,645.3 15 MMDA6 1,223.9 1,609.4 1,954.2 2,002.7 1,752.7 1,846.6 2,247.8 1,959.8 2,276.4 16 Savings deposits5 385.3 404.1 526.8 576.5 524.2 519.0 604.3 519.9 568.9 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 499.9 556.7 612.3 651.7 612.5 620.2 657.8 565.6 615.0 18 Major New York City banks 2,196.3 2,499.1 2,674.9 2,928.4 2,721.9 2,751.0 2,824.8 2,467.8 2,661.4 19 Other banks 305.6 321.2 356.9 375.7 354.2 361.1 387.6 333.3 370.9 20 ATS-NOW accounts4 15.8 15.6 13.8 14.3 12.8 13.7 14.6 13.3 14.6 21 MMDA® 4.0 4.5 5.3 5.5 4.8 5.1 6.3 5.5 6.4 22 Savings deposits 3.2 3.0 3.1 3.3 3.0 3.0 3.5 3.0 3.2 1. These series have been revised to reflect new benchmark adjustments and 3. Represents accounts of individuals, partnerships, and corporations and of revised seasonal factors as well as some revisions of reported data. Historical states and political subdivisions. tables containing revised data for earlier periods may be obtained from the 4. Accounts authorized for negotiable orders of withdrawal (NOW) and ac- Banking Section, Division of Monetary Affairs, Board of Governors of the counts authorized for automatic transfer to demand deposits (ATS). ATS data are Federal Reserve System, Washington, D.C. 20551. available beginning December 1978. These data also appear on the Board's G.6 (406) release. For address, see inside 5. Excludes ATS and NOW accounts, MMDA and special club accounts, such front cover. as Christmas and vacation clubs. 2. Annual averages of monthly figures. 6. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • May 1988 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1987 1988 CCaatteeggoorryy Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjusted 1 Total loans and securities2 2,130.7 2,152.0 2,166.0 2,176.7 2,181.3 2,199.0 2,214.7 2,227.6 2,232.1 2,230.6 2,242.0 2,257.6 2 3 O U t . h S e . r g s o e v c e u r r n i m tie e s n t securities 3 1 1 9 5 3 . . 4 1 3 1 1 9 8 4 . . 1 4 3 1 2 9 1 5 . . 3 5 3 1 2 9 1 5 . . 3 9 3 1 2 9 2 4 . . 9 3 3 1 2 9 8 3 . . 5 7 3 1 3 9 1 3 . . 3 7 3 1 3 9 1 4 . . 7 2 3 1 3 9 1 6 . . 1 2 3 1 3 9 3 6 . . 2 0 3 1 3 9 4 4 . . 1 0 3 1 3 9 4 5 . . 0 7 4 Total loans and leases2 1,622.3 1,639.6 1,649.3 1,659.6 1,664.1 1,676.8 1,689.8 1,701.7 1,704.8 1,701.4 1,713.9 1,727.9 5 Commercial and industrial ..... 546.2 549.1 551.9 554.4 553.6 554.0 559.0 562.8 563.1 565.5 568.5 569.9 6 Bankers acceptances held ... 4.7 4.8 4.8 4.6 4.5 5.3 5.4 5.5' 4.6 4.3 4.5 4.5 7 Other commercial and industrial 541.5 544.3 547.1 549.8 549.1 548.7 553.6 557.3 558.5 561.2 564.0 565.4 8 U.S. addressees4. 533.2 536.0 539.0 541.3 540.8 540.5 545.6 549.3 550.9 553.0 555.1' 556.6 9 Non-U.S. addressees 8.3 8.3 8.1 8.4 8.4 8.2 8.0 8.0 7.6 8.2 8.9 8.8 10 Real estate 517.1 524.8 532.6 542.6 549.6 556.8 561.7 569.4 576.2 582.3 586.9 592.4 11 Individual 316.8 317.8 319.1 318.9 319.7 321.5 322.8 324.1 325.0 325.9 327.8 330.2 12 Security 40.1 44.6 43.6 44.0 43.9 45.4 46.1 47.1 39.3 33.6 36.7' 41.8 13 Nonbank financial institutions 35.4 35.6 35.8 34.6 32.9 32.0 31.8 32.1 32.3 32.3 32.0 32.6 14 Agricultural 30.2 29.9 30.0 30.0 29.8 29.7 29.6 29.6 29.3' 29.2' 29.4 29.6 15 State and political subdivisions 56.8r 56.6' 56.4' 56.1' 55.5' 54.7' 54.6' 54.1 53.4 51.2 52.1' 52.1 16 Foreign banks 9.1 9.3 9.3 9.6 9.0 9.1 9.2 9.6 8.8 8.2 8.3 8.0 17 Foreign official institutions 6.8 6.8 6.1 5.8 5.7 5.7 5.7 5.8 5.7 5.6 5.5' 5.2 18 Lease financing receivables .... 22.7 23.3 23.7 23.9 23.9 24.0 24.1 24.3 24.5 24.8 25.0 25.0 19 All other loans 4i.(y 41.8' 40^ 39.7' 40.3' 43.8' 45.0' 42.7 47.1 42.7 41.7' 41.2 Not seasonally adjusted 20 Total loans and securities2 2,130.7 2,153.1 2,163.4 2,173.7 2,172.8 2,188.8 2,211.6 2,222.4 2,231.3 2,247.0 2,254.7 2,262.3 21 U.S. government securities 317.4 318.0 320.0 318.4 322.1 328.3 331.3 329.3 331.0 333.1 335.6 339.1 22 Other securities 192.7 194.0 195.5 195.3 193.0 193.6 193.8 193.3 195.6 196.6 196.7 196.4 23 Total loans and leases" 1,620.6 1,641.1 1,647.9 1,660.0 1,657.7 1,666.9 1,686.6 1,699.8 1,704.7 1,717.3 1,722.4 1,726.8 24 Commercial and industrial ..... 550.7 552.8 554.4 555.9 551.3 549.5 555.7 558.7 562.0 569.6 568.1 569.2 25 Bankers acceptances held3... 4.6 4.8 4.8 4.7 4.6 5.3 5.5 5.4 4.6 4.4 4.3 4.5 26 Other commercial and industrial 546.1 548.0 549.6 551.2 546.7 544.2 550.2 553.3 557.4 565.2 563.8 564.7 27 U.S. addressees4 537.9 539.9 541.4 542.7 538.1 535.9 542.1 545.2 549.2 557.0 555.7 556.4 28 Non-U.S. addressees 8.1 8.2 8.2 8.5 8.6 8.3 8.2 8.1 8.2 8.2 8.1 8.3 29 Real estate 516.4 523.9 532.0 542.4 549.7 556.8 562.4 570.0 576.8 583.2 587.3 591.7 30 Individual 313.8 315.0 316.5 316.9 318.4 321.5 324.3 325.7 326.7 330.2 331.2 329.6 31 Security 39.6 46.4 43.9 45.4 43.3 43.3 44.8 45.6 39.4 35.3 37.5 40.2 32 Nonbank financial institutions 34.3 35.5 35.6 34.7 32.7 31.9 32.3 32.2 32.7 33.6 32.3 31.6 33 Agricultural 29.2 29.1 29.7 30.3 30.5 30.6 30.7 30.4 29.6 29.0 28.7 28.6 34 State and political subdivisions 57.8 57.1 56.4 55.7 54.7 54.1 53.8 53.2 52.3 51.2 53.9 53.3 35 Foreign banks 9.0 8.9 9.0 9.5 9.0 8.9 9.5 9.8 8.8 8.6 8.5 8.2 36 Foreign official institutions 6.8 6.8 6.1 5.8 5.7 5.7 5.7 5.8 5.7 5.6 5.5 5.2 37 Lease financing receivables .... 22.9 23.5 23.8 24.0 23.9 23.9 24.0 23.9 24.2 24.8 25.2 25.1 38 All other loans 40.1 42.2 40.5 39.4 38.5 40.6 43.4 44.4 46.4 46.2 44.2 44.1 1. Data have been revised because of benchmarking and new seasonal factors. 2. Excludes loans to commercial banks in the United States. Back data are available from the Banking and Monetary Statistics section, Board 3. Includes nonfinancial commercial paper held, of Governors of the Federal Reserve System, Washington, D.C. 20551. These 4. United States includes the 50 states and the District of Columbia, data also appear in the Board's G.7 (407) release. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1987r 1988 SSoouurrccee Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan/ Feb. Total nondeposit funds 1 Seasonally adjusted2 165.2 161.3 170.6 167.2 160.4 166.7 177.3 176.2 173.7 177.1 177.4 174.6 2 Not seasonally adjusted 166.3 160.8 170.7 164.1 156.7 166.8 177.7 176.3 176.0 178.0 177.8 177.2 Federal funds, RPs, and other borrowings from nonbanks 3 Seasonally adjusted 171.9 172.1 170.6 168.4 167.2 167.1 165.0 164.6 165.8 116611..99 116699..22 117722..77 4 Not seasonally adjusted 173.0 171.6 170.6 165.3 163.6 167.2 165.4 164.7 168.1 162.8 169.5 175.3 5 Net balances due to foreign-related institutions, not seasonally adjusted -6.7 --1100..88 .1 --11..22 --66..99 --..44 1122..33 1111..66 77..99 1155..22 88..22 11..99 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted -21.1 -23.0 -15.5 -15.5 -22.2 -17.7 -11.8 --1144..77 --1177..11 --1144..11 --1177..44 --2211..55 7 Gross due from balances 66.0 70.5 68.5 67.1 66.4 64.5 63.8 67.7 70.4 69.6 72.1 74.1 8 Gross due to balances 44.9 47.5 53.0 51.5 44.2 46.8 52.0 53.0 53.3 55.5 54.7 52.6 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted 14.4 12.2 15.5 14.3 15.4 17.3 24.1 26.3 25.0 29.3 25.7 23.4 10 Gross due from balances 72.0 73.4 76.0 77.4 77.4 77.7 77.3 79.7 83.2 79.7 85.2 87.3 11 Gross due to balances 86.4 85.6 91.5 91.8 92.8 95.0 101.4 106.0 108.1 109.0 110.9 110.7 Security RP borrowings 1? Seasonally adjusted® 96.4 99.2 99.9 101.9 103.0 105.2 107.5 107.6 106.9 106.4 108.7 107.2 13 Not seasonally adjusted 97.4 98.7 100.0 98.8 99.4 105.3 107.9 107.7 109.3 107.2 109.0 109.8 U.S. Treasury demand balances 14 Seasonally adjusted 18.9 21.4 25.3 26.9 24.4 28.5 24.9 3344..22 35.7 2266..11 1188..66 2222..66 15 Not seasonally adjusted 17.1 21.6 30.8 25.5 26.6 21.6 25.5 30.7 25.8 22.4 24.9 28.2 Time deposits, $100,000 or more8 16 Seasonally adjusted 355.9 358.9 365.7 372.1 372.5 372.3 373.0 338800..55 387.0 338899..22 338899..11 339944..44 17 Not seasonally adjusted 357.7 358.5 366.3 371.4 370.0 371.8 373.2 380.4 387.0 389.3 390.2 394.7 1. Commercial banks are those in the 50 states and the District of Columbia 3. Other borrowings are borrowings on any instrument, such as a promissory with national or state charters plus agencies and branches of foreign banks. New note or due bill, given for the purpose of borrowing money for tne banking York investment companies majority owned by foreign banks, and Edge Act business. This includes borrowings from Federal Reserve Banks and from corporations owned by domestically chartered and foreign banks. foreignbanks, term federal funds, overdrawn due from bank balances, loan RPs, Data have been revised because of benchmarking to new Call Reports and to and participations in pooled loans. new seasonal factors. Back data are available from the Banking and Monetary 4. Averages of daily figures for member and nonmember banks. Statistics section, Board of Governors of the Federal Reserve System, Washing- 5. Averages of daily data. ton, D.C. 20551. 6. Based on daily average data reported by 122 large banks. These data also appear in the Board's G. 10(411) release. 7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from commercial banks. Averages of daily data. nonbanks and not seasonally adjusted net Eurodollars. 8. Averages of Wednesday figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • May 1988 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series1 Billions of dollars 1987 1988 AAccccoouunntt Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. ALL COMMERCIAL BANKING INSTITUTIONS2 1 Loans and securities 2,314.2 2,325.8 2,321.0 2,331.6 2,348.8 2,374.8 2,402.4 2,389.9 2,430.5 2,415.2 2,420.7 2 Investment securities 491.7 494.5 492.7 497.1 501.1 501.7 503.8 508.0 514.4 515.2 513.9 3 U.S. government securities 305.6 307.4 304.6 309.4 313.7 313.8 316.0 317.3 321.4 322.9 322.2 4 Other 186.1 187.0 188.0 187.7 187.4 187.9 187.9 190.7 193.1 192.4 191.8 5 Trading account assets 23.4 21.4 20.2 20.4 19.5 19.5 19.6 20.3 16.9 18.3 22.0 6 Total loans 1,799.2 1,810.0 1,808.2 1,814.1 1,828.2 1,853.6 1,878.9 1,861.6 1,899.2 1,881.6 1,884.8 7 Interbank loans 154.0 161.8 150.7 156.5 160.8 157.4 172.9 162.0 172.1 160.5 162.5 8 Loans excluding interbank 1,645.2 1,648.1 1,657.5 1,657.6 1,667.5 1,696.2 1,706.1 1,699.7 1,727.2 1,721.1 1,722.3 9 Commercial and industrial 551.9 555.1 554.6 548.1 548.2 560.7 559.7 561.1 576.4 565.3 569.1 10 Real estate 526.4 533.8 544.4 552.9 558.2 564.1 571.7 577.4 586.3 588.5 591.9 11 Individual 316.3 316.9 317.3 319.4 322.1 325.3 326.7 326.9 332.4 330.8 329.8 12 All other 250.6 242.3 241.1 237.2 239.0 246.0 248.0 234.3 232.1 236.5 231.4 13 Total cash assets 211.6 231.9 214.2 208.4 210.7 223.8 223.5 215.2 232.5 209.6 202.3 14 Reserves with Federal Reserve Banks. 29.4 37.5 33.5 32.5 37.3 32.9 38.3 33.8 36.2 33.3 32.8 15 Cash in vault 24.0 25.1 24.2 24.5 24.7 24.5 25.0 24.0 28.5 25.8 25.1 16 Cash items in process of collection ... 74.8 81.6 74.7 69.0 65.9 81.6 79.0 76.1 79.9 70.7 66.8 17 Demand balances at U.S. depository institutions 33.1 36.5 30.4 31.0 30.8 32.7 32.3 32.9 36.6 31.4 30.1 18 Other cash assets 50.3 51.2 51.4 51.5 52.1 52.1 48.9 48.4 51.4 48.5 47.6 19 Other assets 199.2 203.7 197.4 182.5 184.5 193.6 186.3 187.5 184.0 176.0 178.1 20 Total assets/total liabilities and capital 2,724.9 2,761.4 2,732.6 2,722.6 2,744.0 2,792.2 2,812.2 2,792.6 2,847.1 2,800.7 2,801.2 21 Deposits 1,922.8 1,942.5 1,927.4 1,928.8 1,930.4 1,972.4 1,971.2 1,974.1 2,009.1 1,968.1 1,973.9 22 Transaction deposits 591.6 598.1 579.6 575.3 574.1 612.4 598.1 592.0 623.3 576.0 567.3 23 Savings deposits 537.6 541.0 537.6 538.7 537.9 535.3 531.7 531.1 528.0 531.4 535.2 24 Time deposits 793.6 803.4 810.1 814.8 818.4 824.7 841.4 851.0 857.9 860.6 871.4 25 Borrowings 420.2 429.9 419.5 414.6 426.4 416.3 435.7 420.1 426.2 443.2 440.9 26 Other liabilities 194.1 200.0 202.0 202.5 209.6 224.7 225.5 218.9 231.5 208.7 205.3 27 Residual (assets less liabilities) 187.8 189.0 183.7 176.7 177.6 178.8 179.8 179.5 180.4 180.7 181.1 MEMO 28 U.S. government securities (including trading account) 319.4 321.0 317.0 323.8 326.8 327.7 329.9 331.7 332.4 336.9 339.3 29 Other securities (including trading account) 195.6 194.8 195.8 193.8 193.8 193.5 193.5 196.6 198.9 196.7 196.6 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 2,152.0 2,160.3 2,157.0 2,162.8 2,179.6 2,195.4 2,218.6 2,213.8 2,238.5 2,231.2 2,235.6 31 Investment securities 468.1 469.5 468.1 472.1 476.2 475.9 478.7 482.6 488.3 487.0 485.9 32 U.S. Treasury securities 295.5 296.9 295.1 299.4 303.5 302.9 305.7 306.4 311.0 311.3 310.7 33 Other 172.6 172.5 173.0 172.7 172.6 173.0 173.0 176.2 177.3 175.8 175.2 34 Trading account assets 23.4 21.4 20.2 20.4 19.5 19.5 19.6 20.3 16.9 18.3 22.0 35 Total loans 1,660.5 1,669.5 1,668.7 1,670.3 1,684.0 1,700.0 1,720.3 1,711.0 1,733.3 1,725.9 1,727.6 36 Interbank loans 124.3 128.7 120.9 122.0 128.6 125.0 133.3 130.5 135.3 131.0 133.1 37 Loans excluding interbank 1,536.3 1,540.8 1,547.8 1,548.3 1,555.4 1,575.0 1,587.0 1,580.4 1,598.0 1,594.9 1,594.5 38 Commercial and industrial 473.4 475.1 471.3 465.2 464.4 470.2 470.6 472.0 479.4 472.6 475.4 39 Real estate 517.8 525.0 535.5 543.5 548.4 554.0 561.9 567.3 575.0 577.1 579.8 40 Individual 316.0 316.5 317.0 319.1 321.8 325.0 326.4 326.6 332.1 330.5 329.5 41 All other 229.1 224.2 224.0 220.4 220.8 225.8 228.1 214.6 211.6 214.7 209.8 42 Total cash assets 195.2 215.4 197.7 191.6 192.7 204.8 207.8 199.3 214.9 191.9 184.4 43 Reserves with Federal Reserve Banks. 27.2 35.9 32.1 31.3 36.2 30.9 36.5 31.5 35.1 31.7 30.5 44 Cash in vault 24.0 25.0 24.1 24.4 24.6 24.4 24.9 24.0 28.4 25.7 25.1 45 Cash items in process of collection ... 74.3 81.2 74.2 68.5 65.4 81.0 78.4 75.7 79.5 70.2 66.3 46 Demand balances at U.S. depository institutions 31.3 34.5 28.7 29.3 29.2 30.8 30.6 31.4 34.7 29.7 28.5 47 Other cash assets 38.5 38.8 38.6 38.0 37.2 37.7 37.3 36.7 37.3 34.6 34.0 48 Other assets 142.6 142.3 132.8 120.5 119.9 134.2 130.0 123.7 127.2 118.8 122.0 49 Total assets/liabilities and capital 2,489.7 2,517.9 2,487.5 2,474.9 2,492.2 2,534.5 2,556.4 2,536.8 2,580.7 2,542.0 2,541.9 50 Deposits 1,860.7 1,880.1 1,865.7 1,868.3 1,868.8 1,910.3 1,909.1 1,912.4 1,944.6 1,905.9 1,911.2 51 Transaction deposits 583.7 590.0 571.4 567.4 566.0 603.9 589.5 583.7 614.9 567.7 559.4 52 Savings deposits 535.6 539.0 535.6 536.6 535.7 533.2 529.5 528.8 525.7 529.1 532.8 53 Time deposits 741.5 751.1 758.7 764.3 767.1 773.3 790.1 799.9 804.1 809.1 819.0 54 Borrowings 328.2 336.3 327.0 318.9 333.0 324.7 345.7 323.2 331.9 344.7 342.9 55 Other liabilities 116.2 115.8 114.4 114.2 116.0 123.8 125.0 124.8 127.0 113.9 109.9 56 Residual (assets less liabilities) 184.6 185.7 180.5 173.5 174.4 175.6 176.6 176.3 177.2 177.5 177.9 1. Data have been revised because of benchmarking to new Call Reports condition report data. Data for other banking institutions are estimates made for beginning July 1986. Back data are available from the Banking and Monetary the last Wednesday of the month based on a weekly reporting sample of Statistics 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 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS1 Millions of dollars, Wednesday figures 1988 AAddjjuusstt-mmeenntt AAccccoouunntt bbaannkk Jan. 6 Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 Mar. 2 11998877 1 Cash and balances due from depository institutions 115,021 109,114 129,998 104,307 107,816 93,205 121,433 97,516 105,006 3,168 2 Total loans, leases, and securities, net 1,096,292 1,091,893 1,093,276 1,094,932 1,103,345 1,102,642 1,104,191 1,094,710 1,103,570 19,175 3 U.S. Treasury and government agency 127,151 126,308 129,647 129,331 131,042 131,986 133,470 132,226 132,906 1,979 4 Trading account 12,661 12,230 14,849 13,993 16,043 17,333 18,301 17,188 18,089 -12 5 Investment account 114,490 114,079 114,798 115,338 114,999 114,653 115,170 115,038 114,817 1,991 6 Mortgage-backed securities2 37,832 37,850 38,343 38,343 38,544 38,503 38,780 38,226 38,793 0 1 All other maturing in One year or less 16,542 16,330 15,922 16,054 16,346 16,639 17,092 17,126 17,640 455 8 Over one through five years 47,404 47,125 47,928 48,219 47,600 47,658 47,511 47,754 47,537 915 9 Over five years 12,712 12,773 12,605 12,722 12,509 11,853 11,786 11,932 10,798 620 10 Other securities 74,550 73,846 73,628 73,648 73,425 72,897 72,230 72,486 72,456 1,618 11 Trading account 2,450 1,986 1,868 1,900 1,765 1,727 1,885 1,895 1,998 10 12 Investment account 72,101 71,861 71,760 71,748 71,659 71,170 70,345 70,591 70,458 1,608 13 States and political subdivisions, by maturity 51,474 51,319 51,197 51,127 50,758 50,458 49,872 49,888 49,554 1,320 14 One year or less 6,335 6,289 6,287 6,304 6,316 6,145 5,947 5,908 5,984 236 15 Over one year 45,138 45,030 44,910 44,823 44,441 44,313 43,926 43,980 43,570 11,,008855 16 Other bonds, corporate stocks, and securities 20,627 20,542 20,563 20,621 20,902 20,712 20,473 20,703 20,904 228888 17 Other trading account assets 2,943 2,715 2,556 2,444 2,510 2,996 2,965 2,902 3,474 1 18 Federal funds sold3 66,820 68,831 67,489 72,048 75,255 77,003 72,868 68,171 71,254 911 19 To commercial banks 45,234 47,110 42,324 43,712 44,952 47,228 47,442 43,121 44,453 1,217 20 To nonbank brokers and dealers in securities 15,019 15,248 17,733 20,392 20,706 19,734 17,997 18,421 19,510 -78 21 To others 6,567 6,472 7,432 7,945 9,596 10,041 7,429 6,629 7,291 -228 22 Other loans and leases, gross 866,077 861,417 861,207 858,508 862,446 859,101 863,834 860,072 864,624 15,130 23 Other loans, gross 845,261 840,468 840,268 837,444 841,401 838,005 842,743 838,968 843,528 15,000 24 Commercial and industrial 291,091 289,274 288,723 288,260 289,628 289,391 291,325 290,302 292,701 4,491 25 Bankers acceptances and commercial paper 1,875 2,106 2,065 2,140 2,174 2,143 2,063 2,029 2,244 13 26 All other 289,216 287,168 286,658 286,120 287,455 287,248 289,262 288,274 290,457 4,478 27 U.S. addressees 286,111 283,986 283,579 283,088 284,419 284,283 286,207 285,332 287,623 4,472 28 Non-U.S. addressees 3,105 3,181 3,079 3,031 3,035 2,965 3,055 2,942 2,834 7 29 Real estate loans 267,359 267,602 267,175 267,263 267,788 268,095 268,180 268,255 269,464 6,604 30 Revolving, home equity 17,037 17,171 17,223 17,300 17,371 17,442 17,536 17,549 17,657 269 31 All other 250,322 250,430 249,952 249,963 250,417 250,652 250,644 250,706 251,808 6,335 32 To individuals for personal expenditures 161,801 161,323 160,932 160,747 159,966 159,560 159,558 159,622 159,573 3,149 33 To depository and financial institutions 51,625 50,640 51,059 48,693 49,716 48,614 49,387 48,646 49,482 137 34 Commercial banks in the United States 22,348 22,921 23,336 22,392 22,930 22,138 22,594 22,889 22,708 96 35 Banks in foreign countries 5,265 4,849 4,646 3,840 4,120 3,972 4,030 4,004 4,579 3 36 Nonbank depository and other financial institutions . 24,011 22,869 23,076 22,461 22,667 22,503 22,764 21,754 22,195 38 37 For purchasing and carrying securities 12,289 12,136 11,573 12,790 13,929 13,430 14,235 13,322 13,233 75 38 To finance agricultural production 5,742 5,543 5,520 5,496 5,486 5,434 5,426 5,384 3,455 25 39 To states and political subdivisions 32,513 32,468 32,573 32,453 32,305 32,186 32,171 32,104 31,976 391 40 To foreign governments and official institutions 2,746 2,440 2,500 2,4% 2,420 2,319 2,338 2,348 2,284 1 41 All other 20,094 19,043 20,213 19,246 20,162 18,974 20,123 18,984 19,360 126 42 Lease financing receivables 20,816 20,949 20,939 21,063 21,046 21,097 21,091 21,104 21,096 130 43 LESS: Unearned income 4,676 4,669 4,688 4,677 4,662 4,690 4,659 4,675 4,706 121 44 Loan and lease reserve 36,573 36,556 36,563 36,370 36,672 36,651 36,518 36,472 36,481 343 45 Other loans and leases, net 824,828 820,192 819,956 817,460 821,112 817,761 822,657 818,925 823,480 14,666 46 All other assets 125,845 118,986 121,748 119,781 125,369 125,412 126,272 121,969 125,240 1,149 47 Total assets 1,337,158 1,319,993 1,345,022 1,319,020 1,336,530 1,321,258 1,351,896 1,314,195 1,333,816 23,493 48 Demand deposits 251,937 234,802 249,942 221,655 234,203 220,783 245,280 214,894 230,515 4,033 49 Individuals, partnerships, and corporations 193,906 185,351 192,794 173,544 179,312 174,037 189,832 167,752 180,298 4,613 50 States and political subdivisions 6,957 5,850 7,272 6,725 7,178 6,263 6,505 6,727 6,431 110 51 U.S. government 4.979 1,920 3,376 3,079 5,380 2,764 2,417 3,250 1,895 29 52 Depository institutions in the United States 26,179 24,217 28,400 23,250 24,614 21,791 27,837 21,878 24,273 -894 53 Banks in foreign countries 8,561 7,100 8,028 5,468 5,899 6,313 7,561 6,525 6,986 7 54 Foreign governments and official institutions 854 778 812 758 720 673 794 714 674 0 55 Certified and officers' checks 10,500 9,587 9,261 8,829 11,098 8,942 10,334 8,048 9,957 168 56 Transaction balances other than demand deposits 73,048 71,813 70,994 68,742 71,209 70,228 70,284 69,289 72,075 2,298 57 Nontransaction balances 585,864 586,478 584,191 583,641 586,082 588,344 588,169 587,907 590,036 16,041 58 Individuals, partnerships, and corporations 545,304 545,898 543,974 543,642 546,114 548,309 547,827 547,297 549,678 15,428 59 States and political subdivisions 28,592 28,659 28,863 28,886 29,137 29,392 29,441 29,854 29,637 518 60 U.S. government 897 901 867 876 889 886 882 892 913 36 61 Depository institutions in the United States 10,261 10,161 9,662 9,425 9,179 8,988 9,262 9,142 9,028 59 62 Foreign governments, official institutions, and banks .. 810 859 826 811 762 768 757 722 780 1 63 Liabilities for borrowed money 253,637 256,429 268,719 272,834 272,320 273,235 276,154 273,454 275,333 -871 64 Borrowings from Federal Reserve Banks 560 2,480 200 110 0 200 320 75 265 0 65 Treasury tax-and-loan notes 6,623 11,330 22,236 24,091 17,421 16,518 18,016 22,071 16,915 75 66 All other liabilities for borrowed money5 246,454 242,620 246,283 248,633 254,899 256,517 257,818 251,307 258,153 -946 67 Other liabilities and subordinated notes and debentures .. 88,203 85,625 86,347 87,035 86,950 82,963 86,616 83,188 79,861 544 68 Total liabilities 1,252,688 1,235,148 1,260,193 1,233,906 1,250,763 1,235,554 1,266,503 1,228,732 1,247,821 22,046 69 Residual (total assets minus total liabilities)6 84,470 84,846 84,829 85,115 85,767 85,704 85,393 85,463 85,9% 1,447 MEMO 70 Total loans and leases (gross) and investments adjusted . 1,069,959 1,063,086 1,068,868 1,069,875 1,076,796 1,074,616 1,075,332 1,069,847 1,077,552 18,326 71 Total loans and leases (gross) adjusted 865,315 860,216 863,036 864,452 869,819 866,738 866,666 862,233 868,717 14,728 72 Time deposits in amounts of $100,000 or more 182,874 183,446 180,810 181,454 181,706 182,832 181,772 182,456 182,690 3,851 73 U.S. Treasury securities maturing in one year or less 15,684 15,514 15,798 16,143 16,968 17,484 18,053 17,658 17,812 0 74 Loans sold outright to affiliates—total8 1,412 1,477 1,476 1,505 1,491 1,472 1,486 1,480 1,891 0 75 Commercial and industrial 1,127 1,186 1,188 1,219 1,196 1,178 1,191 1,192 1,346 0 76 Other 285 291 289 286 295 294 295 288 545 0 77 Nontransaction savings deposits (including MMDAs) 247,883 247,806 247,767 246,417 247,985 248,456 249,418 248,263 250,019 7,110 1. Beginning Jan. 6, 1988, the "Large bank" reporting group was revised 6. Includes federal funds purchased and securities sold under agreements to somewhat, eliminating some former reporters with less than $2 billion of assets repurchase; for information on these liabilities at banks with assets of $1 billion or and adding some new reporters with assets greater than $3 billion. more on Dec. 31, 1977, see table 1.13. 2. These amounts represent accumulated adjustments originally made to offset 7. This is not a measure of equity capital for use in capital-adequacy analysis or the cummulative effects of bank mergers during the calender year. The adjustment for other analytic uses. data for 1987 should be added to the reported data for 1987 to establish 8. Exclusive of loans and federal funds transactions with domestic commercial comparability with data reported for 1988. banks. 3. Includes U.S. government-issued or guaranteed certificates of participation 9. Loans sold are those sold outright to a bank's own foreign branches, in pools of residential mortgages. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 4. Includes securities purchased under agreements to resell. not a bank), and nonconsolidated nonbank subsidiaries of the holding company. 5. Includes allocated transfer risk reserve. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • May 1988 1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY1 Millions of dollars, Wednesday figures 1988 Account Jan. 6 Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 Mar. 2 1 Cash balances due from depository institutions 23,326 26,300 30,530 27,141 27,911 21,133 27,592 23,556 24,393 2 Total loans, leases and securities, net2 224,068 220,909 222,743 222,247 223,393 224,257 223,274 218,521 219,235 Securities 3 U.S. Treasury and government agency3 0 0 0 0 0 0 0 0 0 4 Trading account 0 0 0 0 0 0 0 0 0 5 Investment account 15,813 15,978 15,928 15,510 15,035 14,729 14,647 14,799 15,034 6 Mortgage-backed securities4 5,752 5,752 5,753 5,850 5,794 5,806 5,697 5,674 5,954 All other maturing in 7 One year or less 1,624 1,630 1,614 1,580 1,734 2,073 2,185 2,387 2,489 8 Over one through five years 5,469 5,483 5,504 5,166 4,793 4,829 4,801 4,765 4,613 9 Over five years 2,968 3,114 3,056 2,913 2,714 2,020 1,964 1,973 1,978 10 Other securities3 0 0 0 0 0 0 0 0 0 11 Trading account 0 0 0 0 0 0 0 0 0 12 Investment account 17,979 17,996 18,060 18,100 18,083 17,925 17,505 17,643 17,493 13 States and political subdivisions, by maturity 13,984 13,999 13,993 13,997 13,901 13,878 13,668 13,776 13,617 14 One year or less 1,170 1,194 1,1% 1,184 1,200 1,201 1,218 1,215 1,242 15 Over one year 12,813 12,805 12,797 12,813 12,701 12,678 12,449 12,560 12,375 16 Other bonds, corporate stocks, and securities 3,995 3,9% 4,067 4,104 4,182 4,047 3,838 3,867 3,876 17 Other trading account assets 0 0 0 0 0 0 0 0 0 Loans and leases 18 Federal funds sold5 26,711 26,232 28,815 30,923 30,703 35,222 31,601 29,952 28,620 19 To commercial banks 13,607 13,186 13,037 12,423 11,868 15,421 16,431 14,681 12,323 20 To nonbank brokers and dealers in securities 9,303 9,142 11,127 13,210 13,162 12,397 10,462 11,020 11,397 21 To others 3,801 3,904 4,650 5,289 5,674 7,403 4,708 4,250 4,899 22 Other loans and leases, gross 179,150 176,202 175,467 173,246 175,167 172,015 175,126 171,738 173,798 23 Other loans, gross 174,433 171,430 170,701 168,438 170,346 167,144 170,246 166,843 168,888 24 Commercial and industrial 60,036 58,547 57,959 57,415 57,474 56,%9 57,403 56,310 57,696 25 Bankers acceptances and commercial paper 295 350 420 469 434 433 407 441 460 26 All other 59,740 58,198 57,539 56,946 57,040 56,535 56,996 55,870 57,237 27 U.S. addressees 59,257 57,651 56,994 56,404 56,455 56,020 56,366 55,347 56,708 28 Non-U.S. addressees 483 546 544 542 584 515 630 523 529 29 Real estate loans 48,563 48,309 47,880 47,478 47,867 47,722 47,562 47,117 47,191 30 Revolving, home equity 2,690 2,704 2,704 2,720 2,731 2,741 2,747 2,760 2,769 31 All other 45,874 45,605 45,176 44,758 45,136 44,981 44,815 44,358 44,422 32 To individuals for personal expenditures 23,651 23,557 23,479 23,397 22,759 22,742 22,717 22,635 22,651 33 To depository and financial institutions 22,943 22,385 22,619 20,985 21,560 21,026 21,769 21,306 22,158 34 Commercial banks in the United States 11,954 12,478 12,853 12,299 12,493 12,115 12,485 12,587 12,648 35 Banks in foreign countries 3,364 3,129 2,861 2,041 2,378 2,295 2,299 2,384 2,910 36 Nonbank depository and other financial institutions 7,626 6,778 6,905 6,645 6,690 6,616 6,985 6,334 6,599 37 For purchasing and carrying securities 4,250 4,756 4,093 5,094 5,763 4,589 5,833 4,935 4,870 38 To finance agricultural production 319 283 285 299 306 288 276 287 298 39 To states and political subdivisions 7,481 7,460 7,450 7,452 7,397 7,392 7,382 7,372 7,348 40 To foreign governments and official institutions 915 601 654 654 649 586 613 604 703 41 All other 6,273 5,530 6,282 5,662 6,570 5,830 6,689 6,276 5,971 42 Lease financing receivables 4,718 4,773 4,765 4,809 4,820 4,871 4,880 4,895 4,910 43 LESS: Unearned income 1,513 1,506 1,537 1,542 1,534 1,545 1,528 1,535 1,572 44 Loan and lease reserve 14,072 13,994 13,989 13,990 14,061 14,088 14,078 14,075 14,138 45 Other loans and leases, net6 163,565 160,703 159,940 157,713 159,572 156,382 159,520 156,128 158,088 46 All other assets7 53,748 51,043 54,985 51,818 57,721 59,332 61,924 59,856 62,542 47 Total assets 301,142 298,253 308,257 301,206 309,025 304,722 312,790 301,934 306,169 Deposits 48 Demand deposits 64,122 58,669 64,224 56,004 59,249 55,607 63,141 53,%8 57,636 49 Individuals, partnerships, and corporations 42,490 40,461 44,348 39,526 39,182 38,797 43,191 36,891 39,756 50 States and political subdivisions 1,380 1,054 1,476 1,226 1,285 1,288 1,168 1,185 926 51 U.S. government 878 299 784 604 1,177 553 362 655 230 52 Depository institutions in the United States 6,695 6,173 6,664 6,070 6,677 5,0% 6,489 5,993 5,897 53 Banks in foreign countries 7,275 5,913 6,699 4,253 4,730 5,145 6,151 5,208 5,810 54 Foreign governments and official institutions 721 652 673 613 572 542 648 567 526 55 Certified and officers' checks 4,683 4,116 3,578 3,711 5,625 4,186 5,131 3,467 4,490 56 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers) 9,791 9,575 9,492 9,239 9,493 9,353 9,327 9,234 9,459 57 Nontransaction balances 107,063 107,816 107,462 108,444 109,090 109,136 109,511 108,962 109,419 58 Individuals, partnerships, and corporations 98,061 98,753 98,620 99,497 100,276 100,434 100,674 100,100 100,608 59 States and political subdivisions 6,695 6,6% 6,755 6,819 6,774 6,873 6,947 7,049 6,984 60 U.S. government 35 38 38 37 36 37 33 37 31 61 Depository institutions in the United States 1,919 1,930 1,678 1,748 1,685 1,485 1,559 1,503 1,503 62 Foreign governments, official institutions, and banks ... 353 398 371 342 319 306 298 272 291 63 Liabilities for borrowed money 62,388 65,812 69,572 69,716 72,716 75,997 73,859 74,684 74,771 64 Borrowings from Federal Reserve Banks 0 1,945 0 0 0 0 0 0 0 65 Treasury tax-and-loan notes 1,123 2,680 5,732 6,490 4,444 4,712 5,487 5,895 4,320 66 All other liabilities for borrowed money8 61,266 61,187 63,840 63,225 68,272 71,285 68,372 68,789 70,452 67 Other liabilities and subordinated note and debentures ... 33,747 32,281 33,458 33,700 34,005 30,309 32,686 30,884 30,452 68 Total liabilities 277,112 274,154 284,207 277,102 284,553 280,402 288,524 277,732 281,738 69 Residual (total assets minus total liabilities)9 24,030 24,099 24,050 24,104 24,472 24,320 24,266 24,202 24,432 MEMO 70 Total loans and leases (gross) and investments adjusted2,10 214,092 210,745 212,378 213,057 214,627 212,354 209,964 206,863 209,974 71 Total loans and leases (gross) adjusted10 180,300 176,771 178,391 179,447 181,509 179,700 177,811 174,421 177,446 72 Time deposits in amounts of $100,000 or more 37,951 39,014 38,383 39,295 39,160 39,322 39,368 39,004 39,077 73 U.S. Treasury securities maturing in one year or less 2,625 2,489 2,935 2,570 3,586 4,172 4,436 4,1% 0 1. These data also appear in the Board's H.4.2 (504) release. For address, see 7. Includes trading account securities. inside front cover. 8. Includes federal funds purchased and securities sold under agreements to 2. Excludes trading account securities. repurchase. 3. Not available due to confidentiality. 9. Not a measure of equity capital for use in capital adequacy analysis or for 4. Includes U.S. government-issued or guaranteed certificates of participation other analytic uses. in pools of residential mortgages. 10. Exclusive of loans and federal funds transactions with domestic commer- Digitized for FRASE5.R I ncludes securities purchased under agreements to resell. cial banks. http://fraser.stlouisfe6.d I.nocrlgud/e s allocated transfer risk reserve. 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 1988 AAccccoouunntt Jan. 6 Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 27 Mar. 2 1 Cash and due from depository institutions ... 11,051 12,720 11,071 11,112 11,302 10,510 10,122 10,410 10,457 2 Total loans and securities 102,861 100,365 98,278 99,575 101,060 101,812 101,039 101,129 100,266 3 U.S. Treasury and government agency securities 7,200 7,338 7,463 7,829 7,774 7,811 8,001 7,706 7,722 4 Other securities 7,828 7,909 7,970 7,928 7,861 7,756 7,940 7,977 7,931 5 Federal funds sold 9,304 9,172 7,490 8,446 8,940 9,595 7,615 8,414 5,823 6 To commercial banks in the United States . 7,525 6,683 5,466 6,448 6,391 7,529 5,872 6,585 3,947 7 To others 1,779 2,489 2,024 1,998 2,549 2,066 1,742 1,829 1,876 8 Other loans, gross 78,528 75,945 75,354 75,371 76,484 76,649 77,483 77,032 78,750 9 Commercial and industrial 51,595 49,867 49,530 49,992 50,315 49,156 50,334 50,552 51,625 10 Bankers acceptances and commercial paper 1,605 1,570 1,428 1,376 1,391 1,468 1,600 1,636 1,667 11 All other 49,990 48,296 48,102 48,616 48,924 47,688 48,734 48,916 49,958 12 U.S. addressees 47,842 46,084 45,757 46,289 46,373 45,278 46,114 46,604 47,468 13 Non-U.S. addressees 2,149 2,212 2,345 2,328 2,551 2,410 2,620 2,312 2,491 14 To financial institutions 15,944 15,360 15,200 14,789 15,308 16,402 15,966 15,657 15,984 15 Commercial banks in the United States.. 11,540 10,972 11,026 10,693 11,088 12,136 11,712 11,634 11,767 16 Banks in foreign countries 1,106 1,041 996 920 1,016 1,005 1,064 992 1,052 17 Nonbank financial institutions 3,297 3,347 3,179 3,175 3,203 3,261 3,191 3,032 3,165 18 To foreign governments and official institutions 598 498 494 490 426 419 416 410 429 19 For purchasing and carrying securities 1,827 1,849 1,752 1,964 1,851 1,872 1,994 1,607 1,887 20 All other 8,564 8,372 8,377 8,135 8,585 8,800 8,773 8,805 8,825 21 Other assets (claims on nonrelated parties) .. 30,093 30,292 30,290 30,418 30,670 31,120 30,463 30,510 30,538 22 Net due from related institutions 15,312 15,106 15,796 14,983 14,853 16,176 15,831 13,807 16,400 23 Total assets 159,316 158,482 155,436 156,088 157,884 159,618 157,455 155,856 157,622 24 Deposits or credit balances due to other than directly related institutions 42,182 41,673 42,588 41,824 42,638 42,432 42,112 41,577 41,693 25 Transaction accounts and credit balances . 3,358 3,145 3,789 2,992 3,337 3,156 3,099 2,970 2,940 26 Individuals, partnerships, and corporations 2,101 1,988 2,418 1,870 1,932 1,914 2,072 1,875 1,821 7.7 Other 1,257 1,157 1,371 1,122 1,405 1,242 1,027 1,095 1,118 28 Nontransaction accounts4 38,824 38,527 38,799 38,832 39,301 39,277 39,013 38,607 38,753 29 Individuals, partnerships, and corporations 31,689 31,476 31,894 31,932 32,300 32,411 32,045 31,766 31,979 30 Other 7,134 7,051 6,904 6,900 7,001 6,866 6,969 6,840 6,774 31 Borrowings from other than directly related institutions 60,005 61,892 60,825 59,503 61,583 62,816 61,292 58,649 61,619 32 Federal funds purchased 27,456 30,269 30,005 30,457 32,134 32,490 31,070 28,198 30,107 33 From commercial banks in the United States 16,296 19,019 17,079 16,970 19,712 19,969 18,322 14,834 15,621 34 From others 11,160 11,251 12,926 13,486 12,423 12,521 12,748 13,364 14,486 35 Other liabilities for borrowed money 32,549 31,623 30,820 29,046 29,449 30,326 30,221 30,451 31,512 36 To commercial banks in the United States 24,174 23,480 22,919 21,654 22,628 23,074 22,851 23,248 24,015 37 To others 8,375 8,143 7,901 7,392 6,820 7,252 7,370 7,203 7,497 38 Other liabilities to nonrelated parties 31,061 31,224 31,375 31,796 31,792 32,124 31,650 31,860 31,390 39 Net due to related institutions 26,068 23,693 20,647 22,964 21,870 22,245 22,401 23,770 22,920 40 Total liabilities 159,316 158,482 155,436 156,088 157,884 159,618 157,455 155,856 157,622 MEMO 41 Total loans (gross) and securities adjusted .. 83,795 82,709 81,786 82,434 83,581 82,146 83,455 82,910 84,512 42 Total loans (gross) adjusted 68,767 67,462 66,352 66,676 67,945 66,578 67,514 67,227 68,859 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 • May 1988 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 DDeecc.. DDeecc.. DDeecc.. DDeecc..^^44 Sept. Dec. Mar. June Sept. Dec. 1 AU holders—Individuals, partnerships, and corporations 291.8 293.5 302.7 321.0 333.6 363.6 335.9 340.2 339.0 344.9 2 Financial business 35.4 32.8 31.7 32.3 35.9 41.4 35.9 36.6 36.5 36.9 3 Nonfinancial business 150.5 161.1 166.3 178.5 185.9 202.0 183.0 187.2 188.2 191.7 4 Consumer 85.9 78.5 81.5 85.5 86.3 91.1 88.9 90.1 88.7 89.9 5 Foreign 3.0 3.3 3.6 3.5 3.3 3.3 2.9 3.2 3.2 3.4 6 Other 17.0 17.8 19.7 21.2 22.2 25.8 25.2 23.1 22.4 23.0 Weekly reporting banks 1986 1987 11998822 11998833 11998844 DDeecc.. DDeecc.. DDeecc..22 Sept. Dec. Mar. June Sept. Dec. 7 All holders—Individuals, partnerships, and corporations 144.2 146.2 157.1 168.6 174.7 195.1 178.1 179.3 179.1 187.0 8 Financial business 26.7 24.2 25.3 25.9 28.9 32.5 28.7 29.3 29.3 29.5 9 Nonfinancial business 74.3 79.8 87.1 94.5 94.8 106.4 94.4 94.8 96.0 100.8 10 Consumer 31.9 29.7 30.5 33.2 35.0 37.5 36.8 37.5 37.2 39.4 11 Foreign 2.9 3.1 3.4 3.1 3.2 3.3 2.8 3.1 3.1 3.3 12 Other 8.4 9.3 10.9 12.0 12.8 15.4 15.5 14.6 13.5 14.0 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; nonfinangross demand deposits have been redefined to exclude demand deposits due to cial business, -.5; consumer, 1.1; foreign, .1; other, -.2. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1987 1988 T 1983 1984 1985 1986 1987 Dec. Dec. Dec. Dec. Dec. Aug. Sept. Oct. Nov.1 Dec. Jan.2 Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 187,658 237,586 298,779 329,991 357,129 350,780 356,993 356,577 351,844 357,129 380,475 Financial companies3 Dealer-placed paper 2 Total 44,455 56,485 78,443 101,072 110011,,995588 110099,,994411 114,435 110099,,002200 110055,,119966 110011,,995588 111166,,773300 3 Bank-related (not seasonally adjusted) 22,,444411 22,,003355 11,,660022 22,,226655 11,,442288 22,,440044 22,,660000 22,,668888 11,,889933 11,,442288 11,,669944 Directly placed paper 4 Total 97,042 110,543 113355,,332200 151,820 117733,,993399 116622,,667744 116655,,331199 117700,,440033 116699,,777799 117733,,993399 117755,,446677 5 Bank-related (not seasonally adjusted) 35,566 42,105 44,778 40,860 43,173 45,487 46,790 46,249 45,353 43,173 45,425 6 Nonfinancial companies 46,161 70,558 85,016 77,099 81,232 78,165 77,239 77,154 76,869 81,232 88,278 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 78,309 78,364 68,413 64,974 70,565 68,645 68,771 71,891 71,068 70,565 62,957 Holder 8 Accepting banks 9,355 9,811 11,197 13,423 10,943'' 10,870 10,521 10,856 10,701 10,943' 8,602 9 Own bills 8,125 8,621 9,471 11,707 9,464 9,905 9,400 9,742 9,714 9,464 7,759 10 Bills bought 1,230 1,191 1,726 1,716 1,479 965 11,,112211 11,,111144 987 11,,447799 843 Federal Reserve Banks 11 Own account 418 0 0 0 0 0 0 0 0 0 0 12 Foreign correspondents 729 671 937 1,317 965 1,397 1,467 1,400 1,134 965 831 13 Others 67,807 67,881 56,279 50,234 58,658 56,379r 56,784 59,635 59,234 58,658 53,524 Basis 14 Imports into United States 15,649 17,845 15,147 14,670 16,483 17,087 17,198 17,814 16,942 16,483 14,468 15 Exports from United States 16,880 16,305 13,204 12,960 15,227 14,967 15,046 15,949 15,435 15,227 14,054 16 All other 45,781 44,214 40,062 37,344 38,855' 36,590 36,526 38,122 38,691 38,855' 34,436 1. A change in the reporting panel in November resulted in a slight understate- 5. As reported by financial companies that place their paper directly with ment of outstanding volume. investors. 2. Data reflect a break in series resulting from additions to the reporting 6. Includes public utilities and firms engaged primarily in such activities as panel. communications, construction, manufacturing, mining, wholesale and retail trade, 3. Institutions engaged primarily in activities such as, but not limited to, transportation, and services. commercial savings, and mortgage banking; sales, personal, and mortgage fi- 7. Beginning January 1988, the number of respondents in the bankers accepnancing; factoring, finance leasing, and other business lending; insurance under- tance survey were reduced from 155 to 111 institutions—those with $100 million writing; and other investment activities. or more in total acceptances. The new reporting group accounts for over 90 4. Includes all financial company paper sold by dealers in the open market. percent of total acceptances activity. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per year Effective Date Rate Average Month rate 10.50 1987—Apr. 1 7.75 1985—Jan. 10.61 1986—Sept. 10.00 May 1 8.00 Feb. 10.50 Oct. 9.50 d 8.25 Mar. 10.50 Nov. Sept. 4 8.75 Apr. 10.50 Dec. 9.00 Oct. 7 9.25 May 10.31 8.50 ?? 9.00 June 9.78 1987—Jan. 8.00 Nov. 5 8.75 July 9.50 Feb. 7.50 Aug. 9.50 Mar. 1988—Feb. 2 8.50 Sept. 9.50 Apr. Oct. 9.50 May Nov. 9.50 June Dec. 9.50 July Aug. 1986—Jan. 9.50 Sept. Feb. 9.50 Oct.. Mar. 9.10 Nov. Apr. 8.83 Dec. May 8.50 June 8.50 1988—Jan. July 8.16 Feb. Aug. 7.90 NOTE. These data also appear in the Board's H.15 (519) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • May 1988 1.35 INTEREST RATES Money and Capital Markets Averages, percent per year; weekly and monthly figures are averages of business day data unless otherwise noted. 1987 1988 1988, week ending IInnssttrruummeenntt 11998855 11998866 11998877 Nov. Dec. Jan. Feb. Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 MONEY MARKET RATES 1 Federal funds1-2 8.10 6.80 6.66 6.69 6.77 6.83 6.58 6.66 6.77 6.38 6.65 6.64 2 Discount widow borrowing1, 1 7.69 6.33 5.66 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Commercial paper 3 7.94 6.62 6.73 6.77 7.76 6.76 6.55 6.66 6.59 6.47 6.61 6.53 4 7.95 6.49 6.81 7.17 7.61 6.87 6.58 6.75 6.62 6.49 6.63 6.58 5 6-month , 8.01 6.39 6.84 7.17 7.49 6.92 6.58 6.78 6.61 6.49 6.64 6.60 Finance paper, directly placed ' 6 77..9911 66..5588 66..6611 66..6633 77..2233 66..6655 66..4455 6.54 6.51 6.36 6.50 6.43 7 3-month 7.77 6.38 6.54 6.91 6.97 6.62 6.39 6.51 6.45 6.31 6.43 6.38 8 6-month % 7.75 6.31 6.37 6.69 6.64 6.53 6.27 6.41 6.33 6.22 6.29 6.24 Bankers acceptances ' 9 3-month 7.92 6.39 6.74 7.07 7.48 6.77 6.49 6.61 6.50 6.43 6.55 6.50 10 6-month .. 7.96 6.29 6.77 7.07 7.41 6.83 6.49 6.63 6.50 6;42 6.56 6.50 Certificates of deposit, secondary market 11 7.97 6.61 6.74 6.80 7.86 6.78 6.55 6.66 6.59 6.49 6.57 6.55 1? 3-month 8.05 6.52 6.86 7.24 7.66 6.92 6.60 6.77 6.63 6.54 6.64 6.61 N 6-month 8.25 6.51 7.00 7.31 7.67 7.10 6.69 6.90 6.70 6.59 6.77 6.73 14 Eurodollar deposits. 3-month 8.28 6.71 7.06 7.41 7.86 7.11 6.73 7.03 6.81 6.70 6.69 6.79 U.S. Treasury bills' Secondary market9 15 7.48 5.98 5.78 5.69 5.77 5.81 5.66 5.74 5.67 5.65 5.72 5.63 16 7.65 6.03 6.03 6.19 6.36 6.25 5.93 6.11 6.05 5.91 5.99 5.81 17 1-year 7.81 6.08 6.32 6.50 6.69 6.52 6.21 6.33 6.22 6.16 6.27 6.20 Auction average 0 18 7.49 5.97 5.82 5.81 5.80 5.90 5.69 5.85 5.74 5.63 5.73 5.64 19 7.66 6.02 6.03 6.23 6.36 6.31 5.96 6.19 6.11 5.85 6.03 5.83 20 1-year 7.79 6.12 6.22 6.48 6.74 6.67 6.18 n.a. n.a. n.a. 6.18 n.a. CAPITAL MARKET RATES U.S. Treasury notes and bonds" Constant maturities ?1 1-year 8.43 6.46 6.77 6.96 7.17 6.99 6.64 6.77 6.65 6.59 6.70 6.63 77 9.27 6.87 7.41 7.69 7.86 7.63 7.18 7.39 7.20 7.14 7.24 7.17 73 3-year 9.64 7.06 7.67 7.99 8.13 7.87 7.38 7.63 7.42 7.34 7.42 7.35 74 10.13 7.31 7.94 8.35 8.45 8.18 7.71 7.91 7.73 7.67 7.79 7.70 75 7-year 10.51 7.55 8.22 8.69 8.82 8.48 8.02 8.19 8.02 7.99 8.10 8.00 7.6 10-year 10.62 7.68 8.39 8.86 8.99 8.67 8.21 8.39 8.20 8.18 8.29 8.20 77 20-year 10.97 7.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 28 30-year 10.79 7.80 8.58 8.95 9.12 8.83 8.43 8.56 8.39 8.41 8.52 8.43 Composite 29 Over 10 years (long-term) 10.75 8.14 8.63 8.99 9.12 8.83 8.41 8.55 8.38 8.38 8.49 8.41 State and local notes and bonds Moody's series 30 8.60 6.95 7.14 7.50 7.45 7.29 7.05 7.15 7.15 7.05 7.00 7.00 31 Baa 9.58 7.76 8.17 8.47 8.42 8.12 7.62 7.80 7.70 7.60 7.55 7.65 32 Bond Buyer series15 9.11 7.32 7.64 7.95 7.% 7.70 7.49 7.51 7.49 7.40 7.55 7.52 Corporate bonds Seasoned issues16 33 All industries 12.05 9.71 9.91 10.54 10.59 10.37 9.89 10.16 9.98 9.89 9.89 9.83 34 11.37 9.02 9.38 10.01 10.11 9.88 9.40 9.64 9.46 9.42 9.41 9.33 35 Aa 11.82 9.47 9.68 10.27 10.33 10.09 9.60 9.90 9.69 9.59 9.61 9.54 36 A 12.28 9.95 9.99 10.63 10.62 10.43 9.94 10.25 10.05 9.94 9.94 9.88 37 Baa 12.72 10.39 10.58 11.23 11.29 11.07 10.62 10.85 10.71 10.62 10.60 10.56 38 A-rated, recently-offered utility bonds17 12.06 9.61 9.95 10.39 10.42 10.05 9.75 9.76 9.63 9.81 9.82 9.75 MEMO: Dividend/price ratio18 39 10.49 8.76 88..3377 9.11 9.08 9.04 9.02 8.93 8.91 8.95 9.11 9.10 40 Common stocks 4.25 3.48 3.08 3.66 3.71 3.66 3.56 3.66 3.63 3.57 3.55 3.48 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 of ten issues: four public utilities, four industrials, one financial, and one 9. Unweighted average of closing bid rates quoted by at least five dealers. transportation. Common stock ratios on the 500 stocks in the price index. 10. Rates are recorded in the week in which bills are issued. Beginning with the NOTE. These data also appear in the Board's H. 15 (519) and G.13 (415) releases. Treasury bill auction held on Apr. 18, 1983, bidders were required to state the For address, see inside front cover. percentage yield (on a bank discount basis) that they would accept to two decimal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A25 1.36 STOCK MARKET Selected Statistics 1987 1988 IInnddiiccaattoorr 11998855 11998866 11998877 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 108.09 136.00 161.70 169.58 174.28 184.18 178.39 157.13 137.21 134.88 140.55 145.13 2 Industrial 123.79 155.85 195.31 206.61 214.12 226.49 219.52 189.86 163.42 162.19 168.47 173.44 3 Transportation 104.11 119.87 140.39 150.39 157.49 164.02 158.58 140.95 117.57 115.85 121.20 126.09 4 Utility 56.75 71.36 74.29 74.25 74.18 78.20 76.13 73.27 69.86 67.39 70.01 72.89 5 Finance 114.21 147.19 146.48 152.73 152.27 160.94 154.08 137.35 118.30 111.47 119.40 124.36 6 Standard & Poor's Corporation (1941-43 = 10)' 186.84 236.34 286.83 301.36 310.09 329.36 318.66 280.16 245.01 240.% 250.48 258.13 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 229.10 264.38 316.61 334.49 348.68 361.52 353.72 306.34 249.42 248.52 267.29 276.54 Volume of trading (thousands of shares) 8 New York Stock Exchange 109,191 141,385 188,642 163,380 180,356 193,477 177,319 277,026 179,481 178,517 174,755 184,688 9 American Stock Exchange 8,355 11,846 13,832 12,813 12,857 13,604 12,381 18,173 11,268 13,422 9,853 9,961 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 28,390 36,840 31,990 38,420 40,250 41,640 44,170 38,250 34,180 31,990 31,320 31,990 Free credit balances at brokers4 11 Margin-account 2,715 4,880 4,750 3,680 4,095 4,240 4,270 8,415 6,700 4,750 4,675 4,555 12 Cash-account 12,840 19,000 15,640 15,405 15,930 16,195 15,895 18,455 15,360 15,640 15,270 14,695 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 collateracompanies. With this change the index includes 400 industrial stocks (formerly lized by securities. Margin requirements on securities other than options are the 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 difference between the market value (100 percent) and the maximum loan value of financial. collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15, 2. Beginning July 5, 1983, the American Stock Exchange rebased its index 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968; effectively cutting previous readings in half. 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 DomesticN onfinancial Statistics • May 1988 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1987 AAccccoouunntt 11998855 11998866 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov.' Dec. Savings and loan associations 1 Assets 948,781 963,316 936,858 939,721 944,229 952,671 949,069 949,223' 955,105' 956,517' 973,816' 978,319 977,978 2 Mortgage-backed securities 97,303 123,257 128,856 129,274 134,746 141,023 142,241 140,897 144,146' 146,209' 150,275' 152,932 154,383 Cash and investment securities 126,712 142,700 135,885 138,746 136,370 138,303 138,125 138,520 137,207' 131,729 139,648' 138,234 135,710 4 Other 103,768' 110,445' 100,339' 101,031' 102,566' 103,250' 103,861' 103,915' 105,120' 104,445' 105,580' 106,143 106,208 5 Liabilities and net worth 948,781 963,316 936,858 939,721 944,229 952,671 949,069 949,223' 955,105' 956,517' 973,816' 978,319 977,978 6 Savings capital 750,071 741,081 722,226 722,548 716,798 718,633 715,662 716,385' 717,257' 721,407' 727,333' 731,061 737,347 7 Borrowed money 138,798 159,742 152,176 158,192 165,883 171,279 175,394 174,358' 178,643' 180,382' 190,644' 191,020 191,037 R FHLBB 73,888 80,194 75,671 76,469 77,857 78,583 79,188 78,888 79,546 80,848 83,303 84,266 87,697 9 Other 64,910 79,548 76,505 81,723 88,026 92,696 %,206 95,470' 99,097' 99,534' 107,341' 106,754 103,340 10 Other 19,045 20,071 21,878 18,958 20,869 22,628 19,584 20,684' 21,956' 19,174' 21,036' 21,287 16,760 11 Net worth2 41,064 42,423 40,579 40,023 40,678 40,127 38,428 37,7%' 37,249' 35,554' 34,803' 34,951 32,833 FSLIC-insured federal savings banks 12 Assets 131,868 210,562 235,763 241,418 246,277 253,006 264,105' 268,781' 272,316' 272,837' 276,556' 279,223 284,2% n Mortgages 72,355 113,638 136,505 138,882 140,854 144,581 150,421 152,881 154,054' 154,655' 156,459' 158,885 161,909 14 Mortgage-backed securities 15,676 29,766 34,634 36,088 37,500 39,371 40,%9 42,714' 43,532' 44,421' 45,132 45,251 45,877 15 Other 11,723 19,034 16,060 16,605 17,034 17,200 17,923' 17,523' 17,793' 17,572' 17,410' 17,353 17,303 16 Liabilities and net worth 131,868 210,562 235,763 241,418 246,277 253,006 264,105' 268,781' 272,316' 272,837' 276,556' 279,223 284,2% 17 Savings capital 103,462 157,872 177,355 178,672 180,637 182,802 189,998 193,890 194,853 195,213 197,298' 199,114 203,231 18 Borrowed money 19,323 37,329 39,777 43,919 46,125 49,896 53,255 53,652 55,660 56,549' 57,551 58,277 60,695 19 FHLBB 10,510 19,897 20,226 21,104 21,718 22,788 24,486 24,981 25,546 26,287 27,350 27,947 29,617 70 Other 8,813 17,432 19,551 22,815 24,407 27,108 28,769 28,671 30,114 30,262' 30,201 30,330 31,078 71 Other 2,732 4,263 5,484 5,264 5,547 6,044 5,987 6,144' 6,455' 5,632' 6,304' 6,363 5,290 22 Net worth 6,351 11,098 13,151 13,564 13,978 14,272 14,871 15,10c 15,172' 15,445' 15,417' 15,483 15,098 Savings banks 23 Assets 216,776 236,866 238,074 240,739 243,454 245,906 244,760 246,833 249,888 251,472 255,989 260,600 256,623 Loans 24 Mortgage 110,448 118,323 119,737 121,178 122,769 124,936 128,217 129,624 130,721 133,298 135,317 137,044 136,742 25 Other 3300,,887766 3355,,116677 3377,,220077 3388,,001122 3377,,113366 3377,,331133 3355,,220000 3355,,559911 3366,,779933 3366,,113344 3366,,447711 3377,,118899 3333,,338800 Securities 26 U.S. government 13,111 14,209 13,525 13,631 13,743 13,650 13,549 13,498 13,720 13,122 13,817 15,694 13,430 27 Mortgage-backed securities .. 19,481 25,836 26,893 27,463 28,700 28,739 27,785 28,252 28,913 29,655 30,202 31,144 32,498 28 State and local government .. 2,323 2,185 2,168 2,041 2,063 2,053 2,059 2,050 2,038 2,023 2,034 2,046 2,004 29 Corporate and other 21,199 20,459 19,770 19,598 19,768 19,956 18,803 18,821 18,573 18,431 18,062 17,583 18,472 30 Cash 6,225 6,894 5,143 5,703 5,308 5,176 4,939 4,806 4,823 4,484 5,529 5,063 5,909 31 Other assets 13,113 13,793 13,631 13,713 13,967 14,083 14,208 14,191 14,307 14,325 14,557 14,837 14,188 32 Liabilities 216,776 236,866 238,074 240,739 243,454 245,906 244,760 246,833 249,888 251,472 255,989 260,600 256,623 33 Deposits 185,972 192,194 192,559 193,693 193,347 194,742 193,274 194,549 195,895 1%,824 199,336 202,030 199,162 34 Regular 181,921 186,345 187,597 188,432 187,791 189,048 187,669 188,783 190,335 191,376 193,777 1%,724 193,778 35 Ordinary savings 33,018 37,717 39,370 40,558 41,326 41,%7 42,178 41,928 41,767 41,773 42,045 42,493 41,299 36 Time 103,311 100,809 100,922 100,8% 100,308 100,607 100,604 102,603 105,133 107,063 109,486 112,231 111,193 37 Other 4,051 5,849 4,962 5,261 5,556 5,694 5,605 5,766 5,560 5,448 5,559 5,306 5,384 38 Other liabilities 17,414 25,274 25,663 27,003 29,105 30,436 30,515 31,655 32,467 32,827 34,226 36,167 35,165 39 General reserve accounts 12,823 18,105 18,486 18,830 19,423 19,603 19,549 19,718 20,471 20,407 20,365 21,133 20,349 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37—Continued 1987 AAccccoouunntt 11998855 11998866 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov/ Dec. Credit unions4 40 Total assets/liabilities and capital 118,010 147,726 149,751 153,253 154,549 156,086 160,644 f f f 41 Federal 77,861 95,483 96,753 98,799 99,751 100,153 104,150 42 State 40,149 52,243 52,998 54,454 54,798 55,933 56,494 1 1 1 43 Loans outstanding.. 73,513 86,137 85,651 86,101 87,089 87,765 90,912 n.a. n. a. n.a. n.a. n.a. n.a. 44 Federal 47,933 55,304 54,912 55,118 55,740 55,952 58,432 45 State 25,580 30,833 30,739 30,983 31,349 31,813 32,480 1 46 Savings 105,963 134,327 136,441 138,810 140,014 141,635 148,283 47 Federal 70,926 87,954 89,485 91,042 92,012 97,189 96,137 1 4 1 48 State 35,037 46,373 46,956 47,768 48,002 49,248 52,146 Life insurance companies 49 Assets 825,901 937,551 961,937 978,455 978,455 985,942 995,576 1,005,592 1,017,018 1,026,919 1,021,148 1,024,460 Securities 50 Government 75,230 84,640 88,003 90,337 89,711 89,554 87,279 8 (.199 89,924 89,408 90,782 91,227 51 United States5.. 51,700 59,033 62,724 65,661 64,621 64,201 61,405 62,461 64,150 63,352 64,880 65,186 52 State and local . 9,708 11,659 11,315 10,860 11,068 11,208 11,485 11,277 11,190 11,087 11,363 11,539 53 Foreign6 13,822 13,948 13,964 13,816 14,022 14,145 14,389 14,461 14,584 14,969 14,539 14,502 54 Business 423,712 492,807 514,328 519,766 522,097 528,789 537,507 555,423 551,701 558,787 549,426 548,767 n.a. 55 Bonds 346,216 401,943 415,004 417,933 420,474 425,788 432,095 448,146 442,604 451,453 455,678 459,537 56 Stocks 77,496 90,864 99,324 101,833 101,623 103,001 105,412 107,277 109,097 107,334 93,748 89,230 57 Mortgages 171,797 193,842 194,935 195,743 197,315 198,760 200,382 201,297 202,241 204,264 206,507 208,839 58 Real estate 28,822 31,615 32,003 31,834 32,011 32,149 32,357 32,699 32,992 33,048 33,235 33,538 59 Policy loans 54,369 54,055 53,806 53,652 53,572 53,468 53,378 53,338 53,330 53,422 53,413 53,334 60 Other assets 71,971 80,592 78,842 82,105 83,749 83,222 84,390 85,420 86,830 87,991 87,785 88,755 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 Nonfinancial Statistics • May 1988 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Fiscal Fiscal Type of account or operation year year 1987 1986 1987' Sept. Oct. Nov. Dec. Jan. U.S. budget2 1 Receipts, total 769,091 854,143 92,410 62,354 56,987 85,525 81,791 2 On-budget 568,862 640,741 73,755 45,992 40,630 67,645 60,645 3 Off-budget 200,228 213,402 18,656 16,362 13,357 17,880 21,146 4 Outlays, total 990,258 1,004,586 76,980 93,095 83,920 109,741 65,706 5 On-budget 806,760 810,754 60,337 76,910 67,150 77,845 66,493 6 Off-budget 183,498 193,832 16,643 16,185 16,770 31,896 -787 7 Surplus, or deficit (-), total -221,167 -150,444 15,430 -30,741 -26,934 -24,216 16,085 8 On-budget -237,898 -170,014 13,417 -30,918 -26,520 -10,200 -5,848 9 Off-budget 16,731 19,570 2,013 176 -414 -14,016 21,933 Source of financing (total) 10 Borrowing from the public 236,187 150,070 -8,060 27,282 23,603 9,766 5,281 11 Operating cash (decrease, or increase -14,324 -5,052 -13,800 -1,879 17,164 -1,218 -17,555 12 Other*'.'.'.'.'.'.!'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.!'.'.'.'.'.'.; -696 5,426 6,430 5,338 -13,833 15,668 -3,810 MEMO 13 Treasury operating balance (level, end of 31,384 36,436 36,436 38,315 21,151 22,369 39,924 period) 7,514 9,120 9,120 8,898 3,595 5,313 10,276 14 Federal Reserve Banks 23,870 27,316 27,316 29,416 17,556 17,056 29,648 15 Tax and loan accounts 1. FY 1987 total outlays and deficit do not correspond to the monthly data disability insurance trust funds) off-budget. because the Monthly Treasury Statement has not completed the monthly distri- 3. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to bution of revisions reflected in the fiscal year total in The Budget of the U.S. international monetaiy fund; other cash and monetary assets; accrued interest Government, Fiscal Year 1989. payable to the public; allocations of special drawing rights; deposit funds; 2. 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 SOURCE. Monthly Treasury Statement of Receipts and Outlays of the U.S. social security trust funds (Federal old-age survivors insurance and Federal Government and the Budget of the U.S. Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Calendar year Fiscal Fiscal Source or type year year 1987 1988 1986 1987 HI H2 H2 Dec. Jan. Feb. RECEIPTS 1 All sources 769,091 854,143 394,345 387,524 447,282 421,712 85,525 81,791 60,355 2 Individual income taxes, net 348,959 392,557 169,444 183,156 205,157 192,575 36,537 43,987 25,651 4 3 P W re it s h i h d e e l n d t ial Election Campaign Fund . 314,80 3 3 6 322,46 3 3 3 153,91 3 9 1 164,07 4 1 156,7 3 6 0 0 170,20 4 3 34,02 0 0 24,97 0 9 28,04 4 6 5 Nonwithheld 105,994 142,957 78,981 27,733 112,421 31,223 3,309 19,262 1,179 6 Refunds 71,873 72,8% 63,488 8,652 64,052 8,853 793 255 3,577 Corporation income taxes 7 Gross receipts 80,442 102,859 41,946 42,108 52,3% 52,821 18,633 4,450 2,652 8 Refunds 17,298 18,933 9,557 8,230 10,881 7,119 820 1,677 9 Social insurance taxes and contributions, net 283,901 303,318 156,714 134,006 163,519 143,755 23,361 28,162 28,500 10 Employment taxes and contributions 255,062 273,185 139,706 122,246 146,6% 130,388 22,735 26,920 25,739 11 Self- c e o m n p tr l i o b y u m ti e o n n t s taxes and 11,840 13,987 10,581 1,338 12,020 1,889 0 819 1,368 12 Unemployment insurance 24,098 25,418 14,674 9,328 14,514 10,977 170 883 2,399 13 Other net receipts 4,742 4,715 2,333 2,429 2,310 2,390 457 360 362 14 Excise taxes 32,919 32,510 15,944 15,947 15,845 17,680 3,838 2,393 2,204 15 Customs deposits 13,327 15,032 6,369 7,282 7,129 7,993 1,361 1,195 1,2% 16 Estate and gift taxes 6,958 7,493 3,487 3,649 3,818 3,610 540 531 566 17 Miscellaneous receipts5 19,884 19,307 10,002 9,605 10,299 10,399 2,141 1,893 1,164 OUTLAYS 18 All types 990,231 1,004,586 486,058 505,448' 502,983' 534,706' 109,741 65,706 84,257 19 National defense 273,375 281,999 135,367 138,544 142,886 146,995' 29,070 19,895 23,670 20 International affairs 14,152 11,649 5,384 8,876 4,374 4,487' 517 1,074 516 21 General science, space, and technology . 8,976 9,216 12,519 4,594 4,324 5,469' 937 773 749 22 Energy 4,735 4,115 2,484 2,735 2,335 1,468' 316 247 -1,635 23 Natural resources and environment 13,639 13,363 6,245 7,141 6,175 7,590' 1,371 1,097 %9 24 Agriculture 31,449 27,356 14,482 16,160 11,824 14,640' 1,278 2,275 1,014 25 Commerce and housing credit 4,823 6,182 860 3,647 4,893 3,852' -350' 1,216 -866 26 Transportation 28,117 26,228 12,658 14,745 12,113 14,0% 2,287 1,990 1,995 27 Community and regional development .. 7,233 5,051 3,169 3,494 3,108 2,075' 701 452 459 28 Education, training, employment, and social services 30,585 29,724 14,712 15,287 14,182 15,592' 2,301 2,771 29 Health 35,935 39,968 17,872 18,795 20,318 20,750 3,176 3,577 3,650 30 Social security and medicare 268,921 282,473 135,214 138,299 142,864 158,469 40,992 6,951 24,585 31 Income security 119,7% 123,250 60,786 60,628 62,248 61,201' 11,485 10,220 11,264 32 Veterans benefits and services 26,356 26,782 12,193 14,447 12,264 14,956' 3,773 1,207 2,170 33 Administration of justice 6,603 7,548 3,352 3,360 3,626 4,291' 774 706 704 34 General government 6,104 5,948 3,566 2,786 3,344 3,56C 1,577 -52 806 35 General-purpose fiscal assistance 6,431 1,621 2,179 2,886 337 1,175 129 403 45 3 3 6 7 N U e n t d i i s n t t r e ib re u s t t e 6 d offsetting receipts i - 1 3 3 3 6 , , 0 0 0 0 7 8 - 1 3 3 6 8 , , 4 5 5 7 5 0 -1 6 7 8 , , 1 0 9 5 3 4 -1 6 7 5 , , 3 8 7 1 6 6 -1 7 8 0 , , 1 1 0 1 4 0 -1 7 7 1 , , 9 9 8 3 1 3 ' ' - 1 2 2 ,7 ,1 7 7 0 7 - 1 2 3 , , 6 5 4 5 7 1 - 1 2 3 ,8 ,9 6 8 8 8 1. Functional details do not add to total outlays for calendar year data because 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous revisions to monthly totals have not been distributed among functions. Fiscal year receipts. total for oudays does not correspond to calendar year data because revisions from 6. Net interest function includes interest received by trust funds. the Budget have not been fully distributed across months. 7. Consists of rents and royalties on the outer continental shelf and U.S. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. government contributions for employee retirement. 3. old-age, disability, and hospital insurance. SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of 4. Federal employee retirement contributions and civil service retirement and Receipts and Outlays of the U.S. Government, and the U.S. Office of Managedisability fund. 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 • May 1988 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1985 1986 1987 IItteemm Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 1,950.3 1,991.1 2,063.6 2,129.5 2,218.9 2,250.7 2,313.1 2,354.3 2,435.2 2 Public debt securities 1,945.9 1,986.8 2,059.3 2,125.3 2,214.8 2,246.7 2,309.3 2,350.3 2,431.7 3 Held by public 1,597.1 1,634.3 1,684.9 1,742.4 1,811.7 1,839.3 1,871.1 1,893.1 1,954.1 4 Held by agencies 348.9 352.6 374.4 382.9 403.1 407.5 438.1 457.2 477.6 5 Agency securities 4.4 4.3 4.3 4.2 4.0 4.0 3.8 4.0 3.5 6 Held by public 3.3 3.2 3.2 3.2 3.0 2.9 2.8 3.0 2.7 7 Held by agencies 1.1 1.1 1.1 1.1 1.1 1.1 1.0 1.0 .8 8 Debt subject to statutory limit 1,932.4 1,973.3 2,060.0 2,111.0 2,200.5 2,232.4 2,295.0 2,336.0 2,417.4 9 Public debt securities 1,931.1 1,972.0 2,058.7 2,109.7 2,199.3 2,231.1 2,293.7 2,334.7 2,416.3 10 Other debt1 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.1 11 MEMO: Statutory debt limit 2,078.7 2,078.7 2,078.7 2,111.0 2,300.0 2,300.0 2,320.0 2,800.0 2,800.0 1. Includes guaranteed debt of Treasuo* 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 1987 Type and holder 1984 1985 1986 1987 Q1 Q2 Q3 Q4 1 Total gross public debt 1,663.0 1,945.9 2,214.8 2,431.7 2,246.7 2,309.3 2,350.3 2,431.7 By type 2 Interest-bearing debt 1,660.6 1,943.4 2,212.0 2,428.9 2,244.0 2,306.7 2,347.7 2,428.9 3 Marketable 1,247.4 1,437.7 1,619.0 1,724.7 1,635.7 1,659.0 1.676.0 1,724.7 4 Bills 374.4 399.9 426.7 389.5 406.2 391.0 378.3 389.5 5 Notes 705.1 812.5 927.5 1,037.9 955.3 984.4 1.005.1 1,037.9 6 Bonds 167.9 211.1 249.8 282.5 259.3 268.6 277.6 282.5 7 Nonmarketable1 413.2 505.7 593.1 704.2 608.3 647.7 671.8 704.2 8 State and local government series 44.4 87.5 110.5 139.3 118.5 125.4 129.0 139.3 9 Foreign issues 9.1 7.5 4.7 4.0 4.9 5.1 4.3 4.0 1 1 0 1 G Pu o b v l e ic r nment 9. . 1 0 7. . 5 0 4. . 7 0 4. . 0 0 4. . 9 0 5. . 1 0 4. . 3 0 4. . 0 0 12 Savings bonds and notes 73.1 78.1 90.6 99.2 93.0 95.2 97.0 99.2 13 Government account series 286.2 332.2 386.9 461.3 391.4 421.6 440.7 461.3 14 Non-interest-bearing debt 2.3 2.5 2.8 2.8 2.7 2.6 2.5 2.8 By holder* 15 U.S. government agencies and trust funds 289.6 348.9 403.1 477.6 407.5 438.1 457.2 477.6 16 Federal Reserve Banks 160.9 181.3 211.3 222.6 196.4 212.3 211.9 222.6 17 Private investors 1,212.5 1,417.2 1,602.0 1,745.2 1,641.4 1,657.7 1,682.6 1,745.2 18 Commercial banks 183.4 192.2 230.1 252.3 232.0 237.1 250.5 252.3 19 Money market funds 25.9 25.1 28.6 14.6 18.8 20.6 15.5 14.6 20 Insurance companies 88.7 115.4 135.4 n.a. 145.3 140.0 143.0 n.a. 21 Other companies 50.1 59.0 68.8 n.a. 73.4 78.7 80.2 n.a. 22 State and local Treasurys 173.4 235.8 273.1 n.a. n.a. n.a. n.a. n.a. Individuals 23 Savings bonds 74.5 79.8 92.3 101.1 94.7 96.8 98.5 101.1 24 Other securities 69.3 75.0 70.5 n.a. 68.3 68.6 70.4 n.a. 25 Foreign and international 192.9 212.5 251.6 287.6 260.4 270.1 267.3 287.6 26 Other miscellaneous investors6 366.6 422.4 451.6 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 Transactions1 Par value; averages of daily figures, in millions of dollars 1987 1988 1988 IItteemm 11998855 11998866 11998877rr Dec. Jan.r Feb. Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 Immediate delivery2 1 U.S. Treasury securities 75,331 95,445 109,892 75,157 108,580 105,540 111,025 110,057 133,605 110,131 101,258 91,826 By maturity 2 Bills 32,900 34,247 37,879 25,227 31,965 28,125 38,800 30,052 33,920 29,501 29,308 2255,,220022 3 Other within 1 year 1,811 2,115 3,267 2,%5 3,788 3,708 3,665 3,564 4,253 3,655 3,312 3,628 4 1-5 years 18,361 24,667 27,866 20,802 28,711 30,042 26,401 29,863 38,379 28,793 28,416 30,481 5 5-10 years 12,703 20,456 23,956 15,7% 27,348 24,282 26,979 28,853 32,188 24,422 20,824 18,822 6 Over 10 years 9,556 13,961 16,924 10,367 16,769 19,383 15,180 17,726 24,867 23,761 19,399 13,693 By type of customer 7 U.S. government securities dealers 3,336 3,670 2,927 2,089 2,757 2,%3 2,975 2,726 3,256 2,900 3,036 22,,558844 8 U.S. government securities brokers 36,222 49,558 61,4% 43,458 63,583 59,619 63,180 63,046 76,207 62,207 57,001 5522,,117722 9 All others3 35,773 42,218 45,468 29,609 42,238 42,956 44,869 44,285 54,141 45,024 41,221 37,070 10 Federal agency securities 11,640 16,748 18,883 14,394 18,101 17,754 19,410 16,341 21,879 21,793 14,106 15,938 11 Certificates of deposit 4,016 4,355 4,106 3,019 4,723 3,634 4,471 3,9% 4,019 3,856 3,249 3,737 12 Bankers acceptances 3,242 3,272 2,966 2,259 3,201 2,781 3,059 3,069 2,934 3,144 2,435 2,676 13 Commercial paper 12,717 16,660 17,104 15,163 19,442 17,981 20,279 17,654 19,220 16,948 18,646 18,204 Futures contracts 14 Treasury bills 5,561 3,311 3,224 2,342 2,783 2,637 3,383 3,105 3,227 3,093 3,290 1,731 15 Treasury coupons 6,085 7,175 8,957 7,364 9,410 9,554 8,321 9,792 11,223 9,0% 8,647 8,549 16 Federal agency securities 252 16 5 5 1 3 0 0 4 0 4 0 Forward transactions 17 U.S. Treasury securities 1,283 1,876 2,056 1,097 1,698 3,613 1,016 1,690 5,272 6,735 959 2,135 18 Federal agency securities 3,857 7,831 9,823 5,704 6,545 6,895 8,615 4,972 6,692 8,717 8,984 4,705 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 • May 1988 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Averages of daily figures, in millions of dollars 1987 1988 1988 IItteemm 11998855 11998866 11998877 Dec. Jan/ Feb. Jan. 21" Feb. 3 Feb. 10 Feb. 17 Feb. 24 Positions Net immediate2 1 U.S. Treasury securities 7,391 12,912 -6,249 -8,657 -13,280 -10,248 -13,479 -12,409 -7,258 -11,721 -12,266 2 Bills 10,075 12,761 4,319 2,506 2,293 3,207 3,718 3,856 4,016 3,430 2,767 3 Other within 1 year 1,050 3,706 1,555 -564 -761 -892 -79 -657 -574 -1,266 -1,041 4 1-5 years 5,154 9,146 612 785 -65 2,735 -2,015 412 4,094 1,883 1,011 5 5-10 years -6,202 -9,505 -6,562 -3,565 -5,610 -7,467 -6,170 -7,155 -7,074 -7,498 -7,500 6 Over 10 years -2,686 -3,197 -6,173 -7,819 -9,137 -7,832 -8,933 -8,866 -7,721 -8,272 -7,502 7 Federal agency securities 22,860 32,984 31,903 25,314 23,943 26,649 23,176 25,084 27,566 28,712 25,144 8 Certificates of deposit 9,192 10,485 8,188 6,815 5,866 5,317 5,288 5,463 5,426 5,395 5,388 9 Bankers acceptances 4,586 5,526 3,662 2,409 2,246 2,875 2,321 2,440 2,922 2,778 2,916 10 Commercial paper 5,570 8,089 7,4% 7,953 5,533 5,819 5,213 6,088 6,066 6,103 5,013 Futures positions 11 Treasury bills -7,322 -18,059 -3,372 450 -2,128 -4,556 -2,597 -3,140 -4,004 -5,092 -4,732 12 Treasury coupons 4,465 3,473 5,989 8,179 7,826 5,053 7,213 5,593 3,577 5,139 5,762 13 Federal agency securities -722 -153 -95 -84 0 0 0 0 0 0 0 Forward positions 14 U.S. Treasury securities -911 -2,144 -1,201 -1,641 -1,175 736 -587 328 1,538 1,672 -61 15 Federal agency securities -9,420 -11,840 -18,816 -15,024 -14,3% -15,626 -13,015 -14,409 -17,079 -17,197 -14,342 Financing3 Reverse repurchase agreements4 16 Overnight and continuing 68,035 98,954 124,791 116,153 126,667 127,093 131,187 126,718 123,351 131,360 125,914 17 Term 80,509 108,693 148,033 147,995 155,658 162,899 164,575 171,573 117777,,447700 115533,,665599 156,642 Repurchase agreements 18 Overnight and continuing 101,410 141,735 170,840 153,155 160,399 163,346 163,048 161,264 160,076 170,618 159,490 19 Term 70,076 102,640 120,980 117,991 122,464 131,616 133,665 138,128 145,181 122,743 127,386 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 1988 AAggeennccyy 11998844 11998855 11998866 Aug. Sept. Oct. Nov. Dec. Jan. 1 Federal and federally sponsored agencies 271,220 293,905 307,361 316,940 320,789 328,990 334,678 2 Federal agencies 35,145 36,390 36,958 37,845 37,177 37,207 37,303 3 Defense Department' 142 71 33 16 15 15 15 4 Export-Import Bank2, 15,882 15,678 14,211 13,416 12,650 12,470 12,470 5 Federal Housing Administration 133 115 138 174 178 182 182 6 Government National Mortgage Association participation certificates5 2,165 2,165 2,165 11,,996655 11,,996655 11,,996655 11,,996655 n.a. n.a. 7 Postal Service 1,337 1,940 3,104 4,603 4,603 4,603 4,603 8 Tennessee Valley Authority 15,435 16,347 17,222 17,586 17,766 17,972 18,068 9 United States Railway Association 51 74 85 85 0 0 0 10 Federally sponsored agencies7 237,012 257,515 270,553 279,095 283,612 291,783 297,375 11 Federal Home Loan Banks 65,085 74,447 88,752 102,422 104,380 108,108 111,185 115,725 116,374 12 Federal Home Loan Mortgage Corporation 10,270 11,926 13,589 14,150 14,949 16,703 17,762 n.a. n.a. 13 Federal National Mortgage Association 83,720 93,8% 93,563 91,568 92,618' 94,298 95,0% 97,057 97,195 14 Farm Credit Banks 72,192 68,851 62,478 55,408 55,554 55,854 55,629r 55,275' 54,072 15 Student Loan Marketing Association8 5,745 8,395 12,171 15,547 16,389 16,220 16,125 16,503 16,424 16 Financing Corporation n.a. n.a. n.a. n.a. n.a. 600 1,200 1,200 1,200 MEMO 17 Federal Financing Bank debt10 145,217 153,373 157,510 158,117 157,252 156,919 156,850 n.a. n.a. Lending to federal and federally sponsored agencies 18 Export-Import Bank3 1155,,885522 1155,,667700 1144,,220055 1133,,441100 1122,,664444 1122,,446644 1122,,446644 - 19 Postal Service 1,087 1,690 2,854 4,353 4,353 4,353 4,353 20 Student Loan Marketing Association 5,000 5,000 4,970 4,970 4,970 4,970 4,970 21 Tennessee Valley Authority 13,710 14,622 15,797 16,206 16,386 16,592 16,688 n.a. n.a. 22 United States Railway Association 51 74 85 85 0 0 0 Other Lending11 23 Farmers Home Administration 58,971 64,234 65,374 65,069 6655,,000099 64,934 6644,,993344 74 Rural Electrification Administration 20,693 20,654 21,680 21,503 21,197 21,226 21,215 25 Other 29,853 31,429 32,545 32,521 32,693 32,380 32,226 1. Consists of mortgages assumed by the Defense Department between 1957 8. Before late 1981, the Association obtained financing through the Federal and 1963 under family housing and homeowners assistance programs. Financing Bank (FFB). 2. Includes participation certificates reclassified as debt beginning Oct. t, 1976. 9. The Financing Corporation, established in August 1987 to recapitalize the 3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. Federal Savings and Loan Insurance Corporation, undertook its first borrowing in 4. Consists of debentures issued in payment of Federal Housing Administration October 1987. insurance claims. Once issued, these securities may be sold privately on the 10. The FFB, which began operations in 1974, is authorized to purchase or sell securities market. obligations issued, sold, or guaranteed by other federal agencies. Since FFB 5. Certificates of participation issued before fiscal 1969 by the Government incurs debt solely for the purpose of lending to other agencies, its debt is not National Mortgage Association acting as trustee for the Farmers Home Admin- included in the main portion of the table in order to avoid double counting. istration; Department of Health, Education, and Welfare; Department of Housing and Urban Development; Small Business Administration; and the Veterans 11. Includes FFB purchases of agency assets and guaranteed loans; the latter Administration. contain loans guaranteed by numerous agencies with the guarantees of any 6. Off-budget. particular agency being generally small. The Farmers Home Administration item 7. Includes outstanding noncontingent liabilities: notes, bonds, and deben- consists exclusively of agency assets, while the Rural Electrification Administratures. Some data are estimated. tion entry contains both agency assets and guaranteed loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • May 1988 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1987 1988 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11998855 11998866 11998877 oorr uussee July Aug. Sept. Oct. Nov. Dec. Jan/ Feb. 1 All issues, new and refunding1 214,189 147,011 95,029 6,967 6,500 5,510 6,257 7,758 7,671 5,412 7,890 Type of issue 2 General obligation 52,622 46,346 29,599 2,238 1,975 1,755 1,127 2,449 1,894 1,259 2,755 3 Revenue 161,567 100,664 65,430 4,729 4,525 3,755 5,130 5,309 5,777 4,153 5,135 Type of issuer 4 State 13,004 14,474 8,426 834 398 535 385 431 550 423 1,200 5 Special district and statutory authority 134,363 89,997 61,663 3,951 4,508 3,712 4,668 4,612 4,972 3,220 4,609 6 Municipalities, counties, and townships 66,822 42,541 24,940 2,182 1,594 1,263 1,204 2,715 2,149 1,769 2,081 7 Issues for new capital, total 156,050 83,490 53,677 4,478 5,084 4,340 4,095 6,628 5,351 2,862 5,433 Use of proceeds 8 Education 16,658 16,948 99,,221177 773 869 653 480 1,006 748 841 692 9 Transportation 12,070 11,666 3,589 647 226 311 168 329 451 189 819 10 Utilities and conservation 26,852 35,383 7,299 823 424 491 590 1,042 350 326 655 11 Social welfare 63,181 17,332 9,627 465 903 647 8% 1,784 1,134 740 747 12 Industrial aid 12,892 5,594 6,083 469 1,630 412 683 229 1,155 153 95 13 Other purposes 24,398 47,433 17,862 1,301 1,033 1,826 1,278 2,238 1,513 613 2,425 1. Par amounts of long-term issues based on date of sale. SOURCES. Securities Data/Bond Buyer Municipal Data Base beginning 1986. 2. Includes school districts beginning 1986. Public Securities Association for earlier data. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 1987 1988 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11998855 11998866 11998877 June July Aug. Sept. Oct. Nov. Dec. Jan. 1 AU issues1 239,015 423,726 286,929' 28,450 27,411 21,888 29,363 20,710' 14,322' 11,872' 21,089 2 Bonds2 203,500 355,293 233,578' 22,098 22,071 17,685 23,705 17,631' 13,624' 11,098' 18,561 Type of offering 3 Public, domestic 119,559 231,936 209,279' 20,568 19,045 14,852 22,045 16,135' 12,891' 10,763' 17,322 4 Private placement, domestic3 46,200r 80,760r n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5. Sold abroad 37,781 42,596 24,299 1,530 3,026 2,833 1,660 1,496 733 335 1,239 Industry group 6 Manufacturing 63,973 91,548 45,240' 4,104 5,552 3,343 3,506 2,724 1,280 891' 3,009 7 Commercial and miscellaneous 17,066 40,124 19,918 2,061 1,037 1,281 1,479 1,165 483 2,577 1,671 8 Transportation 6,020 9,971 2,039 0 343 2% 25 263 0 226 0 9 Public utility 13,649 31,426 17,412' 2,091 1,654 1,533 1,702 1,025' 895' 1,570 1,139 10 Communication 10,832 16,659 5,792' 205 119 856 930 1,384 290' 510 206 11 Real estate and financial 91,958 165,564 143,182' 13,636 13,366 10,377 16,063 11,071 10,676' 5,324' 12,536 12 Stocks3 35,515 68,433 53,351 6.352 5,340 4,203 5,658 3,079 698 774 2,528 Type 13 Preferred 6,505 11,514 10,123 1,202 1,157 906 1,112 236 162 61 1,390 14 Common 29,010 50,316 43,228 5,150 4,183 3,297 4,546 2,843 533 713 1,138 15 Private placement3 6,603 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 16 Manufacturing 5,700 15,027 9,642 1,438 1,046 370 858 703 237 76 201 17 Commercial and miscellaneous 9,149 10,617 11,461 1.353 879 9% 807 656 86 14 360 18 Transportation 1,544 2,427 1,795 492 379 0 11 40 149 1 1 19 Public utility 1,966 4,020 3,839 329 472 85 529 75 25 0 100 20 Communication 978 1,825 1,264 199 294 277 75 107 1 11 60 21 Real estate and financial 16,178 34,517 25,350 2,541 2,270 2,475 3,378 1,498 200 672 1,806 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 1987 1988 IItteemm 11998866 11998877rr June July Aug. Sept. Oct. Nov. Dec/ Jan. INVESTMENT COMPANIES' 1 Sales of own shares2 411,751 381,260 28,637 27,970 26,455 24,834 25,990 21,927 26,494 30,343 2 Redemptions of own shares3 239,394 314,252 23,693 22,807 22,561 28,323 34,597 20,400 28,099 22,324 3 Net sales 172,357 67,008 4,944 5,763 3,894 -3,489 -8,607 1,507 -1,605 8,019 4 Assets4 424,156 453,842 516,866 531,022 539,171 521,007 456,422 446,479 453,842 468,998 5 Cash position5 30,716 38,006 41,467 41,587 40,802 42,397 40,929 41,432 38,006 40,157 6 Other 393,440 415,836 475,099 489,435 498,369 478,610 415,493 405,047 415,836 428,841 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. 1986 1987 AAccccoouunntt 11998855 11998866 11998877 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Corporate profits with inventory valuation and capital consumption adjustment 277.6 284.4 304.0 288.0 282.3 286.4 281.1 294.0 296.8 314.9 310.2 2 Profits before tax 224.8 231.9 273.3 218.9 224.4 236.3 247.9 257.0 268.7 284.9 282.8 3 Profits tax liability 96.7 105.0 135.9 98.1 102.1 106.1 113.9 128.0 134.2 143.0 138.6 4 Profits after tax 128.1 126.8 137.4 120.9 122.3 130.2 134.0 129.0 134.5 141.9 144.2 5 Dividends 81.3 86.8 93.8 84.3 86.6 87.7 88.6 90.3 92.4 95.2 97.3 6 Undistributed profits 46.8 40.0 43.6 36.6 35.7 42.5 45.4 38.7 42.1 46.7 46.9 7 Inventory valuation -.8 6.5 -17.5 17.8 11.3 6.0 -8.9 -11.3 -20.0 -17.6 -21.3 8 Capital consumption adjustment 53.5 46.0 48.1 51.3 46.7 44.0 42.1 48.2 48.0 47.7 48.7 SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • May 1988 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 Q1 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 1988 IInndduussttrryy 11998855 11998866 1199887711 Q2 Q3 Q4 QI Q2 Q3 Q41 Ql2 1 Total nonfarm business 387.13 379.47 390.57 376.21 375.50 386.09 374.23 377.65 393.13 417.25 427.97 Manufacturing 2 Durable goods industries 73.27 69.14 71.85 68.56 69.42 69.87 70.47 68.76 71.78 76.40 78.41 3 Nondurable goods industries 80.21 73.56 76.01 73.62 70.01 74.20 70.18 72.03 75.78 86.05 86.27 Nonmanufacturing 4 Mining 15.88 11.22 11.18 11.29 10.14 10.31 10.31 11.02 11.64 11.74 11.86 Transportation 5 Railroad 7.08 6.66 6.15 6.70 7.02 6.41 5.55 5.77 6.21 7.08 7.66 6 Air 4.79 6.26 6.53 5.87 5.78 6.84 7.46 5.72 5.91 7.03 8.35 7 Other 6.15 5.89 6.42 5.83 6.01 6.25 5.97 6.19 7.05 6.48 6.92 Public utilities 8 Electric 36.11 33.91 31.65 33.77 33.81 33.78 30.85 31.13 31.31 33.32 31.65 9 Gas and other 12.71 12.47 12.88 12.66 12.00 12.34 12.75 12.35 13.58 12.84 13.72 10 Commercial and other2 150.94 160.38 167.89 157.91 161.31 166.08 160.70 164.69 169.87 176.29 183.15 •Trade and services are no longer being reported separately. They are included 2. "Other" consists of construction; wholesale and retail trade: finance and in Commercial and other, line 10. insurance; personal and business services; and communication. 1. Anticipated by business. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A37 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1986 1987 AAccccoouunntt 11998833 11998844 11998855 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ASSETS Accounts receivable, gross 1 Consumer 83.3 89.9 113.4 125.1 137.1 136.5 133.9 138.0 144.4 143.8 2 Business 113.4 137.8 158.3 167.7 161.0 174.8 182.8 189.0 188.7 202.6 3 Real estate 20.5 23.8 28.9 30.8 32.1 33.7 35.1 36.9 38.3 40.3 4 Total 217.3 251.5 300.6 323.6 330.2 345.0 351.8 363.9 371.5 386.8 Less: 5 Reserves for unearned income 30.3 33.8 39.2 40.7 42.4 41.4 40.4 41.2 42.8 45.3 6 Reserves for losses 3.7 4.2 4.9 5.1 5.4 5.8 5.9 6.2 6.6 6.8 7 Accounts receivable, net 183.2 213.5 256.5 277.8 282.4 297.8 305.5 316.5 322.1 334.7 8 All other 34.4 35.7 45.3 48.8 59.9 57.9 59.0 57.7 65.0 58.2 9 Total assets 217.6 249.2 301.9 326.6 342.3 355.6 364.5 374.2 387.1 392.9 LIABILITIES 10 Bank loans 18.3 20.0 20.6 19.2 20.2 22.2 17.3 17.2 16.2 16.5 11 Commercial paper 60.5 73.1 99.2 108.4 112.8 117.8 119.1 120.4 123.5 126.5 Debt 12 Other short-term 11.1 12.9 12.5 15.4 16.0 17.2 21.6 24.4 26.9 27.0 13 Long-term 67.7 77.2 93.1 105.2 109.8 115.6 118.4 121.5 128.0 130.1 14 All other liabilities 31.2 34.5 40.9 40.1 44.1 43.4 46.3 48.3 48.7 50.1 15 Capital, surplus, and undivided profits 28.9 31.5 35.7 38.4 39.4 39.4 41.8 42.3 43.8 42.6 16 Total liabilities and capital 217.6 249.2 301.9 326.6 342.3 355.6 364.5 374.2 387.1 392.9 NOTE. Components may not add to totals because of rounding. 1.52 DOMESTIC FINANCE COMPANIES Business Credit Outstanding and Net Change1 Millions of dollars, seasonally adjusted 1987r 1988 TTyyppee July Aug. Sept. Oct. Nov. Dec. Jan. 1 Total 156,297 171,966 189,219 191,637 193,752 201,129 202,829 205,869 207,677 Retail financing of installment sales 2 Automotive (commercial vehicles) 20,660 25,952 31,094 32,042 32,656 33,865 34,454 35,674 36,379 3 Business, industrial, and farm equipment 22,483 22,950 23,727 23,870 24,328 24,763 24,764 24,987 25,391 Wholesale financing 4 Automotive 23,988 23,419 28,103 27,782 26,792 30,396 30,901 31,059 30,108 5 Equipment 4,568 5,423 5,414 5,504 5,527 5,729 5,794 5,693 5,246 6 All other 6,809 7,079 7,664 7,768 7,956 8,074 8,151 8,408 8,454 Leasing 7 Automotive 16,275 19,783 20,807 21,333 21,842 21,883 22,013 21,943 22,163 8 Equipment 34,768 37,833 40,217 40,636 41,134 41,911 41,964 43,002 43,583 9 Loans on commercial accounts receivable and factored commercial accounts receivable 15,765 15,959 17,160 17,418 17,713 18,362 18,501 18,024 18,520 10 All other business credit 10,981 13,568 15,033 15,284 15,804 16,146 16,287 17,079 17,833 Net change (during period) 11 Total 19,607 15,669 3,396 2,418 2,115 7,377 1,700 3,040 1,810 Retail financing of installment sales 12 Automotive (commercial vehicles) 5,067 5,292 870 948 614 1,209 589 1,220 706 13 Business, industrial, and farm equipment -363 467 467 143 458 435 1 223 405 Wholesale financing 14 Automotive 5,423 -569 -168 -321 -990 3,604 505 158 -953 15 Equipment -867 855 81 90 23 202 65 -101 -447 16 All other 1,069 270 220 104 188 118 77 257 46 Leasing 17 Automotive 3,896 3,508 469 526 509 41 130 -70 221 18 Equipment 2,685 3,065 271 419 498 777 53 1,038 582 19 Loans on commercial accounts receivable and factored commercial accounts receivable 2,161 194 876 258 295 649 139 -477 4% 20 All other business credit 536 2,587 310 251 520 342 141 792 754 1. These data also appear in the Board's G.20 (422) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • May 1988 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1987 1988 IItteemm 11998855 11998866 11998877 Aug. Sept. Oct. Nov. Dec. Jan/ Feb. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms 1 Purchase price (thousands of dollars) 104.1 118.1 137.0 141.2 140.2 145.3 135.9 147.3 150.1 135.6 2 Amount of loan (thousands of dollars) 77.4 86.2 100.5 102.6 100.8 106.1 100.2 107.7 108.4 101.3 3 Loan/price ratio (percent) 77.1 75.2 75.2 75.0 74.6 75.0 75.4 74.9 74.0 76.3 4 Maturity (years) 26.9 26.6 27.8 27.8 27.3 28.3 28.3 28.2 28.2 28.1 5 Fees and charges (percent of loan amount)2 2.53 2.48 2.26 2.19 2.08 2.34 2.33 2.22 2.17 2.25 6 Contract rate (percent per year) 11.12 9.82 8.94 9.01 9.03 8.86 8.92 8.78 8.75 8.80 Yield (percent per year) 7 FHLBB series5 11.58 10.25 9.31 9.38 9.37 9.25 9.30 9.15 9.10 9.16 8 HUD series4 12.28 10.07 10.13 10.37 10.86 10.87 10.59 10.52 10.09 n.a. SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series)5 12.24 9.91 10.12 10.55 10.71 10.90 10.76 10.63 10.17 n.a. 10 GNMA securities6 11.61 9.30 9.42 9.77 10.40 10.53 9.96 10.18 9.83 9.53 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 94,574 98,048 95,030 94,600 94,884 95,097 95,411 96,649 97,159 98,358 12 FHA/V A-insured 34,244 29,683 21,660 21,555 21,620 21,481 21,510 20,288 27,424 28,282 13 Conventional 60,331 68,365 73,370 73,045 73,264 73,617 73,902 76,361 62,747 63,092 Mortgage transactions (during period) 14 Purchases 21,510 30,826 20,531 1,613 1,743 1,278 1,297 3,747 1,267 2,629 Mortgage commitments1 15 Contracted (during period) 20,155 32,987 25,415 2,276 1,842 1,566 2,899 3,115 2,254 2,516 16 Outstanding (end of period) 3,402 3,386 4,886 5,690 5,627 5,046 5,845 4,886 5,542 4,966 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 17 Total 12,399 13,517 12,924 12,940 12,782 12,904 A A 18 FHA/VA 841 746 679 672 666 663 T T T 19 Conventional 11,559 12,771 12,245 12,269 12,115 12,240 Mortgage transactions (during period) 1 1 1 20 Purchases 44,012 103,474 n.a. 5,031 4,297 3,079 2,978 n.a. n.a. n.a. 21 Sales 38,905 100,236 4,723 4,160 3,111 2,742 I 1 1 Mortgage commitments9 • 22 Contracted (during period) 48,989 110,855 4,506 3,507 3,011 2,668 t 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-famiIy 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 11998855 11998866 11998877 Q4 Q1 Q2 Q3 Q4 1 All holders 2,269,173 2,568,562 2,906,394 2,568,562 2,665,207 2,756,124 2,831,431 2,906,394 2 1- to 4-family 1,467,409 1,668,209 1,889,364 1,668,209 1,714,213 1,783,521 1,835,671 1,889,364 3 Multifamily 214,045 247,024 272,604 247,024 257,615 263,513 268,322 272,604 4 Commercial 482,029 556,569 654,288 556,569 599,822 616,968 636,508 654,288 5 105,690 %,760 90,138 %,760 93,557 92,122 90,930 90,138 6 Selected financial institutions 1,390,394 1,507,289 1,699,702 1,507,289 1,559,549 1,606,622 1,650,462 1,699,702 7 Commercial banks2 429,1% 502,534 587,557 502,534 519,474 544,381 566,213 587,557 8 1- to 4-family 213,434 235,814 273,214 235,814 243,518 255,672 262,869 273,214 9 Multifamily 23,373 31,173 32,433 31,173 29,515 30,4% 31,311 32,433 10 Commercial 181,032 222,799 267,221 222,799 233,234 244,385 257,882 267,221 11 Farm 11,357 12,748 14,689 12,748 13,207 13,828 14,151 14,689 12 Savings institutions3 760,499 777,312 861,233 777,312 809,245 824,961 841,658 861,233 13 1- to 4-family 554,301 558,412 602,740 558,412 555,693 572,075 586,221 602,740 14 Multifamily 89,739 97,059 107,054 97,059 104,035 102,933 104,764 107,054 15 Commercial 115,771 121,236 150,680 121,236 148,712 149,183 149,904 150,680 16 Farm 688 605 0 605 805 0 0 0 17 Life insurance companies 171,797 193,842 210,563 193,842 195,743 200,382 204,263 210,563 18 1- to 4-family 12,381 12,827 13,142 12,827 12,903 12,745 12,742 13,142 19 Multifamily 19,894 20,952 22,168 20,952 20,934 21,663 21,968 22,168 20 Commercial 127,670 149,111 165,364 149,111 151,420 155,611 159,464 165,364 21 Farm 11,852 10,952 9,889 10,952 10,486 10,363 10,089 9,889 22 Finance companies 28,902 33,601 40,349 33,601 35,087 36,898 38,328 40,349 23 Federal and related agencies 166,928 203,800 192,401 203,800 199,509 196,514 191,520 192,401 24 Government National Mortgage Association 1,473 889 455 889 687 667 458 455 25 1- to 4-family 539 47 24 47 46 45 25 24 26 Multifamily 934 842 431 842 641 622 433 431 27 Farmers Home Administration 733 48,421 42,978 48,421 48,203 48,085 42,978 42,978 28 1- to 4-family 183 21,625 18,111 21,625 21,390 21,157 18,111 18,111 29 Multifamily 113 7,608 7,903 7,608 7,710 7,808 7,903 7,903 30 Commercial 159 8,446 6,592 8,446 8,463 8,553 6,592 6,592 31 Farm 278 10,742 10,372 10,742 10,640 10,567 10,372 10,372 32 Federal Housing and Veterans Administration 4,920 5,047 5,479 5,047 5,177 5,268 5,330 5,479 33 1- to 4-family 2,254 2,386 2,551 2,386 2,447 2,531 2,452 2,551 34 Multifamily 2,666 2,661 2,928 2,661 2,730 2,737 2,878 2,928 35 Federal National Mortgage Association 98,282 97,895 %,649 97,895 95,140 94,064 94,884 %,649 36 1- to 4-family 91,966 90,718 89,666 90,718 88,106 87,013 87,901 89,666 37 Multifamily 6,316 7,177 6,983 7,177 7,034 7,051 6,983 6,983 38 Federal Land Banks 47,498 39,984 33,930 39,984 37,362 35,833 34,930 33,930 39 1- to 4-family 2,798 2,353 1,9% 2,353 2,198 2,108 2,055 1,9% 40 Farm 44,700 37,631 31,934 37,631 35,164 33,725 32,875 31,934 41 Federal Home Loan Mortgage Corporation 14,022 11,564 12,910 11,564 12,940 12,597 12,940 12,910 42 1- to 4-family 11,881 10,010 11,580 10,010 11,774 11,172 11,570 11,580 43 Multifamily 2,141 1,554 1,330 1,554 1,166 1,425 1,370 1,330 44 Mortgage pools or trusts6 415,042 531,591 671,749 531,591 575,435 615,142 648,219 671,749 45 Government National Mortgage Association 212,145 262,697 319,360 262,697 281,116 293,246 308,9% 319,360 46 1- to 4-family 207,198 256,920 311,567 256,920 274,710 286,091 301,456 311,567 47 Multifamily 4,947 5,777 7,793 5,777 6,406 7,155 7,540 7,793 48 Federal Home Loan Mortgage Corporation 100,387 171,372 212,105 171,372 186,295 200,284 208,350 212,105 49 1- to 4-family 99,515 166,667 205,460 166,667 180,602 194,238 201,786 205,460 50 Multifamily 872 4,705 6,645 4,705 5,693 6,046 6,564 6,645 51 Federal National Mortgage Association 54,987 97,174 139,960 97,174 107,673 121,270 130,540 139,960 52 1- to 4-family 54,036 95,791 137,988 95,791 106,068 119,617 128,770 137,988 53 Multifamily , 951 1,383 1,972 1,383 1,605 1,653 1,770 1,972 54 Farmers Home Administration 47,523 348 324 348 351 342 333 324 55 1- to 4-family 22,186 142 139 142 154 149 144 139 56 Multifamily 6,675 0 0 0 0 0 0 0 57 Commercial 8,190 132 122 132 127 126 124 122 58 Farm 10,472 74 63 74 70 67 65 63 59 Individuals and others7 2%,809 325,882 342,542 325,882 330,714 337,846 341,230 342,542 60 1- to 4-family 165,835 180,8% 180,837 180,8% 179,517 182,010 181,241 180,837 61 Multifamily 55,424 66,133 74,964 66,133 70,146 73,924 74,838 74,964 62 Commercial 49,207 54,845 64,309 54,845 57,866 59,110 62,542 64,309 63 Farm 26,343 24,008 22,432 24,008 23,185 22,802 22,609 22,432 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 FSLIC-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 • May 1988 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change, seasonally adjusted Millions of dollars 1987 1988 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt May June July Aug. Sept. Oct. Nov. Dec/ Jan. Amounts outstanding (end of period) 1 Total 577,784 612,101 583,276 587,821 591,175 5%,182 602,607 605,488 608,122 612,101 617,522 By major holder 2 Commercial banks 261,604 274,966 263,463 264,3% 265,085 265,893 269,155 270,836 272,274 274,966 277,846 3 Finance companies 136,494 143,788 136,398 138,038 138,745 140,689 142,648 143,118 142,767 143,788 144,228 4 Credit unions 77,857 84,387 79,476 80,585 81,492 82,486 83,340 83,639 84,419 84,387 84,867 5 Retailers3 40,586 40,647 40,318 40,287 40,364 40,391 40,482 40,678 40,559 40,647 41,009 6 Savings institutions 58,037 64,788 60,045 60,983 61,910 63,080 63,279 63,525 64,502 64,788 65,982 7 Gasoline companies 3,205 3,525 3,576 3,532 3,580 3,643 3,703 3,691 3,600 3,525 3,590 By major type of credit 8 Automobile 245,055 261,448 247,578 250,130 250,980 254,013 257,470 258,710 259,134 261,448 262,993 9 Commercial banks 100,709 106,508 102,189 102,810 102,829 103,382 104,662 105,382 106,036 106,508 107,692 10 Credit unions 39,029 42,302 39,841 40,3% 40,851 41,349 41,777 41,927 42,318 42,302 42,543 11 Finance companies 93,274 99,195 93,089 94,270 94,455 96,193 97,900 98,219 97,395 99,195 99,066 12 Savings institutions 12,043 13,444 12,459 12,654 12,846 13,089 13,130 13,182 13,384 13,444 13,692 13 Revolving 134,938 145,925 136,869 137,401 138,741 139,837 141,704 143,142 143,620 145,925 147,926 14 Commercial banks 85,652 95,270 87,133 87,590 88,685 89,535 91,226 92,459 92,992 95,270 %,702 15 Retailers 36,240 36,213 36,009 35,971 36,021 36,022 36,087 36,264 36,148 36,213 36,547 16 Gasoline companies 3,205 3,525 3,576 3,532 3,580 3,643 3,703 3,691 3,600 3,525 3,590 17 Savings institutions 7,713 8,610 7,980 8,105 8,228 8,383 8,410 8,443 8,572 8,610 8,768 18 Credit unions 2,128 2,306 2,172 2,202 2,227 2,254 2,278 2,286 2,307 2,306 2,319 19 Mobile home 25,710 25,608 25,542 25,685 25,860 25,695 25,699 25,677 25,731 25,608 25,750 20 Commercial banks 8,812 8,353 8,615 8,609 8,626 8,518 8,538 8,453 8,407 8,353 8,282 21 Finance companies 9,028 8,470 8,785 8,807 8,839 8,623 8,580 8,610 8,578 8,470 8,521 22 Savings institutions 7,870 8,785 8,142 8,269 8,395 8,554 8,581 8,614 8,746 8,785 8,947 23 Other 172,081 179,120 173,287 174,605 175,594 176,637 177,733 177,959 179,637 179,120 180,853 24 Commercial banks 66,431 64,835 65,527 65,387 64,945 64,458 64,728 64,542 64,840 64,835 65,170 25 Finance companies 34,192 36,123 34,524 34,%2 35,452 35,874 36,168 36,289 36,794 36,123 36,641 26 Credit unions 36,700 39,778 37,463 37,986 38,413 38,882 39,285 39,426 39,794 39,778 40,005 27 Retailers 4,346 4,433 4,310 4,315 4,343 4,369 4,395 4,415 4,411 4,433 4,462 28 Savings institutions 30,412 33,949 31,463 31,955 32,441 33,054 33,158 33,287 33,799 33,949 34,575 Net change (during period) 29 Total 54,979 34,317 -319 4,545 3,354 5,007 6,425 2,881 2,634 3,979 5,421 By major holder 30 Commercial banks 19,520 13,362 30 933 689 808 3,262 1,681 1,438 2,692 2,880 31 Finance companies 23,424 7,294 -693 1,640 707 1,944 1,959 470 -351 1,021 440 32 Credit unions 5,738 6,530 221 1,109 907 994 854 299 780 -32 480 33 Retailers 1,722 61 -149 -31 77 27 91 196 -119 88 362 34 Savings institutions 5,604 6,751 219 938 927 1,170 199 246 977 286 1,194 35 Gasoline companies -1,030 320 54 -44 48 63 60 -12 -91 -75 65 By major type of credit 36 Automobile 36,998 16,393 -85 2,552 850 3,033 3,457 1,240 424 2,314 1,545 37 Commercial banks 7,706 5,799 408 621 19 553 1,280 720 654 472 1,184 38 Credit unions 3,394 3,273 111 555 455 498 428 150 391 -16 241 39 Finance companies 23,183 5,921 -649 1,181 185 1,738 1,707 319 -824 1,800 -129 40 Savings institutions 2,715 1,401 45 195 192 243 41 52 202 60 248 41 Revolving 12,917 10,987 163 532 1,340 1,0% 1,867 1,438 478 2,305 2,001 42 Commercial banks 9,786 9,618 204 457 1,095 850 1,691 1,233 533 2,278 1,432 43 Retailers 1,545 -27 -130 -38 50 1 65 177 -116 65 334 44 Gasoline companies -1,030 320 54 -44 48 63 60 -12 -91 -75 65 45 Savings institutions 2,008 897 29 125 123 155 27 33 129 38 158 46 Credit unions 608 178 6 30 25 27 24 8 21 -1 13 47 Mobile home 222 -102 -84 143 175 -165 4 -22 54 -123 142 48 Commercial banks -726 -459 -83 -6 17 -108 20 -85 -46 -54 -71 49 Finance companies -363 -558 -31 22 32 -216 -43 30 -32 -108 51 50 Savings institutions 1,311 915 30 127 126 159 27 33 132 39 162 51 Other 4,842 7,039 -313 1,318 989 1,043 1,0% 226 1,678 -517 1,733 52 Commercial banks 2,754 -1,5% -499 -140 -442 -487 270 -186 298 -5 335 53 Finance companies 604 1,931 -13 438 490 422 294 121 505 -671 518 54 Credit unions 1,736 3,078 104 523 427 469 403 141 368 -16 227 55 Retailers 177 87 -18 5 28 26 26 20 -4 22 29 56 Savings institutions -429 3,537 114 492 486 613 104 129 512 150 626 1. The Board's series cover most short-and intermediate-term credit extended 2. More detail for finance companies is available in the G.20 statistical release. to individuals that is scheduled to be repaid (or has the option of repayment) in 3. Excludes 30-day charge credit held by travel and entertainment companies, two or more installments. 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 1988 IItteemm 11998855 11998866 11998877 July Aug. Sept. Oct. Nov. Dec. Jan. INTEREST RATES Commercial banks' 1 48-month new car2 12.91 11.33 10.45 n.a. 10.37 n.a. n.a. 10.86 n.a. n.a. 2 24-month personal 15.94 14.82 14.22 n.a. 14.22 n.a. n.a. 14.58 n.a. n.a. 3 120-month mobile home2 14.96 13.99 13.38 n.a. 13.24 n.a. n.a. 13.62 n.a. n.a. 4 Credit card 18.69 18.26 17.92 n.a. 17.85 n.a. n.a. 17.82 n.a. n.a. Auto finance companies J New car 11.98 9.44 10.73 10.52 9.63 8.71 10.31 12.24 12.23 12.19 6 Used car 17.59 15.95 14.60 14.53 14.53 14.58 14.76 14.90 14.97 14.56 OTHER TERMS3 Maturity (months) 7 New car 51.5 50.0 53.5 53.4 52.1 50.7 52.8 55.4 55.5 55.5 8 Used car 41.4 42.6 45.2 45.5 45.4 45.2 45.2 45.3 45.3 47.2 Loan-to-value ratio 9 New car 91 91 93 93 93 93 93 94 93 93 10 Used car 94 97 98 98 98 98 99 99 99 98 Amount financed (dollars) 11 New car 9,915 10,665 11,203 11,267 11,374 11,455 11,585 11,630 11,645 11,534 12 Used car 6,089 6,555 7,420 7,527 7,763 7,476 7,537 7,646 7,718 7,612 1. Data for midmonth of quarter only. 3. At auto finance companies. 2. Before 1983 the maturity for new car loans was 36 months, and for mobile NOTE. These data also appear in the Board's G.19 (421) release. For address, home loans was 84 months. see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • May 1988 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1984 1985 1986 1987 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998833 11998844 11998855 11998866 11998877 H2 HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors 550.2 753.9 854.8 831.7 685.2 790.4 722.7 986.8 679.1 984.4 653.7 716.8 By sector and instrument 2 U.S. government 186.6 198.8 223.6 215.0 141.4 207.2 204.8 242.5 207.2 222.8 150.7 132.0 3 Treasury securities 186.7 199.0 223.7 214.7 142.3 207.3 204.9 242.5 207.4 222.0 151.7 132.9 4 Agency issues and mortgages -.1 -.2 -.1 .4 -.9 -.1 -.1 -.1 -.1 .9 -1.0 -.9 5 Private domestic nonfinancial sectors 363.6 555.1 631.1 616.7 543.9 583.3 518.0 744.3 471.8 761.6 503.0 584.7 6 Debt capital instruments 253.4 313.6 447.8 452.7 456.5 342.5 350.4 545.2 365.6 539.8 470.7 442.3 7 Tax-exempt obligations 53.7 50.4 136.4 30.8 31.3 67.0 67.0 205.8 -15.6 77.2 32.7 29.8 8 Corporate bonds 16.0 46.1 73.8 121.3 125.4 69.8 62.2 85.3 135.3 107.3 127.4 123.4 9 183.6 217.1 237.7 300.6 299.8 205.7 221.2 254.2 245.9 355.4 310.5 289.0 10 Home mortgages 117.5 129.7 151.9 201.2 212.6 119.9 139.2 164.7 163.9 238.6 226.9 198.3 11 Multifamily residential 14.2 25.1 29.2 33.1 23.8 22.4 25.0 33.4 31.3 34.9 29.8 17.8 1? 49.3 63.2 62.5 74.6 69.5 63.8 59.5 65.5 59.7 89.6 63.1 75.9 13 Farm 2.6 -.9 -6.0 -8.4 -6.1 -.4 -2.5 -9.5 -9.0 -7.7 -9.3 -2.9 14 Other debt instruments 110.2 241.5 183.3 164.0 87.4 240.8 167.5 199.1 106.3 221.7 32.3 142.5 15 Consumer credit 56.6 90.4 94.6 65.8 30.1 86.2 95.3 93.9 71.0 60.6 19.5 40.7 16 Bank loans n.e.c 23.2 67.1 38.6 66.5 14.2 63.0 21.0 56.2 12.2 120.8 -24.6 53.1 17 Open market paper -.8 21.7 14.6 -9.3 2.3 16.8 14.4 14.8 -13.1 -5.5 4.5 ..11 18 Other 31.3 62.2 35.5 41.0 40.8 74.7 36.8 34.2 36.2 45.8 32.9 4488..66 19 By borrowing sector 363.6 555.1 631.1 616.7 543.9 583.3 518.0 744.3 471.8 761.6 503.0 584.7 70 State and local governments 34.0 27.4 91.8 44.3 33.3 38.6 56.3 127.2 4.3 84.3 35.4 31.2 71 188.2 234.6 293.4 281.1 245.6 234.2 259.8 327.1 233.0 329.3 240.4 250.7 ?? 4.1 -.1 -13.9 -15.1 -10.0 .4 -7.0 -20.8 -16.9 -13.3 -17.8 -2.2 73 Nonfarm noncorporate 77.0 97.0 93.1 116.2 102.5 92.2 85.7 100.5 96.7 135.6 100.7 104.2 24 Corporate 60.3 196.0 166.7 190.2 172.6 217.8 123.2 210.3 154.7 225.8 144.3 200.9 25 Foreign net borrowing in United States 17.3 8.3 1.2 9.0 3.1 -19.4 -5.8 8.2 21.5 -3.5 -7.4 13.5 ?6 3.1 3.8 3.8 2.6 6.3 6.3 5.5 2.1 6.2 -1.1 -1.7 14.2 77 Bank loans n.e.c 3.6 -6.6 -2.8 -1.0 -3.9 -11.9 -5.8 .1 1.5 -3.5 -3.2 -4.6 7,8 Open market paper 6.5 6.2 6.2 11.5 2.1 -4.3 2.8 9.6 19.1 3.9 -5.3 9.5 29 U.S. government loans 4.1 5.0 -6.0 -4.0 -1.5 -9.6 -8.2 -3.7 -5.3 -2.7 2.7 -5.7 30 Total domestic plus foreign 567.5 762.2 856.0 840.7 688.3 771.0 716.9 995.0 700.5 980.9 646.4 730.3 Financial sectors 31 Total net borrowing by financial sectors ... 99.3 151.9 199.0 295.3 283.4 150.7 175.1 222.8 242.3 348.2 318.5 248.8 By instrument 32 U.S. government related 67.8 74.9 101.5 178.1 169.3 77.3 96.8 106.3 136.1 220.1 180.5 158.6 33 Sponsored credit agency securities 1.4 30.4 20.6 15.2 29.9 31.5 26.6 14.6 8.7 21.7 8.1 51.7 34 Mortgage pool securities 66.4 44.4 79.9 163.3 140.2 45.8 70.3 89.5 126.5 200.0 174.0 106.9 35 Loans from U.S. government 1.1 -.4 -.8 2.2 .8 -1.5 -1.5 36 Private financial sectors 31.5 77.0 97.4 117.2 114.1 73.5 78.3 116.5 106.2 128.1 138.0 90.2 37 Corporate bonds 17.4 36.2 48.6 69.0 62.0 41.5 48.9 48.3 72.1 66.0 79.5 44.6 38 Mortgages * .4 .1 .1 .3 .4 * .1 .6 -.5 .2 .4 39 Bank loans n.e.c -.1 .7 2.6 4.0 -1.1 .7 2.3 2.9 4.0 4.0 -4.7 2.6 40 Open market paper 21.3 24.1 32.0 24.2 28.4 16.0 14.6 49.4 15.1 33.4 49.4 7.4 41 Loans from Federal Home Loan Banks -7.0 15.7 14.2 19.8 24.4 14.9 12.5 15.9 14.4 25.2 13.6 35.2 By sector 42 Sponsored credit agencies 1.4 30.4 21.7 14.9 29.2 31.5 26.6 16.8 9.5 20.2 6.6 51.7 43 Mortgage pools 66.4 44.4 79.9 163.3 140.2 45.8 70.3 89.5 126.5 200.0 174.0 106.9 44 Private financial sectors 31.5 77.0 97.4 117.2 114.1 73.5 78.3 116.5 106.2 128.1 138.0 90.2 45 Commercial banks 5.0 7.3 -4.9 -3.6 8.5 -5.3 -4.7 -5.0 -2.7 -4.6 14.1 2.9 46 Bank affiliates 12.1 15.6 14,5 4.6 4.8 10.8 10.2 18.9 -1.7 10.9 11.5 -1.8 47 Savings and loan associations -2.1 22.7 22.3 29.8 35.2 23.3 14.2 30.4 25.5 34.0 29.1 41.3 48 Finance companies 12.9 18.9 53.9 49.7 26.5 29.6 49.7 58.1 53.1 46.3 30.8 22.2 49 REITs -.1 .1 -.7 -.3 .9 .1 -.6 -.8 .6 -1.3 * 1.9 50 CMO Issuers 3.7 12.4 12.2 37.1 38.1 15.0 9.5 14.9 31.4 42.8 52.5 23.7 All sectors 51 Total net borrowing 666.8 914.1 1,054.9 1,136.0 971.7 921.8 892.1 1,217.8 942.8 1,329.1 964.9 979.1 52 U.S. government securities . 254.4 273.8 324.2 393.5 311.5 284.5 301.7 346.6 342.5 444.5 332.8 290.6 53 State and local obligations .. 53.7 50.4 136.4 30.8 31.3 67.0 67.0 205.8 -15.6 77.2 32.7 29.8 54 Corporate and foreign bonds 36.5 86.1 126.1 192.9 193.7 117.6 116.6 135.7 213.6 172.1 205.2 182.2 55 Mortgages 183.6 217.4 237.7 300.7 300.1 206.0 221.2 254.2 246.5 354.9 310.8 289.5 56 Consumer credit 56.6 90.4 94.6 65.8 30.1 86.2 95.3 93.9 71.0 60.6 19.5 40.7 57 Bank loans n.e.c 26.7 61.1 38.3 69.5 9.3 51.8 17.5 59.2 17.7 121.3 -32.5 51.2 58 Open market paper 26.9 52.0 52.8 26.4 32.8 28.6 31.8 73.7 21.0 31.7 48.6 17.0 59 Other loans 28.4 82.9 44.8 56.5 63.0 80.0 41.1 48.6 46.1 66.8 47.8 78.1 External corporate equity funds raised in United States 60 Total new share issues 61.8 -36.4 19.9 91.6 -9.3 -24.9 3.0 36.7 100.8 82.3 84.5 -103.2 61 Mutual funds 27.2 29.3 85.7 163.3 64.5 32.2 64.2 107.1 155.5 171.1 147.2 -18.2 62 Mother 34.6 -65.7 -65.8 -71.7 -73.8 -57.1 -61.2 -70.4 -54.7 -88.7 -62.7 -85.0 63 Nonfinancial corporations 28.3 -74.5 -81.5 -80.8 -76.5 -69.4 -75.5 -87.5 -68.7 -92.7 -70.0 -83.0 64 Financial corporations 2.6 7.8 12.0 8.3 5.1 8.8 11.2 12.8 7.5 9.1 5.4 4.8 65 Foreign shares purchased in United States 3.7 .9 3.7 .7 -2.4 3.5 3.1 4.3 6.6 -5.1 1.9 -6.8 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. 1985 1986 Transaction category, or sector 1983 1984 1986 HI 1 Total fluids advanced in credit markets to domestic nonfinancial sectors 753.9 854.8 685.2 790.4 722.7 986.8 679.1 984.4 By public agencies and foreign 2 Total net advances 114.0 157.6 202.3 319.7 233.6 182.5 195.8 208.7 264.7 374.6 3 U.S. government securities 26.3 39.3 47.1 84.8 51.4 51.0 50.3 43.9 74.0 95.6 4 Residential mortgages 76.1 56.5 94.6 160.3 136.7 57.4 88.6 100.7 123.7 196.9 5 FHLB advances to savings and loans -7.0 15.7 14.2 19.8 24.4 14.9 12.5 15.9 14.4 25.2 6 Other loans and securities 18.6 46.2 46.3 54.7 21.0 59.2 44.4 48.2 52.6 56.9 Total advanced, by sector 7 U.S. government 9.7 17.1 16.8 9.5 -9.7 26.6 25.1 8.4 10.8 8.2 8 Sponsored credit agencies 69.8 74.3 101.5 177.3 166.0 75.2 96.4 106.7 128.2 226.5 9 Monetary authorities 10.9 8.4 21.6 30.2 8.6 4.8 27.5 15.8 13.2 47.2 10 Foreign 23.7 57.9 62.3 102.6 68.6 75.9 46.8 77.8 112.5 92.7 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools.. 67.8 74.9 101.5 178.1 169.3 77.3 96.8 106.3 136.1 220.1 12 Foreign 17.3 8.3 1.2 9.0 3.1 -19.4 -5.8 8.2 21.5 -3.5 Private domestic funds advanced 13 Total net advances 521.3 679.5 755.2 699.2 624.1 665.7 618.0 892.5 571.9 826.4 14 U. S. government securitie s 228.1 234.5 277.0 308.7 260.1 233.5 251.3 302.7 ' 268.6 348.9 15 State and local obligations 53.7 50.4 136.4 30.8 31.3 67.0 67.0 205.8 -15.6 77.2 16 Corporate and foreign bonds 14.5 35.1 40.8 83.4 110.1 53.0 39.7 42.0 100.2 66.6 17 Residential mortgages 55.0 98.2 86.4 74.0 99.6 84.8 75.5 97.4 71.5 76.5 18 Other mortgages and loans 162.4 276.9 228.8 222.1 147.3 242.3 197.0 260.6 161.7 282.4 19 LESS: Federal Home Loan Bank advances -7.0 15.7 14.2 19.8 24.4 14.9 12.5 15.9 14.4 25.2 Private financial intermediation 20 Credit market funds advanced by private financial institutions 395.8 559.8 579.5 726.9 567.7 532.1 483.8 675.2 638.5 815.3 21 Commercial banking 144.3 168.9 186.3 194.7 127.5 145.5 143.3 229.4 117.2 272.3 22 Savings institutions 135.6 150.2 83.0 105.5 140.7 133.5 54.5 111.4 94.5 116.6 23 Insurance and pension funds 100.1 121.8 156.0 176.7 203.6 95.3 139.4 172.5 169.0 184.4 24 Other finance 15.8 118.9 154.2 249.9 95.9 157.8 146.5 161.9 257.9 241.9 25 Sources of funds 395.8 559.8 579.5 726.9 567.7 532.1 483.8 675.2 638.5 815.3 26 Private domestic deposits and RPs 215.4 316.9 213.2 271.4 128.3 353.5 191.4 235.0 252.2 290.6 27 Credit market borrowing 31.5 77.0 97.4 117.2 114.1 73.5 78.3 116.5 106.2 128.1 28 Other sources 148.9 165.9 268.9 338.3 325.3 105.1 214.1 323.6 280.1 396.5 29 Foreign funds 14.6 8.8 19.7 12.9 45.3 1.7 10.8 28.6 11.9 14.0 30 Treasury balances -5.3 4.0 10.3 1.7 5.0 10.8 13.9 6.6 -4.2 7.6 31 Insurance and pension reserves 109.7 118.6 141.0 152.8 207.8 74.6 118.6 163.4 136.6 168.9 32 Other, net 30.0 34.5 98.1 170.9 67.2 18.0 71.4 124.7 135.8 206.1 Private domestic nonfinancial investors 33 Direct lending in credit markets 157.0 196.7 273.2 89.4 170.5 207.1 212.5 333.9 39.7 139.2 34 U.S. government securities 99.3 123.6 145.3 47.1 54.8 84.3 156.2 134.5 42.2 51.9 35 State and local obligations 40.3 30.4 47.6 -5.4 52.2 50.4 14.8 80.4 -67.6 56.8 36 Corporate and foreign bonds -11.6 5.2 11.8 34.7 50.2 36.9 15.4 8.2 68.8 .7 37 Open market paper 12.0 9.3 43.9 -4.8 5.3 3.0 3.5 84.2 -17.3 7.7 38 Other 17.0 28.1 24.6 17.9 8.0 32.5 22.6 26.6 13.6 22.1 39 Deposits and currency 232.8 320.4 223.5 291.8 141.1 354.0 198.3 248.7 261.9 321.6 40 Currency 14.3 8.6 12.4 14.4 15.6 3.6 15.9 8.8 10.7 18.2 41 Checkable deposits 28.8 28.0 41.5 100.1 -9.3 29.9 13.8 69.2 82.5 117.8 42 Small time and savings accounts 215.4 150.7 138.6 120.8 69.3 169.9 162.1 115.1 112.6 129.0 43 Money market fund shares -39.0 49.0 8.9 43.8 22.3 73.4 10.6 7.1 46.9 40.6 44 Large time deposits -8.3 84.3 7.6 -11.6 18.2 79.1 -7.3 22.5 .2 -23.3 45 Security RPs 18.5 5.0 16.6 18.3 27.9 1.2 12.2 21.1 10.0 26.5 46 Deposits in foreign countries 3.1 -5.1 -2.1 5.9 -2.8 -3.1 -9.0 4.9 -.9 12.8 47 Total of credit market instruments, deposits, and currency 389.9 517.1 381.2 301.6 48 Public holdings as percent of total 20.1 20.7 23.6 38.0 33.9 23.7 27.3 21.0 37.8 38.2 49 Private financial intermediation (in percent) — 75.9 82.4 76.7 104.0 91.0 79.9 78.3 75.6 111.6 98.7 50 Total foreign funds 38.2 66.7 82.0 115.5 113.9 77.6 57.7 106.4 124.4 106.7 MEMO: Corporate equities not included above 51 Total net issues 61.8 -36.4 19.9 91.6 -9.3 -24.9 3.0 36.7 100.8 82.3 52 Mutual fund shares 27.2 29.3 85.7 163.3 64.5 32.2 64.2 107.1 155.5 171.1 53 Other equities 34.6 -65.7 -65.8 -71.7 -73.8 -57.1 -61.2 -70.4 -54.7 -88.7 54 Acquisitions by financial institutions 51.1 19.7 43.4 50.6 45.9 39.7 59.5 27.3 46.5 54.6 55 Other net purchases 10.7 -56.1 -22.9 41.0 -55.2 -64.6 -55.8 9.5 54.3 27.7 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 mid 46. 50. Sum of lines 10 and 29. 27. Excludes equity issues and investment company shares. Includes line 19. 51. 53. Includes issues by financial institutions. 29. Foreign deposits at commercial banks, bank borrowings from foreign NOTE. Full statements for sectors and transaction types in flows and in amounts branches, and liabilities of foreign banking agencies to foreign affiliates, less outstanding may be obtained from Flow of Funds Section, Division of Research claims on foreign affiliates and deposits by banking in foreign banks. and Statistics, Board of Governors of the Federal Reserve System, Washington, 30. Demand deposits and note balances at commercial banks. D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • May 1988 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures1 1977 = 100; monthly and quarterly data are seasonally'adjusted. Exceptions noted. 1987 1988 MMeeaassuurree 11998855 11998866 11998877 June July Aug. Sept. Oct. Nov. Dec.' Jan.' Feb. 1 Industrial production 123.8 125.1 129.8 129.1 130.6 131.2 131.0 132.5 133.2' 133.8 134.2 134.4 Market groupings 2 Products, total 130.8 133.2 138.3 137.8 139.5 139.9 139.4 140.9 141.C 141.1 141.9 142.4 3 Final, total 131.1 132.3 136.8 136.2 137.9 138.4 137.8 139.3 139.2' 139.6 140.5 140.9 4 Consumer goods 120.2 124.5 127.7 127.2 128.9 129.4 127.7 129.0 129.4' 129.5 130.4 130.6 5 Equipment 145.4 142.7 148.8 148.1 149.7 150.2 151.2 153.0 152.2' 153.0 153.9 154.6 6 Intermediate 130.0 136.4 143.5 143.3 145.0 145.3 144.9 146.1 147.3' 146.3 146.9 147.7 7 Materials 114.2 113.9 118.2 117.2 118.5 119.4 119.7 121.2 122.5' 123.9 123.6 123.4 Industry groupings 8 Manufacturing 126.4 129.1 134.6 134.0 135.6 135.9 135.7 137.3 137.9 138.8 139.1 139.3 Capacity utilization (percent)2 9 Manufacturing 80.1 79.8 81.0 80.8 81.5 81.5 81.3 82.0 82.2 82.5 82.5 82.5 10 Industrial materials industries 80.2 78.5 80.5 79.8 80.6 81.1 81.2 82.1 82.9' 83.7 83.4 83.1 11 Construction contracts (1982 = 100)3 136.0 158.0 162.0 167.0 165.0 174.0 160.0 164.0 157.0 157.0 145.0 159.0 12 Nonagricultural employment, total4 118.3 120.8 123.8 123.5 123.8 124.0 124.2 124.9 125.2 125.6 125.9 126.5 13 Goods-producing, total 102.4 102.4 102.2 101.7 102.1 102.2 102.4 103.0 103.4 103.8 103.5 104.1 14 Manufacturing, total 97.8 96.5 97.1 96.6 97.0 97.2 97.4 97.8 98.2 98.5 98.5 98.6 15 Manufacturing, production-worker 92.6 91.2 92.1 91.6 92.1 92.2 92.5 92.9 93.3 93.6 93.7 93.9 lb Service-producing 125.0 128.9 132.9 132.6 132.9 133.1 133.4 134.1 134.4 134.8 135.2 135.9 17 Personal income, total 207.0 219.9 233.1 231.1 232.6 233.9 235.3 239.8 238.8 240.7 241.4 243.5 18 Wages and salary disbursements 198.7 210.2 222.6 221.2 222.3 224.2 225.4 227.1 228.6 229.5 230.8 232.4 19 Manufacturing 172.8 176.4 181.5 180.0 180.1 182.0 183.7 184.7 185.7 186.0 186.6 187.1 2 2 1 0 R D e is ta p i o l s s a a b l l e e s 6 p ersonal income5 2 1 0 9 6 0 . . 0 6 2 1 1 9 9 9 . . 1 9 2 2 0 3 8 0 . . 7 7 222io8.<.9 y 2 23 1 0 1 . . 4 2 ' 2 23 1 1 5 . . 6 7 ' 2 2 1 32 2 . . 9 2 ' 2 23 1 7 0 . . 8 5 R ' 2 2 1 3 1 6 . . 2 4 ' ' 2 2 1 3 3 8 . . 5 1 2 2 1 3 3 9 . . 5 5 2 24 1 2 4 . . 2 3 Prices7 22 Consumer (1982 = 100) 107.6 109.6 113.6 113.5 113.8 114.4 115.0 115.3 115.4 115.4 115.7 116.0 23 Producer finished goods (1982 = 100) ... 104.7 103.2 105.4 105.5 106.0 105.9 105.7 106.3 106.2 105.7 106.2 105.9 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 Commerce, and other sources. NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6, 3. Index of dollar value of total construction contracts, including residential, and indexes for series mentioned in notes 3 and 7 may also be found in the Survey nonresidential and heavy engineering, from McGraw-Hill Information Systems of Current Business. Company, F. W. Dodge Division. Figures for industrial production for the last two months are preliminary and 4. Based on data in Employment and Earnings (U.S. Department of Labor). estimated, respectively. 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 1988 CCaatteeggoorryy 11998855 11998866 11998877 July Aug. Sept. Oct. Nov. Dec/ Jan. Feb. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 180,440 182,822 185,010 185,127 185,264 185,428 185,575 185,737 185,882 186,083 186,219 2 Labor force (including Armed Forces)1 117,695 120,078 122,122 122,132 122,568 122,230 122,651 122,861 122,984 123,436 123,598 3 Civilian labor force 115,461 117,834 119,865 119,890 112200,,330066 111199,,996633 112200,,338877 112200,,559944 112200,,772222 112211,,117755 112211,,334488 Employment 4 Nonagricultural industries2 103,971 106,434 109,232 109,427 109,907 109,688 109,961 110,332 110,529 110,836 111,182 5 Agriculture 3,179 3,163 3,208 3,212 3,143 3,184 3,249 3,172 33,,221155 33,,229933 33,,222288 Unemployment 6 Number 8,312 8,237 7,425 7,251 7,256 7,091 7,177 7,090 6,978 7,046 6,938 7 Rate (percent of civilian labor force) 7.2 7.0 6.2 6.0 6.0 5.9 6.0 5.9 5.8 5.8 5.7 8 Not in labor force 62,745 62,744 62,888 62,995 62,696 63,198 62,924 62,876 62,898 62,647 62,621 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 97,519 99,610 102,105 102,126 102,275 102,434 102,983 103,285 103,612 103,786r 104,317 10 Manufacturing 19,260 18,994 19,112 19,104 19,129 19,169 19,247 19,336 19,382 19,4W 19,420 11 Mining 927 783 742 744 751 759 764 759 756 745' 746 12 Contract construction 4,673 4,904 5,032 5,002 5,006 4,989 5,053 5,074 5,121 5,059' 5,166 13 Transportation and public utilities 5,238 5,244 5,377 5,363 5,377 5,416 5,436 5,459 5,473 5,486' 5,497 14 Trade 23,073 23,580 24,056 24,071 24,063 24,129 24,239 24,294 24,329 24,515' 24,642 15 Finance 5,955 6,297 6,588 6,608 6,624 6,629 6,650 6,657 6,668 6,681' 6,677 16 Service 22,000 23,099 24,136 24,214 24,279 24,295 24,406 24,493 24,612 24,647' 24,848 17 Government 16,394 16,710 17,063 17,020 17,046 17,048 17,188 17,213 17,271 17,253' 17,321 1. Persons 16 years of age and over. Monthly figures, which are based on 3. Data include all full- and part-time employees who worked during, or sample data, relate to the calendar week that contains the 12th day; annual data received pay for, the pay period that includes the 12th day of the month, and are averages of monthly figures. By definition, seasonality does not exist in exclude proprietors, self-employed persons, domestic servants, unpaid family population figures. Based on data from Employment and Earnings (U.S. Depart- workers, and members of the Armed Forces. Data are adjusted to the March 1984 ment of Labor). benchmark and only seasonally adjusted data are available at this time. Based on 2. Includes self-employed, unpaid family, and domestic service workers. data from Employment and Earnings (U.S. Department of Labor). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • May 1988 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1987 1987 1987 SSeerriieess Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 126.9 128.2 130.9 133.0 159.5 160.4 161.3 162.2 79.5 79.9 81.2 82.0 2 Mining 98.8 99.0 100.6 103.2 130.4 129.7 129.0 128.4 75.8 76.3 78.0 80.3 3 Utilities 108.1 108.3 111.6 112.5 137.7 138.3 138.8 139.4 78.5 78.3 80.5 80.7 4 Manufacturing 131.6 133.2 135.7 137.9 164.5 165.6 166.7 167.7 80.0 80.5 81.4 82.2 5 Primary processing 114.3 116.1 119.2 122.1 138.2 139.0 139.8 140.6 82.7 83.5 85.3 86.9 6 Advanced processing... 142.0 143.5 145.8 147.5 180.3 181.6 182.9 184.1 78.7 79.0 79.7 80.1 7 Materials 115.0 116.5 119.1 121.9 146.1 146.7 147.2 147.8 78.7 79.4 81.0 82.5 8 Durable goods 121.4 122.9 125.5 129.6 162.3 163.1 163.9 164.7 74.8 75.4 76.7 78.7 9 Metal materials 74.7 77.0 83.6 91.1 110.6 110.0 109.4 108.8 67.5 70.0 76.5 83.8 10 Nondurable goods 121.2 124.0 128.2 129.3 145.6 143.8 144.7 145.6 84.8 86.2 88.6 91.0 11 122.3 125.1 130.5 113322..33 142.4 143.4 144.4 114455..44 85.9 87.2 9900..44 V 136.4 137.7 144.5 142.8 143.9 145.1 95.5 95.7 13 122.9 125.3 130.7 148.8 149.8 150.9 82.6 83.6 14 Energy materials 98.3 98.7 100.0 101.8 120.3 120.2 120.1 119.9 81.7 82.1 83.3 84.9 Previous cycle1 Latest cycle2 1987 1987 1988 High Low High Low Feb. June July Aug. Sept. Oct. Nov/ Dec/ Jan/ Feb. Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 79.7 80.3 81.1 81.4 81.1 81.9 82.1 82.4 82.4 82.4 16 Mining 92.8 87.8 95.2 76.9 75.8 76.6 76.8 78.2 79.1 80.6 81.5 81.5 81.1 80.6 17 Utilities 95.6 82.9 88.5 78.0 78.8 79.0 80.2 81.3 80.0 80.5 81.2 80.4 81.7 82.2 18 Manufacturing 87.7 69.9 86.5 68.0 80.0 80.8 81.5 81.5 81.3 82.0 82.2 82.5 82.5 82.5 19 Primary processing.... 91.9 68.3 89.1 65.1 82.4 84.0 85.4 85.3 85.1 86.2 87.0 87.8 87.1 87.1 20 Advanced processing.. 86.0 71.1 85.1 69.5 79.0 79.2 79.8 79.9 79.5 80.1 80.0 80.1 80.5 80.5 21 Materials 92.0 70.5 89.1 68.5 78.7 79.8 80.6 81.1 81.2 82.1 82.9 83.7 83.4 83.1 22 Durable goods 91.8 64.4 89.8 60.9 74.7 75.9 76.5 76.6 77.0 78.3 79.0 80.2 79.8 79.4 23 Metal materials 99.2 67.1 93.6 45.7 67.8 71.5 73.9 77.5 78.3 82.4 83.3 87.6 81.9 81.3 24 Nondurable goods .... 91.1 66.7 88.1 70.7 84.6 86.1 88.4 88.6 88.7 88.2 89.0 90.5 89.6 89.4 25 Textile, paper, and chemical 92.8 64.8 89.4 68.8 85.4 87.1 90.0 90.5 90.7 90.4 91.0 92.7 91.7 91.4 ">6 98.4 70.6 97.3 79.9 95.6 96.3 100.5 99.9 98.5 97.4 98.7 101.6 100.0 ">1 92.5 64.4 87.9 63.5 82.3 83.1 85.1 86.4 87.4 88.0 88.6 90.8 89.8 28 Energy materials 94.6 86.9 94.0 82.3 81.9 82.8 82.4 84.0 83.5 84.9 85.7 85.1 85.7 85.5 1. Monthly high 1973; monthly low 1975. NOTE. These data also appear in the Board's G.3 (402) release. For address, see 2. Monthly highs 1978 through 1980; monthly lows 1982. inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value • Monthly data are seasonally adjusted 1977 1987 1988 GGrroouuppss p p r o o r - - a 1 v 98 g 7 . tion Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov/ Dec. Jan/ Feb/ Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 129.8 127.2 127.3 127.4 128.4 129.1 130.6 131.2 131.0 132.5 133.2 133.8 134.2 134.4 2 Products 57.72 138.3 136.1 136.2 137.2 137.2 137.8 139.5 139.9 139.4 140.9 141.0 141.1 141.9 142.4 3 Final products 44.77 136.8 135.0 135.0 134.5 135.8 136.2 137.9 138.4 137.8 139.3 139.2 139.6 140.5 140.9 4 Consumer goods 25.52 127.7 127.5 127.5 126.6 128.2 127.2 128.9 129.4 127.7 129.0 129.4 129.5 130.4 130.6 5 Equipment 19.25 148.8 144.9 145.0 144.9 145.8 148.1 149.7 150.2 151.2 153.0 152.2 153.0 153.9 154.6 6 Intermediate products 12.94 143.4 139.7 140.4 139.9 142.1 143.3 145.0 145.3 144.9 146.1 147.3 146.3 146.9 147.7 7 Materials 42.28 118.2 115.1 115.2 116.2 116.3 117.2 118.5 119.4 119.7 121.2 122.5 123.9 123.6 123.4 Consumer goods 8 Durable consumer goods 6.89 120.2 122.4 121.2 118.1 120.2 117.4 120.4 121.2 118.6 124.3 123.9 120.3 121.3 121.1 9 Automotive products 2.98 118.5 123.5 121.2 115.7 118.0 114.9 117.5 118.0 114.2 124.3 121.3 115.4 118.2 117.8 10 Autos and trucks 1.79 115.1 125.2 121.6 111.5 113.1 107.9 112.3 112.4 107.2 122.2 118.7 110.2 112.8 111.8 11 Autos, consumer 1.16 90.7 105.3 100.9 91.8 91.0 87.4 86.4 76.8 79.1 94.7 91.9 83.7 77.5 79.5 12 Trucks, consumer .63 160.5 162.1 159.9 148.1 154.2 146.0 160.4 178.4 159.4 173.2 168.5 159.5 13 Auto parts and allied goods 1.19 123.5 121.0 120.5 121.9 125.3 125.4 125.3 126.6 124.8 127.5 125.2 123.3 126.4 126.9 14 Home goods 3.91 121.6 121.6 121.2 119.9 121.8 119.3 122.5 123.6 121.9 124.3 125.8 123.9 123.7 123.6 15 Appliances, A/C and TV 1.24 141.5 145.2 142.9 137.7 142.2 133.4 141.7 147.1 141.8 145.7 150.1 142.7 141.7 141.1 16 Appliances and TV 1.19 142.1 146.7 143.8 139.2 142.3 133.4 142.6 145.5 140.6 146.1 150.5 142.6 140.4 17 Carpeting and furniture .96 130.7 130.8 131.3 133.5 133.3 132.3 134.1 132.0 131.6 132.9 133.5 133.9 134.0 18 Miscellaneous home goods 1.71 102.0 99.3 99.8 99.4 100.7 101.8 102.2 102.0 102.2 104.1 103.9 104.8 104.9 19 Nondurable consumer goods 18.63 130.5 129.4 129.8 129.8 131.1 130.9 132.1 132.5 131.0 130.8 131.5 132.9 133.7 134.1 20 Consumer staples 15.29 137.3 135.9 136.5 136.4 137.7 137.6 138.9 139.2 137.8 137.4 138.3 140.2 141.1 141.8 21 Consumer foods and tobacco 7.80 136.2 134.0 134.8 134.4 135.6 136.0 137.2 137.4 137.0 137.5 137.3 138.6 138.9 22 Nonfood staples 7.49 138.5 137.9 138.2 138.5 139.9 139.2 140.6 141.2 138.6 137.2 139.4 141.8 143.4 144.4 23 Consumer chemical products 2.75 162.9 164.7 165.7 164.7 165.9 164.4 165.7 167.4 163.6 160.0 163.5 167.7 170.5 24 Consumer paper products 1.88 151.8 147.8 147.5 148.9 152.9 153.1 153.8 153.9 153.2 151.8 152.8 155.3 155.3 25 Consumer energy 2.86 106.3 105.7 105.8 106.5 106.4 105.9 108.0 107.7 105.0 105.8 107.4 108.1 109.6 26 Consumer fuel 1.44 93.1 92.5 94.1 94.5 92.1 91.9 92.7 91.4 91.6 92.4 93.2 95.4 96.1 27 Residential utilities 1.42 119.8 119.2 117.7 118.7 121.0 120.2 123.6 124.3 118.7 119.4 121.8 120.9 Equipment 28 Business and defense equipment 18.01 153.6 150.1 150.1 150.0 150.8 153.2 154.4 154.5 155.2 157.2 156.6 157.7 158.8 159.5 29 Business equipment 14.34 144.5 140.8 140.8 140.8 141.7 144.2 145.6 145.6 146.3 148.7 148.3 149.7 150.8 151.8 30 Construction, mining, and farm 2.08 62.2 56.8 58.1 58.6 61.2 63.0 65.0 66.4 66.1 66.5 66.3 67.3 68.3 69.2 31 Manufacturing 3.27 117.9 111.5 110.9 111.1 111.5 117.2 120.4 120.9 122.0 120.5 120.6 122.2 124.0 124.9 32 Power 1.27 82.6 81.2 81.7 82.4 84.0 84.0 81.8 82.8 81.1 83.0 83.1 84.2 86.0 86.7 33 Commercial 5.22 226.5 218.4 219.7 220.9 222.0 226.7 227.9 227.7 229.1 232.4 232.1 235.2 237.5 239.2 34 Transit 2.49 108.4 117.4 114.0 110.4 110.1 105.4 106.1 104.7 105.1 112.5 111.2 109.1 106.3 106.3 35 Defense and space equipment 3.67 188.9 186.5 186.6 186.1 186.5 188.6 188.7 189.1 189.8 190.3 188.7 188.8 190.0 189.9 Intermediate products 36 Construction supplies 5.95 131.5 128.4 128.5 127.3 128.3 131.5 133.1 132.5 132.3 133.3 134.2 133.7 133.8 134.9 37 Business supplies 6.99 153.5 149.4 150.5 150.5 153.8 153.4 155.2 156.3 155.6 157.1 158.4 157.0 158.1 38 General business supplies 5.67 158.6 154.1 155.2 155.5 158.2 158.5 160.5 161.0 160.9 162.3 164.3 163.0 164.3 39 Commercial energy products 1.31 131.1 128.8 130.3 129.0 135.0 131.1 132.3 135.8 132.7 134.6 132.9 131.1 131.4 Materials 40 Durable goods materials 20.50 125.0 121.5 121.8 122.2 121.6 124.0 125.2 125.5 126.4 128.7 130.2 132.3 131.9 131.5 41 Durable consumer parts 4.92 100.9 100.0 98.9 96.2 95.2 99.2 98.5 99.6 99.0 102.3 103.1 104.8 105.0 103.8 42 Equipment parts 5.94 159.0 155.6 155.8 157.1 156.0 158.3 159.3 159.5 161.1 162.2 163.2 165.4 167.1 167.5 43 Durable materials n.e.c 9.64 116.4 111.5 112.6 114.1 113.9 115.5 117.7 117.9 118.9 121.6 123.6 126.0 123.9 123.5 44 Basic metal materials 4.64 86.7 80.3 80.8 81.8 81.9 83.6 86.6 90.4 91.3 95.3 96.5 101.0 94.6 93.8 45 Nondurable goods materials 10.09 125.8 122.5 122.8 125.4 125.3 124.1 127.6 128.3 128.6 128.2 129.6 132.0 131.0 131.2 46 Textile, paper, and chemical materials 7.53 127.6 123.6 124.0 126.9 126.5 125.1 129.6 130.6 131.2 131.0 132.3 135.1 134.0 134.1 47 Textile materials 1.52 111.7 115.8 118.5 125.0 111.9 117.8 116.7 116.0 113.0 112.7 111.3 111.4 48 Pulp and paper materials 1.55 141.0 136.7 134.7 137.4 137.4 139.0 145.4 145.0 143.3 142.0 144.4 149.0 147.1 49 Chemical materials 4.46 128.4 121.8 122.1 125.0 125.0 124.9 128.1 130.4 132.2 133.4 134.7 138.4 137.2 50 Miscellaneous nondurable materials ... 2.57 120.4 119.0 119.2 121.1 122.0 120.9 122.0 121.4 120.9 119.7 121.7 123.0 51 Energy materials 11.69 99.8 97.6 97.0 97.5 99.3 99.4 99.0 100.9 100.2 101.8 102.8 102.0 102.7 102.3 52 Primary energy 7.57 105.0 102.6 101.5 102.3 103.6 104.0 102.5 104.6 104.6 106.8 108.4 107.7 107.6 53 Converted fuel materials 4.12 90.3 88.5 88.9 88.7 91.4 91.0 92.5 94.1 92.2 92.7 92.6 91.6 93.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • May 1988 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value—Continued 1977 1987 1988 Groups c S o I d C e pr t o io p n o r- a 1 v 98 g 7 . Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov/ Dec Jan." Feb.' Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 104.3 102.4 101.9 101.4 103.1 103.0 103.7 105.4 105.4 106.8 107.9 107.7 2 Mining 9.83 100.7 98.8 98.3 98.6 99.2 99.2 99.2 100.9 101.9 103.6 104.6 103.7 3 Utilities 5.96 110.3 108.5 107.9 106.0 109.6 109.4 111.2 112.9 111.2 112.1 113.2 114.2 4 Manufacturing 84.21 134.6 131.6 132.4 132.4 133.2 134.0 135.6 135.9 135.7 137.3 137.9 139.1 5 Nondurable 35.11 136.7 132.9 133.7 134.6 135.7 136.9 138.5 138.8 138.6 138.1 139.6 141.2 6 Durable 49.10 133.1 130.8 131.5 130.9 131.4 132.0 133.5 133.8 133.7 136.8 136.7 137.5 Mining 1 Metal 10 .50 77.5 73.6 71.2 65.7 71.7 70.7 71.4 79.3 86.5 85.6 90.4 95.1 8 Coal 11.12 1.60 131.8 131.7 122.3 121.9 127.2 128.8 127.9 130.5 133.3 140.3 142.9 140.6 9 Oil and gas extraction 13 7.07 92.7 90.9 92.4 93.1 92.1 91.8 91.8 93.0 93.3 94.1 94.2 94.1 10 Stone and earth minerals 14 .66 128.2 122.1 123.8 125.4 127.6 128.5 130.7 130.3 130.0 131.0 134.1 135.6 Nondurable manufactures 11 Foods 7.96 137.7 136.4 137.3 136.0 137.4 137.7 138.5 138.8 139.5 138.0 138.9 139.4 12 Tobacco products .62 103.4 99.9 101.1 99.6 106.6 107.0 110.4 101.7 103.7 106.5 110.5 13 Textile mill products 2.29 115.8 110.8 112.6 116.6 115.7 117.2 118.3 119.8 118.2 116.8 117.3 117.0 14 Apparel products 2.79 107.4 106.5 105.4 105.3 106.4 107.7 109.7 108.4 107.6 108.0 109.4 107.8 15 Paper and products 3.15 144.4 139.9 139.9 140.5 141.3 142.6 148.8 148.9 147.4 146.0 148.3 150.6 149.2 16 Printing and publishing 4.54 172.0 164.4 167.6 169.2 171.4 174.1 174.0 174.7 174.9 175.2 175.7 175.6 17 Chemicals and products 8.05 140.1 135.7 135.3 137.3 138.1 139.3 140.8 142.3 142.4 141.5 144.4 147.1 18 Petroleum products 2.40 93.5 91.6 92.1 94.0 92.6 92.3 94.1 92.9 93.5 94.6 93.3 96.1 19 Rubber and plastic products 2.80 163.6 156.2 158.6 160.5 162.2 165.4 167.2 164.8 165.2 166.7 169.9 170.6 20 Leather and products .53 60.0 59.8 59.4 60.2 61.4 60.8 59.2 61.3 60.7 59.6 60.7 57.5 Durable manufactures 21 Lumber and products 24 2.30 130.3 129.6 128.9 127.8 130.3 131.1 132.8 131.1 126.9 129.8 134.0 133.6 130.4 22 Furniture and fixtures 25 1.27 152.8 145.0 149.9 148.2 150.5 153.9 156.2 155.2 155.9 156.0 158.5 159.4 159.1 23 Clay, glass, stone products 32 2.72 119.1 118.8 119.8 120.6 117.2 117.9 118.8 116.5 118.6 118.9 120.5 120.1 119.3 24 Primary metals 33 5.33 81.5 75.1 77.0 76.1 77.0 78.8 81.4 85.1 84.5 90.6 90.2 92.3 88.7 2 2 5 6 Fa I b r r o i n c a a t n ed d m ste e e ta l l products 331 3 .2 4 6 3 . . 4 4 6 9 1 7 1 0 1 . . 8 0 1 6 0 2 8 . . 3 3 1 6 1 5 0 . . 4 5 1 6 0 5 9 . . 0 9 1 6 0 5 8 . . 7 5 1 6 1 8 1 . . 3 1 1 7 1 0 1 . . 9 1 1 7 1 6 0 . . 0 1 1 7 1 4 1 . . 6 1 1 8 1 2 3 . . 0 5 1 7 1 9 3 . . 7 6 1 8 1 4 5 . . 6 8 1 8 1 1 6 . .1 0 27 Nonelectrical machinery 35 9.54 152.7 145.5 148.5 150.4 149.7 151.8 155.3 154.3 156.6 158.0 157.2 161.0 162.1 28 Electrical machinery 36 7.15 172.3 171.0 168.5 168.4 171.1 170.5 172.5 174.3 173.4 175.5 175.6 175.8 176.9 29 Transportation equipment 37 9.13 129.2 132.7 132.2 127.8 129.4 126.5 127.6 128.1 125.5 132.0 130.4 128.1 128.7 30 Motor vehicles and parts 371 5.25 111.8 117.7 116.5 109.8 112.0 107.4 109.4 109.1 105.6 116.0 114.0 110.2 110.0 31 Aerospace and miscellaneous transportation equipment . 372-6.9 3.87 152.8 153.0 153.4 152.3 153.1 152.4 152.3 153.9 152.5 153.7 152.7 152.4 154.0 32 Instruments 38 2.66 143.9 142.0 140.3 142.8 142.1 144.5 143.8 146.3 145.6 146.7 147.8 144.9 148.5 33 Miscellaneous manufactures 39 1.46 102.6 101.6 103.9 101.4 101.9 101.2 100.5 102.2 102.1 104.6 104.5 105.8 106.2 Utilities 34 Electric 4.17 126.6 123.6 122.3 128.8 128.8 131.0 132.0 127.5 126.8 127.5 125.6 127.6 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKET 35 Products, total. 517.5 1,735.8 1,718.7 1.725.2 1,710.0 1,723.0 1,720.4 1.732.5 1,741.7 1,735.9 1,774.1 1,772.4 1,769.9 1,783.5 1,788.8 36 Final 405.7 1,333.8 1,329.2 1.330.3 1,316.5 1,324.7 1,320.1 1.326.6 1,334.9 1,330.3 1,360.9 1,359.9 1,357.7 1,370.4 1,377.7 37 Consumer goods. 272.7 866.0 865.3 868.1 857.1 862.8 855.1 863.2 866.4 856.9 876.6 879.8 879.8 889.4 892.3 38 Equipment 133.0 467.8 463.9 462.2 459.4 461.9 465.0 463.5 468.5 473.4 484.4 480.1 477.9 481.0 485.5 39 Intermediate 111.9 402.0 389.5 394.9 393.6 398.4 400.3 405.9 406.8 405.6 413.2 412.5 412.2 413.0 411.0 • A major revision of the industrial production index and the capacity (July 1985), pp. 487-501. The revised indexes for January through June 1985 were utilization rates was released in July 1985. See "A Revision of the Index of shown in the September BULLETIN. Industrial Production" and accompanying tables that contain revised indexes NOTE. These data also appear in the Board's G.12.3 (414) release. For address, (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1987 1988 IItteemm Apr. May June July Aug. Sept. Oct. Nov.' Dec.' Jan. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,733 1,750 1,524 1,598 1,493 1,517 1,487 1,502 1.502 1,463 1,469 1,361 1,257 2 1-family 957 1,071 1,030 1,058 1,009 1,039 993 1,023 992 977 983 974 920 3 2-or-more-family 777 679 495 540 484 478 494 479 510 486 486 387 337 4 Started 1,742 1,805 1,621 1,635 1,599 1,583 1,594 1,583 1,679 1,538 1,661 1,399 1,372 5 1-family 1,072 1,179 1,146 1,201 1,125 1,086 1,142 1,109 1,211 1,105 1,129 1,035 1,002 6 2-or-more-family 669 626 474 434 474 497 452 474 468 433 532 364 370 7 Under construction, end of period1 . 1,063 1,074 991 l,077r 1,06C 1,052' 1,044' 1,046' 1,044' 1,042 1,023 1,015 8 1-family 539 583 592 627' 626r 622' 621' 621' 627' 627' 625 623 618 9 2-or-more-family 524 490 399 45C 443' 438' 431' 423' AW 417' 417 400 397 10 Completed 1,703 1,756 1,667 l,786r 1,687' 1,612' 1,680' 1,633' 1,591' 1,565' 1,571 1,611 1,527 11 1-family 1,072 1,120 1,122 l,165r 1,178' 1,111' 1,112' 1,069' 1.10C 1,114' 1,088 1,104 1,081 12 2-or-more-family 631 637 545 621' 5W 501' 568' 564' 491' 451' 483 507 446 13 Mobile homes shipped 284 244 233 229 224 234 243 234 240 234 222 227 200 Merchant builder activity in 1-family units 14 Number sold 688 748 672 728' 649 640r 672 673' 644 653' 625 582 522 15 Number for sale, end of period1 350 361 370 359 356' 359 359 361 361 360 362 365 369 Price (thousands of dollars)2 Median 16 Units sold 84.3 92.2 104.5 96.5 104.9 109.0 105.0 106.8 106.5 106.5' 117.0 110.0 118.0 17 Units sold 101.0 112.2 127.9 118.1 126.6 135.8 128.6 128.5 133.5 125.8' 139.2 135.5 145.7 EXISTING UNITS (1-family) 18 Number sold 3,217 3,566 3,530 3,59c 3,740' 3,580' 3,47c 3,410 3,43C 3.47C 3,370 3,330 3,170 Price of units sold (thousands of dollars) 19 Median 75.4 80.3 85.6 86.<Y 86.c 85^ 88.3' 86.5' 85.5' 84.6' 85.0 85.4 87.4 20 Average 90.6 98.3 106.2 106.2' 107.5' 107.1' 109.8' 107.C 106.91, 106.1' 106.6 107.1 108.7 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 355,995 388,815 398,944 396,222 396,680 397,191 398,465 402,872 402,782 403,482 405,117 406,779 395,239 22 Private 291,665 316,589 323,622 320,483 321,414 324,256 323,847 329,831 324,857 326,658 327,749 328,727 320,974 23 Residential 158,475 187,147 197,348 199,523 195,871 200,864 198,005 200,241 196,969 198,803 193,866 196,468 191,343 24 Nonresidential, total 133,190 129,442 126,274 120,960 125,543 123,392 125,842 129,590 112277,,888888 112277,,885555 113333,,888833 113322,,225599 112299,,663311 Buildings 25 Industrial 15,769 13,747 13,095 11,492 13,376 13,023 13,005 13,659 14,387 13,561 14,363 13,591 13,351 26 Commercial 59,629 56,762 53,201 50,924 53,224 51,831 52,537 54,055 52,800 53,788 57,657 54,979 54,107 27 Other 12,619 13,216 15,254 14,950 14,926 14,769 15,317 14,888 15,079 15,567 16,176 17,242 16,448 28 Public utilities and other 45,236 45,824 44,728 43,594 44,017 43,769 44,983 46,988 45,622 44,939 45,687 46,447 45,725 29 Public 64,326 72,225 75,319 75,739 75,266 72,935 74,618 73,041 77,924 76,824 77,367 78,052 74,266 30 Military 3,283 3,919 4,204 3,403 4,397 4,352 5,009 4,193 6,083 4,308 4,738 3,164 4,634 31 Highway 21,756 23,360 23,248 22,673 22,607 21,704 22,441 22,005 23,489 24,975 24,713 25,831 24,826 32 Conservation and development... 4,746 4,668 5,222 5,551 4,839 5,498 5,328 5,127 4,978 5,491 5,219 6,114 4,768 33 Other 34,541 40,278 42,645 44,112 43,423 41,381 41,840 41,716 43,374 42,050 42,697 42,943 40,038 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 • May 1988 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted C m h o an n g th e s f e ro a m rli e 1 r 2 Change ( f a r t o a m n n 3 u a m l o r n a t t h e s ) earlier Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll FFFeeebbb... IIIttteeemmm 1987 1987 1988 111999888888 11998877 11998888 (((111999888222 FFeebb.. FFeebb.. === 111000000)))111 Mar. June Sept. Dec. Oct/ Nov/ Dec. Jan. Feb. CONSUMER PRICES2 I AU items 2.1 3.9 6.3 4.3 3.9 3.2 .3 .3 .2 .3 .2 116.0 2 4.7 2.8 3.6 5.8 2.1 2.8 .2 .1 .4 .3 -.3 115.7 3 Energy items -12.1 1.6 25.5 6.6 6.0 -3.9 -.6 .3 -.8 -.7 -.6 87.0 4 All items less food and energy 3.8 4.3 4.9 3.8 3.8 4.4 .5 .3 .2 .5 .2 121.1 5 Commodities 1.6 3.4 4.8 3.7 2.9 2.5 .4 .4 -.2 .4 .1 113.3 6 Services 5.0 4.8 4.8 4.4 4.3 5.0 .6 .2 .4 .6 .4 125.7 PRODUCER PRICES 7 Finished goods .1 1.7 4.3 3.5 3.8 -2.6 -.3 .0 -.4 .4 -.2 105.9 8 Consumer foods 3.2 1.0 -2.5 9.6 -1.8 -5.7 -.3 .2 -1.4 1.7 -1.1 109.4 9 Consumer energy -22.2 -1.8 40.6 2.0 16.5 -12.5 -.9 -.8 -1.6 -4.5 -.8 58.4 10 Other consumer goods 2.7 3.3 2.9 1.8 4.6 1.4 .0 .0 .3 .6 .3 116.7 11 Capital equipment 2.1 1.5 1.1 1.1 4.0 -.7 -.4 .1 .2 .2 .2 112.9 12 Intermediate materials3 -1.6 4.5 6.7 5.3 5.6 4.8 .5 .5 .2 .3 .0 104.2 13 Excluding energy 1.0 5.7 4.2 4.2 5.3 7.6 .7 .5 .5 .9 .2 111.9 Crude materials 14 Foods 1.2 7.3 -2.5 25.2 -4.8 -5.2 .6 -2.8 .8 .9 2.3 99.6 15 Energy -11.9 -3.3 50.0 11.3 5.9 -15.7 -1.7 -1.1 -1.5 -3.8 -.3 70.5 16 Other 2.6 23.0 8.7 27.2 39.4 16.9 3.1 .4 .5 1.3 .8 130.6 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers and reflect a animal feeds. rental equivalence measure of homeownership after 1982. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A51 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1986 1987 AAccccoouunntt 11998855 11998866 11998877'' Q4 Q1 Q2 Q3 Q4' GROSS NATIONAL PRODUCT 1 4,010.3 4,235.0 4,488.5 4,288.1 4,377.7 4,445.1 4,524.0 4,607.4 By source 2 Personal consumption expenditures 2,629.4 2,799.8 2,967.8 2,858.6 2,893.8 2,943.7 3,011.3 33,,002222..66 3 Durable goods 368.7 402.4 413.7 419.8 396.1 409.0 436.8 413.0 4 Nondurable goods 913.1 939.4 982.9 946.3 969.9 982.1 986.4 993.1 5 Services 1,347.5 1,458.0 1,571.2 1,492.4 1,527.7 1,552.6 1,588.1 1,616.5 fi Gross private domestic investment 641.6 671.0 717.5 660.2 699.9 702.6 707.4 760.2 7 Fixed investment 631.6 655.2 671.5 666.6 648.2 662.3 684.5 690.8 8 Nonresidential 442.6 436.9 443.4 439.7 422.8 434.6 456.6 459.6 9 Structures 152.5 137.4 134.2 132.9 128.7 129.7 137.1 141.1 10 Producers' durable equipment 290.1 299.5 309.2 306.7 294.1 304.9 319.5 318.5 11 Residential structures 189.0 218.3 228.1 226.9 225.4 227.7 227.9 231.2 12 Change in business inventories 10.0 15.7 46.1 -6.4 51.6 40.3 22.9 69.4 13 13.6 16.8 36.2 5.1 48.7 27.3 11.1 57.5 14 Net exports of goods and services -79.2 -105.5 -119.6 -116.9 -112.2 -118.4 -123.7 -124.3 15 369.9 376.2 427.8 383.3 397.3 416.5 439.2 458.1 16 Imports 449.2 481.7 547.4 500.2 509.5 534.8 562.9 582.4 17 Government purchases of goods and services 818.6 869.7 922.8 886.3 896.2 917.1 929.0 948.8 18 353.9 366.2 379.4 368.6 366.9 379.6 382.1 388.9 19 State and local 464.7 503.5 543.4 517.7 529.3 537.6 546.9 559.9 By major type of product 70 4,000.3 4,219.3 4,442.5 4,294.6 44,,332266..00 44,,440044..88 44,,550011..11 44,,553377..99 71 1,637.9 1,693.8 1,782.2 1,698.9 1,738.7 1,763.5 1,798.3 1,828.4 77 Durable 704.3 726.8 773.3 737.3 747.0 756.7 785.7 803.8 73 933.6 967.0 1,008.9 961.6 991.7 1,006.8 1,012.6 1,024.6 74 1,969.2 2,116.2 2,271.2 2,160.0 2,212.0 2,252.2 2,289.3 2,331.5 25 403.1 425.0 435.0 429.3 426.9 429.4 436.4 447.5 26 Change in business inventories 10.0 15.7 46.1 -6.4 51.6 40.3 22.9 69.4 77 7.3 4.8 25.3 -4.5 35.2 22.1 -1.9 46.0 28 Nondurable goods 2.7 10.9 20.7 -1.9 16.5 18.2 24.8 23.4 7.9 MEMO Total GNP in 1982 dollars 3,607.5 3,713.3 3,821.0 3,731.5 3,772.2 3,795.3 3,835.9 33,,888800..88 NATIONAL INCOME 30 3,229.9 3,422.0 3,635.3 3,471.0 3,548.3 3,593.3 3,659.0 3,740.6 31 Compensation of employees 2,370.8 2,504.9 2,647.6 2,552.0 2,589.9 2,623.4 2,663.5 2,713.5 37 Wages and salaries 1,974.7 2,089.1 2,212.7 2,128.5 2,163.3 2,191.4 2,226.5 2,269.9 33 Government and government enterprises 372.3 394.8 421.4 403.8 412.2 418.1 424.5 430.9 34 Other 1,602.6 1,694.3 1,791.3 1,724.7 1,751.1 1,773.3 1,801.9 1,839.0 35 Supplement to wages and salaries 396.1 415.8 434.8 423.5 426.6 432.0 437.0 443.6 36 Employer contributions for social insurance 203.8 214.7 224.6 219.1 220.0 222.5 225.9 230.1 37 Other labor income 192.3 201.1 210.2 204.4 206.7 209.5 211.1 213.5 38 257.3 289.8 327.4 297.8 320.9 323.1 322.7 342.7 39 Business and professional1 227.6 252.6 279.0 261.2 269.7 275.8 282.1 288.4 40 Farm1 29.7 37.2 48.4 36.6 51.3 47.3 40.6 54.3 41 Rental income of persons2 9.0 16.7 19.3 18.4 20.0 18.9 17.3 20.9 47 Corporate profits' 277.6 284.4 304.0 281.1 294.0 296.8 314.9 310.2 43 Profits before tax3 224.8 231.9 273.3 247.9 257.0 268.7 284.9 282.8 44 Inventory valuation adjustment -.7 6.5 -17.5 -8.9 -11.3 -20.0 -17.6 -21.3 45 Capital consumption adjustment 53.5 46.0 48.2 42.1 48.2 48.0 47.7 48.7 46 315.3 326.1 337.1 321.7 323.6 331.1 340.6 353.3 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • May 1988 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1986 1987 AAccccoouunntt 11998855 11998866 11998877rr Q4 Q1 Q2 Q3 Q4r PERSONAL INCOME AND SAVING 1 Total personal income 3,327.0 3,534.3 3,746.5 3,593.6 3,662.0 3,708.6 3,761.0 3,854.4 2 Wage and salary disbursements 1,974.9 2,089.1 2,212.7 2,128.5 2,163.3 2,191.4 2,226.1 2,270.2 3 Commodity-producing industries 609.2 623.3 641.1 628.4 632.9 635.0 641.8 654.7 4 Manufacturing 460.9 470.5 484.0 474.5 477.2 479.0 485.1 494.7 5 Distributive industries 473.0 497.1 522.9 504.7 511.5 518.9 526.3 535.0 520.4 573.9 627.3 591.6 606.7 619.3 633.9 649.3 7 Government and government enterprises 372.3 394.8 421.4 403.8 412.2 418.1 424.2 431.2 8 Other labor income 192.3 201.1 210.2 204.4 206.7 209.5 211.1 213.5 9 Proprietors' income 257.3 289.8 327.4 297.8 320.9 323.1 322.7 342.7 10 Business and professional1 227.6 252.6 279.0 261.2 269.7 275.8 282.1 288.4 11 Farm1 29.7 37.2 48.4 36.6 51.3 47.3 40.6 54.3 12 Rental income of persons2 9.0 16.7 19.3 18.4 20.0 18.9 17.3 20.9 13 Dividends 76.3 81.2 87.5 82.9 84.5 86.3 88.7 90.5 14 Persona] interest income 476.5 497.6 516.2 496.8 499.8 506.3 520.0 538.8 15 Transfer payments 489.7 518.3 543.1 526.6 533.7 541.5 545.8 551.4 16 Old-age survivors, disability, and health insurance benefits ... 253.4 269.2 282.8 273.5 278.0 282.3 284.4 286.5 17 LESS: Personal contributions for social insurance 148.9 159.6 169.9 161.8 166.7 168.4 170.7 173.6 18 EQUALS: Personal income 3,327.0 3,534.3 3,746.5 3,593.6 3,662.0 3,708.6 3,761.0 3,854.4 19 LESS: Personal tax and nontax payments 485.9 512.2 564.8 532.0 536.1 578.0 565.7 579.4 20 EQUALS: Disposable personal income 2,841.1 3,022.1 3,181.7 3,061.6 3,125.9 3,130.6 3,195.3 3,275.0 21 LESS: Personal outlays 2,714.1 2,891.5 3,062.7 2,952.6 2,987.5 3,037.4 3,106.5 3,119.3 22 EQUALS: Personal saving 127.1 130.6 119.0 109.0 138.4 93.2 88.8 155.7 MEMO Per capita (1982 dollars) 23 Gross national product 15,073.7 15,369.6 15,672.6 15,387.6 15,523.4 15,586.4 1155,,771144..44 1155,,885599..44 24 Personal consumption expenditures 9,830.2 10,142.8 10,242.8 10,228.8 10,188.9 10,215.6 10,326.5 10,235.4 25 Disposable personal income 10,622.0 10,947.0 10,980.0 10,956.0 11,008.0 10,865.0 10,958.0 11,090.0 26 Saving rate (percent) 4.5 4.3 3.7 3.6 4.4 3.0 2.8 4.8 GROSS SAVING 531.3 532.0 564.5 515.3 554.3 551.3 559.3 593.1 28 Gross private saving 664.2 679.8 672.3 653.4 683.8 639.9 648.7 716.8 29 Personal saving 127.1 130.6 119.0 109.0 138.4 93.2 8888..88 155.7 30 Undistributed corporate profits 99.6 92.6 74.2 78.5 75.6 70.1 7766..88 74.3 31 Corporate inventory valuation adjustment -.7 6.5 -17.5 -8.9 -11.3 -20.0 -17.6 -21.3 Capital consumption allowances 269.1 228822..88 229966..22 228899..33 291.8 229944..55 229977..88 330000..99 168.5 173.8 182.8 176.6 178.0 182.1 185.3 186.0 34 Government surplus, or deficit (-), national income and product accounts -132.9 -147.8 -107.8 -138.1 -129.5 -88.6 --8899..33 --112233..88 35 Federal -196.0 -204.7 -151.7 -188.7 -170.5 -139.2 -135.8 -161.4 36 State and local 63.1 56.8 43.9 50.6 41.0 50.6 46.5 37.6 525.7 527.1 560.6 503.7 552.1 548.1 548.4 593.8 641.6 671.0 717.5 660.2 699.9 702.6 707.4 760.2 -115.9 -143.9 -156.9 -156.5 -147.7 -154.5 -159.0 -166.4 -5.6 -4.9 -3.9 -11.6 -2.2 -3.1 -10.9 .8 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1986 Item credits or debits 1985 1986 1987 Q4 QLR Q2' Q3 Q4" 1 Balance on current account -116,394 -141,352 -160,682 -37,977 -36,909 -41,338 -43,442 -38,993 2 Not seasonally adjusted .... -36,398 -33,435 -42,028 -48,317 -36,902 3 Merchandise trade balance . -I22,148 - I44,339 -I59,'20I -38,595 -38,920 -39,742 -40,365 -40,174 4 Merchandise exports 215,935 224,361 250,814 57,021 56,769 59,875 65,110 69,060 5 Merchandise imports -338,083 -368,700 -410,015 -95,616 -95,689 -99,617 -105,475 -109,234 6 Military transactions, net -3,338 -3,662 -2,078 -495 -37 29 -735 -1,335 7 Investment income, net 25,398 20,844 14,483 4,492 5,513 1,589 294 7,088 Other service transactions, net -1,005 1,463 -418 759 -390 -150 289 -168 R U e .S m . it g t o a v n e c r e n s, m p e e n n t s g i r o a n n s t , s a ( n e d x c o l t u h d e i r n g t ra m n i s li f t e a r r s y ) . -1-41,,202792 -1 -3 1 , , 8 7 8 7 5 2 - -9 3 , , 9 5 4 2 2 6 - - 2 1 , , 9 1 8 5 7 1 -2 - , 9 0 8 8 9 6 -2 - , 8 2 3 2 7 7 -2 - , 8 0 3 9 3 2 -3 - , 8 5 6 3 8 6 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -2,831 -1,920 1,219 15 225 -177 355 816 12 Change in U.S. official reserve assets (increase, -). -3,8580 3120 9,1500 1320 1,9560 3,4190 32 0 3,743 0 13 Gold 14 Special drawing rights (SDRs) -897 -246 -509 -31 76 -171 -210 -205 15 Reserve position in International Monetary Fund. 908 1,500 2,070 283 606 335 407 722 16 Foreign currencies -3,869 -942 7,590 -120 1,274 3,255 -165 3,226 17 Change in U.S. private assets abroad (increase, -) -24,711 -94,374 -74,166 -32,351 13,170 -18,320 -27,559 -41,457 18 Bank-reported claims -1,323 -59,039 -33,431 -31,800 25,686 -15,685 -20,107 -23,325 19 Nonbank-reported claims 1,361 -3,986 170 -1,163 2,603 -327 20 U.S. purchase of foreign securities, net -7,481 -3,302 ' -3,654 3,113 -1,345 384 -923 — i ,770 21 U.S. direct investments abroad, net -17,268 -28,047 -38,194 -3,834 -10,008 -5,622 -6,202 -16,362 22 Change in foreign official assets in the United States (increase, +) -1,140 34,698 44,289 1,003 13,953 10,070 363 19,904 23 U.S. Treasury securities -838 34,515 43,301 4,572 12,145 11,084 860 19,212 24 Other U.S. government obligations -301 -1,214 1,570 -117 -62 256 714 662 25 Other U.S. government liabilities4 823 1,723 -3,227 -607 -1,381 -1,504 -377 35 26 Other U.S. liabilities reported by U.S. banks 645 554 3,705 -2,435 3,611 547 -211 -242 27 Other foreign official assets -1,469 -1,060 -410 -360 -313 -624 237 28 Change in foreign private assets in the United States (increase, +)3 131,012 178,689 158,2% 57,428 12,802 39,494 67,026 38,974 29 U.S. bank-reported liabilities 41,045 77,350 77,857 34,604 -13,614 14,823 44,358 32,290 30 U.S. nonbank-reported liabilities -450 -2,791 1,035 1,761 1,526 525 31 Foreign private purchases of U.S. Treasury securities, net 20,433 8,275 -6,088 -3,074 -1,570 -2,211 -2,855 ''' 548 32 Foreign purchases of other U.S. securities, net— 50,962 70,802 42,134 12,269 18,499 15,870 12,693 -4,928 33 Foreign direct investments in the United States, net3 19,022 25,053 40,581 12,594 7,726 9,486 12,305 11,064 0 0 0 0 0 0 0 0 34 Allocation of SDRs 35 Discrepancy 17,920 23,947 21,892 11,750 -5,197 6,852 3,226 17,013 36 Owing to seasonal adjustments 3,904 2,959 -1,700 -4,833 3,577 37 Statistical discrepancy in recorded data before seasonal adjustment 17,920 23,947 21,892 7,846 -8,156 8,552 8,059 13,437 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -3,858 312 9,150 132 1,956 3,419 32 3,743 39 Foreign official assets in the United States (increase, +) excluding line 25 — 1,963 32,975 47,516 1,610 15,334 11,574 739 19,869 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) -6,709 -8,508 -10,006 -5,195 -2,901 -2,651 -1,721 -2,733 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 46 101 94 53 26 13 47 1. Seasonal factors are not calculated for lines 6, 10, 12-16, 18-20, 22-34, and 4. Primarily associated with military sales contracts and other transactions 38-41. arranged with or through foreign official agencies. 2. Data are on an international accounts (IA) basis. Differs from the Census 5. Consists of investments in U.S. corporate stocks and in debt securities of basis data, shown in table 3.11, for reasons of coverage and timing. Military private corporations and state and local governments. exports are excluded from merchandise data and are included in line 6. NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business 3. Includes reinvested earnings. (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • May 1988 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data are not seasonally adjusted. 1987 1988 IItteemm 11998855 11998866 11998877 July Aug. Sept. Oct. Nov. Dec. Jan. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments, f.a.s. value 218,815 226,808 252,866 21,008 20,222 20,986 21,752 23,799 24,801 22,330 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses, c.i.f. value 352,463 382,964 424,082 37,483 35,905 35,062 39,383 37,016 37,003 34,767 3 Trade balance -133,648 -156,156 -171,217 -16,475 -15,683 -14,076 -17,631 -13,218 -12,202 -12,437 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 1988 Type 1986 Aug. Sept. Oct. Jan. Feb. 1 Total 34,934 43,186 48,511 45,944 45,070 46,200 46,779 45,798 42,955 43,064 2 Gold stock, including Exchange Stabilization Fund 11,096 11,090 11,064 11,068 11,075 11,085 11,082 11,078 11,068 11,063 3 Special drawing rights2,3. 5,641 7,293 8,395 9,174 9,078 9,373 9,937 10,283 9,765 9,761 4 Reserve position in International Monetary Fund 11,541 11,947 11,730 11,116 10,918 11,157 11,369 11,349 10,804 10,445 5 Foreign currencies4 6,656 12,856 17,322 14,586 13,999 14,585 14,391 13,088 11,318 11,795 1. Gold held under earmark at Federal Reserve Banks for foreign and interna- in the IMF also are valued on this basis beginning July 1974. tional accounts is not included in the gold stock of the United States; see table 3. Includes allocations by the International Monetary Fund of SDRs as follows: 3.13. Gold stock is valued at $42.22 per fine troy ounce. $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1, 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 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 1987 1988 AAsssseettss 11998844 11998855 11998866 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Deposits 267 480 287 294 456 236 351 244 355 343 Assets held in custody i 2 U.S. Treasury securities 118,000 121,004 155,835 179,484 179,097 182,072 187,767 195,126 206,675 215,308 3 Earmarked gold3 14,242 14,245 14,048 14,022 14,015 13,998 13,965 13,919 13,882 13,824 1. Excludes deposits and U.S. Treasury securities held for international and 3. Earmarked gold and the gold stock are valued at $42.22 per fine troy ounce, regional organizations. Earmarked gold is gold held for foreign and international accounts and is not 2. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S. included in the gold stock of the United States. Treasury securities payable in dollars and in foreign currencies. 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 1988 AAsssseett aaccccoouunntt 11998844 11998855 11998866 July Aug. Sept. Oct. Nov.' Dec. Jan." All foreign countries 1 Total, all currencies 453,656 458,012 456,628 470,391 473,540 489,929r 521,229' 525,344 518,540 502,980 ? Claims on United States 113,393 119,706 114,563 123,687 124,737 137,452' 138,221' 140,439 138,132 132,026 Parent bank 78,109 87,201 83,492 89,793 89,958 101,869' 99,45C 102,814 105,943 95,482 4 Other banks in United States 13,664 13,057 13,685 14,303 14,739 15,949 17,826 16,701 16,416 14,910 5 Nonbanks 21,620 19,448 17,386 19,591 20,040 19,634 20,945 20,924 15,773 21,634 6 Claims on foreigners 320,162 315,676 312,955 314,078 314,727 319,368' 347,177' 346,351 341,926 332,799 7 Other branches of parent bank 95,184 91,399 96,281 %,582 97,988 103,277 116,553' 116,501 122,057 114,595 8 Banks 100,397 102,960 105,237 110,124 108,068 108,232' 118,094' 115,415 108,642 107,835 9 Public borrowers 23,343 23,478 23,706 21,412 21,537 21,464'' 21,942' 22,229 21,654 21,192 10 Nonbank foreigners 101,238 97,839 87,731 85,960 87,134 86,395 90,588' 92,206 89,573 89,177 11 Other assets 20,101 22,630 29,110 32,626 34,076 33,109 35,831' 38,554 38,482 38,155 12 Total payable in U.S. dollars 350,636 336,520 317,487 322,300 322,286 340,890r 354,491' 353,022 350,547 335,554 n Claims on United States 111,426 116,638 110,620 118,563 118,964 131,918' 131,659' 133,731 132,121 125,470 14 Parent bank 77,229 85,971 82,082 87,779 87,844 100,010" 97,257' 100,123 103,349 92,393 15 Other banks in United States 13,500 12,454 12,830 12,794 12,830 13,942 15,627 14,632 14,657 13,439 16 Nonbanks 20,697 18,213 15,708 17,990 18,290 17,966 18,775 18,976 14,115 19,638 17 Claims on foreigners 228,600 210,129 195,063 190,590 189,958 195,078' 209,097' 203,914 202,282 195,407 18 Other branches of parent bank 78,746 72,727 72,197 72,515 73,327 77,699 86,693' 85,548 88,186 83,793 19 Banks 76,940 71,868 66,421 65,673 64,106 64,508r 68,931' 65,771 63,706 61,359 7,0 Public borrowers 17,626 17,260 16,708 15,062 15,115 14,943r 14,988' 14,952 14,730 14,693 21 Nonbank foreigners 55,288 48,274 39,737 37,340 37,410 37,928 38,485' 37,643 35,660 35,562 22 Other assets 10,610 9,753 11,804 13,147 13,364 13,894 13,735' 15,377 16,144 14,677 United Kingdom 23 Total, all currencies 144,385 148,599 140,917 149,760 148,039 149,633 163,472 167,726 159,186 160,244 74 Claims on United States 27,675 33,157 24,599 32,694 31,377 32,581 33,904 35,406 32,518 32,464 25 Parent bank 21,862 26,970 19,085 27,288 25,627 27,128 27,710 29,553 27,350 26,923 26 Other banks in United States 1,429 1,106 1,612 1,537 1,585 1,349 1,870 1,694 1,259 1,558 77 Nonbanks 4,384 5,081 3,902 3,869 4,165 4,104 4,324 4,159 3,909 3,983 28 Claims on foreigners 111,828 110,217 109,508 108,732 108,293 108,562 120,079 121,473 115,700 118,407 29 Other branches of parent bank 37,953 31,576 33,422 31,241 30,794 33,334 37,402 39,138 39,903 39,702 30 Banks 37,443 39,250 39,468 41,219 40,082 38,390 42,929 41,649 36,735 39,697 31 Public borrowers 5,334 5,644 4,990 4,617 4,761 4,725 4,881 5,272 4,752 4,639 32 Nonbank foreigners 31,098 33,747 31,628 31,655 32,656 32,113 34,867 35,414 34,310 34,369 33 Other assets 4,882 5,225 6,810 8,334 8,369 8,490 9,489 10,847 10,%8 9,373 34 Total payable in U.S. dollars 112,809 108,626 95,028 99,170 %,510 99,656 105,515 107,289 101,065 102,075 35 Claims on United States 26,868 32,092 23,193 31,076 29,519 30,791 31,820 33,409 30,439 30,083 36 Parent bank 21,495 26,568 18,526 26,661 24,853 26,423 26,850 28,685 26,304 25,781 37 Other banks in United States 1,363 1,005 1,475 1,294 1,309 1,105 1,504 1,408 1,044 1,132 38 Nonbanks 4,010 4,519 3,192 3,121 3,357 3,263 3,466 3,316 3,091 3,170 39 Claims on foreigners 82,945 73,475 68,138 64,024 63,265 64,561 69,276 68,864 64,560 67,458 40 Other branches of parent bank 33,607 26,011 26,361 23,827 23,155 25,600 27,810 29,166 28,635 29,336 41 Banks 26,805 26,139 23,251 22,975 22,646 21,522 22,941 21,833 19,188 20,814 47 Public borrowers 4,030 3,999 3,677 3,400 3,473 3,377 3,426 3,472 3,313 3,313 43 Nonbank foreigners 18,503 17,326 14,849 13,822 13,991 14,062 15,099 14,393 13,424 13,995 44 Other assets 2,996 3,059 3,697 4,070 3,726 4,304 4,419 5,016 6,066 4,534 Bahamas and Caymans 45 Total, all currencies 146,811 142,055 142,592 140,512 139,986 152,146' 156,951' 155,100 160,321 148,718 46 Claims on United States 77,2% 74,864 78,048 72,772 72,558 81,913' 83,383' 82,366 85,318 79,893 47 Parent bank 49,449 50,553 54,575 46,256 45,697 53,902' 53,289' 52,759 60,048 51,249 48 Other banks in United States 11,544 11,204 11,156 11,824 12,111 13,538 14,721 13,980 14,277 12,472 49 Nonbanks 16,303 13,107 12,317 14,692 14,750 14,473 15,373 15,627 10,993 16,172 50 Claims on foreigners 65,598 63,882 60,005 63,027 62,336 65,622' 68,713' 67,658 70,162 63,469 51 Other branches of parent bank 17,661 19,042 17,2% 17,493 18,228 18,698 18,936 18,905 21,277 19,777 57 Banks 30,246 28,192 27,476 30,372 29,160 31,692' 35,014' 33,479 33,751 29,365 53 Public borrowers 6,089 6,458 7,051 7,046 6,873 6,988' 7,018' 7,1% 7,428 7,257 54 Nonbank foreigners 11,602 10,190 8,182 8,116 8,075 8,244 7,745 8,078 7,706 7,070 55 Other assets 3,917 3,309 4,539 4,713 5,092 4,611 4,855 5,076 4,841 5,356 56 Total payable in U.S. dollars 141,562 136,794 136,813 131,636 130,985 142,622' 145,841' 144,525 151,434 141,135 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 • May 1988 3.14 Continued 1987 1988 LLiiaabbiilliittyy aaccccoouunntt 11998844 11998855 11998866 July Aug. Sept. Oct. Nov/ Dec. Jan." All foreign countries 57 Total, all currencies 453,656 458,012 456,628 470,391 473,540 489,929' 521,229' 525,344 518,540 502,980 58 Negotiable CDs 37,725 34,607 31,629 32,993 33,648 35,724 36,796 34,690 30,929 29,272 59 To United States 147,583 156,281 152,465 144,267 141,913 153,863' 156,649' 156,079 161,273 150,640 60 Parent bank 78,739 84,657 83,394 72,376 74,361 80,573' 79,592 83,308 86,326 78,502 61 Other banks in United States 18,409 16,894 15,646 15,005 15,289 17,246' 18,868' 18,868 20,558 15,886 62 Nonbanks 50,435 54,730 53,425 56,886 52,263 56,044' 58,189' 53,903 54,389 56,252 63 To foreigners 247,907 245,939 253,775 274,407 278,883 280,791' 306,79c 312,229 304,398 301,456 64 Other branches of parent bank 93,909 89,529 95,146 95,376 97,908 103,961' 114,785' 116,972 124,005 116,241 65 Banks 78,203 76,814 77,809 87,734 87,449 85,552' 98,027' 97,342 87,603 89,310 66 Official institutions 20,281 19,520 17,835 21,528 21,016 20,144' 20,281' 21,819 19,502 21,089 67 Nonbank foreigners 55,514 60,076 62,985 69,769 72,510 71,134' 73,697' 76,096 73,288 74,816 68 Other liabilities 20,441 21,185 18,759 18,724 19,096 19,551' 20,994 22,346 21,940 21,612 69 Total payable in U.S. dollars 367,145 353,712 336,406 334,218 333,377' 352,115' 365,613' 361,432 361,131 344,575 70 Negotiable CDs 35,227 31,063 28,466 28,781 29,634 30,933 32,117 30,075 26,768 24,785 71 To United States 143,571 150,905 144,483 135,564 132,907 143,812' 145,377' 143,099 148,349 139,182 72 Parent bank 76,254 81,631 79,305 67,707 69,581 75,296' 74,111 77,227 80,527 73,009 73 Other banks in United States 17,935 16,264 14,609 13,895 14,086 15,829' 17,313' 17,194 19,154 14,518 74 Nonbanks 49,382 53,010 50,569 53,962 49,240 52,687' 53,953' 48,678 48,668 51,655 75 To foreigners 178,260 163,583 156,806 162,766 163,427' 169,482' 179,329' 179,355 177,503 172,068 76 Other branches of parent bank 77,770 71,078 71,181 70,911 72,620 78,076' 84,376' 84,572 89,873 84,112 77 Banks 45,123 37,365 33,850 35,250 34,808' 35,242' 40,138' 38,832 35,474 33,305 78 Official institutions 15,773 14,359 12,371 15,806 15,527 14,237' 13,369' 14,161 12,389 12,716 79 Nonbank foreigners 39,594 40,781 39,404 40,799 40,472 41,927' 41,446' 41,790 39,767 41,935 80 Other liabilities 10,087 8,161 6,651 7,107 7,409 7,888' 8,790 8,903 8,511 8,540 United Kingdom 81 Total, all currencies 144,385 148,599 140,917 149,760 148,039 149,633 163,472 167,726 159,186 160,244 82 Negotiable CDs 34,413 31,260 27,781 28,590 29,363 31,451 32,523 30,475 26,988 25,184 83 To United States 25,250 29,422 24,657 24,347 22,202 22,462 22,868 24,961 23,470 25,209 84 Parent bank 14,651 19,330 14,469 14,010 13,234 13,357 12,251 14,018 13,223 14,177 85 Other banks in United States 3,125 2,974 2,649 2,021 1,875 2,073 2,382 2,103 1,740 1,596 86 Nonbanks 7,474 7,118 7,539 8,316 7,093 7,032 8,235 8,840 8,507 9,436 87 To foreigners 77,424 78,525 79,498 87,942 87,745 86,813 98,215 101,686 98,689 100,001 88 Other branches of parent bank 21,631 23,389 25,036 23,572 23,379 26,094 29,718 30,727 33,078 33,344 89 Banks 30,436 28,581 30,877 35,647 34,414 31,681 38,502 37,690 34,290 34,820 90 Official institutions 10,154 9,676 6,836 9,241 9,670 10,387 10,248 12,000 11,015 11,571 91 Nonbank foreigners 15,203 16,879 16,749 19,482 20,282 18,651 19,747 21,269 20,306 20,266 92 Other liabilities 7,298 9,392 8,981 8,881 8,729 8,907 9,866 10,604 10,039 9,850 93 Total payable in U.S. dollars 117,497 112,697 99,707 101,593 99,163' 102,202 108,440 108,481 102,550 105,138 94 Negotiable CDs 33,070 29,337 26,169 26,397 27,264 28,776 29,991 27,999 24,926 22,875 95 To United States 24,105 27,756 22,075 21,689 19,578 19,528 18,819 19,800 17,752 20,799 96 Parent bank 14,339 18,956 14,021 13,399 12,608 12,609 11,283 12,792 12,026 13,307 97 Other banks in United States 2,980 2,826 2,325 1,776 1,694 1,883 2,080 1,789 1,512 1,398 98 Nonbanks 6,786 5,974 5,729 6,514 5,276 5,036 5,456 5,219 4,214 6,094 99 To foreigners 56,923 51,980 48,138 50,294 49,183' 50,386 55,209 56,443 55,919 57,620 100 Other branches of parent bank 18,294 18,493 17,951 16,171 15,565 17,994 20,018 20,826 22,334 22,870 101 Banks 18,356 14,344 15,203 16,330 15,471' 14,359 17,786 17,024 15,580 16,119 102 Official institutions 8,871 7,661 4,934 7,203 7,872 8,060 7,115 7,970 7,530 7,993 103 Nonbank foreigners 11,402 11,482 10,050 10,590 10,275 9,973 10,290 10,623 10,475 10,638 104 Other liabilities 3,399 3,624 3,325 3,213 3,138 3,512 4,421 4,239 3,953 3,844 Bahamas and Caymans 105 Total, all currencies 146,811 142,055 142,592 140,512 139,986 152,146' 156,951' 155,100 160,321 148,718 106 Negotiable CDs 615 610 847 1,119 975 886 890 861 885 851 107 To United States 102,955 104,556 106,081 100,073 98,085 108,205' 111,976' 108,039 113,950 105,149 108 Parent bank 47,162 45,554 49,481 40,675 41,730 46,759' 48,793 49,568 52,075 46,729 109 Other banks in United States 13,938 12,778 11,715 11,989 12,276 13,596' 14,872' 15,204 17,224 13,017 110 Nonbanks 41,855 46,224 44,885 47,409 44,079 47,850' 48,311' 43,267 44,651 45,403 111 To foreigners 40,320 35,053 34,400 37,988 39,437 41,417' 42,295' 44,398 43,815 40,820 112 Other branches of parent bank 16,782 14,075 12,631 14,803 16,465 16,965' 17,09C 17,812 18,745 18,627 113 Banks 12,405 10,669 8,617 9,395 9,514 10,435' 11,589' 12,611 11,209 9,344 114 Official institutions 2,054 1,776 2,719 3,263 2,935 1,814' 2,158' 2,064 1,504 1,377 115 Nonbank foreigners 9,079 8,533 10,433 10,527 10,523 12,203' 11,458' 11,911 12,357 11,472 116 Other liabilities 2,921 1,836 1,264 1,332 1,489 1,638' 1,790 1,802 1,671 1,898 117 Total payable in U.S. dollars 143,582 138,322 138,774 135,376 134,354 145,402' 149,472' 146,485 152,927 141,750 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 July Aug. Sept. Oct. Nov.' Dec. Jan.'' 1 Total1 178,380 211,782 232,370 237,728 239,534 252,476 254,058 259,624 266,376 By type 2 Liabilities reported by banks in the United States 26,734 27,868 31,513 29,638 31,869 38,273 34,247 31,821 32,094 3 U.S. Treasury bills and certificates3 53,252 75,650 73,435 78,210 75,701 78,819 82,542 88,829 90,635 U.S. Treasury bonds and notes 4 Marketable 77,154 91,368 112,490 115,101 116,462 118,898 120,752 122,545 127,425 5 Nonmarketable4 3,550 1,300 500 300 300 300 300 300 300 6 U.S. securities other than U.S. Treasury securities 17,690 15,596 14,432 14,479 15,202 16,186 16,217 16,129 15,922 By area 7 Western Europe1 74,447 88,623 107,823 106,873 108,248 116,360 117,628 124,608 127,174 8 Canada 1,315 2,004 3,559 4,189 4,529 5,152 4,884 4,961 6,117 9 Latin America and Caribbean 11,148 8,372 7,904 8,712 8,561 9,217 8,924 8,308 7,922 10 Asia 86,448 105,868 105,505 109,529 109,482 114,160 116,405 116,198 119,258 11 1,824 1,503 1,590 1,837 1,618 1,474 1,562 1,402 1,458 12 Other countries6 3,199 5,412 5,989 6,589 7,094 6,109 4,655 4,147 4,446 1. Includes the Bank for International Settlements. bonds and notes payable in foreign currencies. 2. Principally demand deposits, time deposits, bankers acceptances, commer- 5. Debt securities of U.S. government corporations and federally sponsored cial paper, negotiable time certificates of deposit, and borrowings under repur- agencies, and U.S. corporate stocks and bonds. chase agreements. 6. Includes countries in Oceania and Eastern Europe. NOTE. Based on Treasury Department data and on data reported to the 3. Includes nonmarketable certificates of indebtedness (including those payable Treasury Department by banks (including Federal Reserve Banks) and securities in foreign currencies through 1974) and Treasury bills issued to official institutions dealers in the United States. of foreign countries. 4. Excludes notes issued to foreign official nonreserve agencies. Includes 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 Dec. Mar. June Sept. 1 Banks' own liabilities 5,219 8,586 15,368 29,702 37,873 38,470 45,515 2 Banks' own claims 7,231 11,984 16,294 26,180 34,153 34,006 41,159 3 Deposits 2,731 4,998 8,437 14,129 16,102 12,735 15,404 4 Other claims 4,501 6,986 7,857 12,052 18,050 21,271 25,755 5 Claims of banks' domestic customers2 1,059 569 580 2,507 2,012 889 1,067 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 • May 1988 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1987 1988 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998844 11998855 11998866 July Aug. Sept. Oct. Nov.' Dec. Jan." 1 All foreigners 407,306 435,726 540,996 545,630 555,185 584,448 605,009 605,091 619,305 600,661 2 Banks' own liabilities 306,898 341,070 406,485 410,881 415,824 446,520 462,879 457,651 470,121 445,763 3 Demand deposits 19,571 21,107 23,789 20,219 22,117 21,150 23,201 23,736 22,826 21,442 4 Time deposits 110,413 117,278 130,891 134,127 137,861 148,354 152,292 147,253 148,155 138,902 5 Other. 26,268 29,305 42,705 44,721 42,317 48,903 52,797 52,515 51,963 51,814 6 Own foreign offices 150,646 173,381 209,100 211,814 213,530 228,113 234,589 234,147 247,177 233,605 7 Banks' custody liabilities4 100,408 94,656 134,511 134,749 139,361 137,928 142,130 147,440 149,184 154,898 8 U.S. Treasury bills and certificates 7766,,336688 6699,,113333 90,398 8888,,119933 9922,,770055 8899,,774477 9911,,337744 %%,,661122 110011,,779944 110033,,886611 9 Other negotiable and readily transferable instruments6 18,747 17,964 15,417 15,632 15,259 16,042 15,933 16,737 16,712 16,557 10 Other 5,293 7,558 28,696 30,924 31,397 32,139 34,823 34,090 30,678 34,480 11 Nonmonetary international and regional organizations' 4,454 5,821 5,807 5,946 5,332 7,845 3,594 5,608 5,036 5,748 12 Banks' own liabilities 2,014 2,621 3,958 2,367 2,498 44,,667744 1,680 2,994 3,274 3,925 13 Demand deposits 254 85 199 76 44 8800 107 74 249 790 14 Time deposits 1,267 2,067 2,065 599 807 1,235 986 1,094 1,523 1,681 15 Other. 493 469 1,693 1,692 1,647 3,358 586 1,826 1,502 1,453 16 Banks' custody liabilities4 2,440 3,200 1,849 3,579 2,834 3,171 1,914 2,614 1,761 1,823 17 U.S. Treasury bills and certificates 916 1,736 259 2,339 1,635 1,793 285 747 265 613 18 Other negotiable and readily transferable instruments6 1,524 1,464 1,590 1,240 1,193 1,378 1,624 1,811 1,497 1,210 19 Other 0 0 0 0 6 0 6 55 0 0 20 Official institutions" 86,065 79,985 103,569 104,948 107,848 107,570 117,092 116,790 120,650 122,729 21 Banks' own liabilities 19,039 20,835 25,427 28,343 26,342 28,169 34,720 31,054 28,685 29,467 22 Demand deposits 1,823 2,077 2,267 1,711 1,907 1,800 1,905 1,810 1,948 1,605 23 Time deposits 9,374 10,949 10,497 13,567 13,489 14,246 16,574 13,705 12,428 11,617 24 Other. 7,842 7,809 12,663 13,065 10,946 12,123 16,241 15,539 14,309 16,245 25 Banks' custody liabilities4 67,026 59,150 78,142 76,605 81,505 79,401 82,372 85,735 91,965 93,262 26 U.S. Treasury bills and certificates 59,976 53,252 75,650 73,435 78,210 75,701 78,819 8822,,554422 8888,,882299 90,635 27 Other negotiable and readily transferable instruments6 6,966 5,824 2,347 2,950 3,151 3,540 3,328 2,993 2,990 2,442 28 Other 84 75 145 220 144 160 225 200 146 185 29 Banks' 248,893 275,589 351,745 358,378 362,883 388,625 405,027 400,517 413,717 391,387 30 Banks' own liabilities 225,368 252,723 310,166 315,0% 319,883 344,886 358,706 354,308 370,848 345,291 31 Unaffiliated foreign banks 74,722 79,341 101,066 103,283 106,353 116,772 124,117 120,162 123,671 111,686 32 Demand deposits 10,556 10,271 10,303 8,741 9,901 9,801 11,364 11,872 10,917 9,771 33 Time deposits 47,095 49,510 64,232 66,865 69,588 77,743 79,995 76,671 79,934 71,212 34 Other. 17,071 19,561 26,531 27,677 26,864 29,228 32,758 31,619 32,820 30,703 35 Own foreign offices3 150,646 173,381 209,100 211,814 213,530 228,113 234,589 234,147 247,177 233,605 36 Banks' custody liabilities4 23,525 22,866 41,579 43,281 43,000 43,739 46,321 46,209 42,868 46,096 37 U.S. Treasury bills and certificates 11,448 9,832 9,984 9,142 99,,110000 99,,220066 88,,%%11 99,,448800 99,,118855 88,,997799 38 Other negotiable and readily transferable instruments6 7,236 6,040 5,165 5,850 5,320 5,221 5,454 5,586 5,390 5,492 39 Other 4,841 6,994 26,431 28,289 28,581 29,312 31,906 31,143 28,294 31,625 40 Other foreigners 67,894 74,331 79,875 76,359 79,122 80,408 79,296 82,176 79,902 80,796 41 Banks' own liabilities 60,477 64,892 66,934 65,075 67,101 68,791 67,773 69,294 67,313 67,080 42 Demand deposits 6,938 8,673 11,019 9,691 10,264 9,468 9,825 9,981 9,711 9,275 43 Time deposits 52,678 54,752 54,097 53,0% 53,977 55,130 54,736 55,782 54,270 54,392 44 Other. 861 1,467 1,818 2,287 2,860 4,193 3,211 3,531 3,332 3,413 45 Banks' custody liabilities4 7,417 9,439 12,941 11,284 12,022 11,617 11,523 12,882 12,589 13,717 46 U.S. Treasury bills and certificates 4,029 4,314 4,506 3,276 3,761 3,046 33,,330099 33,,884422 33,,551155 3,633 47 Other negotiable and readily transferable instruments6 3,021 4,636 6,315 5,592 5,594 5,904 5,527 6,347 6,836 7,414 48 Other 367 489 2,120 2,415 2,667 2,668 2,686 2,693 2,238 2,670 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,476 9,845 7,4% 6,313 6,458 6,501 6,676 7,361 7,314 7,550 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. Data exclude "holdings of foreign branches, agencies, or wholly owned subsidiaries of head office or parent dollars" of the International Monetary Fund. foreign bank. 8. Foreign central banks, foreign central governments, and the Bank for 4. Financial claims on residents of the United States, other than long-term International Settlements. 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 1988 AArreeaa aanndd ccoouunnttrryy 11998844 11998855 11998866 July Aug. Sept. Oct. Nov. Dec. Jan.p 1 Totol 407,306 435,726 540,9% 545,630 555,185 584,448 605,009 605,091r 619,305 600,661 2 Foreign countries 402,852 429,905 535,189 539,685 549,853 576,603 601,415 599,483' 614,269 594,912 3 Europe 153,145 164,114 180,556 204,865 208,715 214,145 233,370 229,243' 234,983 225,325 4 Austria 615 693 1,181 795 1,066 1,281 1,166 1,262 920 992 5 Belgium-Luxembourg 4,114 5,243 6,729 9,154 9,754 10,460 10,743 10,909 9,295 9,386 6 Denmark 438 513 482 486 576 590 704 628 766 547 7 Finland 418 4% 580 497 545 517 581 461' 377 401 8 France 12,701 15,541 22,862 25,486 27,003 27,899 28,255 27,522' 29,959 28,114 9 Germany 3,358 4,835 5,762 7,162 7,715 6,823 8,557 8,543' 7,061 7,509 10 Greece 699 666 700 667 636 690 738 698' 689 638 11 Italy 10,762 9,667 10,875 10,031 7,667 8,410 10,254 10,032' 12,063 11,255 1? Netherlands 4,731 4,212 5,600 5,447 5,461 6,106 6,773 6,490 5,013 5,278 13 Norway 1,548 948 735 562 593 663 1,179 1,074 1,362 1,191 14 Portugal 597 652 699 586 700 684 724 858 801 725 15 Spain 2,082 2,114 2,407 2,103 2,287 2,526 2,683 2,614 2,619 2,359 16 Sweden 1,676 1,422 884 1,235 1,387 1,639 1,567 2,882' 1,379 1,393 17 Switzerland 31,740 29,020 30,534 24,607 28,260 27,325 29,153 30,167' 33,806 31,985 18 Turkey 584 429 454 365 514 398 550 433 703 689 19 United Kingdom 68,671 76,728 85,334 107,641 107,369 109,269 119,478 115,362' 117,038 111,993 20 Yugoslavia 602 673 630 459 491 519 508 485 711 541 21 Other Western Europe1 7,192 9,635 3,326 6,410 6,016 7,808 9,060 8,184' 9,797 9,547 7? U.S.S.R 79 105 80 550 45 51 87 36 31 37 23 Other Eastern Europe2 537 523 702 622 629 485 609 602' 594 744 24 Canada 16,059 17,427 26,345 21,232 22,556 26,066 25,733 28,681' 30,083 28,627 75 Latin America and Caribbean 153,381 167,856 210,318 200,119 201,441 214,364 217,763 214,281' 220,120 211,922 76 Argentina 4,394 6,032 4,757 5,122 5,074 4,674 5,075 5,277 4,994 5,070 77 Bahamas 56,897 57,657 73,619 62,518 62,470 71,502 72,768 70,929' 73,966 69,228 78 Bermuda 2,370 2,765 2,922 2,317 2,267 2,234 2,437 2,238' 2,749 2,194 79 Brazil 5,275 5,373 4,325 3,783 3,955 4,377 3,943 4,129' 4,031 4,391 30 British West Indies 36,773 42,674 72,263 73,678 73,722 78,116 79,702 78,191' 80,392 77,397 31 Chile 2,001 2,049 2,054 2,035 2,119 2,248 2,191 2,218 3,041 2,337 37 Colombia 2,514 3,104 4,285 4,424 4,426 4,195 4,190 4,305' 4,205 3,947 33 Cuba 10 11 7 8 7 7 12 9 12 8 34 Ecuador 1,092 1,239 1,236 1,088 1,101 1,097 1,115 1,087 1,082 1,115 35 Guatemala 896 1,071 1,123 1,109 1,087 1,072 1,053 1,032 1,080 1,098 36 Jamaica 183 122 136 146 171 156 140 150 160 150 37 Mexico 12,303 14,060 13,745 14,159 14,549 14,290 14,338 14,508 14,534 15,021 38 Netherlands Antilles 4,220 4,875 4,970 5,291 5,338 5,218 5,305 5,234 4,972 4,987 39 Panama 6,951 7,514 6,886 6,994 7,130 7,188 7,467 7,513 7,400 7,358 40 Peru 1,266 1,167 1,163 1,147 1,203 1,206 1,205 1,205 1,271 1,235 41 Uruguay 1,394 1,552 1,537 1,536 1,485 1,492 1,493 1,526 1,579 1,670 4? Venezuela 10,545 11,922 10,171 9,679 10,146 9,824 9,882 9,075' 9,035 9,174 43 Other 4,297 4,668 5,119 5,085 5,189 5,469 5,447 5,657 5,616 5,539 44 71,187 72,280 108,831 104,394 106,999 111,401 115,626 118,802' 121,029 121,137 China 45 Mainland 1,153 1,607 1,476 1,744 2,011 1,775 1,699 1,435 11,,116622 1,336 46 Taiwan 4,990 7,786 18,902 16,436 15,377 15,197 18,302 21,564 21,493 22,875 47 Hong Kong 6,581 8,067 9,393 8,595 9,015 8,637 9,579 10,541' 10,1% 9,284 48 India 507 712 674 572 902 771 606 701 588 866 49 Indonesia 1,033 1,466 1,547 1,404 1,541 1,435 1,336 1,677 1,399 1,474 50 Israel 1,268 1,601 1,892 928 1,036 1,105 2,170 1,221' 2,677 1,317 51 Japan 21,640 23,077 47,410 48,145 49,872 52,945 53,212 52,709' 52,801 55,069 57 Korea 1,730 1,665 1,141 1,410 1,388 1,714 1,577 1,606' 1,600 1,739 53 1,383 1,140 1,866 1,148 1,208 1,152 1,331 1,259 1,085 1,035 54 1,257 1,358 1,119 1,0% 1,190 1,118 1,275 1,483 1,345 1,445 55 Middle-East oil-exporting countries 16,804 14,523 12,352 11,676 12,676 14,043 13,660 13,373 13,993 12,503 56 Other 12,841 9,276 11,058 11,241 10,782 11,507 10,878 11,232' 12,689 12,195 57 Africa 3,396 4,883 4,021 4,023 4,194 4,011 3,919 4,065' 3,942 3,757 58 Egypt 647 1,363 706 1,113 1,158 1,118 1,104 1,169 1,149 1,142 59 Morocco 118 163 92 75 74 81 70 75 194 71 60 South Africa 328 388 270 229 227 199 280 246 202 214 61 Zaire 153 163 74 64 69 81 71 82 67 89 62 Oil-exporting countries4 1,189 1,494 1,519 1,275 1,331 1,178 1,081 1,108 1,014 981 63 Other 961 1,312 1,360 1,267 1,335 1,354 1,313 1,386 1,316 1,261 64 Other countries 5,684 3,347 5,118 5,052 5,948 6,616 5,005 4,411' 4,112 4,144 65 Australia 5,300 2,779 4,1% 4,333 5,019 5,641 4,011 3,711' 3,325 3,319 66 All other 384 568 922 718 929 975 994 701 787 825 67 Nonmonetary international and regional organizations 4,454 5,821 55,,880077 55,,994466 55,,333322 7,845 3,594 5,608' 55,,003366 5,748 68 International 3,747 4,806 4,620 4,486 3,819 6,197 2,107 3,522' 3,402 4,185 69 Latin American regional 587 894 1,033 1,075 1,070 1,126 1,155 1,478 1,272 1,171 70 Other regional 120 121 154 384 443 522 331 608 362 393 1. Includes the Bank for International Settlements and Eastern European 4. Comprises Algeria, Gabon, Libya, and Nigeria. countries that are not listed in line 23. 5. Excludes "holdings of dollars" of the International Monetary Fund. 2. Comprises Bulgaria, Czechoslovakia, the German Democratic Republic, 6. Asian, African, Middle Eastern, and European regional organizations, 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." United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • May 1988 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 1988 AArreeaa aanndd ccoouunnttrryy 11998844 11998855 11998866 July Aug. Sept. Oct. Nov/ Dec. Jan." 1 Total 400,162 401,608 444,745 424,392 427,057 447,727 461,110 459,6% 458,234 441,835 2 Foreign countries 399,363 400,577 441,724 421,289 423,993 443,043 458,280 452,526 453,651 439,024 3 Europe 99,014 106,413 107,823 108,062 104,180 105,930 110,999 107,255 101,336 %,786 4 Austria 433 598 728 698 785 684 930 927 793 773 5 Belgium-Luxembourg 4,794 5,772 7,498 10,239 9,550 9,591 10,131 9,550 9,370 9,598 6 Denmark 648 706 688 604 868 747 795 881 718 852 7 Finland 898 823 987 1,037 1,031 1,266 1,089 1,030 1,011 891 8 France 9,157 9,124 11,356 11,673 12,530 12,781 14,350 13,512 13,472 11,677 9 Germany 1,306 1,267 1,816 2,009 1,333 1,485 2,092 1,554 2,055 1,915 10 Greece 817 991 648 433 375 406 430 452 463 573 11 Italy 9,119 8,848 9,043 6,784 6,407 6,541 7,418 7,286 7,474 6,526 12 Netherlands 1,356 1,258 3,296 4,429 3,078 3,247 3,976 3,813 2,619 2,902 13 Norway 675 706 672 830 803 722 812 938 934 843 14 Portugal 1,243 1,058 739 645 667 638 570 545 477 471 15 Spain 2,884 1,908 1,492 1,830 1,945 2,233 1,859 2,032 1,849 1.629 16 Sweden 2,230 2,219 1,964 2,287 2,473 2,752 2,533 2,640 2,254 2,106 17 Switzerland 2,123 3,171 3,352 2,464 2,664 2,612 2,825 2,880 2,658 2,572 18 Turkey 1,130 1,200 1,543 1,753 1,757 1,689 1,564 1,566 1,675 1,631 19 United Kingdom 56,185 62,566 58,335 56,544 54,144 54,710 55,860 53,960 49,907 48,351 20 Yugoslavia 1,886 1,964 1,835 1,764 1,742 1,741 1,750 1,697 1,700 1,695 21 Other Western Europe 596 998 539 647 548 619 549 662 661 578 22 u.s.s.k 142 130 345 420 521 549 473 437 394 386 23 Other Eastern Europe 1,389 1,107 948 974 958 915 994 892 852 817 24 Canada 16,109 16,482 21,006 18,676 18,494 21,578 21,402 25,313 25,269 23,341 25 Latin America and Caribbean 207,862 202,674 208,825 200,728 202,384 214,716 216,783 211,887 213,211 206,797 26 Argentina 11,050 11,462 12,091 12,151 12,221 11,857 12,117 12,052 11,966 12,103 27 Bahamas 58,009 58,258 59,342 53,842 55,935 65,309 63,699 61,421 64,774 60,800 28 Bermuda 592 499 418 387 359 328 423 331 482 380 29 Brazil 26,315 25,283 25,716 25,999 26,594 26,056 25,820 25,472 25,289 25,338 30 British West Indies 38,205 38,881 46,284 44,626 43,290 47,512 51,473 49,556 48,759 47,039 31 Chile 6,839 6,603 6,558 6,500 6,510 6,469 6,388 6,429 6,304 6,332 32 Colombia 3,499 3,249 2,821 2,743 2,784 2,729 2,730 2,730 22,,773399 2,709 33 Cuba 0 0 0 0 0 0 0 0 11 0 34 Ecuador 2,420 2,390 2,439 2,3% 2,384 2,367 2,449 2,334 2,284 2,338 35 Guatemala3 158 194 140 107 105 124 131 145 144 134 36 Jamaica 252 224 198 268 202 198 191 184 188 202 37 Mexico 34,885 31,799 30,698 30,271 30,638 30,542 30,259 30,101 29,511 29,115 38 Netherlands Antilles 1,350 1,340 1,041 1,084 994 1,041 1,019 1,108 974 1,029 39 Panama 7,707 6,645 5,436 4,633 4,616 4,579 4,546 4,660 4,739 4,304 40 Peru 2,384 1,947 1,661 1,567 1,549 1,479 1,457 1,459 1,323 1,316 41 Uruguay 1,088 960 940 949 966 946 %1 975 %3 %1 42 Venezuela 11,017 10,871 11,108 11,306 11,366 11,308 11,200 11,114 10,998 10,911 43 Other Latin America and Caribbean 2,091 2,067 1,936 1,902 1,872 1,872 1,920 1,818 1,773 1,786 44 6666,,331166 6666,,221122 96,126 86,516 9911,,442299 9933,,332222 110000,,444400 110000,,119955 110055,,998866 110055,,000088 China 45 Mainland 710 639 787 929 919 894 543 870 956 886 46 Taiwan 1,849 1,535 2,681 2,487 2,772 2,980 4,224 4,784 4,577 3,994 47 Hong Kong 7,293 6,797 8,307 7,495 6,556 6,933 6,889 7,310 8,127 7,566 48 India 425 450 321 416 565 541 527 502 510 515 49 Indonesia 724 698 723 639 624 622 625 601 580 571 50 Israel 2,088 1,991 1,634 1,413 1,450 1,591 1,331 1,293 1,362 1,280 31 Japan 29,066 31,249 59,674 54,5% 61,072 60,121 65,787 64,767 68,970 71,147 52 Korea 9,285 9,226 7,182 4,954 4,589 4,606 4,9% 4,907 4,925 4,939 53 Philippines 2,555 2,224 2,217 2,211 2,148 2,126 2,082 2,040 2,070 1,961 54 Thailand 1,125 845 578 565 545 453 446 439 485 519 55 Middle East oil-exporting countries 5,044 4,298 4,122 3,914 4,315 4,848 5,063 5,157 4,843 3,574 36 Other Asia 6,152 6,260 7,901 6,897 5,875 7,607 7,926 7,524 8,581 8,057 57 Africa 6,615 5,407 4,650 4,705 4,739 4,704 5,376 4,668 4,720 4,782 58 Egypt 728 721 567 572 586 541 538 526 521 510 59 Morocco 583 575 598 568 603 582 605 585 542 491 60 South Africa 2,795 1,942 1,550 1,479 1,497 1,504 1,546 1,494 1,507 1,517 61 Zaire 18 20 28 38 35 40 38 36 15 36 62 Oil-exporting countries 842 630 694 866 862 888 1,531 903 1,003 1,022 63 Other 1,649 1,520 1,213 1,182 1,156 1,149 1,118 1,123 1,131 1,207 64 Other countries 3,447 3,390 3,294 2,601 2,766 2,794 3,280 3,208 3,129 2,310 65 Australia 2,769 2,413 1,949 1,693 1,686 1,834 2,034 2,090 2,098 1,428 66 Allother 678 978 1,345 908 1,080 959 1,246 1,118 1,031 882 67 Nonmonetary international and regional organizations6 800 1,030 33,,002211 3,103 3,063 4,684 2,830 7,170 4,583 2,811 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 States1 Payable in U.S. Dollars Millions of dollars, end of period 1987 1988 TTyyppee ooff ccllaaiimm 11998844 11998855 11998866 July Aug. Sept. Oct. Nov/ Dec. Jan." 1 Total 444444433333333333333,,,,,,,000000077777778888888 444444433333330000000,,,,,,,444444488888889999999 444444477777778888888,,,,,,,666666655555550000000 444444488888881111111,,,,,,,666666655555552222222 444444499999995555555,,,,,,,999999955555559999999 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 444444400000000000000,,,,,,,111111166666662222222 444444400000001111111,,,,,,,666666600000008888888 444444444444444444444,,,,,,,777777744444445555555 424,392 427,057 444444444444447777777,,,,,,,777777722222227777777 461,110 459,6% 444444455555558888888,,,,,,,222222233333334444444 441,835 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666662222222,,,,,,,222222233333337777777 66666660000000,,,,,,,555555500000007777777 66666664444444,,,,,,,000000099999995555555 65,857 65,808 66666667777777,,,,,,,000000077777777777777 65,147 69,655 66666665555555,,,,,,,222222288888885555555 63,093 44 OOwwnn ffoorreeiiggnn ooffffiicceess 111111155555556666666,,,,,,,222222211111116666666 111111177777774444444,,,,,,,222222266666661111111 222222211111111111111,,,,,,,555555533333333333333 189,142 196,182 222222211111110000000,,,,,,,555555500000003333333 218,391 220,312 222222222222223333333,,,,,,,111111133333336666666 216,960 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222224444444,,,,,,,999999933333332222222 111111111111116666666,,,,,,,666666655555554444444 111111122222222222222,,,,,,,999999944444446666666 124,364 121,939 111111122222227777777,,,,,,,222222288888885555555 134,106 126,530 111111122222227777777,,,,,,,000000033333330000000 120,010 66 DDeeppoossiittss 44444449999999,,,,,,,222222222222226666666 44444448888888,,,,,,,333333377777772222222 55555557777777,,,,,,,444444488888884444444 59,612 56,788 55555559999999,,,,,,,666666699999996666666 62,872 58,058 66666660000000,,,,,,,222222277777777777777 55,265 77 OOtthheerr 77777775555555,,,,,,,777777700000006666666 66666668888888,,,,,,,222222288888882222222 66666665555555,,,,,,,444444466666662222222 64,753 65,151 66666667777777,,,,,,,555555588888889999999 71,234 68,472 66666666666666,,,,,,,777777755555552222222 64,745 88 AAllll ootthheerr ffoorreeiiggnneerrss 55555556666666,,,,,,,777777777777777777777 55555550000000,,,,,,,111111188888885555555 44444446666666,,,,,,,111111177777771111111 45,029 43,128 44444442222222,,,,,,,888888866666663333333 43,466 43,199 44444442222222,,,,,,,777777788888883333333 41,772 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 33333332222222,,,,,,,999999911111116666666 22222228888888,,,,,,,888888888888881111111 33333333333333,,,,,,,999999900000005555555 33333333333333,,,,,,,999999922222225555555 33333337777777,,,,,,,777777722222226666666 3333333,,,,,,,333333388888880000000 3333333,,,,,,,333333333333335555555 4444444,,,,,,,444444411111113333333 3333333,,,,,,,222222211111118888888 3333333,,,,,,,666666677777772222222 11 Negotiable and readily transferable 22222223333333,,,,,,,888888800000005555555 11111119999999,,,,,,,333333333333332222222 22222224444444,,,,,,,000000044444444444444 22222222222222,,,,,,,000000077777771111111 22222226666666,,,,,,,666666688888884444444 12 Outstanding collections and other 5555555,,,,,,,777777733333332222222 6666666,,,,,,,222222211111114444444 5555555,,,,,,,444444444444448888888 8888888,,,,,,,666666633333336666666 7777777,,,,,,,333333377777770000000 13 MEMO: Customer liability on 33333337777777,,,,,,,111111100000003333333 22222228888888,,,,,,,444444488888887777777 22222225555555,,,,,,,777777700000006666666 22222221111111,,,,,,,777777788888882222222 22222223333333,,,,,,,333333377777777777777 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States 40,714 38,102 42,079 40,302 41,412 39,768 42,252r 37,825 37,639 n.a. 1. Data for banks' own claims are given on a monthly basis, but the data for 3. Assets owned by customers of the reporting bank located in the United claims of banks' own domestic customers are available on a quarterly basis only. States that represent claims ori foreigners held by reporting banks for the account 2. U.S. banks: includes amounts due from own foreign branches and foreign of their domestic customers. subsidiaries consolidated in "Consolidated Report of Condition" filed with bank 4. Principally negotiable time certificates of deposit and bankers acceptances. regulatory agencies. Agencies, branches, and majority-owned subsidiaries of 5. Includes demand and time deposits and negotiable and nonnegotiable foreign banks: principally amounts due from head office or parent foreign bank, certificates of deposit denominated in U.S. dollars issued by banks abroad. For and foreign branches, agencies, or wholly owned subsidiaries of head office or description of changes in data reported by nonbanks, see July 1979 BULLETIN, parent foreign bank. p. 550. 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 1987 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998844 11998855 11998866 Mar. June Sept. Dec." 1 243,952 227,903 232,295 226,426 236,392 235,812 233,802 By borrower 2 Maturity of 1 year or less1 167,858 160,824 160,555 154,789 167,244 165,451 162,859 3 Foreign public borrowers 23,912 26,302 24,842 24,154 23,270 27,008 26,079 4 All other foreigners 143,947 134,522 135,714 130,635 143,973 138,442 136,781 5 Maturity over 1 year 76,094 67,078 71,740 71,637 69,149 70,361 70,943 6 Foreign public borrowers 38,695 34,512 39,103 39,168 39,483 39,757 38,811 7 All other foreigners 37,399 32,567 32,637 32,468 29,665 30,605 32,132 By area Maturity of 1 year or less1 8 Europe 58,498 56,585 61,784 58,042 68,891 62,045 58,048 9 Canada 6,028 6,401 5,895 5,625 5,622 5,733 5,667 10 Latin America and Caribbean 62,791 63,328 56,271 54,223 55,429 58,138 56,293 11 Asia 33,504 27,966 29,457 29,714 30,936 32,065 36,251 1? Africa 4,442 3,753 2,882 3,154 2,980 2,878 2,823 13 All other2 2,593 2,791 4,267 4,031 3,385 4,592 3,779 Maturity of over 1 year1 14 Europe 9,605 7,634 6,737 6,742 6,417 6,747 6,802 15 Canada 1,882 1,805 1,925 1,873 1,631 1,577 2,633 16 Latin America and Caribbean 56,144 50,674 56,719 56,705 55,572 55,097 53,743 17 Asia 5,323 4,502 4,043 4,122 3,387 3,535 3,665 18 Africa 2,033 1,538 1,539 1,630 1,522 1,612 1,727 19 All other2 1,107 926 777 564 621 1,793 2,372 1. Remaining time to maturity. 2. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • May 1988 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1-2 Billions of dollars, end of period 1985 1986 1987 Area or country 1983 1984 Dec. Mar. June Sept. Dec. Mar. June Sept. Dec. 1 Total 434.0 405.7 385.3 385.6 389.7 389.5 389.6 398.9 391.1 391.6 383.5 2 G-10 countries and Switzerland 167.8 148.1 146.0 152.8 160.3 159.0 158.0 164.5 161.8 156.8 161.4 3 Belgium-Luxembourg 12.4 8.7 9.2 8.2 9.0 8.5 8.4 9.1 8.5 8.3 10.1 4 France 16.2 14.1 12.1 13.6 15.1 14.7 13.8 13.4 12.6 13.8 13.6 5 Germany 11.3 9.0 10.5 11.2 11.5 12.5 11.7 12.8 11.4 10.6 12.6 6 Italy 11.4 10.1 9.6 8.3 9.3 8.1 9.0 8.6 7.5 6.7 7.3 7 Netherlands 3.5 3.9 3.7 3.5 3.4 3.9 4.6 4.4 7.3 4.8 4.1 8 Sweden 5.1 3.2 2.7 2.8 2.9 2.7 2.4 3.0 2.4 2.7 2.1 9 Switzerland 4.3 3.9 4.4 5.3 5.6 4.8 5.8 5.8 5.7 5.4 5.5 10 United Kingdom 65.3 60.3 63.0 67.4 69.2 70.3 71.9 74.0 72.7 72.1 70.6 11 Canada 8.3 7.9 6.8 6.0 7.0 6.2 5.4 5.3 6.9 4.7 5.6 12 Japan 29.9 27.1 23.9 26.5 27.2 27.4 25.0 28.1 26.7 27.8 30.0 13 Other developed countries 36.0 33.6 29.9 31.1 30.7 29.5 26.2 26.0 25.7 26.8 26.2 14 Austria 1.9 1.6 1.5 1.5 1.7 1.7 1.7 1.9 1.8 1.9 1.9 15 Denmark 3.4 2.2 2.3 2.5 2.4 2.3 1.7 1.7 1.5 1.6 1.7 16 Finland 2.4 1.9 1.6 1.9 1.6 1.7 1.4 1.4 1.5 1.4 1.3 17 Greece 2.8 2.9 2.6 2.5 2.6 2.3 2.3 2.1 2.0 1.9 2.0 18 Norway 3.3 3.0 2.9 2.7 3.0 2.7 2.4 2.2 2.2 2.4 2.3 19 Portugal 1.5 1.4 1.2 1.0 1.1 1.0 .8 .9 .8 .8 .6 20 Spain 7.1 6.5 5.8 6.4 6.4 6.7 5.8 6.3 6.1 7.4 8.0 21 Turkey 1.7 1.9 1.8 2.1 2.5 2.1 2.0 1.9 2.1 1.9 1.6 22 Other Western Europe 1.8 1.7 2.0 2.4 2.1 1.6 1.4 1.4 1.6 1.6 1.6 23 South Africa 4.7 4.5 3.2 3.1 3.1 3.1 3.1 3.1 3.1 3.0 2.9 24 Australia 5.4 6.0 5.0 4.9 4.2 4.1 3.5 3.2 3.1 2.9 2.4 25 OPEC countries3 28.4 24.9 21.3 20.4 20.6 20.0 19.6 20.5 19.2 19.4 17.3 26 Ecuador 2.2 2.2 2.1 2.2 2.1 2.2 2.2 2.1 2.1 2.1 1.9 27 Venezuela 9.9 9.3 8.9 8.7 8.8 8.7 8.6 8.8 8.7 8.5 8.2 28 Indonesia 3.4 3.3 3.0 3.3 3.0 2.8 2.5 2.4 2.2 2.0 1.9 29 Middle East countries 9.8 7.9 5.3 4.5 5.0 4.6 4.5 5.5 4.5 5.1 3.6 30 African countries 3.0 2.3 2.0 1.8 1.7 1.7 1.7 1.7 1.7 1.7 1.7 31 Non-OPEC developing countries 110.8 111.8 104.2 102.9 102.0 100.0 99.7 99.9 100.3 97.4 96.8 Latin America 32 Argentina 9.5 8.7 8.8 8.8 9.2 9.3 9.5 9.5 9.5 9.3 9.4 33 Brazil 23.1 26.3 25.4 25.6 25.5 25.4 25.3 25.7 24.6 24.6 24.1 34 Chile 6.4 7.0 6.9 7.0 7.1 7.2 7.1 7.3 7.2 7.1 6.9 35 Colombia 3.2 2.9 2.6 2.3 2.2 2.0 2.1 2.0 2.0 2.0 2.0 36 Mexico 25.8 25.7 23.9 23.9 24.0 24.0 24.0 23.7 25.4 24.7 23.6 37 Peru 2.4 2.2 1.8 1.7 1.6 1.5 1.5 1.4 1.4 1.2 1.1 38 Other Latin America 4.2 3.9 3.4 3.3 3.3 3.3 3.1 3.0 3.0 2.8 2.8 Asia China 39 Mainland .3 .7 .5 .6 .6 .6 .4 .9 .6 .3 .3 40 Taiwan 5.2 5.1 4.5 4.3 3.7 4.3 4.9 5.5 6.6 5.9 8.2 41 India .9 .9 1.2 1.2 1.3 1.3 1.2 1.6 1.7 1.9 1.9 42 Israel 1.9 1.8 1.6 1.3 1.6 1.4 1.5 1.4 1.3 1.3 1.0 43 Korea (South) 11.2 10.6 9.2 9.2 8.7 7.3 6.7 6.2 5.7 5.1 4.9 44 Malaysia 2.8 2.7 2.4 2.2 2.0 2.1 2.1 1.9 1.7 1.6 1.5 45 Philippines 6.1 6.0 5.7 5.6 5.7 5.4 5.4 5.4 5.4 5.4 5.1 46 Thailand 2.2 1.8 1.4 1.3 1.1 1.0 .9 .9 .8 .7 .7 47 Other Asia 1.0 1.1 1.0 .9 .8 .7 .7 .6 .8 .7 .7 Africa 48 Egypt 1.5 1.2 1.0 .9 .9 .7 .7 .6 .6 .6 .5 4 5 9 0 M Za o ir r e o cco .8J .8j .9j .9 J .9 J .9 J .9 . . 9 11 . . 9 1 .8| . . 0 9 51 Other Africa4 2.3 2.1 L9 L9 L7 L6 L6 1.4 1.3 13 1.3 52 Eastern Europe 5.3 4.4 4.1 4.0 4.0 3.4 3.2 3.1 3.4 3.4 3.0 53 U.S.S.R .2 .1 .1 .3 .3 .1 .1 .1 .3 .5 .4 54 Yugoslavia 2.4 2.3 2.2 2.0 2.0 1.9 1.7 1.6 1.7 1.7 1.6 55 Other 2.8 2.0 1.8 1.7 1.7 1.4 1.4 1.3 1.4 1.3 1.0 56 Offshore banking centers 68.9 65.6 62.9 57.5 55.4 60.5 63.2 65.1 62.6 66.5 54.8 57 Bahamas 21.7 21.5 21.2 21.2 17.1 19.9 22.3 24.1 20.0 26.4 18.4 58 Bermuda .9 .9 .7 .7 .4 .4 .7 .8 .6 .6 .6 59 Cayman Islands and other British West Indies 12.2 11.8 11.6 9.2 12.2 12.8 13.6 12.7 14.2 12.4 11.7 60 Netherlands Antilles 4.2 3.4 2.2 2.2 2.4 1.9 1.8 1.7 1.3 1.2 1.2 61 Panama 5.8 6.7 6.0 4.3 4.2 5.1 4.1 5.4 5.3 5.3 4.5 62 Lebanon J J . 1 63 Hong Kong 13^8 1L4 1L4 1L4 9.5 io!s 1L2 1L4 12^6 12.3 1L2 64 Singapore 10.3 9.8 9.8 8.4 9.3 9.7 9.4 8.8 8.5 8.3 7.0 65 Others6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated7 16.8 17.3 16.9 16.8 16.8 17.2 19.8 19.8 18.0 21.3 24.0 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. This group comprises the Organization of Petroleum Exporting Countries (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are shown individually, other members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, adjusted to exclude the claims on foreign branches held by a U.S. office or another Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates), and Bahrain and foreign branch of the same banking institution. The data in this table combine Oman (not formally members of OPEC). foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims 4. Excludes Liberia. of U.S. offices in table 3.18 (excluding those held by agencies and branches of 5. Includes Canal Zone beginning December 1979. foreign banks and those constituting claims on own foreign branches). 6. Foreign branch claims only. 2. Beginning with June 1984 data, reported claims held by foreign branches 7. Includes New Zealand, Liberia, and international and regional organizahave been reduced by an increase in the reporting threshold for "shell" branches tions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A63 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1986 1987 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998833 11998844 11998855 Sept. Dec. Mar. June Sept. 1 Total 25,346 29,357 27,825 26,429 25,717 27,432 28,751 28,353r 2 Payable in dollars 22,233 26,389 24,2% 22,432 21,885 23,264 24,286 24,032f 3 Payable in foreign currencies 3,113 2,968 3,529 3,997 3,833 4,169 4,466 4,321 By type 4 Financial liabilities 10,572 14,509 13,600 13,501 12,239 13,114 13,946 12,852' 5 Payable in dollars 8,700 12,553 11,257 11,071 9,774 10,398 11,068 10,141' 6 Payable in foreign currencies 1,872 1,955 2,343 2,430 2,464 2,716 2,878 2,712 7 Commercial liabilities 14,774 14,849 14,225 12,929 13,479 14,318 14,805 15,500 8 Trade payables 7,765 7,005 6,685 5,728 6,447 6,985 7,139 7,389 9 Advance receipts and other liabilities 7,009 7,843 7,540 7,201 7,032 7,333 7,666 8,111 10 Payable in dollars 13,533 13,836 13,039 11,361 12,110 12,865 13,218 13,891 11 Payable in foreign currencies 1,241 1,013 1,186 1,567 1,368 1,453 1,587 1,609 By area or country Financial liabilities 1? Europe 5,742 6,728 7,700 8,907 8,023 8,383 9,645 9,202r 13 Belgium-Luxembourg 302 471 349 448 270 232 257 230 14 France 843 995 857 501 644 742 807 615' 15 Germany 502 489 376 319 270 368 305 386r 16 Netherlands 621 590 861 741 704 693 669 641' 17 Switzerland 486 569 610 567 646 711 703 684 18 United Kingdom 2,839 3,297 4,305 5,880 5,199 5,378 6,642 6,360' 19 Canada 764 863 839 362 399 431 441 407 70 Latin America and Caribbean 2,5% 5,086 3,184 2,283 1,964 2,369 1,747 %1 71 Bahamas 751 1,926 1,123 842 614 669 398 280 77 Bermuda 13 13 4 4 4 0 0 0 73 Brazil 32 35 29 28 32 26 22 22 74 British West Indies 1,041 2,103 1,843 1,291 1,163 1,545 1,223 581 75 Mexico 213 367 15 18 22 30 29 17 26 Venezuela 124 137 3 5 3 3 5 3 77 Asia 1,424 1,777 1,815 1,881 1,784 1,861 2,046 2,204' ?R Japan 991 1,209 1,198 1,446 1,377 1,459 1,666 1,717' 29 Middle East oil-exporting countries2 170 155 82 3 8 7 7 7 30 Africa 19 14 12 4 1 3 1 2 31 Oil-exporting countries3 0 0 0 2 1 1 0 0 32 Mother4 27 41 50 63 67 67 66 76 Commercial liabilities 33 Europe 3,245 4,001 4,074 4,344 4,494 4,521 4,987 4,973 34 Belgium-Luxembourg 62 48 62 75 101 85 111 56 35 France 437 438 453 370 351 379 422 437 36 Germany 427 622 607 633 722 591 594 679 37 Netherlands 268 245 364 581 460 372 339 350 38 Switzerland 241 257 379 361 387 484 557 556 39 United Kingdom 732 1,095 976 1,142 1,346 1,309 1,380 1,475 40 Canada 1,841 1,975 1,449 1,313 1,393 1,352 1,253 1,263 41 Latin America and Caribbean 1,473 1,871 1,088 848 890 1,089 1,037 1,050 47 Bahamas 1 7 12 37 32 28 13 22 43 Bermuda 67 114 77 172 132 297 245 223 44 Brazil 44 124 58 44 61 82 88 40 45 British West Indies 6 32 44 45 48 89 64 44 46 Mexico 585 586 430 197 213 185 160 231 47 Venezuela 432 636 212 207 217 224 203 176 48 6,741 5,285 6,046 4,856 5,098 5,818 5,921 6,516 49 Japan 1,247 1,256 1,799 2,137 2,051 2,468 2,480 2,422 50 Middle East oil-exporting countries2'3 4,178 2,372 2,829 1,507 1,686 1,948 1,870 2,109 51 Africa 553 588 587 585 622 520 524 571 52 Oil-exporting countries3 167 233 238 176 197 170 166 150 53 All other4 921 1,128 982 982 981 1,019 1,083 1,128 1. For a description of the changes in the International Statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. July 1979 BULLETIN, p. 550. 4. Includes nonmonetary international and regional organizations. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 5. Revisions include a reclassification of transactions, which also affects the United Arab Emirates (Trucial States). totals for Asia and the grand totals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • May 1988 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States' Millions of dollars, end of period 1986 1987 Type, and area or country 11998833 11998844 11998855 Sept. Dec. Mar. June Sept/ 1 Total 34,911 29,901 28,876 34,157 33,451 34,034 31,515 31,378 2 Payable in dollars 31,815 27,304 26,574 31,446 30,923 31,238 28,405 28,686 3 Payable in foreign currencies 3,096 2,597 2,302 2,711 2,528 2,796 3,110 2,692 By type 4 Financial claims 23,780 19,254 18,891 24,833 23,357 24,080 21,580 21,055 5 Deposits 18,496 14,621 15,526 18,953 17,899 17,994 15,437 15,849 6 Payable in dollars 17,993 14,202 14,911 18,389 17,343 17,168 14,253 14,988 7 Payable in foreign currencies 503 420 615 565 555 826 1,183 861 8 Other financial claims 5,284 4,633 3,364 5,880 5,458 6,086 6,143 5,206 9 Payable in dollars 3,328 3,190 2,330 4,506 4,110 4,740 4,868 4,081 10 Payable in foreign currencies 1,956 1,442 1,035 1,374 1,349 1,345 1,275 1,125 11 Commercial claims 11,131 10,646 9,986 9,324 10,095 99,,995544 9,935 10,323 12 Trade receivables 9,721 9,177 8,696 8,079 8,902 88,,889988 8,892 9,382 13 Advance payments and other claims . 1,410 1,470 1,290 1,245 1,192 1,056 1,043 942 14 Payable in dollars 10,494 9,912 9,333 8,551 9,471 9,330 9,283 9,617 15 Payable in foreign currencies 637 735 652 773 624 624 652 706 By area or country Financial claims 16 Europe 6,488 5,762 6,929 10,545 8,759 9,337 9,859 9,473 17 Belgium-Luxembourg 37 15 10 67 41 15 6 23 18 France 150 126 184 418 138 172 154 169 19 Germany 163 224 223 129 111 163 92 98 20 Netherlands 71 66 161 73 86 69 75 157 21 Switzerland 38 66 74 138 182 74 95 44 22 United Kingdom 5,817 4,864 6,007 9,478 7,957 8,491 9,237 8,783 23 Canada 5,989 3,988 3,260 3,970 3,964 3,779 3,329 2,885 24 Latin America and Caribbean 10,234 8,216 7,846 9,438 9,207 9,547 7,539 7,502 25 Bahamas 4,771 3,306 2,698 2,806 2,624 3,945 2,572 2,518 26 Bermuda 102 6 6 19 6 3 6 2 27 Brazil 53 100 78 105 73 71 103 102 28 British West Indies 4,206 4,043 4,571 6,060 6,078 5,128 4,349 3,687 29 Mexico 293 215 180 173 174 164 167 173 30 Venezuela 134 125 48 40 24 23 22 18 31 Asia 764 961 731 715 1,320 1,193 779 1,105 32 Japan 297 353 475 365 999 931 439 721 33 Middle East oil-exporting countries' 4 13 4 2 11 11 10 10 34 Africa 147 210 103 84 85 84 58 71 35 Oil-exporting countries3 55 85 29 18 28 19 9 14 36 All other4 159 117 21 81 22 140 16 20 Commercial claims 3,670 3,801 3,533 3,389 3,718 3,703 3,850 4,118 37 Europe 135 165 175 125 133 145 137 168 38 Belgium-Luxembourg 459 440 426 415 410 417 435 413 39 France 349 374 346 401 447 451 531 551 40 Germany 334 335 284 157 173 165 182 199 41 Netherlands 317 271 284 233 217 196 187 208 42 Switzerland 809 1,063 898 874 998 1,070 1,071 1,225 43 United Kingdom 44 Canada 829 1,021 1,023 960 928 927 927 904 45 Latin America and Caribbean 2,695 2,052 1,753 1,686 1,981 1,944 1,878 1,850 46 Bahamas 8 8 13 29 28 11 14 12 47 Bermuda 190 115 93 132 170 157 153 125 48 Brazil 493 214 206 202 235 217 202 227 49 British West Indies 7 7 6 23 51 25 17 13 50 Mexico 884 583 510 317 411 445 346 366 51 Venezuela 272 206 157 192 234 171 201 188 52 Asia 3,063 3,073 2,982 2,588 2,751 2,707 2,640 2,777 53 Japan 1,114 1,191 1,016 797 881 926 950 1,019 54 Middle East oil-exporting countries' 737 668 638 682 565 529 455 436 55 Africa . 588 470 437 470 495 432 379 407 56 Oil-exporting countries 139 134 130 168 135 141 123 123 57 All other4 286 229 257 231 222 240 261 267 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 1988 1987 1988 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 11998866 11998877'' Jan. July Aug. Sept. Oct. Nov. Dec. Jan." U.S. corporate securities STOCKS 1 Foreign purchases 148,114 248,892 12,914 23,645 24,774 22,473 30,207 13,626' 13,627 12,914 2 Foreign sales 129,395 232,646 12,889 21,883 24,554 19,433 27,768 20,325' 16,630 12,889 3 Net purchases, or sales (-) 18,719 16,246 25 1,763 220 3,040 2,438 -6,699r -3,004 25 4 Foreign countries 18,927 16,294 57 1,749 117 2,951 2,424 -6,651r -2,943 57 5 Europe 9,559 1,861 -226 717 81 1,312 138 -5,948 -2,329 -226 6 France 459 905 -% 66 -69 -15 58 -541 -393 -% 7 Germany 341 -74 67 -% 28 -12 380 -183 -149 67 8 Netherlands 936 890 -72 153 135 79 -40 -169 32 -72 9 Switzerland 1,560 -1,163 -114 -80 -325 435 294 -1,574 -743 -114 10 United Kingdom 4,826 514 -136 635 125 770 -624 -3,407 -959 -136 11 Canada 816 1,096 147 255 -21 -46 238 169R 111 147 12 Latin America and Caribbean 3,031 1,314 -143 387 188 157 -512 -561 -50 -143 13 Middle East' 976 -1,360 104 -913 -255 135 569 -83 -448 104 14 Other Asia 3,876 12,8% 156 1,290 171 1,242 2,014 -28 -160 156 15 Africa 297 123 7 -14 16 20 7 11 -6 7 16 Other countries 373 365 12 27 -63 132 -30 -211 -61 12 17 Nonmonetary international and regional organizations -208 -48 -32 14 102 90 15 -48 -61 -32 BONDS2 18 Foreign purchases 123,169 105,806 5,014 9,414 7,027 8,662 9,158 5,691 6,842 5,014 19 Foreign sales 72,520 78,154 5,173 6,533 5,638 4,786 7,275 5,354' 5,500 5,173 20 Net purchases, or sales (-) 50,648 27,652 -159 2,881 1,389 3,876 1,883 337' 1,342 -159 21 Foreign countries 49,801 26,911 468 2,872 1,548 3,836 1,874 80' 913 468 22 Europe 39,313 22,120 282 2,328 1,616 3,149 922 409' 550 282 23 France 389 194 51 64 26 -37 55 -34 -13 51 24 Germany -251 -8 61 116 -22 -56 -98 -26 17 61 25 Netherlands 387 269 -13 -65 44 116 36 -16 1 -13 26 Switzerland 4,529 1,651 -50 245 306 166 136 -39 -203 -50 27 United Kingdom 33,900 19,878 346 1,897 1,317 2,828 1,012 371' 751 346 28 Canada 548 1,296 29 87 -8 47 305 68 114 29 79 Latin America and Caribbean 1,476 2,473 -22 305 44 682 524 -15 292 -22 30 Middle East' -2,961 -551 -164 -166 -14 -87 42 -92 -20 -164 31 Other Asia 11,270 1,619 347 301 -93 52 65 -247 -25 347 32 Africa 16 16 0 1 -17 -6 24 -10 3 0 33 Other countries 139 -61 -4 15 20 -1 -9 -33 0 -4 34 Nonmonetary international and regional organizations 847 740 -627 9 -159 40 10 257 429 -627 Foreign securities 35 Stocks, net purchases, or sales (—) -2,360 1,296 407 -15 -373 448 2,053 692' 835 407 36 Foreign purchases 49,587 94,259 4,879 8,585 8,674 8,657 12,857 7,571' 4,889 4,879 37 Foreign sales 51,947 92,964 4,472 8,599 9,047 8,208 10,804 6,879' 4,054 4,472 38 Bonds, net purchases, or sales (-) -3,555 -7,277 -1,327 -588 -241 -674 -2,566 -1,929 -1,379 -1,327 39 Foreign purchases 166,992 198,597 12,759 16,303 12,292 12,923 18,118 17,674 12,433 12,759 40 Foreign sales 170,548 205,874 14,086 16,891 12,532 13,597 20,684 19,603 13,812 14,086 41 Net purchases, or sales (-), of stocks and bonds -5,915 -5,982 -920 -602 -614 -226 -513 -1,237' -544 -920 42 Foreign countries -7,000 -6,125 -985 -329 -1,207 -546 253 —1,137' -230 -985 43 Europe -18,533 -11,833 -418 -572 -8% -510 -931 -1,591 -387 -418 44 Canada -876 -3,913 -656 -5% -484 -263 -71 -498' 107 -656 45 Latin America and Caribbean 3,476 828 126 -62 83 -20 -152 329 2 126 46 10,858 9,519 -209 1,078 224 82 1,333 418 159 -209 47 Africa 52 89 9 5 5 14 16 3 10 9 48 Other countries -1,977 -816 163 -182 -140 150 59 201 -121 163 49 Nonmonetary international and regional organizations 1,084 144 65 -274 594 320 -767 -101 -314 65 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, ties sold abroad by U.S. corporations organized to finance direct investments Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). abroad. 2. Includes state and local government securities, and securities of U.S. government agencies and corporations. Also includes issues of new debt securi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • May 1988 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1988 1987 1988 CCoouunnttrryy oorr aarreeaa 11998866 11998877 Jan. July Aug. Sept. Oct. Nov. Dec. Jan." Transactions, net purchases or sales 1 -) during period1 1 Estimated total2 19,388 25,936 4,407 807 1,110 523 -1,262 6,380 2,675 4,407 2 Foreign countries2 20,491 31,027 5,502 3,610 2,787 704 -5,527 7,676 4,290 5,502 3 Europe2 16,326 23,610 4,100 4,453 -1,007 -1,167 -954 6,340 1,282 4,100 4 Belgium-Luxembourg -245 653 459 -2 366 -25 165 -2 -103 459 5 Germany 7,670 13,295 2,944 1,516 780 130 31 1,820 1,121 2,944 6 Netherlands 1,283 -911 -337 204 -254 -2% -707 314 -76 -337 7 Sweden .. ^ 132 233 -61 76 -153 -156 4 182 51 -61 8 Switzerland 329 1,925 118 512 -688 -99 -609 -297 -522 118 9 United Kingdom 4,546 3,955 -101 1,105 -431 -985 -642 3,163 1,200 -101 10 Other Western Europe 2,613 4,479 1,069 1,042 -631 259 804 1,158 -391 1,069 11 Eastern Europe 0 -19 9 0 4 5 0 3 1 9 12 Canada 881 4,534 356 654 378 203 -389 679 720 356 13 Latin America and Caribbean 926 -2,146 219 -673 -675 -29 -117 472 -141 219 14 Venezuela -96 150 0 -4 30 55 -63 35 1 0 15 Other Latin America and Caribbean 1,130 -1,096 184 15 -49 -155 -227 367 167 184 16 Netherlands Antilles -108 -1,200 36 -684 -656 72 173 69 -309 36 17 1,345 4,677 750 -676 4,318 1,762 -5,333 1,476 2,429 750 18 Japan -22 877 2,979 -597 1,839 799 -5,272 1,757 2,020 2,979 19 -54 -56 -38 20 -24 3 2 -29 49 -38 20 All other 1,067 407 114 -168 -204 -68 1,263 -1,260 -48 114 21 Nonmonetary international and regional organizations -1,104 -5,090 -1,094 -2,802 -1,677 -180 4,265 -1,296 -1,615 -1,094 22 International -1,430 -4,177 -1,023 -2,875 -1,722 111 4,326 -1,492 -1,620 -1,023 23 Latin American regional 157 3 8 0 0 -10 0 0 0 8 Memo 24 Foreign countries2 20,491 31,027 5,502 3,610 2,787 704 -5,527 7,676 4,290 5,502 25 Official institutions 14,214 31,178 4,880 2,251 2,612 1,360 2,437 1,854' 1,794' 4,880 26 Other foreign2 6,283 -154 622 1,358 175 -657 -7,964 5,822' 2,497' 622 Oil-exporting countries 27 Middle East3 -1,529 -3,111 -809 107 329 -509 -695 -891 368 -809 28 Africa 5 16 0 0 0 0 -1 -1 -1 0 1. Estimated official and private transactions in marketable U.S. Treasury 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and securities with an original maturity of more than 1 year. Data are based on United Arab Emirates (Trucial States). monthly transactions reports. Excludes nonmarketable U.S. Treasury bonds and 4. Comprises Algeria, Gabon, Libya, and Nigeria, notes held by official institutions of foreign countries. 2. Includes U.S. Treasury notes publicly issued to private foreign residents denominated in foreign currencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest and Exchange Rates A67 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per year Rate on Mar. 31, 1988 Rate on Mar. 31, 1988 Rate on Mar. 31, 1988 Country Country Country Percent e M ffe o c n t t i h v e Percent e M ffe o c n t t i h v e Percent e M ffe o c n t t i h v e Austria.. 3.0 Dec. 1987 France' 7.25 Jan. 1988 Norway 8.0 June 1983 Belgium . 6.50 Mar. 1988 Germany, Fed. Rep. of. 2.5 Dec. 1987 Switzerland 2.5 Dec. 1987 Brazil ... 49.0 Mar. 1981 Italy 12.0 Aug. 1987 United Kingdom Canada.. 8.78 Mar. 1988 Japan 2.5 Feb. 1987 Venezuela 8.0 Oct. 1985 Denmark 7.0 Oct. 1983 Netherlands 3.25 Jan. 1988 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 year, averages of daily figures 1987 1988 CCoouunnttrryy,, oorr ttyyppee 11998855 11998866 11998877 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Eurodollars 8.27 6.70 7.07 7.51 8.29 7.41 7.86 7.11 6.73 6.74 2 United Kingdom 12.16 10.87 9.65 10.12 9.92 8.87 8.71 8.84 9.18 8.83 3 Canada 9.64 9.18 8.38 9.32 9.12 8.70 8.95 8.75 8.58 8.63 4 Germany 5.40 4.58 3.97 3.98 4.70 3.92 3.65 3.40 3.29 3.38 5 Switzerland 4.92 4.19 3.67 3.51 4.03 3.65 3.51 2.09 1.48 1.61 6 Netherlands 6.29 5.56 5.24 5.31 5.63 4.99 4.65 4.24 3.98 3.97 7 8 F It r a a ly n ce 1 9 4 . . 9 8 1 6 1 7 2 . . 6 6 8 0 1 8 1 . . 1 1 4 5 1 7 2 . . 8 3 5 6 1 8 1 . . 1 8 5 5 1 8 1 . . 6 3 6 6 1 8 1 . . 4 2 8 5 1 8 0 . . 1 4 9 7 1 7 0 . . 5 8 4 0 1 7 1 . .1 89 1 9 Belgium 9.60 8.04 7.01 6.56 6.84 6.93 6.57 6.49 6.19 6.09 10 Japan 6.47 4.96 3.87 3.77 3.89 3.90 3.90 3.88 3.82 3.82 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • May 1988 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar 1987 1988 Country/currency 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. 1 Australia/dollar^ 70.026 67.093 70.136 71.12 68.60 71.06 71.11 71.40 73.29 2 Austria/schilling 20.676 15.260 12.649 12.674 11.843 11.500 11.635 11.920 11.767 3 Belgium/franc 59.336 44.662 37.357 37.494 35.190 34.186 34.576 35.473 35.126 4 Canada/dollar 1.3658 1.3896 1.3259 1.3097 1.3167 1.3075 1.2855 1.2682 1.2492 5 China, P.R./yuan 2.9434 3.4615 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 6 Denmark/krone 10.598 8.0954 6.8477 6.9262 6.4962 6.3043 6.3562 6.4918 6.4261 7 Finland/markka 6.1971 5.0721 4.4036 4.3570 4.1392 4.0462 4.0391 4.1159 4.0483 8 France/franc 8.9799 6.9256 6.0121 6.0160 5.7099 5.5375 5.5808 5.7323 5.6893 9 Germany/deutsche mark 2.9419 2.1704 1.7981 1.8006 1.6821 1.6335 1.6537 1.6963 1.6770 10 Greece/drachma 138.40 139.93 135.47 138.61 132.42 129.46 131.92 135.56 134.60 11 Hong Kong/dollar 7.7911 7.8037 7.7985 7.8077 7.7968 7.7726 7.7872 7.7978 7.8028 12 India/rupee.. 12.332 12.597 12.943 12.995 12.972 12.934 13.040 13.065 12.979 13 Ireland/punt2 106.62 134.14 148.79 148.72 158.08 162.63 160.64 156.87 159.33 14 Italy/lira 1908.90 1491.16 1297.03 1302.58 1238.89 1203.74 1216.88 1249.62 1240.67 15 Japan/yen 238.47 168.35 144.60 143.32 135.40 128.24 127.69 129.17 127.11 16 Malaysia/ringgit 2.4806 2.5830 2.5185 2.5308 2.4989 2.4944 2.5400 2.5812 2.5689 17 Netherlands/guilder .... 3.3184 2.4484 2.0263 2.0267 1.8931 1.8382 1.8584 1.9051 1.8837 18 New Zealand/dollar2 ... 49.752 52.456 59.327 64.031 61.915 64.664 65.818 66.386 66.239 19 Norway/krone 8.5933 7.3984 6.7408 6.6311 6.4233 6.3820 6.3538 6.4167 6.3337 20 Portugal/escudo 172.07 149.80 141.20 142.82 136.84 133.77 135.87 138.84 137.48 21 Singapore/dollar 2.2008 2.1782 2.1059 2.0891 2.0444 2.0127 2.0261 2.0185 2.0133 22 South Africa/rand 2.2343 2.2918 2.0385 2.0496 1.9738 1.9525 1.9755 2.0529 2.1330 23 South Korea/won 861.89 884.61 825.93 808.47 802.30 798.34 791.31 776.85 757.37 24 Spain/peseta 169.98 140.04 123.54 118.60 113.26 110.80 112.34 114.36 112.38 25 Sri Lanka/rupee 27.187 27.933 29.471 30.347 30.519 30.644 30.825 30.859 30.892 26 Sweden/krona 8.6031 7.1272 6.3468 6.3560 6.0744 5.9473 5.9749 6.0524 5.9497 27 Switzerland/franc 2.4551 1.7979 1.4918 1.4940 1.3825 1.3304 1.3466 1.3916 1.3863 28 Taiwan/dollar 39.889 37.837 31.756 30.036 29.813 29.004 28.628 28.665 28.687 29 Thailand/baht 27.193 26.314 25.774 25.783 25.495 25.249 25.235 25.324 25.232 30 United Kingdom/pound 129.74 146.77 163.98 166.20 177.54 182.88 180.09 175.82 183.30 MEMO 31 United States/dollar3 ... 143.01 112.22 96.94 96.65 91.49 88.70 89.29 91.08 89.73 1. 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 2. Value in U.S. cents. RESERVE BULLETIN, vol. 64, August 1978, p. 700). 3. Index of weighted-average exchange value of U.S. dollar against the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

69 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) .... Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables, details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 1987 A77 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference 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 commercial banks, June 30, 1987 February 1988 A70 Assets and liabilities of commercial banks, September 30, 1987 April 1988 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 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1987 February 1988 A76 Terms of lending at commercial banks, February 1987 May 1987 A70 Terms of lending at commercial banks, May 1987 September 1987 A70 Terms of lending at commercial banks, August 1987 January 1988 A70 Terms of lending at commercial banks, November 1987 May 1988 A70 Pro forma balance sheet and income statements for priced service operations, June 30, 1987 November 1987 A74 Pro forma balance sheet and income statements for priced service operations, September 30,1987 . February 1988 A80 Special tables begin on next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • May 1988 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 1-5, 19881 A. Commercial and Industrial Loans2 Weighted Loan rate (percent) Loans Most AAmmoouunntt ooff Average aavveerraaggee made Partici- common Characteristic ( o t f h o l d o u o a s l n a la s n r d s s ) ( o t f h o d s u o iz s l a e la n r d s s ) mmaa D ttuu a rr y ii s tt yy33 WW e a f v f ee e e iigg c r t a hh i g tt v ee e e dd 4 Standard q r I u a n a n t r g e t r e i - l 6 e ( c p o u m e m n r e c d m n e e t n r i t t - ) (p p l e o a r t a c i n o e s n n t) p r r a ic t i e n 7 g ALL BANKS 1 Overnight8 15,079,351 6,412 7.48 .07 7.14-7.77 79.6 12.9 Fed funds 2 One month and under 7,673,326 788 17 8.08 .13 7.39-8.39 73.3 14.1 Domestic 3 Fixed rate 6,387,718 1,125 16 7.91 .12 7.36-8.12 74.7 14.2 Domestic 4 Floating rate 1,285,608 317 20 8.93 .27 7.72-9.66 66.4 13.1 Prime 5 Over one month and under a year . 7,414,473 107 125 8.98 .21 7.78-9.96 72.3 10.6 Prime 6 Fixed rate 3,269,245 99 103 8.63 .27 7.61-9.78 68.7 16.6 Foreign 7 Floating rate 4,145,229 115 143 9.26 .20 8.56-10.12 75.0 6.0 Prime 8 Demand9 16,561,762 270 • 9.03 .17 7.71-10.11 80.1 6.8 Prime 9 Fixed rate 3,516,615 998 * 7.72 .20 7.19-8.00 81.2 2.1 Domestic 10 Floating rate 13,045,147 226 * 9.39 .15 8.84-10.20 79.7 8.1 Prime 11 Total short term 46,728,912 328 36 8.37 .14 7.32-9.14 77.5 10.6 Prime 12 Fixed rate (thousands of dollars)... 27,373,114 613 19 7.74 .08 7.24-7.92 76.7 12.6 Fed funds 13 1-24 221,756 7 111 11.50 .16 10.52-12.36 25.2 .0 Prime 14 25-49 125,094 33 130 10.92 .21 10.20-11.78 29.5 .4 Prime 15 50-99 176,240 63 104 11.09 .29 10.11-12.19 34.2 5.3 Prime 16 100-499 467,325 206 128 9.92 .27 8.88-11.00 48.9 13.1 Prime 17 500-999 340,945 691 43 8.44 .13 7.63-9.18 80.4 13.9 Domestic 18 1000 and over 26,041,754 7,865 15 7.62 .05 7.23-7.85 78.1 12.8 Fed funds 19 Floating rate (thousands of dollars) 19,355,798 198 98 9.26 .17 8.46-10.20 78.7 7.6 Prime 20 1-24 457,379 10 153 10.73 .08 9.92-11.30 72.3 .8 Prime 21 25-49 524,086 34 150 10.53 .07 9.85-11.04 72.5 1.4 Prime 22 50-99 832,120 66 148 10.17 .03 9.38-10.75 77.6 2.4 Prime 23 100-499 3,323,772 198 144 9.92 .06 9.11-10.47 83.8 5.1 Prime 24 500-999 1,556,790 659 135 9.71 .09 8.87-10.47 88.2 6.9 Prime 25 1000 and over 12,661,650 4,469 73 8.86 .19 7.79-9.92 76.8 9.2 Prime Months 26 Total long term 4,202,893 204 62 9.41 .27 8.13-10.47 53.0 11.3 Prime 27 Fixed rate (thousands of dollars)... 1,253,687 154 65 9.87 .35 8.10-11.85 42.2 22.1 Other 28 1-99 140,800 20 35 11.90 .15 10.47-12.13 12.7 .0 Prime 29 100-499 204,137 231 89 10.32 .23 9.38-11.02 10.9 .8 Prime 30 500-999 34,314 691 45 9.16 .26 8.75-9.67 64.3 6.1 Other 31 1000 and over 874,436 2,696 66 9.47 .49 7.65-12.13 53.3 31.2 Other 32 Floating rate (thousands of dollars) 2,949,206 237 60 9.22 .21 8.13-10.20 57.6 6.8 Prime 33 1-99 234,741 23 43 10.88 .13 9.93-11.57 22.6 1.4 Prime 34 100-499 325,764 204 61 10.12 .10 9.38-10.47 47.0 5.2 Prime 35 500-999 307,349 651 89 10.24 .18 9.72-10.65 40.4 4.3 Prime 36 1000 and over 2,081,352 5,442 58 8.74 .21 7.55-9.65 65.7 8.0 Prime Loan rate (percent) DDaayyss rPurji me ra,t e1"1 Effective4 Nominal10 LOANS MADE BELOW PRIME" 37 Overnight8 14,528,699 10,017 * 7.41 7.15 8.56 79.0 13.3 38 One month and under 6,226,466 4,457 15 7.63 7.36 8.64 74.2 13.6 39 Over one month and under a year 3,544,491 632 105 7.76 7.52 8.70 79.3 15.5 40 Demand9 5,951,703 1,940 * 7.51 7.33 8.60 64.4 3.8 41 Total short term 30,251,360 2,626 20 7.51 7.27 8.60 75.2 11.8 42 Fixed rate 24,517,040 3,654 14 7.47 7.23 8.59 77.1 13.4 43 Floating rate 5,734,320 1,192 63 7.72 7.46 8.65 67.1 4.9 Months 44 Total long term 1,613,116 736 46 7.98 7.75 8.86 75.4 5.9 45 Fixed rate 508,124 568 37 8.15 8.03 9.15 63.5 4.5 46 Floating rate .. 1,104,992 851 50 7.91 7.63 8.73 80.8 6.5 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 4.23 Continued A. Commercial and Industrial Loans Continued Weighted Loan rate (percent) Loans Amount of Average average made Partici- Characteristic (tho lo u a s n a s n ds (tho s u i s z a e n ds maturity3 Weighted Standard Inter- co u m nd m er it p lo at a i n o s n of dollars) of dollars) Days e a f v fe e c r t a i g v e e 4 error5 q r u a a n r g ti e l 6 e (p m er e c n e t n t) (percent) LARGE BANKS 1 Overnight8 11,021,395 9,289 7.51 7.24-7.79 76.7 13.1 2 3 On F e i x m ed o n r t a h t e a nd under 6 5, , 2 0 3 5 9 5 , , 3 8 6 3 0 6 4 3 , , 6 0 4 3 6 0 If 7 8 . . 9 0 5 3 7 7. . 3 4 8 4 - - 8 8 . . 3 3 0 6 7 7 9 7 . . 8 3 1 1 3 2 . . 4 5 4 Floating rate 816,476 938 19 8.55 7.63-9.11 61.5 19.0 5 Over one month and under a year ... 3,972,508 591 103 8.35 7.66-9.06 79.2 9.0 6 Fixed rate 1,943,984 1,028 93 8.10 7.61-8.82 78.0 15.2 7 Floating rate 2,028,523 420 113 8.59 7.76-9.30 80.3 3.2 8 Demand9 8,941,959 547 8.66 7.43-9.84 69.2 5.7 9 Fixed rate 2,380,074 3,997 7.63 7.12-8.00 74.7 2.0 10 Floating rate 6,561,885 417 9.04 8.03-9.% 67.3 7.0 11 Total short term 29,991,698 1,143 8.07 7.30-8.82 74.9 10.4 12 Fixed rate (thousands of dollars) 19,709,634 4,133 7.69 7.25-7.93 76.4 12.4 13 1-24 10,177 10 10.76 9.92-11.33 26.3 .0 14 25-49 11,687 33 85 10.33 9.77-11.02 27.2 .0 15 50-99 18,941 65 82 9.98 9.38-10.65 32.5 .0 16 100-499 118,812 222 49 9.19 8.32-10.12 60.0 1.9 17 500-999 195,547 686 43 8.39 7.63-9.14 76.9 6.8 18 1000 and over 19,354,470 8,601 15 7.67 7.25-7.92 76.6 12.5 19 Floating rate (thousands of dollars) .. 10,282,064 479 66 8.81 7.79-9.84 72.1 6.6 20 1-24 79,347 11 128 10.41 9.65-11.02 82.6 .0 21 25-49 114,164 34 130 10.27 9.65-11.02 79.9 .4 22 50-99 219,372 67 117 10.11 9.38-10.75 81.0 .6 23 100-499 1,128,537 209 130 9.76 9.11-10.24 85.5 3.4 24 500-999 687,112 665 108 9.56 8.87-10.14 88.6 5.0 25 1000 and over 8,053,532 5,870 58 8.54 7.60-9.34 68.4 7.5 Months 26 Total long term 2,119,240 1,189 8.57 7.41-9.38 76.2 27 Fixed rate (thousands of dollars)... 544,255 1,265 8.49 7.40-9.34 72.6 .0 28 1-99 5,956 22 11.79 10.47-12.40 8.7 .0 29 100-499 18,725 297 9.90 8.57-11.30 57.9 .0 30 500-999 8,330 625 9.67 8.84-10.75 90.4 .0 31 1000 and over 511,245 6,5% 8.38 7.40-9.34 73.6 .0 32 Floating rate (thousands of dollars) 1,574,985 1,165 8.60 7.41-9.58 77.4 2.9 33 1-99 26,864 36 10.73 9.92-11.30 50.8 2.7 34 100-499 75,276 222 10.01 9.11-10.65 61.8 4.0 35 500-999 69,488 663 9.50 8.84-10.38 82.9 5.2 36 1000 and over 1,403,357 9,239 8.44 7.34-9.31 78.5 2.7 Loan rate (percent) Days Prime rate11 Effective4 Nominal10 LOANS MADE BELOW PRIME12 37 Overnight8 10,598,577 10,913 7.45 7.18 8.57 76.0 13.6 38 One month and under 5,045,077 6,148 14 7.67 7.40 8.64 77.7 11.1 39 Over one month and under a year 2,621,957 4,704 102 7.69 7.46 8.60 81.7 10.7 40 Demand9 4,165,484 5,046 7.44 7.27 8.57 51.7 3.1 41 Total short term 22,431,096 7,065 7.52 7.28 8.59 72.5 10.8 42 Fixed rate 17,879,407 7,616 7.49 7.25 8.59 75.1 12.8 43 Floating rate 4,551,689 5,503 7.65 7.40 8.59 62.5 2.6 Months 44 Total long term 1,228,210 5,656 7.51 8.60 85.3 45 Fixed rate 322,399 4,523 7.70 7.66 8.69 74.7 .0 46 Floating rate .. 905,811 6,210 7.72 7.46 8.57 89.0 1.2 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • May 1988 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 1-5, 1988'—Continued A. Commercial and Industrial Loans — Continued2 Weighted Loan rate (percent) Loans Amount of Average average made Partici- Characteristic (tho lo u a s n a s n ds (tho s u iz sa e nds maturity3 Weighted Standard Inter- co u m nd m er it p lo at a i n o s n of dollars) of dollars) Days e a f v fe e c r t a i g v e e 4 error5 q r u a a n r g ti e l 6 e (p m er e c n e t n t) (percent) OTHER BANKS 1 Overnight8 4,057,956 3,482 7.39 7.05-7.52 87.3 12.2 2 One month and under 1,617,490 209 18 8.29 7.23-8.85 58.3 16.7 3 Fixed rate 1,148,358 252 17 7.75 7.20-7.85 51.5 22.2 4 Floating rate 469,132 147 22 9.59 7.92-10.75 75.0 3.0 5 Over one month and under a year . 3,441,966 55 151 9.71 8.78-10.75 64.3 12.5 6 Fixed rate 1,325,260 42 117 9.41 7.55-11.07 55.1 18.6 7 Floating rate 2,116,705 68 172 9.90 9.05-10.47 70.0 8.6 8 Demand9 7,619,803 170 9.46 8.84-10.20 92.7 8.1 9 Fixed rate 1,136,540 388 7.90 7.30-8.06 94.9 2.1 10 Floating rate 6,483,262 154 9.74 9.11-10.33 92.4 9.2 11 Total short term 16,737,214 144 8.90 7.38-10.20 82.3 10.8 12 Fixed rate (thousands of dollars)... 7,663,480 192 27 7.87 7.12-7.91 77.6 13.3 13 1-24 211,579 7 112 11.53 10.52-12.36 25.2 .0 14 25-49 113,407 33 134 10.98 10.38-11.78 29.8 .5 15 50-99 157,299 63 107 11.22 10.14-12.47 34.4 5.9 16 100-499 348,513 201 155 10.17 9.04-11.35 45.1 17.0 17 500-999 145,398 697 43 8.50 7.64-9.38 85.2 23.4 18 1000 and over 6,687,284 6,306 13 7.48 7.12-7.72 82.6 13.7 19 Floating rate (thousands of dollars) 9,073,734 119 145 9.77 9.11-10.47 86.2 8.7 20 1-24 378,032 9 157 10.80 9.92-11.35 70.2 1.0 21 25-49 409,922 33 153 10.60 9.92-11.19 70.5 1.7 22 50-99 612,748 66 154 10.19 9.58-10.75 76.4 3.0 23 100-499 2,195,235 193 148 10.01 9.31-10.47 82.9 5.9 24 500-999 869,678 655 149 9.83 8.98-10.47 87.9 8.3 25 1000 and over 4,608,118 3,154 133 9.42 8.84-10.20 91.5 12.2 Months 26 Total long term 2,083,653 111 10.27 9.38-11.35 29.4 20.7 27 Fixed rate (thousands of dollars)... 709,431 92 10.93 9.71-12.13 18.8 39.0 28 1-99 134,844 20 11.91 10.47-12.13 12.8 .0 29 100-499 185,412 226 10.36 9.38-10.75 6.2 .9 30 500-999 25,984 715 9.00 8.75-9.65 56.0 8.1 31 1000 and over 363,191 1,471 11.00 10.23-12.13 24.8 75.1 32 Floating rate (thousands of dollars) 1,374,221 124 9.92 9.05-10.47 34.8 11.3 33 1-99 207,877 22 10.90 9.96-11.57 18.9 1.2 34 100-499 250,488 199 10.16 9.38-10.47 42.6 5.6 35 500-999 237,861 648 10.45 9.92-10.75 27.9 4.1 36 1000 and over 677,995 2,941 9.35 8.84-10.11 39.2 19.0 Loan rate (percent) Days Prime rate11 Effective4 Nominal10 LOANS MADE BELOW PRIME12 37 Overnight8 3,930,122 8,200 7.29 7.04 8.54 87.1 12.6 38 One month and under 1,181,390 2,049 17 7.47 7.22 8.61 59.1 24.0 39 Over one month and under a year 922,534 183 112 7.94 7.69 9.01 72.7 29.2 40 Demand9 1,786,218 797 7.70 7.47 8.65 93.9 5.3 41 Total short term 7,820,264 937 7.49 7.24 8.63 82.7 14.6 42 Fixed rate 6,637,632 1,522 14 7.40 7.16 8.59 82.3 14.8 43 Floating rate 1,182,631 297 116 7.95 7.71 8.89 84.9 13.5 Months 44 Total long term 384,905 195 54 8.83 8.53 9.68 43.7 21.9 45 Fixed rate 185,724 226 8.93 8.67 9.93 44.0 12.4 46 Floating rate 199,181 173 8.73 8.40 9.44 43.5 30.7 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A73 4.23 Continued B. Construction and Land Development Loans1 Loan rate (percent) AAmmoouunntt ooff AAvveerraaggee WWeeiigghhtteedd LLooaannss mmaaddee PPaarrttiiccii-llooaannss ssiizzee aavveerraaggee uunnddeerr ppaattiioonn CChhaarraacctteerriissttiicc (( oo tt ff hh oo dd uu oo ss ll aa llaa nn rr dd ss ss )) (( oo tt ff hh oo dd uu oo ss ll aa llaa nn rr dd ss ss )) (( mm mm aa oo tt nn uu tt rr hh iitt ss yy )) 33 W e a f v f e e e i c g r t a h i g t v e e e d 4 St e a r n ro d r a 5 r d q r I u a n a n t r e g t r i e - l 6 e ccoo (( mm ppee mm rrcc iitt ee mm nntt ee )) nn tt ((pp ll ee oo rr aa cc nn ee ss nn tt)) ALL BANKS 1 Total 3,922,390 208 9 9.22 .21 8.43-9.92 83.7 25.1 7. Fixed rate (thousands of dollars) 2,273,566 499 5 8.84 .32 8.20-8.87 88.3 31.0 1-24 27,155 10 7 10.82 .22 9.69-12.19 57.4 1.2 4 25-49 23,025 32 6 11.44 .37 10.39-12.68 38.0 1.3 50-99 12,659 54 7 11.04 .46 10.39-11.91 12.6 1.3 6 100-499 67,261 156 10 10.45 .52 9.65-11.57 33.0 12.0 7 500 and over 2,143,466 5,671 5 8.73 .33 8.20-8.84 91.4 32.5 8 Floating rate (thousands of dollars) ... 1,648,824 115 19 9.75 .15 9.11-10.47 77.5 17.0 9 1-24 85,438 10 5 10.59 .15 10.20-11.02 88.0 1.8 10 25-49 79,680 35 10 10.67 .11 9.93-11.02 85.9 2.9 11 50-99 99,626 70 12 10.32 .09 9.75-10.75 71.8 4.3 17 100-499 275,561 195 15 10.14 .09 9.58-10.75 77.6 6.1 13 500 and over 1,108,519 1,441 23 9.47 .16 8.87-9.92 76.5 23.1 By type of construction 14 Single family 361,630 35 11 10.48 .11 9.92-11.02 71.9 2.1 IS Multifamily 327,594 252 10 9.69 .13 9.01-10.47 93.8 21.4 16 Nonresidential 3,233,166 442 9 9.04 .21 8.29-9.38 84.0 28.1 LARGE BANKS13 1 Total 2,388,141 1,384 5 8.83 .20 8.29-9.11 92.4 19.8 7. Fixed rate (thousands of dollars) 1,635,743 6,014 3 8.66 .17 8.29-8.73 99.2 19.5 3 1-24 843 11 11 10.26 .22 9.92-10.75 85.5 37.6 4 25-49 1,143 34 22 10.48 .52 9.92-11.30 73.5 16.0 5 50-99 * * * * * * * * 6 100-499 7,899 225 12 8.21 .39 7.92-9.94 84.8 41.1 7 500 and over 1,624,790 14,908 3 8.66 .23 8.29-8.73 99.4 19.4 8 Floating rate (thousands of dollars) ... 752,399 518 12 9.22 .20 8.84-9.92 77.4 20.4 9 1-24 4,487 11 8 10.42 .26 9.92-11.02 91.8 4.0 10 25-49 8,210 36 11 10.11 .13 9.79-10.47 95.9 5.9 11 50-99 15,714 70 9 10.01 .11 9.65-10.47 92.4 1.5 17 100-499 73,123 218 12 9.84 .09 9.42-10.20 96.1 11.1 13 500 and over 650,865 2,712 12 9.11 .21 8.45-9.65 74.7 22.2 By type of construction 14 Single family 25,863 67 11 10.08 .09 9.92-10.47 9944..11 8.0 IS Multifamily 216,039 730 4 9.45 .19 8.87-10.20 93.4 23.9 16 Nonresidential 2,146,240 2,063 5 8.76 .20 8.29-8.87 92.2 19.5 OTHER BANKS13 1 Total 1,534,249 90 16 9.83 .29 9.11-11.00 70.3 33.4 7. Fixed rate (thousands of dollars) 637,823 149 9 9.32 .50 7.71-11.30 60.2 60.5 3 1-24 26,312 10 7 10.84 .38 9.69-12.19 56.5 .0 4 25-49 21,882 32 5 11.49 .54 10.39-12.68 36.2 .6 S 50-99 11,592 53 7 11.18 .45 10.39-11.91 8.3 .0 6 100-499 59,362 150 10 10.75 .74 9.65-11.57 26.2 8.2 7 500 and over 518,676 1,928 9 8.95 .75 7.71-10.25 66.5 73.5 8 Floating rate (thousands of dollars) ... 896,425 70 23 10.19 .11 9.42-10.75 77.5 14.2 9 1-24 80,951 10 5 10.60 .18 10.24-11.02 87.8 1.7 10 25-49 71,469 35 10 10.73 .14 10.20-11.03 84.8 2.5 11 50-99 83,912 70 12 10.38 .13 9.75-10.79 67.9 4.8 17 100-499 202,438 188 15 10.24 .11 9.65-11.02 70.9 4.3 13 500 and over 457,655 865 33 9.97 .20 9.11-10.24 79.1 24.2 By type of construction 14 Single family 335,767 34 11 10.51 .18 9.92-11.02 70.2 1.6 IS Multifamily 111,556 111 19 10.15 .17 9.65-10.75 94.7 16.5 16 Nonresidential 1,086,926 173 17 9.59 .31 7.71-11.02 67.8 45.0 1. 40.8 percent of construction and land development loans were priced relative For notes see end of table, to the prime rate. *Fewer than 10 sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • May 1988 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 1-5, 1988'—Continued C. Loans to Farmers13 Size class of loans (thousands) Characteristic All sizes $1-9 $10-24 $25-49 $50-99 $100-249 and $ 2 o 50 v er ALL BANKS 1 Amount of loans (thousands of dollars) $1,073,523 $98,023 $125,425 $147,492 $174,367 $215,790 $312,427 2 Number of loans 43,529 26,430 8,225 4,305 2,534 1,467 568 3 Weighted average maturity (months) 17.5 8.2 11.8 16.8 24.7 28.3 11.2 4 Weighted average interest rate (percent)4 11.00 11.57 11.55 11.06 11.07 11.03 10.52 5 Standard error .48 .35 .69 .77 .61 .51 .98 6 Interquartile rante6 10.24-11.61 10.92-12.26 10.78-12.10 10.50-11.76 10.50-11.75 10.52-11.61 9.04-11.07 By purpose of loan 7 Feeder livestock 10.26 11.51 11.20 11.31 10.76 10.36 9.48 8 Other livestock 12.53 11.47 12.06 10.72 10.16 * 13.54 9 Other current operating expenses 11.05 11.57 11.47 11.15 10.95 11.16 10.43 10 Farm machinery and equipment 12.02 11.53 14.44 11.04 * * * II Farm real estate 10.31 11.57 9.89 11.02 * * * 12 Other 10.82 11.69 10.94 10.86 11.10 11.31 9.54 Percentage of amount of loans 13 With floating rates 58.4 45.4 54.8 66.3 70.5 48.5 60.3 14 Made under commitment 59.5 43.6 49.2 38.7 52.6 54.9 85.5 By purpose of loan 1.*) Feeder livestock 1188..55 1122..11 1155..11 1177..44 11.0 14.5 29.2 16 Other livestock 8.6 6.4 6.2 11.0 2.2 * 17.5 17 Other current operating expenses 47.6 64.1 54.6 38.6 49.8 55.8 36.9 18 Farm machinery and equipment 4.8 8.4 6.6 7.2 19 Farm real estate 6.0 1.6 2.5 8.9 20 Other 14.5 7.4 15.0 16.9 22.5 16.7 9.5 LARGE BANKS13 1 Amount of loans (thousands of dollars) $319,986 $8,572 $13,560 $17,759 $28,906 $61,070 $190,120 2 Number of loans 4,649 2,158 895 506 440 388 263 3 Weighted average maturity (months) 14.9 8.5 10.0 8.2 16.2 12.3 16.7 4 Weighted average interest rate (percent)4 9.66 10.71 10.51 10.32 10.06 10.13 9.28 5 Standard error .33 .32 .59 .74 .59 .48 .30 6 Interquartile rante 9.04-10.38 10.17-11.20 9.92-11.00 9.85-10.68 9.60-10.52 9.60-10.52 8.84-9.84 By purpose of loan 7 Feeder livestock 9.43 99..8822 1100..3355 1100..2266 10.22 10.13 9.09 8 Other livestock 9.71 10.56 10.86 * 9.89 * 9.54 9 Other current operating expenses 9.90 10.84 10.45 10.20 10.04 10.22 9.40 10 Farm machinery and equipment 10.48 11.52 11.61 * * 11 Farm real estate 9.25 10.92 10.64 10.82 * * * 12 Other 9.76 10.82 10.28 10.49 10.05 9.82 9.54 Percentage of amount of loans 13 With floating rates 86.4 90.6 93.2 92.3 91.9 94.3 81.7 14 Made under commitment 88.8 81.9 77.7 81.2 87.1 89.4 90.7 By purpose of loan 15 Feeder livestock 3344..55 1133..44 1111..77 18.9 18.6 38.8 39.5 16 Other livestock 9.7 4.1 6.7 * 9.3 * 11.8 17 Other current operating expenses 30.7 63.3 55.5 47.6 44.4 36.6 21.9 18 Farm machinery and equipment 2.1 1.8 5.4 * * 19 Farm real estate 7.8 6.0 4.6 6.4 20 Other 15.2 11.4 16.0 17.8 20.8 11.1 15.6 OTHER BANKS13 1 Amount of loans (thousands of dollars) $753,537 $89,452 $111,865 $129,734 $145,460 $154,720 * 7, Number of loans 38,879 24,272 7,330 3,798 2,095 1,079 * 3 Weighted average maturity (months)3 18.1 8.2 12.0 17.5 25.8 31.7 * 4 Weighted average interest rate (percent)4 11.57 11.66 11.67 11.16 11.27 11.38 * 5 Standard error .35 .14 .36 .21 .13 .16 6 Interquartile rante6 10.93-11.95 11.02-12.31 10.78-12.19 10.77-11.77 10.78-11.79 10.97-12.10 * By purpose of loan 7 Feeder livestock 1111..3322 1111..6699 1111..2288 11.47 9 8 O O t t h h e e r r c li u v r e r s e t n o t c k o perating expenses 1 1 1 3 . . 3 9 2 5 1 1 1 1 . . 6 7 4 4 11.60 * 11.31 * 11.1 * 1 11.38 * • * 10 Farm machinery and equipment 12.25 11.53 * 11 Farm real estate 10.98 * 12 Other 11.30 11.83 11.03 10.91 11.29 * * For notes see end of table. •Fewer than 10 sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A75 4.23 Continued C. Loans to Farmers14—Continued Size class of loans (thousands) Characteristic $250 All sizes $1-9 $10-24 $25-49 $50-99 $100-249 and over Percentage of amount of loans 13 With floating rates 46.5 41.1 50.1 62.7 66.2 30.4 * 14 Made under commitment 47.0 39.9 45.8 32.9 45.7 41.3 * By purpose of loan 15 Feeder livestock 11.7 11.9 15.5 17.2 * * « 16 Other livestock 8.1 6.6 * * « * • 17 Other current operating expenses 54.8 64.2 54.5 37.3 50.9 63.4 * 18 Farm machinery and equipment 5.9 9.1 * * * * * 19 Farm real estate 5.2 * * * * * * 20 Other 14.2 7.1 14.8 16.8 22.9 * * *Fewer than 10 sample loans. differ by less than this amount from the average rate that would be found by a 1. The survey of terms of bank lending to business collects data on gross loan complete survey of lending at all banks. extensions made during the first full business week in the mid-month of each 6. The interquartile range shows the interest rate range that encompasses the quarter by a sample of 340 commercial banks of all sizes. A subsample of 250 middle 50 percent of the total dollar amount of loans made. banks also report loans to fanners. The sample data are blown up to estimate the 7. The most common base rate is that rate used to price the largest dollar lending terms at all insured commercial banks during that week. The estimated volume of loans. Base pricing rates include the prime rate (sometimes referred to terms of bank lending are not intended for use in collecting the terms of loans as a bank's "basic" or "reference" rate); the federal funds rate; domestic money extended over the entire quarter or residing in the portfolios of those banks. market rates other than the federal funds rate; foreign money market rates; and Construction and land development loans include both unsecured loans and loans other base rates not included in the foregoing classifications. secured by real estate. Thus, some of the construction and land development 8. Overnight loans are loans that mature on the following business day. loans would be reported on the statement of condition as real estate loans and the 9. Demand loans have no stated date of maturity. remainder as business loans. Mortgage loans, purchased loans, foreign loans, and 10. Nominal (not compounded) annual interest rates are calculated from survey loans of less than $1,000 are excluded from the survey. data on the stated rate and other terms of the loan and weighted by loan size. As of Dec. 31,1985, assets of most of the large banks were at least $5.5 billion. 11. The prime rate reported by each bank is weighted by the volume of loans For all insured banks total assets averaged $165 million. extended and then averaged. 2. Beginning with the August 1986 survey respondent banks provide informa- 12. The proportion of loans made at rates below prime may vary substantially tion on the type of base rate used to price each commercial and industrial loan from the proportion of such loans outstanding in banks'portfolios. made during the survey week. This reporting change is reflected in the new 13. Among banks reporting loans to farmers (Table C), most "large banks" column on the most common base pricing rate in table A and footnote 13 from (survey strata 1 to 3) had over $600 million in total assets, and most "other banks" table B. (survey strata 4 to 6) had total assets below $600 million. 3. Average maturities are weighted by loan size and exclude demand loans. The survey of terms of bank lending to farmers now includes loans secured by 4. Effective (compounded) annual interest rates are calculated from the stated farm real estate. In addition, the categories describing the purpose of farm loans rate and other terms of the loan and weighted by loan size. have now been expanded to include "purchase or improve farm real estate." In 5. The chances are about two out of three that the average rate shown would previous surveys, the purpose of such loans was reported as "other." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 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 STAHLY 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 JARED J. ENZLER, Associate Director OFFICE OF THE SECRETARY THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director WILLIAM W. WILES, Secretary ELEANOR J. STOCKWELL, Associate Director BARBARA R. LOWREY, Associate Secretary MARTHA BETHEA, Deputy Associate Director JAMES MCAFEE, Associate Secretary PETER A. TINSLEY, Deputy Associate Director MARK N. GREENE, Assistant Director MYRON L. KWAST, Assistant Director DIVISION OF CONSUMER SUSAN J. LEPPER, Assistant Director AND COMMUNITY AFFAIRS MARTHA S. SCANLON, Assistant Director DAVID J. STOCKTON, Assistant Director GRIFFITH L. GARWOOD, Director JOYCE K. ZICKLER, Assistant Director GLENN E. LONEY, Assistant Director LEVON H. GARABEDIAN, Assistant Director (Administration) ELLEN MALAND, Assistant Director DOLORES S. SMITH, Assistant Director DIVISION OF MONETARY AFFAIRS DIVISION OF BANKING SUPERVISION AND REGULATION DONALD L. KOHN, Director DAVID E. LINDSEY, Deputy Director WILLIAM TAYLOR, Staff Director BRIAN F. MADIGAN, Assistant Director DON E. KLINE, Associate Director RICHARD D. PORTER, Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board FREDERICK M. STRUBLE, Associate Director WILLIAM A. RYBACK, Deputy Associate Director STEPHEN C. SCHEMERING, Deputy Associate Director OFFICE OF THE INSPECTOR GENERAL RICHARD SPILLENKOTHEN, Deputy Associate Director HERBERT A. BIERN, Assistant Director BRENT L. BOWEN, Inspector General JOE M. CLEAVER, Assistant Director ANTHONY CORNYN, Assistant Director JAMES I. GARNER, Assistant Director JAMES D. GOETZINGER, Assistant Director MICHAEL G. MARTINSON, Assistant Director ROBERT S. PLOTKIN, Assistant Director SIDNEY M. SUSSAN, Assistant Director LAURA M. HOMER, Securities Credit Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All 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 DIVISION OF FEDERAL RESERVE Programs Officer BANK OPERATIONS DIVISION OF HUMAN RESOURCES MANAGEMENT CLYDE H. FARNSWORTH, JR., Director ELLIOTT C. MCENTEE, Associate Director DAVID L. SHANNON, Director DAVID L. ROBINSON, Associate Director JOHN R. WEIS, Associate Director C. WILLIAM SCHLEICHER, JR., Associate Director ANTHONY V. DIGIOIA, Assistant Director CHARLES W. BENNETT, Assistant Director JOSEPH H. HAYES, JR., Assistant Director JACK DENNIS, JR., Assistant Director FRED HOROWITZ, Assistant Director EARL G. HAMILTON, Assistant Director JOHN H. PARRISH, Assistant Director OFFICE OF THE CONTROLLER LOUISE L. ROSEMAN, Assistant Director FLORENCE M. YOUNG, Adviser GEORGE E. LIVINGSTON, Controller STEPHEN J. CLARK, Assistant Controller (Programs and Budgets) DARRELL R. PAULEY, Assistant Controller (Finance) 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

78 Federal Reserve Bulletin • May 1988 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. ROBERT P. BLACK W. LEE HOSKINS ROBERT T. PARRY ROBERT P. FORRESTAL MANUEL H. JOHNSON MARTHA R. SEGER ALTERNATE MEMBERS ROGER GUFFEY THOMAS C. MELZER THOMAS M. TIMLEN SILAS KEEHN FRANK E. MORRIS STAFF DONALD L. KOHN, Secretary and Economist J. ALFRED BROADDUS, JR., Associate Economist NORMAND R.V. BERNARD, Assistant Secretary JOHN M. DAVIS, Associate Economist ROSEMARY R. LONEY, Deputy Assistant Secretary RICHARD G. DAVIS, Associate Economist MICHAEL BRADFIELD, General Counsel DAVID E. LINDSEY, Associate Economist ERNEST T. PATRIKIS, Deputy General Counsel CHARLES J. SIEGMAN, Associate Economist MICHAEL J. PRELL, Economist THOMAS D. SIMPSON, Associate Economist EDWIN M. TRUMAN, Economist LAWRENCE SLIFMAN, Associate Economist JOHN H. BEEBE, Associate Economist SHEILA L. TSCHINKEL, 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 CHARLES T. FISHER, III, President BENNETT A. BROWN, Vice President J. TERRENCE MURRAY, First District CHARLES T. FISHER, III, Seventh District WILLARD C. BUTCHER, Second District DONALD N. BRANDIN, Eighth District SAMUEL A. MCCULLOUGH, Third District DEWALT H. ANKENY, JR., Ninth District THOMAS H. O'BRIEN, Fourth District F. PHILLIPS GILTNER, Tenth District FREDERICK DEANE, JR., Fifth District GERALD W. FRONTERHOUSE, Eleventh District BENNETT A. BROWN, Sixth District PAUL HAZEN, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

79 and Advisory Councils CONSUMER ADVISORY COUNCIL STEVEN W. HAMM, Columbia, South Carolina, Chairman EDWARD J. WILLIAMS, Chicago, Illinois, Vice Chairman NAOMI G. ALBANESE, Greensboro, North Carolina ROBERT A. HESS, Washington, D.C. STEPHEN BROBECK, Washington, D.C. ROBERT J. HOBBS, Boston, Massachusetts EDWIN B. BROOKS, JR., Richmond, Virginia RAMON E. JOHNSON, Salt Lake City, Utah JUDITH N. BROWN, Edina, Minnesota ROBERT W. JOHNSON, West Lafayette, Indiana MICHAEL S. CASSIDY, New York, New York A. J. (JACK) KING, Kalispell, Montana BETTY TOM CHU, Arcadia, California JOHN M. KOLESAR, Cleveland, Ohio JERRY D. CRAFT, Atlanta, Georgia ALAN B. LERNER, Dallas, Texas DONALD C. DAY, Boston, Massachusetts RICHARD L. D. MORSE, Manhattan, Kansas RICHARD B. DOBY, Denver, Colorado WILLIAM E. ODOM, Dearborn, Michigan RICHARD H. FINK, Washington, D.C. SANDRA R. PARKER, Richmond, Virginia NEIL J. FOGARTY, Jersey City, New Jersey SANDRA PHILLIPS, Pittsburgh, Pennsylvania STEPHEN GARDNER, Dallas, Texas JANE SHULL, Philadelphia, Pennsylvania KENNETH A. HALL, Picayune, Mississippi RALPH E. SPURGIN, Columbus, Ohio ELENA G. HANGGI, Little Rock, Arkansas LAWRENCE WINTHROP, Portland, Oregon THRIFT INSTITUTIONS ADVISORY COUNCIL JAMIE J. JACKSON, Houston, Texas, President GERALD M. CZARNECKI, Honolulu, Hawaii, Vice President ROBERT S. DUNCAN, Hattiesburg, Mississippi JOSEPH W. MOSMILLER, Baltimore, Maryland BETTY GREGG, Phoenix, Arizona JANET M. PAVLISKA, Arlington, Massachusetts THOMAS A. KINST, Hoffman Estates, Illinois LOUIS H. PEPPER, Seattle, Washington RAY MARTIN, LOS Angeles, California WILLIAM G. SCHUETT, Milwaukee, Wisconsin JOE C. MORRIS, Emporia, Kansas DONALD B. SHACKELFORD, Columbus, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. Mail Stop 138, Board of Governors of the Federal Reserve $13.50 each. System, Washington, D.C. 20551. When a charge is indicat- FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updated, payment should accompany request and be made to the ed at least monthly. (Requests must be prepaid.) Board of Governors of the Federal Reserve System. Payment Consumer and Community Affairs Handbook. $75.00 per from foreign residents should be drawn on a U.S. bank. year. Stamps and coupons are not accepted. Monetary Policy and Reserve Requirements Handbook. $75.00 per year. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- Securities Credit Transactions Handbook. $75.00 per year. TIONS. 1984. 120 pp. Federal Reserve Regulatory Service. 3 vols. (Contains all ANNUAL REPORT. three Handbooks plus substantial additional material.) ANNUAL REPORT: BUDGET REVIEW, 1986-87. $200.00 per year. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or Rates for subscribers outside the United States are as $2.00 each in the United States, its possessions, Canada, follows and include additional air mail costs: and Mexico; 10 or more of same issue to one address, Federal Reserve Regulatory Service, $250.00 per year. $18.00 per year or $1.75 each. Elsewhere, $24.00 per Each Handbook, $90.00 per year. year or $2.50 each. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint MULTICOUNTRY MODEL, May 1984.590 pp. $14.50 each. of Part I only) 1976. 682 pp. $5.00. WELCOME TO THE FEDERAL RESERVE. BANKING AND MONETARY STATISTICS. 1941-1970. 1976. PROCESSING AN APPLICATION THROUGH THE FEDERAL RE- 1,168 pp. $15.00. SERVE SYSTEM. August 1985. 30 pp. ANNUAL STATISTICAL DIGEST INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 1974-78. 1980. 305 pp. $10.00 per copy. 440 pp. $9.00 each. 1981. 1982. 239 pp. $ 6.50 per copy. FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. 1982. 1983. 266 pp. $ 7.50 per copy. December 1986. 264 pp. $10.00 each. 1983. 1984. 264 pp. $11.50 per copy. 1984. 1985. 254 pp. $12.50 per copy. 1985. 1986. 231 pp. $15.00 per copy. CONSUMER EDUCATION PAMPHLETS 1986. 1987. 288 pp. $15.00 per copy. Short pamphlets suitable for classroom use. Multiple copies HISTORICAL CHART BOOK. Issued annually in Sept. $1.25 are available without charge. each in the United States, its possessions, Canada, and Mexico; 10 or more to one address, $1.00 each. Elsewhere, $1.50 each. Consumer Handbook on Adjustable Rate Mortgages SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- Consumer Handbook to Credit Protection Laws RIES OF CHARTS. Weekly. $21.00 per year or $.50 each in Fair Credit Billing the United States, its possessions, Canada, and Mexico; Federal Reserve Glossary 10 or more of same issue to one address, $19.50 per year A Guide to Business Credit and the Equal Credit Opportunity or $.45 each. Elsewhere, $26.00 per year or $.60 each. Act THE FEDERAL RESERVE ACT, and other statutory provisions Guide to Federal Reserve Regulations affecting the Federal Reserve System, as amended How to File A Consumer Credit Complaint through April 20, 1983, with Supplements covering If You Borrow To Buy Stock amendments through August 1987. 576 pp. $7.00. If You Use A Credit Card REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- Series on the Structure of the Federal Reserve System ERAL RESERVE SYSTEM. The Board of Governors of the Federal Reserve System ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— The Federal Open Market Committee Regulation Z) Vol. I (Regular Transactions). 1969. 100 Federal Reserve Bank Board of Directors pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each Federal Reserve Banks volume $2.25; 10 or more of same volume to one Organization and Advisory Committees address, $2.00 each. FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one address, $1.50 each. PAMPHLETS FOR FINANCIAL INSTITUTIONS THE BANK HOLDING COMPANY MOVEMENT TO 1978: A Short pamphlets on regulatory compliance, primarily suit- COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to able for banks, bank holding companies and creditors. one address, $2.25 each. INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; 10 or more to one address, $1.25 each. Limit of 50 copies Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

81 The Board of Directors' Opportunities in Community Rein- 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET vestment INTERVENTION: A REVIEW OF THE LITERATURE, by The Board of Directors' Role in Consumer Law Compliance Ralph W. Tryon. October 1983. 14 pp. Out of print. Combined Construction/Permanent Loan Disclosure and 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Regulation Z INTERVENTION: APPLICATIONS TO CANADA, GERMA- Community Development Corporations and the Federal Re- NY, AND JAPAN, by Deborah J. Danker, Richard A. serve Haas, Dale W. Henderson, Steven A. Symansky, and Construction Loan Disclosures and Regulation Z Ralph W. Tryon. April 1985. 27 pp. Out of print. Finance Charges Under Regulation Z 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- How to Determine the Credit Needs of Your Community MY, by Darrell Cohen and Peter B. Clark. January Regulation Z: The Right of Rescission 1984. 16 pp. Out of print. The Right to Financial Privacy Act 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF Signature Rules in Community Property States: Regulation B FINANCIAL DEREGULATION, INTERSTATE BANKING, Signature Rules: Regulation B AND FINANCIAL SUPERMARKETS, by Stephen A. Timing Requirements for Adverse Action Notices: Regula- Rhoades. February 1984. Out of print. tion B 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDE- What An Adverse Action Notice Must Contain: Regulation B LINES, AND THE LIMITS OF CONCENTRATION IN LO- Understanding Prepaid Finance Charges: Regulation Z CAL BANKING MARKETS, by James Burke. June 1984. Closing the Loan: A Consumer's Guide to Mortgage Settle- 14 pp. Out of print. ment Costs 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN Refinancing Your Mortgage THE UNITED STATES, by Thomas D. Simpson and A Consumer's Guide to Lock-Ins Patrick M. Parkinson. August 1984. 20 pp. 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF THE LITERATURE, by John D. Wolken. November 1984. 38 pp. Out of print. STAFF STUDIES. Summaries Only Printed in the Bulletin 141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAY- MENT COSTS, by William Dudley. November 1984. Studies and papers on economic and financial subjects that 15 pp. Out of print. are of general interest. Requests to obtain single copies of the full text or to be added to the mailing list for the series 142. MERGERS AND ACQUISITIONS BY COMMERCIAL may be sent to Publications Services. BANKS, 1960-83, by Stephen A. Rhoades. December 1984. 30 pp. Out of print. 143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF Staff Studies 115-125 are out of print. THE ELECTRONIC FUND TRANSFER ACT: RECENT SURVEY EVIDENCE, by Frederick J. Schroeder. April 1985. 23 pp. Out of print. 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- 144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CON- DENCE ON COMPETITION AND PERFORMANCE IN SUMER CREDIT REGULATIONS: THE TRUTH IN LEND- BANKING MARKETS, by Timothy J. Curry and John T. ING AND EQUAL CREDIT OPPORTUNITY LAWS, by Rose. Jan. 1982. 9 pp. Gregory E. Elliehausen and Robert D. Kurtz. May 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- 1985. 10 pp. KET INTERVENTION, by Donald B. Adams and Dale 145. SERVICE CHARGES AS A SOURCE OF BANK INCOME W. Henderson. August 1983. 5 pp. Out of print. AND THEIR IMPACT ON CONSUMERS, by Glenn B. 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- Canner and Robert D. Kurtz. August 1985. 31 pp. Out VENTION: JANUARY-MARCH 1975, by Margaret L. of print. Greene. August 1984. 16 pp. Out of print. 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, VENTION: SEPTEMBER 1977-DECEMBER 1979, by Mar- by Thomas F. Brady. November 1985. 25 pp. garet L. Greene. October 1984. 40 pp. Out of print. 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- INDEXES OF THE MONETARY AGGREGATES, by Helen VENTION: OCTOBER 1980-OcTOBER 1981, by Margaret T. Farr and Deborah Johnson. December 1985. 42 pp. L. Greene. August 1984. 36 pp. 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- TION RESULTS, by Flint Bray ton and Peter B. Clark. BLES: A REVIEW OF THE LITERATURE, by Victoria S. December 1985. 17 pp. Farrell with Dean A. DeRosa and T. Ashby McCown. 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS January 1984. Out of print. IN BANKING BEFORE AND AFTER ACQUISITION, by 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- Stephen A. Rhoades. April 1986. 32 pp. DEUTSCHE MARK INTERVENTION, by Laurence R. 150. STATISTICAL COST ACCOUNTING MODELS IN BANK- Jacobson. October 1983. 8 pp. ING: A REEXAMINATION AND AN APPLICATION, by 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- John T. Rose and John D. Wolken. May 1986. 13 pp. TWEEN EXCHANGE RATES AND INTERVENTION: A 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT REVIEW OF THE TECHNIQUES AND LITERATURE, by PRICING FROM 1983 THROUGH 1985, by Patrick I. Kenneth Rogoff. October 1983. 15 pp. Mahoney, Alice P. White, Paul F. O'Brien, and Mary 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- M. McLaughlin. January 1987. 30 pp. VENTION, AND INTEREST RATES: AN EMPIRICAL IN- 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A VESTIGATION, by Bonnie E. Loopesko. November REVIEW OF THE LITERATURE, by Mark J. War- 1983. Out of print. shawsky. April 1987. 18 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis Bank Lending to Developing Countries. 10/84. and Alice P. White. September 1987. 14 pp. Survey of Consumer Finances, 1983: A Second Report. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF 12/84. PROPOSED CEILINGS ON CREDIT CARD INTEREST Union Settlements and Aggregate Wage Behavior in the RATES, by Glenn B. Canner and James T. Fergus. 1980s. 12/84. October 1987. 783 pp. The Thrift Industry in Transition. 3/85. 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark A Revision of the Index of Industrial Production. 7/85. J. Warshawsky. November 1987. 25 pp. Financial Innovation and Deregulation in Foreign Industrial Countries. 10/85. Recent Developments in the Bankers Acceptance Market. 1/86. REPRINTS OF BULLETIN ARTICLES The Use of Cash and Transaction Accounts by American Most of the articles reprinted do not exceed 12 pages. Families. 2/86. Financial Characteristics of High-Income Families. 3/86. Prices, Profit Margins, and Exchange Rates. 6/86. Limit of 10 copies Agricultural Banks under Stress. 7/86. Foreign Lending by Banks: A Guide to International and U.S. Statistics. 10/86. Foreign Experience with Targets for Money Growth. 10/83. Recent Developments in Corporate Finance. 11/86. Intervention in Foreign Exchange Markets: A Summary of U.S. International Transactions in 1986. 5/87. Ten Staff Studies. 11/83. Measuring the Foreign-Exchange Value of the Dollar. 6/87. A Financial Perspective on Agriculture. 1/84. Changes in Consumer Installment Debt: Evidence from the Survey of Consumer Finances, 1983. 9/84. 1983 and 1986 Surveys of Consumer Finances. 10/87. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

83 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, 74 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 37 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 8 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21 Deposits (See also specific types) Nonfinancial corporations, 36 Banks, by classes, 3, 18-20, 21 Automobiles Federal Reserve Banks, 4, 10 Consumer installment credit, 40, 41 Turnover, 15 Production, 47, 48 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) Discounts and advances by Reserve Banks (See Loans) BANKERS acceptances, 9, 23, 24 Dividends, corporate, 35 Bankers balances, 18-20 (See also Foreigners) Bonds (See also U.S. government securities) EMPLOYMENT, 45 New issues, 34 Eurodollars, 24 Rates, 24 Branch banks, 21, 55 FARM mortgage loans, 39 Business activity, nonfinancial, 44 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business expenditures on new plant and equipment, 36 Federal credit agencies, 33 Business loans (See Commercial and industrial loans) Federal finance Debt subject to statutory limitation, and types and CAPACITY utilization, 46 ownership of gross debt, 30 Capital accounts Receipts and outlays, 28, 29 Banks, by classes, 18 Treasury financing of surplus, or deficit, 28 Federal Reserve Banks, 10 Treasury operating balance, 28 Central banks, discount rates, 67 Federal Financing Bank, 28, 33 Certificates of deposit, 24 Federal funds, 6, 17, 19, 20, 21, 24, 28 Commercial and industrial loans Federal Home Loan Banks, 33 Commercial banks, 16, 19, 70-72 Federal Home Loan Mortgage Corporation, 33, 38, 39 Weekly reporting banks, 19-21 Federal Housing Administration, 33, 38, 39 Commercial banks Federal Land Banks, 39 Assets and liabilities, 18-20 Federal National Mortgage Association, 33, 38, 39 Commercial and industrial loans, 16, 18, 19, 20, 21, 70-72 Federal Reserve Banks Consumer loans held, by type, and terms, 40, 41 Condition statement, 10 Loans sold outright, 19 Discount rates (See Interest rates) Nondeposit funds, 17 U.S. government securities held, 4, 10, 11, 30 Real estate mortgages held, by holder and property, 39 Federal Reserve credit, 4, 5, 10, 11 Terms of Lending, 70-75 Federal Reserve notes, 10 Time and savings deposits, 3 Federal Savings and Loan Insurance Corporation insured Commercial paper, 23, 24, 37 institutions, 26 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 33 Construction, 44, 49, 73 Finance companies Consumer installment credit, 40, 41 Assets and liabilities, 37 Consumer prices, 44, 50 Business credit, 37 Consumption expenditures, 51, 52 Loans, 40, 41 Corporations Paper, 23, 24 Nonfinancial, assets and liabilities, 36 Financial institutions Profits and their distribution, 35 Loans to, 19, 20, 21 Security issues, 34, 65 Selected assets and liabilities, 26 Cost of living (See Consumer prices) Float, 4 Credit unions, 26, 40. (See also Thrift institutions) Flow of funds, 42, 43 Currency and coin, 18 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 4, 13 agencies, 21 Customer credit, stock market, 25 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 19, 20 Foreign exchange rates, 68 DEBITS to deposit accounts, 15 Foreign trade, 54 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 55, 57, 60, 61, 62, 64 Banks, by classes, 18-21 Liabilities to, 20, 54, 55, 57, 58, 63, 65, 66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 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 Commercial banks, 70-75 SAVING Consumer installment credit, 41 Flow of funds, 42, 43 Federal Reserve Banks, 7 National income accounts, 51 Foreign central banks and foreign countries, 67 Savings and loan associations, 26, 39, 40, 42. (See also Money and capital markets, 24 Thrift institutions) Mortgages, 38 Savings banks, 26, 39, 40 Prime rate, 23 Savings deposits (See Time and savings deposits) International capital transactions of United States, 53-67 Securities (See also specific types) International organizations, 57, 58, 60, 63, 64 Federal and federally sponsored credit agencies, 33 Inventories, 51 Foreign transactions, 65 Investment companies, issues and assets, 35 New issues, 34 Investments (See also specific types) Prices, 25 Banks, by classes, 18, 19, 20, 21, 26 Special drawing rights, 4, 10, 53, 54 Commercial banks, 3, 16, 18-20, 39 State and local governments Federal Reserve Banks, 10, 11 Deposits, 19, 20 Financial institutions, 26, 39 Holdings of U.S. government securities, 30 New security issues, 34 LABOR force, 45 Ownership of securities issued by, 19, 20, 26 Life insurance companies (See Insurance companies) Rates on securities, 24 Loans (See also specific types) Stock market, selected statistics, 25 Banks, by classes, 18-20 Stocks (See also Securities) Commercial banks, 3, 16, 18-20, 70-75 New issues, 34 Federal Reserve Banks, 4, 5, 7, 10, 11 Prices, 25 Financial institutions, 26, 39 Insured or guaranteed by United States, 38, 39 Student Loan Marketing Association, 33 MANUFACTURING Capacity utilization, 46 TAX receipts, federal, 29 Production, 46, 48 Thrift institutions, 3. (See also Credit unions and Savings Margin requirements, 25 and loan associations) Member banks (See also Depository institutions) Time and savings deposits, 3, 13, 17, 18, 19, 20, 21 Federal funds and repurchase agreements, 6 Trade, foreign, 54 Reserve requirements, 8 Treasury cash, Treasury currency, 4 Mining production, 48 Treasury deposits, 4, 10, 28 Mobile homes shipped, 49 Treasury operating balance, 28 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

85 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 George N. Hatsopoulos Frank E. Morris Richard N. Cooper Robert W. Eisenmenger NEW YORK* 10045 John R. Opel E. Gerald Corrigan To be announced Thomas M. Timlen Buffalo 14240 Mary Ann Lambertsen John T. Keane PHILADELPHIA 19105 Nevius M. Curtis Edward G. Boehne Peter A. Benoliel William H. Stone, Jr. CLEVELAND* 44101 Charles W. Parry 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 Robert A. Georgine Robert P. Black Hanne Merriman Jimmie R. Monhollon Baltimore 21203 Thomas R. Shelton Robert D. McTeer, Jr.1 Charlotte .,28230 G. Alex Bernhardt Albert 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 Roy D. Terry Fred R. Herr1 Jacksonville 32231 E. William Nash, Jr. James D. Hawkins1 Miami 33152 Sue McCourt Cobb James Curry Nashville 37203 Condon S. Bush Donald E. Nelson New Orleans 70161 Sharon A. Perlis Robert J. Musso CHICAGO* 60690 Robert J. Day Silas Keehn Marcus Alexis Daniel M. Doyle Detroit 48231 Richard T. Lindgren Roby L. Sloan1 ST. LOUIS 63166 Robert L. Virgil, Jr. Thomas C. Melzer H. Edwin Trusheim James R. Bowen Little Rock 72203 James R. Rodgers John F. Breen Louisville 40232 Lois H. Gray James E. Conrad Memphis 38101 Sandra B. Sanderson Paul I. Black, Jr. MINNEAPOLIS 55480 Michael W. Wright Gary H. Stern John A. Roll wage n Thomas E. Gainor Helena 59601 Marcia S. Anderson Robert F. McNellis KANSAS CITY 64198 Irvine O. Hockaday, Jr. Roger Guffey Fred W. Lyons, Jr. Henry R. Czerwinski Denver 80217 James C. Wilson 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 Peyton Yates Sammie C. Clay Houston 77252 Walter M. Mischer, Jr. Robert Smith, III1 San Antonio 78295 Robert F. McDermott Thomas H. Robertson SAN FRANCISCO 94120 Robert F. Erburu Robert T. Parry Carolyn S. Chambers Carl E. Powell John F. Hoover1 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 Carol A. Nygren Gerald R. Kelly1 •Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 060%; 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 fo1.r FSeRnAioSr EVRic e President. http://frase2r. .sEtlxoeucuistfieved .Voircge/ President. Federal Reserve Bank of St. Louis

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

Publications of Interest FEDERAL RESERVE REGULATORY SERVICE tains Regulations G, T, U, and X, dealing with extensions of credit for the purchase of securities, together To promote public understanding of its regulatory with all related statutes, Board interpretations, rulfunctions, the Board publishes the Federal Reserve ings, and staff opinions. Also included is the Board's Regulatory Service, a three-volume looseleaf service list of OTC margin stocks. containing all Board regulations and related statutes, The Consumer and Community Affairs Handbook interpretations, policy statements, rulings, and staff contains Regulations B, C, E, M, Z, AA, and BB and opinions. For those with a more specialized interest in associated materials. the Board's regulations, parts of this service are For domestic subscribers, the annual rate is $200 for published separately as handbooks pertaining to mon- the Federal Reserve Regulatory Service and $75 for etary policy, securities credit, and consumer affairs. each handbook. For subscribers outside the United These publications are designed to help those who States, the price including additional air mail costs is must frequently refer to the Board's regulatory materi- $250 for the Service and $90 for each Handbook. All als. They are updated monthly, and each contains subscription requests must be accompanied by a check conversion tables, citation indexes, and a subject or money order payable to Board of Governors of the index. Federal Reserve System. Orders should be addressed The Monetary Policy and Reserve Requirements to Publications Services, Mail Stop 138, Federal Re- Handbook contains Regulations A, D, and Q plus serve Board, 20th Street and Constitution Avenue, related materials. N.W., Washington, D.C. 20551. The Securities Credit Transactions Handbook con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT plains how to use the credit laws to shop for credit, PUBLICATIONS apply for it, keep up credit ratings, and complain about an unfair deal. The Federal Reserve Board publishes a series of Protections offered by the Electronic Fund Transfer pamphlets covering individual credit laws and topics, Act are explained in Alice in Debitland. This booklet as pictured below. The series includes such subjects as offers tips for those using the new "paperless" syshow the Equal Credit Opportunity Act protects wom- tems for transferring money. en against discrimination in their credit dealings, how Copies of consumer publications are available free to use a credit card, and how to resolve a billing error. of charge from Publications Services, Mail Stop 138, The Board also publishes the Consumer Handbook Board of Governors of the Federal Reserve System, to Credit Protection Laws, a complete guide to con- Washington, D.C. 20551. Multiple copies for classsumer credit protections. This 44-page booklet ex- room use are also available free of charge. Fair Credit Billing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis