Federal Reserve Bulletin, 1989-02

VOLUME 75 • NUMBER 2 • FEBRUARY 1989 FEDERAL RESERVE BULLETIN 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 53 MONETARY POLICY IN AN ERA 66 RECORD OF POLICY ACTIONS OF THE OF CHANGE FEDERAL OPEN MARKET COMMITTEE To the ongoing process of adaptation and At its meeting on November 1, 1988, the innovation in a dynamic market economy Committee agreed on a directive that called has been added the dismantling of regula- for maintaining the current degree of prestions in several areas, all of which has been sure on reserve conditions and that proreflected in the rapid pace of change in the vided for remaining especially alert to poeconomy and in financial markets over the tential developments that might require past decade or so. This article discusses the some firming during the intermeeting pedevelopments that have been most impor- riod. Accordingly, somewhat greater retant from the perspective of monetary pol- serve restraint would be acceptable, or icy. slightly lesser reserve restraint might be acceptable, over the intermeeting period depending on indications of inflationary 58 TREASURY AND FEDERAL RESERVE pressures, the strength of the business ex- FOREIGN EXCHANGE OPERATIONS pansion, the behavior of the monetary aggregates, and developments in foreign ex- On balance over the three-month period change and domestic financial markets. The from August through October 1988, the reserve conditions contemplated by the dollar ended the period about 5V2 percent Committee were expected to be consistent lower against the Japanese yen and 5 perwith growth of M2 and M3 at annual rates of cent lower against the German mark from around 2Vi percent and 6 percent respeclevels at the end of July. tively over the three-month period from September to December. The intermeeting range for the federal funds rate was left 63 INDUSTRIAL PRODUCTION unchanged at 6 to 10 percent. Industrial production increased an esti- 73 LEGAL DEVELOPMENTS mated 0.5 percent in November. Various bank holding company, bank service corporation, and bank merger orders; 65 ANNOUNCEMENTS and pending cases. Increase in the net transaction accounts to AI FINANCIAL AND BUSINESS STATISTICS which a 3 percent reserve requirement will apply in 1989. These tables reflect data available as of December 28, 1988. Proposal to amend Regulation Z. A3 Domestic Financial Statistics Hearing scheduled on proposal to rescind A46 Domestic Nonfinancial Statistics rule. A55 International Statistics Changes in Board staff. A71 GUIDE TO TABULAR PRESENTATION, Admission of one state bank to membership STATISTICAL RELEASES, AND SPECIAL in the Federal Reserve System. TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 BOARD OF GOVERNORS AND STAFF A79 INDEX TO STATISTICAL TABLES A74 FEDERAL OPEN MARKET COMMITTEE A8I FEDERAL RESERVE BANKS, AND STAFF; ADVISORY COUNCILS BRANCHES, AND OFFICES A76 FEDERAL RESERVE BOARD A82 MAP OF FEDERAL RESERVE SYSTEM PUBLICATIONS Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy in an Era of Change This article has been adapted from remarks mitted to the economy. In a simplified descripmade by Donald L. Kohn, Director of the tion of this process, the central bank alters the Board's Division of Monetary Affairs, at the cost and quantity of reserves, and those alteropening session of a conference on this subject ations work through the supply of and demand sponsored by the American Enterprise Institute for money and credit to affect interest rates, on November 16, 1988, in Washington D.C. exchange rates, and other financial variables and to influence the demand for output and the price The pace of change in financial markets and the level. Inevitably, it takes some time for people to economy seems to have accelerated over the past recognize that factors important to their spending decade or so. To the ongoing process of private decisions have changed in more than trivial ways adaptation and innovation in a dynamic market and to alter their behavior accordingly, and then economy has been added the dismantling of for the full effects of the new behavior to be felt regulations in a number of areas. This article in the economy. In practice, the process involves discusses those developments that have been the simultaneous determination of these variamost important from one perspective—that of bles through complex interactions, affected powmonetary policy. erfully by expectations about the future actions of the participants, including those of the central bank. As a consequence, the duration of the lags RELATION OF POLICY ACTIONS TO may vary over time. ECONOMIC OBJECTIVES Questions about the relation of policy settings to objectives also arise because of the effects of The practical question a monetary policymaker factors outside the direct influence of the monemust ask constantly is, how do I judge whether tary policymaker, such as developments abroad the instruments at my disposal are at the right or changes in fiscal policy or private spending settings to foster national economic objectives? behavior. These factors could significantly influ- Or, more broadly, is there a system to guide ence the level of economic activity and prices, adjustment of those instruments to get them possibly requiring some reaction by monetary closer to their appropriate settings? Such a sys- policymakers. tem need not involve frequent discretionary Because of the lags involved, making monechanges in the instrument settings in response to tary policy necessarily involves predicting the a variety of incoming information. Rather, it effects of policy actions and of these other influcould be embodied in a policy rule in which the ences. The predictions may be arrived at through instruments reacted fairly automatically to cer- formal forecasting exercises. However, the expetain developments, such as changes in demands rience of recent decades has reinforced skeptifor money, and in which few, if any, ad hoc cism about detailed forecasts of gross national adjustments were required. product that attempt to take explicit account of These questions arise in part out of the uncer- the interactions over time, a skepticism already tainties created by the lags between policy ac- present in face of the complexity of the economy tions and economic results. The lags are inherent and of the transmission of policy actions. That in a complex process through which actions to skepticism has prompted a search for intermedialter policy instruments, such as adjustments to ate guideposts along the way, so that policymareserve availability through open market opera- kers can judge whether they are on the right track tions or changes in the discount rate, are trans- and the public can judge the direction of policy. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • Februrarv 1989 It has also prompted a search for policy rules— systems, which have facilitated more complex ways of setting or adjusting the instruments of strategies for managing assets and liabilities. policy, usually keyed to an intermediate guide- Such strategies also have included greater econpost such as a measure of the money stock—that omizing on lower-yielding financial assets, such require little judgment by policymakers. Of as transaction deposits, and on lower-yielding course, the use of guideposts and rules itself real assets in the form of business inventories. In involves implicit forecasting: the intermediate the economy, imports and exports have become guide should be related predictably to objectives; more important in variations in domestic spendand predetermined changes in instruments in ing and production. Deregulation and technologreaction to deviations of the guide from its path ical advances have made some of these developshould be proportioned and timed appropriately ments possible, but many have also been to achieve progress toward those objectives. impelled by the unusually wide amplitude of It is in the context of the need to predict the cycles in the economy, in inflation, and in finaneffect of policy actions that questions arise about cial markets. These swings have reflected in part how financial and economic changes have af- the supply shocks of the last 15 years as fected the transmission of policy and about the well as unprecedented shifts in monetary and implications of these changes for the variables to fiscal policy, and they have been associated with which the central bank is, or ought to be, paying huge fluctuations in interest and exchange attention. That is, harking back to the issues rates. facing the policymaker, how have these changes Certainly, taken together these developments affected the instrument settings needed to have mattered for the transmission of monetary achieve ultimate objectives and the criteria for policy to the economy. They have altered the judging whether the settings are appropriate? responses of certain financial variables to policy impulses and the responses of the economy to those financial variables. And they have changed EFFECTS OF DEREGULATION AND the importance of particular channels of policy INNOVATION influence as well as the way other variables affect the economy. A number of developments in the economic and The effects can be seen clearly in new behavior financial environment bear on these questions. patterns of traditional intermediate indicators of Several involved discrete changes in law, regu- policy, both money and interest rates—changes lation, and international agreements. A key se- that have been well-documented elsewhere, most ries of changes concerned deregulation of inter- recently in articles by William Poole and Benjaest rates on both sides of the balance sheets of min Friedman in the Summer 1988 issue of depository institutions: through removal of Reg- Journal of Economic Perspectives. ulation Q on deposits and of usury ceilings on loans. In the international arena, the earlier Effects on the Monetary Aggregates moves to floating exchange rates and freer capital flows seemed to take on greater importance in As the character of monetary assets has changed the past decade. with innovation and deregulation, so has the way At the same time, certain evolutionary changes these assets have been supplied and demanded in in financial markets and the economy may have financial markets. In effect, new instruments affected the way monetary policy works. In have been created bearing old names, and quite financial markets such changes include the naturally they do not behave in the old ways. greater use of floating-rate financing, and of The most important effect of deregulation on futures and options and other forms of realloca- the monetary aggregates has been on their intertion of the risks of fluctuations in interest rates or est elasticity over the short and intermediate other prices in financial markets. The expansion terms. Many observers expected that, when deof markets in derivative instruments has been posit rates were deregulated, adjustment of these fostered in part by improvements to information rates to market yields would forestall widespread Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy in an Era of Change 55 reallocation of asset portfolios in the wake of be an aspect of a prescient and appropriate policy changes in market interest rates. Instead, de- that had moved toward restraint to head off inflamands for the aggregates remain quite sensitive tionary pressures. Similar problems could cloud the to movements in market interest rates; indeed, interpretation of opposite movements of money the interest sensitivity of the narrow aggregates supply indicators if the economy were weak and has increased. As anticipated, since deregulation interest rates had fallen substantially. the opportunity costs of holding deposits have As a consequence of deregulation, these probfallen as deposit rates have moved up toward lems have become so serious for Ml that this market rates. Yet, for many household deposits aggregate, which formerly was considered the opportunity costs continue to fluctuate over a most reliable intermediate guide, has not been wide range in response to changes in market able to serve as a useful indicator or target for rates, and on average, for periods of a year or policy. M2 has not been affected in this way, but two, may be relatively as variable as before. it remains sufficiently interest sensitive that it is The behavior of opportunity costs results from difficult to judge the import of a path for this the tendency for depository institutions to adjust aggregate without reference to the surrounding many of their retail deposit rates only sluggishly. economic situation. The effects have been greatest on Ml, since yields on NOW accounts, which are an important Effects on Interest Rates and Spending component of that aggregate, move much more slowly than short-term market rates or yields on The natural inclination in such circumstances is small time deposits do. Also, NOW accounts to pay closer attention directly to spending have attracted considerable savings funds, which trends, relating them to such determinants as may be particularly sensitive to changes in inter- interest rates. But, even that relationship has est differentials. The lag in adjustment of rates on been affected by deregulation and innovation in NOW accounts has occasioned substantial shifts recent years. of funds between these accounts and small time In particular, removal of Regulation Q ceilings deposits as yield relationships have changed. on deposits and of usury ceilings on loans has Such shifts would be subsumed within M2, but meant that financial intermediaries no longer even demands for this aggregate seem to exhibit abruptly reduce the supply of mortgage credit substantial interest sensitivity over the periods of and certain other types of credit, with effects on a year or so that are relevant to standard target- associated spending, when interest rates reach ing exercises. certain levels. Moreover, new financial instru- For the policymaker, the practical effect of an ments, markets, and techniques have broadened interest-sensitive money demand is a loose tie the choices available to savers, spenders, and between money and income within a business intermediaries for structuring their assets and cycle. The amount of money the public wishes to liabilities. Small savers have many more opporhold at any level of income or spending can vary tunities to earn market-related rates of return, substantially depending on the interest rates pre- and investors can adjust the liquidity and other vailing. For example, strong growth of income risk characteristics of their portfolios at lower might be associated with fairly subdued mone- transaction costs. Borrowers have new, inexpentary expansion if the robust behavior of the sive channels for liquefying fixed assets and for economy were accompanied by higher interest tapping savings flows—for example, through rates, whose depressing effects on money de- home equity lines of credit and securitized mortmand could more than offset the boost from gages. Financial intermediaries have gained greater income and savings. Although rapid greater flexibility for asset and liability managemoney growth in a strong economy might well ment. The result has been to reduce quantity or signal a monetary policy that had been too easy, liquidity constraints in financial markets, and weak money growth would not necessarily sug- thus to elevate rate movements as a transmission gest that policy was too tight and might lead to a channel for monetary policy and other influences downturn. In fact, such a path for money might in the economy. In turn, this development means Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • Februrarv 1989 that real interest rates now may vary more as effects of particular policy actions. Certainly, economic conditions change and in particular projections made using older relationships— they may need to rise to higher levels than based on either the money stock or interest previously to provide equivalent restraint on rates—have foundered at one time or another in spending during "booms" in business activity. recent years. These failures have spurred a fresh examination of the fundamental relationships International Considerations among financial and real variables. The U.S. economy probably never was so orderly or so At the same time, judgments about what policy easily described as implied by the settled relasettings are appropriate for the desired results tionships that, until the mid-1970s, seemed to with respect to prices and output have been emerge from the data of the postwar era, with its affected by the growing need to take account of damped business cycles and stable exchange international considerations. This need reflects rates. Attempts to respecify and rethink these the shift to floating exchange rates and the in- relationships are clearly desirable from the percreasing mobility of capital, as well as the greater spective of the policymaker. proportion of imports and exports in spending Important aspects of this work, and, indeed, and production. Changes in interest rates, for good indicators of the unsettled nature of the example, may have a significant effect on the debate, have been the renewed attention to the economy through their influence on capital flows, value of particular intermediate targets or indicaexchange rates, and the competitive position of tors for policy and the proposals of new candidomestic versus foreign providers of goods and dates. Many of those who would run policy services, as well as through their direct effect on according to a rule for money stock growth have spending and saving decisions. In addition, wide acknowledged the disturbances to deposits that variations in exchange rates in recent years— accompanied deregulation and are looking to the under the influence of a variety of factors besides monetary base as a guide. Those who focus on monetary policy—have had major effects on the interest rates have acknowledged the difficulty of economy. determining their appropriate level without ref- One consequence of this confluence of inter- erence to numerous other factors. Recently, national factors has been increasing attention to commodity prices, exchange rates, the slope of the exchange rate as an influence on prices and the yield curve, and various leading indicators of output and as a channel through which various real activity all have been mentioned for use as forces, including monetary policy, affect the intermediate guides to policy in combination with economy. A related consequence has been each other or with other variables, such as the heightened sensitivity to foreign economic devel- money supply and interest rates. Given the opments and policies as influences on the ex- added uncertainty, this discussion takes on change rate, financial markets, and the economy greater significance, though perhaps with even in the United States. Recognition of these inter- less chance of successful conclusion than before. dependencies has argued strongly that policy can be improved through more regular and more systematic exchanges of information about eco- SOME CAVEATS nomic developments and policy intentions with foreign authorities. And, it has prompted explo- At the same time, we should be careful not to ration of the potential benefits from more formal overstate the effects of changes in the economic schemes for policy cooperation or coordination. and financial environment on the policy process. Monetary policy seems to have done reasonably Further Research well in fostering progress toward national economic goals in recent years. One reason for this Together, these changes in the transmission of relative success may be that, although the prepolicy to the economy probably have added to cise specifications of key relationships have the uncertainty associated with predicting the changed, many of the changes have been more Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy in an Era of Change 57 evolutionary than revolutionary, leaving longer- claims that would cause conflicts between the term and more fundamental relationships essen- need to stabilize the dollar to prevent inflation tially intact. Policymakers have, with due cau- and the need to supply sufficient liquidity to tion, been able to take advantage of the lessons sustain growth. But, a large volume of liquid of history. dollar claims has long been held in internationally The monetary aggregates, for example, always mobile portfolios, and an exogenous impulse to have had some interest sensitivity that policyma- flee from these assets could be just as serious for kers needed to be aware of when interpreting the United States whether it is a net creditor or a their movements. In fact, deregulation probably net debtor. Furthermore, in the last few years the has enhanced the monetary aggregates as nomi- Federal Reserve has not encountered prolonged nal anchors for policy over the long run, by or disruptive conflict between the needs of interreducing longer-term interest elasticity and by nal and external balance. Nevertheless, the dediluting the incentives for financial innovation terioration in our external position is a serious that would facilitate economizing on holdings of problem: it represents an underlying imbalance monetary assets. between domestic spending and production that Although the fading of credit-availability ef- is not sustainable. Reliance on monetary policy fects undoubtedly has lifted equilibrium real in- alone to address this problem will damp growth terest rates under certain circumstances, it has of capital and add to strains in our financial not altered the fundamental comparison of cost, markets. We need, instead, to augment national including interest rates, with return when decid- savings by bringing down our federal budget ing whether to spend. This decision also has been deficit. basically unaffected by the use of variable-rate With all the changes in the financial and ecoloans, futures, swaps, and the like. These instru- nomic system, monetary policy continues to ments serve primarily to redistribute cash flow work through the same basic mechanisms that and wealth when interest rates, exchange rates, alter the incentives to save and to spend and that or stock prices change; they do not alter the shift the locus of such spending. Many of these prospective profitability of a capital project. changes arise in the natural evolution of a dy- Moreover, attention to international consider- namic economic and financial system to which a ations is not a new aspect of monetary policy. central bank must learn to adapt. Some of them Even before the gyrations of exchange markets may have weakened the effectiveness of policy— and trade balances of recent years, movements defined narrowly as the impact of a given twist of of the dollar, and before that of international the instrument dials—while others have probably reserves, were taken as indicators of underlying strengthened it. On balance, they do not justify conditions in the economy and prices and as holding policymakers any less accountable for influences on future developments. As such, they results today than they were 10, 20, or 30 years frequently have had a bearing on the stance of ago. policy. Even so, the system is changing, and along A recent twist for the United States has been with that, so are the answers to the policymaconcern that the move from net creditor to net kers' questions about the relationship of instrudebtor status internationally will constrain mon- ment settings to ultimate outcomes. To enable etary policy. The underlying hypothesis, it policy to adapt to the changes in the system, we seems, is that crossing that essentially unknow- must find out as much about their effects as able line heightens the risk of shifts out of dollar possible. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report, covering the period August an upward revision to June employment data and through October 1988, provides information on evidence of increasing capacity utilization, sug- Treasury and System foreign exchange opera- gested that U.S. economic growth was proceedtions. It was prepared by Sam Y. Cross, Man- ing at a pace that could give rise to new ager of Foreign Operations of the System Open inflationary pressures. Market participants inter- Market Account and Executive Vice President in preted these economic statistics as increasing the charge of the Foreign Group of the Federal likelihood that the Federal Reserve would tighten Reserve Bank of New York.1 its monetary policy stance. Some observers already claimed to see signs of Federal Reserve During the early weeks of the period under tightening and were attracted by the prospects of review, the dollar continued the generally up- rising short-term interest rates and the relatively ward trend that had prevailed throughout the high yields available on dollar-denominated assummer, moving higher against all major foreign sets. Even so, market participants were somecurrencies but especially against the German what surprised when the Federal Reserve raised mark. At times during August and to a lesser the discount rate Vi percentage point to 6V2 extent during September, there were episodes of percent on August 9. Subsequently, short-term upward pressure whereupon the U.S. authorities interest rate differentials favoring the dollar intervened, selling dollars to restrain the dollar's against both the German mark and the Japanese rise. As the period progressed, shifts in expecta- yen widened. On August 10, the dollar reached tions about the U.S. economic outlook, about the prospects for further increases in U.S. short- 1. Federal Reserve reciprocal currency term interest rates, and about the progress of arrangements external adjustment led to a more cautious atti- Millions of dollars tude toward the dollar, and the currency started to ease. During October, selling pressures inten- Amount of facility, sified, and late that month the U.S. authorities Institution October 31, intervened in the foreign exchange market to 1988 support the dollar. On balance, the dollar ended Austrian National Bank 250 the three-month period about 5Vi percent lower National Bank of Belgium 1,000 Bank of Canada 2,000 against the Japanese yen and 5 percent lower National Bank of Denmark 250 against the German mark from levels at the end Bank of England 3,000 Bank of France 2,000 of July. German Federal Bank 6,000 Bank of Italy 3,000 In the opening weeks of the period, the dollar Bank of Japan 5,000 was buttressed by the release of economic statis- Bank of Mexico 700 tics indicating continued strength in the U.S. Netherlands Bank 500 Bank of Norway 250 economy. The August 5 announcement of pre- Bank of Sweden 300 Swiss National Bank 4,000 liminary employment data for July, together with Bank for International Settlements: Dollars against Swiss francs 60 Dollars against other authorized European 1. The charts for the report are available on request from currencies 1,250 Publications Services, Board of Governors of the Federal Total 30,100 Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

59 its period high of DM1.9245 against the mark States and abroad expressing concern that any while trading as high as ¥135.20 against the yen. further rise of the dollar against the German mark At that time, the dollar was 2Vi percent higher might impede improvement in the trade balances, against the mark and Wi percent higher against were, by the end of August, beginning to be the yen from the start of the period. From its low viewed as a forceful demonstration that internapoint around the turn of the year, the dollar had tional agreements to foster exchange market stamoved up more than 23 percent against the mark bility remained intact. and more than 12 percent against the yen. Then on August 25, in a move prompted by For several weeks thereafter the dollar traded developments in the foreign exchange market as firmly as market participants adjusted commer- well as by domestic conditions in the individual cial leads and lags and implemented other hedg- countries, the German Bundesbank and several ing strategies to take account of the dollar's other European central banks raised their official renewed strength. Sentiment toward the dollar interest rates. As German interest rates edged remained bullish, with traders interpreting even higher after the Bundesbank's announcement potentially unfavorable news as favorable for the of a Vi percentage point rise in the discount dollar. In these circumstances, market partici- rate, interest rate differentials favoring the pants questioned the degree of the administra- dollar against the mark narrowed, diminishing tion's concern over the dollar's rise. the relative attractiveness of dollar-denominated Perceptions that external adjustment was pro- assets. ceeding on track encouraged positive sentiment That day the dollar declined almost 1 percent toward the dollar. Market participants noted that against the mark, bringing the dollar to about the the trade deficit had narrowed with each of the same level as at the opening of the period. The previous three monthly reports, setting in place a yen declined even more against the mark on that trend of improved performance based on varying and subsequent days because the Bank of Japan combinations of strong export performance and was not expected to follow actions by the other slower growth of imports. The August 16 report central banks to raise official interest rates. As that the U.S. trade deficit for June had widened the yen weakened, the dollar moved to its period to a seasonally adjusted $12.5 billion from a high against the yen of ¥137.25 on September 2. revised $9.8 billion in May initially disappointed Throughout much of September, the dollar the market, and the dollar briefly declined. But traded within a relatively narrow range. Market strong upward pressure on the dollar soon re- participants expressed renewed confidence in the emerged as some market participants seemed to official commitments to promote exchange rate view the widening of the deficit—and in particu- stability and perceived that monetary authorities lar the rise in imports—as yet another indication would not welcome any further rise of the dollar. that the Federal Reserve might further tighten its Many of the factors that had contributed to the policy stance to counter inflationary pressures. upward pressure during late summer also had Meanwhile, others noted the favorable implica- become much less evident. In particular, a new tions for increasing U.S. industrial capacity of round of statistics suggested that U.S. economic the substantial rise in imports of capital goods. growth was slowing to a more sustainable pace. The dollar moved as high as DM1.9230 against While that development was viewed as generally the mark on August 22 and ¥134.70 against the favorable for long-run economic prospects, it yen on August 24, almost matching the highs weakened some of the short-term demand for reached earlier in the month. Between August 5 dollars by contributing to expectations that upand August 23, the U.S. monetary authorities at ward pressure on dollar interest rates was likely times intervened heavily in the foreign exchange to subside. The financial markets took special market to resist the tendency for the dollar to note of the September 2 release of U.S. nonfarm advance, selling a total of $1,806 million against payroll figures for August that showed slower marks in operations often coordinated with other employment growth than the market had previcentral banks. The intervention operations, rein- ously anticipated. Inflation concerns were also forced by official commentary both in the United allayed by the outlook for declining oil prices and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

60 Federal Reserve Bulletin • Februrarv 1989 2. Drawings and repayments by foreign central banks1 Millions of dollars; drawings or repayments (-) Outstanding as OutstandingI as Amount of Central bank of July 31, August September October of October 31, facility 1988 1988 Under reciprocal currency arrangements with the Federal Reserve System Bank of Mexico 700.0 0 700.0 -700.0 0 Under reciprocal currency arrangements with the U.S. Treasury Bank of Mexico 300.0 0 300.0 -300.0 0 Under special swap arrangements with the U.S. Treasury National Bank of Yugoslavia 50.0 33.8 0 -33.* Central Bank of Brazil 250.0 232.5 -232.5 0 Central Bank of the Argentine Republic 265.02 1. Data are on a value-date basis. 2. Arrangement was in effect as of October 20, 1988. the report of unchanged average earnings during During these episodes, the dollar moved up August. smartly, and the U.S. authorities intervened to As the upward pressures on the dollar eased resist these pressures. Between September 14 and as market participants perceived prospects and September 22, the Trading Desk at the for greater exchange rate stability, investors Federal Reserve Bank of New York sold $230 were increasingly attracted to certain relatively million against marks. On September 26, the first high-yielding currencies, such as the Canadian business day after the G-7 meeting, the Desk sold dollar. The Canadian dollar also benefited from an additional $100 million against marks, and a early public opinion polls in advance of the substantial number of other central banks inter- Canadian elections showing strong support for vened forcefully to sell dollars at the same time. the incumbent Conservative party that favored The visible, concerted intervention operations the enactment of the U.S.-Canadian free trade provided a clear signal to the market that the agreement. The U.S. dollar declined steadily G-7 had not changed its exchange market objecagainst the Canadian dollar from early Septem- tives. ber through mid-October. At the end of September, market participants Although the positive outlook that had pre- noted that there was significant concerted intervailed during the summer tended to erode during vention to sell dollars against the mark when the September, there were episodes of upward pres- dollar, at about DM1.89, was still well below the sure on the dollar. One occasion followed the levels reached the previous month. Furthermore, September 14 announcement of a U.S. trade subsequent official statements from various deficit for July that was smaller than expected sources pointed to the economic risks of a further and that provided reassurance to the market that dollar rise and gave new weight to the September the correction of global imbalances was continu- 24 statement. ing. Another occurred following the release of a During October, market sentiment toward the statement by the Group of Seven (G-7) finance dollar turned negative. For one thing, the prosministers and central bank governors attending a pect of upward pressure on short-term dollar meeting in Berlin over the weekend of September interest rates appeared to diminish further. Re- 24. Although that statement reaffirmed the basic lease of a series of economic reports indicated objectives of previous commitments regarding that U.S. economic activity, while still showing cooperative efforts, including exchange rate sta- strength, was moderating even more. News of bility, it contained no precise reference to dollar increases in U.S. employment during September exchange rates. Some market participants, there- that were smaller than had been forecast (alfore, concluded that the G-7 was prepared to though they were later revised upward) and tolerate further dollar appreciation. preliminary third-quarter U.S. GNP figures rein- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 61 forced the view that a further tightening of U.S. ket rates eased by a modest amount. However, monetary policy was less likely in the near term. market sentiment toward the dollar remained Moreover, market participants, having seen distinctly negative as skepticism deepened that repeated evidence of coordinated central bank the policy initiatives needed to keep the internasales of dollars during the summer and early tional adjustment process intact, both here autumn, remained convinced that the monetary and abroad, would be undertaken promptly authorities would firmly resist any further sub- enough. stantial rise of the dollar. The dollar closed the three-month period at In addition, concerns were aroused about the ¥125.50 against the yen, barely AVi percent pace of adjustment of global imbalances by the above its record low of ¥120.20 recorded on October 13 release of U.S. trade data for August January 4, 1988. Against the mark, the dollar showing a widening of the trade deficit to $12.2 closed the reporting period at around DM1.79, billion. Despite comments of U.S. officials cau- more than 14^2 percent above its record low of tioning that wide fluctuations in monthly trade DM1.5615 in January. On a trade-weighted basis, data were of little significance and noting the as measured by the index of the Federal Reserve clear trend of improvement in the U.S. trade Board staff, the dollar declined AVi percent in accounts over a longer period, the market con- terms of the other Group of Ten currencies tinued to focus closely on these monthly trade during the period. releases. Participants expressed growing concern The U.S. monetary authorities sold a total of about the sustainability of U.S. progress in re- $2,136 million against German marks and purducing its external deficit. chased a total of $200 million against Japanese The dollar's decline against the yen during yen during the three-month period. The Federal October was particularly noteworthy. Over the Reserve and the Treasury's Exchange Stabilizacourse of the month, the dollar moved approxi- tion Fund (ESF) participated equally in the fimately 6 percent lower against the Japanese yen. nancing of all intervention operations. Widespread reports circulated of substantial During the period, there were several other sales of dollars against yen by Japanese institu- foreign currency transactions of the ESF and the tional investors and by U.S. investment banks Federal Reserve. seeking to hedge an increasing proportion of their • On August 1, the Bank of Mexico activated dollar portfolios in anticipation of further dollar its reciprocal arrangements with the Federal Redeclines. Furthermore, the yen's strength serve and the U.S. Treasury, drawing $700 milseemed to reflect a relatively favorable market lion and $300 million respectively. On September assessment of Japan's progress in adapting to the 15, both amounts were fully repaid. rise in its currency since 1985. Selling pressure • On August 26, the Central Bank of Brazil intensified as the dollar moved below important repaid an outstanding drawing of $232.5 million technical and psychological levels, reaching the on a short-term ESF financing facility of $250 period lows of about ¥124.50 against the yen and million. The remaining $17.5 million was not DM1.76 against the mark at one point on October drawn during the period. 31. Under these circumstances, the U.S. author- • The National Bank of Yugoslavia repaid ities entered the market to buy dollars for the first $17.2 million to the U.S. Treasury on September and only time in the period, purchasing on that 26 and $16.6 million on September 30, thereby day $200 million against yen to support the liquidating the $50 million ESF facility. This dollar. facility was provided to Yugoslavia in June along As the period ended, the dollar was under- with a $200 million facility by the Bank for pinned by a widely held market view that the International Settlements, acting for a number of authorities would act to prevent any sharp fall in central banks. the dollar, at least through early November, in • On October 20, the U.S. Treasury through advance of the U.S. presidential election. In the ESF, together with a number of other monaddition, interest rate differentials favoring the etary institutions, agreed to establish a facility to dollar widened slightly as Japanese money mar- provide up to $500 million in short-term financing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

62 Federal Reserve Bulletin • Februrarv 1989 3. Net profits or losses (-) on U.S. Treasury and Such foreign currency acquisitions totaled Federal Reserve current foreign exchange $2,103.4 million equivalent. operations1 As of the end of October, cumulative book- Millions of dollars keeping or valuation gains on outstanding foreign U.S. currency balances were $1,536.9 million for the Federal Treasury Federal Reserve and $1,258.9 million for the Period Exchange Reserve Stabilization ESF. These valuation gains represent the in- Fund crease in the dollar value of outstanding currency August 1, 1988 to October 31, 1988 0 0 assets valued at exchange rates at the end of the Valuation profits and losses on period, compared with the rates prevailing at the outstanding assets and liabilities as of October 31, 1988 1,536.9 1,258.9 time the foreign currencies were acquired. The Federal Reserve and the ESF regularly 1. Data are on a value-date basis. invest their foreign currency balances in a variety to Argentina. The ESF's share was $265 million. of instruments that yield market-related rates of No drawings were made as of October 31. return and that have a high degree of quality and As in previous periods, the U.S. authorities liquidity. A portion of the balances is invested in acquired foreign currencies through sales of dol- securities issued by foreign governments. As of lars to other official institutions and through the end of October, holdings of such securities by receipt of principal repayments and interest pay- the Federal Reserve amounted to $2,540.1 milments received under the Supplementary Financ- lion equivalent, and holdings by the Treasury ing Facility of the International Monetary Fund. amounted to the equivalent of $2,816.9 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

63 Industrial Production Released for publication December 14 in November was 5.1 percent higher than it was a year earlier. Industrial production increased 0.5 percent in In market groups, output of consumer goods November after having risen a revised 0.5 per- increased 0.3 percent in November as production cent in October and 0.1 percent in September. In of light trucks and nondurable goods posted November, the output of materials, business gains. However, auto assemblies, at an annual equipment (other than commercial equipment), rate of 7.6 million units, were down slightly from and construction supplies led the advance. At October. Moreover, output of home goods, such 139.9 percent of the 1977 average, the total index as appliances, declined in November after having Ratio scale, 1977=100 1982 1984 19 86 1988 1982 1984 1986 1988 All series are seasonally adjusted. Latest figures: November. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

64 Federal Reserve Bulletin • Februrarv 1989 1977 = 100 Percentage change from preceding month Percentage cchhaannggee,, Group 1988 1988 NNoovv.. 11998877 ttoo NNoovv.. 11998888 Oct. Nov. July Aug. Sept. Oct. Nov. Major market groups Total industrial production 139.3 139.9 1.1 .3 .1 .5 .5 5.1 Products, total 148.2 148.7 .8 .5 .1 .5 .3 5.4 Final products 146.7 146.9 .7 .5 .0 .6 .2 5.5 Consumer goods 136.4 136.8 .9 .6 -.1 1.2 .3 5.7 Durable 129.1 128.9 .0 .3 .5 2.2 -.1 4.1 Nondurable 139.2 139.7 1.2 .7 -.3 .9 .4 6.3 Business equipment.. 160.7 161.3 .8 .5 .4 .0 .4 8.8 Defense and space — 184.4 184.3 .2 .0 -.2 -.1 -.1 -2.3 Intermediate products.. 153.8 154.8 1.0 .5 .5 .5 .6 5.1 Construction supplies 139.6 140.7 .6 -.2 .4 .7 .8 4.8 Materials 127.1 128.0 1.6 .1 .0 .5 .7 4.5 Major industry groups Manufacturing 145.3 146.0 1.1 .3 .3 .6 .5 5.9 Durable 144.7 145.4 .9 .2 .4 .6 .5 6.4 Nondurable 146.2 146.8 1.4 .3 .1 .6 .4 5.1 Mining 102.6 103.2 1.3 -.5 -.2 -.9 .6 -1.4 Utilities 113.5 114.0 1.0 2.9 -4.2 .6 .4 .7 NOTE. Indexes are seasonally adjusted. risen sharply in October. Total production of spread in November; the most notable advances business equipment advanced 0.4 percent in No- occurred in the output of parts for consumer vember as all major components other than com- durables, basic metals, chemicals, and coal. mercial equipment continued to advance rapidly. In industry groups, manufacturing output in- Output of commercial equipment, which includes creased 0.5 percent as most major industries computers, decreased for the third successive posted gains; the only significant decline was in month. Gains in materials production were wide- petroleum refining. Mining output rose 0.6 percent, and production at utilities increased 0.4 percent. Total industrial production—Revisions Capacity utilization in total industry for November 1988 was estimated at 84.2 percent, up Estimates as shown last month and current estimates 0.2 percentage point from October. In manufac- Percentage change turing, capacity utilization for November was Index (1977=100) from previous MMoonntthh months 84.5 percent, 0.2 percentage point higher than it was in October, and 2.3 percentage points higher Previous Current Previous Current than it was a year earlier. Detailed data for capacity utilization are shown separately in "Ca- August 138.4 138.5 .3 .3 Sept 138.7 138.6 .2 .1 pacity Utilization," Federal Reserve monthly Oct 139.2 139.3 .4 .5 Nov 139.9 .5 statistical release, G.3. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

65 Announcements INCREASE IN AMOUNT TO WHICH HEARING SCHEDULED ON PROPOSAL RESERVE REQUIREMENT WILL APPLY TO RESCIND RULE The Federal Reserve Board announced on De- The Federal Reserve Board scheduled an inforcember 6, 1988, an increase from $40.5 million to mal hearing for February 3, 1989, on a recent $41.5 million in the net transaction accounts to proposal to rescind the Board's current rule that which a 3 percent reserve requirement will apply permits state banks in a holding company to in 1989. The Board also increased the amount of acquire all of the shares of a company engaged in reservable liabilities that are exempt from re- nonbanking activities that the state bank is perserves from $3.2 million to $3.4 million of total mitted to conduct directly. reservable liabilities. Additionally, the Board increased the deposit cutoff level, which separates weekly reporting CHANGES IN BOARD STAFF institutions from quarterly reporters, from $40.0 million to $42.1 million. Institutions with total James McAfee, Associate Secretary in the Office reservable liabilities below the exemption level of the Secretary, resigned, effective January 23, of $3.4 million are excused from reporting even 1989. on a quarterly basis if their deposits can be Jennifer J. Johnson has been appointed to the estimated from other sources. Board's staff as Associate Secretary. Ms. John- These adjustments took effect beginning De- son was Vice President and General Counsel of cember 20, 1988. Shawmut Bank and Secretary of Shawmut Corporation. She received an A.B. degree from Mount Holyoke College and a J.D. degree from PROPOSED ACTION the University of Pennsylvania. The Federal Reserve Board issued for public comment on December 22, 1988, a proposal to SYSTEM MEMBERSHIP: ADMISSION OF amend its Regulation Z (Truth in Lending) to STATE BANKS implement the Fair Credit and Charge Card Disclosure Act. Comment is requested by February The following state bank was admitted to mem- 21, 1989. bership in the Federal Reserve System for the period December 1 through December 31, 1988. Virginia Stephens City Marathon Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

66 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON NOVEMBER 1, 1988 weakened in August and September, owing partly to reduced sales of motor vehicles. Indicators of business capital spending in the 1. Domestic Policy Directive third quarter suggested a considerably reduced rate of expansion compared with the first half of The information reviewed at this meeting indi- the year. Growth of real outlays for business cated that the expansion in economic activity had equipment slowed sharply, as investment in inmoderated from the vigorous pace evident earlier formation-processing equipment decelerated. in the year. Private domestic final demand grew Nonresidential construction activity was weak in at an appreciably slower pace in the third quarter the first two months of the quarter, with oil than in the first half of the year; and other recent drilling and expenditures on commercial and statistics, including data on labor market activ- industrial structures other than office buildings ity, also suggested some slowing in the rate of contracting further. Inventory investment in the economic expansion. Information on wage and manufacturing and wholesale sectors picked up price developments gave no clear evidence on in July and August, but stocks accumulated balance of any change in underlying inflation about in line with the growth of sales. Retail trends. inventories, reflecting little further change in Total nonfarm payroll employment increased stocks at auto dealers after a sharp rise in the considerably in the third quarter, but the gains second quarter, increased much less rapidly. were less than those registered in the first half. In Housing construction had been flat in recent August and September, hiring in all major sectors months; the third-quarter pace of starts of singleexcept government moderated, and employment family homes was unchanged from that of the in manufacturing declined. Despite this broad- previous quarter while multifamily starts edged based slowing in the growth of private payrolls, down. the civilian unemployment rate fell to 5.4 percent Preliminary data for the nominal U.S. merin September and has remained in a narrow range chandise trade deficit in August showed a larger around 5VI percent since early spring. deficit than in July. However, the average for Industrial production increased only slightly July and August was slightly lower than the on balance in August and September after a second-quartet rate as exports increased more strong surge earlier in the summer. Output of than imports. Most of the rise in exports was in business equipment continued to advance fairly nonagricultural goods, particularly capital goods rapidly while production of consumer goods was and consumer durables; increased imports of sluggish. Total industrial capacity utilization de- consumer goods and food outweighed a slight clined slightly in September but was still more reduction in the value of purchases of imported than Vz percent above the relatively high second- oil. Economic activity in the major foreign indusquarter level. trial economies appeared to have rebounded Overall consumer spending in constant dollar somewhat in the third quarter, following a proterms increased substantially on average in the nounced slackening in the second quarter. third quarter, as outlays for services and nondu- Reflecting a decline in gasoline prices at the rable goods strengthened while purchases of du- refinery level, producer prices of finished goods rables were little changed. However, retail sales registered a smaller advance in September than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

67 in August; however, for the third quarter as a Treasury bills and CDs. Interest rates in longwhole, these prices rose more rapidly than during term debt markets declined a little further as the first half of the year. At the crude materials indications of more moderate economic expanlevel, producer food prices continued to rise sion and weak energy prices apparently reduced sharply. Consumer prices increased at a some- concerns about inflation and buoyed expectawhat slower rate in September as declines in tions that money market conditions would not be energy prices outweighed the passthrough to the tightened substantially further. Lower bond retail level of higher wholesale food prices. Ex- yields apparently contributed to higher equity cluding food and energy items, consumer prices prices; some broad indexes of stock prices had on a year-over-year basis continued to rise at risen about 3 percent since the September meetabout the 4l/2 percent annual rate evident since ing. late 1987. Most measures of labor costs indicated Expansion of M2 slowed further in September, some slowing in the rate of increase over the and preliminary data suggested that growth resummer months, after a sharp upward movement mained quite weak in October as earlier inin the second half of 1987 and early 1988. creases in market interest rates and opportunity In the foreign exchange markets, the trade- costs continued to damp demands for liquid weighted value of the dollar in terms of the other deposit components. By contrast, after slow G-10 currencies had declined from its high level growth in August and September, M3 appeared of last summer by the time of the previous to have strengthened somewhat in October, in Committee meeting on September 20. Following association with a resumption in growth of bank the meeting, the dollar initially fluctuated in a credit. After registering relatively strong expannarrow range but later declined appreciably in sion in June and July, Ml had increased only response to indications of more moderate U.S. slightly on balance in recent months, with total economic growth and to information suggesting a transactions deposits falling marginally. slower U.S. external adjustment than the mar- The staff projection prepared for this meeting kets had anticipated earlier. suggested that growth of the nonfarm sector of At its meeting on September 20, the Commit- the economy in the current quarter might be near tee adopted a directive calling for no change in the reduced pace of the third quarter and that the degree of pressure on reserve positions. expansion in 1989 was likely to remain, on bal- These reserve conditions were expected to be ance, well below the pace of the first half of 1988. consistent with growth of M2 and M3 at annual The effects of the drought would continue to be rates of about 3 and 5 percent respectively over reflected in an uneven quarterly pattern of the period from August to December. The mem- growth of GNP, notably through the first half of bers agreed that somewhat greater reserve re- next year. To the extent that expansion of final straint would, or slightly lesser reserve restraint demand at a pace that could foster higher inflamight, be acceptable depending on indications of tion was not accommodated by monetary policy, inflationary pressures, the strength of the busi- pressures would be generated in financial marness expansion, the behavior of the monetary kets that would restrain domestic spending. The aggregates, and developments in foreign ex- staff projection, which assumed a slightly restricchange and domestic financial markets. tive fiscal policy, continued to indicate relatively Adjustment plus seasonal borrowing fluctuated sluggish growth of consumer spending, sharply over a sizable range during the intermeeting reduced expansion of business fixed investment period, averaging about $630 million in the two from the pace in the first half of 1988, and complete reserve maintenance periods since the restrained housing activity. As in earlier projec- September meeting. The federal funds rate rose tions, the external sector was expected to consomewhat, with funds trading around SlA percent tribute importantly to domestic economic and sometimes higher over most of the inter- growth. The staff now anticipated some marginal meeting period. Most other short-term interest easing in aggregate price increases in 1989, in rates edged higher, perhaps reflecting the firmer large part because recent declines in crude oil federal funds rate as well as increased supplies of prices portended lower energy prices more gen- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

68 Federal Reserve Bulletin • Februrarv 1989 erally. However, any decline in inflation would relatively sluggish performance of retail sales be limited, largely because of continuing pres- recently, notably of durable goods, and the consures stemming from still strong demands press- tinuing weakness of construction activity, including against reduced margins of unutilized labor ing housing. A review of local business condiand other production resources. tions continued to indicate an uneven pattern of In the Committee's discussion of the economic regional activity, but on balance local developsituation and outlook, members welcomed the ments tended to confirm broader indications of apparent moderation in the expansion of eco- further, though reduced, growth in overall businomic activity toward a pace that might prove to ness activity. be more sustainable and consistent with progress With regard to the outlook for inflation, a over time toward price stability. Continuing ex- critical issue in the view of many members was pansion, but at a more moderate pace than that whether overall demand conditions in the econexperienced in the first half of 1988, was viewed omy would be consistent with containing or as a reasonable expectation, partly in light of the reducing inflation. A number of members exmonetary policy tightening that already had been pressed concern that underlying pressures on implemented this year. There was no evidence of resources remained strong and that the possibilemerging imbalances in key sectors of the econ- ity of greater inflation constituted the major omy that might bring the expansion to an end, current threat to sustained economic expansion. although the outlook remained clouded by the One observed that the uncertainties in the outnation's outsized trade and federal budget defi- look for inflation were compounded by the proscits and the financial problems or debt exposure pect that, with production resources at or close of a number of depository institutions and busi- to full capacity, even small differences in demand ness firms. In the view of many of the members, pressures could have a disproportionate effect on the risks of deviations from current expectations the actual rate of inflation next year. However, continued to be in the direction of greater infla- some members commented that, on the whole, tionary pressures. Other members, while con- price and wage developments were more favorcerned about the potential for inflation, felt that able than might have been anticipated at current the economy already appeared to be on a track rates of capacity utilization. Recent reports from consistent with no pickup in inflation and per- around the nation suggested that inflation was haps some improvement next year. not worsening in regional markets, including In the course of the Committee's discussion, parts of the country where business activity members noted that despite signs of some slow- remained relatively robust. Indeed, there were ing in recent months, the expansion in business indications that prices of some business products activity retained appreciable momentum as evi- previously in short supply now were showing denced, for example, by order backlogs, ongoing some tendency to level off, and there was little or strength in business capital spending, and note- no evidence of faster increases in wages. Moreworthy improvement in the agricultural sector. over, recent developments in financial markets Further improvement in the nation's trade bal- suggested some lessening of inflationary expecance also appeared likely, and while the gains tations, although the latter remained volatile. might be more limited than in recent quarters, At its meeting in late June, the Committee they would help to sustain domestic manufac- reviewed the basic policy objectives that it had turing activity. Consumer spending might be set for growth of the monetary and debt aggresupported to some extent by gains in real in- gates in 1988, and it established tentative objeccomes stemming from reduced energy prices. By tives for expansion of those aggregates in 1989. most measures, business inventories appeared to For the period from the fourth quarter of 1987 to be relatively lean and, assuming continued mod- the fourth quarter of 1988, the Committee reaferate growth in overall final demand, further firmed the ranges of 4 to 8 percent set in Februinventory accumulation might provide a modest ary for growth of both M2 and M3. The monitorfillip to the expansion over the year ahead. On ing range for expansion of total domestic the other hand, members also took note of the nonfinancial debt in 1988 was left unchanged Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 69 from its February specification of 7 to 11 percent. of M2 and M3 was anticipated from the very For the year to date, M2 had grown at an annual sluggish performance of September and October, rate somewhat below, and M3 at a rate somewhat but further adjustments of asset portfolios to above, the midpoints of their annual ranges. previous increases in interest rates and opportu- Expansion of total domestic nonfinancial debt nity costs were likely to limit the rise. In addiappeared to have moderated to a pace marginally tion, reductions in compensating balances in below the midpoint of its range. For 1989 the response to earlier increases in market interest Committee agreed on tentative reductions to rates were expected to be more pronounced late ranges of 3 to 7 percent for M2 and V/i to IV2 in the year, though such adjustments would have percent for M3. The monitoring range for growth their major impact on Ml growth. Concurrently, of total domestic nonfinancial debt was lowered expansion of M3 and, to a lesser degree, M2 to 6I/2 to IOV2 percent for 1989. It was understood might be buttressed to some extent as banks that all the ranges for next year were provisional undertook to secure funds to underwrite a perand that they would be reviewed in February haps substantial portion of the initial cash needed 1989 in the light of intervening developments. to finance the recent surge in merger and buyout With respect to Ml, the Committee reaffirmed in activities. Although members observed that any June its earlier decision not to set a specific target easing of reserve conditions to stimulate monefor growth in 1988 and it also decided not to tary growth would not be desirable at this point, establish a tentative range for 1989. some indicated that they would become increas- In the Committee's discussion of policy imple- ingly concerned if very weak monetary growth mentation for the period immediately ahead, the were to persist in the context of sluggish expanmembers generally agreed that the current rela- sion in economic activity. tively balanced performance of the economy and With regard to possible adjustments in the the uncertainties surrounding the outlook argued degree of reserve pressure in the intermeeting for an unchanged policy at this point. Some period, a majority of the members believed that commented that the apparent strength of under- operations should be adjusted more readily lying inflationary pressures might require further toward further tightening than toward any easmonetary restraint later, but for now they fa- ing. Some indicated that they viewed the incorvored or could accept a steady policy course. poration of such an understanding as a key Other members were more persuaded that, in the element of an acceptable directive, given their context of the recent evidence of slower eco- assessment of the inflationary risks in the economic growth, monetary policy already appeared nomic outlook. Most of the other members indito be on a course that would promote progress in cated that they could accept such a directive, reducing inflation. From the perspective of the although they were less inclined than they had growth of the monetary aggregates and reserve been previously to bias it toward further reas well as interest rate developments, monetary straint; in this view, the direction of any potential policy had been fairly restrictive for some adjustment in policy implementation was less months and further restraint needed to be ap- certain than earlier, given the recent perforproached with some caution. At the same time, mance of the economy and behavior of the members stressed the continuing need to sustain monetary aggregates. One member felt that the the System's commitment to its long-run objec- risks of some further weakness in the economy tive of controlling inflation, including the desir- were sufficiently strong that a continued bias ability of making clear that the current rate of toward possible tightening during the intermeetinflation was unacceptable. ing period was not acceptable. In the course of the Committee's discussion, At the conclusion of the Committee's discusthe members took account of a staff analysis that sion, all but one member indicated that they concluded that the maintenance of unchanged favored or could accept a directive that called for reserve conditions was likely to be associated maintaining the current degree of pressure on with relatively slow monetary growth over the reserve conditions and that provided for remainbalance of the year. Some pickup in the growth ing especially alert to potential developments Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

70 Federal Reserve Bulletin • Februrarv 1989 that might require some firming during the inter- months; growth of M3 moderated in August and Sepmeeting period. Accordingly, somewhat greater tember but appears to have strengthened somewhat in October. Thus far this year, M2 has grown at a rate reserve restraint would be acceptable, or slightly somewhat below, and M3 at a rate somewhat above, lesser reserve restraint might be acceptable, over the midpoint of the ranges established by the Committhe intermeeting period depending on indications tee for 1988. Ml has increased only slightly on balance of inflationary pressures, the strength of the in recent months after registering relatively strong business expansion, the behavior of the mone- growth in June and July. Expansion of total domestic nonfinancial debt for the year thus far appears to be at tary aggregates, and developments in foreign a pace somewhat below that in 1987. exchange and domestic financial markets. The The Federal Open Market Committee seeks monereserve conditions contemplated by the Commit- tary and financial conditions that will foster price tee were expected to be consistent with growth stability over time, promote growth in output on a of M2 and M3 at annual rates of around 2Vi sustainable basis, and contribute to an improved pattern of international transactions. In furtherance of percent and 6 percent respectively over the these objectives, the Committee at its meeting in late three-month period from September to Decem- June reaffirmed the ranges it had established in Febber. The intermeeting range for the federal funds ruary for growth of 4 to 8 percent for both M2 and M3, rate, which provides one mechanism for initiat- measured from the fourth quarter of 1987 to the fourth ing consultation of the Committee when its quarter of 1988. The monitoring range for growth of total domestic nonfinancial debt was also maintained boundaries are persistently exceeded, was left at 7 to 11 percent for the year. unchanged at 6 to 10 percent. For 1989, the Committee agreed on tentative ranges At the conclusion of the meeting, the following for monetary growth, measured from the fourth quardomestic policy directive was issued to the Fed- ter of 1988 to the fourth quarter of 1989, of 3 to 7 eral Reserve Bank of New York: percent for M2 and 31/2 to IVi percent for M3. The Committee set the associated monitoring range for growth of total domestic nonfinancial debt at 6V2 to The information reviewed at this meeting indicates IOV2 percent. It was understood that all these ranges that the expansion in economic activity has moderated were provisional and that they would be reviewed in from the vigorous pace earlier in the year. Total early 1989 in the light of intervening developments. nonfarm payroll employment grew considerably in the With respect to Ml, the Committee reaffirmed its third quarter but the gains were less than those regisdecision in February not to establish a specific target tered in the first half of the year and employment in for 1988 and also decided not to set a tentative range manufacturing declined in August and September. The for 1989. The behavior of this aggregate will continue civilian unemployment rate fell to 5.4 percent in Septo be evaluated in the light of movements in its tember, remaining in the narrow range that has prevelocity, developments in the economy and financial vailed since early spring. Industrial production admarkets, and the nature of emerging price pressures. vanced only slightly on balance in August and In the implementation of policy for the immediate September after a sharp increase in July, while housfuture, the Committee seeks to maintain the existing ing construction has been flat in recent months. Condegree of pressure on reserve positions. Taking account sumer spending increased substantially on average in of indications of inflationary pressures, the strength of the the third quarter but apparently slowed in recent business expansion, the behavior of the monetary aggremonths. Indicators of business capital spending suggates, and developments in foreign exchange and domesgest considerably slower expansion in the third quartic financial markets, somewhat greater reserve restraint ter, following very rapid growth in the first half of the would, or slightly lesser reserve restraint might, be acyear. Preliminary data for the nominal U.S. merchanceptable in the intermeeting period. The contemplated dise trade deficit in August showed a greater deficit reserve conditions are expected to be consistent with than in July, but the average for July-August was growth of M2 and M3 over the period from September slightly less than the second-quarter rate. The latest through December at annual rates of about 2Vi and 6 information on prices and wages suggests little if any percent, respectively. The Chairman may call for Comchange from recent trends. mittee consultation if it appears to the Manager for Do- Interest rates in long-term debt markets have demestic Operations that reserve conditions during the peclined a little further since the Committee meeting on riod before the next meeting are likely to be associated September 20, while rates in short-term markets have with a federal funds rate persistently outside a range of 6 edged higher. The trade-weighted foreign exchange to 10 percent. value of the dollar in terms of the other G-10 currencies declined appreciably over the intermeeting period from the high level of last summer. Votes for this action: Messrs. Greenspan, Corri- Expansion of M2 has slowed considerably in recent gan, Angell, Black, Forrestal, Heller, Hoskins, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 71 Johnson, Kelley, La Ware, and Parry. Vote against government and federal agency securities that is this action: Ms. Seger. specified in paragraph 1(a) of the Authorization for Domestic Open Market Operations. The in- Ms. Seger indicated that while an unchanged crease was effective for the intermeeting period policy was acceptable to her at this point, she did ending with the close of business on December not want to bias the directive toward potential 14, 1988. tightening. In her view current indications of slower economic growth and the lagged effects of Votes for this action: Messrs. Greenspan, Corriearlier policy tightening actions pointed to rela- gan, Angell, Black, Forrestal, Heller, Hoskins, tively slow expansion and reduced inflationary Johnson, Kelley, LaWare, Parry, and Ms. Seger. pressures over the year ahead. In these circum- Votes against this action: None. stances, she would not want to react more promptly or vigorously to indications of greater This action was taken on the recommendation strength or price pressures in the economy, of the Manager for Domestic Operations. The which might well prove to be temporary, than to Manager had advised that the usual leeway of $6 evidence of a weakening economy. billion for changes in System Account holdings would probably not be sufficient over the inter- In the period following the Committee meeting meeting period because of seasonal increases in on November 1, it became increasingly evident currency in circulation and in required reserves. in the implementation of policy that depository institutions had reduced their demands on the 3. Change in Terms of Certain Members discount window; in this period, a significantly to Calendar- Year Basis lower level of adjustment plus seasonal borrowing was being associated with a slightly higher federal funds rate than had been anticipated at The Committee amended its "Rules of Organizathe time of the meeting. To take account of this tion" to advance from March 1 to January 1 of change in behavior, but also in light of recent each year the start of the terms of office of the information suggesting that the economic expan- Federal Reserve Bank presidents who serve onesion retained considerable strength, the Manager year terms as Committee members or alternate for Domestic Operations adjusted the reserve members. The change will be effective starting paths to incorporate a lower level of borrowing, with the calendar year 1990. Because the Comwith the expectation that federal funds would mittee's objectives for monetary growth are escontinue to trade in the slightly higher range that tablished on a calendar-year basis, the Commithad prevailed recently. This adjustment in open tee believed that it would be appropriate to have market operations was discussed with the Com- all the members responsible for carrying out mittee on November 22, 1988. The members those objectives during the year participate in the agreed that the factors relating to the apparent vote to establish them at the start of the year. change in the relationship between borrowing The Committee emphasized that this change was and the federal funds rate, and the broader essentially procedural in nature, given the contiimplications for the conduct of open market nuity of its decisionmaking process. The Full operations, would be reviewed further at the Employment and Balanced Growth Act of 1978 December meeting. requires that the Committee's monetary growth objectives for the calendar year be transmitted to the Congress by February 20 of each year. 2. Authorization for Domestic Open Market Operations Votes for this action: Messrs. Greenspan, Corrigan, Angell, Black, Forrestal, Heller, Hoskins, Effective November 2, 1988, the Committee ap- Johnson, Kelley, LaWare, Parry, and Ms. Seger. proved a temporary increase of $4 billion, to $10 Votes against this action: None. billion, in the limit between Committee meetings on changes in System Account holdings of U.S. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

73 Legal Developments FINAL RULE—AMENDMENT TO REGULATION E Collection of Checks), with respect to the law of New Jersey. The Expedited Funds Availability Act pro- The Board of Governors is amending 12 C.F.R. Part vides standards for determining whether State law 205, its Regulation E (Electronic Fund Transfers), to governing funds availability supersedes, or is prereflect properly an amendment that was incorrectly empted by Federal law. Under Regulation CC, the incorporated into the Code of Federal Regulations. Board will issue preemption determinations upon re- Effective December 30, 1988, 12 C.F.R. Part 205 is quest. amended as follows: Effective December 19, 1988, 12 C.F.R. Part 229 is amended as follows: 1. The authority citation for 12 C.F.R. Part 205 continues to read as follows: Part 229—[Amended] Authority. Pub. L. 95-630, 92 Stat. 3730 (15 U.S.C. 1. The authority citation for Part 229 continues to read 1693b). as follows: 2. Section 205.6(c) is revised in its entirety to read as Authority: Title VI of Pub. L. 100-86, 101 Stat. 522, follows: 635, 12 U.S.C. 4001 et seq. Section 205.6—Liability of Consumer for 2. Appendix F is amended by adding a preemption Unauthorized Transfers determination for the state of New Jersey alphabetically to read as follows: (c) Notice to financial institution. For purposes of this Appendix F—Official Board Interpretations; section, notice to a financial institution is given when a Preemption Determinations consumer takes such steps as are reasonably necesa|c $ sjt $ sfc sary to provide the financial institution with the pertinent information, whether or not any particular officer, New Jersey employee, or agent of the financial institution does in fact receive the information. Notice may be given to Background the financial institution, at the consumer's option, in person, by telephone, or in writing. Notice in writing is The Board has been requested, in accordance with considered given at the time the consumer deposits the section 229.20(d) of Regulation CC (12 C.F.R. Part notice in the mail or delivers the notice for transmis- 229), to determine whether the Expedited Funds sion by any other usual means to the financial institu- Availability Act (the "Act") and Subpart B (and in tion. Notice is also considered given when the financonnection therewith, Subpart A) of Regulation CC cial institution becomes aware of circumstances that preempt the provisions of New Jersey law concerning lead to the reasonable belief that an unauthorized disclosure of a bank's funds availability policy. (See electronic fund transfer involving the consumer's acalso the Board's preemption determination regarding count has been or may be made. the Uniform Commercial Code, section 4-213(5), pertaining to availability of cash deposits.) New Jersey does not have a law or regulation establishing the maximum time periods within which FINAL RULE—AMENDMENT TO REGULATION funds deposited by check or electronic payment must CC be made available for withdrawal. New Jersey does, however, have regulations concerning the disclosure The Board of Governors is amending 12 C.F.R. Part of a banking institution's availability policy (N.J.A.C. 229, its Regulation CC (Availability of Funds and §§ 3:1-15.1 et seq.). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

74 Federal Reserve Bulletin • Februrarv 1989 Disclosures Notice of the application, affording interested persons an opportunity to submit comments, has been New Jersey law requires every banking institution published (53 Federal Register 43,037 (1988)). The (defined as any state or federally chartered commercial time for filing comments has expired, and the Board bank, savings bank, or savings and loan association) to has considered the application and all comments reprovide written disclosure to all holders of and appli- ceived in light of the factors set forth in section 3(c) of cants for deposit accounts which describes the institu- the BHC Act. tion's funds availability policy. Institutions must also First Bank System is the largest commercial banking disclose to their customers any significant changes to organization in Minnesota, controlling deposits of their availability policy. $12.3 billion, representing 31 percent of total deposits Regulation CC preempts state disclosure require- in commercial banking organizations in the state.2 ments concerning funds availability that relate to Suburban is the 46th largest commercial banking or- "accounts" that are inconsistent with the federal ganization in Minnesota, controlling deposits of $73 requirements. The state requirements are different million, representing less than one percent of total from, and therefore inconsistent with, the federal deposits in commercial banking organizations in the disclosure rules. (Section 229.25(c)(2)). Thus, the New state. Upon consummation of this proposal, First Jersey statute (N.J.A.C. §§ 3:1-15.1 et seq.) is pre- Bank System would control approximately $12.4 bilempted by Regulation CC to the extent that these lion in deposits, representing 31.1 percent of total disclosure provisions apply to "accounts" as defined deposits in commercial banking organizations in the by Regulation CC. The New Jersey disclosure rules state. Consummation of the proposal would not inwould continue to apply to other "deposit accounts," crease significantly the concentration of banking reas defined by New Jersey law, including money mar- sources in Minnesota. ket accounts and saving accounts established by a First Bank System competes directly with Suburban natural person for personal for family purposes, which in the Minneapolis - St. Paul banking market.3 First are not governed by the Regulation CC disclosure Bank System is the largest commercial banking orgarequirements. nization in the market, with deposits of $10.9 billion, representing 44 percent of the total deposits in commercial banks in the market. Suburban is among the ORDERS ISSUED UNDER BANK HOLDING smaller commercial banking organizations in the mar- COMPANY ACT ket, with $73 million in deposits, representing less than one percent of the total deposits in commercial banks Orders Issued Under Section 3 of the Bank in the market. Upon consummation of this proposal, Holding Company Act First Bank System would control $10.9 billion in deposits, representing 44.3 percent of the total com- First Bank System, Inc. mercial banking deposits in the market. The Minneap- Minneapolis, Minnesota olis - St. Paul banking market would be considered highly concentrated with a four firm ratio of 74.8 Order Approving the Merger of Bank Holding percent. Consummation of this proposal would in- Companies crease the Herfindahl-Hirschman Index ("HHI") of the market by 26 points to 2519.4 First Bank System, Inc., Minneapolis, Minnesota, a bank holding company within the meaning of the Bank Holding Company Act (12 U.S.C. § 1841 et seq.) 2. Banking data are as of March 31, 1988. ("BHC Act"), has applied for the Board's approval 3. The Minneapolis - St. Paul banking market is defined as the under section 3(a)(5) of the BHC Act to merge with Minneapolis - St. Paul Ranally Metropolitan Area adjusted to include all of Scott and Carver Counties and Lanesburgh Township in Suburban Bancorporation, Inc., Eden Prairie, Minne- Le Sueur County. sota ("Suburban"), and thereby to acquire indirectly 4. Under the revised Department of Justice Merger Guidelines (49 Suburban National Bank, Eden Prairie, Minnesota Federal Register 26,823 (June 29, 1984), any market in which the post-merger HHI is over 1800 is considered highly concentrated, and ("Bank").1 the Department is likely to challenge a merger that increases the HHI by more than 50 points unless other factors indicate that the merger will not substantially lessen competition. The Department of Justice has informed the Board that a bank merger or acquisition is not likely to be challenged (in the absence of other factors indicating an 1. In connection with the holding company merger, Suburban's anticompetitive effect) unless the post-merger HHI is at least 1800 and banking subsidiary, Suburban National Bank, Eden Prairie, Minne- the merger increases the HHI by at least 200 points. The Justice sota, will be merged into First Bank System's lead bank, First Bank Department has stated that the higher than normal HHI thresholds for National Association, Minneapolis, Minnesota. screening bank mergers for anti-competitive effects implicitly recog- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 Although consummation of this proposal would ance agency activities. First Bank System is authoeliminate some existing competition in the Minneapo- rized to engage in insurance agency activities pursuant lis - St. Paul banking market, 108 other commercial to exemption G to section 4(c)(8) of the BHC Act, banking organizations would continue to operate in the which authorizes those bank holding companies that market. In addition, the Board has considered the engaged, with Board approval, in insurance agency presence of thrift institutions in the banking market in activities prior to 1971, to engage, or control a comits analysis of this proposal. The Board has previously pany engaged, in insurance agency activities. indicated that thrift institutions have become, or have 12 U.S.C. § 1843(c)(8)(G). The record indicates that the potential to become, major competitors of com- First Bank System has been engaged in general insurmercial banks.5 Thrift institutions already exert a ance agency activities in the state of Minnesota on a considerable competitive influence in the market as continuous basis since receiving Board approval in providers of NOW accounts and consumer loans, and 1959, and is one of 16 companies that qualify for many are engaged in the business of making commer- exemption G.8 Protestants claim, however, that as a cial loans. Based upon the number, size, market share result of this proposal a new bank holding company is and commercial lending activities of thrift institutions being created that would not be entitled to exercise the in the market, the Board has concluded that thrift grandfather rights of First Bank System. institutions exert a significant influence upon compe- The Board has considered carefully the arguments tition in the Minneapolis - St. Paul banking market.6 made by Protestants and concludes that facts and Accordingly, in view of all the facts of record, and in circumstances do not support Protestants' arguments particular in light of the small increase in concentra- that First Bank System would cease to exist under this tion in the market, the Board has determined that proposal. As noted above, the structure of the proconsummation of this proposal would not have a posal is a merger of Suburban into First Bank System, significant adverse effect on existing competition in the with First Bank System continuing to exist as the Minneapolis - St. Paul banking market. surviving corporation. First Bank System will con- The financial and managerial resources of First tinue to operate under the same corporate charter Bank System and its subsidiary banks are consistent following consummation. The much larger size of First with approval. In reaching this conclusion, the Board Bank System, with approximately $26 billion in assets, has taken into account First Bank System's recent relative to the size of Suburban, with approximately announcement of the substantial loss resulting from $60 million in assets, reflects a bona fide acquisition by the sale of its government bond portfolio, as well as First Bank System of Suburban. the steps First Bank System intends to take to restore In addition, the Board notes that the acquisition of its capital position to more satisfactory levels. Consid- Suburban would not expand First Bank System's erations relating to the convenience and needs of the authority to engage in insurance activities under excommunity to be served are also consistent with emption G, since First Bank System currently has approval. authority to engage in insurance agency activities at In connection with this application, the Board has the locations in which Suburban operates, or other received comments from various insurance trade as- locations in the United States.9 The Board notes that sociations ("Protestants").7 Protestants assert that the the Board's original approval in 1959 gave First Bank proposal to merge Suburban into First Bank System System authority to engage in insurance agency activwould result in an impermissible broadening of First ities at all of its bank subsidiaries in Minnesota.10 Bank System's grandfather rights to conduct insur- Based on the structure of the proposal, the relative size of the two institutions involved, the continuation of First Bank System's charter, and all the other facts of record indicating that the essential characteristics of nizes the competitive effects of limited purpose lenders and other non-depository financial entities. First Bank System will continue to exist, the Board 5. National City Corporation, 70 FEDERAL RESERVE BULLETIN 743 concludes that this proposal would not result in the (1984); NCNB Bancorporation 70 FEDERAL RESERVE BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL RESERVE BUL- LETIN 802 (1983); and First Tennessee National Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). 6. If 50 percent of the deposits controlled by thrift institutions were 8. See First Bank Stock Corporation, 45 FEDERAL RESERVE BULincluded in the calculation of market concentration, First Bank LETIN 917 (1959). The name of First Bank Stock Corporation has been System and Suburban would control 38.7 percent and 0.3 percent of changed to First Bank System, and the name of First Service total market deposits, respectively. The HHI would increase by 21 Agencies, Inc. has been changed to First System Agencies, Inc. points to 2005 upon consummation of this proposal. 9. See First Bank System, 70 FEDERAL RESERVE BULLETIN 657 7. The Independent Insurance Agents of America, Inc., National (1984); Norwest Corporation, 70 FEDERAL RESERVE BULLETIN 235 Association of Casualty and Surety Agents, National Association of (1984). Life Underwriters, National Association of Professional Insurance 10. First Bank Stock Corporation, 45 FEDERAL RESERVE BULLETIN Agents, and National Association of Surety Bond Producers. 929 (1959). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • Februrarv 1989 formation of a new bank holding company or the loss of the state in which such bank is located, by language of First Bank System's exemption G rights.11 to that effect and not merely by implication."1 Based on the foregoing and other facts of record, the Effective December 31, 1988, the Nevada interstate Board has determined that the application should be, banking statute will permit out-of-state bank holding and hereby is, approved. The acquisition shall not be companies to acquire established Nevada banks and consummated before the thirtieth calendar day follow- bank holding companies.2 Security Pacific will not ing the effective date of this Order or later than three acquire Nevada National until after December 31, months after the effective date of this Order, unless 1988. The Nevada Commissioner of Financial Institusuch period is extended for good cause by the Board, tions has approved Security Pacific's proposal pursuor by the Federal Reserve Bank of Minneapolis, acting ant to the Nevada statute. In light of the foregoing, the pursuant to delegated authority! Board has determined that its approval of the proposal By order of the Board of Governors, effective is not prohibited by the Douglas Amendment. December 21, 1988. Security Pacific operates 10 banking subsidiaries located in California, Washington, Oregon, Arizona, Alaska, and New York. Security Pacific is the third Voting for this action: Chairman Greenspan and Governors Angell, Heller, Kelley, and LaWare. Absent and not voting: largest banking organization in California, controlling Governors Johnson and Seger. deposits of $27.1 billion, representing 13.8 percent of the total deposits in commercial banks in California.3 JAMES MCAFEE Nevada National is the fourth largest commercial Associate Secretary of the Board banking organization in Nevada, controlling deposits of $516.8 million, representing 8.5 percent of total Security Pacific Corporation deposits in commercial banks in the state. Consumma- Los Angeles, California tion of the proposal would not have any significant adverse effect upon the concentration of banking re- Order Approving Acquisition of a Bank Holding sources in California or Nevada. Company Security Pacific and Nevada National do not compete directly in any banking market. Accordingly, Security Pacific Corporation, Los Angeles, California consummation of the proposal would not eliminate any ("Security Pacific"), a bank holding company within significant existing competition in any relevant bankthe meaning of the Bank Holding Company Act (the ing market. Consummation also would not have any "BHC Act") (12 U.S.C. § 1842(a)(3)), has applied for significant adverse effect on probable future competithe Board's approval under section 3(a)(3) of the BHC tion in any relevant banking market. Act to acquire 100 percent of the outstanding voting The financial and managerial resources of Security shares of Nevada National Bancorporation, Reno, Pacific, Nevada National, and their subsidiaries are Nevada ("Nevada National"), and thereby indirectly consistent with approval. Considerations relating to to acquire Nevada National Bank, Reno, Nevada. the convenience and needs of the communities to be Notice of the application, affording interested perserved by Security Pacific's and Nevada National's sons an opportunity to submit comments, has been subsidiary banks are also consistent with approval. published (53 Federal Register 36,638 (1988)). The Based on the foregoing and other facts of record, the time for filing comments has expired, and the Board Board has determined that the application should be, has considered the application and all comments reand hereby is, approved. This transaction shall not be ceived in light of the factors set forth in section 3(c) of consummated before the thirtieth calendar day followthe BHC Act. ing the effective date of this Order, or later than three The Douglas Amendment to the BHC Act prohibits months after the effective date of this Order, unless the Board from approving an application by a bank such period is extended for good cause by the Board or holding company to acquire a bank located outside the bank holding company's home state, unless such acquisition is "specifically authorized by the statute laws 1. 12 U.S.C. § 1842. A bank holding company's home state for purposes of the Douglas Amendment is that state in which the total deposits of its banking subsidiaries were largest on July 1, 1966, or on 11. Protestants also requested the Board to order new publication of the date it became a bank holding company, whichever date is later. notice of the application to permit public comment on the entry of a Security Pacific's home state is California. new bank holding company into insurance activities. Because the 2. Nev. Rev. Stat. Ann. § 666.335 (Michie 1986) (Effective Decem- Board has concluded that no new bank holding company is being ber 31, 1988. Expires by limitation July 1, 1990). Nevada National was formed as a result of the proposal, the Board has determined there is in operation on July 1, 1985, as required by the statute. Id. no basis for ordering republication of notice in this case. 3. Deposit data are as of June 30, 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 77 by the Federal Reserve Bank of San Francisco, acting banks in the market. Wiregrass is the seventh largest pursuant to delegated authority. banking organization, with deposits of $18.4 million, By order of the Board of Governors, effective representing 2.95 percent of market deposits. The December 5, 1988. Dothan market is highly concentrated, with the four largest commercial banks controlling 82.91 percent of Voting for this action: Chairman Greenspan and Governors the total bank deposits in the market. Upon consum- Johnson, Seger, Kelley, and LaWare. Absent and not voting: mation, SouthTrust would remain the largest commer- Governors Angell and Heller. cial banking organization in the market, controlling $293.1 million in deposits, or 47.1 percent of market JAMES MCAFEE deposits. The four-firm concentration ratio would in- Associate Secretary of the Board crease 2.95 points to 85.86 percent. The market would be considered highly concentrated after consumma- SouthTrust Corporation tion of the proposed transaction, with the Herfindahl- Birmingham, Alabama Hirschman Index ("HHI") increasing 260 points to 2881.3 Order Approving the Acquisition of a Bank Holding Although consummation of this proposal would Company eliminate some existing competition between South- Trust and Wiregrass in the Dothan banking market, SouthTrust Corporation, Birmingham, Alabama numerous other commercial banks would continue to ("SouthTrust"), a bank holding company within the operate in the market after consummation of this meaning of the Bank Holding Company Act (the proposal. In addition, the Board has considered the "Act") (12 U.S.C. § 1841 et seq.), has applied for the presence of thrift institutions in this market. The Board's approval under section 3(a)(3) of the Act Board has previously indicated that thrift institutions (12 U.S.C. § 1842(a)(3)) to acquire at least 80 percent have become, or have the potential to become, major of the voting shares of The Wiregrass Bank & Trust competitors of commercial banks.4 In the Dothan Company, Headland, Alabama ("Wiregrass"). market, thrift institutions account for a significant Notice of the application, affording interested per- percentage of the total deposits.5 Based upon the size sons an opportunity to submit comments, has been and market share of thrift institutions, the Board has duly published (53 Federal Register 37,053 (1988)). concluded that thrift institutions exert a significant The time for filing comments has expired, and the competitive influence that mitigates the anticompeti- Board has considered the application and all com- tive effects of this proposal in this banking market.6 ments received in light of the factors set forth in On the basis of the foregoing and other facts of section 3(c) of the Act. record, the Board concludes that consummation of SouthTrust is the second largest commercial bankthis proposal would not have a significantly adverse ing organization in Alabama, controlling total deposits of approximately $4.3 billion, representing 17.9 percent of the total deposits in commercial banking orga- 3. Under the revised Department of Justice Merger Guidelines, 49 nizations ("total bank deposits") in the state.1 Wire- Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is above 1800 is considered highly concentrated. In grass is the 96th largest commercial banking such markets, the Justice Department is likely to challenge a merger organization in Alabama, controlling deposits of $17.4 that increases the HHI by more than 50 points. The Justice Departmillion, representing 0.07 percent of the total bank ment has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors deposits in the state. Consummation of this proposal indicating anticompetitive effects) unless the post-merger HHI is at would not have any significant adverse effect on the least 1800 and the merger increases the HHI by at least 200 points. The concentration of banking resources in Alabama. Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects Wiregrass and a subsidiary bank of SouthTrust implicitly recognizes the competitive effect of limited-purpose lenders compete directly in the Dothan, Alabama, banking and other non-depository financial entities. market.2 In this market, SouthTrust's subsidiary bank, 4. National City Corporation, 70 FEDERAL RESERVE BULLETIN 743 (1984); The Chase Manhattan Corporation, 70 FEDERAL RESERVE SouthTrust Bank of Dothan, N.A., Dothan, Alabama, BULLETIN 529 (1984); NCNB Bancorporation, 70 FEDERAL RESERVE is the largest bank, with deposits of $274.8 million, BULLETIN 225 (1984); General Bancshares Corporation, 69 FEDERAL RESERVE BULLETIN 802 (1983); and First Tennessee National Corporepresenting 44.15 percent of deposits in commercial ration, 69 FEDERAL RESERVE BULLETIN 298 (1983). 5. Thrift institutions control nearly 25 percent of the combined deposits of banks and thrifts in the Dothan banking market. Market 1. State banking data are as of December 31, 1987. Market deposit deposit data for thrift institutions are as of June 30, 1987. data are as of June 30, 1987. 6. If 50 percent of deposits held by thrift institutions in the Dothan 2. The Dothan banking market is approximated by the following banking market were included in the calculation of market concentraareas in Alabama: Houston County; Midland City and Grimes in Dale tion, SouthTrust's pro forma market share would be 40.65 percent. County; and Headland and Newville in Henry County. The HHI would increase by 193 points to 2311. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • Februrarv 1989 effect on existing competition in the Dothan banking (2) the Bond Buyer Municipal Bond Index futures market. contract, the Major Market Index futures contract, The financial and managerial resources of South- and options on the Bond Buyer Municipal Bond Trust and Wiregrass are considered satisfactory and Index futures contract, all of which are traded on the consistent with approval. Further, the Board con- Chicago Mercantile Exchange; cludes that convenience and needs of the communities (3) the New York Stock Exchange Composite Index to be served are consistent with approval of this futures contract, which is traded on the New York application. Futures Exchange, a subsidiary of the New York Based on the foregoing and other facts of record, the Stock Exchange; Board has determined that the application should be, (4) the Financial Times Stock Index futures conand hereby is, approved. The acquisition of Wiregrass tract, which is traded on the London International shall not be consummated before the thirtieth calendar Financial Futures Exchange; and day following the effective date of this Order, or later (5) the Nikkei Stock Average futures contract, than three months after the effective date of this which is traded on the Singapore International Mon- Order, unless such period is extended for good cause etary Exchange. by the Board or by the Federal Reserve Bank of Atlanta, acting pursuant to delegated authority. Notice of the application, affording interested per- By order of the Board of Governors, effective sons an opportunity to submit comments on the pro- December 5, 1988. posed activities has been duly published (53 Federal Register 44,666 (1988)). The time for filing comments Voting for this action: Chairman Greenspan and Governors has expired, and the Board has considered the appli- Johnson, Seger, Kelley, and LaWare. Absent and not voting: cation and all comments received in light of the public Governors Angell and Heller. interest factors set forth in section 4(c)(8) of the BHC Act. JAMES MCAFEE BankAmerica, with total consolidated assets of $95 Associate Secretary of the Board billion, is the largest banking organization in California.1 BankAmerica operates two subsidiary Orders Issued Under Section 4 of the Bank banks and engages through certain of its subsidiaries in Holding Company Act a variety of nonbanking activities. BA Futures is a futures commission merchant ("FCM") registered BankAmerica Corporation with the Commodity Futures Trading Commission San Francisco, California ("CFTC") that engages in the execution and clearance of futures contracts and options on futures contracts Order Approving Application to Execute and Clear for bullion, foreign exchange, government securities, Futures Contracts on Stock Indexes and a Municipal certificates of deposit, and other money market instru- Bond Index and Options on such Futures Contracts ments that a bank may buy or sell in the cash market for its own account, pursuant to section BankAmerica Corporation, San Francisco, California 225.25(25)(b)(18) of the Board's Regulation Y, ("BankAmerica"), a bank holding company within the 12 C.F.R. § 225.25(b)(18).2 meaning of the Bank Holding Company Act ("BHC The Board has previously determined that the exe- Act"), has applied pursuant to section 4(c)(8) of the cution and clearance of futures contracts and options BHC Act (12 U.S.C. § 1843(c)(8)) for its wholly on futures contracts based on stock indexes and on a owned subsidiary, BA Futures, Incorporated, San municipal bond index are closely related to banking. Francisco, California ("BA Futures"), to engage {J.P. Morgan & Co. Incorporated, 71 FEDERAL REde novo in the execution and clearance, on major SERVE BULLETIN 251 (1985); and Northern Trust Corcommodity exchanges, of futures contract on stock poration, 74 FEDERAL RESERVE BULLETIN 333 (1988). indexes, a futures contract on a municipal bond The proposed activities of BA Futures are essentially index, and options on such futures contracts. identical to those activities previously approved by the BA Futures proposes to execute and clear: Board.3 Accordingly, the Board concludes that (1) the Standard & Poor's 500 Stock Price Index futures contract ("S&P 500"), the Standard & 1. As of September 30, 1988. Poor's 100 Stock Price Index futures contract 2. In March 1984, the Federal Reserve Bank of San Franscisco, ("S&P 100"), and options on the S&P 500 futures acting pursuant to delegated authority under 12 C.F.R. § 225.23(a)(1), contract, which are traded on the Chicago Mercan- authorized BA Futures to engage in the above activities. 3. The Board has previously approved under section 4(c)(8) the tile Exchange; execution and clearance of futures contracts and options on those Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 79 BankAmerica's proposed activities are closely related BHC Act and the Board's regulations and orders to banking. thereunder. Under section 4 of the BHC Act, the Board is also The transaction shall be made not later than three required to determine that the performance of the months after the effective date of this Order, unless proposed activities by the applicant "can reasonably such period is extended for good cause by the Board or be expected to produce benefits to the public . . . that by the Federal Reserve Bank of San Francisco, puroutweigh possible adverse effects, such as undue suant to delegated authority. concentration of resources, decreased or unfair com- By order of the Board of Governors, effective petition, conflicts of interests, or unsound banking December 13, 1988. practices." 12 U.S.C. § 1843(c)(8). Consummation of BankAmerica's proposal would Voting for this action: Chairman Greenspan and Governors provide added convenience to its customers. In addi- Johnson, Seger, Heller, Kelley, and LaWare. Absent and not tion, the Board expects that the de novo entry of voting: Governor Angell. BankAmerica into the market for these services would increase the level of competition among providers of JAMES MCAFEE Associate Secretary of the Board these services already in operation. Accordingly, the Board concludes that the performance of the proposed activities by BankAmerica can reasonably be expected Bank of Boston Corporation to provide benefits to the public. Boston, Massachusetts Moreover, there is no evidence in the record that Order Approving the Acquisition of Factoring Assets consummation of the proposed FCM activities would result in any adverse effects such as undue concentra- Bank of Boston Corporation, Boston, Massachusetts tion of resources, decreased or unfair competition, ("Bank of Boston"), a bank holding company within conflicts of interests, or unsound banking practices. In the meaning of the Bank Holding Company Act (the addition, the Board has taken into account and has "Act") (12 U.S.C. § 1841 et seq.), has applied for the relied on the regulatory framework established pursu- Board's approval under section 4(c)(8) of the Act and ant to law by the CFTC for the trading of futures. section 225.23(a)(2) of the Board's Regulation Y The financial and managerial resources and future (12 C.F.R. § 225.23(a)(2)) to acquire all of the factorprospects of Applicant are considered consistent with ing assets and assume related liabilities of First Union approval. Based upon consideration of all the relevant Commercial Corporation, Charlotte, North Carolina facts, the Board concludes that the balance of the ("First Union"). First Union engages in commercial public interest factors that it is required to consider financing and factoring activities, primarily for the under section 4(c)(8) is favorable. Accordingly, based furniture, textile, apparel, and carpet industries. Facon all the facts or record, and subject to the conditions toring activities have previously been determined by in this Order, the Board has determined that the the Board to be closely related to banking and permisproposed application should be, and hereby is apsible for bank holding companies or their subsidiaries proved. This determination is subject to all of the conditions set forth in Regulation Y, including sections (12 C.F.R. § 225.25(b)(l)(v)). 225.4(d) and 225.23(b)(3) (12 C.F.R. §§ 225.4(d) and Notice of the application, affording interested per- 225.23(b)(3)), and to the Board's authority to require sons an opportunity to submit comments and views, such modification or termination of the activities of a has been duly published (53 Federal Register 46,660 bank holding company or any of its subsidiaries as the (1988)). The time for filing comments and views has Board finds necessary to assure compliance with, or to expired, and the Board has considered the application prevent evasion of, the provisions and purposes of the and all comments received in light of the factors specified in section 4(c)(8) of the Act. Bank of Boston, with consolidated assets of approximately $34.2 billion,1 operates four subsidiary banks futures contracts on all of the indexes being applied for by BankAme- in Massachusetts, Connecticut, Maine and Rhode rica with the exception of the Financial Times futures contract and the Island.2 Bank of Boston also engages through its Nikkei futures contract. The Board has however permitted bank holding companies to execute and clear the Financial Times futures contract and the Nikkei futures contract pursuant to Regulation K (12 C.F.R. Part 211). Board letters, dated August 6, 1984 and January 1. Asset data are as of September 30, 1988. 27, 1986. These contracts have essentially the same terms and serve 2. On November 30, 1988, the Board approved the application of the same functions as the futures contracts for which execution and Bank of Boston Corporation to acquire BankVermont Corporation, clearance has been previously approved by Board order. Therefore, Burlington, Vermont. This transaction has not yet been consummated the Board has determined that the execution and clearance of futures and the asset data regarding Bank of Boston do not reflect this contracts on these additional indexes is closely related to banking. acquisition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • Februrarv 1989 nonbank subsidiaries in various nonbanking activities, This determination is subject to the conditions set such as mortgage banking, trust activities, leasing, forth in Regulation Y, including sections 225.4(d) and investment advisory services, and underwriting and 225.23(b), and to the Board's authority to require such dealing in municipal revenue bonds, commercial paper modification or termination of the activities of a holdand consumer-receivable related securities. ing company or any of its subsidiaries as the Board Bank of Boston controls indirectly BancBoston Fi- finds necessary to assure compliance with the provinancial Company ("BBFC"), Boston, Massachusetts, sions and purposes of the Act and the Board's regulawhich engages in factoring activities world-wide. tions and orders issued thereunder, or to prevent Through BBFC, Bank of Boston controls the eighth evasion thereof. largest factoring operation in the United States, with The transaction shall be consummated not later than year-end 1987 receivables of $2.96 billion, represent- three months after the effective date of this Order, ing 6.57 percent of the market for factoring in the unless such period is extended for good cause by the United States.3 Board or by the Federal Reserve Bank of Boston, First Union is the eighteenth largest factoring oper- pursuant to delegated authority. ation in the United States, with year-end 1987 receiv- By order of the Board of Governors, effective ables of $615 million, representing 1.36 percent of the December 21, 1988. market for factoring services in the United States. First Union provides factoring services primarily in Voting for this action: Chairman Greenspan and Governors North Carolina, South Carolina and New York Angell, Heller, Kelley and LaWare. Absent and not voting: through offices located in Charlotte, North Carolina Governors Johnson and Seger. and New York, New York. Upon consummation of this proposal, Bank of Boston would control the sixth JAMES MCAFEE Associate Secretary of the Board largest factoring operation in the United States, with a 7.93 percent market share. Barnett Banks, Inc. The Board has previously stated that the market for Jacksonville, Florida factoring services is nationwide. The market is considered unconcentrated, with a four-firm concentration Order Approving Acquisition of a Federal Savings ratio of 38.0 percent. The Herfindahl-Hirschman In- Bank dex ("HHI") of the market is 705 and would increase by 18 points to 723 upon consummation of this proposal.4 Although the acquisition of First Union Barnett Banks, Inc., Jacksonville, Florida ("Barnett"), a bank holding company within the would eliminate some existing competition between meaning of the Bank Holding Company Act (the Bank of Boston and First Union, numerous other "BHC Act") (12 U.S.C. § 1841 et seq.), has applied factors continue to operate in the market and the pursuant to section 4(c)(8) of the BHC Act and section market would remain unconcentrated. Accordingly, 225.23 of the Board's Regulation Y (12 C.F.R. consummation of this proposal would not have a § 225.23), to acquire all of the voting shares of Barnett significant adverse effect on competition in the factor- Federal Savings Bank ("Barnett Federal"), a de novo ing market. federal savings bank formed to acquire substantially There is no evidence in the record that consummaall of the assets and certain liabilities of First Federal tion of this proposal would result in adverse effects, Savings and Loan Association of Columbus, Columsuch as unsound banking practices, unfair competibus, Georgia ("First Federal"), an insolvent thrift tion, conflicts of interest, or an undue concentration of institution.1 Upon consummation of the proposed acresources. Financial and managerial resources also are quisition, Barnett Federal will operate as a federal consistent with approval of this application. savings bank in Georgia.2 Based upon the foregoing and other considerations reflected in the record, the Board has determined that the balance of the public interest factors that the Board is required to consider under section 4(c)(8) is favor- 1. First Federal is currently operated as a federal stock savings and loan association and will be placed into receivership by the Federal able. Accordingly, the application is hereby approved. Savings and Loan Insurance Corporation (the "FSLIC"). Immediately thereafter, Barnett Federal will acquire substantially all of the assets, as well as the secured, deposit and certain tax claim liabilities 3. Market data are as of December 31, 1987. of First Federal, from the FSLIC as receiver for First Federal. FSLIC 4. Under the revised Department of Justice Merger Guidelines (49 will also provide financial assistance for the acquisition. Federal Register 26,823 (June 29, 1984)), any market in which the 2. Barnett Federal will be operated as a wholly owned subsidiary of post-merger HHI is below 1000 is considered unconcentrated, and the First City Bancorp, Inc., Marietta, Georgia, which is a wholly owned Department will not challenge a merger with a post-merger HHI below subsidiary of Suncoast Bancorp, Inc., Vero Beach, Florida, which, in 100, except in extraordinary circumstances. turn, is a wholly owned subsidiary of Barnett. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 81 Barnett, with total consolidated assets of $24.5 banking, and reaffirms that determination in this billion, is the largest commercial banking organization Order.5 in Florida.3 It operates 34 banking subsidiaries and In D.H. Baldwin & Co.,6 however, the Board deterengages in numerous nonbanking activities, including mined that, as a general matter, the operation of a trust company functions, check-guaranty services, savings and loan association is not a proper incident to discount securities brokerage, and permissible credit banking because the potential adverse effects of genrelated insurance activities. erally allowing affiliations of banks and thrift institu- First Federal, with total assets of $265.8 million, is tions were not outweighed by the potential public the eleventh largest savings institution in Georgia, and benefits. In individual cases involving failing thrifts, operates one office in the state. the Board has found that the balance of public benefits By letter dated December 27, 1988, the Federal was favorable on the basis that the adverse effects of Home Loan Bank Board ("Bank Board") requested the affiliation would be overcome by the public benethat the Board approve this application to acquire fits of preserving the failing thrift institution as a Barnett Federal under the Bank Board's Expedited competitive entity in the market and ensuring public Case Processing Program for failing thrift institutions. confidence.7 The 1982 Garn-St Germain Act recog- The Bank Board urged the Board to approve this nized the Board's authority under section 4(c)(8) of the application in order to restore public confidence, main- BHC Act to approve such acquisitions by authorizing the Board in these cases to dispense with the usual tain confidence in the savings and loan industry gennotice and hearing requirements of section 4(c)(8) erally, and stabilize the daily increasing potential cost under appropriate emergency circumstances. to the FSLIC. The Bank Board based its request on the insolvent condition of First Federal as well as on Based upon the Board's review of the record, the the substantial public benefits of the proposal, includ- Board has determined that there are substantial beneing the significant and stabilizing capital injections fits to the public in this case that outweigh the generproposed by Barnett and the FSLIC. alized adverse effects found by the Board in the D.H. In light of the condition of First Federal, the Board Baldwin case. In particular, under the proposal, Barpromptly caused notice of the application to be pub- nett Federal will have the financial and managerial lished in the Federal Register (53 Federal Register resources to continue to provide service to the conve- 49,228 (1988)). The time for filing comments has ex- nience and needs of the customers and community pired, and the Board has considered the application served by First Federal. and all comments received in light of the public As the Board previously has noted, bank holding interest factors set forth in section 4(c)(8) of the BHC companies contemplating expansion proposals are ex- Act.4 pected to maintain consolidated capital levels signifi- Section 4(c)(8) of the BHC Act authorizes a bank cantly above the minimums set forth in the Board's holding company to engage in, or acquire and retain a Capital Adequacy Guidelines and without undue relicompany that engages in, activities determined by the ance on intangibles, particularly goodwill. In that Board to be "so closely related to banking or manag- regard, Barnett is an adequately capitalized instiing or controlling banks as to be a proper incident tution, and, because this transaction will have a thereto." The Board has determined previously that de minimis effect on its financial condition, it will the operation of a thrift institution is closely related to remain so on a consolidated basis upon consummation of the proposal. Moreover, in accordance with its prior rulings in this area, the Board expects that Barnett will cause Barnett Federal to achieve and maintain levels 3. Asset data are as of September 30, 1988. of capital consistent with those applying to banking 4. The Board received a protest to the proposal alleging an unfairness in the Bank Board's bidding procedure in favor of out-of-state institutions as well as an inability on Barnett's part to acquire First Federal directly under applicable law. As the Board has previously held, the Board's consideration of the effects of a proposal involving a bank holding company acquisition under the prudential standards of section 4(c)(8), which involve an evaluation of the possible adverse effects and anticipated public benefits of the proposal, does not 5. See, e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 724 (1986); include a review of the FSLIC's selection of the appropriate bidder for First Pacific Investments Limited, 72 FEDERAL RESERVE BULLETIN the failing thrift. Citicorp, 72 FEDERAL RESERVE BULLETIN 724, 728 342 (1986); F.N.B. Corporation, 71 FEDERAL RESERVE BULLETIN 340 (1986); Citicorp, 68 FEDERAL RESERVE BULLETIN 656, 668 (1982). (1985). That decision is committed to the discretion of the FSLIC. With 6. D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 regard to protestant's second contention, the Board notes that Barnett (1977). The Board has invited public comment on a proposal to could acquire First Federal directly under applicable law. Accord- reexamine this position. 52 Federal Register 36,041 (1987). ingly, and in light of the facts of record in this case, the Board 7. See, e.g., F.N.B. Corporation, supra; The Chase Manhattan concludes that protestant's comments do not warrant denial of this Corporation, 71 FEDERAL RESERVE BULLETIN 462 (1985); Interstate application. Financial Corp., 68 FEDERAL RESERVE BULLETIN 316 (1982). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • Februrarv 1989 organizations generally as soon as possible, and in any Based upon the foregoing and other facts and circase within one year.8 cumstances reflected in the record, the Board has First Federal operates in the Columbus Area bank- determined that the acquisition of Barnett Federal by ing market.9 Barnett does not control a depository Barnett would result in substantial and compelling institution in that market. Accordingly, the Board has public benefits that are sufficient to outweigh any determined that consummation of this proposal would adverse effects that may reasonably be expected to not have a significant adverse effect on competition. In result from this proposal. Accordingly, the application addition, the Board concludes that consummation of is approved subject to the conditions described in this this proposal would not have a significant adverse Order, and the record of the application. effect on probable future competition in any relevant The Board's decision in this case is subject to the market. conditions set forth in Regulation Y, including sections To guard against possible adverse effects of affili- 225.4(d) and 225.23(b), and to the Board's authority to ation between a banking organization and a savings require such modification or termination of the activand loan association, the Board conditions its approval ities of a holding company or any of its subsidiaries as as follows: the Board finds necessary to assure compliance with, 1. Barnett will operate Barnett Federal as a federal or to prevent evasion of, the provisions and purposes savings bank having as its primary purpose the of the BHC Act and the Board's regulations and orders provision of residential housing credit. Barnett Fed- issued thereunder. This transaction shall not be coneral will limit its activities to those currently permit- summated later than three months after the effective ted to thrift institutions under the Home Owners' date of this Order, unless that period is extended for Loan Act, but shall not engage in any activity good cause by the Board or by the Federal Reserve prohibited to bank holding companies and their Bank of Atlanta, pursuant to delegated authority. subsidiaries under section 4(c)(8) of the BHC Act.10 By order of the Board of Governors, effective 2. Barnett Federal will not establish or operate a December 27, 1988. remote service unit at any location outside of Georgia. Voting for this action: Chairman Greenspan and Governors 3. Barnett Federal will not establish or operate Angell, Heller, Kelley, and LaWare. Absent and not voting: branches at locations not permissible for national Governors Johnson and Seger. banks located in Georgia. 4. Barnett shall not change Barnett Federal's name WILLIAM W. WILES Secretary of the Board to any title that might confuse the public regarding its status as a nonbank thrift institution.11 Barnett Banks, Inc. 5. Barnett Federal will not convert its charter to that Jacksonville, Florida of a national or state commercial bank without the Board's prior approval. Order Approving Acquisition of a Federal Savings Bank The Board concludes that consummation of the proposal, subject to the conditions set out above, Barnett Banks, Inc., Jacksonville, Florida would not result in conflicts of interests, unsound ("Barnett"), a bank holding company within the banking practices, decreased or unfair competition, meaning of the Bank Holding Company Act undue concentration of resources, or other adverse (12 U.S.C. § 1841 et seq.) (the "BHC Act"), has effects. applied pursuant to section 4(c)(8) of the BHC Act and section 225.23 of the Board's Regulation Y (12 C.F.R. § 225.23), to acquire all of the voting shares of the 8. See First Bancorporation of Ohio, 14 FEDERAL RESERVE BUL- LETIN 817 (1988). successor to First Federal Savings and Loan Associ- 9. The Columbus Area banking market is approximated by Chatta- ation, Summerville, Georgia ("First Federal"), an hoochee and Muskogee Counties in Georgia, Russell County, Ala- insolvent thrift institution.1 Upon consummation of bama, and the city of Smiths in Lee County, Alabama. 10. These limitations also apply to First Federal's wholly owned the proposed acquisition, First Federal will operate as subsidiary, First Columbus Service Corporation, Columbus, Georgia a federal savings bank in Georgia.2 ("Company"), which is primarily engaged in the sale of real estate owned by the company. Barnett has committed that Company will engage in only those real estate activities permissible under the BHC Act and the Board's Regulation Y. Barnett has also committed that 1. Under Barnett's proposal, the assets and liabilities of First Company will discontinue any impermissible activities within two Federal will be transferred to the FSLIC as receiver, and then to a years after consummation of the proposed transaction. newly-formed federal savings bank. 11. See Barnett Banks, Inc., 75 FEDERAL RESERVE BULLETIN 2. Through its acquisition of First Federal, Barnett will also (Order dated December 5, 1988). indirectly acquire First Federal's wholly owned insurance agency Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 83 Barnett, with total consolidated assets of $24.2 Board has determined previously that the operation of billion, is the largest commercial banking organization a thrift institution is closely related to banking, and in Florida.3 It operates 34 banking subsidiaries and reaffirms that determination in this Order.8 engages in numerous nonbanking activities, including In D.H. Baldwin & Co.,9 however, the Board detertrust company functions, check-guaranty services, mined that, as a general matter, the operation of a discount securities brokerage, and permissible credit savings and loan association is not a proper incident to related insurance activities. banking because the potential adverse effects of gen- First Federal, with total assets of $41.4 million, is erally allowing affiliations of banks and thrift instituthe fifty-eighth largest savings institution in Georgia. tions were not outweighed by the potential public First Federal operates one office in Summerville, benefits. In individual cases involving failing thrifts the Georgia. Board has found that the balance of public benefits By letter dated December 2, 1988, the Federal was favorable on the basis that the adverse effects of Home Loan Bank Board ("Bank Board") requested the affiliation would be overcome by the public benethat the Board act immediately upon the application in fits of preserving the failing thrift institution as a view of the emergency nature of the situation at First competitive entity in the market and ensuring public Federal, its deteriorating financial condition, the need confidence.10 The 1982 Garn-St Germain Act recogto restore public confidence in First Federal, and in nized the Board's authority under section 4(c)(8) of the order to stabilize the increasing potential cost to the BHC Act to approve such acquisitions by authorizing FSLIC.4 the Board in these cases to dispense with the usual In light of the condition of First Federal, the Board notice and hearing requirements of section 4(c)(8) promptly caused notice of the application to be pub- under appropriate emergency circumstances. lished in the Federal Register5 and determined that a Based upon the Board's review of the record, the shortened public comment period was necessary.6 The Board has determined that there are substantial benetime for filing comments has expired and the Board has fits to the public in this case that outweigh the generconsidered the application and all comments received alized adverse effects found by the Board in D.H. in light of the public interest factors set forth in section Baldwin. In particular, Barnett's acquisition of First 4(c)(8) of the BHC Act.7 Federal will provide First Federal with the financial Section 4(c)(8) of the BHC Act authorizes a bank and managerial resources to enable it to continue its holding company to engage or acquire a company that operations and its service to the convenience and engages in activities determined by the Board to be needs of its community. "so closely related to banking or managing or control- As the Board previously has noted, bank holding ling banks as to be a proper incident thereto." The companies contemplating expansion proposals are expected to maintain consolidated capital levels significantly above the minimums set forth in the Board's subsidiary, Summerville Service, Inc., Summerville, Georgia ("Com- Capital Adequacy Guidelines and without undue relipany"). Barnett has committed that Company will engage in only ance on intangibles, particularly goodwill. In that those insurance activities permissible under the Board's Regulation Y. 3. Asset data are as of June 30, 1988. regard, Barnett is a strongly capitalized institution, 4. The Bank Board has indicated that First Federal has incurred and will remain so on a consolidated basis upon significant operating losses over a prolonged period, and has negative capital of $3.68 million, as of June 30, 1988. consummation of the proposal. Moreover, in accord- 5. Notice of the application, providing an opportunity for interested ance with its prior rulings in this area, the Board third parties to submit comments, was also published in newspapers of expects that Barnett will cause First Federal to general circulation in Summerville and Atlanta, Georgia, and Jacksonville, Florida. achieve and maintain levels of capital consistent with 6. The Board is authorized by statute to waive or shorten the usual those applying to banking organizations generally. notice and comment period under section 4 in the case of failing thrift acquisitions, if the Board, with the concurrence of the primary Federal regulator of the thrift being acquired, determines that an emergency exists which requires the Board to act immediately on the application. 12 U.S.C. § 1843(c)(8); 12 C.F.R. § 225.23(i). The 8. See, e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 724 (1986); FHLBB has concurred in the Board's finding that an emergency exists First Pacific Investments Limited, 72 FEDERAL RESERVE BULLETIN requiring immediate action. 342 (1986); F.N.B. Corporation, 71 FEDERAL RESERVE BULLETIN 340 7. The Board received one comment on the application, from (1985); Old Stone Corporation, 69 FEDERAL RESERVE BULLETIN 812 Farmers & Merchants Bank, Summerville, Georgia ("F&M"). F&M (1983); Interstate Financial Corp., 68 FEDERAL RESERVE BULLETIN argued that Baraett's acquisition of First Federal would result in 316 (1982); D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 decreased competition in the Chattooga Area banking market. As (1977). discussed below, the Board has considered the effect on competition 9. D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 of the proposal, and concluded that consummation of the proposal (1977). The Board has invited public comment on a proposal to would not have a significant adverse effect on competition in the reexamine this position. 52 Federal Register 36,041 (1987). relevant market. Indeed, the proposal would have a beneficial impact 10. See, e.g., F.N.B. Corporation, supra; The Chase Manhattan on competition by ensuring the continued operation of First Federal as Corporation, 71 FEDERAL RESERVE BULLETIN 462 (1985); Interstate a viable institution. Financial Corp., supra. 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84 Federal Reserve Bulletin • Februrarv 1989 First Federal operates in the Chattooga Area bank- process this application under the emergency thrift ing market.11 Barnett does not control a depository acquisition provisions of the Garn-St Germain Act, institution in that market. Accordingly, the Board has but under another provision of the Savings and Loan determined that consummation of this proposal would Holding Company Amendments ("S&LHC Act") not have a significant adverse effect on competition. (12 U.S.C. § 1729(f)). To guard against possible adverse effects of affili- While the branching restriction may not be required ation between a banking organization and a savings under the S&LHC Act, the Board believes that it bank, the Board conditions its approval as follows: continues to be appropriate under the BHC Act. 1. Barnett will operate First Federal as a federal Commencing in 1982 (prior to the enactment of the savings bank having as its primary purpose the Garn-St Germain Act) and continuing to the present, provision of residential housing credit. First Federal the Board has allowed emergency thrift acquisitions as will limit its activities to those currently permitted to an exception to its D.H. Baldwin doctrine under thrift institutions under the Home Owners' Loan certain limitations, including the branching restriction Act, but shall not engage in any activity prohibited noted above. The branching restriction was estabto bank holding companies and their subsidiaries lished in order to minimize the impact of bank holding under section 4(c)(8) of the BHC Act. company thrift acquisitions on the authority of a state 2. First Federal will not establish or operate a to limit the expansion of financial institutions within its remote service unit at any location outside of Geor- borders. The Board was also concerned with the gia. competitive impact bank holding company thrift acqui- 3. First Federal will not establish or operate sitions could have on local commercial banking orgabranches at locations not permissible for national or nizations, which, unlike thrift institutions, could be state banks located in Georgia. limited in their ability to branch. That concern is 4. Barnett shall not change First Federal's name to heightened where federal assistance has been provided any title that might confuse the public regarding its to the bank holding company in order to facilitate its status as a nonbank thrift institution. acquisition of the thrift. 5. First Federal will not convert its charter to that of The legislative history of the 1982 Garn-St Germain a national or state commercial bank without the Act evidences a clear Congressional policy of promot- Board's prior approval. ing competitive equality between branches of thrifts acquired by banks with federal assistance and Barnett has requested that the Board not limit the branches of commercial banks.13 Accordingly, Conbranching ability of First Federal to that permitted a gress established specific policies for handling federcommercial bank in Georgia. Under Georgia law, ally assisted emergency thrift acquisitions by bank banks generally may only branch within their home holding companies, such as this, that limit the acquired counties. Ga. Code Ann. §§ 7-1-601 (1988).12 In this thrift's branching. The Board finds no compelling case, the Georgia Department of Banking and Finance reason to deviate from those policies in this case. has conditioned its approval of Barnett's acquisition Barnett also has proposed to rename First Federal on a requirement that First Federal not branch beyond "Barnett Bank, a Federal Savings Bank". In that those areas permissible for commercial banks in regard, Barnett has applied to acquire and operate Georgia. First Federal as a thrift and not as a bank. The Board In enacting the emergency thrift acquisition provi- has, however, required in previous thrift acquisitions sions of the 1982 Garn-St Germain Act, Congress that any name proposed for an acquired thrift not blur imposed a series of restrictions and limitations on the the distinction between banking and nonbanking suboperation of thrift institutions acquired by bank hold- sidiaries of bank holding companies. ing companies with federal assistance, including a The Board does not believe that this case presents limitation that the acquired thrift "may retain and any facts which would justify departing from past operate any existing branch or branches—but other- practice, particularly in view of the fact that Barnett wise shall be subject to the conditions upon which a national bank may establish and operate branches in the state in which the thrift is located." 12 U.S.C. 13. See, e.g., Financial Institutions Restructuring and Services Act § 1730a(m)(5)(A). The Bank Board has chosen not to of 1981: Hearings on S.1686, S.1703, S.1720, and S.1721 Before the Senate Committee on Banking, Housing, and Urban Affairs, 97th Cong. 1st Sess. 215 (1981): "This [branching restriction] assures the acquiring institution will not gain competitive advantage over a bank 11. The Chattooga Area banking market is approximated by Chat- or bank holding company, because it has acquired an institution which tooga and Floyd Counties in Georgia. has greater branching powers" (Remarks of Mr. Bianchi, President, 12. A federally-chartered thrift institution is not limited in its Conference of State Bank Supervisors). See also id. at 309, 386-387; branching power in Georgia. and S. Rep. No. 97-536 at 6-7. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 85 currently controls a bank subsidiary in Georgia named the other hand, I would note that First Federal is a Barnett Bank of Atlanta. Barnett Bank of Atlanta thrift institution and not a commercial bank, and I am currently operates 15 offices in Cobb and Fulton concerned that the branching restriction will, in the counties in Georgia. Accordingly, the Board's ap- future, diminish the attractiveness of failing thrift proval is conditioned on Barnett's not changing the acquisitions for bank holding companies. name of First Federal as proposed. I would also allow Barnett to rename First Federal, The Board concludes that consummation of the "Barnett Bank, a Federal Savings Bank". The proposal, subject to the conditions set out above, FHLBB has expressed the opinion that the name would not result in conflicts of interests, unsound change is consistent with that agency's regulations. banking practices, decreased or unfair competition, Moreover, many thrift institutions that are not owned undue concentration of resources, or other adverse by bank holding companies have adopted names that effects. contain the word "bank" and that identify the thrift as Based upon the foregoing and other facts and cir- a federal savings bank. In these circumstances I becumstances reflected in the record, the Board has lieve Barnett's proposed name change for First Feddetermined that the acquisition of First Federal by eral is not likely to confuse the public regarding that Barnett would result in substantial and compelling institution's status as a thrift, and is consistent with public benefits that are sufficient to outweigh any the standards the Board must apply under the Bank adverse effects that may reasonably be expected to Holding Company Act. Accordingly, I would approve result from this proposal. Accordingly, the application the application and permit the name change proposed is approved subject to the conditions described in this by Barnett. Order, and the record of the application. December 5, 1988 The Board's decision in this case is subject to the conditions set forth in Regulation Y, including sections Citicorp 225.4(d) and 225.23(b), and to the Board's authority to New York, New York require such modification or termination of the activities of a holding company or any of its subsidiaries as Order Approving Acquisition of a Federal Savings the Board finds necessary to assure compliance with, and Loan Association or to prevent evasion of, the provisions and purposes of the BHC Act and the Board's regulations and orders Citicorp, New York, New York, a bank holding comissued thereunder. This transaction shall not be con- pany within the meaning of the Bank Holding Comsummated later than three months after the effective pany Act (the "BHC Act") (12 U.S.C. § 1841 date of this Order, unless that period is extended for et seq.), has applied pursuant to section 4(c)(8) of the good cause by the Board or by the Federal Reserve BHC Act and section 225.23 of the Board's Regulation Bank of Atlanta, pursuant to delegated authority. Y (12 C.F.R. § 225.23), for Citicorp Mortgage, Inc., By order of the Board of Governors, effective St. Louis, Missouri, a wholly owned subsidiary of December 5, 1988. Citicorp, to acquire all of the voting shares of Glen Ellyn Savings and Loan Association, A Federal Savings and Loan Association, Glen Ellyn, Illinois ("Glen Voting for this action: Chairman Greenspan and Governors Johnson, Seger, Angell, Kelley, and La Ware. Absent and not Ellyn").1 Glen Ellyn is a failed thrift institution in voting: Governor Heller. receivership that will be merged into and operated as a branch of Citicorp Savings of Illinois, A Federal JAMES MCAFEE Savings and Loan Association, Chicago, Illinois Associate Secretary of the Board ("Citicorp Savings") upon consummation of the proposed acquisition. Concurring Statement of Governor Seger Citicorp, with total consolidated assets of $209.2 billion, is the largest commercial banking organization I concur in the Board's decision to approve this application. I am concerned, however, regarding the requirement that First Federal's future branching be 1. Glen Ellyn currently operates as a mutual thrift institution and limited to that of a commercial bank in Georgia. I will be converted to a federal stock savings and loan association on a recognize that the Board has consistently imposed the voluntary supervisory basis. Glen Ellyn is qualified for such a conversion under Federal Home Loan Bank Board regulations (12 C.F.R. branching limitation in past failing thrift acquisitions, § 563b.24), because its liabilities exceed its assets under generally that such limitation is required by the Garn-St Ger- accepted accounting principles and, upon consummation of the promain Act, and that the state of Georgia has chosen to posed transaction, Glen Ellyn will become a viable entity under 12 C.F.R. § 563b.26. Glen Ellyn will retain its Federal Savings and limit branching by commercial banks in that state. On Loan Insurance Corporation ("FSLIC") deposit insurance. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • Februrarv 1989 in New York.2 It presently operates nine banking In D.H. Baldwin & Co.,6 however, the Board detersubsidiaries. mined that, as a general matter, the operation of a Glen Ellyn, with total assets of $71.3 million, is the savings and loan association is not a proper incident to 148th largest of 252 savings institutions in Illinois, and banking because the potential adverse effects of genoperates one office in the state.3 erally allowing affiliations of banks and thrift institu- By letter dated December 16, 1988, the Federal tions were not outweighed by the potential public Home Loan Bank Board ("Bank Board") requested benefits. In individual cases involving failing thrifts, that the Board approve this application to acquire Glen the Board has found that the balance of public benefits Ellyn under the Bank Board's Expedited Case Proc- was favorable on the basis that the adverse effects of essing Program for failing thrift institutions. The Bank the affiliation would be overcome by the public bene- Board urged the Board to approve this application in fits of preserving the failing thrift institution as a order to restore public confidence in Glen Ellyn, competitive entity in the market and ensuring public maintain confidence in the savings and loan industry confidence.7 The 1982 Garn-St Germain Act recoggenerally, and stabilize the daily increasing potential nized the Board's authority under section 4(c)(8) of the cost to the FSLIC. The Bank Board based its request BHC Act to approve such acquisitions by authorizing on both the deteriorating and volatile condition of Glen the Board in these cases to dispense with the usual Ellyn, as well as on the substantial public benefits of notice and hearing requirements of section 4(c)(8) the proposal, including the significant and stabilizing under appropriate emergency circumstances. capital injections proposed by Citicorp and the Based upon the Board's review of the record, the FSLIC. Board has determined that there are substantial bene- In light of the condition of Glen Ellyn, the Board fits to the public in this case that outweigh the generpromptly caused notice of the application to be pub- alized adverse effects found by the Board in D.H. lished in the Federal Register (53 Federal Register Baldwin. In particular, Citicorp's acquisition of Glen 44,666 (1988)) and determined that a shortened public Ellyn will provide Glen Ellyn with the financial and comment period was necessary.4 The time for filing managerial resources to enable it to continue its opercomments has expired, and the Board has considered ations and its service to the convenience and needs of the application and all comments received in light of its community. the public interest factors set forth in section 4(c)(8) of As the Board previously has noted, bank holding the BHC Act. companies contemplating expansion proposals are ex- Section 4(c)(8) of the BHC Act authorizes a bank pected to maintain consolidated capital levels signifiholding company to engage in, or acquire a company cantly above the minimums set forth in the Board's that engages in, activities determined by the Board to Capital Adequacy Guidelines and without undue relibe "so closely related to banking or managing or ance on intangibles, particularly goodwill. In that controlling banks as to be a proper incident thereto." regard, Citicorp is an adequately capitalized institu- The Board has determined previously that the opera- tion, and, because this transaction will not result in a tion of a thrift institution is closely related to banking, diminution of its capital, it will remain so on a consoland reaffirms that determination in this Order.5 idated basis upon consummation of the proposal. Moreover, in accordance with its prior rulings in this area, the Board expects that Citicorp will cause Glen Ellyn to achieve and maintain levels of capital consistent with those applying to banking organizations 2. Asset data are as of September 30, 1988. generally as soon as possible, and in any case within 3. Asset data are as of June 30, 1988. one year.8 4. The Board is authorized by statute and regulation to waive or shorten the usual notice and comment period, as well as the hearing The proposed acquisition would not substantially requirements normally accorded section 4 applications, in the case of lessen or otherwise decrease competition in any relefailing thrift acquisitions. Under these provisions, the Board is re- vant market. On the contrary, the acquisition would quired to determine, with the concurrence of the primary Federal regulator of the thrift being acquired, that an emergency exists which have the substantial beneficial effect of preserving requires the Board to act immediately on an application to acquire a failing thrift institution. 12 U.S.C. § 1843(c)(8); 12 C.F.R. § 225.23(i). The Bank Board has concurred that an emergency exists and has requested that the Board act immediately on the application. 6. D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 5. See, e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 724 (1986); (1977). The Board has invited public comment on a proposal to First Pacific Investments Limited, 72 FEDERAL RESERVE BULLETIN reexamine this position. 52 Federal Register 36,041 (1987). 342 (1986); F.N.B. Corporation, 71 FEDERAL RESERVE BULLETIN 340 7. See, e.g., F.N.B. Corporation, supra; The Chase Manhattan (1985); Old Stone Corporation, 69 FEDERAL RESERVE BULLETIN 812 Corporation, 71 FEDERAL RESERVE BULLETIN 462 (1985); Interstate (1983); Interstate Financial Corp., 68 FEDERAL RESERVE BULLETIN Financial Corp., supra. 316 (1982); D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 8. See First Bancorporation of Ohio, 74 FEDERAL RESERVE BUL- (1977). LETIN 817 (1988). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 87 Glen Ellyn as an effective competitor. In that regard, would not result in conflicts of interests, unsound both Citicorp Savings and Glen Ellyn engage in de- banking practices, decreased or unfair competition, posit taking and lending activities within the Chicago, undue concentration of resources, or other adverse Illinois banking market.9 In view of Glen Ellyn's small effects. market share, the unconcentrated nature of the market Citicorp's previous acquisition of Citicorp Savings and the de minimis increase in concentration resulting and its application to acquire Glen Ellyn were made from this proposal, the deteriorating condition of Glen pursuant to section 408(m) of the National Housing Ellyn, and the fact that numerous other bank and thrift Act ("section 408(m)").12 Section 408(m) and the institutions would remain in the market, the Board Board's previous approval restrict Citicorp Savings concludes that the acquisition would have no substan- from establishing branches in Illinois at locations not tial adverse effect on existing competition in the Chi- permissible for national or state banks. A recently cago market. In addition, the Board concludes that enacted exception to Illinois bank branching restricconsummation of this proposal would not have a tions provides that the main office of a bank acquired significant adverse effect on probable future competi- by merger with another bank may be operated as a tion in any relevant market. branch of the acquiring bank.13 Correspondingly, To guard against possible adverse effects of affili- Citicorp proposes to operate Glen Ellyn's only office ation between a banking organization and a savings as a branch of Citicorp Savings after Glen Ellyn is and loan association, the Board conditions its approval acquired by merger. The Board has requested the as follows: views of the Illinois Commissioner of Banks and Trust Companies on the permissibility of the proposal under 1. Citicorp will operate Glen Ellyn as a federal Illinois law and has received no objections. Accordsavings and loan association having as its primary ingly, the Board concludes that approval of this applipurpose the provision of residential housing credit. cation is consistent with the provisions of section Glen Ellyn will limit its activities to those currently 408(m). permitted to thrift institutions under the Home Owners' Loan Act, but shall not engage in any activity Based upon the foregoing and other facts and cirprohibited to bank holding companies and their cumstances reflected in the record, the Board has subsidiaries under section 4(c)(8) of the BHC Act.10 determined that the acquisition of Glen Ellyn by 2. Glen Ellyn will not establish or operate a remote Citicorp would result in substantial and compelling service unit at any location outside of Illinois. public benefits that are sufficient to outweigh any 3. Glen Ellyn will not establish or operate branches adverse effects that may reasonably be expected to at locations not permissible for national banks lo- result from this proposal. Accordingly, the application cated in Illinois. is approved subject to the conditions described in this 4. Citicorp shall not change Glen Ellyn's name to Order and the record of the application. any title that might confuse the public regarding its The Board's decision in this case is subject to the status as a nonbank thrift institution.11 conditions set forth in Regulation Y, including sections 5. Glen Ellyn will not convert its charter to that of a 225.4(d) and 225.23(b), and to the Board's authority to national or state commercial bank without the require such modification or termination of the activ- Board's prior approval. ities of a holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, The Board concludes that consummation of the or to prevent evasion of, the provisions and purposes proposal, subject to the conditions set out above, of the BHC Act and the Board's regulations and orders issued thereunder. This transaction shall not be consummated later than three months after the effective date of this Order, unless that period is extended for 9. The Chicago, Illinois banking market is approximated by Cook, DuPage and Lake counties in Illinois. Within the Chicago market, good cause by the Board or by the Federal Reserve Citicorp Savings is the fifth largest depository institution among banks Bank of New York, pursuant to delegated authority. and thrift institutions in the market with total deposits of $3.8 billion, representing approximately 4.0 percent of market deposits in such By order of the Board of Governors, effective institutions. Glen Ellyn is the 189th largest depository institution December 19, 1988. among banks and thrifts in the market, with total deposits of $71.0 million, representing less than one percent of the total deposits in banks and thrifts in the market. Market data are as of June 30, 1987. 10. These limitations also apply to Glen Ellyn's wholly owned 12. Section 408(m) was enacted by section 123 of the Garn-St subsidiary, Trust Company of Glen Ellyn ("Company"). Citicorp has Germain Act of 1982, and is codified at 12 U.S.C. § 1730a(m). committed to divest Company's real estate investments within two Citicorp, 70 FEDERAL RESERVE BULLETIN 149, 151 (1984). years from the date of consummation of this proposal, and will not 13. This exception provides that a "continuing bank" may "conundertake any new projects or investments during this period. tinue, maintain and operate the main banking premises and facilities of 11. See Barnett Banks, Inc., 75 FEDERAL RESERVE BULLETIN any merging bank." 111. Ann. Stat. ch. 17, para. 311(15)(g) (Smith- (Order dated December 5, 1988). Hurd, West Supp. 1988). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Federal Reserve Bulletin • Februrarv 1989 Voting for this action: Chairman Greenspan and Governors company that engages in, activities determined by the Johnson, Angell, Heller, Kelley, and LaWare. Absent and Board to be "so closely related to banking or managnot voting: Governor Seger. ing or controlling banks as to be a proper incident thereto." The Board has determined previously that JAMES MCAFEE the operation of a thrift institution is closely related to Associate Secretary of the Board banking, and reaffirms that determination in this Order.3 Michigan National Corporation In D.H. Baldwin & Co.,4 however, the Board deter- Farmington Hills, Michigan mined that, as a general matter, the operation of a savings and loan association is not a proper incident to Order Approving Acquisition of a Federal Savings banking because the potential adverse effects of genand Loan Association erally allowing affiliations of banks and thrift institutions were not outweighed by the potential public Michigan National Corporation, Farmington Hills, benefits. In individual cases involving failing thrifts, Michigan ("Michigan National"), a bank holding comthe Board has found that the balance of public benefits pany within the meaning of the Bank Holding Comwas favorable on the basis that the adverse effects of pany Act (the "BHC Act") (12 U.S.C. § 1843(c)(8)), the affiliation would be overcome by the public benehas applied pursuant to section 4(c)(8) of the BHC fits of preserving the failing thrift institution as a Act and section 225.23 of the Board's Regulation Y competitive entity in the market and ensuring public (12 C.F.R. § 225.23), to acquire all of the voting confidence.5 The 1982 Garn-St Germain Act recogshares of Beverly Hills Savings, A Federal Savings nized the Board's authority under section 4(c)(8) of the and Loan Association, Beverly Hills, California BHC Act to approve such acquisitions by authorizing ("Beverly Hills Savings"), an insolvent thrift instituthe Board in these cases to dispense with the usual tion. Upon consummation of the proposal, Beverly notice and hearing requirements of section 4(c)(8) Hills Savings will be operated as a subsidiary of under appropriate emergency circumstances. Michigan National.1 After considering all the facts and circumstances in Michigan National, with assets in Michigan of $8.4 this case, the Board has concluded that an emergency billion, is the third largest commercial banking organisituation exists at Beverly Hills Savings that requires zation in Michigan. It presently operates four banking the Board to act immediately on this application, and subsidiaries. the Bank Board has concurred in this finding. Accord- Beverly Hills Savings, with total assets of $1.4 ingly, the Board has, under the authority provided in billion, is the 34th largest savings institution in Calisection 118 of the Garn-St Germain Act, dispensed fornia, and operates six branches in the state.2 with the notice and hearing requirements of section By letter dated December 30, 1988, the Federal 4(c)(8) with respect to this application.6 Home Loan Bank Board ("Bank Board") requested that the Board approve this application to acquire Beverly Hills Savings. The Bank Board urged the Board to approve this application in order to restore public confidence in Beverly Hills Savings, maintain 3. See, e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 724 (1986); First Pacific Investments Limited, 72 FEDERAL RESERVE BULLETIN confidence in the savings and loan industry generally, 342 (1986); F.N.B. Corporation, 71 FEDERAL RESERVE BULLETIN 340 and stabilize the daily increasing potential cost to the (1985); Old Stone Corporation, 69 FEDERAL RESERVE BULLETIN 812 FSLIC. The Bank Board based its request on both the (1983); Interstate Financial Corp., 68 FEDERAL RESERVE BULLETIN 316 (1982); D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 deteriorating and volatile condition of Beverly Hills (1977). Savings, and on the substantial public benefits of the 4. D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 proposal, including the significant and stabilizing cap- (1977). The Board has invited public comment on a proposal to reexamine this position. 52 Federal Register 36,041 (1987). ital injections proposed by Michigan National and the 5. See, e.g., F.N.B. Corporation, supra; The Chase Manhattan FSLIC. Corporation, 71 FEDERAL RESERVE BULLETIN 462 (1985); Interstate Financial Corp., supra. Section 4(c)(8) of the BHC Act authorizes a bank 6. The Board is authorized by statute and regulation to waive or holding company to engage in, or acquire and retain a shorten the usual notice and comment period, as well as the hearing requirements normally accorded section 4 applications, in the case of failing thrift acquisitions. Under these provisions, the Board is required to determine, with the concurrence of the primary Federal 1. Beverly Hills Savings currently operates as a mutual thrift regulator of the thrift being acquired, that an emergency exists which institution and will be converted to a federal stock savings association requires the Board to act immediately on an application to acquire a on a supervisory basis with assistance from the Federal Savings and failing thrift institution. 12 U.S.C. § 1843(c)(8); 12 C.F.R. § 225.23(i). Loan Insurance Corporation (the "FSLIC"). Beverly Hills Savings The Board has waived the notice and hearing requirements of section will retain its FSLIC deposit insurance. 4(c)(8) in similar circumstances. First Pacific Investments Limited, 2. Asset data are as of June 30, 1988. supra; F.N.B. Corporation, supra. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 89 Based upon the Board's review of the record, the 1. Michigan National will operate Beverly Hills Board has determined that there are substantial bene- Savings as a federal savings and loan association fits to the public in this case that outweigh the gener- having as its primary purpose the provision of alized adverse effects found by the Board in D.H. residential housing credit. Beverly Hills Savings will Baldwin. In particular, Michigan National's acquisi- limit its activities to those currently permitted to tion of Beverly Hills Savings will provide Beverly thrift institutions under the Home Owners' Loan Hills Savings with the financial and managerial re- Act, but shall not engage in any activity prohibited sources to enable it to continue its operations and its to bank holding companies and their subsidiaries service to the convenience and needs of its commu- under section 4(c)(8) of the BHC Act.9 nity. 2. Beverly Hills Savings will not establish or operate As the Board previously has noted, bank holding a remote service unit at any location outside of companies contemplating expansion proposals are ex- California. pected to maintain consolidated capital levels signifi- 3. Beverly Hills Savings will not establish or operate cantly above the minimums set forth in the Board's branches at locations not permissible for national Capital Adequacy Guidelines and without undue reli- banks located in California. ance on intangibles, particularly goodwill. In evaluat- 4. Beverly Hills Savings will be operated as a ing such a proposal, the Board will consider, among separate, independent, profit-oriented corporate enother factors, the effect of the acquisition on the tity and shall not be operated in tandem with any tangible primary capital of the applicant and the ac- other subsidiary of Michigan National. Michigan quired institution. National and Beverly Hills Savings will limit their Michigan National's primary capital on a tangible operations to effect this condition and will observe basis is above levels specified in the Board's Capital the following conditions: Adequacy Guidelines. While the proposal would re- a. No banking or other subsidiary of Michigan duce Michigan National's tangible primary capital, its National will link its deposit-taking activities to capital position would continue to be well in excess of accounts at Beverly Hills Savings in a sweeping minimum requirements under the Guidelines, and arrangement or similar arrangement. Michigan National has indicated that it plans to restore b. Neither Michigan National nor any of its subits capital position by internal capital generation or sidiaries will solicit deposits or loans for Beverly otherwise to take into account the expansion effected Hills Savings, nor shall Beverly Hills Savings through this acquisition. Moreover, in accordance solicit deposits or loans for any other subsidiary with its prior rulings in this area, the Board expects of Michigan National. that Michigan National will cause Beverly Hills Sav- 5. Michigan National shall not change Beverly Hills ings to achieve and maintain levels of capital consis- Savings' name to any title that might confuse the tent with those generally applying to banking organi- public regarding its status as a nonbank thrift zations as soon as possible, and in any case within one institution.10 year.7 6. Beverly Hills Savings will not convert its charter Beverly Hills Savings operates in the consolidated to that of a national or state commercial bank Los Angeles metropolitan banking market.8 Michigan without the Board's prior approval. National does not control a depository institution in 7. To the extent necessary to insure independent that market. Accordingly, the Board has determined operation of Beverly Hills Savings and prevent the that the acquisition would have no substantial adverse improper diversion of funds, there shall be no transeffect on existing competition in any market. In addi- actions between Beverly Hills Savings and Michigan tion, the Board concludes that consummation of this National or any of its subsidiaries without the prior proposal would not have a significant adverse effect on approval of the Federal Reserve Bank of Chicago. probable future competition in any relevant market. This limitation encompasses the transfer, purchase, To guard against possible adverse effects of affili- sale or loan of any assets or liabilities, but does not ation between a banking organization and a savings include infusions of capital from Michigan National, and loan association, the Board conditions its approval the payment of dividends by Beverly Hills Savings, as follows: or the sale of residential real estate loans from 7. See First Bancorporation of Ohio, 74 FEDERAL RESERVE BUL- 9. These limitations also apply to Beverly Hills Savings' service LETIN 817 (1988). corporation subsidiaries. 8. The consolidated Los Angeles metropolitan banking market is 10. See Barnett Banks, Inc., 75 FEDERAL RESERVE BULLETIN approximated by the Los Angeles RMA. (Order dated December 5, 1988). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 Federal Reserve Bulletin • Februrarv 1989 Beverly Hills Savings to any subsidiary of Michigan Bank"), the successor to Virginia Federal Savings and National. Loan Association, Richmond, Virginia ("Virginia Federal").1 The Board concludes that consummation of the MNC, with total consolidated assets of $17.8 billion, proposal, subject to the conditions set out above, is the largest commercial banking organization in would not result in conflicts of interests, unsound Maryland.2 It presently operates three banking subsidbanking practices, decreased or unfair competition, iaries. undue concentration of resources, or other adverse Virginia Federal, with total assets of $662 million, is effects. the tenth largest savings institution in Virginia, and Based upon the foregoing and other facts and cir- operates 16 full-service offices in the state.3 cumstances reflected in the record, the Board has By letter dated December 22, 1988, the Federal determined that the acquisition of Beverly Hills Sav- Home Loan Bank Board ("Bank Board") requested ings by Michigan National would result in substantial that the Board approve this application to acquire and compelling public benefits that are sufficient to Virginia Federal under the Bank Board's Expedited outweigh any adverse effects that may reasonably be Case Processing Program for failing thrift institutions. expected to result from this proposal. Accordingly, the The Bank Board stated that Virginia Federal is insolapplication is approved subject to the conditions de- vent and urged the Board to approve this application in scribed in this Order and the record of the application. order to restore public confidence in Virginia Federal, The Board's decision in this case is subject to the maintain confidence in the savings and loan industry conditions set forth in Regulation Y, including sections generally, and stabilize the daily increasing potential 225.4(d) and 225.23(b), and to the Board's authority to cost to the FSLIC. The Bank Board based its request require such modification or termination of the activ- on both the deteriorating and volatile condition of ities of a holding company or any of its subsidiaries as Virginia Federal, and on the substantial public benefits the Board finds necessary to assure compliance with, of the proposal, including the significant and stabilizor to prevent evasion of, the provisions and purposes ing capital injections proposed by MNC and the of the BHC Act and the Board's regulations and orders FSLIC. issued thereunder. This transaction shall not be con- In light of the condition of Virginia Federal, the summated later than three months after the effective Board promptly caused notice of the application to be date of this Order, unless that period is extended for published in the Federal Register (53 Federal Register good cause by the Board or by the Federal Reserve 49,230 (1988)). The time for filing comments has ex- Bank of Chicago, pursuant to delegated authority. pired, and the Board has considered the application By order of the Board of Governors, effective and all comments received in light of the public December 30, 1988. interest factors set forth in section 4(c)(8) of the BHC Act. Voting for this action: Chairman Greenspan and Governors Section 4(c)(8) of the BHC Act authorizes a bank Angell, Heller, Kelley, and LaWare. Absent and not voting: holding company to engage in, or acquire a company Governors Johnson and Seger. that engages in, activities determined by the Board to be "so closely related to banking or managing or WILLIAM W. WILES controlling banks as to be a proper incident thereto." Secretary of the Board The Board has determined previously that the operation of a thrift institution is closely related to banking, MNC Financial, Inc. and reaffirms that determination in this Order.4 Baltimore, Maryland Order Approving Acquisition of a Federal Savings 1. Virginia Federal currently operates as a mutual thrift institution and will be converted to a federal stock savings bank on a supervisory Bank basis. Virginia Federal will then be merged with and into Savings Bank, a de novo federal stock savings bank, and will retain its Federal MNC Financial, Inc., Baltimore, Maryland ("MNC"), Savings and Loan Insurance Corporation ("FSLIC") deposit insurance. a bank holding company within the meaning of the 2. Asset data are as of September 30, 1988. Bank Holding Company Act (the "BHC Act") 3. Asset data are as of June 30, 1988. (12 U.S.C. § 1841 et seq.), has applied pursuant 4. See, e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 724 (1986); First Pacific Investments Limited, 72 FEDERAL RESERVE BULLETIN to section 4(c)(8) of the BHC Act and section 225.23 342 (1986); F.N.B. Corporation, 71 FEDERAL RESERVE BULLETIN 340 of the Board's Regulation Y (12 C.F.R. § 225.23), (1985); Old Stone Corporation, 69 FEDERAL RESERVE BULLETIN 812 to acquire all of the voting shares of Virginia Fed- (1983); Interstate Financial Corp., 68 FEDERAL RESERVE BULLETIN 316 (1982); D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 eral Savings Bank, Richmond, Virginia ("Savings (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 91 In D.H. Baldwin & Co.,5 however, the Board deter- ally applying to banking organizations as soon as mined that, as a general matter, the operation of a possible, and in any case within one year.7 savings and loan association is not a proper incident to The proposed acquisition would not substantially banking because the potential adverse effects of gen- lessen or otherwise decrease competition in any releerally allowing affiliations of banks and thrift institu- vant market. On the contrary, the acquisition would tions were not outweighed by the potential public have the substantial beneficial effect of preserving benefits. In individual cases involving failing thrifts, Virginia Federal as an effective competitor. In view of the Board has found that the balance of public benefits the fact that MNC's bank subsidiaries and Virginia was favorable on the basis that the adverse effects of Federal operate in separate banking markets, the the affiliation would be overcome by the public bene- Board concludes that the acquisition would have no fits of preserving the failing thrift institution as a substantial adverse effect on existing competition in competitive entity in the market and ensuring public any market. Moreover, while both MNC and Virginia confidence.6 The 1982 Garn-St Germain Act recog- Federal offer mortgage lending in the Richmond banknized the Board's authority under section 4(c)(8) of the ing market, consummation of the proposal would have BHC Act to approve such acquisitions by authorizing a de minimis effect on existing competition. In addithe Board in these cases to dispense with the usual tion, the Board concludes that consummation of this notice and hearing requirements of section 4(c)(8) proposal would not have a significant adverse effect on under appropriate emergency circumstances. probable future competition in any relevant market. Based upon the Board's review of the record, the To guard against possible adverse effects of affili- Board has determined that there are substantial bene- ation between a banking organization and a savings fits to the public in this case that outweigh the gener- institution, the Board conditions its approval as folalized adverse effects found by the Board in D.H. lows: Baldwin. In particular, MNC's acquisition of Savings 1. MNC will operate Savings Bank as a federal Bank will provide Savings Bank with the financial and savings bank having as its primary purpose the managerial resources to enable it to continue its oper- provision of residential housing credit. Savings ations and its service to the convenience and needs of Bank will limit its activities to those currently perits community. mitted to thrift institutions under the Home Owners' As the Board previously has noted, bank holding Loan Act, but shall not engage in any activity companies contemplating expansion proposals are ex- prohibited to bank holding companies and their pected to maintain consolidated capital levels signifi- subsidiaries under section 4(c)(8) of the BHC Act.8 cantly above the minimums set forth in the Board's 2. Savings Bank will not establish or operate a Capital Adequacy Guidelines and without undue reli- remote service unit at any location outside of Virance on intangibles, particularly goodwill. In evaluat- ginia. ing such a proposal, the Board will consider, among 3. Savings Bank will not establish or operate other factors, the effect of the acquisition on the branches at locations not permissible for national tangible primary capital of the applicant and the ac- banks located in Virginia. quired institution. 4. MNC shall not change Savings Bank's name to MNC's primary capital on a tangible basis is above any title that might confuse the public regarding its levels specified in the Board's Capital Adequacy status as a nonbank thrift institution.9 Guidelines. While the proposal would reduce MNC's 5. Savings Bank will not convert its charter to that of tangible primary capital, its capital position would a national or state commercial bank without the continue to be well in excess of minimum require- Board's prior approval.10 ments under the Guidelines. Moreover, in accordance with its prior rulings in this area, the Board expects that MNC will cause Savings Bank to achieve and 7. See First Bancorporation of Ohio, 74 FEDERAL RESERVE BULmaintain levels of capital consistent with those gener- LETIN 817 (1988). 8. These limitations also apply to Savings Bank's seven wholly owned subsidiaries. MNC has committed to terminate any impermissible insurance activities of Savings Bank within two years of consummation of this proposal. During this two-year period, MNC will limit the insurance agency activities of Savings Bank and its subsidiaries to the renewal of existing policies and those credit-related insurance agency activities permitted under section 4(c)(8)(A) of the 5. D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 BHC Act. (1977). The Board has invited public comment on a proposal to 9. See Barnett Banks, Inc., 75 FEDERAL RESERVE BULLETIN reexamine this position. 52 Federal Register 36,041 (1987). (Order dated December 5, 1988). 6. See, e.g., F.N.B. Corporation, supra; The Chase Manhattan 10. See Citicorp (Fidelity Federal Savings and Loan Association), Corporation, 71 FEDERAL RESERVE BULLETIN 462 (1985); Interstate 68 FEDERAL RESERVE BULLETIN 656 (1982). The Board notes that Financial Corp., supra. MNC may acquire a bank in Virginia pursuant to relevant state law Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 Federal Reserve Bulletin • Februrarv 1989 The Board concludes that consummation of the "BHC Act") (12 U.S.C. § 1841 et seq.), has applied proposal, subject to the conditions set out above, pursuant to section 4(c)(8) of the BHC Act and section would not result in conflicts of interests, unsound 225.23 of the Board's Regulation Y (12 C.F.R. banking practices, decreased or unfair competition, § 225.23), to acquire all of the voting shares of First undue concentration of resources, or other adverse Federal Savings and Loan Association of Jacksonville, effects. Jacksonville, Florida ("First Federal"); and subse- Based upon the foregoing and other facts and cir- quently to acquire South Florida Savings, A Federal cumstances reflected in the record, the Board has Savings and Loan Association, Miami, Florida determined that the acquisition of Savings Bank by ("South Florida"), by merger with First Federal.1 MNC would result in substantial and compelling pub- Southeast, with total consolidated assets of $13.2 lic benefits that are sufficient to outweigh any adverse billion, is the third largest commercial banking organieffects that might reasonably be expected to result zation in Florida.2 It presently operates five banking from this proposal. Accordingly, the application is subsidiaries and engages in a number of nonbanking approved subject to the conditions described in this activities. Order and the record of the application. First Federal, with total assets of $1.2 billion, is the The Board's decision in this case is subject to the 25th largest savings institution in Florida. It currently conditions set forth in Regulation Y, including sections operates 18 branches in Florida and controls five 225.4(d) and 225.23(b), and to the Board's authority to service corporation subsidiaries. South Florida, with require such modification or termination of the activ- total assets of $133 million, is the 60th largest savings ities of a holding company or any of its subsidiaries as institution in Florida. It currently operates four the Board finds necessary to assure compliance with, branches in Florida and controls three service corpoor to prevent evasion of, the provisions and purposes ration subsidiaries.3 of the BHC Act and the Board's regulations and orders By letter dated December 14, 1988, the Federal issued thereunder. This transaction shall not be con- Home Loan Bank Board ("Bank Board") requested summated later than three months after the effective that the Board approve Southeast's application to date of this Order, unless that period is extended for acquire First Federal and South Florida. The Bank good cause by the Board or by the Federal Reserve Board stated that both thrifts are insolvent and have Bank of Richmond, pursuant to delegated authority. incurred significant operating losses. The Bank Board By order of the Board of Governors, effective urged the Board to approve this application in order to December 22, 1988. restore public confidence in the resulting thrift institu- Voting for this action: Chairman Greenspan and Governors 1. First Federal is currently operated as a mutual thrift institution, Angell, Heller, Kelley, and LaWare. Absent and not voting: and will be converted to a federal stock savings and loan association Governors Johnson and Seger. on a voluntary supervisory basis. First Federal is qualified for such a conversion under Federal Home Loan Bank Board regulations (12 C.F.R. § 563b.24), because its liabilities exceed its assets under JAMES MCAFEE generally accepted accounting principles and, upon consummation of Associate Secretary of the Board the proposed transaction, First Federal will become a viable entity under 12 C.F.R. § 563b.26 South Florida will then be merged with Southeast Banking Corporation and into First Federal in a supervisory merger with Federal Savings & Loan Insurance Corporation (the "FSLIC") assistance, pursuant to Miami, Florida an agreement to be entered into by the FSLIC, First Federal and Southeast. First Federal will retain its FSLIC deposit insurance. 2. Asset data are as of June 30, 1988. Order Approving Acquisition of Federal 3. The service corporation subsidiaries of First Federal engage in Savings and Loan Associations real estate investment and development, mortgage banking activities, insurance brokerage and agency activities, and advertising, marketing, promotional and public relation services on behalf of First Southeast Banking Corporation, Miami, Florida Federal. The service corporation subsidiaries of South Florida engage ("Southeast"), a bank holding company within the in real estate investment and development. meaning of the Bank Holding Company Act (the Southeast has committed to terminate any impermissible real estate development activities within two years of consummation of this proposal and will not undertake any new projects or investments during this period. Southeast has also committed that, within two years of consummation of its acquisition of First Federal, Southeast and section 3(d) of the BHC Act. Va. Code Ann. § 6.1-399 (1988); will divest or terminate its general insurance agency activities, unless 12 U.S.C. § 1842(d). In these situations, the Board has relied on the during such period Southeast receives approval pursuant to an appliconditions listed above to address the potential adverse effects rather cation under section 4(c)(8) of the BHC Act to retain such activities. than the more extensive tandem conditions applicable where the thrift During this two-year period or unless authorization is granted pursuto be acquired is located in a state in which the applicant bank holding ant to the BHC Act for broader activities, Southeast will limit the company may not acquire a bank. See Letter from William W. Wiles insurance agency activities of First Federal and its subsidiaries to the to Patrick Mulhern, Senior Vice President and General Counsel, renewal of existing policies and those credit-related insurance agency Citicorp (August 10, 1987). activities permitted under section 4(c)(8)(A) of the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 93 tion, maintain confidence in the savings and loan ts to the public in this case that outweigh the generalindustry generally, and stabilize the daily increasing ized adverse effects found by the Board in D.H. potential cost to the FSLIC. The Bank Board based its Baldwin. In particular, Southeast's acquisition of First request on both the deteriorating condition of the Federal and South Florida will provide them with the thrifts and the substantial public benefits of the pro- financial and managerial resources to enable them as a posal, including the significant and stabilizing capital combined entity to continue to serve the convenience injections proposed by Southeast and the FSLIC. and needs of their communities. Notice of the application, affording interested per- As the Board previously has noted, bank holding sons an opportunity to submit comments on the pro- companies contemplating expansion proposals are exposal, has been duly published (53 Federal Register pected to maintain consolidated capital levels signifi- 41,412 (1988)). The time for filing comments has ex- cantly above the minimums set forth in the Board's pired, and the Board has considered the application Capital Adequacy Guidelines and without undue reliand all comments received in light of the public ance on intangibles, particularly goodwill. In evaluatinterest factors set forth in section 4(c)(8) of the ing such a proposal, the Board will consider, among BHC Act. other factors, the effect of the acquisition on the Section 4(c)(8) of the BHC Act authorizes a bank tangible primary capital of the applicant and the acholding company to engage in or acquire a company quired institution. that engages in activities determined by the Board to Southeast's primary capital on a tangible basis is be "so closely related to banking or managing or above levels specified in the Board's Capital Adecontrolling banks as to be a proper incident thereto." quacy Guidelines. While the proposal would reduce The Board has determined previously that the opera- Southeast's tangible primary capital, its capital position of a thrift institution is closely related to banking, tion would continue to be well in excess of minimum and reaffirms that determination in this Order.4 requirements under the Guidelines, and Southeast has In D.H. Baldwin & Co.,5 however, the Board deter- indicated that it plans to restore its capital position by mined that, as a general matter, the operation of a internal capital generation or otherwise to take into savings and loan association is not a proper incident to account the expansion effected through this acquisibanking because the potential adverse effects of gen- tion. Moreover, the Board expects that Southeast will erally allowing affiliations of banks and thrift institu- cause First Federal to achieve and maintain levels of tions are not outweighed by the potential public ben- capital consistent with those applying to banking orefits. In individual cases involving failing thrifts, the ganizations generally as soon as possible, and in any Board has found that the balance of public benefits case within approximately one year.7 was favorable on the basis that the adverse effects of The proposed acquisitions would not substantially the affiliation would be overcome by the public bene- lessen competition in any relevant market. On the fits of preserving the failing thrift institution as a contrary, the acquisitions would have the substantial competitive entity in the market and ensuring public beneficial effect of preserving the resulting merged confidence.6 The 1982 Garn-St Germain Act recog- thrift institution as an effective competitor. In that nized the Board's authority under section 4(c)(8) of the regard, Southeast and South Florida engage in deposit BHC Act to approve such acquisitions by authorizing taking and lending activities within the Miami-Fort the Board in these cases to dispense with the usual Lauderdale banking market.8 In view of South Flonotice and hearing requirements of section 4(c)(8) rida's small market share and the de minimis increase under appropriate emergency circumstances. in concentration resulting from this proposal, the Based upon the Board's review of the record, the deteriorating condition of South Florida, and the fact Board has determined that there are substantial bene- that 141 other bank and thrift institutions would re- 4. See, e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 724 (1986); 1. See First Bancorporation of Ohio, 74 FEDERAL RESERVE BUL- First Pacific Investments Limited, 72 FEDERAL RESERVE BULLETIN LETIN 817 (1988). 342 (1986); F.N.B. Corporation, 71 FEDERAL RESERVE BULLETIN 340 8. The Miami-Fort Lauderdale banking market is approximated by (1985); Old stone Corporation, 69 FEDERAL RESERVE BULLETIN 812 Dade and Broward Counties. Within the Miami-Fort Lauderdale (1983); Interstate Financial Corp., 68 FEDERAL RESERVE BULLETIN banking market, Southeast is the largest depository institution among 316 (1982); D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 banks and thrift institutions in the market with total deposits of $4.9 (1977). billion, representing approximately 9.4 percent of market deposits in 5. D.H. Baldwin & Co., 63 FEDERAL RESERVE BULLETIN 280 such institutions. South Florida is the 40th largest depository institu- (1977). The Board has invited public comment on a proposal to tion among banks and thrifts in the market, with total deposits of reexamine this position. 52 Federal Register 36,041 (1987). $204.3 million, representing approximately 0.4 percent of the total 6. See, e.g., F.N.B. Corporation, supra; The Chase Manhattan deposits in banks and thrifts in the market. Upon consummation of the Corporation, 71 FEDERAL RESERVE BULLETIN 462 (1985); Interstate proposal, Southeast would control 9.8 percent of the total deposits of Financial Corp., supra. banks and thrifts in the market. Market data are as of June 30, 1986. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 Federal Reserve Bulletin • Februrarv 1989 main in the market, the Board concludes that the 5. First Federal will not convert its charter to that of acquisitions would have no substantial adverse effect a national or state commercial bank without the on existing competition in the Miami-Fort Lauderdale Board's prior approval. banking market. In the Jacksonville banking market, Southeast and The Board concludes that consummation of the First Federal engage in deposit taking and lending proposal, subject to the conditions set out above, activities.9 In view of the small increase in concentra- would not result in conflicts of interests, unsound tion resulting from this proposal, the deteriorating banking practices, unfair competition, undue concencondition of First Federal, and the fact that 23 other tration of resources, or other adverse effects. bank and thrift institutions would remain in the mar- Based upon the foregoing and other facts and cirket, the Board concludes that the acquisitions would cumstances reflected in the record, the Board has have no substantial adverse effect on existing compe- determined that the acquisition of First Federal and tition in the Jacksonville banking market. In addition, South Florida by Southeast would result in substantial the Board concludes that consummation of this pro- and compelling public benefits that are sufficient to posal would not have a significant adverse effect on outweigh any adverse effects that may reasonably be probable future competition in any relevant market. expected to result from this proposal. Accordingly, the Regarding the nonbanking activities of First Federal application is approved subject to the conditions deand South Florida, consummation of the proposal scribed in this Order, applicable Bank Board approvwould have a de minimis effect on existing competi- als, and the record of the application. tion, and there are numerous competitors for these The Board's decision in this case is subject to the services. conditions set forth in Regulation Y, including sections To guard against possible adverse effects of affili- 225.4(d) and 225.23(b), and to the Board's authority to ation between a banking organization and a savings require such modification or termination of the activand loan institution, the Board conditions its approval ities of a holding company or any of its subsidiaries as as follows: the Board finds necessary to assure compliance with, 1. Southeast will operate First Federal as a federal or to prevent evasion of, the provisions and purposes savings and loan association having as its primary of the BHC Act and the Board's regulations and orders purpose the provision of residential housing credit. issued thereunder. This transaction shall not be con- First Federal will limit its activities to those permit- summated later than three months after the effective ted to thrift institutions under the Home Owners' date of this Order, unless that period is extended for Loan Act, but shall not engage in any activity good cause by the Board or by the Federal Reserve prohibited to bank holding companies and their Bank of Atlanta, pursuant to delegated authority. subsidiaries under section 4(c)(8) of the BHC Act.10 By order of the Board of Governors, effective 2. First Federal will not establish or operate a December 15, 1988. remote service unit at any location outside of Florida. Voting for this action: Chairman Greenspan and Governors 3. First Federal will not establish or operate Johnson, Seger, Heller, Kelley, and LaWare. Absent and not branches at locations not permissible for national voting: Governor Angell. banks located in Florida. JAMES MCAFEE 4. Southeast shall not change First Federal's name Associate Secretary of the Board to any title that might confuse the public regarding its status as a nonbank thrift institution.11 The Fuji Bank, Limited Tokyo, Japan 9. The Jacksonville banking market is approximated by Duval County plus Orange Park in Clay County. Within the Jacksonville Order Approving Application to Acquire banking market, Southeast is the 7th largest depository institution among banks and thrift institutions in the market, with total deposits 24.9 Percent of the Shares of a Company Engaged of $235.1 million, representing approximately 2.9 percent of market in Certain Securities and Futures Activities deposits in such institutions. First Federal is the 4th largest depository institution among banks and thrifts in the market, with total deposits of $909.8 million, representing approximately 11.4 percent of the total The Fuji Bank, Limited, Tokyo, Japan ("Fuji"), a deposits in banks and thrifts in the market. Upon consummation of the registered bank holding company, has applied for the proposal, Southeast would control 14.3 percent of the total deposits of banks and thrifts in the market. Market data are as of June 30, 1986. Board's approval under section 4(c)(8) of the Bank 10. These limitations also apply to First Federal's service corpora- Holding Company Act ("BHC Act") (12 U.S.C. tion subsidiaries. § 1843(c)(8)), and section 225.21(a) of the Board's 11. See Barnett Banks, Inc., 75 FEDERAL RESERVE BULLETIN (Order dated December 5, 1988). Regulation Y, 12 C.F.R. § 225.21(a), to acquire 24.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 95 percent of the outstanding voting shares of Kleinwort Board has considered the application in light of the Benson Government Securities, Inc., Chicago, Illinois public interest factors set forth in section 4(c)(8) of the ("Company"). Fuji will acquire the shares from Klein- BHC Act. wort Benson Group pic, London, United Kingdom Fuji, with total consolidated assets equivalent to ("Kleinwort"), which currently owns 100 percent of approximately $326.4 billion, is the fifth largest bank- Company. Company engages in the following activi- ing organization in the world.3 Fuji owns a bank ties that the Board has determined by regulation to be subsidiary in New York City, and operates branches in closely related to banking and generally permissible New York and Chicago, and agencies in Los Angeles, for bank holding companies: Houston, San Francisco and Atlanta. Fuji engages in (1) underwriting and dealing in obligations of the various activities in the United States under sections United States, general obligations of states and their 4(c)(8) and 4(c)(9) of the BHC Act and the Board's political subdivisions, and other obligations ("bank- Regulations Y and K (12 C.F.R. Parts 225 and 211, eligible securities"), pursuant to 12 C.F.R. respectively). § 225.25(b)(16);1 In acting on Fuji's proposed acquisition, the Board (2) purchasing and selling futures, forward and op- must consider whether the standards enumerated in tions contracts for its own account on bank-eligible section 4(c)(8) of the BHC Act are satisfied. As noted securities for hedging purposes in accordance with above, the Company's activities have previously been 12 C.F.R. § 225.142; determined by the Board to be closely related to (3) providing portfolio investment advice and re- banking within the meaning of section 4(c)(8) of the search and furnishing general economic information BHC Act. The Board must also find that the proposed and advice, general economic statistical forecasting acquisition can reasonably be expected to produce services and industry studies pursuant to 12 C.F.R. benefits to the public that outweigh the possible ad- §§ 225.25(b)(4)(iii) and (iv) in connection with and as verse effects. 12 U.S.C. § 1843(c)(8). an incident to the proposed bank-eligible securities In prior decisions, the Board has expressed concern activities; and about joint ventures, particularly those between bank (4) acting as a futures commission merchant holding companies and securities firms. The Board has ("FCM") for affiliated and nonaffiliated persons in previously stated that such relationships could potenthe execution and clearance on major commodity tially lead to a matrix of relationships between coexchanges of futures contracts and options on fu- venturers that could break down the legally mandated tures contracts for bullion, foreign exchange, gov- separation of banking and commerce, create the posernment securities, certificates of deposit, and other sibility of conflicts of interest and concentration of money market instruments that a bank may buy resources that the BHC Act was designed to prevent, or sell in the cash market for its own account; and or impair or give the appearance of impairing, the providing investment advice to institutional custom- ability of the banking organization to function effecers in conjunction therewith as permitted by tively as an independent and impartial provider of 12 C.F.R. §§ 225.25(b)(18) and (19), respectively.2 credit.4 Further, joint ventures must be carefully analyzed for any possible adverse effects on competition In addition, Fuji has also applied for approval to and on the financial condition of the banking organiacquire indirectly through Company one percent of the zation involved in the proposal. The Board has also voting shares of Liberty Brokerage, Inc., New York, stated that such concerns are exacerbated where, as New York, an inter-dealer blind broker of government here, the joint venture involves a relationship between securities. a bank holding company and a securities firm that is Notice of the application, affording interested per- more than a passive investor, because such an arsons an opportunity to submit comments, has been rangement creates the potential for the mingling of duly published (53 Federal Register 26,663 (1988)). permissible and impermissible securities activities.5 The time for filing comments has expired, and the To address the possible adverse effects of Fuji's association with Company, Fuji has made a series of commitments which are consistent with prior Board 1. Company also engages in the following incidental activities: engaging in repurchase and reverse repurchase transactions and collateralized bank-eligible securities borrowing and lending transactions. 3. Asset data are as of March 31, 1988. Banking data are as of 2. Until Company becomes a registered FCM, Fuji proposes that December 31, 1987. Ranking is as of December 31, 1986. Company continue to receive customer orders to purchase and sell 4. See e.g., Independent Bankers Financial Corporation, 72 FEDfinancial contracts and pass them on to registered FCM's for execu- ERAL RESERVE BULLETIN 664 (1986); and Amsterdam-Rotterdam tion, clearing and settlement for a fee. Company would not take a Bank, N.V., 70 FEDERAL RESERVE BULLETIN 835 (1984). position as principal in such contracts. 5. Id. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 Federal Reserve Bulletin • Februrarv 1989 decisions in this area. These commitments require a made it difficult to compare the capital positions of separation between the activities of the bank holding domestic and foreign banks. The Board, however, company and the impermissible activities of the non- recently adopted a proposal to supplement its considbanking joint venture partner (in this case Klein wort). eration of capital adequacy with a risk-based system While Fuji's commitments are slightly different than that has been agreed to by the member countries of the in prior cases, in light of the temporary nature of the Basle Committee on Banking Regulations and Superjoint venture, the Board believes that the commit- visory Practices and the other domestic federal bankments adequately separate Company's permissible se- ing agencies.8 The Japanese Ministry of Finance in curities activities from the impermissible activities of April of this year acted to implement for Japanese Kleinwort's other subsidiaries. In this case, Fuji states banking organizations the risk-based capital framethat the parties do not intend to enter into the trans- work developed by the Basle Committee. The Board action for the purpose of being in business together. considers the Basle Committee proposal an important Rather, the parties expect that either Fuji or Kleinwort step toward a more consistent and equitable internawill divest its interest in Company by year-end 1989, tional standard for assessing capital adequacy. or shortly thereafter. In this case, the primary capital ratio of Fuji, as Accordingly, the Board concludes that no adverse publicly reported, is well below the 5.5 percent minieffects would be likely to result from the proposal mum level specified in the Board's Capital Adequacy which would warrant denial of the application. Guidelines. After making adjustments to reflect Japa- With regard to competitive issues, Fuji and Com- nese banking and accounting practices, however, inpany do not currently compete with each other in any cluding consideration of a portion of the unrealized market either in the United States or abroad. Accord- appreciation in Fuji's portfolio of equity securities ingly, consummation of the proposed transaction consistent with the principles in the Basle capital would not eliminate any existing competition between framework, Fuji's capital ratio meets United States Fuji and Company. standards. In every case involving a nonbanking acquisition by The Board has also considered several additional a bank holding company under section 4 of the BHC factors that mitigate its concern in this case. The Act, the Board considers the financial condition and Board notes that the application involves nonbanking resources of the applicant and its subsidiaries and the activities that require a small commitment of capital effect of the transaction on these resources.6 In ac- and that Fuji's bank in the United States is among the cordance with the principles of national treatment and more strongly capitalized banking organizations in the competitive equity, the Board has stated that it ex- United States. The Board notes further that Fuji is in pects a foreign bank to meet the same general stan- compliance with the capital and other financial redards of financial strength as domestic bank holding quirements of Japanese banking organizations. In this companies and to be able to serve as a source of regard, the Board has considered as favorable factors strength to its United States banking operations.7 In that, in anticipation of implementation of the Basle considering applications of foreign banking organiza- Committee risk-based capital framework, Fuji has, tions, the Board has noted that foreign banks operate through the issuance of common stock and retention of outside the United States in accordance with different earnings increased its equity capital by almost $1.2 regulatory and supervisory requirements, accounting billion in its latest fiscal year and that Fuji's capital principles, asset quality standards, and banking prac- improvement program is consistent with meeting the tices and traditions, and that these differences have standards in the Basle Committee capital framework for 1990 and 1992. Based on these and other facts of record, the Board concludes that financial considerations are consistent 6. 12 C.F.R. § 225.24; Bayerische Vereinsbank AG, 73 FEDERAL RESERVE BULLETIN 155, 156 (1987). with approval of the application. 7. Toyo Trust and Banking Co., Ltd., 74 FEDERAL RESERVE Consummation of Fuji's proposal would provide BULLETIN 623 (1988); Taiyo Kobe Bank, Ltd., 74 FEDERAL RESERVE BULLETIN 621 (1988); The Long-Term Credit Bank of Japan, Limited, increased convenience to Company's customers and 74 FEDERAL RESERVE BULLETIN 573 (1988); The Sanwa Bank, Lim- gains in efficiency. In addition, the Board expects that ited, 74 FEDERAL RESERVE BULLETIN 578 (1988); Sumitomo Trust & the de novo entry of Fuji into the market for these Banking Co., Ltd., 73 FEDERAL RESERVE BULLETIN 749 (1987); Ljubljanska Banka-Associated Bank, 12 FEDERAL RESERVE BULLE- services would increase the level of competition TIN 489 (1986); The Mitsubishi Trust and Banking Corporation, 72 among providers of these services. Accordingly, the FEDERAL RESERVE BULLETIN 256 (1986); The Industrial Bank of Board has determined that the performance of the Japan, Ltd., 72 FEDERAL RESERVE BULLETIN 71 (1986); and The Mitsubishi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984). See also, Policy Statement on Supervision and Regulation of Foreign-Based Bank Holding Companies, Federal Reserve Regulatory Service f 4-835 (1979). 8. 53 Federal Register 8,549 (1988). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 97 proposed activities by Company can reasonably be Voting for this action: Chairman Greenspan and Governors expected to produce benefits to the public. Angell, Heller, Kelley, and LaWare. Voting against this The Board believes that the proposal is not likely to action: Governor Seger. Absent and not voting: Governor Johnson. result in decreased or unfair competition, conflicts of interests, unsound banking practices, concentration of JAMES MCAFEE resources, or other adverse effects. Based on the Associate Secretary of the Board foregoing and other facts of record, the Board has determined that the balance of public interest factors it Dissenting Statement of Governor Seger must consider under section 4(c)(8) of the BHC Act is favorable. Accordingly, the Board has determined that I dissent from the Board's action in this case. I believe the application should be, and hereby is, approved. that foreign banking organizations whose primary cap- This determination is further subject to all of the ital, based on U.S. accounting principles, is below the conditions set forth in the Board's Regulation Y, Board's minimum capital guidelines for U.S. banking including those in sections 225.4(d) and 225.23(b), and organizations have an unfair competitive advantage in to the Board's authority to require modification or termination of the activities of the holding company or the United States over domestic banking organizaany of its subsidiaries as the Board finds necessary to tions. In my view, such foreign organizations should assure compliance with the provisions and purposes of be judged against the same financial and managerial the BHC Act and the Board's regulations and orders standards, including the Board's capital adequacy issued thereunder, or to prevent evasion thereof. guidelines, as are applied to domestic banking organizations. The majority concludes that Applicant's pri- The Primary Dealers Act of 1988, enacted as part of mary capital meets United States standards. To do so, the Omnibus Trade and Competitiveness Act of 1988, however, the majority makes adjustments that are not prohibits ownership or control of a primary dealer by available for U.S. banks under guidelines that have not a foreign person from a country that does not accord yet become effective for U.S. or foreign banking U.S. financial institutions the same competitive oppororganizations. tunities as it affords to domestic companies with In addition, I am concerned that while this applicarespect to the underwriting and distribution of governtion would permit a large Japanese banking organizament debt instruments. In this case, Fuji proposes tion to acquire a large securities dealer in the U.S., (i) to acquire 24.9 percent of the voting shares of U.S. banking organizations are not permitted to make Company; comparable acquisitions in Japan. While some prog- (ii) to hold subordinated debt of Company; ress is being made in opening Japanese markets to (iii) to provide capital support to Company if U.S. banking organizations, U.S. banking organizanecessary; tions and other financial institutions, in my opinion, (iv) to acquire an option to purchase up to 80 are still far from being afforded a full opportunity to percent of Company; and compete in Japan. (v) to have representation on the board of direc- December 19, 1988 tors and the executive committee of Company. In the light of these facts, under a reasonable Orders Issued Under Sections 3 and 4 of the Bank Holding Company Act construction of the term control the Board is likely to find that Fuji controls Company. It is not necessary, however, to make a control determination at this time Chemical Banking Corporation as the Primary Dealers Act does not become effective New York, New York until August 23, 1989, and then only if it were to be determined that the home country of Fuji does not Order Approving Acquisition of a Bank Holding accord U.S. institutions the same competitive oppor- Company, Banks, and Nonbanking Subsidiaries tunities as it affords to domestic companies in its government debt market. This transaction shall not be consummated later Chemical Banking Corporation, New York, New than three months after the effective date of this York, a bank holding company within the meaning of Order, unless such period is extended for good cause the Bank Holding Company Act (the "Act") by the Board or by the Federal Reserve Bank of New (12 U.S.C. § 1841 et seq.), has applied for the Board's York, pursuant to delegated authority. approval under section 3(a)(3) of the Act (12 U.S.C. By order of the Board of Governors, effective § 1842(a)(3)) to acquire Horizon Bancorp, Mor- December 19, 1988. ristown, New Jersey ("Horizon"), and thereby indi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 Federal Reserve Bulletin • Februrarv 1989 rectly to acquire Horizon's four subsidiary banks.1 Applicant competes with Horizon in the Metropoli- Applicant has also applied under section 4(c)(8) of the tan New York - New Jersey banking market.5 Appli- Act (12 U.S.C. § 1843(c)(8)) to indirectly acquire Ho- cant is the fourth largest of 155 commercial banking rizon's two nonbanking subsidiaries: Horizon Broker- organizations in the market, with deposits of $23.3 age Services, Inc., Morristown. New Jersey, engaged billion, controlling 9.7 percent of total deposits in in discount brokerage activities; and Horizon Trust commercial banks in the market.6 Horizon is the 25th Company of Florida, N.A., Boca Raton, Florida, largest commercial banking organization in the marengaged in providing corporate trust operations and ket, with deposits of $1.6 billion, controlling 0.7 perservices. cent of total deposits in commercial banks in the Notice of the applications, affording an opportunity market. The Metropolitan New York - New Jersey for interested persons to submit comments, has been market is considered unconcentrated, with a Herfinduly published (53 Federal Register 43,037 (1988)). dahl-Hirschman Index ("HHI") of 686, which would The time for filing comments has expired, and the increase by 13 points to 699 upon consummation of the Board has considered the applications and all com- proposal. On the basis of the foregoing, the Board ments received in light of the factors set forth in concludes that consummation of the proposal would not have a substantial adverse competitive effect in the sections 3(c) and 4(c)(8) of the Act (12 U.S.C. Metropolitan New York - New Jersey banking market. §§ 1842(c) and 1843(c)(8)). The Board also concludes that consummation of the Applicant, with $40.9 billion in domestic deposits, is proposal would not have a significant adverse effect on the fourth largest banking organization in the United probable future competition in any relevant banking States. Applicant ranks third in the state of New York, market. with deposits representing 10.7 percent of the total deposits in commercial banks in the state. Applicant Section 3(c) of the Act requires in every case that also ranks third in the state of Texas, controlling 9.4 the Board consider the financial resources of the percent of the total deposits in commercial banks in applicant and the bank or bank holding company to be the state. Horizon is the fifth largest commercial acquired. The Board has stated and continues to banking organization in New Jersey, with total depos- believe that capital adequacy is an especially imporits of $3.6 billion, representing 5.4 percent of the total tant factor in the analysis of bank holding company deposits in commercial banks in New Jersey.2 expansion proposals. The Board expects banking or- The Board has previously determined that the ac- ganizations contemplating expansion proposals to quisition of a New Jersey bank holding company by a maintain strong capital levels substantially above the New York bank holding company is specifically au- minimum levels specified in the Board's Capital Adethorized by the statute laws of New Jersey, subject to quacy Guidelines without significant reliance on intanthe determination by the New Jersey Commissioner of gibles, particularly goodwill.7 Banking that the specific proposal is consistent with The Board carefully analyzes the effect of expansion the New Jersey banking statute.3 Based on the fore- proposals on the preservation or achievement of going, the Board has determined that the proposed strong capital levels and has adopted a policy that acquisition is specifically authorized by the statute there should be no significant diminution of financial laws of New Jersey and that Board approval of the strength below these levels for the purpose of effecting proposal is not barred by the Douglas Amendment to major expansion proposals.8 To achieve full complithe BHC Act (12 U.S.C. § 1842(d)), subject to the New Jersey Commissioner's specific determination that the proposal is consistent with the New Jersey interstate banking statute.4 to consummation. The Pennsylvania Department of Banking has approved the plan of dissolution. 5. The Metropolitan New York - New Jersey market includes New 1. Applicant will acquire Horizon through a merger of New Jersey York City; Nassau, Orange, Putnam, Rockland, Suffolk, Sullivan, and Holdings, Inc., a wholly owned subsidiary of Applicant, with and into Westchester Counties in New York; Bergen, Essex, Hudson, Hun- Horizon. terdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Horizon's bank subsidiaries, all located in New Jersey, are Horizon Sussex, Union, and Warren Counties in New Jersey; and parts of Bank, N.A., Morristown; Horizon Trust Company, N.A., Mor- Fairfield County in Connecticut. ristown; Marine National Bank, Pleasantville; and Princeton Bank, 6. Market deposit data are as of June 30, 1986. Princeton. 7. Capital Adequacy Guidelines, 50 Federal Register 16,057 (1985), 2. National and state deposit data are as of June 30, 1988. 71 FEDERAL RESERVE BULLETIN 445 (1985). 3. N.J. Stat. Ann. § 17:9A-370 et seq. (West 1988); National 8. Thus, for example, the Board has generally approved proposals Westminster Bank PLC, 74 FEDERAL RESERVE BULLETIN 142 (1988). involving a decline in capital only where the applicants have promptly 4. Horizon owns Princeton Bank of Pennsylvania, Philadelphia, restored their capital to pre-acquisition levels following consumma- Pennsylvania ("PBP"). Pennsylvania law, however, does not cur- tion of the proposals and have implemented programs of capital rently permit New York bank holding companies to acquire banks in improvement to raise capital significantly above minimum levels. See, Pennsylvania. Accordingly, Horizon has agreed to dissolve PBP prior e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 724 (1986); Security Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 99 ance with this policy, the Board has required, as a Finally, and most significantly, the Board expects condition for approval of expansion proposals, that a Applicant to continue to improve its equity capital substantial majority of the cash outlay for an acquisi- base through controlled asset growth, external capital tion be supported by the issuance before consumma- improvement initiatives, and sound dividend policies. tion of an equal amount of new equity capital, with the In acting on future proposals, the Board will consider remaining portion of the cash outlay supported by the Applicant's progress in this regard. issuance of new equity capital within a short period of Accordingly, on the basis of the above considertime thereafter.9 ations, the particular facts of this case, and Appli- Applicant proposes to acquire Horizon through a cant's continuing steps to strengthen its capital posicash purchase amounting to approximately $642 mil- tion, the Board concludes that financial factors are lion. While the proposal will result in a lessening of the consistent with approval of the proposal. Managerial overall capital strength of Applicant, Applicant has resources, convenience and needs considerations, and taken, and has committed to take in the near term, future prospects of Applicant and Horizon are also substantial steps to satisfy the Board's policy against consistent with approval. declines in necessary capital strength to support ex- Applicant competes with Horizon in the provision of pansion proposals. Applicant already has issued $200 discount brokerage and corporate trust operations and million of perpetual preferred stock and $150 million of services. In view of the small market share held by mandatory convertible debt. It will issue $150 million Applicant and Horizon in the relevant markets and the of subordinated debt within one year of consumma- unconcentrated nature of the markets, the Board contion. In addition, the Board has relied on assurances of cludes that the proposal would not have any significant Applicant that it plans to further strengthen its equity adverse effect on existing or probable future competicapital in the near future. tion in any relevant market for these services. The Board has also considered several additional Furthermore, there is no evidence in the record to factors that bear on the financial assessment of this indicate that approval of this proposal would result in case. Initially, the Board notes that this acquisition is undue concentration of resources, unfair competition, of a company that is in strong condition and that the conflicts of interests, unsound banking practices, or acquisition, in conjunction with asset reductions Ap- other adverse effects on the public interest. Accordplicant has already made, should result in an overall ingly, the Board has determined that the balance of strengthening of Applicant's asset structure. The public interest factors it must consider under section Board has also considered that Applicant negotiated 4(c)(8) of the Act is favorable and consistent with the terms of this agreement before the Board had approval of the application to acquire the nonbanking announced its policy regarding diminution in capital subsidiaries of Horizon. strength to support expansion proposals.10 Moreover, Based on the foregoing and other facts of record and taking into account the substantial steps already taken in reliance on the commitments made by Applicant, and proposed to be taken by Applicant to improve its the Board has determined that consummation of the capital position, Applicant will be in compliance with transaction would be in the public interest and that the the 1990 transitional risk-based capital requirements applications under sections 3 and 4 of the Act should established by the Basle Committee on Banking Reg- be, and hereby are, approved. The transaction shall ulations and Supervisory Practices at consummation not be consummated before the thirtieth calendar day of this proposal and appears well positioned to meet following the effective date of this Order, or later than the Basle Committee's 1992 minimum ratios in the three months after the effective date of this Order, near future. unless such period is extended for good cause by the Board or by the Federal Reserve Bank of New York, pursuant to delegated authority. By order of the Board of Governors, effective December 2, 1988. Voting for this action: Vice Chairman Johnson and Gover- Pacific Corporation, 72 FEDERAL RESERVE BULLETIN 800 (1986). See also Security Banks of Montana, 71 FEDERAL RESERVE BULLETIN 246 nors Seger, Heller, Kelley, and LaWare. Voting against this (1985). action: Governor Angell. Absent and not voting: Chairman 9. The Bank of New York Company, Inc., 74 FEDERAL RESERVE Greenspan. BULLETIN 257, 264-265 (1988). 10. Applicant signed the agreement May 1,1986. The Board's policy JAMES MCAFEE was announced May 19, 1986. See Citicorp, 72 FEDERAL RESERVE BULLETIN 497 (1986). Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

100 Federal Reserve Bulletin • Februrarv 1989 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 4 . .. Nonbanking Effective Activity/Company date Norwest Corporation, HBE Leasing Corporation, December 12, 1988 Minneapolis, Minnesota St. Louis, Missouri 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(s) Bank(s) Bank date American Chartered Bancorp, American Chartered Bank, Chicago December 16, 1988 Inc., Schaumburg, Illinois Schaumburg, Illinois American State Corporation, American State Bank, Chicago December 1, 1988 Lawrenceburg, Indiana Lawrenceburg, Indiana ANB Bankcorp, Inc., Citizens Bank, N.A., Kansas City December 1, 1988 Bristow, Oklahoma Sapulpa, Oklahoma Bainum Bancorp, The Bank of Glenwood, St. Louis December 19, 1988 Glenwood, Arkansas Glenwood, Arkansas Barnett Banks, Inc., ANB Bankshares, Inc., Atlanta December 15, 1988 Jacksonville, Florida Brusnwick, Georgia BON, Inc., Farmers State Bank and Trust Kansas City November 28, 1988 Moundridge, Kansas Company, Canton, Kansas Bosshard Financial Group, Inc. Grand Marsh State Bank, Chicago December 2, 1988 La Crosse, Wisconsin Grand Marsh, Wisconsin Farmers State Bank, Hillsboro, Wisconsin Cenvest, Inc., First Central Bank, Boston December 9, 1988 Meriden, Connecticut Hartford, Connecticut Charter 95 Corporation, Merchants State Bank of North Minneapolis December 9, 1988 Hudson, Wisconsin Branch, North Branch, Minnesota Commbanc Shares, Inc., The Community Bank, Cleveland November 28, 1988 Erlanger, Kentucky Erlanger, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 101 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank date Community Bancorp, Inc., Community State Bank of Chicago December 7, 1988 St. Charles, Michigan St. Charles, St. Charles, Michigan Community Financial The Peoples State Bank of Caro, Chicago December 1, 1988 Corporation, Michigan, Harbor Beach, Michigan Caro, Michigan Dassel Investment Company, Fidelity State Bank, Minneapolis December 20, 1988 Minneapolis, Minnesota New Prague, Minnesota D & D Bancshares, Inc., Mount Auburn Savings Bank, Chicago December 1, 1988 Garrison, Iowa Mount Auburn, Iowa Dumas Bancshares, Inc., First State Bank, St. Louis December 13, 1988 Dumas, Arkansas Gould, Arkansas Evans Bancorp, Inc., The Evans National Bank New York December 21, 1988 Angola, New York of Angola, Angola, New York Exchange Bancorp, Inc., Rankin State Bank, Chicago November 30, 1988 Chicago, Illinois Rakin, Illinois Fairfield County Bancorp, Inc., Bank of Stamford, New York December 1, 1988 Stamford, Connecticut Stamford, Connecticut Farmers State Bancorp, Farmers State Bank, Cleveland December 16, 1988 Union City, Ohio Losantville, Indiana Fifth Third Bancorp, New Palestine Bancorp, Cleveland December 21, 1988 Cincinnati, Ohio New Palestine, Indiana First Busey Corporation, Community Bank of Mahomet, Chicago December 8, 1988 Urbana, Illinois Mahomet, Illinois First City Bank of Dallas, First City Bank-Central Dallas November 29, 1988 Dallas, Texas Arlington, N.A., Arlington, Texas First City National Bank of Arlington, Arlington, Texas First City National Bank of Colleyville, Colleyville, Texas First City Bank-Forest Hill, Forest Hill, Texas First City National Bank of Fort Worth, Fort Worth, Texas First Dakota Financial First Dakota National Bank, Minneapolis December 9, 1988 Corporation, Yankton, South Dakota Yankton, South Dakota First Interstate Corporation of First Interstate Bank of Northern Chicago November 28, 1988 Wisconsin, Indiana, National Association, Kohler, Wisconsin South Bend, Indiana First National Bancorp, Inc., Southwest Suburban Bank, Chicago December 7, 1988 Joliet, Illinois Bolingbrook, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 Federal Reserve Bulletin • Februrarv 1989 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank date First National Bancshares of Oxford Bancshares, Inc., Kansas City December 2, 1988 Winfield, Inc., Oxford, Kansas Winfield, Kansas First of America Bank Wabash Valley Bancorporation, Chicago December 20, 1988 Corporation, Inc., Kalamazoo, Michigan Peru, Indiana First of America Bank Corporation-Indiana, Indianapolis, Indiana First Paxton Bancorp, Inc., Cissna Park State Bank, Chicago December 8, 1988 Paxton, Illinois Cissna Park, Illinois FIRST SUBURBAN BANCORP First State Bank of Alsip, Chicago December 1, 1988 CORPORATION, Alsip, Illinois May wood, Illinois First Wisconsin Corporation, Metro Bancorp, Incorporated, Chicago December 19, 1988 Milwaukee, Wisconsin Phoenix, Arizona IBT Bancorp, Inc., Isabella Bank and Trust, Chicago December 20, 1988 Mount Pleasant, Michigan Mount Pleasant, Michigan Jacob Schmidt Company, Barnesville Investment Minneapolis December 19, 1988 St. Paul, Minnesota Corporation, American Bancorporation, Inc.. Barnesville, Minnesota St. Paul, Minnesota Klossner Bancorporation, Inc., Houston State Holding, Inc., Minneapolis December 7, 1988 Klossner, Minnesota Houston, Minnesota Lakeland Bancorp, Inc., Lakeland State Bank, New York December 21, 1988 Newfoundland, New Jersey Newfoundland, New Jersey Lawton Partners Holding First United, Inc., St. Louis December 13, 1988 Company, Central City, Kentucky Central City, Kentucky Midwest Guaranty Bancorp, Inc., Midwest Guaranty Bank, Chicago November 30, 1988 Birmingham, Michigan Troy, Michigan Monticello Bankshares, Inc., Bank of Clinton County, St. Louis December 14, 1988 Monticello, Kentucky Albany, Kentucky Moody Bank Holding Company, Bank of Galveston, N.A., Dallas November 28, 1988 Inc., Galveston, Texas Reno, Nevada The Moody National Bank of Galveston, Galveston, Texas Mountain-Valley Bancshares, The First National Bank of Richmond December 13, 1988 Inc., Parsons, Parsons, West Virginia Parsons, West Virginia National City Bancshares, Inc., The Farmers and Merchants St. Louis November 23, 1988 Evansville, Indiana Bank, Fort Branch, Indiana NBD Bancorp, Inc., NBD New Castle Bank, Chicago December 9, 1988 Detroit, Michigan Newark, Delaware Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 103 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank date New Mexico Financial Ranchers State Bank, Kansas City December 15, 1988 Corporation, Belen, New Mexico Belen, New Mexico Schneider Bancorporation, Plattsmouth State Bank, Kansas City December 1, 1988 Plattsmouth, Nebraska Plattsmouth, Nebraska Sovran Financial Corporation, First Bank of Marion County, Richmond December 19, 1988 Norfolk, Virginia South Pittsburg, Tennessee Sovran Financial Corporation, First National Bank of Richmond December 19, 1988 Norfolk, Virginia Collierville, Collierville, Tennessee State Bancshares, Inc., State Bank of Southwest St. Louis December 16, 1988 Springfield, Missouri Missouri, Springfield, Missouri Summcorp, Summit Bank of Indianapolis, Chicago December 1, 1988 Fort Wayne, Indiana Indianapolis, Indiana Texas Peoples National Peoples National Bank, Dallas December 15, 1988 Bancshares, Inc., Bogata, Texas Paris, Texas United Security Bancorporation, Home Security Bank, San Francisco December 14, 1988 Chewelah, Washington Sunny side, Washington Wheeler County Bancshares, First Bank & Trust, Dallas December 19, 1988 Inc., Shamrock, Texas Shamrock, Texas Winter-Park Bancshares, Inc., Owen-Curtiss Financial Minneapolis December 16, 1988 Exeland, Wisconsin Corporation, Owen, Wisconsin Gilman Corporation, Gilman, Wisconsin WNB Bancshares, Inc., WNB Financial Corp., Dallas November 25, 1988 Odessa, Texas Odessa, Texas Western National Bank, Odessa, Texas Section 4 Nonbanking Reserve Effective Applicant Activity/Company Bank date First Interstate Corporation of reinsurance of group credit Chicago November 28, 1988 Wisconsin, insurance through a joint Kohler, Wisconsin venture with American Bankers Life Assurance Company of Florida First Tennessee National Check Consultants, Inc., St. Louis December 9, 1988 Corporation, Memphis, Tennessee Memphis, Tennessee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 Federal Reserve Bulletin • Februrarv 1989 Section 4—Continued Nonbanking Reserve Effective Applicant Activity/Company Bank date Guaranty Bancshares Brant Leasing, Inc., Philadelphia December 15, 1988 Corporation, Trevose, Pennsylvania Shamokin, Pennsylvania Hampton Park Corporation, The Palwaukee Bank, Chicago December 9, 1988 Romeoville, Illinois Prospect Heights, Illinois First Bank of Romeoville, Romeo ville, Illinois Kermit State Bancshares, Inc., Computer Center, Inc., Dallas November 25, 1988 Kermit, Texas Monahans, Texas Lake Crystal Bancorporation, Lake Crystal National Agency, Minneapolis December 16, 1988 Inc., Lake Crystal, Minnesota Lake Crystal, Minnesota Mercantile Bankshares Benchmark Appraisal Group, Richmond December 5, 1988 Corporation, Inc., Baltimore, Maryland Columbia, Maryland Monahans Bancshares, Inc., Computer Center, Inc., Dallas November 25, 1988 Monahans, Texas Monahans, Texas Trustcorp, Inc., Gotfryd Corp., Cleveland December 8, 1988 Toledo, Ohio Constantine, Michigan Wisdom Holding Corporation, Wisdom & Merrell Insurance St. Louis November 25, 1988 Salem, Missouri Agency, Inc., Rolla, Missouri Sections 3 and 4 Nonbanking Reserve Effective A t p Activity/Company Bank date Brooke Holdings, Inc., Citizens State Bank, Kansas City December 1, 1988 Jewell, Kansas Jewell, Kansas 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 105 Reserve Effective Applicant Bank(s) Bank date Cole Taylor Bank/Drovers, Cole Taylor Bank/Main, Chicago November 29, 1988 Chicago, Illinois Wheeling, Illinois Cole Taylor Bank/Skokie, Skokie, Illinois Cole Taylor Bank/Ford City, Chicago, Illinois First Community Bank, Inc., Valley Bank & Trust Company, Richmond November 29, 1988 Princeton, West Virginia Bluefield, West Virginia 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. American Land Title Association v. Board of Gover- Independent Insurance Agents of America, Inc. v. nors, No. 88-1872 (D.C. Cir., filed December 16, Board of Governors, No. 87-1686 (D.C. Cir., filed 1988). November 19, 1987). MCorp v. Board of Governors, No. CA3-88-2693-F National Association of Casualty and Surety Agents, (N.D. Tex., filed October 28, 1988). et al., v. Board of Governors,Nos. 87-1644, 87- 1801, 88-1001 88-1206, 88-1245, 88-1270 (D.C. White v. Board of Governors, No. CU-S-88-623-RDF Cir., filed Nov. 4, Dec. 21, 1987, Jan. 4, March 18, (D. Nev., filed July 29, 1988). March 30, April 7, 1988). VanDyke v. Board of Governors, No. 88-5280 (8th Teichgraeber v. Board of Governors, No. 87-2505-0 Cir., filed July 13, 1988). (D. Kan., filed Oct. 16, 1987). Whitney v. United States, et al., No. CA3-88-1596-H Northeast Bancorp v. Board of Governors, No. 87- (N.D. Tex., filed July 7, 1988). 1365 (D.C. Cir., filed July 31, 1987). Baugh v. Board of Governors, No. C88-3037 (N.D. National Association of Casualty & Insurance Agents Iowa, filed April 8, 1988). v. Board of Governors, Nos. 87-1354, 87-1355 (D.C. Bonilla v. Board of Governors, No. 88-1464 (7th Cir., Cir., filed July 29, 1987). filed March 11, 1988). The Chase Manhattan Corporation v. Board of Gov- Cohen v. Board of Governors, No. 88-1061 (D.N.J., ernors, No. 87-1333 (D.C. Cir., filed July 20, 1987). filed March 7, 1988). Lewis v. Board of Governors, Nos. 87-3455, 87-3545 Stoddard v. Board of Governors, No. 88-1148 (D.C. (11th Cir., filed June 25, Aug. 3, 1987). Cir., filed February 25, 1988). CBC, Inc. v. Board of Governors, No. 86-1001 (10th Cir., filed Jan. 2, 1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

57 Federal Reserve Bulletin • Februrarv 1989 A36 Domestic finance companies—Assets and A56 U.S. reserve assets liabilities and business credit A56 Foreign official assets held at Federal Reserve Banks A57 Foreign branches of U.S. banks—Balance REAL ESTATE sheet data A59 Selected U.S. liabilities to foreign official A37 Mortgage markets institutions A38 Mortgage debt outstanding REPORTED BY BANKS IN THE UNITED STATES CONSUMER INSTALLMENT CREDIT A59 Liabilities to and claims on foreigners A39 Total outstanding and net change A60 Liabilities to foreigners A40 Terms A62 Banks' own claims on foreigners A63 Banks' own and domestic customers' claims on foreigners FLOW OF FUNDS A63 Banks' own claims on unaffiliated foreigners A64 Claims on foreign countries—Combined A41 Funds raised in U.S. credit markets domestic offices and foreign branches A43 Direct and indirect sources of funds to credit markets A44 Summary of credit market debt outstanding REPORTED BY NONBANKING BUSINESS A45 Summary of credit market claims, by holder ENTERPRISES IN THE UNITED STATES Domestic Nonfinancial Statistics A65 Liabilities to unaffiliated foreigners A66 Claims on unaffiliated foreigners SELECTED MEASURES SECURITIES HOLDINGS AND TRANSACTIONS A46 Nonfinancial business activity—Selected A67 Foreign transactions in securities measures A68 Marketable U.S. Treasury bonds and notes— A47 Labor force, employment, and unemployment Foreign transactions A48 Output, capacity, and capacity utilization A49 Industrial production—Indexes and gross value A51 Housing and construction INTEREST AND EXCHANGE RATES A52 Consumer and producer prices A53 Gross national product ami income A69 Discount rates of foreign central banks A54 Personal income and saving A69 Foreign short-term interest rates A70 Foreign exchange rates International Statistics A71 Guide to Tabular Presentation, Statistical Releases, and Special Tables SUMMARY STATISTICS A55 U.S. international transactions—Summary A56 U.S. foreign trade Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A3 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 1987 1988 1988 Q4 Ql Q2 Q3 July Aug. Sept.' Oct.' Nov. Reserves of depository institutions 1 Total 2.5 3.5 5.8 4.3 11.9 -2.9 -1.9 -.8 2.0 2 Required 1.4 2.9 7.2 4.0 9.7 -1.9 -2.3 -2.6 1.1 3 Nonborrowed 2.4 1.5 -6.5 2.5 5.1 1.1 6.4 10.3 -9.4 4 Monetary base3 7.8 8.3 7.6 6.6 10.4 2.5 5.5 5.7 3.3 Concepts of money, liquid assets, and debt4 5 Ml 3.9 3.8 6.3 5.2 9.0 .3 -.3 1.8 .3 6 M2 3.9 6.8 7.7 3.6 3.7 2.3 1.0 1.2 6.4 7 M3 5.5 7.1 7.7 5.7 7.0 3.8 1.7 4.7 6.3 8 L 5.8 6.9 9.r 7.2' 11.5' 5.4' 1.8 5.9 n.a. 9 Debt 10.0 8.2' 8.7r 8.6r 8.3' 9.3' 8.8 7.8 n.a. Nontransaction components 10 In M25 3.9 7.8 8.2 3.1 1.8 3.1 1.4 1.0 8.6 11 In M3 only6 11.9 8.2 7.4 13.7r 19.6 9.2 4.1 17.4 5.8 Time and savings deposits Commercial banks 12 Savings . .7 6.3 11.0 8.8 9.6 7.6 -2.5 -2.5 19.0 13 Small-denomination time® .. 14.8 13.7 11.8 10.2 8.8 12.6 20.0 23.4 17.1 14 Large-denomination time ' 10.5 3.4 6.7 21.5 25.5 21.1 18.0 14.6 1.7 Thrift institutions 15 Savings -3.8 -2.4 6.6 5.8r 7.5' 5.4 -2.5 -8.9 -2.5 16 Small-denomination time 16.0 21.3 14.0 4.5 1.3 6.1 10.1 9.0 6.2 17 Large-denomination time 22.2 13.7 9.3 4.5 3.6 -.7 24.3 14.0 2.8 18 D Fe eb d t e ral c omponents4 7.6 8.0 8.2' i.r 5.7' 10.3' 12.3 5.4 n.a. 19 Nonfederal .. 10.7 8.2r 8.9^ 9.r 9.r 9.0' 7.7 8.6 n.a. 20 Total loans and securities at commercial banks" 5.2 5.3 11.ff 7.3 6.3 7.2 -.7 7.1 6.0 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. noniinancial 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 aidded 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. officii 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 Financial Statistics • February 1989 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 Sept. Oct. Nov. Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 256,979 255,178 258,858 255,563 254,497 255,673 259,022 259,508 258,005 259,428 2 U.S. government securities' 226,629 225,724 229,131 225,964 225,397 225,868 228,318 228,920 229,119 231,005 3 Bought outright 224,058 225,210 228,390 225,964 225,094 224,865 227,958 228,482 229,119 229,259 4 Held under repurchase agreements 2,571 514 741 0 303 1,003 360 438 0 1,746 5 Federal agency obligations 8,525 7,482 7,332 7,186 7,198 7,460 7,221 7,229 7,102 7,730 6 Bought outright 7,191 7,160 7,106 7,186 7,116 7,116 7,116 7,102 7,102 7,102 7 Held under repurchase agreements 1,334 322 226 0 82 344 105 127 0 628 8 Acceptances 0 0 0 0 0 0 0 0 0 0 9 Loans 2,722 2,337 2,883 2,283 2,359 2,346 2,966 3,500 2,757 2,367 10 Float 1,154 1,219 1,186 1,721 828 1,094 1,082 1,169 1,401 495 11 Other Federal Reserve assets 17,951 18,416 18,327 18,409 18,715 18,904 19,435 18,690 17,626 17,831 12 Gold stock2 11,062 11,064 11,061 11,063 11,064 11,063 11,062 11,061 11,060 11,060 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 18,606 18,667 18,718 18,667 18,681 18,694 18,704 18,714 18,724 18,734 ABSORBING RESERVE FUNDS 15 Currency in circulation 236,382 237,156 240,343 237,898 236,965 237,185 238,635 240,626 240,657 242,179 16 Treasury cash holdings2 392 398 401 401 396 395 401 404 401 399 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 7,684 5,954 5,268 5,470 5,623 6,197 5,509 5,209 5,288 5,137 18 Foreign 236 240 246 236 238 234 216 233 289 262 19 Service-related balances and adjustments 1,848 1,848 1,746 1,982 1,915 2,109 1,929 1,887 1,897 1,932 20 Other 404 352 380 314 389 402 333 305 328 552 21 Other Federal Reserve liabilities and capital 7,632 7,617 7,955 7,567 7,524 7,946 88,,222255 77,,775511 77,,771177 88,,004422 22 Reserve balances with Federal Reserve Banks 37,087 36,361 37,316 36,443 36,210 35,981 38,558 37,886 36,231 35,738 End-of-month figures Wednesday figures 1988 1988 Sept. Oct. Nov. Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 261,855 257,722 261,971 257,243 253,025 256,369 259,289 259,803 255,616 261,971 24 U.S. government securities' 229,181 225,638 232,702 226,242 224,263 225,785 227,837 229,178 228,077 232,702 25 Bought outright 223,573 223,041 228,701 226,242 224,263 224,553 227,837 229,178 228,077 228,701 26 Held under repurchase agreements 5,608 2,597 4,001 0 0 1,232 0 0 0 4,001 27 Federal agency obligations 11,073 8,767 8,384 7,186 7,116 7,544 7,116 7,102 7,102 8,384 28 Bought outright 7,191 7,116 7,102 7,186 7,116 7,116 7,116 7,102 7,102 7,102 29 Held under repurchase agreements 3,882 1,651 1,282 0 0 428 0 0 0 1,282 30 Acceptances 0 0 0 0 0 0 0 0 0 0 31 Loans 2,154 2,275 2,328 3,546 1,980 2,611 3,079 3,406 1,570 2,328 32 Float 1,199 1,690 389 1,855 1,005 1,095 1,968 3,057 920 389 33 Other Federal Reserve assets 18,248 19,352 18,168 18,414 18,661 19,334 19,289 17,060 17,947 18,168 34 Gold stock2 11,062 11,062 11,059 11,063 11,063 11,062 11,062 11,060 11,061 11,059 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 18,637 18,693 18,743 18,679 18,693 18,703 18,713 18,723 18,733 18,743 ABSORBING RESERVE FUNDS 37 Currency in circulation 235,527 237,094 242,472 237,648 236,948 237,930 239,924 240,480 241,883 242,472 38 Treasury cash holdings2 389 397 402 396 394 397 404 401 399 402 Deposits, other than reserve balances, with Federal Reserve Banks 39 Treasury 13,023 6,151 5,198 5,532 5,690 4,467 6,792 5,384 4,631 5,198 40 Foreign 338 301 251 239 226 223 186 182 287 251 41 Service-related balances and adjustments 1,605 1,662 1,613 1,629 1,662 1,662 1,649 1,648 1,613 1,613 42 Other 358 348 398 337 600 351 279 354 225599 339988 43 Other Federal Reserve liabilities and capital 7,899 8,463 8,058 7,330 7,319 88,,007766 77,,553311 77,,446677 77,,554422 88,,005588 44 Reserve balances with Federal Reserve Banks 37,433 38,079 38,399 38,892 34,959 38,046 37,317 38,688 33,813 38,399 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 salc-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 RReesseerrvvee ccllaassssiiffiiccaattiioonn 1985 1986 1987 1988 Dec. Dec. Dec. May June July Aug. Sept. Oct. Nov. 1 Reserve balances with Reserve Banks2 27,620 37,360 37,673 36,509 37,907 37,992 36,911 37,213 36,421 36,997 2 Total vault cash 22,953 24,079 26,155 25,873 25,717 26,479 26,895 26,726 27,1% 26,746 3 Vault . 20,522 22,199 24,449 24,172 24,084 24,763 25,054 24,940 25,494 25,410 4 Surplus . 2,431 1,879 1,706 1,700 1,632 1,715 1,841 1,786 1,702 1,335 5 Total reserves 48,142 59,560 62,123 60,681 61,991 62,756 61,965 62,153 61,915 62,407 6 Required reserves i 47,085 58,191 61,094 59,641 61,103 61,749 61,012 61,181 60,853 61,287 7 Excess reserve balances at Reserve Banks 1,058 1,369 1,029 1,040 888 1,007 953 972 1,062 1,119 8 Total borrowings at Reserve Banks 1,318 827 777 2,578 3,083 3,440 3,241 2,839 2,299 2,861 9 Seasonal borrowings at Reserve Banks 56 38 93 246 311 376 423 421 332 186 10 Extended credit at Reserve Banks8 499 303 483 2,107 2,554 2,538 2,653 2,059 1,781 2,322 Biweekly averages of daily figures for weeks ending 1988 July 27 Aug. 10 Aug. 24 Sept. 7 Sept. 21 Oct. 5 Oct. 19 Nov. 2r Nov. 16 Nov. 30 11 Reserve balances with Reserve Banks2 37,399 37,343 36,422 37,273 37,625 36,527 36,678 36,078 38,143 35,981 12 Total vault cash* 26,647 26,571 27,400 26,351 26,787 26,924 27,612 26,825 26,221 27,259 13 Vault* 24,889 24,762 25,513 24,555 25,054 25,063 25,806 25,309 25,022 25,814 14 Surplus5.... 1,758 1,810 1,887 1,797 1,733 1,861 1,806 1,516 1,200 1,446 15 Total reserves 62,288 62,104 61,935 61,827 62,679 61,590 62,484 61,387 63,165 61,795 16 Required reserves i 61,085 61,309 60,954 60,705 61,896 60,442 61,509 60,260 61,562 61,160 17 Excess reserve balances at Reserve Banks 1,203 796 981 1,123 783 1,148 975 1,128 1,603 635 18 Total borrowings at Reserve Banks 3,268 3,339 3,245 3,093 2,971 2,438 2,204 2,353 3,233 2,562 19 Seasonal borrowings at Reserve Banks 390 407 431 432 408 433 337 285 180 178 20 Extended credit at Reserve Banks 2,663 2,748 2,671 2,482 2,075 1,704 1,681 1,931 2,838 1,863 1. These data also appear in the Board's H.3 (502) release. For address, see in- with Federal Reserve Banks, which exclude required clearing balances and side front cover. adjustments to compensate for float, plus vault cash used to satisfy reserve 2. Excludes required clearing balances and adjustments to compensate for requirements. Such vault cash consists of all vault cash held during the lagged float. computation period by institutions having required reserve balances at Federal 3. Dates refer to the maintenance periods in which the vault cash can be used Reserve Banks plus the amount of vault cash equal to required reserves during the to satisfy reserve requirements. Under contemporaneous reserve requirements, maintenance period at institutions having no required reserve balances. maintenance periods end 30 days after the lagged computation periods in which 7. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy the balances are held. reserve requirements less required reserves. 4. Equal to all vault cash held during the lagged computation period by institutions having required reserve balances at Federal Reserve Banks plus the 8. Extended credit consists of borrowing at the discount window under the amount of vault cash equal to required reserves during the maintenance period at terms and conditions established for the extended credit program to help institutions having no required reserve balances. depository institutions deal with sustained liquidity pressures. Because there is 5. Total vault cash at institutions having no required reserve balances less the not the same need to repay such borrowing promptly as there is with traditional amount of vault cash equal to their required reserves during the maintenance short-term adjustment credit, the money market impact of extended credit is period. similar to that of nonborrowed reserves. 6. Total reserves not adjusted for discontinuities consist of reserve balances 9. Data are prorated monthly averages of biweekly averages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • February 1989 1.13 SELECTED BORROWINGS. IN IMMEDIATELY AVAILABLE FUNDS Large Member Banks1 Averages of daily figures, in millions of dollars 1988 week ending Monday MMaattuurriittyy aanndd ssoouurrccee Mar. 7 Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 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 74,546 74,875 70,844 66,924 75,487 75,392 72,737 67,632 64,874 2 For all other maturities 10,486 10,990 11,063 10,781 10,964 10,407 10,492 10,738 10,683 From other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 3 For one day or under continuing contract 38,939 40,780 38,287 36,308 35,383 39,168 36,509 31,334 28,596 4 For all other maturities 7,002 7,567 5,974 6,270 7,084 7,176 7,543 8,080 9,081 Repurchase agreements on U.S. government and federal agency securities in immediately available funds Brokers and nonbank dealers in securities 5 For one day or under continuing contract 12,705 12,181 12,768 13,570 13,685 13,367 13,659 13,648 13,705 6 For all other maturities 13,797 14,617 14,374 13,645 15,050 14,082 14,777 16,544 17,892 All other customers 7 For one day or under continuing contract 24,513 24,704 24,364 25,634 24,025 25,567 25,461 24,743 25,708 8 For all other maturities 9,613 10,403 12,275 10,562 11,956 9,572 10,279 9,705 9,324 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 35,273 35,864 35,301 31,377 36,189 33,848 34,565 34,092 34,774 10 To all other specified customers 13,953 14,047 13,503 14,184 12,487 13,170 13,321 13,252 14,708 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 12/ O 3 n 0 /88 Eff d e a c te ti ve Pre r v at i e o us 12/ O 3 n 0 /88 Ef d fe a c te ti ve Pre r v at i e o us 12/ O 3 n 0 /88 Eff d e a c te ti ve Pre r v at i e o us Effective date Boston 6te 8/9/88 6 6 te 8/9/88 6 9.55 12/29/88 9.40 12/15/88 New York 8/9/88 8/9/88 12/29/88 12/15/88 Philadelphia 8/9/88 8/9/88 12/29/88 12/15/88 Cleveland 8/9/88 8/9/88 12/29/88 12/15/88 Richmond 8/9/88 8/9/88 12/29/88 12/15/88 Atlanta 8/9/88 8/9/88 12/29/88 12/15/88 Chicago 8/10/88 8/10/88 12/29/88 12/15/88 St. Louis 8/9/88 8/9/88 12/29/88 12/15/88 Minneapolis 8/9/88 8/9/88 12/29/88 12/15/88 Kansas City 8/9/88 8/9/88 12/29/88 12/15/88 Dallas 8/11/88 8/11/88 12/29/88 12/15/88 San Francisco ... 6te 8/9/88 6 6te 8/9/88 6 9.55 12/29/88 9.40 12/15/88 Range of rates for adjustment credit in recent years Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o a f n k Effective date A le l v l e F l) . — R. B o a f n k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977. 6 6 1980—July 28 10-11 10 1984—Apr. 9 8te-9 9 1978-—Jan. 9 6-614 6 te 29 10 10 13 9 9 20 6te 6 te Sept. 26 11 11 Nov. 21 8te-9 8te May 11 6W-7 7 Nov. 17 12 12 26 8te 8te 12 7 m7 Dec. 5 12-13 13 Dec. 24 8 8 July 3 7-71/4 10 7V4 71/4 1981—May 5 13-14 14 1985—May 20 7te-8 7te Aug. 21 7% 73/4 8 14 14 24 7te 7 te Sept. 22 8 8 Nov. 2 13-14 13 Oct. 16 8-8te 8 t'e/ 2 6 13 13 1986—Mar. 7 7-7 Vi 7 Nov. 20 3 1 8'/> 8 9 - t t 9 e e '/ > 8m m 1982—J D u e ly c . 2 4 0 11W 1 — 2 12 1 li 2 t e J A u p ly r. 2 1 1 1 1 0 6te 7 6 - 7 7 6 6 te 23 U!<4 lite Aug. 21 5te-6 5te 1979--J A u u ly g . 2 1 0 7 10- 1 1 0 0 te 1 10 0 t e Aug. 2 3 11 1 -i 1 it e 1 1 1 1 22 5te 5te Sept. 2 2 1 1 0 9 10 1 t 1 0 e 1 t - e l 1 i 1 1 o 1 1 te 2 3 1 7 0 6 lo i - o 1 i t o 0 e t e l 1 1 O 0 0 te 1987—Sept. 1 4 1 5te 6 -6 6 6 Oct. 8 11-12 12 Oct. 12 9te-10 9te 1988—Aug. 9 6-6te 6te 10 12 12 13 9te 9Vi 11 6te 6te Nov. 22 9-91/2 9 1980--Feb. 15 12-13 13 26 9 9 In effect December 30, 1988. 6te 6te 19 13 13 Dec. 14 8te-9 9 May 29 12-13 13 15 8te-9 8te 30 12 12 17 8te 8te 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 te 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 four weeks in a calendar quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7, te 2 p . er E c x e t n e t n d hi e g d h e c r r . e dit is available to depository institutions, when 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 to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective stances or practices involve only a particular institution or when an institution is 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 • February 1989 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Depository institution requirements after implementation of the Type of deposit, ai Monetary Control Act deposit interval Effective date Net transaction accounts • $0 million-$41.5 million 12/20/88 More than $41.5 million ... 12/20/88 Nonpersonal time deposits5 By original maturity Less than 1 Vi 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, 1988. Required reserves must be other transaction accounts, the exemption applies only to such accounts that held in the form of deposits with Federal Reserve Banks or vault cash. Nonmem- would be subject to a 3 percent reserve requirement. bers may maintain reserve balances with a Federal Reserve Bank indirectly on a 3. Transaction accounts include all deposits on which the account holder is pass-through basis with certain approved institutions. For previous reserve permitted to make withdrawals by negotiable or transferable instruments, payrequirements, see earlier editions of the Annual Report and of the FEDERAL ment orders of withdrawal, and telephone and preauthorized transfers in excess of RESERVE BULLETIN. Under provisions of the Monetary Control Act, depository three per month for the purpose of making payments to third persons or others. institutions include commercial banks, mutual savings banks, savings and loan However, MMDAs and similar accounts subject to the rules that permit no more associations, credit unions, agencies and branches of foreign banks, and Edge than six preauthorized, automatic, or other transfers per month, of which no more corporations. than three can be checks, are not transaction accounts (such accounts are savings 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law deposits subject to time deposit reserve requirements). 97-320) requires that $2 million of reservable liabilities (transaction accounts, nonpersonal time deposits, and Eurocurrency liabilities) of each depository 4. The Monetary Control Act of 1980 requires that the amount of transaction institution be subject to a zero percent reserve requirement. The Board is to adjust accounts against which the 3 percent reserve requirement applies be modified the amount of reservable liabilities subject to this zero percent reserve require- annually by 80 percent of the percentage increase in transaction accounts held by ment each year for the succeeding calendar year by 80 percent of the percentage all depository institutions, determined as of June 30 each year. Effective Dec. 20, increase in the total reservable liabilities of all depository institutions, measured 1988 for institutions reporting quarterly and Dec. 27, 1988 for institutions on an annual basis as of June 30. No corresponding adjustment is to be made in reporting weekly, the amount was increased from $40.5 million to $41.5 million. the event of a decrease. On Dec. 20, 1988, the exemption was raised from $3.2 5. In general, nonpersonal time deposits are time deposits, including savings million to $3.4 million. In determining the reserve requirements of depository deposits, that are not transaction accounts and in which a beneficial interest is institutions, the exemption shall apply in the following order: (1) net NOW held by a depositor that is not a natural person. Also included are certain accounts (NOW accounts less allowable deductions); (2) net other transaction transferable time deposits held by natural persons and certain obligations issued accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting to depository institution offices located outside the United States. For details, see with those with the highest reserve ratio. With respect to NOW accounts and section 204.2 of Regulation D. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1988 TTyyppee ooff ttrraannssaaccttiioonn 11998855 11998866 11998877 Apr. May June July Aug. Sept. Oct. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 22,214 22,602 18,983 423 0 0 515 0 11,,228800 337755 2 Gross sales 4,118 2,502 6,050 0 0 0 0 0 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 0 0 0 0 Others within 1 year 5 Gross purchases 1,349 190 3,658 1,092 0 0 0 0 0 0 6 Gross sales 0 0 300 0 0 0 0 0 0 0 7 Maturity shift 19,763 18,673 21,502 868 1,646 1,384 1,033 3,932 1,368 1,669 8 Exchange -17,717 -20,179 -20,388 -1,688 -4,324 -1,826 -87 -4,2% -1,646 -916 9 Redemptions 0 0 70 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 2,185 893 10,231 3,661 0 0 0 00 00 00 11 Gross sales 0 0 452 0 0 0 0 0 0 0 12 Maturity shift -17,459 -17,058 -17,974 -823 -1,102 -1,384 -997 -1,821 -1,368 -1,544 13 Exchange 13,853 16,984 18,938 1,434 3,724 1,826 0 3,971 1,646 639 5 to 10 years 14 Gross purchases 458 236 2,441 1,017 0 0 0 0 00 00 15 Gross sales 100 0 0 0 0 0 0 0 0 0 16 Maturity shift -1,857 -1,620 -3,529 -45 -387 0 -36 -2,111 0 -125 17 Exchange 2,184 2,050 950 254 400 0 87 325 0 276 Over 10 years 18 Gross purchases 293 158 1,858 966 0 0 0 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift -447 0 0 0 -157 0 0 0 0 0 21 Exchange 1,679 1,150 500 0 200 0 0 0 0 0 All maturities 22 Gross purchases 26,499 24,078 37,171 7,160 0 0 515 0 1,280 375 23 Gross sales 4,218 2,502 6,802 0 0 0 0 0 0 0 24 Redemptions 3,500 1,000 9,099 0 0 0 0 0 0 0 Matched transactions 25 Gross sales 866,175 927,997 950,923 86,900 115,287 73,708 81,979 124,875 113,886 98,804 26 Gross purchases 865,968 927,247 950,935 85,608 115,115 72,966 83,464 123,220 113,384 97,897 Repurchase agreements2 27 Gross purchases 134,253 170,431 314,620 18,6% 15,871 10,520 22,978 0 3355,,880000 44,,771155 28 Gross sales 132,351 160,268 324,666 11,088 23,478 5,334 28,164 0 30,191 7,727 29 Net change in U.S. government securities 20,477 29,989 11,235 13,476 -7,779 4,444 -3,186 -1,655 6,386 -3,544 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 00 0 00 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 162 398 276 120 11 0 67 10 0 75 Repurchase agreements2 33 Gross purchases 22,183 31,142 80,353 4,243 4,771 5,083 12,355 0 12,107 2,223 34 Gross sales 20,877 30,522 81,351 1,447 7,566 2,843 14,594 0 8,225 4,454 35 Net change in federal agency obligations 1,144 222 -1,274 2,676 -2,807 2,239 -2,306 -10 3,882 -2,306 36 Total net change in System Open Market 21,621 30,211 9,961 16,151 -10,585 6,683 -5,492 -1,665 10,268 -5,850 1. Sales, redemptions, and negative figures reduce holdings of the System Open 2. In July 1984 the Open Market Trading Desk discontinued accepting bankers Market Account; all other figures increase such holdings. Details may not add to acceptances in repurchase agreements, totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • February 1989 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 1988 1988 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Sept. Oct. Nov. Consolidated condition statement ASSETS 1 Gold certificate account 11,062 11,062 11,060 11,061 11,059 11,062 11,062 11,059 2 Special drawing rights certificate account 5,018 5,018 5,018 5,018 5,018 5,018 5,018 5,018 3 Coin 423 425 422 417 404 397 434 404 Loans 4 To depository institutions 2,611 3,079 3,406 1,570 2,328 2,154 2,275 2,328 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements ... 0 0 0 0 0 0 0 0 Federal agency obligations 7 Bought outright 7,116 7,116 7,102 7,102 7,102 7,191 7,116 7,102 8 Held under repurchase agreements 428 0 0 0 1,282 3,882 1,651 1,282 U.S. Treasury securities Bought outright 9 Bills 107,576 110,860 112,201 111,100 111,724 106,5% 106,064 111,724 10 Notes 87,484 87,484 87,484 87,484 87,484 87,484 87,484 87,484 11 Bonds 29,493 29,493 29,493 29,493 29,493 29,493 29,493 29,493 12 Total bought outright2 224,553 227,837 229,178 228,077 232.701 223,573 223,041 228.701 13 Held under repurchase agreements 1,232 0 0 0 4,001 5,608 2,597 4,001 14 Total U.S. Treasury securities 225,785 227,837 229,178 228,077 232.702 229,181 225,638 232.702 15 Total loans and securities 235,940 238,032 239,686 236,749 243,414 242,408 236,680 243,414 16 Items in process of collection 7,909 7,740 11,445 7,441 6,121 8,052 6,785 6,121 17 Bank premises 741 742 740 742 743 736 740 743 Other assets 18 Denominated in foreign currencies3 10,332 10,181 9,987 9,631 9,565 9,528 10,423 9,565 19 All other 8,261 8,366 6,333 7,574 8,0% 7,984 8,189 8,0% 20 Total assets 279,686 281,566 284,691 278,633 284,420 285,185 279,331 284,420 LIABILITIES 21 Federal Reserve notes 220,047 222,040 222,580 223,967 224,535 217,676 219,232 224,535 Deposits 22 To depository institutions 39,708 38,966 40,336 35,426 40,012 39,038 39,741 40,012 23 U.S. Treasury—General account 4,467 6,792 5,384 4,631 5,198 13,023 6,151 5,198 24 Foreign—Official accounts 223 186 182 287 251 338 301 251 25 Other 351 279 354 259 398 358 354 398 26 Total deposits 44,749 46,223 46,256 40,603 45,859 52,757 46,547 45,859 27 Deferred credit items 6,814 5,772 8,388 6,521 6,020 6,853 5,089 6,020 28 Other liabilities and accrued dividends5 2,931 2,939 2,885 2,951 3,221 3,277 3,051 3,221 29 Total liabilities 274,541 276,974 280,109 274,042 279,635 280,563 273,919 279,635 CAPITAL ACCOUNTS 30 Capital paid in 2,109 2,112 2,107 2,107 2,106 2,097 2,108 2,106 31 Surplus 2,046 2,047 2,047 2,047 2,047 2,047 2,047 2,047 990 433 428 437 632 478 1,257 632 32 Other capital accounts 33 Total liabilities and capital accounts 279,686 281,566 284,691 278,633 284,420 285,185 279,331 284,420 34 MEMcuOst: oMdya rfkoer tfaobrlee igUn. Sa.n dT rienatesrunrayt isoencaul riatciecso uhnetlsd i.n. 228,668 227,934 229,502 231,905 235,131 225,561 231,250 235,131 Federal Reserve note statement 35 Federal Reserve notes outstanding issued to bank 267,614 268,623 269,699 270,471 270,577 265,671 270,577 36 LESS: Held by bank 47,567 46,583 47,119 46,504 46,042 47,995 46,042 37 Federal Reserve notes, net 220,047 222,040 222,580 223,967 224,535 217,676 224,535 Collateral held against notes net: 38 Gold certificate account 11,062 11,062 11,060 11,061 11,059 11,062 11,059 4 3 0 9 O Sp th ec er i al e l d ig r i a b w le i n a g s s r e ig ts h ts certificate account 5,018 0 5,018 0 5,018 0 5,018 0 5,018 0 5,018 0 5,018 0 41 U.S. Treasury and agency securities 203,967 205,960 206,502 207,888 208,458 201,5% 208,458 42 Total collateral 220,047 222,040 222,580 223,967 224,535 217,676 224,535 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 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Sept. 30 Oct. 31 Nov. 30 1 Loans—Total 2,611 3,079 3,406 1,570 2,328 2,154 2,275 2,328 2 Within 15 days 2,509 2,965 3,369 1,552 2,289 1,996 2,189 2,289 3 16 days to 90 days 102 114 37 18 39 158 86 39 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 225,785 227,837 229,178 228,077 232,702 223,573 223,041 232,702 10 Within 15 days1 9,953 6,428 12,890 11,817 12,583 2,318 5,789 12,583 11 16 days to 90 days 50,962 54,892 47,825 52,598 53,659 55,265 51,917 53,659 12 91 days to 1 year 70,013 71,660 75,939 71,138 74,475 70,379 70,477 74,475 13 Over 1 year to 5 years 54,498 54,498 54,040 54,040 53,501 55,403 54,499 53,501 14 Over 5 years to 10 years 13,851 13,851 12,007 12,007 12,007 13,700 13,851 12,007 15 Over 10 years 26,508 26,508 26,477 26,477 26,477 26,508 26,508 26,477 16 Federal agency obligations—Total 7,544 7,116 7,102 7,102 8,384 7,191 7,116 8,384 17 Within 15 days' 542 114 254 254 1,557 215 228 1,557 18 16 days to 90 days 782 878 664 664 675 793 782 675 19 91 days to 1 year 1,606 1,510 1,470 1,470 1,457 1,563 1,492 1,457 20 Over 1 year to 5 years 3,322 3,322 3,322 3,322 3,413 3,293 3,322 3,413 21 Over 5 years to 10 years 1,103 1,103 1,203 1,203 1,093 1,138 1,103 1,093 22 Over 10 years 189 189 189 189 189 189 189 189 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 Domestic Nonfinancial Statistics • February 1989 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1988 IItteemm 1984 1985 1986 1987 Dec. Dec. Dec. Dec. Apr. May June July Aug. Sept. Oct. Nov. Seasonally adjusted ADJUSTED FOR . CHANGES IN RESERVE REQUIREMENTS'1 1 Total reserves' 40.96 47.26 57.46 58.72 60.37 60.37 60.64 61.24 61.09 61.00 60.96 61.06 2 Nonborrowed reserves 37.77 45.94 56.63 57.94 57.38 57.79 57.55 57.80 57.85 58.16 58.66 58.20 3 Nonborrowed reserves plus extended credit 40.38 46.44 56.93 58.43 60.00 59.89 60.11 60.34 60.50 60.21 60.44 60.52 4 Required reserves 40.11 46.20 56.09 57.69 59.51 59.32 59.75 60.23 60.14 60.02 59.89 59.95 5 Monetary base5 200.45 218.26 240.80 257.93 265.81 266.92 268.31 270.63 271.20 272.45 273.73R 274.48 Not seasonally adjusted 6 Total reserves3 41.84 48.27 58.70 60.02 60.95 59.45 60.68 61.47 60.59 60.65 60.54r 61.16 7 Nonborrowed reserves 38.65 46.95 57.87 59.25 57.95 56.88 57.60 58.03 57.35 57.82 58.24R 58.30 8 Nonborrowed reserves plus extended credit4 41.26 47.45 58.18 59.73 60.58 58.98 60.15 60.57 60.00 59.87 60.02R 60.62 9 Required reserves 40.99 47.21 57.33 58.99 60.09 58.41 59.79 60.46 59.64 59.68 59.48 60.05 10 Monetary base 203.39 221.49 244.55 262.05 265.01 265.73 269.44 272.41 271.73 271.57 272.44R 275.49 NOT ADJUSTED FOR , CHANGES IN RESERVE REQUIREMENTS® 11 Total reserves3 40.70 48.14 59.56 62.12 62.06 60.68 61.99 62.76 61.97 62.15 61.92 62.41 12 Nonborrowed reserves 37.51 46.82 58.73 61.35 59.07 58.10 58.91 59.32 58.72 59.31 59.62 59.55 13 Nonborrowed reserves plus extended credit4 40.09 47.41 59.04 61.86 61.89 60.08 61.47 61.99 61.26 61.32 61.45R 61.86 14 Required reserves 39.84 47.08 58.19 61.09 61.21 59.64 61.10 61.75 61.01 61.18 60.85 61.30 15 Monetary base 204.18 223.53 247.71 266.16 268.13 268.90 272.65 275.59 275.03 274.87 275.78' 278.66 1. Latest monthly and biweekly figures are avjiilable 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 actuail reserve requirements, including those on nondeposit liabili- Reserve Banks plus the amount of vault cash equ:il 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 1984 1985 1986 1987 Item Dec. Dec. Dec. Dec. Aug. Sept. Oct.' Nov. Seasonally adjusted 1 Ml 551.9 620.1 725.4 750.8 782.5 782.3' 783.5 783.7 2 M2 2,363.6 2,562.6 2,807.7 2,901.0 3,031.6 3,034.1' 3,037.5 3,054.2 3 M3 2,978.3 3,196.4 3,490.8 3,664.4 3,848.3 3,853.6' 3,868.6 3,888.9 4 L 3,519.4 3,825.9 4,134.3 4,329.3 4,582.3' 4,589.0' 4,608.6 n.a. 5 Debt 5,910. r 6,719.9' 7,576.8'' 8,282.1' 8,758.3' 8,822.6' 8,880.2 n.a. Ml components 6 Currency 156.1 167.7 180.4 196.5 207.2 208.5 209.5 210.3 7 Travelers checks 5.2 5.9 6.5 7.1 7.2 7.3 7.4 7.5 8 Demand deposits 244.1 267.2 303.3 288.0 290.1 288.4 288.6 286.9 9 Other checkable deposits 146.4 179.2 235.2 259.3 278.0 278.2 277.9 279.1 Nontransactions components 10 In M2 ... 1,811.7 1,942.5 2,082.3 2,150.2 2,249.2 2,251.8' 22,,225544..11 2,270.4 11 In M3 only8 614.7 633.8 683.1 763.4 816.6' 819.4' 831.1 834.8 Savings deposits9 12 Commercial Banks 122.6 124.8 155.5 178.2 190.7 190.3 189.9 119922..99 13 Thrift institutions 162.9 176.6 215.2 236.0 243.6' 243.1 241.3 240.8 Small-denomination time deposits10 14 Commercial Banks 386.3 383.3 364.6 384.6 414.1 421.0 429.2 435.3 15 Thrift institutions 497.0 496.2 488.6 528.5 571.6 576.4 580.7 583.7 Money market mutual funds 16 General purpose and broker-dealer 167.5 176.5 208.0 221.1 230.8 230.8' 231.2 238.0 17 Institution-only 62.7 64.5 84.4 89.6 84.0 83.7 84.6 87.4 Large-denomination time deposits" 18 Commercial Banks 270.2 284.9 288.9 323.5 347.1' 352.3 357.1 357.9 19 Thrift institutions 146.8 151.6 150.3 161.2 167.9 171.3 173.3 173.7 Debt components 20 Federal debt 1,366.1 1,585.3 1,805.8 1,956.1 2,058.5' 2,079.6' 2,089.0 n.a. 21 Nonfederal debt 4,544.0r 5,134.6r 5,771.1' 6,326.0' 6,699.8' 6,743.0' 6,791.2 n.a. Not seasonally adjusted ?? Ml 564.5 633.5 740.6 765.9 781.2 779.8 780.9 787.1 73 M2 2,373.2 2,573.9 2,821.4 2,914.7 3,030.8 3,029.4' 3,039.0 3,057.9 74 M3 2,991.4 3,211.0 3,507.6 3,681.0 3,845.9' 3,852.2' 3,868.9 3,896.9 25 L 3,532.7 3,841.4 4,152.3 4,347.4 4,574.3' 4,584.8' 4,610.0 n.a. 26 Debt 5,903.8' 6,710. lr 7,561.0' 8,264.2' 8,719.1' 8,788.9' 8,846.1 n.a. Ml components 27 Currency 158.5 170.2 183.0 199.4 207.9 207.9 209.0 211.3 28 Travelers checks 4.9 5.5 6.0 6.5 8.2 7.9 7.5 7.1 29 Demand deposits 253.0 276.9 314.4 298.5 288.7 287.1 288.4 289.7 30 Other checkable deposits 148.2 180.9 237.3 261.6 276.3 276.9 276.1 279.0 Nontransactions components 31 Mr.... 1,808.7 1,940.3 2,080.7 2,148.8 2,249.6 2,249.6' 2,258.1 2,270.8 32 M3 only8 618.2 637.1 686.2 766.3 815.2 822.8' 829.9 839.0 Money market deposit accounts 33 Commercial Banks 267.4 332.8 379.6 358.2 357.0 353.7 352.3 353.4 34 Thrift institutions 149.4 180.8 192.9 167.0 160.C 156.^ 154.4 152.4 Savings deposits9 35 Commercial Banks 121.5 123.7 154.2 176.7 190.9 189.8 190.1 192.2 36 Thrift institutions 161.5 174.8 212.9 233.3 244.1' 242.3 242.0 239.7 Small-denomination time deposits10 37 Commercial Banks 386.9 384.0 365.3 385.2 415.3 422.8 430.0 436.5 38 Thrift institutions 498.2 497.5 489.7 529.3 571.4 575.6 582.0 584.5 Money market mutual funds 39 General purpose and broker-dealer 167.5 176.5 208.0 221.1 230.8 230.8' 231.2 238.0 40 Institution-only 62.7 64.5 84.4 89.6 84.0 83.7 84.6 87.4 Large-denomination time deposits11 41 Commercial Banks 270.9 285.4 289.1 323.6 346.4' 352.3 356.4 357.9 42 Thrift institutions 146.8 151.9 150.7 161.8 167.6 171.7 174.4 174.6 Debt components 43 Federal debt 1,364.7 1,583.7 1,803.9 1,954.1 2,036.6' 2,056.2' 2,069.2 n.a. 44 Nonfederal debt 4,539.1' 5,126.4r 5,757.1' 6,310.1' 6,682.5' 6,732.6' 6,776.9 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • February 1989 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 Monetary and Reserves Projection market debt of the U.S. government, state and local governments, and private section, Division of Monetary Affairs, Board of Governors of the Federal Reserve nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- System, 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 aJl 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 Eu rodollars 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. Bank group, or type of customer 1985 Apr. May June July Aug. Sept. DEBITS TO Seasonally adjusted Demand deposits 1 All insured banks 156,091.6 188,345.8 217,115.9 213,971.5 224,052.3 230,198.8 224,512.7 228,898.2 227,617.3 2 Major New York City banks 70,585.8 91,397.3 104,496.3 100,695.1 109,714.7 111,402.1 107,336.7 110,150.0 108,741.8 3 Other banks 85,505.9 96,948.8 112,619.6 113,276.4 114,337.6 118,796.6 117,176.0 118,748.2 118,875.5 4 ATS-NOW accounts4 1,823.5 2,182.5 2,402.7 2,557.9 2,664.9 2,786.0 2,570.4 2,963.6 2,871.2 5 Savings deposits 384.9 403.5 526.5 543.7 574.7 597.1 583.3' 609.6 578.6 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 500.3 556.5 612.1 600.2 630.9 649.8 622.7 645.8 651.0 7 Major New York City banks 2,196.9 2,498.2 2,670.6 2,700.6 2,881.3 2,911.0 2,789.6 2,939.3 3,102.4 8 Other banks 305.7 321.2 357.0 354.9 360.6 376.0 363.8 374.6 377.9 9 ATS-NOW accounts4 15.8 15.6 13.8 13.8 14.2 14.8 13.5 15.6 15.1 10 Savings deposits 3.2 3.0 3.1 3.0 3.1 3.2 2.9 3.2 3.1 Not seasonally adjusted Demand deposits 11 All insured banks 156,052.3 188,506.4 217,124.8 214,848.8 222,685.5 241,133.2 217,350.7 237,459.0 224,089.2 12 Major New York City banks 70,559.2 91,500.0 104,518.6 101,141.9 106,335.6 117,287.7 103,561.2 112,654.6 107,115.7 13 Other banks 85,493.1 97,006.6 112,606.1 113,706.9 116,349.9 123,845.5 113,789.6 124,804.4 116,973.5 14 ATS-NOW accounts4 1,826.4 2,184.6 2,404.8 2,745.3 2,601.3 2,851.4 2,536.6 2,828.0 2,951.1 15 MMDA 1,223.9 1,609.4 1,954.2 2,372.8 2,341.0 2,557.1 2,399.0 2,530.0 2,409.4 16 Savings deposits 385.3 404.1 526.8 603.2 566.4 598.3 566.2 615.9 570.1 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 499.9 556.7 612.3 601.8 638.6 679.5 599.9 681.6 642.9 18 Major New York City banks 2,196.3 2,499.1 2,674.9 2,706.2 2,895.6 3,121.4 2,660.7 3,170.3 3,046.4 19 Other banks 305.6 321.2 356.9 355.7 372.9 390.3 351.9 398.9 373.3 20 ATS-NOW accounts4 15.8 15.6 13.8 14.4 14.1 15.2 13.4 15.1 15.6 21 MMDA 4.0 4.5 5.3 6.6 6.6 7.2 6.7 7.2 6.9 22 Savings deposits 3.2 3.0 3.1 3.3 3.1 3.2 3.0 3.3 3.1 1. Historical tables containing revised data for earlier periods may be obtained of states and political subdivisions. from the Monetary and Reserves Projections Section, Division of Monetary 4. Accounts authorized for negotiable orders of withdrawal (NOW) and ac- Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. counts authorized for automatic transfer to demand deposits (ATS). ATS data are 20551. available beginning December 1978. These data also appear on the Board's G.6 (406) release. For address, see inside 5. Excludes ATS and NOW accounts, MMDA and special club accounts, such front cover. as Christmas and vacation clubs. 2. Annual averages of monthly figures. 6. Money market deposit accounts. 3. Represents accounts of individuals, partnerships, and corporations and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • February 1989 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1987 1988 CCaatteeggoorryy Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Seasonally adjusted 1 Total loans and securities2 2,233.0 2,244.8 2,264.1 2,281.3 2,304.7 2,328.5 2,348.4 2,360.8 2,374.9 2,373.6 2,387.5 2,398.1 2 U.S.'government securities 335.0 336.4 336.4 340.2 343.8 346.5 350.5 348.0 350.5 352.5 355.1 356.8 3 Other securities 194.5 192.0 193.7 195.7 196.6 196.1 196.5 196.8 196.4 194.2 195.4 194.8 4 Total loans and leases2 1,703.5 1,716.5 1,734.0 1,745.4 1,764.3 1,786.0 1,801.5 1,815.9 1,827.9 1,826.8 1,836.9 1,846.5 5 Commercial and industrial ..... 562.4 565.2 569.3 568.6 578.1 586.3 592.4 598.3 599.4 597.1 600.9 599.2 6 Bankers acceptances held ... 4.1 4.3 4.3 4.7 4.6 4.4 4.4 4.4 4.6 4.5 4.2 44..22 7 Other commercial and industrial 558.3 560.9 564.9 564.0 573.5 582.0 588.1 593.9 594.7 592.7 596.7 595.0 8 U.S. addressees4 550.2 552.2 556.3 555.8 565.5 575.1 581.3 587.4 588.4 586.4 590.6 589.5 9 Non-U.S. addressees 8.1 8.7 8.7 8.2 8.1 6.9 6.8 6.5 6.3 6.3 6.1 5.5 10 Real estate 588.4 593.7 599.2 604.9 611.3 618.6 625.0 631.4 638.7 644.7 652.0 659.2 11 Individual 327.8 329.8 333.0 337.0 340.4 342.8 344.4 345.3 347.0 349.1 349.6 350.8 12 Security 33.4 36.5 42.1 41.2 39.5 39.8 39.4' 38.6 40.1 3366..33 3388..44 3377..55 13 Nonbank financial institutions 31.8 31.4 31.8 31.2 30.4 30.9 30.6 31.0 30.8 29.9 29.8 29.8 14 Agricultural 29.5 29.6 29.5 29.3 29.4 29.6 29.7 29.6 29.4 2299..33 2299..33 2299..88 15 State and political subdivisions 52.2 52.3' 52.3' 52. r 51.9^ 51.6' 51.5' 50.2 49.6 49.4 48.8' 48.0 16 Foreign banks 7.5 7.6 7.4 7.8 8.3 8.0 7.9 8.2 8.1 7.4 7.6 8.2 17 Foreign official institutions 5.3 5.4 5.1 5.1 5.1 5.1 5.0 5.0 5.2 5.2 5.1 5.4 18 Lease financing receivables 24.6 25.1 25.3 25.4 25.7 26.0 26.5 27.2 27.3 27.7 28.1 28.1 19 All other loans 40.5 39.8' 39. V 42.7' 44. r 47.2'' 49.0' 51.0 52.3 50.7 47.3 50.5 Not seasonally adjusted 20 Total loans and securities2 2,249.2 2,257.5 2,268.8 2,281.6 2,305.9 2,325.2 2,344.6 2,350.7 2,363.5 2,370.3 2,382.0 2,397.3 21 U.S. government securities 334.9 337.9 341.5 342.0 343.4 344.9 347.0 347.1 350.5 352.7 352.8 356.9 71 Other securities 195.0 194.6 194.4 195.3 196.2 196.1 196.0 195.5 196.3 194.3 194.3 194.1 23 Total loans and leases 1,719.3 1,724.9 1,732.9 1,744.2 1,766.3 1,784.2 1,801.6 1,808.1 1,816.7 1,823.3 1,834.9 1,846.2 24 Commercial and industrial ..... 566.4 564.9 568.5 573.8 582.1 588.8 594.0 595.4 594.2 593.7 596.4 598.1 25 Bankers acceptances held ... 4.2 4.1 4.3 4.7 4.5 4.4 4.5 4.4 4.6 4.5 44..11 44..22 26 Other commercial and industrial 562.2 560.7 564.2 569.1 577.6 584.4 589.5 591.0 589.6 589.1 592.3 593.9 27 U.S. addressees 554.1 552.8 556.0 561.2 569.7 577.3 582.6 584.0 582.9 582.5 586.C 587.8 28 Non-U.S. addressees 8.1 8.0 8.2 7.9 7.9 7.1 6.9 7.0 6.7 6.6 6.2 6.1 29 Real estate 589.3 594.1 598.5 604.1 610.3 618.1 624.8 631.5 638.7 645.5 652.7' 659.7 30 Individual 332.1 333.3 332.4 333.9 337.4 339.9 342.3 343.8 347.1 350.7 351.3 352.7 31 Security 35.0 37.3 40.5 40.6 41.2 40.4 40.8 38.2 38.3 3355..33 3377..11 3377..66 32 Nonbank financial institutions 33.1 31.6 30.8 30.3 30.3 30.7 30.6 30.8 30.7 30.2 29.9 30.2 33 Agricultural 29.3 28.9 28.5 28.3 28.6 29.3 30.0 30.3 30.3 3300..33 3300..22 3300..11 34 State and political subdivisions 52.2 54.1' 53.5r 53.0r 52.4r 51.6' 51.1' 49.5 49.1' 48.7' 48.0' 47.1 35 Foreign banks 7.9 7.8 7.6 7.7 7.9 7.7 7.8 8.2 7.9 7.6 7.8 8.2 36 Foreign official institutions 5.3 5.4 5.1 5.1 5.1 5.1 5.0 5.0 5.2 5.2 5.1 5.4 37 Lease financing receivables 24.6 25.2 25.4 25.6 25.9 26.1 26.7 27.2 27.2 27.5 27.6 27.8 38 All other loans 44.0 42.3r 42.0r 41.9' 45. r 46.6' 48.6' 48.2 48.0 48.5 48.8 49.6 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 Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Total nondeposit funds 1 Seasonally adjusted 178.4 180.2 178.1 175.8 183.1 194.3 194.8 192.2 195.4' 181.0 117777..99'' 118844..11 2 Not seasonally adjusted 179.3 180.6 180.7 176.6 182.2 194.1' 191.C 188.2 195.7' 181.6 178.1 186.4 Federal funds, RPs, and other borrowings from nonbanks 3 Seasonally adjusted 163.2 171.1 175.0 178.9 181.1 184.5 186.1 181.4 176.8 171.9 117733..00 117733..99 4 Not seasonally adjusted 164.1 171.4 177.6 179.8 180.2 184.3 182.4 177.4 177.1 172.5 173.3 176.3 5 Net balances due to foreign-related institutions, not seasonally adjusted 15.2 99..11 3.1 --33..11 22..00 99..77 88..77 1100..88 1188..66'' 99..11 1100..22 MEMO 6 Domestically chartered banks' net positions with own foreign branches, not seasonally adjusted -14.0 -16.5 -20.2 -25.3 -22.2 -16.5 -16.3 -14.0 -7.3' -15.7' --2200..66'' --1199..22 7 Gross due from balances 69.5 71.2 72.9 76.6 73. <y 69.7 69.6 70.4' 70.4 74.8 76.6' 77.1 8 Gross due to balances 55.5 54.7 52.7 51.4 50.7 53.2 53.3 56.4 63.1 59.1 56.0 57.9 9 Foreign-related institutions' net positions with directly related institutions, not seasonally adjusted 29.2 25.6 23.3 22.1 24.2 26.2 25.0 24.8 2255^^ 24.7 2255..55 2299..33 10 Gross due from balances 79.8 85.2 87.3 88.6 88.3 89.9 93.6 94.1 93.9 89.6 88.4 87.9 11 Gross due to balances 109.0 110.9 110.6 110.7 112.5' 116.1 118.6 118.9 119.8 114.3' 113.9 117.3 Security RP borrowings 1? Seasonally adjusted 107.3 110.0 109.0 109.7 113.5 117.7 122.0 119.5 116.6 112.6 112.3 112.0 13 U. N S. o t T s re ea a s s o u n ry a ll d y e m ad a j n u d s t b ed a lances y7 108.1 110.4 111.6 110.6 112.6 117.5 118.3 115.5 116.9 113.2 112.6 114.3 14 Seasonally adjusted 26.1 18.6 22.6 24.9 21.8 24.7 22.0 20.2 15.8 24.5 3300..77 2222..11 15 Not seasonally adjusted 22.4 24.9 28.2 22.3 21.7 30.4 21.0 22.0 11.9 24.6 27.7 16.2 Time deposits, $100,000 or more8 16 Seasonally adjusted 389.2 389.1 394.4 396.1 394.0 396.4 400.5 406.8 413.6 419.7 423.7 424.0 17 Not seasonally adjusted 389.3 390.1 394.7 398.2 393.9 397.1 399.8 404.0 412.9 419.7 423.0 424.0 1. Commercial banks are those in the 50 states and the District of Columbia business. This includes borrowings from Federal Reserve Banks and from foreign with national or state charters plus agencies and branches of foreign banks. New banks, term federal funds, overdrawn due from bank balances, loan RPs, and York investment companies majority owned by foreign banks, and Edge Act 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 Euroidollars. 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 • February 1989 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series1 Billions of dollars 1988 Account Jan. Feb. Apr. May July Aug. Sept. ALL COMMERCIAL BANKING INSTITUTIONS^ 1 Loans and securities 2,417.6 2,427.7 2,450.0 2.466.8 2.473.2 2,511.7 2,509.0 2.523.3 2.522.7 2,537.9 2,575.7 2 Investment securities 515.7 514.9 517.7 519.7 521.6 518.6 521.6 525.4 525.9 523.6 529.6 3 U.S. government securities 325.5 325.0 325.7 328.8 330.7 328.0 331.6 334.6 336.5 334.4 340.4 4 Other 190.3 190.0 192.0 190.9 191.0 190.6 190.0 190.8 189.4 189.2 189.2 5 Trading account assets 18.2 21.9 20.3 19.6 20.3 22.1 23.9 22.8 21.3 24.8 24.8 6 Total loans 1,883.6 1,890.9 1,912.0 1,927.5 1.931.3 1,971.0 1,963.5 1,975.1 1,975.5 1,989.4 2,021.3 7 Interbank loans 159.0 161.4 159.5 158.0 152.3 163.7 158.7 154.7 151.2 158.5 167.7 8 Loans excluding interbank 1,724.6 1,729.5 1.752.4 1.769.5 1.779.1 1,807.3 1,804.8 1.820.4 1,824.3 1,830.9 1,853.6 9 Commercial and industrial 562.9 568.9 576.2 583.4 587.8 598.2 592.4 592.8 593.8 593.8 600.1 10 Real estate 595.2 599.2 607.3 612.5 619.7 627.5 633.1 641.8 647.8 654.1 661.6 11 Individual 332.9 332.7 334.8 339.1 340.0 343.2 344.1 349.2 351.5 351.9 354.1 12 All other 233.6 228.7 234.1 234.6 231.7 238.4 235.2 236.6 231.2 231.1 237.8 13 Total cash assets 213.4 207.4 211.2 214.3 200.3 221.4 217.0 221.8 215.9 208.5 235.1 14 Reserves with Federal Reserve Banks 33.3 32.7 32.0 32.2 26.0 34.4 30.7 33.0 31.1 31.6 33.7 15 Cash in vault 25.7 25.1 24.8 25.4 25.4 26.5 25.9 26.5 26.2 26.3 28.7 16 Cash items in process of collection .. 70.8 66.9 74.1 76.4 71.5 77.2 75.7 79.9 76.4 72.6 89.5 17 Demand balances at U.S. depository institutions 31.7 30.4 32.0 30.3 29.2 31.6 31.3 31.5 29.4 29.2 32.0 18 Other cash assets 51.9 52.3 48.2 49.9 48.3 51.8 53.5 50.9 52.8 48.8 51.2 19 Other assets 181.5 180.9 193.1 190.9 186.6 194.3 188.4 187.5 191.8 201.2 201.1 20 Total assets/total liabilities and capital... 2.812.5 2,816.0 2,854.3 2.871.9 2.860.2 2,927.5 2,914.4 2,932.6 2,930.3 2,947.6 3,012.0 2 2 2 2 2 2 2 2 3 4 5 6 7 1 O R B D e o t e T T S h s r p i e a r r i o d m o a r v s u n w i e i l n a s t i i s l a g a d n b s c e ( g i t a p s l d i s i o o e t s i n s p e e i o t s t d s s s e i l p t e s o s s s i l t i s a bilities) 1. 4 5 5 8 2 9 1 5 6 7 3 0 8 7 2 2 7 1 5 3 1 . . . . . . . 1 6 4 6 4 5 6 1, 5 5 8 4 2 9 1 7 3 5 6 0 7 8 4 5 0 8 2 4 8 . . . . . . . 1 7 5 8 6 4 4 2. 5 5 8 4 2 0 1 4 7 5 0 8 0 8 0 9 4 7 8 8 3 . . . . . . . 0 9 9 7 5 5 2 2.0 5 4 5 8 2 1 3 6 1 1 9 7 8 6 0 5 5 9 1 4 . . . . . . . 4 8 9 3 4 1 6 2, 5 5 4 0 8 2 1 7 5 4 0 0 8 8 9 8 2 7 7 8 5 . . . . . . . 1 4 2 4 3 6 8 2, 6 5 8 4 0 2 1 4 8 9 0 4 0 8 4 7 4 3 2 9 7 . . . . . . . 5 4 7 3 5 7 8 2, 5 5 9 4 0 2 1 9 4 0 7 5 0 8 8 5 6 0 0 8 5 . . . . . . . 4 4 4 7 2 2 3 2, 6 5 9 4 0 2 1 5 4 2 0 7 1 8 2 2 1 9 8 2 8 . . . . . . . 4 2 2 5 5 9 7 2. 4 0 5 5 9 2 1 7 1 3 8 5 3 8 0 3 6 8 3 8 7 . . . . . . . 1 8 9 3 6 8 6 2,0 5 5 9 4 2 1 6 3 8 4 8 1 8 8 6 1 7 1 0 9 . . . . . . . 4 9 9 3 3 0 0 2, 6 5 9 4 1 2 1 7 2 4 5 2 2 9 6 7 2 1 2 0 2 . . . . . . . 6 4 2 2 2 6 3 MEMO 28 U.S. government securities (including trading account) 339.5 342.1 341.2 343.4 346.3 344.7 349.2 351.4 352.7 354.3 359.9 29 Other securities (including trading account) 194.5 194.7 196.8 195.9 195.6 196.0 196.4 196.7 194.4 194.2 194.5 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 2,240.5 2,246.3 2,266.0 2,282.3 2,286.4 2.314.6 2.319.3 2,330.5 2,329.1 2,342.4 2,376.2 31 Investment securities 489.1 488.6 491.7 494.6 495.7 492.8 495.3 499.3 501.0 498.5 504.7 32 U.S. Treasury securities 313.9 313.6 314.5 317.7 318.6 316.3 319.3 322.8 325.0 323.1 329.2 33 Other 175.2 175.0 177.2 176.9 177.1 176.6 176.1 176.5 175.9 175.5 175.6 34 Trading account assets 18.2 21.9 20.3 19.6 20.3 22.1 23.9 22.8 21.3 24.8 24.8 35 Total loans 1,733.1 1,735.8 1,754.0 1,768.1 1,770.4 1.799.7 1,800.1 1,808.5 1,806.8 1,819.0 1,846.7 36 Interbank loans 130.3 132.0 131.2 128.5 124.9 133.1 130.7 125.2 121.8 127.8 136.3 37 Loans excluding interbank 1,602.8 1,603.8 1,622.9 1,639.6 1.645.6 1,666.6 1.669.4 1.683.3 1,685.0 1,691.2 1,710.4 38 Commercial and industrial 472.7 475.8 481.0 487.4 488.8 492.6 490.8 489.7 489.2 490.2 495.4 39 Real estate 581.7 584.5 592.1 597.0 603.6 611.4 617.5 625.4 631.5 636.5 642.8 40 Individual 332.6 332.4 334.5 338.8 339.7 342.9 343.8 348.9 351.2 351.6 353.8 41 All other 215.9 211.1 215.3 216.4 213.5 219.7 217.3 219.2 213.2 212.9 218.4 42 Total cash assets 194.2 186.6 193.9 196.7 183.0 201.6 196.4 202.8 193.4 189.7 215.2 43 Reserves with Federal Reserve Banks 31.7 30.5 30.1 30.7 23.6 32.9 29.5 31.4 29.0 29.8 32.6 44 Cash in vault 25.7 25.1 24.7 25.4 25.4 26.4 25.9 26.4 26.2 26.3 28.7 45 Cash items in process of collection .. 70.3 66.4 73.5 75.8 71.0 76.5 75.1 79.2 75.7 71.9 88.7 46 Demand balances at U.S. depository institutions 30.1 30.4 28.7 27.5 29.8 29.4 29.8 27.3 27.2 30.1 47 Other cash assets 36.5 35.2 36.0 35.6 35.8 36.5 36.0 35.3 34.4 35.1 48 Other assets 118.5 123.1 121.3 118.3 125.6 121.6 123.8 127.8 132.9 134.0 49 Total assets/liabilities and capital 2,550.6 2,551.4 2,583.0 2,600.3 2.587.7 2.641.8 2,637.4 2,657.2 2,650.3 2.665.0 2,725.4 5 5 0 1 De T p r o a s n it s s a ction deposits 1, 5 9 6 1 9 0 . . 3 2 1, 5 9 6 1 0 6 . . 7 1 1, 5 9 8 4 0 4 . . 0 5 1, 5 9 8 4 7 8 . . 2 1 1,944.7 1. 5 9 9 7 4 6 . . 5 9 1, 5 9 8 8 9 4 . . 6 4 2.0 6 0 0 6 0 . . 4 6 1, 5 9 7 9 9 1 . . 1 0 1. 5 9 7 9 7 9 . . 3 1 2,0 6 5 1 1 7 . . 1 2 52 Savings deposits 529.3 533.3 537.6 533.9 570.7 541.8 542.9 539.7 534.4 535.8 539.8 53 Time deposits 811.6 822.0 826.9 827.0 539.8 840.6 851.9 866.1 877.5 885.9 894.2 5 5 4 5 O Bo th r e ro r w li i a n b g i s l ities 3 1 5 0 1 8 . . 7 6 3 1 4 0 9 4 . . 9 4 3 1 5 0 0 8 . . 1 6 3 1 5 1 8 2 . . 4 7 8 3 3 5 4 1 . . 2 7 3 1 6 1 9 1 . . 4 0 3 1 5 1 8 2 . . 5 5 3 1 4 1 5 9 . . 7 6 3 1 5 1 8 6 . . 6 4 3 1 6 1 3 7 . . 2 0 3 1 6 2 2 2 . . 5 8 56 Residual (assets less liabilities) 180.2 181.1 179.9 181.1 1 1 0 8 8 2 . .4 8 184.5 182.0 185.4 184.3 185.6 189.0 MEMO4 57 Real estate loans, revolving 31.3 31.7 32.1 33.0 33.7 34.8 35.3 36.3 37.3 37.9 39.1 58 Real estate loans, other 550.4 552.9 560.0 564.0 569.9 576.6 582.2 589.2 594.1 598.5 603.7 1. Back data are available from the Banking and Monetary Statistics section, the last Wednesday of the month based on a weekly reporting sample of Board of Governors of the Federal Reserve System, Washington, D.C., 20551. foreign-related institutions and quarter-end condition reports. These data also appear in the Board's weekly H.8 (510) release. 2. Commercial banking institutions include insured domestically chartered Data have been revised because of benchmarking to new Call reports beginning commercial banks, branches and agencies of foreign banks, Edge Act and January 1987. Agreement corporations, and New York State foreign investment corporations. Figures are partly estimated. They include sill bank-premises subsidiaries and 3. Insured domestically chartered commercial banks include all member banks other significant majority-owned domestic subsidiaries. Loan and securities data and insured nonmember banks. for domestically chartered commercial banks are estimates for the last Wednes- 4. Memorandum items for real estate loans; revolving and other, are shown as day of the month based on a sample of weekly reporting banks and quarter-end separate breakdowns for the first time. condition report data. Data for other banking institutions are estimates made for 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 Oct. 5 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 1 Cash and balances due from depository institutions 105,122 119,433 106,386 99,726' 114,422 102,187 116,679 103,700 117,512 2 Total loans, leases, and securities, net 1,137,731 1,132,809 1,140,338 1,134,358' 1,151,943 1,140,001 1,150,913 1,142,918 1,157,802 3 U.S. Treasury and government agency 132,177r 132,717' 132,826 134,381' 132,734 132,345 134,711 134,944 135,890 4 Trading account 17,529 18,534 18,784 20,227 19,278 18,688 21,049 19,971 19,818 5 Investment account 114,648' 114,183' 114,042 114,154' 113,456 113,657 113,663 114,973 116,072 6 Mortgage-backed securities 44,186' 44,158' 4444,,446666 44,668' 44,825 4444,,885588 4444,,887733 4455,,445599 4466,,222266 All other maturing in 7 One year or less 19,212 19,228 19,234 19,172 19,623 19,739 20,339 20,625 21,137 8 Over one through five years 41,832 41,550 41,240 41,188 40,341 40,373 40,013 40,438 40,328 9 Over five years 9,418 9,247 9,101 9,125 8,667 8,687 8,438 8,451 8,380 10 Other securities 72,798r 72,814' 72,776 72,777 72,812 72,811 72,859 72,970 73,303 11 Trading account 1,736 1,564 1,596 1,518 1,336 1,336 1,446 1,643 1,681 12 Investment account 71,062' 71,25c 71,180 71,259 71,476 71,475 71,412 71,327 71,623 13 States and political subdivisions, by maturity 46,328' 46,272' 46,140 46,136 45,794 45,711 45,560 45,479 45,484 14 One year or less 5,452 5,468 5,420 5,386' 5,262 5,263 5,138 5,087 5,103 15 Over one year 40,876' 40,804' 40,719 40.75C 40,532 40,448 40,422 40,391 40,381 16 Other bonds, corporate stocks, and securities 24,734 24,979 25,040 25,123 25,681 25,764 25,852 25,848 26,139 17 Other trading account assets 3,336 3,502 3,634 3,548 3,986 3,739 3,929 3,843 3,723 18 Federal funds sold3 73,973 67,251 71,754 68,860 78,740 68,841 71,955 66,424 76,096 19 To commercial banks 50,554 43,109 46,430 44,186 51,278 42,594 48,581 42,579 51,272 20 To nonbank brokers and dealers in securities 15,068 16,317 16,737 16,030 18,313 16,832 14,478 14,797 15,593 21 To others 8,351 7,825 8,586 8,644 9,148 9,415 8,896 9,049 9,230 22 Other loans and leases, gross 895,743 896,574 899,321 894,831 903,752 902,354 907,531 905,533 909,443 23 Other loans, gross 872,630' 873,414 876,142 871,640 880,526 879,105 884,207 882,192 886,067 24 Commercial and industrial 298,239' 297,932' 297,843' 296,977 300,502 300,317 300,389 299,887 301,234 25 Bankers acceptances and commercial paper 1,685 1,701 1,703 1,759 1,871 1,805 1,860 1,876 1,904 26 All other 296,554' 2%,232' 296,14C 295,218 298,631 298,511 298,528 298,010 299,330 27 U.S. addressees 294,302' 294,01C 293,914' 292,938 296,374 296,317 2%, 269 295,778 297,073 28 Non-U.S. addressees 2,252 2,222 2,225 2,279 2,258 2,194 2,259 2,232 2,256 29 Real estate loans 291,731' 292,395' 293,675' 293,498 293,436 294,502 295,176 295,347 296,015 30 Revolving, home equity 20,620 20,707 20,808 20,887 21,067 21,146 21,262 21,350 21,443 31 All other 271,111' 271,688' 272,867' 272,610 272,370 273,355 273,914 273,997 274,572 32 To individuals for personal expenditures 164,894' 164,198' 164,158' 164,423 165,281 165,117 165,636 165,861 165,723 33 To depository and financial institutions 46,135' 47,82C 47,489' 46,960 48,574 49,158 50,628 48,890 49,307 34 Commercial banks in the United States 20,551 21,338 21,886 22,142 22,776 23,120 24,115 23,059 22,714 35 Banks in foreign countries 3,941' 4,884' 3,964' 3,653 3,746 4,318 4,528 4,432 4,632 36 Nonbank depository and other financial institutions 21,643 21,599 21,640 21,165 22,051 21,720 21,985 21,398 21,961 37 For purchasing and carrying securities 12,462 12,369 13,925 12,650 14,001 12,838 13,743 14,411 15,271 38 To finance agricultural production 5,613 5,587 5,585 5,567 5,558 5,512 5,495 5,484 5,469 39 To states and political subdivisions 29,584' 29,512 29,452 29,337 29,104 28,849 28,804 28,954 28,871 40 To foreign governments and official institutions 2,251' 2,188' 2,14C 2,147 2,131 2,077 2,132 2,098 2,026 41 All other 21,721' 21,412' 21,875' 20,080 21,938 20,736 22,204 21,260 22,151 42 Lease financing receivables 23,113' 23,160 23,178 23,191 23,225 23,249 23,323 23,341 23,376 43 LESS: Unearned income 4,921 4,934 4,862 4,885 4,844 4,879 4,871 4,874 4,847 44 Loan and lease reserve4 35,374 35,117 35,110 35,152 35,236 35,210 35,201 35,923 35,806 45 Other loans and leases, net 855,447 856,524 859,348 854,793 863,671 862,265 867,459 864,736 868,790 46 All other assets 133,59c 133,326' 130,602' 130,403' 132,549 130,480 131,367 130,374 131,928 47 Total assets 1,376,443' 1,385,568' 1,377,327' 1,364,487' 1,398,914 1,372,668 1,398,958 1,376,993 1,407,241 48 Demand deposits 232,206 238,057 223,717 215,618 235,658 217,665 241,854 225,530 240,653 49 Individuals, partnerships, and corporations 182,012 189,160 177,227 172,689 185,719 175,655 190,422 180,647 191,636 50 States and political subdivisions 5,975 5,288 5,658 5,575 6,581 5,275 6,420 5,935 6,456 51 U.S. government 5,118 1,776 4,107 2,610 1,688 1,518 3,247 3,182 2,949 52 Depository institutions in the United States 23,136 25,389 21,710 20,264 23,179 19,587 25,398 19,594 22,067 53 Banks in foreign countries 6,111 6,905 6,500 5,868 5,786 6,637 6,754 7,042 7,239 54 Foreign governments and official institutions 868 581 688 629 741 663 888 918 832 55 Certified and officers' checks 8,985 8,959 7,827 7,983 11,963 8,330 8,722 8,213 9,474 56 Transaction balances other than demand deposits 73,902 73,328 72,480 71,308 74,006 73,605 73,698 72,917 73,637 57 Nontransaction balances 616,774 617,829 617,061 616,576 620,448 623,481 623,274 622,587 622,745 58 Individuals, partnerships, and corporations 576,569 577,586 577,108 576,532 581,065 583,887 583,645 582,787 583,097 59 States and political subdivisions 30,408 30,539 30,394 30,540 30,007 30,213 30,307 30,349 30,025 60 U.S. government 890 872 917 896 855 942 959 943 965 61 Depository institutions in the United States 8,056 7,991 7,796 7,729 7,669 7,596 7,535 7,712 7,829 62 Foreign governments, official institutions, and banks 850 840 846 879 852 843 827 795 828 63 Liabilities for borrowed money 278,315 279,945 283,452 279,931 286,324 275,150 277,098 272,478 278,897 64 Borrowings from Federal Reserve Banks 4,130 1,750 2,901 1,500 2,160 2,700 3,000 1,200 1,872 65 Treasury tax-and-loan notes 13,956 16,856 18,482 22,464 16,174 7,553 3,510 13,425 12,853 66 All other liabilities for borrowed money 260,229 261,339 262,069 255,967 267,990 264,897 270,588 257,853 264,172 67 Other liabilities and subordinated notes and debentures 83,693 83,992 88,454 88,895 90,310 90,090 90,595 89,958 97,056 68 Total liabilities 1,284,890 1,293,152 1,285,164 1,272,328 1,306,746 1,279,992 1,306,520 1,283,469 1,312,988 69 Residual (total assets minus total liabilities)6 91,553' 92,416' 92,163' 92,159' 92,168 92,677 92,439 93,524 94,253 MEMO 70 Total loans and leases (gross) and investments adjusted ... 1,106,922 1,108,412 1,111,995 1,108,067' 1,117,969 1,114,376 1,118,289 1,118,078 1,124,470 71 Total loans and leases (gross) adjusted 898,611 899,378 902,759 897,362 908,437 905,481 906,790 906,319 911,553 72 Time deposits in amounts of $100,000 or more 194,386' 193,835' 194,166 194,428 193,997 194,552 194,051 194,751 194,464 73 U.S. Treasury securities maturing in one year or less 18,959 18,715 18,986 19,473 19,402 18,861 21,072 20,925 19,895 74 Loans sold outright to affiliates—total8 1,303 1,304 1,291 1,367 1,401 1,380 1,303 1,342 1,308 75 Commercial and industrial 879 879 866 953 987 965 924 968 929 76 Other 424 426 426 414 414 414 379 374 380 77 Nontransaction savings deposits (including MMDAs) 251,186 252,360 250,789 249,650 253,371 255,025 254,856 253,029 253,021 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 Nonfinancial Statistics • February 1989 1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY1 Millions of dollars, Wednesday figures 1988 AAccccoouunntt Oct. 5 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 1 Cash balances due from depository institutions 22,715 25,251 21,944 20,285 27,028 22,061 24,007 20,026 27,884 2 Total loans, leases and securities, net2 211,942 212,650 218,380 212,164 219,266 214,932 217,719 213,718 221,963 Securities 3 U.S. Treasury and government agency 0 0 0 0 0 0 0 0 0 4 Trading account 0 0 0 0 0 0 0 0 0 5 Investment account 15,056 15,074 15,306 15,198 15,256 15,180 15,113 15,381 15,623 6 Mortgage-backed securities4 5,935 5,905 6,119 6,110 6,125 6,126 6,183 6,465 6,660 All other maturing in 7 One year or less 2,249 2,337 2,377 2,306 2,432 2,429 2,320 2,323 2,217 U Over one through five years 4,783 4,760 4,754 4,720 4,740 4,664 4,677 4,672 4,835 9 Over five years 2,088 2,070 2,057 2,062 1,958 1,961 1,934 1,921 1,911 10 Other securities3 0 0 0 0 0 0 0 0 0 11 Trading account 0 0 0 0 0 0 0 0 0 12 Investment account 17,171 17,165 17,197 17,206 17,350 17,435 17,403 17,512 17,718 13 States and political subdivisions, by maturity 12,711 12,703 12,652 12,653 12,562 12,557 12,496 12,481 12,482 14 One year or less 1,229 1,230 1,224 1,226 1,155 1,156 1,098 1,090 1,092 15 Over one year 11,482 11,473 11,428 11,427 11,407 11,401 11,399 11,391 11,390 16 Other bonds, corporate stocks, and securities 4,460 4,462 4,545 4,553 4,788 4,878 4,907 5,031 5,236 17 Other trading account assets 0 0 0 0 0 0 0 0 0 Loans and leases 18 Federal funds sold 25,177 25,200 29,831 26,759 30,393 26,868 26,548 24,195 29,736 19 To commercial banks 12,510 10,937 14,362 12,608 14,210 10,798 13,642 10,424 14,717 20 To nonbank brokers and dealers in securities 7,401 8,866 9,313 8,123 9,818 9,462 7,151 7,578 8,394 21 To others 5,267 5,397 6,156 6,028 6,366 6,609 5,755 6,193 6,625 22 Other loans and leases, gross 169,432 170,132 170,930 167,894 171,189 170,445 173,614 171,595 173,781 23 Other loans, gross 163,954 164,636 165,406 162,370 165,662 164,906 168,008 165,990 168,182 24 Commercial and industrial 55,825 56,030 55,973 55,474 56,646 56,438 56,622 55,816 56,290 25 Bankers acceptances and commercial paper 363 376 368 352 493 422 462 440 483 26 All other 55,462 55,654 55,606 55,122 56,153 56,016 56,160 55,376 55,807 27 U.S. addressees 55,071 55,265 55,222 54,700 55,769 55,652 55,773 55,001 55,372 28 Non-U.S. addressees 392 388 383 422 383 363 387 375 436 29 Real estate loans 49,341 49,215 49,569 49,366 49,125 49,332 49,436 49,162 49,292 30 Revolving, home equity v 3,107 3,128 3,128 3,142 3,189 3,183 3,194 3,211 3,222 31 All other 46,234 46,087 46,441 46,224 45,936 46,149 46,242 45,951 46,069 32 To individuals for personal expenditures 21,120 20,632 20,431 20,449 20,457 20,453 20,578 20,679 20,709 33 To depository and financial institutions 19,985 21,098 20,132 19,501 20,316 21,168 22,568 21,123 21,789 34 Commercial banks in the United States 11,367 11,631 11,459 11,235 11,435 11,826 12,977 11,565 11,748 35 Banks in foreign countries 2,542 3,202 2,401 1,989 2,118 2,672 2,973 2,807 2,964 36 Nonbank depository and other financial institutions 6,076 6,265 6,272 6,277 6,762 6,671 6,618 6,752 7,077 37 For purchasing and carrying securities 4,360 4,434 5,761 4,804 5,4% 4,765 5,075 5,976 6,294 38 To finance agricultural production 203 222 263 247 227 209 204 207 197 39 To states and political subdivisions ... 6,689 6,647 6,615 6,560 6,509 6,444 6,439 6,524 6,397 40 To foreign governments and official institutions 724 656 618 596 658 622 667 660 592 41 Mother 5,707 5,702 6,044 5,372 6,228 5,474 6,420 5,842 6,622 42 Lease financing receivables 5,478 5,496 5,524 5,525 5,527 5,539 5,606 5,605 5,600 43 LESS: Unearned income 1,624 1,621 1,582 1,598 1,587 1,613 1,608 1,616 1,611 44 Loan and lease reserve 13,269 13,300 13,301 13,295 13,335 13,383 13,352 13,351 13,284 45 Other loans and leases, net6 154,538 155,212 156,046 153,001 156,267 155,449 158,654 156,628 158,886 46 All other assets 61,586 63,863 62,012 63,701 63,616 60,123 63,359 61,660 61,130 47 Total assets 296,244 301,764 302,336 296,150 309,910 297,117 305,085 295,404 310,977 Deposits 48 Demand deposits 53,516 55,520 53,195 50,013 56,273 50,729 58,595 52,540 57,536 49 Individuals, partnerships, and corporations 36,786 39,033 37,717 35,664 38,544 36,031 41,024 37,369 40,412 50 States and political subdivisions 910 590 597 550 652 535 760 568 661 51 U.S. government 1,032 243 834 467 215 269 588 562 596 52 Depository institutions in the United States 5,555 5,928 5,424 5,370 5,695 4,557 6,452 4,438 5,542 53 Banks in foreign countries 4,957 5,642 5,278 4,635 4,626 5,466 5,548 5,722 5,922 54 Foreign governments and official institutions 708 432 526 444 567 522 745 758 666 55 Certified and officers' checks 3,567 3,651 2,818 2,883 5,975 3,349 3,477 3,123 33,,773366 56 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers) 8,663 8,618 8,573 8,373 8,688 8,634 8,646 8,574 8,608 57 Nontransaction balances 107,490 108,884 109,499 109,263 109,637 110,680 110,439 110,632 110,972 58 Individuals, partnerships, and corporations 97,784 99,019 99,222 98,984 99,412 100,420 100,171 100,190 100,625 59 States and political subdivisions 7,580 7,703 8,108 8,131 8,157 8,202 8,216 8,247 8,140 60 U.S. government 29 27 29 32 35 23 26 28 32 61 Depository institutions in the United States 1,776 1,826 1,822 1,806 1,747 1,751 1,741 1,887 1,894 62 Foreign governments, official institutions, and banks 320 309 318 310 285 284 284 280 282 63 Liabilities for borrowed money 70,285 72,084 72,342 69,315 74,428 66,848 68,566 65,773 68,091 64 Borrowings from Federal Reserve Banks 1,595 0 0 0 0 0 0 0 0 65 Treasury tax-and-loan notes 3,556 4,728 5,163 5,928 4,184 1,911 1,262 3,807 3,451 66 All other liabilities for borrowed money8 65,134 67,357 67,180 63,386 70,244 64,938 67,303 61,966 64,640 67 Other liabilities and subordinated notes and debentures 30,012 29,731 32,024 32,576 34,225 33,186 31,985 31,256 38,718 68 Total liabilities 269,967 274,838 275,634 269,541 283,252 270,078 278,230 268,774 283,926 69 Residual (total assets minus total liabilities)9 26,277 26,927 26,702 26,609 26,658 27,039 26,855 26,630 27,051 MEMO 70 Total loans and leases (gross) and investments adjusted2,10 202,959 205,002 207,442 203,215 208,543 207,305 206,060 206,696 210,393 71 Total loans and leases (gross) adjusted 170,732 172,764 174,939 170,811 175,937 174,690 173,543 173,802 177,052 72 Time deposits in amounts of $100,000 or more 39,974 40,062 40,924 40,941 40,996 40,998 41,022 41,310 41,053 73 U.S. Treasury securities maturing in one year or less 3,491 3,346 3,990 3,600 3,998 3,654 4,816 4,163 3,299 1. These data also appear in the Board's H.4.2 (504) release. For address, see 7. Includes trading account securities. inside front cover. 8. Includes federal funds purchased and securities sold under agreements to 2. Excludes trading account securities. repurchase. 3. Not available due to confidentiality. 9. Not a measure of equity capital for use in capital adequacy analysis or for 4. Includes U.S. government-issued or guaranteed certificates of participation other analytic uses. in pools of residential mortgages. 10. Exclusive of loans and federal funds transactions with domestic commer- Digitized for FR5A. SInEclRud es securities purchased under agreements to resell. cial banks. 6. Includes allocated transfer risk reserve. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS1 Assets and Liabilities Millions of dollars, Wednesday figures 1988 AAccccoouunntt Oct. 5 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 1 Cash and due from depository institutions ... 10,810 10,389 11,434 10,286 11,233 12,579 11,887 11,126 10,817 2 Total loans and securities 111,005 109,214 111,938 109,648 111,506 111,583 112,279 110,161 112,853 3 U.S. Treasury and government agency securities 7,978 8,035 7,756 7,760 7,885 7,751 77,,883344 77,,554466 77,,665511 4 Other securities 7,178 7,186 7,320 7,315 7,288 7,237 7,242 7,202 7,259 5 Federal funds sold 8,064 7,583 10,198 9,290 8,489 9,036 10,864 7,293 10,173 6 To commercial banks in the United States. 5,690 5,201 7,972 6,852 5,823 6,729 8,861 5,465 7,878 7 To others 2,374 2,382 2,226 2,437 2,666 2,307 2,003 1,828 2,294 8 Other loans, gross 87,785 86,410 86,663 85,283 87,843 87,558 86,340 88,120 87,771 9 Commercial and industrial 56,508' 55,974' 55,384' 55,229' 56,483 55,888 55,485 55,635 56,064 10 Bankers acceptances and commercial paper 1,679 1,595 1,617 1,630 1,555 1,604 1,689 1,736 1,554 11 All other 54,829' 54,378' 53,767' 53,599' 54,928 54,283 53,797 53,899 54,511 12 U.S. addressees 53,093' 52,758' 52,185' 51,931' 53,223 52,608 52,224 52,279 52,871 13 Non-U.S. addressees 1,736 1,620 1,582 1,668 1,704 1,675 1,573 1,620 1,640 14 To financial institutions 17,212 16,615 17,759 16,460 17,062 17,078 16,136 17,424 16,307 15 Commercial banks in the United States.. 13,114 12,330 13,462 12,372 12,648 12,773 11,902 13,038 12,018 16 Banks in foreign countries 1,025 974 1,247 1,133 1,350 1,174 1,157 1,221 1,220 17 Nonbank financial institutions 3,074 3,311 3,050 2,955 3,065 3,130 3,076 3,166 3,070 18 To foreign governments and official institutions 639 642 637 548 621 743 882200 880011 883300 19 For purchasing and carrying securities 1,647 1,432 1,238 1,235 1,611 1,467 1,449 1,805 1,761 20 All other 11,779' 11,748' 11,645' 11,81c 12,066 12,382 12,448 12,455 12,808 21 Other assets (claims on nonrelated parties) .. 30,253 30,248 30,266 30,442 30,628 31,572 32,2% 32,715 33,025 22 Net due from related institutions 17,264 16,149 17,907 18,220 17,526 16,7% 14,936 18,101 15,233 23 Total assets 169,331 166,000 171,546 168,5% 170,893 172,529 171,399 172,104 171,928 24 Deposits or credit balances due to other than directly related institutions 44,095 44,238' 43,954 44,232 43,758 43,029 43,390 43,941 44,179 25 Transaction accounts and credit balances . 3,785 3,820 3,836 4,393 4,549 3,642 4,301 3,888 3,954 26 Individuals, partnerships, and corporations 2,459 2,471 2,486 2,613 2,655 2,350 2,882 2,497 2,451 27 Other 1,326 1,349 1,350 1,780 1,894 1,292 1,418 1,391 1,503 28 Nontransaction accounts 40,310 40,417' 40,118 39,838 39,209 39,387 39,089 40,053 40,225 29 Individuals, partnerships, and corporations 33,344 33,443' 33,308 33,030 32,723 32,891 32,634 33,630 33,713 30 Other 6,966 6,974 6,809 6,808 6,486 6,4% 6,455 6,423 6,512 31 Borrowings from other than directly related institutions 69,346 67,445 72,608 69,%2 69,132 70,561 68,504 67,646 68,197 32 Federal funds purchased 34,338 33,094 35,647 35,242 33,914 33,385 31,479 24,603 31,021 33 From commercial banks in the United States 19,425 16,299 18,337 19,373 17,088 17,674 16,307 12,087 16,454 34 From others 14,914 16,795 17,309 15,869 16,826 15,712 15,172 12,516 14,567 35 Other liabilities for borrowed money 35,007 34,351 36,961 34,720 35,218 37,176 37,024 43,043 37,176 36 To commercial banks in the United States 24,526 23,776 26,219 23,552 23,628 25,763 25,668 28,072 25,744 37 To others 10,481 10,575 10,742 11,168 11,590 11,413 11,356 14,971 11,432 38 Other liabilities to nonrelated parties 31,423 31,387 31,439 31,354 31,582 32,911 33,837 33,964 34,168 39 Net due to related institutions 24,468 22,931' 23,546 23,048 26,420 26,028 25,668 26,552 25,383 40 Total liabilities 169,331 166,000 171,546 168,5% 170,893 172,529 171,399 172,104 171,928 MEMO 41 Total loans (gross) and securities adjusted .. 92,202 91,683 90,504 90,424 93,035 92,081 91,516 91,659 92,957 42 Total loans (gross) adjusted6 77,045 76,462 75,427 75,348 77,862 77,092 76,440 76,910 78,048 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 $750 million or more on June 30,1980, plus those branches and agencies that had deposits. 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 • February 1989 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1 Billions of dollars, estimated daily-average balances, not seasonally adjusted Commercial banks TTyyppee ooff hhoollddeerr 1987 1988 11998833 11998844 11998855 11998866 DDeecc.. DDeecc.. DDeecc.. ,,44 DDeecc.. June Sept. Dec. Mar. June Sept. 1 All holders—Individuals, partnerships, and corporations 293.5 302.7 321.0 363.6 340.2 339.0 343.5 328.6 346.5 337.8 2 Financial business 32.8 31.7 32.3 41.4 36.6 36.5 36.3 33.9 37.2 34.8 3 Nonfinancial business 161.1 166.3 178.5 202.0 187.2 188.2 191.9 184.1 194.3 190.3 4 Consumer 78.5 81.5 85.5 91.1 90.1 88.7 90.0 86.9 89.8 87.8 5 Foreign 3.3 3.6 3.5 3.3 3.2 3.2 3.4 3.5 3.4 3.2 6 17.8 19.7 21.2 25.8 23.1 22.4 21.9 20.3 21.9 21.7 Weekly reporting banks 1987 1988 11998833 11998844 11998855 11998866 DDeecc.. DDeecc..22 DDeecc.. ,,44 DDeecc.. June Sept. Dec. Mar.5 June Sept. 7 All holders—Individuals, partnerships, and corporations 146.2 157.1 168.6 195.1 179.3 179.1 183.8 181.8 191.5 185.3 8 Financial business 24.2 25.3 25.9 32.5 29.3 29.3 28.6 27.0 30.0 27.2 9 Nonfinancial business 79.8 87.1 94.5 106.4 94.8 96.0 100.0 98.2 103.1 101.5 10 Consumer 29.7 30.5 33.2 37.5 37.5 37.2 39.1 41.7 42.3 41.8 11 Foreign 3.1 3.4 3.1 3.3 3.1 3.1 3.3 3.4 3.3 3.1 12 Other 9.3 10.9 12.0 15.4 14.6 13.5 12.7 11.4 12.8 11.7 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 iri 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 refle ct 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 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 . May June July Aug. Sept. Oct. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 187,658 237,586 298,779 329,991 357,129 414,312 417,788 423,599 426,685 421,224 423,759 Financial companies1 Dealer-placed paper 2 Total 44,455 56,485 78,443 101,072 101,958 137,838 142,322 148,125 148,224 151,491 148,944 3 Bank-related (not seasonally adjusted) 22,,444411 22,,003355 11,,660022 22,,226655 11,,442288 11,,442222 11,,444488 11,,334400 983 901 840 Directly placed paper* 4 Total 97,042 110,543 135,320 151,820 173,939 185,876 184,658 185,063 187,305 179,690 182,663 5 Bank-related (not seasonally adjusted) 35,566 42,105 44,778 40,860 43,173 47,719 45,294 44,975 47,818 43,887 41,803 6 Nonfinancial companies4 46,161 70,558 85,016 77,099 81,232 90,598 90,808 90,411 91,156 90,043 92,152 Bankers dollar acceptances (not seasonally adjusted)5 7 Total 78,309 78,364 68,413 64,974 70,565 63,381 64,359 63,240 64,036 63,452 62,253 Holder 8 Accepting banks 9,355 9,811 11,197 13,423 10,943 9,412 9,734 9,655 9,551 9,334 9,083 9 Own bills 8,125 8,621 9,471 11,707 9,464 8,588 8,861 8,702 8,664 8,400 8,026 10 Bills bought 1,230 1,191 1,726 1,716 1,479 825 873 953 888 934 1,057 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 1,050 1,273 1,114 9,915 9,634 1,166 13 Others 67,807 67,881 56,279 50,234 58,658 52,918 53,351 52,471 53,493 53,154 52,004 Basis 14 Imports into United States 15,649 17,845 15,147 14,670 16,483 14,045 14,244 14,001 14,608 14,622 14,064 15 Exports from United States 16,880 16,305 13,204 12,960 15,227 14,534 14,606 14,676 14,345 13,946 14,067 16 All other 45,781 44,214 40,062 37,344 38,855 34,803 35,510 34,564 35,083 34,884 34,122 1. Institutions engaged primarily in activities such as, but not limited to, 4. Includes public utilities and firms engaged primarily in such activities as commercial savings, and mortgage banking; sales, personal, and mortgage fi- communications, construction, manufacturing, mining, wholesale and retail trade, nancing; factoring, finance leasing, and other business lending; insurance under- transportation, and services. writing; and other investment activities. 5. Beginning January 1988, the number of respondents in the bankers accep- 2. Includes all financial company paper sold by dealers in the open market. tance survey were reduced from 155 to 111 institutions—those with $100 million 3. As reported by financial companies that place their paper directly with or more in total acceptances. The new reporting group accounts for over 90 investors. percent of total acceptances activity. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per year Rate Period Av r e a r te a ge Av r e a r te a ge Period 10.50 1985 9.93 1986 —Mar. 9.10 1987 —Sept. 10.00 1986 8.33 Apr. 8.83 Oct. 9.50 1987 8.21 May 8.50 Nov. June 8.50 Dec. 9.00 1985 —Jan. 10.61 July 8.16 8.50 Feb. 10.50 Aug. 7.90 1988 —Jan. 8.00 Mar. 10.50 Sept. 7.50 Feb. 7.50 Apr. 10.50 Oct.. 7.50 Mar. May 10.31 Nov. 7.50 Apr. 7.75 June 9.78 Dec. 7.50 May. 8.00 July 9.50 June, 8.25 Aug. 9.50 1987 —Jan. 7.50 July . 8.75 Sept. 9.50 Feb. 7.50 Aug. 9.25 Oct. 9.50 Mar. 7.50 Sept. 9.00 Nov. 9.50 Apr. 7.75 Oct. 8.75 Dec. 9.50 May 8.14 Nov. June 8.25 8.50 1986 —Jan. 9.50 July 8.25 9.00 Feb. 9.50 Aug. 8.25 9.50 10.00 10.50 NOTE. These data also appear in the Board's H.15 (519) and G. 13 (415) releases. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • February 1989 1.35 INTEREST RATES Money and Capital Markets Averages, percent per year; weekly, monthly and annual figures are averages of business day data unless otherwise noted. 1988 1988, week ending IInnssttrruummeenntt 11998855 11998866 11998877 Aug. Sept. Oct. Nov. Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 MONEY MARKET RATES 1 Federal funds1'2 8.10 6.80 6.66 8.01 8.19 8.30 8.35 8.29 8.36 8.31 8.26 8.33 2 Discount window borrowing1, ,3 7.69 6.32 5.66 6.37 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 Commercial paper ' 3 1-month 7.93 6.61 6.74 8.09 8.09 8.12 8.38 8.16 8.22 8.31 8.42 8.46 4 3-month 7.95 6.49 6.82 8.26 8.17 8.24 8.66 8.29 8.32 8.42 8.65 8.86 5 6-month 8.00 6.39 6.85 8.36 8.23 8.24 8.55 8.28 8.25 8.34 8.57 8.71 Finance paper, directly placed4. 6 1-month 7.90 6.57 6.61 7.96 7.96 8.05 8.29 8.08 8.12 8.23 8.35 8.37 7 3-month 7.77 6.38 6.54 7.95 7.95 8.06 8.20 8.11 8.12 8.20 8.23 8.22 8 6-month ^ 7.74 6.31 6.37 7.57 7.71 7.80 7.94 7.80 7.80 7.91 7.95 8.03 Bankers acceptances • 9 3-month 7.91 6.38 6.75 8.19 8.06 8.15 8.55 8.18 8.18 8.34 8.59 8.78 10 6-month 7.95 6.28 6.78 8.30 8.15 8.13 8.46 8.16 8.11 8.26 8.50 8.67 Certificates of deposit, secondary market 11 1-month 7.96 6.61 6.75 8.08 8.12 8.15 8.43 8.18 8.23 8.30 8.41 8.49 12 3-month 8.04 6.51 6.87 8.35 8.23 8.36 8.78 8.41 8.43 8.55 8.80 9.00 13 6-month 8.24 6.50 7.01 8.66 8.50 8.48 8.81 8.51 8.45 8.58 8.84 9.04 14 Eurodollar deposits. 3-month 8.28 6.71 7.06 8.47 8.31 8.51 8.91 8.56 8.51 8.61 8.85 9.05 U.S. Treasury bills5 Secondary market 15 3-month 7.47 5.97 5.78 7.06 7.24 7.35 7.76 7.42 7.38 7.57 7.91 8.01 16 6-month 7.65 6.02 6.03 7.39 7.43 7.50 7.86 7.53 7.51 7.75 7.94 8.06 17 1-year 7.81 6.07 6.33 7.59 7.53 7.54 7.87 7.55 7.53 7.76 7.94 8.06 Auction average10 18 3-month 7.47 5.98 5.82 7.02 7.23 7.34 7.68 7.45 7.37 7.54 7.82 7.97 19 6-month 7.64 6.03 6.05 7.36 7.43 7.50 7.76 7.54 7.48 7.71 7.87 7.99 20 1-year 7.80 6.18 6.33 7.40 7.60 7.57 7.92 7.57 n.a. n.a. n.a. 7.92 CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities 21 1-year 8.42 6.45 6.77 8.17 8.09 8.11 8.48 8.13 8.10 8.35 8.55 8.71 22 2-year 9.27 6.86 7.42 8.63 8.46 8.35 8.67 8.34 8.29 8.55 8.72 8.89 23 3-year 9.64 7.06 7.68 8.77 8.57 8.43 8.72 8.42 8.38 8.61 8.77 8.94 24 5-year 10.12 7.30 7.94 8.94 8.69 8.51 8.79 8.47 8.44 8.69 8.84 8.99 25 7-year 10.50 7.54 8.23 9.13 8.87 8.69 8.89 8.66 8.59 8.81 8.92 9.05 26 10-year 10.62 7.67 8.39 9.26 8.98 8.80 8.96 8.77 8.72 8.91 8.99 9.10 27 20-year 10.97 7.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 28 30-year 10.79 7.78 8.59 9.32 9.06 8.89 9.02 8.88 8.80 8.98 9.08 9.13 Composite 29 Over 10 years (long-term) 10.75 8.14 8.64 9.33 9.06 8.89 9.07 8.88 8.78 8.97 9.15 9.24 State and local notes and bonds Moody's series14 30 Aaa 8.60 6.95 7.14 7.51 7.39 7.25 7.35 7.20 7.28 7.34 7.37 7.41 31 Baa 9.58 7.76 8.17 7.89 7.84 7.72 7.78 7.65 7.70 7.77 7.82 7.84 32 Bond Buyer series 9.11 7.32 7.64 7.79 7.66 7.47 7.46 7.36 7.33 7.44 7.50 7.58 Corporate bonds Seasoned issues16 33 All industries 12.05 9.71 9.91 10.58 10.28 9.90 9.91 9.87 9.81 9.85 9.92 10.00 34 Aaa 11.37 9.02 9.38 10.11 9.82 9.51 9.45 9.44 9.39 9.38 9.45 9.52 35 Aa 11.82 9.47 9.68 10.37 10.06 9.71 9.72 9.68 9.63 9.67 9.74 9.80 36 A 12.28 9.95 9.99 10.63 10.34 9.99 9.99 9.97 9.90 9.93 10.00 10.08 37 Baa 12.72 10.39 10.58 11.21 10.90 10.41 10.48 10.39 10.32 10.40 10.49 10.58 38 A-rated, recently offered utility bonds17 12.06 9.61 9.95 10.45 10.26 10.11 10.12 10.00 10.02 10.08 10.20 10.20 MEMO: Dividend/price ratio18 39 Preferred stocks 10.44 8.76 8.37 9.39 9.25 9.23 9.29 9.23 9.20 9.20 9.35 9.35 40 Common stocks 4.25 3.48 3.08 3.75 3.69 3.61 3.70 3.55 3.56 3.68 3.82 3.76 1. Weekly, monthly and annual figures are averages of all calendar days, places. Thus, average issuing rates in bill auctions will be reported using two where the rate for a weekend or holiday is taken to be the rate prevailing on the rather than three decimal places. preceding business day. The daily rate is the average of the rates on a given day 11. Yields are based on closing bid prices quoted by at least five dealers. weighted by the volume of transactions at these rates. 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields 2. Weekly figures are averages for statement week ending Wednesday. are read from a yield curve at fixed maturities. Based on only recently issued, 3. Rate for the Federal Reserve Bank of New York. actively traded securities. 4. Unweighted average of offering rates quoted by at least five dealers (in the 13. Averages (to maturity or call) for all outstanding bonds neither due nor case of commercial paper), or finance companies (in the case of finance paper). callable in less than 10 years, including one very low yielding "flower" bond. Before November 1979, maturities for data shown are 30-59 days, 90-119 days, 14. General obligations based on Thursday figures; Moody's Investors Service. and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 15. General obligations only, with 20 years to maturity, issued by 20 state and 150-179 days for finance paper. local governmental units of mixed quality. Based on figures for Thursday. 5. Yields are quoted on a bank-discount basis, rather than in an investment 16. Daily figures from Moody's Investors Service. Based on yields to maturity yield basis (which would give a higher figure). on selected long-term bonds. 6. Dealer closing offered rates for top-rated banks. Most representative rate 17. Compilation of the Federal Reserve. This series is an estimate of the yield (which may be, but need not be, the average of the rates quoted by the dealers). on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 7. Unweighted average of offered rates quoted by at least five dealers early in call protection. Weekly data are based on Friday quotations. the day. 18. Standard and Poor's corporate series. Preferred stock ratio based on a 8. Calendar week average. For indication purposes only. sample of ten issues: four public utilities, four industrials, one financial, and one 9. Unweighted average of closing bid rates quoted by at least five dealers. transportation. Common stock ratios on the 500 stocks in the price index. 10. Rates are recorded in the week in which bills are issued. Beginning with the NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases. Treasury bill auction held on Apr. 18, 1983, bidders were required to state the For address, see inside front cover. percentage yield (on a bank discount basis) that they would accept to two decimal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A25 1.36 STOCK MARKET Selected Statistics 1988 IInnddiiccaattoorr 11998855 11998866 11998877 Mar. Apr. May June July Aug. Sept. Oct. Nov. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 108.09 136.00 161.70 149.88 148.46 144.99 152.72 152.12 149.25 151.47 156.36 152.67 2 Industrial 123.79 155.85 195.31 181.57 181.01 176.02 184.92 184.09 179.72 182.18 188.58 182.25 3 Transportation 104.11 119.87 140.39 135.15 133.40 127.63 136.02 136.49 132.52 136.27 141.83 137.51 4 Utility 56.75 71.36 74.29 71.16 69.35 68.66 72.25 71.49 70.67 71.83 74.19 79.28 5 Finance 114.21 147.19 146.48 125.27 121.66 120.35 129.04 129.99 130.77 133.15 136.09 130.05 6 Standard & Poor's Corporation (1941-43 = 10)' 186.84 236.34 286.83 265.74 262.61 256.12 270.68 269.05 263.73 267.97 277.40 271.02 7 American Stock Exchange (Aug. 31, 1973 = 50? 229.10 264.38 316.61 295.78 300.43 296.30 306.13 307.48 297.76 297.86 302.83 292.25 Volume of trading (thousands of shares) 8 New York Stock Exchange 109,191 141,385 188,647 176,189 162,518 153,906 195,772 166,916 144,668 145,702 162,631 134,427 9 American Stock Exchange 8,355 11,846 13,832 12,442 10,706 8,931 11,348 9,938 9,307 8,198 9,051 8,497 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 28,390 36,840 31,990 32,660 33,270 33,070 32,300 31,770 31,930 32,770 33,410 33,640 Free credit balances at brokers4 11 Margin-account 2,715 4,880 4,750 4,615 4,395 4,380 4,580 4,485 4,655 4,725 5,065 4,920 12 Cash-account 12,840 19,000 15,640 14,355 13,965 14,150 14,460 14,340 14,045 14,175 14,880 15,185 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 • February 1989 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1987 1988 AAccccoouunntt 11998855 11998866 Dec. Jan. Feb. Mar. Apr. May June July Aug.' Sept. FSLIC-insured institutions 1 Assets 1,070,012 1,163,851 1,250,855 1,254,885 1,257,466 1,261,581 1,274,494' 1,285,329' 1,290,209' 1,299,668' 1,311,687 1,323,444 2 Mortgages 690,717 697,451 721,593 722,944 723,856 725,625 728,984' 733,549' 773377,,117711'' 774433,,337744'' 775511,,880022 775544,,992266 3 Mortgage-backed securities 115,525 158,193 201,828 201,732 197,811 197,889 202,742 205,028 220077,,552244'' 220088,,222233 221100,,331177 221111,,224466 4 Contra-assets to mortgage assets' 45,219 41,799 42,344 41,291 40,836 41,268 39,359' 39,765' 40,123' 40,165' 38, %8 38,539 5 Commercial loans 17,424 23,683 23,163 23,538 23,340 24,004 24,243 24,201 24,681' 24,%5' 25,0% 24,864 6 Consumer loans 45,809 51,622 57,902 58,342 58,687 58,390 59,121' 60,250' 61,137' 6611,,557733'' 6622,,440022 6611,,880099 7 Contra-assets to nonmortgage loans2 2,521 3,041 3,467 3,580 3,524 3,628 3,513' 3,395' 3,504' 3,372' 3,137 3,069 8 Cash and investment securities 143,538 164,844 169,717 169,953 174,106 176,386 177,980 179,645 177,607' 178,643' 175,730 182,277 9 Other3 104,739 112,898 122,462 123,247 124,025 124,184 124,2%' 125,816' 125,716' 126,428' 128,446 129,930 10 Liabilities and net worth . 1,070,012 1,163,851 1,250,855 1,254,885 1,257,466 1,261,581 1,274,494' 1,285,329' 1,290,209' 1,299,668' 1,311,687 1,323,444 11 Savings capital 843,932 890,664 932,616 939,080 946,790 958,471 %2,316' %3,761' 966,759' %8,221' 968,303 973,598 12 Borrowed money 157,666 196,929 249,917 246,088 239,452 237,563' 244,990 250,695 257,117' 262,730' 266,710 273,588 13 FHLBB 84,390 100,025 116,363 114,053 112,725 112,389 113,029 114,994 117,281' 118,207' 120,667 123,390 14 Other 73,276 96,904 133,554 132,035 126,727 125,174r 131,961 135,701 139,836' 144,523' 146,043 150,198 15 Other 21,756 23,975 21,941 23,873 25,818 22,555 24,620' 27,157' 24,556' 27,109' 28,911 25,995 16 Net worth 46,657 52,282 46,382 45,845 45,406 42,892 42,568' 43,717' 41,777' 41,608' 47,763 50,264 FSLIC-insured federal savings banks 17 Assets 131,868 210,562 284,272 284,303 295,951 307,756 311,434 323,030 329,739' 333,612' 357,626 367,178 18 Mortgages 72,355 113,638 164,013 163,915 171,592 178,260 180,586 186,818 190,646' 193,155' 204,350 207,978 19 Mortgage-backed securities 15,676 29,766 45,826 46,171 46,687 47,979 49,075' 51,29C 52,648' 53,049' 55,710 56,402 20 Contra-assets to mortgage assets' 9,100 8,909 9,175 9,460 9,346 9,736 10,087 10,134' 10,913 11,127 21 Commercial loans 6,504 6,4% 6,971 7,378 7,531 7,639 7,906 7,920 8,570 8,699 22 Consumer loans ' 8,361 17,6% 17,649 18,795 19,141 19,616 20,426 21,142' 21,444' 22,520 22,412 23 Contra-assets to nonmortgage loans ... 678 698 737 800 724 707' 739' 699' 771 792 24 Finance leases plus interest 591 604 584 611 615 652 708 735 791 806 25 Cash and investment .. 35,347 34,645 35,718 38,224 38,273 39,903 40,274 40,842 44,790 48,442 26 Other ii,723 19,034 24,070 24,430 25,517 26,424 25,822 26,760 27,230' 27,317' 32,598 34,359 27 Liabilities and net worth 131,868 210,562 284,272 284,303 295,951 307,756 311,434 323,030 329,739^ 333,612' 357,626 367,178 28 Savings capital 103,462 157,872 203,1% 204,329 214,169 224,169 226,544' 232,656' 236,759' 239,591' 256,224 261,725 29 Borrowed money 19,323 37,329 60,716 59,206 59,704 61,552 62,566 66,816 69,348 70,015 75,808 80,639 30 FHLBB 10,510 19,897 29,617 28,280 29,169 30,456 30,075 31,682 32,177 31,941 35,357 37,204 31 Other 8,813 17,432 31,099 30,926 30,535 31,0% 32,491 35,134 37,171 38,074 40,451 43,435 32 Other 2,732 4,263 5,324 5,838 6,602 6,089 6,39C 7,122' 6,643' 7,061' 8,061 7,374 33 Net worth 6,351 11,098 15,036 14,930 15,477 15,946 16,087 16,587 16,886 16,859 17,432 17,340 Savings banks 34 Assets 216,776 236,866 259,643 258,428 259,224 262,100 262,269 264,507 269,369 272,459 272,327 255,544 Loans 35 Mortgage 110,448 118,323 138,494 137,858 139,108 140,835 139,691 143,235 147,366 149,115 150,293 143,628 36 Other 30,876 35,167 33,871 35,095 35,752 36,476 37,471 3355,,992277 3355,,999900 3366,,553388 3366,,440022 3333,,114400 Securities 37 U.S. government 13,111 14,205' 13,510 12,776 12,269 12,225 13,203 12,490 1122,,222277 1122,,222222 1111,,993399 1111,,112200 38 Mortgage-backed securities 19,481 25,836 32,772 32,241 32,423 32,272 31,072 3311,,886611 3322,,666699 3333,,001177 3322,,998822 2288,,220055 39 State and local government 2,323 2,185 2,003 1,994 2,053 2,033 2,013 1,933 1,877 1,868 1,929 1,891 40 Corporate and other . 21,199 20,459 18,772 18,780 18,271 18,336 18,549 18,298 18,332 18,376 18,134 17,234 41 Cash 6,225 6,894 5,864 4,841 5,002 4,881 5,237 5,383 5,094 5,449 4,906 5,155 42 Other assets 13,113 13,793 14,357 15,043 14,346 15,042 15,033 15,380 15,814 15,874 15,742 14,171 43 Liabilities 216,776 236,866 259,643 258,628 259,224 262,100 262,269 264,507 269,369 272,459 272,327 255,544 44 Deposits 185,972 192,194 201,497 199,545 200,391 203,407 203,273 205,692 209,227 210,751 210,399 197,151 45 Regular4 181,921 186,345 196,037 194,322 195,336 198,273 197,801 200,098 203,434 204,851 204,866 192,079 46 Ordinary savings .. 33,018 37,717 41,959 41,047 41,234 41,867 41,741 42,403 43,282 43,228 42,651 39,916 47 Time 103,311 100,805' 112,429 112,781 113,751 115,529 115,887 117,297 119,815 121,356 122,959 116,086 48 Other 4,051 5,845' 5,460 5,223 5,055 5,134 5,472 5,594 5,793 5,900 5,533 5,436 49 Other liabilities 17,414 25,274 35,720 36,836 35,787 35,737 35,827 3355,,883366 3366,,777799 3377,,558844 3377,,882244 3355,,001199 50 General reserve accounts 12,823 18,105 20,633 20,514 20,894 21,024 21,109 21,179 21,385 21,559 21,405 20,142 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37—Continued 1987 1988 AAccccoouunntt 11998855 11998866 Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept. Credit unions5 51 Total assets/liabilities and capital 118,010 147,726 169,111 169,175 172,456 172,345 173,276 f t f f t 52 Federal 77,861 95,483 109,797 109,913 112,595 112,573 113,068 53 State 40,149 52,243 1 1 1 59,314 59,262 59,855 59,772 60,208 1 1 54 Loans outstanding.. 73,513 86,137 n.a. n.a. n.a. 101,965 103,271 105,704 105,800 107,065 n.a. n.a. 55 Federal 47,933 55,304 65,732 66,431 68,213 68,658 69,626 56 State 25,580 30,833 I 1 1 36,233 36,840 37,491 37,142 37,439 1 1 5/ Savings 105,963 134,327 156,045 155,105 157,764 158,186 159,314 5 5 8 9 F S e ta d t e e r al 7 3 0 5 , , 9 03 2 7 6 8 4 7 6 , , 9 3 5 7 4 3 •1 t1 •1 1 5 0 4 1 , , 1 8 9 4 8 7 1 5 0 4 1 , , 0 0 5 4 7 8 1 5 0 4 3 , , 6 1 3 2 5 9 1 5 0 4 3 , , 8 3 3 4 9 7 1 5 0 5 4 , , 0 2 5 5 8 6 •1 •1 Life insurance companies 60 Assets 825,901 937,551 l,044,459r 1,042,350' 1,052,645 1,065,549 1,075,541 1,094,827 1,105,546 1,113,547 1,121,337 Securities 61 Government 75,230 84,640 84,426' 91,682' 92,497 92,408 93,946 86,711 87,160 88,218 88,362 62 United States6.. 51,700 59,033 57,078' 64,922' 65,534 65,218 66,749 58,988 59,351 60,244 60,407 63 State and local . 9,708 11,659 10,68 lr 11,749' 11,859 12,033 11,976 11,016 11,114 11,102 11,190 64 Foreign 13,822 13,948 16,667' 15,011' 15,104 15,157 15,221 16,707 16,695 16,872 16,765 65 Business 423,712 492,807 569,199' 563,019' 571,070 580,392 587,846 606,445 614,052 618,742 644,917 n.a. 66 Bonds 346,216 401,943 472,684' 469,207' 476,448 484,403 490,285 503,728 509,105 514,926 540,796 67 Stocks 77,496 90,864 96,515' 93,812' 94,622 95,989 97,561 102,717 104,947 103,816 104,121 68 Mortgages 171,797 193,842 203,545' 212,637' 213,182 214,815 215,383 219,012 220,870 221,990 233,438 69 Real estate 28,822 31,615 34,172' 34,178' 34,503 34,845 34,964 35,484 35,545 35,737 35,920 70 Policy loans 54,369 54,055 53,626' 53,265' 52,720 52,604 52,568 53,013 53,107 53,142 53,194 /I Other assets 71,971 80,592 89,586' 87,569' 88,673 90,499 90,834 94,162 94,812 95,718 95,505 1. Contra-assets are credit-balance accounts that must be subtracted from the NOTE. FSLIC-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 Financial Statistics • February 1989 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1988 111999888666 111999888777 111999888888 June July Aug. Sept. Oct. Nov. U.S. budget1 1 Receipts, total 769,091 854,143 908,953 99,205 60,690 69,479 97,803 63,646 64,408 2 On-budget 568,862 640,741 667,462 77,643 40,980 51,015 75,586 45,847 47,023 3 Off-budget 200,228 213,402 241,491 21,562 19,710 18,464 22,217 17,799 17,385 4 Outlays, total 990,258 1,004,586 1,064,055 90,071 83,634 92,561 87,588 91,086 93,426 5 On-budget 806,760 810,754 861,364 72,888 66,818 74,756 70,071 73,945 75,427 6 Off-budget 183,498 193,832 202,691 17,184 16,816 17,805 17,518 17,141 17,999 7 Surplus, or deficit (-), total -221,167 -150,444 -155,102 -22,583 9,134 -22,944 -23,082 -27,440 -29,018 8 On-budget -237,898 -170,014 -193,901 4,755 -25,838 -23,741 5,515 -28,097 -28,403 9 Off-budget 16,731 19,570 38,800 4,379 2,894 659 4,699 658 -614 Source of financing (total) 10 Borrowing from the public 236,187 150,070 166,171 11,391 3,665 23,370 14,665 10,716 31,520 11 Operating cash (decrease, or increase (-)l -14,324 -5,052 -7,963 -20,638 15,696 10,954 -31,444 13,748 9,218 12 Other2 -696 5,426 -3,106 113 3,583 -11,242 6,564 2,976 -11,720 MEMO 13 Treasury operating balance (level, end of period) 31,384 36,436 44,398 39,604 23,908 12,954 44,398 30,650 21,432 14 Federal Reserve Banks 7,514 9,120 13,024 9,762 3,910 4,390 13,024 6,151 5,198 15 Tax and loan accounts 23,870 27,316 31,375 29,842 19,998 8,564 31,375 24,499 16,234 1. In accordance with the Balanced Budget and Emergency Deficit Control Act international monetary fund; other cash and monetary assets; accrued interest of 1985, all former off-budget entries are now presented on-budget. The Federal payable to the public; allocations of special drawing rights; deposit funds; Financing Bank (FFB) activities are now shown as separate accounts under the miscellaneous liability (including checks outstanding) and asset accounts; agencies that use the FFB to finance their proems. The act has also moved two seigniorage; increment on gold; net gain/loss for U.S. currency valuation adjustsocial security trust funds (Federal old-age survivors insurance and Federal ment; net gain/loss for IMF valuation adjustment; and profit on the sale of gold. disability insurance trust funds) off-budget. SOURCE. Monthly Treasury Statement of Receipts and Outlays of the U.S. 2. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to 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 1988 111999888777 111999888888 H2 HI H2 HI Sept. Oct. Nov. RECEIPTS 1 All sources 854,143 908,954 387,524 447,282 421,712 476,115 97,803 63,646 64,408 2 Individual income taxes, net 392,557 401,181 183,156 205,157 192,575 207,659 41,784 31,287 29,822 3 Withheld 322,463 341,435 164,071 156,760 170,203 169,300 27,209 28,824 30,092 4 Presidential Election Campaign Fund 33 33 4 30 4 28 1 0 0 5 Nonwithheld 142,957 132,199 27,733 112,421 31,223 101,614 16,793 3,430 1,367 6 Refunds 72,896 72,487 8,652 64,052 8,853 63,283 2,219 967 1,638 Corporation income taxes 7 Gross receipts 102,859 109,683 42,108 52,396 52,821 58,002 21,380 3,789 2,662 8 Refunds 18,933 15,487 8,230 10,881 7,119 8,706 712 1,995 1,219 9 Social insurance taxes and contributions, net 303,318 334,335 134,006 163,519 143,755 181,058 28,694 23,848 25,075 10 Employment taxes and contributions 273,028 305,093 122,246 146,696 130,388 164,412 27,991 22,400 22,051 11 Self-employment taxes and contributions 13,987 17,691 1,338 12,020 1,889 14,839 2,326 0 332266 12 Unemployment insurance 25,575 24,584 9,328 14,514 10,977 14,363 285 1,101 2,641 13 Other net receipts4 4,715 4,659 2,429 2,310 2,390 2,284 419 347 382 14 Excise taxes 32,457 35,540 15,947 15,845 17,680 16,440 3,158 3,134 3,247 15 Customs deposits 15,085 16,198 7,282 7,129 7,993 7,851 1,367 1,381 1,403 16 Estate and gift taxes 7,493 7,594 3,649 3,818 3,610 3,863 678 662 753 17 Miscellaneous receipts 19,307 19,909 9,605 10,299 10,399 9,950 1,454 1,540 2,666 OUTLAYS 18 All types 1,003,830 1,064,044 506,556 503,267 532,839 513,210 87,588 91,086 93,426 19 National defense 281,999 290,349 138,544 142,886 146,995 143,080 21,941 25,938 24,702 20 International affairs 11,649 10,469 8,938 4,374 4,487 7,150 -691 2,176 -2,055 21 General science, space, and technology 9,216 10,876 4,594 4,324 5,469 5,361 702 1,136 1,116 22 Energy 4,115 2,342 2,446 2,335 1,468 555 116 366 539 23 Natural resources and environment 13,363 14,538 7,141 6,175 7,590 6,776 1,625 1,451 1,465 24 Agriculture 27,356 17,210 15,660 11,824 14,640 7,872 -414 3,025 3,243 25 Commerce and housing credit 6,182 19,064 3,764 4,893 3,852 5,951 6,076 477 2,764 26 Transportation 26,228 27,196 14,745 12,113 14,096 12,700 2,568 2,504 2,570 27 Community and regional development 5,051 5,577 3,651 3,108 2,075 2,765 743 648 588 28 Education, training, employment, and social services 29,724 30,856 16,209 14,182 15,592 15,451 2,588 2,644 3,054 29 Health 39,968 44,482 18,795 20,318 20,750 22,643 3,823 3,994 3,962 30 Social security and medicare 282,473 297,828 138,299 142,864 158,469 135,322 25,215 23,951 25,310 31 Income security 123,250 130,174 59,979 62,248 61,201 65,555 11,226 8,855 11,054 32 Veterans benefits and services 26,782 29,248 14,190 12,264 14,956 13,241 3,085 1,857 2,713 33 Administration of justice 7,548 9,205 3,413 3,626 4,291 4,761 710 865 803 34 General government 5,948 8,552 1,860 3,344 3,560 4,337 796 934 819 35 General-purpose fiscal assistance 1,621 966 2,886 337 1,175 448 0 0 0 36 Net interest6 , 138,570 151,711 66,226 70,110 71,933 76,098 12,371 13,014 13,622 37 Undistributed offsetting receipts -36,455 -36,576 -16,475 -19,102 -17,684 -17,766 -4,892 -2,751 -2,844 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 • February 1989 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1986 1987 1988 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 2,063.6 2,129.5 2,218.9 2,250.7 2,313.1 2,354.3 2,435.2 2,493.2 2,555.1 2 Public debt securities 2,059.3 2,125.3 2,214.8 2,246.7 2,309.3 2,350.3 2,431.7 2,487.6 2,547.7 3 Held by public 1,684.9 1,742.4 1,811.7 1,839.3 1,871.1 1,893.1 1,954.1 1,996.7 2,013.4 4 Held by agencies 374.4 382.9 403.1 407.5 438.1 457.2 477.6 490.8 534.2 5 Agency securities 4.3 4.2 4.0 4.0 3.8 4.0 3.5 5.6 7.4 6 Held by public 3.2 3.2 3.0 2.9 2.8 3.0 2.7 5.1 7.0 7 Held by agencies 1.1 1.1 1.1 1.1 1.0 1.0 .8 .6 .5 8 Debt subject to statutory limit 2,060.0 2,111.0 2,200.5 2,232.4 2,295.0 2,336.0 2,417.4 2,472.6 2,532.2 9 Public debt securities 2,058.7 2,109.7 2,199.3 2,231.1 2,293.7 2,334.7 2,416.3 2,472.1 2,532.1 10 Other debt1 1.3 1.3 1.3 1.3 1.3 1.3 1.1 .5 .1 11 MEMO: Statutory debt limit 2,078.7 2,111.0 2,300.0 2,300.0 2,320.0 2,800.0 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 Type and holder 1985 1986 Q3 Q4 Q1 Q2 1 Total gross public debt 1,663.0 1,945.9 2,214.8 2,431.7 2,350.3 2,431.7 2,487.6 2,547.7 By type 2 Interest-bearing debt 1,660.6 1,943.4 2,212.0 2,428.9 2,347.7 2,428.9 2,484.9 2,545.0 3 Marketable 1,247.4 1,437.7 1,619.0 1,724.7 1.676.0 1,724.7 1,758.7 1,769.9 4 Bills 374.4 399.9 426.7 389.5 378.3 389.5 392.6 382.3 5 Notes 705.1 812.5 927.5 1,037.9 1.005.1 1,037.9 1,059.9 1,072.7 6 Bonds 167.9 211.1 249.8 282.5 277.6 282.5 291.3 299.9 7 Nonmarketable 413.2 505.7 593.1 704.2 671.8 704.2 726.2 775.1 8 State and local government series 44.4 87.5 110.5 139.3 129.0 139.3 142.9 146.9 9 Foreign issues 9.1 7.5 4.7 4.0 4.3 4.0 6.1 5.7 10 Government 9.1 7.5 4.7 4.0 4.3 4.0 6.1 5.7 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes.. v 73.1 78.1 90.6 99.2 97.0 99.2 102.3 104.5 13 Government account series 286.2 332.2 386.9 461.3 440.7 461.3 474.4 517.5 14 Non-interest-bearing debt 2.3 2.5 2.8 2.8 2.5 2.8 2.6 2.7 By holder4 15 U.S. government agencies and trust funds 289.6 348.9 403.1 477.6 457.2 477.6 490.8 534.2 16 Federal Reserve Banks 160.9 181.3 211.3 222.6 211.9 222.6 217.5 227.6 17 Private investors 1,212.5 1,417.2 1,602.0 1,745.2 1,682.6 1,745.2 1,778.2 1,784.9 18 Commercial banks 183.4 192.2 238.3 253.3 251.3 253.3 260.7 263.0 19 Money market funds 25.9 25.1 28.0 14.3 15.2 14.3 15.2 13.4 20 Insurance companies 76.4 115.4 135.4 n.a. 143.0 n.a. n.a. n.a. 21 Other companies 50.1 59.0 68.8 84.6 81.8 84.6 n.a. n.a. 22 State and local Treasurys 173.0 224.0 260.0 n.a. n.a. n.a. n.a. n.a. Individuals 23 Savings bonds 74.5 79.8 92.3 101.1 98.5 101.1 104.0 106.2 24 Other securities 69.3 75.0 70.5 n.a. 70.4 n.a. n.a. n.a. 25 Foreign and international5 192.9 212.5 251.6 287.3 267.0 287.3 320.8 332.3 26 Other miscellaneous investors 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 IItteemm 11998855 11998866 11998877 Sept. Oct/ Nov. Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Immediate delivery2 1 U.S. Treasury securities 75,331 95,445 110,052 99,232 109,772 114,839 108,709'' 113,848 123,649 128,035 108,879 99,379 By maturity 2 Bills 32,900 34,247 37,924 27,406 29,617 32,560 30,237' 30,401 32,870 37,877 30,342 30,851 3 Other within 1 year 1,811 2,115 3,272 3,249 3,287 3,537 2,641' 4,455 3,409 4,313 2,588 3,568 4 1-5 years 18,361 24,667 27,918 28,204 28,673 32,827 31,231' 29,073 35,124 38,559 33,669 26,236 5 5-10 years 12,703 20,456 24,014 25,854 30,401 27,078 26,837 31,032 32,679 26,259 22,745 24,067 6 Over 10 years 9,556 13,961 16,923 14,519 17,794 18,838 17,762 18,886 19,567 21,027 19,536 14,658 By type of customer 7 U.S. government securities dealers 3,336 3,670 2,936 2,669 3,225 3,123 3,503 3,510 3,167 3,410 3,431 2,104 8 U.S. government securities brokers 36,222 49,558 61,539 58,674 65,612 67,172 64,917' 68,026 74,829 73,917 62,572 57,330 9 All others3 35,773 42,218 45,576 37,888 40,933 44,543 40,288' 42,312 45,652 50,708 42,875 39,945 10 Federal agency securities 11,640 16,748 18,087 15,473 17,653 17,538 15,898' 18,731 17,949 22,852 15,760 13,979 11 Certificates of deposit 4,016 4,355 4,112 3,128 3,636 3,537 3,564 3,121 2,948 3,818 3,941 3,816 12 Bankers acceptances 3,242 3,272 2,965 1,994 2,178 2,563 2,034 2,054 2,643 3,404 2,057 2,497 13 Commercial paper 12,717 16,660 17,135 26,416 28,748 26,591 26,399 28,662 25,452 27,892 25,960 26,914 Futures contracts 14 Treasury bills 5,561 3,311 3,233 2,555 2,777 2,461 2,059 3,529 2,847 2,346 2,737 1,907 15 Treasury coupons 6,085 7,175 8,964 9,393 10,681 11,018 10,369 12,349 11,057 11,710 9,575 11,389 16 Federal agency securities 252 16 5 0 0 0 0 0 0 0 0 0 Forward transactions 17 U.S. Treasury securities 1,283 1,876 2,029 1,479 1,769 3,114 2,128 1,778 3,362 4,579 2,899 1,572 18 Federal agency securities 3,857 7,831 9,290 7,601 8,024 8,190 6,406' 5,771 10,289 10,201 7,328 5,348 1. Transactions are market purchases and sales of securities as reported to the securities, nondealer departments of commercial banks, foreign banking agencies, Federal Reserve Bank of New York by the U.S. government securities dealers on and the Federal Reserve System. its published list of primary dealers. 4. Futures contracts are standardized agreements arranged on an organized Averages for transactions are based on the number of trading days in the period. exchange in which parties commit to purchase or sell securities for delivery at a The figures exclude allotments of, and exchanges for, new U.S. Treasury future date. securities, redemptions of called or matured securities, purchases or sales of 5. Forward transactions are agreements arranged in the over-the-counter securities under repurchase agreement, reverse repurchase (resale), or similar market in which securities are purchased (sold) for delivery after 5 business days contracts. from the date of the transaction for Treasury securities (Treasury bills, notes, and 2. Data for immediate transactions do not include forward transactions. bonds) or after 30 days for mortgage-backed agency issues. 3. Includes, among others, all other dealers and brokers in commodities and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • February 1989 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Averages of daily figures, in millions of dollars 1988 1988 IItteemm 11998855 11998866 11998877 Sept. Oct. Nov. Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Positions Net immediate2 1 U.S. Treasury securities 7,391 12,912 -6,216 -26,759 -25,794r -23,8% -20,420 -26,361 -21,394 -24,242 -25,085 2 Bills 10,075 12,761 4,317 6,816 3,691' 411 2,876 -1,369 1,295 1,760 -1,274 3 Other within 1 year 1,050 3,706 1,557 -3,811 -5,534 -3,599 -5,404 -5,003 -3,298 -2,521 -2,731 4 1-5 years 5,154 9,146 649 -2,896 855 -1,327 4,175 1,732 223 -4,888 -5,134 5 5-10 years -6,202 -9,505 -6,564 -13,750 -11,191 -7,619 -9,494 -9,817 -7,334 -7,549 -4,172 6 Over 10 years -2,686 -3,197 -6,174 -13,117 -13,615 -11,761 -12,573 -11,905 -12,280 -11,045 -11,774 7 Federal agency securities 22,860 32,984 31,910 29,023 30,169 32,174 31,554 33,920 34,515 31,092 28,925 8 Certificates of deposit 9,192 10,485 8,188 8,200 8,262 8,436 9,071 8,724 8,732 7,748 8,131 9 Bankers acceptances 4,586 5,526 3,661 1,786 2,247 2,565 2,729 2,481 2,845 2,452 2,317 10 Commercial paper 5,570 8,089 7,4% 6,830 6,770 5,965 6,466 6,079 6,615 5,593 5,352 Futures positions 11 Treasury bills -7,322 -18,059 -3,373 -4,049 -4,388' -1,978 -6,658 -4,336 -1,233 -547 1,058 12 Treasury coupons 4,465 3,473 5,988 7,745 6,532 5,873 5,468 5,065 6,321 5,960 6,664 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 -347 -969 -759 -653 -1,7% -919 -428 452 15 Federal agency securities -9,420 -11,840 -18,817 -16,988 -17,558 —16,961 -17,791 -18,872 -17,278 -15,998 -15,081 Financing3 Reverse repurchase agreements4 16 Overnight and continuing 68,035 98,954 124,791 139,167 149,450 n.a. 153,7% 143,779 n.a. n.a. n.a. 17 Term , 80,509 108,693 148,033 185,275 193,290 n.a. 212,406 216,432 n.a. n.a. n.a. Repurchase agreements 18 Overnight and continuing 101,410 141,735 170,840 178,459 189,508 n.a. 193,3% 181,667 n.a. n.a. n.a. 19 Term 70,076 102,640 120,980 134,107 145,288 n.a. 162,654 170,116 n.a. n.a. n.a. 1. Data for dealer positions and sources of financing are obtained from reports reverses to maturity, which are securities that were sold after having been submitted to the Federal Reserve Bank of New York by the U.S. Treasury obtained under reverse repurchase agreements that mature on the same day as the securities dealers on its published list of primary dealers. securities. Data for immediate positions do not include forward positions. Data for positions are averages of daily figures, in terms of par value, based on 3. Figures cover financing involving U.S. Treasury and federal agency securithe number of trading days in the period. Positions are net amounts and are shown ties, negotiable CDs, bankers acceptances, and commercial paper. on a commitment basis. Data for financing are in terms of actual amounts 4. Includes all reverse repurchase agreements, including those that have been borrowed or lent and are based on Wednesday figures. arranged to make delivery on short sales and those for which the securities 2. Immediate positions are net amounts (in terms of par values) of securities obtained have been used as collateral on borrowings, that is, matched agreements. owned by nonbank dealer firms and dealer departments of commercial banks on 5. Includes both repurchase agreements undertaken to finance positions and a commitment, that is, trade-date basis, including any such securities that have "matched book" repurchase agreements. been sold under agreements to repurchase (RPs). The maturities of some NOTE. Data on positions for the period May 1 to Sept. 30, 1986, are partially repurchase agreements are sufficiently long, however, to suggest that the securi- estimated. ties involved are not available for trading purposes. Immediate positions include Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1988 AAggeennccyy 11998844 11998855 11998866 11998877 June July Aug. Sept. Oct. 1 Federal and federally sponsored agencies 271,220 293,905 307,361 341,386 354,446 355,810 n.a. n.a. n.a. 2 Federal agencies 35,145 36,390 36,958 37,981 36,361 36,465 n.a. n.a. n.a. 3 Defense Department1 142 71 33 13 11 11 11 11 8 4 Export-Import Bank ' 15,882 15,678 14,211 11,978 11,232 11,232 11,232 10,964R 10,964 5 Federal Housing Administration 133 115 138 183 116 116 115 120 118 6 Government National Mortgage Association participation certificates5 2,165 2,165 2,165 1,615 830 830 n.a. n.a. n.a. 7 Postal Service 1,337 1,940 3,104 6,103 5,842 5,842 5,842 5,842 5,842 8 Tennessee Valley Authority 15,435 16,347 17,222 18,089 18,330 18,434 18,494 18,511 18,138 9 United States Railway Association 51 74 85 0 0 0 0 0 0 10 Federally sponsored agencies7 237,012 257,515 270,553 303,405 318,085 319,345 324,110 328,246 n.a. 11 Federal Home Loan Banks 65,085 74,447 88,752 115,725 117,773 119,409 121,266 126,011 127,113 12 Federal Home Loan Mortgage Corporation 10,270 11,926 13,589 17,645 17,619 17,844 19,652 18,368 17,384 13 Federal National Mortgage Association 83,720 93,896 93,563 97,057 104,757 104,751 105,730 105,986 105,698 14 Farm Credit Banks8 72,192 68,851 62,478 55,275 55,779 54,538 53,582 53,764 53,923 15 Student Loan Marketing Association 5,745 8,395 12,171 16,503 19,257 19,453 19,680 19,917 n.a. 16 Financing Corporation n.a. n.a. n.a. 1,200 2,900 2,900 3,750 3,750 3,750 17 Farm Credit Financial Assistance Corporation11 n.a. n.a. n.a. n.a. n.a. 450 450 450 450 MEMO 18 Federal Financing Bank debt1 145,217 153,373 157,510 152,417 149,833 149,937 149,809 146,151 145,529 Lending to federal and federally sponsored agencies 19 Export-Import Bank 15,852 15,670 14,205 11,972 11,226 11,226 11,226 10,958 1100,,995588 20 Postal Service6 1,087 1,690 2,854 5,853 5,592 5,592 5,592 5,592 5,592 21 Student Loan Marketing Association 5,000 5,000 4,970 4,940 4,940 4,940 4,940 4,910 4,910 22 Tennessee Valley Authority 13,710 14,622 15,797 16,709 16,950 17,054 17,114 17,131 16,758 23 United States Railway Association 51 74 85 0 0 0 0 0 0 Other Lending13 74 Farmers Home Administration 58,971 64,234 65,374 59,674 59,674 59,674 59,464 58,496 58,496 75 Rural Electrification Administration 20,693 20,654 21,680 21,191 19,204 19,206 19,225 19,205 19,222 26 29,853 31,429 32,545 32,078 32,247 32,245 32,248 29,859 29,593 1. Consists of mortgages assumed by the Defense Department between 1957 9. Before late 1981, the Association obtained financing through the Federal and 1963 under family housing and homeowners assistance programs. Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. shown on line 21. 3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. 10. The Financing Corporation, established in August 1987 to recapitalize the 4. Consists of debentures issued in payment of Federal Housing Administration Federal Savings and Loan Insurance Corporation, undertook its first borrowing in insurance claims. Once issued, these securities may be sold privately on the October 1987. securities market. 11. The Farm Credit Financial Assistance Corporation (established in January 5. Certificates of participation issued before fiscal 1969 by the Government 1988 to provide assistance to the Farm Credit System) undertook its first National Mortgage Association acting as trustee for the Farmers Home Admin- borrowing in July 1988. istration; Department of Health, Education, and Welfare; Department of Housing 12. The FFB, which began operations in 1974, is authorized to purchase or sell and Urban Development; Small Business Administration; and the Veterans obligations issued, sold, or guaranteed by other federal agencies. Since FFB Administration. incurs debt solely for the purpose of lending to other agencies, its debt is not 6. Off-budget. included in the main portion of the table in order to avoid double counting. 7. Includes outstanding noncontingent liabilities: notes, bonds, and deben- 13. Includes FFB purchases of agency assets and guaranteed loans; the latter tures. Some data are estimated. contain loans guaranteed by numerous agencies with the guarantees of any 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, particular agency being generally small. The Farmers Home Administration item shown in line 17. consists exclusively of agency assets, while the Rural Electrification Administration 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 • February 1989 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1988 Type of issue or issuer, or use 1986 1987 Apr. May July Aug. Sept. Oct/ 1 All issues, new and refunding1 214,189 147,011 102,407 5,847 7,846 13,912 9,746 6,966 9,669 10,455 7,815 Type of issue 2 General obligation 52,622 46,346 30,589 1,707 3,085 4,237 1,959 2,472 2,370 2,058 2,332 3 Revenue 161,567 100,664 71,818 4,140 4,761 9,675 7,788 4,494 7,299 8,387 5,483 Type of issuer 4 State 13,004 14,474 10,102 441 913 1,349 140 576 1,206 734 513 5 Special district and statutory authority 134,363 89,997 65,460 4,078 4,625 8,629 6,752 3,749 6,407 7,283 4,963 6 Municipalities, counties, and townships 78,754 42,541 26,845 1,328 2,308 3,934 2,854 2,641 2,056 2,438 2,339 7 Issues for new capital, total 156,050 83,490 56,789 1,476 2,334 2,352 2,079 2,318 2,783 2,840 3,555 Use of proceeds 8 Education 16,658 12,307 9,524 911 1,316 1,320 1,699 694 1,351 512 715 9 Transportation 12,070 7,246 3,677 215 452 858 1,446 265 732 559 212 10 Utilities and conservation 26,852 14,594 7,912 429 580 635 225 613 694 1,238 1,013 11 Social welfare 63,181 11,353 11,106 1,099 694 2,060 1,222 1,242 2,358 2,478 1,730 12 Industrial aid 12,892 6,190 7,474 298 248 434 128 460 280 393 264 13 Other purposes 24,398 31,802 18,020 9% 1,900 3,628 3,666 2,043 1,661 1,785 1,430 1. Par amounts of long-term issues based oil 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 1988 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11998855 11998866 11998877 Mar. Apr. May June July Aug. Sept. Oct. 1 All issues1 239,015 423,726 392,156 25,902 21,227 23,413 30,043 18,037r 19,305' 23,933' 20,817 2 Bonds2 203,500 355,293 325,648 20,815 18,515 19,382 25,748 12,899' 15,970' 20,928' 18,190 Type of offering 3 Public, domestic 119,559 231,936 209,279 19,827 16,202 17,4% 22,753 10,850 14,595 18,000 16,500 4 Private placement, domestic3 46,200 80,760 92,070 n.a. n.a. n.a. n.a. n.a. n.a. 5. Sold abroad 37,781 42,596 24,299 988 2,313 1,886 2,995 1,994 1,339 2,700 1,400 Industry group 6 Manufacturing 63,973 91,548 61,666 3,482 4,513 4,206 5,305 2,204 3,476 3,749' 3,479 7 Commercial and miscellaneous 17,066 40,124 49,327 1,007 771 1,446 2,281 1,531 2,227 1,035 765 8 Transportation 6,020 9,971 11,974 1,017 890 184 580 100 0 150 705 9 Public utility 13,649 31,426 23,004 2,259 1,170 1,929 1,707 540 298 856 1,324 10 Communication 10,832 16,659 7,340 115 411 69 925 577 29 1,064 0 11 Real estate and financial 91,958 165,564 172,343 12,935 10,760 11,546 14,949 7,948' 9,939' 14,073' 11,917 12 Stocks3 35,515 68,433 66,508 5,087 2,712 4,031 4,295 5,138 3,335 3,005' 2,627 Type 13 Preferred 6,505 11,514 10,123 625 241 285 501 407 498 385' 865 14 Common 29,010 50,316 43,228 4,462 2,471 3,746 3,794 4,731 2,837 2,620' 1,762 15 Private placement 6,603 13,157 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 16 Manufacturing 5,700 15,027 13,880 256 318 1,080 1,676 2% 538 244 288 17 Commercial and miscellaneous 9,149 10,617 12,888 99 276 157 522 2,073 347 525' 222 18 Transportation 1,544 2,427 2,439 32 150 15 51 0 72 5 25 19 Public utility 1,966 4,020 4,322 93 238 59 207 20 135 215 282 20 Communication 978 1,825 1,458 63 109 78 13 20 3 23 0 21 Real estate and financial 16,178 34,517 31,521 4,544 1,621 2,642 1,826 2,729 2,240 1,993' 1,810 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 1988 IItteemm 11998866 11998877 Mar. Apr. May June July Aug. Sept/ Oct. INVESTMENT COMPANIES1 1 Sales of own shares2 411,751 381,260 24,589 23,162 19,579 22,503 20,728 20,595 19,872 20,497 2 Redemptions of own shares3 239,394 314,252 23,968 25,000 21,412 23,168 20,561 22,836 21,330 19,361 3 Net sales 172,357 67,008 620 -1,828 -1,833 -665 167 -2,242 -1,458 1,136 4 Assets4 424,156 453,842 473,206 473,321 468,735 481,120 477,076 465,822 474,662 481,965 5 Cash position5 30,716 38,006 43,561 45,307 45,003 43,229 44,015 45,229 46,706 46,122 6 Other 393,440 415,836 426,645 428,014 423,732 437,891 433,061 420,595 427,956 435,843 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 Q4 Q1 Q2 Q3 Q4 Ql Q2 Q3r 1 Corporate profits with inventory valuation and capital consumption adjustment 282.3 298.8 310.4 293.9 298.3 305.2 322.0 316.1 316.2 326.5 330.0 2 Profits before tax 224.2 236.3 276.7 252.1 261.8 273.7 289.4 281.9 286.2 305.9 313.9 3 Profits tax liability 96.4 106.6 133.8 114.3 126.3 132.6 140.0 136.2 136.9 143.2 144.8 4 Profits after tax 127.8 129.8 142.9 137.9 135.5 141.1 149.5 145.7 149.4 162.7 169.1 5 Dividends 83.2 88.2 95.5 89.8 91.7 94.0 97.0 99.3 101.3 103.1 105.7 6 Undistributed profits 44.5 41.5 47.4 48.1 43.8 47.0 52.4 46.4 48.1 59.6 63.4 7 Inventory valuation -1.7 8.3 -18.0 -8.1 -14.4 -20.0 -19.5 -18.2 -19.4 -27.4 -29.3 8 Capital consumption adjustment 59.8 54.1 51.7 49.8 50.8 51.5 52.1 52.4 49.4 48.0 45.4 SOURCE. Survey of Current Business (Department of Commerce). 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment • Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1987 1988 IInndduussttrryy 11998866 11998877 1199888811 Ql Q2 Q3 Q4 Ql Q2 Q3 Q41 1 Total nonfarm business 379.47 389.67 430.95 376.73 380.66 394.54 406.82 412.02 426.94 440.42 444.40 Manufacturing 2 Durable goods industries 69.14 71.01 78.06 70.79 69.05 71.96 72.28 75.70 76.87 80.59 79.09 3 Nondurable goods industries 73.56 74.88 85.50 70.70 72.66 76.24 79.92 82.90 84.82 85.78 88.48 Nonmanufacturing 4 Mining 11.22 11.39 12.62 10.38 11.02 11.81 12.32 12.59 13.26 12.74 11.89 Transportation 5 Railroad 6.66 5.92 7.05 5.68 5.84 6.07 6.12 6.92 7.01 7.07 7.19 6 Air 6.26 6.53 7.61 7.01 6.02 6.15 6.94 6.43 6.66 9.31 8.02 7 Other 5.89 6.40 6.91 6.08 6.26 6.97 6.28 7.08 7.05 7.06 6.44 Public utilities 8 Electric 33.91 31.63 32.20 31.23 31.47 31.57 32.28 30.31 30.95 33.79 33.76 9 Gas and other 12.47 13.25 14.27 12.72 12.47 13.73 14.11 14.30 14.48 14.26 14.04 10 Commercial and other 160.38 168.65 186.74 162.13 165.86 170.05 176.56 175.79 185.83 189.82 195.50 •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

A36 Domestic Nonfinancial Statistics • February 1989 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period 1986 1987 AAccccoouunntt 11998833 11998844 11998855 Q2 Q3 Q4 Ql 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 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 n 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 1988 TTyyppee 11998866 11998877 May June July Aug. Sept. Oct. 1 Total 156,297 171,966 205,869 220,304 222,133 223,706 223,958 230,474 231,807 Retail financing of installment sales 2 Automotive (commercial vehicles) 20,660 25,952 35,674 37,219 37,519 37,682 37,519 37,120 37,359 3 Business, industrial, and farm equipment 22,483 22,950 24,987 27,081 27,548 27,428 27,603 27,569 27,841 Wholesale financing 4 Automotive 23,988 23,419 31,059 28,260 28,731 28,449 27,721 32,732 32,523 5 Equipment 4,568 5,423 5,693 5,237 5,557 5,654 5,803 5,949 5,888 6 All other 6,809 7,079 8,408 8,414 8,481 8,458 8,531 8,738 8,867 Leasing 7 Automotive 16,275 19,783 21,943 23,690 24,076 24,400 24,370 23,861 24,186 8 Equipment 34,768 37,833 43,002 52,126 52,365 52,803 53,671 55,400 55,786 9 Loans on commercial accounts receivable and factored commercial accounts receivable 15,765 15,959 18,024 18,700 18,595 19,095 19,132 19,386 19,239 10 All other business credit 10,981 13,568 17,079 19,578 19,260 19,736 19,609 19,719 20,117 Net change (during period) 11 19,607 15,669 3,040 1,390 1,829 1,573 252 6,515 1,333 Retail financing of installment sales 12 Automotive (commercial vehicles) 5,067 5,292 1,220 -400 300 163 -163 -399 239 13 Business, industrial, and farm equipment -363 467 223 -181 467 -120 175 -35 272 Wholesale financing 14 Automotive 5,423 -569 158 899 471 -282 -728 5,011 -208 15 Equipment -867 855 -101 -192 320 97 149 146 -60 16 All other 1,069 270 257 103 67 -23 73 207 129 Leasing 17 Automotive 3,896 3,508 -70 231 386 324 -30 -509 325 18 Equipment 2,685 3,065 1,038 1,034 239 438 867 1,729 386 19 Loans on commercial accounts receivable ami factored commercial accounts receivable 2,161 194 -477 -88 -105 500 37 255 -148 20 All other business credit 536 2,587 792 -14 -318 476 -127 110 398 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

Real Estate A37 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1988 IItteemm 11998855 11998866 11998877 May June July Aug. Sept. Oct. Nov. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms 1 Purchase price (thousands of dollars) 104.1 118.1 137.0 145.3 152.0 152.9 154.2 148.3 153.8 155.3 2 Amount of loan (thousands of dollars) 77.4 86.2 100.5 108.0 110.2 111.9 114.9 109.8 114.0 115.6 3 Loan/price ratio (percent) 77.1 75.2 75.2 76.4 73.8 75.2 76.7 75.4 75.8 76.1 4 Maturity (years) 26.9 26.6 27.8 28.1 27.5 28.4 28.5 27.6 28.4 28.4 5 Fees and charges (percent of loan amount) 2.53 2.48 2.26 2.15 2.16 2.24 2.35 2.14 1.98 2.28 6 Contract rate (percent per year) 11.12 9.82 8.94 8.59 8.90 8.80 8.68 8.90 8.77 9.05 Yield (percent per year) 7 FHLBB series3 11.58 10.25 9.31 8.95 9.26 9.17 9.06 9.26 9.10 9.43 8 HUD series4 12.28 10.07 10.17 10.48 10.35 10.47 10.55 10.39 n.a. n.a. SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series)5 12.24 9.91 10.16 10.84 10.65 10.66 10.74 10.58 n.a. n.a. 10 GNMA securities 11.61 9.30 9.42 9.93 9.88 9.91 10.09 9.93 9.77 9.85 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 94,574 98,048 95,030 101,747 102,368 102,540 102,540 102,453 102,493 102,6% 12 FHA/V A-insured 34,244 29,683 21,660 19,805 19,765 19,677 19,586 19,526 19,464 19,467 13 Conventional 60,331 68,365 73,370 81,941 82,603 82,864 82,954 82,927 83,032' 83,228 Mortgage transactions (during period) 14 Purchases 21,510 30,826 20,531 2,138 2,372 1,960 1,638 1,111 1,488 1,5% Mortgage commitments1 15 Contracted (during period) 20,155 32,987 25,415 2,142 2,179 1,108 1,041 1,439 1,740 1,289 16 Outstanding (end of period) 3,402 3,386 4,886 5,777 5,365 4,277 3,135 3,257 3,165 2,740 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)* 17 Total 12,399 13,517 12,802 15,228 15,576 15,133 15,142 15,442 n.a. n.a. 18 FHA/VA 841 746 686 633 627 619 611 606 n.a. n.a. 19 Conventional 11,559 12,771 12,116 14,595 14,949 14,514 14,531 14,836 n.a. n.a. Mortgage transactions (during period) 20 Purchases 44,012 103,474 76,845 2,877 4,117 3,879 3,858 4,192 n.a. n.a. 21 Sales 38,905 100,236 75,082 2,325 3,649 4,115 3,719 3,728 3,594 4,331 Mortgage commitments9 22 Contracted (during period) 48,989 110,855 71,467 5,159 6,447 5,328 3,480 6,209 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

A38 Domestic Nonfinancial Statistics • February 1989 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1987 1988 Type of holder, and type of property 1985 1986 1987 Q3 Q4 Q1 Q2 1 All holders 2,289,843 2,597,175 2,943,144 2,864,736 2,943,144 2,988,100 3,067,691 2 1- to 4-family 1,488,009 1,698,524 1,925,197 1,870,635 1,925,197 1,955,770 2,015,759 3 Multifamily 214,470 247,831 273,830 268,911 273,830 277,622 282,756 4 Commercial 481,514 555,039 655,249 635,230 655,249 666,521 681,246 5 Farm 105,850 95,781 89,960 88,187 87,930 6 Selected financial institutions 1,390,394 1,507,289 1,700,820 1,648,328 1,700,820 1,723,737 1,773,569 7 Commercial banks2 429,196 502,534 591,151 567,000 591,151 604,403 628,132 8 1- to 4-family 213,434 235,814 275,761 263,762 275,761 280,439 291,767 9 Multifamily 23,373 31.173 33,296 32,114 33,296 33,640 34,672 10 Commercial 181,032 222.799 267,663 256,981 267,663 275,535 286,366 11 Farm 11,357 12,748 14,431 14,143 14,431 14,789 15,327 12 Savings institutions3 760,499 777,312 856,945 838,737 856,945 863,110 882,049 13 1- to 4-family 554,301 558,412 598,886 583,432 598,886 603,532 622,976 14 Multifamily 89,739 97,059 106,359 104,609 106,359 107,687 109,353 15 Commercial 115,771 121,236 150,943 149,938 150,943 151,136 148,969 16 Farm 688 605 n.a. n.a. n.a. n.a. n.a. 17 Life insurance companies 171,797 193,842 212,375 204,263 212,375 214,815 220,870 18 1- to 4-family 12,381 12,827 13,226 12,742 13,226 13,653 14,172 19 Multifamily 19,894 20,952 22,524 21,968 22,524 22,723 23,021 20 Commercial 127,670 149,111 166,722 159,464 166,722 168,774 174,086 21 Farm 11,852 10,952 9,903 10,089 9,903 9,665 9,591 22 Finance companies4 28,902 33,601 40,349 38,328 40,349 41,409 42,518 23 Federal and related agencies 166,928 203.800 192,721 191,520 192,721 196,909 199,474 24 Government National Mortgage Association.. 1,473 889 444 458 444 434 42 25 1- to 4-family 539 47 25 25 25 25 24 26 Multifamily 934 842 419 433 419 409 18 27 Farmers Home Administration5 733 48,421 43,051 42,978 43,051 43,076 42,767 28 1- to 4-family 183 21,625 18,169 18,111 18,169 18,185 18,248 29 Multifamily 113 7,608 8,044 7,903 8,044 8,115 8,213 30 Commercial 159 8,446 6,603 6,592 6,603 6,640 6,288 31 Farm 278 10,742 10,235 10,372 10,235 10,136 10,018 32 Federal Housing and Veterans Administration 4,920 5,047 5,574 5,330 5,574 5,660 5,673 33 1- to 4-family 2,254 2,386 2,557 2,452 2,557 2,608 2,564 34 Multifamily 2,666 2,661 3,017 2,878 3,017 3,052 3,109 35 Federal National Mortgage Association 98,282 97,895 96,649 94,884 96,649 99,787 102,368 36 1- to 4-family 91,966 90,718 89,666 87,901 89,666 92,828 95,404 37 Multifamily 6,316 7,177 6,983 6,983 6,983 6,959 6,964 38 Federal Land Banks 47,498 39,984 34,131 34,930 34,131 33,566 33,048 39 1- to 4-family 2,798 2,353 2,008 2,055 2,008 1,975 1,945 40 Farm 44,700 37,631 32,123 32,875 32,123 31,591 31,103 41 Federal Home Loan Mortgage Corporation .. 14,022 11,564 12,872 12,940 12,872 14,386 15,576 42 1- to 4-family 11,881 10,010 11,430 11,570 11,430 12,749 13,631 43 Multifamily 2,141 1,554 1,442 1,370 1,442 1,637 1,945 44 Mortgage pools or trusts6 439,058 565,428 718,297 692,944 718,297 736,344 754,045 45 Government National Mortgage Association.. 212,145 262,697 317.555 308,339 317,555 322,976 322,616 46 1- to 4-family 207,198 256,920 309,806 300,815 309,806 315,095 314,728 47 Multifamily 4,947 5,777 7,749 7,524 7,749 7,881 7,888 48 Federal Home Loan Mortgage Corporation .. 100,387 171,372 212,634 208,872 212,634 214,724 216,155 49 1- to 4-family 99,515 166,667 205,977 202,308 205,977 208,138 209,702 50 Multifamily 872 4,705 6,657 6,564 6,657 6,586 6,453 51 Federal National Mortgage Association 54,987 97.174 139,960 130,540 139,960 145,242 157,438 52 1- to 4-family 54,036 95,791 137,988 128,770 137,988 142,330 153,253 53 Multifamily 951 1,383 1,972 1,770 1,972 2,912 4,185 54 Farmers Home Administration 47,523 348 245 333 245 172 106 5 5 5 6 M 1- u to lt i 4 fa -f m a i m ly i ly 22 6 , ,6 1 7 8 5 6 142 121 144 121 65 23 5 5 7 8 C Fa o r m m m ercial 1 8 0 , , 1 47 9 2 0 1 7 3 4 2 6 6 3 1 1 6 2 5 4 6 6 3 1 4 5 9 8 4 4 1 2 59 Individuals and others7 293,463 320,658 331,306 331,944 331,306 331,110 340,603 60 1- to 4-family 162,419 177,374 171,325 173,360 171,325 169,509 177,074 61 Multifamily 55,849 66,940 75,368 74,795 75,368 76,021 76,935 62 Commercial 48,692 53,315 63,255 62,131 63,255 64,378 65,496 63 Farm 26,503 23,029 21,358 21,658 21,358 21,202 21,098 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

Consumer Installment Credit A39 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change, seasonally adjusted Millions of dollars 1988 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998866 Feb. Mar. Apr. May June July Aug. Sept/ Oct. Amounts outstanding (end of period) 1 Total 571,833 613,022 624,294 629,485 633,336 636,318 644,372 647,993 653,317 653,319 656,880 By major holder 2 Commercial banks 262,139 281,564 287,344 290,831 293,166 295,546 300,275 303,189 307,119 308,960 312,867 3 Finance companies 133,698 140,072 142,946 144,053 144,516 144,454 144,748 143,812 143,962 142,723 142,480 4 Credit unions 76,191 81,065 81,897 82,595 83,204 83,881 84,912 85,468 85,881 85,553 85,781 5 Retailers 39,660 42,782 43,080 43,271 43,295 43,162 43,450 43,634 43,712 43,956 44,250 6 Savings institutions 56,881 63,949 65,396 65,078 65,387 65,509 67,274 68,182 68,909 68,462 67,845 7 Gasoline companies 3,264 3,590 3,631 3,657 3,769 3,765 3,713 3,707 3,735 3,665 3,658 By major type of credit 8 Automobile 246,109 267,180 273,133 276,762 278,567 279,418 282,254 283,359 285,560 284,782 286,101 9 Commercial banks 100,907 108,438 111,021 113,593 114,868 115,951 117,322 118,650 120,380 121,450 123,124 10 Credit unions 38,413 43,474 44,251 44,795 45,293 45,831 46,565 47,043 47,444 47,436 47,735 11 Finance companies 92,350 98,026 100,123 100,669 100,564 99,708 99,900 98,8% 98,711 %,939 %,400 12 Savings institutions 14,439 17,242 17,738 17,705 17,841 17,928 18,465 18,770 19,026 18,958 18,842 13 Revolving 136,381 159,307 163,462 165,643 167,356 169,154 172,809 174,927 177,568 178,675 180,841 14 Commercial banks 86,757 98,808 101,537 103,152 104,250 105,742 108,309 109,645 111,623 112,341 113,994 15 Retailers 34,320 36,959 37,231 37,408 37,414 37,259 37,526 37,671 37,708 37,914 38,169 16 Gasoline companies 3,264 3,590 3,631 3,657 3,769 3,765 3,713 3,707 3,735 3,665 3,658 17 Savings institutions 8,366 13,279 13,945 14,059 14,309 14,518 15,098 15,492 15,850 15,938 15,984 18 Credit unions 3,674 6,671 7,117 7,368 7,614 7,870 8,162 8,413 8,652 8,816 9,038 19 Mobile home 26,883 25,957 25,857 25,732 25,764 25,703 25,852 25,882 25,915 25,746 25,645 20 Commercial banks 8,926 9,101 9,035 8,993 9,047 8,966 8,933 8,913 8,893 8,833 8,917 21 Finance companies 8,822 7,771 7,679 7,640 7,575 7,578 7,513 7,436 7,387 7,341 7,243 22 Savings institutions 9,135 9,085 9,143 9,099 9,142 9,159 9,406 9,533 9,634 9,572 9,485 23 Other 162,460 160,578 161,842 161,348 161,649 162,043 163,456 163,825 164,274 164,116 164,294 24 Commercial banks 65,549 65,217 65,750 65,094 65,001 64,887 65,710 65,981 66,222 66,335 66,833 25 Finance companies 32,526 34,275 35,144 35,744 36,376 37,168 37,335 37,480 37,863 38,443 38,837 26 Credit unions 34,104 30,920 30,529 30,432 30,297 30,180 30,184 30,012 29,785 29,302 29,008 27 Retailers 5,340 5,823 5,849 5,863 5,880 5,903 5,923 5,964 6,004 6,041 6,081 28 Savings institutions 24,941 24,343 24,570 24,216 24,095 23,904 24,305 24,388 24,399 23,995 23,534 Net change (during period) 29 Total 54,078 41,189 5,036 5,191 3,851 2,982 8,054 3,621 5,324 2 3,561 By major holder 30 Commercial banks 20,495 19,425 2,591 3,487 2,335 2,380 4,729 2,914 3,930 1,841 3,907 31 Finance companies 22,670 6,374 1,251 1,107 463 -62 294 -936 150 -1,239 -243 32 Credit unions 4,268 4,874 235 698 609 677 1,031 556 413 -328 228 33 Retailers 466 3,122 154 191 24 -133 288 184 78 244 294 34 Savings institutions 7,223 7,068 763 -318 309 122 1,765 908 727 -447 -617 35 Gasoline companies -1,044 326 41 26 112 -4 -52 -6 28 -70 -7 By major type of credit 36 Automobile 36,473 21,071 3,250 3,629 1,805 851 2,836 1,105 2,201 -778 1,319 37 Commercial banks 8,178 7,531 1,723 2,572 1,275 1,083 1,371 1,328 1,730 1,070 1,674 38 Credit unions 2,388 5,061 292 544 498 538 734 478 401 -8 299 39 Finance companies 22,823 5,676 976 546 -105 -856 192 -1,004 -185 -1,772 -539 40 Savings institutions 3,084 2,803 259 -33 136 87 537 305 256 -68 -116 41 Revolving 14,368 22,926 1,397 2,181 1,713 1,798 3,655 2,118 2,641 1,107 2,166 42 Commercial banks 11,150 12,051 658 1,615 1,098 1,492 2,567 1,336 1,978 718 1,653 43 Retailers 47 2,639 144 177 6 -155 267 145 37 206 255 44 Gasoline companies -1,044 326 41 26 112 -4 -52 -6 28 -70 -7 45 Savings institutions 2,078 4,913 344 114 250 209 580 394 358 88 46 46 Credit unions 2,137 2,997 209 251 246 256 292 251 239 164 222 47 Mobile home 49 -926 -69 -125 32 -61 149 30 33 -169 -101 48 Commercial banks -627 175 -29 -42 54 -81 -33 -20 -20 -60 84 49 Finance companies -472 -1,051 -74 -39 -65 3 -65 -77 -49 -46 -98 50 Savings institutions 1,148 -50 34 -44 43 17 247 127 101 -62 -87 51 Other 3,188 -1,882 458 -494 301 394 1,413 369 449 -158 178 52 Commercial banks 1,794 -332 238 -656 -93 -114 823 271 241 113 498 53 Finance companies 319 1,749 349 600 632 792 167 145 383 580 394 54 Credit unions -257 -3,184 -266 -97 -135 -117 4 -172 -227 -483 -294 55 Retailers 419 483 10 14 17 23 20 41 40 37 40 56 Savings institutions 913 -598 126 -354 -121 -191 401 83 11 -404 -461 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

A40 Domestic Nonfinancial Statistics • February 1989 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent unless noted otherwise 1988 IItteemm 11998855 11998866 11998877 Apr. May June July Aug. Sept. Oct. INTEREST RATES Commercial banks2 1 48-month new car 12.91 11.33 10.45 n.a. 10.55 n.a. n.a. 10.93 n.a. n.a. 2 24-month personal 15.94 14.82 14.22 n.a. 14.40 n.a. n.a. 14.81 n.a. n.a. 3 120-month mobile home3 14.96 13.99 13.38 n.a. 13.49 n.a. n.a. 13.62 n.a. n.a. 4 Credit card 18.69 18.26 17.92 n.a. 17.78 n.a. n.a. 17.79 n.a. n.a. Auto finance companies 5 New car 11.98 9.44 10.73 12.29 12.29 12.32 12.44 12.64 12.93 13.10 6 Used car 17.59 15.95 14.60 14.82 14.81 14.83 14.99 15.16 15.46 15.67 OTHER TERMS4 Maturity (months) 7 New car 51.5 50.0 53.5 56.2 56.2 56.3 56.4 56.5 56.3 56.3 8 Used car 41.4 42.6 45.2 46.9 46.9 46.9 46.8 46.8 46.5 46.3 Loan-to-value ratio 9 New car 91 91 93 94 94 94 94 94 94 94 10 Used car 94 97 98 98 99 99 99 98 98 99 Amount financed (dollars) 11 New car 9,915 10,665 11,203 11,553 11,624 11,626 11,663 11,593 11,530 11,845 12 Used car 6,089 6,555 7,420 7,662 7,778 7,899 7,947 7,918 7,903 7,944 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

Flow of Funds A41 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1987 1988 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998833 11998844 11998855 11998866 11998877 Q1 Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors 546.8 750.8 846.3 830.6 680.6 552.0 751.7 652.1 766.8 731.8 704.0 760.4 By sector and instrument 2 U.S. government 186.6 198.8 223.6 215.0 143.8 161.6 145.2 101.8 166.7 226.3 87.6 195.5 3 Treasury securities 186.7 199.0 223.7 214.7 142.3 157.7 147.1 102.7 161.8 226.8 79.8 174.6 4 Agency issues and mortgages -.1 -.2 -.1 .4 1.5 3.9 -1.9 -.9 5.0 -.5 7.7 20.9 5 Private domestic nonfinancial sectors 360.2 552.0 622.7 615.6 536.8 390.3 606.4 550.3 600.1 505.6 616.5 564.9 6 Debt capital instruments 257.6 319.3 452.3 460.7 446.1 473.3 466.7 428.1 416.1 363.3 452.2 457.1 7 Tax-exempt obligations 53.7 50.4 136.4 30.8 34.5 38.7 33.1 32.7 33.5 24.8 32.6 44.4 8 Corporate bonds 16.0 46.1 73.8 121.3 99.9 128.9 88.5 100.7 81.6 101.3 118.4 90.8 9 Mortgages 187.9 222.8 242.2 308.6 311.6 305.7 345.1 294.7 301.1 237.1 301.2 322.0 10 Home mortgages 120.4 136.7 156.8 210.9 221.7 224.2 243.5 212.1 206.9 177.9 228.0 210.1 11 Multifamily residential 14.1 25.2 29.8 33.5 24.3 27.4 30.9 23.1 15.9 21.4 14.0 33.5 12 Commercial 51.0 62.2 62.2 73.6 72.0 66.5 77.2 64.1 80.2 43.2 60.8 72.7 13 Farm 2.4 -1.2 -6.6 -9.5 -6.4 -12.4 -6.6 -4.7 -1.9 -5.4 -1.6 5.7 14 Other debt instruments 102.6 232.7 170.3 154.9 90.7 -83.0 139.7 122.2 184.0 142.3 164.2 107.8 15 Consumer credit 49.0 81.6 82.5 54.4 40.7 -.3 52.4 61.4 49.4 34.8 59.5 43.3 16 Bank loans n.e.c 23.2 67.1 38.6 69.3 8.8 -107.8 36.6 21.0 85.3 40.4 74.2 2.6 17 Open market paper -.8 21.7 14.6 -9.3 2.3 -.5 4.7 1.0 3.9 -3.8 4.0 11.1 18 Other 31.3 62.2 34.6 40.5 38.9 25.5 46.1 38.7 45.5 70.9 26.6 50.7 19 By borrowing sector 360.2 552.0 622.7 615.6 536.8 390.3 606.4 550.3 600.1 505.6 616.5 564.9 20 State and local governments 34.0 27.4 91.8 44.3 34.4 37.0 31.4 34.8 34.6 22.3 31.1 41.3 21 Households 186.1 231.5 283.6 286.1 261.5 197.3 302.7 281.2 264.9 220.0 288.0 250.9 22 Nonfinancial business 140.1 293.1 247.3 285.1 240.8 156.0 272.4 234.2 300.7 263.3 297.3 272.7 23 Farm 3.9 -.4 -14.5 -16.3 -11.2 -23.5 -12.7 -9.4 .8 -12.5 -3.6 1.3 24 Nonfarm noncorporate 81.9 123.2 129.3 127.6 115.8 108.4 125.7 105.4 123.8 91.0 87.1 120.3 25 Corporate 54.4 170.3 132.4 173.8 136.3 71.2 159.4 138.3 176.1 184.9 213.9 151.1 26 Foreign net borrowing in United States 17.3 8.4 1.2 9.6 4.3 -8.7 -.1 12.3 13.9 -1.0 4.9 9.7 27 Bonds 3.1 3.8 3.8 3.0 6.8 3.0 -4.1 6.7 21.6 16.8 -2.9 7.4 28 Bank loans n.e.c 3.6 -6.6 -2.8 -1.0 -3.6 -1.2 -3.5 -3.7 -6.1 .7 -3.5 .3 29 Open market paper 6.5 6.2 6.2 11.5 2.1 -4.2 -6.4 21.6 -2.5 1.5 6.4 10.7 30 U.S. government loans 4.1 5.0 -5.9 -3.9 -1.0 -6.4 13.9 -12.3 .8 -19.9 4.9 -8.8 31 Total domestic plus foreign 564.1 759.2 847.5 840.2 685.0 543.3 751.6 664.3 780.7 730.9 709.0 770.1 Financial sectors 32 Total net borrowing by financial sectors 99.2 148.7 198.3 297.2 303.1 340.0 316.7 306.4 249.2 218.9 250.1 249.1 By instrument 33 U.S. government related 67.8 74.9 101.5 178.1 185.8 193.5 196.8 185.5 167.5 137.4 84.7 140.2 34 Sponsored credit agency securities 1.4 30.4 20.6 15.2 30.2 -4.4 21.5 32.0 71.6 56.8 9.4 42.8 35 Mortgage pool securities 66.4 44.4 79.9 163.3 156.4 200.7 175.4 153.5 95.9 80.5 75.3 97.4 36 1.1 -.4 -.7 -2.9 -.1 37 Private financial sectors 31.4 73.8 96.7 119.1 117.2 146.5 119.9 120.8 81.7 81.6 165.4 108.9 38 Corporate bonds 17.3 33.0 47.9 70.9 67.1 103.2 45.6 77.7 41.8 74.7 67.9 65.9 39 Mortgages * .4 .1 .1 .3 .4 .1 .2 .4 .2 * * 40 Bank loans n.e.c -.1 .7 2.6 4.0 -3.3 -9.5 .6 6.3 -10.7 -26.8 8.7 -4.9 41 Open market paper 21.3 24.1 32.0 24.2 28.8 41.5 54.0 14.3 5.4 28.0 78.7 21.3 42 Loans from Federal Home Loan Banks -7.0 15.7 14.2 19.8 24.4 11.0 19.6 22.2 44.9 5.4 10.1 26.6 By sector 43 99.2 148.7 198.3 297.2 303.1 340.0 316.7 306.4 249.2 218.9 250.1 249.1 44 Sponsored credit agencies 1.4 30.4 21.7 14.9 29.5 -7.2 21.4 32.0 71.6 56.8 9.4 42.8 45 Mortgage pools 66.4 44.4 79.9 163.3 156.4 200.7 175.4 153.5 95.9 80.5 75.3 97.4 46 Private financial sectors 31.4 73.8 96.7 119.1 117.2 146.5 119.9 120.8 81.7 81.6 165.4 108.9 47 Commercial banks 5.0 7.3 -4.9 -3.6 7.1 6.4 20.0 -13.1 15.0 -22.4 6.2 -12.9 48 Bank affiliates 12.1 15.6 14.5 4.6 2.9 25.6 -2.7 11.3 -22.6 -5.0 7.6 5.2 49 Savings and loan associations -2.1 22.7 22.3 29.8 36.0 28.0 22.2 41.9 51.9 9.1 18.2 52.9 50 Finance companies 13.0 18.2 52.7 48.4 30.6 18.1 39.9 36.3 28.2 54.5 100.4 40.6 51 REITs -.2 .8 .5 1.0 1.5 1.7 -.5 1.7 3.2 2.4 1.8 1.9 52 CMO Issuers 3.6 9.3 11.5 39.0 39.1 66.8 41.0 42.7 6.0 43.1 31.2 21.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • February 1989 1.57—Continued 1987 1988 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998833 11998844 11998855 11998866 11998877 Ql Q2 Q3 Q4 Ql Q2 Q3 All sectors 53 Total net borrowing 663.4 907.9 1,045.7 1,137.4 988.0 883.3 1,068.3 970.7 1,029.9 949.8 959.1 1,019.2 54 U.S. government securities 254.4 273.8 324.2 393.5 330.4 358.0 342.2 287.3 334.2 363.6 172.3 335.7 55 State and local obligations 53.7 50.4 136.4 30.8 34.5 38.7 33.1 32.7 33.5 24.8 32.6 44.4 56 Corporate and foreign bonds 36.4 83.0 125.4 195.2 173.8 235.2 130.0 185.1 145.0 192.8 183.5 164.1 57 Mortgages 187.8 223.1 242.2 308.6 311.9 306.0 345.2 294.9 301.4 237.4 301.2 322.0 58 Consumer credit 49.0 81.6 82.5 54.4 40.7 -.3 52.4 61.4 49.4 34.8 59.5 43.3 59 Bank loans n.e.c 26.7 61.1 38.3 72.3 1.9 -118.5 33.8 23.6 68.5 14.2 79.4 -2.0 60 Open market paper 26.9 52.0 52.8 26.4 33.2 36.8 52.3 36.9 6.7 25.7 89.1 43.1 61 Other loans 28.4 82.9 44.0 56.1 61.6 27.3 79.4 48.7 91.2 56.4 41.7 68.6 62 MEMO: U.S. government, cash balance -7.1 6.3 14.4 * -7.9 -34.9 77.7 -19.6 -54.7 60.9 3.3 6.4 Totals net of changes in U.S. government cash balances 63 Net borrowing by domestic nonfinancial 553.9 744.5 831.9 830.6 688.5 586.9 674.0 671.7 821.5 670.9 700.8 775544..00 64 Net borrowing by U.S. government 193.7 192.5 209.3 215.0 151.7 196.6 67.6 121.4 221.4 165.4 84.3 189.1 External corporate equity funds raised in United States 65 Total net share issues 58.1 -36.0 20.1 93.9 13.3 170.1 13.9 -47.1 -83.6 -73.7 -141.0 -70.3 66 Mutual funds 27.2 29.3 84.4 161.8 72.3 205.4 79.1 13.8 -9.1 5.0 -8.1 6.0 67 All other 30.8 -65.3 -64.3 -68.0 -59.0 -35.3 -65.2 -60.9 -74.6 -78.7 -132.9 -76.3 68 Nonfinancial corporations 23.5 -74.5 -81.5 -80.7 -76.5 -57.0 -83.0 -78.0 -88.0 -95.0 -140.0 -92.0 69 Financial corporations 3.6 8.2 13.5 11.5 19.9 19.1 16.5 18.4 25.5 17.0 13.8 13.6 70 Foreign shares purchased in United States 3.7 .9 3.7 1.3 -2.4 2.7 1.2 -1.3 -12.0 -.7 -6.7 2.1 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; quarterly data are at seasonally adjusted annual rates. 1987 1988 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998833 11998844 11998855 11998866 11998877 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Total funds advanced in credit markets to domestic nonfinancial sectors 546.8 750.8 846.3 830.6 680.6 552.0 751.7 652.1 766.8 731.8 704.0 760.4 By public agencies and foreign 2 Total net advances 117.8 157.6 193.1 304.2 256.3 270.9 279.3 211.1 264.0 228811..77 162.5 119966..66 3 U.S. government securities 29.0 38.9 37.9 69.4 68.2 59.0 55.3 35.1 123.3 148.6 38.2 17.3 4 Residential mortgages 76.1 56.5 94.6 160.3 153.2 194.8 169.4 146.0 102.7 100.7 89.7 97.5 5 FHLB advances to savings and loans -7.0 15.7 14.2 19.8 24.4 11.0 19.6 22.2 44.9 5.4 10.1 26.6 6 Other loans and securities 19.7 46.6 46.3 54.6 10.5 6.1 35.1 7.8 -6.8 27.0 24.5 55.3 Total advanced, by sector 7 U.S. government 9.7 17.1 16.8 9.7 -11.5 -8.5 -12.3 -24.1 -.9 -8.9 -10.1 1.5 8 Sponsored credit agencies 69.8 74.3 95.5 177.3 180.6 204.9 177.0 187.0 153.6 123.3 86.3 119.9 9 Monetary authorities 14.7 8.4 18.4 19.4 24.7 9.4 29.8 29.0 30.4 -5.5 4.1 17.1 10 Foreign 23.7 57.9 62.3 97.8 62.5 65.1 84.8 19.1 81.0 172.9 82.2 58.2 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 67.8 74.9 101.5 178.1 185.8 193.5 196.8 185.5 167.5 137.4 84.7 140.2 12 Foreign 17.3 8.4 1.2 9.6 4.3 -8.7 -.1 12.3 13.9 -1.0 4.9 9.7 Private domestic funds advanced n Total net advances 514.2 676.4 756.0 714.1 614.5 465.9 669.1 638.7 684.2 586.5 631.2 713.7 14 U.S. government securities 225.4 234.9 286.2 324.1 262.2 299.0 286.9 252.2 210.9 215.0 134.1 318.4 15 State and local obligations 53.7 50.4 136.4 30.8 34.5 38.7 33.1 32.7 33.5 24.8 32.6 44.4 16 Corporate and foreign bonds 14.5 35.1 40.8 84.1 86.5 100.4 58.8 83.7 102.9 115.7 88.1 68.6 17 Residential mortgages 58.3 105.3 91.8 84.1 92.8 56.7 105.0 89.3 120.0 98.7 152.4 146.1 18 Other mortgages and loans 155.1 266.3 214.9 210.8 162.9 -18.0 204.8 203.0 261.7 137.7 234.1 162.8 19 LESS: Federal Home Loan Bank advances -7.0 15.7 14.2 19.8 24.4 11.0 19.6 22.2 44.9 5.4 10.1 26.6 Private financial intermediation 20 Credit market funds advanced by private financial institutions 394.7 581.0 569.8 746.3 564.9 521.5 549.7 639.7 548.5 674.9 615.7 606.4 21 Commercial banking 144.3 168.9 186.3 194.8 136.3 -56.2 198.0 150.9 252.6 56.0 213.3 132.3 77 Savings institutions 135.6 150.2 83.0 105.5 140.4 89.9 132.0 188.7 151.0 87.9 120.7 166.4 23 Insurance and pension funds 100.1 121.8 148.9 181.9 210.8 266.3 178.0 246.2 152.8 282.4 235.3 217.6 24 Other finance 14.7 140.1 151.6 264.3 77.3 221.6 41.7 54.0 -7.9 248.6 46.5 90.1 75 Sources of funds 394.7 581.0 569.8 746.5 564.9 521.5 549.7 639.7 548.5 674.9 615.7 606.4 26 Private domestic deposits and RPs 210.4 321.9 210.6 264.7 146.2 -17.1 141.1 193.9 266.8 287.7 127.3 206.1 77 Credit market borrowing 31.4 73.8 96.1 119.1 117.2 146.5 119.9 120.8 81.7 81.6 165.4 108.9 28 Other sources 152.9 185.3 262.5 362.7 301.4 392.1 288.6 325.0 200.0 305.6 323.0 291.3 29 Foreign funds 14.6 8.8 19.7 12.9 43.7 14.9 35.1 99.5 25.2 -80.1 106.6 -39.2 30 Treasury balances -5.3 4.0 10.3 1.7 -5.8 -36.9 43.6 6.1 -36.1 53.3 -17.5 -1.9 31 Insurance and pension reserves 115.0 124.0 131.9 144.3 175.0 195.1 191.1 194.8 118.9 247.6 207.8 173.7 32 Other, net 28.7 48.5 100.7 203.8 88.6 219.0 18.9 24.6 91.9 84.8 26.1 158.6 Private domestic nonfinancial investors 33 Direct lending in credit markets 150.9 169.2 282.9 86.7 166.8 90.9 239.3 119.8 217.3 -6.9 180.9 216.2 34 U.S. government securities 91.0 115.4 175.7 50.1 103.2 52.1 170.1 70.9 119.6 117.6 23.8 160.0 35 State and local obligations 38.8 26.5 39.6 -13.6 46.1 27.8 58.1 42.4 56.0 1.5 29.7 39.1 36 Corporate and foreign bonds -8.3 -.8 2.4 32.6 5.1 9.3 -58.6 28.3 41.5 -40.6 52.7 -25.9 37 Open market paper 12.4 4.0 45.6 -3.0 7.9 -1.9 64.2 -23.3 -7.5 -65.6 77.7 40.5 38 Other 17.0 24.2 19.6 20.7 4.6 3.6 5.6 1.6 7.7 -19.7 -3.0 2.5 39 Deposits and currency 227.8 325.4 220.9 285.0 162.4 -46.6 149.2 229.3 317.6 282.7 134.9 256.7 40 Currency 14.3 8.6 12.4 14.4 19.0 9.4 12.5 17.3 36.8 8.2 11.9 17.5 41 Checkable deposits 28.8 28.0 40.9 93.2 -2.4 -98.7 40.3 34.5 14.4 4.2 21.5 -.6 47 Small time and savings accounts 215.4 150.7 138.4 120.6 75.9 31.3 69.3 79.9 123.1 195.1 125.5 102.1 43 Money market fund shares -39.0 49.0 8.9 41.5 28.2 14.4 2.4 32.7 63.3 59.1 -34.8 13.0 44 Large time deposits -8.3 84.3 7.7 -11.5 27.6 13.7 4.8 .2 91.6 12.0 -7.6 92.0 45 Security RPs 13.5 10.0 14.6 20.8 16.9 22.1 24.3 46.6 -25.6 17.3 22.7 -.4 46 Deposits in foreign countries 3.1 -5.1 -2.1 5.9 -2.8 -38.9 -4.4 18.1 13.9 -13.3 -4.3 33.1 47 Total of credit market instruments, deposits, and currency 378.7 494.6 503.7 371.8 329.2 44.3 388.5 349.1 534.9 275.8 315.8 472.9 48 Public holdings as percent of total 20.9 20.8 22.8 36.2 37.4 49.9 37.2 31.8 33.8 38.5 22.9 25.5 49 Private financial intermediation (in percent) 76.8 85.9 75.4 104.5 91.9 112.0 82.2 100.2 80.2 115.1 97.6 85.0 50 Total foreign funds 38.2 66.7 82.0 110.7 106.2 80.0 119.9 118.7 106.2 92.8 188.9 19.0 MEMO: Corporate equities not included above 51 Total net issues 58.1 -36.0 20.1 93.9 13.3 170.1 13.9 -47.1 -83.6 -73.7 -141.0 -70.3 57 Mutual fund shares 27.2 29.3 84.4 161.8 72.3 205.4 79.1 13.8 -9.1 5.0 -8.1 6.0 53 Other equities 30.8 -65.3 -64.3 -68.0 -59.0 -35.3 -65.2 -60.9 -74.6 -78.7 -132.9 -76.3 54 Acquisitions by financial institutions 50.4 15.8 45.6 48.5 22.6 29.2 72.6 5.2 -16.5 -33.0 -10.1 -9.4 55 Other net purchases 7.7 -51.8 -25.5 45.4 -9.3 140.9 -58.7 -52.4 -67.1 -40.7 -131.0 -61.0 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 • February 1989 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING Billions of dollars; period-end levels. 1987 1988 Ql Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 5,204.3 5,953.7 6,797.0 7,618.1 8,301.3 7,725.8 7,917.4 8,074.1 8,301.3 8,444.3 8,629.8 8,817.3 By sector and instrument 2 U.S. government 1,177.9 1,376.8 1,600.4 1,815.4 1,959.2 1,843.9 1,875.3 1,897.0 1,959.2 2,001.8 2,020.4 2,063.8 3 Treasury securities 1,174.4 1,373.4 1,597.1 1,811.7 1,954.1 1,839.3 1,871.2 1,893.1 1,954.1 1,996.7 2,013.5 2,051.6 4 Agency issues and mortgages 3.6 3.4 3.3 3.6 5.2 4.6 4.2 3.9 5.2 5.0 7.0 12.2 5 Private domestic nonfinancial sectors 4,026.4 4,577.0 5,196.6 5,802.7 6,342.1 5,881.9 6,042.1 6,177.1 6,342.1 6,442.6 6,609.4 6,753.5 6 Debt capital instruments 2,717.8 3,040.0 3,488.4 3,946.4 4,404.5 4,065.6 4,189.4 4,296.9 4,404.5 4,479.3 4,596.7 4,715.0 7 Tax-exempt obligations 471.7 522.1 658.4 689.2 723.7 696.9 705.2 715.5 723.7 728.0 735.8 749.4 8 Corporate bonds 423.0 469.2 542.9 664.2 764.1 696.4 718.5 743.7 764.1 789.4 819.1 841.7 9 Mortgages 1,823.1 2,048.8 2,287.1 2,593.0 2,916.6 2,672.2 2,765.7 2,837.7 2,916.6 2,961.8 3,041.9 3,123.8 10 Home mortgages 1,200.2 1,336.2 1,490.2 1,699.6 1,908.7 1,730.4 1,800.7 1,853.8 1,908.7 1,939.7 2,000.4 2,056.6 11 Multifamily residential 158.8 183.6 213.0 246.3 269.9 254.2 259.9 264.9 269.9 273.8 278.1 285.6 12 Commercial 350.4 416.5 478.1 551.4 649.2 594.8 613.8 629.0 649.2 660.2 675.5 692.5 13 Farm 113.7 112.4 105.9 95.8 88.9 92.8 91.3 90.0 88.9 88.2 87.9 89.2 14 Other debt instruments 1,308.6 1,536.9 1,708.2 1,856.3 1,937.6 1,816.4 1,852.7 1,880.2 1,937.6 1,963.3 2,012.6 2,038.5 15 Consumer credit 437.7 519.3 601.8 656.2 696.9 643.3 658.7 680.9 696.9 692.2 709.6 727.8 16 Bank loans n.e.c 490.2 552.9 592.6 658.6 656.7 627.7 636.3 637.5 656.7 669.4 689.9 688.7 17 Open market paper 36.8 58.5 72.2 62.9 73.8 63.6 67.9 68.1 73.8 73.5 77.8 80.3 18 Other 344.0 406.2 441.6 478.6 510.1 481.7 489.9 493.7 510.1 528.1 535.3 541.6 19 By borrowing sector 4,026.4 4,577.0 5,196.6 5,802.7 6,342.1 5,881.9 6,042.1 6,177.1 6,342.1 6,442.6 6,609.4 6,753.5 20 State and local governments 357.7 385.1 476.9 520.2 554.7 527.5 535.3 546.2 554.7 558.3 565.7 578.5 21 Households 1,811.6 2,038.2 2,314.5 2,594.2 2,836.6 2,605.4 2,691.2 2,762.8 2,836.6 2,866.2 2,945.7 3,016.4 22 Nonfinancial business 1,857.1 2,153.7 2,405.2 2,688.3 2,950.9 2,749.0 2,815.7 2,868.1 2,950.9 3,018.1 3,097.9 3,158.5 23 Farm 188.4 187.9 173.4 156.6 144.9 149.9 150.2 148.5 144.9 141.5 144.0 145.0 24 Nonfarm noncorporate 645.8 769.0 898.3 1,025.9 1,141.7 1,053.8 1,084.3 1,106.7 1,141.7 1,165.2 1,186.0 1,211.9 25 Corporate 1,022.9 1,196.8 1,333.5 1,505.8 1,664.3 1,545.3 1,581.2 1,612.9 1,664.3 1,711.5 1,767.8 1,801.6 26 Foreign credit market debt held in United States 227.3 235.1 236.7 238.2 244.3 236.7 236.8 238.9 244.3 245.1 246.3 247.8 27 Bonds 64.2 68.0 71.8 74.8 81.6 75.1 74.6 75.9 81.6 85.4 85.2 86.7 28 Bank loans n.e.c 37.4 30.8 27.9 26.9 23.3 26.0 25.4 24.2 23.3 22.8 22.4 22.0 29 Open market paper 21.5 27.7 33.9 37.4 41.2 37.3 35.6 40.6 41.2 42.5 44.0 46.3 30 U.S. government loans 104.1 108.6 103.0 99.1 98.1 98.3 101.2 98.2 98.1 94.4 94.7 92.8 31 Total domestic plus foreign 5,431.6 6,188.8 7,033.7 7,856.3 8,545.6 7,962.5 8,154.2 8,313.1 8,545.6 8,689.4 8,876.1 9,065.1 Financial sectors 32 Total credit market debt owed by financial sectors 857.9 1,006.2 1,206.2 1,510.8 1,862.6 1,621.8 1,710.0 1,783.8 1,862.6 1,903.8 1,972.6 2,035.7 By instrument 33 U.S. government related 456.7 531.2 632.7 810.3 1,026.5 887.1 937.1 981.6 1,026.5 1,054.8 1,076.9 1,113.7 34 Sponsored credit agency securities 206.8 237.2 257.8 273.0 303.2 268.4 275.8 283.7 303.2 313.5 317.9 328.5 35 Mortgage pool securities 244.9 289.0 368.9 531.6 718.3 613.7 656.4 692.9 718.3 736.3 754.0 780.2 36 Loans from U.S. government 5.0 5.0 6.1 5.7 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 37 Private financial sectors 401.2 475.0 573.4 700.5 836.1 734.8 772.9 802.1 836.1 849.0 895.7 922.0 38 Corporate bonds 115.8 148.9 197.5 268.4 335.5 293.4 304.6 324.2 335.5 353.2 370.0 386.8 39 Mortgages 2.1 2.5 2.7 2.7 3.0 2.8 2.9 2.9 3.0 3.1 3.1 3.1 40 Bank loans n.e.c 28.9 29.5 32.1 36.1 40.8 36.5 40.1 42.2 40.8 31.7 34.3 33.9 41 Open market paper 195.5 219.5 252.4 284.6 323.8 295.2 311.1 312.7 323.8 331.5 353.4 356.8 42 Loans from Federal Home Loan Banks... 59.0 74.6 88.8 108.6 133.1 106.8 114.3 120.1 133.1 129.5 134.8 141.6 43 Total, by sector 857.9 1,006.2 1,206.2 1,510.8 1,862.6 1,621.8 1,710.0 1,783.8 1,862.6 1,903.8 1,972.6 2,035.7 44 Sponsored credit agencies 211.8 242.2 263.9 278.7 308.2 273.4 280.7 288.7 308.2 318.5 322.9 333.5 45 Mortgage pools 244.9 289.0 368.9 531.6 718.3 613.7 656.4 692.9 718.3 736.3 754.0 780.2 46 Private financial sectors 401.2 475.0 573.4 700.5 836.1 734.8 772.9 802.1 836.1 849.0 895.7 922.0 47 Commercial banks 76.8 84.1 79.2 75.6 82.7 76.1 80.7 78.6 82.7 76.4 77.2 75.4 48 Bank affiliates 71.0 86.6 101.2 101.3 104.2 109.0 108.7 109.5 104.2 104.4 106.5 105.8 49 Savings and loan associations 73.9 93.2 115.5 145.1 181.1 146.6 157.0 165.4 181.1 177.4 187.3 198.0 50 Finance companies 171.7 193.2 246.9 308.1 357.0 315.4 328.8 339.9 357.0 368.3 393.8 406.3 51 REITs 3.5 4.3 5.6 6.5 8.1 7.0 6.8 7.3 8.1 8.7 9.1 9.6 52 CMO Issuers 4.2 13.5 25.0 64.0 103.1 80.7 90.9 101.6 103.1 113.9 121.7 127.0 All sectors 53 Total credit market debt 6,289.5 7,195.0 8,239.8 9,367.2 10,408.1 9,584.3 9,864.2 10,096.9 10,408.1 10,593.3 10,848.6 11,100.8 54 U.S. government securities 1,629.4 1,902.8 2,227.0 2,620.0 2,980.7 2,726.0 2,807.4 2,873.7 2,980.7 3,051.6 3,092.3 3,172.5 55 State and local obligations 471.7 522.1 658.4 689.2 723.7 696.9 705.2 715.5 723.7 728.0 735.8 749.4 56 Corporate and foreign bonds 603.0 686.0 812.1 1,007.4 1,181.2 1,064.9 1,097.7 1,143.9 1,181.2 1,228.1 1,274.2 1,315.2 57 Mortgages 1,825.4 2,051.4 2,289.8 2,595.8 2,919.7 2,675.1 2,768.6 2,840.6 2,919.7 2,964.9 3,045.0 3,127.0 58 Consumer credit 437.7 519.3 601.8 656.2 696.9 643.3 658.7 680.9 696.9 692.2 709.6 727.8 59 Bank loans n.e.c 556.5 613.2 652.6 721.6 720.8 690.3 701.7 703.8 720.8 723.9 746.6 744.6 60 Open market paper 253.8 305.7 358.5 384.9 438.8 396.1 414.6 421.4 438.8 447.5 475.3 483.4 61 Other loans 512.1 594.4 639.5 692.0 746.3 691.8 710.4 717.0 746.3 757.0 769.8 780.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A45 1.60 SUMMARY OF CREDIT MARKET CLAIMS, BY HOLDER Billions of dollars, except as noted; period-end levels. 1987 1988 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998833 11998844 11998855 11998866 11998877 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Total funds advanced in credit markets to domestic nonfinancial sectors 5,204.3 5,953.7 6,797.0 7,618.1 8,301.3 7,725.8 7,917.4 8,074.1 8,301.3 8,444.3 8,629.8 8,817.3 By public agencies and foreign 2 Total held 1,101.7 1,259.2 1,459.4 1,759.3 2,037.8 1,847.6 1,918.0 1,967.0 2,037.8 2,098.6 2,144.4 2,192.8 3 U.S. government securities 339.0 377.9 421.8 491.2 559.4 502.3 519.5 525.6 559.4 592.7 606.1 607.1 4 Residential mortgages 367.0 423.5 518.2 678.5 862.0 758.9 800.0 834.6 862.0 884.8 906.1 932.2 5 FHLB advances to savings and loans 59.0 74.6 88.8 108.6 133.1 106.8 114.3 120.1 133.1 129.5 134.8 141.6 6 Other loans and securities 336.8 383.1 430.6 481.0 483.4 479.6 484.3 486.8 483.4 491.5 497.4 511.9 7 Total held, by type of lender 1,101.7 1,259.2 1,459.4 1,759.3 2,037.8 1,847.6 1,918.0 1,967.0 2,037.8 2,098.6 2,144.4 2,192.8 8 U.S. government 212.8 229.7 247.6 254.3 235.4 249.2 242.9 237.1 235.4 233.7 232.0 232.6 9 Sponsored credit agencies and mortgage pools ... 482.0 556.3 657.8 833.9 1,044.1 912.0 957.9 1,003.7 1,044.1 1,068.2 1,091.6 1,124.2 10 Monetary authority 159.2 167.6 186.0 205.5 230.1 204.1 214.9 219.6 230.1 224.9 229.7 230.8 11 Foreign 247.7 305.6 367.9 465.7 528.2 482.3 502.3 506.7 528.2 571.8 591.1 605.3 Agency and foreign debt not in line 1 12 Sponsored credit agencies and mortgage pools ... 456.7 531.2 632.7 810.3 1,026.5 887.1 937.1 981.6 1,026.5 1,054.8 1,076.9 1,113.7 13 Foreign 227.3 235.1 236.7 238.2 244.3 236.7 236.8 238.9 244.3 245.1 246.3 247.8 Private domestic holdings 14 Total private holdings 4,786.6 5,460.8 6,207.0 6,907.3 7,534.2 7,002.0 7,173.2 7,327.7 7,534.2 7,645.7 7,808.6 7,985.9 15 U.S. government securities 1,290.4 1,524.9 1,805.2 2,128.7 2,421.3 2,223.7 2,287.9 2,348.1 2,421.3 2,458.9 2,486.3 2,565.3 16 State and local obligations 471.7 522.1 658.4 689.2 723.7 696.9 705.2 715.5 723.7 728.0 735.8 749.4 17 Corporate and foreign bonds 441.7 476.8 517.6 601.7 688.1 626.0 642.4 663.4 688.1 716.3 740.1 757.3 18 Residential mortgages 992.2 1,096.5 1,185.1 1,267.4 1,316.7 1,225.8 1,260.6 1,284.2 1,316.7 1,328.7 1,372.4 1,410.0 19 Other mortgages and loans 1,649.6 1,915.2 2,129.5 2,328.9 2,517.4 2,336.4 2,391.5 2,436.6 2,517.4 2,543.3 2,608.9 2,645.5 20 LESS: Federal Home Loan Bank advances 59.0 74.6 88.8 108.6 133.1 106.8 114.3 120.1 133.1 129.5 134.8 141.6 Private financial intermediation 21 Credit market claims held by private financial institutions 4,111.2 4,691.0 5,264.4 6,009.5 6,585.2 6,126.1 6,277.5 6,433.5 6,585.2 6,723.0 6,892.6 7,042.6 22 Commercial banking 1,622.1 1,791.1 1,978.5 2,173.2 2,309.6 2,155.9 2,207.9 2,248.7 2,309.6 2,322.1 2,377.5 2,414.3 23 Savings institutions 944.0 1,092.8 1,178.4 1,283.0 1,434.2 1,308.4 1,355.4 1,396.5 1,434.2 1,440.3 1,486.8 1,523.4 24 Insurance and pension funds 1,093.5 1,215.3 1,364.2 1,546.0 1,756.9 1,608.7 1,652.6 1,715.3 1,756.9 1,823.0 1,880.9 1,937.2 25 Other finance 451.6 591.7 743.4 1,007.3 1,084.6 1,053.1 1,061.5 1,073.0 1,084.6 1,137.6 1,147.5 1,167.7 26 Sources of funds 4,111.2 4,691.0 5,264.4 6,009.5 6,585.2 6,126.1 6,277.5 6,433.5 6,585.2 6,723.0 6,892.6 7,042.6 27 Private domestic deposits and RPs 2,389.8 2,711.5 2,922.1 3,182.6 3,328.8 3,165.0 3,198.6 3,234.4 3,328.8 3,385.7 3,417.0 3,455.1 28 Credit market debt 401.2 475.0 573.4 700.5 836.1 734.8 772.9 802.1 836.1 849.0 895.7 922.0 29 Other sources 1,320.2 1,504.5 1,768.9 2,126.4 2,420.4 2,226.3 2,305.9 2,397.0 2,420.4 2,488.4 2,579.9 2,665.6 30 Foreign funds -23.0 -14.1 5.6 18.6 62.2 26.7 26.1 52.7 62.2 45.9 62.3 54.8 31 Treasury balances 11.5 15.5 25.8 27.5 21.6 8.6 30.9 33.0 21.6 23.5 32.6 31.5 32 Insurance and pension reserves 1,036.1 1,160.8 1,289.5 1,427.9 1,592.2 1,461.8 1,507.5 1,552.8 1,592.2 1,656.3 1,706.7 1,751.9 33 Other, net 295.6 342.2 448.0 652.5 744.3 729.2 741.4 758.5 744.3 762.8 778.3 827.4 Private domestic nonfinancial investors 34 Credit market claims 1,076.6 1,244.8 1,516.0 1,598.3 1,785.0 1,610.7 1,668.7 1,696.3 1,785.0 1,771.6 1,811.6 1,865.3 35 U.S. government securities 548.6 663.6 830.7 881.2 1,014.7 912.0 950.4 969.4 1,014.7 1,025.7 1,027.0 1,071.4 36 Tax-exempt obligations 170.0 196.3 235.9 222.3 268.4 226.2 243.1 255.9 268.4 265.6 275.3 287.3 37 Corporate and foreign bonds 45.4 44.5 47.6 80.1 85.3 88.8 71.4 80.6 85.3 82.7 93.0 88.4 38 Open market paper 68.4 72.4 118.0 115.0 143.5 115.5 132.6 118.7 143.5 127.8 148.5 149.6 39 Other 244.3 268.0 283.8 299.7 273.2 268.1 271.2 271.9 273.2 269.9 267.9 268.5 40 Deposits and currency 2,566.4 2,891.7 3,112.5 3,393.4 3,555.7 3,364.7 3,405.6 3,444.5 3,555.7 3,607.4 3,646.4 3,690.7 41 Currency 150.9 159.6 171.9 186.3 205.4 185.3 191.3 192.4 205.4 204.0 209.9 210.7 42 Checkable deposits 350.9 378.8 419.7 512.9 510.5 468.5 488.0 487.2 510.5 491.1 506.8 497.3 43 Small time and savings accounts 1,542.9 1,693.5 1,831.9 1,948.3 2,024.2 1,965.2 1,977.7 1,990.8 2,024.2 2,079.4 2,107.9 2,126.8 44 Money market fund shares 169.5 218.5 227.3 268.9 297.1 281.3 279.5 286.4 297.1 322.1 310.4 311.1 45 Large time deposits 247.7 332.1 339.8 328.4 356.0 323.4 322.5 326.3 356.0 351.0 346.1 372.4 46 Security RPs 78.8 88.7 103.3 124.1 141.0 126.6 130.9 143.6 141.0 142.1 145.9 147.4 47 Deposits in foreign countries 25.7 20.6 18.5 24.5 21.6 14.4 15.7 17.8 21.6 17.8 19.4 25.0 48 Total of credit market instruments, deposits, and currency 3,643.0 4,136.5 4,628.5 4,991.7 5,340.8 4,975.4 5,074.2 5,140.8 5,340.8 5,379.0 5,458.0 5,556.1 49 Public holdings as percent of total 20.3 20.3 20.7 22.4 23.8 23.2 23.5 23.7 23.8 24.2 24.2 24.2 50 Private financial intermediation (in percent) 85.9 85.9 84.8 87.0 87.4 87.5 87.5 87.8 87.4 87.9 88.3 88.2 51 Total foreign funds 224.7 291.5 373.5 484.2 590.5 509.0 528.4 559.4 590.5 617.6 653.4 660.0 MEMO: Corporate equities not included above 52 Total market value 2,134.0 2,158.2 2,824.5 3,362.0 3,313.4 3,990.2 4,110.0 4,300.8 3,313.4 3,494.8 3,612.6 3,577.5 53 Mutual fund shares 112.1 136.7 240.2 413.5 460.1 485.2 520.7 525.1 460.1 479.2 486.8 483.9 54 Other equities 2,021.9 2,021.5 2,584.3 2,948.5 2,853.2 3,505.0 3,589.3 3,775.7 2,853.2 3,015.7 3,125.9 3,093.6 55 Holdings by financial institutions 612.0 615.6 800.0 972.2 1,021.7 1,175.7 1,238.9 1,312.5 1,021.7 1,087.1 1,133.8 1,133.0 56 Other holdings 1,522.0 1,542.6 2,024.5 2,389.8 2,291.7 2,814.5 2,871.1 2,988.4 2,291.7 2,407.7 2,478.9 2,444.4 NOTES BY LINE NUMBER. 32. Excludes net investment of these reserves in corporate equities. 1. Line 1 of table 1.59. 33. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 34. Line 14 less line 21 plus line 28. 35-39. Lines 15-19 less amounts acquired by private finance plus amounts 6. Includes farm and commercial mortgages. borrowed by private finance. Line 39 includes mortgages. 12. Credit market debt of federally sponsored agencies, and net issues of 41. Mainly an offset to line 10. federally related mortgage pool securities. 48. Lines 34 plus 40, or line 14 less line 29 plus 41 and 47. 14. Line 1 less line 2 plus line 12 and 13. Also line 21 less line 28 plus line 34. 49. Line 2/line 1 and 13. Also sum of lines 29 and 48 less lines 41 and 47. 50. Line 21/line 14. 19. Includes farm and commercial mortgages. 51. Sum of lines 11 and 30. 27. Line 40 less lines 41 and 47. 52-54. Includes issues by financial institutions. 28. Excludes equity issues and investment company shares. Includes line 20. NOTE. Full statements for sectors and transaction types in flows and in amounts 30. Foreign deposits at commercial banks plus bank borrowings from foreign outstanding may be obtained from Flow of Funds Section, Stop 95, Division of affiliates, less claims on foreign affiliates and deposits by banking in foreign banks. Research and Statistics, Board of Governors of the Federal Reserve System, 31. Demand deposits and note balances at commercial banks. Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • February 1989 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures1 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1988 MMeeaassuurree 11998855 11998866 11998877 Mar. Apr. May June July Aug. Sept.' Oct.' Nov. 1 Industrial production 123.7 125.1 129.8 134.7 135.4 136.1 136.5 138.0 138.5' 138.6 139.3 139.9 Market groupings 2 Products, total 130.6 133.3 138.3 143.6 144.1 145.0 145.3 146.5 147.3' 147.5 148.2 148.7 i Final, total 131.0 132.5 136.8 141.8 142.5 143.5 144.0 145.0 145.8' 145.8 146.7 146.9 4 Consumer goods 119.8 124.0 127.7 131.2 131.9 132.7 133.0 134.2 135.0' 134.8 136.4 136.8 5 Equipment 145.8 143.6 148.8 155.9 156.5 157.7 158.5 159.4 160.1' 160.4 160.2 160.4 6 Intermediate 129.3 136.2 143.5 149.9 149.6 150.4 150.0 151.6 152.3' 153.1 153.8 154.8 7 Materials 114.3 113.8 118.2 122.5 123.6 123.9 124.5 126.4 126.5' 126.5 127.1 128.0 Industry groupings 8 Manufacturing 126.4 129.1 134.6 140.0 140.8 141.8 142.1 143.6 144.0' 144.4 145.3 146.0 Capacity utilization (percent)2 9 Manufacturing 80.1 79.7 81.1 82.7 82.9 83.3 83.3 84.0 84.0' 84.0 84.3 84.5 10 Industrial materials industries 80.3 78.6 80.5 82.4 82.9 83.0 83.2 84.4 84.3 84.1 84.4 84.8 11 Construction contracts (1982 = 100)3 150.0 158.0 161.0 154.0 144.0 157.0 165.0 156.0 155.0 151.0 153.0 157.0 12 Nonagricultural employment, total4 118.3 120.7 124.1 127.3 127.7 127.9 128.6 128.9 129.1 129.4 129.7 130.3 13 Goods-producing, total 102.1 100.9 101.8 104.1 104.5 104.6 105.1 105.4 105.3 105.4 105.7 106.2 14 Manufacturing, total 97.8 96.3 96.8 98.6 98.8 99.0 99.3 99.5 99.4 99.3 99.8 100.2 15 Manufacturing, production-worker.... 92.6 91.2 92.1 93.7 93.9 94.1 94.4 94.6 94.4 94.3 94.9 95.3 16 Service-producing 125.0 129.0 133.4 137.1 137.4 137.7 138.4 138.7 139.0 139.5 139.8 140.3 1/ Personal income, total 206.9 219.7 235.1 248.0 248.8 250.2 251.6 253.3 254.5 256.0 260.2 259.7 18 Wages and salary disbursements 198.8 210.7 226.2 238.9 240.9 242.3 244.2 246.7 247.4 249.0 252.7 253.6 19 Manufacturing 172.8 177.4 183.8 193.6 192.8 193.8 195.4 196.6 196.8 198.1 202.3 201.4 20 Disposable personal income 205.8 218.9 232.7 247.0 243.3 249.5 251.2 253.lr 254.2' 255.6 260.1 259.3 21 Retail sales 189.6 199.5 209.3 220.3 219.4 221.2 222.5 223.7 224.4' 223.7 227.4 229.9 Prices7 22 Consumer (1982-84 = 100) 107.6 109.6 113.6 116.5 117.1 117.5 118.0 118.5 119.0 119.8 120.2 120.3 23 Producer finished goods (1982 = 100) ... 104.7 103.2 105.4 106.3 107.0 107.5 107.9 108.5 108.8 108.6 109.3 109.7 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 shown in the September BULLETIN. Seasonally adjusted data for changes in the price indexes may be obtained from 2. Ratios of indexes of production to indexes of capacity. Based on data from the Bureau of Labor Statistics, U.S. Department of Labor. Federal Reserve, McGraw-Hill Economics Department, Department of Commerce, and other sources. NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6, 3. Index of dollar value of total construction contracts, including residential, and indexes for series mentioned in notes 3 and 7 may also be found in the Survey nonresidential and heavy engineering, from McGraw-Hill Information Systems of Current Business. Company, F. W. Dodge Division. Figures for industrial production for the last two months are preliminary and 4. Based on data in Employment and Earnings (U.S. Department of Labor). estimated, respectively. Series covers employees only, excluding personnel in the Armed Forces. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1988 CCaatteeggoorryy 11998855 11998866 11998877 Apr. May June July Aug. Sept/ Oct/ Nov. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 180,440 182,822 185,010 186,478 186,600 186,755 186,911 187,033 187,178 187,333 187,471 2 Labor force (including Armed Forces)1 117,695 120,078 122,122 123,569 123,204 123,665 123,866 124,234 124,140 124,231 124,799 3 Civilian labor force 115,461 117,834 111199,,886655 112211,,332233 112200,,997788 112211,,447722 112211,,668844 112222,,003311 112211,,992244 112222,,001122 112222,,557722 Employment 4 Nonagricultural industries 103,971 106,434 109,232 111,485 111,160 111,933 112,014 112,029 112,158 112,255 112,700 5 Agriculture 3,179 3,163 3,208 3,228 3,035 3,085 33,,004466 33,,115511 33,,116699 33,,226666 33,,227766 Unemployment 6 Number 8,312 8,237 7,425 6,610 6,783 6,455 6,625 6,851 6,596 6,491 6,595 7 Rate (percent of civilian labor force) 7.2 7.0 6.2 5.4 5.6 5.3 5.4 5.6 5.4 5.3 5.4 8 Not in labor force 62,745 62,744 62,888 62,909 63,396 63,090 63,045 62,799 63,038 63,102 62,672 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 97,519 99,525 102,310 105,281 105,489 106,057 106,271 106,425 106,737 106,975 107,438 10 Manufacturing 19,260 18,965 19,065 19,460 19,490 19,544 19,593 19,560 19,549 19,648 19,719 11 Mining 927 777 721 737 739 740 740 739 734 729 722 12 Contract construction 4,673 4,816 4,998 5,238 5,237 5,308 5,330 5,340 5,365 5,364 5,419 13 Transportation and public utilities 5,238 5,255 5,385 5,543 5,556 5,582 5,598 5,605 5,618 5,623 5,662 14 Trade 23,073 23,683 24,381 25,182 25,245 25,353 25,435 25,471 25,510 25,571 25,618 15 Finance 5,955 6,283 6,549 6,650 6,656 6,679 6,684 6,689 6,692 6,710 6,729 16 Service 22,000 23,053 24,196 25,163 25,216 25,472 25,561 25,662 25,737 25,814 26,008 17 Government 16,394 16,693 17,015 17,308 17,350 17,379 17,330 17,359 17,532 17,516 17,561 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

A48 Domestic Nonfinancial Statistics • February 1989 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1987 1988 1987 1988 1987 1988 SSeerriieess Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3' Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 133.2 134.5 136.0 138.2 162.2 163.1 164.2 165.2 82.1 82.4 82.8 83.8 2 Mining 104.3 102.5 103.3 104.8 128.4 127.7 127.0 126.2 81.2 80.3 81.5 82.3 3 Utilities 112.3 114.7 111.7 114.9 139.4 139.8 140.1 140.4 80.6 82.0 79.9 81.9 4 Manufacturing 138.1 139.6 141.6 143.7 167.7 168.9 170.2 171.5 82.3 82.7 83.2 84.0 5 Primary processing 122.2 123.0 123.9 125.7 140.6 141.6 142.7 143.9 86.9 86.9 86.8 87.4 6 Advanced processing... 147.6 149.7 152.3 154.5 184.1 185.6 186.7 188.1 80.1 80.7 81.5 82.4 7 Materials 122.5 122.5 124.0 126.6 147.8 148.5 149.3 150.1 82.9 82.5 83.0 84.3 8 Durable goods 130.3 131.5 134.2 136.9 164.7 165.7 166.8 167.9 79.1 79.4 80.4 81.6 9 Metal materials 91.4 86.2 88.1 92.4 108.9 108.8 109.1 109.4 84.0 79.2 80.8 84.8 10 Nondurable goods 130.1 129.4 130.5 132.4 145.6 146.8 148.3 149.8 89.3 88.1 87.9 88.7 11 Textile, paper, and chemical .. 133.0 131.6 132.6 135.1 145.4 146.7 148.5 150.2 91.5 89.7 89.2 90.1 P 145.1 145.7 145.9 146.2 147.6 149.2 99.2 98.7 97.8 98.8 n 135.5 133.5 135.7 152.0 153.5 155.4 89.1 87.0 87.3 88.7 14 Energy materials 102.1 100.9 100.4 103.5 119.9 119.7 119.4 119.1 85.2 84.3 84.2 86.0 Previous cycle2 Latest cycle3 1987 1988 High Low High Low Nov. Mar. Apr. May June July Aug. Sept/ Oct/ Nov. Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 82.1 82.4 82.7 82.9 83.0 83.7 83.8 83.7 84.0 84.2 16 Mining 92.8 87.8 95.2 76.9 81.5 80.6 82.3 80.8 81.2 82.5 82.2 82.2 81.6 82.2 17 Utilities 95.6 82.9 88.5 78.0 81.2 81.0 79.3 79.7 80.8 81.5 83.9 80.3 80.8 81.0 18 Manufacturing 87.7 69.9 86.5 68.0 82.2 82.7 82.9 83.3 83.3 84.0 84.0 84.0 84.3 84.5 19 Primary processing.... 91.9 68.3 89.1 65.0 87.0 86.9 86.9 87.0 86.6 87.8 87.4 87.2 87.6 88.0 20 Advanced processing.. 86.0 71.1 85.1 69.5 80.0 80.7 81.2 81.7 81.7 82.2 82.4 82.5 82.7 82.9 21 Materials 92.0 70.5 89.1 68.5 82.9 82.4 82.9 83.0 83.2 84.4 84.3 84.1 84.4 84.8 22 Durable goods 91.8 64.4 89.8 60.9 79.0 79.1 79.7 80.8 80.7 81.7 81.4 81.9 82.3 82.7 23 Metal materials 99.2 67.1 93.6 45.7 83.3 78.3 79.3 82.1 80.8 84.9 83.4 86.0 87.1 87.4 24 Nondurable goods .... 91.1 66.7 88.1 70.7 89.0 88.3 88.7 87.7 87.4 88.9 88.8 88.2 88.7 89.0 25 Textile, paper, and chemical 92.8 64.8 89.4 68.8 91.0 89.9 90.1 88.8 88.9 90.4 90.3 89.5 90.0 90.2 ">6 98.4 70.6 97.3 79.9 98.7 97.8 98.1 98.1 97.1 110000..00 98.4 97.9 98.2 ?7 92.5 64.4 87.9 63.5 88.6 87.5 88.0 86.9 87.0 8888..88 89.0 88.3 89.1 28 Energy materials 94.6 86.9 94.0 82.3 85.7 84.1 84.5 83.3 84.4 86.2 86.6 85.1 84.7 85.5 1. These data also appear in the Board's CI.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 A49 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data are seasonally adjusted 1977 1987 1988 GGrroouuppss por- aa 1 vv 98 gg 7 .. tion Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept. Oct." Nov." Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 129.8 133.2 133.9 134.4 134.4 134.7 135.4 136.1 136.5 138.0 138.5 138.6 139.3 139.9 7 Products 57.72 138.3 141.0 141.3 142.7 143.4 143.6 144.1 145.0 145.3 146.5 147.3 147.5 148.2 148.7 3 Final products 44.77 136.8 139.2 139.8 141.1 141.6 141.8 142.5 143.5 144.0 145.0 145.8 145.8 146.7 146.9 4 Consumer goods 25.52 127.7 129.4 129.8 131.2 131.3 131.2 131.9 132.7 133.0 134.2 135.0 134.8 136.4 136.8 5 Equipment 19.25 148.8 152.2 153.1 154.3 155.3 155.9 156.5 157.7 158.5 159.4 160.1 160.4 160.2 160.4 6 Intermediate products 12.94 143.4 147.3 146.5 148.1 149.4 149.9 149.6 150.4 150.0 151.6 152.3 153.1 153.8 154.8 7 Materials 42.28 118.2 122.5 123.7 123.0 122.1 122.5 123.6 123.9 124.5 126.4 126.5 126.5 127.1 128.0 Consumer goods 8 Durable consumer goods 6.89 120.2 123.9 120.3 121.7 420.6 120.4 123.3 125.6 125.3 125.3 125.7 126.3 129.1 128.9 9 Automotive products 2.98 118.5 121.3 115.4 118.7 117.6 120.6 121.9 127.1 127.1 124.4 124.2 126.3 128.6 129.8 10 Autos and trucks 1.79 115.1 118.7 110.2 112.8 111.8 116.4 118.0 126.9 125.3 120.8 123.1 124.8 128.3 129.5 11 Autos, consumer 1.16 90.7 91.9 83.7 77.5 79.5 86.3 91.0 98.9 99.0 93.8 93.0 97.7 101.3 101.0 1? Trucks, consumer .63 160.5 168.5 159.5 178.3 171.6 172.2 168.2 178.9 174.1 170.8 179.0 175.3 178.4 N Auto parts and allied goods 1.19 123.5 125.2 123.3 127.7 126.4 126.9 127.8 127.4 129.7 129.9 125.9 128.6 129.1 130.2 14 Home goods 3.91 121.6 125.8 123.9 124.0 122.8 120.2 124.3 124.4 123.9 125.9 126.8 126.3 129.4 128.2 15 Appliances, A/C and TV 1.24 141.5 150.1 142.7 142.2 140.6 132.8 143.2 142.2 138.0 143.3 146.5 144.9 154.4 150.1 16 Appliances and TV 1.19 142.1 150.5 142.6 140.9 141.4 132.7 142.2 143.0 137.1 143.8 146.1 143.7 151.9 17 Carpeting and furniture .96 130.7 133.5 133.9 134.2 132.3 133.1 133.1 135.8 135.9 136.6 137.2 137.3 137.8 18 Miscellaneous home goods 1.71 102.0 103.9 104.8 105.2 104.7 103.9 105.7 105.2 107.0 107.4 106.8 106.8 106.6 19 Nondurable consumer goods 18.63 130.5 131.5 133.3 134.7 135.3 135.1 135.1 135.4 135.8 137.5 138.5 138.0 139.2 139.7 70 Consumer staples 15.29 137.3 138.3 140.7 142.3 142.9 142.5 142.5 143.1 143.5 145.3 146.6 145.8 147.3 147.9 71 Consumer foods and tobacco 7.80 136.2 137.3 139.2 140.3 140.8 139.4 138.3 139.2 139.3 141.1 141.3 141.0 142.4 77 Nonfood staples 7.49 138.5 139.4 142.2 144.3 145.0 145.7 146.8 147.0 147.9 149.6 152.1 150.9 152.4 152.7 73 Consumer chemical products 2.75 162.9 163.5 167.7 170.7 171.7 172.7 175.6 177.9 179.5 181.8 183.8 185.1 186.0 24 Consumer paper products 1.88 151.8 152.8 157.0 157.1 157.5 159.1 161.4 162.4 162.8 164.0 165.3 167.0 168.3 75 Consumer energy 2.86 106.3 107.4 108.0 110.6 111.3 111.0 109.6 107.3 107.7 109.3 113.0 107.5 109.6 76 Consumer fuel 1.44 93.1 93.2 95.4 95.4 97.0 97.9 98.9 94.3 93.0 94.6 95.5 92.5 95.7 27 Residential utilities 1.42 119.8 121.8 120.7 126.0 125.8 124.5 120.5 120.6 122.6 124.4 130.9 122.8 Equipment 78 Business and defense equipment 18.01 153.6 156.6 157.8 159.2 160.3 160.8 161.4 162.7 163.5 164.6 165.2 165.7 116655..55 116666..00 79 Business equipment 14.34 144.5 148.3 149.8 151.2 152.4 153.3 154.6 156.9 158.1 159.3 160.2 160.8 160.7 161.3 30 Construction, mining, and farm 2.08 62.2 66.3 67.4 67.1 67.6 68.3 70.8 71.8 72.4 73.6 73.1 73.9 74.6 75.3 31 Manufacturing 3.27 117.9 120.6 122.2 125.4 124.9 127.0 127.7 128.3 130.3 132.4 134.0 135.5 136.8 138.3 37 Power 1.27 82.6 83.1 84.2 86.2 88.3 87.8 87.0 87.4 88.3 89.8 90.9 92.2 92.6 93.3 33 Commercial 5.22 226.5 232.1 235.5 238.0 240.3 239.9 241.5 245.7 247.1 248.2 249.8 249.2 246.5 246.1 34 Transit 2.49 108.4 111.2 109.1 106.5 108.2 111.1 112.3 115.3 115.7 115.9 115.2 116.6 119.3 120.7 35 Defense and space equipment 3.67 188.9 188.7 188.9 190.6 191.0 189.9 187.9 185.5 184.6 184.9 184.9 184.6 184.4 184.3 Intermediate products 36 Construction supplies 5.95 131.5 134.2 133.8 136.8 137.7 137.3 137.6 138.8 137.6 138.4 138.1 138.6 139.6 114400..77 37 Business supplies 6.99 153.5 158.4 157.4 157.8 159.4 160.7 159.9 160.3 160.6 162.8 164.4 165.4 165.9 38 General business supplies 5.67 158.6 164.3 163.3 163.1 165.0 166.6 165.7 165.5 165.9 168.6 170.6 172.1 172.6 39 Commercial energy products 1.31 131.1 132.9 131.8 135.0 135.3 135.3 134.6 137.8 137.5 137.6 137.7 136.4 136.7 Materials 40 Durable goods materials 20.50 125.0 130.2 132.0 131.8 131.4 131.3 132.7 134.8 134.9 136.8 136.6 137.9 138.8 139.7 41 Durable consumer parts 4.92 100.9 103.1 104.6 104.7 104.4 103.5 106.2 110.0 110.3 110.1 109.8 111.0 111.8 113.0 47 Equipment parts 5.94 159.0 163.2 165.3 167.4 167.6 167.3 168.9 170.8 171.6 174.1 173.5 173.8 174.6 174.9 43 Durable materials n.e.c 9.64 116.4 123.6 125.5 123.7 123.0 123.4 124.0 125.3 124.8 127.5 127.6 129.4 130.5 131.7 44 Basic metal materials 4.64 86.7 96.5 100.0 92.9 91.4 90.5 91.6 94.8 93.7 98.4 97.3 100.3 100.8 101.5 45 Nondurable goods materials 10.09 125.8 129.6 132.5 129.9 128.1 130.1 131.1 130.1 130.1 132.8 133.1 132.6 133.8 134.8 46 Textile, paper, and chemical materials 7.53 127.6 132.3 135.6 132.7 129.9 132.4 133.3 131.9 132.1 135.3 135.7 135.0 136.2 137.1 47 Textile materials 1.52 111.7 112.7 113.6 112.6 110.2 112.7 111.9 107.5 107.5 108.5 110.1 108.3 108.2 48 Pulp and paper materials 1.55 141.0 144.4 149.0 148.0 144.4 144.8 145.8 146.4 145.4 150.3 148.3 148.1 149.0 49 Chemical materials 4.46 128.4 134.7 138.4 134.2 131.5 134.8 136.2 135.1 135.8 139.2 140.0 139.5 141.3 50 Miscellaneous nondurable materials ... 2.57 120.4 121.7 123.3 121.8 123.0 123.2 124.6 125.1 124.2 125.6 125.6 125.8 51 Energy materials 11.69 99.8 102.8 101.7 101.4 100.6 100.6 101.0 99.5 101.3 102.7 103.2 101.3 100.8 101.6 5? Primary energy 7.57 105.0 108.4 107.7 107.3 104.8 105.0 106.7 104.0 105.6 106.8 106.2 106.5 105.8 53 Converted fuel materials 4.12 90.3 92.6 90.7 90.6 93.0 92.6 90.5 91.2 93.5 95.3 97.7 91.7 91.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • February 1989 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1977 1987 1988 Groups c S o I d C e a 1 v 98 g 7 . Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept. Oct." Nov/ Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 104.3 107.9 107.3 107.8 106.8 106.7 107.1 106.0 106.8 108.1 109.0 107.0 106.7 107.3 2 Mining 9.83 100.7 104.6 104.6 103.3 101.5 102.7 104.7 102.6 103.0 104.3 103.8 103.5 102.6 103.2 3 Utilities 5.96 110.3 113.2 111.7 115.2 115.6 113.3 111.0 111.6 113.2 114.4 117.8 112.8 113.5 114.0 4 Manufacturing 84.21 134.6 137.9 138.9 139.4 139.5 140.0 140.8 141.8 142.1 143.6 144.0 144.4 145.3 146.0 5 Nondurable 35.11 136.7 139.6 141.3 141.4 141.1 141.7 142.3 142.1 142.6 144.6 145.1 145.3 146.2 146.8 6 Durable 49.10 133.1 136.7 137.3 137.9 138.4 138.8 139.7 141.5 141.7 142.9 143.2 143.8 144.7 145.4 Mining 7 Metal 10 .50 77.5 90.4 96.5 91.5 83.9 84.9 86.9 86.0 82.2 94.0 96.6 99.1 8 Coal 11.12 1.60 131.8 142.9 140.6 140.2 133.7 129.1 136.0 127.8 126.9 141.5 137.2 142.2 138.5 145.6 9 Oil and gas extraction 13 7.07 92.7 94.2 94.1 93.1 92.4 94.8 95.5 94.6 95.8 93.3 93.2 91.7 91.1 10 Stone and earth minerals 14 .66 128.2 134.1 135.6 132.1 134.3 136.9 141.2 140.1 137.4 140.2 141.3 139.5 141.4 Nondurable manufactures 11 Foods 20 7.96 137.7 138.9 140.1 141.2 141.9 141.1 140.3 141.0 141.3 143.3 143.3 143.2 144.3 12 Tobacco products 21 .62 103.4 106.5 110.5 105.8 107.0 107.2 107.2 107.2 104.5 100.6 105.1 103.0 13 Textile mill products 22 2.29 115.8 117.3 118.2 116.2 115.3 117.0 117.3 114.6 114.3 117.1 116.4 115.7 111155..11 14 Apparel products 23 2.79 107.4 109.4 107.8 108.7 108.5 108.7 109.2 108.6 109.3 109.4 108.9 109.6 15 Paper and products 26 3.15 144.4 148.3 150.6 149.9 148.0 149.1 149.2 149.5 148.6 152.3 151.0 150.8 151.9 16 Printing and publishing 27 4.54 172.0 175.7 176.9 177.5 178.7 180.4 181.8 180.7 182.3 184.9 186.7 188.7 189.3 189.2 17 Chemicals and products 28 8.05 140.1 144.4 147.9 147.9 145.4 146.4 148.9 149.1 150.5 153.4 154.8 155.5 156.5 18 Petroleum products 29 2.40 93.5 93.3 96.1 96.3 95.9 98.4 98.5 95.2 94.1 95.0 96.0 93.6 96.2 94.3 19 Rubber and plastic products 30 2.80 163.6 169.9 170.6 170.5 172.3 172.2 172.3 173.4 174.4 175.4 175.3 175.2 176.0 20 Leather and products 31 .53 60.0 60.7 57.5 58.3 59.7 59.5 58.0 57.1 58.9 59.1 59.4 59.5 59.8 Durable manufactures 21 Lumber and products 24 2.30 130.3 134.0 133.6 136.3 139.0 137.8 138.0 139.8 136.4 136.6 133.8 133.5 136.9 22 Furniture and fixtures 25 1.27 152.8 158.5 159.4 158.0 158.3 159.4 159.2 160.5 161.2 162.9 164.9 165.1 164.1 23 Clay, glass, and stone products. 32 2.72 119.1 120.5 120.1 120.4 121.6 122.5 121.4 121.5 123.4 122.2 122.6 122.8 122.6 24 Primary metals 33 5.33 81.5 90.2 90.6 86.5 86.4 85.1 85.3 89.2 87.5 91.5 90.8 93.0 94.3 94.8 25 Iron and steel 331.2 3.49 70.8 79.7 81.9 77.8 77.4 74.2 74.5 78.6 74.2 80.2 78.9 81.4 83.7 26 Fabricated metal products 34 6.46 111.0 113.6 115.8 117.1 117.6 118.8 118.8 119.8 120.4 121.7 122.1 122.6 122.9 124.3 27 Nonelectrical machinery 35 9.54 152.7 157.2 161.0 162.9 163.6 164.6 167.2 170.3 171.2 173.1 174.1 175.0 175.3 176.2 28 Electrical machinery 36 7.15 172.3 175.6 175.9 177.4 177.8 176.6 178.7 179.1 179.5 181.5 182.2 181.7 183.1 182.8 29 Transportation equipment 37 9.13 129.2 130.4 128.1 128.6 128.4 130.0 130.4 133.1 132.8 131.9 131.8 132.6 134.3 135.4 30 Motor vehicles and parts 371 5.25 111.8 114.0 110.2 109.7 109.3 113.0 114.8 119.6 119.1 116.6 117.5 118.5 121.4 122.8 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 152.8 152.7 152.4 154.2 154.5 153.0 151.5 151.5 151.4 152.7 151.3 151.7 151.9 152.5 32 Instruments 38 2.66 143.9 147.8 145.5 148.2 149.2 149.7 150.5 151.3 153.0 156.4 156.8 158.0 159.1 159.6 33 Miscellaneous manufactures 39 1.46 102.6 104.5 105.6 105.0 104.4 105.1 105.9 106.0 107.6 107.8 108.3 108.5 107.9 Utilities 34 Electric 4.17 112266..66 112277..55 112255..66 113300..33 113300..77 112299..00 112277..66 112299..77 113322..11 113344..66 113388..88 113311..99 113322..44 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKET 35 Products, total 517.5 1,735.8 1,772.4 1,778.8 1,790.6 1,797.5 1,807.5 1,812.2 1,820.1 1,813.9 1,822.3 1828.6 1829.1 1855.1 1857.6 36 Final 405.7 1,333.8 1,359.9 1,359.4 1,375.5 1,381.1 1,385.9 1,393.9 1,397.1 1,394.3 1,398.9 1404.2 1404.2 1425.3 1426.3 37 Consumer goods. 272.7 866.0 879.8 881.2 893.6 893.7 893.2 899.1 898.9 893.6 895.6 900.4 896.9 915.8 916.1 38 Equipment 133.0 467.8 480.1 478.2 481.9 487.3 492.7 494.7 498.3 500.7 503.2 503.8 507.3 509.5 510.2 39 Intermediate 111.9 402.0 412.5 419.4 415.1 416.5 421.6 418.4 423.0 419.6 423.4 424.3 424.9 429.8 431.3 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 A51 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1988 IItteemm 11998855 11998866 11998877 Jan. Feb. Mar. Apr. May June July Aug.' Sept.' Oct. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,733 1,750 1,535 1,248 1,429 1,476 1,449 1,436 1,493 1,420 1,464 1,394 1,516 2 1-family 957 1,071 1,024 918 1,003 1,030 960 982 1,002 984 1,022 974 1,027 3 2-or-more-family 111 679 511 330 426 446 489 454 491 436 442 420 489 4 Started 1,742 1,805 1,621 1,382 1,519 1,529 1,584 1,393 1,465 1,477 1,461 1,467 1,542 5 1-family 1,072 1,179 1,146 1,016 1,102 1,172 1,093 1,004 1,092 1,068 1,078 1,045 1,142 6 2-or-more-family 669 626 474 366 417 357 491 389 373 409 383 422 400 7 Under construction, end of period1 . 1,063 1,074 987 1,008 983 999 999 984 982 974 965 957 956 8 1-family 539 583 591 614 596 617 622 610 609 606 603 598 600 9 2-or-more-family 524 490 397 394 387 382 377 374 373 368 362 359 356 10 Completed 1,703 1,756 1,669 1,550 1,452 1,598 1,665 1,450 1,518 1,529 1,538 1,540 1,505 11 1-family 1,072 1,120 1,123 1,098 1,043 1,094 1,059 1,090 1,106 1,077 1,072 1,093 1,077 12 2-or-more-family 631 637 546 452 409 504 606 360 412 452 466 447 428 13 Mobile homes shipped 284 244 233 200 208 212 213 216 230 206 223 228 214 Merchant builder activity in 1-family units 14 Number sold 688 748 672 579 648 664 681 681 718 703' 718 708 733 15 Number for sale, end of period 350 361 370 368 359 372 367 370 367 365' 363 361 356 Price (thousands of dollars)2 Median 16 Units sold 84.3 92.2 104.7 119.0 110.9 108.9 111.0 110.0 111.5 NS.C 110.0 117.0 115.9 17 Units sold 101.0 112.2 127.9 144.4 137.6 133.2 135.6 133.5 136.5 141.3' 140.0 143.0 140.1 EXISTING UNITS (1-family) 18 Number sold 3,217 3,566 3,530 3,170 3,250 3,330 3,520 3,590 3,820 3,630 3,710 3,670 3,630 Price of units sold (thousands of dollars) 19 Median 75.4 80.3 85.6 87.4 88.1 87.9 87.3 88.8 90.2 90.7 91.4 88.2 88.1 20 Average 90.6 98.3 106.2 108.7 110.4 110.7 108.7 111.9 115.4 114.8 115.1 112.3 110.5 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 355,735 386,093 398,848 395,264 392,456 403,555 396,238 398,473 395,714 401,777 402,820 405,505 409,242 22 Private 291,665 314,651 323,819 321,550 317,754 324,257 318,515 320,194 317,708 322,497 326,170 326,514 328,366 23 Residential 158,475 187,147 194,772 195,168 192,097 195,554 192,026 190,374 188,071 192,777 195,758 196,896 198,920 24 Nonresidential, total 133,190 127,504 129,047 126,382 125,657 128,703 126,489 129,820 129,637 129,720 130,412 129,618 129,446 Buildings 25 Industrial 15,769 13,747 13,707 13,480 13,489 14,546 13,849 13,907 13,676 13,183 12,906 1122,,774455 13,730 26 Commercial 59,629 56,762 55,448 53,555 53,571 54,843 56,169 57,447 56,585 56,658 56,381 55,712 54,226 27 Other 12,619 13,216 15,464 16,954 17,101 17,301 16,382 16,847 16,757 16,148 16,618 16,662 17,062 28 Public utilities and other 45,173 43,779 44,428 42,393 41,496 42,013 40,089 41,619 42,619 43,731 44,507 44,499 44,428 29 Public 64,070 71,437 75,028 73,715 74,702 79,298 77,723 78,278 78,007 79,280 76,651 78,991 80,875 30 Military 3,235 3,868 4,327 4,172 3,280 4,216 3,872 3,547 4,844 4,182 4,043 4,469 3,558 31 Highway 21,540 22,681 22,758 24,808 25,348 26,963 26,912 25,254 24,822 27,548 23,537 24,040 25,894 32 Conservation and development... 4,777 4,646 5,162 4,038 4,535 4,899 4,226 4,460 4,596 4,884 4,853 4,981 4,886 33 Other 34,518 40,242 42,781 40,697 41,539 43,220 42,713 45,017 43,745 42,666 44,218 45,501 46,537 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 previous 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

A52 Domestic Nonfinancial Statistics • February 1989 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 IIIttteeemmm llleeevvveeelll 1987 1988 1988 NNNooovvv... 11998877 11998888 111999888888 NNoovv.. NNoovv.. Dec. Mar. June Sept. July Aug. Sept. Oct. Nov. CONSUMER PRICES2 (1982-84=100) 1 All items 4.5 4.2 3.2 4.2 4.5 4.8 .4 .4 .3 .4 .3 120.3 2 Food 3.3 5.3 2.8 1.4 7.1 9.9 1.0 .6 .8 .2 .1 120.2 3 Energy items 9.3 -.1 -3.9 -4.9 4.2 2.7 .3 .9 -.6 .1 .2 88.9 4 All items less food and energy 4.4 4.4 4.4 5.4 4.3 4.0 .3 .2 .4 .5 .3 125.8 5 Commodities 3.9 3.6 2.5 4.7 3.9 3.1 .3 -.3 .8 .7 .1 118.2 6 Services 4.5 4.9 5.0 5.9 4.5 4.1 .4 .5 .1 .5 .5 130.3 PRODUCER PRICES (1982=100) 7 Finished goods 2.6 3.2 -1.9 2.7 3.8 6.5 .7 .5R .4 .0 .3 109.7 8 Consumer foods .5 4.6 -5.7 6.0 8.2 10.0 .6' ,5R 1.2 -.1 .0 114.9 9 Consumer energy 13.4 -4.3 -9.6 -18.5 .7 -.7 2.W 1.2' -3.3 .3 1.2 59.8 10 Other consumer goods 2.4 4.2 1.7 5.7 2.4 6.6 ,8R .3 .4 .0 .3 120.5 11 Capital equipment 1.3 3.1 -.7 3.2 2.5 6.5 .4 .4 .8 -.3 .3 116.0 12 Intermediate materials3 5.4 5.0 4.3 4.3 7.8 4.9 .5 .4 .4 .1 .6 108.8 13 Excluding energy 4.8 7.2 7.2 8.2 6.9 7.2 .7 .4 .6 .5 .7 118.0 Crude materials 14 Foods -.3 13.0 -4.8 17.7 31.0 23.0 1.4 2.2 1.6 1.4 -6.0 107.7 15 Energy 11.5 -16.2 -15.2 -24.1 7.8 -26.1 — .4R -3.1 -2.2 -1.4 62.6 16 Other 23.9 5.4 18.0 15.9 -6.5 8.5 1.8 ,8R -.6 .2 .7 134.0 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers and reflect a animal feeds. rental equivalence measure of homeownership after 1982. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A53 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 Q3 Q4 Ql Q2 Q3' GROSS NATIONAL PRODUCT 1 4,014.9 4,240.3 4,526.7 4,568.0 4,662.8 4,724.5 4,823.8 4,909.0 By source 2 Personal consumption expenditures 2,629.0 2,807.5 3,012.1 3,058.2 3,076.3 3,128.1 3,194.6 33,,226611..22 3 Durable goods 372.2 406.5 421.9 441.4 422.0 437.8 449.8 452.9 4 Nondurable goods 911.2 943.6 997.9 1,006.6 1,012.4 1,016.2 1,036.6 1,060.8 5 Services 1,345.6 1,457.3 1,592.3 1,610.2 1,641.9 1,674.1 1,708.2 1,747.5 6 Gross private domestic investment 643.1 665.9 712.9 702.8 764.9 763.4 758.1 772.5 7 Fixed investment 631.8 650.4 673.7 688.3 692.9 698.1 714.4 722.8 8 Nonresidential 442.9 433.9 446.8 462.1 464.1 471.5 487.8 493.7 9 Structures 153.2 138.5 139.5 143.0 147.7 140.1 142.3 143.8 10 Producers' durable equipment 289.7 295.4 307.3 319.1 316.3 331.3 345.5 349.9 11 Residential structures 188.8 216.6 226.9 226.2 228.8 226.6 226.5 229.1 12 Change in business inventories 11.3 15.5 39.2 14.5 72.0 65.3 43.7 49.7 13 Nonfarm 14.6 17.4 40.7 17.8 72.8 49.4 33.1 41.9 14 Net exports of goods and services -78.0 -104.4 -123.0 -125.2 -125.7 -112.1 -90.4 -80.0 IS Exports 370.9 378.4 428.0 440.4 459.7 487.8 507.1 536.1 16 Imports 448.9 482.8 551.1 565.6 585.4 599.9 597.5 616.0 17 Government purchases of goods and services 820.8 871.2 924.7 932.2 947.3 945.2 961.6 955.3 18 Federal 355.2 366.2 382.0 386.3 391.4 377.7 382.2 367.7 19 State and local 465.6 505.0 542.8 546.0 555.9 567.5 579.4 587.6 By major type of product 70 Final sales, total 4,003.6 4,224.7 4,487.5 4,553.5 4,590.7 44,,665599..22 44,,778800..11 44,,885599..33 71 Goods 1,641.2 1,697.9 1,792.5 1,812.9 1,849.4 1,879.4 1,928.0 1,960.1 7? Durable 706.5 725.3 776.3 792.2 808.7 819.3 849.5 881.6 73 Nondurable 934.6 972.6 1,016.3 1,020.7 1,040.7 1,060.1 1,078.5 1,078.5 74 Services 1,968.3 2,118.3 2,295.7 2,314.4 2,363.9 2,405.2 2,451.5 2,501.6 25 Structures 405.4 424.0 438.4 440.6 449.5 439.9 444.3 447.3 7.6 Change in business inventories 11.3 15.5 39.2 14.5 72.0 65.3 43.7 49.7 27 Durable goods 6.4 4.2 26.6 2.9 50.5 26.6 17.8 45.1 28 Nondurable goods 4.9 11.3 12.6 11.6 21.6 38.6 25.9 4.6 MEMO 29 Total GNP in 1982 dollars 3,618.7 3,721.7 3,847.0 3,865.3 3,923.0 3,956.1 3,985.2 44,,000099..44 NATIONAL INCOME 30 3,234.0 3,437.1 3,678.7 3,708.0 3,802.0 3,850.8 3,928.8 4,000.7 31 Compensation of employees 2,367.5 2,507.1 2,683.4 2,702.8 2,769.9 2,816.4 2,874.0 2,933.2 32 Wages and salaries 1,975.2 2,094.0 2,248.4 2,265.3 2,324.8 2,358.7 2,410.0 2,462.0 33 Government and government enterprises 372.0 393.7 420.1 423.2 429.2 437.1 442.9 449.1 34 Other 1,603.4 1,700.3 1,828.3 1,842.1 1,895.6 1,921.6 1,967.1 2,012.9 35 Supplement to wages and salaries 392.4 413.1 435.0 437.5 445.1 457.7 464.0 471.1 36 Employer contributions for social insurance 204.8 217.0 227.1 228.2 232.7 243.1 247.5 251.7 37 Other labor income 187.6 196.1 207.9 209.3 212.4 214.6 216.5 219.5 38 Proprietors'income1 255.9 286.7 312.9 306.8 326.0 323.9 328.8 321.6 39 Business and professional 225.6 250.3 270.0 271.5 279.0 279.2 285.3 290.7 40 Farm1 30.2 36.4 43.0 35.2 47.0 44.7 43.4 30.9 41 Rental income of persons2 9.2 12.4 18.4 18.1 20.5 20.5 19.1 19.7 42 Corporate profits1 282.3 298.9 310.4 322.0 316.1 316.2 326.5 330.0 43 Profits before tax3 224.3 236.4 276.7 289.4 281.9 286.2 305.9 313.9 44 Inventory valuation adjustment -1.7 8.3 -18.0 -19.5 -18.2 -19.4 -27.4 -29.3 45 Capital consumption adjustment 59.7 54.2 51.7 52.1 52.4 49.4 48.0 45.4 46 Net interest 319.0 331.9 353.6 358.3 369.5 373.9 380.6 396.2 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

A54 Domestic Nonfinancial Statistics • February 1989 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 11998877 Q3 Q4 Q1 Q2 Q3R PERSONAL INCOME AND SAVING 1 Total personal income 3,325.3 3,531.1 3,780.0 3,801.0 3,906.8 3,951.4 4,022.4 4,094.0 2 Wage and salary disbursements 1,975.4 2,094.0 2,248.4 2,265.1 2,325.1 2,358.7 2,410.0 2,462.0 3 Commodity-producing industries 608.9 625.5 649.8 652.8 665.5 676.0 689.1 701.3 4 Manufacturing 460.9 473.1 490.3 492.6 501.3 509.6 517.4 525.9 3 Distributive industries 473.2 498.9 531.7 536.8 547.3 558.2 572.1 585.8 6 Service industries 521.3 575.9 646.8 652.4 682.8 687.4 705.9 725.8 7 Government and government enterprises 372.0 393.7 420.1 423.0 429.5 437.1 442.9 449.1 8 Other labor income 187.6 196.1 207.9 209.3 212.4 214.6 216.5 219.5 9 Proprietors' income1 255.9 286.7 312.9 306.8 326.0 323.9 328.8 321.6 10 Business and professional 225.6 250.3 270.0 271.5 279.0 279.2 285.3 290.7 11 Farm1 30.2 36.4 43.0 35.2 47.0 44.7 43.4 30.9 12 Rental income of persons2 9.2 12.4 18.4 18.1 20.5 20.5 19.1 19.7 13 Dividends 78.7 82.8 88.6 89.9 91.9 93.5 95.0 97.3 14 Personal interest income 478.0 499.1 527.0 533.0 550.0 554.2 563.7 581.9 15 Transfer payments 489.8 521.1 548.8 551.7 556.8 576.3 582.8 588.6 16 Old-age survivors, disability, and health insurance benefits ... 253.4 269.3 282.9 284.5 286.5 298.1 300.4 303.1 17 LESS: Personal contributions for social insurance 149.3 161.1 172.0 172.7 175.9 190.2 193.5 196.7 18 EQUALS: Personal income 3,325.3 3,531.1 3,780.0 3,801.0 3,906.8 3,951.4 4,022.4 4,094.0 19 LESS: Personal tax and nontax payments 486.6 511.4 570.3 576.2 591.0 575.8 601.0 586.5 20 EQUALS: Disposable personal income 2,838.7 3,019.6 3,209.7 3,224.9 3,315.8 3,375.6 3,421.5 3,507.5 21 LESS: Personal outlays 2,713.3 2,898.0 3,105.5 3,152.3 3,171.8 3,225.7 3,293.6 3,361.8 22 EQUALS: Personal saving 125.4 121.7 104.2 72.6 144.0 149.9 127.8 145.7 MEMO Per capita (1982 dollars) 2233 Gross national product 15,120.6 15,401.2 15,770.0 15,834.9 16,031.8 16,127.6 16,213.1 16,265.3 24 Personal consumption expenditures 9,839.4 10,160.1 10,334.3 10,426.8 10,346.1 10,435.4 10,492.2 10,563.1 25 Disposable personal income 10,625.0 10,929.0 11,012.0 10,989.0 11,145.0 11,260.0 11,237.0 11,362.0 26 Saving rate (percent) 4.4 4.0 3.2 2.3 4.3 4.4 3.7 4.2 GROSS SAVING 27 Gross saving 533.5 537.2 560.4 556.8 603.4 627.0 634.1 665.4 28 Gross private saving 665.3 681.6 665.3 642.2 714.1 726.3 711.2 732.9 29 Personal saving 125.4 121.7 104.2 72.6 144.0 149.9 127.8 145.7 30 Undistributed corporate profits' 102.6 104.1 81.1 85.0 80.5 78.1 80.1 79.5 il Corporate inventory valuation adjustment -1.7 8.3 -18.0 -19.5 -18.2 -19.4 -27.4 -29.3 Capital consumption allowances 32 Corporate 268.6 282.4 297.5 299.7 303.7 309.8 313.3 316.8 33 Noncorporate 168.7 173.5 182.5 184.9 185.8 188.5 189.9 190.9 34 Government surplus, or deficit (-), national income and product accounts -131.8 -144.4 -104.9 -85.5 -110.7 -99.2 -77.1 -67.5 35 Federal -196.9 -205.6 -157.8 -138.3 -160.4 -155.1 -133.3 -123.5 36 State and local 65.1 61.2 52.9 52.9 49.7 55.8 56.2 56.0 37 Gross investment 528.7 523.6 552.3 541.7 597.0 612.0 629.0 651.4 38 Gross private domestic 643.1 665.9 712.9 702.8 764.9 763.4 758.1 772.5 39 Net foreign -114.4 -142.4 -160.6 -161.1 -167.8 -151.3 -129.1 -121.1 40 Statistical discrepancy -4.8 -13.6 -8.1 -15.1 -6.4 -15.0 -5.1 -14.0 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 A55 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 11998855 11998866 11998877 Q3 Q4 Ql Q2 Q3" 1 Balance on current account --111155,,110022 --113388,,882277 --115533,,996644 -41,967 -33,523 -36,938 -33,739 -30,894 2 Not seasonally adjusted -47,330 -31,803 -32,179 -34,606 -37,029 3 Merchandise trade balance -122,148 -144,547 -160,280 -39,665 -41,192 -35,184 -30,151 -28,533 4 Merchandise exports 215,935 223,969 249,570 64,902 68,013 75,300 79,606 82,306 5 Merchandise imports -338,083 -368,516 -409,850 -104,567 -109,205 -110,484 -109,757 -110,839 6 Military transactions, net -3,431 -4,372 -2,369 -851 -1,261 -1,033 -914 -934 7 Investment income, net 25,936 23,143 20,374 1,067 12,539 1,159 -1,940 -337 8 Other service transactions, net -449 2,257 1,755 87 479 1,241 2,017 2,028 9 Remittances, pensions, and other transfers -3,786 -3,571 -3,434 -855 -828 -882 -793 -806 10 U.S. government grants (excluding military) -11,223 -11,738 -10,011 -2,125 -3,545 -2,239 -1,958 -2,312 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -2,829 -2,000 1,162 252 1,012 -814 -801 1,931 12 Change in U.S. official reserve assets (increase, -) -3,858 312 9,149 32 3,741 1,503 39 -7,380 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -897 -246 -509 -210 -205 155 180 -35 15 Reserve position in International Monetary Fund 908 1,500 2,070 407 722 446 69 202 16 Foreign currencies -3,869 -942 7,588 -165 3,225 901 -210 -7,547 17 Change in U.S. private assets abroad (increase, -) -25,949 -96,303 -86,298 -25,576 -43,645 5,903 -18,210 -34,181 18 Bank-reported claims -1,323 -59,975 -40,531 -16,519 -23,460 17,108 -13,274 -27,023 19 Nonbank-reported claims 923 -4,220 3,145 -215 1,248 -315 -7,061 20 U.S. purchase of foreign securities, net -7,481 -4,297 -4,456 -972 -1,757 -4,467 1,529 -1,521 21 U.S. direct investments abroad, net -18,068 -27,811 -44,456 -7,870 -19,676 -6,423 596 -5,637 22 Change in foreign official assets in the United States (increase, +) -1,196 35,507 44,968 611 20,047 24,670 5,946 -2,902 23 U.S. Treasury securities -838 34,364 43,361 842 19,243 27,701 5,863 -3,706 24 Other U.S. government obligations -301 -1,214 1,570 714 662 -121 202 572 25 Other U.S. government liabilities ^ 767 2,054 -2,824 -287 108 -123 -570 -354 26 Other U.S. liabilities reported by U.S. banks3 645 1,187 3,901 -34 -223 -1,954 868 1,094 27 Other foreign official assets -1,469 -884 -1,040 -624 257 -833 -417 -508 28 Change in foreign private assets in the United States (increase, +) 131,096 185,746 166,521 71,047 36,025 1,395 59,549 50,928 29 U.S. bank-reported liabilities3 41,045 79,783 87,778 46,153 29,764 -17,233 31,121 30,434 30 U.S. nonbank-reported liabilities -366 -2,906 2,150 -116 -1,000 2,015 113 31 Foreign private purchases of U.S. Treasury securities, net 20,433 3,809 -7,596 -2,835 4% 6,887 5,457 4,322 32 Foreign purchases of other U.S. securities, net 50,962 70,969 42,213 12,819 -4,977 2,379 9,797 8,043 33 Foreign direct investments in the United States, net 19,022 34,091 41,976 15,026 11,742 7,347 13,061 8,129 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 1177,,883399 1155,,556666 1188,,446611 -4,399 16,342 4,282 -12,784 22,498 36 Owing to seasonal adjustments -4,658 3,138 3,747 -3,585 -5,205 37 Statistical discrepancy in recorded data before seasonal adjustment 17,839 15,566 18,461 259 13,204 535 -9,199 27,703 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -3,858 312 9,149 32 3,741 1,503 39 -7,380 39 Foreign official assets in the United States (increase, +) excluding line 25 -1,963 33,453 47,792 898 19,939 24,793 6,516 -2,548 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 -1,723 -2,750 -1,375 -1,783 -423 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 46 101 58 13 12 45 4 5 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 3. Reporting banks include all kinds of depository institutions besides commer- Business (Department of Commerce). cial banks, as well as some brokers and dealers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics: • February 1989 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data are not seasonally adjusted. 1988 IItteemm 11998855 11998866 11998877 Apr. May June July Aug. Sept/ Oct. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments, f.a.s. value 218,815 227,159 254,122 26,335 28,143 26,839 25,098 26,538 27,237 28,477 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 2 C.I.F. value 352,463 382,295 424,442 36,528 37,657 40,158 37,084 39,370 37,935 40,229 3 Customs value 345,276 365,438 406,241 35,027 36,147 38,590 35,583 37,741 36,459 38,685 Trade balance 4 C.I.F. value -133,648 -155,137 -170,320 -10,193 -9,514 -13,319 -11,986 -12,832 -10,698 -11,752 5 Customs value -132,129 -138,279 -152,119 -8,692 -8,004 -11,751 -10,485 -11,203 -9,223 -10,208 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; the timing. On the export side, the largest adjustment is the exclusion of military sales previous month is revised to reflect late documents. Total exports and the trade (which are combined with other military transactions and reported separately in balance reflect adjustments for undocumented exports 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 1988 Type 1985 1986 May June July Aug. Sept. Oct. Nov." 1 Total 43,186 48,511 45,798 41,949 41,028 43,876 47,778 47,788 50,204 48,944 2 Gold stock, including Exchange Stabilization Fund 11,090 11,064 11,078 11,063 11,063 11,063 11,061 11,062 11,062 11,059 3 Special drawing rights ' 7,293 8,395 10,283 9,543 9,180 8,984 9,058 9,074 9,464 9,785 4 Reserve position in International Monetary Fund 11,947 11,730 11,349 10,431 9,992 9,773 9,642 9,637 10,075 10,103 5 Foreign currencies 12,856 17,322 13,088 10,912 10,793 14,056 18,017 18,015 19,603 17,997 1. Gold held under earmark at Federal Reserve Banks for foreign and interna- 3. Includes allocations by the International Monetary Fund of SDRs as follows: tional accounts is not included in the gold stock of the United States; see table $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1, 3.13. Gold stock is valued at $42.22 per fine trey ounce. 1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based million on Jan. 1, 1981; plus transactions in SDRs. on a weighted average of exchange rates for the currencies of member countries. 4. Valued at current market exchange rates. From July 1974 through December 1980, 16 currencies were used; from January 1981, 5 currencies have been used. The U.S. SDR holdiings and reserve position in the IMF also are valued on this basis beginning July 1974. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1988 AAsssseettss 11998855 11998866 11998877 May June July Aug. Sept. Oct. Nov.p 1 Deposits 480 287 244 297 381 269 230 338 301 251 Assets held in custody 2 U.S. Treasury securities 121,004 155,835 195,126 226,341 223,127 223,2% 221,715 221,119 226,533 229,926 3 Earmarked gold 14,245 14,048 13,919 13,654 13,662 13,666 13,658 13,653 13,637 13,640 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 A57 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1 Millions of dollars, end of period 1988 AAsssseett aaccccoouunntt 11998855 11998866 11998877 Apr. May June July Aug. Sept. Oct." All foreign countries 1 Total, all currencies 458,012 456,628 518,618 488,939 492,844 487,677 488,283 487,895 490,582 493,728 2 Claims on United States 119,706 114,563 138,034 139,176 141,790 140,932 147,662 157,021 155,386 155,281 3 Parent bank 87,201 83,492 105,845 102,957 104,299 104,405 109,929 117.525 115,286 115,954 4 Other banks in United States 13,057 13,685 16,416 13,332 14,625 14,424 15,954 16,176 16,121 14,593 5 Nonbanks 19,448 17,386 15,773 22,887 22,866 22,103 21,779 23,320 23,979 24,734 6 Claims on foreigners 315,676 312,955 342,520 314,348 315,302 311,308 305,556 295,270 298,466 301,105 7 Other branches of parent bank 91,399 96,281 122,155 103,090 102,931 106,722 103,646 98,299 102,355 100,609 8 Banks 102,960 105,237 108,859 101,233 103,427 100,669 99,660 98,982 98,563 102,208 9 Public borrowers 23,478 23,706 21,832 20,827 20,991 20,438 19,276 18,709 18,444 18,205 10 Nonbank foreigners 97,839 87,731 89,674 89,198 87,953 83,479 82,974 79,280 79,104 80,083 11 Other assets 22,630 29,110 38,064 35,415 35,752 35,437 35,065 35,604 36,730 37,342 12 Total payable in U.S. dollars 336,520 317,487 350,107 327,736 334,112 334,990 336,233 342,906 340,901 337,346 13 Claims on United States 116,638 110,620 132,023 133,289 136,078 135,348 141,415 151,581 149,764 149,562 14 Parent bank 85,971 82,082 103,251 100,320 101,578 101,422 106,792 114,943 112,621 113,569 15 Other banks in United States 12,454 12,830 14,657 12,318 13,600 13,661 14,434 14,901 14,687 13,114 16 Nonbanks 18,213 15,708 14,115 20,651 20,900 20,265 20,189 21,737 22,456 22,879 17 Claims on foreigners 210,129 195,063 202,428 179,722 182,980 183,568 179,076 174,433 174,27!r 171,717 18 Other branches of parent bank 72,727 72,197 88,284 75,654 76,136 79,774 78,071 73,792 76,506 73,508 19 Banks 71,868 66,421 63,707 54,588 57,102 55,234 54,189 54,839 52,503 54,793 20 Public borrowers 17,260 16,708 14,730 14,407 14,342 13,851 13,247 12,933 12,770 12,616 21 Nonbank foreigners 48,274 39,737 35,707 35,073 35,400 34,709 33,569 32,869 32,492r 30,800 22 Other assets 9,753 11,804 15,656 14,725 15,054 16,074 15,742 16,892 16,866 16,067 United Kingdom 23 Total, all currencies 148,599 140,917 158,695 152,592 156,184 151,835 151,017 149,646 147,329 155,580 24 Claims on United States 33,157 24,599 32,518 31,618 32,832 33,852 35,708 36,307 32,048 36,210 25 Parent bank 26,970 19,085 27,350 26,155 27,506 28,535 30,615 30,767 26,661 30,569 26 Other banks in United States 1,106 1,612 1,259 1,013 1,360 1,322 1,064 1,197 1,238 994 27 Nonbanks 5,081 3,902 3,909 4,450 3,966 3,995 4,029 4,343 4,149 4,647 28 Claims on foreigners 110,217 109,508 115,700 112,261 114,452 107,856 105,594 103,527 105,824 109,793 29 Other branches of parent bank 31,576 33,422 39,903 33,019 33,849 32,446 30,228 29,656 31,758 33,103 30 Banks 39,250 39,468 36,735 38,790 39,883 37,108 37,805 38,259 38,848 40,236 31 Public borrowers 5,644 4,990 4,752 4,914 4,987 4,742 4,665 4,543 4,250 4,190 32 Nonbank foreigners 33,747 31,628 34,310 35,538 35,733 33,560 32,896 31,069 30,968 32,264 33 Other assets 5,225 6,810 10,477 8,713 8,900 10,127 9,715 9,812 9,457 9,577 34 Total payable in U.S. dollars 108,626 95,028 100,574 93,214 97,188 95,326 94,492 96,767 93,790 99,868 35 Claims on United States 32,092 23,193 30,439 29,555 30,736 31,855 33,795 34,535 30,116 34,134 36 Parent bank 26,568 18,526 26,304 25,137 26,608 27,672 29,706 29,837 25,692 29,667 37 Other banks in United States 1,005 1,475 1,044 781 1,068 1,069 870 1,039 910 606 38 Nonbanks 4,519 3,192 3,091 3,637 3,060 3,114 3,219 3,659 3,514 3,861 39 Claims on foreigners 73,475 68,138 64,560 59,434 62,018 57,969 55,832 57,037 58,474 61,034 40 Other branches of parent bank 26,011 26,361 28,635 24,867 25,448 23,843 22,549 22,465 24,472 25,703 41 Banks 26,139 23,251 19,188 18,065 19,555 17,477 18,025 19,165 19,066 20,488 42 Public borrowers 3,999 3,677 3,313 3,412 3,252 3,188 3,133 3,105 3,022 2,984 43 Nonbank foreigners 17,326 14,849 13,424 13,090 13,763 13,461 12,125 12,302 11,914 11,859 44 Other assets 3,059 3,697 5,575 4,225 4,434 5,502 4,865 5,195 5,200 4,700 Bahamas and Caymans 45 Total, all currencies 142,055 142,592 160,321 152,930 156,353 159,718 160,516 165,771 164,313 155,265 46 Claims on United States 74,864 78,048 85,318 88,283 90,896 88,116 92,308 99,090 99,541 94,301 47 Parent bank 50,553 54,575 60,048 59,240 60,419 58,579 61,397 67,034 66,607 62,709 48 Other banks in United States 11,204 11,156 14,277 11,470 12,489 12,236 13,863 13,907 13,878 12,353 49 Nonbanks 13,107 12,317 10,993 17,573 17,988 17,301 17,048 18,149 19,056 19,239 50 Claims on foreigners 63,882 60,005 70,162 58,818 59,374 65,855 62,508 60,822 57,887 54,630 51 Other branches of parent bank 19,042 17,296 21,277 17,790 18,463 24,745 22,797 20,789 20,320 17,331 52 Banks 28,192 27,476 33,751 26,700 27,019 27,650 26,120 26,866 24,545 25,463 53 Public borrowers 6,458 7,051 7,428 6,849 6,955 6,835 6,457 6,185 6,219 6,045 54 Nonbank foreigners 10,190 8,182 7,706 7,479 6,937 6,625 7,134 6,982 6,803 5,791 55 Other assets 3,309 4,539 4,841 5,829 6,083 5,747 5,700 5,859 6,885 6,334 56 Total payable in U.S. dollars 136,794 136,813 151,434 145,398 148,545 152,219 152,685 157,975 156,409 147,481 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

A58 International Statistics: • February 1989 3.14—Continued Liability account 1985 1986 Apr. May June July Aug. Sept. All foreign countries 57 Total, all currencies 458,012 456,628 518,618 488,939 492,844 487,677 488,283 487,895 490,582 493,728 58 Negotiable CDs 34,607 31,629 30,929 31,585 32,175 29,485 30,159 31,203 28,953 27,969 59 To United States 156,281 152,465 161,390 155,411 162,027 156,294 159,009 164,401 165,492 161,783 60 Parent bank 84,657 83,394 87,606 85,543 86,901 87,260 84,196 88,819 94,953' 95,427 61 Other banks in United States 16,894 15,646 20,559 16,312 15,423 14,680 15,310 16,356r 14,272' 14,029 62 Nonbanks 54,730 53,425 53,225 53,556 59,703 54,354 59,503 59,226r 56,267 52,327 63 To foreigners 245,939 253,775 304,803 281,132 277,082 280,939 277,776 270,678 274,822 281,143 64 Other branches of parent bank 89,529 95,146 124,601 105,148 104,667 110,429 107,084 100,538 106,284 106,010 65 Banks 76,814 77,809 87,274 85,016 82,421 82,380 83,086 80,606 80,382 81,946 66 Official institutions 19,520 17,835 19,564 18,005 17,699 17,159 16,628 17,232 16,911 18,786 67 Nonbank foreigners 60,076 62,985 73,364 72,963 72,295 70,971 70,978 72,302 71,245 74,401 68 Other liabilities 21,185 18,759 21,496 20,811 21,560 20,959 21,339 21,613 21,315 22,833 69 Total payable in U.S. dollars ... 353,712 336,406 361,438 337,122 341,729 341,411 341,539 346,185 348,248 343,233 70 Negotiable CDs 31,063 28,466 26,768 26,596 27,233 25,015 24,870 26,128 24,353 23,218 71 To United States 150,905 144,483 148,442 144,863 149,645 144,464 147,551 152,745 154,647 150,497 72 Parent bank 81,631 79,305 81,783 79,857 80,331 80,752 77,503 81,710 88,413' 88,447 73 Other banks in United States 16,264 14,609 19,155 15,115 14,073 13,256 14,011 15,I53r 13,153' 12,868 74 Nonbanks 53,010 50,569 47,504 49,891 55,241 50,456 56,037 55,882' 53,081 49,182 75 To foreigners 163,583 156,806 177,711 156,768 155,450 162,056 158,901 156,358 158,325 158,514 76 Other branches of parent bank 71,078 71,181 90,469 76,708 76,920 83,493 81,144 75,014 79,450 78,423 77 Banks 37,365 33,850 35,065 29,844 28,635 28,909 28,495 30,041 29,341 28,831 78 Official institutions 14,359 12,371 12,409 10,539 10,028 9,571 9,354 9,938 9,207 10,624 79 Nonbank foreigners 40,781 39,404 39,768 39,677 39,867 40,083 39,908 41,365 40,327 40,636 80 Other liabilities 8,161 6,651 8,517 8,895 9,401 9,876 10,217 10,954 10,923 11,004 United Kingdom 81 Total, all currencies 148,599 140,917 158,695 152,592 156,184 151,835 151,017 149,646 147,329 155,580 82 Negotiable CDs 31,260 27,781 26,988 27,090 27,659 25,390 25,750 26,998 24,311 23,345 83 To United States 29,422 24,657 23,470 23,868 27,145 25,120 26,859 25,013 25,657 31,575 84 Parent bank 19,330 14,469 13,223 14,904 15,518 15,996 16,844 15,100 17,115 22,800 85 Other banks in United States 2,974 2,649 1,740 1,508 2,408 1,791 2,051 1,878 2,021 2,192 86 Nonbanks 7,118 7,539 8,507 7,456 9,219 7,333 7,964 8,035 6,521 6,583 87 To foreigners 78,525 79,498 98,689 92,219 91,995 91,691 88,489 87,504 87,212 89,934 88 Other branches of parent bank 23,389 25,036 33,078 27,383 28,743 28,967 26,948 25,570 26,837 25,743 89 Banks 28,581 30,877 34,290 32,970 31,995 33,125 32,763 31,829 31,701 32,385 90 Official institutions 9,676 6,836 11,015 10,181 9,672 8,893 9,034 9,982 8,570 10,656 91 Nonbank foreigners 16,879 16,749 20,306 21,685 21,585 20,706 19,744 20,123 20,104 21,150 92 Other liabilities 9,392 8,981 9,548 9,415 9,385 9,634 9,919 10,131 10,149 10,726 93 Total payable in U.S. dollars 112,697 99,707 102,550 96,532 99,378 97,555 96,908 97,926 96,970 101,689 94 Negotiable CDs 29,337 26,169 24,926 24,392 24,994 22,960 22,846 24,229 22,043 20,864 95 To United States 27,756 22,075 17,752 20,310 22,405 20,889 23,105 20,993 22,177 28,063 % Parent bank 18,956 14,021 12,026 13,947 14,134 14,712 15,729 13,745 16,031 21,665 97 Other banks in United States 2,826 2,325 1,512 1,306 2,184 1,512 1,817 1,655 1,819 1,978 98 Nonbanks 5,974 5,729 4,214 5,057 6,087 4,665 5,559 5,593 4,327 4,420 99 To foreigners 51,980 48,138 55,919 47,589 47,969 48,777 46,083 47,227 47,149 47,278 100 Other branches of parent bank 18,493 17,951 22,334 18,060 18,902 20,303 18,539 17,550 18,696 17,384 101 Banks 14,344 15,203 15,580 12,889 12,860 12,957 12,240 13,501 13,417 13,436 102 Official institutions 7,661 4,934 7,530 5,918 5,470 4,700 5,036 5,781 4,519 6,186 103 Nonbank foreigners 11,482 10,050 10,475 10,722 10,737 10,817 10,268 10,395 10,517 10,272 104 Other liabilities 3,624 3,325 3,953 4,241 4,010 4,929 4,874 5,477 5,601 5,484 Bahamas and Caymans 105 Total, all currencies 142,055 142,592 160,321 152,930 156,353 159,718 160,516 165,771 164,313 155,265 106 Negotiable CDs 610 847 885 1,038 1,096 941 940 731 924 1,092 107 To United States 104,556 106,081 113,950 109,199 112,605 109,424 112,540 117,765 116,687 107,115 108 Parent bank 45,554 49,481 53,239 50,576 51,745 52,221 49,896 54,174 56,818 51,522 109 Other banks in United States 12,778 11,715 17,224 13,621 11,659 11,451 12,069 13,412' 11,106 10,824 110 Nonbanks 46,224 44,885 43,487 45,002 49,201 45,752 50,575 50,179' 48,763 44,769 111 To foreigners 35,053 34,400 43,815 40,953 40,369 47,361 44,993 45,062 44,478 44,636 112 Other branches of parent bank 14,075 12,631 19,185 19,420 18,909 24,755 22,288 21,221 22,872 23,283 113 Banks 10,669 8,617 10,769 9,162 9,080 9,779 10,155 9,607 8,405 8,154 114 Official institutions 1,776 2,719 1,504 1,164 1,053 1,850 1,015 1,099 1,067 972 115 Nonbank foreigners 8,533 10,433 12,357 11,207 11,327 10,977 11,535 13,135 12,134 12,227 116 Other liabilities 1,836 1,264 1,671 1,740 2,283 1,992 2,043 2,213 2,224 2,422 117 Total payable in U.S. dollars .... 138,322 138,774 152,927 146,134 148,923 151,684 152,235 157,512 156,215 147,718 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A59 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1988 IItteemm 11998866 11998877 Apr. May June July Aug. Sept. Oct." 1 Total1 211,834 259,517 286,529 294,729 290,842 290,775 290,263' 288,643' 294,431 By type 2 Liabilities reported by banks in the United States 27,920 31,838 29,683 31,460 30,761 31,971 32,813' 32,224' 33,956 3 U.S. Treasury bills and certificates 75,650 88,829 94,974 %,604 95,299 %,645 %,698 %,812' 100,804 U.S. Treasury bonds and notes 4 Marketable 91,368 122,432 145,929 150,991 149,333 146,971 145,521' 144,082' 144,669 5 Nonmarketable , 1,300 300 795 499 502 506 509 513' 516 6 U.S. securities other than U.S. Treasury securities5 15,5% 16,123 15,148 15,175 14,947 14,682 14,722 15,012' 14,486 By area 7 Western Europe 88,629 124,620 129,739 131,406 126,772 125,095 123,428' 121,249' 124,609 8 Canada 2,004 4,961 8,314 9,372 10,773 10,725 9,981 10,054' 11,014 9 Latin America and Caribbean 8,417 8,328 8,520 9,145 9,407 9,818 11,336 10,136' 9,840 10 Asia 105,868 116,098 132,050 135,120 134,285 135,657 136,165' 137,513' 139,447 11 1,503 1,402 1,417 1,418 1,266 1,179 1,196 1,13c 1,094 12 Other countries 5,412 4,147 5,993 7,773 7,837 7,793 7,646 8,049' 7,912 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 Dec. Mar. June Sept. 1 Banks' own liabilities 8,586 15,368 29,702 55,075 55,457 54,046 61,819 2 Banks' own claims 11,984 16,294 26,180 50,663 51,428 50,098 47,730 3 Deposits 4,998 8,437 14,129 18,253 17,614 16,723 21,165 4 Other claims 6,986 7,857 12,052 32,410 33,814 33,375 26,565 5 Claims of banks' domestic customers 569 580 2,507 551 810 1,004 392 1. Data on claims exclude foreign currencies held by U.S. monetary author- States that represent claims on foreigners held by reporting banks for the accounts ities. of the domestic customers. 2. Assets owned by customers of the reporting bank located in the United Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics: • February 1989 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1988 Holder and type of liability 11998855 11998866 11998877 Apr. May June July Aug.' Sept. Oct." 1 All foreigners 435,726 540,996 618,978 611,031 629,139 637,396 654,760 658,362 658,591 651,436 2 Banks' own liabilities 341,070 406,485 470,056 449,324 465,665 476,117 490,660 494,125 491,149 481,989 3 Demand deposits 21,107 23,789 22,383 20,330 22,181 22,990 21,983 20,314 21,390 21,740 4 Time deposits 117,278 130,891 148,444 134,320 138,255 141,553 142,670 145,663 149,347 141,994 5 Other. 29,305 42,705 51,607 46,018 48,489 47,658 51,244 52,091 53,201 56,664 6 Own foreign offices4 173,381 209,100 247,621 248,655 256,741 263,916 274,762 276,057 267,210 261,591 7 Banks' custody liabilities5 94,656 134,511 148,923 161,707 163,474 161,279 164,101 164,237 167,442 169,447 8 U.S. Treasury bills and certificates6 69,133 90,398 101,743 107,881 108,803 108,614 109,555 109,106 110,686 112,257 9 Other negotiable and readily transferable instruments7 17,964 15,417 16,791 16,017 16,595 16,626 16,165 15,970 15,556 16,459 10 Other 7,558 28,696 30,388 37,810 38,075 36,039 38,381 39,161 41,200 40,731 11 Nonmonetary international and regional organizations 5,821 5,807 4,464 4,575 6,889 7,879 7,036 4,749 7,764 6,077 12 Banks' own liabilities 2,621 3,958 2,702 2,412 4,898 5,142 4,857 2,925 5,104 4,265 13 Demand deposits 85 199 124 67 84 84 92 85 104 143 14 Time deposits 2,067 2,065 1,538 335 1,981 1,873 1,857 966 1,688 1,299 15 Other3 469 1,693 1,040 2,010 2,833 3,185 2,908 1,874 3,311 2,823 16 Banks' custody liabilities5 3,200 1,849 1,761 2,163 1,991 2,737 2,179 1,824 2,660 1,812 17 U.S. Treasury bills and certificates6 1,736 259 265 587 132 745 286 43 755 62 18 Other negotiable and readily transferable instruments 1,464 1,590 1,497 1,564 1,852 1,989 1,861 1,769 1,899 1,750 19 Other 0 0 0 11 7 3 32 12 5 0 20 Official institutions9 79,985 103,569 120,667 124,657 128,065 126,060 128,616 129,511 129,036 134,760 21 Banks' own liabilities 20,835 25,427 28,703 26,623 28,451 27,882 28,386 29,079 28,725 30,203 22 Demand deposits 2,077 2,267 1,757 1,498 1,882 1,834 1,6% 1,405 1,756 1,776 23 Time deposits 10,949 10,497 12,843 11,753 12,860 11,864 11,464 12,289 11,613 11,134 24 Other3 7,809 12,663 14,103 13,372 13,709 14,184 15,226 15,385 15,356 17,293 25 Banks' custody liabilities5 59,150 78,142 91,965 98,033 99,613 98,178 100,230 100,432 100,311 104,557 26 U.S. Treasury bills and certificates6 53,252 75,650 88,829 94,974 96,604 95,299 96,645 %,698 96,812 100,804 27 Other negotiable and readily transferable instruments 5,824 2,347 2,990 2,939 2,775 2,672 3,368 3,450 3,221 3,612 28 Other 75 145 146 120 234 207 217 284 279 141 29 Banks10 275,589 351,745 414,181 401,743 413,460 423,396 436,310 439,668 437,288 424,849 30 Banks' own liabilities 252,723 310,166 371,651 353,971 365,512 375,093 387,456 390,553 385,283 374,246 31 Unaffiliated foreign banks 79,341 101,066 124,030 105,315 108,771 111,177 112,694 114,495 118,073 112,655 32 Demand deposits 10,271 10,303 10,898 9,153 10,260 10,898 10,217 9,258 9,349 10,233 33 Time deposits2 49,510 64,232 79,787 68,098 69,616 72,612 73,186 74,374 78,313 70,679 34 Other3 19,561 26,531 33,345 28,065 28,895 27,668 29,291 30,864 30,411 31,743 35 Own foreign offices4 173,381 209,100 247,621 248,655 256,741 263,916 274,762 276,057 267,210 261,591 36 Banks' custody liabilities5 22,866 41,579 42,530 47,772 47,948 48,303 48,854 49,116 52,005 50,603 37 U.S. Treasury bills and certificates6 9,832 9,984 9,134 8,889 8,872 9,212 9,394 9,299 9,888 7,976 38 Other negotiable and readily transferable instruments 6,040 5,165 5,392 4,637 4,341 4,725 4,625 4,090 4,224 5,265 39 Other 6,994 26,431 28,004 34,245 34,735 34,365 34,835 35,727 37,893 37,362 40 Other foreigners 74,331 79,875 79,666 80,056 80,726 80,061 82,800 84,433 84,503 85,749 41 Banks' own liabilities 64,892 66,934 67,000 66,318 66,804 67,999 69,%1 71,568 72,037 73,274 42 Demand deposits 8,673 11,019 9,604 9,612 9,955 10,173 9,979 9,566 10,181 9,588 43 Time deposits 54,752 54,097 54,277 54,134 53,798 55,204 56,163 58,033 57,733 58,882 44 Other3 1,467 1,818 3,119 2,571 3,051 2,622 3,819 3,969 4,123 4,805 45 Banks' custody liabilities5 9,439 12,941 12,666 13,739 13,922 12,062 12,839 12,865 12,466 12,475 46 U.S. Treasury bills and certificates6 4,314 4,506 3,515 3,430 3,196 3,358 3,231 3,066 3,231 3,414 47 Other negotiable and readily transferable instruments 4,636 6,315 6,914 6,876 7,628 7,241 6,311 6,661 6,212 5,832 48 Other 489 2,120 2,238 3,433 3,099 1,464 3,297 3,137 3,023 3,228 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 9,845 7,496 7,314 7,480 8,261 7,711 6,975 6,792 6,121 6,236 1. Reporting banks include all kinds of depository institutions besides commer- 5. Financial claims on residents of the United States, other than long-term cial banks, as well as some brokers and dealers. securities, held by or through reporting banks. 2. Excludes negotiable time certificates of deposit, which are included in 6. Includes nonmarketable certificates of indebtedness and Treasury bills "Other negotiable and readily transferable instruments." issued to official institutions of foreign countries. 3. Includes borrowing under repurchase agreements. 7. Principally bankers acceptances, commercial paper, and negotiable time 4. U.S. banks: includes amounts due to own foreign branches and foreign certificates of deposit. subsidiaries consolidated in "Consolidated Report of Condition" filed with bank 8. Principally the International Bank for Reconstruction and Development, and regulatory agencies. Agencies, branches, and majority-owned subsidiaries of the Inter-American and Asian Development Banks. Data exclude "holdings of foreign banks: principally amounts due to head office or parent foreign bank, and dollars" of the International Monetary Fund. foreign branches, agencies, or wholly owned subsidiaries of head office or parent 9. Foreign central banks, foreign central governments, and the Bank for foreign bank. Internationa! Settlements. 10. 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 A61 3.17—Continued 1988 AArreeaa aanndd ccoouunnttrryy 11998855 11998866 11998877 Apr. May June July Aug. Sept. Oct." 1 Total 435,726 540,996 618,978 611,031 629,139 637,396 654,760 658,362' 658,591 651,436 2 Foreign countries 429,905 535,189 614,514 606,456 622,250 629,517 647,725 653,612r 650,827 645,358 3 Europe 164,114 180,556 234,641 218,515 227,867 227,626 231,170 232,796' 224,723 226,068 4 Austria 693 1,181 920 1,162 1,090 941 1,412 1,245' 1,072 1,370 5 Belgium-Luxembourg 5,243 6,729 9,347 9,629 9,893 10,363 9,494 10,051' 9,997 10,227 6 Denmark 513 482 760 1,034 1,164 1,364 1,474 2,078 1,402 2,358 '/ Finland 496 580 377 504 478 426 549 417 447 339 8 France 15,541 22,862 29,835 27,015 28,193 26,975 26,002 24,237' 24,295 23,285 9 Germany 4,835 5,762 7,022 6,878 6,487 5,105 5,211 6,226 5,085 5,849 10 Greece 666 700 689 656 675 653 620 694 633 707 11 Italy 9,667 10,875 12,073 10,040 9,285 10,695 9,361 9,766 8,550 12,511 12 Netherlands 4,212 5,600 5,014 5,154 5,757 5,351 5,560 5,647' 6,168 5,777 13 Norway 948 735 1,362 1,101 1,240 1,078 1,330 900 1,060 1,143 14 Portugal 652 699 801 917 910 897 859 848 858 915 15 Spain 2,114 2,407 2,621 2,415 2,839 4,168 5,011 5,570' 6,248 6,838 16 Sweden 1,422 884 1,379 1,692 2,280 1,522 1,926 2,011 2,196 1,579 17 Switzerland 29,020 30,534 33,766 30,523 31,293 31,226 30,451 29,274' 31,894 31,222 18 Turkey 429 454 703 518 628 570 537 709 706 963 19 United Kingdom 76,728 85,334 116,852 109,547 115,439 115,521 121,895 122,620' 113,287 109,889 20 Yugoslavia 673 630 710 566 586 690 614 629 579 655 21 Other Western Europe 9,635 3,326 9,798 8,473 9,038 9,230 8,135 9,232' 9,643 9,633 22 U.S.S.R 105 80 32 44 136 239 81 99' 45 100 23 Other Eastern Europe 523 702 582 648 456 611 648 544' 559 709 24 Canada 17,427 26,345 30,095 27,011 27,890 30,051 29,944 28,128 28,247 26,697 25 Latin America and Caribbean 167,856 210,318 220,399 225,708 229,829 232,760 242,674 246,604' 246,945 240,923 26 Argentina 6,032 4,757 5,006 5,307 5,219 5,876 5,975 6,775 7,106 7,065 27 Bahamas 57,657 73,619 74,676 69,975 73,990 74,034 75,910 78,810 77,921 76,805 28 Bermuda 2,765 2,922 2,344 2,402 2,927 2,077 2,413 2,394' 2,389 2,562 29 Brazil 5,373 4,325 4,005 3,992 4,122 4,205 4,489 4,563' 4,475 4,720 30 British West Indies 42,674 72,263 81,612 92,534 91,601 94,311 101,378 99,827' 101,939 96,625 31 Chile 2,049 2,054 2,210 2,251 2,184 2,378 2,323 2,463' 2,467 2,727 32 Colombia 3,104 4,285 4,204 3,843 4,395 4,502 4,441 44,,440033 4,171 4,136 33 Cuba 11 7 12 13 9 10 9 88 9 12 34 Ecuador 1,239 1,236 1,082 1,174 1,206 1,212 1,216 1,224 1,244 1,265 35 Guatemala 1,071 1,123 1,082 1,209 1,191 1,209 1,183 1,182 1,177 1,150 36 Jamaica 122 136 160 209 152 156 154 149 166 177 37 Mexico 14,060 13,745 14,480 15,347 15,866 15,801 16,334 17,260 15,818 15,671 38 Netherlands Antilles 4,875 4,970 4,975 5,345 5,348 5,338 4,798 5,011 5,252 5,328 39 Panama 7,514 6,886 7,414 4,059 4,005 4,171 4,251 4,262 4,128 4,114 40 Peru 1,167 1,163 1,275 1,424 1,423 1,438 1,514 1,538' 1,584 1,669 41 Uruguay 1,552 1,537 1,582 1,745 1,717 1,882 1,828 1,899' 1,884 1,788 42 Venezuela 11,922 10,171 9,048 9,564 9,255 8,950 9,116 9,330 9,752 9,547 43 Other 4,668 5,119 5,234 5,313 5,219 5,209 5,343 5,504' 5,461 5,560 44 Asia 72,280 108,831 121,364 125,653 112255,,775500 112288,,110000 113344,,000033 113366,,229933 114400,,776688 114411,,991144 China 45 Mainland 1,607 1,476 1,162 1,814 1,921 1,725 1,564 1,757 1,608 1,479 46 Taiwan 7,786 18,902 21,503 23,982 23,874 23,072 24,023 23,422 22,334 23,377 47 Hong Kong 8,067 9,393 10,180 9,635 10,214 9,255 9,951 10,417 10,875 11,487 48 India 712 674 582 675 619 942 858 845' 1,013 838 49 Indonesia 1,466 1,547 1,404 1,063 1,036 1,075 1,036 1,255 1,126 1,290 50 Israel 1,601 1,892 1,292 1,292 1,190 1,334 1,244 1,194 1,130 2,322 51 Japan 23,077 47,410 54,398 58,576 58,151 60,916 63,529 65,001 70,188 70,341 52 Korea 1,665 1,141 1,637 1,574 1,476 1,572 1,459 1,720 2,091 2,574 53 Philippines 1,140 1,866 1,085 1,015 975 954 1,085 1,00! 971 1,140 54 Thailand 1,358 1,119 1,345 1,181 1,448 1,099 1,650 1,422 2,288 1,363 55 Middle-East oil-exporting countries 14,523 12,352 13,988 12,639 12,413 12,089 14,298 12,787' 14,091 13,200 56 Other 9,276 11,058 12,788 12,207 12,434 14,066 13,305 15,472 13,053 12,503 57 Africa 4,883 4,021 3,945 3,878 4,055 4,023 3,837 3,846 3,659 3,702 58 Egypt 1,363 706 1,151 1,218 1,196 1,187 11,,003399 969 813 850 59 Morocco 163 92 194 68 65 73 8800 70 111 66 60 South Africa 388 270 202 195 267 245 200 204 247 245 61 Zaire 163 74 67 82 63 60 63 67 71 71 62 Oil-exporting countries4 1,494 1,519 1,014 1,008 1,090 1,111 1,052 1,039 1,015 993 63 Other 1,312 1,360 1,316 1,307 1,373 1,348 1,403 1,498 1,402 1,477 64 Other countries 3,347 5,118 4,070 5,689 6,859 6,957 6,098 5,945 6,484 6,054 65 Australia 2,779 4,196 3,327 4,885 5,943 6,017 5,329 5,170 5,640 5,199 66 All other 568 922 744 804 916 939 769 775 845 854 67 Nonmonetary international and regional organizations 5,821 5,807 4,464 4,575 6,889 7,879 7,036 4,749 7,764 6,077 68 International 4,806 4,620 2,830 2,691 4,955 5,925 5,105 2,979 5,721 4,110 69 Latin American regional 894 1,033 1,272 1,528 1,727 1,769 1,651 1,614 1,762 1,662 70 Other regional 121 154 362 356 207 185 279 156 281 306 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

A62 International Statistics: • February 1989 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1988 AArreeaa aanndd ccoouunnttrryy 11998855 11998866 11998877 Apr. May June July Aug. Sept. Oct." 1 Total 401,608 444,745 459,706 432,679 450,678 459,411 471,697 471,536r 483,467 464,679 2 Foreign countries 400,577 441,724 456,302 431,317 449,532 456,866 468,541 468,274r 476,448 461,303 3 Europe 106,413 107,823 102,375 93,507 100,484 100,925 9999,,770055 99,205r 110022,,663322 106,240 4 Austria 598 728 793 893 865 806 888888 743 880088 812 5 Belgium-Luxembourg 5,772 7,498 9,397 8,792 8,724 7,863 8,530 8,419' 8,846 8,907 6 Denmark 706 688 717 612 630 640 743 608r 582 536 7 Finland 823 987 1,010 993 1,103 954 1,325 1,231 1,195 913 8 France 9,124 11,356 13,553 10,885 12,147 12,184 11,861 11,963 12,164 12,338 9 Germany 1,267 1,816 2,039 1,610 1,719 2,840 2,153 1,976r 1,718 2,290 10 Greece 991 648 463 513 558 590 563 524 521 494 11 Italy 8,848 9,043 7,460 6,201 6,606 7,072 6,607 6,626 6,117 6,040 12 Netherlands 1,258 3,296 2,624 2,865 2,766 2,656 3,017 2,938 3,202 3,182 13 Norway 706 672 934 650 886 589 484 534 510 535 14 Portugal 1,058 739 477 439 400 358 333 321 333 266 15 Spain 1,908 1,492 1,858 1,766 1,911 1,867 1,978 2,016 1,969 1,766 16 Sweden 2,219 1,964 2,269 2,347 2,480 2,087 1,958 2,256 1,968 1,852 17 Switzerland 3,171 3,352 2,719 2,452 3,093 3,274 2,486 2,559 2,560 2,919 18 Turkey 1,200 1,543 1,680 1,733 1,543 1,495 1,432 1,397 1,396 1,353 19 United Kingdom 62,566 58,335 50,819 47,319 51,679 52,084 51,885 51,728 54,829 57,873 20 Yugoslavia 1,964 1,835 1,700 1,618 1,586 1,624 1,559 1,537 11,,449944 1,472 21 Other Western Europe2 998 539 619 573 598 647 671 524r 886600 1,156 22 U.S.S.R 130 345 389 377 339 506 431 466 503 724 23 Other Eastern Europe 1,107 948 852 866 851 787 800 838r 1,056 813 24 Canada 16,482 21,006 25,288 22,101 23,799 24,639 23,939 24,139' 23,954 22,435 25 Latin America and Caribbean 202,674 208,825 214,641 200,220 203,941 203,208 206,547 208,513' 213,973 199,202 26 Argentina 11,462 12,091 11,996 12,288 12,297 12,365 12,359 12,238' 12,235 12,077 27 Bahamas 58,258 59,342 64,586 54,625 59,251 56,722 62,333 65,702' 6655,,445511 58,444 28 Bermuda 499 418 471 669 369 818 460 4^ 668888 586 29 Brazil 25,283 25,716 25,897 26,042 26,119 26,230 26,041 25,909' 25,660 25,886 30 British West Indies 38,881 46,284 49,896 48,212 48,873 51,140 49,745 48,970' 55,105 47.405 31 Chile 6,603 6,558 6,308 6,132 6,018 5,881 5,778 5,677' 5,656 5,459 32 Colombia 3,249 2,821 2,740 2,721 3,082 3,095 3,127 3,029 3,023 3,016 33 Cuba 0 0 1 1 0 0 0 0 0 0 34 Ecuador 2,390 2,439 2,286 2,883 2,197 2,142 2,146 2,156' 2,185 2,168 35 Guatemala4 194 140 144 141 149 144 157 148 150 175 36 Jamaica4 224 198 188 212 177 187 214 184 185 201 37 Mexico 31,799 30,698 29,532 27,296 26,679 26,177 26,017 25,885' 25,963 25,637 38 Netherlands Antilles 1,340 1,041 980 1,304 1,434 1,238 1,055 1,269 1,079 1,500 39 Panama 6,645 5,436 4,744 2,749 2,566 2,492 2,400 2,369 2,233 2,304 40 Peru 1,947 1,661 1,329 1,283 1,297 1,149 1,136 1,192' 1,080 1,065 41 Uruguay 960 940 968 913 880 885 878 920 891 850 42 Venezuela 10,871 11,108 10,838 10,944 10,833 10,912 11,016 10,794' 10,753 10,720 43 Other Latin America and Caribbean 2,067 1,936 1,738 1,805 1,719 1,631 1,686 1,649' 1,636 1,709 44 66,212 96,126 110066,,002255 110088,,339955 111133,,779977 112200,,112200 113300,,444433 112288,,661155'' 112288,,225599 112244,,997700 China 45 Mainland 639 787 968 1,135 841 1,065 1,033 1,017' 1,180 928 46 Taiwan 1,535 2,681 4,577 3,812 3,805 3,957 3,562 3,241 2,829 2,940 47 Hong Kong 6,797 8,307 8,216 6,343 8,356 9,632 8,342 7,451 8,440 9,431 48 India 450 321 510 542 507 499 508 548 540 634 49 Indonesia 698 723 580 643 631 695 688 703 738 739 50 Israel 1,991 1,634 1,363 1,284 1,259 1,213 1,206 1,174 1,180 1,170 51 Japan 31,249 59,674 68,628 75,166 78,638 82,361 93,093 92,806 90,599 87,652 52 Korea 9,226 7,182 5,127 4,781 4,886 4,987 4,882 4,853' 5,126 5,134 53 Philippines 2,224 2,217 2,071 1,959 2,012 2,055 2,029 2,030 2,009 1,912 54 Thailand 845 578 496 516 596 641 668 683 759 766 55 Middle East oil-exporting countries 4,298 4,122 4,858 4,077 3,541 4,573 6,400 6,215' 6,400 5,407 56 Other Asia 6,260 7,901 8,633 8,136 8,725 8,441 8,031 7,891 8,462 8,257 57 Africa 5,407 4,650 4,742 4,879 5,092 5,423 5,493 5,462 5,462 5,722 58 Egypt 721 567 521 483 503 605 539 530 535 540 59 Morocco 575 598 542 495 483 484 481 478' 478 474 60 South Africa 1,942 1,550 1,507 1,439 1,496 1,693 1,726 1,711' 1,702 1,706 61 Zaire 20 28 15 47 42 41 38 36 16 17 62 Oil-exporting countries 630 694 1,003 1,138 1,244 1,275 1,340 1,359' 1,388 1,484 63 Other 1,520 1,213 1,153 1,276 1,324 1,325 1,369 1,348 1,343 1,501 64 Other countries 3,390 3,294 3,230 2,216 2,419 2,551 2,414 2,341' 2,167 2,735 65 Australia 2,413 1,949 2,191 1,360 1,413 1,678 1,554 1,499 1,392 1,876 66 Allother 978 1,345 1,039 856 1,006 873 860 842 775 859 67 Nonmonetary international and regional organizations 1,030 3,021 3,404 1,362 1,147 2,545 3,156 3,262' 7,019 3,376 1. Reporting banks include all kinds of depository institutions besides commer- 4. Included in "Other Latin America and Caribbean" through March 1978. cial banks, as well as some brokers and dealers.. 5. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 2. Includes the Bank for International Settlements. Beginning April 1978, also United Arab Emirates (Trucial States). includes Eastern European countries not listed in line 23. 6. Comprises Algeria, Gabon, Libya, and Nigeria. 3. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German 7. Excludes the Bank for International Settlements, which is included in Democratic Republic, Hungary, Poland, and Romania. "Other Western Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A63 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 1988 TTyyppee ooff ccllaaiimm 11998855 11998866 11998877 Apr. May June July Aug/ Sept. Oct." 1 Total 444444433333330000000,,,,,,,444444488888889999999 444444477777778888888,,,,,,,666666655555550000000 444444499999997777777,,,,,,,444444466666664444444 444444499999994444444,,,,,,,888888844444443333333 555555511111119999999,,,,,,,222222266666668888888 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 444444400000001111111,,,,,,,666666600000008888888 444444444444444444444,,,,,,,777777744444445555555 444444455555559999999,,,,,,,777777700000006666666 432,679 450,678 444444455555559999999,,,,,,,444444411111111111111 471,697 471,536 444444488888883333333,,,,,,,444444466666667777777 464,679 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666660000000,,,,,,,555555500000007777777 66666664444444,,,,,,,000000099999995555555 66666664444444,,,,,,,777777700000003333333 61,173 61,276 66666662222222,,,,,,,777777711111111111111 63,212 62,532 66666665555555,,,,,,,000000066666663333333 59,959 44 OOwwnn ffoorreeiiggnn ooffffiicceess 111111177777774444444,,,,,,,222222266666661111111 222222211111111111111,,,,,,,555555533333333333333 222222222222224444444,,,,,,,555555566666667777777 211,576 225,498 222222233333330000000,,,,,,,555555522222227777777 240,342 238,627 222222255555550000000,,,,,,,333333333333332222222 236,092 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111111111116666666,,,,,,,666666655555554444444 111111122222222222222,,,,,,,999999944444446666666 111111122222227777777,,,,,,,555555577777773333333 117,539 122,447 111111122222223333333,,,,,,,444444411111118888888 127,181 128,305 111111122222224444444,,,,,,,888888822222227777777 122,419 66 DDeeppoossiittss 44444448888888,,,,,,,333333377777772222222 55555557777777,,,,,,,444444488888884444444 66666660000000,,,,,,,444444499999990000000 55,984 57,502 55555558888888,,,,,,,888888800000006666666 59,769 60,281 66666661111111,,,,,,,444444400000008888888 54,896 77 OOtthheerr 66666668888888,,,,,,,222222288888882222222 66666665555555,,,,,,,444444466666662222222 66666667777777,,,,,,,000000088888883333333 61,555 64,945 66666664444444,,,,,,,666666611111112222222 67,413 68,024 66666663333333,,,,,,,444444411111119999999 67,524 88 AAllll ootthheerr ffoorreeiiggnneerrss 55555550000000,,,,,,,111111188888885555555 44444446666666,,,,,,,111111177777771111111 44444442222222,,,,,,,888888866666663333333 42,391 41,458 44444442222222,,,,,,,777777755555555555555 40,962 42,072 44444443333333,,,,,,,222222244444444444444 46,209 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 22222228888888,,,,,,,888888888888881111111 33333333333333,,,,,,,999999900000005555555 33333337777777,,,,,,,777777755555558888888 33333335555555,,,,,,,444444433333332222222 33333335555555,,,,,,,888888800000001111111 3333333,,,,,,,333333333333335555555 4444444,,,,,,,444444411111113333333 3333333,,,,,,,666666699999992222222 4444444,,,,,,,888888844444443333333 5555555,,,,,,,333333399999991111111 11 Negotiable and readily transferable 11111119999999,,,,,,,333333333333332222222 22222224444444,,,,,,,000000044444444444444 22222226666666,,,,,,,666666699999996666666 22222224444444,,,,,,,111111122222220000000 22222220000000,,,,,,,999999911111116666666 12 Outstanding collections and other 6666666,,,,,,,222222211111114444444 5555555,,,,,,,444444444444448888888 7777777,,,,,,,333333377777770000000 6666666,,,,,,,444444466666668888888 9999999,,,,,,,444444499999994444444 13 MEMO: Customer liability on 22222228888888,,,,,,,444444488888887777777 22222225555555,,,,,,,777777700000006666666 22222223333333,,,,,,,333333322222229999999 11111119999999,,,,,,,666666611111118888888 11111118888888,,,,,,,666666699999990000000 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States .... 38,102 43,974 40,059 43,147 44,425 42,243 46,796R 49,720 42,635 n.a. 1. Data for banks' own claims are given on a monthly basis, but the data for and foreign branches, agencies, or wholly owned subsidiaries of head office or claims of banks' own domestic customers are available on a quarterly basis only. parent foreign bank. Reporting banks include all kinds of depository institutions besides commercial 3. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for the account banks, as well as some brokers and dealers. of their domestic customers. 2. U.S. banks: includes amounts due from own foreign branches and foreign 4. Principally negotiable time certificates of deposit and bankers acceptances. subsidiaries consolidated in "Consolidated Report of Condition" filed with bank 5. Includes demand and time deposits and negotiable and nonnegotiable regulatory agencies. Agencies, branches, and majority-owned subsidiaries of certificates of deposit denominated in U.S. dollars issued by banks abroad. For foreign banks: principally amounts due from head office or parent foreign bank, description of changes in data reported by nonbanks, see July 1979 BULLETIN, p. 550. 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1987 1988 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998844 11998855 11998866 Dec. Mar. June Sept." 1 ToUl 243,952 227,903 232,295 235,037 218,843 227,521 229,178 By borrower 2 Maturity of 1 year or less2 167,858 160,824 160,555 163,895 151,998 162,874 166,739 3 Foreign public borrowers 23,912 26,302 24,842 26,001 24,253 25,608 27,591 4 All other foreigners 143,947 134,522 135,714 137,894 127,745 137,267 139,148 5 Maturity over 1 year 76,094 67,078 71,740 71,142 66,845 64,647 62,439 6 Foreign public borrowers 38,695 34,512 39,103 38,652 35,836 35,605 35,074 7 All other foreigners 37,399 32,567 32,637 32,491 31,009 29,042 27,365 By area Maturity of 1 year or less 8 Europe 58,498 56,585 61,784 59,068 51,464 55,169 53,896 9 Canada 6,028 6,401 5,895 5,684 4,937 6,425 5,907 10 Latin America and Caribbean 62,791 63,328 56,271 56,494 55,433 56,298 55,609 11 Asia 33,504 27,966 29,457 35,938 35,505 38,965 42,327 1? Africa 4,442 3,753 2,882 2,824 2,596 2,914 3,112 N All other3 2,593 2,791 4,267 3,887 2,062 3,103 5,887 Maturity of over 1 year 14 Europe 9,605 7,634 6,737 6,867 6,040 5,401 5,272 15 Canada 1,882 1,805 1,925 2,661 2,239 2,337 2,070 16 Latin America and Caribbean 56,144 50,674 56,719 53,817 51,583 49,775 48,280 17 Asia 5,323 4,502 4,043 3,668 3,669 3,699 4,015 18 Africa 2,033 1,538 1,539 1,747 2,201 2,429 2,261 19 All other3 1,107 926 777 2,381 1,114 1,006 541 1. Reporting banks include all kinds of depository institutions besides commer- 2. Remaining time to maturity, cial banks, as well as some brokers and dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics: • February 1989 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks12 Billions of dollars, end of period 1986 1987 1988 Area or country 1984 170 J Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. 1 Total 405.7 385.4 381.6 385.1 394.8 384.6 387.7 381.3 372.3 353.1 359.4 2 G-10 countries and Switzerland 148.1 146.0 154.8 156.6 162.7 158.1 155.2 159.9 156.5 150.5 150.3 3 Belgium-Luxembourg 8.7 9.2 8.3 8.3 9.1 8.3 8.2 10.1 9.3 9.2 9.5 4 France 14.1 12.1 14.5 13.7 13.3 12.5 13.7 13.8 11.5 10.8 10.0 5 Germany 9.0 10.5 12.4 11.6 12.7 11.2 10.5 12.6 11.8 10.6 8.9 6 Italy 10.1 9.6 7.8 9.0 8.6 7.5 6.6 7.3 7.4 6.1 5.9 7 Netherlands 3.9 3.7 3.9 4.6 4.4 7.3 4.8 4.1 3.3 3.3 3.0 8 Sweden 3.2 2.7 2.7 2.4 3.0 2.4 2.6 2.1 2.1 1.9 2.0 9 Switzerland 3.9 4.4 4.7 5.8 5.8 5.7 5.4 5.6 5.1 5.6 5.2 10 United Kingdom 60.3 63.0 68.8 71.0 73.7 72.1 72.1 69.1 71.3 69.8 68.9 11 Canada 7.9 6.8 5.9 5.3 5.3 4.7 4.7 5.5 5.0 5.4 5.2 12 Japan 27.1 23.9 25.8 24.9 26.9 26.4 26.6 29.8 29.7 28.0 31.7 13 Other developed countries 33.6 29.9 28.9 25.7 25.7 25.2 25.9 26.3 26.2 23.7 22.7 14 Austria 1.6 1.5 1.7 1.7 1.9 1.8 1.9 1.9 1.6 1.6 1.6 15 Denmark 2.2 2.3 2.2 1.7 1.7 1.5 1.6 1.7 1.4 1.0 1.1 16 Finland 1.9 1.6 1.6 1.4 1.4 1.4 1.4 1.3 1.0 1.2 1.3 17 Greece 2.9 2.6 2.3 2.3 2.1 2.0 1.9 2.0 2.3 2.2 2.1 18 Norway 3.0 2.9 2.7 2.4 2.2 2.1 2.0 2.3 2.0 2.0 2.0 19 Portugal 1.4 1.2 1.0 .8 .8 .8 .8 .5 .4 .4 .4 20 Spain 6.5 5.8 6.7 5.8 6.3 6.1 7.4 8.0 9.0 7.2 6.3 21 Turkey 1.9 1.8 1.9 1.8 1.7 1.7 1.5 1.6 1.6 1.5 1.3 22 Other Western Europe 1.7 2.0 1.6 1.4 1.4 1.5 1.6 1.6 1.9 1.6 1.9 23 South Africa 4.5 3.2 3.0 3.0 3.0 3.0 2.9 2.9 2.8 2.8 2.7 24 Australia 6.0 5.0 4.2 3.5 3.2 3.1 2.9 2.5 2.1 2.2 1.8 25 OPEC countries3 24.9 21.3 19.7 19.3 20.0 18.8 19.0 17.1 17.1 16.4 17.6 26 Ecuador 2.2 2.1 2.2 2.2 2.1 2.1 2.1 1.9 1.9 1.8 1.8 27 Venezuela 9.3 8.9 8.7 8.6 8.5 8.4 8.3 8.1 8.1 8.0 7.9 28 Indonesia 3.3 3.0 2.8 2.5 2.4 2.2 2.0 1.9 1.9 1.8 1.9 29 Middle East countries 7.9 5.3 4.4 4.3 5.4 4.4 5.0 3.6 3.6 3.1 4.3 30 African countries 2.3 2.0 1.7 1.7 1.6 1.7 1.7 1.7 1.7 1.7 1.7 31 Non-OPEC developing countries 111.8 104.2 99.1 99.1 100.3 100.5 97.7 97.7 94.0 91.3 87.0 Latin America 32 Argentina 8.7 8.8 9.2 9.5 9.5 9.5 9.3 9.4 9.5 9.4 9.2 33 Brazil 26.3 25.4 25.2 25.2 26.1 25.1 25.1 24.7 23.9 23.7 22.4 34 Chile 7.0 6.9 7.1 7.1 7.2 7.2 7.0 6.9 6.6 6.4 6.2 35 Colombia 2.9 2.6 1.9 2.1 2.0 1.9 1.9 2.0 1.9 2.1 2.1 36 Mexico 25.7 23.9 23.9 23.8 23.9 25.3 24.8 23.7 22.5 21.1 20.6 37 Peru 2.2 1.8 1.5 1.4 1.4 1.3 1.2 1.1 1.1 .9 .8 38 Other Latin America 3.9 3.4 3.3 3.1 3.0 2.9 2.8 2.7 2.8 2.6 2.5 Asia China 39 Mainland .7 .5 .6 .4 .9 .6 .3 .3 .4 .3 .3 40 Taiwan 5.1 4.5 4.3 4.9 5.5 6.6 6.0 8.2 6.1 4.9 3.1 41 India .9 1.2 1.3 1.2 1.7 1.7 1.9 1.9 2.1 2.3 2.0 42 Israel 1.8 1.6 1.4 1.5 1.4 1.3 1.3 1.0 1.0 1.0 1.0 43 Korea (South) 10.6 9.2 7.1 6.6 6.2 5.6 5.0 4.9 5.6 5.9 6.0 44 Malaysia 2.7 2.4 2.1 2.1 1.9 1.7 1.6 1.5 1.5 1.5 1.6 45 Philippines 6.0 5.7 5.4 5.4 5.4 5.4 5.4 5.1 5.1 4.9 4.5 46 Thailand 1.8 1.4 1.0 .9 .9 .8 .7 .7 1.0 1.1 1.2 47 Other Asia 1.1 1.0 .6 .7 .6 .7 .7 .7 .7 .8 .8 Africa 48 Egypt 1.2 1.0 .7 .7 .6 .6 .6 .5 .5 .6 .5 49 Morocco .8 .9 .9 .9 .9 .9 .8 .9 .9 .9 .8 50 Zaire .1 .1 .1 .1 .1 .1 .1 .0 .1 .1 .0 51 Other Africa4 2.1 1.9 1.6 1.6 1.4 1.3 1.3 1.3 1.0 1.2 1.2 52 Eastern Europe 4.4 4.1 3.3 3.2 3.0 3.3 3.3 3.0 2.9 3.1 3.1 53 U.S.S.R .1 .1 .1 .1 .1 .3 .5 .4 .3 .4 .4 54 Yugoslavia 2.3 2.2 1.9 1.7 1.6 1.7 1.7 1.6 1.7 1.7 1.7 55 Other 2.0 1.8 1.4 1.4 1.3 1.3 1.2 1.0 .9 1.0 1.1 56 Offshore banking centers 65.6 62.9 58.3 61.3 62.8 60.5 64.3 54.1 54.1 45.9 50.0 57 Bahamas 21.5 21.2 19.6 22.0 23.8 19.9 25.5 17.1 18.3 12.1 17.0 58 Bermuda .9 .7 .4 .7 .8 .6 .6 .6 .8 1.0 .9 59 Cayman Islands and other British West Indies 11.8 11.6 11.3 12.4 12.1 13.9 12.8 13.1 11.7 10.0 10.6 60 Netherlands Antilles 3.4 2.2 1.8 1.8 1.7 1.3 1.2 1.2 1.3 1.2 1.2 6 6 1 2 P L a e n b a a m no a n 6.7] 6.0] 5.1 J 4.0 J 4.2 3.9 3.7 3.7 3. . 2 1 3. . 0 1 2. . 7 1 63 Hong Kong 11.4 11.4 10.3 U.l 11.4 12^5 12.3 11.2 11.3 11.7 10.6 6 6 4 5 O Si t n h g e a r p s6 o re 9. . 8 0 9. . 8 0 9. . 7 0 9. . 2 0 8. . 6 0 8. . 3 0 8. . 1 0 7. . 0 0 7. . 4 0 6. . 8 0 7. . 0 0 66 Miscellaneous and unallocated7 17.3 16.9 17.3 19.8 20.1 18.1 22.3 23.2 21.5 22.2 28.4 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 A65 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1987 1988 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998844 11998855 11998866 June Sept. Dec. Mar. June 1 29,357 27,825 25,779 29,019 28,669 27,590 28,840 29,299r 2 Payable in dollars 26,389 24,2% 21,980 24,565 24,141 22,253 23,246 24,047r 3 Payable in foreign currencies 2,968 3,529 3,800 4,454 4,528 5,337 5,594 5,252r By type 4 Financial liabilities 14,509 13,600 12,312 14,0% 13,034 11,574 13,066 13,009r 5 Payable in dollars 12,553 11,257 9,827 11,197 10,080 8,097 9,384 9,513r 6 Payable in foreign currencies 1,955 2,343 2,485 2,899 2,954 3,477 3,681 3,497 7 Commercial liabilities 14,849 14,225 13,467 14,923 15,635 16,016 15,774 16,29c 8 Trade payables 7,005 6,685 6,462 7,286 7,548 7,425 6,601 6,873r 9 Advance receipts and other liabilities 7,843 7,540 7,004 7,637 8,086 8,591 9,173 9,417 10 Payable in dollars 13,836 13,039 12,153 13,368 14,061 14,156 13,862 14,534r 11 Payable in foreign currencies 1,013 1,186 1,314 1,555 1,574 1,859 1,912 l,755r By area or country Financial liabilities 12 Europe 6,728 7,700 8,079 9,713 9,298 7,794 8,939 8,71c 13 Belgium-Luxembourg 471 349 270 257 230 202 241 267 14 France 995 857 661 822 615 364 365 330 15 Germany 489 376 368 402 505 583 586 623 16 Netherlands 590 861 704 669 641 1,014 1,013 879r 17 Switzerland 569 610 646 655 685 493 652 705 18 United Kingdom 3,297 4,305 5,140 6,646 6,357 4,946 5,900 5,733 19 Canada 863 839 399 441 397 400 467 458 20 Latin America and Caribbean 5,086 3,184 1,961 1,744 %1 847 1,195 l,175r 21 Bahamas 1,926 1,123 614 398 280 278 249 211 22 Bermuda 13 4 4 0 0 0 0 0 23 Brazil 35 29 32 22 22 25 23 19 24 British West Indies 2,103 1,843 1,163 1,223 580 476 824 879r 25 Mexico 367 15 22 29 17 13 15 26 26 Venezuela 137 3 0 2 3 0 2 0 27 Asia 1,777 1,815 1,805 2,131 2,300 2,429 2,379 2,591 28 Japan 1,209 1,198 1,398 1,751 1,830 2,042 1,987 2,063 29 Middle East oil-exporting countries 155 82 8 7 7 8 12 11 30 Africa 14 12 1 1 2 4 5 2 31 Oil-exporting countries 0 0 1 0 0 1 3 1 32 Allother4 41 50 67 66 76 100 80 73 Commercial liabilities 33 Europe 4,001 4,074 4,447 4,966 4,951 5,626 5,757 5,839' 34 Belgium-Luxembourg 48 62 101 111 59 125 148 150 35 France 438 453 352 423 437 451 441 433 36 Germany 622 607 714 585 674 916 817 798 37 Netherlands 245 364 424 324 336 421 484 535 38 Switzerland 257 379 387 557 556 559 529 482' 39 United Kingdom 1,095 976 1,341 1,380 1,473 1,668 1,798 1,850 40 Canada 1,975 1,449 1,405 1,371 1,399 1,301 1,393 1,169 41 Latin America and Caribbean 1,871 1,088 924 1,069 1,082 865 937 994' 42 Bahamas 7 12 32 13 22 19 17 58r 43 Bermuda 114 77 156 266 252 168 325 272 44 Brazil 124 58 61 88 40 46 59 54 45 British West Indies 32 44 49 67 47 19 14 28 46 Mexico 586 430 217 214 231 189 164 233 47 Venezuela 636 212 216 203 176 162 85 111 48 Asia 5,285 6,046 5,091 5,919 6,511 6,573 5,899 6,270 49 Japan 1,256 1,799 2,052 2,481 2,422 2,580 2,509 2,659 50 Middle East oil-exporting countries • 2,372 2,829 1,679 1,867 2,104 1,964 1,069 1,320 51 Africa 588 587 619 524 572 574 576 624 52 Oil-exporting countries 233 238 197 166 151 135 159 115 53 All other4 1,128 982 980 1,074 1,119 1,078 1,212 1,394 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

A66 International Statistics: • February 1989 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1987 1988 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998844 11998855 11998866 June Sept. Dec. Mar. June 1 29,901 28,876 36,248 33,578 33,209 32,285 31,389 38,476r 2 Payable in dollars 27,304 26,574 33,850 30,597 30,648 29,192 29,410 36,567' 3 Payable in foreign currencies 2,597 2,302 2,399 2,981 2,561 3,093 1,979 1,909' By type 4 Financial claims 19,254 18,891 26,273 23,686 22,857 21,747 20,606 26,847' 5 Deposits 14,621 15,526 19,916 16,014 17,286 15,535 13,205 19,808' 6 Payable in dollars 14,202 14,911 19,331 14,775 16,377 14,089 12,650 19,117' 7 Payable in foreign currencies 420 615 585 1,238 908 1,447 555 691 8 Other financial claims 4,633 3,364 6,357 7,673 5,572 6,212 7,400 7,039' 9 Payable in dollars 3,190 2,330 5,005 6,391 4,447 5,099 6,349 6,237' 10 Payable in foreign currencies 1,442 1,035 1,352 1,282 1,124 1,113 1,051 803 11 Commercial claims 10,646 9,986 9,975 9,892 10,352 10,537 10,784 11,628' 12 Trade receivables 9,177 8,696 8,783 8,848 9,399 9,530 9,726 10,571' 13 Advance payments and other claims 1,470 1,290 1,192 1,043 953 1,007 1,057 1,057' 14 Payable in dollars 9,912 9,333 9,513 9,431 9,824 10,005 10,410 11,213' 13 Payable in foreign currencies 735 652 462 461 528 533 373 415' By area or country Financial claims 16 Europe 5,762 6,929 10,744 11,468 10,785 10,666 10,340 12,495' 17 Belgium-Luxembourg 15 10 41 6 26 6 15 15 18 France 126 184 138 169 171 359 328 174 19 Germany 224 223 116 % 103 72 85 154 20 Netherlands 66 161 151 140 157 348 334 333 21 Switzerland 66 74 185 98 44 76 56 82' 22 United Kingdom 4,864 6,007 9,855 10,745 10,074 9,561 9,276 11,371' 23 Canada 3,988 3,260 4,808 3,712 3,294 3,294 2,840 3,009 24 Latin America and Caribbean 8,216 7,846 9,291 7,638 7,579 6,831 6,511 10,847' 25 Bahamas 3,306 2,698 2,628 2,589 3,299 1,804 2,268 4,121 26 Bermuda 6 6 6 6 2 7 43 126 27 Brazil 100 78 86 115 113 64 86 46 28 British West Indies 4,043 4,571 6,078 4,429 3,716 4,439 3,580 6,051' 29 Mexico 215 180 174 168 174 172 154 147 30 Venezuela 125 48 21 20 18 19 35 23 31 Asia 961 731 1,317 789 1,105 830 841 416' 32 Japan 353 475 999 452 737 550 673 184 33 Middle East oil-exporting countries 13 4 7 6 10 10 8 6 34 Africa 210 103 85 59 71 65 53 61 35 Oil-exporting countries 85 29 28 9 14 7 7 10 36 All other4 117 21 28 20 24 61 21 20 Commercial claims 37 Europe 3,801 3,533 3,708 3,845 4,120 4,132 4,135 4,900' 38 Belgium-Luxembourg 165 175 133 137 169 179 192 159 39 France 440 426 414 439 416 595 485 686' 40 Germany 374 346 444 526 550 560 629 769' 41 Netherlands 335 284 164 172 190 133 151 173 42 Switzerland 271 284 217 187 206 185 173 262' 43 United Kingdom 1,063 898 999 1,074 1,228 1,086 1,084 1,300 44 Canada 1,021 1,023 934 1,046 1,051 931 1,167 946' 45 Latin America and Caribbean 2,052 1,753 1,857 1,727 1,711 1,912 1,963 2,093' 46 Bahamas 8 13 28 14 12 19 14 13 47 Bermuda 115 93 193 169 143 159 171 174 48 Brazil 214 206 234 204 231 226 215 233 49 British West Indies 7 6 39 19 20 26 24 25 50 Mexico 583 510 412 347 369 366 371 399' 51 Venezuela 206 157 237 204 192 298 322 344 52 Asia 3,073 2,982 2,755 2,642 2,800 2,919 2,867 3,009^ 53 Japan 1,191 1,016 881 952 1,027 1,160 1,109 1,168 54 Middle East oil-exporting countries 668 638 563 452 434 450 412 449 55 Africa 470 437 500 378 407 401 420 423 56 Oil-exporting countries' 134 130 139 123 124 144 157 136 57 All other4 229 257 222 255 262 241 231 257 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 A67 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1988 1988 Transactions, and area or country 1986 1987 Jan.- Apr. May June July Aug. Sept. Oct." Oct. U.S. corporate securities STOCKS 1 Foreign purchases 148,114 249,113 157,676 15,022 13,654 20,007 19,207 17,275 11,971 13,205 2 Foreign sales 129,395 232,849 158,661 13,705 14,723 19,678 18,383 16,704 12,552 14,824 3 Net purchases, or sales (-) 18,719 16,264 -985 1,317 -1,069 329 824 572 -581 -1,619 4 Foreign countries 18,927 16,313 -832 1,300 -976 287 793 548 -554 -1,506 Europe 9,559 1,928 -1,772 481 -1,151 33 227 287 -616 -128 6 France 459 905 -168 -1 -153 121 -34 -21 -37 89 7 Germany 341 -74 301 104 -66 -36 -3 9 -14 106 8 Netherlands 936 892 -506 -145 -43 -56 20 -5 -56 15 9 Switzerland 1,560 -1,123 -1,710 -17 -247 -204 -90 -37 -506 -216 10 United Kingdom 4,826 630 -43 429 -711 146 253 234 245 -41 11 Canada 816 1,048 236 241 102 -172 58 162 44 -118 12 Latin America and Caribbean 3,031 1,314 1,150 230 -82 -116 58 159 310 376 13 Middle East' 976 -1,360 -2,501 24 62 -549 -159 91 -188 -846 14 Other Asia 3,876 12,8% 1,791 372 106 1,039 518 -228 -127 -693 15 Japan 3,305 11,365 2,197 262 85 1,187 475 -282 24 -626 16 Africa 297 123 168 19 23 3 78 41 5 5 17 Other countries 373 365 % -67 -35 51 13 36 19 -102 18 Nonmonetary international and regional organizations -208 -48 -153 17 -92 42 31 23 -28 -112 BONDS2 19 Foreign purchases 123,169 105,856 70,324 5,618 7,810 8,341 8,277 5,966 7,450 7,585 20 Foreign sales 72,520 78,312 48,175 4,433 3,518 4,590 5,064 4,144 4,953 4,647 21 Net purchases, or sales (-) 50,648 27,544 22,149 1,185 4,292 3,751 3,213 1,822 2,497 2,938 22 Foreign countries 49,801 26,804 22,730 1,186 4,262 3,569 3,190 1,837 2,433 3,063 23 Europe 39,313 21,989 14,364 658 2,256 2,203 1,744 1,482 1,639 2,384 24 France 389 194 260 7 -18 15 -7 5 90 45 25 Germany -251 33 1,422 347 11 226 8 166 160 65 26 Netherlands 387 269 829 58 180 55 17 41 415 48 77 Switzerland 4,529 1,587 271 -15 152 -71 -139 84 97 175 28 United Kingdom 33,900 19,770 10,744 228 1,886 1,738 1,685 1,188 821 1,839 29 Canada 548 1,2% 528 104 98 216 130 27 -155 20 30 Latin America and Caribbean 1,552 2,857 1,616 % 141 174 254 193 45 198 31 Middle East1 -3,113 -1,314 -476 -54 -4 -124 -101 -87 -14 -45 37 Other Asia 11,346 2,021 6,724 373 1,755 1,091 1,152 254 916 502 33 Japan 9,611 1,622 5,748 336 1,641 1,049 1,035 178 575 399 34 Africa 16 16 -7 4 -2 4 0 1 1 4 35 Other countries 139 -61 -19 5 17 5 10 -33 1 -1 36 Nonmonetary international and regional organizations 847 740 -581 -1 31 182 23 -14 64 --112244 Foreign securities 37 Stocks, net purchases, or sales (-) -1,853 1,149 -333 372 905 -154 -126 -257R -57 -124 38 Foreign purchases 49,149 95,263 59,644 5,797 5,964 6,404 7,052 5,904' 5,054 6,071 39 Foreign sales 51,002 94,114 59,978 5,425 5,059 6,558 7,178 6,161 5,111 6,195 40 Bonds, net purchases, or sales (-) -3,685 7,836 -8,849 -137 873 -708 -659 -363 -509 -3,408 41 Foreign purchases 166,992 199,010 174,990 15,593 15,119 17,013 19,224 17,038 25,271 20,502 42 Foreign sales 170,677 206,845 183,838 15,730 14,246 17,721 19,882 17,401 25,780 23,910 43 Net purchases, or sales (-), of stocks and bonds -5,538 -6,687 -9,182 235 1,778 -863 -785 -620' -566 -3,532 44 Foreign countries -6,493 -6,718 -9,526 179 1,562 -774 -759 -650' -547 -3,582 45 Europe -18,026 -12,088 -8,231 483 681 -1,185 -488 -897' -446 -2,886 46 Canada -876 -4,065 -3,541 -406 -162 -186 -319 216 -730 -287 47 Latin America and Caribbean 3,476 828 1,448 538 322 301 -48 -34 290 -120 48 10,858 9,338 975 -407 6% 557 237 -114 189 130 49 Africa 52 89 -38 14 -1 1 11 37 28 -189 50 Other countries -1,977 -820 -138 -43 24 -262 -153 143 121 -230 51 Nonmonetary international and regional organizations 955 31 343 56 216 -89 -26 30 -19 49 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

A68 International Statistics: • February 1989 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1988 1988 Country or area 1986 1987 J O an ct . . - Apr. May June July Aug. Sept. Oct.'' Transactions, net purchases or sales (-) during period1 1 Estimated total2 19,388 25,587 39,475 3,433 11,062 -2,162 905 -383' -2,686 2,597 2 Foreign countries2 20,491 30,889 37,856 3,728 9,972 -3,337 2,156 -149' -2,259 155 3 Europe2 16,326 23,716 12,184 2,332 3,108 -3,226 -1,460 -836 -1,233 -172 4 Belgium-Luxembourg -245 653 860 47 159 -68 122 -209 -333 -23 5 Germany 7,670 13,330 -3,927 1,576 79 -4,241 -4,240 -2,020 -720 277 6 Netherlands 1,283 -913 -365 117 -22 -796 312 -346 -58 53 7 Sweden 132 210 -7% -93 104 -232 -187 175 -121 -162 8 Switzerland2 329 1,917 -712 344 -309 654 -51 344 -1,355 88 9 United Kingdom 4,546 3,975 7,953 97 1,523 47 837 416 2,023 -1,019 10 Other Western Europe 2,613 4,563 9,154 238 1,560 1,420 1,755 803 -663 614 11 Eastern Europe 0 -19 17 5 14 -10 -9 0 -7 1 12 Canada 881 4,526 3,342 133 1,415 669 -314 -315 -167 633 13 Latin America and Caribbean 926 -2,192 287 75 360 -580 0 -312 269 -574 14 Venezuela -96 150 -109 15 1 2 -2 -128 -17 1 15 Other Latin America and Caribbean 1,130 -1,142 536 97 -17 63 57 -292 285 -331 16 Netherlands Antilles -108 -1,200 -140 -36 376 -645 -55 108 1 -244 17 1,345 4,488 20,065 713 4,476 -382 3,246 9l¥ -1,351 289 18 Japan -22 868 18,087 687 2,820 -52 3,006 1,540' -2,841 622 19 -54 -56 3 0 -13 -1 -10 5 31 0 20 All other 1,067 407 1,976 475 626 183 694 391 193 -21 21 Nonmonetary international and regional organizations -1,104 -5,300 1,617 -295 1,090 1,174 -1,252 -234' -428 2,441 22 International -1,430 -4,387 1,922 -334 1,155 1,546 -1,137 -282 -455 2,365 23 Latin American regional 157 3 -51 0 7 -38 -14 -8 0 0 Memo 24 Foreign countries2 20,491 30,889 37,856 3,728 9,972 -3,337 2,156 -40 -2,259 155 25 Official institutions 14,214 31,064 22,238 3,075 5,062 -1,658 -2,362 — 1,450^ -1,439 587 26 Other foreign 6,283 -181 15,619 653 4,910 -1,678 4,518 1,301' -821 -431 Oil-exporting countries 27 Middle East3 -1,529 -3,142 -1,287 514 -612 -201 295 449 -182 -1,023 28 Africa4 5 16 1 0 0 0 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 A69 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per year Rate on Dec. 31, 1988 Rate on Dec. 31, 1988 Rate on Dec. 31, 1988 Country Country Country Percent e M ffe o c n t t i h v e Percent e M ffe o c n t t i h v e Percent e M ffe o c n t t i h v e Austria.. 4.0 Aug. 1988 France1 7.75 Dec. 1988 Norway 8.0 June 1983 Belgium . 7.5 Dec. 1988 Germany, Fed. Rep. of. 3.5 Aug. 1988 Switzerland „ 3.5 Dec. 1988 Brazil ... 49.0 Mar. 1981 Italy 12.5 Aug. 1988 United Kingdom' Canada.. 11.17 Dec. 1988 Japan 2.5 Feb. 1987 Venezuela 8.0 Oct. 1985 Denmark 7.0 Oct. 1983 Netherlands 4.5 Dec. 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 1988 CCoouunnttrryy,, oorr ttyyppee 11998866 11998877 11998888 June July Aug. Sept. Oct. Nov. Dec. 1 Eurodollars 6.70 7.07 7.86 7.61 8.09 8.47 8.31 8.51 8.91 9.30 2 United Kingdom 10.87 9.65 10.28 8.91 10.45 11.29 12.09 11.94 12.23 13.07 3 Canada 9.18 8.38 9.63 9.44 9.42 9.92 10.48 10.48 10.86 11.15 4 Germany 4.58 3.97 4.28 3.88 4.88 5.28 4.93 5.03 4.91 5.32 5 Switzerland 4.19 3.67 2.94 2.82 3.67 3.57 3.34 3.62 4.10 4.77 6 Netherlands 5.56 5.24 4.72 4.10 4.85 4.50 5.51 5.35 5.30 5.60 7 France 7.68 8.14 7.80 7.27 7.32 7.58 7.86 7.87 8.03 8.36 8 Italy 12.60 11.15 11.04 10.90 11.02 11.02 11.27 11.30 11.48 11.96 9 Belgium 8.04 7.01 6.69 6.04 6.84 7.25 7.39 7.24 7.18 7.38 10 Japan 4.96 3.87 3.% 3.82 3.84 3.98 4.15 4.26 4.22 4.16 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

A70 International Statistics • February 1989 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar 1988 CCoouunnttrryy//ccuurrrreennccyy 11998866 11998877 11998888 July Aug. Sept. Oct. Nov. Dec. 1 Australia/dollar2 67.093 70.136 78.408 80.00 80.57 79.15 80.% 85.07 85.73 2 Austria/schilling 15.260 12.649 12.357 12.991 13.281 13.135 12.777 12.307 12.359 3 Belgium/franc 44.662 37.357 36.783 38.649 39.562 39.149 38.077 36.670 36.815 4 Canada/dollar 1.3896 1.3259 1.2306 1.2075 1.2237 1.2267 1.2055 1.2186 1.1962 5 China, P.R./yuan 3.4615 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 6 Denmark/krone 8.0954 6.8477 6.7411 7.0266 7.2280 7.1764 7.0055 6.7547 6.7891 7 Finland/markka 5.0721 4.4036 4.1933 4.3896 4.4720 4.4282 4.3041 4.1522 4.1408 8 France/franc 6.9256 6.0121 5.9594 6.2241 6.3919 6.3515 6.1975 5.9746 5.9994 9 Germany/deutsche mark 2.1704 1.7981 1.7569 1.8466 1.8880 1.8668 1.8165 1.7491 1.7563 10 Greece/drachma 139.93 135.47 142.00 147.85 151.62 151.47 148.71 145.22 146.10 11 Hong Kong/dollar 7.8037 7.7985 7.8071 7.8135 7.8050 7.8106 7.8133 7.8095 7.8062 12 India/rupee 12.597 12.943 13.899 14.079 14.217 14.490 14.720 14.966 15.019 13 Ireland/punt2 134.14 148.79 152.49 145.49 142.17 143.60 147.30 152.70 152.29 14 Italy/lira 1491.16 1297.03 1302.39 1367.26 1397.93 1393.15 1353.36 1300.22 1295.61 15 Japan/yen 168.35 144.60 128.17 133.02 133.77 134.32 128.68 123.20 123.61 16 Malaysia/rinegit 2.5830 2.5185 2.6189 2.6267 2.6520 2.6643 2.6785 2.6779 2.6935 17 Netherlands/guilder 2.4484 2.0263 1.9778 2.0827 2.1319 2.1063 2.0486 1.9729 1.9824 18 New Zealand/dollar2 52.456 59.327 65.558 66.832 64.815 61.480 62.113 64.067 63.621 19 Norway/krone 7.3984 6.7408 6.5242 6.7207 6.9016 6.9150 6.7400 6.57% 6.5234 20 Portugal/escudo 149.80 141.20 144.26 150.42 153.72 154.18 150.13 145.57 145.56 21 Singapore/dollar 2.1782 2.1059 2.0132 2.0459 2.0417 2.0409 2.0202 1.9616 1.9442 22 South Africa/rand 2.2918 2.0385 2.1900 2.3985 2.4531 2.4575 2.4662 2.3943 2.3487 23 South Korea/won 884.61 825.93 734.51 728.67 725.74 723.00 712.72 696.08 687.89 24 Spain/peseta 140.04 123.54 116.52 122.27 124.122 124.36 120.02 115.17 113.73 25 Sri Lanka/rupee 27.933 29.471 31.847 31.782 32.807 32.953 32.989 32.989 33.016 26 Sweden/krona 7.1272 6.3468 6.1369 6.3542 6.4878 6.4448 6.2694 6.0%8 6.0888 27 Switzerland/franc 1.7979 1.4918 1.4642 1.5343 1.5837 1.5763 1.5372 1.4675 1.4799 28 Taiwan/dollar 37.837 31.756 28.636 28.726 28.693 28.914 28.880 28.170 28.199 29 Thailand/baht 26.314 25.774 25.312 25.523 25.560 25.548 25.365 25.146 25.146 30 United Kingdom/pound 146.77 163.98 178.13 170.51 169.65 168.40 173.87 180.85 182.58 MEMO 31 United States/dollar3 112.22 96.94 92.72 96.53 98.29 97.91 95.10 91.91 91.88 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.'i (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

A71 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTAION 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 po- "U.S. government securities" may include guaranteed litical subdivisions. issues of U.S. government agencies (the flow of funds figures In some of the tables, details do not add to totals because also include not fully guaranteed issues) as well as direct of rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 1988 All 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, September 30, 1987 February 1988 A76 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1987 June 1988 A76 Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1988 September 1988 A82 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1988 January 1989 A78 Terms of lending at commercial banks, November 1987 September 1988 A76 Terms of lending at commercial banks, February 1988 May 1988 A70 Terms of lending at commercial banks, May 1988 September 1988 A70 Terms of lending at commercial banks, August 1988 January 1989 A72 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 statements for priced service operations, March 31, 1988 August 1988 A70 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 BOB STAHLY MOORE, Special Assistant to the Board CHARLES J. SLEGMAN, Senior Associate Director DAVID H. HOWARD, Deputy Associate Director ROBERT F. GEMMILL, Staff Adviser LEGAL DIVISION DONALD B. ADAMS, Assistant Director 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 RLCKI R. TLGERT, Assistant General Counsel MARYELLEN A. BROWN, Assistant to the General Counsel MICHAEL J. PRELL, Director EDWARD C. ETTIN, Deputy Director THOMAS D. SIMPSON, Associate Director OFFICE OF THE SECRETARY LAWRENCE SLIFMAN, Associate Director MARTHA BETHEA, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TLNSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary MYRON L. KWAST, Assistant Director BARBARA R. LOWREY, Associate Secretary SUSAN J. LEPPER, Assistant Director MARTHA S. SCANLON, Assistant Director DAVID J. STOCKTON, Assistant Director DIVISION OF CONSUMER JOYCE K. ZICKLER, Assistant Director AND COMMUNITY AFFAIRS LEVON H. GARABEDIAN, Assistant Director (Administration) GRIFFITH L. GARWOOD, Director GLENN E. LONEY, Assistant Director DIVISION OF MONETARY AFFAIRS ELLEN MALAND, Assistant Director DOLORES S. SMITH, Assistant Director DONALD L. KOHN, Director DAVID E. LINDSEY, Deputy Director DIVISION OF BANKING BRIAN F. MADIGAN, Assistant Director RICHARD D. PORTER, Assistant Director SUPERVISION AND REGULATION NORMAND R.V. BERNARD, Special Assistant to the Board WILLIAM TAYLOR, Staff Director DON E. KLINE, Associate Director OFFICE OF THE INSPECTOR GENERAL FREDERICK M. STRUBLE, Associate Director WILLIAM A. RYBACK, Deputy Associate Director BRENT L. BOWEN, Inspector General STEPHEN C. SCHEMERING, Deputy Associate Director RICHARD SPILLENKOTHEN, Deputy Associate Director HERBERT A. BIERN, Assistant Director JOE M. CLEAVER, Assistant Director ROGER T. COLE, 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 JOHN P. LAWARE 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. ROBINSON, Associate Director C. WILLIAM SCHLEICHER, JR., Associate Director DAVID L. SHANNON, Director CHARLES W. BENNETT, Assistant Director JOHN R. WEIS, Associate Director JACK DENNIS, JR., Assistant Director ANTHONY V. DIGIOIA, Assistant Director EARL G. HAMILTON, Assistant Director JOSEPH H. HAYES, JR., Assistant Director JOHN H. PARRISH, Assistant Director FRED HOROWITZ, Assistant Director LOUISE L. ROSEMAN, Assistant Director FLORENCE M. YOUNG, Adviser OFFICE OF THE CONTROLLER GEORGE E. LIVINGSTON, Controller STEPHEN J. CLARK, Assistant Controller (Programs and Budgets) DARRELL R. PAULEY, Assistant Controller (Finance) DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director OFFICE OF THE EXECUTIVE DIRECTOR FOR INFORMATION RESOURCES MANAGEMENT ALLEN E. BEUTEL, Executive Director STEPHEN R. MALPHRUS, Deputy Executive 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

A74 Federal Reserve Bulletin • February 1989 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 JOHN P. LAWARE ROBERT P. FORRESTAL MANUEL H. JOHNSON ROBERT T. PARRY MARTHA R. SEGER ALTERNATE MEMBERS ROGER GUFFEY THOMAS C. MELZER JAMES H. OLTMAN SILAS KEEHN RICHARD F. SYRON 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. LLNDSEY, 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 B. KENNETH WEST, Seventh District WILLARD C. BUTCHER, Second Dis trict DONALD N. BRANDIN, Eighth District SAMUEL A. MCCULLOUGH, Third District LLOYD P. JOHNSON, JR., Ninth District THOMAS H. O'BRIEN, Fourth District JORDAN L. HAINES, Tenth District FREDERICK DEANE, JR., Fifth District JAMES E. BURT III, Eleventh District KENNETH L. ROBERTS, 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 JUDITH N. BROWN, Edina, Minnesota, Chairman WILLIAM E. ODOM, Dearborn, Michigan, Vice Chairman NAOMI G. ALBANESE, Greensboro, North Carolina ROBERT A. HESS, Washington, D.C. GEORGE H. BRAASCH, Chicago, Illinois RAMON E. JOHNSON, Salt Lake City, Utah BETTY TOM CHU, Arcadia, California BARBARA KAUFMAN, San Francisco, California CLIFF E. COOK, Tacoma, Washington A. J. (JACK) KING, Kalispell, Montana JERRY D. CRAFT, Atlanta, Georgia MICHELLE S. MEIER, Washington, D.C. DONALD C. DAY, Boston, Massachusetts RICHARD L. D. MORSE, Manhattan, Kansas R.B. (JOE) DEAN, JR., Columbia, South Carolina LINDA K. PAGE, Columbus, Ohio RICHARD B. DOBY, Denver, Colorado SANDRA PHILLIPS, Pittsburgh, Pennsylvania WILLIAM C. DUNKELBERG, Philadelphia, Pennsylvania VINCENT P. QUAYLE, Baltimore, Maryland RICHARD H. FINK, Washington, D.C. CLIFFORD N. ROSENTHAL, New York, New York JAMES FLETCHER, Chicago, Illinois ALAN M. SILBERSTEIN, New York, New York STEPHEN GARDNER, Dallas, Texas RALPH E. SPURGIN, Columbus, Ohio ELENA G. HANGGI, Little Rock, Arkansas DAVID P. WARD, Peapack, New Jersey JAMES HEAD, Berkeley, California LAWRENCE WINTHROP, Portland, Oregon THRIFT INSTITUTIONS ADVISORY COUNCIL GERALD M. CZARNECKL, Honolulu, Hawaii, President DONALD B. SHACKELFORD, Columbus, Ohio, Vice President CHARLOTTE CHAMBERLAIN, Glendale, California JOE C. MORRIS, Overland Park, Kansas ROBERT S. DUNCAN, Hattiesburg, Mississippi JOSEPH W. MOSMILLER, Baltimore, Maryland ADAM A. JAHNS, Chicago, Illinois LOUIS H. PEPPER, Seattle, Washington H. C. KLEIN, Jacksonville, Arkansas MARION O. SANDLER, Oakland, California PHILIP E. LAMB, Springfield, Massachusetts CHARLES B. STUZIN, Miami, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SER- FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; up- VICES, MS-138, Board of Governors of the Federal Reserve dated at least monthly. (Requests must be prepaid.) System, Washington, D.C. 20551 or telephone (202) 452- Consumer and Community Affairs Handbook. $75.00 per 3244. When a charge is indicated, payment should accom- year. pany request and be made payable to the Board of Governors Monetary Policy and Reserve Requirements Handbook. of the Federal Reserve System. Payment from foreign resi- $75.00 per year. dents should be drawn on a U.S. bank. Securities Credit Transactions Handbook. $75.00 per year. The Payment System Handbook. $75.00 per year. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- Federal Reserve Regulatory Service. 3 vols. (Contains all TIONS. 1984. 120 pp. three Handbooks plus substantial additional material.) ANNUAL REPORT. $200.00 per year. ANNUAL REPORT: BUDGET REVIEW, 1986-87. Rates for subscribers outside the United States are as FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or follows and include additional air mail costs: $2.00 each in the United States, its possessions, Canada, Federal Reserve Regulatory Service, $250.00 per year. and Mexico; 10 or more of same issue to one address, Each Handbook, $90.00 per year. $18.00 per year or $1.75 each. Elsewhere, $24.00 per THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A year or $2.50 each. MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint each. of Part I only) 1976. 682 pp. $5.00. PROCESSING AN APPLICATION THROUGH THE FEDERAL RE- ANNUAL STATISTICAL DIGEST SERVE SYSTEM. August 1985. 30 pp. 1974-78. 1980. 305 pp. $10.00 per copy. INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 1981. 1982. 239 pp. $ 6.50 per copy. 440 pp. $9.00 each. 1982. 1983. 266 pp. $ 7.50 per copy. FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. 1983. 1984. 264 pp. $11.50 per copy. December 1986. 264 pp. $10.00 each. 1984. 1985. 254 pp. $12.50 per copy. 1985. 1986. 231 pp. $15.00 per copy. 1986. 1987. 288 pp. $15.00 per copy. 1987. 1988. 272 pp. $15.00 per copy. CONSUMER EDUCATION PAMPHLETS HISTORICAL CHART BOOK .Issued annually in Sept. $1.25 Short pamphlets suitable for classroom use. Multiple copies each in the United States, its possessions, Canada, and are available without charge. Mexico; 10 or more to one address, $1.00 each. Elsewhere, $1.50 each. Consumer Handbook on Adjustable Rate Mortgages SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- Consumer Handbook to Credit Protection Laws RIES OF CHARTS. Weekly. $24.00 per year or $.60 each in Fair Credit Billing the United States, its possessions, Canada, and Mexico; Federal Reserve Glossary 10 or more of same issue to one address, $22.50 per year A Guide to Business Credit and the Equal Credit Opportunity or $.55 each. Elsewhere, $30.00 per year or $.70 each. Act THE FEDERAL RESERVE ACT, and other statutory provisions Guide to Federal Reserve Regulations affecting the Federal Reserve System, as amended How to File A Consumer Credit Complaint through April 20, 1983, with Supplements covering If You Use A Credit Card amendments through August 1987. 576 pp. $7.00. REGULATIONS OF THE BOARD OF GOVERNORS OF THE Series on the Structure of the Federal Reserve System FEDERAL RESERVE SYSTEM. The Board of Governors of the Federal Reserve System ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— The Federal Open Market Committee Regulation Z) Vol. I (Regular Transactions). 1969. 100 Federal Reserve Bank Board of Directors pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each Federal Reserve Banks volume $2.25; 10 or more of same volume to one Organization and Advisory Committees address, $2.00 each. A Consumer's Guide to Mortgage Lock-Ins INTRODUCTION TO FLOW OF FUNDS. 1980.68 pp. $1.50 each; A Consumer's Guide to Mortgage Closings 10 or more to one address, $1.25 each. A Consumer's Guide to Mortgage Refinancing PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. Making Deposits: When Will Your Money Be Available? $13.50 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All PAMPHLETS FOR FINANCIAL INSTITUTIONS VESTIGATION, by Bonnie E. Loopesko. November Short pamphlets on regulatory compliance, primarily suit- 1983. Out of print. able for banks, bank holding companies and creditors. 134. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET INTERVENTION: A REVIEW OF THE LITERATURE, by Limit of 50 copies Ralph W. Tryon. October 1983. 14 pp. Out of print. 135. SMALL EMPIRICAL MODELS OF EXCHANGE MARKET The Board of Directors' Opportunities in Community Rein- INTERVENTION: APPLICATIONS TO CANADA, GERvestment MANY, AND JAPAN, by Deborah J. Danker, Richard A. The Board of Directors' Role in Consumer Law Compliance Haas, Dale W. Henderson, Steven A. Symansky, and Combined Construction/Permanent Loan Disclosure and Ralph W. Tryon. April 1985. 27 pp. Out of print. Regulation Z 136. THE EFFECTS OF FISCAL POLICY ON THE U.S. ECON- Community Development Corporations and the Federal Re- OMY, by Darrell Cohen and Peter B. Clark. January serve 1984. 16 pp. Out of print. Construction Loan Disclosures and Regulation Z 137. THE IMPLICATIONS FOR BANK MERGER POLICY OF Finance Charges Under Regulation Z FINANCIAL DEREGULATION, INTERSTATE BANKING, How to Determine the Credit Needs of Your Community AND FINANCIAL SUPERMARKETS, by Stephen A. Regulation Z: The Right of Rescission Rhoades. February 1984. Out of print. The Right to Financial Privacy Act 138. ANTITRUST LAWS, JUSTICE DEPARTMENT GUIDE- Signature Rules in Community Property States: Regulation B LINES, AND THE LIMITS OF CONCENTRATION IN LOCAL Signature Rules: Regulation B BANKING MARKETS, by James Burke. June 1984.14 pp. Timing Requirements for Adverse Action Notices: Regula- Out of print. tion B 139. SOME IMPLICATIONS OF FINANCIAL INNOVATIONS IN What An Adverse Action Notice Must Contain: Regulation B THE UNITED STATES, by Thomas D. Simpson and Understanding Prepaid Finance Charges: Regulation Z Patrick M. Parkinson. August 1984. 20 pp. 140. GEOGRAPHIC MARKET DELINEATION: A REVIEW OF THE LITERATURE, by John D. Wolken. November 1984. 38 pp. Out of print. STAFF STUDIES: Summaries Only Printed in the 141. A COMPARISON OF DIRECT DEPOSIT AND CHECK PAY- Bulletin MENT COSTS, by William Dudley. November 1984. Studies and papers on economic and financial subjects that 15 pp. Out of print. are of general interest. Requests to obtain single copies of 142. MERGERS AND ACQUISITIONS BY COMMERCIAL the full text or to be added to the mailing list for the series BANKS, 1960-83, by Stephen A. Rhoades. December may be sent to Publications Services. 1984. 30 pp. Out of print. 143. COMPLIANCE COSTS AND CONSUMER BENEFITS OF Staff Studies 115-125 are out of print. THE ELECTRONIC FUND TRANSFER ACT: RECENT SUR- VEY EVIDENCE, by Frederick J. Schroeder. April 1985. 114. MULTIBANK HOLDING COMPANIES: RECENT EVI- 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 W. 1985. 10 pp. 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 of Greene. August 1984. 16 pp. Out of print. 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 1980-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 INTER- 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF NATIONAL TRADE AND OTHER ECONOMIC VARIABLES: THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- A REVIEW OF THE LITERATURE, by Victoria S. Farrell TION RESULTS, by Flint Brayton and Peter B. Clark. with Dean A. DeRosa and T. Ashby McCown. January December 1985. 17 pp. 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. Ja- Stephen A. Rhoades. April 1986. 32 pp. cobson. 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 RE- John T. Rose and John D. Wolken. May 1986. 13 pp. VIEW OF THE TECHNIQUES AND LITERATURE, by Ken- 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT neth Rogoff. October 1983. 15 pp. PRICING FROM 1983 THROUGH 1985, by Patrick I. Ma- 133. RELATIONSHIPS AMONG EXCHANGE RATES, INTER- honey, Alice P. White, Paul F. O'Brien, and Mary M. VENTION, AND INTEREST RATES: AN EMPIRICAL IN- 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 Survey of Consumer Finances, 1983. 9/84. REVIEW OF THE LITERATURE, by Mark J. Warshawsky. Bank Lending to Developing Countries. 10/84. April 1987. 18 pp. Survey of Consumer Finances, 1983: A Second Report. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and 12/84. Alice P. White. September 1987. 14 pp. Union Settlements and Aggregate Wage Behavior in the 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF 1980s. 12/84. PROPOSED CEILINGS ON CREDIT CARD INTEREST The Thrift Industry in Transition. 3/85. RATES, by Glenn B. Canner and James T. Fergus. A Revision of the Index of Industrial Production. 7/85. October 1987. 26 pp. Financial Innovation and Deregulation in Foreign Industrial 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. Countries. 10/85. Warshawsky. November 1987. 25 pp. Recent Developments in the Bankers Acceptance Market. 1/86. 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANK- The Use of Cash and Transaction Accounts by American ING MARKETS, by James V. Houpt. May 1988. 47 pp. Families. 2/86. Financial Characteristics of High-Income Families. 3/86. Prices, Profit Margins, and Exchange Rates. 6/86. REPRINTS OF BULLETIN ARTICLES Agricultural Banks under Stress. 7/86. Foreign Lending by Banks: A Guide to International and Most of the articles reprinted do not exceed 12 pages. U.S. Statistics. 10/86. Recent Developments in Corporate Finance. 11/86. Limit of 10 copies 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. A Financial Perspective on Agriculture. 1/84. Home Equity Lines of Credit. 6/88. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 Index to Statistical Tables References are to pages A3-A71 although the prefix 'A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 36 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) Automobiles Banks, by classes, 3, 18-20, 21 Consumer installment credit, 39, 40 Federal Reserve Banks, 4, 10 Production, 49, 50 Turnover, 15 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) BANKERS acceptances, 9, 23, 24 Discounts and advances by Reserve Banks (See Loans) Bankers balances, 18-20. (See also Foreigners) Dividends, corporate, 35 Bonds (See also U.S. government securities) New issues, 34 EMPLOYMENT, 47 Rates, 24 Eurodollars, 24 Branch banks, 21, 57 Business activity, nonfinancial, 46 FARM mortgage loans, 38 Business expenditures on new plant and equipment, 35 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business loans (See Commercial and industrial loans) Federal credit agencies, 33 Federal finance Debt subject to statutory limitation, and types and own- CAPACITY utilization, 48 ership of gross debt, 30 Capital accounts Receipts and outlays, 28, 29 Banks, by classes, 18 Treasury financing of surplus, or deficit, 28 Federal Reserve Banks, 10 Treasury operating balance, 28 Federal Financing Bank, 28, 33 Central banks, discount rates, 69 Federal funds, 6, 17, 19, 20, 21, 24, 28 Certificates of deposit, 24 Federal Home Loan Banks, 33 Commercial and industrial loans Federal Home Loan Mortgage Corporation, 33, 37, 38 Commercial banks, 16, 19 Federal Housing Administration, 33, 37, 38 Weekly reporting banks, 19-21 Federal Land Banks, 38 Commercial banks Federal National Mortgage Association, 33, 37, 38 Assets and liabilities, 18-20 Federal Reserve Banks Commercial and industrial loans, 16, 18, 19, 20, 21 Condition statement, 10 Consumer loans held, by type, and terms, 39, 40 Discount rates (See Interest rates) Loans sold outright, 19 U.S. government securities held, 4, 10, 11, 30 Nondeposit funds, 17 Federal Reserve credit, 4, 5, 10, 11 Real estate mortgages held, by holder and property, 38 Federal Reserve notes, 10 Time and savings deposits, 3 Federal Savings and Loan Insurance Corporation insured Commercial paper, 23, 24, 36 institutions, 26 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 33 Construction, 46, 51 Finance companies Consumer installment credit, 39, 40 Assets and liabilities, 36 Consumer prices, 46, 48 Business credit, 36 Consumption expenditures, 53, 54 Loans, 39, 40 Corporations Paper, 23, 24 Nonfinancial, assets and liabilities, 35 Financial institutions Profits and their distribution, 35 Loans to, 19, 20, 21 Security issues, 34, 67 Selected assets and liabilities, 26 Cost of living (See Consumer prices) Float, 4 Credit unions, 26, 39. (See also Thrift institutions) Flow of funds, 41, 43, 44, 45 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, 70 DEBITS to deposit accounts, 15 Foreign trade, 56 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 57, 59, 62, 63, 64, 66 Banks, by classes, 18-21 Liabilities to, 20, 56, 57, 59, 60, 65, 67, 68 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, 56 Terms, yields, and activity, 37 Government National Mortgage Association, 33, 37, 38 Type of holder and property mortgaged, 38 Gross national product, 53 Repurchase agreements, 6, 17, 19, 20, 21 Reserve requirements, 8 HOUSING, new and existing units, 51 Reserves Commercial banks, 18 INCOME, personal and national, 46, 53, 54 Depository institutions, 3, 4, 5, 12 Industrial production, 46, 49 Federal Reserve Banks, 10 Installment loans, 39, 40 U.S. reserve assets, 56 Insurance companies, 26, 30, 38 Residential mortgage loans, 37 Interest rates Retail credit and retail sales, 39, 40, 46 Bonds, 24 Consumer installment credit, 40 SAVING Federal Reserve Banks, 7 Flow of funds, 41, 43, 44, 45 Foreign central banks and foreign countries, 69 National income accounts, 53 Money and capital markets, 24 Savings and loan associations, 26, 38, 39, 41. (See also Mortgages, 37 Thrift institutions) Prime rate, 23 Savings banks, 26, 38, 39 International capital transactions of United States, 55-69 Savings deposits (See Time and savings deposits) International organizations, 59, 60, 62, 65, 66 Securities (See also specific types) Inventories, 53 Federal and federally sponsored credit agencies, 33 Investment companies, issues and assets, 35 Foreign transactions, 67 Investments (See also specific types) New issues, 34 Banks, by classes, 18, 19, 20, 21, 26 Prices, 25 Commercial banks, 3, 16, 18-20, 38 Special drawing rights, 4, 10, 55, 56 Federal Reserve Banks, 10, 11 State and local governments Financial institutions, 26, 38 Deposits, 19, 20 Holdings of U.S. government securities, 30 LABOR force, 47 New security issues, 34 Life insurance companies (See Insurance companies) Ownership of securities issued by, 10, 20, 26 Loans (See also specific types) Rates on securities, 24 Banks, by classes, 18-20 Stock market, selected statistics, 25 Commercial banks, 3, 16, 18-20 Stocks (See also Securities) Federal Reserve Banks, 4, 5, 7, 10, 11 New issues, 34 Financial institutions, 26, 38 Prices, 25 Insured or guaranteed by United States, 37, 38 Student Loan Marketing Association, 33 MANUFACTURING Capacity utilization, 48 TAX receipts, federal, 29 Production, 48, 50 Thrift institutions, 3. (See also Credit unions and Savings Margin requirements, 25 and loan associations) Member banks (See also Depository institutions) Time and savings deposits, 3, 13, 17, 18, 19, 20, 21 Federal funds and repurchase agreements, 6 Trade, foreign, 56 Reserve requirements, 8 Treasury cash, Treasury currency, 4 Mining production, 50 Treasury deposits, 4, 10, 28 Mobile homes shipped, 51 Treasury operating balance, 28 Monetary and credit aggregates, 3, 12 UNEMPLOYMENT, 47 Money and capital market rates, 24 U.S. government balances Money stock measures and components, 3, 13 Commercial bank holdings, 18, 19, 20 Mortgages (See Real estate loans) Treasury deposits at Reserve Banks, 4, 10, 28 Mutual funds, 35 U.S. government securities Mutual savings banks (See Thrift institutions) Bank holdings, 18-20, 21, 30 Dealer transactions, positions, and financing, 32 NATIONAL defense outlays, 29 Federal Reserve Bank holdings, 4, 10, 11, 30 National income, 53 Foreign and international holdings and transactions, 10, 30, 68 OPEN market transactions, 9 Open market transactions, 9 PERSONAL income, 54 Outstanding, by type and holder, 26, 30 Prices Rates, 24 Consumer and producer, 46, 52 U.S. international transactions, 55-69 Stock market, 25 Utilities, production, 50 Prime rate, 23 Producer prices, 46, 52 VETERANS Administration, 37, 38 Production, 46, 49 Profits, corporate, 35 WEEKLY reporting banks, 19-21 Wholesale (producer) prices, 46, 52 REAL estate loans Banks, by classes, 16, 19, 20, 33 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 Richard F. Syron Richard N. Cooper Robert W. Eisenmenger NEW YORK* 10045 Cyrus R. Vance E. Gerald Corrigan Ellen V. Futter James H. Oltman Buffalo 14240 Mary Ann Lambertsen John T. Keane PHILADELPHIA 19105 Peter A. Benoliel Edward G. Boehne Gunnar E. Sarsten 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 Hanne M. Merriman Robert P. Black Leroy T. Canoles, Jr. Jimmie R. Monhollon Baltimore 21203 To be announced Robert D. McTeer, Jr.1 Charlotte 28230 To be announced Albert D. Tinkelenberg1 Culpeper Communications John G. Stoides1 and Records Center 22701 ATLANTA 30303 Bradley Currey, Jr. Robert P. Forrestal Larry L. Prince Jack Guynn Delmar Harrison1 Birmingham 35283 To be announced Fred R. Herr1 Jacksonville 32231 To be announced James D. Hawkins1 Miami 33152 To be announced James Curry III Nashville 37203 To be announced Donald E. Nelson New Orleans 70161 To be announced 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 To be announced John F. Breen Louisville 40232 To be announced Howard Wells Memphis 38101 To be announced Paul I. Black, Jr. MINNEAPOLIS 55480 Michael W. Wright Gary H. Stern John A. Rollwagen Thomas E. Gainor Helena 59601 To be announced Robert F. McNellis KANSAS CITY 64198 Fred W. Lyons, Jr. Roger Guffey To be announced Henry R. Czerwinski Denver 80217 James C. Wilson Kent M. Scott Oklahoma City 73125 Patience S. Latting David J. France Omaha 68102 Kenneth L. Morrison Harold L. Shewmaker DALLAS 75222 Bobby R. Inman Robert H. Boy kin Hugh G. Robinson William H.Wallace Tony J. Salvaggio1 El Paso 79999 To be announced Sammie C. Clay Houston 77252 To be announced Robert Smith, III1 San Antonio 78295 To be announced Thomas H. Robertson SAN FRANCISCO 94120 Robert F. Erburu Robert T. Parry Carolyn S. Chambers Carl E. Powell John F. Hoover1 Los Angeles 90051 Yvonne B. Burke 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 F1.R SAenSiEorR V ice President. 2. Executive Vice President. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories H MR •HHIB BBMBI LEGEND ' Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest NEW HANDBOOK AVAILABLE FROM THE containing all Board regulations and related statutes, REGULATORY SERVICE interpretations, policy statements, rulings, and staff opinions. For those with a more specialized interest in The Federal Reserve Board has announced publica- the Board's regulations, parts of this service are pubtion of The Payment System Handbook. The new lished separately as handbooks pertaining to monetary handbook, which is part of the Federal Reserve Reg- policy, securities credit, consumer affairs, and, availulatory Service, deals with expedited funds availabil- able for the first time in September 1988, The Payment ity, check collection, wire transfers, and risk-reduc- System Handbook. tion policy. It includes Regulation CC (Availability of For domestic subscribers, the annual rate for The Funds and Collection of Checks), Regulation J (Col- Payment System Handbook is $75. For subscribers lection of Checks and Other Items and Wire Transfers outside the United States, the price, including addiof Funds by Federal Reserve Banks), the Expedited tional air mail costs, is $90. For the Federal Reserve Funds Availability Act and related statutes, official Regulatory Service, not including handbooks, the an- Board commentary on Regulation CC, and policy nual rate is $200 for domestic subscribers and $250 for statements on risk reduction in the payment system. In subscribers outside the United States. All subscription addition, it contains detailed subject and citation in- requests must be accompanied by a check payable to dexes. It is published in loose-leaf binder form and is "Board of Governors of the Federal Reserve updated monthly. System." Orders should be addressed to Publications To promote public understanding of its regulatory Services, Mail Stop 138, Board of Governors of the functions, the Board publishes the Federal Reserve Federal Reserve System, Washington, D.C. 20551. Regulatory Service, a three-volume loose-leaf service Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT Three booklets on the mortgage process are also PUBLICATIONS available: A Consumer's Guide to Mortgage Refinancing, A Consumer's Guide to Mortgage Lock-Ins, and The Federal Reserve Board publishes a series of A Consumer's Guide to Mortgage Closings. These pamphlets covering individual credit laws and topics, booklets were prepared in conjunction with the Fedas pictured below. The series includes such subjects as eral Home Loan Bank Board and in consultation with how the Equal Credit Opportunity Act protects wom- other federal agencies and trade and consumer en against discrimination in their credit dealings, how groups. to use a credit card, and how to resolve a billing error. Copies of consumer publications are available free The Board also publishes the Consumer Handbook of charge from Publications Services, Mail Stop 138, to Credit Protection Laws, a complete guide to con- Board of Governors of the Federal Reserve System, sumer credit protections. This 44-page booklet ex- Washington, D.C. 20551. Multiple copies for classplains how to use the credit laws to shop for credit, room use are also available free of charge. apply for it, keep up credit ratings, and complain about an unfair credit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis