Federal Reserve Bulletin, 1988-08

VOLUME 74 • NUMBER 8 • AUGUST 1988 V FEDERAL RESERVE BULLETIN £ vu 1 ^ lO BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Michael Bradfield • S. David Frost • Griffith L. Garwood • Donald L. Kohn • Michael J. Prell • Edwin M. Truman The FEDERAL RESERVE BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by Mendelle T. Berenson, the Graphic Communications Section under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 517 MONETARY POLICY REPORT that economic and financial conditions re- TO THE CONGRESS mained reasonably consistent with current expectations. In particular, and in keeping The economy continued to expand rapidly with the Committee's usual approach to in the first half of 1988 and displayed impolicy, the conduct of open market operapressive resilience in the wake of last fall's tions would take account of conditions in stock market break. financial markets, the strength of the business expansion, indications of inflation, the 534 INDUSTRIAL PRODUCTION performance of the dollar in foreign exchange markets, and the behavior of the Industrial production increased an estimonetary aggregates. Later in the intermated 0.4 percent in May. meeting period, some added reserve restraint would be acceptable, or some slight 536 ANNOUNCEMENTS lessening of reserve pressure might be acceptable, depending on ongoing economic Meeting of Consumer Advisory Council. and financial developments. The contem- New prices and deadlines approved for ser- plated reserve conditions were likely to be vices for returned checks and forward col- associated with slower monetary growth, lection. but given their relatively rapid expansion in April, M2 and M3 were still expected to New consumer credit publications now grow at the rates of 6 to 7 percent estabavailable. lished in late March for the period from Proposed amendment to Regulation H to March to June. The members agreed that facilitate public access to financial informa- the intermeeting range for the federal funds tion regarding state member banks; pro- rate should be raised by 1 percentage point posed amendments to Regulation Y to im- to 5 to 9 percent. plement limitations placed on grandfathered nonbank banks by the Competitive Equality Banking Act of 1987; proposed amendment 545 LEGAL DEVELOPMENTS to Regulation CC to restrict certain delayed disbursement practices. Various bank holding company, bank ser- Four state banks admitted to membership in vice corporation, and bank merger orders; the Federal Reserve System. and pending cases. 538 RECORD OF POLICY ACTIONS OF THE AI FINANCIAL AND BUSINESS STATISTICS FEDERAL OPEN MARKET COMMITTEE At its meeting on May 17, 1988, the Com- These tables reflect data available as of mittee adopted a directive that called ini- June 28, 1988. tially for maintaining the current degree of pressure on reserve positions. Some slight A3 Domestic Financial Statistics firming would be implemented after a short A44 Domestic Nonfinancial Statistics interval following the meeting, assuming A53 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 GUIDE TO TABULAR PRESENTATION, A76 FEDERAL RESERVE BOARD STATISTICAL RELEASES, AND SPECIAL PUBLICATIONS TABLES A79 INDEX TO STATISTICAL TABLES AH BOARD OF GOVERNORS AND STAFF A81 FEDERAL RESERVE BANKS, A74 FEDERAL OPEN MARKET COMMITTEE BRANCHES, AND OFFICES AND STAFF; ADVISORY COUNCILS A82 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on July 13, growth of domestic demand, which would allow 1988, pursuant to the Full Employment and Bal- the economy to accommodate rising external anced Growth Act of 1978.1 demands on U.S. producers without generating overall inflationary pressures. Consistent with continued external adjustment and with its com- MONETARY POLICY AND THE mitment to achieving price stability over time, ECONOMIC OUTLOOK FOR 1988 AND 1989 the Federal Open Market Committee (FOMC) in February lowered its 1988 target growth ranges The economy continued to expand rapidly in the for M2 and M3 to 4 to 8 percent. first half of 1988, displaying impressive resilience At the beginning of the year, the conduct of in the wake of last fall's stock market break. monetary policy was complicated by exceptional Especially encouraging has been the fact that the uncertainty about the state of the economy. expansion in activity this year has been propelled Some signs of weakness had begun to emerge, largely by rising exports and business invest- seemingly lending support to the widely held ment, which bodes well for the restoration of view that economic activity would falter after the better balance in the economy. stock market break. In particular, inventories With the industrial sector continuing to enjoy had accumulated at a rapid rate in the fourth greater growth, capacity utilization rates have quarter of 1987, producing some overhang of crept higher. At the same time, the civilian stocks at the retail level. Moreover, other indiunemployment rate has declined since year-end, cators suggested that the rate of increase in labor and the average of 5Vi percent in the second demand had slackened. At the same time, finanquarter was the lowest in nearly 15 years. De- cial markets seemed to be somewhat fragile, as spite the tightening of labor markets, wage in- conditions had not yet returned to normal followcreases to date have been notably restrained, on ing the plunge in stock prices. The Federal balance, helping to contain cost pressures in Reserve thus was faced with the challenge of many sectors. Most measures of price inflation countering the apparent near-term weakness of among finished goods and services also have the economy, while taking account of the longershown little if any pickup, although basic com- range need to ensure that growth in domestic modity prices have risen considerably, most re- demand would not become excessive. cently reflecting the effects of drought on agricul- In this situation, and with the dollar firming on tural markets. foreign exchange markets, the Committee loos- During the first half of the year, the Federal ened slightly further the easier reserve conditions Reserve continued to direct its policies toward that had been adopted following the stock market providing monetary and financial conditions that plunge. Market interest rates edged down, would foster price stability over time, promote which—in conjunction with earlier declines in sustainable economic growth, and contribute to rates—helped lift M2 and M3 to near the top of an improved pattern of international transac- their 1988 target ranges and resulted in a modest tions. It was recognized that progress toward fall in their velocities (the ratio of nominal gross these goals in 1988 would require relatively slow national product to the money supply) during the first quarter. Given the risk that economic activity was weakening, as well as the still unsettled con- 1. The charts for the report are available on request from ditions in financial markets, the Committee viewed Publications Services, Board of Governors of the Federal the more rapid growth in money as appropriate. Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

518 Federal Reserve Bulletin • August 1988 By early spring, however, the bulk of the incom- fourth quarter of 1988. In addition, the Commiting data indicated that business activity had, in tee retained the monitoring range of 7 to 11 fact, remained robust. Additional information percent for the debt of domestic nonfinancial available later in the second quarter confirmed sectors and again set no range for Ml. Recognizthe strength of the economy, and high and rising ing the variability of the relationship of these levels of resource utilization pointed to a greater measures to the performance of the economy, potential for a buildup of inflationary pressures. the Committee agreed that operating decisions The costs of allowing inflation to reintensify were would continue to be made not only in light of the seen as quite high, based on the experience of the behavior of the monetary aggregates, but also early 1980s, when the reversal of the inflation with due regard to developments in the economy process led unavoidably to sizable losses in out- and financial markets, including attention to the put and to an extended period of high unemploy- sources and extent of price pressures and to the ment. performance of the dollar in foreign exchange Against this backdrop, the Committee tightened markets. reserve conditions somewhat in a series of moves In the absence of any significant economic and beginning in late March. Market interest rates financial disturbances, the Committee expected responded to the strength in the economy and to growth in M2 to moderate over the remainder of the Federal Reserve's actions by moving up- the year, placing the aggregate around the middle ward. Over the past four months, most short- of its target range at year-end. Growth in M3 this term interest rates have increased about 1 per- year is expected to exceed that of M2 but to centage point on balance. Long-term rates remain comfortably within its range, on the asgenerally rose substantially through late May, sumption that asset expansion at depository inbut have declined a little on net since then. The stitutions would remain fairly robust in the secbetter performance of the bond market recently ond half. The debt of domestic nonfinancial has occurred at a time when investor sentiment sectors is expected to remain near the middle of toward investment in dollar-denominated assets its monitoring range, which would put its growth has been buoyed by better trade statistics and for the year around the slowest annual pace may also have reflected favorable market re- registered in the past decade. sponse to the Federal Reserve's demonstrated For 1989, the Committee set, on a tentative resolve to fight inflation. basis, target growth ranges of 3 to 7 percent for Despite the Committee's tightening actions, M2 M2 and 3l/2 to IVi percent for M3, measured from and M3 continued to expand rapidly through the fourth quarter of 1988 to the fourth quarter of April, in response to earlier decreases in interest 1989; the monitoring range over the same period rates and to a bulge in transaction balances for domestic debt was set at 6Vi to 10'/2 percent associated with unusually large individual tax (table 1). Although uncertain about how strong payments. As the tax-related surge unwound and the economy might be over the coming year or the influence of higher interest rates began to be so, the Committee recognized that, given the felt, the two broad aggregates grew at a reduced current high levels of resource utilization, it was pace in May and June, and ended the first half of necessary to be particularly attentive to inflathe year in the upper halves of their target tionary risks. An acceleration of inflation could ranges. undermine the sustainability of the economic 1. Ranges of growth for monetary and credit aggregates MONETARY PLANS FOR THE REMAINDER Percent change, fourth quarter to fourth quarter OF 1988 AND FOR 1989 Provisional for Aggregate 1987 1988 At its meeting last month, the Federal Open 1989 Market Committee agreed to retain the target M2 51/: to 8'/> 4 to 8 3 to 7 growth ranges of 4 to 8 percent for M2 and M3, M3 5'/- to 8Vi 4 to 8 V/2 to Vfr 8 to 11 7 to 11 6Vi to 10'/> measured from the fourth quarter of 1987 to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 519 2. Economic projections for 1988 and 1989 ** FOMC members and nonvoting FRB presidents IItteemm Range Central tendency AAddmmiinniissttrraattiioonn Percent change, fourth quarter to fourth quarter Nominal GNP 1988 4 to 7 53/4 to 6% 6.6 1989 4 to VA 5 to 7 7.1 Real GNP 1988 1 to 3'/4 2V4 to 3 3.0 1989 1 to 3 2 to Vh 3.3 Implicit deflator for GNP 1988 23/4 to 4 3 to 33/4 3.5 1989 2 to 5 3 to 4'A 3.7 Average level in the fourth quarter, percent Civilian unemployment rate 1988 5'A to 6V2 5'A to 53/4 5.5 1989 5 to 7 5lA to 6 5.3 expansion and the international competitive po- against establishing a range for the monetary sition of U.S. producers. The lower ranges ten- base because it seemed unlikely to provide a tatively adopted for 1989 were believed consis- more reliable guide for policy than the aggregates tent with a monetary policy that would curb any for which ranges already are established. Altendency for inflation to worsen and would con- though the base has been less variable in relation tribute over time to the restoration of price to economic activity and prices than Ml, its stability. However, the Committee also noted velocity nonetheless has fluctuated appreciably that developments over the next half year could and rather unpredictably from year to year. alter substantially the rates of money growth needed to foster satisfactory economic performance in 1989 and beyond. Consequently, it stressed the provisional nature of its decision and Economic Projections the possibility that the ranges for 1989 might need to be adjusted when they are reviewed early next As is indicated in table 2, the central tendency of year. the forecasts of Committee members and nonvot- The Committee again decided not to set a ing Reserve Bank presidents—premised on the range for Ml, given the sharp swings in its monetary policy objectives outlined above—is velocity in recent years, resulting in part from its for growth in real GNP of 23A to 3 percent in increased sensitivity to movements in market 1988, with a modest slowing of expansion in interest rates since deposits were deregulated. In 1989. Such a pace of growth likely would generconsidering narrow monetary measures, the ate employment gains sufficient to hold the civil- Committee also has discussed whether the mon- ian unemployment rate close to its average secetary base could play a useful role in the conduct ond-quarter level of 5VI percent. Prices, as of policy. This measure comprises the major measured by the implicit deflator for GNP, are monetary liabilities of the Federal Reserve Sys- generally expected to rise 3 to 33/4 percent over tem—currency in the hands of the public and the four quarters of 1988, similar to last year's reserves of depository institutions—and repre- rate of advance. For 1989, projections of the sents, in a sense, the "base" of the broader increase in the GNP deflator are of course more monetary aggregates.2 The Committee decided uncertain, and the central-tendency range widens to 3 to 4L/Z percent. The administration forecast for 1988 is quite similar to the central tendency of forecasts of FOMC members and nonvoting presidents. For 2. The characteristics of the base and its behavior are discussed in the appendix to this report. 1989, the administration is projecting stronger Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

520 Federal Reserve Bulletin • August 1988 growth of real output than that indicated by the is a clear need for further initiatives to deal with FOMC forecasts, but its expectation for inflation the out-year deficits, which remain distressingly is in the middle of the range of FOMC forecasts. large; financial events later this year and in 1989 The administration's projection of nominal GNP could be substantially affected by the developin both years is around the upper end of the ments in the fiscal arena. Although little change central-tendency ranges and within the full is expected in the overall pace of inflation this ranges, suggesting that the administration's eco- year, as compared with 1987, the sources of nomic forecast and the FOMC's monetary actual and potential price pressure appear to ranges are broadly compatible. Continued im- have changed. In 1987, a rebound in oil prices provement in the external sector is expected to was a major factor boosting the general price provide the main impetus to U.S. economic level; assuming that world oil prices remain growth over the next year and a half. Real fairly stable, domestic energy prices should not exports of goods should remain on a strong be a significant inflationary force in 1988-89. upward path, reflecting the improved competi- Labor markets have tightened considerably since tive position of U.S. producers. At the same last year, however, and most measures of wage time, the growth of real imports is likely to be and compensation rates have firmed. Although restrained, owing to the lagged effects of the the overall rate of industrial capacity utilizadepreciation of the dollar through the end of tion is not high by historical standards, plants are last year. This continued shrinkage of the real being used very intensively in some materialstrade deficit is expected to be sufficient to gener- producing sectors; sharply rising materials prices ate some reduction in the nation's deficit on have raised costs for manufacturers generally. current account during 1988 and a further decline Food prices also have been a less favorable in 1989. In contrast to the boost provided by element in the inflation picture recently, and the external sector, domestic demand is pro- are likely to experience some further accelerajected to remain relatively subdued. Consumer tion as a consequence of drought conditions; spending, in particular, has been on a sluggish however, it is important to recognize the tempogrowth trend since late 1986, and that pattern rary nature of this phenomenon, which should seems likely to persist. Moreover, in an environ- have no lasting effect on overall inflation so long ment of more moderate growth of overall as it does not become embedded in wage activity, economy-wide spending on new plant trends. and equipment may not rise as swiftly as it For 1989, the FOMC central-tendency range has on average over the past year. Even so, for the GNP deflator widens on the upper end, within manufacturing, improved profitability and suggesting the possibility of a pickup in inflahigher capacity utilization have stimulated a tion from the pace this year. However, this healthy pickup in capital spending, which should apparent acceleration of prices largely reflects continue for some time. The performance of the the arithmetic implication of an eccentric moveinterest-sensitive sectors, most notably home- ment in the deflator for GNP in the first quarter building and business investment, will be influ- of this year. Shifts in the composition of output enced considerably by the extent to which the caused the deflator to rise at an annual rate of federal government is competing for available less than IV2 percent during that quarter; these supplies of credit. Accordingly, continued fiscal shifts are not expected to be so noticeable in restraint is essential if we are to free up re- coming quarters. The view that inflation next sources to support private investment. In this year will not differ significantly from the pace regard, the budget summit agreement reached anticipated over the final three quarters of 1988 last December was a favorable first step, and reflects the expectation that business and the Federal Open Market Committee members labor—recognizing the realities of a highly comand other Reserve Bank presidents have as- petitive international marketplace—will consumed that the necessary legislative action will tinue to exercise restraint in setting prices and be taken to implement the agreement. There wages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 521 THE PERFORMANCE OF THE ECONOMY The External Sector DURING THE FIRST HALF OF 1988 After having trended downward for nearly three The economy continued to expand briskly in the years, the dollar has appreciated substantially first part of 1988. Activity was boosted by thus far in 1988 against most major foreign curstrength in capital spending and growth in foreign rencies. The dollar rose sharply at the beginning demand for U.S. goods. The rise in overall of the year, responding in part to coordinated output during the first six months of this year central bank intervention. In recent months, supported the addition of about PA million jobs sentiment toward the dollar has been improved to nonfarm payrolls, and the civilian unemploy- by the release of better-than-expected trade rement rate, which had trended down throughout ports and the firming actions of the Federal 1987, dropped somewhat further since the begin- Reserve. ning of the year to an average level of 5V2 percent The U.S. merchandise trade deficit for the first in the second quarter. quarter was $144 billion at a seasonally adjusted Despite the greater tightness in labor markets annual rate, substantially below the figures for and the higher rates of capacity utilization now the fourth quarter and for 1987 as a whole. In prevailing in some industries, tendencies toward April, the trade deficit narrowed further. Exports additional inflation have been limited. Prices of have continued to expand rapidly, while import materials and components have risen sharply, growth has slowed considerably. The strong but for finished goods there are only hints of growth of exports can be attributed primarily to price acceleration outside the food sector. the increased price competitiveness of U.S. Wages, on the whole, have continued to be fairly goods, which reflects the decline of the dollar in well behaved, suggesting a recognition by labor recent years and the tight control over producand by management of the need to maintain tion costs exercised by domestic firms. This competitive cost structures. growth of exports continues to be broadly based, The continued resurgence of manufacturing and foreign sales have been particularly strong has been one of the most notable economic for industrial machinery and for computing developments this year. During the first five equipment. On the import side, the volume of months of 1988, industrial production expanded purchases rose less than 1 percent in the first at nearly a 4 percent annual rate, and the rate of quarter and apparently declined in April. Imports capacity utilization for total manufacturing rose of consumer goods excluding autos were essen- Vi percentage point between December and May tially unchanged in the first quarter, continuing to just over 83 percent, the highest level during the patter\of 1987, while auto imports fell somethe 1980s. Owing to these advances in produc- what. In cofttjast, imports of capital goods rose tion, manufacturers have embarked on substan- considerably, stimulated by the surge in equiptial programs to invest in plant and equipment, ment outlays by domestic firms. pacing an economy-wide pickup in the rate of Economic expansion abroad has continued at a capital spending. The better balance of expan- moderate pace, on balance, so far this year, sion also has been visible in agriculture, although providing some support for an improved U.S. the upturn in that sector has been jeopardized by trade position. Activity increased sharply in the recent drought conditions. major foreign industrial countries in early 1988, The improvements in manufacturing and agri- while growth in the smaller industrial nations culture are, in part, reflections of a broader remained subdued. In the newly industrialized adjustment of the U.S. external position. The countries of Asia, economic activity continued to combination of a lower dollar and domestic cost expand rapidly. In contrast, growth slowed in containment has translated into a marked turn- Latin America, primarily due to a sharp deceleraround in real net exports. That process also has ation of activity in Brazil. In the OPEC counbeen aided by stronger economic growth in other tries, activity appears to have stabilized in 1988, large industrial countries. after a decline in 1987, as higher volumes of oil Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

522 Federal Reserve Bulletin • August 1988 exports have offset the effects on government near-record vacancy rates and changes in the tax revenues of a slight softening in prices. laws have reduced the incentive to build new units. In the single-family sector, building has The Household Sector fluctuated from month to month, influenced by movements in interest rates and perhaps by Consumer spending showed some vigor in early weather; on balance, the average level of starts 1988, after having declined in the fourth quarter through May was roughly 6 percent below the of last year. Real outlays increased at a 33/4 1987 pace. percent annual rate in the first quarter, as purchases of motor vehicles bounced back with the The Business Sector expansion of manufacturers' incentive programs, outlays for other durable goods were strong, and Business fixed investment advanced sharply in expenditures on services continued to post ap- the first quarter of 1988, owing to a large increase preciable gains. Data for April and May suggest, in purchases of equipment. In recent months, however, that the growth of consumer spending spending appears to have remained near the high slowed from the rapid first-quarter rate. first-quarter level. Surveys of capital spending The buoyancy of consumer spending early this plans, taken this spring, point to appreciable year can be traced to robust income growth. Real growth in investment outlays over the second disposable personal income rose at a 5 percent half of 1988. annual rate, on average, during the fourth quarter Real outlays for computing equipment jumped of 1987 and the first quarter of 1988, substantially at more than a 90 percent annual rate in the first above the 2 percent rate posted for 1987 as a quarter, but fell back considerably in subsequent whole. However, disposable income growth ap- months. Smoothing through this volatility, it pears to have slowed considerably in the second appears that demand for such equipment has quarter, as a result of a spurt in nonwithheld tax emerged from the lull that prevailed during 1986 payments and a slower pace of employment and the first half of 1987, when excess computing gains. capacity—as well as concerns about the useful- Although the pace of consumer spending thus ness of available software—limited purchases. far this year has been stronger than many ex- Outlays for other types of equipment also have pected, the stock market break probably did been strong, on balance, since the turn of the exert some restraining effect. This is evident year, largely reflecting the buoyancy of overall in the personal saving rate, which has averaged economic activity. In particular, with utilization 41/2 percent for the seven months after October— rates now at elevated levels in many manufactur- 1 percentage point above the average level ing industries, equipment investments have been during the first three quarters of 1987. While an attractive way of removing bottlenecks and most households experienced little direct loss achieving a relatively rapid improvement in of wealth from the stock market decline, the effective capacity. startling dimensions of the event obviously Although the data for May showed a surprising affected consumer sentiment last fall. With jump in nonresidential construction activity, real each passing month, however, confidence has outlays in this sector were sluggish overall during grown and helped to sustain the growth of the first five months of the year. Commercial spending. construction, the largest part of this aggregate, Residential construction was weak during the continues to be restrained by an overhang of first half of 1988. Total housing starts averaged vacant space. In addition, oil and gas drilling, about 1V2 million units at an annual rate through which was up more than 20 percent in 1987, has May, almost 9 percent below the 1987 total. In changed little since last fall, owing in large part to the multifamily sector, building declined from the the general weakness of petroleum prices over already depressed 1987 level. Starts in this sector this period. Industrial construction, in contrast, have been falling since the end of 1985, as has risen briskly in recent months. Nonetheless, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 523 even here, the picture is cloudy. Although capac- down of some major defense procurement proity utilization is high in a number of sectors, grams, restraint on domestic discretionary manufacturers apparently remain cautious about spending, and net reductions in farm inventories making the large, long-range commitments in- held by the Commodity Credit Corporation. volved in building new plants, and new contracts However, on a budget basis, total outlays have for industrial construction actually have trended been growing rapidly, owing to continued indown since the beginning of the year, after creases in entitlements, greater demands on dehaving risen in 1987. posit insurance agencies, and increasing net in- The pace of business inventory investment terest payments. moderated somewhat during the first four months Meanwhile, growth of federal government revof 1988, reducing the concern about excessive enue has slowed compared with the sharp instocks that had arisen earlier this year. This crease in FY 1987. Although tax receipts have concern had focused on the retail sector, where been pushed up by the robust gains in income inventories at auto dealers and at certain outlets and by an increase in the payroll tax rate, this for nondurable goods (primarily general mer- upward impetus to revenue has been tempered chandise and apparel stores) appeared high rela- by the final reductions in income tax rates from tive to sales at year-end. By cutting production the reforms enacted in 1986. In contrast to its early in the year and offering a variety of sales effects this year, tax reform had provided a incentives, automakers have been able to bring substantial boost to revenues in FY 1987. On their inventories into better alignment with sales. balance, it is quite possible that the budget deficit In contrast, inventory-to-sales ratios for nondu- this year will exceed the $150 billion shortfall rable retail goods continue to hover at levels that recorded last year. are high by historical standards. At the manufac- The state and local sector continues to operate turing level, inventory positions through May under budgetary pressure, as operating and capappeared fairly lean in general, given the pace of ital accounts (which exclude social insurance shipments. Much of the recent building of factory funds) have been in deficit for the past year and stocks has been in industries where market de- a half. In the first quarter of 1988, this combined mand has been robust, such as aircraft, machin- deficit stood at $9 billion, similar to the shortfall ery, chemicals, and paper. recorded during 1987. Many states have acted to Before-tax economic profits of nonfinancial curb this fiscal erosion, using a combination of corporations continued to be strong in the first tax hikes—primarily sales and excise taxes—and quarter, with manufacturing firms posting sub- budget cuts. As a result, the growth of real stantial gains. After-tax profits also rose notice- spending slowed considerably in the first quarter, ably, as the maximum tax rate on corporate reflecting a sharp decrease in construction outprofits was reduced from 40 to 34 percent, a lays. This was the third such decline in the past change mandated by the Tax Reform Act of 1986. four quarters, and this downtrend in construction Owing to the strong growth of profits, the inter- activity has occurred despite continuing needs to nal cash flow of nonfinancial corporations has expand and upgrade the basic infrastructure. increased considerably since mid-1987, reversing the slide of the previous year. Labor Markets The Government Sector Early in the year, incoming data seemed to signal some weakening of labor demand. Initial claims In real terms, federal government purchases of for unemployment insurance, which had trended goods and services—which add directly to GNP up during the final months of 1987, rose even and account for about one-third of total federal further just after the turn of the year. Moreover, expenditures—fell during the first quarter and the first report on nonfarm payroll employment appear to have remained relatively weak in re- for January showed the smallest monthly incent months. This dropoff reflects the winding crease since mid-1986. Taken together, these Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

524 Federal Reserve Bulletin • August 1988 indicators conveyed a picture of deterioration in rate of IV2 percent. Although this rate is somethe labor market. However, as subsequent data what above the sluggish pace of the 1970s, it were released, it became clear that the underly- remains far below the advances registered earlier ing pattern of labor demand had, in fact, re- in the postwar period. In contrast, productivity mained healthy. Claims for unemployment insur- gains in manufacturing have been quite rapid in ance dropped back to relatively low levels, and recent years. The first-quarter rise in factory the anemic employment gains for January were output per hour was nearly 3 percent at an annual revised up substantially. Moreover, since Janu- rate, in line with the average increase registered ary, nonfarm payroll employment has advanced during 1986 and 1987; these productivity admore than 300,000 at a monthly rate, somewhat vances have continued to hold down unit labor above the average increase in 1987. Although the costs, which fell Vi percent over the year ended gains have been concentrated in the service- in the first quarter of 1988. producing sector, manufacturing has posted an average monthly increase of about 30,000 jobs Price Developments thus far this year, with the largest advances in the machinery and metals industries. Upward pressures on prices appear to have The combination of strong gains in employ- grown stronger this year, reflecting the lagged ment and slower growth of the labor force over effects of the earlier depreciation of the dollar, as the first half of 1988 lowered the civilian jobless well as tighter markets for labor, industrial marate to 5.3 percent in June from 5.8 percent at the terials, and farm output. Energy prices, in conend of last year. Jobless rates fell for a broad trast, have been restrained this year, on balance, spectrum of demographic groups over the first and have provided some offset to these preshalf of the year, and the June rate of unemploy- sures. For the most part, signs of higher inflation ment represents the lowest monthly figure since have been confined to price indicators for commid-1974. The June level, however, may be modities and intermediate goods, which have artificially low, owing to the difficulty of adjust- posted sharp increases. The consumer price ining for seasonal swings in employment at the end dex—a measure of inflation for finished goods of the school year. and services—showed no acceleration during the As the unemployment rate dropped last year, first five months of 1988, rising at the AVi percent compensation increases, which had been moder- annual rate registered for 1987 as a whole. ating for several years, leveled out. In the early In the energy sector, spot prices for crude oil part of this year, there were some signs of an plummeted after OPEC failed last December to acceleration in labor costs. Hourly compensa- reach a credible agreement to limit production. tion, as measured by the employment cost index, The contract price for West Texas Intermediate advanced nearly 4 percent between the first (the benchmark crude oil in the United States) quarter of 1987 and the first quarter of this year, fell from about $18 per barrel in December to about 3A percentage point more than in the pre- about $16 per barrel in March. Reflecting these vious 12-month period. Although this pickup was developments, retail prices for gasoline fell conrelated in large part to the strength of labor siderably in the first quarter. During March and demand, it was exacerbated by the rise in the April, prices for crude oil drifted up and, in payroll tax rate that took effect on January 1. By response, consumer energy prices rebounded in sector, the sharpest uptick in compensation rates April and May. More recently, however, crude occurred in manufacturing, where increases in oil prices have receded again, as OPEC's June production have led to a firming in labor demand. meeting adjourned without an agreement on pro- This pattern stands in contrast to trends in the duction cuts. early 1980s, when pay gains in manufacturing In the agricultural sector, tighter crop inventolagged far behind those in the service-producing ries and stronger grain exports pushed up farmsector. level prices early in 1988. In addition, prices for Since 1980, output per hour in the nonfarm grains and soybeans recently have surged in business sector has risen at an average annual commodity markets, owing to the drought in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 525 major growing regions. It now appears likely that considerable if the pressures on materials prices retail food prices will accelerate in coming do not ease soon. months and exert some upward pressure on aggregate consumer price inflation. Excluding food and energy, prices at the con- MONETARY POLICY AND FINANCIAL sumer level rose at an annual rate of about 43A DEVELOPMENTS DURING THE FIRST HALF percent during the first five months of this year. OF 1988 Consumer price inflation has remained at this relatively high rate partly because of continued The Federal Open Market Committee has sought increases in import prices spurred by the earlier monetary and financial conditions that promote depreciation of the dollar. Particularly notewor- price stability over time, support sustainable thy has been a jump in clothing prices, which economic growth, and contribute to an improved have been affected not only by the dollar's move- pattern of international transactions. To this end, ment but also by quotas on apparel imports. In the Committee at its February meeting estabthe service area, medical care costs have contin- lished target ranges, measured as growth rates ued to rise rapidly. from the fourth quarter of 1987 to the fourth At earlier stages of processing, inflation ap- quarter of 1988, of 4 to 8 percent for both M2 and pears to have picked up for a wide range of M3. It also set a monitoring range of 7 to 11 items. On commodity markets, prices of crude percent for the growth of domestic nonfinancial industrial materials have remained on an up- debt and chose, once again, not to stipulate a ward course this year, although the price hikes range for Ml growth. The 1988 target ranges for have been less pervasive than in 1987. Reflecting, M2 and M3 represented reductions from last in part, these developments, the producer price year's ranges of SVi to SV2 percent for both index for intermediate materials other than food aggregates and resulted in a lowering of the and energy rose at an annual rate of nearly midpoint of the target ranges by 1 full percentage 8 percent over the first five months of this year, point. up from the pace of 5 percent registered last year. In widening the target ranges for M2 and M3, Price increases have been especially large for the Committee cited the high degree of variability materials used by producers of metals, chemi- in the relationship between money and aggregate cals, paper, and plastic, where output has been demand that had appeared in recent years. As a strong or capacity utilization rates high. result of this development, which stemmed The upward movement of intermediate goods largely from an increased sensitivity of money prices relative to finished goods prices at the growth to interest rate changes, it was believed producer level has been quite substantial. Al- that a wider range of monetary growth rates though divergences in the two series, such as the could be compatible with satisfactory outcomes one that has arisen over the past year, are not for the economy. At the time of the February unprecedented, disparities typically have not FOMC meeting, broader ranges seemed particupersisted for long. Historical evidence indicates larly appropriate in light of the uncertain outlook that higher materials costs, on average, pass for spending. More specifically, the eventual through rather quickly into finished goods effects on domestic demand of the October stock prices. In the recent period, the effect of the market plunge and the subsequent drop in intersharp rise in materials prices may have been est rates remained unclear. Ml had become even cushioned by restraint on unit labor costs, by more interest sensitive, and it had varied more the spreading of overhead costs over larger sales widely relative to GNP than had the broad aggrevolumes, and, perhaps, by efforts to save on or gates, thus making it even more difficult to intersubstitute away from higher cost materials. pret; consequently, the Committee decided Nonetheless, past experience suggests that, against establishing a target range for this aggreeven if there may not be a significant delayed gate. pass-through in coming months, the risks of In setting a monitoring range for domestic an acceleration in finished goods prices would be nonfinancial sector debt, the Committee antici- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

526 Federal Reserve Bulletin • August 1988 pated that debt growth would slow in 1988, owing serve's less accommodative posture, interest to less government borrowing. Nonetheless, the rates rose on balance over those months. Late in rate of expansion of domestic debt was expected the second quarter, growth in the aggregates to exceed that of income. As was the case for the moderated, leaving both well within their target monetary aggregates, considerable uncertainty ranges as the first half of 1988 ended. surrounded the prospects for debt growth, leading the Committee to widen the monitoring range by dropping the lower limit 1 percentage point Behavior of Money and Credit from the previous year's rate. During the first part of 1988, monetary policy From the fourth quarter of 1987 through June was conducted against a backdrop of data sug- 1988, M2 increased at about a 7 percent annual gesting some weakness in the economic expan- rate, a noticeable increase over its 1987 rate of 4 sion. Reflecting concern about the outlook for percent (table 3).The faster growth can be attribeconomic growth, the Committee moved in Jan- uted primarily to the lagged reaction of the uary to ease slightly the degree of pressure on public's demand for M2 balances to decreases in reserve positions. On balance, interest rates fell market interest rates relative to deposit rates that during January and February, which, in conjunc- occurred in late 1987 and early 1988. In the tion with rate declines that followed the stock second quarter of 1988, however, the "oppormarket drop in October, contributed to a pickup tunity cost" of holding M2 reversed its downin growth of M2 and M3 over the first quarter of ward trend, and growth in M2 moderated toward the year. the end of the period. Also contributing to the As information suggesting greater economic May-June slowdown was the runoff of an unusustrength and an increased potential for a buildup ally large, tax-related buildup of transaction balof inflationary pressures became available in ances that inflated both Ml and M2 in April. On March and in subsequent months, and with M2 balance, M2 velocity is estimated to have deand M3 running near the upper ends of their clined slightly over the first half of the year, in growth ranges, the Committee moved, in several contrast to its upward movement in 1987 when steps, to tighten reserve pressures. Owing to the market interest rates and the opportunity cost of force of credit demands and the Federal Re- M2 were generally increasing. 3. Growth of money and debt Percentage changes at annual rates Debt of domestic Period Ml M2 M3 nonfinancial sectors Fourth quarter 1987 to second quarter 1988e .. 5.0 7.4 7.1 8.5 Fourth quarter 1987 to June 1988e 5.1 7.1 7.0 8.5 Fourth quarter to fourth quarter 1979 7.7 8.2 10.4 12.3 1980 7.5 8.9 9.5 9.6 1981 5.2(2.5)' 9.3 12.3 10.0 1982 8.7 9.1 9.9 8.9 1983 10.2 12.1 9.8 11.3 1984 5.3 7.6 10.4 14.2 1985 12.0 8.9 7.7 13.3 1986 15.6 9.4 9.1 13.3 1987 6.2 4.0 5.4 9.6 Quarterly average 1987: 1 13.2 6.5 6.5 10.5 2 6.6 2.7 4.6 8.6 3 .8 2.8 4.5 7.9 4 3.9 3.9 5.4 10.1 1988: 1 3.8 6.7 7.0 8.4 2e 6.1 7.9 7.1 8.3 iHummEHHimigiiiBii 1. M1 figure in parentheses is adjusted for shifts to NOW accounts in 1981. eEstimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 527 A number of the components of M2 contrib- Reflecting the effects of smaller federal deficits uted to its strengthening in the first half of the during the calendar year, growth in federal debt year. After having declined steadily over the last slowed from last year's pace and remained at a half of 1987, liquid retail deposits—the sum of rate well below that recorded over most of the other checkable deposits, savings deposits, and 1980s. Nonfederal debt also expanded at a somemoney market deposit accounts—registered a what slower rate, as the growth of the debt of solid gain over the first half of 1988, as reductions households and state and local governments dein market interest rates during the winter com- clined modestly. In the household sector, a falloff bined with the slow adjustment of rates on these in mortgage borrowing associated with weaker deposits to increase their relative attractiveness. housing expenditures offset a pickup in consumer Growth in small time deposits also was particu- credit. Business borrowing expanded at roughly larly strong, as was that in M2-type money the same pace as in 1987, with rising interest market mutual fund assets early in the year. rates in the second quarter causing firms to shift Falling market interest rates, coupled with slow more of their borrowing to short-term instruadjustment of returns on fund assets, provided ments. money funds with a rate advantage in the first quarter, thereby leading to higher asset growth. Implementation of Monetary Policy Rising market rates of interest and the apparent use of money funds to pay taxes, however, In conducting monetary policy, the Federal Resignificantly slowed their growth in the second serve directed its operations during the first three quarter. months of 1988 at either maintaining or easing M3 growth increased in the first half of 1988 to slightly the degree of reserve pressure that had a rate of 7 percent, following an increase of 5Vi prevailed since the October stock market colpercent in 1987. Credit expansion at banks and lapse. Thereafter, the System moved in several thrift institutions, which heavily influences the steps to firm reserve positions. overall behavior of M3, remained at roughly the The early months of 1988 were marked by same pace as last year, but it was financed to a widespread concern that the economic expansion greater extent over the first half of the year by might be faltering. Data available in January and liabilities included in M3. In particular, inflows to February pointed toward a weakening in domesbanks from their foreign branches and borrow- tic final demand, as evidenced by a substantial ings by savings and loans from Federal Home buildup of inventories in the fourth quarter of Loan Banks, which are not included in M3, 1987 and some softening in labor market data. At dropped off sharply compared with 1987. the same time, inflationary pressures and expec- Ml grew at a 5 percent rate during the first half tations appeared to have diminished somewhat, of the year, which although below the 6'/4 percent and after coming under pressure in late Decemrate for all of 1987, was higher than its growth in ber, the dollar first rebounded and then stabilized the second half of last year. The sluggish growth against most major currencies. of Ml, especially in comparison to that of M2 and In these circumstances, the Committee moved M3, owed entirely to weakness in demand depos- in late January to ease slightly the pressure on its, which have been declining over the past year bank reserve positions. The provision of nonborand a half. In contrast, growth in currency and rowed reserves through open market operations other checkable deposits was robust. was increased, the level of discount window Domestic nonfinancial debt grew at a rate of borrowing declined, and the federal funds rate 8I/2 percent from the fourth quarter of 1987 to edged downward. Other market interest rates June, according to estimates based on partial declined as well; in spite of lower interest rates, data. Debt growth in the first half represented a the dollar was relatively stable against most slowdown from last year's rate of 9'/2 percent and major currencies. a substantial decline from the rate of expansion The downward trend for most market interest of 13'A percent in 1985 and 1986. Nonetheless, rates came to an end in late February and early debt continued to grow faster than nominal GNP. March, when incoming information indicated Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

528 Federal Reserve Bulletin • August 1988 that the economy was considerably stronger than As markets exhibited signs of increased stabilit was earlier thought to be, and in light of ity this year, the Committee responded by grademerging pressures on industrial capacity and ually placing greater emphasis on reserve posilabor markets, the risks of a pickup in inflation tions in conducting System operations, allowing appeared to have risen. In this environment, money markets to respond more sensitively to monetary policy began in late March to become changing economic circumstances. The transiless accommodative. The restraint in policy was tion back to the pre-October approach was comaimed at moderating potential inflationary pres- pleted in the spring. sures by damping domestic demand to facilitate a shift of resources to the external sector. As Other Financial Developments information pointing to substantial economic strength became available in April and May, and The collapse of equity prices last October heightwith the monetary aggregates growing at rates ened public concerns about the volatility of stock near the upper end of their target ranges, the prices and the fragility of financial institutions Committee moved again to apply slightly greater and markets. These concerns became the subject pressure on reserve positions. Reflecting both of studies by a presidential commission, governthe System's actions and market concerns about mental agencies, and the securities industry. inflation, market interest rates moved higher. Recommendations from these groups and from a Since late May, however, long-term interest follow-up presidential working group focused on rates have fallen on balance, despite further ways to avoid excessive stock price volatility and increases in short-term interest rates. The result- to strengthen the ability of markets and related ing narrowing of the spread between long- and systems to deal with large price movements. short-term rates apparently reflects some lessen- Progress has been made in this regard, with steps ing of concerns about inflation, brought about in having been taken by market participants to part by the firmer monetary policy. Long-term address some of the problems revealed by the yields also have benefited recently from the market break in clearing and settlement systems. upward movement of the dollar against most Additional steps have been taken to coordinate major currencies, as the trade balance has con- trading halts triggered by extreme movements in tinued to improve. The change in attitude toward prices and to strengthen capital positions of the dollar apparently has encouraged invest- specialists and other market makers. ments in relatively high yielding dollar assets. In considering the possibility of future regula- In the aftermath of the stock market crash last tory action in this sphere, it is noteworthy that October, the Committee modified the System's the stock market break has not been followed by procedures by placing greater emphasis on any major aftershocks. In part, this reflects the money market conditions and less on bank re- basic resilience in this period of the economy and serve positions in carrying out day-to-day open financial markets. In addition, it attests to the market operations. In doing so, it was neither general adequacy of the current regulatory the Committee's intention to alter its operating framework and monetary policy institutions in procedures permanently nor to ignore bank cushioning financial disturbances, so that they do reserve positions completely. Rather, the thrust not spread to the economy as a whole. Thus, of the modification was to permit greater flexi- while the additional steps initiated by private bility in System operations in light of the volatil- entities to strengthen market mechanisms cerity and fragility characterizing financial markets tainly are desirable, a major extension of the at that time. During this period, it was con- governmental regulatory apparatus does not sidered important to assure the markets of seem necessary. the System's intention to provide adequate The banking industry also has been the subject liquidity, and it was feared that significant varia- of considerable concern, arising from its welltion in money market conditions could add to publicized difficulties with energy, agricultural, the unusual uncertainties already in the mar- real estate, and developing country loans. These kets. problems have been highlighted by the many Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 529 bank closings and the rescue by bank regulators has outstripped that of disposable income. The of several large banks. As a result of large banks ratio of household sector indebtedness to income choosing to make sizable increases in loan-loss is at an all-time high. Recent information also reserves, profits reported by the banking indus- shows a rising level of personal bankruptcies and try as a whole in 1987 were down nearly 80 a relatively high level of delinquencies on certain percent from 1986. Despite these difficulties, types of consumer loans. some bright spots emerged last year, especially Although these developments suggest that the improved performance of agricultural banks. debt burdens may be difficult for some house- It is important to note, however, that throughout holds to manage, other evidence indicates that this period of stress in the industry, the commer- most households are able to meet their debt cial banking system has continued to play its obligations reasonably well. The trend toward crucial role as a provider of credit to the econ- longer repayment schedules has held down debtomy. service payments. The increased use of adjust- The savings and loan industry continues to be able-rate mortgages has made the financial posiunder financial stress. Although the majority of tions of many households more vulnerable to savings and loans are healthy and reasonably increases in interest rates; however, at the same profitable, the industry as a whole reported enor- time, deposit deregulation has meant that housemous losses in 1987 and in the first quarter of hold interest income is more responsive to 1988. Roughly one-sixth of the institutions are changes in rates. Furthermore, for the sector as a insolvent when evaluated in accordance with whole, assets have risen more rapidly than debt, generally accepted accounting principles, and implying increases in household net worth. Intheir aggregate losses increased in 1987 and in the deed, survey information indicates that many first quarter of 1988. The prospects for the recov- families with consumer debt have substantial ery of the insolvent institutions are not bright, amounts of financial assets that could be tapped implying that the Federal Savings and Loan to meet debt-service obligations in the event that Insurance Corporation (FSLIC) will be required incomes proved to be inadequate. either to liquidate them or to assist in their Like households, businesses have added absorption by stronger institutions. greatly to their indebtedness in recent years. The deterioration of the savings and loan in- Many companies have dramatically increased dustry has affected the financial condition of the their leverage through debt-financed merger, buy- FSLIC, whose net worth became more deeply out, and share retirement activity. Reflecting negative in 1987. The Congress approved a plan heavier debt loads, the bite that interest paylast year providing nearly $11 billion to recapi- ments take out of corporate cash flow is near talize the FSLIC. This action has helped the historically high levels for the nonfinancial cor- FSLIC liquidate several large and especially porate sector as a whole. A downturn in earnings troubled savings and loans, but concerns persist would place serious debt-servicing strains on in the market that the total available new capital many individual firms. In addition, heavy relimay fall short of that needed for the FSLIC to ance on floating-rate loans and short-term debt deal fully with the problem institutions. obligations has rendered many firms vulnerable The difficulties of many individual depository to a significant rise in borrowing costs. In reflecinstitutions have been associated, in most cases, tion of this situation, downgradings of corporate with specific types of loans or certain regions and debt have continued to exceed upgradings by a countries. However, concerns have been ex- large margin. pressed more generally about the financial health Firms would not have been able to assume of households and businesses—especially about these greater financial exposures were it not for the ability of these sectors to service their debts receptive attitudes among lenders and equity if interest rates were to rise sharply or business investors. Companies engaging in restructurings conditions were to weaken significantly. that have involved the addition of massive With regard to households, the rapid growth of amounts of debt to their balance sheets have their debt during the current economic expansion been rewarded with sizable runups in their share Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

530 Federal Reserve Bulletin • August 1988 prices; this is reflected in the absence of an nents of the narrow monetary aggregate, Ml. uptrend during the 1980s in the market-value Thus, both through its currency component and based "debt-equity" measure. Moreover, lend- its reserves component, the monetary base is ers are exacting relatively small risk premiums closely related to Ml. The links between the on debt obligations incurred by firms, as re- monetary base and broader measures of money, flected, for example, in the spreads between such as M2 and M3, are much looser because yields on high-grade corporate bonds and most savings-type instruments in these measures Treasury securities or even those for below- either are not reservable or have a much lower investment-grade "junk" bonds. Nonetheless, reserve requirement applied to them. Moreover, our financial history provides numerous re- currency accounts for an even smaller share—on minders of the fragility of this type of situ- the order of 5 percent—of these aggregates. ation: last fall, for example, when confidence was Looking at the base as currency and reserves jolted by the stock market break, yield spreads focuses on the monetary liabilities of the Federal widened dramatically, and the availability of Reserve—frequently referred to as the "uses" of new credit to riskier borrowers was sharply the base.3 Alternatively, the base can be meacurtailed. sured from its "sources" in the Federal Reserve balance sheet, the assets held by the System less its nonmonetary liabilities. The two concepts are APPENDIX: THE MONETARY BASE identical if all components are measured contemporaneously. In recent years, the monetary base has received There are two publicly available measures of increased attention as the behavior of other mon- the monetary base. One, corresponding to the etary aggregates—especially Ml—has diverged uses concept, is constructed by the Board, and from historical patterns. In part, the appeal of the the other, a sources concept, is produced by the base has resulted from the notion that it may Federal Reserve Bank of St. Louis. Besides the have a reasonably stable relationship with nom- difference in accounting approach, which affects inal spending. In addition, it is perceived as being the treatment of vault cash used to meet reserve more directly under the control of the Federal requirements, the two measures differ in the Reserve than are the broader aggregates. This method of adjustment for changes in reserve appendix reviews the historical and analytical requirements and in the method of seasonal characteristics of the monetary base. It discusses adjustment. its definition, its relation to income and other The Board measure constructs the base from economic variables, and its control by the Fed- the currency component of the money stock eral Reserve. (currency held by the nonbank public, 76 percent), total reserves (lagged vault cash, up to Concepts, Definitions, and Measurement required reserves, plus reserve deposits at the Federal Reserve banks, 23 percent), and a third The monetary base consists of currency in the component that includes current surplus vault hands of the nonbank public and reserves held by cash held at depository institutions plus servicedepository institutions—both reserves required related balances (1 percent).4 to be held against deposits and the additional, "excess" reserves that depository institutions choose to hold. Because reserve requirements are substantially higher for transaction deposits 3. Technically, the base also encompasses a relatively (that is, checkable deposits) than for nontransac- small amount of U.S. Treasury liabilities. 4. "Vault cash" included in total reserves is lagged four tion deposits, the bulk of required reserves— weeks, which reflects its use to meet reserve requirements. about three-quarters—is related to transaction "Surplus vault cash" is bank holdings of currency in excess deposits. In turn, transaction deposits consist of required reserves. "Service-related balances" comprise other balances held by depository institutions at the Federal primarily of demand deposits and other check- Reserve, including required clearing balances and adjustable deposits, which are the principal compo- ments to compensate for Federal Reserve float. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 531 The St. Louis measure, consistent with its markedly from that of other narrow aggregates. sources concept, comprises Federal Reserve Specifically, the velocity of the monetary base credit—holdings of U.S. government securities, has behaved similarly to the velocity of Ml, with discounts and advances, Federal Reserve float, a pronounced break in the 1980s from its earlier and other Federal Reserve assets—plus other behavior. Between 1960 and 1980, the velocities sources, including the gold stock, special draw- of the base, Ml-A (currency plus demand deposing rights and Treasury currency outstanding. its), and Ml all rose, in part reflecting the effects It subtracts several categories of liabilities, on money demand of the generally rising trend of namely, Treasury and foreign deposits at the interest rates. Fluctuations of base velocity Federal Reserve, Treasury holdings of coin around its trend during the 1960s and 1970s were and currency, and certain miscellaneous items. comparable with those of the other aggregates. Implicitly, all vault cash is treated contempo- And, in the 1980s, velocity of the base and Ml raneously.5 declined both absolutely and relative to the ear- The St. Louis and Board measures of the lier trend as deregulation and falling market monetary base have moved together over time, interest rates encouraged a large volume of funds though the St. Louis measure generally lies to move into transaction deposits. above the Board measure, reflecting differences Statistical methods of relating growth in inin techniques for adjustment of breaks caused by come to past growth rates in the base produce changes in reserve requirements. In terms of results that echo this pattern of velocity behavgrowth rates, the two series track each other ior. When these relationships are estimated using closely. data through 1980, they make substantial errors Growth of the monetary base has been much in predicting nominal GNP in subsequent years, smoother on average than that of the other much as do equations involving other aggremonetary aggregates.6 In large measure, the gates—especially the narrow aggregates. Techsmooth growth of the base can be attributed to its niques that allow for a break in behavior in the large currency component, which over long pe- early 1980s make somewhat smaller but still large riods of time has expanded in a relatively stable errors in the 1980s and leave unanswered quesfashion. Between 1959 and 1987, the average tions about the potential for additional shifts in quarter-to-quarter fluctuation of growth in cur- the relationships. rency in circulation was less than one-fifth of the An examination of the demand properties of quarterly fluctuation in growth of total reserve the base can shed light on the determinants of the balances. behavior of its velocity and the errors made in While growth in the base has been relatively predicting GNP. The demand for the base is smooth, its longer-run pattern has not differed derived from demands for its components, currency and reserves. The demand for reserves, in turn, depends on demands for excess reserves and for reservable deposits—primarily the trans- 5. There are two other differences between the Board base and the St. Louis base concerning seasonal adjustment and action deposits that are included in Ml but also adjustments for changes in reserve requirements. St. Louis some that are not in that aggregate, such as seasonally adjusts the whole base directly after adding a interbank and U.S. government deposits and reserve adjustment magnitude (RAM) to account for regulatory changes in reserve requirements as well as changes in certain time and savings deposits. composition of deposits. For the Board measure, currency, Analysis by the Board's staff has found that total reserves, and the residual component are seasonally the demand for the base has substantial interest adjusted separately, after applying to the reserves and residual components certain break adjustment factors, and finally sensitivity, mainly reflecting the interest sensitivthe components are summed. The Board's break adjustment ity of demand deposits and other checkable method is intended to adjust only for regulatory changes in deposits.7 This interest responsiveness, together reserve requirements. 6. This and subsequent mentions of the monetary base refer specifically to the Board measure of the base, but, in view of the close relationship between the two measures, 7. An estimated demand equation for the base was derived should apply nearly as well to the series produced by the from the Board staffs standard models of demand for cur- Federal Reserve Bank of St. Louis. rency and demand for required reserves on transaction Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

532 Federal Reserve Bulletin • August 1988 with the drop in interest rates during the 1980s, number of households. Although available data helps to explain the turnaround in base velocity, are inadequate to determine even approximate much as it explains the movements in the veloc- magnitudes, it seems likely that a substantial part ities of other monetary aggregates—especially of U.S. currency is being employed in support of Ml—in recent years. However, the base proba- activity that is not reflected in U.S. GNP—in bly is less interest sensitive than are the other particular, activity outside our borders. Espemonetary aggregates, because of the importance cially to the extent this activity and the currency of the currency component, which does not to support it move independently of U.S. GNP, respond very much to changes in interest rates. this would tend to reduce the usefulness of the This implies that efforts to control the base to base as an indicator or target. predetermined target ranges could involve very Not only is it difficult to account fully for the wide swings in interest rates. Whether those level of currency outstanding, growth occasionfluctuations would be beneficial to the economy ally has been at variance with expectations, depends in part on the stability of the demand despite the relatively stable long-run relationship relationship. If the demand for the base is rela- with measured income. For example, in the past tively stable, the interest rate movements would year and a half, growth of currency has been tend to stabilize GNP in the face of disturbances roughly twice as rapid as would be expected on to spending. But if base demand tends to move the basis of historical experience, judging by the unpredictably, the interest rate movements asso- Board staffs quarterly econometric model, with ciated with controlling the base would tend to no obvious explanation for the strength. destabilize GNP. Over long periods of time, the demand for the Controllability of the Monetary Base base appears to be fairly predictable, especially compared with Ml-A and Ml. Movements in For the most part, the Federal Reserve historitransaction deposits, especially demand depos- cally has supplied the monetary base to accomits, often have been somewhat erratic, tending to modate its demand. This has been a consistent loosen the relationships of Ml-A and Ml with policy with regard to demands for currency. With GNP, but their effects on base demand are muted respect to reserves, the interactions have been by the fractional nature of reserve requirements. more complex. Except in the early 1980s, reac- Another factor contributing to the relative stabil- tions to deviations of reserves from expectations ity of the demand for the base is that unpredict- have been quite indirect. Any increases or deable movements in transaction deposits at times creases in the demand for reserves have been have tended to offset unexplained changes in completely accommodated in the short run. currency, perhaps owing to substitution between However, over time persistent deviations in currency and demand deposits. However, there money (and implicitly reserves) from objectives is considerable variability in the relationship of have prompted adjustments in monetary policy the base to income and other variables over when those deviations were judged likely to be periods of a year or less—and evidence suggests associated with unwelcome developments in the that at least over these shorter periods it is no economy. more stable than M2. Even in the period from late 1979 through late In considering the past and prospective degree 1982, when the Federal Reserve used nonborof stability of demand for the base, attention rowed reserves as an operating target to achieve must be directed to its largest component, cur- goals for money growth over time, total reserves rency. Analysts have noted the extraordinarily were not closely controlled because borrowed large volume of dollar currency outstanding rel- reserves adjusted in response to deviations in ative to measured U.S. economic activity or the money growth from objectives. Because of the remaining two-day lag between the ends of the reserve computation and reserve accounts in Ml only. Demands for other components of maintenance periods, control of total reserves or reserves were not explicitly modeled, as the effects of these components on required reserves are relatively small. the monetary base would need to be indirect, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 533 working through the effects of changes in interest volatility under base targeting could be quite rates on the demand for the components of the substantial, especially in the short-to-intermebase in the short run. In this respect, control of diate run. Changes in the quantity of the base the base is achieved in the same way as for the demanded that caused the base to deviate from broader aggregates. It is likely that the base, or its target would need to be offset in the short run for that matter any of the broader aggregates, mainly by changes in reserves (given the low could be controlled reasonably well over a span interest sensitivity of currency demand), which of several quarters—a period that would be would have multiple effects on the quantity of meaningful in terms of the effects of monetary money. policy. However, the degree of interest rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

534 Industrial Production Released for publication June 15 136.0 percent of the 1977 annual average, the total index in May was 6.1 percent higher than it Industrial production increased 0.4 percent in was a year earlier. May after a rise of 0.6 percent in April. The May In market groups, production of durable congain reflected further sizable increases in the sumer goods advanced sharply in May as the output of automotive products, business equip- output of motor vehicles surged. Automobile ment, and materials. However, other major sec- assemblies rose to an annual rate of 7.5 million tors, such as nondurable consumer goods and units from the 7 million unit rate in April, and construction supplies, remained sluggish. At light truck production also increased in May. Ratio scale, 1977 = 100 TOTAL INDEX 140 Products 120 Materials 100 80 J L _ MANUFACTURING 140 _ MATERIALS Nondurable Durable 120 100 Energy 80 - CONSUMER GOODS - - Nondurable ^ —. — JO-N-V - Durable 1 1 1 1 240 140 MOTOR VEHICLES AND PARTS FINAL PRODUCTS Defense and space 200 120 100 160 140 80 120 100 60 80 1982 1984 1986 1988 1982 1984 1986 1988 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

535 1977 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, GGGrrrooouuuppp 1988 1988 MMMaaayyy 111999888777 tttooo MMMaaayyy 111999888888 Apr. May Jan. Feb. Mar. Apr. May Major market groups Total industrial production 135.5 136.0 .4 .0 .2 .6 .4 6.1 Products, total 144.0 144.5 1.0 .5 .2 .3 .3 5.6 Final products 142.4 143.0 1.0 .3 .2 .4 .4 5.6 Consumer goods 131.6 132.0 1.1 .1 -.1 .3 .3 3.7 Durable 123.1 125.4 1.2 -.1 .1 2.0 1.9 4.4 Nondurable 134.8 134.4 1.1 .4 -.2 -.2 -.3 3.4 Business equipment 154.7 155.9 .9 .8 .6 .8 .8 10.1 Defense and space 189.1 188.7 .9 .2 -.6 -.4 -.2 -.3 Intermediate products 149.6 149.7 1.1 .9 .2 .0 .1 5.6 Construction supplies 137.0 136.8 2.3 .6 -.6 .1 -.1 6.0 Materials 123.8 124.5 -.6 -.7 .3 1.1 .6 7.1 Major industry groups Manufacturing 140.8 141.5 .3 .1 .4 .6 .4 6.2 Durable 139.9 141.2 .5 .4 .3 .8 .9 7.5 Nondurable 142.1 141.8 .1 -.2 .5 .2 -.1 4.5 Mining 104.0 103.2 -1.2 -1.7 .6 1.9 -.8 4.0 Utilities 112.6 113.4 3.1 .3 -1.8 -.8 .7 3.5 NOTE. Indexes are seasonally adjusted. However, output of home goods, particularly Among intermediate products and materials, appliances, edged down and remained below the production of construction supplies has been level of the fourth quarter of last year. Produc- unchanged, on balance, since January; the outtion of nondurable consumer goods decreased for put of business supplies, which rose strongly a third month as the output of food was again earlier in the year, has flattened out in the past weak and consumer fuel production fell for the two months. However, materials output rose first time since last summer. In contrast, robust again in May and now has surpassed the Decemgains in the output of business equipment contin- ber high. The recent gains have been widespread ued last month with strength in all major compo- among durable materials, with notable increases nents of that subindex. in the output of parts for consumer durable goods and equipment as well as in the production of basic metals. In nondurables, chemical materials Total industrial production—Revisions have continued to improve after having declined Estimates as shown last month and current estimates sharply in January and February. In industry groups, manufacturing output rose Percentage change Index (1977=100) from previous 0.4 percent in May, reflecting gains in steel, MMoonntthh months motor vehicles, and machinery. Production at Previous Current Previous Current utilities rose 0.7 percent, but mining output decreased 0.8 percent, reflecting decreases in oil February 134.4 134.4 .0 .0 and gas extraction. March 134.7 134.7 .2 .2 April 135.6 135.5 .7 .6 May 136.0 .4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

536 Announcements MEETING OF revenue in 1989 is estimated at $548.8 million, CONSUMER ADVISORY COUNCIL resulting in a cost recovery rate of 101.8 percent. Raw returned check prices range from 30 cents The Federal Reserve Board announced on to 75 cents for local returns and 40 cents to 95 June 23, 1988, that its Consumer Advisory Coun- cents for nonlocal returned checks. Qualified cil would meet on July 14 and 15. returned check prices are generally double to The Consumer Advisory Council was estab- triple the corresponding forward collection fees. lished by the Board in 1976, at the direction of Fees for fine-sort returned checks are the same the Congress, to represent the interests of the as those for fine-sort forward collection items. financial industry and consumers. The Council Copies of the fee schedules and deadlines for advises and consults with the Board in the exer- Federal Reserve Bank priced services are availcise of the Board's functions under the Con- able from the Federal Reserve Bank in each sumer Credit Protection Act and on other con- District. sumer-related matters of interest to the Board. NEW CONSUMER CREDIT PUBLICATIONS AVAILABLE NEW PRICES AND DEADLINES APPROVED FOR RETURNED CHECKS AND The Federal Reserve Board announced on FORWARD COLLECTION SERVICES June 20, 1988, the publication of three new booklets on the mortgage process that were The Federal Reserve Board approved on prepared in conjunction with the Federal Home June 22, 1988, prices and deadlines for new Loan Bank Board. Federal Reserve returned check services as well The three new booklets are the following: A as revised prices and deadlines for forward col- Consumer's Guide to Mortgage Financing, A lection services. The prices and deadlines will Consumer's Guide to Mortgage Lock-ins, and A become effective September 1, 1988, and will Consumer's Guide to Mortgage Closings. They remain in effect through 1989. have been designed to help consumers under- The Board's action at this time is due to stand these important aspects of the mortgage responses to the new check return services that process. will be offered by the Federal Reserve Banks The booklets were developed in consultation beginning September 1, 1988. These new ser- with many other federal agencies and trade and vices are designed to facilitate bank compliance consumer groups at the request of the Congress. with requirements of the Expedited Funds Avail- Copies are available on request from Publicaability Act by reducing risk to depository banks tions Services, Board of Governors of the Fedfrom making funds available for withdrawal on a eral Reserve System, Washington, D.C. 20551, more prompt basis. or from the Federal Reserve Banks. The total cost for check services in 1988, including the Private Sector Adjustment Factor PROPOSED ACTIONS (PSAF), is projected to be $511.6 million. Total revenue in 1988 is estimated at $514.8 million, The Federal Reserve Board issued for public resulting in a cost recovery rate of 100.6 percent. comment on June 3, 1988, a proposed addition to In 1989, the total cost for check services, includ- Regulation H (Membership of State Banking ing PSAF, is projected at $539.3 million. Total Institutions in the Federal Reserve System) to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

537 facilitate public access to financial information SYSTEM MEMBERSHIP: ADMISSION OF regarding state member banks. Comments STATE BANKS should be submitted to the Board by August 19, 1988. The following state banks were admitted to mem- The Federal Reserve Board also issued for bership in the Federal Reserve System during the public comment on June 3, 1988, proposed period June 1 through June 30, 1988. amendments to Regulation Y (Bank Holding Companies and Change in Bank Control) to Florida implement the limitations placed on grandfa- Ocala Friendship Community Bank thered nonbank banks by the Competitive Equal- Pennsylvania ity Banking Act of 1987 (CEBA). Comments Devon First Sterling Bank were to have been submitted to the Board by Virginia July 18, 1988. Fredericksburg .... Virginia Heartland Bank The Federal Reserve Board issued for public West Virginia comment on June 22, 1988, a proposed amend- Buckhannon First Community Bank ment to Regulation CC (Availability of Funds and Collection of Checks) to restrict certain delayed disbursement practices. Comments should be submitted to the Board by September 23, 1988. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

538 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON MAY 17, 1988 other durables and on services remained strong. Outlays on nondurable goods continued sluggish. Domestic Policy Directive A surge in business fixed investment during the first quarter reflected large gains in spending on The information reviewed at this meeting sug- information-processing and other equipment. gested continuing strength in the economic ex- New orders for nondefense capital goods softpansion, supported by strong sales in both do- ened recently, but order backlogs were still high mestic and export markets, and relatively high and suggested that output would remain at an utilization levels of labor and capital resources. advanced level in the current quarter. Spending In this setting, consumer and producer prices on structures declined in the first quarter, and have risen more rapidly recently. In addition, forward commitments for nonresidential building labor costs increased substantially in the first were essentially flat in nominal terms. While quarter. inventories of motor vehicles declined during the Nonfarm payroll employment continued to in- first quarter, nonauto inventory investment recrease in April, though at a more moderate pace mained close to the high rate of the fourth than in other recent months. The rise included quarter. Sales of new and existing homes insizable growth in the manufacturing sector and creased late in the first quarter. After showing was accompanied by a sharp increase in the weakness early in the year, housing starts picked average workweek. Employment as measured by up to a 1.55 million annual rate in March, a level the household survey was up very sharply in marginally above that in the fourth quarter but April, and the civilian unemployment rate de- still appreciably below that in earlier quarters. clined 0.2 percentage point to a level of 5.4 The U.S. merchandise trade deficit declined percent; that level was down appreciably since substantially in both nominal and real terms in the start of the year and was the lowest since the first quarter. Exports reached a record level; 1974. oil imports fell, but non-oil imports continued to Growth in industrial production picked up con- expand. Indicators of economic activity in the siderably in April from a reduced pace earlier in major foreign industrial countries during the first the year. Auto assemblies posted large gains, and months of 1988 showed continued strength in the output of business equipment remained ex- Japan and, on balance, in Europe as well. ceptionally strong. Capacity utilization rates in The consumer price index increased substanmanufacturing and mining and in the production tially in March, despite a limited rise in retail of industrial materials increased appreciably in food prices and flat retail energy prices. At the April and on balance have risen substantially producer level, prices of finished goods rose over the past several quarters to relatively high rapidly in March and April, largely reflecting levels. increases in the food and energy sectors. Prices Consumer spending for durables and services of intermediate goods advanced considerably was strong in the first quarter. Retail sales, as further in both months, continuing their uptrend revised, showed substantial gains in February of the past year and a half that has coincided with and March but fell in April. Auto sales declined increased capacity utilization rates. Commodity somewhat in April, apparently reflecting reduced prices strengthened recently after registering sales incentives, but household spending on mixed changes in the first quarter. Broad mea- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

539 sures of labor costs indicated a substantial ad- ending April 20, adjustment plus seasonal borvance in the first quarter, in part because of a rise rowing rose to an average of about $330 million; in payroll taxes. in the subsequent period ending May 4, borrow- Dollar exchange rates moved within a narrow ing averaged about $440 million, reflecting the range during most of the intermeeting period, impact of a tax-related bulge in Treasury deposits with uncertainties regarding U.S. trade and price at the Federal Reserve Banks that affected reperformance apparently offset by indications of serve market conditions and complicated the U.S. monetary tightening; also, weakness at the management of reserves. More recently, open time of the release of the February trade data was market operations were adjusted toward the immet by concerted central bank intervention. On a plementation of further slight firming in reserve weighted-average basis, the dollar appreciated conditions in relation to what had been sought slightly on balance in relation to the other G-10 earlier in the period. This action was taken in currencies until late in the period; it strengthened light of information that indicated considerable with respect to the mark and weakened slightly strength in the economy and a related increase in with respect to the pound and the yen. The dollar concerns about the potential for greater inflation. then appreciated about 1 percent on the morning Growth of M2 and M3 for the year to date was at of the May 17 meeting in response to news of the rates in the upper portions of the Committee's improved U.S. trade deficit in March. ranges for 1988. Monetary growth was boosted in At its meeting in February the Committee April by a temporary buildup in transaction balagreed on policy objectives that called for mon- ances associated with very large tax payments by etary growth ranges of 4 to 8 percent for both M2 individuals. Although preliminary data for early and M3 for the period from the fourth quarter of May indicated substantial weakness of money 1987 to the fourth quarter of 1988. The associated growth, the cumulative expansion of the broad range for growth in total domestic nonfinancial aggregates remained relatively high in their andebt was set at 7 to 11 percent. The Committee nual ranges. Total and nonborrowed reserves decided not to establish a numerical target for Ml rose at rapid rates in April in conjunction with growth; instead, the appropriateness of changes the increase in required reserves against transacin Ml would be evaluated during the year in the tion deposits. light of the behavior of Ml velocity, develop- The firming of reserve conditions was reflected ments in the economy and financial markets, and in a rise in the federal funds rate from around 6!/2 the nature of emerging price pressures. percent at the time of the March meeting to At its previous meeting on March 29, the around 7 percent most recently. Other short-term Committee adopted a directive calling for a slight rates also rose about Vi percentage point over the increase in the degree of pressure on reserve intermeeting period, while yields on Treasury positions. These reserve conditions were ex- and corporate bonds increased somewhat less. pected to be consistent with growth in both M2 Banks raised their prime lending rate from 8V2 to and M3 at annual rates of about 6 to 7 percent 9 percent during the first half of May. Broad over the period from March through June. Tak- indexes of stock prices changed little on balance ing account of conditions in financial markets, over the period. the members agreed that somewhat greater or The staff projection reviewed at this meeting somewhat lesser reserve restraint would be ac- suggested that the economy had considerable ceptable, depending on the strength of the busi- underlying strength, reflecting both an improving ness expansion, indications of inflationary pres- trade balance and continuing momentum in dosures, developments in foreign exchange mestic demands. With unemployment already a markets, and the behavior of the monetary ag- little lower, and capacity utilization a little gregates. The intermeeting range for the federal higher, than had been anticipated, the risks of funds rate was left unchanged at 4 to 8 percent. higher rates of price and wage inflation had Some slight firming of reserve conditions was increased. The actual course of the economy implemented immediately after the March meet- would depend in part on how these developments ing. In the two reserve maintenance periods affected financial markets. Pressures in those Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

540 Federal Reserve Bulletin • August 1988 markets could restrain domestic final demands. reported rising costs of materials and other man- Relatively sluggish growth in such demands, ufacturing inputs. With profit margins under along with indications of overstocking in the more pressure, numerous firms were looking for retail sector, would encourage a reduced rate of opportunities to pass on rising costs, and there inventory investment. Growth in business fixed were reports of some increase in successful efinvestment was projected to slow substantially, forts by businesses to raise prices, especially on and federal purchases, in constant dollar terms, crude and intermediate producer goods. Howwere expected to be weak. Under such circum- ever, while many specific instances of sizable stances, while prices and wages might rise some- price increases could be cited, broad measures of what more rapidly in the quarters ahead, re- prices, including commodity prices as a group, flecting the effects of the lower dollar on market did not indicate at this point that a significant prices and reduced margins of unutilized produc- worsening had occurred in the overall rate of tion resources, the extent and duration of any inflation. Likewise, while reports of shortages of pickup of inflation might be limited. qualified labor were multiplying and business In the Committee's discussion of the outlook resistance to higher wages seemed to be diminfor economic activity and prices, the members ishing in some areas, the members did not curfocused on the strong performance of the econ- rently detect any appreciable acceleration in omy in recent months, and, in the context of wage rate increases. Nonetheless, several exdiminishing margins of unused labor and other pressed concern that, unless the expansion in production resources, they expressed consider- overall demands were to slow markedly from the able concern about the potential for higher rates recent pace, which exceeded the trend growth of of inflation in the year ahead. Members referred potential output, a substantially higher rate of to widespread evidence of strength in the manu- price and wage inflation could not be avoided in facturing sector and to indications that many the relatively near future. Others were less ready firms were producing at very high levels of to conclude that an inflationary surge might be capacity use. Manufacturing was continuing to imminent, but they believed that the situation benefit from the nation's improved ability to needed careful watching. compete internationally as a result of the depre- In the Committee's discussion of policy for the ciated dollar, and strength in manufacturing was intermeeting period ahead, the members generfeeding through to other related sectors of the ally agreed that some further tightening of reeconomy. On the negative side, members re- serve conditions was needed to counter the risks ferred to indications that inventories were higher of rising inflationary pressures in the economy. A than desired in some industries, notably at the failure to act in timely fashion not only would be retail level, and some saw a relatively weak inconsistent with the Committee's commitment outlook for construction, both residential and to achieving price stability over time but would in nonresidential. Weaknesses in the financial sec- fact compound the difficulties of accomplishing tors of the economy and relatively heavy debt that objective. Views differed, however, regardburdens also increased the downside risks in the ing the desirable extent of such firming and the economy. But, on balance, while some slowing appropriate timing for its implementation. A mafrom the current rate of expansion was a reason- jority favored only a slight move toward more able expectation, the risks were on the side of restraint, at least pending an evaluation of further faster-than-desired growth and more inflationary developments, and most of these members prepressures. Some members observed that in these ferred to delay the tightening action for a short circumstances fiscal restraint, especially if sup- period. Other members felt that current and plemented by measures to reduce the inflationary potential pressures on prices and wages argued consequences of many government programs, more urgently for a prompt move to somewhat could greatly facilitate the effort to control infla- greater restraint. tion while encouraging sustained economic ex- The members who favored only slight further pansion. firming, whether immediately or after a short Turning to the outlook for inflation, members delay, saw a considerable risk that an apprecia- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 541 ble further tightening would be unexpected so gates, especially Ml and M2, was likely to modsoon after the most recent firming and might well erate substantially from the pace in April. The have an exaggerated impact on financial markets. projected slowing reflected in part a reversal of Among other effects, it might give rise to antici- the tax-related buildup in transaction accounts pations of an increase in the discount rate, and during April, which was already occurring, and foster unwarranted expectations about the Sys- the impact of increased opportunity costs of tem's intentions. Some members also stressed holding money balances in response to the rise in the adverse impact that any marked weakening market interest rates. While M2 and M3 curof financial markets could have on troubled de- rently appeared to be growing at rates that were pository institutions. In these circumstances, consistent with the Committee's expectations for marginal further tightening in the near term the second quarter, their cumulative growth thus would provide an appropriate balance between far this year was at rates in the upper part of the the need to curb the emergence of excessive Committee's ranges. One member stressed that demand pressures in the economy and the risks any tendency for monetary growth to exceed the of further restraint for financial markets and ranges should be firmly resisted under prevailing depository institutions. A few members also ex- circumstances. Another commented that repressed the view that the two firming actions duced growth, which brought the expansion for since late March, taken together, already repre- the year to around the middle of the Committee's sented a significant move to greater restraint and ranges, would be a desirable outcome. more time was needed to appraise their impact With regard to adjustments in the degree of on the economy before any substantial further reserve pressure during the intermeeting period, tightening was implemented. the slight firming after a short interval following Members who favored moving promptly to a today's meeting that was favored by a majority of somewhat greater degree of restraint gave more the members would be implemented unless ecoemphasis to the risks of more inflation as demand nomic and financial conditions in the period pressures encountered labor and capacity con- ahead were to differ markedly from current exstraints in many industries. In this view the pectations. Should unanticipated developments System's recent firming actions were helpful, but of that sort occur, the Chairman would call for a they did not go far enough toward restraining the special consultation of the Committee. On the growth in total demands to a noninflationary question of any subsequent adjustment in policy, pace. These members recognized that apprecia- a majority believed that policy implementation ble further firming could have some adverse should remain especially alert to incoming inforimpact on financial markets in the short run and mation that might call for further firming. Given on the condition of many already weakened the recent tightening of reserve conditions and depository institutions. However, a prompt and the presumption that at least marginally firmer somewhat stronger response to inflationary de- reserve conditions would be implemented in the velopments at this point would have a favorable intermeeting period, the members decided to effect on inflationary expectations, and over time raise the intermeeting range for the federal funds also on long-term debt markets, and would re- rate by 1 percentage point to 5 to 9 percent. With duce the need for greater and more disruptive such an increase the average trading level extightening actions later. Some of these members pected for the federal funds rate in the period indicated that a relatively modest move now, or ahead would be aligned somewhat more symmetin the very near future, and a readiness to tighten rically around the middle of the range. further later during the intermeeting period In further discussion most of the members would constitute an acceptable compromise, indicated that they now favored dropping from given concerns about the risks of unwarranted the directive the special reference to sensitive reactions in the financial markets. conditions in financial markets and the related During the discussion members referred to a reference to the need for flexibility in the conduct staff analysis prepared for this meeting that con- of open market operations. Members noted that cluded that expansion of the monetary aggre- these references, while helpful in describing the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

542 Federal Reserve Bulletin • August 1988 Committee's approach to operations for an ex- be acceptable, depending on ongoing economic tended period following the October distur- and financial developments. The contemplated bances in financial markets, no longer served a reserve conditions were likely to be associated clarifying purpose in communicating the Com- with slower monetary growth, but given their mittee's intentions. While still somewhat vola- relatively rapid expansion in April, M2 and M3 tile, market conditions were now closer to those were still expected to grow at the rates of 6 to 7 prevailing prior to the October break in the stock percent established in late March for the period market, and the Committee anticipated that the from March to June. The members agreed that earlier approach to open market operations gen- the intermeeting range for the federal funds rate, erally would be followed. A few members felt, which provides one mechanism for initiating conhowever, that still quite sensitive conditions in sultation of the Committee when its boundaries financial markets continued to warrant more than are persistently exceeded, should be raised by 1 the usual amount of flexibility in the conduct of percentage point to 5 to 9 percent. open market operations. At the conclusion of the meeting the following In advance of the discussion of long-term domestic policy directive was issued to the Fedmonetary growth ranges at its next meeting, the eral Reserve Bank of New York: Committee considered the role that the monetary base might play in monetary policy. One pro- The information reviewed at this meeting suggests posal was to set fairly wide limits on quarterly continuing strong expansion in economic activity and fluctuations in the monetary base, but to adjust rising levels of resource utilization. In April, total policy promptly if the limits were breached. The nonfarm payroll employment rose further; the increase included sizable growth in the manufacturing sector. Committee also discussed whether a range for The civilian unemployment rate fell to 5.4 percent, the base comparable to the existing ranges for down appreciably from its level at the start of the year. M2 and M3 and nonfinancial debt might usefully Growth in industrial production picked up considersupplement the current ranges. Most members ably in April from a reduced pace earlier in the year. expressed reservations about the reliability of the Retail sales fell appreciably last month but estimates of sales in February and March were revised substanbase as a guide to or restraint on policy, given tially higher. Indicators of business capital spending their questions about the behavior of currency point to substantial gains thus far this year, notably for and reserves relative to income. However, there equipment. The nominal U.S. merchandise trade defwas sentiment for a continuing review of possible icit in the first quarter was substantially smaller than monetary indicators of future price trends. that for the fourth quarter. Consumer and producer prices have risen more rapidly recently following a At the conclusion of the Committee's discusperiod of relatively modest increases. Broad measures sion, all but two of the members indicated that of labor costs indicate a substantial advance in the first they favored or could accept a directive that quarter, in part because of a rise in payroll taxes. called initially for maintaining the current degree Interest rates have risen somewhat since the Comof pressure on reserve positions. Some slight mittee's meeting on March 29. The trade-weighted foreign exchange value of the dollar in terms of other firming would be implemented after a short inter- G-10 currencies had increased slightly on balance over val following today's meeting, assuming that the intermeeting period prior to May 17 and jumped economic and financial conditions remained rea- following release of the March trade data. sonably consistent with current expectations. In Ml and M2 grew rapidly in April, owing in part to a particular, and in keeping with the Committee's buildup in transaction balances associated with tax payments, while M3 expanded at a slower pace than in usual approach to policy, the conduct of open previous months. Through April, expansion of M2 and market operations would take account of condi- M3 was in the upper portion of the ranges established tions in financial markets, the strength of the by the Committee for 1988. Expansion in total domesbusiness expansion, indications of inflation, the tic nonfinancial debt appears to be continuing at a pace performance of the dollar in foreign exchange close to that in 1987. markets, and the behavior of the monetary ag- The Federal Open Market Committee seeks monetary and financial conditions that will foster price gregates. Later in the intermeeting period, some stability over time, promote growth in output on a added reserve restraint would be acceptable, or sustainable basis, and contribute to an improved patsome slight lessening of reserve pressure might tern of international transactions. In furtherance of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 543 these objectives, the Committee at its meeting in Votes for this action: Messrs. Greenspan, Corri- February established growth ranges of 4 to 8 percent gan, Angell, Black, Forrestal, Heller, Johnson, for both M2 and M3, measured from the fourth quarter Kelley, and Seger. Votes against this action: of 1987 to the fourth quarter of 1988. The monitoring Messrs. Hoskins and Parry. range for growth in total domestic nonfinancial debt was set at 7 to 11 percent for the year. Messrs. Hoskins and Parry dissented because With respect to Ml, the Committee decided in they favored a prompt move to a greater degree February not to establish a specific target for 1988. of reserve restraint. In their view the risks were The behavior of this aggregate in relation to economic activity and prices has become very sensitive to considerable that price and wage inflation would changes in interest rates, among other factors, as accelerate from rates that were already too high. evidenced by sharp swings in its velocity in recent A more substantial firming was needed to modyears. Consequently, the appropriateness of changes erate underlying pressures and to foster reasonin Ml this year will continue to be evaluated in the able progress toward price stability. In the ablight of the behavior of its velocity, developments in the economy and financial markets, and the nature of sence of such a move at this time, even greater emerging price pressures. tightening might well be required later, with In the initial implementation of policy, the Commit- attendant costs to financial markets and the econtee seeks to maintain the existing degree of pressure omy. Mr. Hoskins noted that the M2 and M3 on reserve positions. Taking account of conditions in aggregates were near the upper bound of their financial markets, the strength of the business expantarget ranges. He also referred to the strengthension, indications of inflationary pressures, developments in foreign exchange markets, and the behavior ing of business activity abroad, which had impliof the monetary aggregates, the Committee expects cations, potentially, for more widespread price that a slight increase in the degree of pressure on pressures, and to the desirability of increasing reserve positions would be appropriate in the weeks the credibility, and thus the effectiveness, of ahead. Depending on further developments in these monetary policy through timely, anti-inflationary factors, somewhat greater reserve restraint would, or slightly lesser reserve restraint might, also be accept- measures. He emphasized that monetary policy able later in the intermeeting period. The contem- should be directed toward a steady reduction of plated reserve conditions are expected to be consistent inflation and not toward meeting shorter-term with growth in M2 and M3 over the period from March business cycle goals. Mr. Parry noted that the through June at annual rates of about 6 to 7 percent. two tightening actions in recent weeks were of The Chairman may call for Committee consultation if it appears to the Manager for Domestic Operations insufficient magnitude to have much effect on the that reserve conditions during the period before the economy in the context of strengthened prosnext meeting are likely to be associated with a federal pects for growth and already tight labor markets. funds rate persistently outside a range of 5 to 9 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

545 Legal Developments AMENDMENT TO REGULATION D 2. A new section 204.132 is added to read as follows: The Board of Governors is amending 12 C.F.R. Part Part 204.132—Treatment of Loan Strip 204, its Regulation D, clarifying that the ostensible sale Participations of a short-term loan made under a long-term lending commitment, known as a loan strip or strip participa- Effective March 31, 1988, the glossary section of the tion, is regarded as a "deposit" for the purposes of instructions for the Report of Condition and Income Regulation D whenever the depository institution sell- (FFIEC 031-034; OMB No. 7100-0036) ("Call ing the loan or participation is legally committed to Report") was amended to clarify that certain shortmake another loan at the end of the short-term period term loan participation arrangements (sometimes if the original investor does not wish to renew its known or styled as "loan strips" or "strip participainterest and another investor cannot be located. In tions") are regarded as borrowings rather than sales such a circumstance, the legal commitment of the for Call Report purposes in certain circumstances. lender/seller to advance funds to the borrower, which Through this interpretation, the Board is clarifying would, in substance, permit repayment of the short- that such transactions should be treated as deposits for term loan to the purchaser, is comparable to a repur- purposes of Regulation D. chase agreement. This is true regardless of whether These transactions involve the sale (or placement) the commitment is exercised. Actual reporting of and of a short-term loan by a depository institution that has reserve maintenance against these liabilities will begin been made under a long-term commitment of the after final approval of a new reporting form being depository institution to advance funds. For example, adopted in order to monitor these liabilities for monea 90-day loan made under a five-year revolving line of tary policy purposes. This approval is expected by credit may be sold to or placed with a third party by July or August of 1988. the depository institution originating the loan. The This interpretation is effective June 29, 1988, but depository institution originating the loan is obligated depository institutions should not include these liabil- to renew the 90-day note itself (by advancing funds to ities on their reports of deposits or maintain reserves its customer at the end of the 90-day period) in the against them at this time. Depository institutions will event the original participation does not wish to renew be informed individually when and how these deposits the credit. Since, under these arrangements, the deshould be so included and when appropriate reserve pository institution is obligated to make another loan maintenance should begin following final approval of at the end of 90 days (absent any event of default on the new reporting form for these liabilities which is the part of the borrower), the depository institutions expected in July or August of 1988. selling the loan or participation in effect must buy back the loan or participation at the maturity of the 90-day loan sold to or funded by the purchaser at the option of Part 204—Reserve Requirements of Depository the purchaser. Accordingly, these transactions bear Institutions the essential characteristics of a repurchase agreement and, therefore, are reportable and reservable under Regulation D. 1. The authority citation for 12 C.F.R. Part 204 Because many of these transactions give rise to continues to read as follows: deposit liabilities in the form of promissory notes, acknowledgements of advance or similar obligations Authority. Sees. 11(a), 11(c), 19, 25, 25(a) of the (written or oral) as described in section 204.2(a)(l)(vii) Federal Reserve Act (12 U.S.C. 248(a), 248(c), 371a, of Regulation D, the exemptions from the definition of 371b, 461, 601, 611); sec. 7 of the International Bank- "deposit" incorporated in that section may apply to ing Act of 1978 (12 U.S.C. 3105); and section 411 of the liability incurred by a depository institution when the Garn-St Germain Depository Institutions Act of it offers or originates a loan strip facility. Thus, for 1982 (12 U.S.C. 461). example, loan strips sold to domestic offices of other Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

546 Federal Reserve Bulletin • August 1988 depository institutions are exempt from Regulation D Authority: Sections 9, 11, and 21 of the Federal under section 204.2(a)(l)(vii)(A)(l) because they are Reserve Act (12 U.S.C. §§ 321-338, 248, and 486, obligations issued or undertaken and held for the respectively); sections 4 and 13(j) of the Federal Deaccount of a U.S. office of another depository institu- posit Insurance Act (12 U.S.C. §§ 1814 and 1823(j), tion. Similarly, some of these transactions result in respectively); section 7(a) of the International Banking Eurocurrency liabilities and are reportable and reserv- Act of 1978 (12 U.S.C. § 3105); sections 907 - 910 of able as such. the International Lending Supervision Act of 1983 (12 U.S.C. §§ 3906 - 3909); sections 2, 12(b), 12(g), 12(i), 15B(c)(5), 17, 17A, and 23 of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78b, 78/(b), 78/(g), AMENDMENT TO REGULATION H 78/(i), 78o-4(c)(5), 78q, 78q-l, and 78w, respectively); and section 5155 of the Revised Statutes (12 U.S.C. The Board of Governors is amending 12 C.F.R. Part § 36) as amended by the McFadden Act of 1927. 208, its Regulation H, to implement Title VIII of the Competitive Equality Banking Act of 1987 ("CEBA") 2. Section 208.15 is amended by revising paragraphs which permits state member agricultural banks to (a)(l)(iv), (a)(2), (b)(1), (d)(3), (e)(4), (f)(1), and amortize losses on qualified agricultural loans. The (f)(2)(vi) and adding paragraph (a)(4) to read as folregulation describes the procedures and standards lows: applicable to state member banks desiring to amortize losses under that statute. It also describes the manner Section 208.15 —Agricultural loan loss in which such amortizations are to be done. Title VIII amortization of CEBA required regulations implementing Title VIII to be issued not more than 90 days after enactment, (3.) that is, by November 9, 1987. Therefore, the Board (1) * * * initially published the rule as a final rule effective (iv) which has: November 9, 1987, and provided for reporting on the (A) at least 25 percent of its total loans in Call Report beginning December 31, 1987, but allowed qualified agricultural loans and agriculturallyinterested parties to comment through December 3, related other property; or 1987 (52 Federal Register 42,087; November 3, 1987). (B) less than 25 percent of its total loans in The comment period , was extended and closed on qualified agricultural loans and agriculturally- January 8, 1988 (52 Federal Register 46,984; Decem- related other property but which bank the ber 11, 1987). Board or the Reserve Bank in whose District After consideration of comments received, the the bank is located or its primary state regulator Board is making one substantive change and several has recommended to the Federal Deposit Insurtechnical changes to the rule. The substantive change ance Corporation for eligibility under this part. would allow eligible state member banks to amortize (2) "Qualified agricultural loan" means: over a period of up to seven years losses on reap- (i) loans qualifying as "loans to finance agriculpraisal or sale of real or personal property that was tural production and other loans to farmers" or as acquired in connection with a qualified agricultural "loans secured by farm land" for purposes of loan and that the bank owned on January 1, 1983, or Schedule RC-C of the FFIEC Consolidated Resubsequently acquires prior to January 1, 1992. Under port of Condition or such other comparable the initial rule, such property had to be currently schedule; owned. The technical changes clarify the regulatory (ii) loans secured by farm machinery, definition of "qualified agricultural loan" and add a (iii) other loans that a bank proves to be suffidefinition for "agriculturally-related other property." ciently related to agriculture for classification as Effective, retroactively, to November 9, 1987, the an agricultural loan by the Federal Reserve; and Board amends 12 C.F.R. Part 208 as follows: (iv) the remaining unpaid balance of any loans, described in paragraphs (a)(2)(i), (ii), and (iii) of this section, that have been charged off since Part 208—Membership of State Banking January 1, 1984, and that qualify for deferral Institutions in the Federal Reserve System under this section. 1. The authority citation for 12 C.F.R. Part 208 is revised to read as set forth below, and the authority (4) "Agriculturally-related other property" means citations following each section are removed: any property, real or personal, that the bank owned Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 547 on January 1, 1983, and any such additional prop- (Regulation CC —Availability of Funds and Collection erty that it acquires prior to January 1, 1992, in of Checks (12 C.F.R. Part 229)). connection with a qualified agricultural loan. For the Effective September 1, 1988, the Board amends purposes of sections 208.15(a)(l)(iv) and 208.15(e), 12 C.F.R. Part 210 as follows: the value of such property shall include the amount previously charged off as loss. 1. The title of Part 210 is revised to read as follows: (b) * * * ^ * * * Part 210—Regulation J (Collection of Checks (i) Any loss that the bank would be required to and Other Items and Wire Transfers of Funds reflect in its financial statements for any period by Federal Reserve Banks) between and including 1984 and 1991. (ii) Any loss that the bank would be required to 2. The authority citation for Part 210 is revised to read reflect in its financial statements for any period as follows: between and including 1983 and 1991 resulting from a reappraisal or sale of agriculturally-related Authority: Federal Reserve Act, section 13 other property. (12 U.S.C. 342), section ll(i) (12 U.S.C. 248(i)), section 16 (12 U.S.C. 248(o) and 360), and section 19(f) (12 U.S.C. 464); and the Expedited Funds Avail- ^^ * * * ability Act (12 U.S.C. 4001 et seq.) (3) there is no evidence that fraud or criminal abuse by the bank or its officers, directors, or principal 3. The title of Subpart A is revised to read as follows: shareholders led to significant losses on qualified agricultural loans or from a reappraisal or sale of Subpart A—Collection of Checks and Other agriculturally-related other property; and Items by Federal Reserve Banks 4. Section 210.1 is revised to read as follows: (e) * * * (4) the bank agrees to make a reasonable effort, Section 210.1—Authority, purpose, and scope. consistent with safe and sound banking practices, to maintain in its loan portfolio a percentage of agri- The Board of Governors of the Federal Reserve Syscultural loans, including agriculturally-related other tem ("Board") has issued this subpart pursuant to the property, not lower than the percentage of such Federal Reserve Act, section 13 (12 U.S.C. 342), loans in its loan portfolio on January 1, 1986; and section ll(i) (12 U.S.C. 248(i)), section 16 (12 U.S.C. 248(o) and 360), and section 19(f) (12 U.S.C. 464); the ^ * * * Expedited Funds Availability Act (12 U.S.C. 4001 et seq.); and other laws. This subpart governs the (1) A bank wishing to amortize losses on qualified collection of checks and other cash and noncash items agricultural loans or from reappraisal or sale of and the handling of returned checks by Federal Reagriculturally-related other property shall submit a serve Banks. Its purpose is to provide rules for colproposal to the appropriate Accepting Official. lecting and returning items and settling balances. (2) * * * (vi) a list of the loans and agriculturally-related 5. In Section 210.2, paragraphs (e) and (f) and the other property upon which the bank proposes to undesignated paragraph at the end of paragraph (g) are defer loss including for each such loan or proprevised, footnote 2 in paragraph (g) is deleted, paraerty, the following information: graph (j) is revised, paragraphs (k) and (1) are redesignated as paragraphs (1) and (m), a new paragraph (k) is added, the introductory text of redesignated paragraph (1) is revised, and the undesignated paragraph at the end of section 210.2 is revised to read as follows: AMENDMENT TO REGULATION J The Board of Governors is amending 12 C.F.R. Part Section 210.2—Definitions, 210, its Regulation J, to conform that regulation to the regulation the Board adopted on May 13, 1988, implementing the Expedited Funds Availability Act of 1987 (e) "Cash item" means — Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

548 Federal Reserve Bulletin • August 1988 (1) a check other than one classified as a noncash (b) Binding effect. This subpart, together with Subpart item under this section; or C of Part 229 and the operating circulars of the (2) any other item payable on demand and collect- Reserve Banks, are binding on all parties interested in ible at par that the Reserve Bank of the District in an item handled by any Reserve Bank. which the item is payable is willing to accept as a cash item. "Cash item" does not include a returned check. 7. Paragraph (a)(1) of section 210.6 is revised to read as (f) "Check" means a draft, as defined in the Uniform follows: Commercial Code, that is drawn on a bank and payable on demand. "Check as defined in 12 C.F.R. Section 210.6—Status, Warranties, and 229.2(k)" means an item defined as a check in Liability of Reserve Bank. 12 C.F.R. 229.2(k) for purposes of Subpart C of Part 229. (g) * * * Unless otherwise indicated, "item" includes (a)(1) Status and Liability. A Reserve Bank shall act both a cash and a noncash item, and includes a only as agent or subagent of the owner with respect returned check sent by a paying or returning bank. to an item. This agency terminates not later than the "Item" does not include a check that cannot be time the Reserve Bank receives payment for the collected at par, or an "item" as defined in section item in actually and finally collected funds and 210.26 that is handled under Subpart B. makes the proceeds available for use by the sender. A Reserve Bank may be liable to the owner, to the sender, to a prior collecting bank, or to the deposi- (j) "Paying bank" means — tary bank's customer with respect to a check as (1) The bank by which an item is payable unless the defined in 12 C.F.R. 229.2(k). A Reserve Bank shall item is payable or collectible at or through another not have or assume any liability with respect to an bank and is sent to the other bank for payment or item or its proceeds except for the Reserve Bank's collection; own lack of good faith or failure to exercise ordinary (2) The bank at or through which an item is payable care, except as provided in paragraph (b) of this or collectible and to which it sent for payment or section and except as provided in Subpart C of collection; or Part 229. (3) The bank whose routing number appears on a check in magnetic characters or fractional form and to which the check is sent for payment or collection. 8. Paragraph (b) of section 210.7 is revised to read as (k) "Returned check" means a cash item or a check as follows: defined in 12 C.F.R. 229.2(k) returned by a paying bank, including a notice of nonpayment in lieu of a Section 210.7—Presenting items for payment. returned check, whether or not a Reserve Bank handled the check for collection. (1) "Sender" means any of the following that sends an item to a Reserve Bank for forward collection: (b) Place of presentment. A Reserve Bank or subse- * * * quent collecting bank may present an item — (1) At a place requested by the paying bank; (2) In the case of a check as defined in 12 C.F.R. Unless the context otherwise requires, the terms not 229.2(k), in accordance with 12 C.F.R. 229.36; defined herein have the meanings set forth in (3) At a place requested by the nonbank payor, if the 12 C.F.R. 229.2 applicable to Subpart C of Part 229, item is payable by a nonbank payor other than and the terms not defined herein or in 12 C.F.R. 229.2 through or at a paying bank; have the meanings set forth in the Uniform Commer- (4) Under a special collection agreement consistent cial Code. with this subpart; or (5) Through a clearinghouse and subject to its rules 6. Paragraph (b) of section 210.3 is revised to read as and practices. follows: Section 210.3—General provisions. 9. Section 210.9 is revised by redesignating footnote 3 as footnote 2, and revising the first sentence of paragraph (e) to read as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 549 Section 210.9—Payment. presented, or a special collection agreement under which the item was presented, may not extend these return times, but may provide for a shorter return (e) Liability of Reserve Bank. Except as set forth in 12 time. C.F.R. 229.35(b), a Reserve Bank shall not be liable (b) Return of checks not handled by Reserve Banks. for the failure of a collecting bank, paying bank, or A paying bank that receives a check as defined in nonbank payor to pay for an item, or for any loss 12 C.F.R. 229.2(k), other than directly or indirectly resulting from the Reserve Bank's acceptance of any from a Reserve Bank, and that determines not to pay form of payment other than cash authorized in para- the check, may send the returned check to its Reserve graph (a), (b), and (c) of this section. Bank in accordance with Subpart C of Part 229, the Uniform Commercial Code, and its Reserve Bank's operating circular. A returning bank may send a re- 10. Section 210.10 is revised to read as follows: turned check to its Reserve Bank in accordance with Subpart C of Part 229, the Uniform Commercial Code, Section 210.10—Time schedule and availability and its Reserve Bank's operating circular. of credits for cash items and returned checks. (c) Paying bank's and returning bank's agreement. By sending a returned check to a Reserve Bank, the (a) Each Reserve Bank shall include in its operating paying bank or returning bank — circulars a time schedule for each of its offices indicat- (1) Authorizes the receiving Reserve Bank (and any ing when the amount of any cash item or returned other Reserve Bank or returning bank to which the check received by it (or sent direct to another Reserve returned check is sent) to handle the returned check office for the account of that Reserve Bank) is counted subject to this subpart and to the Reserve Banks' as reserves for purposes of Part 204 of this chapter operating circulars; (Regulation D) and becomes available for use by the (2) Makes the warranties set forth in 12 C.F.R. sender or paying or returning bank. The Reserve Bank 229.34; and shall give either immediate or deferred credit in ac- (3) Agrees to indemnify each Reserve Bank for any cordance with its time schedule to a sender or paying loss or expense (including attorneys' fees and exor returning bank other than a foreign correspondent. penses of litigation) resulting from — A Reserve Bank ordinarily gives credit to a foreign (i) The paying or returning bank's lack of authorcorrespondent only when the Reserve Bank receives ity to give the authorization in paragraph (c)(1) of payment of the item in actually and finally collected this section; funds, but, in its discretion, a Reserve Bank may give (ii) Any action taken by a Reserve Bank within the immediate or deferred credit in accordance with its scope of its authority in handling the returned time schedule. check; or (b) Notwithstanding its time schedule, a Reserve Bank (iii) Any warranty made by the Reserve Bank may refuse at any time to permit the use of credit given under 12 C.F.R. 229.34. for any cash item or returned check, and may defer (d) Recovery by Reserve Bank. If an action or proceedavailability after credit is received by the Reserve ing is brought against (or if defense is tendered to) a Bank for a period of time that is reasonable under the Reserve Bank that has handled a returned check based circumstances. on — (1) The alleged failure of the paying or returning 11. Section 210.12 is revised to read as follows: bank to have the authority to give the authorization in paragraph (c)(1) of this section; Section 210.12—Return of cash items and (2) Any action by the Reserve Bank within the scope handling of returned checks. of its authority in handling the returned check; or (3) Any warranty made by the Reserve Bank under (a) Return of cash items. A paying bank that receives 12 C.F.R. 229.34, the Reserve Bank may, upon the a cash item directly or indirectly from a Reserve Bank, entry of a final judgment or decree, recover from the other than for immediate payment over the counter, paying bank or returning bank the amount of attorand that pays for the item as provided in section neys' fees and other expenses of litigation incurred, 210.9(a) of this subpart, may, before it has finally paid as well as any amount the Reserve Bank is required the item, return the item in accordance with Subpart C to pay under the judgment or decree, together with of Part 229, the Uniform Commercial Code, and its interest thereon. Reserve Bank's operating circular. The rules or prac- (e) Methods of recovery. The Reserve Bank may tices of a clearinghouse through which the item was recover the amount stated in paragraph (d) of this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

550 Federal Reserve Bulletin • August 1988 section by charging any account on its books that is Revision of Rules Regarding Availability of maintained or used by the paying or returning bank Information (or, if the returning bank is another Reserve Bank, by entering a charge against the other Reserve Bank The Board of Governors is revising 12 C.F.R. Part through the Interdistrict Settlement Fund), if — 261, its Rules Regarding Availability of Information, to (1) The Reserve Bank made seasonable written update procedures, which have not had a comprehendemand on the paying or returning bank to assume sive review since 1967. This revision was published for defense of the action or proceeding; and comment on April 23, 1987. (52 Federal Register (2) The paying or returning bank has not made any 13,458). The revised regulation includes: other arrangement for payment that is acceptable to (1) a description of the Board's procedures in prothe Reserve Bank. cessing requests under the Freedom of Information Act ("FOIA"); The Reserve Bank is not responsible for defending the (2) further delegation of authority to the Board's action or proceeding before using this method of General Counsel to act on requests for information recovery. A Reserve Bank that has been charged by law enforcement agencies and others; through the Interdistrict Settlement Fund may recover (3) additional provisions regarding the availability of from the paying or returning bank in the manner and information to federal and state financial instituunder the circumstances set forth in this paragraph. A tions' supervisory authorities; Reserve Bank's failure to avail itself of the remedy (4) disclosure by financial institutions of examinaprovided in this paragraph does not prejudice its tion or inspection reports to certified public accounenforcement in any other manner of the indemnity tants and attorneys employed by such institutions; agreement referred to in paragraph (c)(3) of this sec- and tion. (5) notice of FOIA requests to submitters of confi- (f) Reserve Bank's responsibility. A Reserve Bank dential commercial or financial information, and shall handle a returned check, or a notice of nonpay- procedures for requesting confidential treatment of ment, in accordance with Subpart C of Part 229 and its such information and requests for disclosure of such operating circular. A Reserve Bank may permit or information. require the paying or returning bank to send direct to On April 22, 1987, the Board adopted as a final rule another Reserve Bank a returned check with respect changes to its fee schedules pertaining to requests for to which the depositary bank is located within the Board documents pursuant to the Freedom of Inforother Reserve Bank's District, in accordance with mation Reform Act of 1986, P.L. 99-570. 52 Federal section 210.4(b). Register 15,299 (April 28, 1987). Accordingly, those (g) Settlement. A subsequent returning bank or depos- changes to that section (§ 261.10) were not addressed itary bank shall settle for returned checks in the same in this rulemaking. manner as for cash items presented for payment. Effective July 11, 1988, 12 C.F.R. Part 261 is revised as follows: 12. Paragraph (a) of section 210.13 is revised to read as follows: Part 261—Rules Regarding Availabilty of Information Section 210.13—Unpaid items. Subpart A—General Provisions (a) Right of charge-back. If a Reserve Bank does not receive payment in actually and finally collected funds 261.1—Authority, Purpose, and Scope for an item, the Reserve Bank shall recover by charge- 261.2—Definitions back or otherwise the amount of the item from the 261.3—Custodian of Records; Certification; Service; sender, paying bank, or returning bank from which it Alternative authority was received, whether or not the item itself can be sent back. In the event of recovery, neither the owner or holder of the item, nor the sender, paying bank, or Subpart B—Published Information and Records returning bank from which it was received, shall have Available to Public; Procedures for Requests any interest in any reserve balance or other funds in the Reserve Bank's possession of the bank failing to 261.5—Published Information make payment in actually and finally collected funds. 261.6—Records Available to Public Upon Request 261.7—Deferred Availability of Certain Information 261.8—Exemptions from Disclosure Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 551 261.9—Procedures for Making Requests for Identifi- (i) the kinds of information the Board regularly able Records; Processing of Requests; Appel- publishes; late Review of Denial of Request; Time Exten- (ii) the types of records made available to the sions public upon request; 261.10—Fee Schedules; Waiver of Fees (iii) the kinds of information exempt from disclosure or subject to deferred availability; and Subpart C—Confidential Information Made (iv) the procedures for obtaining information and Available to Supervised Institutions, Financial for processing information requests. Institutions Supervisory Agencies, Law (3) Subpart C sets forth: Enforcement Agencies, and Others in Certain (i) the kinds of confidential information made Circumstances available to supervised institutions, supervisory agencies, law enforcement agencies, and others in 261.11—Confidential Supervisory Information Made certain circumstances; Available to Supervised Financial Institutions (ii) the procedures for disclosure; and Financial Institution Supervisory Agen- (iii) the procedures for processing law enforcecies ment requests; and 261.12—Confidential Information Made Available to (iv) the procedures with respect to subpoenas, Law Enforcement Agencies and Other Non- orders compelling production, and other process. financial Institution Supervisory Agencies (4) Subpart D contains the procedures relating to 261.13—Other Disclosure of Confidential Supervisory requests for confidential treatment of documents Information and information. 261.14—Subpoenas, Orders Compelling Production and Other Process Section 261.2—Definitions. Subpart D—Requests for Confidential For purposes of this regulation: Treatment (a) "Board's official files" means the Board's central records. 261.15—Scope of Subpart (b) "Confidential supervisory information" means 261.16—Submission and Form of Request for Confi- cease and desist orders, suspension or removal orders, dential Treatment; Action on Request or other orders or actions under the Financial Institu- 261.17—Confidential Commercial or Financial Infor- tions Supervisory Act of 1966, as amended, the Bank mation Holding Company Act of 1956, as amended, or the Federal Reserve Act of 1913, as amended; reports of Authority: 5 U.S.C. 552, 12 U.S.C. 248(k), 321, and examination and inspection, confidential operating and 1844. condition reports, and any information derived from, related to, or contained in them. "Confidential supervisory information" may consist of documents pre- Subpart A—General Provisions pared by, on behalf of, or for the use of the Board, a Reserve Bank, a Federal or state financial institutions Section 261.1—Authority, Purpose, and Scope. supervisory agency, or a bank or bank holding company. (a) Authority. This regulation is issued by the Board of (c) "Information of the Board" means all information Governors of the Federal Reserve System (the coming into the possession of the Board, any Board "Board") pursuant to 12 U.S.C. 248(i) and (k) and member, any Federal Reserve Bank, or any officer, 5 U.S.C. 552. employee, or agent of the Board or of any Federal (b) Purpose. This regulation sets forth the kinds of Reserve Bank, in the performance of functions for or information made available to the public, the rules of on behalf of the Board, including functions delegated procedure for obtaining documents and records, and by the Board pursuant to Part 265 of this Chapter. the rules of procedure with respect to confidential (d)(1) "Records of the Board" includes applications, information. rules, statements, opinions, orders, memoranda, (c) Scope. letters, reports, accounts, and other written mate- (1) Subpart A contains general provisions and defi- rial, as well as magnetic tapes, computer printouts nitions of terms used in this regulation. of information obtained through use of existing (2) Subpart B implements the Freedom of Informa- computer programs, maps, photographs, and other tion Act (5 U.S.C. 552) and explains: materials in nonwritten or machine readable form Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

552 Federal Reserve Bulletin • August 1988 that are under the control of the Board, that contain Board's official files and any other files containing information of the Board, and that: Board records as seem reasonably likely in the (i) constitute part of the Board's official files; or particular circumstances to contain documents of (ii) are maintained for administrative reasons in the kind requested. Searches may be done manually the regular course of business in official files in or by computer using existing programming. For any division or office of the Board or any Federal purposes of computing fees under section 261.10 of Reserve Bank in connection with the transaction this regulation, search time includes all time spent of any official business. looking for material that is responsive to a request, (2) "Records of the Board" does not include: including line-by-line identification of material (i) handwritten notes; personal files of Board within documents. Such activity is distinct from members and employees; tangible exhibits, for- "review" of material to determine whether the mulas, designs, or other items of valuable intel- material is exempt from disclosure. lectual property; extra copies of documents and (2) "Search" does not mean or include: library and museum materials kept solely for (i) research; reference or exhibition purposes; unaltered pub- (ii) creation of any information or data retrieval lications otherwise available to the public in program or system; Board publications, libraries, or established dis- (iii) extensive modification of an existing program tribution systems; or system; (ii) documents, including lists, and other material (iv) creation of any document, or any other activnot in existence or not in the Board's possession ity that involves creative processes rather than or control on the date a request for records is simply retrieval of existing documents. received; (iii) documents no longer in the possession of the Section 261.3—Custodian of Records; Board which have been disposed of in accordance Certification; Service; Alternative Authority. with law; (iv) copies of transcripts provided to the Board (a) Custodian of records. The Secretary of the Board is under any reporting service contract and that may the official custodian of all records of the Board, be obtained directly from the contractor; including all records that are in the possession or (v) documents of other agencies made available to control of the Board, any Federal Reserve Bank, or the Board on a confidential basis by such agen- any Board or Reserve Bank employee. cies; (b) Certification of record. The Secretary may certify (vi) documents that are not the property of the the authenticity of any record of the Board, or of any Board and which have been made available to the copy of such record, for any purpose, and for or before Board on a temporary or otherwise limited basis any duly constituted Federal or state court, tribunal, with its consent. or agency. (e)(1) "Report of examination" means the report (c) Service of subpoenas or other process. Subpoenas prepared by the Board concerning its examination of or other judicial or administrative process demanding a state member bank of the Federal Reserve Sys- access to records of the Board shall be addressed to tem, and includes reports of inspection of bank and served upon the Secretary of the Board at the holding companies, U.S. branches or agencies of Board's offices in Washington, D.C. 20551. foreign banks, and other institutions examined by (d) Alternative authority. the Federal Reserve System. Such reports may be (1) Secretary of the Board. prepared either solely by the Board or jointly by the Any action or determination required or permitted Board and an appropriate state bank supervisory by this regulation to be done by the Secretary of the agency. Board may be done by an Associate Secretary or (2) "Reports of examination" may include reports other responsible employee of the Board who has of examination of other financial institutions pre- been duly designated for this purpose by the Secrepared and provided to the Federal Reserve System tary. by other Federal and state financial institution su- (2) General Counsel. Any action or determination pervisory agencies. required or permitted by this regulation to be done (f) "Report of inspection" means the report prepared by the General Counsel may, in the General Counby the Board concerning its inspection of a bank sel's absence, be done by a deputy or associate holding company and its bank and nonbank subsidiar- general counsel or other attorney of the Board's ies. Legal Division who has been duly designated for (g)(1) "Search" means a reasonable search of the this purpose by the General Counsel. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 553 (3) Director of Banking Supervision and Regulation. showing the votes taken and the underlying rea- Any action or determination required or permitted sons (12 U.S.C. 247a); by this regulation to be done by the Director of the (ii) material pertaining to administering Board Division of Banking Supervision and Regulation functions under the Bank Holding Company Act may, in the Director's absence, be done by the of 1956 (12 U.S.C. 1843 (c) and 1844 (d)); Deputy Director or other official of the Division who (iii) material pertaining to bank mergers approved has been duly designated for this purpose by the by the Board under section 18(c) of the Federal Director. Deposit Insurance Act (12 U.S.C. 1828 (c) (9)); and Subpart B—Published Information and Records (iv) reports required by section 114 of the Truth in Available to Public: Procedures for Requests Lending Act (15 U.S.C. 1613); section 602 of the Change in Bank Control Act (12 U.S.C. 18170')(14)); section 121 of the Securities and Section 261.5—Published Information. Exchange Act (15 U.S.C. 78w(b); the Securities Act Amendments of 1975 (15 U.S.C. 78w); sec- (a) Federal Register. The Board publishes in the tion 707 of the Equal Credit Opportunity Act Federal Register for the guidance of the public: (15 U.S.C. 169If); section 18 of the Federal Trade (1) descriptions of the Board's central and field Commission Improvement Act (12 U.S.C. organization; 57a(f)(5)); section 918 of the Electronic Funds (2) statements of the general course and method by Transfer Act (15 U.S.C. 1693p); section 805 of the which the Board's functions are channeled and Community Reinvestment Act (12 U.S.C. 2904); determined, including the nature and requirements and section 3(h) of the International Banking Act of procedures; of 1978, P.L. 95-369. (3) rules of procedure, descriptions of forms avail- (2) Reports under other Acts. The Board also reable and the place where they may be obtained, and ports to Congress annually, or at more frequent instructions on the scope and contents of all papers, intervals, under certain Acts of Congress, including reports, and examinations; but not limited to the Freedom of Information Act (4) substantive rules and interpretations of general (5 U.S.C. 552(e)); the Government in the Sunshine applicability, and statements of general policy; Act (5 U.S.C. 552b(i)); and the Full Employment (5) every amendment, revision, or repeal of the and Balanced Growth Act of 1978 (12 U.S.C. 225a), foregoing; concerning the administration of its functions under (6) general notices of proposed rulemaking; each of these acts. (7) notices of applications received under the Bank (c) FEDERAL RESERVE BULLETIN. Holding Company Act of 1956 (12 U.S.C. 1841 (1) Contents. In the FEDERAL RESERVE BULLETIN, et seq.) and the Change in Bank Control Act which is issued monthly, the Board publishes: (12 U.S.C. 1817); (i) economic and statistical information; (8) notices of formal public hearings ordered by the (ii) articles on subjects of economic interest or Board; relating to Board activities; (9) notices of all Board meetings, pursuant to (iii) regulations; 5 U.S.C. 552b; (iv) statements of general policy; (10) notices identifying the Board's systems of rec- (v) interpretations of laws and regulations of genords, pursuant to 5 U.S.C. 552a; and eral interest to the public; (11) notices of agency data collection forms being (vi) notices of Board action on certain types of reviewed under the Paperwork Reduction Act applications; and (5 U.S.C. 3501 et seq.). (vii) Board orders and accompanying statements (b) Board's reports to Congress. on certain types of adjudications. (1) Annual report under Federal Reserve Act. The (2) Advanced release of information. Some material Board's annual report to Congress pursuant to the published in the Bulletin is released in advance of Federal Reserve Act (12 U.S.C. 247), which is made publication, including certain regulations, interprepublic upon its submission to Congress, contains a tations, orders and opinions, and the Board's index full account of the Board's operations during the of industrial production and other statistical series. year, an economic review of the year, and legislative (d) Other published information. recommendations to Congress. The report includes: (1) Statements of financial condition. As required by (i) a full account of the policy actions taken by the section 11 (a) of the Federal Reserve Act (12 U.S.C. Board and the Federal Open Market Committee, 248(a)), the Board issues weekly a statement show- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

554 Federal Reserve Bulletin • August 1988 ing the condition of each Federal Reserve Bank and basis about matters issued, adopted, and promula consolidated statement of the condition of all gated by the Board. The weekly index is available Federal Reserve Banks. from the Publications Services Section on a sub- (2) Index of applications. The Board also issues scription or a single issue basis pursuant to a current weekly an index of the applications received and the schedule of charges. Back issues of this index are actions taken on such applications, as well as other available from the Secretary of the Board subject to matters issued, adopted, or promulgated by the the schedule of charges, described in section 261.10 Board. of this regulation, (3) Statement of changes in bank structure. In (f) Obtaining Board publications. All publications isaddition, the Board issues weekly a statement show- sued by the Board may be obtained from the Publicaing changes in the structure of the banking industry tions Services Section of the Federal Reserve Board, resulting from mergers and the establishment of 20th Street and Constitution Ave., N.W., Washington, branches. D.C. 20551 (pedestrian entrance is on C Street, N.W.), (4) Press releases. The Board frequently issues including: statements to the press and public regarding mone- (1) current and available back issues of the Board's tary and credit actions, regulatory actions, actions Annual Report to Congress (copies of the Board's taken on certain types of applications, and other Annual Report to Congress are also normally availmatters. Current press releases may be obtained able for examination at each Federal Reserve Bank); from the Board's Publications Services Section. and (5) Computer tapes. The Board periodically pre- (2) single current and available back issues of the pares data of various kinds on computer tapes, FEDERAL RESERVE BULLETIN, which may be obwhich are available to the public through the Na- tained at the prescribed rates (any individual or tional Technical Information Service and may be group may subscribe annually to the Bulletin at the obtained by the procedure described in section prescribed rate). 261.6(c)(3)of this regulation. (6) Regulatory Service. The Board publishes The Section 261.6—Records Available to Public Federal Reserve Regulatory Service, which is a Upon Request. multivolume looseleaf service containing statutes, regulations, interpretations, rulings, staff opinions, and procedural rules under which the Board oper- (a) Types of records made available. Subject to the ates. Parts of the Service are also published as provisions of this regulation, the following records separate looseleaf handbooks relating to Consumer shall be made available for inspection and copying and Community Affairs, Monetary Policy and Re- upon request, unless they were published promptly serve Requirements, and Securities Credit Transac- and made available for sale or without charge: tions. The Service and each handbook contain sub- (1) orders made in the adjudication of cases, and ject and citation indexes, are updated monthly, and final opinions, including concurring and dissenting may be subscribed to on a yearly basis. opinions, and orders and opinions issued pursuant (7) Lists of Board publications. The Board's Publi- to authority delegated by the Board; cations Services Section maintains a list of Board (2) interpretations and statements of policy adopted publications that are available to the public. In by the Board that are not published in the Federal addition, a partial list of important publications is Register; published in the FEDERAL RESERVE BULLETIN. (3) records of the final votes of Board members; (e) Indexes to Board actions. (4) administrative staff manuals and instructions to (1) The Board's Freedom of Information Office staff that affect the public; and maintains an index to Board actions which provides (5) other records subject to disclosure pursuant to identifying information about any matters issued, 5 U.S.C. 552. adopted, and promulgated by the Board since July 4, (b) Exceptions and limitations. 1967. The index is updated weekly and is available (1) Confidentiality. The Board may delete identifyto the public on microform. Copies of the index may ing details from any record to prevent a clearly be obtained upon request to the Secretary of the unwarranted invasion of personal privacy. The Board subject to the current schedule of charges, as Board shall state in writing the reason for the described in section 261.10 of this regulation. deletion. (2) In addition, the Board publishes a weekly index, (2) Deferred availability. Availability of information as described in paragraph (d)(2) of this section, in any record may be postponed, as provided in which provides identifying information on a current section 261.7 of this regulation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 555 (3) Exempt records; discretionary release. Some inspection and copying only at the Federal Reserve records are exempt from disclosure under 5 U.S.C. Bank where those records are filed. 552(b), as described in section 261.8 of this regula- (3) The publicly available portions of Reports of tion. However, except where disclosure is expressly Condition and Income of individual banks, as well prohibited by statute, regulation, or order, the as certain other data files produced by the Board, Board may release records that are exempt from are distributed by the National Technical Informamandatory disclosure whenever the Board or desig- tion Service. Requests for these public reports nated Board members, the Secretary of the Board, should be addressed to: Sales Office National Techthe General Counsel of the Board, the Director of nical Information Service, U.S. Department of the Division of Banking Supervision and Regulation, Commerce, 5285 Port Royal Road, Springfield, Viror the appropriate Federal Reserve Bank, acting ginia 22161, (703) 487-4650. pursuant to this regulation or part 265 of this title, determines that such disclosure would be in the Section 261.7—Deferred Availability of Certain public interest. In no event shall the release of Information. information that has been requested for commercial solicitation purposes be considered to be in the (a) Information subject to deferred availability. Cerpublic interest unless such release is specifically tain types of information may not be published in the authorized by the persons named in the records to Federal Register or made available for inspection and be released. copying until after a period of time the Board deter- (4) Nonexempt information. Although the Board mines to be reasonably necessary to avoid the effects may deny access to portions of a record, it shall described in paragraph (b) of this section. release reasonably segregable nonexempt por- (b) Reasons for deferred availability. Information tions. may be subject to deferred availability or deferred (5) Requests for applications, notices, and reports. publication because earlier disclosure would likely: The Board preliminarily identifies public portions of (1) interfere with accomplishing the objectives of the most applications filed under the Bank Holding Board in the discharge of its statutory functions; Company Act, notices filed under the Change in (2) interfere with the orderly conduct of the foreign Bank Control Act, and other reports filed in connec- affairs of the United States; tion with its supervision of financial institutions. The (3) permit speculators or others to gain unfair profits public portions contain information that may be or other unfair advantages by speculative trading in released by the Board or appropriate Federal Re- securities or otherwise; serve Bank without further review. Each request for (4) result in unnecessary or unwarranted disturthese applications, notices, and reports shall be bances in the securities markets; considered to be a request for the public portions (5) interfere with the orderly execution of the objeconly, unless the requester specifically seeks access tives or policies of other government agencies; or to the entire document. (6) impair the ability to negotiate any contract or (6) Disposal of records. Nothing in this regulation otherwise harm the commercial or financial interests precludes the Board from disposing of records eli- of the United States, the Board, any Federal Regible for disposal in the normal course of business serve Bank, or any department or agency of the and in accordance with applicable law. United States. (c) How to obtain access to records. (1) Records of the Board subject to this section are Section 261.8—Exemptions from Disclosure. available for inspection and copying, in response to requests for identifiable records pursuant to section (a) Types of information or records that are exempt 261.9 of this regulation, from 9:00 a.m. to 5:00 p.m. from disclosure. The following records and informaweekdays, at the Office of the Board of Governors tion of the Board are exempt from disclosure under of the Federal Reserve System, 20th Street and this regulation: Constitution Avenue, N.W., Washington, D.C. (1) National defense. Any information or record that 20551 (the pedestrian entrance is on C Street, is specifically authorized under criteria established N.W.). Indexes of Board actions and copies of by an Executive order to be kept secret in the selected Board records are available in the Freedom interest of national defense or foreign policy and is of Information Office for immediate inspection with- in fact properly classified pursuant to such Execuout a request or other prior arrangements. tive order. (2) The Board may determine that certain classes of (2) Examination, inspection, operating, or condition publicly available filings shall be made available for reports, and confidential supervisory information. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

556 Federal Reserve Bulletin • August 1988 (i) Any matter that is contained in or related to information related solely to the internal personnel confidential supervisory information prepared by, rules and practices of the Board, within the meaning on behalf of, or for the use of the Board, any of 5 U.S.C. 552(b)(2). Federal Reserve Bank, or any Federal or state (6) Personnel and medical files. Any information financial institution supervisory agency that contained in personnel and medical files and similar deems such documents or information confiden- files the disclosure of which would constitute a tial. clearly unwarranted invasion of personal privacy. (ii) The Board may, however, determine that (7) Inter- or intra-agency memorandums or letters. certain kinds of operating or condition reports Any matter contained in inter- or intra-agency memmay, for reasons of policy, be routinely disclosed orandums or letters that would not be routinely to the public upon request. In such case, no available by law to a party (other than an agency) in special authorization shall be required for disclo- litigation with an agency, including but not limited sure of the reports by members of the Board's to: staff or by staff of the Reserve Banks; and there (i) memorandums; shall be no limitation on the use of the reports by (ii) reports; members of the public receiving them. (iii) other documents prepared by the staffs of the (3) Trade secrets; commercial or financial informa- Board or Federal Reserve Banks; and tion. (iv) records of deliberations of the Board and of (i) Any matter that is a trade secret or that discussions at meetings of the Board, any Board constitutes commercial or financial information committee, or Board staff, that are not subject to obtained from a person and that is privileged or 5 U.S.C. 552(b). confidential. (8) Court order prohibitions. Any document or in- (ii) The Board may, however, make any informa- formation that is covered by an order of a court of tion furnished in confidence in connection with an competent jurisdiction that prohibits its disclosure. application for Board approval of a transaction (9) Statutory exemption. Any information specifiavailable to the public in accordance with section cally exempted from disclosure by statute (other 261.6 of this regulation, and without prior notice than 5 U.S.C. 552(b)), if the statute: and to the extent it deems necessary, may com- (i) requires that the matters be withheld from the ment on such information in any opinion or state- public in such a manner as to leave no discretion ment issued to the public in connection with a on the issue; or Board action to which such information pertains. (ii) establishes particular criteria for withholding (4) Records or information compiled for law en- or refers to particular types of matters to be forcement purposes. Any records or information withheld. compiled for law enforcement purposes, to the (b) Segregation of nonexempt information. extent permitted under 5 U.S.C. 552(b)(7), including (1) Partial release. The Board shall provide any information relating to proceedings for: reasonably segregable portion of a record that is (i) issuing cease-and-desist orders, suspension or requested after deleting those portions that are removal orders, or other orders or actions under exempt under this section. In determining whether the Financial Institutions Supervisory Act of exempt information is reasonably segregable, the 1966, as amended, the Bank Holding Company Board shall consider all relevant factors, including Act of 1956, as amended, or the Federal Reserve but not limited to: Act of 1913, as amended; (i) the amount and placement of nonexempt infor- (ii) terminating membership of an institution in the mation in relation to the structure and size of the Federal Reserve System under section 9 of the document; and Federal Reserve Act (12 U.S.C. 327); (ii) the intelligibility and usefulness of the nonex- (iii) suspending a depository institution from use empt information that is segregated balanced of the credit facilities of the Federal Reserve against the administrative burden and cost of System under section 4 of the Federal Reserve segregation. Act (12 U.S.C. 301); or (2) Reasonably segregable portions. Subject to (iv) granting or revoking any approval, permis- these considerations, reasonably segregable nonexsion, or authority, except to the extent provided empt portions of a document are those nonexempt in this regulation and Part 262 of this chapter portions: concerning bank holding company and bank (i) whose meaning is not distorted by deletion; merger applications. (ii) that are sufficiently detailed to be intelligible (5) Internal personnel rules and practices. Any and useful to the requester; and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 557 (iii) from which a skillful and knowledgeable per- (B) does not otherwise comply with the requireson could not reconstruct any exempt informa- ments of paragraph (a)(1) of this section, tion. (ii) The Board may return a defective request, (3) Computer tapes. Information stored on com- specifying the deficiency. The requester may subputer tape that can be segregated only by creating a mit a corrected request which shall be treated as a new retrieval program is not considered reasonably new request. segregable. (3) Oral requests. The Board may honor an oral (c) Prohibition against disclosure. Except as provided request for records, but if the requester is dissatisin this regulation, no officer, employee, or agent of the fied with the Board's response and wishes to seek Board or any Federal Reserve Bank shall disclose or review, the requester must submit a written request, permit the disclosure of any unpublished information which shall be treated as an initial request. of the Board to any person (other than Board or (4) Advance payment of fees. Whenever the Board Reserve Bank officers, employees, or agents properly requires advance payment of any fee pursuant to entitled to such information for the performance of section 261.10(g) of this regulation, the requester official duties), whether by giving out or furnishing the shall promptly remit the required advance payment information or a copy of it or by allowing any person to to the Board as a condition to further processing of inspect or copy it, or otherwise. the request. (b) Procedures for responding to requests. Section 261.9—Procedures for Making (1) Time limits. In response to any request that Requests for Identifiable Records; Processing satisfies paragraph (a) of this section, the Board of Requests; Review of Denial of Request; shall, if necessary, cause an appropriate search to be Time Extensions. conducted of records of the Board in existence on the date of receipt of the request, and shall deter- (a) Procedures for making request for records. mine within ten working days of receipt of the (1) Contents of Request. A request for identifiable request whether to comply with the request, unless records shall reasonably describe the records to the running of such time is suspended for payment which access is sought in a way that enables the of fees, pursuant to section 261.10(g)(3)of this regu- Board's staff to identify and produce the records lation, or such period is extended, pursuant to with reasonable effort and without unduly burdening paragraph (e) of this section or section 261.7 of this or disrupting any of the Board's operations. The regulation. The date of receipt for any request, request shall be submitted in writing to the Secre- including one that is addressed incorrectly or that is tary of the Board, and the envelope clearly marked referred to the Board by another agency or by a "Freedom of Information Act Request." The re- Federal Reserve Bank, is the date the Office of the quest shall contain the following information: Secretary actually receives it. (i) the name and address of the person filing the (2) Response to request. The Board shall, within the request, and the telephone number at which the time period specified in paragraph (b)(1) of this requester can be reached during normal business section, notify the requester of: hours; (i) the Board's determination of the request; (ii) the name of any pending litigation to which the (ii) the reasons for the determination; request relates, the court, and its location; (iii) the right of the requester to appeal to the (iii) whether the requested information is intended Board any denial or partial denial, as specified in for commercial use, and whether the requester is paragraph (d) of this section; and an educational or noncommercial scientific insti- (iv) in the case of a denial of a request, the name tution, or news media representative; and and title or position of the person responsible for (iv) a statement agreeing to pay the applicable the denial. fees; or a statement identifying any fee limitation (3) Refusal to acknowledge records. If a request desired; or a request for a waiver or reduction of covers records or types of records whose existence fees that satisfies section 261.10(h) of this regula- is confidential, such as records of enforcement action. tions against identifiable financial institutions, the (2) Defective requests. Board may advise the requester that it can neither (i) The Board need not accept or process a request confirm nor deny the existence of the requested that is not a request for identifiable records or records and notify the requester of the legal basis for that: that determination. (A) can be complied with only by designing an (4) Priority of responses. The Secretary will assign information retrieval system; or responsible staff to particular requests and will Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

558 Federal Reserve Bulletin • August 1988 normally process requests in the order they are (3) Decision on appeal; time limits. The Board or received. However, in the Secretary's discretion, or designated Board member(s) shall make a determiupon a court order in a matter to which the Board is nation with respect to any appeal within 20 working a party, a particular request may be processed out of days of actual receipt of the appeal by the Secreturn. tary and shall immediately notify the appealing (5) Referrals. To the extent a request covers docu- party of the determination and the right to seek ments that were created by, obtained from, or judicial review if the determination upholds, in classified by another agency, the Board may refer whole or in part, the denial of the request for the request to that agency for a response and inform records. Such determination is not subject to review the requester promptly of the referral. under section 265.3 of this chapter which pro- (c) Procedures for copying and review of records; vides for review of actions taken under delegated number of copies; method of duplication. authority. (1) Request for copies. When a requester asks that (4) Mootness of appeal. documents be copied, copies shall be made at the (i) The Board, a Board member, or a staff person fee established, as provided in section 261.10 of this designated by the Chairman may declare an apregulation. Copies shall be sent to the requester by peal wholly or partially moot and instruct the regular U.S. mail to the address indicated in the Secretary of the Board to reconsider the previous request, unless the requester elects to take delivery denial or to release the requested documents, of the documents at the Board's Freedom of Infor- where a determination is made that intervening mation Office in Washington, D.C., or makes other circumstances or additional facts not known at the arrangements acceptable to the Board. time of denial have or may have eliminated any (2) Number of copies; method of duplication. The need or justification for withholding the requested Board need not provide more than one copy of any documents. record to any requester, and the Board may select (ii) The Secretary may reconsider a denial being the form of the copy provided, such as paper, appealed if such intervening circumstances or microform, or other medium. additional facts come to the attention of the Sec- (3) Request to review documents. Requesters may retary while an appeal is pending. review documents at the Board's Freedom of Infor- (e) Time extensions in unusual circumstances; failure mation Office under staff supervision. Requesters to comply with time limits. may not disassemble or alter any record or file being (1) Time extensions. In unusual circumstances, as inspected. defined in 5 U.S.C. 552(a)(6), the time limits speci- (d) Appeal of denial of request for records. fied in paragraph (b)(1) and paragraph (d)(3) of this (1) Request for review; time limits. Any person section may be extended for a period of time not to denied access to Board records requested in accord- exceed 10 working days by written notice to the ance with this section may file with the Board a requester setting forth the reasons for the extenwritten request for review of the denial by the Board sion and the date on which a determination is or Board member(s) designated to hear such appeal. expected to be dispatched. The extension of time The request shall be filed within ten working days of may be divided between the initial and appellate the date on which the denial was issued, or, where a reviews but the total extensions relating to any request for documents has been partially approved request and resulting appeal may not exceed 10 but access to the documents has not been given, working days. within ten working days from the date such docu- (2) Failure to comply with time limits. If the Board ments are transmitted to the requester. The request fails to comply with the time limits and extensions shall prominently display the word "Appeal" on the specified in this section, the Board or other responfirst page. An initial request for records may not be sible Board employee shall, where practicable, give combined in the same letter with an appeal. notice to the requester, stating the reasons for the (2) Untimely appeals. The Board may consider an delay and the date by which the Board expects to untimely appeal if: dispatch its determination. Without prejudice to the (i) it is accompanied by a written request for leave legal remedies provided the requester in 5 U.S.C. to file an untimely appeal; and 552, the Board shall continue processing the request (ii) the Board or designated Board member(s) as quickly as possible and shall dispatch its deterdetermines, in its discretion and for good and mination when reached in the same manner as substantial cause shown, that the appeal should if it had been reached within the applicable time be considered. limits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 559 Section 261.10—Fee Schedules; Waiver of (3) In determining whether a requester properly Fees. belongs in this category, the Secretary shall look first to the use to which a requester will put the documents requested. Where a requester does not (a) Fee schedules. Records of the Board available for explain its purpose, or where its explanation is public inspection and copying are subject to a written insufficient, the Secretary may seek additional clar- Schedule of Fees for search, review, and duplication. ification from the requester before categorizing the (See Appendix A for Schedule of Fees.) The fees set request as one for commercial use. forth in the Schedule of Fees reflect the full allowable (d) Educational, research, or media use. direct costs of search, duplication, and review, and (1) Only the fees in the Schedule of Fees for documay be adjusted from time to time by the Secretary to ment duplication apply when records are not sought reflect changes in direct costs. for commercial use and the requester is a repre- (b) Fees charged. The fees charged only cover the full sentative of the news media, or an educational or allowable direct costs of search, duplication, or re- noncommercial scientific institution, whose purpose view. is scholarly or scientific research. However, there is (1) "Direct costs" mean those expenditures which no charge for the first one hundred pages of duplithe Board actually incurs in searching for and dupli- cation. cating (and in the case of commercial requesters, (2) "Educational institution" refers to a preschool, a reviewing) documents to respond to a request made public or private elementary or secondary school, or under section 261.9 of this regulation. Direct costs an institution of undergraduate higher education, include, for example, the salary of the employee graduate higher education, professional education, performing work (the basic rate of pay for the or an institution of vocational education which opemployee plus a factor to cover benefits) and the erates a program of scholarly research. cost of operating duplicating machinery. Not in- (3) "Noncommercial scientific institution" refers to cluded in direct costs are overhead expenses such as an institution that is not operated on a "comcosts of space, and heating or lighting the facility in mercial" basis (as that term is used in paragraph (c) which the records are stored. of this section) and which is operated solely for the (2) "Duplication" refers to the process of making a purpose of conducting scientific research the results copy of a document necessary to respond to a of which are not intended to promote any particular request for disclosure of records, or for inspection product or industry. of original records that contain exempt material or (4) "Representative of the news media" refers to that otherwise cannot be inspected directly. Such any person that is actively gathering news for an copies may take the form of paper copy, microform, entity that is organized and operated to publish or audio-visual materials, or machine readable docu- broadcast news to the public. The term "news" mentation (e.g., magnetic tape or disk), among means information that is about current events or others. that would be of current interest to the public. (3) "Review" refers to the process of examining Examples of news media entities include, but are documents located in response to a request that is not limited to, television or radio stations broadcastfor a commercial use to determine whether any ing to the public at large, and publishers of periodportion of any document located is permitted to be icals (but only in those instances when they can withheld. It also includes processing any documents qualify as disseminators of "news") who make their for disclosure, e.g., doing all that is necessary to products available for purchase or subscription by the general public. "Freelance" journalists may be excise them and otherwise prepare them for release. regarded as working for a news organization if they Review does not include time spent resolving gencan demonstrate a solid basis for expecting publicaeral legal or policy issues regarding the application tion through that organization, even though not of exemptions. actually employed by it. (c) Commercial use. (1) The fees in the Schedule of Fees for document (e) Other uses. For all other requests, the fees in the search, duplication, and review apply when records Schedule of Fees for document search and duplication are requested for commercial use. apply. However, there is no charge for the first one (2) "Commercial use request" refers to a request hundred pages of duplication or the first two hours of from or on behalf of one who seeks information for search time. a use or purpose that furthers the commercial, trade, (f) Aggregated requests. If the Secretary reasonably or profit interests of the requester or the person on believes that a requester or group of requesters is whose behalf the request is made. attempting to break down a request into a series of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

560 Federal Reserve Bulletin • August 1988 requests, each seeking portions of a document or (h) Waiver or reduction of fees. documents solely for the purpose of avoiding the (1) Standards for determining waiver or reduction. assessment of fees, the Secretary may aggregate such The Secretary or his or her designee shall grant a requests and charge accordingly. It is considered waiver or reduction of fees chargeable under parareasonable for the Secretary to presume that multiple graph (b) of this section where it is determined both requests of this type made within a 30-day period have that disclosure of the information is in the public been made to avoid fees, interest because it is likely to contribute significantly (g) Payment procedures. to public understanding of the operations or activi- (1) Fee payment. The Secretary may assume that a ties of the government, and that the disclosure of person requesting records pursuant to section 261.9 information is not primarily in the commercial interof this regulation will pay the applicable fees, unless est of the requester. The Secretary or his or her a request includes a limitation on fees to be paid or designee shall also waive fees that are less than the seeks a waiver or reduction of fees pursuant to average cost of collecting fees. In determining paragraph (h) of this section. whether disclosure is in the public interest, the (2) Advance notification. If the Secretary estimates following factors shall be considered: that charges are likely to exceed $25, the requester (i) whether the subject of the requested records shall be notified of the estimated amount of fees, concerns the operations or activities of the govunless the requester has indicated in advance will- ernment; ingness to pay fees as high as those anticipated. (ii) whether the disclosure is likely to contribute to Upon receipt of such notice the requester may confer an understanding of government operations or with the Secretary as to the possibility of reformulat- activities; ing the request in order to lower the costs. (iii) whether disclosure of the requested informa- (3) Advance payment. tion will contribute to public understanding; (i) The Secretary may require advance payment of (iv) whether the disclosure is likely to contribute any fee estimated to exceed $250. The Secretary significantly to public understanding of governmay also require full payment in advance where a ment operations or activities; requester has previously failed to pay a fee in a (v) whether the requester has a commercial intertimely fashion. est that would be furthered by the requested (ii) For purposes of computing the time period for disclosure; and, if so, responding to requests under section 261.9(b) of (vi) whether the magnitude of the identified comthis regulation, the running of the time period will mercial interest of the requester is sufficiently begin only after the Secretary receives the re- large, in comparison with the public interest in quired payment. disclosure, that disclosure is primarily in the (4) Late charges. The Secretary may assess interest commercial interest of the requester. charges when a fee is not paid within 30 days of the (2) Contents of request for waiver. The Secretary date on which the billing was sent. Interest will be at shall normally deny a request for a waiver of fees the rate prescribed in section 3717 of Title 31 that does not include: U.S.C.A. and will accrue from the date of the (i) a clear statement of the requester's interest in billing. This rate of interest is published by the the requested documents; Secretary of the Treasury before November 1 each (ii) the use proposed for the documents and year and is equal to the average investment rate for whether the requester will derive income or other Treasury tax and loan accounts for the 12-month benefit from such use; period ending on September 30 of each year. The (iii) a statement of how the public will benefit from rate is effective on the first day of the next calendar such use and from the Board's release of the quarter after publication. requested documents; and (5) Fees for nonproductive search. Fees for record (iv) if specialized use of the documents or inforsearches and review may be charged even if no mation is contemplated, a statement of the reresponsive documents are located or if the request is quester's qualifications that are relevant to the denied, particularly if the requester insists upon a specialized use. search after being informed that it is likely to be (3) Burden of proof. In all cases the burden shall be nonproductive or that any records found are likely on the requester to present evidence or information to be exempt from disclosure. The Secretary shall in support of a request for a waiver or reduction of apply the standards set out in paragraph (h) of this fees. section in determining whether to waive or reduce (4) Employee requests. In connection with any refees. quest by an employee, former employee, or appli- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 561 cant for employment, for records for use in prose- information for any purpose without the prior cuting a grievance or complaint of discrimination written approval of the Board's General Counsel against the Board, fees shall be waived where the except as necessary to provide advice to the total charges (including charges for information pro- supervised financial institution, its parent bank vided under the Privacy Act of 1974 (5 U.S.C. holding company, or the officers, directors, and 552(a)) are $50 or less; but the Secretary may waive employees of such supervised financial institution fees in excess of that amount. and parent bank holding company. (c) Disclosure upon request to Federal financial institution supervisory agencies. Upon request, the Direc- Subpart C—Confidential Information Made tor of the Division of Banking Supervision and Regu- Available to Supervised Institutions, Financial lation or the appropriate Federal Reserve Bank, may Institutions Supervisory Agencies, Law make available to the Comptroller of the Currency, the Enforcement Agencies, and Others in Certain Federal Deposit Insurance Corporation, and the Fed- Circumstances eral Home Loan Bank Board and their regional offices and representatives, confidential supervisory information and other appropriate information (such as confi- Section 261.11—Confidential Supervisory dential operating and condition reports) relating to a Information Made Available to Supervised bank, bank holding company (including subsidiaries), Financial Institutions and Financial Institution U.S. branch or agency of a foreign bank, or other Supervisory Agencies. supervised financial institution. (d) Disclosure upon request to state financial institu- (a) Disclosure of confidential supervisory information tion supervisory agencies. Upon request, the Director to supervised financial institutions. Confidential super- of the Division of Banking Supervision and Regulation visory information concerning a supervised bank, or the appropriate Federal Reserve Bank may make bank holding company (including subsidiaries), U.S. available confidential supervisory information and branch or agency of a foreign bank, or other institution other appropriate information (such as confidential examined by the Federal Reserve System ("su- operating and condition reports) relating to a bank, pervised financial institution") may be made available bank holding company (including subsidiaries), U.S. by the Board or the appropriate Federal Reserve Bank branch or agency of a foreign bank, or other superto the supervised financial institution. vised financial institution to: (b) Disclosure of confidential supervisory information (1) a state financial institution supervisory agency by supervised financial institutions. having direct supervisory authority over such super- (1) Parent bank holding company, directors, of- vised financial institution; or ficers, and employees. Any supervised financial (2) a state financial institution supervisory agency institution lawfully in possession of confidential not having direct supervisory authority over such supervisory information of the Board pursuant to supervised financial institution if the requesting this section may disclose such information, or por- agency has entered into an information sharing tions thereof, to its directors, officers, and employ- agreement with the appropriate Federal Reserve ees, and to its parent bank holding company and its Bank and the information to be provided concerns a directors, officers, and employees. supervised financial institution that has acquired or (2) Certified public accountants and legal counsel. has applied to acquire a financial institution subject Any supervised financial institution lawfully in pos- to that agency's direct supervisory authority. session of confidential supervisory information of (e) Discretionary disclosures. The Board may deterthe Board pursuant to this section may disclose such mine, from time to time, to authorize other disclosures information, or portions thereof, to any certified of confidential information as necessary. public accountant or legal counsel employed by the (f) Conditions and limitations. The Board may impose supervised financial institution, subject to the fol- any conditions or limitations on disclosure under this lowing conditions: section that it determines are necessary to effect the (i) certified public accountants or legal counsel purposes of this regulation. shall review the confidential supervisory informa- (g) Other disclosure prohibited. All confidential supertion only on the premises of the supervised finan- visory information or other information made availcial institution, and shall not make or retain any able under this section shall remain the property of the copies of such information; Board. No supervised financial institution, financial (ii) the certified public accountants or legal coun- institution supervisory agency, person, or any other sel shall not disclose the confidential supervisory party to whom the information is made available, or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

562 Federal Reserve Bulletin • August 1988 any other officer, director, employee or agent thereof, subject to disciplinary action under 12 C.F.R. may disclose such information without the prior writ- § 264.735-5 (Rules of Employee Responsibilities ten permission of the Board's General Counsel except and Conduct). in published statistical material that does not disclose, either directly or when used in conjunction with pub- Section 261.12—Confidential Information Made licly available information, the affairs of any individ- Available to Law Enforcement Agencies and ual, corporation, or other entity. No person obtaining Other Nonfinancial Institution Supervisory access to confidential supervisory information pursu- Agencies. ant to this section may make a personal copy of any such information; and no person may remove confi- (a) Disclosure upon request. Upon written request, the dential supervisory information from the premises of Board may make available to appropriate law enforcethe institution or agency in possession of such infor- ment agencies and to other nonfinancial institution mation except as permitted by specific language in this supervisory agencies for use where necessary in the regulation or by the Board. performance of official duties, reports of examination (h) Disclosure of Foreign Bank Confidential Report of and inspection, confidential supervisory information, Operations. and other confidential documents and information of (1) Availability of Foreign Bank Confidential Re- the Board concerning banks, bank holding companies port of Operations to Bank Supervisory Agencies. and their subsidiaries, U.S. branches and agencies of Notwithstanding any other provision of this regula- foreign banks, and other examined institutions. tion, any Confidential Report of Operations (Form (b) Eligibility. Federal, state, and local law enforce- F.R. 2068) of a foreign banking organization may, ment agencies and other nonfinancial institution superupon written request to and approval by the Direc- visory agencies may file written requests with the tor of the Division of Banking Supervision and Board for access to confidential documents and infor- Regulation (or his delegee), and with the concur- mation under this section of the regulation. Properly rence of the General Counsel (or his delegee), be accredited foreign law enforcement agencies and other made available for inspection to another bank su- foreign government agencies may also file written pervisory authority having general supervision of requests with the Board. any United States branch, agency, subsidiary bank (c) Contents of request. To obtain access to confidenor commercial lending company of the foreign bank- tial documents or information under this section of the ing organization, only for use where necessary in the regulation, the head of the law enforcement agency or performance of official duties. These reports shall be nonfinancial institution supervisory agency (or their made available for inspection by authorized persons designees) shall address a letter request to the Board's only on Federal Reserve premises under the same General Counsel, specifying: procedures as apply to personnel of the Federal (1) the particular information, kinds of information, Reserve System. All reports made available under and where possible, the particular documents to this paragraph shall remain the property of the which access is sought; Board; and no person, agency or authority who (2) the reasons why such information cannot be obtains access to any such report, or any officer, obtained from the examined institution in question director, or employee thereof, shall publish, publi- rather than from the Board; cize, or otherwise disclose any information con- (3) a statement of the law enforcement purpose or tained in the report to any person. other purpose for which the information shall be (2) Restrictions on disclosure by Federal Reserve used; System employees. It is the Board's policy that the (4) whether the requested disclosure is permitted or confidentiality of a foreign banking organization's restricted in any way by applicable law or regula- Confidential Report of Operations (Form F.R. 2068) tion; should be maintained at all times. Except as pro- (5) a commitment that the information requested vided by paragraph (h)(1) of this section, informa- shall not be disclosed to any person outside the tion submitted to the Board as part of any Confiden- agency without the written permission of the Board tial Report of Operations is not available for public or its General Counsel; and inspection by any person other than an officer, (6) if the document or information requested inemployee, or agent of the Board or of a Federal cludes customer account information subject to the Reserve Bank properly entitled to such information Right to Financial Privacy Act, as amended in the performance of such person's official duties. (12 U.S.C. 3401 et seq.), a statement that such Any employee that violates this section by releasing customer account information need not be provided, such a report to any unauthorized person may be or a statement as to why the Act does not apply to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 563 the request, or a certification that the requesting disclosure of confidential supervisory information unagency has complied with the requirements of the der this section, will not authorize disclosure unless Act. the person requesting disclosure is able to show a (d) Action on request. substantial need for such information that outweighs (1) The General Counsel shall review each request the need to maintain confidentiality. and may approve the request upon determining that: (b) Requests for disclosure. (i) the request complies with this section; (1) Requests from litigants for information or testi- (ii) the information is needed in connection with a mony. Any person (except agencies identified in formal investigation or other official duties of the sections 261.11 and 261.12 of this regulation) seekrequesting agency; ing access to confidential supervisory information or (iii) satisfactory assurances of confidentiality have seeking to obtain the testimony of present or former been given; and Board or Reserve Bank employees on matters in- (iv) no law prohibits the requested disclosure. volving confidential supervisory information of the (2) The General Counsel may impose any conditions Board, whether by deposition or otherwise, for or limitations on disclosure that the General Counsel use in litigation before a court, board, commission, determines to be necessary to effect the purposes of or agency, shall file a written request with the this regulation or to insure compliance with applica- General Counsel of the Board. The request shall ble laws or regulations. describe: (e) Federal and state grand jury, criminal trial, and (i) the particular information, kinds of informagovernment administrative subpoenas. The Board's tion, and where possible, the particular docu- General Counsel shall review and may approve the ments to which access is sought; disclosure of confidential information pursuant to Fed- (ii) the judicial or administrative action for which eral and state grand jury, criminal trial, and govern- the confidential supervisory information is ment administrative subpoenas. The General Counsel sought; may impose such conditions or limitations on disclo- (iii) the relationship of the confidential supervisure under this section that the General Counsel sory information to the issues or matters raised by determines are necessary to effect the purposes of this the judicial or administrative action; regulation, to insure compliance with applicable laws (iv) the requesting person's need for the informaor regulations, or to protect the confidentiality of the tion; Board's information. (v) the reason why the requesting person cannot (f) Requests for testimony or interviews. Government obtain the information sought from any other agencies seeking to obtain testimony or interviews source; and from current and former Federal Reserve System staff (vi) a commitment to obtain a protective order concerning any confidential information of the Board acceptable to the Board from the judicial or shall use the procedures set out in paragraph (c) of this administrative tribunal hearing the action preservsection. ing the confidentiality of any information that is (g) Other disclosure prohibited. All reports and infor- provided. mation made available under this section remain the (2) All other requests. Any other person (except property of the Board, and except as otherwise pro- agencies identified in sections 261.11 and 261.12 of vided in this regulation, no person, agency, or author- this regulation) seeking access to confidential superity to whom the information is made available, or any visory information for any other purpose shall file a officer, director, or employee thereof, may disclose written request with the General Counsel of the any such information except in published statistical Board. A request under this paragraph (b)(2) shall material that does not disclose, either directly or when describe the purpose for which such disclosure is used in conjunction with publicly available informa- sought. tion, the affairs of any individual or corporation. (c) Action on request. (1) Determination of approval. The General Coun- Section 261.13—Other Disclosure of sel of the Board may approve a request made Confidential Supervisory Information. under this section provided that he or she determines that: (a) Board policy. It is the Board's policy regarding (i) the person making the request has shown a confidential supervisory information that such infor- substantial need for confidential supervisory inmation is confidential and privileged. Accordingly, the formation that outweighs the need to maintain Board will not normally disclose this information to confidentiality; and the public. The Board, when considering a request for (ii) disclosure is consistent with the supervisory Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

564 Federal Reserve Bulletin • August 1988 and regulatory responsibilities and policies of the tion. If the court or other body orders the disclosure of Board. the information or the giving of testimony, the person (2) Conditions or limitations. The General Counsel having the information shall continue to decline to of the Board may, in approving a request, impose disclose the information and shall promptly report the such conditions or limitations on use of any infor- facts to the Board for such action as the Board may mation disclosed as is deemed necessary to protect deem appropriate. the confidentiality of the Board's information. (d) Exhaustion of administrative remedies for discov- Subpart D—Requests for Confidential ery purposes in civil, criminal, or administrative ac- Treatment tion. Action on a request under this section by the General Counsel of the Board shall exhaust adminis- Section 261.15—Scope of Subpart. trative remedies for discovery purposes in any civil, criminal, or administrative proceeding. A request (a) Data collection forms. This subpart does not apply made pursuant to section 261.9 of this regulation does to data collected by the Board on forms that are not exhaust administrative remedies for discovery approved pursuant to the Paperwork Reduction Act purposes. Therefore, it is not necessary to file a (44 U.S.C. 3501 et seq.) and are deemed confidential request pursuant to section 261.9 to exhaust adminis- by the Board. Any such form deemed confidential by trative remedies under this section. the Board shall contain language so indicating on the (e) Other disclosure prohibited. All confidential super- face of the form or in its instructions. Such information visory information made available under this section may, however, be disclosed in aggregate form in such shall remain the property of the Board. Any person in a manner that individual company data is not disclosed possession of such information shall not use or dis- or derivable. close such information for any purpose other than that (b) Duty to submit information. This subpart does not authorized by the General Counsel of the Board with- modify in any manner the obligation of any person or out his or her prior written approval. company to submit, pursuant to any law or regulation, any document, information, form, or other filing to the Section 261.14—Subpoenas, Orders Compelling Board or any Federal Reserve Bank. Production, and Other Process. (c) Public comments. (1) Any comments submitted by a member of the (a) Advice by person served. Any person (including public on applications and regulatory proposals beany officers, employee, or agent of the Board or any ing considered by the Board are public unless the Federal Reserve Bank) who has documents or infor- Board or the Secretary determines that confidential mation of the Board that may not be disclosed and who treatment is warranted. is served with a subpoena, order, or other judicial or (2) A request for confidential treatment of such administrative process requiring his or her personal comments shall be submitted in a separate letter or attendance as a witness or requiring the production of memorandum accompanying the comments and on documents or information in any proceeding, shall: which the words,"Request for Confidential Treat- (1) promptly inform the Board's General Counsel of ment" are prominently displayed. Notwithstanding the service and all relevant facts, including the any other provision of this regulation, the Board documents and information requested, and any facts need not inform any person submitting such comof assistance to the Board in determining whether ments of a decision not to afford confidential treatthe material requested should be made available; ment to the comments. and (2) at the appropriate time inform the court or Section 261.16—Submission and Form of tribunal that issued the process and the attorney for Request for Confidential Treatment; Action on the party at whose instance the process was issued Request. of the substance of these rules. (b) Appearance by person served. Unless the Board (a) Submission of request. Any submitter of docuhas authorized disclosure of the information re- ments or information to the Board who desires that quested, any person who has Board information that they be afforded confidential treatment pursuant to may not be disclosed, and who is required to respond 5 U.S.C. 552(b)(4) shall file a request for confidential to a subpoena or other legal process, shall attend at the treatment with the Board (or in the case of documents time and place required and decline to disclose or to filed with a Federal Reserve Bank, with that Reserve give any testimony with respect to the information, Bank), at the time they are submitted or a reasonable basing such refusal upon the provisions of this regula- time after submission. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 565 (b) Form of request. Each request for confidential ably be expected to cause substantial competitive treatment shall state in reasonable detail the facts and harm to the submitter. arguments supporting the request and its legal justifi- (b) Notice to submitter. The notice given to the cation. Conclusory statements that particular informa- submitter pursuant to paragraph (a) of this section tion would be useful to competitors or would impair shall: sales, or similar statements, generally will not be (1) where possible, be given within five working considered sufficient to justify confidential treatment. days of the receipt of the request for access; (c) Designation and separation of confidential mate- (2) describe the request; rial. All information considered confidential by a sub- (3) give the submitter a reasonable opportunity, not mitter shall be clearly designated "Confidential" in the to exceed ten working days, to submit written submission and clearly separated from information for objections to disclosure of the information; and which confidential treatment is not requested. (4) if given orally, be promptly confirmed in writing (d) Action on request. by the Secretary. (1) Requests for confidential treatment of any doc- (c) Notice to requester. At the same time the Secretary uments shall be considered in connection with any notifies the submitter, the Secretary shall also notify request for access to the documents. At their dis- the requester that the request is subject to the provicretion, appropriate Board or staff members (in- sions of this section and that the submitter is being cluding Reserve Bank staff) may act on the request notified of the request. for confidentiality prior to any request for access to (d) Determination by Secretary. The Secretary's dethe documents. termination whether or not to disclose any document (2) Any request for confidentiality pursuant to for which confidential treatment has been requested 5 U.S.C. 552(b)(4) shall be handled in accordance pursuant to this section shall be communicated to the with section 261.17 of this subpart. submitter and the requester immediately. If the Secre- (3) Nothing in this section limits the Secretary's tary determines to disclose the document or informaauthority to make determinations regarding requests tion and the submitter has objected to such disclosure for access to records under section 261.9. pursuant to paragraph (b) of this section, the Secretary (e) Special procedures. The Board may establish spe- shall provide the submitter with the reasons for discial procedures for particular documents, filings, or closure, and shall delay release of the document or types of information by express provisions in this information for ten working days following the date of regulation or by instructions on particular forms that the determination. are approved by the Board. These special procedures (e) Exceptions to notice to submitter. Notice to the shall take precedence over the procedures set out in submitter need not be given if: this subpart. (1) the Secretary determines, prior to giving such notice, that the request for access should be denied; (2) the requested information lawfully has been Section 261.17—Confidential Commercial or published or otherwise made available to the public; Financial Information. (3) disclosure of the information is required by law (other than 5 U.S.C. 552); or (a) Request for confidential information. (4) the submitter's claim of confidentiality under (1) The Secretary shall notify a submitter of any 5 U.S.C. 552 (b)(4) appears obviously frivolous or request for access to all or a portion of information has already been denied by the Secretary, except provided to the Board by the submitter if: that in this last instance the Secretary shall give the (i) the submitter requested confidential treatment submitter written notice of the determination to of that information pursuant to 5 U.S.C. 552(b)(4) disclose the information at least five working days ("trade secrets and commercial or financial infor- prior to release. mation obtained from a person and privileged or (f) Notice of lawsuit. confidential"); and (1) The Secretary shall promptly notify any sub- (ii) the request by the submitter for confidential mitter of information or documents covered by this treatment was made within 10 years preceding the section of the filing of any suit against the Board date of the request for access. pursuant to 5 U.S.C. 552 to compel disclosure of (2) Absent a request by a submitter for confidential such documents or information. treatment, the Secretary may notify a submitter of a (2) The Secretary shall promptly notify the requester request for access to all or a portion of information of any suit filed against the Board to enjoin the provided by the submitter if it appears to the Secre- disclosure of any documents requested by the retary that disclosure of the information may reason- quester. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

566 Federal Reserve Bulletin • August 1988 (g) Exception for Board rulings. Nothing in this section ORDERS ISSUED UNDER BANK HOLDING shall apply in connection with any determination by COMPANY ACT the Board to comment upon information submitted to the Board in any opinion or statement issued to Orders Issued Under Section 3 of the Bank the public as described in section 261.8 of this Holding Company Act regulation. DG Bancshares, Inc. Dallas, Texas AMENDMENT TO RULES REGARDING DELEGATION OF AUTHORITY Order Approving Formation of a Bank Holding Company The Board of Governors is amending 12 C.F.R. Part 265, its Rules Regarding Delegation of Authority, to DG Bancshares, Inc., Dallas, Texas ("Bancshares"), conform references to the Board's Regulations G, T, has applied for the Board's approval pursuant to and U (12 C.F.R. Parts 207, 220, and 221, respec- section 3(a)(1) of the Bank Holding Company Act tively) to the totally revised versions of those regula- (12 U.S.C. § 1841 et seq.) ("BHC Act"), to become a tions that became effective in 1983 and 1984. bank holding company by acquiring all of the voting Effective June 8, 1988, the Board amends 12 C.F.R. shares of Deposit Guaranty Bank, Dallas, Texas Part 265 as follows: ("Bank"). 1 Notice of the application, affording an opportunity Part 265—Rules Regarding Delegation of for interested persons to submit comments, has been Authority published. (53 Federal Register 12,190 (1988)). The time for filing comments has expired and the Board has 1. The authority citation for Part 265 continues to read considered the application and all comments received as follows: in light of the factors set forth in section 3(c) of the BHC Act (12 U.S.C. § 1842(c)). Authority: Section ll(k), 38 Stat. 265 and 80 Stat. Bancshares, a non-operating corporation with no 1314; 12 U.S.C. 248(k). subsidiaries, was organized for the purpose of becoming a bank holding company by acquiring Bank. Bank 2. Section 265.2 is amended by revising paragraph is a newly-chartered institution formed for the purpose (c)(18) and removing and reserving paragraph (c)(19) of acquiring the assets and assuming the liabilities of to read as follows: Bank of Dallas, Dallas, Texas, and controls deposits of $151.7 million.2 Consummation of this proposal would Section 265.2—Specific functions delegated to not significantly affect the concentration of banking Board employees and to Federal Reserve resources in Texas. Banks. Bank operates in the Dallas banking market.3 Principals of Bancshares are not associated with any other bank in that market. Accordingly, the Board has (c) determined that consummation of this proposal would (18) Under the provisions of sections 207.6(d), not have a significant adverse effect on competition in 220.17(d), and 221.7(d) of this chapter (Regulations G, this market. T, and U, respectively) to approve issuance of the list In evaluating this application, the Board has considof OTC margin stocks and to add, omit, or remove any ered the financial resources of Bancshares and Bank. stock in circumstances indicating that such change is The Board notes that outside investors will be providnecessary or appropriate in the public interest. (19) [Reserved] 1. In connection with this application, DG II, Inc., Wilmington, Delaware, has also applied to become a bank holding company. DG II, Inc., will be an intermediate holding company between Bancshares 3. In section 265.2(f)(17), the reference to "section and Bank. 207.1(b)" is revised to read "section 207.3(a)(2)" and 2. Deposit data are as of March 31, 1988. the reference to "section 207.1(a)" is revised to read 3. The Dallas banking market is approximated by Dallas County, the southeast quadrant of Denton County (including Denton and "section 207.3(a)(1)." Lewisville), the southwest quadrant of Collin County (including McKinney and Piano), the northern half of Rockwall County, the communities of Forney and Terrell in Kaufman County, Midlothian, Waxahachie, and Ferris in Ellis County, and Grapevine and Arlington in Tarrant County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 567 ing a substantial amount of new capital. Further, ceived in light of the factors set forth in section 3(c) of Bancshares will strengthen Bank's primary capital the Act. ratio. After a review of this proposal in light of all the First American is the second largest commercial facts of record, the Board concludes that the financial banking organization in Tennessee2 and controls deand managerial resources of Bancshares and Bank are posits of approximately $4.7 billion, representing 14.5 consistent with approval. percent of total deposits in commerical banking orga- Convenience and needs considerations also are con- nizations (hereafter "deposits") in the state.3 Northsistent with approval. ern is the ninth largest commercial banking organiza- Based on the foregoing and other facts of record, the tion in Tennessee, controlling deposits of Board has determined that the application should be, approximately $323.9 million, representing 1.0 percent and hereby is, approved. The transaction shall not be of total deposits in the state. Upon consummation of consummated before the thirtieth calendar day follow- this proposal, First American would remain the secing the effective date of this Order, or later than three ond largest commercial banking organization in Tenmonths after the effective date of this Order, unless nessee, controlling deposits of approximately $5.0 such period is extended for good cause by the Board or billion, representing 15.5 percent of total deposits in the Federal Reserve Bank of Dallas, acting pursuant to the state. Accordingly, consummation of this proposal delegated authority. would not have any significant adverse effect on the By order of the Board of Governors, effective concentration of banking resources in Tennessee. June 13, 1988. First American's subsidiary banks compete directly with Northern's subsidiary banks in the Montgomery County and Nashville banking markets. In the Mont- Voting for this action: Chairman Greenspan and Governors Angell, Heller, and Kelley. Absent and not voting: Gover- gomery County banking market,4 First American is nors Johnson and Seger. the smallest of four commercial banking organizations, controlling deposits of $8.8 million, representing 2.0 WILLIAM W. WILES percent of the total deposits in the market. Northern is Secretary of the Board the second largest commercial banking organization in the market, controlling deposits of $160.1 million, First American Corporation representing 36.4 percent of the total deposits in the Nashville, Tennessee market. Upon consummation of this proposal, First American would become the second largest commer- Order Approving Acquisition of a Bank Holding cial banking organization in the market, controlling Company deposits of $168.9 million, representing 38.4 percent of the total deposits in the market. The four-firm concen- First American Corporation, Nashville, Tennessee tration ratio would remain 100 percent, and the Her- ("First American"), a bank holding company within findahl-Hirschman Index ("HHI") would increase by the meaning of the Bank Holding Company Act 146 points to 3504.5 ("Act") (12 U.S.C. § 1841 etseq.), has applied for the Although consummation of this proposal would Board's approval under section 3 of the Act to acquire eliminate some existing competition in the Montgomby merger 100 percent of the voting shares of Northern ery County banking market, the Board believes the of Tennessee Corp., Clarksville, Tennessee anticompetitive effects of this proposal are mitigated ("Northern"), and thereby indirectly to acquire Northern's bank holding company subsidiary, Central Bancorp, Inc., Murfreesboro, Tennessee, and North- 2. First American has 11 bank subsidiaries in Tennessee and one in ern's four bank subsidiaries.1 Kentucky. 3. State banking data are as of June 30, 1987. Notice of the application, affording an opportunity 4. The Montgomery County banking market is approximated by for interested persons to submit comments, has been Montgomery County, Tennessee. 5. Under the revised Department of Justice Merger Guidelines, 49 duly published (53 Federal Register 8,285 (1988)). The Federal Register 26,823 (June 29, 1984), a market in which the time for filing comments has expired, and the Board post-merger HHI is above 1800 is considered highly concentrated. In has considered the application and all comments re- such markets, the Department is likely to challenge a merger that increases the HHI by more than 50 points. The Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by at least 200 points. The Justice Depart- 1. Northern's bank subsidiaries are: Northern Bank of Tennessee, ment has stated that the higher than normal HHI thresholds for Clarksville; Bedford County Bank, Shelbyville; First Southern Bank screening bank mergers for anticompetitive effects implicitly recogof Mt. Juliet, Mt. Juliet; and First Southern Bank of Rutherford nizes the competitive effect of limited-purpose lenders and other County, Murfreesboro, all in Tennessee. non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

568 Federal Reserve Bulletin • August 1988 by several factors. The Board notes that First Ameri- concluded that thrift institutions exert a significant can is the smallest competitor in the market and competitive influence that mitigates the anticompetioperates only one banking office in the market. In tive effects of this proposal in the Nashville banking addition, the Board has considered the presence of market.9 thrift institutions in the banking market in its analysis On the basis of the foregoing and other facts of of this proposal.6 Three thrift institutions operate in record, the Board concludes that consummation of the the market, controlling deposits of $148.0 million, proposal would not have a substantial adverse effect representing 25.2 percent of the total deposits among on existing competition in the Nashville and Montbanks and thrifts in the market. The thrift institutions gomery County banking markets. are active competitors in the market as providers of The financial and managerial resources of First NOW accounts, consumer loans and commercial American, Northern and their subsidiary banks are loans. Based upon the size and market share of thrift consistent with approval. Considerations relating to institutions in the market, the Board has concluded the convenience and needs of the communities to be that thrift institutions exert a significant competitive served are also consistent with approval. influence that mitigates the anticompetitive effects of Based on the foregoing and other facts of record, the this proposal in the Montgomery County banking Board has determined that the application should be, market.7 and hereby is, approved. The acquisition of Northern In the Nashville banking market,8 First American is shall not be consummated before the thirtieth calendar the second largest of 16 commercial banking organiza- day following the effective date of this Order, or later tions, controlling deposits of approximately $1.7 bil- than three months after the effective date of this lion, representing 25.3 percent of the total deposits in Order, unless such period is extended for good cause the market. Northern is the eighth largest commercial by the Board or by the Federal Reserve Bank of banking organization in the market, controlling depos- Atlanta, acting pursuant to delegated authority. its of $63.4 million, representing less than 1.0 percent By order of the Board of Governors, effective of the total deposits in the market. Upon consumma- June 1, 1988. tion of this proposal, First American would remain the second largest commercial banking organization in the Voting for this action: Chairman Greenspan and Governors market, controlling deposits of approximately $1.8 Johnson, Angell, Heller, and Kelley. Absent and not voting: billion, representing 26.2 percent of the total deposits Governor Seger. in the market. The four-firm concentration ratio would increase by less than one percentage point to 90.3 JAMES MCAFEE percent, and the HHI would increase by 43 points to Associate Secretary of the Board 2410. Norwest Corporation Although consummation of this proposal would Minneapolis, Minnesota eliminate some existing competition in the Nashville banking market, numerous other commercial banks Order Approving Acquisition of a Bank Holding would continue to operate in the market after consum- Company mation of this proposal. Moreover, the Board has considered the presence of thrift institutions in the Norwest Corporation, Minneapolis, Minnesota market. Based upon the number, size and market ("Norwest"), a bank holding company within the share of thrift institutions in the market, the Board has meaning of the Bank Holding Company Act of 1956, as amended (the "Act") (12 U.S.C. § 1841 et seq.), has 6. The Board has previously indicated that thrift institutions have applied for the Board's approval under section 3 of the become, or have the potential to become, major competitors of Act (12 U.S.C. § 1842) to acquire PB Bancorp, Cedar commercial banks. National City Corporation, 70 FEDERAL RESERVE BULLETIN 743 (1984); NCNB Bancorporation, 70 FEDERAL RESERVE Rapids, Iowa ("Bancorp"), and thereby to acquire BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL indirectly Peoples Bank and Trust Company, Cedar RESERVE BULLETIN 802 (1983); and First Tennessee National Corpo- Rapids, Iowa ("Bank"). ration, 69 FEDERAL RESERVE BULLETIN 298 (1983). 7. If 50 percent of deposits held by thrift institutions in the Montgomery County banking market were included in the calculation of market concentration, the share of total deposits held by the four largest organizations in the market would be 96.9 percent. First 9. If 50 percent of deposits held by thrift institutions in the Nashville American would control 1.7 percent of the market's total deposits and banking market were included in the calculation of market concentra- Northern would control 31.2 percent of the market's total deposits. tion, the share of total deposits held by the four largest organizations The HHI would increase by 109 points to 2703. in the market would be 80.7 percent. First American would control 8. The Nashville banking market is approximated by Davidson, 22.6 percent of the market's total deposits and Northern would control Rutherford, Williamson and Wilson Counties plus the southern halves 0.8 percent of the market's total deposits. The HHI would increase by of Robertson and Summer Counties, all in Tennessee. 35 points to 1952. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 569 Notice of the application, affording opportunity for $2.2 billion, controlling approximately 8.9 percent of interested persons to submit comments and views, has the total deposits in commercial banks in Iowa. Conbeen duly published (53 Federal Register 286 (1988)). summation of the proposed transaction would not The time for filing comments has expired, and the significantly increase the concentration of banking Board has considered the application and all com- resources in Iowa. ments received in light of the factors set forth in Norwest competes with Bank in the Cedar Rapids section 3(c) of the Act. banking market.5 Norwest is the fourth largest of 19 Section 3(d) of the Act, the Douglas Amendment commercial banking organizations in the market, con- (12 U.S.C. § 1842(d)), prohibits the Board from ap- trolling approximately $84.4 million in deposits, repreproving an application by a bank holding company to senting approximately 6.1 percent of total deposits in acquire any bank located outside the bank holding commercial banking organizations in the market. Bank company's home state unless the acquisition is "spe- is the second largest commercial banking organization cifically authorized by the statute laws of the state in in the market, controlling $208.5 million in deposits, which such bank is located, by language to that effect representing approximately 15.2 percent of total deand not merely by implication."1 In relevant part, posits in the market. Upon consummation, Norwest Iowa law authorizes, an out-of-state bank holding would become the second largest commercial banking company to acquire an Iowa bank if the out-of-state organization in the market, controlling deposits of bank holding company was on January 1, 1971, regis- $292.9 million, representing approximately 21.3 pertered with the Board as a bank holding company and cent of total deposits in commercial banking organizaon that date owned at least two banks in Iowa.2 tions in the market. The four-firm concentration ratio Norwest meets the requirements of this provision of is approximately 70.6 percent, and the Herfindahl- Iowa law. Norwest is an out-of-state bank holding Hirschman Index ("HHI") would increase by 186 company that was registered with the Board on Janu- points to 2341.6 Based upon these and other facts of ary 1, 1971, and, on that date, Norwest owned at least record, the Board concludes that consummation of the two banks in Iowa.3 Further, the Iowa Deputy Super- proposal would not have any significant adverse comintendent of Banking has indicated that his office petitive effects or result in the concentration of bankanticipates making no objection to Norwest's pro- ing resources in any relevant banking market. posal. Accordingly, the Board concludes that the The financial and managerial resources of Norwest proposed acquisition is specifically authorized by the and Bancorp are consistent with approval. statute laws of Iowa and thus Board approval of this In considering the convenience and needs of the application is not prohibited by the Douglas Amendcommunities to be served, the Board has taken into ment. account the records of the subsidiary banks of Nor- Norwest, a multibank holding company with ap- west and Bancorp under the Community Reinvestproximately $2.1 billion in deposits in Iowa, is the ment Act ("CRA").7 The Board has received comlargest of 480 commercial banking organizations in the ments regarding Norwest's CRA performance from state, controlling approximately 8.1 percent of total United Neighbors, Inc., Davenport, Iowa;8 Iowa Citdeposits in commercial banks in Iowa.4 Bank is the izens for Community Improvement, Des Moines, Iowa 14th largest commercial banking organization in Iowa, with deposits of approximately $156.8 million, controlling less than one percent of the total deposits in 5. The Cedar Rapids banking market is approximated by Linn County, and Jefferson Township in Johnson County, Iowa. commercial banks in Iowa. Upon consummation, 6. Under the revised Department of Justice Merger Guidelines (49 Norwest would remain the largest commercial banking Federal Register 26,823), a market in which the post-merger HHI is organization in Iowa, with deposits of approximately between 1000 and 1800 is considered moderately concentrated. In such markets, the Department is likely to challenge a merger that increases the HHI by more than 100 points. The Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticom- 1. A bank holding company's home state for purposes of the petitive effects) unless the post-merger HHI is at least 1800 and the Douglas Amendment is that state in which the total deposits of its merger increases the HHI by at least 200 points. The Justice Departbanking subsidiaries were largest on July 1, 1966, or on the date it ment has stated that the higher than normal HHI thresholds for became a bank holding company, whichever date is later. 12 U.S.C. screening bank mergers for anticompetitive effects implicitly recog- § 1842. Norwest's home state is Minnesota. nizes the competitive effect of limited purpose lenders and other 2. Iowa Code Ann. § 524.1805 (West 1987). non-depository financial entities. 3. Norwest also fulfills the requirements of another provision of 7. 12 U.S.C. § 2901 et seq. Iowa law which provides that a bank holding company may not 8. United Neighbors, Inc. has protested the CRA performance of acquire an Iowa bank if, upon acquisition, the acquiring bank holding Bettendorf Bank, N.A., Bettendorf, Iowa. United Neighbors genercompany would have more than ten percent of the total time and ally alleges that this bank has an extremely poor home loan record in demand deposits of all Iowa banks. Iowa Code Ann. § 524.1802(1) low- and moderate-income neighborhoods in its community and (West 1987). follows restrictive policies that cause and contribute to red-lining in 4. Deposit data are as of December 30, 1986. those neighborhoods. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

570 Federal Reserve Bulletin • August 1988 ("Iowa CCI");9 and Minnesota Citizens Organizations their lending against low- and moderate-income neigh- Acting Together, St. Paul, Minnesota ("Minnesota borhoods within their relevant communities and that COACT")10 (together, "Protestants"). In accordance the present community delineations for the banks are with the Board's practice and procedure for handling proper. Although the proposed redelineations of comprotested applications,11 the Federal Reserve Bank of munities for certain Minnesota banks after proposed Minneapolis assisted in arranging meetings between mergers may not have included areas presently served the parties to clarify the issues under the CRA and to by the banks to be merged, Norwest will establish provide a forum to resolve the concerns raised by the community advisory boards consisting of persons repprotest. The parties, however, were unable to come to resenting those communities to restructure and review a resolution of their differences. those delineations. The CRA requires the federal banking agencies, in The record before the Board shows that the bank connection with their examination of financial institu- which is the focus of the United Neighbors, Inc. tions, to assess the record of banks under their super- protest, with a loan-to-deposit ratio of 80 percent, is an vision in meeting the credit needs of their entire active lender in the commercial and small business, communities, including the low- and moderate-income agricultural, educational, and consumer areas and that neighborhoods, consistent with the safe and sound its lending activities do not discriminate against lowoperation of the institutions. The CRA requires the and moderate-income neighborhoods. The Board also agencies to take these records into account when notes that the bank has recently developed a $400,000 acting on certain applications involving the institu- neighborhood reinvestment package targeted to lowtions. In connection with this application, the Board and moderate-income segments of the bank's commuhas carefully reviewed the record of CRA performance nity. of Norwest's subsidiary banks as reflected in their The banks covered by Iowa CCI's protest have, reports of examination12 and the information submit- throughout the recent difficulties in the farming sector, ted by Protestants and Norwest. continued to carry a diversified loan portfolio which The examination reports for the banks which are the includes agricultural loans. The record shows that subject of these protests indicate that the banks have three of the four banks' agricultural lending as a satisfactory CRA records and are in general compli- percentage of their loan portfolios is above the peer ance with applicable CRA regulations. The banks have group average, while that of the fourth bank is consisadopted CRA statements which describe the types of tent with its peer group. That bank has also recently loan services the banks provide to help meet the credit increased its agricultural lending. needs of their communities,13 and the banks are acting Minnesota COACT expressed concerns regarding in accordance with those statements. The examination Norwest's CRA performance generally and certain reports also show that the banks do not discriminate in Norwest banks specifically. The record shows that each of the particular banks covered by Minnesota COACT's protest, ten national banks and one state 9. Iowa CCI has protested the CRA performance of Norwest Bank Des Moines, N.A., Des Moines, Iowa; Norwest Bank Atlantic, N.A., non-member bank, are helping to meet the agriculture, Atlantic, Iowa; Norwest Bank Denison, N.A., Denison, Iowa; and housing, and small business needs of their entire Norwest Bank Fort Dodge, N.A., Fort Dodge, Iowa. Iowa CCI communities, including low- and moderate-income generally alleges that these banks do not meet the credit needs of family farmers. neighborhoods. To address certain concerns regarding 10. Minnesota COACT has protested the CRA performance of responsibility within the Norwest organization for Norwest generally and eleven Norwest banks in Minnesota, specifically, Albert Lea, Austin, Dodge Center, Duluth, Litchfield, CRA policies, community delineations, and ascertain- Mankato, Rochester, Sauk Rapids, St. Cloud, Two Harbors, and ment of credit needs, Norwest has decided to establish Winona. Minnesota COACT generally alleges that Norwest and these community advisory boards at certain of its Minnesota banks exclude low- and moderate-income neighborhoods from their community delineations, fail to adequately ascertain community banks to review community delineations, CRA statecredit needs and to communicate credit services, and fail to meaning- ments, and loan programs. These boards also will help fully assess and meet credit needs in the agriculture, housing, and local banks to address CRA issues relevant to their small business areas. 11. See 12 C.F.R. § 262.25(c). local communities. With regard to COACT'S com- 12. These recent examinations were conducted by the Office of the ments regarding Norwest's Duluth bank, the record Comptroller of the Currency in response to protests filed with that shows that the bank has a good distribution of agriculoffice in connection with recent applications filed by Norwest to merge certain of its subsidiary banks. ture, housing, and small business loans and does not 13. The CRA statements list the specific types of credit that the discriminate against low- and moderate-income neighbanks are willing to extend within their local communities within borhoods. Further, as a result of ongoing dialogue with certain categories, such as residential loans for 1 to 4 dwelling units, residential loans for 5 dwelling units and over, housing rehabilitation a local community group, the bank has lowered its loans, home improvement loans, small business loans, farm loans, minimum mortgage amount and appointed two lending community development loans, commercial loans, and consumer loans. officers to work with the group. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 571 Norwest does not presently have a corporate CRA Based on the foregoing and other facts of record, the plan at the holding company level for its subsidiary Board has determined that the application should be, banks, but has advised the Board that it is in the and hereby is, approved. The acquisition of Bancorp process of developing a corporate CRA plan which it shall not be consummated before the thirtieth calendar will adopt within three months and implement within day following the effective date of this Order, or later six months. The plan will include a corporate CRA than three months after the effective date of this policy statement and will address the issue of docu- Order, unless such period is extended for good cause mentation of the means used to identify and address by the Board or by the Federal Reserve Bank of community needs. Under the plan, each local bank Minneapolis, acting pursuant to delegated authority. will prepare a written community marketing plan that By order of the Board of Governors, effective will identify community needs and will detail the June 28, 1988. means to be used to address those needs and the means to be used to communicate with and inform the Voting for this action: Chairman Greenspan and Governors entire community of its products and services. These Johnson, Seger, Angell, Heller, and Kelley. plans will include advertising and marketing programs for credit and deposit products and services and will WILLIAM W. WILES be designed to reach the entire community, including Secretary of the Board low- and moderate-income neighborhoods. The community advisory boards will assist bank Orders Issued Under Section 4 of the Bank management in the preparation of these plans and Holding Company Act review the applicable bank's performance in meeting its plan and addressing the needs of its community. Canadian Imperial Bank of Commerce The boards will report and make recommendations to Toronto, Canada the Board of Directors of each of the banks. Norwest's Executive Vice President for Community Banking will Order Approving Application to Engage in Certain monitor and be accountable for CRA performance as a Securities and Financial Advisory Activities whole and will report periodically to Norwest's Board of Directors. Regional presidents will monitor and be Canadian Imperial Bank of Commerce, Toronto, Canaccountable for bank performance with local managers ada ("Applicant"), a foreign bank subject to the Bank and bank presidents responsible for implementing Holding Company Act ("BHC Act") (12 U.S.C. each bank's plan in its community or communities, § 1841 et seq.), has applied for the Board's approval and the plan will specifically detail these accountabil- under section 4(c)(8) of the BHC Act, 12 U.S.C. ities and responsibilities. The plan should also address § 1843(c)(8), and section 225.21(a) of the Board's Regulation Y, 12 C.F.R. § 225.21(a), to acquire Wood the issue of procedures for documentation of CRA Gundy Corp., New York, New York ("Company"), performance and the areas in which recent examinaand thereby engage in: tions noted Norwest's subsidiary banks could strengthen their CRA performance. Norwest should (1) providing brokerage and investment advisory submit its proposed CRA policy to the Federal Re- services to institutional customers and Company's serve Bank of Minneapolis for review and file with the affiliates; Reserve Bank semi-annual reports outlining its prog- (2) providing advice in connection with merger, acquisition, divestiture and financial transactions, ress in implementing the policy. including public and private financings, loan syndi- In light of all the facts of record, including Norcations, interest rate swaps, interest rate caps and west's commitment to adopt a corporate plan regardsimilar transactions to affiliated and unaffiliated fiing the CRA performance of its subsidiary banks, the nancial and nonfinancial institutions; and Board concludes that convenience and needs considerations in this case are consistent with approval of the (3) providing financial advice to the Canadian fedapplication.14 eral, provincial and municipal governments and In addition, Iowa CCI and Minnesota COACT requested a public 14. Iowa CCI also requested that the Board order a public meeting. hearing. Although section 3(b) of the Act does not require a formal Under the Board's rules, the Board may hold a public meeting on an hearing in this instance, the Board may, in any case, order an informal application to clarify factual issues related to the application and to or a formal hearing. In light of all the facts of record, (and the facts that provide an opportunity for testimony, if appropriate. 12 U.S.C. the Iowa CCI and Minnesota COACT have met with Norwest to § 262.25(d). In this case, the Reserve Bank has arranged a private present their views, and that Iowa CCI and Minnesota COACT have meeting for this purpose. In light of all the facts of record, the Board submitted written comments to the Board), the Board has determined has determined that a public meeting would serve no useful purpose. that a hearing would serve no useful purpose. Accordingly, the Accordingly, the request for a public meeting is denied. requests for a hearing are denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

572 Federal Reserve Bulletin • August 1988 their agents, such as with respect to the issuance of Bank of Canada.4 In addition, as in Sovran Financial their securities in the United States.1 Corporation, Applicant has proposed that Company be permitted to exchange confidential information with Company currently engages in a wide range of secu- Applicant and its bank affiliates regarding their cusrities underwriting, dealing, brokerage and advisory tomers with such customers' consent. 74 FEDERAL activities. Applicant has committed to limit Company RESERVE BULLETIN 334 (Order dated May 3, 1988). to those activities for which it seeks approval here. Unlike NatWest and other prior brokerage cases, Notice of the application, affording interested per- Applicant has not committed that it will prohibit sons an opportunity to submit comments, has been Company from transmitting advisory or research recduly published (53 Federal Register 16,588 (1988)). ommendations to the commercial lending department The time for filing comments has expired, and the of any affiliate. Instead, Applicant has proposed that Board has considered the application and all com- Company be permitted to transmit to the commercial ments received in light of the public interest factors set lending department of any affiliate advisory research forth in section 4(c)(8) of the BHC Act. or recommendations which are generally available to Applicant, with total consolidated assets equivalent its customers.5 to approximately $67.3 billion, is the 63rd largest bank- Under the circumstances, where the information is ing organization in the world.2 Applicant owns bank widely distributed to Company's customers, the Board subsidiaries in Los Angeles and New York and main- does not believe that this modification would result in tains branches in Chicago, Pittsburgh, Seattle and Port- an increased potential for adverse effects that would land, and agencies in San Francisco, Los Angeles, New outweigh reasonably anticipated public benefits. In- York and Atlanta. Applicant engages in various activi- deed, Applicant has indicated that it has proposed ties in the United States under sections 4(c)(8) and such a modification to NatWest simply because of the 4(c)(9) of the BHC Act and the Board's Regulations Y operational difficulties that would be involved in preand K (12 C.F.R. Parts 225 and 211, respectively). venting such information from reaching the commercial lending departments of Company's affiliates. Investment Advice and Securities Brokerage on a Combined Basis Circuit in its affirmance of the NatWest Order, and the U.S. Supreme Court has declined to review the matter. Securities Industry Associ- The Board previously has determined that the com- ation v. Board of Governors of the Federal Reserve System, 821 F.2d 810 (D.C. Cir. 1987), cert, denied, 108 S. Ct. 697 (1988). bined offering of investment advice with securities 4. Under this proposal, Company will not act as principal or take a brokerage services to institutional customers is a per- position (i.e., bear the financial risk) in any securities it brokers or missible nonbanking activity and does not violate the recommends except bank-eligible securities. Where Company pro- Glass-Steagall Act.3 Applicant has applied to conduct vides investment advice on any bank-eligible securities that it is at the same time carrying for its own account, Company will disclose such its brokerage activity in accordance with substantially fact to its customers in accordance with prior Board decisions. See all of the limitations approved by the Board in Royal Manufacturers Hanover Corporation, 70 FEDERAL RESERVE BULLE- TIN 661, 662 (1984). As in Royal Bank of Canada, Company will execute a transaction only at the direction of a customer and will not exercise discretion with respect to any customer account. Company 1. Applicant has also applied to engage in providing discount will not execute any transaction where an affiliate exercises investbrokerage services together with related securities credit services ment discretion without customer authorization. Company will offer pursuant to the Board's Regulation T (12 C.F.R. Part 220) and investment advice, as well as provide securities execution services, to incidental activities such as offering custodial accounts and cash institutional customers on an integrated basis, i.e., Company will not management services and securities borrowing and lending for affil- charge an explicit fee for the investment advice and will receive fees iates and institutional customers; providing portfolio investment ad- only for transactions executed for customers. If Company offers its vice and research to affiliates and institutional customers; furnishing advisory services for a separate fee, it will not require its advisory general economic information and advice, general economic statistical customers to use its brokerage services. In addition, as in Royal Bank forecasting services and industry studies to affiliates and institutional of Canada, Company will employ a $1 million threshold in determincustomers; and underwriting and dealing in obligations of the United ing institutional customers. States, general obligations of states and their political subdivisions, 5. Advisory research or recommendations which Applicant indiand other obligations that state member banks are authorized to cates that it would deem to be generally available to its customers underwrite and deal in under 12 U.S.C. §§ 24 and 335 ("bank-eligible would include industry and company reports published by Company. securities"). The Board has previously found these latter activities, as Company regularly publishes research reports on particular indusproposed here, to be generally permissible for bank holding compa- tries. With respect to a particular industry, Company's industry nies. 12 C.F.R. §§ 225.25(b)(15), (4)(iii), (4)(iv) and (16), respectively. reports may identify general trends, review worldwide or certain Applicant has also proposed to engage in futures, forward and options country markets, summarize historical performance and provide incontracts on bank-eligible securities for hedging purposes in accord- dustry forecasts. Company also regularly publishes research reports ance with 12 C.F.R. § 225.142. on individual companies. Company reports may include information 2. Asset and banking data are as of January 31, 1988. Ranking is as on a company's historical or projected performance, as well as its of December 31, 1986. relative position in a particular market. Company reports may also be 3. See, e.g., National Westminster Bank PLC, 72 FEDERAL RE- released which summarize and evaluate a particular transaction and SERVE BULLETIN 584 (1986) ("NatWest"); and Royal Bank of Can- may contain recommendations to the shareholders of the companies involved in such transactions. Such industry reports and company ada, 74 FEDERAL RESERVE BULLETIN 334 (1988). That position has been upheld by the U.S. Court of Appeals for the District of Columbia reports are made generally available by Company to its customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 573 Merger and Acquisition Advice to Unaffiliated Applicant has also requested permission for Com- Financial and Nonfinancial Institutions pany to continue to engage in underwriting and dealing in Canadian government debt obligations. These are The Board has previously approved providing advice activities that are not permitted for U.S. bank holding to unaffiliated financial and nonfinancial institutions companies and the Board does not propose to authowith certain limitations in Signet Banking Corpora- rize such activities at this time. In light of the fact that tion, 73 FEDERAL RESERVE BULLETIN 59 (1987) the acquisition of Company is only a small part of a ("Signet"). Applicant's proposal differs in two ways larger transaction in Canada, however, and in order to from Signet. First, Applicant has proposed to provide permit an orderly transition, the Board under section such services to affiliates, which it may do under the 4(c)(9) has determined that Company may continue to servicing exemption of the BHC Act.6 Second, Appli- engage in such activities with respect to Canadian cant has proposed, as in the context of its investment government debt obligations for six months, after advice and brokerage proposal, to exchange confiden- which time the activities must be conformed to the tial information received from Company's customers requirements of the BHC Act. with such customers' consent. The Board believes that Consummation of the proposal is not likely to result this modification is consistent with the reasoning in the in decreased or unfair competition, conflicts of inter- Board's Sovran brokerage Order and does not alter the ests, unsound banking practices, concentration of reunderlying rationale of the Board's decision in Signet sources, or other adverse effects. Based on the forethat the activity is closely related to banking or a going and other facts of record, the Board has proper incident thereto. determined that the balance of public interest factors it must consider under section 4(c)(8) of the BHC Act is Financial Advisory Services to Canadian favorable. Accordingly, the Board has determined that Governmental Entities the application should be, and hereby is, approved. This determination is further subject to all of the In Royal Bank of Canada, the Board approved the conditions set forth in the Board's Regulation Y, activity of providing financial advice to the Canadian including those in sections 225.4(d) and 225.23(b), and federal, provincial and municipal governments, such to the Board's authority to require modification or as with respect to the issuance of their securities in the termination of the activities of the holding company or United States. Applicant's proposal differs from this any of its subsidiaries as the Board finds necessary to activity only in that Applicant proposes to provide assure compliance with the provisions and purposes of financial advice to the above entities' agents. Appli- the BHC Act and the Board's regulations and orders cant defines such an agent to mean, generally, a body issued thereunder, or to prevent evasion thereof. corporate expressly declared by or pursuant to any This transaction shall not be consummated later Act of the Canadian Parliament or a provincial legis- than three months after the effective date of this lature to be an agent of the Crown. Order, unless such period is extended for good cause The Board believes that the skills necessary to by the Board, or by the Federal Reserve Bank of San conduct the proposed activity are virtually indistin- Francisco, pursuant to delegated authority. guishable from the advisory activity approved in Royal By order of the Board of Governors, effective Bank of Canada. Moreover, the Board also believes June 1, 1988. that the slight modification proposed by Applicant to the activity previously approved by the Board in Royal Voting for this action: Chairman Greenspan and Governors Johnson, Angell, Heller, and Kelley. Absent and not voting: Bank of Canada does not alter the activity to render it Governor Seger. less closely related to banking. In addition, Applicant's modification would not appear to alter the JAMES MCAFEE Associate Secretary of the Board activity such that the public benefits stemming from this proposal, such as increased competition, customer convenience and efficiency, would be out- The Long-Term Credit Bank of Japan, Limited weighed by adverse effects. Tokyo,Japan Order Approving Application to Acquire a Company Engaged in Certain Securities, Futures and Financial Advisory Activities 6. Section 4(c)(1)(C) of the BHC Act provides in relevant part that a bank holding company may, without Board authorization, establish a subsidiary to be engaged in "furnishing services to or performing The Long-Term Credit Bank of Japan, Limited, Toservices for such bank holding company or its banking subsidiaries." 12 U.S.C. § 1843(c)(1)(C). kyo, Japan ("Applicant"), a foreign bank subject to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

574 Federal Reserve Bulletin • August 1988 the Bank Holding Company Act ("BHC Act") tered under that act and organizing, sponsoring and (12 U.S.C. § 1841 et seq.), has applied for the Board's managing closed-end investment companies; proapproval under section 4(c)(8) of the BHC Act, viding portfolio investment advice and research; and 12 U.S.C. § 1843(c)(8), and section 225.21(a) of the furnishing general economic information and ad- Board's Regulation Y, 12 C.F.R. § 225.21(a), to ac- vice, general economic statistical forecasting serquire Greenwich Capital Markets., Inc., Greenwich, vices and industry studies to affiliates and nonaffi- Connecticut ("Company"), and thereby engage in the liates, pursuant to 12 C.F.R. §§ 225.25(b)(4)(ii), (iii) following activities which the Board has determined and (iv); and by regulation to be closely related to banking and (7) providing through Greenwich Asset Managegenerally permissible for bank holding companies: ment, Incorporated, investment advice as a com- (1) underwriting and dealing in obligations of the modity trading adviser registered with the Commod- United States, general obligations of states and their ities Futures Trading Commission ("CFTC") with political subdivisions, and other obligations ("bank- respect to the purchase and sale of futures coneligible securities") pursuant to 12 C.F.R. tracts and options on futures contracts for the § 225.25(b)(16);> commodities and instruments referred to in (2) providing portfolio investment advice and re- section 225.25(b)(18), pursuant to 12 C.F.R. search and furnishing general economic information § 225.25(b)(19). and advice, general economic statistical forecasting services and industry studies on a nonfee basis in Applicant has also proposed to engage through connection with and as an incident to the proposed Company in the following activities which the Board bank-eligible securities activities, pursuant to has not approved by regulation: 12 C.F.R. §§ 225.25(b)(4)(iii) and (iv); (1) trading for the account of Company in foreign (3) engaging in futures, forward and options con- exchange;3 tracts on bank-eligible securities for hedging pur- (2) acting as an FCM and providing investment poses in accordance with 12 C.F.R. § 225.142; advice in connection with future contracts and op- (4) acting as a futures commission merchant tions on futures contracts for certain broad-based ("FCM") for nonaffiliated persons in the execution stock and municipal bond indexes; and and clearance on major commodity exchanges of (3) engaging through Company's subsidiary, Greenfutures contracts and options on futures contracts wich Capital Mortgage, Inc., in mortgage banking for bullion, foreign exchange, government securi- activities, consisting of the issuance and sale of ties, certificates of deposit and other money market mortgage-related securities backed by the guaraninstruments that a bank may buy or sell in the cash tees of the Government National Mortgage Associmarket for its own account in accordance with ation. 12 C.F.R. § 225.25(b)(18);2 (5) providing investment advice as an FCM with In addition, Applicant has applied for approval to respect to the purchase and sale of futures con- acquire indirectly through Company 1.01 percent of tracts and options on futures contracts for the the voting shares of Liberty Brokerage, Inc., New commodities and instruments referred to in York, New York, an inter-dealer blind broker of section 225.25(b)(18), pursuant to 12 C.F.R. government securities. § 225.25(b)(19); Company currently engages in underwriting, trading (6) engaging through Greenwich Asset Management, and dealing in government securities in the cash, Incorporated, in serving as an investment adviser as forward, futures and options markets.4 Company is defined in section 2(a)(20) of the Investment Com- registered as a broker-dealer with the Securities and pany Act of 1940 to investment companies regis- Exchange Commission and as an FCM with the CFTC. Applicant has committed to limit Company to those activities for which it seeks approval here and to 3. Applicant has also proposed that Company be permitted to trade 1. Applicant has also applied to engage in the following incidental for its own account in foreign exchange forward, futures, options and activities: engaging in repurchase and reverse repurchase transactions options on futures transactions for hedging purposes. Applicant has on such securities, collateralized borrowing and lending of such requested that this portion of its application be suspended until the securities, clearing and settling bank-eligible securities transactions Board reviews an identical proposal by another bank holding company and providing custodial, accounting, record keeping and ancillary which is currently pending. services, pursuant to 12 C.F.R. §§ 225.25(b)(3) and 225.25(b)(15). 4. Company has four wholly owned subsidiaries: Greenwich Asset 2. Applicant has also proposed to provide such services to its Management Incorporated, Greenwich Capital Acceptance, Inc., affiliates pursuant to section 4(c)(1)(C) of the BHC Act, 12 U.S.C. Greenwich Capital Mortgage, Inc., and Greenwich Capital Markets, § 1843(c)(1)(C). Ltd. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 575 liquidate any positions in securities or commodities execute and clear all of the above futures contracts held by Company in connection with its remaining and options.9 The Board has also previously approved activities. the provision of investment advice by FCM subsidiar- Notice of the application, affording interested per- ies regarding all of the above instruments except for sons an opportunity to submit comments, has been the MMI futures and the Bond Buyer futures.10 duly published (53 Federal Register 13,158 (1988)). The Board believes that the skills necessary to The time for filing comments has expired, and the engage in providing investment advice on the MMI Board has considered the application in light of the futures and the Bond Buyer futures are virtually public interest factors set forth in section 4(c)(8) of the indistinguishable from the advisory activities previ- BHC Act. ously approved by the Board in Bankers Trust, J.P. Applicant, with total consolidated assets equivalent Morgan and Northern Trust. Moreover, the Board to approximately $185 billion, is the 21st largest bank- believes that the modifications proposed by Applicant ing organization in the world.5 Applicant is a regis- to the activities previously approved by the Board do tered bank holding company by virtue of its ownership not alter the activity to render it less closely related to of LTCB Trust Company, New York, New York, a banking. In addition, Applicant's modification would state chartered trust company, the deposits of which not appear to alter the activity such that the public are insured by the Federal Deposit Insurance Corpo- benefits stemming from this proposal, such as inration. In addition, Applicant maintains a branch in creased competition, customer convenience and effi- New York and an agency in Los Angeles. ciency, would be outweighed by adverse effects. Trading in Foreign Exchange Issuance of GNMA Certificates Applicant has proposed that Company be permitted to Applicant proposes that Company be permitted to trade for its own account in foreign exchange. Na- purchase mortgage loans, issue for its own account tional banks are expressly authorized by statute to through Greenwich Capital Mortgage, Inc., or third engage in "buying and selling exchange" and banks party servicers, and sell securities guaranteed by actively participate in this market.6 The Board has also GNMA.11 These securities would represent undivided previously permitted a bank holding company to deal interests in pools of mortgage loans. The Board has in foreign exchange.7 not previously approved this activity for bank holding companies. FCM Activities In order to approve this aspect of the proposal, the Board must determine: In addition to acting as an FCM pursuant to section (1) that the proposed activity is closely related to 225.25(b)(18),8 Applicant has also proposed to act as banking; and an FCM and provide investment advice for The Standard & Poor's 100 Stock Price Index futures contract (the "S&P 100 futures"); The Standard & Poor's 500 Stock Price Index futures contract (the "S&P 500 futures"); options on the S&P 500 futures; The Major 9. Bankers Trust New York Corporation, 71 FEDERAL RESERVE Market Index futures contract (the "MMI futures"); BULLETIN 111 (1985) (approving the execution and clearance of the The Long-Term Municipal Bond Index futures con- Bond Buyer futures) ("Bankers Trust"); J.P. Morgan & Co. Incortract—based on The Bond Buyer Municipal Bond porated, 71 FEDERAL RESERVE BULLETIN 251 (1985) (approving the execution and clearance of the S&P 100 futures, the S&P 500 futures, Index (the "Bond Buyer futures"); and options on the options on the S&P 500 futures and the MMI futures) ("J.P. Bond Buyer futures. The Board has previously autho- Morgan"); and Northern Trust Corporation, 1A FEDERAL RESERVE BULLETIN 333 (1980) (approving the execution and clearance of the rized FCM subsidiaries of bank holding companies to S&P 500 futures, options on the S&P 500 futures, the MMI futures, the Bond Buyer futures and options on the Bond Buyer futures) ("Northern Trust"). 10. Bankers Trust, supra (approving the provision of advice on the 5. Asset data are as of March 31, 1988. Banking data are as of Bond Buyer futures); and Citicorp, 73 FEDERAL RESERVE BULLETIN December 31, 1987. Ranking is as of December 31, 1986. 220 (1987) (approving the provision of advice on the S&P 100 futures, 6. 12 U.S.C. § 24 Seventh. the S&P 500 futures and options on the S&P 500 futures). 7. Standard and Chartered Banking Corporation, 38 Federal Reg- 11. Under section 306(g) of the National Housing Act, 12 U.S.C. ister 27,552 (1973). § 1721(g), GNMA is authorized to guarantee the timely payment of 8. The Board notes that it has approved prior applications by bank principal and interest to holders of securities backed by pools of holding companies to conduct securities and other nonbanking activ- mortgages, usually on single family homes, insured or guaranteed by ities in addition to FCM activities in the same subsidiary. See, e.g., the Federal Housing Administration, the Veterans' Administration, or Security Pacific Corporation, 70 FEDERAL RESERVE BULLETIN 238 the Farmers Home Administration. The GNMA guaranty is backed by (1984) (Order approving FCM activities, brokering and dealing U.S. the full faith and credit of the federal government. The securities are government securities and brokering options in U.S. government typically issued in pass-through form in minimum face denominations securities and options in U.S. and foreign money market instruments). of $25,000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

576 Federal Reserve Bulletin • August 1988 (2) that the public benefits associated with the pro- weighs any potential harm resulting therefrom. Moreposed activity outweigh any possible adverse ef- over, the issuance of GNMA securities is subject to fects. 12 U.S.C. § 1843(c)(8). the antifraud provisions of federal securities laws. Finally, the Board has previously determined that In determining if an activity is closely related to underwriting and dealing in GNMA certificates is of banking under section 4(c)(8) of the BHC Act, the sufficiently low risk to be generally permissible for Board has relied on guidelines established by the bank holding companies.14 federal courts. Under these guidelines, an activity may be found to be closely related to banking if it is Financial Factors demonstrated: (1) that banks generally have, in fact, provided the In every case involving a nonbanking acquisition by a proposed services; bank holding company under section 4 of the Act, the (2) that banks generally provide services that are Board considers the financial condition and resources operationally or functionally so similar to the pro- of the Applicant and its subsidiaries and the effect of posed services as to equip them particularly well to the transaction on these resources.15 In accordance provide the proposed services; or with the principles of national treatment and competi- (3) that banks generally provide services that are so tive equity, the Board has stated it expects a foreign integrally related to the proposed activity as to bank to meet the same general standards of financial require their provision in a specialized form.12 strength as domestic bank holding companies and to be able to serve as a source of strength to its United National banks are specifically authorized under the States banking operations.16 In considering applica- Glass-Steagall Act to issue and sell securities which tions of foreign banking organizations, the Board has are guaranteed by GNMA as well as to underwrite and noted that foreign banks operate outside the United deal in such securities.13 Accordingly, the Board be- States in accordance with different regulatory and lieves that the issuance and sale of GNMA certificates supervisory requirements, accounting principles, asset is closely related to banking. quality standards, and banking practices and tradi- With respect to the "proper incident" requirement, tions, and that these differences make it difficult to section 4(c)(8) of the BHC Act requires the Board to compare the capital positions of domestic and foreign consider whether the performance of the activity by an banks. In the past, the Board has addressed the affiliate of a holding company "can reasonably be complex issues involved in balancing these concerns expected to produce benefits to the public, such as in the context of individual applications on a case-bygreater convenience, increased competition, or gains case basis, making adjustments as appropriate to an in efficiency that outweigh possible adverse effects, applicant's capital to reflect differences in accounting such as undue concentration of resources, decreased treatment and regulatory practices. or unfair competition, conflicts of interests, or un- The Board recently has announced a proposal to sound banking practices." supplement its consideration of capital adequacy with The Board also believes that the activity will not a risk-based system that is simultaneously being proresult in adverse effects that would outweigh the posed by the member countries of the Basle Commitpublic benefits stemming from this proposal, such as tee on Banking Regulations and Supervisory Practices increased competition, customer convenience and ef- and the other domestic federal banking agencies.17 ficiency. The statutory exemption permitting banks to The Japanese Ministry of Finance in April of this year issue and sell GNMA securities appears to reflect a acted to implement for Japanese banking organizations Congressional determination that GNMA securities the risk-based capital framework developed by the are not the type of securities that would lead to unsound speculation or that the public interest in the issuance and sale of GNMA securities by banks out- 14. 12 C.F.R. § 225.25(b)(16). 15. 12 C.F.R. § 225.24; Bayerische Vereinsbank AG, 73 FEDERAL RESERVE BULLETIN 155, 156 (1987). 12. National Courier Association v. Board of Governors, 516 F.2d 16. Sumitomo Trust & Banking Co., Ltd., 73 FEDERAL RESERVE 1229 (D.C. Cir. 1975). However, the National Courier guidelines are BULLETIN 749 (1987); Ljubljanska Banka-Associated Bank, 72 FEDnot the exclusive basis for finding a close relationship between a ERAL RESERVE BULLETIN 489 (1986); The Mitsubishi Trust and proposed activity and banking. The Board has stated that in acting on Banking Corporation, 72 FEDERAL RESERVE BULLETIN 256 (1986); a request to engage in a new nonbanking activity, it will consider any The Industrial Bank of Japan, Ltd., 72 FEDERAL RESERVE BULLETIN other factor that an applicant may advance to demonstrate a reason- 71 (1986); The Mitsubishi Bank, Limited, 70 FEDERAL RESERVE able or close connection or relationship of the activity to banking. 49 BULLETIN 518 (1984). See also Policy Statement on Supervision and Federal Register 794, 806 (1984); Securities Industry Association v. Regulation of Foreign-Based Bank Holding Companies, Federal Re- Board of Governors, 468 U.S. 207, 210-11 n.5 (1984). serve Regulatory Service f 4-835 (1979). 13. 12 U.S.C. § 24 (Ninth) and (Seventh), respectively. 17. 53 Federal Register 8,549 (1988). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 577 Basle Committee. The Board considers the Basle favorable. Accordingly, the Board has determined that Committee proposal an important step toward a more the application should be, and hereby is, approved. consistent and equitable international norm for assess- This determination is further subject to all of the ing capital adequacy. Until that framework becomes conditions set forth in the Board's Regulation Y, effective, however, the Board will continue to evaluate including those in sections 225.4(d) and 225.23(b), and applications involving foreign banking organizations to the Board's authority to require modification or on a case-by-case basis consistent with its prior pre- termination of the activities of the holding company or cedent. any of its subsidiaries as the Board finds necessary to In this case, the primary capital ratio of Applicant, assure compliance with the provisions and purposes of as publicly reported, is well below the 5.5 percent the BHC Act and the Board's regulations and orders minimum level specified in the Board's Capital Ade- issued thereunder, or to prevent evasion thereof. quacy Guidelines. After making adjustments to reflect The Board notes that section 3502 of the Omnibus Japanese banking and accounting practices, however, Trade and Competitiveness Act of 1988 (H.R. 3) including consideration of a portion of the unrealized ("Trade Bill"), if enacted, would preclude the Federal appreciation in Applicant's portfolio of equity securi- Reserve Bank of New York from designating as a ties consistent with the principles in the Basle capital primary dealer any foreign organization whose counframework, Applicant's capital ratio meets United try does not permit U.S. companies to underwrite its States standards. debt instruments to the same extent as its own domes- The Board has also considered several additional tic companies. The Trade Bill contains a provision, factors that mitigate its concern in this case. The however, which states that a foreign organization is Board notes that the application involves nonbanking grandfathered if, before July 31, 1987, that organizaactivities that require a small commitment of capital tion and the primary dealer to be acquired informed and that Applicant's bank in the United States is the Reserve Bank of its intention to acquire control of among the more strongly capitalized banking organi- the primary dealer. Applicant and Company had so zations in the United States. The Board notes further informed the Reserve Bank. that Applicant is in compliance with the capital and This transaction shall not be consummated later other financial requirements of Japanese banking or- than three months after the effective date of this ganizations. In this regard, the Board has considered Order, unless such period is extended for good cause as favorable factors that, in anticipation of implemen- by the Board, or by the Federal Reserve Bank of New tation of the Basle Committee risk-based capital York, pursuant to delegated authority. framework, Applicant has, through the issuance of By order of the Board of Governors, effective common stock and retention of earnings increased its June 6, 1988. equity capital by almost $1 billion in its latest fiscal year and that Applicant's capital improvement pro- Voting for this action: Chairman Greenspan and Governors gram is consistent with meeting the standards in the Johnson, Heller, and Kelley. Absent and not voting: Gover- Basle Committee capital framework for 1990 and 1992. nors Seger and Angell. Based on these and other facts of record, the Board concludes that financial considerations are consistent JAMES MCAFEE Associate Secretary of the Board with approval of the application. Consummation of Applicant's proposal would provide increased convenience to Company's customers Midland Bank, PLC and gains in efficiency. In addition, the Board expects London, England that the de novo entry of Applicant into the market for these services would increase the level of competition Order Approving an Application to Engage in among providers of these services. Accordingly, the Foreign Exchange Activities and Related Advisory Board has determined that the performance of the Services proposed activities by Company can reasonably be expected to produce benefits to the public. Midland Bank, PLC, London, England ("Midland"), The Board believes that the proposal is not likely to a foreign bank subject to the Bank Holding Company result in decreased or unfair competition, conflicts of Act (the "BHC Act") (12 U.S.C. § 1841 et seq.), has interests, unsound banking practices, concentration of applied, pursuant to section 4(c)(8) of the BHC Act resources, or other adverse effects. Based on the (12 U.S.C. § 1843(c)(8)) and section 225.23 of the foregoing and other facts of record, the Board has Board's Regulation Y (12 C.F.R. § 225.23), for perdetermined that the balance of public interest factors it mission to engage through its subsidiary Thomas must consider under section 4(c)(8) of the BHC Act is Cook, Inc., Princeton, New Jersey ("TCI"), in certain Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

578 Federal Reserve Bulletin • August 1988 activities relating to trading and providing advice with 12 U.S.C. § 1843(c)(8). TCI's participation in the respect to foreign exchange. wholesale foreign currency market will result in public TCI's proposed activities include the purchase and benefits of increased competition and enhanced consale of foreign exchange at the wholesale level for its venience for customers. own account and for the account of others. TCI would Regarding the possibility of unsound banking pracuse forward and futures foreign currency contracts to tices, TCI proposes to buy and sell foreign exchange hedge its cash position. In addition, TCI intends to for anticipated customer needs rather than for investprovide travel-related advisory services to its clients ment or speculative purposes. Furthermore, TCI inregarding exchange rates and other foreign currency tends to hedge potential risks in its cash foreign issues.1 exchange position with forward and futures transac- Notice of the application, affording interested per- tions. In the Board's view, these factors should minisons an opportunity to submit comments on the pro- mize the potential risks involved in the proposed posal, has been duly published (53 Federal Register activities. 9,143 (1988)). The time for filing comments has expired, Based on the foregoing and other facts of record, the and the Board has considered the application and all Board has determined that the balance of public intercomments received in light of the public interest factors est factors that it is required to consider under section set forth in section 4(c)(8) of the BHC Act. 4(c)(8) of the BHC Act is favorable. Accordingly, the Midland, a bank organized under the laws of Great Board has determined that the application should be, Britain, has total assets of approximately $90.7 and hereby is, approved. This determination is subject billion.2 Midland engages in a broad range of financial to all of the conditions set forth in the Board's Reguand commercial services directly and indirectly lation Y, including sections 225.4(d) and 225.23(b)(3) through its offices worldwide. (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)), and to the The Board has previously determined that a bank Board's authority to require such modification or holding company may engage in the purchase and sale termination of the activities of a bank holding comof foreign exchange for its own account and for the pany or any of its subsidiaries as the Board finds account of others.3 The Board has also approved the necessary to assure compliance with the provisions use of forward and futures contracts to hedge a cash and purposes of the BHC Act and the Board's regulaposition in foreign exchange, pursuant to section tions and orders issued thereunder, or to prevent 225.142 of Regulation Y.4 Accordingly, the Board evasion thereof. concludes that the proposed activities are closely This activity shall not be commenced later than related to banking.5 three months after the effective date of this Order, In order to approve this application, the Board is unless such period is extended for good cause by the also required to determine that Midland's performance Board or by the Federal Reserve Bank of New York, of the proposed activities "can reasonably be ex- pursuant to delegated authority. pected to produce benefits to the public . . . that By order of the Board of Governors, effective outweigh possible adverse effects, such as undue June 13, 1988. concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking Voting for this action: Chairman Greenspan and Governors practices." Angell, Heller, and Kelley. Absent and not voting: Governors Johnson and Seger. 1. TCI would provide customers with advice such as the currency WILLIAM W. WILES used in a particular country and whether U.S. dollar or foreign Secretary of the Board currency travellers cheques are accepted. 2. Banking data are as of December 31, 1987. 3. The Long-Term Credit Bank of Japan, Ltd., 74 FEDERAL RE- The Sanwa Bank, Limited SERVE BULLETIN 573 (Order dated June 6, 1988); Southern Bancor- Osaka, Japan poration, Inc., 69 FEDERAL RESERVE BULLETIN 224 (1983). 4. 12 C.F.R. § 225.142. 5. As part of its foreign currency activities, TCI proposes to provide Order Approving Application to Acquire a Company information on exchange rates to its wholesale customers for use by Engaged in Certain Securities, Futures and the latter's retail customers as well as information regarding the acceptance of U.S. dollar or foreign currency travellers cheques Financial Advisory Activities abroad. Such information and advice will be provided as part of the sale of foreign currency without any separate fee. TCI will not provide advice to customers on foreign exchange exposures or on investment The Sanwa Bank, Limited, Osaka, Japan ("Apin foreign currency. The proposed advisory activities are generally plicant"), a foreign bank subject to the Bank Holding related to the type of foreign currency transactions performed for Company Act ("BHC Act") (12 U.S.C. § 1841 travel-related purposes. Such activities, therefore, are permissible as incidental to TCI's foreign currency operations. et seq.), has applied for the Board's approval under Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 579 section 4(c)(8) of the BHC Act, 12 U.S.C. Brokerage, Inc., New York, New York, an inter- § 1843(c)(8), and section 225.21(a) of the Board's dealer blind broker of government securities. Regulation Y, 12 C.F.R. § 225.21(a), to acquire Bro- Company currently engages in underwriting, trading phy, Gestal, Knight & Co., L.P., New York, New and dealing in government securities in the cash, York ("Company"), and thereby engage in the follow- forward, futures and options markets. Company is ing activities which the Board has determined by registered as a broker-dealer with the Securities and regulation to be closely related to banking and gener- Exchange Commission. Applicant has committed to ally permissible for bank holding companies: limit Company to those activities for which it seeks (1) underwriting and dealing in obligations of the approval here and to liquidate any positions in securi- United States, general obligations of states and their ties or commodities held by Company in connection political subdivisions, and other obligations ("bank- with its remaining activities. eligible securities"), pursuant to 12 C.F.R. Notice of the application, affording interested per- § 225.25(b)(16);1 sons an opportunity to submit comments, has been (2) engaging in futures, forward and options con- duly published (53 Federal Register 9,810 (1988)). The tracts on bank-eligible securities for hedging pur- time for filing comments has expired, and the Board poses in accordance with 12 C.F.R. § 225.142; has considered the application in light of the public (3) providing portfolio investment advice and re- interest factors set forth in section 4(c)(8) of the BHC search and furnishing general economic information Act. and advice, general economic statistical forecasting Applicant, with total consolidated assets equivalent services and industry studies pursuant to 12 C.F.R. to approximately $324 billion, is the fifth largest bank- §§ 225.25(b)(4)(iii) and (iv) in connection with and as ing organization in the world.3 Applicant owns a bank an incident to the proposed bank-eligible securities subsidiary in San Francisco, branches in New York, activities but not in connection with its brokerage Chicago and Boston, and agencies in San Francisco, activities; Atlanta and Dallas. Applicant engages in various ac- (4) providing discount brokerage services in accord- tivities in the United States under sections 4(c)(8) and ance with 12 C.F.R. § 225.25(b)(15); and 4(c)(9) of the BHC Act and the Board's Regulations Y (5) acting as a futures commission merchant and K (12 C.F.R. Parts 225 and 211, respectively). ("FCM") for nonaffiliated persons in the execution As noted, the Board has previously determined that and clearance on major commodity exchanges of all of Applicant's activities, as proposed here, are futures contracts and options on futures contracts closely related to banking and generally permissible for bullion, foreign exchange, government securi- for bank holding companies, except for the provision ties, certificates of deposit, and other money market of advice in connection with financing transactions to instruments that a bank may buy or sell in the cash nonaffiliated institutional customers.4 The Board has market for its own account; and providing invest- previously determined by order that the latter activity ment advice to institutional customers in conjunc- is closely related to banking. tion therewith as permitted by 12 C.F.R. In every case involving a nonbanking acquisition by §§ 225.25(b)(18) and (19), respectively.2 a bank holding company under section 4 of the Act, the Board considers the financial condition and re- In addition, Applicant has applied to provide advice sources of the Applicant and its subsidiaries and the in connection with financing transactions to nonaffi- effect of the transaction on these resources.5 In acliated institutional customers in accordance with the cordance with the principles of national treatment and limitations set forth in Signet Banking Corporation, 73 competitive equity, the Board has stated it expects a FEDERAL RESERVE BULLETIN 59 (1987). Applicant has foreign bank to meet the same general standards of also applied for approval to acquire indirectly through financial strength as domestic bank holding companies Company one percent of the voting shares of Liberty and to be able to serve as a source of strength to its 3. Asset data are as of March 31, 1988. Banking data are as of 1. Applicant has also applied to engage in the following incidental December 31, 1987. Ranking is as of December 31, 1986. activities: engaging in repurchase and reverse repurchase transactions 4. The Board notes that it has approved prior applications by bank and the provision of clearing, settling, accounting, record keeping and holding companies to conduct securities and other nonbanking activother ancillary services to those counterparties with which it deals that ities in addition to FCM activities in the same subsidiary. See, e.g., do not maintain accounts with clearing agencies. Security Pacific Corporation, 70 FEDERAL RESERVE BULLETIN 238 2. Until Company becomes a registered FCM, Applicant proposes (1984) (Order approving FCM activities, brokering and dealing U.S. that Company continue to receive customer orders to purchase and government securities and brokering options in U.S. government sell financial contracts and pass them on to FCM's for execution, securities and options in U.S. and foreign money market instruments). clearing and settlement for a fee. Company would not take a position 5. 12 C.F.R. § 225.24; Bayerische Vereinsbank AG, 73 FEDERAL as principal in such contracts. RESERVE BULLETIN 155, 156 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

580 Federal Reserve Bulletin • August 1988 United States banking operations.6 In considering ap- among the more strongly capitalized banking organiplications of foreign banking organizations, the Board zations in the United States. The Board notes further has noted that foreign banks operate outside the that Applicant is in compliance with the capital and United States in accordance with different regulatory other financial requirements of Japanese banking orand supervisory requirements, accounting principles, ganizations. In this regard, the Board has considered asset quality standards, and banking practices and as favorable factors that, in anticipation of implementraditions, and that these differences make it difficult tation of the Basle Committee risk-based capital to compare the capital positions of domestic and framework, Applicant has, through the issuance of foreign banks. In the past, the Board has addressed the common stock and retention of earnings, increased its complex issues involved in balancing these concerns equity capital by $1.9 billion in its latest fiscal year and in the context of individual applications on a case-by- that Applicant's capital improvement program is concase basis, making adjustments as appropriate to an sistent with meeting the standards in the Basle Comapplicant's capital to reflect differences in accounting mittee capital framework for 1990 and 1992. treatment and regulatory practices. Based on these and other facts of record, the Board The Board recently has announced a proposal to concludes that financial considerations are consistent supplement its consideration of capital adequacy with with approval of the application. a risk-based system that is simultaneously being pro- Consummation of Applicant's proposal would proposed by the member countries of the Basle Commit- vide increased convenience to Company's customers tee on Banking Regulations and Supervisory Practices and gains in efficiency. In addition, the Board expects and the other domestic federal banking agencies.7 The that the de novo entry of Applicant into the market for Japanese Ministry of Finance in April of this year these services would increase the level of competition acted to implement for Japanese banking organizations among providers of these services. Accordingly, the the risk-based capital framework developed by the Board has determined that the performance of the Basle Committee. The Board considers the Basle proposed activities by Company can reasonably be Committee proposal an important step toward a more expected to produce benefits to the public. consistent and equitable international norm for assess- The Board believes that the proposal is not likely to ing capital adequacy. Until that framework becomes result in decreased or unfair competition, conflicts of effective, however, the Board will continue to evaluate interests, unsound banking practices, concentration of applications involving foreign banking organizations resources, or other adverse effects. Based on the on a case-by-case basis consistent with its prior prec- foregoing and other facts of record, the Board has edent. determined that the balance of public interest factors it In this case, the primary capital ratio of Applicant, must consider under section 4(c)(8) of the BHC Act is as publicly reported, is well below the 5.5 percent favorable. Accordingly, the Board has determined that minimum level specified in the Board's Capital Ade- the application should be, and hereby is, approved. quacy Guidelines. After making adjustments to reflect This determination is further subject to all of the Japanese banking and accounting practices, however, conditions set forth in the Board's Regulation Y, including consideration of a portion of the unrealized including those in sections 225.4(d) and 225.23(b), and appreciation in Applicant's portfolio of equity securi- to the Board's authority to require modification or ties consistent with the principles in the Basle capital termination of the activities of the holding company or framework, Applicant's capital ratio meets United any of its subsidiaries as the Board finds necessary to States standards. assure compliance with the provisions and purposes of The Board has also considered several additional the BHC Act and the Board's regulations and orders factors that mitigate its concern in this case. The issued thereunder, or to prevent evasion thereof. Board notes that the application involves nonbanking The Board notes that section 3502 of the Omnibus activities that require a small commitment of capital Trade and Competitiveness Act of 1988 (H.R. 3) and that Applicant's bank in the United States is ("Trade Bill"), if enacted, would preclude the Federal Reserve Bank of New York from designating as a primary dealer any foreign organization whose coun- 6. Sumitomo Trust & Banking Co., Ltd., 73 FEDERAL RESERVE try does not permit U.S. companies to underwrite its BULLETIN 749 (1987); Ljubljanska Banka-Associated Bank, 72 FED- ERAL RESERVE BULLETIN 489 (1986); The Mitsubishi Trust and debt instruments to the same extent as its own domes- Banking Corporation, 72 FEDERAL RESERVE BULLETIN 256 (1986); tic companies. The Trade Bill contains a provision, The Industrial Bank of Japan, Ltd., 72 FEDERAL RESERVE BULLETIN however, which states that a foreign organization is 71 (1986); The Mitsubishi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984). See also, Policy Statement on Supervision and grandfathered if, before July 31, 1987, that organiza- Regulation of Foreign-Based Bank Holding Companies, Federal Retion and the primary dealer to be acquired informed serve Regulatory Service U 4-835 (1979). the Reserve Bank of its intention to acquire control of 7. 53 Federal Register 8,549 (1988). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 581 the primary dealer. Applicant and Company had so Inc., Louisville, Kentucky, and thereby engage in informed the Reserve Bank. acting as agent and broker for credit life, accident, and This transaction shall not be consummated later health insurance that is related to extensions of credit than three months after the effective date of this by affiliated banks pursuant to section 225.25(b)(8); Order, unless such period is extended for good cause and National Processing Company, Inc., Louisville, by the Board or by the Federal Reserve Bank of San Kentucky; Irving, Texas; Phoenix, Arizona; Home- Francisco, pursuant to delegated authority. wood, Illinois; and Atlanta, Georgia; and thereby By order of the Board of Governors, effective engage in providing data processing services for finan- June 6, 1988. cial transactions nationwide, pursuant to section 225.25(b)(7) of the Board's Regulation Y. Further, National City has provided notice to the Board under Voting for this action: Chairman Greenspan and Governors section 4(c)(14) of the Act to acquire First Kentucky Johnson, Heller, and Kelley. Absent and not voting: Governors Seger and Angell. National Trading Company, Louisville, Kentucky.1 Notice of the applications, affording an opportunity JAMES MCAFEE for interested persons to submit comments, has been Associate Secretary of the Board published (53 Federal Register 10,154 (1988)). The time for filing comments has expired, and the Board Orders Issued Under Sections 3 and 4 of the has considered the applications and all comments Bank Holding Company Act received in light of the factors set forth in sections 3(c) and 4(c)(8) of the Act. National City Corporation Section 3(d) of the Act, the Douglas Amendment, Cleveland, Ohio prohibits the Board from approving an application by a bank holding company to acquire control of any bank Order Approving Acquisition of a Bank Holding located outside of the holding company's home state,2 Company and Its Banking and Nonbanking unless such acquisition is "specifically authorized by Subsidiaries the statute laws of the State in which [thel bank is located, by language to that effect and not merely by National City Corporation, Cleveland, Ohio ("Nation- implication." 12 U.S.C. § 1842(d). In this case, First al City"), has applied for the Board's approval under Kentucky controls banks in three states: Kentucky, section 3 of the Bank Holding Company Act Indiana, and Virginia. The laws of Kentucky and (12 U.S.C. § 1842) ("Act"), to acquire all of the voting Indiana3 expressly authorize the acquisition of banks shares of First Kentucky National Corporation, Lou- in these states by Ohio bank holding companies, such isville, Kentucky ("First Kentucky"), and thereby to as National City. Virginia law permits an out-of-state acquire indirectly First Kentucky's subsidiary banks: bank holding company to acquire a finance service First Kentucky Trust Company, Louisville, Ken- center bank subject to certain conditions.4 First Kentucky; First National Bank of Louisville, Louisville, tucky's sole bank in Virginia is a finance service center bank, and the Virginia Corporation Commission, in Kentucky; Commerce National Bank, Lexington, consultation with the Virginia Commissioner of Finan- Kentucky ; The Third National Bank of Ashland, Ashcial Institutions, has approved the acquisition by Naland, Kentucky; The American National Bank and tional City pursuant to Virginia law. Accordingly, the Trust Company, Bowling Green, Kentucky; Central Bank and Trust Company, Owensboro, Kentucky; Mutual Trust Bank, New Albany, Indiana; and First 1. National City will acquire First Kentucky through the merger of National Bank of Louisville, Henrico County, Vir- First Kentucky with and into National City's wholly owned subsidginia. iary, NC Acquisition Corporation, Cleveland, Ohio. In connection National City also has applied for the Board's ap- with these applications, NC Acquisition Corporation also has applied to acquire First Kentucky's banking and nonbanking subsidiaries, and proval under section 4(c)(8) of the Act (12 U.S.C. has provided notice to the Board under section 4(c)(14) of the Act to § 1843(c)(8)) to acquire First Kentucky's nonbanking acquire First Kentucky National Trading Company. subsidiaries: First Kentucky Company, Louisville, 2. A bank holding company's home state is that state in which the operations of the bank holding company's banking subsidiaries were Kentucky, and thereby engage in providing investprincipally conducted on July I, 1966, or the date on which the ment advisory activities primarily to pension and profit company became a bank holding company, whichever is later. sharing accounts pursuant to section 225.25(b)(4); 3. Ky. Rev. Stat. Ann. § 287.900 (Michie/Bobbs-Merrill 1986) and Ind. Code Ann. § 28-2-15-14 et seq. (Burns 1987). See Cooperative First Kentucky Investment Advisors, Inc., Louisville, Agreement and Determination of Reciprocity between the Common- Kentucky, and thereby engage in providing invest- wealth of Kentucky and the State of Ohio, October 16, 1985. 4. Va. Code Ann. § 6.1-392 (1987). Virginia law allows regional ment advice to individuals and institutions pursuant to bank holding companies to acquire Virginia full service banks, but section 225.25(b)(4); Churchill Insurance Agency, Ohio is not within the region. Va. Code Ann. § 6.1-398 et seq. (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

582 Federal Reserve Bulletin • August 1988 Board's approval of these applications is not pre- received comments from the United Mine Workers of cluded by the Douglas Amendment. The Board's America, Washington, D.C. ("UMW"), alleging that approval, however, is subject to National City's ob- the subsidiary banks of National City and First Kentaining approval of the acquisitions from the Kentucky tucky have technically and substantively violated the Commissioner of Banking and Securities, and the CRA. Specifically, the UMW states that reports of Indiana Department of Financial Institutions, as re- lending prepared pursuant to the Home Mortgage quired by the relevant statutes of these states. Disclosure Act ("HMDA") for certain National City National City, with approximately $11.0 billion in banks are inaccurate, that National City's banks are domestic deposits, is the largest commercial banking not extending mortgage loans in low- and moderateorganization in Ohio, controlling approximately 15.2 income and minority neighborhoods in Cleveland, and percent of total deposits in commercial banks in Ohio.5 that certain of National City and First Kentucky's First Kentucky is the largest commercial banking banks are decreasing their community reinvestment organization in Kentucky, with domestic deposits of activity.9 The UMW and National City have held approximately $3.5 billion, controlling approximately private meetings in an attempt to resolve the issues 12.7 percent of the total deposits in commercial banks raised by the protest, but have been unable to come to in Kentucky. a resolution of their differences. National City competes with First Kentucky in the Initially, the Board notes that all the subsidiary Huntington, West Virginia; Ashland, Kentucky; and banks of National City and First Kentucky have Ironton, Ohio, markets.6 National City is the 13th satisfactory CRA records. The Board also notes that largest of 23 commercial banking organizations in the National City has adopted a corporate Public Policy market, controlling deposits of approximately $58.1 Statement which sets out its corporate and social million, representing approximately 3.1 percent of responsibilities, including its obligation under the CRA total deposits in commercial banking organizations in to meet the credit needs of the communities served by the market.7 First Kentucky is the 3rd largest commer- its subsidiary banks, especially low- and moderatecial banking organization in the market, controlling income neighborhoods, minority businesses, and nondeposits of approximately $153.1 million, representing profit community groups. In furtherance of this policy, approximately 8.3 percent of market deposits. Upon National City has in place an extensive program to consummation, National City would become the sec- ascertain the credit needs of the communities served ond largest commercial banking organization in the by its subsidiary banks. Through its Neighborhood market, controlling deposits of approximately $211.2 Banking Department, National City coordinates activmillion, representing approximately 11.4 percent of ities which help its subsidiary banks to ascertain the total market deposits. The Herfindahl-Hirschman In- credit needs of their communities. These activities dex would increase 52 points to 775. Based on the facts include meetings with community groups and formal of record, the Board concludes that consummation of reports completed by branch managers and other the proposal would not have a significant adverse officers which detail information regarding the credit effect on competition in this market. needs of the community. Information obtained from The financial and managerial resources of National these activities is shared with a management level City and First Kentucky are consistent with approval. Public Policy Committee, which is in turn monitored The Board notes that the transaction will be accom- by a Public Policy Committee of National City's board plished through an exchange of shares without any of directors. significant impact on National City's capital position. National City also has established a community In considering the convenience and needs of the development corporation ("CDC") with the stated communities to be served, the Board has taken into purposes of promoting the revitalization of low- and account the records of National City and First Kentucky under the Community Reinvestment Act meeting the credit needs of its entire community, including the low- ("CRA"), 12 U.S.C. § 2901 et seq* The Board has and moderate-income neighborhoods, consistent with the safe and sound operation of the institution. 9. The UMW also alleges that National City and First Kentucky 5. State banking data are as of December 31, 1987. have inadequate financial and managerial resources. The UMW al- 6. The Huntington, West Virginia; Ashland, Kentucky; and Iron- leges that the acquisition will decrease the value of National City's ton, Ohio, market is approximated by Lawrence County in Ohio, stock, that National City has a large loan exposure to Third World Boyd County and Carter County in Kentucky, Cabell County in West countries, large interbank deposits, and excessive off-balance sheet Virginia, Wayne County in West Virginia (except for the community transactions. The Board has examined these contentions in the of Fort Gay), and Greenup County in Kentucky (except for Fullterton context of its evaluation of the capital and overall financial condition Division and the northern fringe of Greenup Division). of National City and the effect of the proposed acquisition on these 7. Market data are as of June 30, 1986. factors. Based upon this review, the Board has concluded that the 8. The CRA requires the Board, in its evaluation of applications UMW's allegations do not support an adverse finding regarding under section 3 of the Act, to assess the record of an applicant in National City's financial or managerial resources. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 583 moderate-income neighborhoods throughout the local monitoring the CRA activities of each bank.12 Finally, communities served by National City's subsidiary National City has indicated that it will attempt to work banks, engaging in credit and asset management coun- with loan customers who are having difficulty meeting seling of low- and moderate-income residents, and payment schedules because of temporary reductions acting as a contact between various neighborhood or disruptions of income. groups, financial institutions, developers, and govern- The Board has carefully examined the UMW's ment institutions concerned with community planning allegation that National City Bank, Cleveland, Ohio, is and development. National City has indicated that it not extending mortgage loans in Cleveland.13 The will continue to provide the necessary equity to sup- Board notes that its review of the relevant data indiport its CDC activities and will establish divisions of cates that there is less demand for mortgage loans in the CDC which will address the economic and housing the city of Cleveland than in other areas of the development needs in the markets served by First Cleveland MSA, and that the majority of mortgage Kentucky's banks. National City has stated that its loans in Cleveland are made by mortgage bankers and CDC has not refused, and has no intention of refusing, savings institutions rather than commercial banks. The to help with any proposed transaction due to a con- Board's review also indicates that National City is not straint of capital in the CDC. making mortgage or home improvement loans in a way National City has also made a number of commit- that is detrimental to low- and moderate-income neighments with regard to implementation of CRA-related borhoods or minority neighborhoods in the MSA. services and programs at First Kentucky. National The UMW further alleges that BancOhio National City will offer at First Kentucky banks a loan program Bank's branch in Cadiz, Ohio, is not fulfilling its designed to be responsive to the housing needs of low- obligations under the CRA. National City indicates and moderate-income individuals,10 make F.H.A. and that this bank maintains contact with local community V.A. loans available in the smaller Kentucky commu- groups, corporations, small businesses, real estate nities served by First Kentucky banks, and encourage brokers, and other groups in order to ascertain the First Kentucky banks to use S.B. A. and other govern- credit needs of the community. Information from these ment sponsored programs to promote lending to small contacts is then used to develop products to meet businesses. National City has also committed to offer those needs. In addition, National City will introduce a checking account similar to "lifeline" accounts at at BancOhio National Bank a loan program designed First Kentucky banks. With regard to community for low- and moderate-income individuals which is outreach, all National City banks will identify an similar to its R.l.G.H.T. loan program.14 employee having full- or part-time responsibility for The UMW also questions the CRA performance of community outreach.11 In addition, each First Ken- three subsidiary banks of First Kentucky: The Amertucky bank will establish a Public Policy Committee of ican National Bank and Trust of Bowling Green, its board of directors, which will be responsible for Bowling Green, Kentucky ("American National Bank"); Central Bank and Trust Company of Owensboro, Owensboro, Kentucky ("Central Bank"); and The Third National Bank of Ashland, Ashland, Ken- 10. National City presently has such a program in place at its banks tucky ("Third National Bank"). American National entitled Reinvest in Great Housing Today ("R.I.G.H.T."). Under the R.l.G.H.T. program, certain enhancements are offered on first mort- Bank indicates that, because of its recent financial gages of up to $50,000 to persons seeking to finance the acquisition of difficulties, it is concentrating on educational efforts, single-family, owner-occupied homes in low- and moderate-income employee involvement in the community, and advercensus tracts. While the specific composition of the loan programs at the First Kentucky banks may vary to reflect unique market condi- tising of services rather than expansion of its loan tions and requirements, all of the plans will include the following portfolio. The bank's president is also active in a local incentives to encourage individuals living in low- and moderateincome neighborhoods to apply for a first mortgage: reduced points, expanded debt ratios, a mortgage application fee refund, and consideration of various forms of income. To encourage use of these loan programs, each bank will promote their program through communications to the targeted population and to realtors in the bank's 12. National City banks currently have such committees in place. community. 13. The UMW also alleges that National City Bank misreported its 11. This individual will: (1) coordinate activities and programs that lending on HMDA forms. The Board notes that National City Bank provide a better understanding among low- and moderate-income has established written procedures and controls for the preparation of individuals of the banking services available to them and how to HMDA forms in order to prevent similar problems. access and use those products and services; (2) be responsible to 14. The Board also received comments from an individual alleging assure that loan officers and other bank officials are trained regarding that BancOhio National Bank ("BancOhio") is not meeting the needs the bank's obligations under the terms of the CRA and fair lending of American Indians in central Ohio. The individual indicated that the responsibilities in general; and (3) be trained, expected to maintain a bank had refused to participate in a program in which the North working knowledge of, and inform others of the capabilities of American Indian Cultural Center, Inc. ("NAICC") was involved, but National City's CDC in order to encourage use of the CDC to address NAICC indicated that it receives federal money for the program and the economic development needs of the local community. has never requested credit from BancOhio for the program. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

584 Federal Reserve Bulletin • August 1988 organization which promotes community develop- event the acquisition does not occur, constitutes an ment, including small business development. unsafe and unsound banking practice and violates the The record shows that Central Bank ascertains Act, the Board's regulations, and state law.16 community credit needs through a periodic review of The Board has reviewed the terms of the option as the geographic distribution of credit extensions and well as certain modifications made by National City employee involvement in business and social service and believes that, as modified, the option is in conorganizations. Central Bank also developed and com- formance with the control provisions of the Act, the pleted a ten-week media campaign in 1987 regarding Board's regulations, and the Board's Policy Statement small business lending in order to heighten awareness on Nonvoting Equity Investments.17 The option entiof Central Bank's presence and solicit ideas for new tles National City to acquire less than 25 percent of the products and services. Further, Central Bank partici- voting shares of First Kentucky and is transferable pates in student loan and federal and state low-income only in a widespread distribution. With regard to the housing loan programs. shareholder's remaining allegations, the record indi- The record shows that Third National Bank ascer- cates that First Kentucky's directors engaged in negotains community credit needs through direct contact tiations with National City and another potential acwith community members through branch offices lo- quiror, considered offers from both National City and cated in the community, as well as through participa- the other potential acquiror, and, after consultation tion in a contact with local associations. The record with their financial advisor, determined that National also shows that the bank is an active real estate lender. City's offer was in the best interests of First Kentucky. The Board notes that although these First Kentucky Further, the Board's regulations specifically recognize banks appear to be performing adequately under the the permissibility of a company's ownership of an CRA, the banks could improve their performance in option for shares of a bank holding company provided the area of ascertainment of credit needs. National the option continues only for the time reasonably City has directly addressed this concern with a com- necessary to obtain regulatory approval for the mitment to establish, at all First Kentucky banks, acquisition.18 In these circumstances, the Board does Public Policy Committees of the bank's board of not believe a short-term option conforming to the directors and implement the above described CRA and Board's regulations would constitute an unsafe or consumer related programs at these banks. unsound banking practice for the holding company The Board has received favorable comments regard- granting the option. ing the CRA performance of First Kentucky's subsid- As indicated earlier, National City also has applied, iary bank, Commerce National Bank ("Commerce pursuant to section 4(c)(8), to acquire the nonbanking National"), Lexington, Kentucky, from the Commu- subsidiaries of First Kentucky. National City comnity Reinvestment Alliance of Lexington, Inc., Lex- petes with First Kentucky in merchant card processing ington, Kentucky ("Alliance"). Alliance states that activities. The market for merchant card processing is Commerce National has supported the Lexington national, and there are numerous competitors. Accommunity, has worked with Alliance to improve its cordingly, the Board concludes that this proposal will services, and has a strong lending record in low- and not have any significant adverse effect upon competimoderate-income communities. Alliance further rec- tion for nonbanking services in any relevant market. ommends that the Board approve the applications. There is no evidence in the record to indicate that Based on the foregoing and other facts of record, approval of this proposal would result in undue conincluding National City's commitments, the Board has centration of resources, decreased or unfair competidetermined that convenience and needs considerations tion, conflicts of interests, unsound banking practices, are consistent with approval.15 or other adverse effects on the public interest. Accord- The Board received comments from a shareholder ingly, the Board has determined that the balance of of First Kentucky alleging that National City's option to acquire 7.4 million shares of First Kentucky, in the 16. Protestant alleges that the option is unsafe and unsound because it is unduly coercive to both First Kentucky and its shareholders, and prevents First Kentucky from considering or accepting other offers. 15. The UMW has also requested that the Board order a public Protestant further alleges that the option represents the acquisition by meeting. Under the Board's rules, the Board may hold a public National City of control over First Kentucky without the prior meeting on an application to clarify factual issues related to the approval of the Board under the BHC Act and the Board's regulations. application and to provide an opportunity for testimony, if appropri- Finally, Protestant alleges that the directors of First Kentucky vioate. 12 C.F.R. § 262.25(d). In this case, the UMW and National City lated their fiduciary duty to shareholders, and hence state law, have had numerous private meetings for this purpose. In light of all the because they did not take sufficient time to consider and negotiate the facts of record, the Board has determined that a public meeting would best offer for First Kentucky. serve no useful purpose in this case. Accordingly, the request for a 17. 12 C.F.R. § 225.143. public meeting is denied. 18. 12 C.F.R. § 225.3l(d)(ii). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 585 public interest factors it must consider under section Board or by the Federal Reserve Bank of Cleveland, 4(c)(8) of the Act is favorable and consistent with acting pursuant to delegated authority. The determiapproval of the applications to acquire First Ken- nations as to National City's nonbanking activities are tucky's nonbanking subsidiaries and activities. subject to all of the conditions contained in Regulation The Board also has considered the notice of Na- Y, including those in sections 225.4(d) and 225.23(b)(3) tional City's proposed acquisition of control of First (12 C.F.R. §§ 225.4(d) and 225.23(b)(3)), and to the Kentucky National Trading Company. Based on the Board's authority to require such modification or facts of record, the Board has determined that disap- termination of the activities of a holding company or proval of the proposed investment is not warranted. any of its subsidiaries as the Board finds necessary to Based on the foregoing and other facts of record, assure compliance with the provisions and purposes of and in reliance on all of the commitments made by the Act and the Board's regulations and orders issued National City in this case, the Board has determined thereunder, or to prevent evasion thereof. that the applications should be, and hereby are, ap- By order of the Board of Governors, effective proved, subject to National City's obtaining the ap- June 28, 1988. proval of the Kentucky Commissioner of Banking and Securities, and the Indiana Department of Financial Institutions. The acquisition of First Kentucky shall Voting for this action: Chairman Greenspan and Governors not be consummated before the thirtieth calendar day Johnson, Seger, Angell, Heller, and Kelley. following the effective date of this Order, or later than three months after the effective date of this Order, WILLIAM W. WILES unless such period is extended for good cause by the Secretary of the Board APPLICATIONS APPROVED UNDER BANK MERGER ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Applicant Bank(s) ^date^ First Interstate Bank of California, Bank of Contra Costa, June 17, 1988 San Francisco, California Walnut Creek, California Legal Developments continued on the next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

586 Federal Reserve Bulletin • August 1988 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Affiliated Banc Corporation, Vanguard Savings Bank, Boston June 2, 1988 Holyoke, Massachusetts Holyoke, Massachusetts BancSecurity Corporation, Kellogg-Sully Bank & Trust, Chicago June 9, 1988 Marshalltown, Iowa Kellogg, Iowa Bank Shares Incorporated, Lakeville Financial Services, Minneapolis June 15, 1988 Minneapolis, Minnesota Inc., Lakeville, Minnesota Burkburnett Bancshares, Inc., The Burkburnett Bank, Dallas June 9, 1988 Burkburnett, Texas Burkburnett, Texas Calhoun Bankshares, Inc., Calhoun County Bank, Richmond June 14, 1988 Grantsville, West Virginia Grantsville, West Virginia Casey County Bancorp, Inc., The Casey County Bank, Inc., St. Louis June 15, 1988 Liberty, Kentucky Liberty, Kentucky Central Bancorp, Inc., Central Bank, Dallas June 17, 1988 Garland, Texas Garland, Texas Central Bank Shares, Inc., Bank of Central Florida/Seminole Atlanta June 1, 1988 Orlando, Florida County, Sanford, Florida Citizens National Bank The Citizens National Bank of St. Louis June 3, 1988 Corporation, Tell City, Tell City, Indiana Tell City, Indiana City Holding Company, First State Bank & Trust, Richmond June 2, 1988 Charleston, West Virginia Rainelle, West Virginia Community Bankers, Inc., Community Bank, Dallas May 26, 1988 Granbury, Texas Rockwall, Texas Eastern Wisconsin Bancshares, State Bank of Howards Grove, Chicago May 27, 1988 Inc., Howards Grove, Wisconsin Howards Grove, Wisconsin First Express of Nebraska, Inc., Gering State Bank, Kansas City June 17, 1988 Lincoln, Nebraska Gering, Nebraska First Financial Bancorp, NB Banc Corp, Cleveland June 14, 1988 Monroe, Ohio Van Wert, Ohio Van Wert National Bank, Van Wert, Ohio First Financial Corporation of The First National Bank of St. Louis May 25, 1988 America, Salem, Salem, Missouri Salem, Missouri First Jacksboro Bancshares of The First National Bank of Dallas June 10, 1988 Delaware, Inc., Jacksboro, Wilmington, Delaware Jacksboro, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 587 Section 3—Continued Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date First Junction City Bancshares, Junction City First National Kansas City June 6, 1988 Inc., Company, Junction City, Kansas Junction City, Kansas First Miami Bancorp, Inc., The First National Bank of South Atlanta June 17, 1988 South Miami, Florida Miami, South Miami, Florida First Michigan Bank Corporation, CSB Financial Corporation, Chicago June 16, 1988 Zeeland, Michigan Greenville, Michigan First Peoria Corp., Farmers State Bank of Benson, Chicago June 17, 1988 Peoria, Illinois Benson, Illinois First Potomac Bancorp, Inc., Sailors & Merchants Bank and Richmond June 2, 1988 McLean, Virginia Trust, Vienna, Virginia First United Bancorporation, Security Bank of Colorado, Kansas City June 3, 1988 Inc., Aurora, Colorado Aurora, Colorado F & M Bancorporation, Inc., PTD Bancorp, Inc., Chicago June 17, 1988 Kaukauna, Wisconsin Potosi, Wisconsin FNB Financial Corporation, First National Bank of Knoxville, Atlanta May 27, 1988 Knoxville, Tennessee Knoxville, Tennessee Hancock Bancorp, Inc., Breckinridge Bank, St. Louis June 20, 1988 Hawesville, Kentucky Cloverport, Kentucky Home Port Bancorp, Inc., Nantucket Savings Bank, Boston May 27, 1988 Nantucket, Massachusetts Nantucket, Massachusetts Investors Bancorporation, Inc., Roberts Bancorporation, Minneapolis May 27, 1988 Hudson, Wisconsin Roberts, Wisconsin State Bank of Roberts, Roberts, Wisconsin Kansas Bank Corporation, American National Bancshares of Kansas City June 10, 1988 Liberal, Kansas Westlink, Inc., Wichita, Kansas Lafayette Bancorporation, Banc of Reynolds, Chicago May 31, 1988 Lafayette, Indiana Reynolds, Indiana Bank of Reynolds, Reynolds, Indiana Lewisburg Bancshares Lewisburg Banking Company, St. Louis June 6, 1988 Corporation, Lewisburg, Kentucky Lewisburg, Kentucky Liberty National Bancorp, Inc., Bank of Jessamine, Inc., St. Louis June 10, 1988 Louisville, Kentucky Nicholasville, Kentucky Middlefield Banc Corp., The Middlefield Banking Cleveland June 8, 1988 Middlefield, Ohio Company, Middlefield, Ohio Mid-Wisconsin Financial Security State Bank of Colby, Minneapolis June 21, 1988 Services, Inc., Colby, Wisconsin Medford, Wisconsin NCNB Corporation, USBancorp, Inc., Richmond May 31, 1988 Charlotte, North Carolina St. Petersburg, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

588 Federal Reserve Bulletin • August 1988 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date NESB Corp., OmniBank of Connecticut, Inc., Boston May 27, 1988 New London, Connecticut Madison, Connecticut North Fork Bancorporation, Inc., Southold Savings Bank, New York June 10, 1988 Mattituck, New York Southold, New York Phelps County Bank Employee Phelps County Bancshares, Inc., St. Louis June 3, 1988 Stock Ownership Plan, Rolla, Missouri Rolla, Missouri Pikeville National Corporation, The Exchange Bank of Cleveland June 8, 1988 Pikeville, Kentucky Kentucky, Mount Sterling, Kentucky Pikeville National Corporation, Whitley-Williamsburg Financial Cleveland June 17, 1988 Pikeville, Kentucky Corporation, Williamsburg, Kentucky Pro Group Inc., Producers Bank and Trust Co., Philadelphia June 3, 1988 Bradford, Pennsylvania Bradford, Pennsylvania Seaway Financial Corporation, The Commercial and Savings Chicago June 14, 1988 St. Clair, Michigan Bank of St. Clair County, St. Clair, Michigan The Algonac Savings Bank, Algonac, Michigan Southside Bancshares Corp., Bank of Chesterfield, St. Louis June 17, 1988 St. Louis, Missouri Chesterfield, Missouri SouthTrust Corporation, Latta Bank & Trust Co., Atlanta May 27, 1988 Birmingham, Alabama Latta, South Carolina Spring Rivers Bancshares, Inc., Bank of Imboden, St. Louis June 8, 1988 Imboden, Arkansas Imboden, Arkansas United National Bancorp, Newco National Bank, New York June 10, 1988 Branchburg, New Jersey Plainfield, New Jersey The First National Bank of Blairstown, Blairstown, New Jersey United National Bank, Plainfield, New Jersey Upbancorp, Inc., First West Bank, Chicago May 27, 1988 Chicago, Illinois Tempe, Arizona U. S. Bancorp, Mt. Baker Bank, A Savings San Francisco May 31, 1988 Portland, Oregon Bank, Bellingham, Washington Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 589 Section 4 Nonbanking Reserve Effective Applicant Company/ Bank date Activity First National Holding Company, E. Gdowski Insurance Agency, Kansas City June 14, 1988 Inc., Inc., Fullerton, Nebraska Fullerton, Nebraska engage in general insurance agency activities The Hongkong and Shanghai engage de novo through CM&M New York June 15, 1988 Banking Corporation, Futures, Inc. in futures Hong Kong commission merchant activities Kellett, N.V., Curacao, Netherlands Antilles HSBC Holding B.V., Amsterdam, the Netherlands Marine Midland Banks, Inc., Buffalo, New York NBD Bancorp, Inc., Trust Company of Naples, Chicago June 20, 1988 Detroit, Michigan Naples, Florida Otto Bremer Foundation, St. Paul, Minnesota Bremer Financial Corporation, First American Bank and Trust, Minneapolis June 15, 1988 St. Paul, Minnesota Willmar, Minnesota APPLICATIONS APPROVED UNDER BANK MERGER 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. Reserve Effective Applicant Bank(s) Bank date Citizens Bank and Trust Lone Star Bank, Dallas May 26, 1988 Company, Bay town, Texas Bay town, Texas Citizens Bank, Bank of Ardmore, Atlanta June 6, 1988 Smithville, Tennessee Ardmore, Tennessee Columbian Corporation, Topeka Bank Shares, Inc., Kansas City June 22, 1988 Topeka, Kansas Topeka, Kansas Columbian Financial Corporation, Topeka, Kansas Fayette County Bank, St. Elmo Bank, St. Louis June 20, 1988 St. Elmo, Illinois St. Elmo, Illinois Interstate Bank North, First National Bank of Dallas May 26, 1988 Houston, Texas Kingwood, Kingwood, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

590 Federal Reserve Bulletin • August 1988 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. Credit Union National Association, Inc., et al., v. Securities Industry Association v. Board of Gover- Board of Governors, No. 88-1295 (D.D.C. May 13, nors, No. 87-4135 (2d Cir., filed Oct. 8, 1987). 1988). Securities Industry Association v. Board of Gover- Bonilla v. Board of Governors, No. 88-1464 (7th Cir., nors, No. 87-4115 (2d Cir., filed Sept. 9, 1987). filed March 11, 1988). Barrett v. Volcker, No. 87-2280 (D.D.C., filed Cohen v. Board of Governors, No. 88-1061 (D.N J., Aug. 17, 1987). filed March 7, 1988). Northeast Bancorp v. Board of Governors, No. 87- Stoddard v. Board of Governors, No. 88-1148 (D.C. 1365 (D.C. Cir., filed July 31, 1987). Cir., filed Feb. 25, 1988). National Association of Casualty & Insurance Agents Securities Industry Association v. Board of Gover- v. Board of Governors, Nos. 87-1354,87-1355 (D.C. nors, Nos. 87-4161, 88-4063 (2d Cir., filed Dec. 15, Cir., filed July 29, 1987). 1987, May 3, 1988). The Chase Manhattan Corporation v. Board of Gov- Independent Insurance Agents of America, Inc. v. ernors, No. 87-1333 (D.C. Cir., filed July 20, 1987). Board of Governors, No. 87-1686 (D.C. Cir., filed Lewis v. Board of Governors, Nos. 87-3455, 87-3545 Nov. 19, 1987). (11th Cir., filed June 25, Aug. 3, 1987). National Association of Casualty and Surety Agents, Securities Industry Association v. Board of Goveret al., v. Board of Governors, Nos. 87-1644, 87- nors, et al., No. 87-1169 (D.C. Cir., filed April 17, 1801, 88-1001, 88-1206, 88-1245, 88-1270 (D.C. 1987). Cir., filed Nov. 4, Dec. 21, 1987, Jan. 4, March 18, Jenkins v. Board of Governors, No. 86-1419 (D.C. March 30, April 7, 1988). Cir., filed July 18, 1986). Teichgraeber v. Board of Governors, No. 87-2505-0 CBC, Inc. v. Board of Governors, No. 86-1001 (10th (D. Kan., filed Oct. 16, 1987). Cir., filed Jan. 2, 1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

2 Federal Reserve Bulletin • August 1988 A36 Total nonfarm business expenditures on new A54 U.S. reserve assets plant and equipment A54 Foreign official assets held at Federal Reserve A37 Domestic finance companies—Assets and Banks liabilities and business credit A55 Foreign branches of U.S. banks—Balance sheet data A57 Selected U.S. liabilities to foreign official institutions REAL ESTATE A38 Mortgage markets A39 Mortgage debt outstanding REPORTED BY BANKS IN THE UNITED STATES A57 Liabilities to and claims on foreigners A58 Liabilities to foreigners CONSUMER INSTALLMENT CREDIT A60 Banks' own claims on foreigners A40 Total outstanding and net change A61 Banks' own and domestic customers' claims on A41 Terms foreigners A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined FLOW OF FUNDS domestic offices and foreign branches A42 Funds raised in U.S. credit markets A43 Direct and indirect sources of funds to credit markets REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES A63 Liabilities to unaffiliated foreigners A64 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SECURITIES HOLDINGS AND TRANSACTIONS SELECTED MEASURES A65 Foreign transactions in securities A44 Nonfinancial business activity—Selected A66 Marketable U.S. Treasury bonds and notes— measures Foreign transactions A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value INTEREST AND EXCHANGE RATES A49 Housing and construction A50 Consumer and producer prices A67 Discount rates of foreign central banks A51 Gross national product and income A67 Foreign short-term interest rates A52 Personal income and saving A68 Foreign exchange rates A69 Guide to Tabular Presentation, Statistical Releases and Special International Statistics Tables SUMMARY STATISTICS SPECIAL TABLE A53 U.S. international transactions—Summary A70 Pro forma balance sheet and income statement A54 U.S. foreign trade for priced service operations, March 31, 1988 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 1988 1988 Q2 Q3 Q4 Ql' Jan. Feb. Mar.' Apr.' May Reserves of depository institutions2 1 Total 6.5' 2.5' 3.5 15.0 2.3 3.8 12.3 -.2 2 Required 6.8' ,3r 1.4' 2.9 9.8 5.7 8.0 13.9 -3.6 3 Nonborrowed 3.9' .y 2.4' 1.5 8.9 16.5 -23.7 -13.0 8.5 4 Monetary base3 7.0' 5.1 7.8' 8.3 13.0 6.0 5.9 11.4 5.1 Concepts of money, liquid assets, and debt4 5 Ml 6.6 .8 3.9 3.9 12.9 1.1 5.5 11.2 -.2 6 M2 2.7 2.8 3.9 6.7 9.9 8.6 8.8 10.0 4.9 7 M3 4.6 4.5 5.4 6.9 8.3 10.5 7.8 7.2 4.7 8 L 4.0 4.3 5.8 6.8 10.4 8.9 7.5 12.5 n.a. 9 Debt 8.6' 7.9' 10.1' 8.4 7.0 8.0 8.5 8.4 n.a. Nontrgnsaction components 10 In M25 1.3 3.6r 3.9' 7.7 8.8 11.2 9.9 9.6 6.6 11 In M3 only6 12.3' 11.0r 11.3' 7.5 2.4 17.6 4.2 -3.4 3.7 Time and savings deposits Commercial banks 12 Savings 2222..44 10.1 .7 6.3 5.4 13.4 14.6 5.9 11.7 13 Small-denomination time -2.7 7.4 14.8 13.7 10.6 17.6 11.6 15.1 6.6 14 Large-denomination time9, 17.1 6.8 10.5 3.2 -12.6 17.6 5.5 -3.7 10.7 Thrift institutions 15 Savings 19.2 7.0 -3.8 -2.4 -3.6 -.5 7.1 10.1 3.5 16 Small-denomination time 1.2 9.3 16.0 21.3 18.4 25.0 18.0 13.6 10.2 17 Large-denomination time -5.1 9.9 22.2 15.7 11.2 16.2 1.5 15.3 5.7 Debt components4 18 8.9r 5.8' 7.6' 9.3 5.3 11.2 15.2 7.1 n.a. 19 Nonfederal 8.5r 8.5' 10.8' 8.2 7.6 7.1 6.5 8.8 n.a. 20 Total loans and securities at commercial banks 8.2 6.2 5.5 5.1 6.1 9.3 7.9 11.4 13.0 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 nonfinancial 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 market 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. All IRA and Keogh accounts at commercial M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) banks and thrifts are subtracted from small time deposits. issued by all commercial banks and overnight Eurodollars issued to U.S. residents 9. Large-denomination time deposits are those issued in amounts of $100,000 by foreign branches of U.S. banks worldwide, Money Market Deposit Accounts or more, excluding those booked at international banking facilities. (MMDAs), savings and small-denomination time deposits (time deposits—includ- 10. Large-denomination time deposits at commercial banks less those held by ing retail RPs—in amounts of less than $100,000), and balances in both taxable and money market mutual funds, depository institutions, and foreign banks and tax-exempt general purpose and broker-dealer money market mutual funds. official institutions. Excludes individual retirement accounts (IRA) and Keogh balances at depository 11. Changes calculated from figures shown in table 1.23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic NonfinancialS tatistics • August 1988 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week ending Factors 1988 1988 Mar. Apr. May Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 239,867 248,228 249,800 247,367 247,821 247,343 256,213 253,664 251,276 244,363 2 U.S. government securities1 215,545 221,348 223,732 220,510 221,263 221,778 228,105 226,254 225,250 219,342 3 Bought outright 215,545 220,204 222,187 220,510 220,470 221,497 223,044 223,466 223,123 219,342 4 Held under repurchase agreements 0 1,144 1,545 0 793 281 5,061 2,788 2,127 0 5 Federal agency obligations 7,401 7,665 7,777 7,382 7,485 7,341 9,079 8,313 7,776 7,268 6 Bought outright 7,401 7,347 7,272 7,382 7,365 7,279 7,279 7,279 7,268 7,268 7 Held under repurchase agreements 0 318 505 0 120 62 1,800 1,034 508 0 8 Acceptances 0 0 0 0 0 0 0 0 0 0 9 Loans 1,690 3,081 2,592 3,565 3,672 2,034 2,414 2,080 2,270 2,911 10 Float 622 694 649 573 -87 567 677 823 767 724 11 Other Federal Reserve assets 14,609 15,440 15,050 15,337 15,487 15,622 15,938 16,194 15,213 14,118 12 Gold stock2 11,063 11,063 11,063 11,063 11,063 11,063 11,063 11,063 11,063 11,063 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 18,315 18,366 18,427 18,355 18,369 18,383 18,397 18,411 18,425 18,439 ABSORBING RESERVE FUNDS 15 Currency in circulation 225,434 228,362 230,482 228,897 228,766 228,031 228,667 230,072 230,569 230,479 16 Treasury cash holdings 468 484 475 488 487 483 479 481 479 470 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 2,894 5,047 7,276 3,456 3,662 4,383 14,094 13,152 5,996 3,176 18 Foreign 238 240 259 245 261 236 222 279 244 254 19 Service-related balances and adjustments 1,909 2,000 1,922 1,922 2,311 1,935 1,872 1,946 1,897 1,980 20 Other 408 364 360 323 366 402 363 308 322 339 21 Other Federal Reserve liabilities and capital 7,153 7,328 7,302 7,271 7,354 7,307 7,356 7,233 7,443 7,302 22 Reserve balances with Federal Reserve Banks 35,758 38,850 36,231 39,201 39,065 39,030 37,637 34,686 38,832 34,885 End-of-month figures Wednesday figures 1988 1988 Mar. Apr. May Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 242,542 260,242 248,274 247,638 253,098 251,090 247,935 255,598 244,790 240,806 24 U.S. government securities1 217,496 230,971 223,192 220,408 225,524 224,915 221,829 227,935 218,978 215,217 25 Bought outright 217,4% 223,363 223,192 220,408 219,974 222,947 221,829 223,071 218,978 215,217 26 Held under repurchase agreements 0 7,608 0 0 5,550 1,968 0 4,864 0 0 27 Federal agency obligations 7,399 10,074 7,268 7,379 8,122 7,715 7,279 8,702 7,268 7,268 28 Bought outright 7,399 7,279 7,268 7,379 7,279 7,279 7,279 7,279 7,268 7,268 29 Held under repurchase agreements 0 2,795 0 0 843 436 0 1,423 0 0 30 Acceptances 0 0 0 0 0 0 0 0 0 0 31 Loans 2,311 2,590 3,304 3,838 3,602 2,276 2,214 1,942 2,905 2,834 32 Float 298 371 122 427 208 239 728 782 1,203 709 33 Other Federal Reserve assets 15,038 16,236 14,388 15,586 15,642 15,945 15,885 16,237 14,436 14,778 34 Gold stock2 11,063 11,063 11,063 11,062 11,063 11,063 11,063 11,063 11,063 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 18,339 18,395 18,451 18,367 18,381 18,395 18,409 18,423 18,437 18,451 ABSORBING RESERVE FUNDS 37 Currency in circulation 227,099 228,308 232,758 229,243 228,556 228,258 229,388 230,567 230,666 231,090 38 Treasury cash holdings2 479 479 459 488 484 477 482 481 470 467 Deposits, other than reserve balances, with Federal Reserve Banks 39 Treasury 2,403 16,186 2,871 3,900 5,319 11,343 9,682 10,639 2,610 4,382 40 Foreign 534 215 298 239 204 236 233 262 260 227 41 Service-related balances and adjustments 1,671 1,660 1,660 1,672 1,675 1,679 1,680 1,674 1,674 1,660 42 Other 436 360 427 343 398 398 333 304 320 565 43 Other Federal Reserve liabilities and capital 7,234 7,450 7,235 7,002 7,401 7,188 6,940 7,173 7,120 7,206 44 Reserve balances with Federal Reserve Banks3 37,106 40,060 37,098 39,199 43,523 35,987 33,687 39,002 36,188 29,741 1. Includes securities loaned—fully guaranteed by U.S. government securities stock. Revised data not included in this table are available from the Division of pledged with Federal Reserve Banks—and excludes any securities sold and Research and Statistics, Banking Section. scheduled to be bought back under matched sale-purchase transactions. 3. Excludes required clearing balances and adjustments to compensate for 2. Revised for periods between October 1986 and April 1987. At times during float. this interval, outstanding gold certificates were inadvertently in excess of the gold NOTE. For amounts of currency and coin held as reserves, see table 1.12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Monthly averages9 Reserve classification 1985 1986 1987 1988 Dec. Dec. Dec. Oct. Nov. Dec. Jan. Feb. Apr. 1 Reserve balances with Reserve Banks2 27,620 37,360 37,673 37,249 37,453 37,673 37,485 34,211 36,027 38,429 2 Total vault cash3 22,953 24,079 26,155 25,587 25,431 26,155 26,919 28,119 25,926 25,200 3 Vault* 20,522 22,199 24,449 23,857 23,752 24,449 25,155 25,836 24,049 23,636 4 Surplus 2,431 1,879 1,706 1,730 1,679 1,706 1,764 2,283 1,877 1,564 5 Total reserves6 48,142 59,560 62,123 61,106 61,205 62,123 62,640 60,047 60,076 62,064 6 Required reserves 47,085 58,191 61,094 59,977 60,282 61,094 61,345 58,914 59,147 61,205 7 Excess reserve balances at Reserve Banks 1,058 1,369 1,029 1,129 923 1,029 1,295 1,133 929 859 8 Total borrowings at Reserve Banks 1,318 827 777 943 625 777 1,082 396 1,752 2,993 9 Seasonal borrowings at Reserve Banks .. 56 38 93 189 126 93 59 75 119 146 10 Extended credit at Reserve Banks 499 303 483 449 394 483 372 205 1,478 2,624 Biweekly averages of daily figures for weeks ending 1988 Feb.10 Feb. 24 Mar. 9 Mar. 23 Apr. 6 Apr. 20 May 4 May 18 June 1 June 15 11 Reserve balances with Reserve Banks2 33,681 34,102 35,575 35,761 37,003 39,123 38,313 36,737r 35,707 38,658 12 Total vault cash3 29,417 27,954 25,987 26,224 25,336 25,205 25,112 25,726 26,265 25,118 13 Vault* 26,967 25,685 23,998 24,332 23,610 23,709 23,549 24,122 24,418 23,605 14 Surplus5 2,450 2,270 1,989 1,892 1,726 1,497 1,563 1,604 1,847 1,513 15 Total reserves6 60,648 59,787 59,573 60,093 60,613 62,831 61,862 60,859' 60,125 62,263 16 Required reserves 59,366 58,700 58,607 59,182 59,696 62,145 60,796 59,959' 58,971 61,566 17 Excess reserve balances at Reserve Banks 1,282 1,087 966 911 917 686 1,067 901r 1,154 697 18 Total borrowings at Reserve Banks 287 425 537 1,924 2,817 3,619 2,224 2,175 3,120 3,465 19 Seasonal borrowings at Reserve Banks 55 77 111 123 122 124 191 241 269 287 20 Extended credit at Reserve Banks8 144 232 255 1,685 2,494 3,278 1,787 1,798 2,538 2,986 1. These data also appear in the Board's H.3 (502) release. For address, see in- adjustments to compensate for float, plus vault cash used to satisfy reserve side front cover. requirements. Such vault cash consists of all vault cash held during the lagged 2. 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 3. 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, 7. 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. 4. Equal to all vault cash held during the lagged computation period by 8. Extended credit consists of borrowing at the discount window under the institutions having required reserve balances at Federal Reserve Banks plus the terms and conditions established for the extended credit program to help amount of vault cash equal to required reserves during the maintenance period at depository institutions deal with sustained liquidity pressures. Because there is institutions having no required reserve balances. not the same need to repay such borrowing promptly as there is with traditional 5. 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. 9. Before February 1984, data are prorated monthly averages of weekly 6. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • August 1988 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Member Banks1 Averages of daily figures, in millions of dollars 1987 week ending Monday MMaattuurriittyy aanndd ssoouurrccee Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Dec. 7 Dec. 14 Dec. 21 Dec. 28 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 75,965 79,120 76,821 70,725 70,174 75,638 75,774 70,856 67,536 2 For all other maturities 9,781 10,341 10,353 1100,,119900 11,547 99,,669944 99,,660088 88,,995533 99,,440099 From other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 3 For one day or under continuing contract 24,574 25,943 26,635 26,265 24,679 29,930 27,276 24,725 22,860 4 For all other maturities 8,510 8,645 8,238 7,762 8,848 7,160 7,468 6,968 7,191 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 15,544 13,351 13,080 13,972 13,136 13,388 14,052 14,741 12,170 6 For all other maturities 12,306 12,424 13,080 12,622 13,982 13,240 1133,,227744 1122,,111199 1122,,660033 All other customers 7 For one day or under continuing contract 28,666 28,274 27,616 27,840 24,071 27,077 27,093 24,887 24,512 8 For all other maturities 9,710 10,277 10,209 9,662 13,855 9,972 9,942 9,886 12,018 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 35,913 33,803 34,054 29,895 32,952 31,276 30,472 31,147 30,352 10 To all other specified customers 14,502 14,362 14,889 12,211 11,190 11,795 11,027 11,062 10,326 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 ccrreeddiitt11 First 30 days of borrowing After 30 days of borrowing3 BBBaaannnkkk On Effective Previous On Effective Previous On Effective Previous 6/24/88 date rate 6/24/88 date rate 6/24/88 date rate Effective date Boston 6 9/9/87 5W 6 9/9/87 5W 7.90 6/16/88 7.80 6/2/88 New York 9/4/87 9/4/87 6/16/88 6/2/88 Philadelphia 9/4/87 9/4/87 6/16/88 6/2/88 Cleveland 9/4/87 9/4/87 6/16/88 6/2/88 Richmond 9/5/87 9/5/87 6/16/88 6/2/88 Atlanta 9/4/87 9/4/87 6/16/88 6/2/88 Chicago 9/4/87 9/4/87 6/16/88 6/2/88 St. Louis 9/9/87 9/9/87 6/16/88 6/2/88 Minneapolis 9/8/87 9/8/87 6/16/88 6/2/88 Kansas City 9/4/87 9/4/87 6/16/88 6/2/88 Dallas 9/11/87 9/11/87 6/16/88 6/2/88 San Francisco ... 6 9/9/87 5W 6 9/9/87 5W 7.90 6/16/88 7.80 6/2/88 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or 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. Banks N.y. Banks N.Y. Banks In effect Dec. 31, 1977. 6 6 1980—July 28 10-11 10 1984—Apr. 9 8W-9 9 1978—Jan. 9 6-6W 6W 29 10 10 13 9 9 20 6W 6W Sept. 26 11 11 Nov. 21 8W-9 8W May 11 61/2-7 7 Nov. 17 12 12 26 8W 8W 12 7 7 Dec. 5 12-13 13 Dec. 24 8 8 July 3 7-71/4 71/4 10 7 V* 7Va 1981—May 5 13-14 14 1985—May 20 7W-8 7W Aug. 21 73/4 73/4 8 14 14 24 7W 7W Sept. 22 8 8 Nov. 2 13-14 13 Oct. 16 8-sw 8 W 6 13 13 1986—Mar. 7 7-7 W 7 20 sw 8W Dec. 4 12 12 10 7 7 Nov. 1 8W-9W 9 W Apr. 21 6W-7 6W 3 9W m 1982—July 20 11 n W w - 12 11 W July 11 6 6 23 11W Aug. 12 5W-6 5W 1979—July 20 10 10 Aug. 2 11—11W 11 22 5W 5W Aug. 2 1 0 7 10 1 - 0 1 W 0W l 1 o 0 w W 1 3 6 10 11 W 1 1 1 0 W 1987—Sept. 4 5W-6 6 Sept. 19 1014-11 11 27 10-10W 10 11 6 6 21 11 11 30 10 10 Oct. 8 11-12 12 Oct. 12 9W-10 9W In effect June 24, 1988. 6 6 10 12 12 13 9W 9W Nov. 22 9-9 W 9 1980—Feb. 15 12-13 13 26 9 9 19 13 13 Dec. 14 8W-9 9 May 29 12-13 13 15 8W-9 8W 30 12 12 17 8W 8W 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 W 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 W 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 Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981 the experiencing difficulties adjusting to changing market conditions over a longer formula for applying the surcharge was changed from a calendar quarter to a period of time. 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 • August 1988 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Depository institution requirements after implementation of the Monetary Control Act Type of deposit, and deposit interval Effective date Net transaction accounts3'4 $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 Yi years 10/6/83 1 Vi 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, 4. The Monetary Control Act of 1980 requires that the amount of transaction nonpersonal time deposits, and Eurocurrency liabilities) of each depository accounts against which the 3 percent reserve requirement applies be modified institution be subject to a zero percent reserve requirement. The Board is to adjust annually by 80 percent of the percentage increase in transaction accounts held by the amount of reservable liabilities subject to this zero percent reserve require- all depository institutions, determined as of June 30 each year. Effective Dec. 15, ment each year for the succeeding calendar year by 80 percent of the percentage 1987 for institutions reporting quarterly and Dec. 29, 1987 for institutions increase in the total reservable liabilities of all depository institutions, measured reporting weekly, the amount was increased from $36.7 million to $40.5 million. on an annual basis as of June 30. No corresponding adjustment is to be made in 5. In general, nonpersonal time deposits are time deposits, including savings the event of a decrease. On Dec. 15, 1987, the exemption was raised from $2.9 deposits, that are not transaction accounts and in which a beneficial interest is million to $3.2 million. In determining the reserve requirements of depository held by a depositor that is not a natural person. Also included are certain institutions, the exemption shall apply in the following order: (1) net NOW transferable time deposits held by natural persons and certain obligations issued accounts (NOW accounts less allowable deductions); (2) net other transaction to depository institution offices located outside the United States. For details, see accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting section 204.2 of Regulation D. with those with the highest reserve ratio. With respect to NOW accounts and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1987 1988 TTyyppee ooff ttrraannssaaccttiioonn 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 22,214 22,602 18,983 1,095 3,388 150 0 346 560 423 2 Gross sales 4,118 2,502 6,050 300 0 0 49 538 0 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 3,500 1,000 9,029 0 0 0 600 1,600 0 0 Others within 1 year 5 Gross purchases 1,349 190 3,658 300 670 479 0 0 0 1,092 6 Gross sales 0 0 300 0 0 0 0 0 0 0 7 Maturity shift 19,763 18,673 21,502 816 2,247 1,400 950 1,939 2,051 868 8 Exchange -17,717 -20,179 -20,388 -1,178 -3,728 -1,742 -754 -2,868 -2,089 1,688 9 Redemptions 0 0 70 0 70 0 0 0 0 0 1 to 5 years 10 Gross purchases 2,185 893 10,231 0 50 2,589 0 0 0 33,,666611 11 Gross sales 0 0 452 0 0 0 0 800 0 0 12 Maturity shift -17,459 -17,058 -17,974 -761 -1,900 -1,400 -840 -952 -2,051 -823 13 Exchange 13,853 16,984 18,938 1,178 3,278 1,742 749 2,643 2,089 1,434 5 to 10 years 14 Gross purchases 458 236 2,441 0 0 5% 0 0 0 11,,001177 15 Gross sales 100 0 0 0 0 0 0 175 0 0 16 Maturity shift -1,857 -1,620 -3,529 -55 -347 0 -110 -987 0 -45 17 Exchange 2,184 2,050 950 0 300 0 5 150 0 254 Over 10 years 18 Gross purchases 293 158 1,858 0 0 445 0 0 0 966 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -447 0 0 0 0 0 0 0 0 0 21 Exchange 1,679 1,150 500 0 150 0 0 75 0 0 All maturities 22 Gross purchases 26,499 24,078 37,171 1,395 4,108 4,259 0 346 560 7,160 73 Gross sales 4,218 2,502 6,802 300 0 0 49 1,513 0 0 24 Redemptions 3,500 1,000 9,099 0 70 0 600 1,600 0 0 Matched transactions 25 Gross sales 866,175 927,997 950,923 77,497 85,288 104,833 78,358 97,892 104,527 86,900 26 Gross purchases 865,968 927,247 950,935 73,779 85,494 105,917 78,513 99,139 104,572 85,608 Repurchase agreements2 27 Gross purchases 134,253 170,431 314,620 65,675 15,853 23,512 10,591 0 0 1188,,669966 28 Gross sales 132,351 160,268 324,666 57,380 18,751 25,264 14,237 0 0 11,088 29 Net change in U.S. government securities 20,477 29,989 11,235 5,673 1,346 3,591 -4,140 -1,520 605 13,476 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 162 398 276 56 1 13 131 21 3 120 Repurchase agreements2 33 Gross purchases 22,183 31,142 8800,,335533 18,523 66,,778866 99,,771188 44,,004422 0 0 44,,224433 34 Gross sales 20,877 30,522 81,351 15,607 7,425 10,679 5,357 0 0 1,447 35 Net change in federal agency obligations 1,144 222 -1,274 2,860 -640 -975 -1,446 -21 -3 2,676 36 Total net change in System Open Market 21,621 30,211 9,961 8,533 706 2,617 -5,586 -1,541 602 16,151 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 DomesticN onfinancialS tatistics • August 1988 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1988 1988 Apr. 27 May 4 May 11 May 18 May 25 Mar. Apr. May Consolidated condition statement ASSETS 1 Gold certificate account 11,063 11,063 11,063 11,063 11,063 11,063 11,063 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 451 440 439 441 424 480 450 402 Loans 4 To depository institutions 2,276 2,214 1,942 2,905 2,834 2,311 2,590 3,304 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 V Bought outright 7,279 7,279 7,279 7,268 7,268 7,399 7,279 7,268 8 Held under repurchase agreements 436 0 1,423 0 0 0 2,795 0 U.S. Treasurv securities Bought outright 9 Bills 105,970 104,852 106,094 102,001 98,240 107,256 106,386 106,215 10 Notes 87,684 87,684 87,684 87,484 87,484 81,923 87,684 87,484 11 Bonds 29,293 29,293 29,293 29,493 29,493 28,317 29,293 29,493 12 Total bought outright2 222,947 221,829 223,071 218,978 215,217 217,496 223,363 223,192 13 Held under repurchase agreements 1,968 0 4,864 0 0 0 7,608 0 14 Total U.S. Treasury securities 224,915 221,829 227,935 218,978 215,217 217,496 230,971 223,192 15 Total loans and securities 234,906 231,322 238,579 229,151 225,319 227,206 243,635 233,764 16 Items in process of collection 6,813 7,654 6,658 7,221 6,701 6,267 7,577 5,354 17 Bank premises 717 720 719 723 721 716 719 723 Other assets 18 Denominated in foreign currencies3 6,447 6,447 6,449 6,462 6,466 6,652 6,446 6,349 19 All other 8,781 8,718 9,069 7,251 7,591 7,670 9,071 7,316 20 Total assets 274,1% 271,382 277,994 267,330 263,303 265,072 283,979 269,989 LIABILITIES 21 Federal Reserve notes 210,791 211,901 213,064 213,140 221133,,553300 220099,,771199 221100,,884422 221155,,116688 Deposits 22 To depository institutions 37,666 35,367 40,676 37,862 31,401 38,777 41,720 38,758 23 U.S. Treasury—General account 11,343 9,682 10,639 2,610 4,382 2,403 16,186 2,871 24 Foreign—Official accounts 236 233 262 260 227 534 215 298 23 Other 398 333 304 320 565 436 360 427 26 Total deposits 49,643 45,615 51,881 41,052 36,575 42,150 58,481 42,354 27 Deferred credit items 6,574 6,926 5,876 6,018 5,992 5,969 7,206 5,232 28 Other liabilities and accrued dividends5 2,671 2,470 2,633 2,590 2,669 2,607 2,861 2,539 29 Total liabilities 269,679 266,912 273,454 262,800 258,766 260,445 279,390 265,293 CAPITAL ACCOUNTS 30 Capital paid in 2,096 2,096 2,098 2,100 2,102 2,095 2,0% 2,101 31 Surplus 2,047 2,047 2,047 2,047 2,047 2,047 2,047 2,047 32 Other capital accounts 374 327 395 383 388 485 446 548 33 Total liabilities and capital accounts 274,196 271,382 277,994 267,330 263,303 265,072 083,979 269,989 34 MEMO: Marketable U.S. Treasury securities held in custody for foreign and international account 228,833 228,833 229,897 231,623 230,348 226,340 229,054 230,917 Federal Reserve note statement 35 Federal Reserve notes outstanding issued to bank 256,762 257,159 257,855 258,122 258,648 255,201 256,806 258,661 36 LESS: Held by bank 45,971 45,258 44,791 44,982 45,118 45,482 45,964 43,493 37 Federal Reserve notes, net 210,791 211,901 213,064 213,140 221133,,553300 220099,,771199 221100,,884422 221155,,116688 Collateral held against notes net: 38 Gold certificate account 11,063 11,063 11,063 11,063 11,063 11,063 11,063 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 194,710 195,820 196,983 197,059 197,449 193,638 194,761 199,087 42 Total collateral 210,791 211,901 213,064 213,140 213,530 209,719 210,842 215,168 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 1988 Apr. 27 May 4 May 11 May 18 May 25 Mar. 31 Apr. 29 May 31 1 Loans Total 2,276 2,214 1,942 2,905 2,834 2,311 2,590 3,282 2 Within 15 days 2,252 2,102 1,812 2,884 2,788 2,271 2,523 3,185 3 16 days to 90 days 24 112 130 21 46 40 67 97 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 224,915 221,829 227,935 218,978 215,217 217,496 230,971 223,192 10 Within 15 days1 12,283 14,328 19,566 5,805 7,304 7,362 15,082 7,372 11 16 days to 90 days 52,676 47,511 50,949 51,096 45,986 51,566 55,856 53,232 12 91 days to 1 year 66,873 66,230 63,659 66,400 66,250 71,273 66,950 67,115 13 Over 1 year to 5 years 51,196 51,873 51,873 53,734 53,734 47,600 51,196 53,530 14 Over 5 years to 10 years 15,422 15,422 15,422 15,435 15,435 14,196 15,422 15,435 15 Over 10 years 26,465 26,465 26,466 26,508 26,508 25,499 26,465 26,508 16 Federal agency obligations—Total 7,715 7,279 8,702 7,268 7,268 7,399 10,074 7,268 17 Within 15 days' 577 11 1,482 268 268 385 2,936 246 18 16 days to 90 days 659 783 736 576 576 592 659 661 19 91 days to 1 year 1,837 1,843 1,843 1,782 1,818 1,634 1,837 1,728 20 Over 1 year to 5 years 3,292 3,292 3,291 3,292 3,282 3,381 3,292 3,309 21 Over 5 years to 10 years 1,161 1,161 1,161 1,161 1,135 1,217 1,161 1,135 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 onfinancialS tatistics • August 1988 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1987' 1988' 1984 1985 1986 1987 IItteemm Dec/ Dec/ Dec/ Dec/ Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted CHANGES IN RESERVE REQUIREMENTS1 1 Total reserves3 40.96 47.26 57.46 58.72 59.47 59.05 58.72 59.46 59.57 59.76 60.37 60.36 2 Nonborrowed reserves 37.77 45.94 56.63 57.94 58.52 58.43 57.94 58.38 59.18 58.01 57.38 57.79 3 Nonborrowed reserves plus extended credit4 40.38 46.44 56.93 58.43 58.97 58.82 58.43 58.75 59.38 59.49 60.00 59.89 4 Required reserves 40.11 46.20 56.09 57.69 58.34 58.13 57.69 58.16 58.44 58.83 59.51 59.34 5 Monetary base5 200.45 218.26 240.80 257.93 255.30 256.94 257.93 260.72 262.02 263.32 265.81 266.93 Not seasonally adjusted 6 Total reserves3 41.84 48.27 58.70 60.02 59.07 59.14 60.02 61.20 58.66 58.85 60.95 59.45 7 Nonborrowed reserves 38.65 46.95 57.87 59.25 58.13 58.51 59.25 60.12 58.27 57.10 57.95 56.88 8 Nonborrowed reserves plus extended credit 41.26 47.45 58.18 59.73 58.58 58.91 59.73 60.49 58.47 58.58 60.58 58.98 9 Required reserves 40.99 47.21 57.33 58.99 57.94 58.21 58.99 59.90 57.53 57.92 60.09 58.43 10 Monetary base5 203.39 221.49 244.55 262.05 254.12 257.65 262.05 262.01 259.01 260.77 265.01 265.74 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS6 11 Total reserves3 40.70 48.14 59.56 62.12 61.11 61.20 62.12 62.64 60.05 60.08 62.06 60.68 12 Nonborrowed reserves 37.51 46.82 58.73 61.35 60.16 60.58 61.35 61.56 59.65 58.32 59.07 58.10 13 Nonborrowed reserves plus extended credit 40.09 47.41 59.04 61.86 61.22 60.79 61.86 62.12 59.82 59.58 61.89 60.08 14 Required reserves 39.84 47.08 58.19 61.09 59.98 60.28 61.09 61.34 58.91 59.15 61.21 59.65 15 Monetary base 204.18 223.53 247.71 266.16 258.08 261.67 266.16 265.79 262.60 263.98 268.13 268.91 1. Latest monthly and biweekly figures are available from the Board's H.3(502) terms and conditions established for the extended credit program to help statistical release. Historical data and estimates of the impact on required reserves depository institutions deal with sustained liquidity pressures. Because there is of changes in reserve requirements are available from the Monetary and Reserves not the same need to repay such borrowing promptly as there is with traditional Projections Section. Division of Monetary Affairs. Board of Governors of the short-term adjustment credit, the money market impact of extended credit is Federal Reserve System, Washington, D.C. 20551. similar to that of nonborrowed reserves. 2. Figures incorporate adjustments for discontinuities associated with the 5. 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 3. 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 6. 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 4. Extended credit consists of borrowing at the discount window under the reserve requirements. 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 MEASURES1 Billions of dollars, averages of daily figures 1988 Item'1 D 19 e 8 c 4 . D 19 e 8 c 5 . D 19 e 8 c 6 . D 19 e 8 c 7 . Feb. Mar. Apr.' May Seasonally adjusted 1 Ml 551.9 620.1 725.4 750.8 759.6 763.1 770.2 770.1 ? M2 2,363.6 2,562.6 2,807.8 2,901.1' 2,946.0' 2,967.5' 2,991.9 3,003.7 M3 2,978.3 3,196.4 3,490.4' 3,661.1' 3,719.5' 3,744.5' 3,766.7 3,780.0 4 L 3,519.4 3,825.9 4,133.8r 4,325.4 4,396.1' 4,424.5' 4,467.3 n.a. 5 5,932.6 6,749.4 7,607.6' 8,305.1' 8,409.8' 8,469.5' 8,528.7 n.a. Ml components 6 Currency 156.1 167.7 180.4 196.5 199.3 200.9 202.5 203.6 7 Travelers checks 5.2 5.9 6.5 7.1 7.3 7.3 7.3 7.4 8 Demand deposits 244.1 267.2 303.3 288.0 287.8 287.9 290.1 287.3 9 Other checkable deposits6 146.4 179.2 235.2 259.3 265.2 267.1 270.3 271.9 Nontransactions components 10 In M27 1,811.7 1,942.5 2,082.4 2,150.3' 2,186.4' 2,204.4' 2,221.7 2,233.5 11 In M3 only8 614.7 633.8 682.6' 760.C 773.5' 777.0' 774.8 776.4 Savings deposits9 n Commercial Banks 122.6 124.8 155.5 117788..22 181.0 118833..22 118844..11 118855..99 13 Thrift institutions 162.9 176.6 215.2 236.0 235.2 236.6 238.6 239.3 Small denomination time deposits10 14 Commercial Banks 386.3 383.3 364.6 384.6 393.7 339977..55 402.5 440044..77 15 Thrift institutions 497.0 496.2 488.6 528.5 547.8 556.0 562.3 567.1 Money market mutual funds 16 General purpose and broker-dealer 167.5 176.5 208.0 221.1 231.0' 234.9' 236.1 223322..77 17 Institution-only 62.7 64.5 84.4 89.6 98.7 97.4 91.9 90.0 Large denomination time deposits11 18 Commercial Banks12 270.2 284.9 288.9 323.5 324.8 332266..33'' 325.4 332288..44 19 Thrift institutions 146.8 151.6 150.3 161.2 164.9 165.1 167.2 168.1 Debt components 70 Federal debt 1,365.3 1,584.3 1,804.5 1,954.7' 1,981.5' 2,006.6' 2,018.5 n.a. 21 Nonfederal debt 4,567.3 5,165.1 5,803.2' 6,350.4' 6,428.2' 6,462.9' 6,510.2 n.a. Not seasonally adjusted ?? Ml 564.5 633.5 740.6 765.9 745.1 752.3 778.4 763.7 23 M2 2,373.2 2,573.9 2,821.5 2,914.8' 2,933.4 2,958.9' 2,999.5 2,989.8 ?4 M3 2,991.4 3,211.0 3,507.2' 3,677.7' 3,708.0' 3,737.7' 3,771.5 3,767.6 L 3,532.7 3,841.4 4,151.9' 4,343.4' 4,391.8' 4,423.1' 4,467.7 n.a. 26 Debt 5,927.1 6,740.6 7,593.3' 8,288.9' 8,375.3' 8,437.6' 8,499.0 n.a. Ml components 27 Currency 158.5 170.2 183.0 199.4 197.2 199.2 201.6 203.6 78 Travelers checks 4.9 5.5 6.0 6.5 6.8 6.9 6.9 7.1 29 Demand deposits 253.0 276.9 314.4 298.5 279.1 279.9 291.9 282.8 30 Other checkable deposits6 148.2 180.9 237.3 261.6 262.0 266.3 278.0 270.2 Nontransactions components 31 M2 1,808.7 1,940.3 2,080.8 2,148.9' 2,188.3 2,206.6' 2,221.1 2,226.1 32 M3 only8 618.2 637.1 685.7' 762.9' 774.6' 778.7' 772.0 777.7 Money market deposit accounts 33 Commercial Banks 267.4 332.8 379.6 358.2 359.1 360.8 360.1 356.9 34 Thrift institutions 149.4 180.8 192.9 167.0 163.5 163.8 163.0 162.6 Savings deposits9 35 Commercial Banks 121.5 123.7 154.2 117766..77 179.4 118822..55 185.0 118877..11 36 Thrift institutions 161.5 174.8 212.9 233.3 232.8 236.1 239.5 241.4 Small denomination time deposits10 37 Commercial Banks 386.9 384.0 365.3 385.2 394.1 397.2 399.6 401.4 38 Thrift institutions 498.2 497.5 489.7 529.3 550.4 556.6 560.9 562.6 Money market mutual funds 39 General purpose and broker-dealer 167.5 176.5 208.0 221.1 231.0' 234.9' 236.1 232.7 40 Institution-only 62.7 64.5 84.4 89.6 98.7 97.4 91.9 90.0 Large denomination time deposits11 41 Commercial Banks12 270.9 285.4 289.1 323.6 325.1 328.4' 325.3 329.1 42 Thrift institutions 146.8 151.9 150.7 161.8 166.0 165.3 165.6 167.1 Debt components 43 Federal debt 1,364.7 1,583.7 11,,880033..99'' 1,954.1' 1,974.6' 11,,999933..22'' 2,001.6 n.a. 44 Nonfederal debt 4,562.4 5,156.9 5,789.4' 6,334.7' 6,400.7' 6,444.4' 6,497.4 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics • August 1988 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) Debt: Debt of domestic nonfinancial sectors consists of outstanding credit release. Historical data are available from the Banking Sections, Division of market debt of the U.S. government, state and local governments, and private Research and Statistics, Board of Governors of the Federal Reserve System, nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- Washington, D.C. 20551. sumer credit (including bank loans), other bank loans, commercial paper, bankers 2. 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, 3. 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 4. 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. 5. 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 6. 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 7. 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 8. 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 9. Savings deposits exclude MMDAs. worldwide and at all banking offices in the United Kingdom and Canada, and 10. 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 11. 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 12. 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. 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 1988 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 1199885522 1199886622 1199887722 Oct. Nov. Dec. Jan. Feb. Mar. DEBITS TO Seasonally adjusted Demand deposits 1 All insured banks 156,091.6 188,345.8 217,115.9 234,398.3 219,386.1 203,290.6 213,270.8 221,057.3 218,986.7 2 Major New York City banks 70,585.8 91,397.3 104,4%.3 110,833.6 103,693.6 92,640.1 98,733.8 104,568.3 101,161.0 3 Other banks 85,505.9 96,948.8 112,619.6 123,564.6 115,692.5 110,650.5 114,537.0 116,489.0 117,825.7 4 ATS-NOW accounts4 1,823.5 2,182.5 2,402.7 2,591.3 2,536.1 2,525.7 2,352.7 2,730.3 2,856.8 5 Savings deposits5 384.9 403.5 526.5 582.4 570.8 556.0 534.9 596.0 640.7 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 500.3 556.5 612.1 654.9 619.0 590.4 602.5 628.2 628.8 7 Major New York City banks 2,196.9 2,498.2 2,670.6 2,744.7 2,620.2 2,608.1 2,600.3 2,844.8 2,811.0 8 Other banks 305.7 321.2 357.0 389.1 367.4 358.3 362.5 369.7 377.3 9 ATS-NOW accounts4 15.8 15.6 13.8 14.4 14.2 14.2 13.0 14.9 15.5 10 Savings deposits5 3.2 3.0 3.1 3.3 3.3 3.2 3.0 3.3 3.5 DEBITS TO Not seasonally adjusted Demand deposits3 11 All insured banks 156,052.3 188,506.4 217,124.8 233,999.8 202,230.1 222,338.9 210,029.1 208,899.2 233,286.6 12 Major New York City banks 70,559.2 91,500.0 104,518.6 111,398.9 96,035.9 102,548.7 40.3 36.8 109,557.8 13 Other banks 85,493.1 97,006.6 112,606.1 122,600.8 106,194.2 119,790.3 112,189.0 110,792.7 123,728.8 14 ATS-NOW accounts4 1,826.4 2,184.6 2,404.8 2,577.7 2,375.8 2,645.3 2,565.2 2,468.6 2,825.0 15 MMDA 1,223.9 1,609.4 1,954.2 2,247.8 1,959.8 2,276.4 2,305.6 2,102.8 2,337.5 16 Savings deposits 385.3 404.1 526.8 604.3 519.9 568.9 552.5 526.3 616.5 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 499.9 556.7 612.3 657.8 565.6 615.0 578.7 610.5 684.3 18 Major New York City banks 2,196.3 2,499.1 2,674.9 2,824.8 2,467.8 2,661.4 2,430.3 2,664.6 3,005.7 19 Other banks 305.6 321.2 356.9 387.6 333.3 370.9 347.7 362.8 406.4 20 ATS-NOW accounts4 15.8 15.6 13.8 14.6 13.3 14.6 13.9 13.5 15.3 21 MMDA 4.0 4.5 5.3 6.3 5.5 6.4 6.5 5.9 6.5 22 Savings deposits5 3.2 3.0 3.1 3.5 3.0 3.2 3.1 3.0 3.4 1. Historical tables containing revised data for earlier periods may be obtained of states and political subdivisions. from the Banking Section, Division of Monetary Affairs, Board of Governors of 4. Accounts authorized for negotiable orders of withdrawal (NOW) and acthe Federal Reserve System, Washington, D.C. 20551. counts authorized for automatic transfer to demand deposits (ATS). ATS data are These data also appear on the Board's G.6 (406) release. For address, see inside available beginning December 1978. front cover. 5. Excludes ATS and NOW accounts, MMDA and special club accounts, such 2. Annual averages of monthly figures. as Christmas and vacation clubs. 3. Represents accounts of individuals, partnerships, and corporations and 6. Money market deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • August 1988 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1987 1988 CCaatteeggoorryy June July Aug. Sept. Oct. Nov. Dec. Jan.' Feb/ Mar/ Apr/ May Seasonally adjusted 1 Total loans and securities2 2,176.7 2,181.3 2,199.0 2,214.7 2,227.6 2,232.1 2,230.6 2,242.4 2,259.8 2,274.8 2,297.7 2,322.5 2 U.S. government securities 321.3 322.9 328.5 331.3 331.7 331.1 333.2 334.6 334.9 338.9 343.0 346.0 4 3 T O o th ta e l r l s o e a c n u s r i a t n ie d s leases2 1,6 1 5 9 9 5 . . 6 9 1,6 1 6 9 4 4. . 3 1 1,6 1 7 9 6 3 . . 8 7 1,6 1 8 9 9 3 . . 8 7 1,7 1 0 94 1 . . 2 7 1,7 1 0 9 4 6. . 2 8 1,7 1 0 9 1 6 . . 4 0 1,7 1 1 9 4 3. . 9 0 1,7 1 2 9 9 5 . . 2 6 1,7 1 3 9 8 7 . . 4 5 1,7 1 5 9 6 8 . . 4 2 1,7 1 7 9 8 7 . . 9 6 6 5 Co B m a m nk e e rc rs i a a l c a c n e d p t i a n n d c u e s s t ri h a e l ld . 3 . . . 55 4 4 . . 6 4 55 4 3 . . 5 6 55 5 4 . . 3 0 55 5 9 . . 4 0 56 5 2 . . 5 8 56 4 3 . . 6 1 56 4 5 . . 3 5 56 4 8 . . 5 3 57 4 1 . . 5 1 56 4 9 . . 8 3 57 4 8 . . 7 8 58 4 7 . . 5 4 7 Other commercial and 9 8 N U i o . n S n d . - u U a s d . t S r d i . r a e l a s d s d ee re s4 s sees4 ... 5 5 4 4 8 9 1 . . . 4 8 4 r 5 54 4 8 0 9 . . . 8 1 3 ' 5 54 4 8 8 0 . . . 7 T 6 ' 5 5 5 4 7 3 5 . . . 6 9 7 ' ' 5 5 5 4 7 7 9 . . . 3 9 4 ' ' 5 5 5 5 7 8 1 . . . 5 5 0 ' ' 5 56 5 8 1 3 . . . 2 2 1 ' 5 5 5 6 9 4 3 . . . 0 8 9 5 55 6 8 7 6 . . . 9 6 6 5 5 5 6 8 6 4 . . . 4 1 5 5 56 7 8 5 4 . . . 3 8 1 5 5 7 8 7 5 2 . . . 8 1 9 10 Real estate 542.6 549.6 556.8 561.7 569.4 576.2 582.3 587.5 593.0 598.2 604.4 612.5 11 Individual 318.9 319.7 321.5 322.8 324.1 325.0 325.9 327.9 330.8 334.6 337.6 339.2 12 Security 44.0 43.9 45.4 46.1 47.1 39.3 33.4 36.3 41.3 39.8 38.1 38.8 13 Nonbank financial institutions 34.5 32.5 31.5 31.4 31.7 31.9 31.9 32.1 32.7 32.1 31.2 31.8 14 Agricultural 30.0 29.8 29.7 29.6 29.6 29.3 29.2 29.4 29.5 29.5 29.5 29.4 15 State and political subdivisions 56.1 55.5 54.7 54.6 54.1 53.4 51.2 52.3 52.3 52.1 51.9 51.6 16 Foreign banks 9.6 9.0 9.1 9.2 9.6 8.8 8.2 8.2 7.8 8.1 8.5 8.2 17 Foreign official institutions... 5.9 5.7 5.7 5.7 5.8 5.7 5.6 5.6 5.2 5.2 5.2 5.3 18 Lease financing receivables .. 23.9 23.9 24.0 24.1 24.3 24.5 24.8 24.8 24.7 24.8 25.0 25.3 19 All other loans 39.8 40.7 44.3 45.5 43.2 47.6 43.3 41.6 40.9 44.6 46.1 49.4 Not seasonally adjusted 20 Total loans and securities2 2,173.7 2,172.8 2,188.8 2,211.6 2,222.4 2,231.3 2,247.0 2,255.0 2,264.5 2,275.0 2,298.8 2,319.1 21 U.S. government securities ... 318.4 322.1 328.3 331.3 329.3 331.0 333.1 336.1 340.0 340.8 342.6 344.3 2 2 3 2 T O o th ta e l r l s o e a c n u s r i a t n ie d s leases2 1,6 1 6 9 0 5 . . 0 3 1,6 1 5 9 7 3 . . 7 0 1,6 1 6 9 6 3 . . 9 6 1,6 1 8 9 6 3 . . 6 8 1,6 1 9 9 9 3 . . 8 3 1,7 1 0 9 4 5 . . 7 6 1,7 1 1 9 7 6 . . 3 6 1,7 1 2 9 2 6 . . 4 5 1,7 1 2 9 8 6 . . 2 3 1,7 1 3 9 7 7 . . 2 1 1,7 1 5 9 8 7 . . 5 8 1,7 1 7 9 7 7 . . 1 6 2 2 4 5 Co B m a m nk e e rc rs ia l a c a c n e d p t i a n n d c u e s s t ri h a e l ld .. 3 55 4 5 . . 7 9 55 4 1 . . 6 3 54 5 9 . . 3 5 55 5 5 . . 5 7 55 5 8 . . 4 7 56 4 2 . . 6 0 56 4 9 . . 4 6 56 4 8 . . 3 0 57 4 0 . . 4 3 57 4 4 . . 8 5 58 4 2 . . 7 8 58 4 9 . . 5 8 26 Other commercial and 27 U.S. i n a d d us d t r ri e a s l sees4......... 5 5 4 5 2 1 . . 7 2 5 5 3 46 8 . . 7 2 ' 5 5 3 44 6 . . 2 (r 5 5 4 5 2 0 . . 1 2 5 5 4 53 5 . . 3 3 ' 5 5 4 57 9 . . 4 3 ' 5 5 5 65 7 . . 2 1 ' 5 5 5 6 5 3 . . 5 7 5 5 5 6 7 5 . . 4 9 5 5 6 6 1 9 . . 5 7 55 5 77 7 00 8 .. . 00 1 5 5 7 8 7 5 . . 9 3 28 Non-U.S. addressees 8.4' 8.6 8.3 8.1' 8.1 8.1' 8.1' 8.2 8.5 8.1 88..11 7.3 29 Real estate 542.4 549.7 556.8 562.4 570.0 576.8 583.2 587.8 592.3 597.4 603.4 612.0 30 Individual 316.9 318.4 321.5 324.3 325.7 326.7 330.2 331.3 330.2 331.5 334.5 336.3 31 Security 45.4 43.3 43.3 44.8 45.6 39.4 35.1 37.1 39.7 39.3 39.8 39.3 32 Nonbank financial institutions 34.6 32.3 31.4 31.8 31.7 32.3 33.2 32.4 31.6 31.1 31.1 31.5 33 Agricultural 30.3 30.5 30.6 30.7 30.4 29.6 29.0 28.6 28.5 28.5 28.7 29.1 34 State and political subdivisions 55.7 54.7 54.1 53.8 53.2 52.3 51.2 54.1 53.6 53.0 5522..44 51.6 35 Foreign banks 9.5 9.0 8.9 9.5 9.8 8.8 8.6 8.4 8.0 8.0 88..11 7.9 36 Foreign official institutions.. 5.9 5.7 5.7 5.7 5.8 5.7 5.6 5.6 5.2 5.2 5.2 5.3 37 Lease financing receivables . 24.0 23.9 23.9 24.0 23.9 24.2 24.8 25.0 24.9 25.0 25.2 25.4 38 All other loans 39.5 38.9 41.0 43.9 44.8 46.8 46.8 44.1 43.8 43.8 47.1 48.8 1. These data also appear in the Board's G.7 (407) release. For address, see 3. Includes nonfinancial commercial paper held. inside front cover. 4. United States includes the 50 states and the District of Columbia. 2. Excludes loans to commercial banks in the United States. 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 1987 1988 SSoouurrccee June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Total nondeposit funds 1 Seasonally adjusted 167.2 160.4 166.8 177.3'' 176.3 173.8 177.3'" 117788..CC 117755..44'' 117722..88'''' 179.9' 190.5 2 Not seasonally adjusted 164.1 156.8 166.9 177.7r 176.3r 176.1 178.2' 178.3' 178.0' 173.7' 179.1' 190.3 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 168.4 167.3 167.1 165.0' 164.7 165.9 116622..22'' 116699..88'' 173.6' 177.4' 179.5' 181.6 4 Not seasonally adjusted 165.3 163.6 167.2 165.4' 164.8 168.3r 163. r 170. r 176. r 178.2' 178.7' 181.4 5 Net balances due to foreign-related institutions, not seasonally adjusted --11..22 --66..99 --..33 1122..33 1111..66 77..99 1155..11 88..22 1.8 --44..55 ..33 88..99 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted4 -15.5 -22.2 -17.7 -11.8 -14.7 -17.1 -14.1 -17.4 -21.5 -26.7 -23.8' -17.3 7 Gross due from balances 67.1 66.4 64.5 63.8 67.7 70.4 69.6 72.1 74.1 78.0 74.5 70.5 8 Gross due to balances 51.5 44.2 46.8 52.0 53.0 53.3 55.5 54.7 52.7 51.3 50.7' 53.2 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted 14.3 15.4 17.4 24.1 26.3 24.9 2299..22 2255..66 23.3 2222..11 2244..22 2266..22 10 Gross due from balances 77.4 77.4 77.7 77.3 79.7 83.2 79.8 85.2 87.3 88.6 88.3 89.8 11 Gross due to balances 91.8 92.8 95.0 101.4 106.0 108.2 109.0 110.9 110.6 110.7 112.4 116.0 Security RP borrowings 12 Seasonally adjusted® 101.9 103.0 105.2 107.4' 107.6 107.0' 106.5' 108.9' 107.7' 108.2' 112.0' 114.9 13 Not seasonally adjusted 98.8 99.4 105.3 107.8r 107.6r 109.3 107.4' 109.3'' 110.3'' 109.1' 111.2' 114.7 U.S. Treasury demand balances7 14 Seasonally adjusted 26.9 24.4 28.5 24.9 34.2 35.7 26.1 18.6 22.6 24.9 21.8 24.7 15 Not seasonally adjusted 25.5 26.6 21.6 25.5 30.7 25.8 22.4 24.9 28.2 22.3 21.7 30.4 Time deposits, $100,000 or more8 16 Seasonally adjusted 372.1 372.5 372.3 373.0 380.5 387.0 389.2 389.1 394.4 396.1 394.1 396.5 17 Not seasonally adjusted 371.4 370.0 371.8 373.2 380.4 387.0 389.3 390.1 394.7 398.2 394.0 397.2 1. Commercial banks are those in the 50 states and the District of Columbia business. This includes borrowings from Federal Reserve Banks and from with national or state charters plus agencies and branches of foreign banks. New foreignbanks, term federal funds, overdrawn due from bank balances, loan RPs, York investment companies majority owned by foreign banks, and Edge Act and participations in pooled loans. corporations owned by domestically chartered and foreign banks. 4. Averages of daily figures for member and nonmember banks. These data also appear in the Board's G. 10(411) release. For address, see 5. Averages of daily data. inside front cover. 6. Based on daily average data reported by 122 large banks. 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from 7. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at nonbanks and not seasonally adjusted net Eurodollars. commercial banks. Averages of daily data. 3. Other borrowings are borrowings on any instrument, such as a promissory 8. Averages of Wednesday figures. note or due bill, given for the purpose of borrowing money for the banking Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • August 1988 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series1 Billions of dollars 1987 1988 AAccccoouunntt July Aug. Sept. Oct. Nov. Dec. Jan/ Feb/ Mar/ Apr. May ALL COMMERCIAL BANKING INSTITUTIONS2 1 Loans and securities 2,331.6 2,348.8 2,374.8 2,402.4 2,389.9 2,430.5 2,416.5 2,424.1 2,444.6 2,462.9' 2,469.0 2 Investment securities 497.1 501.1 501.7 503.8 508.0 514.4 516.0 515.4 518.3 520.3 522.5 3 U.S. government securities 309.4 313.7 313.8 316.0 317.3 321.4 323.7 323.6 324.6 328. lr 330.0 4 Other 187.7 187.4 187.9 187.9 190.7 193.1 192.2 191.8 193.7 192. R 192.6 3 Trading account assets 20.4 19.5 19.5 19.6 20.3 16.9 18.2 21.9 20.3 19.6 20.3 6 Total loans 1,814.1 1,828.2 1,853.6 1,878.9 1,861.6 1,899.2 1,882.3 1,886.9 1,906.0 1,923 .IT 1,926.2 7 Interbank loans 156.5 160.8 157.4 172.9 162.0 172.1 160.9 162.8 161.0 161.6 154.0 8 Loans excluding interbank 1,657.6 1,667.5 1,696.2 1,706.1 1,699.7 1,727.2 1,721.4 1,724.1 1,745.0 1,761.5'' 1,772.1 9 Commercial and industrial 548.1 548.2 560.7 559.7 561.1 576.4 565.4 570.4 576.9 584. R 588.7 10 Real estate 552.9 558.2 564.1 571.7 577.4 586.3 589.3 592.7 600.0 605.9' 613.9 11 Individual 319.4 322.1 325.3 326.7 326.9 332.4 330.8 330.4 332.7 335.9' 336.3 12 All other 237.2 239.0 246.0 248.0 234.3 232.1 235.8 230.6 235.4 235.6' 233.2 13 Total cash assets 208.4 210.7 223.8 223.5 215.2 232.5 209.7 203.3 207.9 210.8R 197.0 14 Reserves with Federal Reserve Banks. 32.5 37.3 32.9 38.3 33.8 36.2 33.3 32.8 32.1 32.2 26.0 15 Cash in vault 24.5 24.7 24.5 25.0 24.0 28.5 25.8 25.1 24.8 25.4 25.4 16 Cash items in process of collection ... 69.0 65.9 81.6 79.0 76.1 79.9 70.7 66.8 7744..11 7766..44 7711..66 17 Demand balances at U.S. depository institutions 31.0 30.8 32.7 32.3 32.9 36.6 31.3 30.0 31.6 30.6 29.5 18 Other cash assets 51.5 52.1 52.1 48.9 48.4 51.4 48.6 48.5 45.3 46.2' 44.6 19 Other assets 182.5 184.5 193.6 186.3 187.5 184.0 177.7 178.1 189.0 185.2' 182.0 20 Total assets/total liabilities and capital 2,722.6 2,744.0 2,792.2 2,812.2 2,792.6 2,847.1 2,803.9 2,805.5 2,841.5 2,859.0' 2,848.0 21 Deposits 1,928.8 1,930.4 1,972.4 1,971.2 1,974.1 2,009.1 1,969.0 1,975.0 2,004.1 2,007.2 2,004.6 22 Transaction deposits 575.3 574.1 612.4 598.1 592.0 623.3 576.2 567.5 587.6 595.0 578.1 23 Savings deposits 538.7 537.9 535.3 531.7 531.1 528.0 531.7 535.6 539.7 536.0' 542.0 24 Time deposits 814.8 818.4 824.7 841.4 851.0 857.9 861.1 871.8 876.8 876.2 884.4 23 Borrowings 414.6 426.4 416.3 435.7 420.1 426.2 446.1 444.2 446.3 456.3R 448.7 26 Other liabilities 202.5 209.6 224.7 225.5 218.9 231.5 208.1 205.3 211.1 214.lr 211.8 27 Residual (assets less liabilities) 176.7 177.6 178.8 179.8 179.5 180.4 180.7 181.0 180.0 181.4 182.9 MEMO 28 U.S. government securities (including trading account) 323.8 326.8 327.7 329.9 331.7 332.4 337.7 340.8 340.1 342.8 334455..77 29 Other securities (including trading account) 193.8 193.8 193.5 193.5 196.6 198.9 196.5 196.5 198.5 197.1 197.2 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 2,162.8 2,179.6 2,195.4 2,218.6 2,213.8 2,238.5 2,232.9 2,237.8 2,255.8 2,272.0 2,277.3 31 Investment securities 472.1 476.2 475.9 478.7 482.6 488.3 488.0 487.6 490.4 493.8 495.2 32 U.S. Treasury securities 299.4 303.5 302.9 305.7 306.4 311.0 312.1 312.2 313.1 316.8 317.7 33 Other 172.7 172.6 173.0 173.0 176.2 177.3 175.9 175.4 177.2 177.0 177.6 34 Trading account assets 20.4 19.5 19.5 19.6 20.3 16.9 18.2 21.9 20.3 19.6 20.3 33 Total loans 1,670.3 1,684.0 1,700.0 1,720.3 1,711.0 1,733.3 1,726.6 1,728.3 1,745.1 1,758.6 1,761.8 36 Interbank loans 122.0 128.6 125.0 133.3 130.5 135.3 131.4 133.4 132.2 129.0 125.5 37 Loans excluding interbank 1,548.3 1,555.4 1,575.0 1,587.0 1,580.4 1,598.0 1,595.2 1,595.0 1,612.9 1,629.7' 11,,663366..33 38 Commercial and industrial 465.2 464.4 470.2 470.6 472.0 479.4 472.7 475.6 480.7 487.2 448888..88 39 Real estate 543.5 548.4 554.0 561.9 567.3 575.0 577.9 580.3 587.3 593.0' 600.5 40 Individual 319.1 321.8 325.0 326.4 326.6 332.1 330.5 330.1 332.4 335.6R 336.0 41 All other 220.4 220.8 225.8 228.1 214.6 211.6 214.1 209.0 212.5 213.9 211.0 42 Total cash assets 191.6 192.7 204.8 207.8 199.3 214.9 192.1 184.4 191.7 194.3 180.8 43 Reserves with Federal Reserve Banks. 31.3 36.2 30.9 36.5 31.5 35.1 31.7 30.5 30.1 30.8 23.6 44 Cash in vault 24.4 24.6 24.4 24.9 24.0 28.4 25.7 25.1 24.7 25.4 25.4 45 Cash items in process of collection ... 68.5 65.4 81.0 78.4 75.7 79.5 70.2 66.3 73.6 75.9 7711..11 46 Demand balances at U.S. depository institutions 29.3 29.2 30.8 30.6 31.4 34.7 29.7 28.4 30.0 29.0 27.8 47 Other cash assets 38.0 37.2 37.7 37.3 36.7 37.3 34.8 34.0 33.4 33.3 32.9 48 Other assets 120.5 119.9 134.2 130.0 123.7 127.2 118.9 121.4 126.8 125.R 121.7 49 Total assets/liabilities and capital 2,474.9 2,492.2 2,534.5 2,556.4 2,536.8 2,580.7 2,543.9 2,543.6 2,574.3 2,591.5' 2,579.7 50 Deposits 1,868.3 1,868.8 1,910.3 1,909.1 1,912.4 1,944.6 1,906.9 1,912.2 1,940.1 1,943.7 1,940.6 31 Transaction deposits 567.4 566.0 603.9 589.5 583.7 614.9 567.9 559.6 579.2 586.4 569.8 32 Savings deposits 536.6 535.7 533.2 529.5 528.8 525.7 529.4 533.2 537.3 533.6 539.6 33 Time deposits 764.3 767.1 773.3 790.1 799.9 804.1 809.6 819.4 823.6 823.7 831.2 34 Borrowings 318.9 333.0 324.7 345.7 323.2 331.9 347.0 344.8 343.4 351.0 344.2 55 Other liabilities 114.2 116.0 123.8 125.0 124.8 127.0 112.5 108.8 114.0 118.5 115.2 56 Residual (assets less liabilities) 173.5 174.4 175.6 176.6 176.3 177.2 177.5 177.8 176.8 178.2' 179.7 1. Data for 1988 have been revised because of changes made in data for condition report data. Data for other banking institutions are estimates made for foreign-related institutions. Back data are available from the Banking and Mon- the last Wednesday of the month based on a weekly reporting sample of etary Statistics section, Board of Governors of the Federal Reserve System, foreign-related institutions and quarter-end condition reports. Washington, D.C., 20551. These data also appear in the Board's weekly H.8 (510) 2. Commercial banking institutions include insured domestically chartered release. commercial banks, branches and agencies of foreign banks, Edge Act and Figures are partly estimated. They include all bank-premises subsidiaries and Agreement corporations, and New York State foreign investment corporations. other significant majority-owned domestic subsidiaries. Loan and securities data 3. Insured domestically chartered commercial banks include all member banks for domestically chartered commercial banks are estimates for the last Wednes- and insured nonmember banks. day of the month based on a sample of weekly reporting banks and quarter-end 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 AAccccoouunntt Mar. 30r Apr. 6r Apr. 13r Apr. 20r Apr. 27r May 4 May 11 May 18 May 25 1 Cash and balances due from depository institutions 101,551 104,277 104,435 106,098 101,849 109,022 103,976 101,901 91,701 2 Total loans, leases, and securities, net 1,100,543 1,114,441 1,104,072 1,121,638 1,111,817 1,130,200 1,112,048 1,116,620 1,113,781 3 U.S. Treasury and government agency 129,797 131,507 131,378 132,775 130,061 131,157 131,460 131,812 132,774 4 Trading account 15,539 16,260 16,296 16,966 14,609 15,299 16,042 16,321 15,668 6 5 M In o v r e t s g t a m g e e n - t b a a c c k c e o d u n s t e curities ? 1 4 1 0 4 , , 8 2 6 5 3 8 1 4 1 0 5 , , 8 2 2 4 0 6 1 4 1 0 5 , , 8 0 1 8 5 2 1 4 1 0 5 , , 6 8 4 0 2 8 1 4 1 1 5 , , 3 4 2 5 4 2 1 4 1 1 5 , , 3 8 5 5 4 8 1 4 1 1 5 , , 4 4 2 1 9 9 1 4 1 0 5 , , 8 4 7 9 7 2 1 4 1 1 7 , , 4 1 1 0 8 6 All other maturing in 7 One year or less 17,201 17,961 17,634 17,969 17,286 17,729 16,988 16,928 1177,,442233 8 Over one through five years 46,428 46,795 46,860 47,452 46,807 46,794 47,051 47,444 47,699 9 Over five years 9,766 9,670 9,773 9,745 10,034 9,982 9,950 10,242 10,566 10 Other securities 72,732 72,324 72.514 72,148 72,072 72,824 72,682 72,743 72,689 11 Trading account 1,717 1,309 1,412 1,636 1,691 2,015 1,910 1,587 1,633 1? Investment account 71,014 71,015 71,102 70,511 70,381 70,809 70,772 71,155 71,056 13 States and political subdivisions, by maturity 49,399 49,101 49,094 49,021 49,002 48,851 48,830 48,782 48,742 14 One year or less 5,981 5,932 5,923 5,930 5,906 5,915 5,924 5,905 5,870 15 Over one year 43,418 43,169 43,171 43,091 43,096 42,936 42,906 42,877 42,873 16 Other bonds, corporate stocks, and securities 21,616 21,914 22,007 21,491 21,379 21,958 21,942 22,374 22,313 17 Other trading account assets 3,057 3,398 3,145 3,319 3,261 3,488 3,290 2,812 2,966 18 Federal funds sold3 68,683 74,212 67,172 78,699 72,713 82,685 66,041 69,834 68,105 19 To commercial banks 41,875 48,366 39,466 50,298 44,020 48,025 37,539 42,445 41,386 70 To nonbank brokers and dealers in securities 18,163 17,190 18,988 19,675 20,206 23,290 19,143 18,999 17,410 71 To others 8,645 8,656 8,719 8,726 8,487 11,370 9,358 8,390 9,309 7? Other loans and leases, gross 867,679 874,656 871,485 876,322 875,334 881,412 879,984 880,879 878,705 73 846,645 853,574 850,387 855,150 854,121 860,133 858,699 859,624 857,252 74 Commercial and industrial 293,332 298,561 296,927 298,181 297,997 301,894 300,833 299,979 298,719 75 Bankers acceptances and commercial paper 2,447 2,435 2,357 2,322 2,291 2,298 2,121 2,105 2,088 76 All other 290,885 296,126 294,570 295,859 295,706 299,596 298,712 297,873 296,631 77 U.S. addressees 288,257 293,455 291,864 293,173 293,032 296,952 296,123 295,348 294,100 28 Non-U.S. addressees 2.628 2,671 2,706 2,686 2,674 2,644 2,589 2,526 2,532 79 Real estate loans 271,349 271,002 271,978 272,680 273,660 274,266 275,084 276,130 277,244 30 Revolving, home equity 18,222 18,314 18,432 18,692 18,870 19,046 19,160 19,272 19,365 31 All other 253,127 252,688 253,546 253,988 254,790 255,220 255,925 256,858 257,879 37 To individuals for personal expenditures 160,634 160,812 161,331 162,078 162,345 162,232 162,166 161,792 161,963 33 To depository and financial institutions 48,415 50,712 49,310 49,494 48,851 49,552 49,500 49,246 48,932 34 Commercial banks in the United States 22,633 23,744 23,235 23,348 22,692 23,060 22,990 23,297 22,811 35 Banks in foreign countries 3,509 4,490 3,592 3,832 4,128 3,876 3,975 3,600 3,771 36 Nonbank depository and other financial institutions ... 22,274 22,478 22,484 22,314 22,031 22,616 22,534 22,350 22,350 37 For purchasing and carrying securities 14,215 13,491 12,741 13,415 13,080 12,218 11,879 13,198 11,704 38 To finance agricultural production 5,420 5,464 5,553 5,538 5,541 5,575 5,620 5,634 5,666 39 To states and political subdivisions 31,821 31,725 31,636 31,632 31,440 31,303 31,128 31,112 30,993 40 To foreign governments and official institutions 2,189 2,247 2,138 2,238 2,157 2,166 2,175 2,154 2,068 41 All other 19,270 19,561 18,772 19,893 19,050 20,928 20,314 20,379 19,961 47 Lease financing receivables 21,034 21,082 21,098 21,173 21,214 21,279 21,285 21,256 21,453 43 LESS: Unearned income 4,816 4,770 4,805 4,825 4,846 4,834 4,856 4,909 4,919 44 Loan and lease reserve 36,588 36,887 36,816 36,801 36,779 36,532 36,553 36,552 36,539 45 826,276 833,000 829,863 834,697 833,709 840,046 838,575 839,418 837,247 46 All other assets 125,319 128,467 127,245 129,020 126,401 128,413 127,693 128,287 122,326 47 Total assets 1,327,413 1,347,185 1,335,753 1,356,756 1,340,068 1,367,634 1,343,717 1,346,808 1,327,807 48 Demand deposits 223,226 229,555 228,349 232,101 225,052 238,177 222,603 224,955 215,417 49 Individuals, partnerships, and corporations 175,045 181,381 183,738 181,033 176,870 183,837 176,612 176,441 170,851 50 States and political subdivisions 5,882 5,743 5,848 6,582 6,317 7,836 5,621 5,889 5,629 51 U.S. government 3,069 2,630 1,991 6,195 4,010 5,277 2,853 4,142 2,121 57 Depository institutions in the United States 21,954 22,663 21,402 21,703 21,591 24,983 20,988 22,970 21,035 53 Banks in foreign countries 5,991 6,758 5,551 6,481 6,362 6,425 6,813 6,036 5,998 54 Foreign governments and official institutions 943 1,035 1,021 818 754 842 710 854 623 55 Certified and officers' checks 10,342 9,344 8,797 9,289 9,149 8,976 9,006 8,624 9,159 56 Transaction balances other than demand deposits 70,778 74,934 75,453 76,469 72,034 72,688 71,172 71,047 70,279 57 Nontransaction balances 591,104 593,193 .592,592 589,534 589,619 592,396 592,832 594,807 595,070 58 Individuals, partnerships, and corporations 550,976 553,701 553,288 550,211 549,873 552,525 552,361 553,824 553,994 59 States and political subdivisions 29,329 28,971 28,676 28,622 29,066 29,080 29,799 30,278 30,458 60 U.S. government 933 942 942 959 964 962 960 1,050 1,059 61 Depository institutions in the United States 9,099 8,817 8,942 8,912 8,890 9,032 8,940 8,923 8,842 67 Foreign governments, official institutions, and banks 767 762 744 830 824 796 772 732 716 63 Liabilities for borrowed money 273,862 280,595 273,503 290,364 278,817 295,046 286,616 283,924 274,337 64 Borrowings from Federal Reserve Banks 1,900 4,055 3,640 3,192 1,900 1,825 1,550 2,502 2,400 65 Treasury tax-and-loan notes 16,778 4,249 4,678 23,522 24,913 25,331 26,124 20,105 17,846 66 All other liabilities for borrowed money5 255,183 272,291 265,185 263,650 252,004 267,890 258,942 261,317 254,091 67 Other liabilities and subordinated notes and debentures 83,463 82,964 79,563 82,176 88,583 82,484 83,109 84,773 85,751 68 Total liabilities 1,242,432 1,261,240 1,249,460 1,270,644 1,254,105 1,280,790 1,256,332 1,259,506 1,240,854 69 Residual (total assets minus total liabilities)6 84,982 85,944 86,293 86,112 85,962 86,844 87,385 87,303 86,953 MEMO 70 Total loans and leases (gross) and investments adjusted7 ... 1,077,439 1,083,988 1,082,994 1,089,617 1,086,730 1,100,481 1,092,927 1,092,340 1,091,042 71 Total loans and leases (gross) adjusted 871,854 876,759 875,957 881,375 881,335 893,012 885,495 884,972 882,613 77 Time deposits in amounts of $100,000 or more 181,514 180,282 178,819 178,850 179,9% 181,478 181,834 182,076 182,315 73 U.S. Treasury securities maturing in one year or less 17,495 18,108 17,277 18,126 16,405 16,865 16,924 16,004 17,062 74 Loans sold outright to affiliates—total8 1,588 1,556 1,556 1,450 1,538 1,494 1,502 1,525 1,534 75 Commercial and industrial 1,100 1,094 1,095 990 1,069 1,026 1,034 1,064 1,088 76 Other 488 462 461 460 469 468 468 460 447 77 Nontransaction savings deposits (including MMDAs) 251,026 253,952 254,201 250,731 249,500 250,664 250,551 252,228 252,015 1. Beginning Jan. 6, 1988, the "Large bank" reporting group was revised repurchase; for information on these liabilities at banks with assets of $1 billion or somewhat, eliminating some former reporters with less than $2 billion of assets more on Dec. 31, 1977, see table 1.13. and adding some new reporters with assets greater than $3 billion. 6. This is not a measure of equity capital for use in capital-adequacy analysis or 2. Includes U.S. government-issued or guaranteed certificates of participation for other analytic uses. in pools of residential mortgages. 7. Exclusive of loans and federal funds transactions with domestic commercial 3. Includes securities purchased under agreements to resell. banks. 4. Includes allocated transfer risk reserve. 8. Loans sold are those sold outright to a bank's own foreign branches, 5. Includes federal funds purchased and securities sold under agreements to nonconsolidated nonbank affiliates of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic NonfinancialS tatistics • August 1988 1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY1 Millions of dollars, Wednesday figures 1988 AAccccoouunntt Mar. 3<f Apr. 6r Apr. 13r Apr. 2V Apr. 27r May 4 May 11 May 18 May 25 1 Cash balances due from depository institutions 23,584 21,606 21,920 21,831 21,988 25,427 23,881 21,175 18,552 2 Total loans, leases and securities, net2 215,891 219,840 213,707 222,649 218,524 225,498 215,113 215,645 214,427 Securities 3 U.S. Treasury and government agency 0 0 0 0 0 0 0 0 0 4 Trading account3 0 0 0 0 0 0 0 0 0 5 Investment account 15,197 15,296 15,320 15,303 15,350 15,820 15,343 15,404 15,161 6 Mortgage-backed securities4 6,463 6,485 6,482 6,476 6,361 6,331 6,320 5,819 5,521 All other maturing in 7 One year or less 2,131 2,273 2,166 2,153 2,220 2,618 2,183 2,708 2,742 8 Over one through five years 4,465 4,416 4,456 4,513 4,564 4,641 4,684 4,719 4,727 9 Over five years 2,138 2,122 2,216 2,160 2,204 2,229 2,155 2,158 2,172 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 16,618 16,656 16,719 16,216 16,178 16,305 16,254 16,633 16,580 13 States and political subdivisions, by maturity 12,946 12,896 12,896 12,887 12,877 12,908 12,951 12,941 12,942 14 One year or less 1,000 994 989 997 1,001 1,009 1,010 1,003 9% 15 Over one year 11,946 11,902 11,907 11,890 11,876 11,899 11,941 11,938 11,946 16 Other bonds, corporate stocks, and securities 3,672 3,760 3,822 3,328 3,302 3,397 3,303 3,692 3,638 17 Other trading account assets 0 0 0 0 0 0 0 0 0 Loans and leases 18 Federal funds sold 31,102 31,408 28,331 36,798 32,886 38,186 29,305 29,349 29,544 19 To commercial banks 13,964 14,972 10,526 18,556 14,520 15,476 11,410 12,101 13,902 20 To nonbank brokers and dealers in securities 11,033 10,430 11,674 12,446 12,364 14,538 11,253 11,493 8,989 21 To others 6,105 6,005 6,131 5,796 6,002 8,173 6,642 5,754 6,652 22 Other loans and leases, gross 168,462 171,695 168,506 169,521 169,320 170,413 169,490 169,569 168,466 23 Other loans, gross 163,578 166,847 163,647 164,652 164,432 165,478 164,547 164,632 163,505 24 Commercial and industrial 55,453 58,039 56,684 56,984 57,247 58,943 58,228 57,270 57,214 25 Bankers acceptances and commercial paper 505 463 463 526 477 531 474 472 463 26 All other 54,948 57,576 56,221 56,459 56,770 58,412 57,754 56,798 56,752 27 U.S. addressees 54,391 57,054 55,757 55,959 56,304 57,968 57,313 56,381 56,340 28 Non-U.S. addressees 558 521 464 499 466 445 441 417 412 29 Real estate loans 46,039 45,837 45,917 45,903 46,235 46,424 46,339 46,592 46,634 30 Revolving, home equity 2,784 2,817 2,831 2,856 2,873 2,888 2,899 2,910 2,927 31 All other 43,255 43,020 43,086 43,047 43,362 43,536 43,440 43,682 43,707 32 To individuals for personal expenditures 21,107 21,272 21,375 21,443 21,538 21,338 21,372 21,397 21,454 33 To depository and financial institutions 21,434 22,490 21,595 21,769 21,029 20,824 21,168 20,854 20,700 34 Commercial banks in the United States 12,839 13,083 12,973 12,838 12,388 12,010 12,358 12,336 11,972 35 Banks in foreign countries 2,124 2,993 2,103 2,392 2,296 2,302 2,464 2,099 2,242 36 Nonbank depository and other financial institutions 6,471 6,413 6,519 6,538 6,345 6,512 6,346 6,419 6,486 37 For purchasing and carrying securities 6,055 5,349 4,902 4,970 5,167 4,351 4,116 5,471 4,318 38 To finance agricultural production 247 246 265 260 269 271 281 278 294 39 To states and political subdivisions 7,087 7,089 7,044 7,073 7,011 6,981 6,918 6,909 6,876 40 To foreign governments and official institutions 592 670 574 673 633 623 625 620 548 41 Allother 5,564 5,856 5,290 5,575 5,302 5,723 5,498 5,240 5,467 42 Lease financing receivables 4,884 4,848 4,858 4,870 4,888 4,934 4,943 4,937 4,960 43 LESS: Unearned income 1,476 1,464 1,480 1,492 1,501 1,490 1,507 1,527 1,542 44 Loan and lease reserve 14,013 13,752 13,689 13,697 13,709 13,737 13,772 13,783 13,782 45 Other loans and leases, net6 152,973 156,479 153,336 154,332 154,109 155,186 154,211 154,259 153,142 46 All other assets 57,569 59,628 59,316 58,958 57,704 57,960 58,133 60,842 57,150 47 Total assets 297,044 301,074 294,942 303,438 298,216 308,884 297,128 297,662 290,129 Deposits 48 Demand deposits 55,624 54,956 52,661 55,577 53,725 58,093 52,354 54,110 52,170 49 Individuals, partnerships, and corporations 38,166 37,989 37,887 38,158 37,404 40,057 36,359 37,350 36,355 50 States and political subdivisions 855 724 696 725 609 931 581 827 701 51 U.S. government 592 608 361 1,408 962 1,014 565 823 394 52 Depository institutions in the United States 5,424 5,399 4,906 5,460 5,300 6,484 4,764 6,200 5,348 53 Banks in foreign countries 4,802 5,576 4,436 5,227 5,186 5,190 5,503 4,802 4,784 54 Foreign governments and official institutions 753 870 888 668 622 698 566 694 461 55 Certified and officers' checks 5,032 3,790 3,488 3,932 3,641 3,720 4,017 3,413 4,128 56 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers) 8,608 9,082 9,365 9,456 8,850 8,716 8,566 8,618 8,561 57 Nontransaction balances 104,548 105,402 105,878 105,443 104,758 104,819 104,556 105,379 105,882 58 Individuals, partnerships, and corporations 96,631 97,504 97,876 97,377 96,489 96,784 96,401 96,884 97,088 59 States and political subdivisions 6,020 5,990 6,059 6,122 6,228 5,997 6,228 6,537 6,765 60 U.S. government 32 34 28 29 33 26 31 35 38 61 Depository institutions in the United States 1,576 1,579 1,640 1,640 1,736 1,744 1,629 1,661 1,729 62 Foreign governments, official institutions, and banks 289 295 274 275 271 267 266 262 262 63 Liabilities for borrowed money 71,656 74,407 73,080 77,383 70,557 80,426 75,640 73,162 66,224 64 Borrowings from Federal Reserve Banks 0 0 0 990 0 0 0 0 0 65 Treasury tax-and-loan notes 4,868 1,005 1,268 6,356 6,885 6,950 7,559 6,028 5,384 66 All other liabilities for borrowed money8 66,788 73,402 71,813 70,037 63,672 73,477 68,081 67,134 60,840 67 Other liabilities and subordinated notes and debentures 32,823 32,828 29,400 31,106 35,944 32,047 30,955 31,396 32,516 68 Total liabilities 273,260 276,676 270,384 278,964 273,834 284,102 272,071 272,665 265,354 69 Residual (total assets minus total liabilities)9 23,783 24,398 24,558 24,474 24,382 24,783 25,057 24,997 24,775 MEMO 70 Total loans and leases (gross) and investments adjusted2,10 204,576 207,000 205,377 206,444 206,826 213,238 206,624 206,517 203,876 71 Total loans and leases (gross) adjusted 172,761 175,047 173,338 174,925 175,298 181,113 175,027 174,480 172,135 72 Time deposits in amounts of $100,000 or more 37,583 37,610 37,816 37,985 37,800 37,896 37,586 37,834 38,170 73 U.S. Treasury securities maturing in one year or less 4,285 4,384 3,683 3,847 3,365 3,852 3,998 3,579 3,982 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. Digitized for FiRn ApoSolEs Rof residential mortgages. 10. Exclusive of loans and federal funds transactions with domestic commer- 5. Includes securities purchased under agreements to resell. cial banks. http://fraser.stlo6u. isInfecldud.oesr gal/l ocated 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 Mar. 30 Apr. 6 Apr. 13 Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 1 Cash and due from depository institutions ... 9,976 10,440 10,711 10,845 10,110 10,110 11,916 10,064 9,968 2 Total loans and securities 102,722 104,187 103,531 103,597 102,439 104,293 104,249 105,090 104,381 3 U.S. Treasury and government agency securities 7,762 7,534 7,790 7,763 7,638 8,166 8,322 7,878 8,286 4 Other securities 7,899 7,864 7,804 7,691 7,603 7,621 7,592 7,457 7,535 5 Federal funds sold 7,298 9,570 8,873 10,014 9,263 8,869 9,036 10,340 8,397 6 To commercial banks in the United States. 4,924 6,785 6,072 7,081 6,367 5,820 6,147 7,416 5,900 7 To others 2,374 2,786 2,801 2,934 2,896 3,050 2,889 2,925 2,497 8 Other loans, gross 79,764 79,219 79,064 78,129 77,934 79,637 79,298 79,414 80,163 9 Commercial and industrial 51,585 51,888 51,181 50,608 51,877 53,061 53,239 52,810 53,674 10 Bankers acceptances and commercial paper 1,649 1,702 1,551 1,546 1,453 1,466 1,587 1,538 1,491 11 All other 49,936 50,185 49,630 49,063 50,424 51,595 51,652 51,272 52,183 12 U.S. addressees 47,527 47,691 47,095 46,786 48,088 49,541 49,654 49,207 50,061 n Non-y.S. addressees 2,409 2,494 2,535 2,277 2,336 2,054 1,998 2,065 2,121 14 To financial institutions 16,930 15,700 16,128 15,545 14,728 14,678 14,398 14,858 14,680 15 Commercial banks in the United States.. 12,390 11,390 11,878 11,302 10,760 10,816 10,272 10,562 10,636 16 Banks in foreign countries 1,398 1,270 1,284 1,159 925 996 1,064 984 1,060 17 Nonbank financial institutions 3,142 3,040 2,966 3,084 3,042 2,865 3,063 3,312 2,985 18 To foreign governments and official institutions 484 518 513 512 518 563 574 571 562 19 For purchasing and carrying securities .... 1,546 1,449 1,740 1,895 1,453 1,508 1,213 1,301 1,366 20 All other 9,220 9,664 9,502 9,568 9,358 9,826 9,874 9,873 9,880 21 Other assets (claims on nonrelated parties) .. 30,902 29,600 30,070 30,505 30,998 31,155 30,936 31,402 31,289 22 Net due from related institutions 16,081 16,840 14,047 15,454 16,300 15,921 15,278 15,420 15,074 23 Total assets 159,682 161,068 158,359 160,402 159,848 116611,,447799 116622,,338811 116611,,997777 160,712 24 Deposits or credit balances due to other than directly related institutions 42,712 42,107 41,208 41,473 42,294 41,847 41,831 41,725 42,262 25 Transaction accounts and credit balances3. 3,271 3,054 3,226 3,120 3,620 3,344 3,203 3,121 3,320 26 Individuals, partnerships, and corporations 2,105 1,888 2,021 2,070 2,061 2,111 1,926 2,101 1,965 27 Other 1,166 1,167 1,204 1,050 1,560 1,233 1,277 1,019 1,355 28 Nontransaction accounts 39,441 39,052 37,983 38,352 38,673 38,503 38,628 38,604 38,942 29 Individuals, partnerships, and corporations 32,256 31,837 30,891 31,188 31,512 31,257 31,387 31,420 31,743 30 Other 7,184 7,215 7,091 7,164 7,160 7,246 7,241 7,184 7,199 31 Borrowings from other than directly related institutions 61,304 66,618 65,067 66,864 63,081 65,806 64,077 62,315 62,896 32 Federal funds purchased 28,688 34,925 32,829 34,812 30,641 33,087 30,681 30,454 31,201 33 From commercial banks in the United States 15,698 18,897 18,134 18,643 15,170 15,982 14,634 16,130 16,041 34 From others 12,990 16,027 14,695 16,169 15,471 17,105 16,048 14,324 15,160 35 Other liabilities for borrowed money 32,616 31,693 32,238 32,052 32,440 32,719 33,396 31,861 31,695 36 To commercial banks in the United States 24,030 23,995 24,356 24,113 24,332 24,376 24,871 23,372 23,832 37 To others 8,587 7,698 7,883 7,939 8,108 8,343 8,524 8,489 7,863 38 Other liabilities to nonrelated parties 32,802 31,601 31,632 31,807 32,059 32,577 32,712 32,630 32,861 39 Net due to related institutions 22,864 20,741 20,452 20,258 22,414 21,249 23,760 25,307 22,693 40 Total liabilities 159,682 161,068 158,359 160,402 159,848 161,479 162,381 161,977 160,712 MEMO 41 Total loans (gross) and securities adjusted .. 85,408 86,013 85,581 85,215 85,312 87,657 87,830 87,112 87,845 42 Total loans (gross) adjusted6 69,748 70,615 69,987 69,761 70,070 71,870 71,916 71,776 72,024 1. Effective Jan. 1, 1986, the reporting panel includes 65 U.S. branches and 3. Includes credit balances, demand deposits, and other checkable deposits. agencies of foreign banks that include those branches and agencies with assets of 4. Includes savings deposits, money market deposit accounts, and time depos- $750 million or more on June 30, 1980, plus those branches and agencies that had its. reached the $750 million asset level on Dec. 31, 1984. These data also appear in the 5. Includes securities sold under agreements to repurchase. Board's H.4.2 (504) release. For address, see inside front cover. 6. Exclusive of loans to and federal funds sold to commercial banks in the 2. Includes securities purchased under agreements to resell. United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • August 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 1988 1982 1983 1984 11998855 Dec. Dec. Dec. DDeecc.. ,,44 Dec. Mar. June Sept. Dec. Mar. 1 All holders—Individuals, partnerships, and corporations 291.8 293.5 302.7 321.0 363.6 335.9 340.2 339.0 344.9 328.6 2 Financial business 35.4 32.8 31.7 32.3 41.4 35.9 36.6 36.5 36.9 33.9 3 Nonfinancial business 150.5 161.1 166.3 178.5 202.0 183.0 187.2 188.2 191.7 184.1 4 Consumer 85.9 78.5 81.5 85.5 91.1 88.9 90.1 88.7 89.9 86.9 5 Foreign 3.0 3.3 3.6 3.5 3.3 2.9 3.2 3.2 3.4 3.5 6 Other 17.0 17.8 19.7 21.2 25.8 25.2 23.1 22.4 23.0 20.3 Weekly reporting banks 1986 1987 1988 1982 1983 1984 1985 Dec. Dec. Dec.2 Dec.5'4 Dec. Mar. June Sept. Dec. Mar.5 7 All holders—Individuals, partnerships, and corporations 144.2 146.2 157.1 168.6 195.1 178.1 179.3 179.1 187.0 181.8 8 Financial business 26.7 24.2 25.3 25.9 32.5 28.7 29.3 29.3 29.5 27.0 9 Nonfinancial business 74.3 79.8 87.1 94.5 106.4 94.4 94.8 96.0 100.8 98.2 10 Consumer 31.9 29.7 30.5 33.2 37.5 36.8 37.5 37.2 39.4 41.7 11 Foreign 2.9 3.1 3.4 3.1 3.3 2.8 3.1 3.1 3.3 3.4 12 Other 8.4 9.3 10.9 12.0 15.4 15.5 14.6 13.5 14.0 11.4 1. Figures include cash items in process of collection. Estimates of gross 4. Historical data back to March 1985 have been revised to account for deposits are based on reports supplied by a sample of commercial banks. Types corrections of bank reporting errors. Historical data before March 1985 have not of depositors in each category are described in the June 1971 BULLETIN, p. 466. been revised, and may contain reporting errors. Data for all commercial banks for Figures may not add to totals because of rounding. March 1985 were revised as follows (in billions of dollars): all holders, -.3; 2. Beginning in March 1984, these data reflect a change in the panel of weekly financial business, -.8; nonfinancial business, -.4; consumer, .9; foreign, .1; reporting banks, and are not comparable to earlier data. Estimates in billions of other, -.1. Data for weekly reporting banks for March 1985 were revised as dollars for December 1983 based on the new weekly reporting panel are: financial follows (in billions of dollars): all holders, -.1; financial business, -.7; nonfinanbusiness, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other cial business, -.5; consumer, 1.1; foreign, .1; other, -.2. 9.5. 5. Beginning March 1988, these data reflect a change in the panel of weekly 3. Beginning March 1985, financial business deposits and, by implication, total reporting banks, and are not comparable to earlier data. Estimates in billions of gross demand deposits have been redefined to exclude demand deposits due to dollars for December 1987 based on the new weekly reporting panel are: financial thrift institutions. Historical data have not been revised. The estimated volume of business, 29.4; nonfinancial business, 105.1; consumer, 41.1; foreign, 3.4; other, such deposits for December 1984 is $5.0 billion at all insured commercial banks 13.1. and $3.0 billion at weekly reporting banks. 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 IInnssttrruummeenntt D 19 e 8 c 3 . 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.1 Dec. Jan.2 Feb. Mar. Apr. Commercial paper (seasonally adjusted unless noted otherwise) 1 AH issuers. 187,658 237,586 298,779 329,991 357,129 351,844 357,129 380,339 388,893 391,305 406,484 Financial companies3 Dealer-placed paper 2 Total 44,455 56,485 78,443 101,072 101,958 105,197 101,958 120,930 125,914 128,680 133,946 3 Bank-related (not seasonally adjusted) . 2,441 2,035 1,602 2,265 1,428 1,893 1,428 1,694 1,724 1,371 1,093 Directly placed paper 4 Total 97,042 110,543 135,320 151,820 173,939 169,779 173,939 175,467 174,595 173,316 180,119 5 Bank-related (not seasonally adjusted) 35,566 42,105 44,778 40,860 43,173 45,353 43,173 45,425 43,987 43,681 45,703 6 Nonfinancial companies6 46,161 70,558 85,016 77,099 81,232 76,869 81,232 83,942 88,384 89,309 92,419 Bankers dollar acceptances (not seasonally adjusted)7 7 Total 78,309 78,364 68,413 64,974 70,565 71,068 70,565 63,152 62,419 63,454 64,112 Holder 8 Accepting banks 9,355 9,811 11,197 13,423 10,943 10,701 10,943 8,646 9,629 10,243 10,295 9 Own bills 8,125 8,621 9,471 11,707 9,464 9,714 9,464 7,804 8,561 8,825 8,929 10 Bills bought 1,230 1,191 1,726 1,716 1,479 987 1,479 843 11,,006677 11,,441177 11,,336666 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 1,134 965 831 833 795 803 13 Others 67,807 67,881 56,279 50,234 58,658 59,234 58,658 53,674 51,958 52,417 53,014 Basis 14 Imports into United States 15,649 17,845 15,147 14,670 16,483 16,942 16,483 14,469 14,354 14,575 14,715 15 Exports from United States 16,880 16,305 13,204 12,960 15,227 15,435 15,227 14,054 13,891 13,899 14,746 16 All other 45,781 44,214 40,062 37,344 38,855 38,691 38,855 34,629 34,173 34,980 34,652 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 and from the correction of a misclassification that had understated dealer- communications, construction, manufacturing, mining, wholesale and retail trade, placed financial and overstated nonfinancial outstandings. transportation, and services. 3. Institutions engaged primarily in activities such as, but not limited to, 7. Beginning January 1988, the number of respondents in the bankers accepcommercial savings, and mortgage banking; sales, personal, and mortgage fi- tance survey were reduced from 155 to 111 institutions—those with $100 million nancing; factoring, finance leasing, and other business lending; insurance under- or more in total acceptances. The new reporting group accounts for over 90 writing; and other investment activities. percent of total acceptances activity. 4. Includes all financial company paper sold by dealers in the open market. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per year Rate Effective Date Month Av r e a r te a ge Month 10.50 1987—Apr. 1 7.75 1985—Jan. 10.61 1986—Oct. 10.00 May I 8.00 Feb. 10.50 Nov. 9.50 15 8.25 Mar. 10.50 Dec. Sept. 4 8.75 Apr. 10.50 9.00 Oct. 7 9.25 May 10.31 1987—Jan. 8.50 7? 9.00 June 9.78 Feb. 8.00 Nov. 5 8.75 July 9.50 Mar. 7.50 Aug. 9.50 Apr. 1988—Feb. ? 8.50 Sept. 9.50 May May 11 9.00 Oct. 9.50 June Nov. 9.50 July Dec. 9.50 Aug. Sept. 1986—Jan. 9.50 Oct. Feb. 9.50 Nov. Mar. 9.10 Dec. Apr. 8.83 May 8.50 1988—Jan. June 8.50 Feb. July 8.16 Mar. Aug. 7.90 Apr. Sept. 7.50 May 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 • August 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. 1988 1988, week ending Instrument 11998855 11998866 11998877 Feb. Mar. Apr. May Apr. 29 May 6 May 13 May 20 MONEY MARKET RATES 1 Federal funds1,2 8.10 6.80 6.66 6.58 6.58 6.87 7.09 6.85 6.82 7.02 7.04 2 Discount window borrowing1, ,3 7.69 6.32 5.66 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Commercial paper4,5 3 1-month 7.93 6.61 6.74 6.55 6.57 6.80 7.07 6.85 6.89 7.06 7.08 4 3-month 7.95 6.49 6.82 6.58 6.62 6.86 7.19 6.93 7.00 7.17 7.21 5 6-month 8.00 6.39 6.85 6.58 6.64 6.92 7.31 7.01 7.13 7.30 7.32 Finance paper, directly placed4,5 6 1-month 7.90 6.57 6.61 6.45 6.44 6.71 6.96 6.76 6.84 6.95 6.98 7 3-month 7.77 6.38 6.54 6.39 6.38 6.67 7.00 6.75 6.78 6.91 7.11 8 6-month ^ 7.74 6.31 6.37 6.27 6.23 6.51 6.75 6.57 6.59 6.69 6.81 Bankers acceptances ,6 9 3-month 7.91 6.38 6.75 6.49 6.51 6.79 7.12 6.85 6.96 7.11 7.15 10 6-month 7.95 6.28 6.78 6.49 6.55 6.86 7.25 6.95 7.11 7.23 7.26 Certificates of deposit, secondary market7 11 1-month 7.96 6.61 6.75 6.55 6.56 6.80 7.04 6.84 6.89 7.01 7.06 12 3-month 8.04 6.51 6.87 6.60 6.63 6.92 7.24 6.99 7.09 7.22 7.25 13 6-month 8.24 6.50 7.01 6.69 6.78 7.14 7.52 7.23 7.37 7.51 7.52 14 Eurodollar deposits^ 3-month8 8.28 6.71 7.06 6.73 6.74 7.05 7.40 7.18 7.19 7.34 7.40 U.S. Treasury bills5 Secondary market 15 3-month 7.47 5.97 5.78 5.66 5.70 5.91 6.26 5.91 6.16 6.26 6.22 16 6-month 7.65 6.02 6.03 5.93 5.91 6.21 6.56 6.28 6.43 6.47 6.53 17 1-year ., ,\6- 7.81 6.07 6.33 6.21 6.28 6.56 6.90 6.60 6.75 6.85 6.91 Auction average" 18 3-month 7.47 5.98 5.82 5.69 5.69 5.92 6.27 5.92 6.13 6.31 6.28 19 6-month 7.64 6.03 6.05 5.96 5.91 6.21 6.53 6.28 6.41 6.51 66..5500 20 1-year 7.80 6.18 6.33 6.18 6.30 6.57 6.74 6.74 CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities12 21 1-year 8.42 6.45 6.77 6.64 6.71 7.01 7.40 7.07 7.23 7.33 7.40 22 2-year 9.27 6.86 7.42 7.18 7.27 7.59 8.00 7.67 7.80 7.95 8.02 23 3-year 9.64 7.06 7.68 7.38 7.50 7.83 8.24 7.92 8.06 8.19 8.26 24 5-year 10.12 7.30 7.94 7.71 7.83 8.19 8.58 8.27 8.39 8.53 8.64 25 7-year 10.50 7.54 8.23 8.02 8.19 8.52 8.89 8.60 8.71 8.84 8.95 26 10-year 10.62 7.67 8.39 8.21 8.37 8.72 9.09 8.82 8.93 99..0044 99..1144 27 20-year 10.97 7.85 28 30-year 10.79 7.78 8.59 8.43 8.63 8.95 9.23 9.07 9.14 9.18 9.26 Composite 29 Over 10 years (long-term) .. 10.75 8.14 8.64 8.41 8.61 8.91 9.24 9.02 9.10 9.17 9.31 State and local notes and bonds Moody's series 30 Aaa 8.60 6.95 7.14 7.05 7.20 7.33 7.56 7.30 7.35 7.60 7.65 31 Baa 9.58 7.76 8.17 7.62 7.80 7.82 7.90 7.78 7.80 7.90 8.00 32 Bond Buyer series15 9.11 7.32 7.64 7.49 7.74 7.81 7.90 7.77 7.84 7.85 7.97 Corporate bonds Seasoned issues 33 All industries 12.05 9.71 9.91 9.89 9.86 10.15 10.37 10.20 10.25 10.31 10.40 34 Aaa 11.37 9.02 9.38 9.40 9.39 9.67 9.90 9.73 9.78 9.85 9.94 35 Aa 11.82 9.47 9.68 9.60 9.59 9.86 10.10 9.92 9.97 10.04 10.15 3 3 6 7 A Ba a 1 12 2 . . 7 2 2 8 1 9 0 . . 9 3 5 9 1 9 0 . . 9 5 9 8 1 9 0 . . 9 6 4 2 1 9 0 . . 8 5 9 7 1 1 0 0 . . 9 1 0 7 1 11 0 . . 0 4 4 1 1 1 0 0 . . 2 9 2 2 1 1 0 0 . . 2 % 6 1 1 0 1 . .0 35 1 1 1 1 0 . . 0 4 7 6 38 A-rated, recently-offered utility bonds17 12.06 9.61 9.95 9.75 9.91 10.23 10.61 10.46 10.56 10.51 10.73 MEMO: Dividend/price ratio 39 Preferred stocks 10.49 8.76 8.37 9.02 9.07 9.19 9.25 9.22 9.21 9.20 9.29 40 Common stocks 4.25 3.48 3.08 3.56 3.48 3.57 3.80 3.61 3.70 3.82 3.84 1. Weekly and monthly figures are averages of all calendar days, where the places. Thus, average issuing rates in bill auctions will be reported using two rate for a weekend or holiday is taken to be the rate prevailing on the preceding rather than three decimal places. business day. The daily rate is the average of the rates on a given day weighted by 11. Yields are based on closing bid prices quoted by at least five dealers. the volume of transactions at these rates. 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields 2. Weekly figures are averages for statement week ending Wednesday. are read from a yield curve at fixed maturities. Based on only recently issued, 3. Rate for the Federal Reserve Bank of New York. actively traded securities. 4. Unweighted average of offering rates quoted by at least five dealers (in the 13. Averages (to maturity or call) for all outstanding bonds neither due nor case of commercial paper), or finance companies (in the case of finance paper). callable in less than 10 years, including one very low yielding "flower" bond. Before November 1979, maturities for data shown are 30-59 days, 90-119 days, 14. General obligations based on Thursday figures; Moody's Investors Service. and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 15. General obligations only, with 20 years to maturity, issued by 20 state and 150-179 days, for finance paper. local governmental units of mixed quality. Based on figures for Thursday. 5. Yields are quoted on a bank-discount basis, rather than in an investment 16. Daily figures from Moody's Investors Service. Based on yields to maturity yield basis (which would give a higher figure). on selected long-term bonds. 6. Dealer closing offered rates for top-rated banks. Most representative rate 17. Compilation of the Federal Reserve. This series is an estimate of the yield (which may be, but need not be, the average of the rates quoted by the dealers). on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 7. Unweighted average of offered rates quoted by at least five dealers early in call protection. Weekly data are based on Friday quotations. the day. 18. Standard and Poor's corporate series. Preferred stock ratio based on a 8. Calendar week average. For indication purposes only. sample often issues: four public utilities, four industrials, one financial, and one 9. Unweighted average of closing bid rates quoted by at least five dealers. transportation. Common stock ratios on the 500 stocks in the price index. 10. Rates are recorded in the week in which bills are issued. Beginning with the NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases. Treasury bill auction held on Apr. 18, 1983, bidders were required to state the For address, see inside front cover. percentage yield (on a bank discount basis) that they would accept to two decimal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.36 STOCK MARKET Selected Statistics 1987 1988 IInnddiiccaattoorr 11998855 11998866 11998877 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 108.09 136.00 161.70 178.39 157.13 137.21 134.88 140.55 145.13 149.88 148.46 144.99 2 Industrial 123.79 155.85 195.31 219.52 189.86 163.42 162.19 168.47 173.44 181.57 181.01 176.02 3 Transportation 104.11 119.87 140.39 158.58 140.95 117.57 115.85 121.20 126.09 135.15 133.40 127.63 4 Utility 56.75 71.36 74.29 76.13 73.27 69.86 67.39 70.01 72.89 71.16 69.35 68.66 5 Finance 114.21 147.19 146.48 154.08 137.35 118.30 111.47 119.40 124.36 125.27 121.66 120.35 6 Standard & Poor's Corporation (1941-43 = 10)1 186.84 236.34 286.83 318.66 280.16 245.01 240.96 250.48 258.13 265.74 262.61 256.12 7 American Stock Exchange2 (Aug. 31, 1973 = 50) 229.10 264.38 316.61 353.72 306.34 249.42 248.52 267.29 276.54 295.78 300.43 296.30 Volume of trading (thousands of shares) 8 New York Stock Exchange 109,191 141,385 188,647 177,319 277,026 179,513 178,517 174,755 184,688 176,189 162,518 153,906 9 American Stock Exchange 8,355 11,846 13,832 12,381 18,173 11,268 13,422 9,853 9,961 12,442 10,706 8,931 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers 28,390 36,840 31,990 44,170 38,250 34,180 31,990 31,320 31,990 32,660 33,270 33,070 Free credit balances at brokers4 11 Margin-accounr 2,715 4,880 4,750 4,270 8,415 6,700 4,750 4,675 4,555 4,615 4,395 4,380 12 Cash-account 12,840 19,000 15,640 15,895 18,455 15,360 15,640 15,270 14,695 14,355 13,965 14,150 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 Domestic Nonfinancial Statistics • August 1988 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1987 1988 AAccccoouunntt 11998855 11998866 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. FSLIC-insured institutions 1 Assets 1,070,012 1,163,851 1,195,474 1,202,920 1,207,750 1,216,995 1,218,829 1,239,634' 1,246,743' 1,250,673' 1,254,586' 1,257,418' 1,261,523 2 Mortgages 669900,,771177 697,451 696,561 699,500 701,282'' 704,815 708,433 716,593r 721,115r 724,507' 725,888' 772277,,660055'' 772255,,662266 3 Mortgage-backed securities 115,525 158,193 178,876 180,084 182,067 186,101 191,829 193,756 196,586 198,563' 198,241' 193,972' 197,652 4 Contra-assets to mortgage assets1 . 45,219 41,799 41,046 41,893 41,955' 42,023 42,438 42,167'' 41,381' 42,169' 41,079' 40,724' 41,129 5 Commercial loans 17,424 23,683 22,097 23,098 23,018 23,174 23,300 23,255 23,294 23,204' 23,539' 23,326' 24,148 6 Consumer loans 45,809 51,622 53,808 54,588 55,186 56,079 56,118 56,549 57,465 57,940' 58,331' 58,679' 58,410 7 Contra-assets to nonmortgage loans2... 2,521 3,041 2,974 3,222 3,150 3,242 3,442 3,373 3,433 3,461' 3,575' 3,523' 3,592 8 Cash and investment securities 143,538 164,844 168,705 169,996 170,788 170,071 164,034 173,113 170,707 169,616' 169,918' 173,974' 176,347 9 Other3 104,739 112,898 119,447 120,769 120,514 122,020 120,995 121,909' 122,385' 122,473' 123,323' 124,109' 124,061 10 Liabilities and net worth 1,070,012 1,163,851 1,195,474 1,202,920 1,207,750 1,216,995 1,218,829 l,239,634r 1,246,743' 1,250,673' 1,254,586' 1,257,418' 1,261,523 11 Savings capital 843,932 890,664 893,801 897,999 902,617 904,441 908,907 916,843 922,340 932,613' 939,080' 946,791' 958,473 12 Borrowed money 157,666 196,929 219,308 226,719 226,093 232,332 234,941 246,106 247,197 249,645' 245,635' 239,250' 237,372 13 FHLBB 84,390 100,025 100,504 102,787 102,979 104,191 106,250 109,736 111,283 116,363 114,039 112,725 112,381 14 Other 73,276 96,904 118,804 123,932 123,114 128,141 128,691 136,370 135,914 133,282' 131,596' 126,525' 124,991 15 Other 21,756 23,975 28,417 25,345 26,599 28,170 24,599 27,097 27,409 21,932' 23,857' 25,807' 22,512 16 Net worth 46,657 52,282 53,947 52,856 52,441 52,052 50,382 49,589' 49,796' 46,482' 46,014' 45,570' 43,166 FSLIC-insured federal savings banks 17 Assets 131,868 210,562 253,006 264,105 268,779 272,134 272,834 276,560 279,222 284,274' 284,324' 295,973r 18 Mortgages 72,355 113,638 146,492 152,381 154,839 156,048 156,705 158,507 161,014' 164,013'' 163,909r 171,592' 19 Mortgage-backed securities 15,676 29,766 39,371 40,969 42,714 43,532 44,421 45,117r 45,237' 45,827'' 46,186 46,701 20 Contra-assets to mortgage assets1 8,281 8,568 8,777 8,853 8,700 8,787 8,809 9,0%r 8,899' 9,166r 21 Commercial loans 5,567 6,166 6,277 6,213 6,188 6,275 6,540 6,512'' 6,497'' 6,972r 22 Consumer loans 8,361 13,180 14,789 15,627 16,089 16,549 16,582' 16,563' 17,343 17,696' 17,649' 18,796' 23 Contra-assets to nonmortgage loans2.. 636 714 741 704 702 690 712 578' 736' 24 Finance leases plus interest 505 580 569 577 552 550 566 592 604' 584' 25 Cash and investment .. 31,816 33,294 33,677 34,267 33,589 34,902' 33,965' 35,344' 34,632' 35,705'' 26 Other 11,723 19,034 23,383 24,371 24,133 24,506 24,199 24,122r 24,078' 24,065'' 24,444' 25,525r 27 Liabilities and net worth 131,868 210,562 253,006 264,105 268,779 272,134 272,834 276,560 279,222 284,274' 284,324' 295,973' 28 Savings capital .. 103,462 157,872 182,802 189,998 193,890 194,853 195,213 197,298 199,114 203,196'' 204,329' 214,169'' 29 Borrowed money 19,323 37,329 49,896 53,255 53,652 55,660 56,549 57,551 58,277 60,716'' 59,206' 59,704' 30 FHLBB 10,510 19,897 22,788 24,486 24,981 25,546 26,287 27,350 27,947 29,617 28,280 29,169 31 Other 8,813 17,432 27,108 28,769 28,671 30,114 30,262 30,201 30,330 31,099' 30,926' 30,535' 32 Other 2,732 4,263 6,036 5,981 6,138 6,450 5,631' 6,293 6,350' 5,324' 5,823' 6,587' 33 Net worth 6,351 11,098 14,272 14,871 15,100 15,172 15,444' 15,416r 15,481' 15,039' 14,966' 15,514r Savings banks 34 Assets 216,776 236,866 245,906 244,760 246,833 249,888 251,472 255,989 260,600 259,643 258,628 259,224 262,100 Loans 35 Mortgage 110,448 118,323 124,936 128,217 129,624 130,721 133,298 135,317 137,044 138,494 137,858 139,108 140,835 36 Other 30,876 35,167 37,313 35,200 35,591 36,793 36,134 36,471 37,189 3333,,887711 3355,,009955 3355,,775522 3366,,447766 Securities 37 U.S. government 13,111 14,209 13,650 13,549 13,498 13,720 13,122 13,817 15,694 13,510 12,776 1122,,226699 12,225 38 Mortgage-backed securities 19,481 25,836 28,739 27,785 28,252 28,913 29,655 30,202 31,144 32,772 3322,,224411 3322,,442233 32,272 39 State and local government 2,323 2,185 2,053 2,059 2,050 2,038 2,023 2,034 2,046 2,003 1,994 2,053 2,033 40 Corporate and other . 21,199 20,459 19,956 18,803 18,821 18,573 18,431 18,062 17,583 18,772 18,780 18,271 18,336 41 Cash 6,225 6,894 5,176 4,939 4,806 4,823 4,484 5,529 5,063 5,864 4,841 5,002 4,881 42 Other assets 13,113 13,793 14,083 14,208 14,191 14,307 14,325 14,557 14,837 14,357 15,043 14,346 15,042 43 Liabilities 216,776 236,866 245,906 244,760 246,833 249,888 251,472 255,989 260,600 259,643 258,628 259,224 262,100 44 Deposits 185,972 192,194 194,742 193,274 194,549 195,895 196,824 199,336 202,030 201,497 199,545 200,391 203,407 45 Regular4 181,921 186,345 189,048 187,669 188,783 190,335 191,376 193,777 196,724 196,037 194,322 195,336 198,273 46 Ordinary savings .. 33,018 37,717 41,967 42,178 41,928 41,767 41,773 42,045 42,493 41,959 41,047 41,234 41,867 47 Time 103,311 100,809 100,607 100,604 102,603 105,133 107,063 109,486 112,231 112,429 112,781 113,751 115,529 48 Other 4,051 5,849 5,694 5,605 5,766 5,560 5,448 5,559 5,306 5,460 5,223 5,055 5,134 49 Other liabilities 17,414 25,274 30,436 30,515 31,655 32,467 32,827 34,226 36,167 35,720 3366,,883366 3355,,778877 3355,,773377 50 General reserve accounts 12,823 18,105 19,603 19,549 19,718 20,471 20,407 20,365 21,133 20,633 20,514 20,894 21,024 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.37—Continued 1987 1988 AAccccoouunntt 11998855 11998866 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Credit unions5 5511 TToottaa aa ll nn aa dd ssss ee cc tt aa ss pp //ll ii ii tt aa aa bb ll iilliittiieess 118,010 147,726 156,086 160,644 ! 1 I ! 1 1 1 1 1 5522 FFeeddeerraall 77,861 95,483 100,153 104,150 5533 SSttaattee 40,149 52,243 55,933 56,494 5544 LLooaannss oouuttssttaannddiinngg.... 73,513 86,137 87,765 90,912 n.a. 5555 FFeeddeerraall 47,933 55,304 55,952 58,432 5566 SSttaattee 25,580 30,833 31,813 32,480 n.a. n.a. n.a. n.a. 1 n.a. n.a. n.a. n.a. 5 5 5 5 7 8 7 8 SSaa FF vvii ee nn dd gg ee ss rr aall 1 7 0 0 5 , , 9 9 2 6 6 3 1 8 3 7 4 , , 9 3 5 2 4 7 1 9 4 7 1 , , 1 6 8 3 9 5 1 9 4 6 8 , , 1 2 3 8 7 3 1 1 1 1 1 1 1 1 5599 SSttaattee 35,037 46,373 49,248 52,146 Life insurance companies 60 Assets 825,901 937,551 985,942 995,576 1,005,592 1,017,018 1,026,919 1,021,148 1,024,460 1,033,170 1,042,350 Securities 61 Government 75,230 84,640 89,554 87,279 88,199 89,924 89,408 90,782 91,227 91,302 91,682 62 United States6.. 51,700 59,033 64,201 61,405 62,461 64,150 63,352 64,880 65,186 64,551 64,922 63 State and local . 9,708 11,659 11,208 11,485 11,277 11,190 11,087 11,363 11,539 11,758 11,749 64 Foreign" 13,822 13,948 14,145 14,389 14,461 14,584 14,969 14,539 14,502 14,993 15,011 65 Business 423,712 492,807 528,789 537,507 555,423 551,701 558,787 549,426 548,767 553,486 563,019 n.a. n.a. 66 Bonds 346,216 401,943 425,788 432,095 448,146 442,604 451,453 455,678 459,537 461,942 469,207 67 Stocks 77,496 90,864 103,001 105,412 107,277 109,097 107,334 93,748 89,230 91,544 93,812 68 Mortgages 171,797 193,842 198,760 200,382 201,297 202,241 204,264 206,507 208,839 212,375 212,637 69 Real estate 28,822 31,615 32,149 32,357 32,699 32,992 33,048 33,235 33,538 34,016 34,178 70 Policy loans 54,369 54,055 53,468 53,378 53,338 53,330 53,422 53,413 53,334 53,313 53,265 71 Other assets 71,971 80,592 83,222 84,390 85,420 86,830 87,991 87,785 88,755 88,678 87,569 1. Contra-assets are credit-balance accounts that must be subtracted from the NOTE. FSLlC-insured institutions: Estimates by the FHLBB for all institutions corresponding gross asset categories to yield net asset levels. Contra-assets to insured by the FSLIC and based on the FHLBB thrift Financial Report. mortgage loans, contracts, and pass-through securities include loans in process, FSLIC-insured federal savings banks: Estimates by the FHLBB for federal unearned discounts and deferred loan fees, valuation allowances for mortgages savings banks insured by the FSLIC and based on the FHLBB thrift Financial "held for sale," and specific reserves and other valuation allowances. Report. 2. Contra-assets are credit-balance accounts that must be subtracted from the Savings banks: Estimates by the National Council of Savings Institutions for all corresponding gross asset categories to yield net asset levels. Contra-assets to savings banks in the United States and for FDIC-insured savings banks that have nonmortgage loans include loans in process, unearned discounts and deferred loan converted to federal savings banks. fees, and specific reserves and valuation allowances. Credit unions: Estimates by the National Credit Union Administration for 3. Holding of stock in Federal Home Loan Bank and Finance leases plus federally chartered and federally insured state-chartered credit unions serving interest are included in "Other" (line 9). natural persons. 4. Excludes checking, club, and school accounts. Life insurance companies: Estimates of the American Council of Life Insurance 5. Data include all federally insured credit unions, both federal and state for all life insurance companies in the United States. Annual figures are annualchartered, serving natural persons. statement asset values, with bonds carried on an amortized basis and stocks at 6. Direct and guaranteed obligations. Excludes federal agency issues not year-end market value. Adjustments for interest due and accrued and for guaranteed, which are shown in the table under "Business" securities. differences between market and book values are not made on each item separately 7. Issues of foreign governments and their subdivisions and bonds of the but are included, in total, in "other assets." International Bank for Reconstruction and Development. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • August 1988 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Fiscal Fiscal Type of account or operation year year 1987 1988 1986 1987 Jan. Feb. Mar. Apr. May U.S. budget1 1 Receipts, total 769,091 854,143 85,525 81,791 60,355 65,730 109,323 59,711 2 On-budget 568,862 640,741 67,645 60,645 40,610 44,958 81,993 39,764 3 OIF-budget 200,228 213,402 17,880 21,146 19,745 20,772 27,330 19,947 4 Outlays, total 990,258 1,004,586 109,771 65,786 84,260 94,877 94,433 82,173 5 On-budget 806,760 810,754 77,876 66,573 66,507 76,858 79,508 64,566 6 Off-budget 183,498 193,832 31,896 -787 17,753 18,020 15,925 17,607 7 Surplus, or deficit (-), total -221,167 -150,444 -24,246 16,005 -23,905 -29,147 13,890 -22,462 8 On-budget -237,898 -170,014 -10,230 -5,928 -25,897 -31,899 2,485 -24,802 9 Off-budget 16,731 19,570 -14,016 21,933 1,992 2,752 11,405 2,340 Source of financing (total) 10 Borrowing from the public 236,187 150,070 9,766 5,281 20,157 17,160 -334 7,559 11 Operating cash (decrease, or increase (~)1 -14,324 -5,052 -1,218 -17,555 11,002 6,009 -23,276 27,223 12 Other -696 5,426 15,698 -3,730 -7,257 5,979 9,719 -12,321 MEMO 13 Treasury operating balance (level, end of period) 31,384 36,436 22,369 39,924 28,922 22,913 46,189 18,966 14 Federal Reserve Banks 7,514 9,120 5,313 10,276 2,473 2,403 16,186 2,871 15 Tax and loan accounts 23,870 27,316 17,056 29,648 26,450 20,510 30,003 16,095 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 monetary 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 FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr 1986 1987 1988 111999888666 111999888777 HI H2 HI H2 Mar. Apr. May RECEIPTS 1 All sources 769,091 854,143 394,345 387,524 447,282 421,712 65,730 109,323 59,711 2 Individual income taxes, net 348,959 392,557 169,444 183,156 205,157 192,575 20,637 53,334 17,958 3 Withheld 314,803 322,463 153,919 164,071 156,760 170,203 33,296 24,913 27,071 4 Presidential Election Campaign Fund 36 33 31 4 30 4 7 7 7 5 Nonwithheld 105,994 142,957 78,981 27,733 112,421 31,223 4,315 50,477 9,714 6 Refunds 71,873 72,896 63,488 8,652 64,052 8,853 16,982 22,062 18,834 Corporation income taxes 7 Gross receipts 80,442 102,859 41,946 42,108 52,396 52,821 14,909 14,030 22,,774488 8 Refunds 17,298 18,933 9,557 8,230 10,881 7,119 2,203 2,004 1,136 9 Social insurance taxes and contributions, net 283,901 303,318 156,714 134,006 163,519 143,755 25,676 37,357 33,396 10 Employment taxes and contributions2 255,062 273,185 139,706 122,246 146,696 130,388 25,141 34,464 2244,,994488 11 Self-employment taxes and contributions' 11,840 13,987 10,581 1,338 12,020 1,889 880 8,833 997744 12 Unemployment insurance 24,098 25,418 14,674 9,328 14,514 10,977 179 2,477 8,073 13 Other net receipts4 4,742 4,715 2,333 2,429 2,310 2,390 356 416 375 14 Excise taxes 32,919 32,510 15,944 15,947 15,845 17,680 2,885 2,767 3,055 15 Customs deposits 13,327 15,032 6,369 7,282 7,129 7,993 1,444 1,204 1,282 16 Estate and gift taxes 6,958 7,493 3,487 3,649 3,818 3,610 622 749 751 17 Miscellaneous receipts5 19,884 19,307 10,002 9,605 10,299 10,399 1,760 1,886 1,657 OUTLAYS 18 All types 990,231 1,004,586 486,058 506,556R 502,898' 532,145' 94,877 95,433 82,173 19 National defense 273,375 281,999 135,367 138,544 142,886 146,995 26,484 26,747 20,967 20 International affairs 14,152 11,649 5,384 8,938 4,374 4,487 1,490 1,561 907 21 General science, space, and technology 8,976 9,216 4,191 4,594 4,324 5,469 956 949 911 22 Energy 4,735 4,115 2,484 2,446 2,335 1,468 538 382 507 23 Natural resources and environment 13,639 13,363 6,245 7,141 6,175 7,590 1,082 1,037 1,133 24 Agriculture 31,449 27,356 14,482 15,660 11,824 14,640 1,160 2,099 1,304 25 Commerce and housing credit 4,890 6,182 860 3,764 4,893 3,852 2,409 1,203 163 26 Transportation 28,117 26,228 12,658 14,745 12,113 14,096 1,838 2,053 2,427 27 Community and regional development 7,233 5,051 3,169 3,651 3,108 2,075 535 555 2% 28 Education, training, employment, and social services 30,585 29,724 14,712 16,209 14,182 15,592 2,545 2,253 2,410 29 Health 35,935 39,968 17,872 18,795 20,318 20,750 3,765 3,791 3,741 30 Social security and medicare 268,921 282,473 135,214 138,299 142,864 158,469 26,145 24,920 24,487 31 Income security 119,796 123,250 60,786 59,979 62,248 61,201 12,738 12,916 10,214 32 Veterans benefits and services 26,356 26,782 12,193 14,190 12,264 14,956 2,555 3,748 1,441 33 Administration of justice 6,603 7,548 3,352 3,413 3,626 4,291 868 825 831 34 General government 6,104 5,948 3,566 1,860 3,344 3,560 383 697 1,017 35 General-purpose fiscal assistance 6,431 1,621 2,179 2,886 337 1,175 0 0 0 36 Net interest6 136,008 138,570 68,054 66,226 70,110 71,933 12,187 12,592 12,719 37 Undistributed offsetting receipts' -33,007 -36,455 -17,183 -16,475 -19,102 -17,684 -2,802 -2,895 -3,303 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 outlays 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 Financial Statistics • August 1988 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1986 1987 1988 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 1,991.1 2,063.6 2,129.5 2,218.9 2,250.7 2,313.1 2,354.3 2,435.2 2,493.2 2 Public debt securities 1,986.8 2,059.3 2,125.3 2,214.8 2,246.7 2,309.3 2,350.3 2,431.7 2,487.6 3 Held by public 1,634.3 1,684.9 1,742.4 1,811.7 1,839.3 1,871.1 1,893.1 1,954.1 1,996.7 4 Held by agencies 352.6 374.4 382.9 403.1 407.5 438.1 457.2 477.6 490.8 5 Agency securities 4.3 4.3 4.2 4.0 4.0 3.8 4.0 3.5 5.6 6 Held by public 3.2 3.2 3.2 3.0 2.9 2.9 3.0 2.7 5.1 7 Held by agencies 1.1 1.1 1.1 1.1 1.1 1.0 1.0 .8 .6 8 Debt subject to statutory limit 1,973.3 2,060.0 2,111.0 2,200.5 2,232.4 2,295.0 2,336.0 2,417.4 2,487.0 9 Public debt securities 1,972.0 2,058.7 2,109.7 2,199.3 2,231.1 2,293.7 2,334.7 2,416.3 2,486.7 10 Other debt1 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.1 .3 11 MEMO: Statutory debt limit 2,078.7 2,078.7 2,111.0 2,300.0 2,300.0 2,320.0 2,800.0 2,800.0 2,800.0 1. Includes guaranteed debt of Treasury and other federal agencies, specified SOURCES. Treasury Bulletin and Monthly Statement of the Public Debt of the participation certificates, notes to international lending organizations, and District United States. of Columbia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1987 1988 Type and holder 1984 1985 1986 1987 Q2 Q3 Q4 Q1 1 Total gross public debt 1,663.0 1,945.9 2,214.8 2,431.7 2,309.3 2,350.3 2,431.7 2,487.6 By type 2 Interest-bearing debt 1,660.6 1,943.4 2,212.0 2,428.9 2,306.7 2,347.7 2,428.9 2,484.9 3 Marketable 1,247.4 1,437.7 1,619.0 1,724.7 1,659.0 1.676.0 1,724.7 1,758.7 4 Bills 374.4 399.9 426.7 389.5 391.0 378.3 389.5 392.6 5 Notes 705.1 812.5 927.5 1,037.9 984.4 1.005.1 1,037.9 1,059.9 6 Bonds 167.9 211.1 249.8 282.5 268.6 277.6 282.5 291.3 7 Nonmarketable1 413.2 505.7 593.1 704.2 647.7 671.8 704.2 726.2 8 State and local government series 44.4 87.5 110.5 139.3 125.4 129.0 139.3 142.9 1 9 0 Fo G re o ig v n e r i n s m su e e n s t 2 9 9 . . 1 1 7 7 . . 5 5 4 4 . . 7 7 4 4. . 0 0 5 5 . . 1 1 4 4 . . 3 3 4 4 . . 0 0 66..11 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes. 73.1 78.1 90.6 99.2 95.2 97.0 99.2 102.3 13 Government account series 286.2 332.2 386.9 461.3 421.6 440.7 461.3 474.4 14 Non-interest-bearing debt 2.3 2.5 2.8 2.8 2.6 2.5 2.8 2.6 By holder4 15 U.S. government agencies and trust funds 289.6 348.9 403.1 477.6 438.1 457.2 477.7' 490.8 16 Federal Reserve Banks 160.9 181.3 211.3 222.6 212.3 211.9 222.6 217.5 17 Private investors 1,212.5 1,417.2 1,602.0 1,745.2 1,657.7 1,682.6 1,745.2 1,778.2 18 Commercial banks 183.4 192.2 232.1' 252.3 238.4' 251.3' 253.3 260.7 19 Money market funds 25.9 25.1 28.0' 14.3' 20.6 15.2' 14.3' 14.9 20 Insurance companies 76.4' 115.4 135.4 n.a. 140.0 143.0 n.a. n.a. 21 Other companies 50.1 59.0 68.8 84.6 79.7' 81.8' 84.6 n.a. 22 State and local Treasurys 173.C 224.0' 260.0' n.a. n.a. n.a. n.a. n.a. Individuals 23 Savings bonds 74.5 79.8 92.3 101.1 96.8 98.5 101.1 104.0 24 Other securities 69.3 75.0 70.5 n.a. 68.6 70.4 n.a. n.a. 25 Foreign and international 192.9 212.5 251.6 287.3' 268.6' 267.0' 287.3' 323.5 26 Other miscellaneous investors6 354.7' 434.2' 467.1' 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 1988 1988 11998855 11998866 11998877 Mar. Apr. May Apr. 20 Apr. 27 May 4 May 11 May 18 May 25 Immediate delivery2 1 U.S. Treasury securities 75,331 95,445 110,052 90,640 94,367' 105,177 109,666 77,047' 86,606 108,291 115,528 106,532 By maturity 2 Bills 32,900 34,247 37,924 28,277 29,312' 30,333 32,125 22,706' 29,906 31,522 29,888 31,316 3 Other within 1 year 1,811 2,115 3,272 2,986 3,578 3,844 3,226 3,567 4,004 2,926 4,368 4,075 4 1-5 years 18,361 24,667 27,918 23,706 24,704' 30,831 29,959 21,952 21,793 31,862 34,250 34,252 5 5-10 years 12,703 20,456 24,014 21,797 22,630 23,852 26,573 16,961 19,803 25,629 24,344 22,190 6 Over 10 years 9,556 13,961 16,923 13,874 14,143 16,318 17,783 11,861 11,101 16,353 22,678 14,699 By type of customer 7 U.S. government securities dealers 3,336 3,670 2,936 2,743 2,815 2,620 2,219 2,392 3,592 2,358 3,197 2,395 8 U.S. government securities brokers 36,222 49,558 61,539 52,625 55,501 63,544 66,366 44,457 50,671 66,293 69,044 64,720 9 All others3 35,773 42,218 45,576 35,272 SE.OSO' 39,012 41,080 30,197' 32,342 39,640 43,286 39,416 10 Federal agency securities 11,640 16,748 18,087 15,677 14,715 15,142 16,623 13,598 13,478 14,520 16,408 15,641 11 Certificates of deposit 4,016 4,355 4,112 3,127 3,429 2,905 3,824 3,701 2,741 2,713 2,951 2,987 12 Bankers acceptances 3,242 3,272 2,965 2,278 2,458 2,131 2,391 2,647 2,128 2,436 2,360 1,886 13 Commercial paper 12,717 16,660 17,135 17,257 18,470 18,114 18,925 17,462 19,747 17,386 17,826 17,132 Futures contracts 14 Treasury bills 5,561 3,311 3,233 2,768 2,995 3,189 4,786 1,158 2,049 4,149 4,315 2,438 15 Treasury coupons 6,085 7,175 8,964 9,414 8,773 9,113 11,081 6,704 7,753 8,258 10,658 10,277 16 Federal agency securities — 252 16 5 6 0 0 0 0 0 0 0 0 Forward transactions5 17 U.S. Treasury securities 1,283 1,876 2,029 1,454 1,505 2,517 1,142 1,028 2,648 3,082 1,843 2,0% 18 Federal agency securities 3,857 7,831 9,290 8,426 7,418' 8,604 8,922 6,222 7,009 10,793 9,385 7,242 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 NonfinancialS tatistics • August 1988 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Averages of daily figures, in millions of dollars 1988 1988 IItteemm Mar. Apr. May Apr. 27 May 4 May 11 May 18 May 25 Positions Net immediate2 1 U.S. Treasury securities 7,391 12,912 -6,216 -10,138 —15,292r -26,254 -22,031r -21,489 -24,799 -24,412 -29,055 2 Bills 10,075 12,761 4,317 3,290 5,45r 214 1,727' 1,624 999 -89 269 3 Other within 1 year 1,050 3,706 1,557 -780 -970 -2,616 -1,382 -2,322 -2,042 -2,572 -3,121 4 1-5 years 5,154 9,146 649 2,992 -3,217' -6,775 -5,334 -2,762 -5,314 -6,555 -10,068 5 5-10 years -6,202 -9,505 -6,564 -8,193 -8,54C -8,637 -8,807 -9,625 -9,603 -7,208 -8,222 6 Over 10 years -2,686 -3,197 -6,174 -7,447 -8,016 -8,441 -8,235 -8,404 -8,841 -7,988 -7,913 7 Federal agency securities 22,860 32,984 31,910 28,780 26,632' 26,743 25,765' 26,861 27,358 27,790 25,068 8 Certificates of deposit 9,192 10,485 8,188 5,619 5,678 6,083 5,337 5,604 5,607 5,948 6,399 9 Bankers acceptances 4,586 5,526 3,661 3,197 3,059 2,392 3,378 3,151 2,719 2,324 1,899 10 Commercial paper 5,570 8,089 7,496 6,204 5,591 4,519 5,727 5,990 4,868 4,140 3,655 Futures positions 11 Treasury bills -7,322 -18,059 -3,373 -4,192 -3,681 -2,027 -3,022 -559 -820 -2,480 -3,398 12 Treasury coupons 4,465 3,473 5,988 5,406 5,101 4,461 5,624r 4,788 3,263 3,695 5,442 13 Federal agency securities -722 -153 -95 0 0 0 0 0 0 0 0 Forward positions 14 U.S. Treasury securities -911 -2,144 -1,211 734 1,142 2,203 1,423 1,111 856 2,857 3,076 15 Federal agency securities -9,420 -11,840 -18,817 -16,442 -16,517 -14,963 -15,879 -15,483 -15,802 -16,540 -12,928 Financing3 Reverse repurchase agreements 16 Overnight and continuing 68,035 98,954 124,791 129,242 128,158 105,221 128,980 133,448 122,454 137,632 127,670 17 Term 80,509 108,693 148,033 154,817 173,474 173,858 183,522 187,705 188,633 162,396 171,438 Repurchase agreements3 18 Overnight and continuing 101,410 141,735 170,840 167,007 169,194 169,031 163,766 174,225 157,862 173,713 164,323 19 Term 70,076 102,640 120,980 128,663 138,097 139,537 145,290 148,455 155,756 128,868 138,889 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 Nov. Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies 271,220 293,905 307,361 334,300 341,386 338,483 346,901 351,356' 348,273 2 Federal agencies 35,145 36,390 36,958 37,303 37,981 37,637 37,286 36,844' 36,672 3 Defense Department' 142 71 33 15 13 13 12 12 11 4 Export-Import Bank2,3 15,882 15,678 14,211 12,470 11,978 11,978 11,978 11,494' 11,494 5 Federal Housing Administration4 133 115 138 182 183 98 101 100 103 6 Government National Mortgage Association participation certificates 2,165 2,165 2,165 1,965 1,615 1,615 1,165 1,165 830 7 Postal Service6 1,337 1,940 3,104 4,603 6,103 6,103 6,103 6,103 6,103 8 Tennessee Valley Authority 15,435 16,347 17,222 18,068 18,089 17,830 17,927 17,970 18,131 9 United States Railway Association 51 74 85 0 0 0 0 0 0 10 Federally sponsored agencies7 237,012 257,515 270,553 296,997 303,405 300,846 309,615 314,512 311,601 11 Federal Home Loan Banks 65,085 74,447 88,752 111,185 115,725 116,374 117,569 118,250 118,153 12 Federal Home Loan Mortgage Corporation 10,270 11,926 13,589 17,762 17,645 15,581 19,405 20,143 17,199 13 Federal National Mortgage Association 83,720 93,896 93,563 95,096 97,057 97,195 98,593 99,853 100,911 14 Farm Credit Banks 72,192 68,851 62,478 55,629' 55,275 54,072 55,275 56,145 54,311 15 Student Loan Marketing Association 5,745 8,395 12,171 16,125 16,503 16,424 16,923 18,271 18,877 16 Financing Corporation n.a. n.a. n.a. 1,200 1,200 1,200 1,850 1,850 2,150 MEMO 17 Federal Financing Bank debt10 145,217 153,373 157,510 156,850 152,417 152,099 150,178 149,721 150,044 Lending to federal and federally sponsored agencies 18 Export-Import Bank3 15,852 1155,,667700 1144,,220055 1122,,446644 1111,,997722 1111,,997722 1111,,997722 1111,,448888 1111,,448888 19 Postal Service6 1,087 1,690 2,854 4,353 5,853 5,853 5,853 5,853 5,853 20 Student Loan Marketing Association 5,000 5,000 4,970 4,940 4,940 4,940 4,940 4,940 4,940 21 Tennessee Valley Authority 13,710 14,622 15,797 16,688 16,709 16,450 16,547 16,590 16,751 22 United States Railway Association6 51 74 85 0 0 0 0 0 0 Other Lending11 23 Farmers Home Administration 58,971 64,234 65,374 64,934 59,674 5599,,667744 59,674 59,674 5599,,667744 24 Rural Electrification Administration 20,693 20,654 21,680 21,215 21,191 21,187 19,193 19,184 19,203 25 Other 29,853 31,429 32,545 32,256 32,078 32,023 31,999 31,992 32,135 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. 1, 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 • August 1988 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1987 1988 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May 1 All issues, new and refunding' 214,189 147,011 102,407 6,821 8,320 8,385 5,412 8,585 9,821 5,847 6,885 Type of issue 2 General obligation 52,622 46,346 30,589 1,248 2,472 1,995 1,259 2,880 2,776 1,707 2,847 3 Revenue 161,567 100,664 71,818 5,573 5,848 6,390 4,153 5,705 7,045 4,140 4,038 Type of issuer 4 13,004 14,474 10,102 385 431 550 423 1,197 613 441 913 5 Special district and statutory authority 134,363 89,997 65,460 5,128 5,076 5,447 3,220 5,154 5,823 4,078 3,884 6 Municipalities, counties, and townships 66,822 42,541 26,845 1,308 2,813 2,388 1,769 2,234 2,677 1,328 2,088 7 Issues for new capital, total 156,050 83,490 56,789 4,498 6,626 5,913 2,862 5,773 6,044 3,948 4,680 Use of proceeds 8 Education 16,658 16,948 9,525 690 1,002 931 841 754 933 911 1,197 9 Transportation 12,070 11,666 3,677 175 351 455 189 826 559 215 448 10 Utilities and conservation 26,852 35,383 7,912 615 1,094 377 326 655 1,016 429 394 11 Social welfare 63,181 17,332 11,107 949 1,664 1,278 740 650 1,218 1,099 619 12 Industrial aid 12,892 5,594 6,551 815 330 1,297 153 2,473 105 298 227 13 Other purposes 24,398 47,433 18,020 1,254 2,185 1,575 613 415 2,213 996 1,795 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 iissssuuee oorr iissssuueerr,, 11998855 11998866 11998877 oorr uussee Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 All issues1 239,015 423,726 392,156r 29,363 20,710 14,322 11,872 22,175 22,394' 25,902' 20,650 2 Bonds2 203,500 355,293 325,648' 23,705 17,631 13,624 11,098 19,485 18,504' 20,815' 18,073 Type of offering 3 Public, domestic 119,559 231,936 209,279 22,045 16,135 12,891 10,763 18,246 16,713' 19,827 16.000 4 Private placement, domestic3 46,200 80,760 92,070' n.a. n.a. n.a. n.a. n.a. 5. Sold abroad 37,781 42,596 24,299 1,660 1,496 733 335 1,239 1,791 988 2,073 Industry group 6 Manufacturing 63,973 91,548 61,666' 3,509 2,784 1,280 928 3,053 3,151 3,482 4,518 7 Commercial and miscellaneous 17,066 40,124 49,327' 1,479 1,165 483 2,577 2,084 1,396 1,007 703 8 Transportation 6,020 9,971 11,974 25 263 0 226 0 200 1,017 890 9 Public utility 13,649 31,426 23,004' 1,702 1,025 895 1,570 1,142 1,718 2,259 1,100 10 Communication 10,832 16,659 7,340 930 1,384 290 510 206 101 115 129 11 Real estate and financial 91,958 165,564 172,343' 16,060 11,011 10,676 5,287 13,000 11,937' 12,935' 10,733 12 Stocks3 35,515 68,433 66,508 5,658 3,079 698 774 2,690 3,890 4,972 2,800 Type 13 Preferred 6,505 11,514 10,123 1,112 236 162 61 1,388 376 625 241 14 Common 29,010 50,316 43,228 4,546 2,843 533 713 1,302 3,534 4,49C 2,336 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 13,880 858 703 237 76 268 296 256' 320 17 Commercial and miscellaneous 9,149 10,617 12,888 807 656 86 14 360 44 99 179 18 Transportation 1,544 2,427 2,439 11 40 149 1 1 474 32' 150 19 Public utility 1,966 4,020 4,322 529 75 25 0 100 142 93 238 20 Communication 978 1,825 1,458 75 107 1 11 60 0 63 109 21 Real estate and financial 16,178 34,517 31,521 3,378 1,498 200 672 1,901 2,933 4,544' 1,581 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. Before 1987, annual totals include Excludes secondary offerings, employee stock plans, investment companies other underwritten issues only. than closed-end, intracorporate transactions, equities sold abroad, and Yankee SOURCES. IDD Information Services, Inc., U.S. Securities and Exchange bonds. Stock data include ownership securities issued by limited partnerships. Commission and the Board of Governors of the Federal Reserve System. 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 11998877 Sept. Oct. Nov. Dec. Jan. Feb. Mar/ Apr. INVESTMENT COMPANIES1 1 Sales of own shares2 411,751 381,260 24,834 25,990 21,927 26,494 30,343 23,265 24,589 22,970 2 Redemptions of own shares3 239,394 314,252 28,323 34,597 20,400 28,099 22,324 20,914 23,968 25,004 3 Net sales 172,357 67,008 -3,489 -8,607 1,507 -1,605 8,019 2,351 620 -2,034 4 Assets4 424,156 453,842 521,007 456,422 446,479 453,842 468,998 481,232 473,206 473,070 5 Cash position5 30,716 38,006 42,397 40,929 41,432 38,006 40,157 41,232 43,561 45,111 6 Other 393,440 415,836 478,610 415,493 405,047 415,836 428,841 439,995 426,645 427,959 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 1988 AAccccoouunntt 11998855 11998866 11998877 Q2 Q3 Q4 Ql Q2 Q3 Q4 Qlr 1 Corporate profits with inventory valuation and capital consumption adjustment 277.6 284.4 304.7 282.3 286.4 281.1 294.0 296.8 314.9 313.0 310.9 2 Profits before tax 224.8 231.9 274.0 224.4 236.3 247.9 257.0 268.7 284.9 285.6 281.5 3 Profits tax liability 96.7 105.0 136.3 102.1 106.1 113.9 128.0 134.2 143.0 140.0 137.2 4 Profits after tax 128.1 126.8 137.7 122.3 130.2 134.0 129.0 134.5 141.9 145.6 144.2 5 Dividends 81.3 86.8 93.8 86.6 87.7 88.6 90.3 92.4 95.2 97.3 99.3 6 Undistributed profits 46.8 40.0 43.9 35.7 42.5 45.4 38.7 42.1 46.7 48.3 44.9 7 Inventory valuation -.8 6.5 -17.5 11.3 6.0 -8.9 -11.3 -20.0 -17.6 -21.3 -16.4 8 Capital consumption adjustment 53.5 46.0 48.1 46.7 44.0 42.1 48.2 48.0 47.7 48.7 45.8 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 • August 1988 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 11998866 11998877 Q4 QI Q2 Q3 Q4 QL Q21 Q31 1 379.47 388.60 430.23 386.09 374.23 377.65 393.13 409.37 409.73 429.01 438.22 Manufacturing ? 69.14 70.91 163.01 69.87 70.47 68.76 71.78 72.64 75.33 79.00 79.30 3 73.56 74.55 85.39 74.20 70.18 72.03 75.78 80.20 82.45 83.82 86.43 Nonmanufacturing 4 11.22 11.34 12.39 10.31 10.31 11.02 11.64 12.39 12.50 12.87 12.51 Transportation 5 6.66 5.91 6.65 6.41 5.55 5.77 6.21 6.10 6.76 6.78 6.81 6 Air 6.26 6.55 7.62 6.84 7.46 5.72 5.91 7.12 6.90 7.44 8.43 7 Other 5.89 6.39 6.97 6.25 5.97 6.19 7.05 6.35 6.94 6.58 7.37 Public utilities 8 33.91 31.58 32.90 33.78 30.85 31.13 31.31 33.01 29.94 32.55 34.31 9 12.47 13.18 14.28 12.34 12.75 12.35 13.58 14.06 14.37 13.81 14.63 1100 160.38 168.19 186.40 166.08 160.70 164.69 169.87 177.50 174.54 186.15 188.44 •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 Liabilities1 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 89.9 111.9 123.4 135.3 134.7 131.1 134.7 141.6 141.1 2 Business 113.4 137.8 157.5 166.8 159.7 173.4 181.4 188.1 188.3 207.6 3 Real estate 20.5 23.8 28.0 29.8 31.0 32.6 34.7 36.5 38.0 39.5 4 Total 217.3 251.5 297.4 320.0 326.0 340.6 347.2 359.3 367.9 388.2 Less: 5 Reserves for unearned income 30.3 33.8 39.2 40.7 42.4 41.5 40.4 41.2 42.5 45.3 6 Reserves for losses 3.7 4.2 4.9 5.1 5.4 5.8 5.9 6.2 6.5 6.8 7 Accounts receivable, net 183.2 213.5 253.3 274.2 278.2 293.3 300.9 311.9 318.9 336.1 8 All other 34.4 35.7 45.3 49.5 60.0 58.6 59.0 57.7 64.5 58.2 9 Total assets 217.6 249.2 298.6 323.7 338.2 351.9 359.9 369.6 383.4 394.3 LIABILITIES 10 Bank loans 18.3 20.0 18.0 16.3 16.8 18.6 17.2 17.3 15.9 16.4 11 Commercial paper 60.5 73.1 99.2 108.4 112.8 117.8 119.1 120.4 124.2 128.4 Debt 12 Other short-term 11.1 12.9 12.7 15.8 16.4 17.5 21.8 24.8 26.9 28.0 13 Long-term 67.7 77.2 94.4 106.9 111.7 117.5 118.7 121.8 128.2 137.1 14 All other liabilities 31.2 34.5 41.5 40.9 45.0 44.1 46.5 49.1 48.6 52.8 15 Capital, surplus, and undivided profits 28.9 31.5 32.8 35.4 35.6 36.4 36.6 36.3 39.5 31.5 16 Total liabilities and capital 217.6 249.2 298.6 323.7 338.2 351.9 359.9 369.6 383.4 394.3 1. 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 1987 1988 TTyyppee Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 156,297 171,966 201,129 202,829 205,869 206,755 213,337 216,007 218,914 Retail financing of installment sales 2 Automotive (commercial vehicles) 20,660 25,952 33,865 34,454 35,674 36,419 36,318 36,914 37,619 3 Business, industrial, and farm equipment 22,483 22,950 24,763 24,764 24,987 25,474 26,976 27,081 27,263 Wholesale financing 4 Automotive 23,988 23,419 30,396 30,901 31,059 30,115 28,654 27,329 27,361 5 Equipment 4,568 5,423 5,729 5,794 5,693 5,308 5,323 5,251 5,429 6 All other 6,809 7,079 8,074 8,151 8,408 8,454 88,,333311 8,347 8,311 Leasing 7 Automotive 16,275 19,783 21,883 22,013 21,943 22,943 23,100 23,493 23,458 8 Equipment 34,768 37,833 41,911 41,964 43,002 43,245 48,175 50,411 5511,,009922 9 Loans on commercial accounts receivable and factored commercial accounts receivable 15,765 15,959 18,362 18,501 18,024 18,506 17,862 17,895 18,789 10 All other business credit 10,981 13,568 16,146 16,287 17,079 16,291 17,062 19,287 19,592 Net change (during period) 11 19,607 15,669 7,377 1,700 3,040 886 549 2,670 2,907 Retail financing of installment sales 12 Automotive (commercial vehicles) 5,067 5,292 1,209 589 1,220 745 -101 596 705 13 Business, industrial, and farm equipment -363 467 435 1 223 487 -232 105 182 Wholesale financing 14 Automotive 5,423 -569 3,604 505 158 -944 -1,461 -1,325 32 15 Equipment -867 855 202 65 -101 -385 14 -72 178 16 All other 1,069 270 118 77 257 46 -123 16 -36 Leasing 17 Automotive 3,896 3,508 41 130 -70 1,000 157 393 -34 18 Equipment 2,685 3,065 777 53 1,038 243 632 22,,223366 681 19 Loans on commercial accounts receivable and factored commercial accounts receivable 2,161 194 649 139 -477 482 -643 -643 894 20 All other business credit 536 2,587 342 141 792 -788 770 689 305 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 • August 1988 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1987 1988 IItteemm 11998855 11998866 11998877 Nov. Dec. Jan. Feb. Mar. Apr. May Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 104.1 118.1 137.0 135.9 147.3 150.1 139.4 147.2 151.4' 141.1 2 Amount of loan (thousands of dollars) 77.4 86.2 100.5 100.2 107.7 108.4 104.3 106.3 112.1' 104.6 3 Loan/price ratio (percent) 77.1 75.2 75.2 75.4 74.9 74.0 76.4 75.0 76.2' 76.5 4 Maturity (years) 26.9 26.6 27.8 28.3 28.2 28.2 28.1 27.3 27.7 28.0 5 Fees and charges (percent of loan amount) 2.53 2.48 2.26 2.33 2.22 2.17 2.23 2.28 2.20' 2.23 6 Contract rate (percent per year) 11.12 9.82 8.94 8.92 8.78 8.75 8.76 8.77 8.76' 8.59 Yield (percent per year) 7 FHLBB series3 11.58 10.25 9.31 9.30 9.15 9.10 9.12 9.15 9.13r 8.95 8 HUD series4 12.28 10.07 10.13 10.59 10.52 10.09 9.80 9.99 n.a. n.a. SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series)5 12.24 9.91 10.12 10.76 10.63 10.17 9.86 10.28 n.a. n.a. 10 GNMA securities6 11.61 9.30 9.42 9.96 10.18 9.83 9.53 9.53 9.67 9.93 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 94,574 98,048 95,030 95,411 96,649 97,159 98,358 99,787 100,7% n.a. 12 FHA/VA-insured 34,244 29,683 21,660 21,510 20,288 20,237 20,181 20,094 19,932 n.a. 13 Conventional 60,331 68,365 73,370 73,902 76,361 76,923 78,177 79,693 80,864 n.a. Mortgage transactions (during period) 14 Purchases 21,510 30,826 20,531 1,297 3,747 1,267 2,629 2,776 2,409 n.a. Mortgage commitments1 15 Contracted (during period) 20,155 32,987 25,415 2,899 3,115 2,254 2,516 3,823 2,555 n.a. 16 Outstanding (end of period) 3,402 3,386 4,886 5,845 4,886 5,542 4,966 6,149 6,033 n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)* 17 Total 12,399 13,517 12,802 12,904 12,871 13,090 n.a. n.a. n.a. n.a. 18 FHA/VA 841 746 686 663 657 632 646 n.a. n.a. n.a. 19 Conventional 11,559 12,771 12,116 12,240 12,215 12,458 13,280 n.a. n.a. n.a. Mortgage transactions (during period) 20 Purchases 44,012 103,474 76,845 2,978 3,267 2,168 3,293 n.a. n.a. n.a. 21 Sales 38,905 100,236 75,082 2,742 3,201 1,832 2,414 2,309 2,058 n.a. Mortgage commitments9 22 Contracted (during period) 48,989 110,855 71,467 2,668 2,693 3,868 4,910 n.a. n.a. n.a. 1. Weighted averages based on sample surveys of mortgages originated by 6. Average net yields to investors on Government National Mortgage Associmajor institutional lender groups; compiled by the Federal Home Loan Bank ation guaranteed, mortgage-backed, fully modified pass-through securities, as- Board in cooperation with the Federal Deposit Insurance Corporation. suming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying 2. Includes all fees, commissions, discounts, and "points" paid (by the the prevailing ceiling rate. Monthly figures are averages of Friday figures from the borrower or the seller) to obtain a loan. Wall Street Journal. 3. Average effective interest rates on loans closed, assuming prepayment at the 7. Includes some multifamily and nonprofit hospital loan commitments in end of 10 years. addition to 1- to 4-family loan commitments accepted in FNMA's free market 4. Average contract rates on new commitments for conventional first mort- auction system, and through the FNMA-GNMA tandem plans. gages; from Department of Housing and Urban Development. 8. Includes participation as well as whole loans. 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing 9. Includes conventional and government-underwritten loans. FHLMC's mort- Administration-insured first mortgages for immediate delivery in the private gage commitments and mortgage transactions include activity under mortgage/ secondary market. Based on transactions on first day of subsequent month. Large securities swap programs, while the corresponding data for FNMA exclude swap monthly movements in average yields may reflect market adjustments to changes activity. in maximum permissable contract rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A39 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1987 1988 Type of holder, and type of property 11998855 11998866 11998877 Q1 Q2 Q3 Q4 QL 1 All holders 2,269,173 2,568,562 2,908,072 2,665,339 2,756,383 2,832,137 2,908,072 2,949,977 2 1- to 4-family 1,467,409 1,668,209 1,888,158 1,712,737 1,780,438 1,835,799 1,888,158 1,919,280 3 Multifamily 214,045 247,024 273,740 257,859 263,564 268,019 273,740 275,173 4 Commercial 482,029 556,569 656,203 601,207 620,259 637,412 656,203 666,167 5 Farm 105,690 96,760 89,971 93,536 92,122 90,907 89,971 89,357 6 Selected financial institutions 1,390,394 1,507,289 1,699,922 1,559,681 1,606,881 1,647,928 1,699,922 1,723,399 7 Commercial banks 429,196 502,534 590,829 519,606 544,640 566,600 590,829 605,491 8 1- to 4-family 213,434 235,814 275,166 242,042 252,589 262,352 275,166 282,583 9 Multifamily 23,373 31,173 33,493 29,759 30,547 31,614 33,493 33,907 10 Commercial 181,032 222,799 267,679 234,619 247,676 258,496 267,679 274,348 11 Farm 11,357 12,748 14,491 13,186 13,828 14,138 14,491 14,653 12 Savings institutions3 760,499 777,312 856,369 809,245 824,961 838,737 856,369 861,824 13 1- to 4-family 554,301 558,412 598,441 555,693 572,075 583,432 598,441 604,343 14 Multifamily 89,739 97,059 106,346 104,035 102,933 104,609 106,346 105,945 15 Commercial 111155,,777711 121,236 150,825 148,712 149,183 149,938 150,825 150,781 16 Farm 668888 605 805 17 Life insurance companies 171,797 193,842 212,375 195,743 200,382 204,263 212,375 214,675 18 1- to 4-family 12,381 12,827 13,226 12,903 12,745 12,742 13,226 13,226 19 Multifamily 19,894 20,952 22,524 20,934 21,663 21,968 22,524 22,524 20 Commercial 127,670 149,111 166,722 151,420 155,611 159,464 166,722 169,122 21 Farm 11,852 10,952 9,903 10,486 10,363 10,089 9,903 9,803 22 Finance companies4 28,902 33,601 40,349 35,087 36,898 38,328 40,349 41,409 23 Federal and related agencies 166,928 220033,,880000 192,721 199,509 196,514 191,520 192,721 196,613 24 Government National Mortgage Association.. 1,473 888899 444 687 667 458 444 430 25 1- to 4-family 539 47 25 46 45 25 25 24 26 Multifamily 934 842 419 641 622 433 419 406 27 Farmers Home Administration5 733 48,421 43,051 48,203 48,085 42,978 43,051 43,051 28 1- to 4-family 183 21,625 18,169 21,390 21,157 18,111 18,169 18,169 29 Multifamily 113 7,608 8,044 7,710 7,808 7,903 8,044 8,044 30 Commercial 159 8,446 6,603 8,463 8,553 6,592 6,603 6,603 31 Farm 278 10,742 10,235 10,640 10,567 10,372 10,235 10,235 32 Federal Housing and Veterans Administration 4,920 5,047 5,574 5,177 5,268 5,330 5,574 5,679 33 1- to 4-family 2,254 2,386 2,557 2,447 2,531 2,452 2,557 2,612 34 Multifamily 2,666 2,661 3,017 2,730 2,737 2,878 3,017 3,067 35 Federal National Mortgage Association 98,282 97,895 96,649 95,140 94,064 94,884 96,649 99,787 36 1- to 4-family 91,966 90,718 89,666 88,106 87,013 87,901 89,666 92,828 37 Multifamily 6,316 7,177 6,983 7,034 7,051 6,983 6,983 6,959 38 Federal Land Banks 47,498 39,984 34,131 37,362 35,833 34,930 34,131 33,566 39 1- to 4-family 2,798 2,353 2,008 2,198 2,108 2,055 2,008 1,975 40 Farm 44,700 37,631 32,123 35,164 33,725 32,875 32,123 31,591 41 Federal Home Loan Mortgage Corporation .. 14,022 11,564 12,872 12,940 12,597 12,940 12,872 14,100 42 1- to 4-family 11,881 10,010 11,430 11,774 11,172 11,570 11,430 12,500 43 Multifamily 2,141 1,554 1,442 1,166 1,425 1,370 1,442 1,600 44 Mortgage pools or trusts6 415,042 531,591 670,394 575,435 615,142 648,084 670,394 683,042 45 Government National Mortgage Association.. 212,145 262,697 317,555 281,116 293,246 308,339 317,555 322,555 46 1- to 4-family 207,198 256,920 309,806 274,710 286,091 300,815 309,806 314,684 47 Multifamily 4,947 5,777 7,749 6,406 7,155 7,524 7,749 7,871 48 Federal Home Loan Mortgage Corporation .. 100,387 171,372 212,634 186,295 200,284 208,872 212,634 215,000 49 1- to 4-family 99,515 166,667 205,977 180,602 194,238 202,308 205,977 208,400 50 Multifamily 872 4,705 6,657 5,693 6,046 6,564 6,657 6,600 51 Federal National Mortgage Association 54,987 97,174 139,960 107,673 121,270 130,540 139,960 145,242 52 1- to 4-family 54,036 95,791 137,988 106,068 119,617 128,770 137,988 142,330 53 Multifamily 951 1,383 1,972 1,605 1,653 1,770 1,972 2,912 54 Farmers Home Administration 47,523 348 245 351 342 333 245 245 55 1- to 4-family 22,186 142 121 154 149 144 121 121 56 Multifamily 6 675 57 Commercial 8,190 132 63 127 126 124 63 63 58 Farm 10,472 74 61 70 67 65 61 61 59 Individuals and others7 296,809 325,882 345,035 330,714 337,846 344,605 345,035 346,923 60 1- to 4-family 165,835 180,896 183,229 179,517 182,010 184,794 183,229 184,076 61 Multifamily 55,424 66,133 75,094 70,146 73,924 74,403 75,094 75,338 62 Commercial 49,207 54,845 64,311 57,866 59,110 62,798 64,311 65,250 63 Farm 26,343 24,008 22,401 23,185 22,802 22,610 22,401 22,259 1. Based on data from various institutional and governmental sources, with 4. Assumed to be entirely 1- to 4-family loans. some quarters estimated in part by the Federal Reserve. Multifamily debt refers 5. FmHA-guaranteed securities sold to the Federal Financing Bank were to loans on structures of five or more units. reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:4, 2. Includes loans held by nondeposit trust companies but not bank trust because of accounting changes by the Farmers Home Administration. departments. 6. Outstanding principal balances of mortgage pools backing securities insured 3. Includes savings banks and savings and loan associations. Beginning 1987:1, or guaranteed by the agency indicated. data reported by FSLIC-insured institutions include loans in process and other 7. Other holders include mortgage companies, real estate investment trusts, contra assets (credit balance accounts that must be subtracted from the corre- state and local credit agencies, state and local retirement funds, noninsured sponding gross asset categories to yield net asset levels). pension funds, credit unions, and other U.S. agencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic NonfinancialS tatistics • August 1988 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change, seasonally adjusted Millions of dollars 1987 1988 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998866 11998877 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar/ Apr. Amounts outstanding (end of period) 1 Total 571,833 613,022 598,190 602,977 606,926 608,728 613,022 619,258 624,294 629,485 633,131 By major holder 2 3 C Fi o n m an m c e e r c c ia o l m b p a a n n k i s e s . 2 . .. . . . 2 1 6 3 2 3 , , 1 6 3 9 9 8 2 1 8 4 1 0 , , 5 0 6 7 4 2 2 1 7 3 3 7 , , 8 6 7 6 9 3 2 1 7 3 6 8 , , 8 3 0 9 5 5 2 1 7 3 8 9 , , 8 2 5 3 5 6 2 1 7 3 9 8 , , 5 9 5 2 0 8 2 1 8 4 1 0 , , 5 0 6 7 4 2 2 1 8 4 4 1 , , 7 6 5 9 3 5 2 1 8 4 7 2 , , 3 9 4 4 4 6 2 1 9 4 0 4 , , 8 0 3 5 1 3 2 1 9 4 2 4 , , 9 5 6 1 8 6 4 5 C R r e e ta d i i l t e u rs n 3 i ons 7 3 6 9 , , 1 6 9 6 1 0 8 4 1 2 , , 0 7 6 8 5 2 7 41 9 , , 3 8 8 1 1 6 8 41 0 , , 6 3 3 5 2 1 4 8 2 0 , , 0 6 1 7 2 2 8 42 0 , , 2 9 9 2 1 3 4 8 2 1 , , 7 0 8 6 2 5 8 42 1 , , 9 6 2 6 6 2 8 4 1 3 , , 8 0 9 8 7 0 4 8 3 2 , , 2 5 7 9 1 5 4 8 3 3 , , 2 1 9 5 5 0 6 Savings institutions ... 56,881 63,949 61,798 62,098 62,457 63,412 63,949 64,633 65,396 65,078 65,435 7 Gasoline companies ... 3,264 3,590 3,653 3,696 3,694 3,624 3,590 3,590 3,631 3,657 3,769 By major type of credit 8 Automobile 246,109 267,180 259,558 261,902 263,823 264,474 267,180 269,883 273,133 276,762 278,308 9 Commercial banks .. 100,907 108,438 105,661 106,685 107,414 107,727 108,438 109,298 111,021 113,593 114,625 10 Credit unions 38,413 43,474 41,515 42,118 42,612 43,071 43,474 43,959 44,251 44,795 45,264 11 Finance companies.. 92,350 98,026 96,287 96,809 97,261 96,733 98,026 99,147 100,123 100,669 100,564 12 Savings institutions . 14,439 17,242 16,095 16,290 16,536 16,943 17,242 17,479 17,738 17,705 17,855 13 Revolving 136,381 159,307 149,815 152,553 155,196 156,425 159,307 162,065 163,462 165,643 167,253 14 Commercial banks .. 86,757 98,808 94,142 96,083 97,416 97,378 98,808 100,879 101,537 103,152 104,141 15 Retailers 34,320 36,959 35,731 35,941 36,270 36,501 36,959 37,087 37,231 37,408 37,414 16 Gasoline companies . 3,264 3,590 3,653 3,696 3,694 3,624 3,590 3,590 3,631 3,657 3,769 17 Savings institutions . 8,366 13,279 11,194 11,333 11,922 12,636 13,279 13,601 13,945 14,059 14,319 18 Credit unions 3,674 6,671 5,095 5,500 5,894 6,286 6,671 6,908 7,117 7,368 7,609 19 Mobile home 26,883 25,957 26,879 26,845 26,698 26,604 25,957 25,926 25,857 25,732 25,745 20 Commercial banks .. 8,926 9,101 9,156 9,157 9,174 9,169 9,101 9,064 9,035 8,993 9,021 21 Finance companies.. 8,822 7,771 8,281 8,235 8,228 8,211 7,771 7,753 7,679 7,640 7,575 22 Savings institutions . 9,135 9,085 9,442 9,453 9,2% 9,224 9,085 9,109 9,143 9,099 9,148 23 Other 162,460 160,578 161,938 161,677 161,209 161,225 160,578 161,384 161,842 161,348 161,826 24 Commercial banks .. 65,549 65,217 64,920 64,880 64,851 65,276 65,217 65,512 65,750 65,094 65,180 25 Finance companies.. 32,526 34,275 33,095 33,351 33,747 33,984 34,275 34,795 35,144 35,744 36,376 26 Credit unions 34,104 30,920 33,206 32,733 32,166 31,566 30,920 30,795 30,529 30,432 30,277 27 Retailers 5,340 5,823 5,650 5,691 5,742 5,790 5,823 5,839 5,849 5,863 5,880 28 Savings institutions . 24,941 24,343 25,067 25,022 24,703 24,609 24,343 24,444 24,570 24,216 24,113 Net change (during period) 29 Total 54,078 41,189 4,677 4,787 3,949 1,802 4,294 6,236 5,036 5,191 3,646 By major holder 30 Commercial banks .... 20,495 19,425 1,592 2,926 2,050 695 2,014 3,189 2,591 3,487 2,137 31 Finance companies ... 22,670 6,374 1,249 732 841 -308 1,144 1,623 1,251 1,107 463 32 Credit unions 4,268 4,874 692 535 321 251 142 597 235 698 555 33 Retailers3 466 3,122 237 251 380 279 491 144 154 191 24 34 Savings institutions ... 7,223 7,068 854 300 359 955 537 684 763 -318 357 35 Gasoline companies ... -1,044 326 53 43 -2 -70 -34 0 41 26 112 By major type of credit 36 Automobile 36,473 21,071 2,973 2,344 1,921 651 2,706 2,703 3,250 3,629 1,546 37 Commercial banks .. 8,178 7,531 802 1,024 729 313 711 860 1,723 2,572 1,032 38 Credit unions 2,388 5,061 679 603 494 459 403 485 292 544 469 39 Finance companies.. 22,823 5,676 1,155 522 452 -528 1,293 1,121 976 546 -105 40 Savings institutions . 3,084 2,803 337 195 246 407 299 237 259 -33 150 41 Revolving 14,368 22,926 2,006 2,738 2,643 1,229 2,882 2,758 1,397 2,181 1,610 42 Commercial banks .. 11,150 12,051 1,117 1,941 1,333 -38 1,430 2,071 658 1,615 989 43 Retailers 47 2,639 189 210 329 231 458 128 144 177 6 44 Gasoline companies . -1,044 326 53 43 -2 -70 -34 0 41 26 112 45 Savings institutions . 2,078 4,913 238 139 589 714 643 322 344 114 260 46 Credit unions 2,137 2,997 409 405 394 392 385 237 209 251 241 47 Mobile home 49 -926 -87 -34 -147 -94 -647 -31 -69 -125 13 48 Commercial banks .. -627 175 -12 1 17 -5 -68 -37 -29 -42 28 49 Finance companies.. -472 -1,051 -171 -46 -7 -17 -440 -18 -74 -39 -65 50 Savings institutions . 1,148 -50 96 11 -157 -72 -139 24 34 -44 49 51 Other 3,188 -1,882 -215 -261 -468 16 -647 806 458 -494 478 52 Commercial banks .. 1,794 -332 -315 -40 -29 425 -59 295 238 -656 86 53 Finance companies.. 319 1,749 265 256 3% 237 291 520 349 600 632 54 Credit unions -257 -3,184 -396 -473 -567 -600 -646 -125 -266 -97 -155 55 Retailers 419 483 48 41 51 48 33 16 10 14 17 56 Savings institutions . 913 -598 183 -45 -319 -94 -266 101 126 -354 -103 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. These data also appear in the Board's G.19 (421) release. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Installment Credit A41 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent unless noted otherwise 1987 1988 IItteemm 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr. INTEREST RATES Commercial banks2 1 48-month new car3 12.91 11.33 10.45 n.a. 10.86 n.a. n.a. 10.72 n.a. n.a. 2 24-month personal 15.94 14.82 14.22 n.a. 14.58 n.a. n.a. 14.46 n.a. n.a. 3 120-month mobile home3 14.96 13.99 13.38 n.a. 13.62 n.a. n.a. 13.45 n.a. n.a. 4 Credit card 18.69 18.26 17.92 n.a. 17.82 n.a. n.a. 17.80 n.a. n.a. Auto finance companies 5 New car 11.98 9.44 10.73 10.31 12.24 12.23 12.19 12.26 12.24 12.29 6 Used car 17.59 15.95 14.60 14.76 14.90 14.97 14.56 14.75 14.77 14.82 OTHER TERMS4 Maturity (months) 7 New car 51.5 50.0 53.5 52.8 55.4 55.5 55.5 55.9 56.0 56.2 8 Used car 41.4 42.6 45.2 45.2 45.3 45.3 47.2 46.8 46.9 46.9 Loan-to-value ratio 9 New car 91 91 93 93 94 93 93 94 94 94 10 Used car 94 97 98 99 99 99 98 99 98 98 Amount financed (dollars) 11 New car 9,915 10,665 11,203 11,585 11,630 11,645 11,534 11,447 11,493 11,553 12 Used car 6,089 6,555 7,420 7,537 7,646 7,718 7,612 7,619 7,587 7,662 1. These data also appear in the Board's G.19 (421) release. For address, see 3. Before 1983 the maturity for new car loans was 36 months, and for mobile inside front cover. home loans was 84 months. 2. Data for midmonth of quarter only. 4. At auto finance companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • August 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 H2 HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors 550.2 753.9 854.8 831.7 672.2 790.4 722.7 986.8 679.1 984.4 623.1 721.4 By sector and instrument ? U.S. government 186.6 198.8 223.6 215.0 143.8 207.2 204.8 242.5 207.2 222.8 115522..88 134.9 3 186.7 199.0 223.7 214.7 142.3 207.3 204.9 242.5 207.4 222.0 151.7 132.9 4 Agency issues and mortgages -.1 -.2 -.1 .4 1.5 -.1 -.1 -.1 -.1 .9 1.0 2.0 363.6 555.1 631.1 616.7 528.4 583.3 518.0 744.3 471.8 761.6 470.3 586.4 6 Debt capital instruments 253.4 313.6 447.8 452.7 435.6 342.5 350.4 545.2 365.6 539.8 443.6 427.7 7 Tax-exempt obligations 53.7 50.4 136.4 30.8 34.5 67.0 67.0 205.8 -15.6 77.2 34.9 34.1 8 Corporate bonds 16.0 46.1 73.8 121.3 99.4 69.8 62.2 85.3 135.3 107.3 97.3 101.6 9 183.6 217.1 237.7 300.6 301.7 205.7 221.2 254.2 245.9 355.4 311.4 291.9 10 Home mortgages 117.5 129.7 151.9 201.2 211.4 119.9 139.2 164.7 163.9 238.6 221.0 201.9 11 Multifamily residential 14.2 25.1 29.2 33.1 25.0 22.4 25.0 33.4 31.3 34.9 30.0 20.1 1? Commercial 49.3 63.2 62.5 74.6 71.5 63.8 59.5 65.5 59.7 89.6 69.8 73.1 13 Farm 2.6 -.9 -6.0 -8.4 -6.3 -.4 -2.5 -9.5 -9.0 -7.7 -9.3 -3.2 14 110.2 241.5 183.3 164.0 92.8 240.8 167.5 199.1 106.3 221.7 26.7 158.8 15 Consumer credit 56.6 90.4 94.6 65.8 41.8 86.2 95.3 93.9 71.0 60.6 28.3 55.2 16 Bank loans n.e.c 23.2 67.1 38.6 66.5 9.3 63.0 21.0 56.2 12.2 120.8 -32.6 51.2 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 .1 18 Other 31.3 62.2 35.5 41.0 39.4 74.7 36.8 34.2 36.2 45.8 26.6 52.2 19 By borrowing sector 363.6 555.1 631.1 616.7 528.4 583.3 518.0 744.3 471.8 761.6 470.3 586.4 ?0 State and local governments 34.0 27.4 91.8 44.3 33.9 38.6 56.3 127.2 4.3 84.3 33.2 34.7 71 188.2 234.6 293.4 281.1 248.9 234.2 259.8 327.1 233.0 329.3 231.1 266.8 If 4.1 -.1 -13.9 -15.1 -11.7 .4 -7.0 -20.8 -16.9 -13.3 -17.8 -5.6 73 Nonfarm noncorporate 77.0 97.0 93.1 116.2 103.3 92.2 85.7 100.5 96.7 135.6 104.5 102.1 24 Corporate 60.3 196.0 166.7 190.2 153.9 217.8 123.2 210.3 154.7 225.8 119.4 188.5 25 Foreign net borrowing in United States 17.3 8.3 1.2 9.0 3.8 -19.4 -5.8 8.2 21.5 -3.5 -7.4 15.0 76 3.1 3.8 3.8 2.6 6.3 6.3 5.5 2.1 6.2 -1.1 -1.7 14.3 77 Bank loans n.e.c 3.6 -6.6 -2.8 -1.0 -3.6 -11.9 -5.8 .1 1.5 -3.5 -3.2 -4.1 78 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 -1.0 -9.6 -8.2 -3.7 -5.3 -2.7 2.7 -4.7 30 Total domestic plus foreign 567.5 762.2 856.0 840.7 676.0 771.0 716.9 995.0 700.5 980.9 615.7 736.3 Financial sectors 31 Total net borrowing by financial sectors ... 99.3 151.9 199.0 295.3 284.2 150.7 175.1 222.8 242.3 348.2 319.3 249.7 By instrument 32 U.S. government related 67.8 74.9 101.5 178.1 168.3 77.3 96.8 106.3 136.1 220.1 180.5 156.5 33 Sponsored credit agency securities 1.4 30.4 20.6 15.2 30.2 31.5 26.6 14.6 8.7 21.7 8.1 52.3 34 Mortgage pool securities 66.4 44.4 79.9 163.3 138.8 45.8 70.3 89.5 126.5 200.0 174.0 104.1 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 97.4 117.2 116.0 73.5 78.3 116.5 106.2 128.1 138.7 93.2 37 Corporate bonds 17.4 36.2 48.6 69.0 65.8 41.5 48.9 48.3 72.1 66.0 80.2 51.4 38 Mortgages * .4 .1 .1 .3 .4 * .1 .6 -.5 .2 .3 39 Bank loans n.e.c -.1 .7 2.6 4.0 -3.3 .7 2.3 2.9 4.0 4.0 -4.7 -1.9 40 Open market paper 21.3 24.1 32.0 24.2 28.8 16.0 14.6 49.4 15.1 33.4 49.4 8.2 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 29.5 31.5 26.6 16.8 9.5 20.2 6.6 52.3 43 Mortgage pools 66.4 44.4 79.9 163.3 138.8 45.8 70.3 89.5 126.5 200.0 174.0 104.1 44 Private financial sectors 31.5 77.0 97.4 117.2 116.0 73.5 78.3 116.5 106.2 128.1 138.7 93.2 45 Commercial banks 5.0 7.3 -4.9 -3.6 7.1 -5.3 -4.7 -5.0 -2.7 -4.6 14.1 .1 46 Bank affiliates 12.1 15.6 14.5 4.6 3.0 10.8 10.2 18.9 -1.7 10.9 11.5 -5.6 47 Savings and loan associations -2.1 22.7 22.3 29.8 35.7 23.3 14.2 30.4 25.5 34.0 27.7 43.8 48 Finance companies 12.9 18.9 53.9 49.7 30.8 29.6 49.7 58.1 53.1 46.3 32.9 28.7 49 REITs -.1 .1 -.7 -.3 1.4 .1 -.6 -.8 .6 -1.3 * 2.9 50 CMO Issuers 3.7 12.4 12.2 37.1 38.0 15.0 9.5 14.9 31.4 42.8 52.6 23.3 All sectors 51 Total net borrowing 666.8 914.1 1,054.9 1,136.0 960.2 921.8 892.1 1,217.8 942.8 1,329.1 935.0 986.0 52 U.S. government securities .. 254.4 273.8 324.2 393.5 312.9 284.5 301.7 346.6 342.5 444.5 334.8 291.4 53 State and local obligations ... 53.7 50.4 136.4 30.8 34.5 67.0 67.0 205.8 -15.6 77.2 34.9 34.1 54 Corporate and foreign bonds . 36.5 86.1 126.1 192.9 171.5 117.6 116.6 135.7 213.6 172.1 175.8 167.3 55 Mortgages 183.6 217.4 237.7 300.7 301.9 206.0 221.2 254.2 246.5 354.9 311.6 292.2 56 Consumer credit 56.6 90.4 94.6 65.8 41.8 86.2 95.3 93.9 71.0 60.6 28.3 55.2 57 Bank loans n.e.c 26.7 61.1 38.3 69.5 2.4 51.8 17.5 59.2 17.7 121.3 -40.5 45.3 58 Open market paper 26.9 52.0 52.8 26.4 33.2 28.6 31.8 73.7 21.0 31.7 48.6 17.8 59 Other loans 28.4 82.9 44.8 56.5 62.1 80.0 41.1 48.6 46.1 66.8 41.5 82.7 External corporate equity funds raised in United States 60 Total new share issues 61.8 -36.4 19.9 91.6 1.6 -24.9 3.0 36.7 100.8 82.3 84.5 -81.3 61 Mutual funds 27.7 29.3 85.7 163.3 75.4 32.2 64.2 107.1 155.5 171.1 147.2 3.6 62 All other 34 6 -65.7 -65.8 -71.7 -73.8 -57.1 -61.2 -70.4 -54.7 -88.7 -62.7 -84.9 63 Nonfinancial corporations 78,1 -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 7.6 7.8 12.0 8.3 5.4 8.8 11.2 12.8 7.5 9.1 5.4 5.3 65 Foreign shares purchased in United States. 3.7 .9 3.7 .7 -2.7 3.5 3.1 4.3 6.6 -5.1 1.9 -7.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates. 1984 1985 1986 1987 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998833 11998844 11998855 11998866 11998877 H2 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 550.2 753.9 854.8 831.7 672.2 790.4 722.7 986.8 679.1 984.4 623.1 721.4 By public agencies and foreign 2 Total net advances 114.0 157.6 202.3 319.7 231.6 182.5 195.8 208.7 264.7 374.6 237.0 226.3 3 U.S. government securities 26.3 39.3 47.1 84.8 58.2 51.0 50.3 43.9 74.0 95.6 45.4 71.0 4 Residential mortgages 76.1 56.5 94.6 160.3 135.6 57.4 88.6 100.7 123.7 196.9 166.8 104.6 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 13.6 35.2 6 Other loans and securities 18.6 46.2 46.3 54.7 13.4 59.2 44.4 48.2 52.6 56.9 11.1 15.4 Total advanced, by sector 7 U.S. government 9.7 17.1 16.8 9.5 -13.7 26.6 25.1 8.4 10.8 8.2 -16.6 -11.2 8 Sponsored credit agencies 69.8 74.3 101.5 177.3 166.2 75.2 96.4 106.7 128.2 226.5 168.1 164.7 9 Monetary authorities 10.9 8.4 21.6 30.2 10.0 4.8 27.5 15.8 13.2 47.2 10.8 9.1 10 Foreign 23.7 57.9 62.3 102.6 69.2 75.9 46.8 77.8 112.5 92.7 74.6 63.8 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 67.8 74.9 101.5 178.1 168.3 77.3 96.8 106.3 136.1 220.1 180.5 156.5 12 Foreign 17.3 8.3 1.2 9.0 3.8 -19.4 -5.8 8.2 21.5 -3.5 -7.4 15.0 Private domestic funds advanced n Total net advances 521.3 679.5 755.2 699.2 612.6 665.7 618.0 892.5 571.9 826.4 559.3 666.5 14 U.S. government securities 228.1 234.5 277.0 308.7 254.7 233.5 251.3 302.7 268.6 348.9 289.5 220.4 15 State and local obligations 53.7 50.4 136.4 30.8 34.5 67.0 67.0 205.8 -15.6 77.2 34.9 34.1 16 Corporate and foreign bonds 14.5 35.1 40.8 83.4 85.5 53.0 39.7 42.0 100.2 66.6 70.3 100.7 17 Residential mortgages 55.0 98.2 86.4 74.0 100.8 84.8 75.5 97.4 71.5 76.5 84.1 117.3 18 Other mortgages and loans 162.4 276.9 228.8 222.1 161.6 242.3 197.0 260.6 161.7 282.4 94.1 229.2 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 13.6 35.2 Private financial intermediation 20 Credit market funds advanced by private financial institutions 395.8 559.8 579.5 726.9 558.7 532.1 483.8 675.2 638.5 815.3 578.5 538.9 21 Commercial banking 144.3 168.9 186.3 194.7 136.6 145.5 143.3 229.4 117.2 272.3 99.1 173.6 22 Savings institutions 135.6 150.2 83.0 105.5 135.8 133.5 54.5 111.4 94.5 116.6 106.4 165.1 23 Insurance and pension funds 100.1 121.8 156.0 176.7 177.2 95.3 139.4 172.5 169.0 184.4 210.2 144.2 24 Other finance 15.8 118.9 154.2 249.9 109.4 157.8 146.5 161.9 257.9 241.9 162.8 56.0 25 Sources of funds 395.8 559.8 579.5 726.9 558.7 532.1 483.8 675.2 638.5 815.3 578.5 538.9 26 Private domestic deposits and RPs 215.4 316.9 213.2 271.4 163.8 353.5 191.4 235.0 252.2 290.6 60.0 265.4 27 Credit market borrowing 31.5 77.0 97.4 117.2 116.0 73.5 78.3 116.5 106.2 128.1 138.7 93.2 28 Other sources 148.9 165.9 268.9 338.3 279.0 105.1 214.1 323.6 280.1 396.5 379.8 180.3 29 Foreign funds 14.6 8.8 19.7 12.9 44.0 1.7 10.8 28.6 11.9 14.0 24.5 63.5 30 Treasury balances -5.3 4.0 10.3 1.7 -5.8 10.8 13.9 6.6 -4.2 7.6 4.3 -16.0 31 Insurance and pension reserves 109.7 118.6 141.0 152.8 147.8 74.6 118.6 163.4 136.6 168.9 175.2 120.3 32 Other, net 30.0 34.5 98.1 170.9 93.0 18.0 71.4 124.7 135.8 206.1 175.7 12.5 Private domestic nonfinancial investors 33 Direct lending in credit markets 157.0 196.7 273.2 89.4 169.9 207.1 212.5 333.9 39.7 139.2 119.5 220.8 34 U.S. government securities 99.3 123.6 145.3 47.1 69.4 84.3 156.2 134.5 42.2 51.9 72.9 66.3 35 State and local obligations 40.3 30.4 47.6 -5.4 58.7 50.4 14.8 80.4 -67.6 56.8 25.6 91.8 36 Corporate and foreign bonds -11.6 5.2 11.8 34.7 23.0 36.9 15.4 8.2 68.8 .7 -8.0 53.9 37 Open market paper 12.0 9.3 43.9 -4.8 6.8 3.0 3.5 84.2 -17.3 7.7 19.0 -5.5 38 Other 17.0 28.1 24.6 17.9 12.1 32.5 22.6 26.6 13.6 22.1 9.9 14.3 39 Deposits and currency 232.8 320.4 223.5 291.8 180.6 354.0 198.3 248.7 261.9 321.6 45.1 313.9 40 Currency 14.3 8.6 12.4 14.4 19.0 3.6 15.9 8.8 10.7 18.2 9.6 28.4 41 Checkable deposits 28.8 28.0 41.5 100.1 -.2 29.9 13.8 69.2 82.5 117.8 -21.6 21.3 42 Small time and savings accounts 215.4 150.7 138.6 120.8 78.8 169.9 162.1 115.1 112.6 129.0 51.7 105.9 43 Money market fund shares -39.0 49.0 8.9 43.8 27.2 73.4 10.6 7.1 46.9 40.6 3.1 51.3 44 Large time deposits -8.3 84.3 7.6 -11.6 31.0 79.1 -7.3 22.5 .2 -23.3 4.0 55.9 45 Security RPs 18.5 5.0 16.6 18.3 26.9 1.2 12.2 21.1 10.0 26.5 22.7 31.0 46 Deposits in foreign countries 3.1 -5.1 -2.1 5.9 -2.2 -3.1 -9.0 4.9 -.9 12.8 -24.5 20.1 47 Total of credit market instruments, deposits, and currency 389.9 517.1 496.7 381.2 350.5 561.1 410.7 582.6 301.6 460.9 164.6 534.7 48 Public holdings as percent of total 20.1 20.7 23.6 38.0 34.3 23.7 27.3 21.0 37.8 38.2 38.5 30.7 49 Private financial intermediation (in percent) 75.9 82.4 76.7 104.0 91.2 79.9 78.3 75.6 111.6 98.7 103.4 80.8 50 Total foreign funds 38.2 66.7 82.0 115.5 113.2 77.6 57.7 106.4 124.4 106.7 99.2 127.2 MEMO: Corporate equities not included above 51 Total net issues 61.8 -36.4 19.9 91.6 1.6 -24.9 3.0 36.7 100.8 82.3 84.5 -81.3 52, Mutual fund shares 27.2 29.3 85.7 163.3 75.4 32.2 64.2 107.1 155.5 171.1 147.2 3.6 53 Other equities 34.6 -65.7 -65.8 -71.7 -73.8 -57.1 -61.2 -70.4 -54.7 -88.7 -62.7 -84.9 54 Acquisitions by financial institutions 51.1 19.7 43.4 50.6 43.0 39.7 59.5 27.3 46.5 54.6 67.4 18.5 55 Other net purchases 10.7 -56.1 -22.9 41.0 -41.4 -64.6 -55.8 9.5 54.3 27.7 17.1 -99.9 NOTES BY LINE NUMBER. 31. Excludes net investment of these reserves in corporate equities. 1. Line 1 of table 1.57. 32. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 33. Line 13 less line 20 plus line 27. 6. Includes farm and commercial mortgages. 34-38. Lines 14-18 less amounts acquired by private finance plus amounts 11. Credit market funds raised by federally sponsored credit agencies, and net borrowed by private finance. Line 38 includes mortgages. issues of federally related mortgage pool securities. 40. Mainly an offset to line 9. 13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. 47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46. Also sum of lines 28 and 47 less lines 40 and 46. 48. Line 2/line 1. 18. Includes farm and commercial mortgages. 49. Line 20/line 13. 26. Line 39 less lines 40 and 46. 50. Sum of lines 10 and 29. 27. Excludes equity issues and investment company shares. Includes line 19. 51. 53. Includes issues by financial institutions. 29. Foreign deposits at commercial banks, bank borrowings from foreign NOTE. Full statements for sectors and transaction types in flows and in amounts branches, and liabilities of foreign banking agencies to foreign affiliates, 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 • August 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 Sept. Oct. Nov. Dec. Jan. Feb.' Mar.' Apr.' May 1 Industrial production 123.7 125.1 129.8 131.0 132.5 133.2 133.9 134.4 134.4 134.7 135.5 136.0 Market groupings 2 Products, total 130.6 133.3 138.3 139.4 140.9 141.0 141.3 142.7 143.4 143.6 144.0 144.5 3 Final, total 131.0 132.5 136.8 137.8 139.3 139.2 139.8 141.1 141.6 141.8 142.4 143.0 4 Consumer goods 119.8 124.0 127.7 127.7 129.0 129.4 129.8 131.2 131.3 131.2 131.6 132.0 5 Equipment 145.8 143.6 148.8 151.2 153.0 152.2 153.1 154.3 155.3 156.0 156.7 157.6 6 Intermediate 129.3 136.2 143.5 144.9 146.1 147.3 146.5 148.1 149.4 149.7 149.6 149.7 7 Materials 114.3 113.8 118.2 119.7 121.2 122.5 123.7 123.0 122.1 122.5 123.8 124.5 Industry groupings 8 Manufacturing 126.4 129.1 134.6 135.7 137.3 137.9 138.9 139.4 139.5 140.0 140.8 141.5 Capacity utilization (percent)2 9 Manufacturing 80.1 79.8 81.0 81.3 82.0 82.2 82.5 82.7 82.6 82.7 82.9 83.1 10 Industrial materials industries 80.2 78.5 80.5 81.2 82.1 82.9 83.7 83.0 82.3 82.3 83.1 83.4 11 Construction contracts (1982 = 100)3 150.0 158.0 161.0 160.0 164.0 157.0 157.0 145.0 159.0 154.0 144.0 157.0 12 Nonagricultural employment, total4 118.3 120.7R 124.1' 124.8' 125.3' 125.7' 126.1' 126.4' 127.0 127.3 127.6 127.9 13 Goods-producing, total 102. 1' 100.9^ 101.8' 102.3' 102.8' 103.2' 103.5' 103.4' 103.8 / 104.1 104.5 104.5 14 Manufacturing, total 97.8 96.3' 96.8' 97.3' 97.7' 98.C 98.3' 98.4' 98.5 98.6 98.8 98.9 15 Manufacturing, production-worker 92.6 91.2 92.1 92.5 92.8' 93.2' 93.5' 93.5' 93.7 93.7 93.9 94.1 16 Service-producing 125.0 129.(R 133.4' 134.2' 134.8' 135.1' 135.6' 136.1' 136.7 137.1 137.3 137.7 17 Personal income, total 207.0 219.9 233.1 235.3 239.8 238.9 240.7 240.7' 242.1 244.9 245.2 246.0 18 Wages and salary disbursements 198.7 210.2' 222.6 225.4 227.1 228.6 229.5 230.7 232.3 234.0 235.1 236.4 19 Manufacturing 172.8 176.4' 181.5 183.7 184.7 185.7 186.0 186.6 187.1 190.1 188.4 189.4 20 Disposable personal income 206.0 219.1 230.7 232.9 237.8 236.4 238.1 238.8' 240.6 243.2 240.8 244.3 21 Retail sales6 189.6 199.5 209.3 212.9 211.2 211.9 214.2 214.5 216.7 220.3 219.4 219.6 Prices7 22 Consumer (1982 = 100) 107.6 109.6 113.6 115.0 115.3 115.4 115.4 115.7 116.0 116.5 117.1 117.5 23 Producer finished goods (1982 = 100) ... 104.7 103.2 105.4 105.7 106.2 106.3 105.8 106.3' 105.9 106.2 106.9 107.5 1. A major revision of the industrial production index and the capacity 5. Based on data in Survey of Current Business (U.S. Department of Comutilization rates was released in July 1985. See "A Revision of the Index of merce). Industrial Production" and accompanying tables that contain revised indexes 6. Based on Bureau of Census data published in Survey of Current Business. (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 7. Data without seasonal adjustment, as published in Monthly Labor Review. (July 1985), pp. 487-501. The revised indexes for January through June 1985 were Seasonally adjusted data for changes in the price indexes may be obtained from shown in the September BULLETIN. the Bureau of Labor Statistics, U.S. Department of Labor. 2. Ratios of indexes of production to indexes of capacity. Based on data from Federal Reserve, McGraw-Hill Economics Department, Department of Com- NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6, merce, and other sources. and indexes for series mentioned in notes 3 and 7 may also be found in the Survey 3. Index of dollar value of total construction contracts, including residential, of Current Business. nonresidential and heavy engineering, from McGraw-Hill Information Systems Figures for industrial production for the last two months are preliminary and Company, F. W. Dodge Division. estimated, respectively. 4. Based on data in Employment and Earnings (U.S. Department of Labor). Series covers employees only, excluding personnel in the Armed Forces. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1987r 1988r CCaatteeggoorryy 11998855 11998866rr 11998877rr Oct. Nov. Dec. Jan. Feb. Mar. Apr. May HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 180,440 182,822 185,010 185,575 185,737 185,882 186,083 186,219 186,361 186,478 186,600 2 Labor force (including Armed Forces)1 117,695 120,078 122,122 122,651 122,861 122,984 123,436 123,598 123,153 123,569 123,204 3 Civilian labor force 115,461 117,834 119,865 120,387 120,594 120,722 112211,,117755 121,348 112200,,990033 112211,,332233 112200,,997788 Employment 4 Nonagricultural industries 103,971 106,434 109,232 109,961 110,332 110,529 110,836 111,182 110,899 111,485 111,160 5 Agriculture 3,179 3,163 3,208 3,249 3,172 3,215 33,,229933 3,228 33,,220044 33,,222288 33,,003355 Unemployment 6 Number 8,312 8,237 7,425 7,177 7,090 6,978 7,046 6,938 6,801 6,610 6,783 7 Rate (percent of civilian labor force) 7.2 7.0 6.2 6.0 5.9 5.8 5.8 5.7 5.6 5.4 5.6 8 Not in labor force 62,745 62,744 62,888 62,924 62,876 62,898 62,647 62,621 63,208 62,909 63,396 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 97,519 99,525 102,310 103,371 103,678 104,001 104,262 104,729 105,020 105,269 105,478 10 Manufacturing 19,260 18,965 19,065 19,225 19,297 19,348 19,369 19,390 19,405 19,459 19,475 11 Mining 927 777 721 740 736 735 728 731 733 739 737 12 Contract construction 4,673 4,816 4,998 5,060 5,090 5,118 5,083 5,150 5,192 5,240 5,234 13 Transportation and public utilities 5,238 5,255 5,385 5,448 5,466 5,481 5,499 5,513 5,530 5,542 5,561 14 Trade 23,073 23,683 24,381 24,640 24,719 24,768 24,937 25,080 25,111 25,172 25,241 15 Finance 5,955 6,283 6,549 6,604 6,608 6,619 6,633 6,636 6,651 6,649 6,639 16 Service 22,000 23,053 24,196 24,524 24,604 24,725 24,795 24,975 25,078 25,156 25,235 17 Government 16,394 16,693 17,015 17,130 17,158 17,207 17,218 17,254 17,320 17,312 17,356 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 • August 1988 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1987 1988 1987 1988 1987 1988 SSeerriieess Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 QLR Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 128.2 130.9 133.0 134.5 160.4 161.3 162.2 163.1 79.9 81.2 82.1 82.4 2 Mining 99.0 100.6 103.2 102.5 129.7 129.0 128.4 127.7 76.3 78.0 81.2 80.2 3 Utilities 108.3 111.6 112.5 115.1 138.3 138.8 139.4 139.8 78.3 80.5 80.6 82.1 4 Manufacturing 133.2 135.7 137.9 139.6 165.6 166.7 167.7 168.9 80.5 81.4 82.3 82.7 5 Primary processing 116.1 119.2 122.1 122.7 139.0 139.8 140.6 141.6 83.5 85.3 86.9 86.9 6 Advanced processing... 143.5 145.8 147.5 149.6 181.6 182.9 184.1 185.6 79.0 79.7 80.1 80.7 7 Materials 116.5 119.1 121.9 122.6 146.7 147.2 147.8 148.5 79.4 81.0 82.9 82.5 8 Durable goods 122.9 125.5 129.6 131.3 163.1 163.9 164.7 165.7 75.4 76.7 79.1 79.4 9 Metal materials 77.0 83.6 91.1 86.6 110.0 109.4 108.8 108.8 70.0 76.5 84.0 79.2 10 Nondurable goods 124.0 128.2 129.3 130.3 143.8 144.7 145.6 146.8 86.2 88.6 89.3 88.1 11 Textile, paper, and chemical ... 125.1 130.5 132.3 133.1 143.4 144.4 145.4 146.7 87.2 90.4 91.5 89.6 17 Paner 137.7 144.5 143.9 145.1 95.7 99.6 99.2 98.8 125.3 130.7 149.8 150.9 83.6 86.3 89.1 87.0 14 Energy materials 98.7 100.0 101.8 100.9 120.2 120.1 119.9 119.7 82.1 83.3 85.2 84.2 Previous cycle2 Latest cycle3 1987 1987 1988 High Low High Low May Sept. Oct. Nov. Dec. Jan. Feb/ Mar/ Apr/ May Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 79.9 81.1 81.9 82.1 82.4 82.5 82.4 82.4 82.7 82.9 16 Mining 92.8 87.8 95.2 76.9 76.5 79.1 80.6 81.5 81.5 80.7 79.5 80.1 81.8 81.3 17 Utilities 95.6 82.9 88.5 78.0 79.2 80.0 80.5 81.2 80.4 82.4 78.3 80.5 80.6 82.1 18 Manufacturing 87.7 69.9 86.5 68.0 80.4 81.3 82.0 82.2 82.5 82.7 82.6 82.7 82.9 83.1 19 Primary processing.... 91.9 68.3 89.1 65.1 83.2 85.1 86.2 87.0 87.8 87.1 86.6 86.8 87.0 87.1 20 Advanced processing.. 86.0 71.1 85.1 69.5 79.2 79.5 80.1 80.0 80.1 80.7 80.7 80.8 81.1 81.3 21 Materials 92.0 70.5 89.1 68.5 79.3 81.2 82.1 82.9 83.7 83.0 82.3 82.3 83.1 83.4 22 Durable goods 91.8 64.4 89.8 60.9 75.1 77.0 78.3 79.0 80.2 79.7 79.3 79.1 79.9 80.6 23 Metal materials 99.2 67.1 93.6 45.7 69.7 78.3 82.4 83.3 87.6 80.1 79.3 78.2 79.2 81.1 24 Nondurable goods .... 91.1 66.7 88.1 70.7 86.2 88.7 88.2 89.0 90.5 88.8 87.3 88.3 88.6 88.7 25 Textile, paper, and chemical 92.8 64.8 89.4 68.8 87.1 90.7 90.4 91.0 92.7 90.8 88.5 89.9 90.0 90.0 98.4 70.6 97.3 79.9 95.7 98.5 97.4 98.7 101.6 100.6 97.8 98.0 98.1 92.5 64.4 87.9 63.5 83.9 87.4 88.0 88.6 90.8 87.8 85.7 87.4 87.4 28 Energy materials 94.6 86.9 94.0 82.3 82.1 83.5 84.9 85.7 85.1 84.7 84.1 83.8 84.8 84.6 1. These data also appear in the Board's G.3 (402) release. For address, see 2. Monthly high 1973; monthly low 1975. inside front cover. 3. Monthly highs 1978 through 1980; monthly lows 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data are seasonally adjusted 1977 1987 1988 1987 GGrroouuppss por- aavvgg.. tion May June July Aug. Sept. Oct. Nov. Dec. Jan. FFeebb// Mar. Apr.p MMaayy** Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 129.8 128.4 129.1 130.6 131.2 131.0 132.5 133.2 133.9 134.4 134.4 134.7 135.5 136.0 ? 57.72 138.3 137.2 137.8 139.5 139.9 139.4 140.9 141.0 141.3 142.7 143.4 143.6 144.0 144.5 3 Final products 44.77 136.8 135.8 136.2 137.9 138.4 137.8 139.3 139.2 139.8 141.1 141.6 141.8 142.4 143.0 4 Consumer goods 25.52 127.7 128.2 127.2 128.9 129.4 127.7 129.0 129.4 129.8 131.2 131.3 131.2 131.6 132.0 5 19.25 148.8 145.8 148.1 149.7 150.2 151.2 153.0 152.2 153.1 154.3 155.3 156.0 156.7 157.6 6 Intermediate products 12.94 143.4 142.1 143.3 145.0 145.3 144.9 146.1 147.3 146.5 148.1 149.4 149.7 149.6 149.7 7 Materials 42.28 118.2 116.3 117.2 118.5 119.4 119.7 121.2 122.5 123.7 123.0 122.1 122.5 123.8 124.5 Consumer goods 8 Durable consumer goods 6.89 120.2 120.2 117.4 120.4 121.2 118.6 124.3 123.9 120.3 121.7 120.6 120.6 123.1 125.4 9 Automotive products 2.98 118.5 118.0 114.9 117.5 118.0 114.2 124.3 121.3 115.4 118.7 117.6 120.6 122.0 127.8 10 Autos and trucks 1.79 115.1 113.1 107.9 112.3 112.4 107.2 122.2 118.7 110.2 112.8 111.8 116.4 118.0 126.9 11 Autos, consumer 1.16 90.7 91.0 87.4 86.4 76.8 79.1 94.7 91.9 83.7 77.5 79.5 86.3 91.0 98.9 1? Trucks, consumer .63 160.5 154.2 146.0 160.4 178.4 159.4 173.2 168.5 159.5 178.3 171.6 172.2 168.2 N Auto parts and allied goods 1.19 123.5 125.3 125.4 125.3 126.6 124.8 127.5 125.2 123.3 127.7 126.4 126.9 128.0 129.2 14 Home goods 3.91 121.6 121.8 119.3 122.5 123.6 121.9 124.3 125.8 123.9 124.0 122.8 120.6 123.9 123.6 IS Appliances, A/C and TV 1.24 141.5 142.2 133.4 141.7 147.1 141.8 145.7 150.1 142.7 142.2 140.6 132.8 142.0 140.7 16 Appliances and TV 1.19 142.1 142.3 133.4 142.6 145.5 140.6 146.1 150.5 142.6 140.9 141.4 132.7 142.3 17 Carpeting and furniture .96 130.7 133.3 132.3 134.1 132.0 131.6 132.9 133.5 133.9 134.2 132.3 134.0 133.7 18 Miscellaneous home goods 1.71 102.0 100.7 101.8 102.2 102.0 102.2 104.1 103.9 104.8 105.2 104.7 104.4 105.3 19 Nondurable consumer goods 18.63 130.5 131.1 130.9 132.1 132.5 131.0 130.8 131.5 133.3 134.7 135.3 135.1 134.8 134.4 ?N Consumer staples 15.29 137.3 137.7 137.6 138.9 139.2 137.8 137.4 138.3 140.7 142.3 142.9 142.4 142.1 141.7 71 Consumer foods and tobacco 7.80 136.2 135.6 136.0 137.2 137.4 137.0 137.5 137.3 139.2 140.3 140.8 139.6 138.3 ?? Nonfood staples 7.49 138.5 139.9 139.2 140.6 141.2 138.6 137.2 139.4 142.2 144.3 145.0 145.3 146.0 145.3 n Consumer chemical products 2.75 162.9 165.9 164.4 165.7 167.4 163.6 160.0 163.5 167.7 170.7 171.7 171.7 172.0 74 Consumer paper products 1.88 151.8 152.9 153.1 153.8 153.9 153.2 151.8 152.8 157.0 157.1 157.5 159.1 161.1 75 Consumer energy 2.86 106.3 106.4 105.9 108.0 107.7 105.0 105.8 107.4 108.0 110.6 111.3 111.0 111.0 76 Consumer fuel 1.44 93.1 92.1 91.9 92.7 91.4 91.6 92.4 93.2 95.4 95.4 97.0 97.9 99.0 27 Residential utilities 1.42 119.8 121.0 120.2 123.6 124.3 118.7 119.4 121.8 120.7 126.0 125.8 124.5 Equipment 78 Business and defense equipment 18.01 153.6 150.8 153.2 154.4 154.5 155.2 157.2 156.6 157.8 159.2 160.3 160.8 161.7 162.6 79 Business equipment 14.34 144.5 141.7 144.2 145.6 145.6 146.3 148.7 148.3 149.8 151.2 152.4 153.4 154.7 155.9 30 Construction, mining, and farm 2.08 62.2 61.2 63.0 65.0 66.4 66.1 66.5 66.3 67.4 67.1 67.6 68.7 70.2 71.2 31 Manufacturing 3.27 117.9 111.5 117.2 120.4 120.9 122.0 120.5 120.6 122.2 125.4 124.9 127.0 128.5 129.5 3? Power 1.27 82.6 84.0 84.0 81.8 82.8 81.1 83.0 83.1 84.2 86.2 88.3 87.8 88.0 88.3 33 5.22 226.5 222.0 226.7 227.9 227.7 229.1 232.4 232.1 235.5 238.0 240.3 239.9 241.0 242.1 34 Transit 2.49 108.4 110.1 105.4 106.1 104.7 105.1 112.5 111.2 109.1 106.5 108.2 111.1 112.8 115.6 35 Defense and space equipment 3.67 188.9 186.5 188.6 188.7 189.1 189.8 190.3 188.7 188.9 190.6 191.0 189.8 189.1 188.7 Intermediate products 36 Construction supplies 5.95 131.5 128.3 131.5 133.1 132.5 132.3 133.3 134.2 113333..88 113366..88 113377..77 113366..99 113377..00 113366..88 37 Business supplies 6.99 153.5 153.8 153.4 155.2 156.3 155.6 157.1 158.4 157.4 157.8 159.4 160.6 160.4 38 General business supplies 5.67 158.6 158.2 158.5 160.5 161.0 160.9 162.3 164.3 163.3 163.1 165.0 166.4 166.3 39 Commercial energy products 1.31 131.1 135.0 131.1 132.3 135.8 132.7 134.6 132.9 131.8 135.0 135.3 135.3 134.8 Materials 40 Durable goods materials 20.50 125.0 121.6 124.0 125.2 125.5 126.4 128.7 130.2 132.0 131.8 113311..44 131.4 113333..00 134.4 41 4.92 100.9 95.2 99.2 98.5 99.6 99.0 102.3 103.1 104.6 104.7 104.4 104.1 106.6 108.5 4? 5.94 159.0 156.0 158.3 159.3 159.5 161.1 162.2 163.2 165.3 167.4 167.6 167.3 168.4 169.5 43 Durable materials n.e.c 9.64 116.4 113.9 115.5 117.7 117.9 118.9 121.6 123.6 125.5 123.7 123.0 123.2 124.7 125.9 44 Basic metal materials 4.64 86.7 81.9 83.6 86.6 90.4 91.3 95.3 96.5 100.0 92.9 91.4 90.4 91.5 93.6 45 Nondurable goods materials 10.09 125.8 125.3 l&l 127.6 128.3 128.6 128.2 129.6 132.5 129.9 128.1 130.1 131.0 131.6 4466 Textile, paper, and chemical 7.53 127.6 126.5 125.1 129.6 130.6 131.2 131.0 132.3 135.6 132.7 129.9 132.5 133.1 133.6 4477 Textile materials 1.52 111.7 111.9 117.8 116.7 116.0 113.0 112.7 113.6 112.6 110.2 112.7 114.1 4488 Pulp and paper materials 1.55 141.0 137.4 139.0 145.4 145.0 143.3 142.0 144.4 149.0 148.0 144.4 145.2 145.8 49 Chemical materials 4.46 128.4 125.0 124.9 128.1 130.4 132.2 133.4 134.7 138.4 134.2 131.5 134.8 135.2 50 Miscellaneous nondurable materials ... 2.57 120.4 122.0 120.9 122.0 121.4 120.9 119.7 121.7 123.3 121.8 123.0 123.2 11.69 99.8 99.3 99.4 99.0 100.9 100.2 101.8 102.8 101.7 101.4 100.6 100.3 101.4 101.0 52 Primary energy 7.57 105.0 103.6 104.0 102.5 104.6 104.6 106.8 108.4 107.7 107.3 104.8 104.3 106.2 53 Converted fuel materials 4.12 90.3 91.4 91.0 92.5 94.1 92.2 92.7 92.6 90.7 90.6 93.0 92.9 92.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • August 1988 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued Groups c S o I d C e pr 1 t o i 9 o p 7 n o 7 r - a 19 v 8 g 7 . 1987 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar. Apr.' May' Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 104.3 103.1 103.0 103.7 105.4 105.4 106.8 107.9 107.3 107.8 106.8 107.2 107.0 2 Mining 9.83 100.7 99.2 99.2 99.2 100.9 101.9 103.6 104.6 104.6 103.3 101.5 104.0 103.2 3 Utilities 5.96 110.3 109.6 109.4 111.2 112.9 111.2 112.1 113.2 111.7 115.2 115.6 112.6 113.4 4 Manufacturing 84.21 134.6 133.2 134.0 135.6 135.9 135.7 137.3 137.9 138.9 139.4 139.5 140.8 141.5 5 Nondurable 35.11 136.7 135.7 136.9 138.5 138.8 138.6 138.1 139.6 141.3 141.4 141.1 142.1 141.8 6 Durable 49.10 133.1 131.4 132.0 133.5 133.8 133.7 136.8 136.7 137.3 137.9 138.4 139.9 141.2 Mining 7 Metal 10 .50 77.5 71.7 70.7 71.4 79.3 86.5 85.6 90.4 96.5 91.5 83.9 84.7 8 Coal 11.12 1.60 131.8 127.2 128.8 127.9 130.5 133.3 140.3 142.9 140.6 140.2 133.7 129.1 9 Oil and gas extraction 13 7.07 92.7 92.1 91.8 91.8 93.0 93.3 94.1 94.2 94.1 93.1 92.4 94.0 10 Stone and earth minerals 14 .66 128.2 127.6 128.5 130.7 130.3 130.0 131.0 134.1 135.6 132.1 134.3 136.6 Nondurable manufactures 11 Foods 7.96 137.7 137.4 137.7 138.5 138.8 139.5 138.0 138.9 140.1 141.2 141.9 141.4 12 Tobacco products .62 103.4 106.6 107.0 106.8 110.4 101.7 103.7 106.5 110.5 105.8 107.0 106.4 13 Textile mill products 2.29 115.8 115.7 117.2 118.3 119.8 118.2 116.8 117.3 118.2 116.2 115.3 117.5 14 Apparel products 2.79 107.4 106.4 107.7 109.7 108.4 107.6 108.0 109.4 107.8 108.7 108.5 108.7 15 Paper and products 3.15 144.4 141.3 142.6 148.8 148.9 147.4 146.0 148.3 150.6 149.9 148.0 149.5 149.4 16 Printing and publishing 4.54 172.0 171.4 174.1 174.0 174.7 174.9 175.2 175.7 176.9 177.5 178.7 180.3 17 Chemicals and products 8.05 140.1 138.1 139.3 140.8 142.3 142.4 141.5 144.4 147.9 147.9 145.4 146.3 18 Petroleum products 2.40 93.5 92.6 92.3 94.1 92.9 93.5 94.6 93.3 96.1 96.3 95.9 98.2 19 Rubber and plastic products.... 2.80 163.6 162.2 165.4 167.2 164.8 165.2 166.7 169.9 170.6 170.5 172.3 172.2 20 Leather and products .53 60.0 61.4 60.8 59.2 61.3 60.7 59.6 60.7 57.5 58.3 59.7 59.5 Durable manufactures 21 Lumber and products 24 2.30 130.3 130.3 131.1 132.8 131.1 126.9 129.8 134.0 133.6 136.3 139.0 137.1 137.4 22 Furniture and fixtures 25 1.27 152.8 150.5 153.9 156.2 155.2 155.9 156.0 158.5 159.4 158.0 158.3 159.2 160.5 23 Clay, glass, stone products 32 2.72 119.1 117.2 117.9 118.8 116.5 118.6 118.9 120.5 120.1 120.4 121.6 122.2 121.7 24 Primary metals 33 5.33 81.5 77.0 78.8 81.4 85.1 84.5 90.6 90.2 90.6 86.5 86.4 85.0 85.3 87.9 2 2 5 6 Fa I b r r o i n c a a te n d d m ste e e ta l l products 331 3 .2 4 6 3 . . 4 4 6 9 17101..80 1 6 0 5 8 . . 7 5 16181..31 17101..91 1 7 1 6 0 . . 0 1 17141..61 1 8 1 2 3 . . 0 5 1 7 1 9 3 . . 7 6 1 8 1 1 5 . . 9 8 1 7 1 7 7 . . 8 1 1 7 1 7 7 . . 4 6 1 7 1 4 8 . . 2 8 1 7 1 5 9 . . 1 5 120.5 27 Nonelectrical machinery 35 9.54 152.7 149.7 151.8 155.3 154.3 156.6 158.0 157.2 161.0 162.9 163.6 164.8 166.6 168.0 28 Electrical machinery 36 7.15 172.3 171.1 170.5 172.5 174.3 173.4 175.5 175.6 175.9 177.4 177.8 176.6 179.7 179.8 29 Transportation equipment 37 9.13 129.2 129.4 126.5 127.6 128.1 125.5 132.0 130.4 128.1 128.6 128.4 129.9 130.4 133.2 30 Motor vehicles and parts 371 5.25 111.8 112.0 107.4 109.4 109.1 105.6 116.0 114.0 110.2 109.7 109.3 113.0 115.0 119.8 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 152.8 153.1 152.4 152.3 153.9 152.5 153.7 152.7 152.4 154.2 154.5 152.9 151.4 151.3 32 Instruments 38 2.66 143.9 142.1 144.5 143.8 146.3 145.6 146.7 147.8 145.5 148.2 149.2 149.7 151.0 151.3 33 Miscellaneous manufactures 39 1.46 102.6 101.9 101.2 100.5 102.2 102.1 104.6 104.5 105.6 105.0 104.4 105.1 106.0 Utilities 34 Electric 4.17 126.6 128.8 131.0 132.0 127.5 126.8 128.2 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKET 35 Products, total. 517.5 1,735.8 1,723.0 1,720.4 1.732.5 1,741.7 1,735.9 1,774.1 1,772.4 1,778.8 1,790.6 1,797.5 1,807.7 1.814.4 1,816.8 36 Final 405.7 1,333.8 1,324.7 1,320.1 1.326.6 1,334.9 1,330.3 1,360.9 1,359.9 1,359.4 1,375.5 1,381.1 1,386.9 1.393.5 1394.6 37 Consumer goods. 272.7 866.0 862.8 855.1 863.2 866.4 856.9 876.6 879.8 881.2 893.6 893.7 894.0 898.2 895.4 38 Equipment 133.0 467.8 461.9 465.0 463.5 468.5 473.4 484.4 480.1 478.2 481.9 487.3 492.9 495.3 499.3 39 Intermediate 111.9 402.0 398.4 400.3 405.9 406.8 405.6 413.2 412.5 419.4 415.1 416.5 420.9 420.9 422.2 1. These data also appear in the Board's G.12.3 (414) release. For address, see Industrial Production" and accompanying tables that contain revised indexes inside front cover. (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 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. 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 11998855 11998866 11998877 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.' Apr. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,733 1,750 1,535 1,510 1,514 1,501 1,453 1,459 1,372 1,248 1,429 1,476 1,449 2 1-family 957 1,071 1,024 994 1,014 983 962 971 957 918 1,003 1,030 960 3 2-or-more-family 777 679 511 516 500 518 491 488 415 330 426 446 489 4 Started 1,742 1,805 1,621 1,594 1,583 1,679 1,538 1,661 1,399 1,382 1,519 1,529 1,576 5 1-family 1,072 1,179 1,146 1,142 1,109 1,211 1,105 1,129 1,035 1,016 1,102 1,172 1,088 6 2-or-more-family 669 626 474 452 474 468 433 532 364 366 417 357 488 7 Under construction, end of period1 . 1,063 1,074 987 1,052 1,044 1,046 1,044 1,042 1,016 1,008 988 1,005 n.a. 8 1-family 539 583 591 621 621 627 627 625 618 614 600 622 n.a. 9 2-or-more-family 524 490 397 431 423 419 417 417 398 394 388 383 n.a. 10 Completed 1,703 1,756 1,669 1,680 1,633 1,591 1,565 1,571 1,624 1,550 1,442 1,568 n.a. 11 1-family 1,072 1,120 1,123 1,112 1,069 1,100 1,114 1,088 1,104 1,098 1,031 1,076 n.a. 12 2-or-more-family 631 637 546 568 564 491 451 483 520 452 411 492 n.a. 13 Mobile homes shipped 284 244 233 243 234 240 234 222 227 200 208 212 213 Merchant builder activity in 1-family units 14 Number sold 688 748 672 672 673 644 653 625 586 579' 645' 653 679 15 Number for sale, end of period1 350 361 370 359 361 361 360 362 365 368' 36C 374 370 Price (thousands of dollars)2 Median 16 Units sold 84.3 92.2 104.7 105.0 106.8 106.5 106.5 117.0 111.8 119.C 110.0 107.0 110.5 Average 17 Units sold 101.0 112.2 127.9 128.6 128.5 133.5 125.8 139.2 136.2 144.4' 137.6' 131.5 137.0 EXISTING UNITS (1-family) 18 Number sold 3,217 3,566 3,530 3,470 3,410 3,430 3,470 3,370 3,330 3,170 3,250 3,330 3,520 Price of units sold (thousands of dollars) 19 Median 75.4 80.3 85.6 88.3 86.5 85.5 84.6 85.0 85.4 87.4 88.1 87.9 87.3 20 Average 90.6 98.3 106.2 109.8 107.0 106.9 106.1 106.6 107.1 108.7 110.4 110.7 108.7 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 355,995 388,815 398,189 398,465 402,872 402,782 398,930 403,963 403,884 394,453 396,011' 401,167 401,780 22 Private 291,665 316,589 322,948 323,847 329,831 324,857 322,213 327,020 326,272 319,175 318,137' 319,322 322,463 23 Residential 158,475 187,147 190,508 198,005 200,241 196,969 194,521 193,731 194,535 191,979 190,066' 191,240 191,871 24 Nonresidential, total 133,190 129,442 132,440 125,842 129,590 127,888 127,692 133,289 131,737 127,196 128,071' 128,082 130,592 Buildings 75 Industrial 15,769 13,747 13,095 13,005 13,659 14,387 13,536 14,336 13,579 13,324 13,782r 14,654 16,002 26 Commercial 59,629 56,762 53,201 52,537 54,055 52,800 53,912 57,683 54,982 54,351 54,137' 53,737 54,752 27 Other 12,619 13,216 15,254 15,317 14,888 15,079 15,593 16,158 17,321 16,444 17,782' 17,170 16,695 28 Public utilities and other 45,173 45,717 44,728 44,983 46,988 45,622 44,651 45,112 45,855 43,077 42,370' 42,521 43,143 29 Public 64,326 72,225 75,239 74,618 73,041 77,924 76,716 76,943 77,613 75,278 77,874' 81,844 79,317 30 Military 3,283 3,919 4,204 5,009 4,193 6,083 4,308 4,738 3,164 4,667 4,367 4,844 4,706 31 Highway 21,756 23,360 23,248 22,441 22,005 23,489 24,993 24,713 25,792 25,018 25,835 27,678 27,675 32 Conservation and development... 4,746 4,668 5,142 5,328 5,127 4,978 5,445 4,725 5,565 4,371 4,558' 4,921 4,389 33 Other 34,541 40,278 42,645 41,840 41,716 43,374 41,970 42,767 43,092 41,222 43,114' 44,401 42,547 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 • August 1988 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted Change from 12 Change from 3 months earlier months earlier (at annual rate) Change from 1 month earlier IIInnndddeeexxx llleeevvveeelll IIIttteeemmm MMMaaayyy 1987 1988 1988 111999888888 11998877 11998888 (((111999888222 MMaayy MMaayy === 111000000)))111 June Sept. Dec. Mar. Jan/ Feb/ Mar. Apr. May CONSUMER PRICES2 1 All items 3.9 3.9 4.3 3.9 3.2 4.2 .3 .2 .5 .4 .3 117.5 2 Food 4.9 3.3 5.8 2.1 2.8 1.4 .3 -.3 .3 .7 .4 117.0 i Energy items -.2 1.5 6.6 6.0 -3.9 -4.9 -.7 -.6 .0 .8 .5 88.7 4 All items less food and energy 4.2 4.3 3.8 3.8 4.4 5.4 .5 .2 .6 .4 .2 122.7 5 Commodities 3.2 3.4 3.7 2.9 2.5 4.7 .4 .1 .7 .6 .2 115.5 6 Services 4.8 4.7 4.4 4.3 5.0 5.9 .6 .4 .5 .2 .4 126.9 PRODUCER PRICES 7 Finished goods 2.4 2.0 3.5 3.8 -1.9 2.3 .3 -.3 .6 .4 .5 107.5 8 Consumer foods 4.3 .6 9.6 -1.8 -5.7 5.6 1.7 -1.1 .7 .4 .9 111.3 9 Consumer energy -5.1 -.2 2.0 16.5 -9.6 -19.6 -5.1 -1.0 .9 3.1 .2 61.5 10 Other consumer goods 2.7 3.3 1.8 4.6 1.7 5.3 .7 .2 .4 .0 .3 117.5 11 Capital equipment 2.0 2.1 1.1 4.0 -.7 3.2 .4 -.1 .4 .2 .4 113.9 12 Intermediate materials3 1.9 5.4 5.3 5.6 4.3 3.9 .4 .0 .6 .8 .6 106.3 13 Excluding energy 2.1 6.8 4.2 5.3 7.2 7.8 1.2 .0 .7 .7 .5 114.3 Crude materials 14 Foods 9.5 2.9 25.2 -4.8 -4.8 16.7 1.1 2.0 .8 .4 2.4 104.5 15 Energy 4.6 -4.2 11.3 5.9 -15.2 -23.6 -3.8 -.4 -2.4 2.5 1.3 71.4 16 Other 5.5 18.6 27.2 39.4 18.0 13.8 1.5 .4 1.4 .2 -1.7 131.1 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers and reflect a animal feeds. rental equivalence measure of homeownership after 1982. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A51 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1987 1988 AAccccoouunntt 11998855 11998866 11998877 Q1 Q2 Q3 Q4 Qlr GROSS NATIONAL PRODUCT 1 Total 4,010.3 4,235.0 4,488.5 4,377.7 4,445.1 4,524.0 4,607.4 4,665.1 By source 2 Personal consumption expenditures 2,629.4 2,799.8 2,967.8 2,893.8 2,943.7 3,011.3 3,022.6 3,068.3 3 Durable goods 368.7 402.4 413.7 396.1 409.0 436.8 413.0 424.0 4 Nondurable goods 913.1 939.4 982.9 969.9 982.1 986.4 993.1 998.4 5 Services 1,347.5 1,458.0 1,571.2 1,527.7 1,552.6 1,588.1 1,616.5 1,645.9 6 Gross private domestic investment 641.6 671.0 717.5 699.9 702.6 707.4 760.2 762.7 7 Fixed investment 631.6 655.2 671.5 648.2 662.3 684.5 690.8 704.9 8 Nonresidential 442.6 436.9 443.4 422.8 434.6 456.6 459.6 477.8 9 Structures 152.5 137.4 134.2 128.7 129.7 137.1 141.1 140.0 10 Producers' durable equipment 290.1 299.5 309.2 294.1 304.9 319.5 318.5 337.8 11 Residential structures 189.0 218.3 228.1 225.4 227.7 227.9 231.2 227.2 12 Change in business inventories 10.0 15.7 46.1 51.6 40.3 22.9 69.4 57.8 13 Nonfarm 13.6 16.8 36.2 48.7 27.3 11.1 57.5 38.2 14 Net exports of goods and services -79.2 -105.5 -119.6 -112.2 -118.4 -123.7 -124.3 -111.1 15 Exports 369.9 376.2 427.8 397.3 416.5 439.2 458.1 485.8 16 Imports 449.2 481.7 547.4 509.5 534.8 562.9 582.4 596.9 17 Government purchases of goods and services 818.6 869.7 922.8 896.2 917.1 929.0 948.8 945.1 18 Federal 353.9 366.2 379.4 366.9 379.6 382.1 388.9 375.1 19 State and local 464.7 503.5 543.4 529.3 537.6 546.9 559.9 570.0 By major type of product 20 Final sales, total 44,,000000..33 4,219.3 4,442.5 4,326.0 4,404.8 4,501.1 4,537.9 4,607.3 21 Goods 1,637.9 1,693.8 1,782.2 1,738.7 1,763.5 1,798.3 1,828.4 1,854.6 22 Durable 704.3 726.8 773.3 747.0 756.7 785.7 803.8 815.4 23 Nondurable 933.6 967.0 1,008.9 991.7 1,006.8 1,012.6 1,024.6 1,039.2 24 Services 1,969.2 2,116.2 2,271.2 2,212.0 2,252.2 2,289.3 2,331.5 2,368.3 25 Structures 403.1 425.0 435.0 426.9 429.4 436.4 447.5 442.2 26 Change in business inventories 10.0 15.7 46.1 51.6 40.3 22.9 69.4 57.8 27 Durable goods 7.3 4.8 25.3 35.2 22.1 -1.9 46.0 21.5 28 Nondurable goods 2.7 10.9 20.7 16.5 18.2 24.8 23.4 36.3 29 MEMO Total GNP in 1982 dollars 3,607.5 3,713.3 3,821.0 3,772.2 3,795.3 3,835.9 3,880.8 3,915.4 NATIONAL INCOME 30 Total 3,229.9 3,422.0 3,636.0 3,548.3 3,593.3 3,659.0 3,743.5 3,793.9 31 Compensation of employees 2,370.8 2,504.9 2,647.6 2,589.9 2,623.4 2,663.5 2,713.5 2,765.0 32 Wages and salaries 1,974.7 2,089.1 2,212.7 2,163.3 2,191.4 2,226.5 2,269.9 2,309.2 33 Government and government enterprises 372.3 394.8 421.4 412.2 418.1 424.5 430.9 439.1 34 Other 1,602.6 1,694.3 1,791.3 1,751.1 1,773.3 1,801.9 1,839.0 1,870.1 35 Supplement to wages and salaries 396.1 415.8 434.8 426.6 432.0 437.0 443.6 455.9 36 Employer contributions for social insurance 203.8 214.7 224.6 220.0 222.5 225.9 230.1 240.5 37 Other labor income 192.3 201.1 210.2 206.7 209.5 211.1 213.5 215.4 38 Proprietors' income1 257.3 289.8 327.4 320.9 323.1 322.7 342.7 338.5 39 Business and professional 227.6 252.6 279.0 269.7 275.8 282.1 288.4 292.7 40 Farm1 29.7 37.2 48.4 51.3 47.3 40.6 54.3 45.8 41 Rental income of persons2 9.0 16.7 19.3 20.0 18.9 17.3 20.9 22.2 42 Corporate profits1 277.6 284.4 304.7 294.0 296.8 314.9 313.0 310.9 43 Profits before tax3 224.8 231.9 274.1 257.0 268.7 284.9 285.6 281.5 44 Inventory valuation adjustment -.7 6.5 -17.5 -11.3 -20.0 -17.6 -21.3 -16.4 45 Capital consumption adjustment 53.5 46.0 48.2 48.2 48.0 47.7 48.7 45.8 46 Net interest 315.3 326.1 337.1 323.6 331.1 340.6 353.3 357.3 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 • August 1988 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1987 1988 AAccccoouunntt 11998855 11998866 1987 Q1 Q2 Q3 Q4 QL' PERSONAL INCOME AND SAVING 1 Total personal income 3,327.0 3,534.3 3,746.5 3,662.0 3,708.6 3,761.0 3,854.4 3,899.1 2 Wage and salary disbursements 1,974.9 2,089.1 2,212.7 2,163.3 2,191.4 2,226.1 2,270.2 2,309.2 3 Commodity-producing industries 609.2 623.3 641.1 632.9 635.0 641.8 654.7 663.6 4 Manufacturing 460.9 470.5 484.0 477.2 479.0 485.1 494.7 501.2 5 Distributive industries 473.0 497.1 522.9 511.5 518.9 526.3 535.0 543.1 6 Service industries 520.4 573.9 627.3 606.7 619.3 633.9 649.3 663.4 7 Government and government enterprises 372.3 394.8 421.4 412.2 418.1 424.2 431.2 439.1 8 Other labor income 192.3 201.1 210.2 206.7 209.5 211.1 213.5 215.4 9 Proprietors' income 257.3 289.8 327.4 320.9 323.1 322.7 342.7 338.5 10 Business and professional 227.6 252.6 279.0 269.7 275.8 282.1 288.4 292.7 11 Farm1 29.7 37.2 48.4 51.3 47.3 40.6 54.3 45.8 12 Rental income of persons2 9.0 16.7 19.3 20.0 18.9 17.3 20.9 22.2 13 Dividends 76.3 81.2 87.5 84.5 86.3 88.7 90.5 92.1 14 Personal interest income 476.5 497.6 516.2 499.8 506.3 520.0 538.8 541.7 15 Transfer payments 489.7 518.3 543.1 533.7 541.5 545.8 551.4 569.5 16 Old-age survivors, disability, and health insurance benefits ... 253.4 269.2 282.8 278.0 282.3 284.4 286.5 297.8 17 LESS: Personal contributions for social insurance 148.9 159.6 169.9 166.7 168.4 170.7 173.6 189.4 18 EQUALS: Personal income 3,327.0 3,534.3 3,746.5 3,662.0 3,708.6 3,761.0 3,854.4 3,899.1 19 LESS: Personal tax and nontax payments 485.9 512.2 564.8 536.1 578.0 565.7 579.4 576.5 20 EQUALS: Disposable personal income 2,841.1 3,022.1 3,181.7 3,125.9 3,130.6 3,195.3 3,275.0 3,322.6 21 LESS: Personal outlays 2,714.1 2,891.5 3,062.7 2,987.5 3,037.4 3,106.5 3,119.3 3,166.7 22 EQUALS: Personal saving 127.1 130.6 119.0 138.4 93.2 88.8 155.7 155.9 MEMO Per capita (1982 dollars) 23 Gross national product 15,073.7 15,369.6 15,672.6 15,523.4 15,586.4 15,714.4 1155,,885599..44 1155,,996611..66 24 Personal consumption expenditures 9,830.2 10,142.8 10,242.8 10,188.9 10,215.6 10,326.5 10,235.4 10,305.3 25 Disposable personal income 10,622.0 10,947.0 10,980.0 11,008.0 10,865.0 10,958.0 11,090.0 11,160.0 26 Saving rate (percent) 4.5 4.3 3.7 4.4 3.0 2.8 4.8 4.7 GROSS SAVING 531.3 532.0 565.2 554.3 551.3 559.3 595.9 625.3 28 Gross private saving 664.2 679.8 672.6 683.8 639.9 648.7 718.2 722.8 29 Personal saving 127.1 130.6 119.0 138.4 93.2 88.8 155.7 155.9 30 Undistributed corporate profits 99.6 92.6 74.6 75.6 70.1 76.8 75.7 74.3 31 Corporate inventory valuation adjustment -.7 6.5 -17.5 -11.3 -20.0 -17.6 -21.3 -16.4 Capital consumption allowances 269.1 282.8 229966..22 229911..88 229944..55 229977..88 330000..99 330044..55 168.5 173.8 182.8 178.0 182.1 185.3 186.0 188.0 34 Government surplus, or deficit (-), national income and -132.9 -147.8 -107.4 --112299..55 -88.6 -89.3 --112222..33 --9977..55 35 Federal -196.0 -204.7 -151.4 -170.5 -139.2 -135.8 -160.2 -143.1 36 State and local 63.1 56.8 44.0 41.0 50.6 46.5 37.9 45.6 37 Gross investment 525.7 527.1 560.6 552.1 548.1 548.4 593.8 612.5 38 Gross private domestic 641.6 671.0 717.5 699.9 702.6 707.4 760.2 762.7 -115.9 -143.9 -156.9 -147.7 -154.5 -159.0 -166.4 -150.2 40 Statistical discrepancy -5.6 -4.9 -4.6 -3, -10.9 -12.8 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 1987 1988 Item credits or debits 1985r 1986' 1987' Ql' Q2' Q3' Q4' Ql' 1 Balance on current account -115,102 -138,827 -153,964 -37,624 -40,852 -41,967 -33,523 -39,751 2 3 N M o e t r c s h e a a n so d n is a e l ly tr a a d d e j u b s a te la d n ce -i 22^148 -144,547 :m280 - - 3 3 3 9 , , 0 8 3 7 2 1 - -3 4 9 1 , , 5 7 5 9 2 9 - - 4 3 7 9 , , 3 6 3 6 0 5 - - 3 4 1 1 , , 8 1 0 9 3 2 - - 3 3 4 5 , , 9 9 3 4 7 5 4 Merchandise exports 215,935 223,969 249,570 56,791 59,864 64,902 68,013 74,672 5 Merchandise imports -338,083 -368,516 -409,850 -96,662 -99,416 -104,567 -109,205 -110,617 6 Military transactions, net -3,431 -4,372 -2,369 -78 -179 -851 -1,261 -899 7 Investment income, net3 25,936 23,143 20,374 5,076 1,692 1,067 12,539 -595 8 Other service transactions, net -449 2,257 1,755 -143 13 87 479 735 9 Remittances, pensions, and other transfers -3,786 -3,571 -3,434 -867 -884 -855 -828 -868 10 U.S. government grants (excluding military) -11,223 -11,738 -10,011 -2,100 -2,241 -2,125 -3,545 -2,283 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -2,829 -2,000 1,162 67 -170 252 1,012 -780 1 1 2 3 Ch G an o g ld e in U.S. official reserve assets (increase, -) -3,858 0 31 0 2 9,14 0 9 1,95 0 6 3,419 0 3 0 2 3,741 0 1,50 0 3 14 Special drawing rights (SDRs) -897 -246 -509 76 -171 -210 -205 155 15 Reserve position in International Monetary Fund 908 1,500 2,070 606 335 407 722 446 16 Foreign currencies -3,869 -942 7,588 1,274 3,255 -165 3,225 901 17 Change in U.S. private assets abroad (increase, -)3 -25,949 -96,303 -86,298 9,049 -26,127 -25,576 -43,645 8,169 18 Bank-reported claims -1,323 -59,975 -40,531 21,870 -22,422 -16,519 -23,460 17,402 19 Nonbank-reported claims 923 -4,220 3,145 -491 2,603 -215 1,248 20 U.S. purchase of foreign securities, net -7,481 -4,297 -4,456 -1,639 -88 -972 -1,757 -4,388 21 U.S. direct investments abroad, net3 -18,068 -27,811 -44,456 -10,691 -6,220 -7,870 -19,676 -4,845 22 Change in foreign official assets in the United States (increase, +) -1,196 35,507 44,%8 13,977 10,332 611 20,047 24,372 23 U.S. Treasury securities -838 34,364 43,361 12,193 11,083 842 19,243 27,568 24 Other U.S. government obligations -301 -1,214 1,570 -62 256 714 662 -116 25 Other U.S. government liabilities 767 2,054 -2,824 -1,337 -1,309 -287 108 -251 26 Other U.S. liabilities reported by U.S. banks 645 1,187 3,901 3,543 615 -34 -223 -1,996 27 Other foreign official assets -1,469 -1,040 -360 -313 -624 257 -833 28 Change in foreign private assets in the United States (increase, +)3 131,0% 185,746 166,521 19,122 40,327 71,047 36,025 3,504 29 U.S. bank-reported liabilities 41,045 79,783 87,778 -6,100 17,961 46,153 29,764 -15,994 30 U.S. nonbank-reported liabilities -366 -2,906 2,150 1,6% 1,570 -116 -1,000 31 Foreign private purchases of U.S. Treasury securities, net 20,433 3,809 -7,5% -2,826 -2,431 -2,835 496 ' '7,001 32 Foreign purchases of other U.S. securities, net 50,%2 70,%9 42,213 18,373 15,998 12,819 -4,977 2,328 33 Foreign direct investments in the United States, net3 19,022 34,091 41,976 7,979 7,229 15,026 11,742 10,169 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 17,839 15,566 18,461 -6,547 13,071 -4,399 16,342 2,984 36 Owing to seasonal adjustments 4,141 -2,615 -4,658 3,138 3,925 37 Statistical discrepancy in recorded data before seasonal adjustment 17,839 15,566 18,461 -10,688 15,686 13,204 -941 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -3,858 312 9,149 1,956 3,419 32 3,741 1,503 39 Foreign official assets in the United States (increase, +) excluding line 25 -1,963 33,453 47,792 15,314 11,641 19,939 24,623 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) -6,709 -9,327 -9,956 -2,801 -2,681 -1,723 -2,750 -1,331 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 46 101 58 26 13 12 15 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 • August 1988 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data are not seasonally adjusted. 1987r 1988r IItteemm 11998855 11998866rr 11998877rr Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments, f.a.s. value 218,815 227,159 254,122 22,778 23,279 24,314 22,990 24,139 29,106 26,521 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses, c.i.f. value 352,463 382,295 424,442 39,765 36,739 37,340 34,523 37,133 38,633 36,300 3 Trade balance -133,648 -155,137 -170,320 -16,987 -13,460 -13,026 -11,533 -12,994 -9,528 -9,780 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 TTyyppee 11998844 11998855 11998866 Nov. Dec. Jan. Feb. Mar. Apr. May" 1 Total 34,934 43,186 48,511 46,779 45,798 42,955 43,064 43,186 42,730 41,949 2 Gold stock, including Exchange Stabilization Fund1 11,096 11,090 11,064 11,082 11,078 11,068 11,063 11,063 11,063 11,063 3 Special drawing rights2,3 5,641 7,293 8,395 9,937 10,283 9,765 9,761 9,899 9,589 9,543 4 Reserve position in International Monetary Fund 11,541 11,947 11,730 11,369 11,349 10,804 10,445 10,645 10,803 10,431 5 Foreign currencies4 6,656 12,856 17,322 14,391 13,088 11,318 11,795 11,579 11,275 10,912 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 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Deposits 267 480 287 351 244 355 343 534 215 297 Assets held in custody i 2 U.S. Treasury securities 118,000 121,004 155,835 187,767 195,126 206,675 215,308 222,407c 224,725 226,341 3 Earmarked gold 14,242 14,245 14,048 13,965 13,919 13,882 13,824 13,773 13,719 13,654 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 11998866 Oct. Nov. Dec. Jan. Feb. Mar. Apr.p All foreign countries 1 Total, all currencies 453,656 458,012 456,628 521,757 525,894 518,604' 503,254' 495,003' 502,398 488,939 2 Claims on United States 113,393 119,706 114,563 138,221 140,425 138,034' 131,376 131,012' 135,339 139,186 3 Parent bank 78,109 87,201 83,492 99,450 102,814 105,845r 95,482 94,348 99,041 102,957 4 Other banks in United States 13,664 13,057 13,685 17,826 16,701 16,416 14,910 15,388 14,507 13,342 5 Nonbanks 21,620 19,448 17,386 20,945 20,910 15,773 20,984 21,276' 21,791 22,887 6 Claims on foreigners 320,162 315,676 312,955 347,614 346,819 342,506r 334,074' 326,653' 328,542 314,571 7 Other branches of parent bank 95,184 91,399 96,281 116,558 116,509 122,155' 115,275' 111,671' 108,972 103,090 8 Banks 100,397 102,960 105,237 118,248 115,591 108,856 108,161' 105,604' 106,936 101,226 9 Public borrowers 23,343 23,478 23,706 22,157 22,385 21,828 21,329' 21,331' 21,962 21,060 10 Nonbank foreigners 101,238 97,839 87,731 90,651 92,334 89,667 89,309 88,047' 90,672 89,195 11 Other assets 20,101 22,630 29,110 35,922 38,650 38,064' 37,804' 37,338' 38,517 35,182 12 Total payable in U.S. dollars 350,636 336,520 317,487 354,544 353,073 350,106r 335,313' 330,726' 333,874 327,438 13 Claims on United States 111,426 116,638 110,620 131,659 133,731 132,023' 124,893' 124,786' 128,770 133,299 14 Parent bank 77,229 85,971 82,082 97,257 100,123 103,251r 92,466' 91,271 95,776 100,320 15 Other banks in United States 13,500 12,454 12,830 15,627 14,632 14,657 13,439 13,886 13,190 12,328 16 Nonbanks 20,697 18,213 15,708 18,775 18,976 14,115 18,988 19,629' 19,804 20,651 17 Claims on foreigners 228,600 210,129 195,063 209,137 203,963 202,427r 196,154 190,922' 190,758 179,414 18 Other branches of parent bank 78,746 72,727 72,197 86,695 85,548 88,284' 84,468' 83,063' 81,692 75,423 19 Banks 76,940 71,868 66,421 68,931 65,771 63,706 61,359' 58,181' 58,274 54,466 20 Public borrowers 17,626 17,260 16,708 14,988 14,952 14,730 14,720 14,645' 14,853 14,423 21 Nonbank foreigners 55,288 48,274 39,737 38,523 37,692 35,707 35,607 35,033 35,939 35,102 22 Other assets 10,610 9,753 11,804 13,748 15,379 15,656' 14,266' 15,018' 14,346 14,725 United Kingdom 23 Total, all currencies 144,385 148,599 140,917 163,472 167,726 158,695'' 160,244 157,634' 155,657 152,592 24 Claims on United States 27,675 33,157 24,599 33,904 35,392 32,518 32,464 32,869 29,406 31,618 25 Parent bank 21,862 26,970 19,085 27,710 29,553 27,350 26,923 27,484 24,512 26,155 26 Other banks in United States 1,429 1,106 1,612 1,870 1,694 1,259 1,558 1,527 1,111 1,013 27 Nonbanks 4,384 5,081 3,902 4,324 4,145 3,909 3,983 3,858 3,783 4,450 28 Claims on foreigners 111,828 110,217 109,508 120,079 121,487 115,700 118,407 115,489' 117,150 112,347 29 Other branches of parent bank 37,953 31,576 33,422 37,402 39,138 39,903 39,702 38,077 34,278 33,019 30 Banks 37,443 39,250 39,468 42,929 41,649 36,735 39,697 38,654 40,422 38,790 31 Public borrowers 5,334 5,644 4,990 4,881 5,272 4,752 4,639 4,613 5,312 5,000 32 Nonbank foreigners 31,098 33,747 31,628 34,867 35,428 34,310 34,369 34,145' 37,138 35,538 33 Other assets 4,882 5,225 6,810 9,489 10,847 10,477' 9,373 9,276 9,101 8,627 34 Total payable in U.S. dollars 112,809 108,626 95,028 105,515 107,289 100,574r 102,148' 101,642 95,972 92,871 35 Claims on United States 26,868 32,092 23,193 31,820 33,409 30,439 30,156' 30,971 27,213 29,555 36 Parent bank 21,495 26,568 18,526 26,850 28,685 26,304 25,854' 26,565 23,217 25,137 37 Other banks in United States 1,363 1,005 1,475 1,504 1,408 1,044 1,132 1,273 945 781 38 Nonbanks 4,010 4,519 3,192 3,466 3,316 3,091 3,170 3,133 3,051 3,637 39 Claims on foreigners 82,945 73,475 68,138 69,276 68,864 64,560 67,458 66,313 64,422 59,091 40 Other branches of parent bank 33,607 26,011 26,361 27,810 29,166 28,635 29,336 29,813 26,812 24,636 41 Banks 26,805 26,139 23,251 22,941 21,833 19,188 20,814 19,516 19,831 17,953 42 Public borrowers 4,030 3,999 3,677 3,426 3,472 3,313 3,313 3,347 3,864 3,412 43 Nonbank foreigners 18,503 17,326 14,849 15,099 14,393 13,424 13,995 13,637 13,915 13,090 44 Other assets 2,996 3,059 3,697 4,419 5,016 5,575' 4,534 4,358 4,337 4,225 Bahamas and Caymans 45 Total, all currencies 146,811 142,055 142,592 156,951 155,100 160,321 148,718 143,630 153,254 152,930 46 Claims on United States 77,296 74,864 78,048 83,383 82,366 85,318 79,893 78,015 85,847 88,293 47 Parent bank 49,449 50,553 54,575 53,289 52,759 60,048 51,249 48,402 56,330 59,240 48 Other banks in United States 11,544 11,204 11,156 14,721 13,980 14,277 12,472 13,042 12,400 11,480 49 Nonbanks 16,303 13,107 12,317 15,373 15,627 10,993 16,172 16,571 17,117 17,573 50 Claims on foreigners 65,598 63,882 60,005 68,713 67,658 70,162 63,469 60,111 61,952 58,808 51 Other branches of parent bank 17,661 19,042 17,296 18,936 18,905 21,277 19,802' 18,486' 19,368 17,790 52 Banks 30,246 28,192 27,476 35,014 33,479 33,751 29,340' 27,687' 28,637 26,690 53 Public borrowers 6,089 6,458 7,051 7,018 7,196 7,428 7,257 7,063' 6,891 6,849 54 Nonbank foreigners 11,602 10,190 8,182 7,745 8,078 7,706 7,070 6,875 7,056 7,479 55 Other assets 3,917 3,309 4,539 4,855 5,076 4,841 5,356 5,504 5,455 5,829 56 Total payable in U.S. dollars 141,562 136,794 136,813 145,841 144,525 151,434 141,135 135,916 145,050 145,398 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 • August 1988 3.14 Continued 1987 1988 Oct. Nov. Dec. Jan. Feb. Mar. Apr." All foreign countries 57 Total, all currencies 453,656 458,012 456,628 521,757 525,894 518,604' 503,254' 495,003' 502,398 488,939 58 Negotiable CDs 37,725 34,607 31,629 36,796 34,690 30,929 29,277 31,158 31,854 31,585 59 To United States 147,583 156,281 152,465 156,762 156,206 161,390 150,676' 149,402' 157,063 155,611 60 Parent bank 78,739 84,657 83,394 80,297 83,894r 87,606' 78,590' 85,142' 91,628 85,718 61 Other banks in United States 18,409 16,894 15,646 18,870 18,871 20,559 15,801 14,237 14,806 16,224 62 Nonbanks 50,435 54,730 53,425 57,595 53,441' 53,225' 56,285' 50,023' 50,629 53,669 63 To foreigners 247,907 245,939 253,775 307,161 312,596 304,790 302,042' 293,360' 290,064 280,932 64 Other branches of parent bank 93,909 89,529 95,146 114,863 117,036 124,601 116,434' \\\,9W 109,071 105,038 65 Banks 78,203 76,814 77,809 98,121 97,490 87,261 89,552 88,400 88,257 85,097 66 Official institutions 20,281 19,520 17,835 20,370 21,873 19,564 21,130 20,373 18,608 18,006 67 Nonbank foreigners 55,514 60,076 62,985 73,807 76,197 73,364 74,926 72,638' 74,128 72,791 68 Other liabilities 20,441 21,185 18,759 21,038 22,402 21,495' 21,259' 21,083' 23,417 20,811 69 Total payable in U.S. dollars 367,145 353,712 336,406 365,879 361,698 361,438 344,805 341,630' 344,395 337,122 70 Negotiable CDs 35,227 31,063 28,466 32,117 30,075 26,768 24,785 26,386 26,869 26,596 71 To United States 143,571 150,905 144,483 145,462 143,188 148,442 139,185' 138,737' 144,983 144,893 72 Parent bank 76,254 81,631 79,305 74,788 11,115' 81,783' 73,064' 79,363' 84,801 80,036 73 Other banks in United States 17,935 16,264 14,609 17,315 17,197 19,155 14,433 12,918 13,501 15,013 74 Nonbanks 49,382 53,010 50,569 53,359 48,216' 47,504' 51,688' 46,456' 46,681 49,844 75 To foreigners 178,260 163,583 156,806 179,506 179,526 177,711 172,285' 167,717' 163,275 156,738 76 Other branches of parent bank 77,770 71,078 71,181 84,448 84,630 90,469 84,298' 82,996' 81,073 76,598 77 Banks 45,123 37,365 33,850 40,167 38,932 35,065 33,315 32,278 30,688 29,924 78 Official institutions 15,773 14,359 12,371 13,405 14,161 12,409 12,736 12,071 10,489 10,539 79 Nonbank foreigners 39,594 40,781 39,404 41,486 41,803 39,768 41,936 40,372 41,025 39,677 80 Other liabilities 10,087 8,161 6,651 8,794 8,909 8,517 8,550 8,790' 9,268 8,895 United Kingdom 81 Total, all currencies 144,385 148,599 140,917 163,472 167,726 158,695' 160,244 157,634' 155,657 152,592 82 Negotiable CDs 34,413 31,260 27,781 32,523 30,475 26,988 25,184 26,786 27,279 27,090 83 To United States 25,250 29,422 24,657 22,868 24,961 23,470 25,209 26,382' 22,725 23,988 84 Parent bank 14,651 19,330 14,469 12,251 14,018 13,223 14,177 15,527 14,506 14,904 85 Other banks in United States 3,125 2,974 2,649 2,382 2,103 1,740 1,596 1,615 1,768 1,508 86 Nonbanks 7,474 7,118 7,539 8,235 8,840 8,507 9,436 9,240' 6,451 7,576 87 To foreigners 77,424 78,525 79,498 98,215 101,686 98,689 100,001 94,235' 95,049 92,099 88 Other branches of parent bank 21,631 23,389 25,036 29,718 30,727 33,078 33,344 30,350 30,211 27,383 89 Banks 30,436 28,581 30,877 38,502 37,690 34,290 34,820 33,520 33,316 32,970 90 Official institutions 10,154 9,676 6,836 10,248 12,000 11,015 11,571 11,048 9,624 10,181 91 Nonbank foreigners 15,203 16,879 16,749 19,747 21,269 20,306 20,266 19,317' 21,898 21,565 92 Other liabilities 7,298 9,392 8,981 9,866 10,604 9,548' 9,850 10,231' 10,604 9,415 93 Total payable in U.S. dollars 117,497 112,697 99,707 108,440 108,481 102,550 105,138 105,162 98,982 96,532 94 Negotiable CDs 33,070 29,337 26,169 29,991 27,999 24,926 22,875 24,281 24,716 24,392 95 To United States 24,105 27,756 22,075 18,819 19,800 17,752 20,799 23,019 19,116 20,310 96 Parent bank 14,339 18,956 14,021 11,283 12,792 12,026 13,307 14,626 13,622 13,947 97 Other banks in United States 2,980 2,826 2,325 2,080 1,789 1,512 1,398 1,401 1,556 1,306 98 Nonbanks 6,786 5,974 5,729 5,456 5,219 4,214 6,094 6,992 3,938 5,057 99 To foreigners 56,923 51,980 48,138 55,209 56,443 55,919 57,620 53,444 50,590 47,589 UK) Other branches of parent bank 18,294 18,493 17,951 20,018 20,826 22,334 22,870 21,753 21,292 18,060 101 Banks 18,356 14,344 15,203 17,786 17,024 15,580 16,119 14,401 13,106 12,889 102 Official institutions 8,871 7,661 4,934 7,115 7,970 7,530 7,993 7,045 5,181 5,918 103 Nonbank foreigners 11,402 11,482 10,050 10,290 10,623 10,475 10,638 10,245 11,011 10,722 104 Other liabilities 3,399 3,624 3,325 4,421 4,239 3,953 3,844 4,418 4,560 4,241 Bahamas and Caymans 105 Total, all currencies 146,811 142,055 142,592 156,951 155,100 160,321 148,718 143,630 153,254 152,930 106 Negotiable CDs 615 610 847 890 861 885 851 940 1,069 1,038 107 To United States 102,955 104,556 106,081 111,976 108,039 113,950 105,147' 99,821' 110,451 109,319 108 Parent bank 47,162 45,554 49,481 49,387 5 0^ 53,239' 46,594' 48,976' 55,981 50,688 109 Other banks in United States 13,938 12,778 11,715 14,872 15,204 17,224 13,017 11,455 11,829 13,676 110 Nonbanks 41,855 46,224 44,885 47,717 42,805' 43,487' 45,536' 39,390' 42,641 44,955 111 To foreigners 40,320 35,053 34,400 42,295 44,398 43,815 40,822' 41,234' 40,038 40,833 112 Other branches of parent bank 16,782 14,075 12,631 17,090 17,812 19,185 18,629' 18,604' 17,260 19,300 113 Banks 12,405 10,669 8,617 11,589 12,611 10,769 9,344 9,825 9,404 9,162 114 Official institutions 2,054 1,776 2,719 2,158 2,064 1,504 1,377 1,179 1,873 1,164 115 Nonbank foreigners 9,079 8,533 10,433 11,458 11,911 12,357 11,472 11,626 11,501 11,207 116 Other liabilities 2,921 1,836 1,264 1,790 1,802 1,671 1,898 1,635 1,6% 1,740 117 Total payable in U.S. dollars 143,582 138,322 138,774 149,472 146,485 152,927 141,750 136,636 145,366 146,134 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 1988 IItteemm 11998855 11998866 Oct. Nov. Dec. Jan. Feb. Mar. Apr." 1 Total1 178,380 211,834 252,551 254,080 259,635 267,049 276,360 284,424 286,583 By type 2 Liabilities reported by banks in the United States 26,734 27,920 38,337 34,259 31,821 32,522 32,118f 29,848 29,565 3 U.S. Treasury bills and certificates3 53,252 75,650 78,819 82,542 88,829 90,635 93,407 95,624 94,974 U.S. Treasury bonds and notes 4 Marketable 77,154 91,368 118,909 120,762 122,556 127,674 134,843 142,984 146,082 5 Nonmarketable4 , 3,550 1,300 300 300 300 300 300 792 795 6 U.S. securities other than U.S. Treasury securities5 17,690 15,596 16,186 16,217 16,129 15,918 15,692 15,176 15,167 By area 7 Western Europe 74,447 88,629 116,510 117,628 124,609 127,733 127,594 129,325 129,457 8 Canada 1,315 2,004 5,152 4,884 4,961 6,182 6,839 7,954 8,314 9 Latin America and Caribbean 11,148 8,417 9,217 8,924 8,308 7,925 8,271 8,709 8,495 10 Asia 86,448 105,868 114,106 116,417 116,208 119,309 127,479'' 131,593 132,439 11 Africa 1,824 1,503 1,474 1,562 1,402 1,458 1,493 1,512 1,417 12 Other countries6 3,199 5,412 6,089 4,665 4,147 4,442 4,682 4,839 5,966 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 1987 1988 IItteemm 11998844 11998855 11998866 June Sept. Dec. Mar. 1 Banks' own liabilities 8,586 15,368 29,702 39,102 45,872 54,913 56,490 2 Banks' own claims 11,984 16,294 26,180 34,244 41,744 50,785 51,564 3 Deposits 4,998 8,437 14,129 12,034 15,753 18,119 17,711 4 Other claims 6,986 7,857 12,052 22,210 25,992 32,666 33,852 5 Claims of banks' domestic customers 569 580 2,507 923 1,067 551 810 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 •ties. 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 • August 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 Holder and type of liability 11998844 11998855 11998866 Oct. Nov. Dec. Jan. Feb/ Mar. Apr/ 1 All foreigners 407,306 435,726 540,996 605,116 605,074 618,622 601,118 605,237 606,543 610,340 2 Banks' own liabilities 306,898 341,070 406,485 462,986 457,634 469,487 446,221 446,172 444,407 448,404 3 Demand deposits 19,571 21,107 23,789 22,876 23,736 22,704 21,445 21,114 21,903 20,808 4 Time deposits1 110,413 117,278 130,891 151,925 147,162 148,152 139,077 140,177 138,391 134,819 5 Other2. 26,268 29,305 42,705 53,047 52,474 51,059 51,836 52,651 46,513 45,172 6 Own foreign offices 150,646 173,381 209,100 235,138 234,262 247,571 233,862 232,228 237,600 247,605 7 Banks' custody liabilities4 100,408 94,656 134,511 142,130 147,440 149,135 154,897 159,066 162,136 161,935 8 U.S. Treasury bills and certificates5 76,368 69,133 90,398 91,374 96,612 101,743 103,861 107,088 109,233 107,881 9 Other negotiable and readily transferable instruments 18,747 17,964 15,417 15,933 16,737 16,712 16,654 15,592 16,121 16,017 10 Other 5,293 7,558 28,696 34,823 34,090 30,680 34,383 36,386 36,783 38,038 11 Nonmonetary international and regional organizations 4,454 5,821 5,807 3,594 5,809 4,373 5,875 8,640 6,064 4,478 12 Banks' own liabilities 2,014 2,621 3,958 1,680 3,195 2,612 4,052 6,629 4,062 2,315 13 Demand deposits 254 85 199 107 74 249 790 74 134 67 14 Time deposits 1,267 2,067 2,065 986 1,094 1,523 1,583 2,481 2,092 335 15 Other. 493 469 1,693 586 2,027 839 1,678 4,074 1,836 1,913 16 Banks' custody liabilities4 2,440 3,200 1,849 1,914 2,614 1,761 1,823 2,011 2,002 2,163 17 U.S. Treasury bills and certificates 916 1,736 259 285 747 265 613 415 635 587 18 Other negotiable and readily transferable instruments6 1,524 1,464 1,590 1,624 1,811 1,497 1,210 1,521 1,351 1,564 19 Other 0 0 0 6 55 0 0 75 16 11 20 Official institutions8 86,065 79,985 103,569 117,156 116,801 120,650 123,157 125,525 125,472 124,540 21 Banks' own liabilities 19,039 20,835 25,427 34,785 31,066 28,686 29,895 29,232 26,897 26,506 22 Demand deposits 1,823 2,077 2,267 1,905 1,820 1,948 1,605 1,861 2,020 1,660 23 Time deposits' 9,374 10,949 10,497 16,584 13,707 12,429 11,907 11,654 11,718 11,635 24 Other2 7,842 7,809 12,663 16,296 15,539 14,309 16,383 15,717 13,158 13,210 25 Banks' custody liabilities4 67,026 59,150 78,142 82,372 85,735 91,965 93,262 96,294 98,575 98,033 26 U.S. Treasury bills and certificates5 59,976 53,252 75,650 78,819 82,542 88,829 90,635 93,407 95,624 94,974 27 Other negotiable and readily transferable instruments6 6,966 5,824 2,347 3,328 2,993 2,990 2,442 2,592 2,750 2,939 28 Other 84 75 145 225 200 146 185 294 201 120 29 Banks9 248,893 275,589 351,745 405,636 400,611 414,024 391,711 390,909 394,984 401,229 30 Banks' own liabilities 225,368 252,723 310,166 359,316 354,402 371,204 345,529 344,043 347,457 353,229 31 Unaffiliated foreign banks 74,722 79,341 101,066 124,178 120,140 123,633 111,666 111,815 109,857 105,623 32 Demand deposits 10,556 10,271 10,303 11,369 11,862 10,918 9,774 9,747 10,014 9,438 33 Time deposits' 47,095 49,510 64,232 79,583 76,658 79,926 71,284 71,718 70,672 68,725 34 Other2 17,071 19,561 26,531 33,225 31,621 32,790 30,608 30,350 29,171 27,461 35 Own foreign offices3 150,646 173,381 209,100 235,138 234,262 247,571 233,862 232,228 237,600 247,605 36 Banks' custody liabilities4 23,525 22,866 41,579 46,321 46,209 42,819 46,182 46,866 47,526 48,000 37 U.S. Treasury bills and certificates 11,448 9,832 9,984 8,961 9,480 9,134 8,979 9,526 9,597 8,889 38 Other negotiable and readily transferable instruments6 7,236 6,040 5,165 5,454 5.586 5,390 5,580 4,436 4,627 4,637 39 Other 4,841 6,994 26,431 31,906 31,i43 28,296 31,624 32,904 33,303 34,474 40 Other foreigners 67,894 74,331 79,875 78,729 81,853 79,575 80,374 80,163 80,024 80,093 41 Banks' own liabilities 60,477 64,892 66,934 67,206 68,970 66,985 66,745 66,267 65,990 66,355 42 Demand deposits 6,938 8,673 11,019 9,495 9,981 9,589 9,275' 9,433 9,734 9,644 43 Time deposits 52,678 54,752 54,097 54,772 55,703 54,275 54,303r 54,324 53,909 54,123 44 Other2 861 1,467 1,818 2,940 3,287 3,121 3,166 2,511 2,347 2,587 45 Banks' custody liabilities4 7,417 9,439 12,941 11,523 12,882 12,589 13,629 13,895 14,034 13,739 46 U.S. Treasury bills and certificates 4,029 4,314 4,506 3,309 3,842 3,515 3,633 3,740 3,378 3,430 47 Other negotiable and readily transferable instruments 3,021 4,636 6,315 5,527 6,347 6,836 7,422 7,044 7,393 6,876 48 Other 367 489 2,120 2,686 2,693 2,238 2,575 3,112 3,263 3,433 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 10,476 9,845 7,496 6,676 7,361 7,314 7,647 7,370 7,325 7,480 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr." 1 Total 407,306 435,726 540,996 605,116 605,074 618,622 601,118 605,237' 605,543 610,340 2 Foreign countries 402,852 429,905 535,189 601,522 599,265 614,249 595,243 596,597' 600,479 605,862 3 Europe 153,145 164,114 180,556 233,296 229,008 234,662 225,499 226,519' 212,953 218,433 4 Austria 615 . 693 1,181 1,166 1,254 920 992 964 957 1,142 5 Belgium-Luxembourg 4,114 5,243 6,729 10,833 10,917 9,304 9,397 9,832' 8,773 9,624 6 Denmark 438 513 482 704 628 757 547 659' 930 1,034 7 Finland 418 496 580 571 461 377 401 369 405 504 8 France 12,701 15,541 22,862 28,255 27,522 29,954 28,198 28,868 28,449 27,040 9 Germany 3,358 4,835 5,762 8,562 8,548 7,061 7,788 8,872' 6,606 6,857 10 Greece 699 666 700 738 715 689 638 639 656 656 11 Italy 10,762 9,667 10,875 10,282 10,016 12,063 11,259 11,001 10,076 10,040 12 Netherlands 4,731 4,212 5,600 6,725 6,490 5,013 5,272 5,302 5,399 5,134 13 Norway 1,548 948 735 1,187 1,074 1,362 1,196 828 917 1,101 14 Portugal 597 652 699 724 858 801 725 780 877 917 15 Spain 2,082 2,114 2,407 2,683 2,614 2,619 2,359 2,433 2,618 2,444 16 Sweden 1,676 1,422 884 1,582 2,882 1,379 1,393 1,719 1,836 1,712 17 Switzerland 31,740 29,020 30,534 29,053 30,167 33,754 31,925 32,011' 31,815 30,722 18 Turkey 584 429 454 550 433 703 674 539 616 518 19 United Kingdom 68,671 76,728 85,334 119,308 115,122 116,778 111,752 112,207' 101,571 109,417 20 Yugoslavia 602 673 630 508 485 711 541 557 550 566 21 Other Western Europe1 7,192 9,635 3,326 9,180 8,184 9,798 9,683 8,340 9,213 8,275 22 U.S.S.R 79 105 80 87 36 31 37 49 66 44 23 Other Eastern Europe2 537 523 702 599 602 588 721 549 623 686 24 Canada 16,059 17,427 26,345 25,740 28,681 30,083 28,691 25,967' 27,323 27,215 25 Latin America and Caribbean 153,381 167,856 210,318 217,859 214,306 220,313 212,002 212,719' 221,688 225,021 26 Argentina 4,394 6,032 4,757 5,075 5,267 4,994 4,893 5,083' 5,101 5,322 77 Bahamas 56,897 57,657 73,619 72,547 70,946 74,589 69,111 64,964' 70,296 69,383 28 Bermuda 2,370 2,765 2,922 2,442 2,231 2,335 2,197 2,021 2,184 2,424 29 Brazil 5,275 5,373 4,325 3,691 4,136 4,000 3,936 3,745 4,074 4,258 30 British West Indies 36,773 42,674 72,263 80,303 78,236 81,632 78,503 82,625 87,889 92,132 31 Chile 2,001 2,049 2,054 2,191 2,218 2,210 2,122 2,361 2,314 2,251 32 Colombia 2,514 3,104 4,285 4,195 4,305 4,205 3,947 3,897 33,,883333 3,843 33 Cuba 10 11 7 12 9 12 8 9 88 13 34 Ecuador 1,092 1,239 1,236 1,062 1,087 1,082 1,115 1,133 1,169 1,174 35 Guatemala 896 1,071 1,123 1,053 1,032 1,080 1,098 1,098 1,182 1,209 36 Jamaica 183 122 136 140 150 160 150 148 208 209 37 Mexico 12,303 14,060 13,745 14,325 14,508 14,534 15,024 15,186' 15,783 15,354 38 Netherlands Antilles 4,220 4,875 4,970 5,305 5,234 4,972 4,987 5,231 5,213 5,345 39 Panama 6,951 7,514 6,886 7,457 7,503 7,400 7,329 6,983 4,306 4,072 40 Peru 1,266 1,167 1,163 1,205 1,205 1,271 1,235 1,328 1,364 1,410 41 Uruguay 1,394 1,552 1,537 1,494 1,526 1,579 1,670 1,753 1,763 1,743 42 Venezuela 10,545 11,922 10,171 9,929 9,075 9,035 9,174 9,729 9,411 9,564 43 Other 4,297 4,668 5,119 5,434 5,639 5,223 5,502 5,426 5,591 5,315 44 Asia 71,187 72,280 108,831 115,683 111188,,883344 121,177 121,181 122,919' 112299,,227788 125,625 China 45 Mainland 1,153 1,607 1,476 1,699 1,435 1,162 1,336 1,352 1,562 1,789 46 Taiwan 4,990 7,786 18,902 18,302 21,564 21,494 22,869 23,884 24,005 23,981 47 Hong Kong 6,581 8,067 9,393 9,590 10,541 10,196 9,579 10,001' 10,011 9,631 48 India 507 712 674 606 701 588 571 879' 662 675 49 Indonesia 1,033 1,466 1,547 1,336 1,677 1,399 1,474 1,583' 1,547 1,065 50 Israel 1,268 1,601 1,892 2,170 1,221 1,477 1,270 1,333 1,400 1,315 51 Japan 21,640 23,077 47,410 53,268 52,735 54,109 55,221 56,346' 60,344 58,543 52 Korea 1,730 1,665 1,141 1,557 1,606 1,599 1,709 1,502 1,593 1,574 53 Philippines 1,383 1,140 1,866 1,331 1,259 1,085 1,035 1,009 1,095 1,015 54 Thailand 1,257 1,358 1,119 1,275 1,483 1,345 1,433 1,354 1,189 1,181 55 Middle-East oil-exporting countries 16,804 14,523 12,352 13,660 13,379 13,993 12,503 12,408' 12,735 12,648 56 Other 12,841 9,276 11,058 10,888 11,232 12,730 12,181 11,267' 13,135 12,206 57 3,396 4,883 4,021 3,918 4,065 3,944 3,757 3,755 4,034 3,878 58 Egypt 647 1,363 706 1,104 1,169 1,150 1,142 1,118 1,099 1,218 59 Morocco 118 163 92 70 75 194 71 69 75 68 60 South Africa 328 388 270 280 246 202 214 194 387 195 61 Zaire 153 163 74 71 82 67 89 86 81 82 62 Oil-exporting countries 1,189 1,494 1,519 1,081 1,108 1,014 981 1,047 1,062 1,008 63 Other 961 1,312 1,360 1,313 1,386 1,316 1,261 1,241 1,330 1,307 64 Other countries 5,684 3,347 5,118 5,026 4,372 4,069 4,114 4,717 5,203 5,689 65 Australia 5,300 2,779 4,196 4,057 3,711 3,325 3,319 3,814 4,154 4,885 66 All other 384 568 922 969 661 744 795 903 1,048 804 67 Nonmonetary international and regional organizations 4,454 5,821 5,807 3,594 5,809 4,373 5,875 8,640 6,064 4,478 68 International5 3,747 4,806 4,620 2,107 3,724 2,739 4,301 6,600 4,361 2,401 69 Latin American regional 587 894 1,033 1,155 1,478 1,272 1,181 1,505 1,305 1,528 70 Other regional6 120 121 154 331 608 362 393 536 397 548 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 • August 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 Oct. Nov. Dec. Jan. Feb. Mar. 1 400,162 401,608 444,745 461,224 459,788 458,714 442,141 440,615r 440,065 2 Foreign countries 399,363 400,577 441,724 458,393 452,618 454,131 439,493 438,391' 438,158 3 Europe 99,014 106,413 107,823 111,006 107,259 101,409 97,019 100,091' 94,062 4 Austria 433 598 728 929 927 793 762 800 846 5 Belgium-Luxembourg 4,794 5,772 7,498 10,133 9,551 9,377 9,629 9,796 8.269 6 Denmark 648 706 688 790 881 718 852 746 874 7 Finland 898 823 987 1,089 1,030 1,010 876 835 729 8 France 9,157 9,124 11,356 14,348 13,512 13,473 11,687 12,258 12,229 9 Germany 1,306 1,267 1,816 2,104 1,557 2,060 2,194 1,928 1,881 10 Greece 817 991 648 430 452 463 579 710 696 11 Italy 9,119 88,,884488 9,043 7,412 7,286 7,467 6,508 6,165 6,454 12 Netherlands 1,356 11,,225588 3,296 3,964 3,813 2,619 2,902 2,879 2,779 13 Norway 675 706 672 812 938 934 842 747 628 14 Portugal 1,243 1,058 739 570 545 477 471 499 429 15 Spain 2,884 1,908 1,492 1,859 2,032 1,849 1,629 1,966 1,762 16 Sweden 2,230 2,219 1,964 2,527 2,640 2,269 2,106 2,274 2,229 17 Switzerland 2,123 3,171 3,352 2,825 2,880 2,659 2,566 3,086' 2.237 18 Turkey 1,130 1,200 1,543 1,564 1,566 1,675 1,637 1,660 1,589 19 United Kingdom 56,185 62,566 58,335 55,906 53,960 49,959 48,326 50,149' 46,951 20 Yugoslavia 1,886 1,964 1,835 1,750 1,697 1,700 1,694 1,702 1,640 21 Other Western Europe1 596 998 539 539 662 665 578 725 733 22 U.S.S.R 142 130 345 473 437 389 386 380 328 23 Other Eastern Europe2 1,389 1,107 948 983 892 852 795 790 781 24 Canada 16,109 16,482 21,006 21,402 25,313 25,269 23,380 21,901' 21,103 25 Latin America and Caribbean 207,862 202,674 208,825 217,010 211,906 213,253 206,917 202,328' 207,528 26 Argentina 11,050 11,462 12,091 12,119 12,054 11,987 12,106 11,975 12,155 27 Bahamas 58,009 58,258 59,342 63,666 61,437 64,788 60,916 57,404' 58,249 28 Bermuda 592 499 418 418 331 478 380 311' 1,471 29 Brazil 26,315 25,283 25,716 25,803 25,453 25,288 25,358 25,343 25,307 30 British West Indies 38,205 38,881 46,284 51,721 49,549 48,757 47,041 46,578' 52,196 31 Chile 6,839 6,603 6,558 6,388 6,429 6,304 6,332 6,260 6,027 32 Colombia 3,499 3,249 2,821 2,730 2,730 22,,773399 2,709 2,668 2,652 33 Cuba 0 0 0 0 0 11 0 0 0 34 Ecuador 2,420 2,390 2,439 2,396 2,334 2,286 2,339 2,238 2,229 35 Guatemala3 158 194 140 131 145 144 134 140 149 36 Jamaica 252 224 198 191 184 188 202 191' 201 37 Mexico 34,885 31,799 30,698 30,307 30,101 29,526 29,138 29,217 27,516 38 Netherlands Antilles 1,350 1,340 1,041 1,013 1,113 980 1,009 1,146' 1,159 39 Panama 7,707 6,645 5,436 4,566 4,685 4,739 4,304 3,818' 3,098 40 Peru 2,384 1,947 1,661 1,457 1,459 1,323 1,316 1,336 1.270 41 Uruguay 1,088 960 940 961 975 968 961 955 929 42 Venezuela 11,017 10,871 11,108 11,224 11,109 10,998 10,920 11,038 11,094 43 Other Latin America and Caribbean 2,091 2,067 1,936 1,920 1,818 1,761 1,753 1,710' 1,827 44 66,316 6666,,221122 96,126 110000,,332288 110000,,227722 110066,,223311 110044,,995511 106,829' 108,142 China 45 Mainland 710 639 787 543 870 968 886 887 1,096 46 Taiwan 1,849 1,535 2,681 4,224 4,784 4,577 3,877 3,813 3,549 47 Hong Kong 7,293 6,797 8,307 6,887 7,312 8,135 7,591 7,911' 8,473 48 India 425 450 321 527 502 510 495 548 566 49 Indonesia 724 698 723 625 601 580 571 632 645 50 Israel 2,088 1,991 1,634 1,331 1,293 1,363 1,278 1,211 1.238 51 Japan 29,066 31,249 59,674 65,679 64,767 69,098 71,230 73,216' 72,802 52 Korea 9,285 9,226 7,182 4,996 4,982 5,004 4,919 4,777' 5,011 53 Philippines 2,555 2,224 2,217 2,082 2,040 2,069 1,961 1,966 2,063 54 Thailand 1,125 845 578 446 439 491 517 520 541 55 Middle East oil-exporting countries 5,044 4,298 4,122 5,063 5,157 4,841 3,567 3,455' 3,538 56 Other Asia 6,152 6,260 7,901 7,924 7,524 8,596 8,060 7,892' 8,621 57 Africa 6,615 5,407 4,650 5,375 4,668 4,742 4,807 4,865' 4,824 58 Egypt 728 721 567 538 526 521 513 469 483 59 Morocco 583 575 598 605 585 542 491 490 471 60 South Africa 2,795 1,942 1,550 1,546 1,494 1,507 1,520 1,461 1,435 61 Zaire 18 20 28 38 36 15 36 82 46 62 Oil-exporting countries 842 630 694 1,530 903 1,003 1,019 1,086 1,129 63 Other 1,649 1,520 1,213 1,118 1,123 1,153 1,229 1,276' 1,260 64 Other countries 3,447 3,390 3,294 3,272 3,201 3,228 2,418 2,378 2,499 65 Australia 2,769 2,413 1,949 2,035 2,093 2,189 1,428 1,430 1,481 66 All other 678 978 1,345 1,237 1,109 1,039 991 947 1,019 67 Nonmonetary international and regional organizations 800 1,030 3,021 2,830 7,170 4,583 2,648 2,224' 1,907 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 Oct. Nov. Dec. Jan. Feb/ Mar. Apr." 1 Total 444444433333333333333,,,,,,,000000077777778888888 444444433333330000000,,,,,,,444444488888889999999 444444477777778888888,,,,,,,666666655555550000000 444444499999996666666,,,,,,,444444444444440000000 444444477777778888888,,,,,,,000000055555554444444 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 444444400000000000000,,,,,,,111111166666662222222 444444400000001111111,,,,,,,666666600000008888888 444444444444444444444,,,,,,,777777744444445555555 461,224 459,788 444444455555558888888,,,,,,,777777711111114444444 442,141 440,615 444444444444440000000,,,,,,,000000066666665555555 430,068 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666662222222,,,,,,,222222233333337777777 66666660000000,,,,,,,555555500000007777777 66666664444444,,,,,,,000000099999995555555 64,967 69,483 66666665555555,,,,,,,333333322222229999999 63,360 62,215 66666660000000,,,,,,,555555555555553333333 60,227 44 OOwwnn ffoorreeiiggnn ooffffiicceess 111111155555556666666,,,,,,,222222211111116666666 111111177777774444444,,,,,,,222222266666661111111 222222211111111111111,,,,,,,555555533333333333333 218,3% 220,479 222222222222223333333,,,,,,,111111111111110000000 217,060 218,420 222222222222220000000,,,,,,,777777722222227777777 210,851 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222224444444,,,,,,,999999933333332222222 111111111111116666666,,,,,,,666666655555554444444 111111122222222222222,,,,,,,999999944444446666666 134,104 126,389 111111122222227777777,,,,,,,333333311111119999999 119,773 118,185 111111111111117777777,,,,,,,222222211111117777777 116,413 66 DDeeppoossiittss 44444449999999,,,,,,,222222222222226666666 44444448888888,,,,,,,333333377777772222222 55555557777777,,,,,,,444444488888884444444 63,193 58,052 66666660000000,,,,,,,222222255555550000000 54,730 54,963 55555555555555,,,,,,,000000000000000000000 55,088 77 OOtthheerr 77777775555555,,,,,,,777777700000006666666 66666668888888,,,,,,,222222288888882222222 66666665555555,,,,,,,444444466666662222222 70,911 68,337 66666667777777,,,,,,,000000066666668888888 65,043 63,222 66666662222222,,,,,,,222222211111117777777 61,325 88 AAllll ootthheerr ffoorreeiiggnneerrss 55555556666666,,,,,,,777777777777777777777 55555550000000,,,,,,,111111188888885555555 44444446666666,,,,,,,111111177777771111111 43,756 43,437 44444442222222,,,,,,,999999955555557777777 41,947 41,795 44444441111111,,,,,,,555555566666669999999 42,577 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 33333332222222,,,,,,,999999911111116666666 22222228888888,,,,,,,888888888888881111111 33333333333333,,,,,,,999999900000005555555 33333337777777,,,,,,,777777722222226666666 33333337777777,,,,,,,999999988888889999999 3333333,,,,,,,333333388888880000000 3333333,,,,,,,333333333333335555555 4444444,,,,,,,444444411111113333333 3333333,,,,,,,666666677777772222222 5555555,,,,,,,111111111111111111111 11 Negotiable and readily transferable 22222223333333,,,,,,,888888800000005555555 11111119999999,,,,,,,333333333333332222222 22222224444444,,,,,,,000000044444444444444 22222226666666,,,,,,,666666688888884444444 22222224444444,,,,,,,333333399999999999999 12 Outstanding collections and other 5555555,,,,,,,777777733333332222222 6666666,,,,,,,222222211111114444444 5555555,,,,,,,444444444444448888888 7777777,,,,,,,333333377777770000000 8888888,,,,,,,444444477777779999999 13 MEMO: Customer liability on 33333337777777,,,,,,,111111100000003333333 22222228888888,,,,,,,444444488888887777777 22222225555555,,,,,,,777777700000006666666 22222223333333,,,,,,,888888833333334444444 11111118888888,,,,,,,888888800000000000000 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States 40,714 38,102 41,434 42,272 37,905 37,919 34,264R 39,500 35,722 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 on 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 1988 MMaattuurriittyy ;; bbyy bboorrrroowweerr aanndd aarreeaa 11998844 11998855 11998866 June Sept. Dec. Mar.p 1 Total 243,952 227,903 232,295 236,828 236,490 235,092 217,300 By borrower 2 Maturity of 1 year or less1 167,858 160,824 160,555 167,488 166,156 164,075 151,163 3 Foreign public borrowers 23,912 26,302 24,842 24,088 27,157 25,993 24,126 4 All other foreigners 143,947 134,522 135,714 143,400 138,998 138,082 127,037 5 Maturity over 1 year 76,094 67,078 71,740 69,340 70,334 71,017 66,138 6 Foreign public borrowers 38,695 34,512 39,103 39,341 39,470 38,591 35,135 7 All other foreigners 37,399 32,567 32,637 29,999 30,864 32,425 31,003 By area Maturity of 1 year or less1 8 Europe 58,498 56,585 61,784 68,872 62,228 58,780 50,808 9 Canada 6,028 6,401 5,895 5,603 5,733 5,697 4,839 10 Latin America and Caribbean 62,791 63,328 56,271 55,489 58,439 56,426 55,162 11 Asia 33,504 27,966 29,457 31,155 32,133 36,437 35,793 12 Africa 4,442 3,753 2,882 2,989 2,871 2,845 2,569 13 All other2 2,593 2,791 4,267 3,380 4,751 3,891 1,992 Maturity of over 1 year1 14 Europe 9,605 7,634 6,737 6,479 6,753 6,830 5,962 15 Canada 1,882 1,805 1,925 1,664 1,579 2,661 2,242 16 Latin America and Caribbean 56,144 50,674 56,719 55,580 55,089 53,758 50,938 17 Asia 5,323 4,502 4,043 3,495 3,497 3,666 3,752 18 Africa 2,033 1,538 1,539 1,512 1,622 1,726 2,133 19 All other2 1,107 926 777 611 1,794 2,375 1,112 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 • August 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 1986 1987 1988 AArreeaa oorr ccoouunnttrryy 11998844 11998855 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar. 1 Total 405.7 385.3 385.6 389.7 389.5 389.6 393.4 382.9 384.4 38I.3r 368.6 2 G-10 countries and Switzerland 148.1 146.0 152.8 160.3 159.0 158.0 162.2 157.7 154.7 160.4 156.8 3 Belgium-Luxembourg 8.7 9.2 8.2 9.0 8.5 8.4 9.0 8.3 8.2 10.1 9.4 4 France 14.1 12.1 13.6 15.1 14.7 13.8 13.3 12.5 13.7 13.8 11.5 5 Germany 9.0 10.5 11.2 11.5 12.5 11.7 12.7 11.2 10.5 12.6 11.8 6 Italy 10.1 9.6 8.3 9.3 8.1 9.0 8.6 7.5 6.6 7.3 7.4 7 Netherlands 3.9 3.7 3.5 3.4 3.9 4.6 4.4 7.3 4.8 4.1 3.3 8 Sweden 3.2 2.7 2.8 2.9 2.7 2.4 3.0 2.4 2.6 2.1 2.1 9 Switzerland 3.9 4.4 5.3 5.6 4.8 5.8 5.8 5.7 5.4 5.5 5.1 10 United Kingdom 60.3 63.0 67.4 69.2 70.3 71.9 73.4 71.8 71.4 69.2 70.9 11 Canada 7.9 6.8 6.0 7.0 6.2 5.4 5.1 4.6 4.6 5.6 4.9 12 Japan 27.1 23.9 26.5 27.2 27.4 25.0 26.9 26.3 27.0 30.1 30.3 13 Other developed countries 33.6 29.9 31.1 30.7 29.5 26.2 25.7 25.2 25.9 26.2' 26.0 14 Austria 1.6 1.5 1.5 1.7 1.7 1.7 1.9 1.8 1.9 1.9 1.6 15 Denmark 2.2 2.3 2.5 2.4 2.3 1.7 1.7 1.5 1.6 1.7 1.4 16 Finland 1.9 1.6 1.9 1.6 1.7 1.4 1.4 1.4 1.4 1.3 1.0 17 Greece 2.9 2.6 2.5 2.6 2.3 2.3 2.1 2.0 1.9 2.0 2.3 18 Norway 3.0 2.9 2.7 3.0 2.7 2.4 2.2 2.1 2.0 2.3 2.0 19 Portugal 1.4 1.2 1.0 1.1 1.0 .8 .8 .8 .8 .5' .4 20 Spain 6.5 5.8 6.4 6.4 6.7 5.8 6.3 6.1 7.4 8.0 9.0 21 Turkey 1.9 1.8 2.1 2.5 2.1 2.0 1.7 1.7 1.5 1.6 1.6 22 Other Western Europe 1.7 2.0 2.4 2.1 1.6 1.4 1.4 1.5 1.6 1.6 1.9 23 South Africa 4.5 3.2 3.1 3.1 3.1 3.1 3.0 3.0 2.9 2.9 2.8 24 Australia 6.0 5.0 4.9 4.2 4.1 3.5 3.2 3.1 2.9 2.5 2.0 25 OPEC countries3 24.9 21.3 20.4 20.6 20.0 19.6 20.2 19.0 19.1 17.3 17.2 26 Ecuador 2.2 2.1 2.2 2.1 2.2 2.2 2.1 2.1 2.0 1.9 11..99 27 Venezuela 9.3 8.9 8.7 8.8 8.7 8.6 8.7 8.6 8.4 8.2 88..11 28 Indonesia 3.3 3.0 3.3 3.0 2.8 2.5 2.4 2.2 2.0 1.9 1.9 29 Middle East countries 7.9 5.3 4.5 5.0 4.6 4.5 5.4 4.4 4.9 3.6 3.7 30 African countries 2.3 2.0 1.8 1.7 1.7 1.7 1.6 1.7 1.7 1.7 1.7 31 Non-OPEC developing countries 111.8 104.2 102.9 102.0 100.0 99.7 99.3 99.6 96.6 96.7 93.1 Latin America 32 Argentina 8.7 8.8 8.8 9.2 9.3 9.5 9.5 9.5 9.3 9.4 9.4 33 Brazil 26.3 25.4 25.6 25.5 25.4 25.3 25.5 24.4 24.5 24.1 23.2 34 Chile 7.0 6.9 7.0 7.1 7.2 7.1 7.2 7.2 7.0 6.9 6.5 35 Colombia 2.9 2.6 2.3 2.2 2.0 2.1 2.0 1.9 1.9 2.0 1.9 36 Mexico 25.7 23.9 23.9 24.0 24.0 24.0 23.9 25.3 24.7 23.6 22.2 37 Peru 2.2 1.8 1.7 1.6 1.5 1.5 1.4 1.3 1.2 1.1 1.1 38 Other Latin America 3.9 3.4 3.3 3.3 3.3 3.1 3.0 3.0 2.8 2.8 2.8 Asia China 39 Mainland .7 .5 .6 .6 .6 .4 .9 .6 .3 .3 .4 40 Taiwan 5.1 4.5 4.3 3.7 4.3 4.9 5.5 6.6 5.9 8.2 6.6 41 India .9 1.2 1.2 1.3 1.3 1.2 1.7 1.7 1.9 1.9 2.1 42 Israel 1.8 1.6 1.3 1.6 1.4 1.5 1.4 1.3 1.3 1.0 1.1 43 Korea (South) 10.6 9.2 9.2 8.7 7.3 6.7 6.2 5.6 4.9 4.9 5.3 44 Malaysia 2.7 2.4 2.2 2.0 2.1 2.1 1.9 1.7 1.6 1.5 1.5 45 Philippines 6.0 5.7 5.6 5.7 5.4 5.4 5.4 5.4 5.4 5.1 5.1 46 Thailand 1.8 1.4 1.3 1.1 1.0 .9 .9 .8 .7 .7 1.0 47 Other Asia 1.1 1.0 .9 .8 .7 .7 .6 .7 .7 .6 .7 Africa 48 Egypt 1.2 1.0 .9 .9 .7 .7 .6 .6 .6 .5 .5 49 Morocco .8 .9 .9 .9 .9 .9 .9 .9 .8 .9 ..99 50 Zaire .1 .1 .1 .1 .1 .1 .1 .1 .1 .0 ..11 51 Other Africa4 2.1 1.9 1.9 1.7 1.6 1.6 .9 1.1 1.0 1.1 1.0 52 Eastern Europe 4.4 4.1 4.0 4.0 3.4 3.2 3.0 3.3 3.3 3.0 2.9 53 U.S.S.R .1 .1 .3 .3 .1 .1 .1 .3 .5 .4 .3 54 Yugoslavia 2.3 2.2 2.0 2.0 1.9 1.7 1.6 1.7 1.7 1.6 1.7 55 Other 2.0 1.8 1.7 1.7 1.4 1.4 1.3 1.3 1.2 i.r .9 56 Offshore banking centers 65.6 62.9 57.5 55.4 60.5 63.2 63.2 60.2 63.1 53.3' 51.2 57 Bahamas 21.5 21.2 21.2 17.1 19.9 22.3 24.0 19.7 25.6 17.3' 1155..99 58 Bermuda .9 .7 .7 .4 .4 .7 .8 .6 .6 .6 11..88 59 Cayman Islands and other British West Indies 11.8 11.6 9.2 12.2 12.8 13.6 11.1 12.4 10.7 11.2 10.2 60 Netherlands Antilles 3.4 2.2 2.2 2.4 1.9 1.8 1.7 1.3 1.2 1.2 1.3 61 Panama 6.7 6.0 4.3 4.2 5.1 4.1 5.4 5.2 4.5 4.5 33..22 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 ..11 63 Hong Kong 11.4 11.4 11.4 9.5 10.5 11.2 11.4 12.5 12.3 11.2 11.3 64 Singapore 9.8 9.8 8.4 9.3 9.7 9.4 8.6 8.3 8.1 7.0 7.4 65 Others6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated7 17.3 16.9 16.8 16.8 17.2 19.8 19.8 18.0 21.7 24.4 21.4 1. The banking offices covered by these data are the U.S. offices and foreign from $50 million to $150 million equivalent in total assets, the threshold now branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. applicable to all reporting branches. Offices not covered include (1) U.S. agencies and branches of foreign banks, and 3. 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 Type, and area or country 11998833 11998844 11998855 Dec. Mar. June Sept. Dec/ 1 Total 25,346 29,357 27,825 25,850 27,551 28,953 28,339 27,586 2 Payable in dollars 22,233 26,389 24,296 21,996 23,361 24,466 24,018 22,213 3 Payable in foreign currencies 3,113 2,968 3,529 3,854 4,190 4,487 4,321 5,372 By type 4 Financial liabilities 10,572 14,509 13,600 12,371 13,232 14,148 12,839 11,575 5 Payable in dollars 8,700 12,553 11,257 9,886 10,496 11,249 10,127 8,090 6 Payable in foreign currencies 1,872 1,955 2,343 2,485 2,737 2,899 2,712 3,485 7 Commercial liabilities 14,774 14,849 14,225 13,479 14,318 14,805 15,500 16,011 8 Trade payables 7,765 7,005 6,685 6,447 6,985 7,139 7,389 7,394 9 Advance receipts and other liabilities .. 7,009 7,843 7,540 7,032 7,333 7,666 8,111 8,617 10 Payable in dollars 13,533 13,836 13,039 12,110 12,865 13,218 13,891 14,124 11 Payable in foreign currencies 1,241 1,013 1,186 1,368 1,453 1,587 1,609 1,887 By area or country Financial liabilities 12 Europe 5,742 6,728 7,700 8,138 8,484 9,765 9,188 7,842 13 Belgium-Luxembourg 302 471 349 270 232 257 230 202 14 France 843 995 857 661 758 822 615 415 15 Germany 502 489 376 368 463 402 386 583 16 Netherlands 621 590 861 704 693 669 641 1,014 17 Switzerland 486 569 610 646 663 655 636 480 18 United Kingdom 2,839 3,297 4,305 5,199 5,414 6,698 6,394 4,956 19 Canada 764 863 839 399 431 441 407 357 20 Latin America and Caribbean 2,596 5,086 3,184 1,961 2,366 1,744 961 845 21 Bahamas 751 1,926 1,123 614 669 398 280 278 22 Bermuda 13 13 4 4 0 0 0 0 23 Brazil 32 35 29 32 26 22 22 25 24 British West Indies 1,041 2,103 1,843 1,163 1,545 1,223 581 475 25 Mexico 213 367 15 22 30 29 17 13 26 Venezuela 124 137 3 0 0 2 3 0 27 Asia 1,424 1,777 1,815 1,805 1,882 2,131 2,204 2,428 28 Japan 991 1,209 1,198 1,398 1,480 1,751 1,734 2,042 29 Middle East oil-exporting countries . 170 155 82 8 7 7 7 8 30 Africa 19 14 12 1 3 1 2 4 0 0 0 1 1 0 0 1 31 Oil-exporting countries3 27 41 50 67 67 66 76 98 32 All other4 Commercial liabilities 3,245 4,001 4,074 4,494 4,521 4,987 4,973 5,629 33 Europe 62 48 62 101 85 111 56 125 34 Belgium-Luxembourg 437 438 453 351 379 422 437 449 35 France 427 622 607 722 591 594 679 916 36 Germany 268 245 364 460 372 339 350 437 37 Netherlands 241 257 379 387 484 557 556 558 38 Switzerland 732 1,095 976 1,346 1,309 1,380 1,475 1,660 39 United Kingdom 40 Canada 1,841 1,975 1,449 1,393 1,352 1,253 1,263 1,285 41 Latin America and Caribbean 11,,447733 1,871 1,088 890 1,089 1,037 1,050 862 42 Bahamas 11 7 12 32 28 13 22 19 43 Bermuda 67 114 77 132 297 245 223 165 44 Brazil 44 124 58 61 82 88 40 46 45 British West Indies 6 32 44 48 88 63 44 20 46 Mexico 585 586 430 213 185 160 231 189 47 Venezuela 432 636 212 217 224 203 176 162 48 Asia 6,741 5,285 6,046 5,098 5,818 5,921 6,516 6,564 49 Japan 1,247 1,256 1,799 2,051 2,468 2,480 2,422 2,579 50 Middle East oil-exporting countries2,5 4,178 2,372 2,829 1,686 1,948 1,870 2,109 1,956 51 Africa 553 588 587 622 520 524 571 584 52 Oil-exporting countries3 167 233 238 197 170 166 151 135 53 All other4 921 1,128 982 981 1,019 1,083 1,128 1,085 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 • August 1988 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1986 1987 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998833 11998844 11998855 Dec. Mar. June Sept. Dec. 1 Total 34,911 29,901 28,876 33,519 34,103 31,644 31,390 30,072' 2 Payable in dollars 31,815 27,304 26,574 30,989 31,303 28,518 28,695 26,817' i Payable in foreign currencies 3,096 2,597 2,302 2,530 2,800 3,126 2,696 3,255' By type 4 Financial claims 23,780 19,254 18,891 23,424 24,149 21,691 21,055 19,544r 5 Deposits 18,496 14,621 15,526 17,283 17,407 14,871 15,827 13,617' 6 Payable in dollars 17,993 14,202 14,911 16,726 16,573 13,666 14,954 12,238' 7 Payable in foreign currencies 503 420 615 557 833 1,205 873 1,378' 8 Other financial claims 5,284 4,633 3,364 6,141 6,742 6,820 5,228 5,927' 9 Payable in dollars 3,328 3,190 2,330 4,792 5,400 5,551 4,114 4,778' 10 Payable in foreign currencies 1,956 1,442 1,035 1,349 1,342 1,269 1,114 1,149 11 Commercial claims 11,131 10,646 9,986 10,095 99,,995544 9,953 10,335 10,528' 12 Trade receivables 9,721 9,177 8,696 8,902 88,,889988 8,910 9,394 9,526' 13 Advance payments and other claims 1,410 1,470 1,290 1,192 1,056 1,043 942 1,001 14 Payable in dollars 10,494 9,912 9,333 9,471 9,330 9,301 9,626 9,801' 15 Payable in foreign currencies 637 735 652 624 624 652 709 727 By area or country Financial claims 16 Europe 6,488 5,762 6,929 8,827 9,403 9,958 9,473 9,003' 17 Belgium-Luxembourg 37 15 10 41 15 6 23 6 18 France 150 126 184 138 172 154 169 330 19 Germany 163 224 223 111 163 92 98 64 20 Netherlands 71 66 161 151 132 140 157 282 21 Switzerland 38 66 74 185 77 98 44 76 22 United Kingdom 5,817 4,864 6,007 7,957 8,491 9,268 8,783 8,035' 23 Canada 5,989 3,988 3,260 3,965 3,782 3,330 2,885 2,837' 24 Latin America and Caribbean 10,234 8,216 7,846 9,209 9,550 7,553 7,502 6,757' 25 Bahamas 4,771 3,306 2,698 2,628 3,951 2,588 2,518 1,865 26 Bermuda 102 6 6 6 3 6 2 7 27 Brazil 53 100 78 73 71 103 102 53 28 British West Indies 4,206 4,043 4,571 6,078 5,150 4,404 3,687 4,378' 29 Mexico 293 215 180 174 164 167 173 172 30 Venezuela 134 125 48 21 20 20 18 19 31 Asia 764 961 731 1,316 1,189 776 1,105 825' 32 Japan 297 353 475 999 931 439 737 545r 33 Middle East oil-exporting countries 4 13 4 7 7 6 10 10 34 Africa 147 210 103 85 84 58 71 65 35 Oil-exporting countries 55 85 29 28 19 9 14 7 36 All other4 159 117 21 22 140 16 20 58 Commercial claims 37 Europe 3,670 3,801 3,533 3,718 3,703 3,855 4,121 4,004 38 Belgium-Luxembourg 135 165 175 133 145 137 168 175 39 France 459 440 426 410 417 437 413 588 40 Germany 349 374 346 447 451 532 551 549 41 Netherlands 334 335 284 173 165 182 199 139 42 Switzerland 317 271 284 217 196 187 205 184 43 United Kingdom 809 1,063 898 998 1,070 1,072 1,227 981 44 Canada 829 1,021 1,023 928 927 929 904 901 45 Latin America and Caribbean 2,695 2,052 1,753 1,981 1,944 1,882 1,852 2,093' 46 Bahamas 8 8 13 28 11 14 12 19 47 Bermuda 190 115 93 170 157 153 125 159 48 Brazil 493 214 206 235 217 202 227 222 49 British West Indies 7 7 6 51 18 12 13 45 50 Mexico 884 583 510 411 445 347 367 369 51 Venezuela 272 206 157 234 171 201 189 294 52 Asia 3,063 3,073 2,982 2,751 2,707 2,645 2,783 2,877' 53 Japan 1,114 1,191 1,016 881 926 952 1,022 1,146' 54 Middle East oil-exporting countries2 737 668 638 565 529 455 436 451 55 Africa 588 470 437 495 432 379 407 401' 56 Oil-exporting countries 139 134 130 135 141 123 124 144 57 All other4 286 229 257 222 240 262 268 252 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 Transactions, and area or country 1986 1987 J A an pr .- . Oct. Nov. Dec. Jan. Feb. Mar. Apr." U.S. corporate securities STOCKS 1 Foreign purchases 148,114 249,072 62,390 30,237 13,626 13,627 12,916 16,343 18,041 15,091 2 Foreign sales 129,395 232,849 61,839 27,784 20,325 16,630 12,891 16,720 18,449 13,779 3 Net purchases, or sales (-) 18,719 16,223 551 2,452 -6,699 -3,004 25 -377 -407 1,312 4 Foreign countries 18,927 16,271 569 2,438 -6,651 -2,943 56 -345 -438 1,295 5 Europe 9,559 1,886 -426 138 -5,948 -2,329 -226 -324 -357 481 6 France 459 905 -133 58 -541 -393 -96 -29 -7 -1 7 Germany 341 -74 305 380 -183 -149 67 -37 171 104 8 Netherlands 936 890 -381 -40 -169 32 -72 59 -223 -145 9 Switzerland 1,560 -1,163 -416 294 -1,574 -743 -114 -253 -32 -17 10 United Kingdom 4,826 539 -171 -624 -3,407 -959 -136 -130 -333 429 11 Canada 816 1,048 161 252 169 111 147 -167 -60 241 12 Latin America and Caribbean 3,031 1,314 444 -512 -561 -50 -143 261 100 227 13 Middle East1 976 -1,360 -909 569 -83 -448 104 -251 -786 24 14 Other Asia 3,876 12,896 1,175 2,014 -28 -160 156 70 577 372 15 Africa 297 123 13 7 11 -6 7 -18 5 19 16 Other countries 373 365 111 -30 -211 -61 12 85 84 -70 17 Nonmonetary international and regional organizations -208 -48 -17 15 -48 -61 -32 -33 31 17 BONDS2 18 Foreign purchases 123,169 105,823 24,838 9,158 5,716 6,773 5,024 6,453 7,785 5,576 19 Foreign sales 72,520 78,128 21,191 7,275 5,386 5,461 5,193 6,039 5,566 4,392 20 Net purchases, or sales (-) 50,648 27,695 3,647 1,883 330 1,313 -169 414 2,218 1,184 21 Foreign countries 49,801 26,955 4,389 1,874 72 913 458 532 2,214 1,185 22 Europe 39,313 22,176 2,669 922 409 550 272 263 1,476 658 23 France 389 194 129 55 -34 -13 51 13 57 7 24 Germany -251 -8 787 -98 -26 17 61 118 260 347 25 Netherlands 387 269 74 36 -16 1 -13 -1 30 58 26 Switzerland 4,529 1,651 -26 136 -39 -203 -56 60 -14 -15 27 United Kingdom 33,900 19,934 1,599 1,012 371 751 333 49 989 228 28 Canada 548 1,296 191 305 68 114 29 -29 87 104 29 Latin America and Caribbean 1,476 2,473 638 524 -15 292 -22 316 245 100 30 Middle East1 -2,961 -551 -156 42 -92 -20 -164 -76 144 -61 31 Other Asia 11,270 1,606 1,080 65 -254 -25 347 88 270 376 32 Africa 16 16 -16 24 -10 3 0 -22 3 4 33 Other countries 139 -61 -17 -9 -33 0 -4 -8 -10 5 34 Nonmonetary international and regional organizations 847 740 -742 10 257 400 -627 -119 5 -1 Foreign securities 35 Stocks, net purchases, or sales (-) -1,853' 1,127 -511 2,089 704 841 517 -678 -722 373 36 Foreign purchases 49,149R 95,208 23,196 12,974 7,592 4,897 4,989 5,717 6,693 5,797 37 Foreign sales 51,002' 94,082 23,707 10,885 6,889 4,055 4,472 6,395 7,415 5,424 38 Bonds, net purchases, or sales (-) -3,685 -7,601 -4,073 -2,566 -1,929 -1,379 -1,324 -1,433 -1,179 -137 39 Foreign purchases 166,992 199,121 60,823 18,119 17,753 12,433 12,812 15,858 16,561 15,593 40 Foreign sales 170,677 206,722 64,897 20,684 19,682 13,812 14,136 17,291 17,740 15,730 41 Net purchases, or sales (-), of stocks and bonds -5,538r -6,474 -4,584 -477 -1,225 -538 -807 -2,111 -1,902 236 42 Foreign countries —6,493r -6,618 -4,766 289 -1,125 -224 -873 -2,131 -1,943 180 43 Europe -18,026R -11,972 -3,002 -926 -1,582 -381 -319 -1,626 -1,541 484 44 Canada -876 -4,065 -2,074 -37 -498 107 -654 -648 -366 -406 45 Latin America and Caribbean 3,476 828 737 -152 329 2 126 -64 138 538 46 10,858 9,322 -720 1,330 421 159 -197 37 -152 -407 47 Africa 52 89 74 16 3 10 9 3 48 14 48 Other countries -1,977 -820 219 59 201 -121 163 169 -70 -43 49 Nonmonetary international and regional organizations 955 144 182 -767 -101 -314 65 20 41 56 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 • August 1988 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1988 1987 1988 Country or area 1986 1987 J A an p . r — . Oct. Nov. Dec. Jan. Feb. Mar. Apr." Transactions, net purchases or sales (—) during period1 1 Estimated total2 19,388 25,755 30,296 -1,232 6,380 2,675 4,645 12,083 9,962 3,607 2 Foreign countries2 20,491 31,057 31,487 -5,497 7,676 4,290 5,740 12,832 9,014 3,901 3 Europe2 16,326 23,61V 15,957 -954 6,340 1,282 4,321 5,878 3,471 2,287 4 Belgium-Luxembourg -245 653 1,211 165 -2 -103 469 242 454 47 5 Germany 7,670 13,295 6,934 31 1,820 1,121 3,045 1,397 919 1,574 6 Netherlands 1,283 -911 492 -707 314 -76 -337 334 378 117 7 Sweden 132 233 -373 4 182 51 -61 26 -245 -93 8 Switzerland2 329 1,925 -83 -609 -297 -522 118 -1,188 643 344 9 United Kingdom 4,546 3,955 4,125 -642 3,163 1,200 -101 4,373 -244 97 10 Other Western Europe 2,613 4,479 3,623 804 1,158 -391 1,179 678 1,570 196 11 Eastern Europe 0 -19 28 0 3 1 9 16 -3 5 12 Canada 881 4,534 1,421 -389 679 720 356 559 372 133 13 Latin America and Caribbean 926 -2,146 1,124 -117 472 -141 219 630 199 75 14 Venezuela -96 150 34 -63 35 1 0 -1 20 15 15 Other Latin America and Caribbean 1,130 -1,096 770 -227 367 167 184 320 169 97 16 Netherlands Antilles -108 -1,200 320 173 69 -309 36 311 10 -36 17 Asia 1,345 4,707 13,108 -5,304 1,476 2,429 772 5,921 5,458 957 18 Japan -22 877 12,991 -5,272 1,757 2,020 2,979 4,996 4330 687 19 Africa -54 -56 -9 2 -29 49 -38 25 5 0 20 All other 1,067 407 -114 1,263 -1,260 -48 110 -182 -491 449 21 Nonmonetary international and regional organizations -1,104 -5,301 -1,190 4,265 -1,296 -1,615 -1,095 -748 948 -295 22 International -1,430 -4,387 -1,284 4,326 -1,492 -1,620 -1,023 -879 953 -334 23 Latin American regional 157 3 1 0 0 0 8 -2 -5 0 Memo 24 Foreign countries 20,491 31,057 31,487 -5,497 7,676 4,290 5,740 12,832 9,014 3,901 25 Official institutions 14,214 31,188 23,526 2,466 1,854 1,794 5,118 7,169 8,141 3,098 26 Other foreign2 6,283 -135 7,962 -7,965 5,822 2,497 622 5,663 873 804 Oil-exporting countries 27 Middle East3 -1,529 -3,111 90 -695 -891 368 -809 -296 578 618 28 Africa4 5 16 1 -1 -1 -1 0 0 0 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 Apr. 30, 1988 Rate on Apr. 30, 1988 Rate on Apr. 30, 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 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 . 6.5 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.. 9.12 May 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 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Eurodollars 8.27 6.70 7.07 7.41 7.86 7.11 6.73 6.74 7.05 7.40 7, United Kingdom 12.16 10.87 9.65 8.87 8.71 8.84 9.18 8.83 8.25 8.00 3 Canada 9.64 9.18 8.38 8.70 8.95 8.75 8.58 8.63 8.90 9.07 4 Germany 5.40 4.58 3.97 3.92 3.65 3.40 3.29 3.38 3.37 3.51 5 Switzerland 4.92 4.19 3.67 3.65 3.51 2.09 1.48 1.61 1.83 2.23 6 Netherlands 6.29 5.56 5.24 4.99 4.65 4.24 3.98 3.97 3.98 4.07 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 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 . . 8 1 9 1 1 7 0 . . 9 5 9 4 1 7 0 . . 8 5 1 7 9 Belgium 9.60 8.04 7.01 6.93 6.57 6.49 6.19 6.09 6.08 6.05 10 Japan 6.47 4.96 3.87 3.90 3.90 3.88 3.82 3.82 3.80 3.80 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 • August 1988 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar 1987 1988 CCoouunnttrryy//ccuurrrreennccyy 11998855 11998866 11998877 Dec. Jan. Feb. Mar. Apr. May 1 Australia/dollar^ 70.026 67.093 70.136 71.06 71.11 71.40 73.29 74.80 77.74 2 Austria/schilling 20.676 15.260 12.649 11.500 11.635 11.920 11.767 11.744 11.912 3 Belgium/franc 59.336 44.662 37.357 34.186 34.576 35.473 35.126 34.962 35.381 4 Canada/dollar 1.3658 1.3896 1.3259 1.3075 1.2855 1.2682 1.2492 1.2353 1.2373 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 6.3043 6.3562 6.4918 6261 6.4207 6.4938 7 Finland/markka 6.1971 5.0721 4.4036 4.0462 4.0391 4.1159 4.0483 4.0064 4.0297 8 France/franc 8.9799 6.9256 6.0121 5.5375 5.5808 5.7323 5.6893 5.6704 5.7348 9 Germany/deutsche mark 2.9419 2.1704 1.7981 1.6335 1.6537 1.6963 1.6770 1.6710 1.6935 10 Greece/drachma 138.40 139.93 135.47 129.46 131.92 135.56 134.60 133.86 135.75 U Hong Kong/dollar 7.7911 7.8037 7.7985 7.7726 7.7872 7.7978 7.8028 7.8166 7.8156 12 India/rupee 12.332 12.597 12.943 12.934 13.040 13.065 12.979 13.158 13.315 13 Ireland/punt2 106.62 134.14 148.79 162.63 160.64 156.87 159.33 159.81 157.78 14 Italy/lira 1908.90 1491.16 1297.03 1203.74 1216.88 1249.62 1240.67 1240.99 1258.81 15 Japan/yen 238.47 168.35 144.60 128.24 127.69 129.17 127.11 124.90 124.79 16 Malay sia/ringgit 2.4806 2.5830 2.5185 2.4944 2.5400 2.5812 2.5689 2.5743 2.5847 17 Netherlands/guilder 3.3184 2.4484 2.0263 1.8382 1.8584 1.9051 1.8837 1.8749 1.8987 18 New Zealand/dollar2 49.752 52.456 59.327 64.664 65.818 66.386 66.239 66.143 68.889 19 Norway/krone 8.5933 7.3984 6.7408 6.3820 6.3538 6.4167 6.3337 6.2140 6.1875 20 Portugal/escudo 172.07 149.80 141.20 133.77 135.87 138.84 137.48 136.77 138.44 21 Singapore/dollar 2.2008 2.1782 2.1059 2.0127 2.0261 2.0185 2.0133 2.0044 2.0109 22 South Africa/rand 2.2343 2.2918 2.0385 1.9525 1.9755 2.0529 2.1330 2.1428 2.2114 23 South Korea/won 861.89 884.61 825.93 798.34 791.31 776.85 757.37 745.31 739.44 24 Spain/peseta 169.98 140.04 123.54 110.80 112.34 114.36 112.38 110.80 112.04 25 Sri Lanka/rupee 27.187 27.933 29.471 30.644 30.825 30.859 30.892 30.939 30.993 26 Sweden/krona 8.6031 7.1272 6.3468 5.9473 5.9749 6.0524 5.9497 5.8892 5.9091 27 Switzerland/franc 2.4551 1.7979 1.4918 1.3304 1.3466 1.3916 1.3863 1.3823 1.4111 28 Taiwan/dollar 39.889 37.837 31.756 29.004 28.628 28.665 28.687 28.695 28.666 29 Thailand/baht 27.193 26.314 25.774 25.249 25.235 25.324 25.232 25.171 25.170 30 United Kingdom/pound 129.74 146.77 163.98 182.88 180.09 175.82 183.30 187.82 186.95 MEMO 31 United States/dollar3 143.01 112.22 96.94 88.70 89.29 91.08 89.73 88.95 89.74 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

A69 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) .... Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables, details do not add to totals because of also include not fully guaranteed issues) as well as direct rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases July 1988 A77 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference 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 commercial banks, December 31, 1987 June 1988 A70 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 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1987 June 1988 A76 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 Terms of Lending at commercial banks, February 1988 August 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 Pro forma balance sheet and income statments for priced service operations, March 31, 1987 August 1988 A76 Digitized for SFpReAcSiaEl R Tables begin on next page. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • August 1988 4.31 Pro forma balance sheet for priced services of the Federal Reserve System Millions of dollars Item March 31, 1988 March 31, 1987 Short-term assets1 Imputed reserve requirement on clearing balances 222.0 227.0 Investment in marketable securities 1,628.0 1.665.0 Receivables 58.4 55.2 Materials and supplies 6.0 4.8 Prepaid expenses 9.0 8.1 Net items in process of collection 675.7 4.157.1 Total short-term assets 2,599.1 6,117.3 Long-term assets- Premises 258.7 209.3 Furniture and equipment 119.4 113.6 Leases and leasehold improvements 3.0 3.1 Prepaid pension costs 23.4 Total long-term assets 404.5 325.9 Total assets 3,003.6 6,443.2 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 2,525.7 6,049.1 Short-term debt 73.4 68.2 Total short-term liabilities 2,599.1 6,117.3 Long-term liabilities Obligations under capital leases 1.2 1.4 Long-term debt 120.8 103.2 Total long-term liabilities 122.0 104.6 Total liabilities 2,721.1 6,221.9 Equity 282.5 221.3 Total liabilities and equity3 3,003.6 6,443.2 Details may not add to totals because of rounding. items in the process of collection and of deferred-availability items. However, 1. Short-term assets. The accounts "imputed reserve requirement on clearing because the gross amounts have no implications for income, costs, or the private balances" and "investment in marketable securities" reflect the Federal Re- sector adjustment factor (PSAF), and because the inclusion of these amounts serve's treatment of clearing balances that depository institutions maintain on could lead to distortions and misinterpretations of the assets employed in the deposit with the Reserve Banks. For balance sheet and income statement provision of priced services that must be financed, only the net amount is shown. presentation, clearing balances are reported in a manner comparable to the way That amount represents the assets that involve a financing cost. correspondent banks report compensating balances that respondent institutions 2. Long-term assets. Long-term assets reflected on the balance sheet have been hold with them: These lespondent balances are subject to a reserve requirement allocated to priced services using a direct determination basis. That method uses established by the Federal Reserve, which must be satisfied either with vault cash the Federal Reserve's Planning and Control System to ascertain directly the value or with nonearning balances maintained at a Reserve Bank. Following this model, of assets used solely in priced service operations, and to apportion the value of clearing balances maintained with Reserve Banks for priced-service purposes are jointly used assets between priced and nonpriced services. In addition, an subject to imputed reserve requirements. Therefore, a portion of the clearing estimate of the assets of the Board of Governors directly involved in the balances held with the Federal Reserve is classified on the asset side of the development of priced services is included in long-term assets in the premises balance sheet as required reserves and is reflected in a manner similar to vault account. cash and due-from-bank balances normally shown on a correspondent bank's The category "long-term assets" also includes an allocation of prepaid pension balance sheet. The remainder of clearing balances is assumed to be available for costs associated with priced services. The Federal Reserve Banks implemented investment. For these purposes, the Federal Reserve assumes that all such Financial Accounting Standards Board Statement No. 87—Employers' Accountbalances are invested in three-month Treasury bills. ing for Pensions, effective January 1, 1987. In accordance with the statement's The amount of'' net items in the process of collection'' represents float as of the terms, the Reserve Banks recognized a credit to expenses and an increase in this balance sheet date and is the difference between the value of items in the process long-term asset account. of collection (including checks, coupons, securities, wire transfers, and auto- 3. Liabilities and equity. A matched-book capital structure for those assets that mated clearinghouse (ACH) transactions) and the value of deferred-availability are not "self-financing" has been used to determine the liability and equity items. The cost base for providing services that must be recovered under the amounts. Short-term assets are financed with short-term debt. Long-term assets Monetary Control Act includes the cost of float incurred by the Federal Reserve are financed with long-term debt and equity in a proportion equal to the ratio of during the period valued at the federal funds rate. Conventional accounting long-term debt and equity of the bank holding companies used in the PSAF model. procedures would call for inclusion on a balance sheet of the gross amount of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 4.32 Pro forma income statement for priced services of the Federal Reserve System1 Millions of dollars Quarter ending March 31 Nine months ending September 30 IItteemm 1988 1987 1987 1986 Income2 Services provided to depository institutions 163.2 158.0 484.3 465.4 Expenses3 Production expenses 130.5 127.6 375.3 336688..00 Income from operations 32.7 30.4 109.0 97.5 Imputed costs4 Interest on float 11.2 6.7 17.2 1155..55 Interest on debt 4.1 4.0 12.1 10.0 Sales taxes 2.1 1.6 5.0 5.5 FDIC insurance .4 17.8 .5 12.9 1.4 35.7 1.1 32.0 Income from operations after imputed costs 14.9 17.6 73.3 65.5 Other income and expenses5 Investment income 29.1 27.9 86.9 86.2 Earnings credits 27.3 1.9 26.5 1.4 83.9 3.0 80.1 6.1 Income before income taxes 16.8 19.0 76.3 71.5 Imputed income taxes6 5.4 7.2 25.9 26.9 Net income 11.4 11.8 50.4 44.6 Targeted return on equity6 8.2 7.3 22.0 20.5 Details may not add to totals because of rounding. In the table, unrecovered float includes float generated in providing services to 1. The income statement reflects income and expenses for priced services. government agencies or in other central bank services. Float recovered through Included in these amounts are imputed float costs, imputed financing costs, and income on clearing balances represents increased investable clearing balances as income related to clearing balances. a result of reducing imputed reserve requirements through the use of a CIPC 2. Income. Income represents charges to depository institutions for priced deduction for float when calculating the reserve requirement; this income then services. This income is realized through one of two methods: direct charges to reduces float required to be recovered through other means. As of adjustments to an institution's account, or charges against accumulated earnings credits. Income the institution's reserve or clearing balance, or valuing the float at the federal includes charges for per-item fees, fixed fees, package fees, explicitly priced float, funds rate and billing the institution directly, are ways of recovering midweek account maintenance fees, shipping and insurance fees, and surcharges. closing float and interterritory check float from depositing institutions. The float 3. Production expenses. Production expenses include direct, indirect, and recovered through per-item fees is valued at the federal funds rate and has been other general administrative expenses of the Federal Reserve Banks for providing added to the cost base subject to recovery in the first quarter of 1988. priced services. Included in this amount is the reduction in expenses because of Also included in imputed costs is the interest on debt assumed necessary to implementation of Financial Accounting Standards Board Statement No. 87 (see finance priced-service assets and the sales taxes and FDIC insurance assessment note 2, table 4.31). In the first quarter of 1988 this reduction amounted to $4.7 that the Federal Reserve would have paid had it been a private business firm. million. Also included are the expenses of the staff of the Board of Governors 5. Other income and expenses. The category "Other income and expenses" is working directly on the development of priced services, which amounted to $0.4 comprised of income on clearing balances and the cost of earnings credits granted million in the first quarter for both 1988 and 1987. to depository institutions on their clearing balances. Income on clearing balances 4. Imputed costs. Imputed float costs represent the value of float to be represents the average coupon-equivalent yield on three-month Treasury bills recovered, either explicitly or through per-item fees, during the period. Float applied to the total clearing balance maintained, adjusted for the effect of reserve costs cover float incurred on checks, book-entry securities, noncash collection, requirements on clearing balances. Expenses for earnings credits are derived by ACH transactions, and wire transfers. applying the average federal funds rate to the required portion of clearing The following table reports the Federal Reserve's daily average float perform- balances, and are adjusted for the net effect of reserve requirements on clearing ance and float recovery for the first quarter of 1988 in millions of dollars: balances. 6. Income taxes and return on equity. Imputed income taxes are calculated at Total float 1,159.8 the effective tax rate derived from a model consisting of the 25 largest bank Unrecovered float 45.8 holding companies. Float subject to recovery 1,114.0 The targeted return on equity represents the after-tax rate of return on equity Sources of float recovery based on the bank holding company model that the Federal Reserve would have Income on clearing balances 133.9 earned had it been a private business firm. As of adjustments 454.4 Direct charges 242.8 Per-item fees 282.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 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 MARTHA BETHEA, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary PETER A. TINSLEY, Deputy Associate Director JAMES MCAFEE, Associate Secretary MARK N. GREENE, Assistant Director MYRON L. KWAST, Assistant Director DIVISION OF CONSUMER SUSAN J. LEPPER, Assistant Director MARTHA S. SCANLON, Assistant Director AND COMMUNITY AFFAIRS DAVID J. STOCKTON, Assistant Director JOYCE K. ZICKLER, Assistant Director GRIFFITH L. GARWOOD, Director LEVON H. GARABEDIAN, Assistant Director GLENN E. LONEY, Assistant Director (Administration) ELLEN MALAND, Assistant Director DOLORES S. SMITH, Assistant Director DIVISION OF MONETARY AFFAIRS DIVISION OF BANKING DONALD L. KOHN, Director SUPERVISION AND REGULATION DAVID E. LINDSEY, Deputy Director BRIAN F. MADIGAN, Assistant Director WILLIAM TAYLOR, Staff Director RICHARD D. PORTER, Assistant Director DON E. KLINE, Associate 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

A73 and Official Staff H. ROBERT HELLER EDWARD W. KELLEY, JR. OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES S. DAVID FROST, Staff Director THEODORE E. ALLISON, Staff Director EDWARD T. MULRENIN, Assistant Staff Director PORTIA W. THOMPSON, Equal Employment Opportunity Programs Officer DIVISION OF FEDERAL RESERVE BANK OPERATIONS DIVISION OF HUMAN RESOURCES MANAGEMENT CLYDE H. FARNSWORTH, JR., Director DAVID L. SHANNON, Director ELLIOTT C. MCENTEE, Associate Director JOHN R. WEIS, Associate Director DAVID L. ROBINSON, Associate Director ANTHONY V. DIGIOIA, Assistant Director C. WILLIAM SCHLEICHER, JR., Associate Director JOSEPH H. HAYES, JR., Assistant Director CHARLES W. BENNETT, Assistant Director FRED HOROWITZ, Assistant Director JACK DENNIS, JR., 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) DIVISON 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

74 Federal Reserve Bulletin • August 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 JOHN M. DAVIS, Associate Economist NORMAND R.V. BERNARD, 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 J. ALFRED BROADDUS, JR., 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 T.C. FROST, 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

A75 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

A76 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. CONSUMER EDUCATION PAMPHLETS 1985. 1986. 231 pp. $15.00 per copy. Short pamphlets suitable for classroom use. Multiple copies 1986. 1987. 288 pp. $15.00 per copy. are available without charge. HISTORICAL CHART BOOK. Issued annually in Sept. $1.25 each in the United States, its possessions, Canada, and Consumer Handbook on Adjustable Rate Mortgages Mexico; 10 or more to one address, $1.00 each. Else- Consumer Handbook to Credit Protection Laws where, $1.50 each. Fair Credit Billing SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- Federal Reserve Glossary RIES OF CHARTS. Weekly. $24.00 per year or $.60 each in A Guide to Business Credit and the Equal Credit Opportunity the United States, its possessions, Canada, and Mexico; Act 10 or more of same issue to one address, $22.50 per year Guide to Federal Reserve Regulations or $.55 each. Elsewhere, $30.00 per year or $.70 each. How to File A Consumer Credit Complaint THE FEDERAL RESERVE ACT, and other statutory provisions If You Borrow To Buy Stock affecting the Federal Reserve System, as amended If You Use A Credit Card through April 20, 1983, with Supplements covering Series on the Structure of the Federal Reserve System amendments through August 1987. 576 pp. $7.00. The Board of Governors of the Federal Reserve System REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- The Federal Open Market Committee ERAL RESERVE SYSTEM. Federal Reserve Bank Board of Directors ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Federal Reserve Banks Regulation Z) Vol. I (Regular Transactions). 1969. 100 Organization and Advisory Committees pp. Vol. //(Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one address, $2.00 each. PAMPHLETS FOR FINANCIAL INSTITUTIONS FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY Short pamphlets on regulatory compliance, primarily suit- UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one able for banks, bank holding companies and creditors. address, $1.50 each. THE BANK HOLDING COMPANY MOVEMENT TO 1978: A Limit of 50 copies COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to one address, $2.25 each. INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; The Board of Directors' Opportunities in Community Rein- 10 or more to one address, $1.25 each. vestment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All The Board of Directors' Role in Consumer Law Compliance VESTIGATION, by Bonnie E. Loopesko. November Combined Construction/Permanent Loan Disclosure and 1983. Out of print. Regulation Z 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Community Development Corporations and the Federal Re- INTERVENTION: A REVIEW OF THE LITERATURE, by serve Ralph W. Tryon. October 1983. 14 pp. Out of print. Construction Loan Disclosures and Regulation Z 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET Finance Charges Under Regulation Z INTERVENTION: APPLICATIONS TO CANADA, GERMA- How to Determine the Credit Needs of Your Community NY, AND JAPAN, by Deborah J. Danker, Richard A. Regulation Z: The Right of Rescission Haas, Dale W. Henderson, Steven A. Symansky, and The Right to Financial Privacy Act Ralph W. Tryon. April 1985. 27 pp. Out of print. Signature Rules in Community Property States: Regulation B 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECONO- Signature Rules: Regulation B MY, by Darrell Cohen and Peter B. Clark. January Timing Requirements for Adverse Action Notices: Regula- 1984. 16 pp. Out of print. tion B 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF What An Adverse Action Notice Must Contain: Regulation B FINANCIAL DEREGULATION, INTERSTATE BANKING, Understanding Prepaid Finance Charges: Regulation Z AND FINANCIAL SUPERMARKETS, by Stephen A. Closing the Loan: A Consumer's Guide to Mortgage Settle- Rhoades. February 1984. Out of print. ment Costs 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDE- Refinancing Your Mortgage LINES, AND THE LIMITS OF CONCENTRATION IN LO- A Consumer's Guide to Lock-Ins CAL BANKING MARKETS, by James Burke. June 1984. 14 pp. Out of print. 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN THE UNITED STATES, by Thomas D. Simpson and Patrick M. Parkinson. August 1984. 20 pp. STAFF STUDIES: Summaries Only Printed in the 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF Bulletin THE LITERATURE, by John D. Wolken. November Studies and papers on economic and financial subjects that 1984. 38 pp. Out of print. are of general interest. Requests to obtain single copies of 141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAYthe full text or to be added to the mailing list for the series MENT COSTS, by William Dudley. November 1984. may be sent to Publications Services. 15 pp. Out of print. 142. MERGERS AND ACQUISITIONS BY COMMERCIAL BANKS, 1960-83, by Stephen A. Rhoades. December 1984. 30 pp. Out of print. Staff Studies 115-125 are out of print. 143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF THE ELECTRONIC FUND TRANSFER ACT: RECENT SURVEY EVIDENCE, by Frederick J. Schroeder. April 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- 1985. 23 pp. Out of print. DENCE ON COMPETITION AND PERFORMANCE IN 144. SCALE ECONOMIES IN COMPLIANCE COSTS FOR CON- BANKING MARKETS, by Timothy J. Curry and John T. SUMER CREDIT REGULATIONS: THE TRUTH IN LEND- Rose. Jan. 1982. 9 pp. ING AND EQUAL CREDIT OPPORTUNITY LAWS, by 126. DEFINITION AND MEASUREMENT OF EXCHANGE MAR- Gregory E. Elliehausen and Robert D. Kurtz. May KET INTERVENTION, by Donald B. Adams and Dale 1985. 10 pp. W. Henderson. August 1983. 5 pp. Out of print. 145. SERVICE CHARGES AS A SOURCE OF BANK INCOME 127. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- AND THEIR IMPACT ON CONSUMERS, by Glenn B. VENTION: JANUARY-MARCH 1975, by Margaret L. Canner and Robert D. Kurtz. August 1985. 31 pp. Out Greene. August 1984. 16 pp. Out of print. of print. 128. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF VENTION: SEPTEMBER 1977-DECEMBER 1979, by Mar- BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, garet L. Greene. October 1984. 40 pp. Out of print. by Thomas F. Brady. November 1985. 25 pp. 129. U.S. EXPERIENCE WITH EXCHANGE MARKET INTER- 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) VENTION: OCTOBER I98O-OCTOBER 1981, by Margaret INDEXES OF THE MONETARY AGGREGATES, by Helen L. Greene. August 1984. 36 pp. T. Farr and Deborah Johnson. December 1985. 42 pp. 130. EFFECTS OF EXCHANGE RATE VARIABILITY ON IN- 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF TERNATIONAL TRADE AND OTHER ECONOMIC VARIA- THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- BLES: A REVIEW OF THE LITERATURE, by Victoria S. TION RESULTS, by Flint Brayton and Peter B. Clark. Farrell with Dean A. DeRosa and T. Ashby McCown. December 1985. 17 pp. January 1984. Out of print. 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS 131. CALCULATIONS OF PROFITABILITY FOR U.S. DOLLAR- IN BANKING BEFORE AND AFTER ACQUISITION, by DEUTSCHE MARK INTERVENTION, by Laurence R. Stephen A. Rhoades. April 1986. 32 pp. Jacobson. October 1983. 8 pp. 150. STATISTICAL COST ACCOUNTING MODELS IN BANK- 132. TIME-SERIES STUDIES OF THE RELATIONSHIP BE- ING: A REEXAMINATION AND AN APPLICATION, by TWEEN EXCHANGE RATES AND INTERVENTION: A John T. Rose and John D. Wolken. May 1986. 13 pp. REVIEW OF THE TECHNIQUES AND LITERATURE, by 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT Kenneth Rogoff. October 1983. 15 pp. PRICING FROM 1983 THROUGH 1985, by Patrick I. 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- Mahoney, Alice P. White, Paul F. O'Brien, and Mary VENTION, AND INTEREST RATES: AN EMPIRICAL IN- M. McLaughlin. January 1987. 30 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A A Financial Perspective on Agriculture. 1/84. REVIEW OF THE LITERATURE, by Mark J. War- Survey of Consumer Finances, 1983. 9/84. shawsky. April 1987. 18 pp. Bank Lending to Developing Countries. 10/84. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis Survey of Consumer Finances, 1983: A Second Report. and Alice P. White. September 1987. 14 pp. 12/84. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF Union Settlements and Aggregate Wage Behavior in the PROPOSED CEILINGS ON CREDIT CARD INTEREST 1980s. 12/84. RATES, by Glenn B. Canner and James T. Fergus. The Thrift Industry in Transition. 3/85. October 1987. 26 pp. A Revision of the Index of Industrial Production. 7/85. 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark Financial Innovation and Deregulation in Foreign Industrial J. Warshawsky. November 1987. 25 pp. Countries. 10/85. 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANK- Recent Developments in the Bankers Acceptance Market. ING MARKETS, by James V. Houpt. May 1988. 47 1/86. pages. The Use of Cash and Transaction Accounts by American Families. 2/86. Financial Characteristics of High-Income Families. 3/86. REPRINTS OF BULLETIN ARTICLES Prices, Profit Margins, and Exchange Rates. 6/86. Most of the articles reprinted do not exceed 12 pages. Agricultural Banks under Stress. 7/86. Foreign Lending by Banks: A Guide to International and Limit of 10 copies U.S. Statistics. 10/86. Recent Developments in Corporate Finance. 11/86. Measuring the Foreign-Exchange Value of the Dollar. 6/87. Foreign Experience with Targets for Money Growth. 10/83. Changes in Consumer Installment Debt: Evidence from the Intervention in Foreign Exchange Markets: A Summary of 1983 and 1986 Surveys of Consumer Finances. 10/87. Ten Staff Studies. 11/83. U.S. International Transactions in 1987. 5/88. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 Index to Statistical Tables References are to pages A3-A77 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) Dividends, corporate, 35 BANKERS acceptances, 9, 23, 24 Bankers balances, 18-20. (See also Foreigners) EMPLOYMENT, 45 Bonds (See also U.S. government securities) Eurodollars, 24 New issues, 34 Rates, 24 FARM mortgage loans, 39 Branch banks, 21, 55 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business activity, nonfinancial, 44 Federal credit agencies, 33 Business expenditures on new plant and equipment, 36 Federal finance Business loans (See Commercial and industrial loans) Debt subject to statutory limitation, and types and ownership of gross debt, 30 Receipts and outlays, 28, 29 CAPACITY utilization, 46 Treasury financing of surplus, or deficit, 28 Capital accounts Treasury operating balance, 28 Banks, by classes, 18 Federal Financing Bank, 28, 33 Federal Reserve Banks, 10 Federal funds, 6, 17, 19, 20, 21, 24, 28 Central banks, discount rates, 67 Federal Home Loan Banks, 33 Certificates of deposit, 24 Federal Home Loan Mortgage Corporation, 33, 38, 39 Commercial and industrial loans Federal Housing Administration, 33, 38, 39 Commercial banks, 16, 19, 70-72 Federal Land Banks, 39 Weekly reporting banks, 19-21 Federal National Mortgage Association, 33, 38, 39 Commercial banks Federal Reserve Banks Assets and liabilities, 18-20 Condition statement, 10 Commercial and industrial loans, 16, 18, 19, 20, 21, Discount rates (See Interest rates) 70-72 U.S. government securities held, 4, 10, 11, 30 Consumer loans held, by type, and terms, 40, 41 Federal Reserve credit, 4, 5, 10, 11 Loans sold outright, 19 Federal Reserve notes, 10 Nondeposit funds, 17 Federal Reserve System Real estate mortgages held, by holder and property, 39 Balance sheet for priced services, 76 Terms of lending, 70-75 Condition statement for priced services, 77 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, 77 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

A80 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 Consumer installment credit, 41 SAVING Federal Reserve Banks, 7 Flow of funds, 42, 43 Foreign central banks and foreign countries, 67 National income accounts, 51 Money and capital markets, 24 Savings and loan associations, 26, 39, 40, 42. (See also Mortgages, 38 Thrift institutions) Prime rate, 23 Savings banks, 26, 39, 40 International capital transactions of United States, 53-67 Savings deposits (See Time and savings deposits) International organizations, 57, 58, 60, 63, 64 Securities (See also specific types) Inventories, 51 Federal and federally sponsored credit agencies, 33 Investment companies, issues and assets, 35 Foreign transactions, 65 Investments (See also specific types) New issues, 34 Banks, bv classes, 18, 19, 20, 21, 26 Prices, 25 Commercial banks, 3, 16, 18-20, 39 Special drawing rights, 4, 10, 53, 54 Federal Reserve Banks, 10, 11 State and local governments Federal Reserve System, 76-77 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 Federal Reserve System, 76-77 Student Loan Marketing Association, 33 Financial institutions, 26, 39 Insured or guaranteed by United States, 38, 39 TAX receipts, federal, 29 Thrift institutions, 3. (See also Credit unions and Savings MANUFACTURING and loan associations) Capacity utilization, 46 Time and savings deposits, 3, 13, 17, 18, 19, 20, 21 Production, 46, 48 Trade, foreign, 54 Margin requirements, 25 Treasury cash, Treasury currency, 4 Member banks (See also Depository institutions) Treasury deposits, 4, 10, 28 Federal funds and repurchase agreements, 6 Treasury operating balance, 28 Reserve requirements, 8 Mining production, 48 Mobile homes shipped, 49 UNEMPLOYMENT, 45 Monetary and credit aggregates, 3, 12 U.S. government balances Money and capital market rates, 24 Commercial bank holdings, 18, 19, 20 Money stock measures and components, 3, 13 Treasury deposits at Reserve Banks, 4, 10, 28 Mortgages (See Real estate loans) U.S. government securities Mutual funds, 35 Bank holdings, 18-20, 21, 30 Mutual savings banks (See Thrift institutions) Dealer transactions, positions, and financing, 32 Federal Reserve Bank holdings, 4, 10, 11, 30 NATIONAL defense outlays, 29 Foreign and international holdings and transactions, 10, National income, 51 30, 66 Open market transactions, 9 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

A81 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 James H. Oltman 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 M. Merriman Jimmie R. Monhollon Baltimore 21203 Thomas R. Shelton Robert D. McTeer, Jr.1 Charlotte ...28230 G. Alex Bernhardt Albert D. Tinkelenberg' 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 III 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 Howard Wells Memphis 38101 Sandra B. Sanderson Paul I. Black, Jr. MINNEAPOLIS 55480 Michael W. Wright Gary H. Stern John A. Rollwagen 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 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. Digitized for FR1.A SSeEniRor Vice President. http://fraser.stl2o. uEisxfeecdu.toivrge /V ice President. Federal Reserve Bank of St. Louis

A82 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories April 1984 T I * ALASKA ••// // II II i © / Y YP •An LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch * Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis