Federal Reserve Bulletin, 1989-08

VOLUME 75 • NUMBER 8 • AUGUST 1989 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn • J. Virgil Mattingly, Jr. • 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 527 MONETARY POLICY REPORT 550 STATEMENTS TO CONGRESS TO THE CONGRESS Martha R. Seger, member, Board of Gov- In response to policy actions by the Federal ernors, discusses the Community Reinvest- Reserve and to expectations that additional ment Act, the Government Check Cashing tightening moves might be needed, market Act of 1989, and the Basic Banking Services interest rates climbed throughout the first Access Act of 1989, and says that the Board quarter, and money growth was subdued. opposes the basic banking and check- Over the course of the second quarter, cashing bills because it believes that volunseveral indicators suggested the emergence tary efforts by financial institutions will conof conditions that were more conducive to a tinue to be successful in meeting many of future easing of inflationary pressures. In the concerns that have been expressed this environment, interest rates turned without the burden and cost that rules and down during the spring. The System began regulations inevitably impose, before the to provide reserves slightly more gener- Subcommittee on Consumer and Regulaously through open market operations at tory Affairs of the Senate Committee on the beginning of June and took an additional Banking, Housing, and Urban Affairs, June small easing step in July. By mid-July, most 7, 1989. short-term interest rates were down about Vz percentage point from their December levels, while long-term rates had fallen as 557 Alan Greenspan, Chairman, Board of Govmuch as 1 percentage point on balance. ernors, in discussing the internationalization of securities markets, says that the stability of our financial markets rests on the performance of the world economy; and 540 PRICED SERVICES, 1988 AND 1989 although we can improve the safety and Since 1981, under the mandate of the Mon- soundness of our financial market systems, etary Control Act of 1980, the Federal we cannot eliminate all risks to those sys- Reserve has been charging fees for the tems, before the Subcommittee on Securiservices it provides to depository institu- ties of the Senate Committee on Banking, tions—fees that must, over the long run, Housing, and Urban Affairs, June 14, 1989. cover the full costs of those services. In 1988, the Federal Reserve System received $801.7 million in fees for its priced 563 William Taylor, Director, Division of Bankservices and incurred $796.6 million in ing Supervision and Regulation, Board of costs for a recovery rate of 100.6 percent. Governors, reviews bank supervisory policies regarding U.S. bank lending to developing countries and says that without further cooperation between borrowers and 548 INDUSTRIAL PRODUCTION lenders, credit quality will continue to de- Industrial production was unchanged in teriorate as more countries become unable May after having increased a revised 0.6 or unwilling to service their bank debts, and percent in April. banks with large exposures probably will Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

further strengthen their capital and reserve AI FINANCIAL AND BUSINESS STATISTICS levels, before the Subcommittee on Inter- These tables reflect data available as of national Development, Finance, Trade and June 28, 1989. Monetary Policy of the House Committee on Banking, Finance and Urban Affairs, A3 Domestic Financial Statistics June 27, 1989. A46 Domestic Nonfinancial Statistics A55 International Statistics 566 ANNOUNCEMENTS Resignation of H. Robert Heller as a mem- A7i GUIDE TO TABULAR PRESENTATION, ber of the Board of Governors. STATISTICAL RELEASES, AND SPECIAL Amendments to Regulation Z. TABLES Meeting of Consumer Advisory Council. Policy statements on reduction of risk in the A88 BOARD OF GOVERNORS AND STAFF payment system. Revisions to the methodology for comput- A90 FEDERAL OPEN MARKET COMMITTEE ing the private sector adjustment factor. AND STAFF; ADVISORY COUNCILS Proposed changes to the Board's policy on large dollar payment system risk; proposal to modify a restriction on underwriting of A92 FEDERAL RESERVE BOARD asset-based securities of affiliates; proposal PUBLICATIONS to increase the revenue limit established by the Board in its orders authorizing bank holding company subsidiaries to underwrite A94 INDEX TO STATISTICAL TABLES and deal in bank-ineligible securities. A96 FEDERAL RESERVE BANKS, 569 LEGAL DEVELOPMENTS BRANCHES, AND OFFICES Various bank holding company, bank service corporation, and bank merger orders; and pending cases. A97 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on July 20, erated, reducing somewhat the strains on pro- 1989, pursuant to the Full Employment and Bal- ductive resources, especially in the industrial anced Growth Act of 1978.1 sector of the economy. The dollar exhibited considerable strength in the foreign exchange MONETARY POLICY AND THE ECONOMIC markets, portending a direct reduction in price OUTLOOK FOR 1989 AND 1990 pressures and slower growth in demands on domestic production capacity. Although the un- As 1989 began, a reduction in inflationary pres- employment rate remained essentially unsures appeared essential if the ongoing economic changed in the neighborhood of 5lA percent—the expansion was to be sustained. Monetary policy lowest level since the early 1970s—trends in during 1988 had been directed toward reducing wages and total compensation showed little, if the risks of an escalation of inflation and inflation any, further step-up, reflecting at least in part an expectations, but at the time of the Board's awareness among workers and management of report to the Congress in February of this year, the need to contain costs in a highly competitive success in that effort seemed far from assured. world economy. Meanwhile, prices of actively Indeed, among the data reported in the early traded industrial commodities leveled out, enpart of 1989 were very large increases in the hancing the prospects for a broader slackening in producer and consumer price indexes, reflecting the pace of inflation. not only the effects of run-ups in oil and agricul- In this environment, interest rates turned tural commodity prices, but also broader infla- down during the spring, as financial market partionary developments, including unfavorable ticipants responded not only to the better outlook trends in unit labor costs over the preceding for inflation but also in anticipation of an easing year. Under the circumstances, with pressures of monetary restraint by the Federal Reserve. on productive resources still intense, monetary The System began to provide reserves slightly policy was tightened further. Reserve availability more generously through open market operations was curtailed through open market operations, at the beginning of June and took an additional and the discount rate was raised V2 percentage small easing step in early July. This helped bring point in late February. In response to these about a further decline in market rates of interpolicy actions and to expectations that additional est, which by mid-July generally had more than tightening moves might be needed, market inter- retraced the increases that had occurred earlier est rates climbed throughout the first quarter, in the year. Most short-term interest rates were and money growth was subdued. down about Vi percentage point from their De- Over the course of the second quarter, several cember levels, while long-term rates had fallen as indicators suggested the emergence of conditions much as 1 percentage point on balance. that were more conducive to a future easing of inflationary pressures. Growth of the monetary Monetary Objectives for 1989 and 1990 aggregates weakened further, with M2 running noticeably below its target range for the year. In February, the Federal Open Market Commit- Aggregate demand for goods and services mod- tee (FOMC) specified a range for M2 growth in 1989 that was a full percentage point below that of 1988 and ranges for M3 and debt that were V2 1. The charts for the report are available on request from percentage point below those of the previous Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. year (table 1). This was the third consecutive Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

528 Federal Reserve Bulletin • August 1989 year in which the ranges had been lowered. At the 1. Ranges of growth same time, the Committee recognized that, in light for monetary and credit aggregates of the continuing uncertainty regarding the shorter- Percent change, fourth quarter to fourth quarter term relation between monetary growth and Provisional changes in income and spending, a variety of indi- Aggregate 1988 1989 ranges for 1990 cators of inflation pressures and economic activity as well as the behavior of the aggregates would have M2 4 to 8 3 to 7 3 to 7 M3 4 to 8 3V4 to 7V4 3 Vi to IV2 to be considered in determining policy. Debt 7 to 11 614 to 10% 6% to 10V4 In February, the Committee had anticipated relatively slow money growth over the first half of the year because of the effects of the firming of range. The faster growth of M2 should show policy through late 1988 and into 1989. In addi- through at least in part to a quickening in M3 tion to the influence of the higher interest rates growth over the second half of the year, so that on desired holdings of money, however, several this aggregate would move into the middle part of special factors—including the difficulties of the its range. Domestic nonfinancial debt is likely to thrift industry and a drawdown of liquid assets to remain in the middle portion of its range through meet unusually large individual tax payments— year-end. appear to have further reduced money balances For 1990, the Committee provisionally decided in the first half. These factors contributed to a to use, for all three aggregates, the same growth substantial rise in velocity, the ratio of nominal ranges in force for 1989. The Committee recog- GNP to the stock of money. nized that the economic and financial outlook By June, money growth had picked up. None- over the next year and a half is uncertain; in theless, M2 ended the quarter just 2 percent at an particular, it is unclear at this juncture whether annual rate above the fourth quarter of last year, the velocities of M2 and M3 are more likely to compared with its annual growth range of 3 to 7 trend higher or lower next year. Although the percent. In June, M3 was at the lower end of its Committee's initial assessment is that growth of annual range of 3 ¥2 to IV2 percent. The rate of money and credit through 1990 within the bounds expansion of domestic nonfinancial sector debt of the reduced ranges of this year likely would also slowed in the first half of this year compared foster the slower inflation and sustained real with 1988, though by less than the monetary economic expansion that it is seeking, it will aggregates; debt has grown about 8 percent so far reevaluate the ranges next February in light of this year, near the middle of its monitoring range the unfolding economic and financial situation. of 6V2 to IOV2 percent. The outlook for spending, prices, and financial At its meeting earlier this month, the Commit- markets in 1990 should have clarified somewhat tee agreed to retain the current ranges for growth by then, as should the influence on monetary of money and debt in 1989. The Committee expansion of the ongoing resolution of thrift anticipates that by the fourth quarter all three industry problems. For the long term, the Comaggregates will be well within those ranges. The mittee recognized that ultimate attainment of more rapid growth in M2 and M3 already evident price stability will require that the ranges for since mid-May is expected to extend through the money and credit growth be reduced further in second half. The recent declines in short-term future years. market interest rates have made M2 holdings more attractive, tending to offset the restraining Economic Projections for 1989 and 1990 effects on M2 of previous increases of interest rates. With M2 expansion likely also to be Voting members of the Committee and other boosted by a further replenishing of liquid bal- Reserve Bank presidents believe that the moneances depleted by tax payments, this aggregate is tary ranges specified are consistent with some expected to grow a little faster than nominal progress in reducing inflation, which likely will gross national product in the second half, bringbe associated in the near term with the continuing it into the lower portion of its annual growth ation of a slower pace of economic growth. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 529 central tendency of the forecasts is for increases economic forecast of the Administration; indeed, in real GNP of 2 to 2Vi percent in 1989 and of 1 Vi the Administration has indicated that it shares to 2 percent in 1990 (table 2). the view that the maintenance of anti-inflationary The expected easing of pressures on resources monetary policy is a precondition for healthy should contribute to a damping of inflation in economic expansion. 1990, although the Board members and Bank In an environment of relatively slow overall presidents also are anticipating some near-term growth, such as is expected by the FOMC memrelief from the special problems that boosted bers, some industries and regions are likely to expeprices in the first half of this year. Larger crops rience setbacks; but major imbalances that could later this year should result in more favorable threaten the continuation of the economic expanbehavior of food prices, and the recent peaking sion are not anticipated. In the household sector, of crude oil prices suggests the likelihood of growth of consumer purchases has been sluggish some softening in consumer energy prices. Thus, and may remain so for a while. Residential construcretail inflation should be considerably slower tion activity should pick up some in coming months, over the remainder of this year, and the central in response to the recent decline of mortgage rates, tendency of consumer price index forecasts for although an overhang of supply in some locales 1989 as a whole is 5 to 5Vi percent—compared could damp the recovery. Surveys of business plans with the rate of more than 6 percent observed suggest that capital spending will post further gains through May. The forecasts for the consumer over the remainder of 1989, but some moderation price index in 1990 center on AVi to 5 percent. from first-half growth rates is to be expected in light The Administration's economic forecast, pre- of declining levels of capacity use and the recent sented in connection with its mid-session update weakening in corporate profits. Spending on equipof the budget outlook, does not differ greatly ment is likely to continue to be buoyed by the desire from the projections of the FOMC members. to modernize industrial facilities so as to enhance Nominal GNP is near the upper ends of the efficiency and meet intense competition here and central-tendency ranges of the FOMC for 1989 abroad. and 1990, but with a more favorable mix of real The external sector represents an area of conoutput versus inflation, especially in 1990. There siderable uncertainty in the economic outlook for appears to be no basic inconsistency between the the next year and a half. Real net exports of policy objectives of the Federal Reserve and the goods and services increased earlier this year, 2. Economic projections for 1989 and 1990 FOMC voting members and other FRB Presidents IItteemm aanndd yyeeaarr Range Central tendency Administration 1989 Percent change, fourth quarter to fourth quarter Nominal GNP 5to7y4 6 to 7 7.1 Real GNP I ft to 2% 2 to2V4 2.7 Consumer price index 4ft to5% 5 to 5 4.91 Average level in the fourth quarter, percent Civilian unemployment rate 5 to 6 Around 5 ft 5.3Z 1990 Percent change, fourth quarter to fourth quarter Nominal GNP AWtolft 5 Vi to 6*4 6.8 Real GNP 1 to2V4 1 ft to 2 2.6 Consumer price index 3 to 5% 4ft to 5 4.1' Average level in the fourth quarter, percent Civilian unemployment rate 5 to 6ft 5ft to 6 5.42 1. CPI for Urban Wage Earners and Clerical Workers. FOMC forecasts are 2. Percent oftotal labor force, including armed forces residing in the United for the CPI for All Urban Consumers. States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

530 Federal Reserve Bulletin • August 1989 but improvements may be more difficult to passed through, and food prices surged as the achieve in the period ahead as the effects of past agriculture sector continued to experience addepreciation of the dollar wear off and are offset verse supply developments. Outside food and by those associated with the more recent appre- energy, the rate of inflation has, on average, ciation. In addition, the path of exports will remained at about its 1988 pace, even in the face depend importantly on economic growth abroad, of relatively high levels of resource utilization. which may slow as a result of policy actions This apparent stability of underlying price trends taken by some of our major trading partners to is attributable in part to the appreciation of the dollar offset mounting inflationary pressures. Ulti- on exchange markets. So far in 1989, prices of mately, achievement of the adjustment needed in imported goods other than oil have been virtually the external sector will depend not only on flat on average, restraining increases in the prices of governmental policies that foster macroeco- domestically produced items. In addition, despite nomic stability, but also on the determination of the tightest labor markets in some time, wage trends U.S. firms to meet foreign competition through have been fairly stable, helping to limit the accelerapplication of stringent cost controls and inten- ation in unit labor costs during a period in which sified marketing efforts abroad. productivity has weakened. A key ingredient in maintaining a healthy pace of economic expansion is further progress in reducing The External Sector the federal budget deficit. Since 1983, the deficit has fallen relative to GNP from more than 6 percent to Developments in foreign exchange markets have around 3 percent, but it remains large by historical played an important role in shaping events in the standards. Taking the actions required to meet the domestic economy in recent years. After depre- Gramm-Rudman-Hollings targets on schedule will ciating over most of the period from 1985 to late foster confidence in the U.S. economy, particularly 1987, the foreign exchange value of the dollar in among financial market participants. At the same terms of other Group of Ten (G-10) currencies time, reduced demands by the federal government changed little, on net, in 1988, as a decline in the for credit will free up the available supply to interest- final few months reversed much of the increase sensitive private sectors, such as housing and busi- that had occurred earlier in the year. In Decemness investment. The Committee thus views as ber the dollar began to rebound, and it rose highly encouraging the commitments expressed by substantially through mid-June before dropping the Congress and the Administration to begin soon back somewhat. The appreciation of the dollar to address the problems of meeting the fiscal 1991 through the first half of 1989 was frequently met budget target. by concerted intervention sales of dollars by U.S. and foreign monetary authorities. THE PERFORMANCE OF THE ECONOMY During December, and in the first quarter of this DURING THE FIRST HALF OF 1989 year, the dollar rose in response to perceptions of a relative tightening of U.S. monetary policy. Reports After two years of rapid expansion, economic of somewhat higher rates of inflation and news activity decelerated substantially in the first half about the strength of the economy contributed to of 1989. Even at this more moderate pace of expectations that Federal Reserve policy would be growth, however, job creation was consider- tightened still further. There was a brief pause in the able—nearly 1 Vi million between December and dollar's rise after the Group of Seven finance min- June—and the civilian unemployment rate, fluc- isters and central bank governors stated in April that tuating around 5VA percent, remained in the low- a further rise in the dollar that undermined the est range since the early 1970s. adjustment process would be counterproductive. Inflation rose in the first half of 1989, but most In May and early June, the dollar appreciated of the increase appears to have resulted from significantly on balance, even though interest transitory events. In particular, energy prices rates on nondollar assets rose relative to those on increased sharply, as the rise in crude oil prices dollar-denominated instruments. Sentiment in fabetween November 1988 and May 1989 was vor of the dollar was, perhaps, partly a response Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 531 to concerns about political events abroad, but the May imports of products other than petroleum data on the U.S. trade balance, which were averaged less than 1 percent above their fourthbetter than expected, also may have played a quarter rate. Notable decreases were recorded in role. For a while, the dollar's rise appeared to be imports of consumer goods and automotive prodassociated with expectations of capital gains on ucts. So far in 1989, the value of oil imports has U.S. stocks and bonds. Since mid-June, the risen sharply, as higher prices for petroleum and dollar has retraced much of its second-quarter petroleum products were accompanied by a rise, under the influence of increasing interest small increase in physical volume. The further rates abroad, declines in dollar rates, and some improvement in the U.S. trade balance in the first easing of demands for dollar assets after the five months of this year reflects several factors, initial response to political uncertainties in cer- most importantly the strength of economic activtain other countries. ity abroad, the slower growth of U.S. activity, Measured in terms of a trade-weighted average the continuing, if diminished, benefit for U.S. of the other G-10 currencies, the dollar is about 8 price competitiveness from the depreciation of percent higher than it was in December 1988 and the dollar through the end of 1987, and the about 12 percent higher than it was in December restraint that the recent rise in the dollar placed 1987. After adjustment for changes in relative on prices of non-oil imports. price levels, the appreciation of the dollar has The current account deficit widened in the first been larger because U.S. inflation has remained quarter to $123 billion. The increase from the above the average for the other G-10 countries. fourth-quarter rate was more than accounted for Meanwhile, the currencies of South Korea and by capital losses on assets denominated in for- Taiwan have risen moderately against the dollar eign currencies resulting from the dollar's appreso far in 1989. ciation. Setting aside those losses, the current In most of the other industrial countries, eco- account balance in the first quarter showed a nomic growth has been strong. The resulting deficit of $108 billion, an improvement of about very high rates of capacity utilization and the $22 billion from the previous quarter. Nearly all diminishing slack in labor markets, together with of this improvement resulted from the narrowing higher world oil prices and special factors, have of the trade deficit. Preliminary information on spurred an appreciable pickup in inflation abroad capital transactions in the early months of 1989 in recent quarters. Policymakers in many foreign suggests an increase in net private foreign purindustrial countries have responded by raising chases of U.S. Treasury securities and corporate official interest rates. Growth of the newly indus- bonds and substantial foreign direct investment trializing economies in Asia has slowed recently, in the United States. though the rates remain relatively high. In con- The improvement in real net exports actrast, developing countries that are burdened counted for nearly half of the overall rise in the with large external debts have continued to strug- GNP during the first quarter, more than reversing gle to achieve sustained economic growth. its negative contribution in the fourth quarter. The U.S. merchandise trade deficit in the first The contribution to GNP growth in the second quarter was $110 billion at a seasonally adjusted quarter probably was negligible, however, as real annual rate, significantly better than the figure for net exports may have begun to be depressed by the fourth quarter and that for 1988 as a whole. In the loss in U.S. price competitiveness associated the first two months of the second quarter, the with the cumulative rise in the dollar since the trade deficit was essentially unchanged from the end of 1987. first-quarter pace. Exports have continued to expand this year, although not so rapidly as in 1988. Export gains The Household Sector have been broadly based, with notable increases for agricultural goods, industrial supplies, capital Much of the slowing in overall economic growth goods, and consumer goods. Meanwhile, imports in the first half of 1989 reflected a deceleration in have increased moderately; in fact, in April and consumer spending. The slump in demand was Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

532 Federal Reserve Bulletin • August 1989 fairly broad, encompassing a variety of durable on fixed-rate mortgages rose above 11 percent for and nondurable goods. Despite the widespread the first time since 1985, with part of the rise availability of special financing deals and other attributable to investor concerns about sizable incentives, sales of motor vehicles in the first half future liquidations of mortgage assets by trouwere about 6 percent below the pace of 1988 as a bled thrift institutions. Also, rates on adjustablewhole. A weakening in purchases of furniture rate mortgages (ARMs) rose nearly a full perand appliances likely was related in part to the centage point during the early months of 1989, as drop in home sales. discounting of initial interest rates on ARMs was Consumption slowed against a backdrop of reduced. In recent years, relatively low initial strong income growth in the early part of the terms on ARMs led an increasing number of year, although weaker income growth was evi- households to favor this instrument for home dent in the spring. Personal income gains in the purchases. Since their highs in the spring, interfirst quarter were accentuated by the assumption est rates on ARMs have fallen more than Vi of a of the national income accountants that the in- percentage point, while fixed-rate mortgage rates come of farm proprietors would return to normal have dropped about VA percentage points. levels over the year, after the drought-induced Meanwhile, multifamily starts fell further in the reductions in 1988. With hiring down in the first half of the year from the already low level spring, increases in wages and salaries softened recorded in 1988. Multifamily housing production noticeably, showing virtually no growth in real has been limited by an overhang of vacant rental terms. Also, growth of the nonwage components units. Moreover, building in this sector continues of personal income was weaker on balance in the to reflect the effects of the Tax Reform Act of second quarter. 1986, which, by curtailing many of the financial The personal saving rate has been on a distinct advantages associated with investment in rental upswing since reaching a forty-year low in mid- housing, sharply reduced its after-tax profitability. 1987. Several explanations have been propounded for the recent rise, among them the lower level of The Business Sector household net worth relative to income since the stock market break of 1987, higher costs of con- In contrast to the household sector, business sumer credit (especially in after-tax terms, be- capital spending strengthened in early 1989, recause of the phase-down of interest deductibility), sponding in part to high levels of capacity utiliand concerns about a potential softening of the zation in the United States and to international economy. Whatever the cause, households ap- pressures to lower costs. In the first quarter of pear to have adopted a more cautious spending 1989, real business fixed investment rose at an stance, though it also should be noted that the annual rate of IVi percent, and such spending personal saving rate has remained below the appears to have increased substantially further in norms of the 1960s and 1970s. the second quarter. Residential construction declined over the first The gain in investment has occurred in the half in response to the rise in interest rates and to equipment category. Particularly noteworthy in earlier overbuilding in some markets. The more the first quarter was a sharp rise in outlays for recent drop in rates, which began in May, likely industrial machinery. Increases in that area, will be reflected in some improvement in con- which includes spending for fabricated metal struction over the summer and fall. Total housing products, engines, turbines, and a variety of starts, at an average annual rate of 1.44 million other types of industrial apparatus, have been units through May, were down 3V4 percent from exceptionally strong since mid-1987. Spending their 1988 pace. for high-technology equipment also has been Starts in the single-family sector averaged robust. Computer outlays decelerated during the about 1 million units at an annual rate between second half of 1988, possibly reflecting some March and May, a period relatively free from the hesitation on the part of potential purchasers in weather-related distortions that affected con- response to the rapid pace of new product anstruction in January and February. Interest rates nouncements; but spending was up considerably Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 533 in the first quarter, and another gain appears in that is counted directly in GNP, were virtually train for the second quarter. unchanged. Such purchases are dominated by High levels of factory utilization apparently defense; nominal spending authority in this area have spurred a rise in industrial building in recent has been virtually flat since 1985, and procurequarters. Outlays for construction of office and ment of some major new weapon systems is other commercial buildings also rose earlier this winding down. As a result, real military puryear, although the level of total spending on chases have fallen and in the first quarter were commercial structures remained below that of nearly 5 percent below the mid-1987 peak. The the 1985-86 period, depressed by excess space in decline in defense spending has been partially many areas. And, while the rise in energy prices offset by increases in other federal purchases. led to some increase in oil and gas drilling in the Inventories held by the Commodity Credit Corspring, the level of activity remained very low poration edged down further in the first quarter, compared with that of the early 1980s. but the rate of decline has been slowing (on a Inventory investment slowed over the first five seasonally adjusted basis) since the middle of last months of 1989, as businesses adjusted with ap- year as the effects of last summer's drought have parent promptness to the more moderate expan- dissipated. Spending for the space program and sion of final demand. Inventory buildups by man- for tax and immigration enforcement also has ufacturers have been concentrated in the aircraft risen. and other capital goods industries, where produc- On a unified budget basis, total nominal outtion has risen and order backlogs are large. In lays for the fiscal year through May were more contrast, in the retail sector, automobile invento- than 6 percent above the comparable year-earlier ries rose sharply in the first quarter and have total. Spending related to the thrift institution remained high. In an effort to reduce the overhang problem spiked at year-end 1988 and then before introducing new models in the fall, carmak- dropped sharply in the first half of this year. On ers have lowered factory assembly rates and have the other hand, growth has continued in entitleenhanced sales incentives. Qualitative reports ment spending (principally Medicare and Social have suggested that stocks at some other retailers Security) and in net interest outlays. also may have risen above desired levels, al- Federal receipts have grown even more rapidly though most firms appear to have been following than outlays, buoyed by increases in employcautious inventory policies, and problems of ex- ment and income. In addition, there was an cess stocks seem to be limited. extraordinary spurt in nonwithheld tax collec- In the first quarter of 1989, before-tax eco- tions in April and May, the sources of which are nomic profits of nonfinancial corporations de- at this point uncertain. Some possible explanaclined, in part because unit labor costs increased tions relate to the Tax Reform Act of 1986 and as sales growth slowed and productivity deterio- include greater-than-anticipated effects from its rated. The drop in profits was spread over most base-broadening provisions and a shifting of intypes of businesses; the largest decline was in the come from earlier years into 1988, when the manufacturing sector, which had especially reduction in personal tax rates was fully phased strong gains in both 1987 and 1988. Meanwhile, in. In addition, realizations of taxable capital corporate tax liabilities edged up in the first gains may have been hefty last year because of quarter, owing in part to higher profits generated the large number of corporate mergers and leverfrom the rise in prices of inventories. The com- aged buyouts. All told, receipts thus far in 1989 bination of lower operating profits and higher tax are 10 percent above year-earlier levels, and the liabilities reduced the internal cash flow of non- Administration now projects that the total budget financial corporations. deficit for FY1989 will be $148 billion, compared with the $155 billion recorded in FY 1988. The Government Sector Real purchases of goods and services by state and local governments have been on a moderate In the first quarter, real federal purchases of uptrend this year. Outlays for personnel and goods and services, the part of federal outlays construction in the education and law enforce- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

534 Federal Reserve Bulletin • August 1989 ment areas have been subject to considerable The employment cost index for wages and salaupward pressure. Some other expenditures have ries in the private nonfarm sector, a broader risen because of federal mandates, especially measure of wages that is available only through those in recent health legislation. As in the March, indicated some easing of wage trends in federal sector, growth of state and local outlays the goods-producing sector; however, in the serhas been tempered by budgetary pressures; ex- vice-producing industries, the trend remained cluding retirement trust funds, which are running sharply upward. The cost of benefits provided to a large surplus, the sector had a deficit of about employees in the goods and services sectors rose $17 billion at an annual rate in the first quarter. slightly faster than wages over the year ended in Revenue experience was favorable this spring, March, and total compensation per hour—wages however, as a significant number of states re- and salaries plus benefits—was up AVi percent ported personal income tax receipts that were over that period, in the same range as the 12larger than expected. month increases recorded in the preceding three quarters. Labor Markets Productivity performance has deteriorated somewhat in recent quarters. In some instances, Job growth was substantial over the first half of higher levels of production have forced firms to 1989, though it slowed in the spring. In the first use less efficient capital and to employ less quarter, additions to nonfarm payrolls averaged skilled labor. Output per hour in the nonfarm 264,000 a month, about the same pace seen over business sector was down in the first quarter, and the previous two years. By spring, hiring had virtually unchanged on a four-quarter basis. With begun to slow, and payroll employment growth the sizable increases in compensation over the dropped back to 200,000 per month in the second same period, unit labor costs accelerated to an quarter as a whole. Even at this reduced rate, annual rate of 5XA percent, the largest yearhowever, job gains were larger than are likely to over-year increase since late 1982. In manufacbe sustained, given the underlying trend in labor turing, the rise in unit labor costs in the year force growth. Manufacturing employment de- ended in the first quarter was about 1 percent; clined in the second quarter, while the number of unit costs had declined earlier in the business construction jobs was about unchanged. Growth expansion. This step-up in unit labor costs reof employment moderated in the service- flects a slackening in the improvement of factory producing sectors, where advances have been productivity; compensation increases have rethe largest over the course of this business ex- mained moderate. pansion. The moderation in the growth of the demand Price Developments for labor in the second quarter did not lead to any appreciable reduction in labor market tightness. Inflation increased sharply in early 1989, re- The unemployment rate has fluctuated between flecting higher costs for food and energy. The 5.0 and 5.4 percent thus far this year; in June it consumer price index for all items, a broad-based stood at 5.3 percent. Although many Americans measure for finished goods and services, rose at remain involuntarily unemployed, the difficulty an annual rate of more than 6 percent through of matching workers with jobs—given consider- May, compared with the pace of AVi percent in ations of skill and location—is much greater than 1987 and 1988. The producer price index for it was earlier in the expansion. finished goods recorded an even more pro- By at least one aggregate measure, the rate of nounced acceleration, owing to the greater imincrease in wages seems to have leveled off in portance of food and energy in that index. recent quarters. Average hourly earnings of pro- However, the underlying inflation trend has not duction and nonsupervisory workers accelerated deteriorated: Excluding food and energy, inflafrom late 1986 through mid-1988; since then the tion at the retail level has been running at a rate rate of increase has flattened out, and in June of around 43A percent, about the same as in earnings were up 33/4 percent from a year earlier. 1988. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 535 Energy prices began rising sharply last No- MONETARY POLICY AND vember, after the OPEC nations agreed to limit FINANCIAL DEVELOPMENTS DURING crude oil production. Subsequently, temporary THE FIRST HALF OF 1989 supply disruptions in Alaska and in the North Sea added to price pressures. The posted price of In conducting monetary policy over the first half West Texas Intermediate, the U.S. benchmark of the year, the Federal Open Market Committee for crude oil, jumped from about $13 per barrel in continued its effort to foster long-run price sta- November to more than $19 in early May. As a bility, so as to build a base for sustainable result, energy prices at the producer level expansion of the economy. In again reducing the soared, and consumer energy prices rose nearly ranges for money and debt growth at its February 25 percent at an annual rate between December meeting, the Committee recognized that restraint and May. More recently, posted prices of crude on the expansion of money and credit would be oil have remained between $19 and $20 per needed to promote this goal. barrel. At the same time, the Committee realized that Increases in retail food prices were large in the considerable uncertainty remained about the befirst half of 1989, in part reflecting the lingering havior of the monetary aggregates. Relatively effects of last summer's drought and additional wide monetary ranges—4 percentage points in damage to some crops this year. From the begin- breadth—were retained, in part to take account ning of the year through May, the rise in the of the substantial interest rate sensitivity of consumer price index for food was close to 8 money demand over horizons of as long as a year percent at an annual rate. Although drought and of the unpredictable effects on money decurtailed the winter wheat crop for 1989, total mand of the resolution of the crisis in the thrift crop acreage has expanded, and overall produc- industry. Moreover, in these circumstances, the tion should rebound this year if weather condi- Committee recognized that, in addition to the tions are satisfactory. In addition, meat supplies behavior of the monetary aggregates, a variety of seem likely to hold fairly steady over the second indicators of inflationary pressures and the half of this year. Thus, pressures from the supply course of economic activity would have to be side should not be a big factor in the food price taken into account in shaping policy over 1989. outlook. Excluding food and energy, prices for com- The Implementation of Monetary Policy modities at the consumer level have risen at a rate slightly lower than that recorded for 1988. A As noted previously, developments early in 1989 marked diminution of increases in non-oil import suggested that a worrisome risk remained that prices associated with the appreciation of the inflation was picking up and could become more dollar apparently has restrained the prices of deeply embedded in the economy. Wage and many goods, notably apparel and a variety of benefit costs had accelerated in 1988, and the household items. In contrast, inflation in the readings for the consumer and producer price service sector has increased, especially in labor- indexes were troubling. Extending the move intensive services, such as medical care, enter- toward restraint that began almost a year earlier, tainment, and public transportation. the Federal Reserve increased reserve market At early stages of processing, prices of goods pressures at the start of this year and again in have risen little or declined in recent months. mid-February. On February 24 the discount rate Prices for many crude industrial commodities, was raised Vi percentage point to 7 percent. which had climbed sharply in 1987 and 1988 with These policy actions were accompanied by the expansion of factory output, have softened marked increases, of about a percentage point, in this year. This in turn has helped hold down the most short-term interest rates. Yields on longincrease in prices at the intermediate level of term securities also moved up, but by considerproduction; the producer price index for interme- ably less than short-term rates. The foreign exdiate materials, excluding foods and energy, was change value of the dollar strengthened as unchanged on net in the second quarter. interest rates in the United States rose relative to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

536 Federal Reserve Bulletin • August 1989 those abroad. Money growth slowed: Ml was dence that the more moderate pace of economic roughly flat in the first quarter, and M2 and M3 activity was persisting, indicators of the behavior decelerated from already reduced rates in the of wages and sensitive prices, and the weakness second half of 1988. of the monetary aggregates all were consistent By spring, the outlook for spending and prices with a prospective ebbing of inflationary preshad become more mixed. Employment growth sures. Moreover, the dollar was appreciably still looked strong; indicators of capital spending above year-end levels, which could be expected suggested a rebound from the fourth quarter of to have favorable effects in restraining inflation. 1988; and prices continued to advance rapidly. While inflation remained a concern, an intensifi- But consumer demand appeared to have moder- cation of price pressures did not appear to be a ated; industrial production was weakening; and present danger, and the risks of cumulating the behavior of commodity prices and some weakness in the economy had increased. other indicators of potential price trends sug- Although the easing steps were largely exgested that inflationary momentum might begin pected, most short-term interest rates continued to wane. In view of the uncertainties surrounding downward in anticipation of further monetary the outlook and taking into account the subdued policy actions, more than offsetting their firstpace of money growth, the Committee left re- quarter rise. The bond market rallied further, serve market conditions unchanged through the leaving long-term rates by mid-July down Vi to 1 middle of the second quarter. percentage point on balance from late-1988 lev- Many interest rates began to move off their els. Stock prices continued their brisk upward March highs early in the second quarter as indi- movement, reaching post-October 1987 highs. cations mounted of moderation in the pace of The value of the dollar also moved down someeconomic activity and in underlying price pres- what in late June and dropped further in early sures. With the passing weeks, a considerable July; it retraced most of its rise during the second weakening in housing activity became evident, quarter, although remaining well above its level and incoming data showed employment to be at year-end 1988. expanding at a noticeably slower rate. Market expectations of some additional tightening of The Behavior of the Monetary Aggregates monetary policy shifted to anticipations of an easing. The ensuing decline in interest rates did Growth of the monetary aggregates was quite not, however, prompt a drop in the foreign sluggish over the first half of 1989, reflecting the exchange value of the dollar. Instead, the dollar effects of increases through March in market appreciated further over this period, in part be- interest rates relative to returns on monetary cause of political uncertainties abroad and in part assets, some depositor concern over the probbecause of data on the U.S. trade balance that lems of the thrift industry, and large tax paywere better than expected. The dollar also may ments by individuals (table 3). From the fourth have gained support for a while from expecta- quarter of 1988 through June, M2 edged up at an tions that the rallies in U.S. securities markets annual rate of only 2 percent, markedly below would continue. The monetary aggregates weak- last year's pace of 5lA percent. M2 velocity rose ened further in April and early May, reflecting sharply through the second quarter. the drawdown of liquid balances to make per- The deceleration of M2 in the first quarter sonal tax payments that were larger than ex- stemmed largely from a combination of continpected. In May, M2 fell to the lower edge of the ued increases in market interest rates and unusuparallel band associated with its annual target ally slow upward adjustment of rates paid on range, and M3 slipped just below the bottom of retail deposits. Yields on NOW accounts moved its growth cone. up only about 10 basis points over the year ended The FOMC eased policy slightly at the begin- in March, while those on other liquid deposits— ning of June and again in early July. The federal savings and money market deposit accounts funds rate moved down about Vi percentage (MMDAs)—rose about lA and 1 percentage point point in two steps to around 9XA percent. Evi- respectively; many short-term market rates in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 537 3. Growth of money and debt Percent Debt of domestic Period Ml M2 M3 nonfinancial sectors Fourth quarter to fourth quarter 1979 7.7 8.2 10.4 12.3 1980 7.4 9.0 9.6 9.6 1981 5.2(2.5)' 9.3 12.3 10.0 1982 8.7 9.1 9.9 9.0 1983 10.2 12.1 9.8 11.3 1984 5.3 7.7 10.5 14.2 1985 12.0 8.9 7.7 13.2 1986 15.6 9.3 9.1 13.4 1987 6.4 4.2 5.7 9.8 1988 4.3 5.2 6.2 8.9 Quarterly growth rates (annual rates) 1989:1 -.4 1.9 3.7 8.2 2 -5.5 1.3 3.1 7.4e 1. Ml figure in parentheses is adjusted for shifts to NOW accounts in 1981. Estimated. creased more than 3 percentage points over the remained strong through March. The increase same period. Rates on small time accounts in- in demand for Treasury securities was greater creased much more than those on the more liquid than would have been expected from interest retail deposits, but they too failed to keep up with rate movements alone, suggesting that deposithe rise in market yields. tors' nervousness about the problems of the Some of the sluggishness in the adjustment of thrift industry were playing a role too. Although returns on retail deposits over this period may the President submitted to the Congress a comhave reflected continued regulatory pressures on prehensive plan for resolving the industry's thrift institutions to moderate their pricing of difficulties early in the year and gave assurances deposits, as well as the closing last year of some that the U.S. government would back insured insolvent institutions with aggressive pricing pol- deposits fully, thrift institutions insured by the icies. More broadly, the slow upward adjustment Federal Savings and Loan Insurance Corporaof deposit rates, especially on accounts without tion (FSLIC) experienced large outflows of fixed terms—NOW accounts, MMDAs, and sav- deposits throughout the first quarter. These ings deposits—also reflected the continued evo- outflows apparently depressed overall M2 lution of pricing strategies by depository institu- growth somewhat during that period, but the tions in the deregulated environment. By bulk of the funds likely remained within the concentrating upward rate adjustments in small aggregate. Commercial banks experienced reltime deposits and offering more sophisticated atively strong growth in core deposits, and account structures, in which larger balances re- M2-type money market mutual funds, whose ceive higher rates, institutions found that they rates adjust relatively quickly to changes in could retain the bulk of their funds while mini- market interest rates, saw sizable inflows of mizing the effects of higher market rates on their funds. overall interest expense. The increased opportunity costs of the first Nonetheless, as yields on market instruments part of the year continued to damp money growth became increasingly attractive relative to those into the second quarter, but, in addition, liquid on deposits over the first quarter, some funds balances were drawn down to meet large April were redirected to instruments not included in tax payments. Nonwithheld personal tax paythe monetary aggregates. Noncompetitive ten- ments were $16 billion greater this April than ders for Treasury bills and notes, a rough last. The tax-related effect was manifested in a indicator of the extent to which individual in- sharp drop in the liquid components of M2 in late vestors are increasing their holdings of Trea- April and into May as the payments continued to sury securities, surged early in the year and clear. Transaction accounts posted large de- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

538 Federal Reserve Bulletin • August 1989 clines, outflows of savings and MMDA balances Reflecting interest rate and tax-related effects, accelerated, and inflows to money market mutual Ml declined at an annual rate of 3V2 percent from funds paused. Balances began to bounce back in the fourth quarter of 1988 to June. Balances in late May, however, as depositors started to re- other checkable deposits, which had moved build their holdings of monetary assets; and in down a little over the first quarter in response to June, M2 grew at an annual rate of 63/4 percent. higher opportunity costs, dropped substantially Also contributing to the rebound in holdings of in late April and early May as the tax payments money balances after mid-May were declines in cleared. Demand deposits also declined on balopportunity costs as market interest rates headed ance over the first half of the year, because down. Yields on small time deposits lagged this opportunity costs increased and because the balmove, and returns on these deposits at times ances businesses are required to hold to compenexceeded those on market instruments. Demand sate their banks for services fell. After changes in for Treasury securities through noncompetitive market rates of interest, banks often adjust with tenders fell back, and growth in small time de- a lag the "earnings credit" rates used to deterposits, already robust, jumped to an annual rate mine the level of required compensating balof more than 20 percent for the quarter. Yields on ances; thus, downward adjustments to compensmall time deposits at thrift institutions re- sating balances can continue for some time after sponded somewhat more slowly than those at market rates have stopped rising. The large perbanks to the downturn in market interest rates, sonal tax payments also affected household deand growth of these deposits at thrift institutions mand-deposit balances. Late in the quarter, howsurged. Largely because of this strength in small ever, both demand and other checkable deposits time accounts and because the most anxious began to increase, perhaps as some of the earlier depositors probably had already moved their influences started to be reversed with the drop in funds elsewhere, overall deposit balances at market interest rates over the second quarter. FSLIC-insured thrift institutions stabilized in the second quarter. Credit Flows M3 grew at an annual rate of 31/2 percent from the fourth quarter of last year to June, placing it at The aggregate debt of domestic nonfinancial secthe lower bound of its target range. In the first tors expanded at an annual rate of close to 8 quarter, expansion of M3 was subject to offsetting percent over the first half of this year, near the forces. It was bolstered somewhat by bank fund- midpoint of its monitoring range and down someing needs generated by strong demand for busi- what from its 1988 pace. The growth of federal ness loans. Added demand for commercial and sector debt slowed as tax receipts surged. Exindustrial loans stemmed both from merger-re- pansion of the debt of nonfederal sectors also lated financings and from shifts to short-term moderated, partly in response to higher levels of borrowing by businesses facing rising long-term market interest rates over much of the first half of interest rates and investor concerns about "event the year. Household borrowing in mortgage marrisk"—the possibility that a firm's debt obliga- kets slowed as increases in lending rates damped tions would be significantly downgraded in a cor- housing demand, while the pace of consumer porate buyout or restructuring. Acting to damp borrowing slackened along with the deceleration M3 growth over the first quarter, however, was in consumption spending. heavy reliance by thrift institutions on Federal Mortgage lending by thrift institutions did not Home Loan Bank advances and other borrow- appear to be unusually weak in the first few ings, which are not included in the money stock. months of 1989, given the prevailing interest M3 growth edged down a bit in the second quarter rates. These institutions coped with weak deposit with some easing of bank credit demands and flows by running off cash and investments and, strong growth in government deposits—also not through the first quarter, stepping up borrowing included in the money stock—resulting from the from the Federal Home Loan Banks. Despite large volume of tax payments. By June, however, signs of a reduction in mortgage lending activity M3 had rebounded as tax effects unwound. by these institutions in the second quarter, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 539 overall availability of housing credit did not gered by the RJR-Nabisco acquisition in late appear to be significantly impaired. 1988 as well as higher long-term rates through Spreads between rates on both fixed-rate much of the period, corporate borrowing was mortgages and mortgage-backed securities and concentrated in short-maturity vehicles. Comrates on Treasury instruments of comparable mercial paper issuance surged during the first maturity did widen over the first six months of half of the year; businesses also relied on bank the year, with some market participants report- loans, albeit to a lesser extent. In response to edly fearing that large-scale liquidations of investor concerns about event risk, many firms mortgage-backed securities by troubled thrift issued bonds with relatively short maturities of institutions could adversely affect the market one to five years, or they brought issues to for those instruments. However, the widening market with straight puts or with so-called poison also may have reflected other developments: a puts—covenants designed to protect against neggeneral increase in uncertainty about move- ative effects on bondholders from future restrucments in long-term interest rates (and therefore turings. Toward the end of the second quarter, about prospective prepayments), and the flat- with the introduction of these protections and the tening of the yield curve, which discouraged decline in rates, long-term financing in the corissuance of derivative mortgage instruments porate bond market was on the upswing. and thus reduced demand for the underlying Net issuance of tax-exempt securities by state mortgage-backed securities. and local governments fell sharply over most of the Total borrowing by nonfinancial businesses in first half of 1989. Investor demand for tax-exempt the first half of the year was close to its 1988 securities remained strong and, with diminished pace. Credit demands continued to be buoyed by supply, the ratio of tax-exempt to taxable yields fell sizable merger-related financing in the first quar- to its lowest level since 1984. This ratio rose someter, and an apparent pickup in capital expendi- what late in the second quarter, when the decline in tures increased business borrowing in the second long-term interest rates began to bring forth an quarter even as credit demands related to merg- increase in refunding activity and a pickup of issuers and restructurings, while still strong, eased a ance of bonds to raise new capital. bit. Because of investor fear of event risk trig- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

540 Priced Services, 1988 and 1989 Members of the staff of the Board's Division of security of those systems and its ability to cope Federal Reserve Bank Operations prepared this with interim outages and to restore services article. after disasters. The following sections examine the activity for Since 1981, under the mandate of the Monetary each priced service. Appendix table A.l presents Control Act of 1980, the Federal Reserve has the pro forma balance sheet for all priced serbeen charging fees for the services it provides to vices in 1987 and 1988, and table A.2 presents depository institutions—fees that must, over the activity for certain services in each Federal Relong run, cover the full costs of those services. In serve District. 1988, the Federal Reserve System received $801.7 million in fees for its priced services and incurred $796.6 million in costs, for a recovery CHECK COLLECTION SERVICE rate of 100.6 percent. The 1987 rate was 104.6 percent. Given the 1989 fees for priced services In 1988, the Federal Reserve System processed announced in November 1988 and expected 17.6 billion checks, 3.6 percent more than in 1987 growth in the total provision of services, the 1989 (table 2). The service brought in $513.8 million recovery rate will be approximately 103 percent. and cost $436.6 million. After adjustment for Activity is generally expected to maintain its imputed costs, and for the net of other income recent patterns of growth, with higher volumes and expenses, the service netted $24.9 million for all services except those involving paper- before taxes (table 3). based securities, for which a decline is expected. In September 1988, the Board implemented After adjustments to receipts and costs, new Federal Reserve services designed to speed which are described in the notes to the tables, Reserve Bank processing of returned checks. total 1988 revenue from Federal Reserve priced These services help banks comply with the rules services was $667.7 million, $18.0 million above on check return set out in Regulation CC. Fees 1987 revenue (table 1). Production costs rose for the new check-return services and revised $46.1 million in 1988 to $552.9 million. The fees for forward check collection were effective resulting $114.8 million in income from opera- at the same time. The Federal Reserve priced its tions was reduced $69.9 million by imputed new return services explicitly and began to levy costs and increased $11.0 million by the net of the fees on the paying bank. Forward-collection other income and expenses; thus income before fees were reduced 11 percent on average because imputed income taxes was $55.9 million. After- the returned-check processing cost in those fees tax income for 1988 was $37.9 million, down was eliminated. from $62.9 million from 1987. Each of the To expedite the return process, the Reserve Federal Reserve's major service lines had be- Banks now send returned checks directly to the fore-tax income that at least covered operating depositary bank (that is, the bank of first deposand imputed costs. it), bypassing intermediary endorsers. Under In 1988, the System also continued to pursue the new procedures, the Reserve Banks process its longer-term efforts to design electronic pay- local returned checks at night, dispatching them ment systems. It implemented special programs with the forward-collection checks the next to improve processing of payments, especially morning. The first Federal Reserve office to new procedures to expedite the return of receive nonlocal returned checks "qualifies" checks. It sought to bolster the efficiency and the checks (that is, prepares them for high- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

541 1. Pro forma income statement for Federal Reserve priced services, calendar years 1987 and 19881 Millions of dollars Item 1988 1987 Income from services provided to depository institutions2 667.7 649.7 Production expenses3 552.9 506.8 Income from operations 114.8 142.9 Imputed costs4 Interest on float 43.4 27.4 Interest on debt 16.2 16.1 Sales taxes 8.4 7.4 FDIC insurance 1.8 69.9 1.8 52.7 Income from operations after imputed costs 44.9 90.2 Other income and expenses5 Investment income 134.0 119.1 Earnings credits 123.0 11.0 114.1 5.0 Income before income taxes 55.9 95.2 Imputed income taxes 6 18.1 32.3 Net income 37.9 62.9 MEMO Targeted return on equity6 32.7 29.3 1. The income statement reflects income and expenses for priced services. Float recovered through per-item fees is valued at the federal funds rate and Included in these amounts are the imputed costs of float, imputed financing has been added to the cost base subject to recovery in 1988. costs, and the income related to clearing balances. Details may not add to totals because of rounding. Total float 931.2 2. Income represents charges to depository institutions for priced services. Unrecovered float 55.8 This income is realized through one of two methods: direct charges to an Float subject to recovery 875.4 institution's account or charges against accumulated earnings credits. Sources of recovery of float 3. Production expenses include direct, indirect, and other general Income on clearing balances 105.4 administrative expenses of the Federal Reserve Banks for providing priced As-of adjustments 325.3 services. Also included are the expenses of staff members of the Board of Direct charges 121.2 Governors working directly on the development of priced services, which Per-item fees 323.6 were $1.7 million in both 1988 and 1987. The credit to expenses resulting from implementation of FASB 87 is reflected in production expenses (see table A. 1, Also included in imputed costs is the interest on debt assumed necessary to note 3). finance priced service assets and the sales taxes and FDIC insurance assessment 4. Imputed float costs represent the value of float to be recovered, either that the Federal Reserve would have paid had it been a private-sector firm. explicitly or through per-item fees, during the period. Float costs include These imputed costs are among the components of the PSAF (see table A.l, those for checks, book-entry securities, noncash collection, ACH, and wire note 4). transfers. 5. Other income and expenses consist of income on clearing balances and The following table depicts the daily average recovery of float by the Federal the cost of earnings credits granted to depository institutions on their clearing Reserve Banks for 1988. In the table, unrecovered float includes that generated balances. Income on clearing balances represents the average couponby services to government agencies or by other central bank services. equivalent yield on three-month Treasury bills applied to the total clearing Float recovered through income on clearing balances represents increased balance maintained, adjusted for the effect of reserve requirements on clearing investable clearing balances as a result of reducing imputed reserve balances. Expenses for earnings credits are derived by applying the average requirements through the use of a deduction for float for cash items in process federal funds rate to the required portion of the clearing balances, adjusted for of collection when calculating the reserve requirement. This income then the net effect of reserve requirements on clearing balances. reduces the float required to be recovered through other means. 6. Imputed income taxes are calculated at the effective tax rate derived from As-of adjustments and direct charges refer to midweek closing float and the PSAF model (see table A.l, note 4). The targeted return on equity interterritory check float, which may be recovered from depositing institutions represents the after-tax rate of return on equity that the Federal Reserve would through adjustments to the institution's reserve or clearing balance or by have earned had it been a private business firm, based on the bank holding valuing the float at the federal funds rate and billing the institution directly. company model. These items are among the components of the PSAF (see table A.l, note 4). speed processing) and dispatches them to other Revised fees for the Federal Reserve's re- Federal Reserve offices the next night. Federal turned-check services were approved by the Reserve offices also accept returned checks that Board on March 16, 1989, and became effective have been qualified by the paying bank or prior May 1, 1989. The Board increased the fees for returning bank and dispatch them as quickly as returned checks in response to the decline in forward-collection checks. the cost-recovery rate of the service after the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

542 Federal Reserve Bulletin • August 1989 2. Activity in Federal Reserve priced services, calendar years 1987 and 19881 Thousands of items, except as noted Service 1988 1987 Percent change Fund transfers 56,334 53,278 5.7 Commercial ACH 602,406 475,114 26.8 Commercial checks 17,617,744 17,007,924 3.6 Securities transfers 2,236 2,061 8.5 Definitive safekeeping 138 163 -15.6 Noncash collection 3,337 3,803 -12.2 Cash transportation 341 357 -4.6 1. Activity is defined as follows: wire transfer of funds, the number of basic originated on-line; definitive safekeeping, average number of issues or transactions originated; ACH, total number of commercial items processed; receipts maintained; noncash collection, number of items on which fees are commercial checks, total number of commercial checks collected, including assessed; and cash transportation, number of armored-carrier stops. both processed and fine-sort items; securities, number of basic transfers 3. Pro forma income statement for Federal Reserve priced services, by service, 19881 Millions of dollars Definitive Com- Wire Com- safekeeping Bookmercial transfer Cash Item Total mercial and entry check and net services ACH noncash securities collection settlement collection Income from services 667.7 513.8 - 69.6 42.7 17.9 8.7 14.9 Operating expenses 552.9 436.6 61.2 36.2 15.8 H 14.1 Income from operations 114.8 77.2 8.4 6.6 2.1 I:O .8 Imputed costs 69.9 62.4 3.1 2.7 .9 .1 Income from operations after imputed costs 44.9 14.7 5.4 3.9 1.2 .3 .7 Other income and expenses, net3 11.0 10.2 .3 .3 .1 # .1 Income before income taxes 55.9 24.9 5.7 4.2 1.3 .3 .8 1. The income statement by service reflects revenue, operating expenses, service. Other imputed costs are allocated among priced services according to and imputed costs except for income taxes. The effect of implementing FASB the ratio of operating costs less shipping costs in each service to the total costs 87 (see table A. 1, note 3) is reported only in the "total" column in this table and of all services less the total shipping costs of all services. has not been allocated to individual priced services. Taxes and the aftertax 3. Other income and expenses consist of income on clearing balances and targeted rate of return on equity, as shown on the pro forma income statement the cost of earnings credits for the Federal Reserve. Because clearing balances (table 1), have not been allocated among services because these elements relate relate directly to the Federal Reserve's offering of priced services, the income to the organization as a whole. and cost associated with these balances are allocated to each service based on Details may not sum to totals because of rounding. the ratio of income from each service to total income. 2. Imputed costs include float, interest on debt, sales taxes, and the FDIC •Less than $50,000 in absolute value. assessment. Float costs are based on the actual float incurred in each priced implementation of the returned-check services checks and the "reject" rate of qualified on September 1988. The recovery rates de- deposits. clined primarily because revenue was lower and The number of returned checks has increased costs were higher than expected as a result of approximately 25 percent since the implementhe poor quality of qualified returned-check tation of the new returned-check services. The deposits. The Reserve Banks are working with growth of total returned-check deposits is exdepository institutions to improve the overall pected to change little in 1989; qualified deposquality of returned-check deposits. Federal its are expected to increase, while raw deposits Reserve initiatives to strengthen return opera- shrink. tions include improving the quality of carrier In May 1988, the Board authorized the Reenvelopes and of endorsements, and reducing serve Banks to process notices of nonpayment to the number of misdirected qualified returned the depositary bank on behalf of the paying bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Priced Services, 1988 and 1989 543 for returned checks of $2,500 or more, to con- ELECTRONIC PAYMENTS SERVICES form to Regulation CC's expanded requirement for notice of nonpayment, which was to become The Federal Reserve System continued to work effective September 1, 1988. on the design of electronic payment systems Also in May, the Board approved making during 1988. As part of this effort, the System permanent two services that had been the subject completed a market study that focused on the of pilot programs: check truncation (in which the business requirements for the 1990s, investigatbank holds the check and transmits payment ing service offerings, operating hours, reliability, information electronically) and the electronic security, and formats. Also, an award was made capture of check data encoded for magnetic ink to IBM in early 1989 to test the application of character recognition (MICR). Under the ex- fault-tolerant (that is, highly reliable) minicompanded MICR-capture service, Reserve Banks puter technology to the automated clearinghouse deliver payment information electronically or on (ACH) service. If the test proves successful, the magnetic tape, provide a re turned-check and technology will be evaluated in terms of its retrieval service, and deliver the checks to the Systemwide application to the ACH service as paying bank several days later. Nine Reserve well as to other electronic payment services. Bank offices provided truncation services in The Reserve Banks also began improving the 1988. So far, the Reserve Banks have offered a reliability of automated systems for processing truncation service only locally and only to paying electronic payments during 1988, an effort that is banks that request it. Eventually, the Reserve expected to continue in 1989 and 1990. The aim is Banks will offer a national service by truncating to streamline processing systems, automate opeligible checks at the first Reserve Bank to erations, and incorporate new technology to perreceive the check. mit faster recovery from service interruptions. The Federal Reserve is developing a standard As one result, the total duration of Fedwire for machine-readable endorsements to improve outages in 1988 was half that in 1987. their quality and further expedite the processing The Federal Reserve worked on several new of returned checks. On the grounds of simplicity, ways to restore services after disasters. A test of cost, and compatibility with existing and future whether one Reserve Bank could provide procheck-processing equipment and technology, a cessing backup to another demonstrated the bar code appears to be the most promising type technical feasibility of such an approach; but it of machine-readable endorsement. Depending on also revealed the need for operational changes the outcome of research, the Board may publish before the approach can be used. In November, for public comment modifications to Regulation the Board approved the establishment of a con- CC to incorporate such an endorsement. If it is tingency backup site at the Los Angeles Branch ultimately adopted, depository institutions will for the electronic payment and accounting operbe given adequate time to implement the new ations of the Federal Reserve Bank of San Franstandard. cisco. The Federal Reserve Bank of New York, The Federal Reserve's digitized-image proj- which has a dedicated contingency backup facilect, initiated in 1987, continues to progress ity, completed several simulations of disaster successfully, and testing should be completed recovery during the year. Other Reserve Banks by 1990. By storing checks electronically rather continued to test and improve their methods of than on microfilm, the technique has the poten- restoring electronic payment operations at the tial to support significant efficiencies and im- shared contingency site at Culpeper, Virginia. provements in check and return-item pro- The System made substantial progress in processing. The System is investigating the use of moting electronic access for Federal Reserve digitized-image processing for both high- and services. First, it developed and tested a stanlow-speed processing of returned checks and of dard software system for intelligent terminals, government checks because the technique may known as Fedline II, to give depository institube more efficient and provide better quality than tions access to Federal Reserve services. The does the current practice of microfilming. Reserve Banks began deploying Fedline II in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

544 Federal Reserve Bulletin • August 1989 fourth quarter of 1988, with the objective of $2,500 or more be deposited at the Reserve converting all intelligent connections using Fed- Banks for processing by the nighttime deposit eral Reserve software to Fedline II software by deadlines. This practice should accelerate the year-end 1991. Second, by year-end 1988, con- delivery of large-dollar returns by several days. version to standard protocols and encryption had To enable institutions that do not have electronic been completed for almost all electronic connec- access to the Reserve Banks to comply with this tions between Reserve Banks and depository requirement, the Reserve Banks began permitinstitutions for funds transfers via low-volume ting the return of large-dollar debit transactions terminals and for one-third of the high-volume by telephone. The proportion of return items and connections. notifications of change that is processed electronically again expanded in 1988. Funds Transfer Service New accounting procedures for credit transactions that settle on holidays or on other days when The Federal Reserve processed 56 million trans- depository institutions are closed were also implefers of funds in 1988, 5.7 percent more than in mented on July 18, 1988. The procedures require 1987. While the number grew more slowly than that institutions originating credit transactions that before, the value of funds transfers increased settle on those days be charged as though they were almost 13 percent to $161 trillion, compared with open. This measure reduces risk significantly and a rate of 12 percent in 1987. recognizes that originating institutions can antici- The basic fee for funds transfers was increased pate their settlement obligations. from 47 cents to 50 cents effective January 1989. In another measure to reduce credit risk in the The volume of transfer services is expected to ACH service, the Board authorized the Reserve increase 4 percent in 1989, more slowly than in Banks to obtain prefunding for credit transac- 1988, in part because mergers and consolidation tions if they are concerned that an originating of depository institutions' operations have meant institution may become insolvent before the a reduction in the number of transfers. The transactions are settled. The Reserve Banks can System anticipates that costs will increase in the withhold some or all of the credit associated with next year or two as Reserve Banks take further debit transactions originated by such an instituaction to improve both the reliability of these tion, in anticipation of return items. This treatservices and disaster-recovery capabilities. ment parallels that for checks processed by the These actions, coupled with slower growth in Federal Reserve. volume, may occasion higher fees. In November 1988, the Board approved new Until April 1989, the Reserve Banks accepted ACH fees, which became effective in January unstructured third-party transfers, but originat- 1989. Surcharges on ACH nighttime processing ing institutions paid a 25 cent surcharge for each were reduced from 2 cents to 1.5 cents for transfer that did not conform to the structured next-day credit transactions, and from 4.5 cents format. On April 3, 1989, the structured format to 3.5 cents for debit transactions. The System became mandatory. plans to simplify the ACH fee schedule still more. ACH nighttime surcharges may be re- Automated Clearinghouse Service duced further, and the difference between local and interregional transaction fees, currently set In 1988, the Federal Reserve processed more at 1.0 cent and 1.7 cents respectively, may be than 1 billion ACH items, an increase of about 17 narrowed. The System also plans to simplify percent from 1987 (table 2). Commercial ACH further the fee schedule for the manual aspects of transactions accounted for approximately three- ACH processing, such as tape handling, output fifths of the total, or 602 million items, an in- delivery, and conversion to electronic form of crease of almost 27 percent from 1987. paper or telephonic returns and notifications of change. To reduce credit risk in the ACH system, in December 1987 the Board approved a require- The Reserve Banks will continue to encourage ment, effective July 18,1988, that debit returns of depository institutions to electronically origi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Priced Services, 1988 and 1989 545 nate, receive, and return ACH transactions Federal Reserve's program for reduction of risk with the Reserve Banks. Toward this end, in the payment system. Fedline II will be offered to depository institutions that use intelligent terminals to access Federal Reserve services. The System is also Definitive Safekeeping and Noncash exploring other low-cost electronic alternatives Collection Services for institutions receiving small volumes of ACH transactions. During 1988, the number of definitive safekeeping issues averaged approximately 137,700 a BOOK-ENTRY SECURITIES SERVICE month, 15 percent fewer than in 1987 (table 2). The number of noncash collection items de- In 1988, the Federal Reserve processed 7.9 mil- creased 12.2 percent to 3.3 million. Bearer and lion on-line transfers of Treasury book-entry coupon municipal securities have not been issued securities, 8.5 percent more than in 1987. Trans- since the 1983 revisions in the tax law, and fers of federal agencies' book-entry securities volumes are projected to decline steadily in the totaled 2.2 million, compared with 2.1 million in 1990s. Responding to the 1988 decline, the Re- 1987. The numbers are projected to increase serve Banks have emphasized cost-control meamore than 10 percent in 1989. Fees charged to sures. depository institutions for book-entry security Six Federal Reserve Districts raised their transfers remain in 1989 at $2.25 for on-line prices in 1989 to offset declining volumes in transfers and $7.00 for off-line transfers. How- both definitive safekeeping and noncash procever, a fee was imposed on receivers of reversals essing, and two other Districts raised prices on because they are the parties that originate the noncash processing to offset anticipated detransfer that prompts the reversal. clines in volumes. Full cost recovery for the In 1989, the System will redesign the book- combined service is planned for 1989. To entry securities system. This effort is a response achieve this objective, adjustments to operato the rapid growth in the number of book-entry tions and cost-control measures will be pursecurities eligible for the system in the last few sued, with further consolidation of the service years and to other business needs, such as the where possible. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

546 Federal Reserve Bulletin • August 1989 A. 1. Pro forma balance sheet for priced services, December 31,1987 and 19881 Millions of dollars Item 1988 1987 Short-term assets1 Imputed reserve requirements on clearing balances ... 222.0 219.6 Investment in marketable securities 1,628.0 1,610.4 Receivables 57.7 58.3 Materials and supplies 6.4 4.9 Prepaid expenses 10.9 6.7 Net items in process of collection (float) 967.0 675.7 Total short-term assets 2,892.0 2,575.5 Long-term assets3 Premises 271.8 224.5 Furniture and equipment 126.1 110.9 Leases and leasehold improvements 6.1 3.0 Prepaid pension costs 37.4 18.7 Total long-term assets 441.4 357.1 Total assets 3,333.4 2,932.7 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 2,817.0 2,505.7 Short-term debt 75.0 69.9 Total short-term liabilities 2,892.0 2,575.5 Long-term liabilities Obligations under capital leases 1.2 1.2 Long-term debt 128.1 107.2 Total long-term liabilities 129.3 108.4 Total liabilities 3,021.3 2,684.0 Equity 312.1 248.7 Total liabilities and equity4 3,333.4 2,932.7 1. Details may not sum to totals because of rounding. rate Conventional accounting procedures would call for the gross amount of 2. The imputed reserve requirement on clearing balances and investment in items in the process of collection and deferred availability items to be included marketable securities reflect the Federal Reserve's treatment of clearing on a balance sheet. However, the gross amounts have no implications for balances maintained on deposit with Reserve Banks by depository institutions. income or actual or imputed costs, and inclusion of the gross amounts could For presentation of the balance sheet and the income statement, clearing lead to misinterpretations of the assets employed in the provision of priced serbalances are reported in a manner comparable to the way correspondent banks vices that must be financed. Therefore, only the net amount is shown. The net report compensating balances held with them by respondent institutions. That amount represents the assets that involve a financing cost. is, respondent balances held with a correspondent are subject to a reserve 3. Long-term assets on the balance sheet have been allocated to priced serrequirement established by the Federal Reserve. This reserve requirement vices with the direct determination method, which uses the Federal Reserve's must be satisfied with either vault cash or with nonearning balances maintained Planning and Control System to ascertain directly the value of assets used at a Reserve Bank. Following this model, clearing balances maintained with solely in priced services operations and to apportion the value of jointly used Reserve Banks for priced service purposes are subjected to imputed reserve assets between priced services and nonpriced services. Also, long-term assets requirements. Therefore, a portion of the clearing balances held with the Fed- include an estimate of the assets of the Board of Governors directly involved in eral Reserve is classified on the asset side of the balance sheet as required the development of priced services. reserves and is reflected in a manner similar to vault cash and due from bank Long-term assets include amounts for capital leases and leasehold balances normally shown on a correspondent bank's balance sheet. The improvements and for prepaid pension costs associated with priced services. remainder of clearing balances is assumed to be available for investment. For Effective January 1,1987, the Federal Reserve Banks implemented Financial these purposes, the Federal Reserve assumes that all such balances are Accounting Standards Board Statement No. 87, Employers' Accounting for invested in three-month Treasury bills. Pensions. Accordingly, the Reserve Banks recognized a credit to expenses of Receivables represent (1) amounts due the Reserve Banks for priced ser- $18.7 million and a corresponding increase in this long-term asset account in vices that have been provided to institutions for which payment has not yet 1988. been received and (2) that share of suspense-account and difference-account 4. A matched-book capital structure has been used for those assets that are balances related to priced services. not "self-financing" in determining liability and equity amounts. Short-term The amount shown for materials and supplies represents the inventory value assets are financed with short-term debt. Long-term assets are financed with of such short-term assets necessary for the ongoing operations of priced long-term debt and equity in a proportion equal to the ratio of long-term debt to service areas. Prepaid expenses represent items such as salary advances and equity for the bank holding companies used in the model for the private sector travel advances for priced service personnel. adjustment factor (PSAF). The PSAF model uses the 25 largest bank holding The account "Net items in the process of collection" represents the amount of companies as a basis to impute the taxes that would have been paid and the float as of the balance-sheet date and is the difference between the value of return on capital that would have been provided had Federal Reserve priced items in the process of collection—including checks, coupons, securities, wire services been furnished by a private-sector firm. transfers, and automated clearinghouse (ACH) transactions-and the value of Other short-term liabilities include clearing balances maintained at Reserve deferred-availability items. The cost base for providing services that must be Banks and deposit balances arising from float. Other long-term liabilities recovered under the Monetary Control Act includes the cost of float consist of obligations on capital leases. incurred by the Federal Reserve during the period, valued at the federal funds Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Priced Services, 1988 and 1989 547 A.2. Revenue and expenses of locally priced Federal Reserve services, by District, 19881 Millions of dollars Total Operating Float Total Net DDiissttrriicctt revenue cost cost cost revenue Commercial check collection Boston 36.6 31.6 4.4 36.0 .6 New York 66.4 59.6 6.9 66.4 * Philadelphia 24.7 18.7 1.1 19.8 4.8 Cleveland 30.1 25.4 1.7 27.0 3.0 Richmond 48.2 38.7 2.9 41.6 6.6 Atlanta 59.3 53.3 .6 53.9 5.4 Chicago 71.3 56.8 4.2 61.0 10.2 St. Louis 22.8 19.4 2.3 21.7 1.1 Minneapolis 29.4 24.9 .4 25.3 4.1 Kansas City 32.6 29.1 1.5 30.6 2.0 Dallas 37.7 30.5 2.6 33.1 4.6 San Francisco 54.6 44.5 5.6 50.1 4.5 System total 513.8 435.3 34.2 469.6 44.2 Definitive safekeeping and noncash collection • I Boston .8 .7 .7 .1 New York 2.9 2.5 * 2.4 .4 Philadelphia 1.3 1.2 * 1.2 .1 Cleveland 2.1 1.8 .1 1.9 .2 liliifi iiiisi sisB: • Richmond .9 .9 .9 Atlanta 2.6 2.4 i * ••• 2.3 .3 Chicago 2.7 2.0 • 2.0 .6 St. Louis 1.2 1.1 *• 1.1 .1 Minneapolis .9 1.0 .9 -.1 Kansas City 1.5 1.3 1.3 .2 Dallas 1.3 1.0 * • 1.0 .2 San Francisco * * * System total 17.9 15.8 * 15.8 2.2 Cash services Boston .7 .7 * New York * * * Philadelphia 1.6 1.5 * Cleveland 1.9 1.8 .2 Richmond .1 .1 * Adanta * * * Chicago .5 .4 * St. Louis .3 .3 Minneapolis 2.8 2.5 .3 Kansas City .5 .5 Dallas * * * San Francisco 6.5 6.3 .2 System total 14.9 14.1 .8 1. This table gives the financial results for each Reserve Bank in providing revenue by priced service shown in this table with that shown in table 3, locally priced services. Expenses related to research and development projects adjustments must be made for imputed interest on debt, sales taxes, FDIC are reported at the System level; the sum of expenses for the twelve Districts assessment, Board expenses for priced services, and net income on clearing may not, therefore, equal the System total. The financial results for each balances. Reserve Bank shown here do not include the dollars to be recovered through Details may not sum to totals because of rounding, the PSAF and the net income on clearing balances. Therefore, to reconcile net *Less than $50,000 in absolute value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

548 Industrial Production Released for publication June 15 month, and output of both cars and trucks dropped back to about their March levels. At Industrial production was unchanged in May 141.4 percent of the 1977 average, the total index after having increased a revised 0.6 percent in in May was 3.9 percent higher than it was a year April. In May, further gains occurred in business earlier. Manufacturing output edged down in equipment, excluding motor vehicles, and in May; capacity utilization in manufacturing dematerials. However, production of construction clined 0.3 point to 84.0 percent. Detailed data for supplies declined for the fourth successive capacity utilization are shown separately in "Ca- Ratio scale, 1977=100 Motor Vehicles and Parts Final Products Defense and 150 space 200 135 180 120 Business equipment 160 /-v-.^.. 140 90 Consumer goods 120 75 100 60 80 1983 1985 1987 1989 1983 1985 1987 1989 All series are seasonally adjusted. Latest series: May. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

549 1977 = 100 Percentage change from preceding month Percentage ccchhhaaannngggeee,,, Group 1989 1989 MMMaaayyy 111999888888 tttooo MMMaaayyy 111999888999 Apr. May Jan. Feb. Mar. Apr. May Major market groups Total industrial production 141.4 141.4 .3 -.2 .1 .6 .0 3.9 Products, total 151.1 150.8 .5 .0 .2 .5 -.2 4.0 Final products 149.7 149.4 .3 .3 .1 .6 -.2 4.2 Consumer goods 139.1 138.5 .2 .2 -.3 .6 -.4 4.3 Durable 131.8 130.8 -.4 .1 -1.1 1.3 -.8 4.1 Nondurable 141.8 141.3 .4 .2 -.1 .3 -.3 4.4 Business equipment... 167.4 167.8 .8 .7 .8 .7 .2 6.9 Defense and space 178.6 178.0 -.3 -.4 -.6 .2 -.3 -4.0 Intermediate products... 155.9 155.7 1.0 -.9 .5 .0 -.1 3.5 Construction supplies. 138.5 137.4 .6 -1.9 -.4 -.3 -.8 -1.0 Materials 128.3 128.5 -.1 -.5 -.1 .8 .2 3.7 Major industry groups Manufacturing 147.7 147.6 .6 -.2 -.1 .6 -.1 4.1 Durable 146.6 146.4 .3 -.2 -.2 .7 -.1 3.4 Nondurable 149.3 149.3 .9 -.3 .2 .6 .0 5.1 Mining 102.9 104.1 -1.8 -2.1 1.0 1.0 1.2 1.4 Utilities 116.9 116.4 -1.3 2.2 .4 .0 -.5 4.3 NOTE. Indexes are seasonally adjusted. pacity Utilization," Federal Reserve monthly balance, were little changed. Output of business statistical release G.3. equipment excluding motor vehicles rose 0.5 In market groups, production of consumer percent in May, the same rate of growth as in goods decreased in May as auto assemblies fell to April. Manufacturing and commercial equipan annual rate of 7.1 million units, from 7.4 ment, as well as output of commercial aircraft, million units in April; output of light trucks for continued to post gains. Production of materials consumer use also declined. Production of other rose 0.2 percent in May after having risen sharply consumer goods edged down as output of con- in April. Energy materials advanced again in sumer energy, particularly gasoline and distillate May as extraction of crude oil increased. Nonfuel oil, fell sharply; the remaining sectors, on durables rose again last month, reflecting further gains in chemicals and textiles. Durable materials Total industrial production—Revisions were unchanged; a decline in parts for consumer Estimates as shown last month and current estimates durables, mainly motor vehicles, was offset by small gains in equipment parts and basic metals. Percentage change Index (1977=100) from previous In industry groups, within manufacturing, MMoonntthh months transportation equipment, refined petroleum products, and lumber declined significantly. In Previous Current Previous Current contrast, instruments, nonelectrical machinery, Feb 140.4 140.5 -.3 -.2 and chemicals posted gains. Outside manufac- Mar 140.5 140.6 .0 .1 Apr 141.1 141.4 .4 .6 turing, production in mining rose, but output at May 141.4 .0 utilities declined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

550 Statements to Congress Statement by Martha R. Seger, Member, Board of mechanisms and procedures for the CRA more Governors of the Federal Reserve System, before complicated, costly, or apt to impose delays on the Subcommittee on Consumer and Regulatory those institutions with good records of perfor- Affairs of the Committee on Banking, Housing, and mance. Urban Affairs, U.S. Senate, June 7, 1989. I will begin by describing briefly the threefaceted program that we have established to Thank you for the opportunity to provide the carry out our mandate in enforcing the CRA. views of the Board of Governors of the Federal First, the Federal Reserve's specialized con- Reserve System on legislation relating to the sumer compliance examiners conduct examina- Community Reinvestment Act (CRA), the Gov- tions of CRA performance about every 18 ernment Check Cashing Act of 1989, and the months for most state member banks, and more Basic Banking Services Access Act of 1989. often for those with identified weaknesses in The CRA revisions in S. 909 would require that their record. The examination takes a comprethe numerical ratings and a written assessment of hensive look at the bank's activities to address an institution's CRA performance be made avail- credit needs in its market, including those of lowable to the public. In addition, S. 906 would and moderate-income areas, as well as the kinds require depository institutions to cash govern- of relationships it is forging with specific segment checks at cost for noncustomers provided ments of the community. Second, through the that such persons have registered with the insti- community affairs office at each of the Reserve tution. S. 907 adds the requirement that deposi- Banks, we provide information about community tory institutions offer, for minimal fees, "basic development strategies and techniques to banks, financial services accounts" that have low mini- bank holding companies, and others. One of our mum balance requirements and that they permit primary goals is to become familiar with the at least ten withdrawals per month. credit needs within the Federal Reserve Districts, and then help banks construct programs that respond to those needs. Third, we consider COMMUNITY REINVESTMENT ACT the CRA record of banks in connection with applications received under the Bank Holding To preface our discussion of the legislation per- Company and Bank Merger Acts; CRA perfortaining to the CRA, I would like to underscore mance is taken into account along with legal, our belief that the purpose of the CRA can best financial, managerial, and competitive factors. be accomplished in an arena that is, as much as Our commitment to enhancing the role the possible, open to public view and input. Recent public plays in the CRA process has been a actions by the Board in concert with other regu- long-standing one. For more than 10 years, we lators have echoed a theme that seems to be at have endeavored to ensure that CRA examinathe heart of the proposals before you today—that tions are not conducted in a regulatory vacuum— people who are well informed about the activities Federal Reserve examiners routinely interview of their local financial institutions are better business people, government officials, and housequipped to participate effectively in the CRA ing and other community group leaders in the process. We are also committed to widening the bank's community to learn about the local ecochannels of communication among banks, their nomic environment and the perceptions these communities, and regulators, but we believe this individuals hold of their local financial institushould be done without making the regulatory tions. We require institutions to keep a file of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

551 letters commenting on their CRA performance sion, bringing their concerns to the attention of from members of the community; examiners an institution's management—to the greatest review those letters, as well as the institutions' possible extent—in the framework of a continuresponses to them. Careful attention is also given ing dialogue, rather than in a protest situation. to public comments on CRA performance, or A second important policy direction emphaprotests, received in connection with an applica- sized in the new policy statement should be tion. Yet our experience with the CRA leads us borne in mind in considering proposed legislato believe that more can be done to open up the tion. That is, that institutions desiring to expand process—and that is precisely the direction in their operations should have appropriate CRA which we are moving. policies in place, and working well, before filing In March of this year the Board, together with an application. That means that while committhe Comptroller of the Currency, the Federal ments by applicants for future actions may be Deposit Insurance Corporation, and the Federal used to address specific problems in an otherwise Home Loan Bank Board, adopted a CRA Policy satisfactory record, making commitments to im- Statement to provide guidance to institutions and prove in the future should not be seen by applito community groups and to clarify a number of cants as a way to compensate for a seriously issues that have arisen in enforcing the CRA. For deficient past record of performance. example, institutions are now required by regu- This approach was demonstrated earlier this lation to prepare, annually update, and make year in the Board's denial of an application by available for public review a CRA statement Continental Illinois Bancorp, Inc., of Chicago, listing the loan products they are willing to Illinois, to acquire an Arizona bank. In its order, extend. The new Policy Statement urges each the Board described, and took a positive view of, institution to significantly expand its statement to a plan developed by Continental to correct shortpaint a picture of the institution's overall ap- comings in its CRA performance, which was in proach to CRA, describing strategies for market- the initial stages of implementation. Yet the prior ing and advertising, credit needs assessment and record failed to demonstrate, in the words of the new product development, past accomplish- Board's order, "a basic level of compliance on ments, and future plans. Naturally, the size, which the commitments can be evaluated." The resources, and location of an institution will Board's handling of the Continental case should influence the CRA statement's degree of detail not be interpreted as evidence of any lessened and its scope. While an expanded statement willingness to work with institutions directly, or laying out the details of its CRA efforts may be through their primary regulators, to improve extremely useful to a large bank in a major city, their record. While there were reasons for the it may simply not be necessary for a small bank Board's denial besides CRA factors, the case in a rural setting to go into similar detail. does give a clear signal that, with respect to the A major thrust of the policy statement is to CRA, institutions should "put their houses in shift the "CRA spotlight" away from the appli- order" before considering expansion. It also cations process—with the pressures imposed by highlights the importance of an established our timetable guidelines for completing the pro- record of performance under the CRA. cess—and to build stronger, enduring mechanisms for outreach and service by institutions to their communities. We think that the expanded S. 909 CRA statement is an ideal vehicle for doing that by focusing the attention of an institution's man- In light of these developments, let me now turn agement, and of the public at large, on the our attention to S. 909, which would amend the institution's record on an ongoing basis, and on Community Reinvestment Act to require the any areas needing improvement. At the same regulatory agencies to prepare written evaluatime, we have strongly encouraged community tions of institutions' performance under the act, organizations to take advantage of the expanded and to make those evaluations public. We sup- CRA statements as a starting point for discusport the concept at the core of Senator Metzen- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

552 Federal Reserve Bulletin • August 1989 baum's proposal; in fact, you may recall that Because needs vary widely from community to Governor Johnson endorsed the idea of regularly community, we would be remiss in rigidly focuspublishing an assessment of each institution's ing on these three credit categories in making our CRA record by our examiners in testimony be- evaluations. CRA examiners aim to take a broad fore this committee last September. picture, instead of a snapshot, of all activities by But one point is especially worthy of emphasis an institution that foster community revitalizawith regard to the nature of the written evalua- tion—principally direct loans of all kinds, but tions for public release that we support. Though also, for instance, participation in the secondary the public evaluations we support would summa- market, purchase of state or municipal bonds, rize the examiner's conclusions, together with and investment in or technical assistance to supporting information related to the CRA as- community development projects. Examiners do sessment factors, these evaluations would not be look at the amounts and distribution of credit the same as the examination reports themselves. extended for housing, small businesses, and Neither would they divulge material contained in small farms, not with the intent of making a the examination report that is important for su- quantitative analysis of an institution's lending, pervisory purposes, but must be treated confi- but to gain a full, balanced view of its service to dentially—such as information about the finan- the community. cial condition of the institution and any sensitive Secondly, the bill would mandate public disinformation about its employees, customers, or closure of the numeric ratings assigned during members of the community. We believe that the examinations. Historically, CRA ratings, like relevant provisions of S. 909 should be written to commercial examination ratings, have been recognize the distinction between the examina- treated with strict confidentiality, as required by tion report that is given to the bank and the procedures adhered to by all regulators. The summary assessment that we believe can use- ratings were designed as a kind of supervisory fully be made public. shorthand to help us monitor those institutions The objective of that proposal was to tell needing closer attention; the numeric rating is in people at the community level in a concise, no way a self-explanatory indicator of perforstraightforward, and timely way how well their mance. Moreover, a rating assigned at a particlocal institutions are doing under the CRA. Doing ular date in the past can be misleading, given that so should facilitate exactly what we are endeav- CRA performance should be seen as a process oring to do through the Policy Statement just developing over time, rather than a static state of described—promote the early start of a construc- affairs. At the very least, release of the rating tive dialogue about CRA achievements and number would divert attention from the subgoals. Those concerned about affordable hous- stance of examination findings. Of even greater ing, minority businesses, inner city reinvest- concern is the potential for the undermining of ment, and many other areas will benefit from public confidence in the safety of deposits in an knowing how these factors have been weighed in institution if an adverse CRA rating were to be assessing the record, and what areas for im- misunderstood as a reflection on the institution's provement have been identified. financial soundness. Much more can be achieved We do, however, have serious concerns about by making public only the narrative evaluation, two aspects of the proposal. First, the written eval- as suggested by Governor Johnson last Septemuations of each institution's performance would be ber. required to emphasize three specific types of credit—loans for low- and moderate-income housing, small businesses, and small farms. We believe that CRA AMENDMENT TO H.R. 176 this requirement is inconsistent with the intent of the act itself, which does not impose any specific lend- Your letter asked that we address other CRA ing requirements. Rather, institutions have a re- changes proposed in an amendment to H.R. 176 sponsibility to help meet local credit needs, using late last year. This proposal comprises a broad their own expertise and resources. spectrum of measures pertaining to CRA exami- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 553 nations, assessment factors for CRA perfor- nection with examinations, and we take them very mance, and the treatment of CRA issues in the seriously. We also seek out public input each time applications process. Here again, we believe that we conduct a CRA examination through the the aspect of the proposal dealing with a public community contact interviews I mentioned ear- CRA assessment has merit. Our overriding con- lier. In 1988, Federal Reserve examiners alone cern, however, is that many of its provisions interviewed some 925 consumer advocacy unnecessarily encumber existing administrative groups, housing coalitions, local business and procedures for CRA enforcement. trade associations, as well as local government First, the bill requires in Section 804(b) that the officials, and factored their comments into their agencies give public notice before commencing assessments of CRA performance. Given the CRA examinations. Presumably this would be totality of these efforts, we do not believe this done through newspaper advertisements, since it additional expense for soliciting public commust be given "in a manner reasonably designed ments in the examination process is necessary. to reach members of the community served by The bill's Section 804(e) calls upon the agenthe institution under examination"—although cies to prepare and make public their assessthe use of lobby notices in the institution, or ments of each institution's performance under publications currently disseminated by each Re- the CRA. This concept has our support, for the serve Bank that list pending applications might reasons already discussed in connection with also be envisioned. Senator Metzenbaum's proposal. There is, how- To gauge the implications of this proposal, ever, a need to clarify that the assessment would Reserve Banks surveyed local newspapers to be separate and distinct from the examination estimate the costs involved in running the 26,500 report and the numeric rating. notices that we estimate would be required every Provisions of the bill's Section 805 regarding two years for the examinations by all the federal the consideration of CRA performance in the regulators, assuming every institution is exam- application process are troubling to us. We note ined at least every two years. The total bill would that it would require the agencies to rely on the be about $1.24 million biannually, taking into "most recent assessment of such record" in account price differences in urban and rural considering an applicant institution's perforareas. Time involved in identifying suitable mance. Experience has shown us that the most newspapers and making publication arrange- recent assessment may not always be the only, or ments could add considerably to the price tag. most reliable, indicator of current performance, As stated in the proposed statutory language, especially when the examination report is outthe reason for the provision is to allow any dated, or when an institution has undergone a person to submit comments on an institution's major internal change, such as turnover in manrecord in connection with CRA examinations. agement. In such instances, the flexibility to look Actually, this has long been our practice. In the beyond the latest examination report for up- Federal Financial Institutions Examination to-date information accurately reflecting present Council's A Citizen's Guide to CRA, for exam- performance is essential. ple, community members are encouraged to dis- Section 805(e) sets out timing requirements for cuss their concerns with the institution's regula- agencies to complete their assessments of CRA tory authority, particularly through the public records in the framework of applications that we file, the maintenance of which is one of the think are unnecessary and unwise. You may be CRA's statutory requirements. As indicated in aware that under Regulation Y, the Board has the Guide, persons who request to speak to a imposed on itself a 60-day guideline for pro- Federal Reserve examiner in letters to the public cessing applications. The vast majority of domesfile will be contacted during the next scheduled tic bank and bank holding company applications examination. are processed well within the 60-day goal; in both In reality, we go far beyond this provision, 1987 and 1988, the average processing time for since we welcome comments about any institu- more than 4,000 domestic cases, including those tion's performance at any time, not just in con- with CRA issues, was 39 days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

554 Federal Reserve Bulletin • August 1989 Under the Board's Rules of Procedure, the ment on an applicant's CRA record to do so presence of a CRA protest or an adverse assess- within a 30-day period; otherwise, we may be ment by any agency makes the case a matter for unable to give their comments the attention they Board attention—though it may be returned to deserve, and still carry out our responsibility to the Reserve Bank after Board staff review. It also process applications in a timely manner. In a can make the process more complex, requiring a very few circumstances we do find that an extenthorough, and frequently time-consuming, anal- sion of the comment period is warranted—when ysis of the issues. In many instances, it is neces- the application has not been promptly made sary for us to seek out additional information available for inspection by the parties, for examfrom the applicant, or its primary regulator, to ple, or in the rare event when there has been fully address these issues. This is why we are not inadequate public notice of the application. But always able to meet the 60-day target, although we do not think it is appropriate to extend the delays have generally not been inordinate; in comment period—and possibly delay the Board's 1987, average processing time for the 37 CRA- decision on the case—simply because the comprotested cases was 73 days and in 1988, for 32 menter wants more time to pursue negotiations cases, it was 87 days. with an institution under the pressure of a pend- At the outset, we would question whether ing application. The agencies' recent Policy imposing statutory timeframes on applications Statement stresses this point. processing would achieve the desired end. They In summary, the amendment to H.R. 176, in would seem to hamper, rather than help, our our view, poses a number of problems. Most efforts to give appropriate attention to conve- importantly, it would make more rigid and cumnience and needs considerations in applications, bersome procedures, which for the most part are especially when an applicant's performance has already in place for enforcing the CRA, without been marginal, or when the applicant is not presenting any really new approaches to make readily able to provide detailed information the process work better. We stand ready to about its record. answer any questions you may have, and to Apart from our general concern about these continue working with the committee in this key requirements of the bill, other aspects of the policy area. bill's timing provisions are unclear. CRA is only one of many issues considered as part of these applications. The Board also considers legal, CHECK CASHING AND BASIC BANKING financial, managerial, and competitive issues, as well. The draft seems to speak only of those Let me turn now to the government check cashcases in which CRA issues are brought forward ing and basic banking bills that are under considthrough a protest. In fact, CRA issues may also eration. These bills result from concerns that are be uncovered by Federal Reserve Bank or Board similar to those that motivate the Community review, when any of the banks that are parties to Reinvestment Act. Not only are some people an application have been assigned adverse CRA questioning whether banks are meeting the credit examination ratings by any of the agencies' ex- needs of their communities, but others have also aminers. In addition, the draft appears to require raised concerns that low- and moderate-income that the CRA assessment in an application be persons may not have ready access to banking completed by a certain time in the application services. In particular, the focus has been on the process, whether or not the analysis of any other need to cash government checks and to have an issues the case might raise have been completed account for making a limited number of payand the overall case is ready for final decision. ments to third parties. Let me mention briefly our policy regarding The Board is quite familiar with these conextensions of the comment period since misper- cerns. Since 1977, we have sponsored four surceptions about our policy may have sparked veys that determined, among other things, the interest in the statutory timeframes. We believe number of families that do not have depository that it is incumbent on persons desiring to com- accounts. While the General Accounting Office Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 555 (GAO) has reported a higher number, our re- of surveys have been conducted to assess the search suggests that the overall percentage of availability of basic banking and check cashing families without accounts has remained fairly services. While results vary, there is evidence constant at about 8 to 12 percent between 1977 that a widespread problem does not exist. For and 1986. This research has also indicated that example, in its recent report to the Congress on roughly 30 percent of the families whose income government check cashing, the GAO reported falls in the lowest quintile do not hold accounts. that, as of 1985, 86 percent of banks and 55 Although the percentages for this latter group percent of thrift institutions cashed U.S. Treahave fluctuated, the numbers were more or less sury checks for noncustomers. The American the same in 1986 as in 1977. Thus, while many Bankers Association reports that more than half low-income families do not have accounts, the of all banks, and more than 70 percent of large fact that the percentage has remained relatively banks, offer basic banking accounts and that the constant suggests that the increase in fees and number of institutions offering such accounts has minimum balance requirements in recent years increased dramatically over the years. Following has not caused a significant decline in account a survey of virtually all financial institutions in holding. There are probably more fundamental New York State, the New York State Banking reasons for much of the lack of account owner- Department found that low-cost banking services ship. For example, the convenience of check are widely available and that the vast majority of cashing alternatives, the fact that these families low- and moderate-income persons have ready may have few bills to pay, and the difficulties in access to such accounts. In a 1987 report, the managing an account with limited resources may GAO found that 74 percent of financial instituexplain, to a large degree, why some low-income tions provide low-cost accounts to senior citifamilies do not have an account relationship. zens. Also, it may be that some people simply do not These surveys suggest that check cashing sertrust banks and prefer not to deal with them. vices are often available to noncustomers who Nevertheless, we share the belief that banking choose to use them and that a substantial and services should be widely available to all. Sev- increasing number of financial institutions voluneral years earlier, the Board adopted a Joint tarily offer basic banking accounts. Conse- Policy Statement on Basic Financial Services quently, the Board does not believe that enough with the other federal financial regulatory agen- of a problem has been demonstrated to justify cies and with the state financial institution regu- sweeping legislation. latory associations. The Policy Statement en- The Board has several other concerns with this couraged financial institutions to recognize the legislation. First, as a general matter, we quesneed of consumers for a safe and accessible place tion whether it is wise for the government to to keep money, the need to obtain cash (includ- mandate the services that financial institutions ing cashing government checks), and the need to must provide. This is particularly so when the make payments to third parties. The Policy legislation involves setting the fees for such Statement encouraged institutions to continue to services. If there are problems in the way govdevelop account products that are responsive to ernment funds are delivered to recipients, then it these needs. seems that the government should itself assume In the Policy Statement, the Board supported a more responsibility for addressing the difficulty. voluntary rather than a mandated approach so For example, it might be useful to explore the that institutions could have flexibility in develop- possibility of using federal post offices to provide ing account products that meet the particular check cashing services to holders of government needs of their customers. That remains our pref- checks since they offer other financial services erence, and we oppose legislation to require such as money orders. Electronic delivery of institutions to offer specific banking services. government benefits is another avenue that could First, it is not clear that these services are so be vigorously pursued. Successful electronic widely unavailable at present that legislation is benefits delivery systems are currently operatwarranted. Over the past several years, a number ing, including programs in New York City and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

556 Federal Reserve Bulletin • August 1989 St. Paul, Minnesota. The advantages of these experimentation. Several different account prodsystems—for beneficiaries, government agen- ucts have evolved as a result of voluntary efforts cies, and financial institutions—are numerous. by financial institutions. Some, for example, in- They include eliminating problems with delayed, volve savings accounts with money orders used lost, or stolen checks, providing quicker resolu- for third-party payments. Others, based on a tion of problems concerning payments, and low- "pay-as-you-go" idea, have fees for each check, ering costs to all parties. rather than the monthly maintenance fee contem- A more specific concern involves the mecha- plated by the legislation. Either of these could be nism for setting fees for the services. The bills better and more economical for the person who require the Board to study financial institutions' writes fewer than ten checks a month. The basic "actual" costs and to set the fees permitted to be banking bill will likely result in the standardizacharged for these services to recover these costs. tion of accounts, and it runs the risk of thwarting Besides the many difficulties of trying to deter- the continued development of different services, mine such costs, any fees set by the Board would such as these, to address varying and changing almost certainly be an average and, as such, needs of low-income and elderly individuals. could never reflect the actual differences among Institutions may have much less incentive to institutions. As a result of a federally established offer additional, and potentially cheaper, basic fee, some institutions would fail to recover their banking accounts once they offer the standard costs, while other institutions could exceed them service required by law. under the national fee standard. Finally, it ap- Other innovative arrangements are being invespears inequitable that financial institutions would tigated that would eliminate many of the problems be required to offer these services at cost while with delivering government benefits by paper other entities, such as check cashers, could con- checks. The Board strongly supports the facilitatinue to offer them at a profit. tion of electronic alternatives for the delivery of The Board is also concerned that financial government payments (known as "electronic beninstitutions would increasingly fall victim to efits transfer" or EBT). These arrangements are fraud if check cashing legislation is enacted. probably a better long-term solution to the prob- Checks can easily be stolen, and identification lems that motivate the check-cashing legislation. cards can easily be forged. Giving the Board the Since the Board testified on similar legislation authority to suspend the check cashing require- last fall, interest in electronic benefits transfer ment for certain classes of checks, as the bill has increased. Several meetings have been held does, is small comfort. It would take a relatively among representatives of government agencies, long period of time for the Board to learn of any financial institutions, and consumer groups to patterns of fraud and, by then, significant losses discuss the feasibility of such arrangements. In may already have been suffered. Also, while addition, several programs are now operating fraud levels may now be low for U.S. govern- and others are about to be initiated. The Board ment checks, this may not continue to be the agrees with the GAO's conclusion that electronic case after legislation. Institutions can now keep delivery provides several advantages over a fraud losses low by establishing procedures, paper-based government benefits system. Consebased on their own experiences, that are ade- quently, we are very encouraged about the inquate to address their own risks. Mandatory creased momentum in EBT activity over the last standards may eliminate their ability to continue several months. We urge the Congress to foster using methods that have been successful for these efforts, rather than imposing burdensome them and may leave them far more vulnerable. new requirements on financial institutions. The Joint Policy Statement I mentioned had Finally, in our experience, well-intentioned legthe benefit of putting the federal government islation and regulations, particularly as they pyrbehind providing basic services, while leaving amid on one another, can cumulatively be overthe implementation to the creativity of individual whelming—especially for small institutions. This institutions. Conversely, a single federally man- bears particular note when it is not clear that a dated banking service may stifle innovation and compelling need for the legislation has been dem- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 557 onstrated. The Board believes that voluntary ef- ternatives such as EBT, in particular, merit future forts by financial institutions will continue to be exploration. For all the foregoing reasons, the successful in meeting many of the concerns that Board opposes the basic banking and checkhave been expressed without the burden and cost cashing bills now being considered by the Senate. • that rules and regulations inevitably impose. Al- Statement by Alan Greenspan, Chairman, Board invitation that seem to be most relevant to the of Governors of the Federal Reserve System, Federal Reserve's concerns. before the Subcommittee on Securities of the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, June 14, 1989. RECENT TRENDS I am pleased to appear today to discuss the International transactions in securities have internationalization of securities markets. This soared from levels earlier in this decade. This is subcommittee is to be commended for holding true both of foreign purchases and sales of U.S. timely hearings on this important matter. Our securities and, to a somewhat lesser degree, U.S. markets and financial system are evolving at a transactions in foreign securities. Transactions brisk clip, in ways that were not fully envisioned volume has been most dramatic in foreign puronly a few short years earlier. chases and sales of U.S. Treasury notes and These developments hold a good deal of prom- bonds, which surpassed $3 trillion on a gross ise for the diversity of financial markets and basis last year—from $100 billion to $200 billion instruments available to our investors. At the earlier in the decade. Foreign purchases and same time, they are enhancing the avenues of sales of U.S. corporate stocks and bonds also credit available to borrowers and the conve- have been running dramatically above levels nience and efficiency of financial services. How- earlier in the decade, although they are off from ever, these changes also are adding immensely to peak levels of a couple years earlier. the complexity of our financial system and ac- Similarly, U.S. residents have become much cordingly are posing new risks. With the memory more active transactors in foreign bonds and of October 1987 still fresh in our minds, it is stocks. Purchases and sales of foreign bonds by important that we stand back and review this U.S. residents exceeded $400 billion, gross, last process—not only to take stock of what has year—up about tenfold from the beginning of the happened but to understand better the economic decade. Meanwhile, U.S. transactions in foreign causes of the globalization of securities markets stocks recently have climbed into the $200 billion and to identify potential accompanying risks and annual area on a gross basis—after some reways to limit such risks. We also must be mindful trenchment in the wake of the October 1987 that our domestic financial institutions have collapse—which also is up about tenfold from the much to contribute to this process—and the early part of this decade. considerable economic benefits that it produces— Clearly, this surge in cross-border financial and we must seek to ensure that their competitive transactions has accompanied a large advance in position is not inappropriately hindered. cross-border trade of goods and services. In the In my remarks today, I would like to put trends 1980s, growth of world output devoted to trade in developments in global securities markets in has continued to surpass growth of total output, some perspective and to draw implications for although by a smaller margin than in the 1970s. financial risks. I shall touch on the efforts under Thus, the share of output going to trade has way to coordinate policies internationally and the continued to rise. For the United States, the question of legislation. In this way, I hope to import share of our final purchases has moved address those issues suggested in your letter of higher in the 1980s, but there has been no dis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

558 Federal Reserve Bulletin • August 1989 cernible improvement in the export share of our has shifted increasingly toward conceptual and output during this period of large external deficits. intangible values with decidedly less reliance on In financial markets, securities and open mar- physical volumes. A half century earlier, for ket paper have tended to play a more important example, our radios and calculators were bulky. role in the financing of such international trans- Today, owing to modern electronics, they are actions in recent years, and net securities pur- tiny and light and capable of performing more chases have represented the largest source of functions. Thin fiber optics are replacing vast capital inflow into the United States to finance tonnages of copper and with higher fidelity in our large external deficits. Investors have be- transmission. Financial transactions historically come more familiar with foreign securities issu- buttressed with reams of paper are being progresers through the greater availability of foreign sively reduced to electronic charges. Such adproducts in local markets and through better vances not only reduce the amount of human information on foreign issuers made possible by effort required in making and completing finanvast improvements in information, aided by the cial transactions but facilitate more accuracy and revolution in electronic information processing promptness in execution. and telecommunications. Moreover, the expan- The considerable increase in the economic sion of securities firms and banks into foreign well-being of most nations in recent decades has markets, including their research function, adds come about without much change in the bulk or to the information available to home-country inves- weight of the gross national product. In fact, if all tors about foreign investment opportunities. the weight of materials—the tons of grain, cot- At the same time, issuers, seeking to minimize ton, ore, coal, steel, cement, and so forth—we their funding costs, have increasingly over time produce were added up, their aggregate volume tested external capital markets, most visibly the per capita might not be much greater today than Euromarket. Furthermore, the growing sophisti- it was, say, 50 or 75 years earlier. This would cation of currency and interest rate swap markets mean that increases in the conceptual compohas enhanced this process by enabling borrowers nents of GNP—that is, those reflecting advances to issue instruments in fixed or floating form in in knowledge and ideas—would explain by far the currency most desired by investors and to the major part of the rise in real GNP in the swap into the currency or form preferred by the United States, and presumably the industrial borrower. world as a whole. An increasing array of securities—most nota- In part, this downsizing has reflected the ecobly government bonds and corporate stocks—is nomic need to conserve increasingly precious being traded in secondary markets outside the space. Also, it has been a response to the need to traditional market of the issuer. Many of these reduce the costs of moving goods and services to securities are being traded at some point on the their most highly valued use—thereby conservglobe virtually around the clock, alongside for- ing on energy, labor, and other valuable reeign exchange, and this has been a factor behind sources. Further contributing to this process the surge in transactions volume already noted. have been quantum advances in technology, In many cases, financial futures and options spurred by economic forces. In recent years, the contracts can be traded during these same hours, explosive growth in information-gathering and which facilitates a shifting of risk and an en- processing techniques has greatly extended our hancement of market liquidity. analytical capabilities of substituting ideas for physical volume. Since irreversible conceptual gains are propelling the downsizing process, these trends almost surely will continue into the UNDERLYING ECONOMIC FORCES twenty-first century and beyond. The purpose of production of economic value will not change. It Behind these trends in international trade and serves human needs and values. But the form of securities transactions is a process that I have output will be increasingly less tangible. described elsewhere as the "downsizing of economic output." The creation of economic value In the years ahead, telecommunications and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 559 advanced computing will take on an even greater faster pace than the net transactions required to role. They create value by facilitating the transfer finance current account deficits. Rapidly expandof ideas—that is, they create value by changing ing data processing and virtually instantaneous the location of intellectual property—much like information transmission capacity are facilitating the American railroads in an earlier time created in ways that were not feasible in earlier times the value by transferring physical goods to geo- development of a broad spectrum of complex graphic locations where they were of greater financial instruments that can be tailored to the worth. In today's environment, economic value hedging, funding, and investment needs of a is increasingly created by moving the conceptual growing array of market participants. Some of part of GNP—not coal or ore but data, analysis, this has involved an unbundling of financial risk and insights—from one location to another to meet the increasingly specialized risk avoidthrough increasingly sophisticated electronic ance requirements of market participants. Exmeans. change rate and interest rate swaps, together Downsizing is having a profound impact on with financial futures and options, have become international trade and on the policies of the important means by which currency and interest world's economies. International trade in con- rate risks get shifted to those most willing to take struction gravel and fiberglass insulation, for it on. The proliferation of financial instruments, example, is limited by weight and bulk. High in turn, implies an increasing number of arbitrage value computer-related products, on the other opportunities, which tend to further boost gross hand, are major and increasingly important com- financial transactions volume in relation to outponents of world trade. Obviously, the less the put. bulk, and the lower the weight, the easier it is to Portfolio considerations also are playing an move goods. important role in the globalization of securities It is not surprising, therefore, to find that after markets. As the welfare of people in the United having adjusted for average export price States and abroad becomes more dependent on changes, pounds shipped per real dollar of ex- the performance of external economies and exports have fallen an average of almost 3!/2 per- change market developments, it is natural for cent per year since 1970. Pounds shipped per real both individual investors and institutions that dollar of U.S. imports declined even more, an directly or indirectly manage the assets of indiaverage of 43A percent per year. Reflecting the viduals to acquire or raise the weight of foreign downsizing of tradable goods, the share of U.S. securities in investment portfolios. Such diversiforeign trade carried by air has doubled since fication provides investors a means of protecting 1970. On a global basis, the real value of trade against depreciation of the local currency on has grown at an annual rate of 5 percent over the foreign exchange markets and domestic ecopast two decades, significantly outstripping the nomic disturbances affecting asset values on logrowth in world domestic demand. In tonnage cal markets. Clearly, as international trade conterms, of course, the increase has been far less. tinues to expand more rapidly than global output and domestic economies become even more closely linked to those abroad, the objective of CONSEQUENCES FOR FINANCIAL MARKETS diversifying international securities portfolios will become increasingly important. Moreover, Clearly, as cross-border trade grows, gross sur- since the U.S. dollar is still the key international pluses and deficits on current account similarly currency, such diversification has been, and may can be expected to grow. That is, owing to the continue to be, disproportionately into the dollar. forces that are acting to boost the share of output In summary, therefore, it would seem reasongoing to trade, net cross-border financial claims able to assume that cross-border trading in securelative to GNP can be expected to rise. rities will continue to expand rapidly for the Moreover, new technology—especially com- foreseeable future. This implies that investors puter and telecommunications technology—is will wish to be able to adjust their holdings of boosting gross financial transactions at an ever foreign securities during times that coincide with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

560 Federal Reserve Bulletin • August 1989 their regular domestic trading hours. As a conse- begin trading on the joint system this fall. Alquence, we can expect to see the move to ready, the futures exchanges of Paris and Sydney around-the-clock trading extending to more se- have negotiated to put their products on the curities. GLOBEX system for after-hours trading, and Already, we have virtually around-the-clock others have expressed interest. This type of trading in various U.S. Treasury securities system could be adapted for trading other finanthrough global securities firms with offices in the cial instruments. Far East and Europe as well as in the United As international securities trading has States. Global markets for the securities of other surged—growing more rapidly than trade and governments are not at this time as developed as output—demands for clearing services across a those for our Treasury securities; however, the wide range of financial instruments have soared, potential exists for active around-the-clock mar- placing pressures on clearing and settlement syskets in other government bonds, especially those tems. Some of these pressures arise from the of Japan and Germany. Such trading in securities greater interdependence among clearing and setcreates a demand for hedging instruments—espe- tlement systems. Investors today engage in a cially financial futures and options—and thus we complex chain of financial transactions, often are likely to see more such instruments that also involving positions in both national and internatrade outside regular domestic market hours. tional markets, and difficulties in the clearing and In the corporate securities area, cross-border settlement process in one of these markets can trading of shares of large multinational firms has affect their ability to discharge obligations in become prominent, with considerable scope for others. We got a sense of such clearing and adjusting positions outside the regular hours of settlement problems in October 1987, when the the primary exchange on which the shares are options clearing system was weakened by large listed. In many cases, these shares are listed on losses in the options market and other difficulties foreign exchanges—for example, foreign Ameri- emerged from inadequate coordination of "pays can Depository Receipts (ADRs) are listed on the and collects" in the futures markets. A deficient New York Stock Exchange—or are tracked on a clearing system in Hong Kong not only contribreal-time basis, such as NASDAQ shares dis- uted to paralysis in that marketplace but cast a played on the terminals of International Stock cloud over other markets as well. Exchange members in London. In other cases, a The process of unbundling financial risk is a fairly well-developed, over-the-counter market factor boosting the volume of financial transachas emerged. tions and hence increasing strains on clearing and While international securities activity has settlement systems. Through the use of futures grown rapidly in recent years, trading systems and options, price or interest rate risk can, in have been undergoing changes—generally to re- effect, be unbundled and new synthetic instruflect advanced computer and telecommunica- ments created by shifting risk to other parties, tions technology. For example, the International actions that raise clearing and settlement vol- Stock Exchange in London moved to a terminal- ume. Alternately, elements of risk can be transbased trading system at the time of the Big Bang ferred through interest rate and currency swaps; in 1986 and the Paris Bourse has nearly com- in these cases, such shifting can lead to hedging pleted its conversion to an electronic trading needs or to arbitrage opportunities that result in system. additional transactions in markets for securities Electronic trading system technology has con- and their derivatives and to enlarged clearing and siderable potential for around-the-clock trading. settlement volume, with attendant risks to clear- The GLOBEX system being developed by the ing and settlement systems. Chicago Mercantile Exchange and the Chicago Another important dimension to securities Board of Trade's Aurora system are good exam- market risk resulting from growing internationalples. These exchanges have recently announced ization is the emergence of large multinational that they will combine their systems, and after- securities firms that increasingly act as underhours trading of some futures contracts could writers, dealers, and brokers in securities mar- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 561 kets around the globe. A loss by one or more of choice of where an order will be placed. Factors these firms could impair that firm's functioning in such as relative costs of trading in different other markets, thereby potentially transmitting a markets, liquidity, and the timing of clearing and disturbance to those other markets. Such a dis- settlement systems thus may affect decisions turbance could have ripple effects as creditors about where to place orders. and counterparties seek to reduce their exposure Such opportunities for choice lead to more to these firms and as confidence erodes in the discipline being exerted on exchanges to control clearing and settlement systems in which these costs and enhance liquidity. To the degree that firms are participants. Difficulties could also ex- investors are concerned about the soundness and tend to commercial banks thought to have large timeliness of clearing and settlement systems, credit exposure to such securities firms. discipline is imposed on the exchanges to We observed the potential for such a problem strengthen their clearing mechanisms. However, emerge in October 1987, when it became evident to the degree that some markets seek to lower to the markets that certain firms committed to the costs and add to volume at the expense of capital underwriting of British Petroleum shares in the positions of securities firms or clearing system United Kingdom stood to lose substantial sums. safeguards, risks may be posed for other markets It is reported that for a brief period participants and for the global financial system more broadly. in the U.S. securities markets were cautious In other words, in an interdependent global marabout dealing with these firms, a situation that ketplace, externalities are significant, and weakcould have gotten decidedly worse if the under- nesses in one financial center can pose serious writing environment had not stabilized. problems for other centers. If risks associated with cross-market and cross-border securities activities are to be contained, then it is critical that large investment IMPLICATIONS FOR COORDINATION firms have sound internal risk monitoring and control procedures in place. Moreover, there is The Brady Commission and others have characno substitute for strong capital positions to act as terized our domestic markets for stocks, index a buffer for losses. futures, and options as, in effect, functioning as It is worth noting that computer and telecom- one economic market. It is certainly clear that munications technology, while an important fac- the market for some securities and their derivator contributing to the globalization of securities tives has, in effect, already become a unified markets and to certain financial system risks, can global market, and others are rapidly moving in be used and is being used to limit risk. Informa- this direction. Such international developments tion systems increasingly are permitting securi- obviously require a considerable degree of interties firms to monitor their global positions on a national coordination just as we have learned timely basis, and virtually around-the-clock trad- that domestic markets for securities and their ing in some securities enables them to shed derivatives require a high level of coordination. unwanted risk promptly. Such technology also Both the private and public sectors have impermits clearing systems to monitor member portant roles to play in the coordination of secupositions in their own markets on a timely basis rities market policies. Among the areas needing and to share member position information with attention are capital of dealers and underwriters, other clearing systems, thereby enhancing con- clearing, settlement and payment systems, cirtrol of overall risk to clearing and settlement cuit breakers, disclosure to investors, and acsystems. counting standards followed by securities issuers The trend toward globalization of securities and intermediaries. In addition, coordination of firms and markets—including the move toward insider trading rules and enforcement of securiaround-the-clock trading in a growing array of ties market laws are issues of significance in the securities—not only provides investors with 24- area of securities market regulation and overhour capability to adjust positions but also pro- sight. To an important degree, more standardizavides the investor or brokerage firm with more tion in areas such as clearing and settlement and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

562 Federal Reserve Bulletin • August 1989 capital standards holds the promise of enhancing while others lend themselves to multilateral soefficiency while at the same time strengthening lutions. The nature and regulation of securities market structures. Moreover, coordination of markets have been sufficiently diverse that a policies in these areas will act to reduce the multilateral regulatory approach along the lines scope for so-called regulatory arbitrage—that is, of the Basle agreement on capital guidelines for artificial reasons for investors or securities commercial banks may be difficult, given the entire houses to favor one national market over others. scope of matters requiring coordination. In any At the present time, a considerable amount of event, it is important that regulatory authorities effort is being expended to coordinate within and continue to monitor overall progress in this area and across borders in these various areas. In some seek to identify and address elements of weakness. cases, this involves regulatory authorities; in At the present time, it appears that progress is some other cases, it involves the private sector; being made in key areas needing attention. Given and in still others, it involves a combination of the diversity of traditional national standards, it both. For example, there are a number of bilat- may well take longer to reach agreements than eral discussions between the Securities and Ex- we are accustomed to in our domestic financial change Commission and securities market regu- system. It is also likely that as these coordination lators in other countries on issues relating to the efforts get further along, necessary legislative exchange of information and enforcement of se- changes will become more evident. curities market laws. Also, central banks have, within the context of their responsibilities for national payment systems, been addressing risks LEGISLATIVE ISSUES associated with securities clearing and settlement and are working to coordinate policies on pay- This subcommittee has heard a great deal of ment system netting arrangements. testimony in recent months about steps that have The International Organization of Securities been taken by our national exchanges and clear- Commissions, a group of national securities au- inghouses to strengthen existing systems and to thorities, has established various working groups improve coordination among markets and market seeking to coordinate, among other things, ac- participants. As these hearings proceed, you, no counting standards and capital requirements of doubt, will hear many more ideas and concerns securities firms. The Group of 30, composed of about the future direction of these markets. private-sector representatives from the securities It is encouraging that so many resources in the and banking industries, recently advanced a con- public and private sectors are being focused on structive set of guidelines for securities clearing these issues. It also is encouraging that so much and settlement and now is in the process of can be, and is being, done within the existing seeking implementation. The Organization for legislative and regulatory framework that over- Economic Cooperation and Development has sees our financial system. With a notable excepestablished a group of securities market experts tion, we at the Federal Reserve Board do not at focusing explicitly on the issue of systemic risk in this time see a need for major legislative changes global securities markets. of our securities laws and regulatory structure. It is important to realize that the contributions In the previous Congress, the Senate had that the private and public sectors can make passed a bill that would have broadened the differ, depending on the issue. On matters such powers of banking organizations in the securities as clearing and settlement, the private sector has market area. We supported that bill on the much to offer given its expertise and consider- grounds that our banking organizations have a lot able self-interest in developing a sound global to contribute to the development of a stronger securities clearing and settlement system. Other and more efficient securities market, both domesareas, such as insider trading and enforcement, tically and globally. The formula embodied in the clearly require coordination among regulators. Senate bill last year would enable our banks to Also, some matters are going to be resolved become more competitive in these markets but in most effectively through bilateral approaches a manner that would not jeopardize the safety of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 563 the commercial bank entities or the federal safety the same time, we must seek to strengthen that net applied to the commercial banking system. financial structure through appropriate market We trust the Congress will return to this matter reforms, recognizing that even a system with promptly. formidable safeguards will be unable to insure In closing, the stability of our financial markets against a disruption resulting from a massive must, of course, at root, rest on the performance speculative imbalance. Through the cooperative of the world economy. Thus, at the very top of efforts of the private and public sectors, we can our consideration in maintaining a sound finan- go a considerable distance in improving the cial structure is the pursuit of sound economic safety and soundness of our financial market policies, both domestically, and to the extent systems, but we cannot realistically expect to relevant, on a coordinated international basis. At eliminate all risks to these systems. • Statement by William Taylor, Director, Division lion to a level of about $65 billion. Much of this of Banking Supervision and Regulation, Board of reduction was achieved through mechanisms that Governors of the Federal Reserve System, before also reduced the countries' external debt-service the Subcommittee on International Development, requirements. Finance, Trade and Monetary Policy of the Com- Second, bank capital has been strengthened as mittee on Banking, Finance and Urban Affairs, both bankers and banking supervisors have rec- U.S. House of Representatives, June 27, 1989. ognized the need to increase the capital cushion available to absorb potential losses. Between December 1982 and December 1988, primary I am pleased to have this opportunity to appear capital for twenty-two of the largest U.S. banks before this committee to discuss bank superviincreased from $40 billion to $74 billion. When sory policies regarding U.S. bank lending to measured against declining levels of exposure to developing countries. Before I focus on the regcountries with debt-servicing problems, this inulatory and accounting issues concerning develcrease in capital is substantial. Exposure relative oping country debt, especially as they relate to to primary capital for nine money center banks Secretary Brady's proposal, I would like to begin has declined from 233 percent in 1982 to 106 by summarizing the condition of the banking percent at year-end 1988. For thirteen large resystem within the context of bank claims on gional banks, exposure to these countries has developing countries. declined from 154 percent to 55 percent during the same period. THE BANKING SYSTEM Third, earnings of large U.S. multinational AND DEVELOPING COUNTRY DEBT banks are generally at higher levels and are somewhat more diversified than in the past. Higher earning levels lead to stronger capitalized The U.S. banking system is less vulnerable to organizations, and more diverse earnings help to potential debt-servicing difficulties of developing act as a cushion if a major borrower or borrowing countries than it was when these problems first sector experiences debt-servicing difficulties. surfaced in the early 1980s. However, the vul- Finally, U.S. banks have set aside large nerability of some of the largest U.S. banks to amounts in their general loan-loss reserves for these problems is still of significant concern. their exposure to developing countries. These Several considerations support this judgement. reserves help to cushion a bank's balance sheet First, through a variety of transactions, U.S. from losses on these loans. banks are adjusting their portfolio of claims on developing countries while decreasing their over- In summary, the improved condition of the U.S. banking system through increases in capital all exposure levels. In 1988, twenty-two of the and reserves has reduced the vulnerability of the largest U.S. banks reduced their net exposure to U.S. banking system to debt-servicing difficulties problem debtor countries approximately $9 bil- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

564 Federal Reserve Bulletin • August 1989 of developing countries. However, the substan- a developing country (or any other credit) to tial exposure levels of the largest U.S. banks value that credit at current market value and to require that these banks continue to build their establish sufficient reserves to cover any anticireserves and capital in an orderly manner. At the pated losses associated with that transaction. For same time, it seems to be in the interests of the those loans or portions of loans that are expected banks to support borrowing countries so that to be held as a long-term investment, the carrying they may reform their economies to restore eco- value less any related reserve must reflect a nomic growth, thereby enhancing their credit- realistic assessment of the ultimate value likely worthiness. to be collected. Consequently, depending upon management's intention of either remaining or exiting from the business of lending to develop- ACCOUNTING AND REGULATORY POLICIES ing countries, the carrying value of developing AFFECTING DEBT RESTRUCTURING country credits and reserve levels varies from bank to bank. Bank regulatory and accounting policies pertain- I would like to comment briefly on the Intering to developing country loans of U.S. banks are national Lending Supervision Act of 1983 designed to maintain the safety and soundness of (ILSA). In passing ILSA, the Congress carefully the financial system. These policies are consis- balanced the interest of debtor countries in maintent with those regulations governing other as- taining access to private credit markets against pects of the banking business. the requirements for maintaining a safe and Current regulatory policies provide consider- sound banking system. Based on these considerable flexibility for U.S. banks to engage in trans- ations, the Congress required that banks set actions to adjust or reduce their exposure to aside specific allocated transfer risk reserves developing countries. Such transactions have (ATRR) against credits that have been impaired had the effect of reducing the debt-servicing by a protracted inability of foreign borrowers to obligations of developing countries and have make payments on their external indebtedness. included debt exchanges, debt-for-equity swaps, The law and the implementing regulations essenand discounted buybacks of debt. Bank regula- tially require an ATRR against credits to countory policy is not a barrier to further bank tries that are not servicing their debts and are not participation in debt-reduction transactions as moving toward implementing sound economic envisioned by Secretary Brady's proposals. policies that can restore growth and enhance Accounting rules for loans of U.S. banks to creditworthiness. Such reserves are not required developing countries, like requirements for other against credits to countries that are maintaining debts, provide for disclosure of information to debt service and are working with the internaenable investors to judge the financial condition tional institutions to develop and implement of a bank and the financial impact of manage- sound economic policies. ment's decisions in a meaningful and consistent I believe that this distinction based upon the manner. Banks are required by the Securities and overall performance of borrowers is valid, and it Exchange Commission to disclose information is crucial that it be preserved. Much headway on significant sovereign debt restructurings, in- already undertaken to resolve the developing cluding the amount of exposure, changes in ex- country debt crisis could be lost by requiring an posure, and the impact of restructurings on earn- ATRR against credits to countries that are folings. Considerable information is also required to lowing responsible economic and debt-servicing be provided directly to bank regulatory authori- policies. ties. Failure to provide meaningful financial in- Those who argue for expansion of the alloformation inhibits effective banking supervision cated reserves usually do so in the belief that the and can undermine depositor and investor confi- establishment of a specific reserve by a bank, dence. which is the functional equivalent of a charge-off, Generally accepted accounting practices re- can benefit a borrowing country. It should be quire banks that intend to swap or sell a claim on clearly understood that a mandated charge-off of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 565 a loan, while tax-deductible, does not necessarily nancial condition, its management and asset diminish a bank's incentive to collect in full on quality, and the current financial and economic the credit; nor does it encourage the bank to sell conditions in assessing the adequacy of bank or redeem the credit at a discount. In fact, unlike capital. This capital must support several risks U.S. banks, most banks from countries with other than developing country lending. To assure large tax-deductible reserves have not actively the adequacy of bank capital, those institutions participated in voluntary debt reduction transac- with significant exposure to developing countries tions such as secondary market sales or ex- must continue to augment their capital and rechanges of debt for equity investments. serves in an orderly fashion. In particular, it is To date the allocated reserves required pursu- necessary for these banks to review reserve ant to ILSA have been applied to twelve coun- levels frequently and systematically in light of tries. These countries generally are the weakest changing circumstances. economic performers and have essentially no The proposals set forth by Secretary Brady access to international credit from private mar- provide an opportunity for reinvigorating develkets. Many of these countries have taken unilat- oping country debt strategy. However, I do not eral decisions to reduce or suspend debt service believe that bank supervisory policies can, or to banks. In most cases a further deterioration in should, be used as incentives or disincentives to economic activity and living standards has fol- influence further the implementation of these lowed such actions by these countries. proposals. The decisions of both foreign and Rather than unduly expand the scope of the domestic banks on debt restructurings will inevallocated reserve, U.S. banking supervisors have itably be determined by whether a particular required banks with significant exposures to restructuring provides the best means for realiztroubled sovereign borrowers to strengthen their ing the maximum possible value on their loans. general loan-loss reserves and capital. As previ- While the implementation of Secretary Brady's ously mentioned, U.S. banks have set aside large proposals will require the recognition of some amounts in their general loan-loss reserves for losses on the part of the banks, if properly exposures to developing countries. Many re- implemented, it should improve the quality of the gional U.S. banks have adopted a strategy of remaining credits and prevent further deterioraexiting from this business by selling their loans in tion. the secondary market. To absorb the related In this regard, while several positive steps losses, they have established commensurately have been taken recently, progress has not been high reserve levels. Most money center banks, as great as expected when the Federal Reserve with a longer history of involvement in these testified on this issue before the House Banking countries and multinational corporate clientele Committee at the beginning of this year. What requiring ongoing banking services, have a more concerns me as a bank regulator is that without optimistic view of this business. These banks further cooperation between borrowers and lendapparently intend to hold the bulk of their credits ers, credit quality will continue to deteriorate as as long-term investments. To the extent that more countries become unable or unwilling to these banks are swapping or reducing debt, their service their bank debts. In such an event, furstrong local presence in the debtor countries has ther significant increases in reserves will clearly enabled them to realize prices well above those be required. Time is running short and uncertainprevailing in the secondary market. ties appear to be increasing. In this environment, The adequacy of these general reserves is also it is expected that banks with large exposures judged within the context of an organization's will further strengthen their capital and reserve overall capital structure and financial condition. levels. • Banking regulators examine an institution's fi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

566 Announcements H. ROBERT HELLER: In your three years as a Member of the Board, you RESIGNATION AS A MEMBER helped shape decisions that had a profound impact upon the economy of the United States and the world. OF THE BOARD OF GOVERNORS Your role in sustaining the economic vitality of our country during the last few years was a significant one, H. Robert Heller resigned as a member of the in which you can justifiably take pride. Board of Governors, effective July 31, 1989. I wish you all success in your endeavors in the Following is the text of Governor Heller's letter private sector, and Barbara joins me in wishing you and your family all happiness in your California homeof resignation to President Bush: land. June 20, 1989 Sincerely, President George Bush George Bush The White House Washington, D.C. 20500 Dear Mr. President, AMENDMENTS TO REGULATION Z It has been my great honor and privilege to have The Federal Reserve Board issued on June 5, served on the Board of Governors of the Federal Reserve System for the last few years. I found it a 1989, its final rules to carry out provisions of the distinct personal pleasure and a professionally reward- Home Equity Loan Consumer Protection Act. ing experience to have been associated with a group of The rules are effective June 7, but compliance is exceptional colleagues during a period of unpreceoptional until November 7. dented economic prosperity and significant change in the banking system. The new rules are in the form of amendments I am grateful to President Reagan and to you for to the Board's Regulation Z (Truth in Lending) having given me this opportunity to serve the nation. and generally expand the existing disclosures Unfortunately, personal considerations make it now that must be given to consumers by lenders. necessary for me to return to the private sector and I They also require that the disclosures be protherefore submit my resignation from the Board, effecvided at an earlier time in the application protive July 31, 1989. cess. Respectfully yours, In December 1987, the Board proposed amendments to Regulation Z to change the exist- H. Robert Heller ing disclosure requirements for home equity lines of credit secured by a consumer's principal The letter of acceptance from President Bush dwelling. Subsequently, the Congress adopted follows. the Home Equity Loan Consumer Protection Act on November 23, 1988, and the Board published The White House a proposed rule to implement the new law on Washington January 23, 1989. July 19, 1989 Under the new rule, creditors must give detailed disclosures, grouped together and sepa- Dear Governor Heller: rated from unrelated information, at the time an open-end home equity plan application is pro- I accept with regret your resignation as a Member of vided to the customer. This more detailed inforthe Board of Governors of the Federal Reserve System, effective July 31, 1989. mation includes the following: (1) the payment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

567 terms of the plan; (2) an example of the pay- REVISIONS TO THE METHODOLOGY FOR ments; (3) the fees the creditor imposes to open COMPUTING THE PRIVATE SECTOR or use the plan; (4) an estimate of fees imposed by ADJUSTMENT FACTOR third parties; and (5) any variable-rate features, including the index used to determine the rate. The Federal Reserve Board announced on June In addition to the disclosures, creditors must 16, 1989, revisions to the methodology for comalso provide to the customer a brochure outlining puting the Private Sector Adjustment Factor the general features of home equity plans. Such a (PSAF). The methodology is essentially that as brochure is currently under preparation by the proposed for public comment on January 23, Board. 1989 (Docket No. R-0656). Disclosures and the brochure generally must The PSAF is intended to reflect an allocation be given at the time an application is given to the of imputed costs that takes into account the taxes consumer although extra time is permitted in that would have been paid and the return on some cases, such as when applications are made capital that would have been provided had the by telephone or through intermediaries. services been furnished by a private business firm as required by the Monetary Control Act. The revisions are designed to reduce the neces- MEETING OF CONSUMER ADVISORY sity for ad hoc adjustments and to respond to COUNCIL industry questions regarding the PSAF calculation. The revisions become effective with the The Federal Reserve Board announced that its computation of the PSAF for 1990. Consumer Advisory Council met on June 22, 1989. PROPOSED ACTIONS POLICY STATEMENTS ON REDUCTION OF The Federal Reserve Board issued for public RISK IN THE PAYMENT SYSTEM comment on June 16, 1989, proposed changes to its policy on Large Dollar Payment System Risk The Federal Reserve Board issued on June 16, designed to reduce risk to the Federal Reserve 1989, three risk-related policy statements as part and to the payments system in general. Comof its overall program on Payment System Risk ments must be submitted to the Board by No- Reduction. vember 17, 1989. A Policy Statement on Private Book-Entry The Federal Reserve Board is also seeking Systems (Docket No. R-0665) establishes guiding public comment on whether to modify a restricprinciples for reducing risk on delivery-against- tion on underwriting asset-based securities of payment systems that settle on a net same-day affiliates in the Board's orders under section 20 of basis over the Federal Reserve's wire transfer the Glass-Steagall Act. Comments must be subsystem. mitted to the Board by July 20, 1989. An Interim Policy Statement on Offshore Net- In addition, the Board is seeking public comting and Clearing Arrangements (Docket No. ment on whether to increase from 5 percent to R-0666) establishes guiding principles for any 10 percent the revenue limit established by the offshore dollar clearing or settlement system Board in its orders authorizing bank holding company subsidiaries to underwrite and deal in settling directly or indirectly in the United States. bank-ineligible securities consistent with sec- A Policy Statement on Rollovers and Continution 20 of the Glass-Steagall Act. Comments ing Contracts to Reduce Daylight Overdraft Exmust be submitted to the Board by July 20, posure (Docket No. R-0667) encourages the pru- 1989. dential use of rollovers and continuing contracts to reduce daylight overdrafts on Fedwire. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

569 Legal Developments AMENDMENT TO REGULATION Z (b) Purpose. The purpose of this regulation is to promote the informed use of consumer credit by The Board of Governors is amending 12 C.F.R. Part requiring disclosures about its terms and cost. * * * In 226, its Regulation Z (Truth in Lending), to implement addition, the regulation requires a maximum interest the Home Equity Loan Consumer Protection Act of rate to be stated in variable-rate contracts secured by 1988. The law requires creditors to provide consumers the consumer's dwelling, and imposes limitations on with extensive information for open-end credit plans home equity plans that are subject to the requirements secured by the consumer's dwelling, and imposes of section 226.5b. The regulation does not govern substantive limitations on these plans. Creditors will charges for consumer credit. have to provide information at the time an application (c) Coverage. * * * is provided to the consumer, including information (3) In addition, certain requirements of section about the payment terms, fees imposed under the plan, 226.5b apply to persons who are not creditors but and, for variable-rate plans, information about the who provide applications for home equity plans to index and a fifteen-year history of changes in the index consumers. values. Creditors will be required to provide consum- (d) Organization. * * * ers with a brochure prepared by the Board (or a (2) Subpart B contains the rules for open-end credit. suitable substitute) describing home equity plans. The It requires that initial disclosures and periodic stateregulation also imposes duties on third parties who ments be provided, as well as additional disclosures provide applications to consumers and modifies the for credit and charge card applications and solicitarules relating to advertisements for home equity plans. tions and for home equity plans subject to the require- In addition, to these disclosure requirements, the ments of sections 226.5a and 226.5b, respectively. regulation limits a creditor's right to terminate a plan and accelerate any outstanding balance, or to change the terms of a plan after it has been opened, and limits the type of index that can be used for variable-rate Subpart B—Open-End Credit plans. Effective June 7, 1989, but compliance is optional 3. Section 226.5 is amended by revising footnote 8 to until November 7, 1989, 12 C.F.R. Part 226 is read as follows: amended as follows: 8. The disclosures required under section 226.5a for credit 1. The authority citation for Part 226 continues to read and charge card applications and solicitations, the home equity disclosures required under section 226.5b(d), the alas follows: ternative summary billing rights statement provided for in section 226.9(a)(2), the credit and charge card renewal dis- Authority: Truth in Lending Act, 15 U.S.C. 1604 and closures required under section 226.9(e), and the disclosures sec. 2, Pub. L. No. 100-583, 102 Stat. 2960; Section made under section 226.10(b) about payment requirements 1204(c), Competitive Equality Banking Act, Pub. L. need not be in a form that the consumer can keep. No. 100-86, 101 Stat. 552. 3a. Section 226.5 is further amended by adding para- Subpart A—General graphs (a)(4) and (b)(4) to read as follows: 2. Section 226.1 is amended by revising paragraphs (b) Section 226.5—General Disclosure and (d)(2) and adding paragraph (c)(3) to read as follows: Requirements Section 226.1—Authority, Purpose, Coverage, (a) Form of disclosures. * * * Organization, Enforcement and Liability (4) For rules governing the form of disclosures for home equity plans, see section 226.5b(a). (b) Time of disclosures. * * * Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

570 Federal Reserve Bulletin • August 1989 (4) Home equity plans. Disclosures for home equity application is provided. If such persons have the plans shall be made in accordance with the timing disclosures required under paragraph (d) of this secrequirements of section 226.5(b). tion for a creditor's home equity plan, they also shall provide the disclosures at such time.10a (d) Content of disclosures. The creditor shall provide 4. Section 226.5a is amended by revising paragraph the following disclosures, as applicable: (a)(3) to read as follows: (1) Retention of information. A statement that the consumer should make or otherwise retain a copy of Section 226.5a—Credit and Charge Card the disclosures. Applications and Solicitations (2) Conditions for disclosed terms. (i) A statement of the time by which the consumer must submit an application to obtain specific (3) Exceptions. This section does not apply to home terms disclosed and an identification of any disequity plans accessible by a credit or charge card that closed term that is subject to change prior to are subject to the requirements of section 226.5b; opening the plan. (ii) A statement that, if a disclosed term changes (other than a change due to fluctuations in the 5. A new section 226.5b is added to read as follows: index in a variable-rate plan) prior to opening the plan and the consumer therefore elects not to Section 226.5b—Requirements for Home open the plan, the consumer may receive a refund Equity Plans of all fees paid in connection with the application. (3) Security interest and risk to home. A statement The requirements of this section apply to open-end that the creditor will acquire a security interest in credit plans secured by the consumer's dwelling. For the consumer's dwelling and that loss of the dwellpurposes of this section, an annual percentage rate is ing may occur in the event of default. the annual percentage rate corresponding to the peri- (4) Possible actions by creditor. odic rate as determined under section 226.14(b). (i) A statement that, under certain conditions, the (a) Form of disclosures. creditor may terminate the plan and require pay- (1) General. The disclosures required by paragraph ment of the outstanding balance in full in a single (d) of this section shall be made clearly and conspicpayment and impose fees upon termination; prouously and shall be grouped together and segregated hibit additional extensions of credit or reduce the from all unrelated information. The disclosures may credit limit; and, as specified in the initial agreebe provided on the application form or on a separate ment, implement certain changes in the plan. form. The disclosure described in paragraph (ii) A statement that the consumer may receive, (d)(4)(iii), the itemization of third-party fees deupon request, information about the conditions scribed in paragraph (d)(8), and the variable-rate under which such actions may occur. information described in paragraph (d)(12) of this (iii) In lieu of the disclosure required under parasection may be provided separately from the other graph (d)(4)(H) of this section, a statement of such required disclosures. conditions. (2) Precedence of certain disclosures. The disclosures (5) Payment terms. The payment terms of the plan, described in paragraph (d)(1) through (4)(ii) of this including: section shall precede the other required disclosures. (i) The length of the draw period and any repay- (b) Time of disclosures. The disclosures and brochure ment period. required by paragraphs (d) and (e) of this section shall (ii) An explanation of how the minimum periodic be provided at the time an application is provided to payment will be determined and the timing of the the consumer.103 payments. If paying only the minimum periodic (c) Duties of third parties. Persons other than the payments may not repay any of the principal or creditor who provide applications to consumers for may repay less than the outstanding balance, a home equity plans must provide the brochure required statement of this fact, as well as a statement that under paragraph (e) of this section at the time an a balloon payment may result.10b 10a. The disclosures and the brochure may be delivered or placed in the mail not later than three business days following receipt of a 10b. A balloon payment results if paying the minimum periodic consumer's application in the case of applications contained in mag- payments does not fully amortize the outstanding balance by a azines or other publications, or when the application is received by specified date or time, and the consumer must repay the entire telephone or through an intermediary agent or broker. outstanding balance at such time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 571 (iii) An example, based on a $10,000 outstanding (ii) A statement that the annual percentage rate balance and a recent annual percentage rate,10c does not include costs other than interest. showing the minimum periodic payment, any bal- (iii) The index used in making rate adjustments loon payment, and the time it would take to repay and a source of information about the index. the $10,000 outstanding balance if the consumer (iv) An explanation of how the annual percentage made only those payments and obtained no addi- rate will be determined, including an explanation tional extensions of credit. of how the index is adjusted, such as by the addition of a margin. If different payment terms may apply to the draw and (v) A statement that the consumer should ask any repayment period, or if different payment terms about the current index value, margin, discount or may apply within either period, the disclosures shall premium, and annual percentage rate. reflect the different payment terms. (vi) A statement that the initial annual percentage (6) Annual percentage rate. For fixed-rate plans, a rate is not based on the index and margin used to recent annual percentage rate10c imposed under the make later rate adjustments, and the period of plan and a statement that the rate does not include time such initial rate will be in effect. costs other than interest. (vii) The frequency of changes in the annual (7) Fees imposed by creditor. An itemization of any percentage rate. fees imposed by the creditor to open, use, or main- (viii) Any rules relating to changes in the index tain the plan, stated as a dollar amount or percent- value and the annual percentage rate and resulting age, and when such fees are payable. changes in the payment amount, including, for (8) Fees imposed by third parties to open a plan. A example, an explanation of payment limitations good faith estimate, stated as a single dollar amount and rate carryover. or range, of any fees that may be imposed by (ix) A statement of any annual or more frequent persons other than the creditor to open the plan, as periodic limitations on changes in the annual well as a statement that the consumer may receive, percentage rate (or a statement that no annual upon request, a good faith itemization of such fees. limitation exists), as well as a statement of the In lieu of the statement, the itemization of such fees maximum annual percentage rate that may be may be provided. imposed under each payment option. (9) Negative amortization. A statement that nega- (x) The minimum periodic payment required when tive amortization may occur and that negative am- the maximum annual percentage rate for each ortization increases the principal balance and re- payment option is in effect for a $10,000 outstandduces the consumer's equity in the dwelling. ing balance, and a statement of the earliest date or (10) Transaction requirements. Any limitations on time the maximum rate may be imposed. the number of extensions of credit and the amount (xi) An historical example, based on a $10,000 of credit that may be obtained during any time extension of credit, illustrating how annual perperiod, as well as any minimum outstanding balance centage rates and payments would have been and minimum draw requirements, stated as dollar affected by index value changes implemented amounts or percentages. according to the terms of the plan. The historical (11) Tax implications. A statement that the con- example shall be based on the most recent 15 sumer should consult a tax advisor regarding the years of index values (selected for the same time deductibility of interest and charges under the plan. period each year) and shall reflect all significant (12) Disclosures for variable-rate plans. For a plan plan terms, such as negative amortization, rate in which the annual percentage rate is variable, the carryover, rate discounts, and rate and payment following disclosures, as applicable: limitations, that would have been affected by the (i) The fact that the annual percentage rate, pay- index movement during the period. ment, or term may change due to the variable-rate (xii) A statement that rate information will be feature. provided on or with each periodic statement. (e) Brochure. The home equity brochure published by the Board or a suitable substitute shall be provided. (f) Limitations on home equity plans. No creditor may, 10c. For fixed-rate plans, a recent annual percentage rate is a rate by contract or otherwise: that has been in effect under the plan within the twelve months (1) Change the annual percentage rate unless: preceding the date the disclosures are provided to the consumer. For variable-rate plans, a recent annual percentage rate is the most recent (i) such change is based on an index that is not rate provided in the historical example described in paragraph under the creditor's control; and (d)(12)(xi) of this section or a rate that has been in effect under the plan since the date of the most recent rate in the table. (ii) such index is available to the general public. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

572 Federal Reserve Bulletin • August 1989 (2) Terminate a plan and demand repayment of the (G) the maximum annual percentage rate is entire outstanding balance in advance of the original reached. term unless: (g) Refund of fees. A creditor shall refund all fees paid (i) there is fraud or material misrepresentation by by the consumer to anyone in connection with an the consumer in connection with the plan; application if any term required to be disclosed under (ii) the consumer fails to meet the repayment paragraph (d) of this section changes (other than a terms of the agreement for any outstanding bal- change due to fluctuations in the index in a variableance; or rate plan) before the plan is opened and, as a result, (iii) any action or inaction by the consumer ad- the consumer elects not to open the plan. versely affects the creditor's security for the plan, (h) Imposition of nonrefundable fees. Neither a credor any right of the creditor in such security. itor nor any other person may impose a nonrefundable (3) Change any term, except that a creditor may: fee in connection with an application until three busi- (i) Provide in the initial agreement that specified ness days after the consumer receives the disclosures changes will occur if a specific event takes place and brochure required under this section.10d (for example, that the annual percentage rate will increase a specified amount if the consumer leaves the creditor's employment). 6. Section 226.6 is amended by adding paragraph (e) to (ii) Change the index and margin used under the read as follows: plan if the original index is no longer available, the new index has an historical movement substan- Section 226.6—Initial Disclosure Statement tially similar to that of the original index, and the new index and margin would have resulted in an annual percentage rate substantially similar to the (e) Home equity plan information. The following disrate in effect at the time the original index became closures described in section 226.5b(d), as applicable: unavailable. (1) A statement of the conditions under which the (iii) Make a specified change if the consumer creditor may take certain action, as described in specifically agrees to it in writing at that time. section 226.5b(d)(4)(i), such as terminating the plan (iv) Make a change that will unequivocally benefit or changing the terms. the consumer throughout the remainder of the (2) The payment information described in sections plan. 226.5b(d)(5)(i) and (ii) for both the draw period and (v) Make an insignificant change to terms. any repayment period. (vi) Prohibit additional extensions of credit or (3) A statement that negative amortization may reduce the credit limit applicable to an agreement occur as described in section 226.5b(d)(9). during any period in which: (4) A statement of any transaction requirements as (A) the value of the dwelling that secures the described in section 226.5b(d)(10). plan declines significantly below the dwelling's (5) A statement regarding the tax implications as appraised value for purposes of the plan; described in section 226.5b(d)(ll). (B) the creditor reasonably believes that the (6) A statement that the annual percentage rate consumer will be unable to fulfill the repayment imposed under the plan does not include costs other obligations under the plan because of a material than interest as described in sections 226.5b(d)(6) change in the consumer's financial circum- and 226.5b(d)(12)(ii). stances; (7) The variable-rate disclosures described in sec- (C) the consumer is in default of any material tions 226.5b(d)(12)(viii), (x), (xi), and (xii), as well as obligation under the agreement; the disclosure described in section 226.5b(d)(5)(iii), (D) the creditor is precluded by government unless the disclosures provided with the application action from imposing the annual percentage were in a form the consumer could keep and inrate provided for in the agreement; cluded a representative payment example for the (E) the priority of the creditor's security inter- category of payment option chosen by the conest is adversely affected by government action sumer. to the extent that the value of the security interest is less than 120 percent of the credit line; (F) the creditor is notified by its regulatory agency that continued advances constitute an lOd. If the disclosures and brochure are mailed to the consumer, the consumer is considered to have received them three business days unsafe and unsound practice; or after they are mailed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 573 7. Section 226.9 is amended by adding paragraph (c)(3) Section 226.16—Advertising to read as follows: jjc $ $ i)C $ Section 226.9—Subsequent Disclosure (d) Additional requirements for home equity plans. Requirements (1) Advertisement of terms that require additional disclosures. If any of the terms required to be disclosed under sections 226.6(a) or (b) or the pay- (c) Change in terms. ment terms of the plan are set forth, affirmatively or negatively, in an advertisement for a home equity plan subject to the requirements of section 226.5b, (3) Notice for home equity plans. If a creditor the advertisement also shall clearly and conspicuprohibits additional extensions of credit or reduces ously set forth the following: the credit limit applicable to a home equity plan (i) Any loan fee that is a percentage of the credit pursuant to section 226.5b(f)(3)(vi), the creditor limit under the plan and an estimate of any other shall mail or deliver written notice of the action to fees imposed for opening the plan, stated as a each consumer who will be affected. The notice single dollar amount or a reasonable range. must be provided not later than three business days (ii) Any periodic rate used to compute the finance after the action is taken and shall contain specific charge, expressed as an annual percentage rate as reasons for the action. If the creditor requires the determined under section 226.14(b). consumer to request reinstatement of credit privi- (iii) The maximum annual percentage rate that leges, the notice also shall state that fact. may be imposed in a variable-rate plan. (2) Discounted and premium rates. If an advertisement states an initial annual percentage rate that is 8. Section 226.14 is amended by revising paragraph (b) not based on the index and margin used to make to read as follows: later rate adjustments in a variable-rate plan, the advertisement also shall state the period of time such rate will be in effect, and, with equal promi- Section 226.14—Determination of Annual nence to the initial rate, a reasonably current annual Percentage Rate percentage rate that would have been in effect using the index and margin. (3) Balloon payment. If an advertisement contains a (b) Annual percentage rate for sections 226.5a and statement about any minimum periodic payment, 226.5b disclosures, for initial disclosures and for adthe advertisement also shall state, if applicable, that vertising purposes. Where one or more periodic rates a balloon payment may result.10b may be used to compute the finance charge, the annual (4) Tax implications. An advertisement that states percentage rate(s) to be disclosed for purposes of that any interest expense incurred under the home sections 226.5a, 226.5b, 226.6, and 226.16 shall be equity plan is or may be tax deductible may not be computed by multiplying each periodic rate by the misleading in this regard. number of periods in a year. (5) Misleading terms. An advertisement may not refer to a home equity plan as "free money" or contain a similarly misleading term. 9. Section 226.15 is amended by revising footnote 36 to read as follows: * * * ** 11. Appendix G is amended by adding model forms 36. The term "material disclosures" means the information and clauses G-14A, G-14B, G-14C, and G-15 to read as that must be provided to satisfy the requirements in section follows: 226.6 with regard to the method of determining the finance charge and the balance upon which a finance charge will be imposed, the annual percentage rate, the amount or method of determining the amount of any membership or participation fee that may be imposed as part of the plan, and the APPENDIX G—OPEN-END MODEL FORMS AND payment information described in sections 226.5b(d)(5)(i) and CLAUSES (ii) that is required under section 226.6(e)(2). 10. Section 226.16 is amended by adding paragraph (d) G-14A Home Equity Sample to read as follows: G-14B Home Equity Sample Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

574 Federal Reserve Bulletin • August 1989 G-14C Home Equity Sample (Repayment phase dis- tion. The OCC has also recommended approval of the closed later) transaction. G-15 Home Equity Model Clauses In view of this situation and the need for expeditious action to protect the interest of Bank's depositors, it has been determined, pursuant to section 3(b) of the BHC Act (12 U.S.C. § 1842(b)), section 225.14(h) of the Regulation Y (12 C.F.R. 225.14(h)), and section ORDERS ISSUED UNDER BANK HOLDING 262.3(1) of the Board's Rules of Procedure (12 C.F.R. COMPANY ACT 262.3(1)), to dispense with the notice provisions of the BHC Act. Orders Issued Under Section 3 of the Bank Under section 3(d) of the BHC Act (12 U.S.C. Holding Company Act § 1842(d)), the Douglas Amendment, a bank holding company generally may not be allowed to acquire Banc One Corporation control of any bank located outside of the holding Columbus, Ohio company's principal state of operations.2 Applicant, with approximately $25.2 billion in total assets as of Order Approving Acquisition of a Bank March 31, 1989, is a bank holding company that principally operates in Ohio for purposes of the Dou- Banc One Corporation, Columbus, Ohio ("Appli- glas Amendment. As noted above, Bank is located in cant"), a bank holding company within the meaning of Texas. the Bank Holding Company Act (the "BHC Act"), Section ll(i)(9) of the FDI Act (12 U.S.C. has applied for the Board's approval under section 3 of § 1821(i)(9)) specifically provides that a bank holding the BHC Act (12 U.S.C. § 1842) to acquire control, company may acquire a bridge bank located in another through Banc One Texas Corporation, Columbus, state, without regard to the limitations on interstate Ohio, of Deposit Insurance Bridge Bank, N.A., a bank acquisitions contained in the Douglas Amendbridge bank ("Bank") created by the Federal Deposit ment or in any relevant state law, where the bridge Insurance Corporation ("FDIC") to acquire the assets bank has total assets of at least $500,000,000. See also and assume the deposits and liabilities of twenty bank 12 U.S.C. § 1823(f)(4)(A) and (E). Bank, with total subsidiaries of MCorp, Dallas, Texas. Applicant pro- assets of approximately $12 billion, was established by poses to immediately enter into a management agree- the FDIC pursuant to section ll(i) of the FDI Act and ment with the FDIC that provides that Applicant will will be acquired by Applicant in an assisted transacoperate Bank under the name Bank One Texas, Na- tion. Accordingly, the provisions of section 3(d) of the tional Association, with general discretion over, and BHC Act and of any relevant state law do not bar responsibility for, the daily operations of Bank. Appli- approval of the proposed transaction. cant also proposes to acquire all of the voting shares of In evaluating an application under section 3 of the Bank. BHC Act, the Board is required to consider the On March 28 and 29, 1989, twenty bank subsidiaries financial and managerial resources and future prosof MCorp were declared insolvent and the FDIC was pects of the companies involved, the effect of the appointed receiver.1 Pursuant to section ll(i) of the proposal on competition, and the convenience and Federal Deposit Insurance Act ("FDI Act") as needs of the communities to be served. Under the amended by the Competitive Equality Banking Act of proposal, Applicant would immediately provide Bank 1987 (12 U.S.C. § 1821(i)), the FDIC established with new management officials, with proven manage- Bank to acquire the assets and to assume the liabilities ment capability, and Bank would continue to provide a and deposits of the closed banks. The FDIC solicited full range of services to its customers. The agreement offers for the acquisition of Bank from qualified bid- in principle between Applicant and the FDIC will also ders pursuant to sections 1 l(i) and 13(f) of the FDI Act recapitalize Bank. With respect to the financial fac- (12 U.S.C. §§ 1821(i) and 1823(f)). On June 28, 1989, tors, note has been taken of Applicant's existing the FDIC selected Applicant's bid for Bank. On the financial strength on a consolidated basis. same day, the FDIC advised that Applicant had been selected as the winning bidder, and recommended expeditious action on this application in order to permit Bank to operate without the need for liquida- 2. A bank holding company's principal state of banking operations is the state in which the operations of the bank holding company's banking subsidiaries were principally conducted on the later of July 1, 1966, or the date on which the company became a bank holding 1. See Appendix. company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 575 Based on these and all of the other facts of record, APPENDIX including the bid proposal made by Applicant and accepted by the FDIC, the financial and managerial The bridge bank has acquired the assets and assumed resources and future prospects of Applicant, its sub- the liabilities and deposits of the following bank subsidiaries and Bank are consistent with approval of this sidiaries of MCorp: application. The benefits to the convenience and needs MBank Abilene, N.A., Abilene, Texas; MBank of the communities in Texas of maintaining Bank as a Alamo, N.A., San Antonio, Texas; MBank Austin, viable competitor in Texas weigh in favor of approval N.A., Austin, Texas; MBank Brenham, N.A., Brenof this application. ham, Texas; MBank Corsicana, N.A., Corsicana, While Applicant maintains a loan production office Texas; MBank Dallas, N.A., Dallas, Texas; MBank in Dallas, Texas, the amount of Applicant's lending Denton Co. (Lewisville), N.A., Lewisville, Texas; activities in Texas is not significant. Applicant has no MBank Fort Worth, N.A., Forth Worth, Texas; other banking or nonbanking offices in Texas. Accord- MBank Greenville, N.A., Greenville, Texas; ingly, consummation of the proposal would not in- MBank Houston, N.A., Houston, Texas; MBank crease the concentration of banking resources or have Jefferson Co. (Port Arthur), N.A., Port Arthur, any significant adverse effects on competition in Texas Texas; MBank Longview, N.A., Longview, Texas; or any other relevant market. MBank Marshall, N.A., Marshall, Texas; MBank Based on the foregoing and all of the facts of Midcities (Arlington), N.A., Arlington, Texas; record, the General Counsel and the Staff Director MBank Odessa, N.A., Odessa, Texas; MBank of the Division of Banking Supervision and Regula- Orange, N.A., Orange, Texas; MBank Round Rock, tion have determined, acting pursuant to authority N.A., Round Rock, Texas; MBank Sherman, N.A., specifically delegated by the Board in this case, that Sherman, Texas; MBank Wichita Falls, N.A., the application under section 3 of the BHC Act Wichita Falls, Texas; MBank The Woodlands, should be, and hereby is, approved. This action is N.A., The Woodlands, Texas. limited to approval of the transaction according to the terms and conditions of Applicant's bid as pre- St. Croix Valley Bancshares, Inc. sented to the Board, and any significant change in Bloomington, Minnesota those terms or conditions may require further review by the Board. Order Denying Acquisition of a Bank Holding The FDIC has informed the Board that expeditious Company action on Applicant's proposal is necessary in order to permit Applicant to assume control of Bank and St. Croix Valley Bancshares, Inc., Bloomington, Mincontinue to operate Bank as a viable competitor nesota ("St. Croix"), a bank holding company within serving its communities. In light of these and all the the meaning of the Bank Holding Company Act facts of record in this case, the General Counsel and ("Act"), has applied for the Board's approval under the Staff Director of the Division of Banking Super- section 3 of the Act (12 U.S.C. § 1842) to acquire all vision and Regulation, acting pursuant to authority of the outstanding voting shares of Stillwater Bancordelegated by the Board, have determined, in accord- poration, Inc., Stillwater, Minnesota ("Stillwater"), ance with section 11(b) of the BHC Act, that expe- and thereby indirectly to acquire Cosmopolitan State ditious action on this application is necessary and Bank of Stillwater, Stillwater, Minnesota ("Bank").1 that Applicant may acquire control of Bank through Notice of the application, affording opportunity for the management agreement with the FDIC and may interested persons to submit comments, has been consummate its proposed investment in Bank on or published in accordance with section 3(b) of the Act after the fifth calendar day following the effective (54 Federal Register 13,950 (April 6, 1989)). The time date of this Order. The transaction shall not be for filing comments has expired and the Board has consummated later than three months after the effec- considered the application and all comments received tive date of this Order, unless the period for consum- in light of the factors set forth in section 3(c) of the mation is extended for good cause by the Board or Act. the Federal Reserve Bank of Cleveland under dele- St. Croix (deposits of $14 million) and Stillwater gated authority. (deposits of $45 million) are among the smaller banking By order, approved pursuant to authority delegated by the Board, effective June 29, 1989. 1. Immediately upon acquisition of the outstanding shares of Stillwater, Applicant will merge Stillwater and Bank with and into St. WILLIAM W. WILES Croix and its bank subsidiary, St. Croix Valley Bank, Oak Park Secretary of the Board Heights, Minnesota. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

576 Federal Reserve Bulletin • August 1989 organizations in Minnesota, each controlling substan- The Board notes that debt constitutes a significant tially less than one percent of statewide commercial proportion of St. Croix's financing of this proposal. bank deposits.2 Consummation of this proposal would Upon consummation, St. Croix's debt to outside parnot increase significantly the concentration of banking ties would increase substantially. St. Croix projects resources in Minnesota. that it will be able to reduce this debt in a manner St. Croix and Stillwater compete directly in the consistent with Board policy. In light of the recent Minneapolis-St. Paul banking market.3 St. Croix is the performance of Bank and St. Croix's existing bank 99th largest commercial bank in this market, control- subsidiary, however, St. Croix's earnings projections ling less than one percent of total deposits in commer- appear to be overly optimistic. Upon careful evaluacial banks in the market. Stillwater is the 48th largest tion of more conservative projections based on the commercial banking organization in the market, with recent performance of these banks, it is the Board's deposits also representing less than one percent of judgment that, at this time, Applicant would not have total deposits in commercial banks. Upon consumma- sufficient financial flexibility to service its debt without tion of this proposal, St. Croix would become the 35th unduly straining the resources of the proposed comlargest commercial banking organization in the mar- bined organization and Bank. Moreover, based on the ket, controlling deposits of $57.1 million and repre- record, it does not appear that Applicant would be able senting .23 percent of total deposits in commercial to serve as a source of strength to the combined banks in the market. In view of the de minimis organization or would have the financial resources to meet any unforeseen problems that may arise at its increase in concentration and the numerous banking bank subsidiaries. competitors remaining in the market, the Board has determined that consummation of this proposal would Managerial resources and considerations relating to not have a significant adverse effect on competition in the convenience and needs of the community to be the Minneapolis-St. Paul banking market. served are consistent with, but are not sufficient to In evaluating this application, the Board is required, warrant, approval of the application. under the terms of section 3 of the Act, to consider the On the basis of all the facts of record, the Board financial resources of the companies and banks in- concludes that the banking considerations involved in volved and the effect of the proposed acquisition on this proposal present adverse factors bearing upon the the future prospects of the bank and applicant organi- financial resources and future prospects of Applicant zation. The Board previously has stated that a bank and Bank. Such adverse factors are not outweighed by holding company should serve as a source of financial any pro-competitive effects or by significant benefits strength to its subsidiary banks and that the Board that would better serve the convenience and needs of would closely examine the condition of an applicant the community. Accordingly, it is the Board's judgand its subsidiaries in each case with this consider- ment that approval of the application would not be in ation in mind. The Board also has cautioned against the public interest and that the application should be, the assumption of substantial debt by a bank holding and hereby is, denied. company because of concern that a holding company By order of the Board of Governors, effective with a substantial level of debt would not have the June 26, 1989. financial flexibility necessary to meet unexpected problems in its subsidiary banks and could be forced to Voting for this action: Chairman Greenspan and Governors Johnson, Seger, Angell, Kelley, and La Ware. Absent and not place substantial demands on its subsidiary banks to voting: Governor Heller. meet its debt servicing requirements. There are also other risks associated with leveraging, such as a sig- JENNIFER J. JOHNSON nificant reduction in the parent company's ability to Associate Secretary of the Board use the debt and capital markets to aid its subsidiary bank, should the need arise.4 Orders Issued Under Section 4 of the Bank Holding Company Act First American Corporation 2. Banking data are as of September, 1988. Nashville, Tennessee 3. The Minneapolis-St. Paul banking market is approximated by the Minneapolis-St. Paul Ranally Metropolitan Area, adjusted to include Lanesburgh Township in Le Sueur County and all of Scott and Carver Order Approving Application to Provide Community counties, in Minnesota; and Hudson Township in St. Croix County, Development Advisory and Related Services Wisconsin. 4. Texstar Financial Corporation, Inc., 72 FEDERAL RESERVE BULLETIN 333 (1986); Midwest Bancshares, Inc., 71 FEDERAL RE- First American Corporation, Nashville, Tennessee SERVE BULLETIN 103 (1985); Cambridge Financial Corporation, 69 FEDERAL RESERVE BULLETIN 7% (1983). ("First American"), a bank holding company within Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 577 the meaning of the Bank Holding Company Act of of public and private sources, including government- 1956 (the "BHC Act"), has applied for the Board's insured lending programs. approval under section 4(c)(8) of the BHC Act, Based on the foregoing and other considerations 12 U.S.C. § 1843(c)(8), and section 225.23 of the reflected in the record, the Board has determined that Board's Regulation Y, 12 C.F.R. 225.23(a)(3), to the public benefits associated with consummation of acquire First American Community Development Cor- this proposal can reasonably be expected to outweigh poration, Nashville, Tennessee ("First American possible adverse effects, and that the balance of the CDC"); and thereby to engage de novo in providing, public interest factors that the Board is required to on a nonprofit basis, advisory and related services for consider under section 4(c)(8) of the BHC Act is programs designed to promote community welfare. favorable. Accordingly, the Board believes that the Notice of the application, affording interested per- application should be, and hereby is, approved. This sons an opportunity to submit comments on the pro- determination is subject to all of the conditions set posal, has been published (54 Federal Register 22,366 forth in Regulation Y, including those in sections (1989)). The time for filing comments has expired, and 225.4(d) and 225.23(b), and to the Board's authority to the Board has considered the application and all require such modification or termination of the activcomments received in light of the public interest ities of a holding company or any of its subsidiaries as factors set forth in section 4(c)(8) of the BHC Act. the Board finds necessary to assure compliance with First American, a multi-bank holding company with the provisions and purposes of the BHC Act and the consolidated assets of $7.2 billion, is the largest bank- Board's regulations and orders issued thereunder, or ing organization in Tennessee.1 to prevent evasion thereof. The Board has previously recognized the benefit of This transaction shall not be consummated later allowing bank holding companies to participate in than three months after the effective date of this community development activities based on their Order, unless such period is extended for good cause unique role in the community and has adopted a by the Board or by the Federal Reserve Bank of regulation permitting bank holding companies to make Atlanta, acting pursuant to delegated authority. debt and equity investments in community develop- By order of the Board of Governors, effective ment corporations or projects.2 The Board has also June 21, 1989. determined that the provision of advisory and related services to programs designed to promote community Voting for this action: Chairman Greenspan and Governors development is closely related to banking and permis- Johnson, Seger, Angell, Kelley, and La Ware. Absent and not sible for bank holding companies. Shorebank Corpo- voting: Governor Heller. ration, 74 FEDERAL RESERVE BULLETIN 140 (1988) JENNIFER J. JOHNSON ("Shorebank"). Associate Secretary of the Board First American's proposal does not differ materially from the activities approved in Shorebank. First The Fuji Bank, Limited American CDC will provide technical community Tokyo,Japan development advisory services to First American's subsidiary banks as well as to groups involved in Order Approving Application to Provide Certain community development issues such as low- and mod- Financial Advisory Services erate-income housing.3 First American CDC will not make debt or equity investments in community devel- The Fuji Bank, Limited, Tokyo, Japan ("Applicant"), opment projects or organizations. It will, however, a registered bank holding company, has applied for the provide expertise in obtaining funding from a variety Board's approval under section 4(c)(8) of the Bank Holding Company Act ("BHC Act"), 12 U.S.C. § 1843(c)(8), and section 225.23(a)(3) of the Board's Regulation Y, 12 C.F.R. 225.23(a)(3), to acquire a 1. Data are as of December 31, 1988. general partnership interest in Fuji-Wolfensohn Inter- 2. See 12 C.F.R. 225.25(b)(6); see also 12 C.F.R. 225.127 ("Bank national, a de novo New York general partnership holding companies possess a unique combination of financial and ("Company"). James D. Wolfensohn Incorporated managerial resources making them particularly suited for a meaningful and substantial role in remedying our social ills"). ("JDWI"), a Delaware corporation, would hold the 3. Bank holding companies may, without Board approval, provide remaining partnership interest in Company.1 JDWI is a services to their bank subsidiaries under section 4(c)(1)(C) of the BHC Act, which allows bank holding companies to "[furnish] services to or [perform] services for such bank holding company or its banking subsidiary." Applicant has sought approval in this case because Applicant proposes to provide community development advisory 1. Applicant will acquire its interest indirectly through a newly services to third parties, as well as to its affiliates. formed, wholly owned subsidiary. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

578 Federal Reserve Bulletin • August 1989 specialized investment bank that provides financial Board reaffirms its determinations regarding these advice to institutional clients. Company would engage activities. The Board must also find that the proposed in the following activities: acquisition "can reasonably be expected to produce (i) acting as financial adviser, either on a retainer or benefits to the public . . . that outweigh the possible success fee basis, to provide corporate finance ad- adverse effects, such as undue concentration of revisory services to institutional customers, including sources, decreased or unfair competition, conflicts of advice with respect to structuring, financing, and interests, or unsound banking practices." 12 U.S.C. negotiating domestic and international mergers, ac- § 1843(c)(8). quisitions, joint ventures, divestitures, leveraged The Board has expressed its concerns regarding buyouts, capital-raising vehicles, interest rate conflicts of interest and related adverse effects that, swaps, interest rate caps, interest rate collars, cur- absent certain limitations, may be associated with rency swaps, similar hedging devices, and other financial advisory activities. In order to address these corporate transactions, and to provide ancillary potential adverse effects, Applicant has committed services or functions incidental to the foregoing that: activities; (i) Company's financial advisory activities will not (ii) performing feasibility studies for institutional encompass the performance of routine tasks or customers, principally in the context of determining operations for a client on a daily or continuous the financial attractiveness and feasibility of partic- basis; ular corporate transactions; (ii) Disclosure will be made to each potential client (iii) providing valuation services in connection with of Company that Company is an affiliate of Applithe foregoing; and cant; (iv) rendering fairness opinions in connection with (iii) Advice rendered by Company on an explicit fee corporate transactions. basis will be without regard to correspondent balances maintained by a client of Company at Appli- Notice of the application, affording interested per- cant or any of Applicant's depository subsidiaries; sons an opportunity to submit comments on the pro- (iv) Company will not make available to Applicant posal, has been duly published (54 Federal Register or any of Applicant's subsidiaries confidential infor- 21,286 (1989)). The time for filing comments has ex- mation received from Company's clients, except pired, and the Board has considered the application with the client's consent; and and all comments received in light of the public (v) Applicant will implement procedures that will interest factors set forth in section 4(c)(8) of the BHC prevent and safeguard against tying products and Act. services of Company with loans made by Applicant Applicant, with total consolidated assets equivalent or any of Applicant's subsidiaries. to approximately $334.7 billion, is the third largest banking organization in the world.2 Applicant owns a Prior decisions of the Board also indicate a concern bank subsidiary in New York City and operates that joint ventures could potentially lead to a matrix of branches in New York and Chicago, agencies in Los relationships between co-venturers that could break Angeles, Houston, San Francisco, and Atlanta, and down the legally mandated separation of banking and representative offices in Seattle and Miami. Applicant commerce, create the possibility of conflicts of interest engages in various activities in the United States under and other adverse effects that the BHC Act was sections 4(c)(8) and 4(c)(9) of the BHC Act and the designed to prevent, or impair or give the appearance Board's Regulations Y and K (12 C.F.R. Parts 225 of impairing the ability of the banking organization to and 211, respectively). function effectively as an independent and impartial The Board has previously determined by Order that provider of credit.4 Further, joint ventures must be the proposed activities are closely related to banking carefully analyzed for any possible adverse effects on and permissible for bank holding companies within the meaning of section 4(c)(8) of the BHC Act,3 and the 256 (1988); The Bank of Nova Scotia, 74 FEDERAL RESERVE BULLE- 2. Asset data are as of September 30, 1988. Banking data are as of TIN 249 (1988); Sovran Financial Corporation, 73 FEDERAL RESERVE December 31, 1987. Ranking is as of December 31, 1987. BULLETIN 744 (1987); Amsterdam-Rotterdam Bank N.V., 73 FED- 3. See The Nippon Credit Bank, Ltd., 75 FEDERAL RESERVE ERAL RESERVE BULLETIN 726 (1987); Signet Banking Corporation, 73 BULLETIN 308 (February 13, 1989); Scandinavian Bank Group pic, 75 FEDERAL RESERVE BULLETIN 59 (1987); Security Pacific Corporation, FEDERAL RESERVE BULLETIN 311 (February 6, 1989); Canadian 71 FEDERAL RESERVE BULLETIN 118 (1985). Imperial Bank of Commerce, 74 FEDERAL RESERVE BULLETIN 571 4. See, e.g., Independent Bankers Financial Corporation, 72 FED- (1988); The Royal Bank of Canada, 74 FEDERAL RESERVE BULLETIN ERAL RESERVE BULLETIN 664 (1986); and Amsterdam-Rotterdam 334 (1988); SunTrust Banks, Inc., 74 FEDERAL RESERVE BULLETIN Bank, N.V., 70 FEDERAL RESERVE BULLETIN 835 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 579 competition and on the financial condition of the tic federal banking agencies.7 The Japanese Ministry banking organization involved in the proposal. of Finance in April of last year acted to implement for JDWI has stated that it engages only in activities Japanese banking organizations the risk-based capital that are permissible for a bank holding company. framework developed by the Basle Committee. The Furthermore, Applicant has committed to notify the Board considers the Basle Committee proposal an Board in the event JDWI determines to engage in any important step toward a more consistent and equitable securities business that is impermissible for a state international standard for assessing capital adequacy. member bank under the Glass-Steagall Act, and to In this case, the primary capital ratio of Applicant, seek Board approval of Applicant's retention of its as publicly reported, is well below the minimurh level interest in Company should JDWI's securities activi- specified in the Board's Capital Adequacy Guidelines. ties be inconsistent with the Board's Order approving After making adjustments to reflect Japanese banking this application. and accounting practices, however, including consid- With regard to competitive issues, Applicant and eration of a portion of the unrealized appreciation in JDWI do not currently compete with each other in any Applicant's portfolio of equity securities consistent relevant market. Accordingly, consummation of the with the principles in the Basle capital framework, proposed transaction would not eliminate any existing Applicant's capital ratio meets United States stancompetition between Applicant and JDWI. dards. In every case involving a nonbanking acquisition by The Board also has 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.5 In ac- and that Applicant is in compliance with the capital cordance with the principles of national treatment and and other financial requirements of Japanese banking competitive equity, the Board has stated that it ex- organizations. In addition, the Board has considered pects a foreign bank to meet the same general stan- as favorable factors that, in anticipation of implemendards of financial strength as domestic bank holding tation of the Basle Committee risk-based capital companies and to be able to serve as a source of framework, Applicant has, through the issuance of strength to its United States banking operations.6 In common stock and retention of earnings, increased its considering applications of foreign banking organiza- equity capital by almost $1.4 billion since October tions, the Board has noted that foreign banks operate 1988, and that Applicant's capital improvement prooutside the United States in accordance with different gram is consistent with meeting the standards in the regulatory and supervisory requirements, accounting Basle Committee capital framework for 1990 and 1992. principles, asset quality standards, and banking prac- Based on these and other facts of record, the Board tices and traditions, and that these differences have concludes that the financial considerations are consismade it difficult to compare the capital positions of tent with approval of the application. domestic and foreign banks. The Board, however, Consummation of Applicant's proposal would prorecently adopted a proposal to supplement its considvide increased convenience to Company's customers eration of capital adequacy with a risk-based system and gains in efficiency. In addition, the Board expects that is simultaneously being proposed by the member that the de novo entry of Applicant into the market for countries of the Basle Committee on Banking Regulathese services would increase the level of competition tions and Supervisory Practices and the other domesamong providers of these services. Accordingly, the Board has determined that the performance of the proposed activities by Company can reasonably be 5. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 FEDERAL RESERVE BULLETIN 94 (1989); Bayerische Vereinsbank AG, 73 FEDERAL RE- expected to produce benefits to the public. SERVE BULLETIN 155, 156 (1987). For these reasons, and in reliance on the commit- 6. See Toyo Trust and Banking Co., Ltd., 14 FEDERAL RESERVE ments offered in this case, the Board believes that the BULLETIN 623 (1988); Taiyo Kobe Bank, 74 FEDERAL RESERVE BULLETIN 621 (1988); The Long-Term Credit Bank of Japan, Limited, proposal is not likely to result in decreased or unfair 74 FEDERAL RESERVE BULLETIN 573 (1988); The Sanwa Bank, Lim- competition, conflicts of interests, unsound banking ited, 74 FEDERAL RESERVE BULLETIN 578 (1988); Sumitomo Trust & practices, concentration of resources, or other adverse Banking Co., Ltd., 73 FEDERAL RESERVE BULLETIN 749 (1987); Ljubljanska Banka-Associated Bank, 72 FEDERAL RESERVE BULLE- effects. Based on the foregoing and other facts of TIN 489 (1986); The Mitsubishi Trust and Banking Corporation, 72 record, and subject to the commitments made by FEDERAL RESERVE BULLETIN 256 (1986); The Industrial Bank of Japan, Ltd., 72 FEDERAL RESERVE BULLETIN 71 (1986); The Mitsub- Applicant and Company, the Board has determined ishi Bank, Limited, 70 FEDERAL RESERVE BULLETIN 518 (1984). See also Policy Statement on Supervision and Regulation of Foreign- Based Holding Companies, Federal Reserve Regulatory Service 11 4-835 (1979). 7. 54 Federal Register 4186 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

580 Federal Reserve Bulletin • August 1989 that the balance of the public interest factors that the Applicant, with total consolidated assets equivalent Board is required to consider under section 4(c)(8) of to approximately $155 billion, is the 21st largest bankthe BHC Act is favorable. Accordingly, the applica- ing organization in the world.1 In the United States, tion is hereby approved. This determination is subject Societe Generate operates three branches, one to all of the conditions set forth in the Board's Regu- agency, and one Edge Act corporation. lation Y, including those in sections 225.4(d) and In order to approve an application submitted pursu- 225.23(b), and to the Board's authority to require ant to section 4(c)(8) of the BHC Act, the Board is modification or termination of the activities of the required to determine that the proposed activity is "so holding company or any of its subsidiaries as the closely related to banking as to be a proper incident Board finds necessary to assure compliance with the thereto." 12 U.S.C. § 1843(c)(8). In considering provisions and purposes of the BHC Act and the whether a proposed activity would be a proper inci- Board's regulations and orders issued thereunder, or dent to banking, the Board is required to determine to prevent evasion thereof. that the performance of the proposed activity can This transaction shall not be consummated later reasonably be expected to produce benefits to the than three months after the effective date of this public that outweigh possible adverse effects. Id. Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of New A. Closely Related to Banking Analysis York, pursuant to delegated authority. By order of the Board of Governors, effective Based on guidelines established in the National Cou- June 23, 1989. rier case, a particular activity may be found to meet the "closely related to banking" test if it is demon- Voting for this action: Chairman Greenspan and Governors strated that banks generally have in fact provided the Johnson, Seger, Angell, Kelley, and La Ware. Absent and not proposed activity; that banks generally provide servoting: Governor Heller. vices that are operationally or functionally so similar WILLIAM W. WILES to the proposed activity as to equip them particularly Secretary of the Board well to provide the proposed activity; or that banks generally provide services that are so integrally related Societe Generate to the proposed activity as to require their provision in Paris, France a specialized form.2 Based on the facts of record, the Board finds that the Order Approving Application to Act as a Specialist activity of engaging as a specialist in foreign currency in Options on Foreign Exchange options on the Exchange is closely related to banking for purposes of section 4(c)(8) because banks provide Societe Generate, Paris, France, a foreign bank sub- services that are so operationally and functionally ject to the Bank Holding Company Act ("BHC Act"), similar to the proposed activities that banking organihas applied for the Board's approval under section zations are particularly well equipped to provide them. 4(c)(8) of the BHC Act, 12 U.S.C. § 1843(c)(8), and The Board believes that banks possess substantial section 225.21(a) of the Board's Regulation Y, experience in dealing in foreign exchange and related 12 C. F. R. 225.21 (a), for approval for its wholly owned services that are similar to the functions involved in subsidiary, Societe Generate Options-North America, the specialist activity.3 Inc., Philadelphia, Pennsylvania ("Company"), to act The Board has previously recognized that foreign as the specialist in Deutsche mark options on the exchange activities have traditionally been conducted Philadelphia Stock Exchange ("the Exchange"). Company would be the sole specialist in Deutsche mark options designated by the Exchange. As a spe- 1. Banking data are as of June 30, 1988. Ranking is as of December cialist, Company would act as dealer and market 31, 1987. 2. Nat'l Courier Ass'n v. Board of Governors, 516 F.2d 1229, 1237 maker in such options to assist in the maintenance of a (D.C. Cir. 1975). The Board may also consider any other factor that fair and orderly market on the Exchange. demonstrates a reasonable or close connection or relationship of the activity to banking. 49 Federal Register 794, 806 (1984); Securities Notice of the application, affording interested per- Industry Ass'n v. Board of Governors, 104 S. Ct. 3003, 3005-06 n.5 sons an opportunity to submit comments on the pro- (1984). posal, has been duly published (53 Federal Register 3. The Board notes that in 1984 the Comptroller of the Currency authorized a national bank to engage in the same activity that Societe 50,096 (1988)). The time for filing comments has ex- Generale now proposes through a joint venture with an existing pired, and the Board has considered the application in options trader on the Exchange. Letter, dated January 11, 1984, from light of the public interest factors set forth in section Michael Patriarca, Deputy Comptroller for Multinational Banking. The Comptroller has also approved a proposal by a national bank to 4(c)(8) of the BHC Act. function as the Exchange's specialist on Canadian dollar options. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 581 by banks and would be appropriate activities under the when other dealers might refrain from activity because BHC Act.4 Banks are major participants in all aspects potential profits do not appear likely. of the foreign exchange markets and also act as market In this case, the Board believes that financial risk is makers in various currencies. Their activities include sufficiently minimized by several considerations. trading for their own account as well as for customers First, the rules of the Exchange permit the specialist to in virtually all foreign exchange markets and instru- set the price and quantity that it will buy and sell in ments, including trading foreign currency options on order to minimize its risk in an adverse or volatile regulated exchanges as proposed here. market. Second, the specialist is generally prohibited The Board further notes that banks not only take by the Exchange from "speculating." Third, Societe foreign exchange positions for their own account, but Generale has committed not to write unhedged options also act as market makers in the interbank market, and appears to have developed substantial experience continually offering both bid and offer prices on the with hedging from its existing foreign currency and currencies and contracts they trade. Through their options business. In this regard, Company will instiparticipation in the interbank market for foreign cur- tute a computerized options risk management system rency options, banks have developed experience in that will include an ongoing risk exposure and hedging dealing, market making and risk management which requirement analysis; "what if' studies for different are essential elements of the proposed activities. market scenarios; continuous review of Company's compliance with its own internal limits; and back- B. Balance of Public Benefits and Adverse office surveillance of the firm's floor trading activities. Effects Moreover, the record also shows that Societe Generale has developed extensive experience in trading In order to approve this application, the Board is foreign currency options on the over-the-counter marrequired to determine that the performance of the ket and on exchanges. proposed activities by Societe Generale "can reason- The Board also notes that Company will be a ably be expected to produce benefits to the public, registered broker-dealer with the SEC and hence subsuch as greater convenience, increased competition, ject to the net capital rule. Societe Generale has or gains in efficiency, that outweigh possible adverse indicated that Company's capital will also be greater effects, such as undue concentration of resources, than the capital devoted to the activities by the current decreased or unfair competition, conflicts of interest, specialists. In this regard, the Board expects that or unsound banking practices." 12 U.S.C. § 1843(c)(8). Company will maintain at all times capital adequate to Consummation of the proposal can reasonably be support its activity and cover reasonably expected expected to result in public benefits that outweigh expenses and losses. possible adverse effects. The proposed activities In reaching its conclusions in this case, the Board would facilitate the development of the foreign ex- has considered its decision in Compagnie Financiere change options market by providing increased market de Suez and Banque Indosuez ("Banque Indosuez"), liquidity and enhanced opportunities for financial in- denying a proposal to act as a specialist in French stitutions to hedge foreign exchange risk. Consumma- franc options on the Exchange.5 The Board believes tion of the proposal is also likely to provide gains in that the facts and circumstances in this case are efficiency through linkage of the interbank foreign different in several significant respects from the situaexchange market with the market for exchange-traded tion presented in Banque Indosuez. In particular, this options on foreign exchange. proposal does not raise the issues relating to potential With regard to the adverse effects that might stem conflicts of interest and risk raised in Banque Infrom the proposal, the Board notes that the activity of dosuez. Moreover, the markets for Deutsche marks acting as a specialist involves the financial risk of and Deutsche mark options are considerably larger adverse rate fluctuations. The specialist is required to and more liquid than they were for French francs at deal for its own account as necessary to maintain a that time. The market for foreign currency options has "fair and orderly market." Under the rules of the also broadened significantly, particularly on the Ex- Exchange, the specialist is expected to deal at all change, and the involvement of commercial banks in times, and therefore would be in the market at times that market has become more widespread. Based upon the foregoing and other considerations reflected in the record, and subject to the commit- 4. See Hongkong and Shanghai Banking Corporation, 75 FEDERAL ments made by Societe Generale, the Board has de- RESERVE BULLETIN 217 (1989) (trading foreign exchange forwards, futures, options and options on futures for its own account for other than hedging purposes to a limited extent); and The Nippon Credit Bank, Ltd., 75 FEDERAL RESERVE BULLETIN 308 (1989) (engaging in foreign exchange spot transactions). 5. 72 FEDERAL RESERVE BULLETIN 141 (1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

582 Federal Reserve Bulletin • August 1989 termined that the public benefits associated with this 4. acting as an advisor to institutional customers proposal can reasonably be expected to outweigh regarding financial strategies involving interest rate possible adverse effects, and that the balance of the and currency swaps and swap derivative products. public interest factors that the Board is required to consider under section 4(c)(8) of the BHC Act is Notice of the application, affording interested perfavorable. Accordingly, the application is hereby ap- sons an opportunity to submit comments on the proproved. This determination is further subject to all of posal, has been duly published (54 Federal Register the conditions set forth in the Board's Regulation Y, 8395 (1989)). The time for filing comments has expired, including those in sections 225.4(d) and 225.23(b), and and the Board has considered the application and all to the Board's authority to require modification or comments received in light of the public interest termination of the activities of the holding company or factors set forth in section 4(c)(8) of the BHC Act. any of its subsidiaries as the Board finds necessary to Sumitomo, with approximately $366.9 billion in total assure compliance with the provisions and purposes of consolidated assets as of September 30, 1988, is the the BHC Act and the Board's regulations and orders second largest banking organization in the world. issued thereunder, or to prevent evasion thereof. Sumitomo owns Sumitomo Bank of California, Los This transaction shall not be consummated later Angeles, California, which held total assets of approxthan three months after the effective date of this imately $3.7 billion as of December 31, 1988. In Order, unless such period is extended for good cause addition, Sumitomo owns several agencies and by the Board or by the Federal Reserve Bank of New branches in the United States. The operations of York, pursuant to delegated authority. SBCM will be completely separate and independent of By order of the Board of Governors, effective Sumitomo's U.S. banking operations. June 22, 1989. The Board has permitted bank holding companies under section 4(c)(8) of the BHC Act to provide advice Voting for this action: Chairman Greenspan and Governors in connection with interest rate and currency swaps, Johnson, Seger, Angell, Kelley, and La Ware. Absent and not interest rate caps, and similar transactions.1 However, voting: Governor Heller. the Board has not previously approved the remaining JENNIFER J. JOHNSON proposed activities under section 4(c)(8) of the BHC Associate Secretary of the Board Act.2 In order to approve an application submitted pursu- The Sumitomo Bank, Limited ant to section 4(c)(8) of the BHC Act, the Board is Osaka, Japan required to determine that the proposed activity is "so closely related to banking as to be a proper incident Order Approving Application to Act as a Dealer, thereto." 12 U.S.C. § 1843(c)(8). In considering Broker, and Advisor With Respect to Interest Rate whether a proposed new activity would be a proper and Currency Swaps and Related Transactions The Sumitomo Bank, Limited, Osaka, Japan ("Sumi- 1. Signet Banking Corporation, 73 FEDERAL RESERVE BULLETIN 59 tomo"), a bank holding company within the meaning (1987); The Nippon Credit Bank, Ltd., 75 FEDERAL RESERVE BULLE- TIN 308 (1989) . of the Bank Holding Company Act of 1956 ("BHC 2. The basic structure of an interest rate swap is an exchange Act"), has applied pursuant to section 4(c)(8) of the between two counterparties of the different payment streams that arise out of fixed-rate and floating-rate interest payment obligations. BHC Act (12 U.S.C. § 1843(c)(8)) and section The exchange is made in the same currency and calculated by 225.23(a) of the Board's Regulation Y (12 C.F.R. reference to a mutually agreed upon "notional" principal amount. 225.23(a)) for its wholly owned subsidiary, Sumitomo A currency swap is an exchange between two counterparties of a fixed-rate interest obligation in one currency for a fixed-rate interest Bank Capital Markets, Inc., New York, New York obligation in another currency. Currency swaps may involve either an ("SBCM"), to engage de novo in the following activ- initial physical exchange of principal at an agreed-upon current exchange rate or an exchange of interest payments in different ities: currencies on an agreed notional amount with no actual transfer of 1. intermediating in the international swap markets by principal. In either case, over the course of the swap, there will be a acting as originator and principal in interest rate swap periodic exchange of fixed-rate interest payments. Upon maturity of the swap, if there was a physical exchange of currencies at the outset, and currency swap transactions; there would be a re-exchange of the original principal amounts. 2. acting as an originator and principal with respect to An intermediary in the swap markets is a party who is willing to step certain risk-management products such as caps, between the two parties to a swap agreement and act as the principal counterparty with each of the other participants, thus taking on the floors, and collars, as well as options on swaps, caps, credit risk of each of the participants. Upon entering into a swap with floors, and collars ("swap derivative products"); one counterparty, the intermediary enters into an equivalent and offsetting swap with another counterparty. 3. acting as a broker or agent with respect to the An agent or broker in the swap markets locates, for a fee, a suitable foregoing transactions and instruments; and counterparty for a party seeking to enter into a swap agreement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 583 incident to banking, the Board is required to determine exchange.6 Currency swaps are very similar to foreign that the performance of the proposed activity can exchange forward transactions, the primary difference reasonably be expected to produce benefits to the being the exchange of interest streams in connection public that outweigh possible adverse effects. Id. with currency swaps. Interest rate swaps are, in turn, very similar to currency swaps in that they both involve A. Closely Related to Banking Analysis agreements to exchange different payment streams that arise out of a prescribed principal amount.7 Based on guidelines established by the federal courts, an activity may be found to be closely related to B. Balance of Public Benefits and Adverse banking if it is demonstrated that banks generally Effects have, in fact, provided the proposed activity; that banks generally provide services that are operationally In order to approve this application, the Board is also or functionally so similar to the proposed activity as to required to determine that the performance of the equip them particularly well to provide the proposed proposed activities by Sumitomo "can reasonably be activity; or that banks generally provide services that expected to produce benefits to the public, such as are so integrally related to the proposed activity as to greater convenience, increased competition, or gains require their provision in a specialized form.3 in efficiency, that outweigh possible adverse effects, In this case, the record shows that banks do conduct such as undue concentration of resources, decreased the proposed intermediation activities. Major U.S. or unfair competition, conflicts of interests, or unmoney-center banks are among the larger intermediar- sound banking practices." 12 U.S.C. § 1843(c)(8). ies in the international swap market.4 In addition, for Consummation of the proposal may reasonably be several years banks have participated in the swap expected to result in significant public benefits in the market as end-users, entering into swaps and purchas- form of increased competition in the swap market and ing swap derivative products in order to hedge other gains in efficiency and innovation in the provision of business risks or to match assets and liabilities.5 these services. In addition, the entry of SBCM into Accordingly, the Board concludes that the proposed this market will add a significant amount of additional activities of intermediating in the international swap capital to the swap market as a whole. As one of the markets by acting as originator and principal in inter- larger banks in the world, Sumitomo, through SBCM, est rate swap and currency swap transactions and with will facilitate swap transactions among counterparties respect to swap derivative products is closely related that are not equipped to evaluate the credit of potential to banking for purposes of section 4(c)(8) of the BHC Act. counterparties and hence will increase the accessibil- In addition, the Board finds that acting as agent or ity of swap transactions to additional end-users. broker with respect to interest rate and currency SBCM appears to be capable of managing the risks swaps and swap derivative products is closely related associated with the proposed activities. Sumitomo, to banking for purposes of section 4(c)(8), because which has extensive experience in lending and fibanks provide services that are so operationally and nancing services worldwide, has undertaken to profunctionally similar to the proposed activities that vide credit screening for all potential counterparties of banking organizations are particularly well equipped SBCM through its credit desk services in Tokyo. In to provide them. The Board has previously determined appropriate cases, SBCM will obtain a letter of credit that acting as a broker with respect to foreign ex- on behalf of or collateral from a counterparty. In change forward transactions is closely related to bank- addition, SBCM will establish separate credit risk ing, finding that banks historically have been engaged exposure limits for each swap counterparty. SBCM in the provision of assistance with respect to foreign will monitor this exposure on an ongoing basis, in the aggregate and with respect to each counterparty. Senior management will be periodically informed of the 3. Nat'l Courier Ass'n v. Board of Governors, 516 F.2d 1229, 1237 potential risk to which SBCM is exposed. (D.C. Cir. 1975). The Board may also consider any other factor that an applicant may advance to demonstrate a reasonable or close connec- In order to manage the risk associated with adverse tion or relationship to banking. 49 Federal Register 794, 806 (1984); changes in interest rates ("price risk"), SBCM will Securities Industry Ass'n v. Board of Governors, 468 U.S. 207,210-11 match all the swaps and related instruments in which it n.5 (1984). 4. Bank for International Settlements, Recent Innovations in Inter- is a principal and will hedge any unmatched positions national Banking, p. 45 (April 1986). 5. The Board recognized the involvement of U.S. banks in the swap market in its recently issued Risk-Based Capital Guidelines by expressly including interest rate and currency swaps and swap deriva- 6. See, e.g., Hongkong and Shanghai Banking Corporation, 69 tive products in its list of types of interest rate and foreign exchange FEDERAL RESERVE BULLETIN 221 (1983). rate contracts for which credit equivalent amounts were computed. 54 7. Similarly, caps, floors, and collars involve agreements to pay an Federal Register 4205 (1989). amount by reference to a prescribed interest rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

584 Federal Reserve Bulletin • August 1989 pending a suitable match. SBCM will not enter into cordance with the principles of national treatment and unmatched or unhedged swaps for speculative pur- competitive equity, the Board has stated that it exposes. SBCM's management will set absolute limits on pects a foreign bank to meet the same general stanthe level of risk to which its swap portfolio may be dards of financial strength as domestic bank holding exposed. SBCM's exposure to price risk will be mon- companies and to be able to serve as a source of itored by both business management and internal strength to its United States banking operations.10 In auditing personnel to guarantee compliance with the considering applications of foreign banking organizarisk limitations imposed by management. Auditing tions, the Board has noted that foreign banks operate personnel will report directly to senior management to outside the United States in accordance with different ensure that any violations of portfolio risk limitations regulatory and supervisory requirements, accounting are reported and corrected. principles, asset quality standards, and banking prac- With respect to the risk associated with the potential tices and traditions, and that these differences have for differences between the floating rate indices on two made it difficult to compare the capital positions of matched or hedged swaps ("basis risk"), SBCM's domestic and foreign banks. The Board, however, management will impose absolute limits upon the recently adopted a proposal to supplement its considaggregate basis risk to which SBCM's swaps portfolio eration of capital adequacy with a risk-based system may be exposed. If the level of risk threatens to that is simultaneously being proposed by the member exceed the limits at any time, SBCM will actively seek countries of the Basle Committee on Banking Regulato enter into matching transactions for its unmatched tions and Supervisory Practices and the other domespositions. SBCM's internal auditing staff, together tic federal banking agencies.11 The Japanese Ministry with management, will monitor compliance with the of Finance in April of last year acted to implement for management-imposed basis risk limits.8 Japanese banking organizations the risk-based capital In addition, SBCM intends to minimize operations framework developed by the Basle Committee. The risk through the recruitment and training of an expe- Board considers the Basle Committee proposal an rienced back-office support staff and the use of a important step toward a more consistent and equitable separate operational and data processing structure for international standard for assessing capital adequacy. processing swap and hedging transactions. In this case, the primary capital ratio of Sumitomo, In order to minimize any possible conflicts of inter- as publicly reported, is well below the 5.5 percent est between SBCM's role as a principal or broker in minimum level specified in the Board's Capital Adeswap transactions and its role as advisor to potential quacy Guidelines. After making adjustments to reflect counterparties, SBCM will disclose to each customer Japanese banking and accounting practices, however, the fact that SBCM may have an interest as a coun- including consideration of a portion of the unrealized terparty principal or broker in the course of action appreciation in Sumitomo's portfolio of equity securiultimately chosen by the customer. Also, in any case ties consistent with the principles in the Basle capital in which SBCM has an interest in a specific transaction framework, Sumitomo's capital ratio meets United as an intermediary or principal, SBCM will advise its States standards. customer of that fact before recommending participa- The Board also has considered additional factors tion in that transaction. In addition, SBCM's advisory that mitigate its concern in this case. The Board notes services will be offered only to sophisticated custom- that Sumitomo is in compliance with the capital and ers who would be unlikely to place undue reliance on other financial requirements of Japanese banking orgainvestment advice received and better able to detect nizations. In addition, the Board notes that Sumitomo investment advice motivated by self-interest. currently exceeds the minimum requirements established In every case involving a nonbanking acquisition by by the Basle Committee capital framework for 1992. a bank holding company under section 4 of the BHC Act, the Board considers the financial condition and resources of the applicant and its subsidiaries and the 10. See Toyo Trust and Banking Co., Ltd., 74 FEDERAL RESERVE BULLETIN 623 (1988); Taiyo Kobe Bank, 74 FEDERAL RESERVE effect of the transaction on these resources.9 In ac- BULLETIN 621 (1988); The Long-Term Credit Bank of Japan, Limited, 74 FEDERAL RESERVE BULLETIN 573 (1988); The Sanwa Bank, Limited, 74 FEDERAL RESERVE BULLETIN 578 (1988); Sumitomo Trust & Banting Co., Ltd., 73 FEDERAL RESERVE BULLETIN 749 (1987); Ljubljan- 8. In addition to rate and basis risk, the value of a swap option is ska Banka-Associated Bank, 72 FEDERAL RESERVE BULLETIN 489 (1986); subject to market expectations of the future direction and rate of The Mitsubishi Trust and Banking Corporation, 72 FEDERAL RESERVE change in interest rates, or volatility risk. SBCM's management will BULLETIN 256 (1986); The Industrial Bank of Japan, Ltd., 72 FEDERAL impose absolute limits on the level of volatility risk to which SBCM's RESERVE BULLETIN 71 (1986); The Mitsubishi Bank, Limited, 70 FEDERAL swap portfolio may be exposed. RESERVE BULLETIN 518 (1984). See also Policy Statement on Supervision 9. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 FEDERAL RESERVE and Regulation of Foreign-Based Holding Companies, Federal Reserve BULLETIN 94 (1989); Bayerische Vereinsbank AG, 73 FEDERAL RE- Regulatory Service H 4-835 (1979). SERVE BULLETIN 155, 156 (1987). 11. 54 Federal Register 4186 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 585 Based on these and other facts of record, the Board Board finds necessary to assure compliance with the concludes that the financial considerations are consis- provisions and purposes of the BHC Act and the tent with approval of the application. Board's regulations and orders issued thereunder, or Based on the foregoing and other facts of record, to prevent evasion thereof. and subject to the commitments made by Sumitomo, This transaction shall not be consummated later the Board has determined that the public benefits than three months after the effective date of this associated with this proposal can reasonably be ex- Order, unless such period is extended for good cause pected to outweigh possibly adverse effects, and that by the Board or by the Federal Reserve Bank of San the balance of the public interest factors that the Board Francisco, pursuant to delegated authority. is required to consider under section 4(c)(8) of the By order of the Board of Governors, effective BHC Act is favorable. Accordingly, the application is June 26, 1989. hereby approved. This determination is further subject to all of the conditions set forth in the Board's Regu- Voting for this action: Chairman Greenspan and Governors lation Y, including those in sections 225.4(d) and Johnson, Seger, Angell, Kelley, and La Ware. Absent and not voting: Governor Heller. 225.23(b), and to the Board's authority to require modification or termination of the activities of the JENNIFER J. JOHNSON holding company or any of its subsidiaries as the Associate Secretary of the Board 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 3 Effective Applicant Bank(s) date Barnett Banks, Inc., Investors Trust Financial Corporation, June 9, 1989 Jacksonville, Florida Duluth, Georgia FirstBank Holding Company of FirstBank of South Boulder, N.A., June 6, 1989 Colorado, Boulder, Colorado Lakewood, Colorado FirstBank of Beaver Creek, N.A., unincorporated Eagle County, Colorado BY FEDERAL RESERVE BANKS Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Artemisia Holdings, Inc., Connecticut Bancorp, New York June 7, 1989 Stamford, Connecticut Norwalk, Connecticut Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

586 Federal Reserve Bulletin • August 1989 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Bank of Bolivar Employee Stock Community Financial Services, St. Louis June 8, 1989 Ownership Plan & Trust, Inc., Bolivar, Tennessee Bolivar, Tennessee Belle Fourche Bancshares, Inc., Buffalo Bancorporation, Inc., Minneapolis June 16, 1989 Belle Fourche, South Dakota Buffalo, South Dakota Blairstown Bancorp, Inc., Benton County State Bank, Chicago June 20, 1989 Blairstown, Iowa Blairstown, Iowa BMR Financial Group, Inc., Tucker State Bank, Atlanta June 6, 1989 Atlanta, Georgia Winter Garden, Florida Coal City Corporation, Allied Banc Corporation, Chicago June 19, 1989 Coal City, Illinois Coal City, Illinois Commonwealth Trust Bancorp, The Farmers Bank, Cleveland May 30, 1989 Inc., Butler, Kentucky Butler, Kentucky Continental Bancorporation, Continental Bank of New Jersey, Philadephia May 31, 1989 Gloucester Township, Gloucester Township, Laurel Springs, New Jersey Laurel Springs, New Jersey Easton Bancshares, Inc., Community Bank of Easton, Chicago June 13, 1989 Easton, Illinois Easton, Illinois Fannin Bancshares, Inc., Peoples Bank of Fannin County, Atlanta June 20, 1989 Blue Ridge, Georgia Blue Ridge, Georgia Farmington Bancorp, Inc., Bank of Farmington, Chicago June 6, 1989 Peoria, Illinois Farmington, Illinois First Clay County Banc Clay County Bank, Richmond June 13, 1989 Corporation, Clay, West Virginia Clay, West Virginia First McKinley Corporation, First National Bank in Evanston, Kansas City May 31, 1989 Denver, Colorado Evanston, Wyoming First Wachovia Corporation, First Bank and Trust Company, Richmond June 6, 1989 Winston-Salem, North Carolina Fayetteville, Georgia FNC Acquisition Company, First National Company, Richmond May 31, 1989 Pikeville, Kentucky Pikeville, Kentucky FSB Bancorp, Inc., Farmers State Bank of Chicago May 30, 1989 Breckenridge, Michigan Breckenridge, Breckenridge, Michigan Fulton Bancshares Corporation, Fulton County National Bank Philadelphia June 6, 1989 McConnellsburg, Pennsylvania and Trust Company, McConnellsburg, Pennsylvania Golden Isles Financial Holdings, The First Bank of Brunswick, Atlanta June 8, 1989 Inc., Brunswick, Georgia Brunswick, Georgia Heritage Bancshares, Inc., Heritage National Bank, Atlanta June 16, 1989 Fort Myers, Florida Fort Myers, Florida Hershare Financial Corporation, State Bank of Herscher, Chicago June 6, 1989 Herscher, Illinois Herscher, Illinois HNB Bancorp, Inc., The Hannibal National Bank, St. Louis May 30, 1989 Hannibal, Missouri Hannibal, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 587 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Independent Southern MidSouth Bancshares, Inc., St. Louis June 9, 1989 Bancshares, Inc., Millington, Tennessee Brownsville, Tennessee JDOB, Incorporated, First State Bank of New Minneapolis May 26, 1989 Naples, Florida Germany, New Germany, Minnesota Key Centurion Bancshares, Inc., First National Company, Richmond May 31, 1989 Charleston, West Virginia Pikeville, Kentucky Lexington Bancshares, Inc., Cardinal Bancshares, Inc., Cleveland June 1, 1989 Lexington, Kentucky Lexington, Kentucky MidSouth Bancshares, Inc., Tennessee Bank and Trust, St. Louis June 9, 1989 Millington, Tennessee Millington, Tennessee Morris State Bancshares, Inc., The Morris State Bank, Atlanta May 31, 1989 Dublin, Georgia Dublin, Georgia National Penn Bancshares, Inc., Pennsylvania State Bank, Philadelphia May 30, 1989 Boyertown, Pennsylvania Lemonye, Pennsylvania NBM Bancorp, Inc., The National Bank of Mendota, Chicago June 16, 1989 Mendota, Illinois Mendota, Illinois I.V. Bancorp, Inc., Peru, Illinois NorCentral Bancshares, Inc., The First State Bank of Portis, Kansas City May 25, 1989 Portis, Kansas Portis, Kansas Orono Financial, Inc., Wayzata Bank of the Lakes, Minneapolis June 16, 1989 Navarre, Minnesota N.A., Wayzata, Minnesota People's Savings Financial Corp., The People's Savings Bank of Boston June 9, 1989 New Britain, Connecticut New Britain, New Britain, Connecticut Smoky Mountain Bancorp, Inc., The First National Bank of Atlanta June 19, 1989 Gatlinburg, Tennessee Gatlinburg, Gatlinburg, Tennessee State Bancshares, Inc., State Bank of Fargo, Minneapolis June 2, 1989 Fargo, North Dakota Fargo, North Dakota First State Bank of West Fargo, West Fargo, North Dakota The Sumitomo Bank, Limited, CPB Inc., San Francisco June 12, 1989 Osaka, Japan Honolulu, Hawaii TCB Bancshares, Inc., The Commercial Bank, Atlanta June 14, 1989 Crawford, Georgia Crawford, Georgia Texas Bancorporation, Inc., Texas Bank, Dallas May 25, 1989 Odessa, Texas Odessa, Texas WestOne Bancorp, First Security Bancorp, San Francisco June 5, 1989 Boise, Idaho Tacoma, Washington Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

588 Federal Reserve Bulletin • August 1989 Section 4 Nonbanking Activity/ Reserve Effective Applicant Company Bank date First United Bancorporation, Universal Loans, Inc., Richmond June 16, 1989 Anderson, South Carolina Sumter, South Carolina MNC Financial, Inc., Prime Rate Premium Finance Richmond May 26, 1989 Baltimore, Maryland Corporation, Florence, South Carolina Prime Rate Systems, Inc., Florence, South Carolina Norwest Corporation, Financial Investment Associates Minneapolis June 9, 1989 Minneapolis, Minnesota Incorporated, Northfield, Illinois PNC Financial Corp., Money Station, Inc., Cleveland May 26, 1989 Pittsburgh, Pennsylvania Columbus, Ohio Wells Fargo & Company, Wells Fargo Mortgage and San Francisco June 19, 1989 San Francisco, California Equity Trust, San Francisco, California APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Reserve Effective Applicant Bank(s) Bank date First Bank/Dixon, Lincolnway State Bank, Chicago May 31, 1989 Dixon, Illinois Sterling, Illinois The Polo National Bank, Polo, Illinois First Bank of Stockton/Warren, First National Bank of Freeport, Chicago May 31, 1989 Stockton, Illinois Freeport, Illinois Mount Carroll National Bank, Mount Carroll, Illinois First of America Bank-Northern First of America Bank-Petoskey, Chicago May 25, 1989 Michigan, National Association, Cheboygan, Michigan Petoskey, Michigan Liberty Bank, South Pacific Western Bank, San Francisco June 16, 1989 San Francisco, California San Jose, California Pioneer Bank and Trust, First State Bank, Minneapolis June 16, 1989 Belle Fourche, South Dakota Buffalo, South Dakota Union Colony Bank, Northern Bank and Trust, Kansas City June 15, 1989 Greeley, Colorado Ft. Collins, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 589 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. CB&T Bancshares, Inc. v. Board of Governors, No. VanDyke v. Board of Governors, No. 88-5280 (8th 89-1394 (D.C. Cir., filed June 21, 1989). Cir., filed July 13, 1988). MCorp v. Board of Governors, No. 89-1677 (S.D. Baugh v. Board of Governors, No. C88-3037 (N.D. Tex. filed May 2, 1989). Iowa, filed April 8, 1988). Independent Insurance Agents of America, Inc. v. Bonilla v. Board of Governors, No. 88-1464 (7th Cir., Board of Governors, No. 89-4030 (2d Cir., filed filed March 11, 1988). March 9, 1989). Cohen v. Board of Governors, No. 88-1061 (D.N.J., Securities Industry Association v. Board of Governors, filed March 7, 1988). No. 89-1127 (D.C. Cir. filed February 16, 1989). Stoddard v. Board of Governors, No. 88-1148 (D.C. American Land Title Association v. Board of Gover- Cir., filed February 25, 1988). nors, No. 88-1872 (D.C. Cir., filed December 16, Teichgraeber v. Board of Governors, No. 87-2505-0 1988). (D. Kan., filed Oct. 16, 1987). MCorp v. Board of Governors, No. CA3-88-2693-F The Chase Manhattan Corporation v. Board of Gov- (N.D. Tex., filed October 28, 1988). ernors, No. 87-1333 (D.C. Cir., filed July 20, 1987). White v. Board of Governors, No. CU-S-88-623-RDF Lewis v. Board of Governors, Nos. 87-3455, 87-3545 (D. Nev., filed July 29, 1988). (11th Cir., filed June 25, Aug. 3, 1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics NOTE. The following tables may have some 1.43, 1.45, 1.46, 1.47, 1.48, 1.50, 1.53, 1.54, 1.55, discontinuities in historical data for some series 1.56, 2.11, 2.14, 2.15, 2.16, 2.17, 3.14, and 3.21. beginning with the March 1989 issue: 1.10, 1.17, For a more detailed explanation of the changes, 1.20, 1.21, 1.22, 1.23, 1.24, 1.25, 1.26, 1.28, 1.30, see the announcement on pages 288-89 of the 1.31, 1.32, 1.35, 1.36, 1.37, 1.39, 1.40, 1.41, 1.42, April 1989 BULLETIN. CONTENTS COMMERCIAL BANKING INSTITUTIONS A17 Major nondeposit funds Domestic Financial Statistics A18 Assets and liabilities, last-Wednesday-of-month series MONEY STOCK AND BANK CREDIT WEEKLY REPORTING COMMERCIAL BANKS A3 Reserves, money stock, liquid assets, and debt Assets and liabilities measures A19 All reporting banks A4 Reserves of depository institutions, Reserve A20 Banks in New York City Bank credit A21 Branches and agencies of foreign banks A5 Reserves and borrowings—Depository institutions A22 Gross demand deposits—individuals, A6 Selected borrowings in immediately available partnerships, and corporations funds—Large member banks FINANCIAL MARKETS POLICY INSTRUMENTS A23 Commercial paper and bankers dollar A7 Federal Reserve Bank interest rates acceptances outstanding A8 Reserve requirements of depository institutions A23 Prime rate charged by banks on short-term A9 Federal Reserve open market transactions business loans A24 Interest rates—money and capital markets A25 Stock market—Selected statistics FEDERAL RESERVE BANKS A26 Selected financial institutions—Selected assets and liabilities A10 Condition and Federal Reserve note statements All Maturity distribution of loan and security holdings FEDERAL FINANCE A28 Federal fiscal and financing operations MONETARY AND CREDIT AGGREGATES A29 U.S. budget receipts and outlays A12 Aggregate reserves of depository institutions A30 Federal debt subject to statutory limitation and monetary base A30 Gross public debt of U.S. Treasury—Types A13 Money stock, liquid assets, and debt measures and ownership A15 Bank debits and deposit turnover A31 U.S. government securities A16 Loans and securities—All commercial banks dealers—Transactions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • August 1989 A32 U.S. government securities dealers—Positions International Statistics and financing A33 Federal and federally sponsored credit SUMMARY STATISTICS agencies—Debt outstanding A55 U.S. international transactions—Summary A56 U.S. foreign trade SECURITIES MARKETS AND A56 U.S. reserve assets CORPORATE FINANCE A56 Foreign official assets held at Federal Reserve Banks A34 New security issues—State and local A57 Foreign branches of U.S. banks—Balance governments and corporations sheet data A35 Open-end investment companies—Net sales A59 Selected U.S. liabilities to foreign official and asset position institutions A35 Corporate profits and their distribution A35 Total nonfarm business expenditures on new plant and equipment REPORTED BY BANKS IN THE UNITED STATES A36 Domestic finance companies—Assets and A59 Liabilities to and claims on foreigners liabilities and business credit A60 Liabilities to foreigners A62 Banks' own claims on foreigners A63 Banks' own and domestic customers' claims on REAL ESTATE foreigners A63 Banks' own claims on unaffiliated foreigners A37 Mortgage markets A64 Claims on foreign countries—Combined A38 Mortgage debt outstanding domestic offices and foreign branches CONSUMER INSTALLMENT CREDIT REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES A39 Total outstanding and net change A40 Terms A65 Liabilities to unaffiliated foreigners A66 Claims on unaffiliated foreigners FLOW OF FUNDS SECURITIES HOLDINGS AND TRANSACTIONS A41 Funds raised in U.S. credit markets A67 Foreign transactions in securities A43 Direct and indirect sources of funds to credit A68 Marketable U.S. Treasury bonds and markets notes—Foreign transactions A44 Summary of credit market debt outstanding A45 Summary of credit market claims, by holder INTEREST AND EXCHANGE RATES Domestic Nonfinancial Statistics A69 Discount rates of foreign central banks A69 Foreign short-term interest rates A70 Foreign exchange rates SELECTED MEASURES A71 Guide to Tabular Presentation, A46 Nonfinancial business activity—Selected Statistical Releases, and Special measures Tables A47 Labor force, employment, and unemployment A48 Output, capacity, and capacity utilization SPECIAL TABLES A49 Industrial production—Indexes and gross value A51 Housing and construction A72 Assets and liabilities of commercial banks, A52 Consumer and producer prices September 30, 1988 and December 31, 1988 A84 Assets and liabilities of U.S. branches and A53 Gross national product and income agencies of foreign banks, March 31, 1989 A54 Personal income and saving 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 Annual rates of change, seasonally adjusted in percent1 1988 1989 1989 MMoonneettaarryy aanndd ccrreeddiitt aaggggrreeggaatteess Q2 Q3 Q4 Q1 Jan. Feb. Mar. Apr. May Reserves of depository institutions2 1 Total 6.1 3.1 -.8 -4.2 -6.6 -2.2 -8.1 -7.8' -14.6 2 Required 7.5 2.9 -1.5 -4.4 -8.9 -2.4 -4.3 -4.3 -20.0 3 Nonborrowed -6.2 1.3 5.3 .0 -5.7 1.3 -14.9 -17.9' -3.2 4 Monetary base3 7.3 6.5 4.8 4.6 5.6 3.3 4.6 .3 -1.5 Concepts of money, liquid assets, and debt4 5 Ml 6.4 5.2 2.3 -.4 -6.1 1.7 -1.8 -4.7 -14.9 6 M2 6.9 3.8 3.6 1.9 -1.5' 1.4' 3.7' 1.0' -3.3 7 M3 7.2 5.5' 4.8'' 3.8' 1.6' 2.9' 6.7' 2.5 -1.0 8 L 8.5 7.1' 5.4' 4.8' 1.0' 3.2' 8.5' 4.1 n.a. 9 Debt 8.8' 8.6' 9.1' 8.2' 7.3' 8.6' 7.5' 7.0 n.a. Nontransaction components 10 In M2 7.1 3.3 4.1 2.6' .1 1.2' 5.6' 3.0' .7 11 In M3 only6 8.3 12.r 9.1' 10.8' 12.6' 8.6' 17.2' 7.6' 7.1 Time and savings deposits Commercial banks 12 Savings 10.4 7.9 4.0 -3.7 -10.3 -3.1 -10.8 -19.0 -20.3 13 Small-denomination time 12.9 11.6 18.0 22.5 21.5 26.5 28.6 34.6 28.7 14 Large-denomination time9,10 9.1 18.2 13.0 18.1 19.1 24.3 22.9 22.1' 9.6 Thrift institutions 15 Savings 2.6 2.1 -2.5 -7.7 -9.2 -13.6 -10.6 -25.4 -26.0 16 Small-denomination time 12.5 5.4 6.6 4.3 5.3 5.4 3.4' 17.5' 22.7 17 Large-denomination time9 9.2 3.9 7.9 1.2 5.9 -2.1 -.3 12.5' 8.0 Debt components4 18 Federal 8.3 7.1 7.8 7.7 4.7 10.2' 12.5' 5.1 n.a. 19 Nonfederal 8.9' 9.r 9.5' 8.4' 8.1' 8.1' 5.9' 7.6 n.a. 1. Unless otherwise noted, rates of change are calculated from average institutions and money market funds. Also excludes all balances held by U.S. amounts outstanding in preceding month or quarter. commercial banks, money market funds (general purpose and broker-dealer), 2. Figures incorporate adjustments for discontinuities associated with the foreign governments and commercial banks, and the U.S. government. implementation of the Monetary Control Act and other regulatory changes to M3: M2 plus large-denomination time deposits and term RP liabilities (in reserve requirements. To adjust for discontinuities due to changes in reserve amounts of $100,000 or more) issued by commercial banks and thrift institutions, requirements on reservable nondeposit liabilities, the sum of such required term Eurodollars held by U.S. residents at foreign branches of U.S. banks reserves is subtracted from the actual series. Similarly, in adjusting for discon- worldwide and at all banking offices in the United Kingdom and Canada, and tinuities in the monetary base, required clearing balances and adjustments to balances in both taxable and tax-exempt, institution-only money market mutual compensate for float also are subtracted from the actual series. funds. Excludes amounts held by depository institutions, the U.S. government, 3. The monetary base not adjusted for discontinuities consists of total money market funds, and foreign banks and official institutions. Also subtracted reserves plus required clearing balances and adjustments to compensate for float is the estimated amount of overnight RPs and Eurodollars held by institution-only at Federal Reserve Banks plus the currency component of the money stock less money market mutual funds. the amount of vault cash holdings of thrift institutions that is included in the L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term currency component of the money stock plus, for institutions not having required Treasury securities, commercial paper and bankers acceptances, net of money reserve balances, the excess of current vault cash over the amount applied to market mutual fund holdings of these assets. satisfy current reserve requirements. After the introduction of contemporaneous Debt: Debt of domestic nonfinancial sectors consists of outstanding credit reserve requirements (CRR), currency and vault cash figures are measured over market debt of the U.S. government, state and local governments, and private the weekly computation period ending Monday. nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- Before CRR, all components of the monetary base other than excess reserves sumer credit (including bank loans), other bank loans, commercial paper, bankers are seasonally adjusted as a whole, rather than by component, and excess acceptances, and other debt instruments. The source of data on domestic reserves are added on a not seasonally adjusted basis. After CRR, the seasonally nonfinancial debt is the Federal Reserve Board's flow of funds accounts. Debt adjusted series consists of seasonally adjusted total reserves, which include data are based on monthly averages. Growth rates for debt reflect adjustments for excess reserves on a not seasonally adjusted basis, plus the seasonally adjusted discontinuities over time in the levels of debt .presented in other tables. currency component of the money stock plus the remaining items seasonally 5. Sum of overnight RPs and Eurodollars, money market fund balances adjusted as a whole. (general purpose and broker-dealer), MMDAs, and savings and small time 4. Composition of the money stock measures and debt is as follows: deposits less the estimated amount of demand deposits and vault cash held by Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults thrift institutions to service their time and savings deposit liabilities. of depository institutions; (2) travelers checks of nonbank issuers; (3) demand 6. Sum of large time deposits, term RPs, and Eurodollars of U.S. residents, deposits at all commercial banks other than those due to depository institutions, money market fund balances (institution-only), less a consolidation adjustment the U.S. government, and foreign banks and official institutions less cash items in that represents the estimated amount of overnight RPs and Eurodollars held by the process of collection and Federal Reserve float; and (4) other checkable institution-only money market mutual funds. deposits (OCD) consisting of negotiable order of withdrawal (NOW) and auto- 7. Excludes MMDAs. matic transfer service (ATS) accounts at depositor institutions, credit union 8. Small-denomination time deposits—including retail RPs—are those issued share draft accounts, and demand deposits at thrift institutions. in amounts of less than $100,000. All IRA and Keogh accounts at commercial M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) banks and thrifts are subtracted from small time deposits. issued by all commercial banks and overnight Eurodollars issued to U.S. residents 9. Large-denomination time deposits are those issued in amounts of $100,000 by foreign branches of U.S. banks worldwide, Money Market Deposit Accounts or more, excluding those booked at international banking facilities. (MMDAs), savings and small-denomination time deposits (time deposits—includ- 10. Large-denomination time deposits at commercial banks less those held by ing retail RPs—in amounts of less than $100,000), and balances in both taxable and money market mutual funds, depository institutions, and foreign banks and tax-exempt general purpose and broker-dealer money market mutual funds. official institutions. Excludes individual retirement accounts (IRA) and Keogh balances at depository Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • August 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 1989 1989 Mar. Apr. May Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 258,135 264,245 267,629 263,435 263,494 277,783 279,759 269,689 260,224 2 U.S. government securities1 228,808 233,003 234,995 232,446 232,832 242,985 244,312 237,103 230,029 4 3 H Bo el u d g h u t n d o e u r t ri r g e h p t u rchase agreements 228,8080 231 1 , , 2 7 1 8 5 8 23 4 0 , ,7 2 8 1 3 2 231,8 5 5 8 8 8 231 1 , , 2 5 9 3 9 3 233 9 , , 3 5 9 8 7 8 23 1 4 0 , , 1 1 2 8 3 9 232 4 , , 6 4 8 1 8 5 230,0290 5 Federal agency obligations 6,779 7,400 8,387 6,921 7,173 10,797 10,390 8,645 6,654 6 7 8 Ac H B c o e e p l u d g t a h u n t n c o d e u e s r t ri r g e h p t u rchase agreements.... 6,7790 0 6,7 6 3 6 8 0 2 6 1 , , 6 7 5 3 4 03 6,7 1 7 40 9 2 6,6 4 7 90 4 9 6 4 , , 6 1 5 4 4 30 6 3 , , 6 7 5 30 4 6 6 1 , , 6 9 4 90 5 1 6,650 0 4 9 Loans 1,838 2,326 1,717 2,907 2,019 1,918 1,743 1,734 1,675 10 Float 1,131 800 801 543 369 638 719 977 826 11 Other Federal Reserve assets 19,580 20,716 21,729 20,617 21,102 21,445 22,596 21,230 21,039 12 Gold stock2 11,061 11,061 11,061 11,061 11,061 11,061 11,061 11,061 11,061 13 Special drawing rights certificate account.. 5,095 5,508 6,703 5,518 5,518 5,518 5,611 5,961 7,304 14 Treasury currency outstanding 18,938 18,989 19,049 18,991 19,003 19,017 19,031 19,045 19,059 ABSORBING RESERVE FUNDS 15 Currency in circulation 242,016 243,781 245,574 244,251 243,498 243,757 245,206 245,707 245,363 16 Treasury cash holdings2 449 473 486 479 477 477 490 487 485 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,155 8,798 14,126 6,964 8,120 21,985 23,141 16,166 8,706 18 Foreign 228 240 227 227 207 267 206 232 215 19 Service-related balances and adjustments 2,054 2,125 1,855 2,085 1,999 1,945 1,780 1,922 1,743 20 Other 406 373 528 310 437 418 281 381 635 21 Other Federal Reserve liabilities and capital 8,025 8,121 8,480 8,236 8,220 8,882 8,826 8,630 8,243 22 Reserve balances with Federal Reserve Banks 34,896 35,893 33,166 36,453 36,118 35,646 35,531 32,231 32,256 End-of-month figures Wednesday figures 1989 1989 Mar. Apr. May Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 258,215 279,013 256,669 270,211 268,396 276,905 277,340 263,081 256,318 24 U.S. government securities1 228,643 244,506 223,535 234,000 236,004 240,860 242,395 233,232 224,600 2 2 5 6 H Bo el u d g h u t n o d u er tr i r g e h p t u rchase agreements.... 228,6403 23 9 4 , , 6 8 9 0 8 8 223,5305 22 4 9 , , 1 8 1 8 7 3 22 6 9 , ,7 2 2 8 3 1 23 8 2 , , 0 8 4 1 7 3 23 7 4 , ,8 4 9 9 6 9 233,2320 224,6000 27 Federal agency obligations 6,779 10,495 6,654 7,775 8,711 11,100 9,579 6,654 6,654 2 2 3 8 9 0 Ac B H c o e e u p ld g t a h u n t n c d o e u e s r t ri r g e h p t u rchase agreements 6,7790 0 6 3 , , 6 8 5 4 4 10 6,6540 0 6,7 9 7 9 9 06 6 2 , , 6 0 5 5 4 70 6 4 , , 6 4 5 4 4 06 6 2 , , 6 9 5 2 4 50 6,650 0 4 6,65 0 40 31 Loans 2,454 1,952 2,033 6,669 1,759 2,279 1,713 1,707 1,586 32 Float 559 545 2,064 917 789 1,131 1,397 1,408 1,680 33 Other Federal Reserve assets 19,780 21,515 22,383 20,850 21,133 21,535 22,256 20,080 21,798 34 Gold stock2 11,061 11,061 11,060 11,061 11,060 11,061 11,061 11,061 11,060 35 Special drawing rights certificate account.. 5,368 5,518 8,518 5,518 5,518 5,518 5,818 6,518 8,018 36 Treasury currency outstanding 18,961 19,017 19,073 19,003 19,003 19,017 19,031 19,045 19,059 ABSORBING RESERVE FUNDS 37 Currency in circulation 242,880 243,411 247,525 244,204 243,473 244,480 245,805 245,743 245,921 38 Treasury cash holdings2 457 476 488 477 478 477 487 485 485 Deposits, other than reserve balances, with Federal Reserve Banks 39 Treasury 4,462 22,952 5,288 13,395 13,429 19,960 22,482 9,986 6,922 40 Foreign 351 352 429 194 166 220 144 227 276 41 Service-related balances and adjustments 1,671 1,667 1,616 1,671 1,667 1,665 1,669 1,659 1,616 42 Other 380 481 524 298 5% 305 292 600 483 43 Other Federal Reserve liabilities and capital 7,681 8,969 7,513 8,059 8,243 8,526 8,402 8,058 7,964 44 Reserve balances with Federal Reserve Banks 35,723 37,968 33,553 37,495 35,925 36,867 33,969 32,947 30,789 1. Includes securities loaned—fully guaranteed by U.S. government securities stock. Revised data not included in this table are available from the Division of pledged with Federal Reserve Banks—and excludes any securities sold and Research and Statistics, Banking Section. scheduled to be bought back under matched sale-purchase transactions. 3. Excludes required clearing balances and adjustments to compensate for 2. Revised for periods between October 1986 and April 1987. At times during float. this interval, outstanding gold certificates were inadvertently in excess of the gold NOTE. For amounts of currency and coin held as reserves, see table 1.12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Monthly averages9 Reserve classification 1986 1987 1988 1988 1989 Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May 11 RReesseerrvvee bbaallaanncceess wwiitthh RReesseerrvvee BBaannkkss22 37,360 37,673 37,830 36,997 37,830 36,475 32,834 34,623 35,841 33,199 22 TToottaall vvaauulltt ccaasshh33 24,077 26,185 27,197 26,745 27,197 28,376 29,776 27,059 26,746 27,166 3 Vault4 22,199 24,449 25,909 25,410 25,909 26,993 27,859 25,589 25,456 25,712 4 Surplus 1,878 1,736 1,288 1,335 1,288 1,383 1,917 1,470 1,290 1,454 5 Total reserves 59,560 62,123 63,739 62,407 63,739 63,468 60,693 60,212 61,288 58,911 6 Required reserves 58,191 61,094 62,699 61,287 62,699 62,323 59,539 59,255 60,511 57,881 7 Excess reserve balances at Reserve Banks 1,369 1,029 1,040 1,119 1,040 1,145 1,154 957 776 1,031 8 Total borrowings at Reserve Banks 827 777 1,716 2,861 1,716 1,662 1,487 1,813 2,289 1,720 9 Seasonal borrowings at Reserve Banks 38 93 130 186 130 76 97 139 213 345 10 Extended credit at Reserve Banks 303 483 1,244 2,322 1,244 1,046 1,050 1,334 1,707 1,197 Biweekly averages of daily figures for weeks ending 1989 Feb. 22 Mar. 8 Mar. 22 Apr. 5 Apr. 19 May 3 May 17r May 31 June 14 June 28 11 Reserve balances with Reserve Banks2 32,455 34,485 34,702 34,623 36,239 35,863' 33,864 31,964 34,643 32,969 12 Total vault cash 29,739 27,581 26,738 27,095 26,339 27,106 26,644 27,701 26,607 27,630 13 Vault4 27,838 25,962 25,332 25,659 25,174 25,723 25,352 26,071 25,301 26,104 14 Surplus 1,901 1,620 1,406 1,436 1,166 1,383 1,292 1,631 1,306 1,526 15 Total reserves 60,293 60,446 60,034 60,282 61,413 61,588' 59,216 58,034 59,944 59,073 16 Required reserves i 59,278 59,490 59,299 58,977 61,190 60,345r 58,357 56,877 59,013 58,163 17 Excess reserve balances at Reserve Banks 1,016 957 735 1,305 223 1,241 859 1,158 931 909 18 Total borrowings at Reserve Banks 1,477 1,800 1,586 2,177 2,582 1,968 1,739 1,649 2,126 965 19 Seasonal borrowings at Reserve Bulks 99 116 136 167 190 265 336 373 388 467 20 Extended credit at Reserve Banks 1,111 1,250 1,164 1,675 1,970 1,387 1,206 1,148 1,657 287 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 8. Extended credit consists of borrowing at the discount window under the institutions having required reserve balances at Federal Reserve Banks plus the terms and conditions established for the extended credit program to help amount of vault cash equal to required reserves during the maintenance period at depository institutions deal with sustained liquidity pressures. Because there is institutions having no required reserve balances. not the same need to repay such borrowing promptly as there is with traditional 5. Total vault cash at institutions having no required reserve balances less the short-term adjustment credit, the money market impact of extended credit is amount of vault cash equal to their required reserves during the maintenance similar to that of nonborrowed reserves. period. 9. Data are prorated monthly averages of biweekly averages. 6. Total reserves not adjusted for discontinuities consist of reserve balances Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • August 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 July 11 July 18 July 25 Aug. 1 Aug. 8 Aug. 15 Aug. 22 Aug. 29 Sept. 5 Federal funds purchased, repurchase agreements, and other selected borrowing in immediately available funds From commercial banks in the United States 1 For one day or under continuing contract 72,579 70,622 68,388 71,992 67,616 69,245 66,871 64,904 69,394 2 For all other maturities 10,493 10,721 10,653 11,289 10,782 1111,,113366 1100,,110022 1100,,118877 10,001 From other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 3 For one day or under continuing contract 30,899 30,891 28,342 26,473 28,408 27,188 26,570 26,952 27,114 4 For all other maturities 5,900 5,792 5,682 5,947 6,654 7,463 6,700 6,579 6,629 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 14,510 14,962 14,802 15,502 16,127 16,293 16,304 15,212 15,337 6 For all other maturities 13,204 14,749 15,276 15,402 15,083 14,913 1122,,558877 1133,,117777 12,365 All other customers 7 For one day or under continuing contract 24,778 24,766 26,015 26,956 26,384 26,803 27,452 28,070 27,866 8 For all other maturities 9,192 9,064 9,332 9,970 9,845 10,381 10,559 10,701 10,279 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 34,467 37,210 34,405 35,329 34,700 35,575 35,147 34,797 39,559 10 To all other specified customers 13,947 16,052 14,474 14,160 15,158 15,511 14,952 14,010 14,263 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. 2. Brokers and nonbank dealers in securities; other depository institutions; These data also appear in the Board's H.5 (507) release. For address, see inside foreign banks and official institutions; and United States government agencies, front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels AAddjjuussttmmeenntt ccrreeddiitt Extended credit2 aanndd FFFeeedddeeerrraaalll RRReeessseeerrrvvveee SSeeaassoonnaall ccrreeddiitt'' First 30 days of borrowing After 30 days of borrowing3 BBBaaannnkkk 6/2 O 9 n / 89 Eff d e a c te ti ve Pre r v at i e o us 6/2 O 9 n / 89 Eff d e a c te ti ve Pre r v at i e o us 6/2 O 9 n / 89 Ef d fe a c te ti ve Pre r v at i e o us Effective date 6V2 Vl Boston 7 2/24/89 7 2/24/89 6 9.90 6/29/89 9.85 6/15/89 New York 2/24/89 2/24/89 6/29/89 6/15/89 Philadelphia 2/24/89 2/24/89 6/29/89 6/15/89 Cleveland 2/24/89 2/24/89 6/29/89 6/15/89 Richmond 2/24/89 2/24/89 6/29/89 6/15/89 Atlanta 2/24/89 2/24/89 6/29/89 6/15/89 Chicago 2/24/89 2/24/89 6/29/89 6/15/89 St. Louis 2/24/89 2/24/89 6/29/89 6/15/89 Minneapolis 2/24/89 2/24/89 6/29/89 6/15/89 Kansas City 2/24/89 2/24/89 6/29/89 6/15/89 Dallas 2/27/89 Vl 2/27/89 Vl 6/29/89 6/15/89 San Francisco ... 7 2/24/89 6 7 2/24/89 6 9.90 6/29/89 9.85 6/15/89 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o a f n 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 Vl 1980—July 28 10-11 10 11998844——AApprr.. 9 8'A-9 9 1978—Jan. 9 6-6 VVti 66Vl 29 10 10 13 9 9 Vi 20 6 Sept. 26 11 11 Nov. 21 8V Vi-9i 8 May 11 6V1l-7 7 Nov. 17 12 12 26 8 8W 12 7 Dec. 5 12-13 13 Dec. 24 8 8 July 3 7-71/4 1IVV4 * IVi 10 m7V4 73/4 1981—May 5 13-14 14 11998855——MMaayy 20 71/ V2-8i Vi Aug. 21 8 14 14 24 7 7 Sept. 22 8-88 W 8 Vl Nov. 2 13-14 13 7-V/l Oct. 16 SVi S8Vl 6 13 13 1986—Mar. 7 1 7 20 W/l-WA Vl Dec. 4 12 12 10 6Vl-7 7 Nov. 1 3 9 Vl 9 9 Vl 1982—July 20 im- 1 V 2 l 11 V V l l J A u p ly r. 2 1 1 1 6 6 6 V V i l 23 11 Vl 11 AAuugg.. 21 5V5SV-6l 55Vl 1979—July 20 10 1100 W Aug. 2 11-11 11 22 Aug. 17 10lO-1V0ViS Vl 3 11 1\m1 20 10^-11 10 16 10'/! 10 11998877——SSeepptt.. 4 5V4-6 6 Sept. 19 11 27 10-10^ 10 11 6 6 21 11 11 30 9V10l -10 Vl Vl Vl Oct. 8 11-12 12 Oct. 12 Vl 9 Vi 11998888——AAuugg.. 9 6-6 Vi 6 Vi 10 12 12 13 9 Vl 99 11 6 6 1980— M Fe a b y . 2 3 1 1 9 0 5 9 1 12 2 1 1 - - 2 3 1 1 3 3 1 1 1 13 2 3 3 N De o c v . . 2 2 1 1 1 2 6 4 5 7 9 8 8 V 8 V -9 9 VS i - - 9 9l 9 9 S % V V z i I 1 n 9 8 e 9 ff — ec F t e J b u . n e 2 2 7 4 2 9, 1989 6V 7 7 l-7 1 7 1 June 13 11-12 11 16 11 11 1. Adjustment credit is available on a short-term basis to help depository in no case will the rate charged be less than the basic discount rate plus 50 basis institutions meet temporary needs for funds that cannot be met through reason- points. The flexible rate is reestablished on the first business day of each able alternative sources. After May 19,1986, the highest rate established for loans two-week reserve maintenance period. At the discretion of the Federal Reserve to depository institutions may be charged on adjustment credit loans of unusual Bank, the time period for which the basic discount rate is applied may be size that result from a major operating problem at the borrower's facility. shortened. Seasonal credit is available to help smaller depository institutions meet regular, 4. For earlier data, see the following publications of the Board of Governors: seasonal needs for funds that cannot be met through special industry lenders and Banking and Monetary Statistics, 1914-1941, and 1941-1970; Annual Statistical that arise from a combination of expected patterns of movement in their deposits Digest, 1970-1979. and loans. A temporary simplified seasonal program was established on Mar. 8, In 1980 and 1981, the Federal Reserve applied a surcharge to short-term 1985, and the interest rate was a fixed rate Vl percent above the rate on adjustment adjustment credit borrowings by institutions with deposits of $500 million or more credit. The program was reestablished for 1986 and 1987; but was not renewed for that had borrowed in successive weeks or in more than four weeks in a calendar 1988. quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7, 1980. There was no surcharge until Nov. 17,1980, when a 2 percent surcharge was 2. Extended credit is available to depository institutions, when similar assist- adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and ance is not reasonably available from other sources, when exceptional circum- 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 somewhat above rates on market sources of funds ordinarily will be charged, but Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • August 1989 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Depository institution requirements after implementation of the Type of deposit, and Monetary Control Act deposit interval2 Percent of Effective date deposits Net transaction accounts3,4 $0 million-$41.5 million 3 12/20/88 More than $41.5 million 12 12/20/88 Nonpersonal time deposits5 By original maturity Less than 1 Vl years 3 10/6/83 \Vl years or more 0 10/6/83 Eurocurrency liabilities All types 3 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, 4. The Monetary Control Act of 1980 requires that the amount of transaction nonpersonal time deposits, and Eurocurrency liabilities) of each depository accounts against which the 3 percent reserve requirement applies be modified institution be subject to a zero percent reserve requirement. The Board is to adjust annually by 80 percent of the percentage increase in transaction accounts held by the amount of reservable liabilities subject to this zero percent reserve require- all depository institutions, determined as of June 30 each year. Effective Dec. 20, ment each year for the succeeding calendar year by 80 percent of the percentage 1988 for institutions reporting quarterly and Dec. 27, 1988 for institutions increase in the total reservable liabilities of all depository institutions, measured reporting weekly, the amount was increased from $40.5 million to $41.5 million. on an annual basis as of June 30. No corresponding adjustment is to be made in 5. In general, nonpersonal time deposits are time deposits, including savings the event of a decrease. On Dec. 20, 1988, the exemption was raised from $3.2 deposits, that are not transaction accounts and in which a beneficial interest is million to $3.4 million. In determining the reserve requirements of depository held by a depositor that is not a natural person. Also included are certain institutions, the exemption shall apply in the following order: (1) net NOW transferable time deposits held by natural persons and certain obligations issued accounts (NOW accounts less allowable deductions); (2) net other transaction to depository institution offices located outside the United States. For details, see accounts; and (3) nonpersonal time deposits or Eurocurrency liabilities starting section 204.2 of Regulation D. with those with the highest reserve ratio. With respect to NOW accounts and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1988 1989 TTyyppee ooff ttrraannssaaccttiioonn 11998866 11998877 11998888 Oct. Nov. Dec. Jan. Feb. Mar. Apr. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 22,604 18,983 8,223 375 3,599 1,125 0 0 0 3,077 2 Gross sales 2,502 6,051 587 0 0 0 154 3,688 0 0 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 1,000 9,029 2,200 0 0 0 600 1,600 0 0 Others within 1 year 5 Gross purchases 190 3,659 2,176 0 0 1,084 0 0 0 172 6 Gross sales 0 300 0 0 0 0 0 0 0 0 7 Maturity shift 18,674 21,504 23,854 1,669 5,264 1,750 620 5,418 2,646 1,657 8 Exchange -20,180 -20,388 -24,588 -916 -2,391 -1,703 -2,703 -2,308 -2,322 -110 9 Redemptions 0 70 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 893 10,231 5,485 0 0 1,824 0 0 0 1,436 11 Gross sales 0 452 800 0 0 0 3 225 0 0 12 Maturity shift -17,058 -17,975 -17,720 -1,544 -3,088 -1,750 -541 -5,319 -2,646 -1,532 13 Exchange 16,985 18,938 22,515 639 2,091 1,703 2,492 2,008 2,322 0 5 to 10 years 14 Gross purchases 236 2,441 1,579 0 0 562 0 0 0 287 15 Gross sales 0 0 175 0 0 0 20 0 0 0 16 Maturity shift -1,620 -3,529 -5,946 -125 -2,145 0 -79 -100 0 -125 17 Exchange 2,050 950 1,797 276 300 0 212 200 0 110 Over 10 years 18 Gross purchases 158 1,858 1,398 0 0 432 0 0 0 284 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift 0 0 -188 0 -31 0 0 0 0 0 21 Exchange 1,150 500 275 0 0 0 0 100 0 0 All maturities 22 Gross purchases 24,081 37,170 18,863 375 3,599 5,028 0 0 0 5,255 23 Gross sales 2,502 6,803 1,562 0 0 0 177 3,913 0 0 24 Redemptions 1,000 9,099 2,200 0 0 0 600 1,600 0 0 Matched transactions 25 Gross sales 927,999 950,923 1,168,484 98,804 98,618 93,650 94,204 110,393 83,677 77,349 26 Gross purchases 927,247 950,935 1,168,142 97,897 100,680 93,584 94,252 112,472 82,821 78,259 Repurchase agreements2 27 Gross purchases 170,431 314,621 152,613 4,715 17,867 15,575 17,208 0 0 22,244 28 Gross sales 160,268 324,666 151,497 7,727 16,463 14,815 21,969 0 0 12,547 29 Net change in U.S. government securities 29,988 11,234 15,872 -3,544 7,064 5,721 -5,489 -3,434 -856 15,863 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 398 276 587 75 14 135 148 40 0 125 Repurchase agreements2 33 Gross purchases 31,142 80,353 57,259 2,223 4,763 7,672 88,,998800 0 0 7,207 34 Gross sales 30,521 81,350 56,471 4,454 5,132 6,853 1111,,008811 0 0 3,366 35 Net change in federal agency obligations 222 -1,274 198 -2,306 -383 683 -2,249 -40 0 3,716 36 Total net change in System Open Market Account 30,212 9,961 16,070 -5,850 6,681 6,404 -7,738 -3,474 -856 19,579 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 • August 1989 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1989 1989 May 3 May 10 May 17 May 24 May 31 Mar. Apr. May Consolidated condition statement ASSETS 1 Gold certificate account 11,061 11,061 11,061 11,060 11,060 11,061 11,061 11,060 2 Special drawing rights certificate account 5,518 5,818 6,518 8,018 8,518 5,368 5,518 8,518 3 461 466 472 460 432 481 466 432 Loans 4 To depository institutions 2,279 1,713 1,707 1,586 2,033 2,454 1,952 2,033 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 6,654 6,654 6,654 6,654 6,654 6,779 66,,665544 66,,665544 8 Held under repurchase agreements 4,446 2,925 0 0 0 0 3,841 0 U.S. Treasury securities Bought outright 9 Bills 110,002 112,085 110,421 101,864 100,799 108,011 111,997 100,799 10 Notes 92,497 92,497 92,397 92,322 92,322 90,603 92,497 92,322 11 Bonds 30,314 30,314 30,314 30,414 30,414 30,029 30,314 30,414 12 Total bought outright1 232,813 234,896 233,232 224,600 223,535 228,643 234,808 223,535 13 Held under repurchase agreements 8,047 7,499 0 0 0 0 9,698 0 14 Total U.S. Treasury securities 240,860 242,395 233,232 224,600 223,535 228,643 244,506 223,535 15 Total loans and securities 254,239 253,687 241,593 232,840 232,222 237,876 256,953 232,222 16 Items in process of collection 8,533 7,273 7,865 7,235 10,442 7,069 8,294 10,442 17 Bank premises 762 761 762 762 761 761 761 761 Other assets 18 Denominated in foreign currencies 11,048 11,461 11,871 13,342 13,656 10,471 10,911 13,656 19 All other4 9,725 10,034 7,447 7,694 7,966 8,548 9,843 7,966 20 Total assets 301,347 300,561 287,589 281,411 285,057 281,635 303,807 285,057 LIABILITIES 21 Federal Reserve notes 226,402 227,727 227,655 227,806 229,372 224,857 225,336 229,372 Deposits 22 To depository institutions 38,532 35,638 34,606 32,405 33,553 37,394 37,968 33,553 23 U.S. Treasury—General account 19,960 22,482 9,986 6,922 5,288 4,462 22,952 5,288 24 Foreign—Official accounts 220 144 227 276 429 351 352 429 25 Other 305 292 600 483 524 380 481 524 26 Total deposits 59,017 58,556 45,419 40,086 39,794 42,587 61,753 39,794 77 Deferred, credit items 7,402 5,876 6,457 5,555 8,378 6,510 7,749 8,378 28 Other liabilities and accrued dividends 3,730 3,680 3,357 3,276 3,212 3,265 3,990 3,212 29 Total liabilities 296,551 295,839 282,888 276,723 280,756 277,219 298,828 280,756 CAPITAL ACCOUNTS 30 Capital paid in 2,136 2,136 2,142 2,142 2,142 2,131 2,135 2,142 31 Surplus 2,112 2,112 2,112 2,112 2,081 2,107 2,112 2,081 32 Other capital accounts 548 474 447 434 78 194 732 78 33 Total liabilities and capital accounts 301,347 300,561 287,589 281,411 285,057 281,635 303,807 285,057 34 MEMO: Marketable U.S. Treasury securities held in custody for foreign and international accounts 236,901 237,207 237,670 235,972 234,667 235,732 236,761 234,667 Federal Reserve note statement 3S Federal Reserve notes outstanding issued to bank 270,064 270,605 270,623 271,322 271,562 268,232 270,007 271,562 36 LESS: Held by bank 43,662 42,878 42,968 43,516 42,190 43,374 44,671 42,190 37 Federal Reserve notes, net 226,402 227,727 227,655 227,806 229,372 224,857 225,336 229,372 Collateral held against notes net: 38 Gold certificate account 11,061 11,061 11,061 11,060 11,060 11,061 11,061 11,060 39 Special drawing rights certificate account 5,518 5,818 6,518 8,018 8,518 5,368 5,518 8,518 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 209,823 210,848 210,076 208,728 209,794 208,428 208,757 209,794 42 Total collateral 226,402 227,727 227,655 227,806 229,372 224,857 225,336 229,372 1. Some of these data also appear in the Board's H.4.1 (503) release. For 4. Includes special investment account at the Federal Reserve Bank of Chicago address, see inside front cover. in Treasury bills maturing within 90 days. 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities 5. Includes exchange-translation account reflecting the monthly revaluation at pledged with Federal Reserve Banks—and excludes securities sold and scheduled market exchange rates of foreign-exchange commitments. to be bought back under matched sale-purchase transactions. 3. Valued monthly at market exchange rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity groupings 1989 May 3 May 10 May 17 May 24 May 31 Mar. 31 Apr. 28 May 31 1 Loans—Total 2,279 1,713 1,707 1,586 2,033 863 2,454 2,033 2 Within 15 days 2,127 1,554 1,668 1,551 1,940 854 2,402 1,940 3 16 days to 90 days 152 159 39 35 93 9 52 93 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 .. 240,860 242,395 233,232 224,600 223,535 232,933 228,643 223,535 10 Within 15 days' 19,964 22,133 9,598 9,565 4,691 5,457 7,183 4,691 11 16 days to 90 days 51,013 52,602 54,543 46,220 49,365 58,957 53,969 49,365 12 91 days to 1 year 77,191 74,968 76,675 76,474 76,876 73,405 76,037 76,876 13 Over 1 year to 5 years 52,347 52,347 52,598 52,523 52,786 55,524 51,664 52,786 14 Over 5 years to 10 years 13,053 13,053 13,512 13,512 13,511 12,681 12,781 13,511 15 Over 10 years 27,292 27,292 26,306 26,306 26,306 26,909 27,009 26,306 16 Federal agency obligations—Total 11,100 9,579 6,654 6,654 6,654 6,819 6,779 6,654 17 Within 15 days' 4,446 3,011 386 386 347 136 240 347 18 16 days to 90 days 820 734 435 435 473 835 726 473 19 91 days to 1 year 1,264 1,319 1,318 1,318 1,324 1,303 1,279 1,324 20 Over 1 year to 5 years 3,412 3,357 3,357 3,357 3,352 3,359 3,357 3,352 21 Over 5 years to 10 years 969 969 969 969 969 997 988 969 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 DomesticN onfinancial Statistics • August 1989 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1988 1989 IItteemm 1985 1986 1987 1988 Dec. Dec. Dec. Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May Seasonally adjusted ADJUSTED FOR - CHANGES IN RESERVE REQUIREMENTS'* 1 Total reserves3 48.49 58.14 58.69 60.71 60.86 60.85 60.71 60.37 60.26 59.85 59.46 58.74 2 Nonborrowed reserves 47.17 57.31 57.92 58.99 58.56 57.99 58.99 58.71 58.77 58.04 57.17 57.02 3 Nonborrowed reserves plus extended credit4 47.67 57.62 58.40 60.23 60.34 60.31 60.23 59.75 59.82 59.38 58.88 58.22 4 Required reserves 47.44 56.77 57.66 59.67 59.80 59.73 59.67 59.23 59.11 58.90 58.69 57.71 5 Monetary base 219.51 241.45 257.99 275.50 273.66 274.38 275.50 276.78 277.55 278.61 278.67 278.33 Not seasonally adjusted 6 Total reserves3 49.59 59.46 60.06 62.21 60.37 60.96 62.21 62.07 59.37 58.94 60.01 57.72 7 Nonborrowed reserves 48.27 58.64 59.28 60.50 58.07 58.10 60.50 60.40 57.88 57.13 57.72 56.00 8 Nonborrowed reserves plus extended credit4 48.77 58.94 59.76 61.74 59.85 60.42 61.74 61.45 58.93 58.46 59.43 57.20 9 Required reserves 48.53 58.09 59.03 61.17 59.31 59.84 61.17 60.92 58.22 57.98 59.23 56.69 10 Monetary base 222.73 245.25 262.08 279.71 272.29 275.32 279.71 277.92 274.36 275.62 278.11 277.49 NOT ADJUSTED FOR , CHANGES IN RESERVE REQUIREMENTS" 11 Total reserves3 48.14 59.56 62.12 63.74 61.92 62.41 63.74 63.47 60.69 60.21 61.29 58.91 12 Nonborrowed reserves 46.82 58.73 61.35 62.02 59.62 59.55 62.02 61.81 59.21 58.40 59.00 57.19 13 Nonborrowed reserves plus extended credit4 47.32 59.04 61.83 63.27 61.40 61.87 63.27 62.85 60.26 59.73 60.71 58.39 14 Required reserves 47.08 58.19 61.09 62.70 60.85 61.29 62.70 62.32 59.54 59.25 60.51 57.88 15 Monetary base 223.53 247.71 266.16 283.18 275.78 278.65 283.18 281.31 277.66 278.94 281.52 280.54 1. Latest monthly and biweekly figures are available from the Board's H.3(502) the terms and conditions established for the extended credit program to helpdestatistical release. Historical data and estimates of the impact on required reserves pository institutions deal with sustained liquidity pressures. Because there isnot of changes in reserve requirements are available from the Monetary and Reserves the same need to repay such borrowing promptly as there is with traditional Projections Section. Division of Monetary Affairs. Board of Governors of the short-term adjustment credit, the money market impact of extended credit is Federal Reserve System, Washington, D.C. 20551. similar to that of nonborrowed reserves. 2. Figures incorporate adjustments for discontinuities associated with the 5. The monetary base not adjusted for discontinuities consists of total reserves implementation of the Monetary Control Act and other regulatory changes to plus required clearing balances and adjustments to compensate for float at Federal reserve requirements. To adjust for discontinuities due to changes in reserve Reserve Banks and the currency component of the money stock plus, for instirequirements on reservable nondeposit liabilities, the sum of such required tutions not having required reserve balances, the excess of current vault cash over reserves is subtracted from the actual series. Similarly, in adjusting for disconti- the amount applied to satisfy current reserve requirements. Currency and vault nuities in the monetary base, required clearing balances and adjustments to cash figures are measured over the weekly computation period ending Monday. compensate for float also are subtracted from the actual series. The seasonally adjusted monetary base consists of seasonally adjusted total 3. Total reserves not adjusted for discontinuities consist of reserve balances reserves, which include excess reserves on a not seasonally adjusted basis, plus with Federal Reserve Banks, which exclude required clearing balances and the seasonally adjusted currency component of the money stock and the remainadjustments to compensate for float, plus vault cash held during the lagged ing items seasonally adjusted as a whole. computation period by institutions having required reserve balances at Federal 6. Reflects actual reserve requirements, including those on nondeposit liabili- Reserve Banks plus the amount of vault cash equal to required reserves during the ties, with no adjustments to eliminate the effects of discontinuities associated with maintenance period at institutions having no required reserve balances. implementation of the Monetary Control Act or other regulatory changes to 4. Extended credit consists of borrowing at the discount window under 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 1989 1985 1986 1987 1988 Dec. Dec. Dec. Dec. Feb. Mar. Apr. May Seasonally adjusted 1 Ml 620.5 725.9 752.3 790.3 787.4 786.3 783.2 773.4 2 M2 2,567.4 2,811.2 2,909.9 3,069.4' 3,069.2' 3,078.7' 3,081.3' 3,072.8 M3 3,201.7 3,494.9 3,677.6 3,913.0' 3,927.7' 3,949.5' 3,957.6' 3,954.3 4 L 3,830.6 4,137.1 4,340.2' 4,673.5' 4,689.7' 4,723.C 4,739.2 n.a. 5 Debt 6,733.3' 7,596.9' 8,310.7' 9,052.1' 9,172.3' 9,229.4' 9,283.5 n.a. Ml components 6 Currency 167.8 180.5 196.4 211.8 214.3 215.6 221155..99 221166..44 7 Travelers checks 5.9 6.5 7.1 7.6 7.5 7.3 7.3 7.3 8 Demand deposits 267.3 303.2 288.3 288.6 284.8 284.3 281.5 278.2 9 Other checkable deposits6 179.5 235.8 260.4 282.3 280.9 279.1 278.5 271.5 Nontransactions components 10 In M27 1,946.9 2,085.3 2,157.7 2,279.2' 2,281.8' 2,292.4' 22,,229988..11'' 2,299.4 11 In M3 only8 634.3 683.7 767.6 843.6' 858.5' 870.8' 876.4' 881.5 Savings deposits9 1? Commercial Banks 125.0 155.8 178.5 192.5 190.3 188.6 118855..66 118822..55 13 Thrift institutions 176.6 215.2 237.8 238.8 234.3 232.2 227.3 222.4 Small-denomination time deposits10 14 Commercial Banks 383.3 364.6 385.3 443.1 461.0 472.0 485.6 497.2 15 Thrift institutions 499.2 489.3 528.8 582.2 587.4 589.0 597.6' 608.9 Money market mutual funds 16 General purpose and broker-dealer 176.5 208.0 221.1 239.4 247.2' 256.0' 260.2 259.9 17 Institution-only 64.5 84.4 89.6 87.6 89.6 87.6 87.7 91.6 Large-denomination time deposits'1 18 Commercial Banks12 285.1 288.8 325.4 364.9 378.2 385.5 392.6 395.7 19 Thrift institutions 151.5 150.1 162.0 172.9 173.4 173.4 175.2 176.3 Debt components 2 7 1 0 N Fe o d n e f r e a d l e d ra e l b t d ebt 5 1, M 585 1 .3 . 9 5 1 , , 7 8 9 0 1 5. . 8 1 ' 6 1 , , 3 95 5 7 3 . . 5 1 ' 6 2 , , 9 1 3 1 8 4 . . 1 0' ' 7 2, , 1 0 4 3 0 2 . . 4 0 ' ' 7 2, , 1 0 6 6 2 6 . . 6 7 ' ' 2 7 2 , ,, 1 11 1 77 1 11 . .. 7 88 n n . . a a . . Not seasonally adjusted ??. Ml 633.5 740.4 766.4 804.4 772.3 775.1 791.3' 767.2 M2 2,576.2 2,821.1 2,918.7 3,077.1' 3,056.7' 3,072.1' 3,092.9' 3,063.3 ?4 3,213.3 3,507.4 3,688.5 3,922.8' 3,915.6' 3,944.3' 3,963.2' 3,944.2 25 3,843.7 4,152.0 4,354.5' 4,687.(y 4,686.6' 4,719.6' 4,741.0 n.a. 26 6,723.5' 7,581.1' 8,292.8' 9,037.5' 9,136.4' 9,190.2' 9,246.3 n.a. Ml components 27 Currency 170.2 183.0 199.3 214.9 211.9 213.9 215.1 221166..66 28 Travelers checks 5.5 6.0 6.5 6.9 7.1 7.0 7.0 7.1 29 Demand deposits 276.9 314.0 298.6 298.8 275.7 275.8 283.3 273.3 30 Other checkable deposits 180.9 237.4 262.0 283.7 277.6 278.3 286.0 270.2 Nontransactions components 31 1,942.7 2,080.7 2,152.3 2,272.8' 2,284.4' 2,297.0' 2,301.5' 2,296.1 32 M3 only8 637.1 686.3 769.8 845.7' 859.0' 872.2' 870.3' 880.8 Money market deposit accounts 33 Commercial Banks 332.8 379.6 358.8 352.5 342.5 340.1 336.3 327.1 34 Thrift institutions 180.7 192.9 167.5 150.3 142.9 140.2 135.0 129.9 Savings deposits9 35 Commercial Banks 123.7 154.2 176.6 190.3 118888..22 118877..88 118866..22 118833..77 36 Thrift institutions 174.8 212.7 234.8 235.6 230.5 230.7 227.9 223.8 Small-denomination time deposits10 37 Commercial Banks 384.0 365.3 386.1 444.1 462.8 473.0 483.6 493.5 38 Thrift institutions 499.9 489.8 529.1 582.4 591.6 592.0 598.5' 605.8 Money market mutual funds 39 General purpose and broker-dealer 176.5 208.0 221.1 239.4 247.2' 256.0' 260.2 259.9 40 Institution-only 64.5 84.4 89.6 87.6 89.6 87.6 87.7 91.6 Large-denomination time deposits" 41 Commercial Banks 228855..44 228899..11 332255..88 336655..66 337788..11 338877..00 339900..55 339944..44 42 Thrift institutions 151.8 150.7 163.0 174.0 174.3 173.2 173.7 175.2 Debt components 43 Federal debt 1,583.7 1,803.9 1,955.6 2,111.8 2,133.6 22,,114499..00'' 2,155.1 n.a. 44 Nonfederal debt 5,139.8' 5,777.2' 6,337.2' 6,925.7' 7,002.8' 7,041.2' 7,091.3 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • August 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 all commercial banks other than those due to depository institutions, 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of the U.S. government, and foreign banks and official institutions less cash items in depository institutions. the process of collection and Federal Reserve float; and (4) other checkable 4. Outstanding amount of U.S. dollar-denominated travelers checks of nondeposits (OCD) consisting of negotiable order of withdrawal (NOW) and auto- bank issuers. Travelers checks issued by depository institutions are included in matic transfer service (ATS) accounts at depository institutions, credit union demand deposits. share draft accounts, and demand deposits at thrift institutions. 5. Demand deposits at commercial banks and foreign-related institutions other M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) than those due to depository institutions, the U.S. government, and foreign banks issued by all commercial banks and overnight Eurodollars issued to U.S. residents and official institutions less cash items in the process of collection and Federal by foreign branches of U.S. banks worldwide, MMDAs, savings and small- Reserve float. denomination time deposits (time deposits—including retail RPs—in amounts of 6. Consists of NOW and ATS balances at all depository institutions, credit less than $100,000), and balances in both taxable and tax-exempt general purpose union share draft balances, and demand deposits at thrift institutions. and broker-dealer money market mutual funds. Excludes individual retirement 7. Sum of overnight RPs and overnight Eurodollars, money market fund accounts (IRA) and Keogh balances at depository institutions and money market balances (general purpose and broker-dealer), MMDAs, and savings and small funds. Also excludes all balances held by U.S. commercial banks, money market time deposits. funds (general purpose and broker-dealer), foreign governments and commercial 8. Sum of large time deposits, term RPs, and term Eurodollars of U.S. banks, and the U.S. government. residents, money market fund balances (institution-only), less the estimated M3: M2 plus large-denomination time deposits and term RP liabilities (in amount of overnight RPs and Eurodollars held by institution-only money market amounts of $100,000 or more) issued by commercial banks and thrift institutions, funds. term Eurodollars held by U.S. residents at foreign branches of U.S. banks 9. Savings deposits exclude MMDAs. worldwide and at all banking offices in the United Kingdom and Canada, and 10. Small-denomination time deposits—including retail RPs—are those issued balances in both taxable and tax-exempt, institution-only money market mutual in amounts of less than $100,000. All individual retirement accounts (IRA) and funds. Excludes amounts held by depository institutions, the U.S. government, Keogh accounts at commercial banks and thrifts are subtracted from small time money market funds, and foreign banks and official institutions. Also subtracted deposits. is the estimated amount of overnight RPs and Eurodollars held by institution-only 11. Large-denomination time deposits are those issued in amounts of $100,000 money market mutual funds. or more, excluding those booked at international banking facilities. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term 12. Large-denomination time deposits at commercial banks less those held by Treasury securities, commercial paper and bankers acceptances, net of money money market mutual funds, depository institutions, and foreign banks and market mutual fund holdings of these assets. official institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 1.22 BANK DEBITS AND DEPOSIT TURNOVER1 Debits are shown in billions of dollars, turnover as ratio of debits to deposits. Monthly data are at annual rates. 1988 1989 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11998866 11998877 11998888 Oct. Nov. Dec. Jan. Feb. Mar. DEBITS TO Seasonally adjusted Demand deposits3 1 All insured banks 188,346.0 217,116.2 226,888.4 235,980.5 238,497.5 245,617.5 252,226.7 255,774.3 249,088.3 2 Major New York City banks 91,397.3 104,496.3 107,547.3 114,876.4 112,071.8 111,115.5 109,875.9 121,770.1 111,387.4 3 Other banks 96,948.8 112,619.8 119,341.2 121,104.1 126,425.7 134,502.0 142,350.8 134,004.2 137,700.9 4 ATS-NOW accounts4 2,182.5 2,402.7 2,757.7 2,820.2 2,897.2 3,020.8 2,976.2 3,054.9 3,264.9 5 Savings deposits 403.5 526.5 583.0 521.3 574.9 640.7 647.4 649.2 675.2 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 556.5 612.1 641.2 659.7 676.6 698.5 716.3 734.4 721.0 7 Major New York City banks 2,498.2 2,670.6 2,903.5 3,086.1 3,034.6 3,140.7 3,113.7 3,618.0 3,393.0 8 Other banks 321.2 357.0 376.8 377.9 400.6 425.3 449.3 425.9 440.4 9 ATS-NOW accounts4 15.6 13.8 14.7 14.8 15.1 15.8 15.6 16.0 17.1 10 Savings deposits 3.0 3.1 3.1 2.8 3.1 3.4 3.5 3.5 3.6 DEBITS TO Not seasonally adjusted Demand deposits 11 All insured banks 188,506.7 217,125.1 227,010.7 227,485.2 228,743.0 258,119.4 257,649.6 231,347.8 264,581.6 12 Major New York City banks 91,500.1 104,518.8 91,242.6 111,019.4 108,689.1 117,470.7 112,480.2 110,047.2 120,202.2 13 Other banks 97,006.7 112,606.2 119,445.7 116,465.8 120,053.9 140,648.8 145,169.4 121,300.6 144,379.4 14 ATS-NOW accounts4 2,184.6 2,404.8 2,754.7 2,805.4 2,714.1 3,163.8 3,245.1 2,762.1 3,228.6 15 MMDA® 1,609.4 1,954.2 2,430.1 2,325.8 2,539.7 2,940.5 3,072.5 2,622.4 2,636.7 16 Savings deposits 404.1 526.8 578.0 540.9 523.7 655.6 668.7 573.3 649.6 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 556.7 612.3 641.7 639.8 643.3 699.1 713.7 683.1 782.3 18 Major New York City banks 2,499.1 2,674.9 2,901.4 3,059.1 2,998.6 3,058.1 2,998.6 3,255.7 3,603.3 19 Other banks 321.2 356.9 377.1 364.8 375.9 425.2 448.7 397.8 473.6 20 ATS-NOW accounts4 15.6 13.8 14.7 14.9 14.3 16.3 16.7 14.5 16.9 21 MMDA 4.5 5.3 6.9 6.7 7.3 8.4 8.9 7.8 7.8 22 Savings deposits5 3.0 3.1 3.1 2.9 2.8 3.5 3.6 3.1 3.5 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 • August 1989 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1988 1989 CCaatteeggoorryy June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted 1 Total loans and securities2 2,343.5 2,358.5 2,371.4 2,373.5 2,392.6 2,400.6 2,408.0 2,412.8 2,441.8 2,454.9 2,460^ 2,476.9 2 U.S. government securities 348.8 349.3 350.9 353.2 356.0 358.5 362.4 361.8 363.4 370.3 372.2 375.3 3 Other securities 196.7 196.9 196.7 195.4 196.6 195.3 192.9 188.0 188.5 187.7' 185.3 184.7 4 Total loans and leases 1,797.9 1,812.3 1,823.9 1,825.0 1,839.9 1,846.8 1,852.7 1,863.0 1,889.9 1,896.8 1,903.4' 1,916.9 6 5 Co B m a m nk e e rc rs i a a l c a c n e d p t i a n n d c u e s s t ri h al e ld .. 3. . . . . . 58 4 9 . . 3 3 59 4 4 . . 3 9 59 4 5 . . 2 3 59 4 4 . . 1 3 59 4 7 . . 1 8 59 4 8 . . 3 9 59 4 9 . . 1 7 60 4 4. . 5 3 61 4 6 . . 1 5 61 4 4. . 5 0 61 4 6 . . 0 2 ' 62 4 2 . . 2 0 7 Other commercial and industrial 584.9 590.6 591. r 590.3 593.8 594.6 595.6 600.2 612.4 610.5 612.2' 617.8 8 U.S. addressees 578.1 583.7 584.4 583.5 587.3 588.5 589.6 594.5 607.5 605.0 607.3' 612.3 9 Non-U.S. addressees 6.8 6.9 6.7 6.8 6.5 6.1' 6.0 5.7 5.0 5.5 4.9 5.5 10 Real estate 626.9 633.3 640.3 646.9 654.7 659.3 664.8 671.2 678.3 685.5' 694.8 700.8 11 Individual 343.4 344.6 346.5 348.9 350.8 352.3 355.1 357.0 357.9 359.9 362.1' 364.7 12 Security 39.5 38.9 39.7 36.7 38.6' 38.0' 38.1' 37.2' 44.2' 43 .(K 39.4' 37.4 13 Nonbank financial institutions 30.6 31.0 31.0 30.5 30. r 30.0 29.9 30.1 30.5 29.6 29.1 28.9 14 Agricultural 29.6 29.6 29.6 29.6 29.8 30.3 30.7 30.7 30.7 30.7 30.4 30.3 15 State and political subdivisions 49.2 48.8 48.3' 48. r 48.7 48.(K 47.1 44.8 45.0 45.1 45.2 45.3 16 Foreign banks 8.1 8.2 8.2 7.5 7.8 8.2 7.5 7.6 8.2 7.9 8.0 9.1 17 Foreign official institutions 5.0 5.0 5.2 5.2 5.1 5.4 5.6 5.6 5.5 5.5 5.6 5.6 18 Lease financing receivables 26.8 27.5 27.6 27.8 27.9 28.0 28.1 28.3 28.4 28.6 28.6 29.6 19 All other loans 49.5r 50.3r 52.3 49.3' 48.4' 48.5' 46.2' 46.<y 44.6' 46.5' 43.9' 43.2 Not seasonally adjusted 20 Total loans and securities2 2,346.6 2,352.6 2,364.4 2,370.9 2,383.8 2,399.6 2,420.3 2,420.7 2,443.6 2,452.8 2,463.9 2,478.0 21 U.S. government securities ... 347.8 347.9 351.1 353.0 352.9 357.2 362.7 363.6 367.9 371.8 372.4 374.4 2 2 2 3 T O o th ta e l r l s o e a c n u s r i a t n ie d s leases2 1,8 1 0 9 1 6 . . 9 9 1,8 1 0 9 8 6 . . 2 4 1,8 1 1 97 6 . . 0 3 1,8 1 2 9 2 5. . 2 7 1,8 1 3 9 5 5 . . 5 4 1,8 1 4 95 7 . . 4 0 1,8 1 6 92 5 . . 7 0 1,8 1 6 9 7 0. . 1 0 1,8 1 8 8 7 8 . . 4 3 1,8 1 9 8 4 7 . . 0 0 1,9 18 0 5 6 . . 2 2 ' 1,9 1 1 8 8 5 . . 5 1 24 Commercial and industrial .. 593.1 593.9 591.0 589.5 593.2 596.5 602.8 603.8 615.9 617.8 620.8' 625.7 25 Bankers acceptances held 4.5 4.4 4.3 4.2 4.1 4.2 4.0 4.1 4.0 3.9 3.9 4.2 26 Other commercial and 27 U.S. i n a d d u d s r t e r s ia s l e es4 5 5 8 8 1 8 . . 7 5 5 5 8 8 2 9 . . 6 5 5 58 8 0 6 . . 1 7 5 5 8 7 5 8 . . 4 9 ' 5 58 8 3 9 . . 0 2 ' 5 5 8 9 6 2 . . 2 2 5 59 9 2 8 . . 6 8 ' 5 5 9 9 4 9 . . 4 7 6 6 1 0 1 6 . . 8 5 6 6 0 1 8 3 . . 5 8 ' 6 6 1 1 1 6 . .9 5 ' ' 6 6 2 1 1 5 . . 5 9 28 Non-U.S. addressees 6.9 6.9 6.6 6.5 6.1 6.1 6.1 5.4 5.4 5.4 5.4 5.6 29 Real estate 626.8 633.7 641.5 648.6 655.6 661.1 666.1 671.2 676.4 682.8 692.7 699.5 30 Individual 342.0 343.5 346.7 350.5 351.8 353.3 359.0 359.8 357.2 357.0 359.6 362.5 31 Security 41.2 38.6 38.5 35.3 37.V 37.5' 38.5' 37.6' 43.2' 43.6' 41.4' 38.3 32 Nonbank financial institutions 30.8 31.0 30.9 30.4 29.8 30.1 30.9 30.6 29.9 29.0 29.0 29.1 33 Agricultural 29.9 30.3 30.4 30.5 30.6 30.5 30.5 30.1 29.8 29.6 29.6 30.1 34 State and political subdivisions 48.9 48.2 47.7 47.4 48.3' 47.4' 46.9 46.3 46.0 45.7 45.4 45.2 35 Foreign banks 7.9 8.4 8.1 7.7 7.9 8.2 7.8 7.8 8.3 7.7 7.7 8.8 36 Foreign official institutions.. 5.0 5.0 5.2 5.2 5.1 5.4 5.6 5.6 5.5 5.5 5.6 5.6 37 Lease financing receivables . 26.8 27.4 27.5 27.7 27.8 27.9 28.3 28.6 28.5 28.6 28.7 29.5 38 All other loans 49.5 48.2' 49.0 49.8' 48.3' 49.0' 48.6' 45.7' 46^ 46.7' 45.7' 44.3 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 1988 1989 SSoouurrccee June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted 1 Total nondeposit funds 214.0 215.2r 219.4' 210.0' 210.9' 217.3' 214.6' 207.4 210.5 211.1' 204.2' 207.1 2 Net balances due to related foreign offices 8.2 13.9 19.2 8.2 5.6 9.3 6.7 8.0 10.7 8.0 2.9 .0 3 Borrowings from other than commercial banks in United States 205.8 201.3 200.3 201.8 205.3 208.0 207.9 199.4 199.9 203. <r 201.3' 207.1 4 Domestically chartered banks 172.0 166.9 165.8 165.8 167.1 168.7 168.9 162.4 160.7 165.1' 162.8' 166.5 5 Foreign-related banks 33.8 34.4 34.5 35.9 38.2 39.3 39.0 36.9 39.2 38.0 38.5 40.6 Not seasonally adjusted Total nondeposit funds 217.1 210.8' 218.3' 206.5' 204.8' 214.1' 209.0' 206.5 215.3 216.7' 206.8' 214.7 7 Net balances due to related foreign offices .... 8.7 10.8' 18.7' 9.2' 5.2' 10.3' 9.2' 7.7 10.4 7.0' .8 2.6 8 Domestically chartered banks -16.3 -14.1 -7.3 -15.7 -20.5 -19.2 -20.7 -20.5 -17.9 -19.8 -23.1 -22.0 9 Foreign-related banks 25.0 24^ 26.0' 24^ 25.7' 29.5' 29.9' 28.2 28.3 26.9 23.9 24.6 10 Borrowings from other than commercial banks in United States4 208.4 199.9 199.6' 197.3 199.6 203.7 199.8 198.9 204.9 209.7' 206.1' 212.1 11 Domestically chartered banks 173.3 165.0 165.3 162.1 162.9' 167.4 162.9' 160.8 164.4 170.2' 166.7' 171.0 12 Federal funds and security RP borrowings 168.4 159.6 160.3 157.6 158.8 162.8 159.3 157.4 161.2 166.7' 162.4' 167.3 13 Other6 4.8 5.4 5.0 4.4 4.1 4.6 3.5 3.4 3.2 3.5 4.3 3.7 14 Foreign-related banks6 35.2 34.9 34.2 35.3 36.8 36.3 37.0 38.1 40.5 39.5 39.4 41.0 MEMO Gross large time deposits 15 Seasonally adjusted 403.2 408.4 414.6 419.7 423.2 424.5 429.2 434.9 440.3 446.6 452.7 456.8 16 Not seasonally adjusted 401.8 405.9 415.1 421.7 424.7 425.6 429.8 434.5 440.2 448.1 450.6 455.5 U.S. Treasury demand balances at commercial banks8 17 Seasonally adjusted 22.0 21.3 17.1 23.5 27.2 23.0 24.9 20.3 20.3 20.3 20.9 27.1 18 Not seasonally adjusted 21.0 22.0 11.9 24.6 27.7 16.3 22.9 25.0 25.9 18.1 20.2 34.3 1. Commercial banks are those in the 50 states and the District of Columbia 4. Other borrowings are borrowings through any instrument, such as a promwith national or state charters plus agencies and branches of foreign banks, New issory note or due bill, given for the purpose of borrowing money for the banking York investment companies majority owned by foreign banks, and Edge Act business. This includes borrowings from Federal Reserve Banks and from foreign corporations owned by domestically chartered and foreign banks. banks, term federal funds, loan RPs, and sales of participations in pooled loans. These data also appear in the Board's G.10 (411) release. For address, see 5. Based on daily average data reported weekly by approximately 120 large inside front cover. banks and quarterly or annual data reported by other banks. 2. Includes federal funds, RPs, and other borrowing from nonbanks and net 6. Figures are partly daily averages and partly averages of Wednesday data. balances due to related foreign offices. 7. Time deposits in denominations of $100,000 or more. Estimated averages of 3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and daily data. U.S. branches and agencies of foreign banks with related foreign offices plus net 8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at compositions with own IBFs. mercial banks. Averages of daily data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • August 1989 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series1 Billions of dollars 1989 Account July Aug. Sept. Oct. Dec. Jan. Feb. Mar. Apr. May ALL COMMERCIAL BANKING INSTITUTIONS^ 1 Loans and securities 2,512.1 2,526.3 2,524.9 2.541.5 2,581.3 2,592.0 2,576.7 2,613.5 2,616.8 2.613.0 2.650.0 2 Investment securities 523.5 526.7 527.0 525.0 531.3 533.0 533.3 535.5 538.7 538.1 541.3 3 U.S. government securities 332.6 335.1 336.5 334.7 340.8 345.9 348.8 352.9 357.1 358.3 360.9 4 Other 190.8 191.6 190.5 190.4 190.5 187.1 184.5 182.6 181.6 179.8 180.4 5 Trading account assets 23.9 22.7 21.2 24.9 24.8 19.2 21.5 20.1 21.8 17.8 19.2 6 Total loans 1,964.8 1.977.0 1,976.7 1.991.6 2,025.2 2.039.7 2,022.0 2,057.9 2,056.3 2.057.1 2,089.5 7 Interbank loans 159.7 1.812560..81 153.2 160.0 170.6 165.4 159.9 173.0 154.5 150.4 160.1 8 Loans excluding interbank 1,805.1 1,823.5 1,831.6 1.854.6 1,874.3 1,862.1 1,884.9 1,901.8 1.906.7 1,929.4 9 Commercial and industrial 591.0 589.0 589.2 591.6 598.5 606.1 602.2 615.2 619.5 622.9 626.7 10 Real estate 635.2 645.1 651.0 656.3 663.1 669.3 672.2 677.0 687.2 694.8 702.1 11 Individual 343.8 348.9 351.6 352.5 354.7 361.3 359.9 357.3 357.1 361.0 363.2 12 All other 235.0 237.2 231.8 231.2 238.3 237.5 227.9 235.4 238.1 228.0 237.5 13 Total cash assets 217.1 222.1 215.0 208.5 235.1 244.4 214.7 226.0 210.5 214.2 247.2 14 Reserves with Federal Reserve Banks. 30.7 33.0 31.1 31.7 33.8 34.5 31.6 27.8 30.9 33.4 27.8 15 Cash in vault 26.0 26.6 26.3 26.4 28.8 30.5 27.6 26.7 27.0 27.0 28.0 16 Cash items in process of collection ... 75.5 79.7 76.2 72.8 89.6 92.0 76.2 75.7 77.8 106.9 17 Demand balances at U.S. depository institutions 31.3 31.5 29.4 29.2 32.1 34.3 27.8 32.5 27.9 27.6 34.0 18 Other cash assets 53.5 51.3 52.0 48.4 50.8 53.2 51.5 50.1 48.9 48.4 50.5 19 Other assets 189.3 188.4 193.4 201.4 201.2 199.4 195.0 191.4 193.3 200.5 206.2 20 Total assets/total liabilities and capital 2,918.5 2,936.8 2,933.3 2.951.3 3.017.7 3.035.8 2,986.4 3,030.8 3,020.6 3.027.8 3,103.4 21 Deposits 2,052.1 2,075.1 2,060.0 2.069.4 2.122.8 2.142.9 2,093.9 2,121.8 2,120.1 2,131.6 2,180.9 22 Transaction deposits 598.9 609.9 588.5 587.4 627.7 641.5 585.5 601.4 581.9 594.0 628.7 23 Savings deposits 545.5 542.4 536.8 538.4 542.2 537.0 530.2 528.7 524.6 513.3 511.2 24 Time deposits 907.6 922.7 934.7 943.6 952.9 964.4 978.2 991.7 1,013.5 1,024.3 1.041.1 25 Borrowings 469.2 448.7 468.3 479.5 476.7 470.9 491.8 500.9 482.3 485.3 508.7 26 Other liabilities 209.9 222.4 215.5 211.9 224.2 229.0 204.8 212.3 219.9 211.2 212.2 27 Residual (assets less liabilities) 187.3 190.6 189.5 190.6 193.9 193.1 195.8 195.8 198.5 199.6 201.6 MEMO 28 U.S. government securities (including trading account) 350.2 352.0 352.7 354.5 360.3 359.9 365.9 367.8 373.7 371.2 374.1 29 Other securities (including trading account) 197.1 197.4 195.5 195.3 195.8 192.3 188.9 187.8 186.8 184.7 186.4 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 2,322.9 2,334.5 2,332.7 2,347.3 2,382.9 2.385.5 2.378.3 2.399.0 2,401.2 2,401.2 2,439.4 31 Investment securities 496.3 499.7 501.2 499.2 505.7 508.0 507.5 509.4 513.5 514.2 516.9 32 U.S. government securities 320.2 323.2 324.9 323.4 329.6 334.9 336.3 340.0 344.7 346.1 348.1 33 Other 176.1 176.4 176.3 175.8 176.1 173.0 171.2 169.3 168.8 168.1 168.8 34 Trading account assets 23.9 22.7 21.2 24.9 24.8 19.2 21.5 20.1 21.8 17.8 19.2 35 Total loans 1.802.7 1,812.1 1,810.2 1,823.3 1,852.4 1,858.3 1.849.4 1,869.5 1,865.9 1,869.2 1.903.3 36 Interbank loans 132.1 127.8 124.2 129.6 139.4 132.2 130.6 138.2 121.2 119.2 130.3 37 Loans excluding interbank 1,670.6 1,684.3 1,686.0 1,693.6 1,713.1 1,726.1 1.718.7 1,731.3 1,744.7 1,750.1 1,773.0 38 Commercial and industrial 492.6 490.6 489.9 492.4 498.1 499.5 498.7 503.0 504.9 509.1 513.4 39 Real estate 618.0 626.1 631.8 636.6 642.3 648.5 651.3 655.6 665.4 672.6 679.4 40 Individual 343.5 348.5 351.2 352.2 354.4 361.0 359.6 357.0 356.8 360.7 362.9 41 All other 216.6 219.0 213.1 212.4 218.3 217.1 209.2 215.8 217.6 207.7 217.4 42 Total cash assets 197.1 203.5 194.2 190.4 216.0 223.2 193.7 206.6 191.7 194.8 227.1 43 Reserves with Federal Reserve Banks 29.6 31.4 29.0 29.9 32.6 33.1 30.1 26.6 29.5 30.7 26.7 44 Cash in vault 26.0 26.6 26.3 26.4 28.8 30.4 27.6 26.7 26.9 27.0 28.0 45 Cash items in process of collection .. 75.2 79.4 75.8 72.0 91.2 75.4 87.8 74.9 76.9 105.9 46 Demand balances at U.S. depository institutions 29.5 29.8 27.4 27.3 30.2 32.2 25.9 30.5 25.8 26.0 32.0 47 Other cash assets 36.9 36.4 35.7 34.8 35.5 36.2 34.8 35.1 34.3 34.5 34.6 48 Other assets 121.5 123.6 126.7 131.9 132.9 134.9 127.8 129.1 134.6 133.6 129.6 49 Total assets/liabilities and capital 2,641.5 2,661.5 2.653.6 2,669.6 2,731.7 2.743.6 2.699.8 2,734.7 2,730.6 2,800.0 2.722.5 50 Deposits 1.986.8 2,009.0 1.992.7 2,001.0 2,053.0 2,069.9 2,022.6 2.049.1 2.043.6 2,053.5 2.101.4 51 Transaction deposits 590.2 601.1 579.4 577.6 617.5 631.5 576.0 591.9 572.6 584.1 618.6 52 Savings deposits 543.0 539.9 534.3 535.8 539.7 534.5 527.8 526.3 522.1 510.7 508.5 53 Time deposits 853.6 868.0 879.0 887.6 895.8 903.9 918.8 930.9 949.0 958.6 974.2 54 Borrowings 315191..90 345.3 359.0 364.7 365.6 363.1 376.2 378.1 362.4 367.9 382.5 55 Other liabilities 120.1 115.8 116.7 122.6 120.9 108.6 115.2 121.4 113.1 118.0 56 Residual (assets less liabilities) 183.9 187.2 186.1 187.2 190.5 189.7 192.4 192.4 195.1 196.2 198.2 MEMO 57 Real estate loans, revolving 35.4 36.3 37.4 38.4 39.5 40.1 40.6 41.4 42.5 43.4 44.2 58 Real estate loans, other 582.6 589.8 594.4 598.2 602.8 608.4 610.7 614.2 622.8 629.2 635.2 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 Figures are partly estimated. They include all bank-premises subsidiaries and commercial banks, branches and agencies of foreign banks, Edge Act and other significant majority-owned domestic subsidiaries. Loan and securities data Agreement corporations, and New York State foreign investment corporations. for domestically chartered commercial banks are estimates for the last Wednes- 3. Insured domestically chartered commercial banks include all member banks day of the month based on a sample of weekly reporting banks and quarter-end and insured nonmember banks. 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 1989 AAccccoouunntt Apr. 5' Apr. 12 Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 1 Cash and balances due from depository institutions 108,707 108,674 111,460 107,682 114,789 101,145 111,852 99,936 126,800 2 Total loans, leases, and securities, net 1,191,976 1,184,455' 1,197,576' 1,187,151' 1,202,577 1,187,776 1,201,383 1,196,428 1,213,512 3 U.S. Treasury and government agency 137,179 135,318' 136,081' 134,107 135,676 135,412 138,365 139,978 137,223 4 Trading account 16,532 14,518' 15,554 12,904 13,912 13,280 15,571 15,202 13,216 5 Investment account 120,648 120,799' 120,527' 121,203 121,764 122,133 122,794 124,776 124,006 6 Mortgage-backed securities 49,941 50,051' 50,242' 50,637' 51,082 51,113 51,397 53,554 53,590 All other maturing in 7 One year or less 22,731 22,488 21,499' 21,409' 21,274 21,208 20,790 20,547 21,031 8 Over one through five years 40,340 40,647' 41,204' 41,733' 41,893 41,942 42,462 42,391 41,184 9 Over five years 7,635 7,613' 7,582' 7,423' 7,514 7,869 8,144 8,284 8,202 10 Other securities 71,886 71,670 71,563 71,713 71,669 71,770 71,728 72,076 72,667 11 Trading account 1,182 898 1,057 1,031 1,093 1,046 834 923 1,138 12 Investment account 70,704 70,773 70,506 70,682 70,576 70,725 70,894 71,152 71,529 13 States and political subdivisions, by maturity 44,548 44,752 44,708 44,692 44,501 44,440 44,433 44,439 44,473 14 One year or less 4,934 4,989 5,005' 4,993 5,024 4,974 4,956 4,961 5,051 15 Over one year 39,614 39,763 39,703' 39,699 39,477 39,467 39,477 39,478 39,422 16 Other bonds, corporate stocks, and securities 26,157 26,020 25,798 25,990 26,075 26,284 26,461 26,714 27,057 17 Other trading account assets 4,158 4,229 4,019 3,891 3,936 3,989 4,090 4,153 4,829 18 Federal funds sold4 79,128 75,811' 79,567 70,839 78,890 67,122 71,708 66,824 77,108 19 To commercial banks 50,332 45,614 52,244 47,438 54,801 45,932 48,988 42,626 51,929 20 To nonbank brokers and dealers in securities 20,103 21,919' 20,415 16,599 16,951 15,361 15.901 16,466 18,223 21 To others 8,693 8,278 6,908 6,802 7,138 5,828 6,819 7,732 6,956 22 Other loans and leases, gross 939,056 936,739' 945,671 944,671 950,639 947,769 953,824 951,740 960,070 23 Other loans, gross 914,623 912,239' 921,180' 920,194 926,039 923,165 929,266 927,126 935,462 24 Commercial and industrial 312,526 311,774' 314,122' 314,889 317,884 316,780 316,888 316,749 318,067 25 Bankers acceptances and commercial paper 1,626 1,664 1,598 1,714 1,740 1,806 1,681 1,748 1,978 26 All other 310,900 310,110' 312,524' 313,175 316,144 314,974 315,207 315,000 316,089 27 U.S. addressees 309,083 308,288' 310,778' 311,393 314,206 313,074 313,302 312,987 314,130 28 Non-U.S. addressees 1,817 1,822' 1,746 1,782 1,937 1,901 1,905 2,014 1,959 29 Real estate loans 319,222 319,731 321,281 321,976 322,288 323,282 324,666 324,880 325,528 30 Revolving, home equity 23,333 23,406 23,650 23,850 23,942 24,113 24,217 24,314 24,423 31 All other 295,889 296,326 297,631 298,126 298,346 299,169 300,450 300,566 301,104 32 To individuals for personal expenditures 167,940 168,097' 168,789' 169,536' 169,193 169,142 169,252 169,451 169,681 33 To depository and financial institutions 42,819 43,119' 44,400 42,888' 44,155 44,375 46,047 45,082 47,523 34 Commercial banks in the United States 19,557 19,452 20,277 19,311 20,230 20,180 21,438 21,005 21,350 35 Banks in foreign countries 3,261 3,430 3,545 3,487' 3,641 4,194 3,910 4,122 4,783 36 Nonbank depository and other financial institutions .. 20,000 20,237 20,578 20,090 20,284 20,001 20,698 19,955 21,390 37 For purchasing and carrying securities 14,468 13,552 15,395 14,102 14,940 13,561 14,243 13,654 15,608 38 To finance agricultural production 5,522 5,538 5,561 5,584 5,581 5,592 5,688 5,672 5,686 39 To states and political subdivisions 27,482 27,436' 27,317' 27,436' 27,375 27,264 27,233 27,158 27,144 40 To foreign governments and official institutions 1,860 1,859 1,842 1,969 1,887 1,929 2,119 1,969 1,840 41 All other 22,784 21,133' 22,472' 21,815' 22,736 21,238 23,130 22,510 24,384 42 Lease financing receivables 24,433 24,500' 24,491' 24,477 24,600 24,604 24,558 24,615 24,608 43 LESS: Unearned income 4,915 4,921' 4,933' 4,928' 4,898 4,938 4,948 4,960 4,920 44 Loan and lease reserve 34,516 34,391 34,393 33,144 33,337 33,348 33,384 33,383 33,465 45 Other loans and leases, net 899,625 897,427' 906,346' 906,600' 912,404 909,482 915,492 913,397 921,685 46 All other assets 135,169 133,802' 136,908' 129,599 132,145 132,729 131,166 129,339 131,337 47 Total assets 1,435,852 1,426,932' 1,445,944' 1,424,432' 1,449,511 1,421,650 1,444,402 1,425,703 1,471,648 48 Demand deposits 234,249 223,940' 231,148 220,021 229,729 213,972 222,228 209,927 244,114 49 Individuals, partnerships, and corporations 183,719 180,206' 182,031' 174,716 177,649 172,058 179,074 168,217 189,983 50 States and political subdivisions 5,496 5,463 6,064 6,247 7,860 5,674 5,744 5,454 5,894 51 U.S. government 5,779 3,751 7,469 4,649 6,491 2,886 1,645 3,435 2,678 52 Depository institutions in the United States 22,074 19,650 19,754 18,567 21,154 19,076 20,634 18,504 25,996 53 Banks in foreign countries 6,837 5,709 5,748 6,262 6,134 5,707 5,801 6,048 8,515 54 Foreign governments and official institutions 688 721 788 741 672 816 1,039 622 669 55 Certified and officers' checks 9,656 8,440 9,294' 8,838 9,769 7,755 8,292 7,646 10,378 56 Transaction balances other than demand deposits 79,921 79,914' 83,069' 77,604' 76,512 73,950 73,531 72,482 74,271 57 Nontransaction balances 671,963 671,626' 668,246' 667,345' 669,054 670,246 673,458 673,368 673,096 58 Individuals, partnerships, and corporations 630,634 630,134' 626,624' 626,071' 627,726 628,575 631,269 631,507 631,788 59 States and political subdivisions 31,773 32,104 32,236 31,945 31,955 32,341 32,842 32,663 32,310 60 U.S. government 974 967 958 971 972 937 935 930 922 61 Depository institutions in the United States 7,923 7,754 7,756 7,738 7,742 7,764 7,750 7,568 7,420 62 Foreign governments, official institutions, and banks .. 659 666 670 620 659 629 661 701 657 63 Liabilities for borrowed money 267,308 267,118' 279,873 275,866 288,844 278,253 292,780 284,177 289,130 64 Borrowings from Federal Reserve Banks 2,240 2,010 6,157 1,150 1,632 1,035 1,060 985 1,349 65 Treasury tax-and-loan notes 370 2,143 21,011 25,359' 25,598 25,696 25,696 24,373 21,700 66 All other liabilities for borrowed money 264,697 262,966' 252,706 249,357' 261,614 251,522 266,024 258,819 266,081 67 Other liabilities and subordinated notes and debentures .. 84,115 85,028' 84,676' 84,806' 85,962 85,298 82,244 85,317 90,394 68 Total liabilities 1,337,555 1,327,627' 1,347,012' 1,325,642' 1,350,100 1,321,721 1,344,241 1,325,271 1,371,007 69 Residual (total assets minus total liabilities)7 98,297 99,305 98,931 98,790 99,411 99,929 100,161 100,432 100,641 MEMO 70 Total loans and leases (gross) and investments adjusted . 1,161,519 1,158,701' 1,164,381' 1,158,473 1,165,780 1,159,950 1,169,288 1,171,141 1,178,618 71 Total loans and leases (gross) adjusted 948,295 947,484' 952,718 948,761 954,498 948,778 955,106 954,933 963,899 72 Time deposits in amounts of $100,000 or more 215,403 214,981' 213,084' 213,872' 214,705 215,464 216,357 216,914 215,385 73 U.S. Treasury securities maturing in one year or less 21,202 20,931' 20,069' 18,652' 19,122 19,174 19,388 19,552 19,392 74 Loans sold outright to affiliates—total 1,893 1,915 1,812 1,871 1,870 1,839 1,877 1,926 1,775 75 Commercial and industrial 1,605 1,623 1,514 1,573 1,575 1,544 1,555 1,618 1,466 76 Other 288 292 298 298 295 295 322 308 309 77 Nontransaction savings deposits (including MMDAs) 254,221 252,830' 249,759' 246,999' 246,320 245,6% 246,665 245,452 246,395 1. Beginning Jan. 6, 1988, the "Large bank" reporting group was revised 6. Includes federal funds purchased and securities sold under agreements to somewhat, eliminating some former reporters with less than $2 billion of assets repurchase; for information on these liabilities at banks with assets of $1 billionor and adding some new reporters with assets greater than $3 billion. more on Dec. 31, 1977, see table 1.13. 2. For adjustment bank data see this table in the March 1989 Bulletin. The 7. This is not a measure of equity capital for use in capital-adequacy analysis or adjustment data for 1988 should be added to the reported data for 1988 to establish for other analytic uses. comparability with data reported for 1989. 8. Exclusive of loans and federal funds transactions with domestic commercial 3. Includes U.S. government-issued or guaranteed certificates of participation banks. in pools of residential mortgages. 9. Loans sold are those sold outright to a bank's own foreign branches, 4. Includes securities purchased under agreements to resell. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 5. Includes allocated transfer risk reserve. 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 • August 1989 1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY1 Millions of dollars, Wednesday figures 1989 AAccccoouunntt Apr. 5 Apr. 12 Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 1 Cash balances due from depository institutions 22,066'' 20,343 21,720 22,546 25,562 20,527 22,828 21,252 28,490 2 Total loans, leases and securities, net2 216,668' 216,574' 217,197' 213,418 215,490 208,549 215,583 212,905 222,681 Securities 3 U.S. Treasury and government agency 0 0 0 0 0 0 0 0 0 4 Trading account3 0 0 0 0 0 0 0 0 0 5 Investment account 15,419' 15,400' 15,265' 15,062 14,962 15,056 15,530 15,704 15,244 6 Mortgage-backed securities 7,256r 77,,224466'' 7,247' 7,227 77,,224400 77,,224422 77,,225577 77,,226633 77,,223377 All other maturing in 7 One year or less 2,791 2,793 2,699 2,660 2,564 2,758 2,659 2,712 2,804 8 Over one through five years 3,514 3,504 3,497 3,496 3,488 3,371 3,900 4,029 3,500 9 Over five years 1,857 1,857 1,822 1,679 1,670 1,685 1,714 1,700 1,703 10 Other securities 0 0 0 0 0 0 0 0 0 11 Trading account3 0 0 0 0 0 0 0 0 0 12 Investment account 17,466 17,572 17,329 17,454 17,436 17,549 17,589 17,710 17,777 13 States and political subdivisions, by maturity 11,954 12,089 12,081 12,052 12,018 12,042 12,001 11,997 11,990 14 One year or less 1,120 1,138 1,143 1,147 1,168 1,170 1,166 1,162 1,161 15 Over one year 10,834 10,951 10,937 10,905 10,850 10,872 10,835 10,835 10,828 16 Other bonds, corporate stocks, and securities 5,512 5,483 5,248 5,402 5,418 5,507 5,588 5,713 5,787 17 Other trading account assets3 0 0 0 0 0 0 0 0 0 Loans and leases 18 Federal funds sold 28,558r 29,246' 26,660 23,990 25,116 20,683 23,787 22,312 27,529 19 To commercial banks 11,705 10,426 10,982 11,056 13,184 10,006 12,567 9,039 13,687 20 To nonbank brokers and dealers in securities 11,246r 13,484' 11,441 8,587 7,873 7,440 7,504 8,614 9,708 21 To others 5,607 5,336 4,236 4,347 4,058 3,236 3,716 4,658 4,134 22 Other loans and leases, gross 169,810 168,864 172,492 171,480 172,527 169,905 173,337 171,859 176,814 23 Other loans, gross 164,007 163,034 166,643 165,641 166,693 164,070 167,591 166,120 171,076 24 Commercial and industrial 57,663 57,715 58,070 58,633 59,277 58,600 59,230 59,431 60,169 25 Bankers acceptances and commercial paper 315 385 297 382 325 355 303 355 422 26 All other 57,348 57,330 57,773 58,251 58,952 58,245 58,926 59,076 59,747 27 U.S. addressees 56,821 56,764 57,232 57,675 58,321 57,606 58,309 58,393 59,118 28 Non-U.S. addressees 527 567 541 576 631 639 617 683 629 29 Real estate loans 51,455 51,482 51,610 51,684 51,679 51,750 52,022 52,139 52,240 30 Revolving, home equity 3,357 3,372 3,395 3,422 3,441 3,449 3,461 3,469 3,479 31 All other 48,098 48,110 48,216 48,262 48,238 48,300 48,561 48,669 48,761 32 To individuals for personal expenditures 19,656' 19,650 19,790 19,863 19,368 19,368 19,331 19,366 19,347 33 To depository and financial institutions 16,619 16,901 17,867 17,372 17,509 17,402 18,463 17,953 20,126 34 Commercial banks in the United States 7,999 7,828 8,521 8,067 8,212 7,992 8,860 8,444 9,204 35 Banks in foreign countries 2,006 2,102 2,157 2,139 2,195 2,796 2,544 2,798 3,323 36 Nonbank depository and other financial institutions 6,614 6,971 7,189 7,166 7,102 6,614 7,059 6,711 7,598 37 For purchasing and carrying securities 5,912 5,384 6,785 5,875 6,395 5,271 5,660 5,033 6,165 38 To finance agricultural production 157 151 158 167 161 174 194 170 158 39 To states and political subdivisions 6,074 6,037 6,036 6,032 6,034 6,015 6,001 5,975 5,982 40 To foreign governments and official institutions 499 484 522 610 520 583 753 605 480 41 All other 5,971' 5,229 5,804 5,404 5,749 4,907 5,936 5,447 6,408 42 Lease financing receivables 5,803 5,830 5,849 5,840 5,834 5,835 5,746 5,739 5,737 43 LESS: Unearned income 1,602 1,607 1,620 1,623 1,610 1,634 1,648 1,656 1,641 44 Loan and lease reserve 12,983 12,901 12,929 12,944 12,940 13,010 13,013 13,024 13,041 45 Other loans and leases, net6 155,225 154,356 157,943 156,913 157,977 155,261 158,677 157,179 162,131 46 All other assets 62,034' 59,857' 63,259' 58,065 59,369 59,792 61,784 58,636 57,284 47 Total assets 300,768' 296,774' 302,175 294,029 300,421 288,868 300,195 292,793 308,455 Deposits 48 Demand deposits 53,590' 47,493' 51,844 49,596 50,670 47,475 50,746 46,512 58,706 49 Individuals, partnerships, and corporations 36,801' 33,806' 37,015 34,692 34,056 33,792 36,203 32,714 38,911 50 States and political subdivisions 617 464 510 505 1,379 550 487 493 625 51 U.S. government 1,062 693 1,280 1,176 1,215 504 227 670 478 52 Depository institutions in the United States 5,414 4,640 4,643 4,611 5,009 4,6% 5,198 4,674 6,745 53 Banks in foreign countries 5,432 4,492 4,496 5,029 4,880 4,487 44,,558888 4,814 7,040 54 Foreign governments and official institutions 529 596 654 597 521 675 886688 488 530 55 Certified and officers' checks 3,735 22,,880011 3,245 22,,998844 33,,661100 22,,777700 33,,117744 22,,665588 44,,337766 56 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers) 9,022 9,179 9,791 8,919 8,544 8,261 8,207 8,113 8,236 57 Nontransaction balances 114,114 112,866 112,546 112,789 112,910 112,666 113,069 113,557 113,778 58 Individuals, partnerships, and corporations 104,093 102,752 102,298 102,901 102,964 102,493 102,610 103,061 103,405 59 States and political subdivisions 7,763 7,910 7,967 7,644 7,673 7,921 8,155 8,178 8,095 60 U.S. government 24 27 29 28 24 25 29 28 29 61 Depository institutions in the United States 1,990 1,936 1,998 2,003 1,996 2,015 2,026 2,005 2,000 62 Foreign governments, official institutions, and banks 243 241 254 213 251 212 249 284 249 63 Liabilities for borrowed money 68,137' 69,71C 71,274 66,083 70,191 63,324 72,879 67,597 65,776 64 Borrowings from Federal Reserve Banks 0 0 3,675 0 0 0 0 0 0 65 Treasury tax-and-loan notes 1 357 5,561 6,531 6,202 6,201 6,082 5,726 5,381 66 All other liabilities for borrowed money8 68,136' 69,353' 62,038 59,552 63,990 57,123 66,798 61,871 60,395 67 Other liabilities and subordinated notes and debentures 27,973' 29,200' 28,459 28,620 29,935 28,669 26,686 28,482 33,420 68 Total liabilities 272,836r 268,449' 273,914 266,007 272,249 260,395 271,587 264,261 279,916 69 Residual (total assets minus total liabilities)9 27,932 28,325 28,261 28,022 28,172 28,472 28,608 28,532 28,539 MEMO 70 Total loans and leases (gross) and investments adjusted2,10 211,549' 212,828' 212,242' 208,862 208,645 205,195 208,817 210,102 214,472 71 Total loans and leases (gross) adjusted10 178,664' 179,856' 179,648 176,347 176,247 172,590 175,698 176,688 181,452 72 Time deposits in amounts of $100,000 or more 42,908' 42,376' 42,561' 42,854' 42,681 42,571 43,144 43,199 43,084 73 U.S. Treasury securities maturing in one year or less 3,692 3,800 3,055 2,772 3,253 3,165 3,114 3,239 2,950 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 FRA5S. EInRcl udes 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 1989 AAccccoouunntt Apr. 5 Apr. 12 Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 1 Cash and due from depository institutions ... 10,540 10,614 11,210 11,005 13,042 10,534 11,398 11,026 11,420 2 Total loans and securities 112299,,008888 112277,,226666 131,007 130,663 132,100 130,967 132,963 131,5% 130,213 3 U.S. Treasury and government agency securities 8,092 8,137 8,890 8,473 9,006 8,591 8,580 8,687 8,863 4 Other securities 6,952' 6,632 6,212 6,213 6,190 6,184 6,200 6,042 6,137 5 Federal funds sold2 6,760 5,453 7,310 7,325 7,216 6,598 8,223 6,815 5,500 6 To commercial banks in the United States. 5,728 4,146 5,759 5,863 6,061 5,448 6,737 5,582 4,489 7 To others 1,032 1,307 1,551 1,462 1,155 1,150 1,486 1,233 1,011 8 Other loans, gross 107,284' 107,044 108,595 108,652 109,688 109,594 109,960 110,052 109,713 9 Commercial and industrial 7700,,550077 6699,,666611 7711,,221188 7711,,440077 7711,,777777 7711,,115500 71,410 71,007 71,241 10 Bankers acceptances and commercial paper 1,683 1,543 1,698 1,594 1,773 1,858 1,794 1,761 1,648 11 All other 68,824 68,118 69,520 69,813 70,004 69,292 69,616 69,246 69,593 12 U.S. addressees 67,253 66,593 67,723 68,184 68,366 67,532 67,918 67,543 67,894 13 Non-U.S. addressees 1,571 1,525 1,797 1,629 1,638 1,760 1,698 1,703 1,699 14 Loans secured by real estate 14,253' 14,593 14,365 14,512 14,581 14,770 14,814 14,728 14,691 15 To financial institutions 18,387 18,817 18,728 18,991 19,679 19,832 19,776 20,505 19,894 16 Commercial banks in the United States.. 13,398 14,013 13,687 13,967 14,600 14,876 15,122 15,564 14,492 17 Banks in foreign countries 1,389 1,302 1,396 1,547 1,612 1,555 1,434 1,611 1,944 18 Nonbank financial institutions 33,,660000 33,,550022 3,645 33,,447777 3,467 3,401 3,220 3,330 3,458 19 To foreign governments and official institutions 744 835 800 822 709 818 741 746 692 20 For purchasing and carrying securities 1,956 1,691 1,944 1,544 1,622 1,607 1,581 1,576 1,563 21 All other3 1,437 1,447 1,540 1,376 1,320 1,417 1,638 1,490 1,632 22 Other assets (claims on nonrelated parties) .. 30,672 31,532 31,306 31,596 32,266 32,488 32,368 32,351 32,669 23 Net due from related institutions 17,368 14,749 15,173 14,860 14,494 16,677 15,349 14,506 18,293 24 Total assets 118877,,667700 118844,,116633 118888,,669977 118888,,112244 119911,,990033 119900,,666677 119922,,007788 118899,,448800 192,5% 25 Deposits or credit balances due to other than directly related institutions 47,684 47,774 48,275 48,668 48,340 48,262 48,279 48,246 48,523 26 Transaction accounts and credit balances . 33,,330088 33,,339988 33,,330011 44,,000055 33,,334444 33,,119988 33,,332299 33,,442211 3,609 27 Individuals, partnerships, and corporations 2,082 2,114 2,013 2,711 1,944 2,004 1,940 1,837 2,107 28 Other 1,226 1,284 1,288 1,294 1,400 1,194 1,389 1,584 1,502 29 Nontransaction accounts 4444,,337766 4444,,337766 4444,,997744 4444,,666633 4444,,99%% 4455,,006644 4444,,995500 44,825 44,914 30 Individuals, partnerships, and corporations 37,370 37,595 38,229 37,979 38,160 38,104 37,980 37,700 37,852 31 Other 77,,000066 66,,778811 66,,774455 66,,668844 66,,883366 66,,996600 6,970 7,125 7,062 32 Borrowings from other than directly related institutions 84,883 79,769 85,717 77,834 82,064 83,826 83,056 83,517 83,5% 33 Federal funds purchased 4411,,777755 3355,,223388 3399,,663366 3322,,009944 35,819 37,062 36,398 38,489 38,550 34 From commercial banks in the United States 26,694 19,155 23,994 16,185 18,977 19,931 20,222 18,740 21,099 35 From others 15,081 16,083 15,642 15,909 16,842 17,131 16,176 19,749 17,451 36 Other liabilities for borrowed money 4433,,110088 4444,,553311 4466,,008811 4455,,774400 4466,,224455 4466,,776644 4466,,665588 45,028 45,046 37 To commercial banks in the United States 27,956 29,492 30,353 30,225 31,212 31,695 31,198 29,833 29,517 38 To others 15,152 15,039 15,728 15,515 15,033 15,069 15,460 15,195 15,529 39 Other liabilities to nonrelated parties 31,158 31,885 32,279 33,188 33,479 33,773 33,581 33,196 33,782 40 Net due to related institutions 23,944 24,735 22,425 28,434 28,020 24,804 27,160 24,520 26,694 41 Total liabilities 187,670 184,163 188,697 188,124 191,903 190,667 192,078 189,480 192,5% MEMO 42 Total loans (gross) and securities adjusted .. 109,962 109,107 111,561 110,833 111,439 110,643 111,104 110,450 111,232 43 Total loans (gross) adjusted 94,918' 94,338 96,459 96,147 96,243 95,868 96,324 95,721 %,232 1. Effective Jan. 4, 1989, the reporting panel includes a new group of large U.S. separate component of Other loans, gross. Formerly, these loans were included in branches and agencies of foreign banks. Earlier data included 65 U.S. branches "All other", line 21. and agencies of foreign banks that included those branches and agencies with 4. Includes credit balances, demand deposits, and other checkable deposits. assets of $750 million or more on June 30, 1980, plus those branches and agencies 5. Includes savings deposits, money market deposit accounts, and time that had reached the $750 million asset level on Dec. 31, 1984. These data also deposits. appear in the Board's H.4.2 (504) release. For address, see inside front cover. 6. Includes securities sold under agreements to repurchase. 2. Includes securities purchased under agreements to resell. 7. Exclusive of loans to and federal funds sold to commercial banks in the 3. Effective Jan. 4, 1989, loans secured by real estate are being reported as a United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • August 1989 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations' Billions of dollars, estimated daily-average balances, not seasonally adjusted Commercial banks TTyyppee ooff hhoollddeerr 1987 1988 1989 11998833 11998844 11998855 11998866 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Dec. Mar. June Sept. Dec. Mar. 1 All holders—Individuals, partnerships, and corporations 293.5 302.7 321.0 363.6 343.5 328.6 346.5 337.8 354.7 n.a. 2 Financial business 32.8 31.7 32.3 41.4 36.3 33.9 37.2 34.8 38.6 n.a. 3 Nonfinancial business 161.1 166.3 178.5 202.0 191.9 184.1 194.3 190.3 201.2 n.a. 4 Consumer 78.5 81.5 85.5 91.1 90.0 86.9 89.8 87.8 88.3 n.a. 5 Foreign 3.3 3.6 3.5 3.3 3.4 3.5 3.4 3.2 3.7 n.a. 6 Other 17.8 19.7 21.2 25.8 21.9 20.3 21.9 21.7 22.8 n.a. Weekly reporting banks 1987 1988 1989 11998833 11998844 11998855 11998866 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Dec. Mar. June Sept. Dec. Mar. 7 All holders—Individuals, partnerships, and corporations 146.2 157.1 168.6 195.1 183.8 181.8 191.5 185.3 198.3 181.9 8 Financial business 24.2 25.3 25.9 32.5 28.6 27.0 30.0 27.2 30.5 27.2 9 Nonfinancial business 79.8 87.1 94.5 106.4 100.0 98.2 103.1 101.5 108.7 98.6 10 Consumer 29.7 30.5 33.2 37.5 39.1 41.7 42.3 41.8 42.6 41.1 11 Foreign 3.1 3.4 3.1 3.3 3.3 3.4 3.4 3.1 3.6 3.3 12 Other 9.3 10.9 12.0 15.4 12.7 11.4 12.8 11.7 12.9 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 in the June 1971 BULLETIN, p. 466. been revised, and may contain reporting errors. Data for all commercial banks for Figures may not add to totals because of rounding. March 1985 were revised as follows (in billions of dollars): all holders, -.3; 2. Beginning in March 1984, these data reflect a change in the panel of weekly financial business, -.8; nonfinancial business, -.4; consumer, .9; foreign, .1; reporting banks, and are not comparable to earlier data. Estimates in billions of other, -.1. Data for weekly reporting banks for March 1985 were revised as dollars for December 1983 based on the new weekly reporting panel are: financial follows (in billions of dollars): all holders, - .1; financial business, -.7; nonfinanbusiness, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other cial business, -.5; consumer, 1.1; foreign, .1; other, -.2. 9.5. 5. Beginning March 1988, these data reflect a change in the panel of weekly 3. Beginning March 1985, financial business deposits and, by implication, total reporting banks, and are not comparable to earlier data. Estimates in billions of gross demand deposits have been redefined to exclude demand deposits due to dollars for December 1987 based on the new weekly reporting panel are: financial thrift institutions. Historical data have not been revised. The estimated volume of business, 29.4; nonfinancial business, 105.1; consumer, 41.1; foreign, 3.4; other, such deposits for December 1984 is $5.0 billion at all insured commercial banks 13.1. and $3.0 billion at weekly reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1988 1989 IInnssttrruummeenntt D 19 e 8 c 4 . D 19 e 8 c 5 . D 19 e 8 c 6 . D 19 e 8 c 7 . D 19 e 8 c 8 . Nov. Dec. Jan. Feb. Mar. Apr. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 237,586 298,779 329,991 357,129 455,017 443,531 455,017 471,066 487,771 492,821 494,292 Financial companies1 Dealer-placed paper 2 Total 5566,,448855 7788,,444433 110011,,007722 110011,,995588 115599,,994477 115577,,004422 115599,,994477 116622,,888844 117733,,994444 117722,,995500 117700,,554499 3 Bank-related (not seasonally adjusted) 22,,003355 11,,660022 22,,226655 11,,442288 11,,224488 995 11,,224488 n.a. n.a. n.a. n.a. Directly placed paper 4 Total 111100,,554433 113355,,332200 151,820 117733,,993399 119922,,444422 119922,,222200 119922,,444422 119999,,882288 220011,,999977 220055,,337744 207,231 5 Bank-related (not seasonally adjusted) ^ 42,105 44,778 40,860 43,173 43,155 43,729 43,155 n.a. n.a. n.a. n.a. 6 Nonfinancial companies 70,558 85,016 77,099 81,232 102,628 94,269 102,628 108,354 111,830 114,497 116,512 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 78,364 68,413 64,974 70,565 66,631 65,961 66,631 62,212 62,812 62,458 64,357 Holder 8 Accepting banks 9,811 11,197 13,423 10,943 9,086 9,483 9,086 9,009 9,401 8,336 9,623 9 Own bills 8,621 9,471 11,707 9,464 8,022 8,768 8,022 7,927 8,497 7,642 8,107 10 Bills bought 11,,119911 11,,772266 1,716 11,,447799 11,,006644 715 11,,006644 11,,008822 904 693 1,516 Federal Reserve Banks 11 Own account 0 0 0 0 0 0 0 0 0 0 0 12 Foreign correspondents 671 937 1,317 965 1,493 1,393 1,493 1,596' 1,579 1,544 1,400 13 Others 67,881 56,279 50,234 58,658 56,052 55,086 56,052 51,608 51,832 52,579 53,334 Basis 14 Imports into United States 17,845 15,147 14,670 16,483 14,984 14,959 14,984 14,917 15,588 14,755 15,234 15 Exports from United States 16,305 13,204 12,960 15,227 14,410 14,578 14,410 13,813 13,927 13,581 14,371 16 All other 44,214 40,062 37,344 38,855 37,237 36,424 37,237 33,482 33,297 34,122 34,752 1. Institutions engaged primarily in activities such as, but not limited to, 5. 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. 6. 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. Beginning January 1989, bank-related series have been discontinued. or more in total acceptances. The new reporting group accounts for over 90 4. As reported by financial companies that place their paper directly with percent of total acceptances activity. investors. 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 Period Av r e a r te a ge Period 9.00 1986 8.33 1987 —Jan 7.50 1988 —Jan. 8.50 1987 8.21 Feb 7.50 Feb. 8.00 1988 9.32 Mar 7.50 Mar. 7.50 Apr 7.75 Apr. 1986 —Jan. 9.50 May 8.14 May. 7.75 Feb. 9.50 June 8.25 June. 8.00 Mar. 9.10 July 8.25 July. 8.25 Apr. 8.83 Aug 8.25 Aug. 8.75 May 8.50 Sept 8.70 Sept. 9.25 June 8.50 Oct 9.07 Oct.. 9.00 July 8.16 Nov 8.78 Nov. 8.75 Aug. 7.90 Dec 8.75 Dec. Sept. 7.50 8.50 Oct. 7.50 1989 —Jan. 9.00 Nov. 7.50 Feb. 9.50 Dec. 7.50 Mar. 10.00 Apr. 10.50 May. June. 11.00 11.50 11.00 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 • August 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. 1989 1989, week ending IInnssttrruummeenntt 11998866 11998877 11998888 Feb. Mar. Apr. May Apr. 28 May 5 May 12 May 19 May 26 MONEY MARKET RATES 1 Federal funds1,2 6.80 6.66 7.57 9.36 9.85 9.84 9.81 9.86 9.88 9.86 9.75 9.74 2 Discount window borrowing1, ,3 6.32 5.66 6.20 6.59 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 Commercial paper ' 3 1-month 6.61 6.74 7.58 9.29 9.88 9.77 9.58 9.72 9.70 9.66 9.50 9.47 4 3-month 6.49 6.82 7.66 9.37 9.95 9.81 9.47 9.72 9.69 9.59 9.37 9.29 5 6-month 6.39 6.85 7.68 9.35 9.97 9.78 9.29 9.65 9.59 9.46 9.16 9.06 Finance paper, directly placed4. 6 1-month 6.57 6.61 7.44 9.21 9.77 9.70 9.48 9.64 9.62 9.58 9.40 9.37 7 3-month 6.38 6.54 7.38 9.11 9.70 9.70 9.27 9.63 9.56 9.41 9.15 9.04 8 6-month 6.31 6.37 7.14 8.65 9.17 9.29 8.97 9.23 9.20 9.19 8.81 8.76 Bankers acceptances ,6 9 3-month 6.38 6.75 7.56 9.27 9.83 9.68 9.35 9.60 9.57 9.45 9.26 9.18 10 6-month 6.28 6.78 7.60 9.26 9.87 9.63 9.15 9.50 9.43 9.27 9.03 8.95 Certificates of deposit, secondary market7 11 1-month 6.61 6.75 7.59 9.33 9.91 9.81 9.61 9.75 9.76 9.69 9.52 9.49 12 3-month 6.51 6.87 7.73 9.51 10.09 9.94 9.59 9.84 9.83 9.72 9.49 9.41 13 6-month 6.50 7.01 7.91 9.71 10.40 10.13 9.60 9.96 9.89 9.75 9.48 9.38 14 Eurodollar deposits, 3-month8 6.71 7.06 7.85 9.61 10.18 10.04 9.66 9.98 9.89 9.85 9.64 9.46 U.S. Treasury bills5 Secondary market9 15 3-month 5.97 5.78 6.67 8.53 8.82 8.65 8.43 8.53 8.54 8.43 8.30 8.41 16 6-month 6.02 6.03 6.91 8.55 8.85 8.65 8.41 8.59 8.52 8.42 8.33 8.39 17 1-year 6.07 6.33 7.13 8.55 8.82 8.64 8.31 8.52 8.47 8.36 8.23 8.21 Auction average 18 3-month 5.98 5.82 6.68 8.48 8.83 8.70 8.40 8.66 8.64 8.41 8.21 8.32 19 6-month 6.03 6.05 6.92 8.49 8.87 8.73 8.39 8.72 8.64 8.39 8.19 8.33 20 1-year 6.18 6.33 7.17 8.59 8.68 8.75 8.44 n.a. n.a. 8.44 n.a. n.a. CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities 21 1-year 6.45 6.77 7.65 9.25 9.57 9.36 8.98 9.22 9.16 9.05 8.89 8.86 22 2-year 6.86 7.42 8.10 9.37 9.68 9.45 9.02 9.33 9.22 9.11 8.95 8.86 23 3-year 7.06 7.68 8.26 9.32 9.61 9.40 8.98 9.26 9.18 9.08 8.90 8.82 24 5-year 7.30 7.94 8.47 9.27 9.51 9.30 8.91 9.16 9.09 9.06 8.86 8.73 25 7-year 7.54 8.23 8.71 9.23 9.43 9.24 8.88 9.13 9.07 9.06 8.81 8.67 26 10-year 7.67 8.39 8.85 9.17 9.36 9.18 8.86 9.09 9.07 9.05 8.79 8.63 27 20-year 7.84 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 28 30-year 7.78 8.59 8.96 9.01 9.17 9.03 8.83 8.95 8.97 9.02 8.80 8.63 Composite13 29 Over 10 years (long-term) 8.14 8.64 8.98 9.16 9.33 9.18 8.95 9.10 9.11 9.14 8.90 8.74 State and local notes and bonds Moody's series14 30 Aaa 6.95 7.14 7.36 7.23 7.40 7.37 7.22 7.28 7.28 7.25 7.21 7.13 31 Baa 7.76 8.17 7.83 7.59 7.78 7.82 7.66 7.80 7.75 7.70 7.62 7.58 32 Bond Buyer series15 7.32 7.63 7.68 7.44 7.59 7.49 7.25 7.40 7.36 7.36 7.18 7.11 Corporate bonds Seasoned issues16 33 All industries 9.71 9.91 10.18 10.05 10.18 10.14 9.97 10.11 10.08 10.05 9.93 9.80 34 Aaa 9.02 9.38 9.71 9.64 9.80 9.79 9.59 9.75 9.73 9.69 9.54 9.41 35 Aa 9.47 9.68 n.a. 9.83 9.98 9.94 9.77 9.92 9.88 9.85 9.73 9.63 36 A 9.95 9.99 10.24 10.13 10.26 10.20 10.01 10.16 10.14 10.08 9.98 9.85 37 Baa 10.39 10.58 10.83 10.61 10.67 10.61 10.48 10.59 10.57 10.57 1100..4466 1100..3322 38 A-rated, recently offered utility bonds17 9.61 9.95 n.a. 10.25 10.37 10.33 n.a. 10.22 10.26 10.13 10.03 9.94 MEMO: Dividend/price ratio18 39 Preferred stocks 8.76 8.37 9.23 9.31 9.43 9.50 9.32 9.48 9.46 9.39 9.32 9.19 40 Common stocks 3.48 3.08 3.64 3.59 3.68 3.59 3.52 3.56 3.56 3.60 3.49 3.48 1. Weekly, monthly and annual figures are averages of all calendar days, percentage yield (on a bank discount basis) that they would accept to two decimal where the rate for a weekend or holiday is taken to be the rate prevailing on the places. Thus, average issuing rates in bill auctions will be reported using two preceding business day. The daily rate is the average of the rates on a given day rather than three decimal places. weighted by the volume of transactions at these rates. 11. Yields are based on closing bid prices quoted by at least five dealers. 2. Weekly figures are averages for statement week ending Wednesday. 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields 3. Rate for the Federal Reserve Bank of New York. are read from a yield curve at fixed maturities. Based on only recently issued, 4. Unweighted average of offering rates quoted by at least five dealers (in the actively traded securities. case of commercial paper), or finance companies (in the case of finance paper). 13. Averages (to maturity or call) for all outstanding bonds neither due nor 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.36 STOCK MARKET Selected Statistics 1988 1989 IInnddiiccaattoorr 11998866 11998877 11998888 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 136.00 161.70 149.91 151.47 156.36 152.67 155.35 160.40 165.08 169.73 169.38 175.55 2 Industrial 155.85 195.31 180.83 182.18 188.58 182.25 187.75 194.62 200.00 197.58 204.81 211.81 3 Transportation 119.87 140.39 134.01 136.27 141.83 137.51 144.06 153.09 162.66 153.85 164.32 169.05 4 Utility 71.36 74.29 72.22 71.83 74.19 79.28 74.81 75.87 77.84 87.16 79.69 84.21 5 Finance 147.19 146.48 127.41 133.15 136.09 130.05 128.83 132.26 137.19 146.14 143.26 146.82 6 Standard & Poor's Corporation (1941-43 = 10)' 236.34 286.83 n.a. 267.97 277.40 271.02r 281.28'' 285.41r 294.01r 292.7 V 302.25r 314.43 7 American Stock Exchange (Aug. 31, 1973 = 50p 264.38 316.61 294.90 297.86 302.83 292.25 298.59 316.14 323.% 327.47 336.82 349.82 Volume of trading (thousands of shares) 8 New York Stock Exchange 141,385 188,647 161,450 145,702 162,631 134,427 135,473 168,193 169,321 159,024 161,862 n.a. 9 American Stock Exchange 11,846 13,832 9,955 8,198 9,051 8,497 11,227 10,797 11,780 11,395 11,529 n.a. Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 36,840 31,990 32,740 32,770 33,410 33,640 32,740 32,530 31,480 32,130 32,610 33,140 Free credit balances at brokers4 11 Margin-account 4,880 4,750 5,660 4,'725 5,065 4,920 5,660 5,790 5,605 5,345 5,450 5,250 12 Cash-account 19,000 15,640 16,595 14,175 14,880 15,185 16,595 15,705 16,195 16,045 16,125 15,965 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June J , 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 8 0 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 8 0 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 collatercompanies. With this change the index includes 400 industrial stocks (formerly alized by securities. Margin requirements on securities other than options are the 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 difference between the market value (100 percent) and the maximum loan value of financial. collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15, 2. Beginning July 5, 1983, the American Stock Exchange rebased its index 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968; effectively cutting previous readings in half. and Regulation X, effective Nov. 1, 1971. 3. Beginning July 1983, under the revised Regulation T, margin credit at On Jan. 1, 1977, the Board of Governors for the first time established in broker-dealers includes credit extended against stocks, convertible bonds, stocks Regulation T the initial margin required for writing options on securities, setting acquired through exercise of subscription rights, corporate bonds, and govern- it at 30 percent of the current market-value of the stock underlying the option. On ment securities. Separate reporting of data for margin stocks, convertible bonds, Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the and subscription issues was discontinued in April 1984. same as the option maintenance margin required by the appropriate exchange or 4. Free credit balances are in accounts with no unfulfilled commitments to the self-regulatory organization; such maintenance margin rules must be approved by brokers and are subject to withdrawal by customers on demand. the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC 5. New series beginning June 1984. approved new maintenance margin rules, permitting margins to be the price of the 6. These regulations, adopted by the Board of Governors pursuant to the option plus 15 percent of the market value of the stock underlying the option. Securities Exchange Act of 1934, limit the amount of credit to purchase and carry Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • August 1989 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1988 1989 Account 1986 198/ June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. FSLIC-insured institutions 1 Assets 1,163,851 1,250,855 1,289,979 1,299,373 1,311,668 1,323,840 1,332,828' 1,332,856' 1,350,708' l,337,832r 1,339,548' 1,341,292 2 Mortgages 697,451 721,593 736,893 774433,,008833 751,421 754,389 760,852' 763,036' 776644,,660022'' 776677,,330000'' 776677,,227700'' 776699,,331188 3 Mortgage-backed securities 158,193 201,828 207,744 220088,,550099 210,573 211,195 221111,,884444 212,679' 221144,,882211 221111,,447744'' 221122,,558899 221155,,550044 4 Contra-assets to mortgage assets1 . 41,799 42,344 40,251 40,296 39,078 38,500 38,303' 37,738' 37,545' 37,430' 37,041' 37,975 5 Commercial loans 23,683 23,163 24,672 24,964 25,099 24,782 25,145 25,276 33,657' 33,077' 33,041' 32,935 6 Consumer loans 51,622 57,902 61,150 61,571 62,417 61,558 61,057 61,508 6622,,006644 62,367' 6622,,337722'' 61,620 7 Contra-assets to nonmortgage loans .... 3,041 3,467 3,513 3,389 3,118 3,074 2,931 2,960 3,062' 2,931' 3,015' 4,125 8 Cash and investment securities 164,844 169,717 177,533 178,459 175,793 183,178 184,777' 179,817' 186,155' 178,609' 177,947' 175,746 9 Other3 112,898 122,462 125,751 126,472 128,561 130,313 130,387' 131,237' 130,016' 125,366' 126,384' 127,270 10 Liabilities and net worth . 1,163,851 1,250,855 1,289,979 1,299,373 1,311,668 1,323,840 1,332,828' 1,332,856' 1,350,708' 1,337,832' 1,339,548' 1,341,292 11 Savings capital 890,664 932,616 966,750 968,214' 968,294' 973,742 976,163 971,493 971,680' 963,815 957,347 956,358 12 Borrowed money 196,929 249,917 257,134 262,745 266,787 273,665 278,249' 281,041' 299,251' 299,341' 305,607 312,959 13 FHLBB 100,025 116,363 117,287 118,213 120,677 123,436 124,368 127,548 134,143 135,708 140,028 145,986 14 Other 96,904 133,554 139,847 144,532 146,110 150,229 153,881' 153,493' 165,108' 163,633' 165,579 166,973 15 Other 23,975 21,941 24,564 27,110 28,903 26,021 27,561' 29,181' 24,162' 29,776' 31,798 29,645 16 Net worth 52,282 46,382 41,531 41,304 47,684 50,412 50,855' 51,141' 55,615' 59,316' 59,323' 57,923 FSLIC-insured federal savings banks 17 Assets 210,562 284,270 329,736 333,596 357,897 367,928 369,682' 374,931' 425,806' 423,840' 432,655 443,267 18 Mortgages 113,638 161,926 190,647 193,150 204,351 207,952 207,207' 210,73c 227,858' 223311,,777766'' 235,075 241,268 19 Mortgage-backed securities 29,766 45,826 52,648 53,027 55,688 56,399 56,630' 57,815' 65,473' 62,730' 6655,,007744 68,051 20 Contra-assets to mortgage assets . n.a. 9,100 10,089 10,135 10,893 10,982 10,894' 10,899' 12,748' 12,5^ 12,665 13,150 21 Commercial loans n.a. 6,504 7,904 7,916 8,568 8,694 8,880' 9,040' 16,756' 16,271' 16,371 16,421 22 Consumer loans 13,180 1177,,669966 21,142 21,449 22,526 2222,,442200 22,421' 2222,,667799'' 2244,,224422'' 2255,,005500'' 2255,,998866 2266,,114488 23 Contra-assets to nonmortgage loans .... n.a. 678 738 699 734 785 789 803 897' 811' 853 934 24 Finance leases plus interest n.a. 591 708 735 791 804 804' 831' 882' 905' 997 965 25 Cash and investment ... n.a. 35,347 40,286 40,837 44,859 48,984 48,818' 48,028' 59,999,800' 57,445' 58,978 59,056 26 Other 19,034 24,069 27,230 27,316 32,740 34,442 29,178' 29,942' 35,378' 33,956' 34,427 36,352 27 Liabilities and net worth . 210,562 284,270 329,736 333,596 357,897 367,928 369,682' 374,931' 425,806' 423,840' 432,655 443,267 28 Savings capital 157,872 203,196 236,759 239,590 256,223 261,862 262,922' 263,984 298,206' 298,530' 301,778 307.591 29 Borrowed money 37,329 60,716 69,356 70,015 75,859 80,674 80,779' 83,628 99,250' 98,259' 102,858 107,191 30 FHLBB 19,897 29,617 32,177 31,941 35,357 37,245 37,510 39,630 46,244' 46,466' 48,889 51,531 31 Other 17,432 31,099 37,179 38,074 40,502 43,429 43,269' 43,998 53,006' 51,793' 53,969 55,660 32 Other 4,263 5,324 6,639 7,051 8,052 7,374 7,667' 8,320' 8,086' 8,275' 8,888 8,651 33 Net worth 11,098 15,034 16,886 16,843 17,661 17,886 18,194' 18,882' 20,186' 21,621' 22,137 23,233 Savings banks 34 Assets 236,866 259,643 249,927 252,875 253,453 255,510 257,127 258,537 261,361 254,319 254,165 255,226 Loans 35 Mortgage 118,323 138,494 138,148 139,844 141,316 143,626 145,398 146,501 147,597 144,998 145,426 145,174 36 Other 3355,,116677 3333,,887711 32,399 32,941 32,799 32,879 33,234 3333,,779911 3311,,226699 3322,,445500 3322,,336699 3333,,119944 Securities 37 U.S. government 14,209 13,510 11,597 11,563 11,353 11,182 10,896 10,804 11,457 10,485 10,315 1100,,331188 38 Mortgage-backed securities 25,836 32,772 29,735 30,064 30,006 29,190 29,893 29,372 29,751 2299,,225588 2299,,008855 2299,,337733 39 State and local government 2,185 2,003 1,849 1,840 1,901 1,878 1,872 1,887 1,848 1,835 1,829 1,814 40 Corporate and other . 20,459 18,772 17,492 17,527 17,301 17,234 16,886 16,773 17,822 15,964 15,812 15,984 41 Cash 6,894 5,864 4,831 5,186 4,950 5,463 4,825 5,093 7,050 5,532 5,465 5,972 42 Other assets 13,793 14,357 13,876 13,910 13,827 14,058 14,123 14,316 14,567 13,797 13,864 13,397 43 Liabilities 236,866 259,643 249,927 252,875 253,453 255,510 257,127 258,537 261,361 254,319 254,165 255,226 44 Deposits 192,194 201,497 194,018 195,537 195,907 197,665 197,925 199,092 202,058 195,452 195,308 199,399 45 Regular4 186,345 196,037 188,571 189,993 190,716 192,228 192,663 194,095 196,407 190,378 190,422 194,276 46 Ordinary savings .. 37,717 41,959 40,179 40,124 39,738 39,618 39,375 39,482 39,750 38,221 38,049 38,070 47 Time 100,809 112,429 110,738 112,272 114,255 116,387 117,712 119,026 121,148 118,612 119,109 123,162 48 Other 5,849 5,460 5,447 5,544 5,191 5,427 5,262 4,997 5,651 5,074 4,886 7,206 49 Other liabilities 25,274 3355,,772200 34,038 34,686 34,776 3355,,000011 35,997 3366,,001122 36,169 3333,,778822 33,642 30,500 50 General reserve accounts 18,105 20,633 19,875 20,069 20,018 20,151 20,324 20,462 20,337 20,138 20,336 20,338 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37—Continued 1988 1989 AAccccoouunntt 11998866 11998877 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Credit unions5 51 Total assets/liabilities and capital 147,726 172,345 173,276 173,044 174,649 174,722 174,406 174,593 175,027 176,270 178,175 52 Federal 95,483 112,573 113,068 112,686 113,383 113,474 113,717 114,566 114,909 115,543 117,555 53 State 52,243 59,772 60,208 60,358 61,266 61,248 61,135 60,027 60,118 60,727 60,620 54 Loans outstanding.. 86,137 n a. 105,800 107,065 108,974 110,939 111,624 112,452 113,191 114,012 113,880 114,572 55 Federal 55,304 68,658 69,626 70,944 72,200 72,551 73,100 73,766 74,083 73,917 74,395 56 State 30,833 37,142 37,439 38,030 38,739 39,073 39,352 39,425 39,927 39,963 40,177 57 Savings 134,327 158,186 159,314 158,731 157,944 160,174 159,021 159,010 159,106 161,073 164,322 58 Federal 87,954 103,347 104,256 103,657 103,698 104,184 103,223 104,431 104,629 105,262 107,368 59 State 46,373 54,839 55,058 55,074 54,246 55,990 55,798 54,579 54,477 55,811 56,954 Life insurance companies 60 Assets 937,551 1,044,459 1,105,546 1,113,547 1,121,337 1,131,179 1,139,490 1,144,854 1,157,140 1,167,184 1,173,325 Securities 61 Government 84,640 84,426 87,160 88,218 88,362 87,588 88,883 89,510 88,167 88,747 88,168 62 United States6.. 59,033 57,078 59,351 60,244 60,407 59,874 60,621 61,108 60,685 61,042 60,800 63 State and local . 11,659 10,681 11,114 11,102 11,190 11,054 11,069 11,189 11,126 11,036 10,736 64 Foreign 13,948 16,667 16,695 16,872 16,765 16,660 17,193 17,213 16,356 16,669 16,632 65 Business 492,807 569,199 614,052 618,742 624,917 630,086 633,390 638,350 644,894 655,149 659,826 n.a. 66 Bonds 401,943 472,684 509,105 514,926 520,796 525,336 527,419 532,197 538,053 545,970 550,630 67 Stocks 90,864 96,515 104,947 103,816 104,121 104,750 105,971 106,153 106,841 109,179 109,196 68 Mortgages 193,842 203,545 220,870 221,990 233,438 225,627 227,342 229,234 232,639 233,334 233,827 69 Real estate 31,615 34,172 35,545 35,737 35,920 35,892 36,892 36,673 37,972 38,112 38,690 70 Policy loans 54,055 53,626 53,107 53,142 53,194 53,149 53,157 53,148 53,020 53,210 53,265 71 Other assets 80,592 89,586 94,812 95,718 95,505 98,837 99,826 94,116 95,518 98,632 99,550 1. Contra-assets are credit-balance accounts that must be subtracted from the NOTE. FSLlC-insured institutions: Estimates by the FHLBB for all institutions corresponding gross asset categories to yield net asset levels. Contra-assets to insured bv 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 • August 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 1989 111999888666 111999888777 111999888888 Dec. Jan. Feb. Mar. Apr. May U.S. budget1 1 Receipts, total 769,091 854,143 908,953 93,795 89,369 61,978 68,276 128,952 71,115 2 On-budget 568,862 640,741 667,462 74,682 65,250 38,473 44,677 99,679 49,493 3 Off-budget 200,228 213,402 241,491 19,114 24,119 23,505 23,598 29,273 21,622 4 Outlays, total 990,258 1,003,830 1,064,044 105,237 86,563 89,850 104,055 88,381' 96,581 5 On-budget 806,760 809,998 861,352 91,606 68,999 71,324 85,191 71,798r 77,851 6 Off-budget 183,498 193,832 202,691 13,632 17,564 18,526 18,864 16,582 18,730 7 Surplus, or deficit (-), total -221,167 -149,687 -155,090 -11,442 2,806 -27,871 -35,779 40,572r -25,466 8 On-budget -237,898 -169,257 -193,890 -16,924 -3,749 -32,851 -40,513 27,881' -28,358 9 Off-budget 16,731 19,570 38,800 5,482 6,555 4,979 4,735 12,691 2,891 Source of financing (total) 10 Borrowing from the public 236,187 150,070 162,062 12,036 7,359 17,190 13,405 -1,291 10,214 11 Operating cash (decrease, or increase (-)l -14,324 -5,052 -7,963 -12,268 -8,135 17,009 10,154 -38,788 21,396 12 Other2 -696 4,669 991 11,674 -2,030 -6,328 12,221 -493' -6,144 MEMO 13 Treasury operating balance (level, end of period) 31,384 36,436 44,398 33,700 41,835 24,826 14,672 53,461' 32,065 14 Federal Reserve Banks 7,514 9,120 13,024 8,657 11,766 6,298 4,462 22,952 5,289 15 Tax and loan accounts 23,870 27,316 31,375 25,044 30,069 18,528 10,211 30,508 26,776 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 programs. 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 1987 1988 1989 111999888777 111999888888 HI H2 HI H2 Mar. Apr. May RECEIPTS 1 All sources 854,143 908,954 447,282 421,712 476,115 449,821 68,276 128,952 71,115 2 Individual income taxes, net 392,557 401,181 205,157 192,575 207,659 200,299 17,769 68,533 25,336 3 Withheld 322,463 341,435 156,760 170,203 169,300 179,600 34,088 23,649 2299,,008855 4 Presidential Election Campaign Fund 33 33 30 4 28 4 7 6 88 5 Nonwithheld 142,957 132,199 112,421 31,223 101,614 29,880 4,585 61,704 14,842 6 Refunds 72,896 72,487 64,052 8,853 63,283 9,187 20,912 16,826 18,599 Corporation income taxes 7 Gross receipts 102,859 109,683 52,396 52,821 58,002 56,409 14,481 16,412 2,994 8 Refunds 18,933 15,487 10,881 7,119 8,706 7,384 1,980 1,723 1,068 9 Social insurance taxes and contributions, net 303,318 334,335 163,519 114433,,775555 181,058 157,603 3300,,226688 39,496 35,349 10 Employment taxes and contributions 273,028 305,093 146,6% 130,388 164,412 144,983 29,736 36,775 27,281 11 Self-employment taxes and contributions 13,987 17,691 12,020 1,889 14,839 3,032 1,181 8,900 1,281 12 Unemployment insurance 25,575 24,584 14,514 10,977 14,363 10,359 118 2,375 7,661 13 Other net receipts 4,715 4,659 2,310 2,390 2,284 2,262 414 346 407 14 Excise taxes 32,457 35,540 15,845 17,680 16,440 19,434 3,228 2,616 3,640 15 Customs deposits 15,085 16,198 7,494 7,993 7,913 8,535 1,476 1,263 1,466 16 Estate and gift taxes 7,493 7,594 3,818 3,610 3,863 4,054 723 1,146 793 17 Miscellaneous receipts5 19,307 19,909 10,299 10,399 9,950 10,873 2,312 1,209 2,605 OUTLAYS 18 All types 1,003,830 1,064,055' 503,267 532,839 513,210 553,217r 104,055 88,381' 96,581 19 National defense 281,999 290,361 142,886 146,995 143,080 150,4% 29,719 21,247 25,012 20 International affairs 11,649 10,471 4,374 4,487 7,150 2,636 1,762 1,366 1,398 21 General science, space, and technology .... 9,216 10,841 4,324 5,469 5,361 5,852 1,200 929 1,128 22 Energy 4,115 2,297 2,335 1,468 555 1,966 573 280 267 23 Natural resources and environment 13,363 14,606 6,175 7,590 6,776 8,330 1,268 951 1,3% 24 Agriculture 26,606 17,210 11,824 14,640 7,872 7,725 %5 2,364 1,470 25 Commerce and housing credit 6,182 18,808 4,893 3,852 5,951 20,274 841 1,334' 558 26 Transportation 26,222 27,272 12,113 14,096 12,700 14,922 2,109 1,746 2,668 27 Community and regional development 5,051 5,294 3,108 2,075 2,765 2,690 312 241 -25 28 Education, training, employment, and social services 29,724 31,938 14,182 15,592 15,451 16,152 2,967 2,859 3,039 29 Health 39,968 44,490 20,318 20,750 22,643 23,360 3,881 4,028 4,454 30 Social security and medicare 282,472 297,828 142,864 158,469 135,322 149,508' 27,778 25,877 27,067 31 Income security 123,250 129,332 62,248 61,201 65,555 64,978 14,458 11,612 12,106 32 Veterans benefits and services 26,782 29,428 12,264 14,956 13,241 15,797 3,766 1,251 2,809 33 Administration of justice 7,548 9,223 3,626 4,291 4,761 4,778 806 949 1,066 34 General government 5,948 7,658 3,344 3,560 4,337 5,137 743 156 872 35 General-purpose fiscal assistance 1,621 1,816 337 1,175 448 0 0 0 n.a. 36 Net interest6 138,570 151,748 70,110 71,933 76,098 78,317 13,931 14,076 14,605 37 Undistributed offsetting receipts -36,455 -36,967 -19,102 -17,684 -17,766 -18,771 -3,025 -2,887 -3,309 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 1990. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • August 1989 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1987 1988 1989 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 2,250.7 2,313.1 2,354.3 2,435.2 2,493.2 2,555.1 2,614.6 2,707.3 2,763.6 2 Public debt securities 2,246.7 2,309.3 2,350.3 2,431.7 2,487.6 2,547.7 2,602.2 2,684.4 2,740.9 3 Held by public 1,839.3 1,871.1 1,893.1 1,954.1 1,996.7 2,013.4 2,051.7 2,095.2 2,133.4 4 Held by agencies 407.5 438.1 457.2 477.6 490.8 534.2 550.4 589.2 607.5 5 Agency securities 4.0 3.8 4.0 3.5 5.6 7.4 12.4 22.9 22.7 6 Held by public 2.9 2.8 3.0 2.7 5.1 7.0 12.2 22.6 22.3 7 Held by agencies 1.1 1.0 1.0 .8 .6 .5 .2 .3 .4 8 Debt subject to statutory limit 2,232.4 2,295.0 2,336.0 2,417.4 2,472.6 2,532.2 2,586.9 2,669.1 2,725.6 9 Public debt securities 2,231.1 2,293.7 2,334.7 2,416.3 2,472.1 2,532.1 2,586.7 2,668.9 2,725.5 10 Other debt1 1.3 1.3 1.3 1.1 .5 .1 .1 .2 .2 11 MEMO: Statutory debt limit 2,300.0 2,320.0 2,800.0 2,800.0 2,800.0 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 1988 1989 TTyyppee aanndd hhoollddeerr 11998855 11998866 11998877 11998888 Q2 Q3 Q4 Q1 1 Total gross public debt 1,945.9 2,214.8 2,431.7 2,684.4 2,547.7 2,602.2 2,684.4 2,740.9 By type 7 1,943.4 2,212.0 2,428.9 2,663.1 2,545.0 2,599.9 2,663.1 2,738.3 3 1,437.7 1,619.0 1,724.7 1,821.3 1,769.9 1,802.9 1,821.3 1,871.7 4 399.9 426.7 389.5 414.0 382.3 398.5 414.0 417.0 5 812.5 927.5 1,037.9 1,083.6 1,072.7 1,089.6 1,083.6 1,121.4 6 211.1 249.8 282.5 308.9 299.9 299.9 308.9 318.4 7 Nonmarketable 505.7 593.1 704.2 841.8 775.1 797.0 841.8 866.6 8 State and local government series 87.5 110.5 139.3 151.5 146.9 147.6 151.5 154.4 9 Foreign issues 7.5 4.7 4.0 6.6 5.7 6.3 6.6 6.7 10 Government 7.5 4.7 4.0 6.6 5.7 6.3 6.6 6.7 It Public .0 .0 .0 .0 .0 .0 .0 .0 17 Savings bonds and notes.. ^ 78.1 90.6 99.2 107.6 104.5 106.2 107.6 110.4 13 Government account series 332.2 386.9 461.3 575.6 517.5 536.5 575.6 594.7 14 Non-interest-bearing debt 2.5 2.8 2.8 21.3 2.7 2.3 21.3 2.6 By holder4 15 U.S. government agencies and trust funds 348.9 403.1 477.6 589.2 534.2 550.4 589.2 607.5 16 181.3 211.3 222.6 238.4 227.6 229.2 238.4 228.6 17 1,417.2 1,602.0 1,745.2 1,852.8 1,784.9 1,819.0 1,852.8 1,900.2 18 Commercial banks 198.2 203.5 201.2 195.0 202.5 203.0 195.0 n.a. 19 Money market funds 25.1 28.0 14.3 18.8 13.1 10.8 18.8 n.a. ?n Insurance companies 78.5 105.6 120.6 n.a. 132.2 135.0 n.a. n.a. 71 59.0 6688..88 84.6 86.1 86.5 86.0 86.1 n.a. 22 State and local Treasurys 226.7 226622..88 282.6 n.a. 286.3 287.0 n.a. n.a. Individuals 73 Savings bonds 79.8 92.3 101.1 109.6 106.2 107.8 109.6 112.2 74 Other securities 75.0 70.5 72.3 77.8 73.9 76.7 77.8 n.a. 75 Foreign and international 212.5 251.6 287.3 349.3 333.8 334.3 349.3 363.1 26 Other miscellaneous investors 462.4 518.9 581.2 n.a. 552.6 583.1 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 1989 1989 IItteemm 11998866 11998877 11998888 Mar. Apr/ May Apr. 26 May 3 May 10 May 17 May 24 May 31 Immediate delivery2 1 U.S. Treasury securities 95,444 110,050 101,623 101,107 108,007 120,920 98,348r 101,246 113,118 142,041 131,380 113,484 By maturity 2 Bills 34,247 37,924 29,387 30,718 29,322 29,394 26,340' 24,271 27,736 32,788 29,494 31,957 3 Other within 1 year 2,115 3,271 3,426 3,953 3,172 3,596 2,702 4,020 3,343 4,002 3,438 3,172 4 1-5 years 24,667 27,918 27,777 29,531 31,428 38,123 32,681 31,004 34,685 47,414 44,123 32,262 5 5-10 years 20,455 24,014 24,939 24,284 29,713 30,665 24,288 27,478 30,171 33,337 32,876 29,640 6 Over 10 years 13,961 16,923 16,093 12,621 14,373 19,141 12,337 14,473 17,183 24,500 21,449 16,453 By type of customer 7 U.S. government securities dealers 33,,666699 2,936 2,761 3,561 3,379 2,966 2,690 2,712 2,826 2,735 3,245 3,038 8 U.S. government securities brokers 49,558 61,539 59,844 59,914 64,438 72,398 59,023 61,477 67,586 85,826 79,524 66,100 9 All others3 42,217 45,575 39,019 37,632 40,191 45,556 36,634' 37,058 42,705 53,480 48,610 44,346 10 Federal agency securities 16,747 18,084 15,903 15,417 17,225 16,311 15,130' 16,605 15,416 21,067 13,990 15,115 11 Certificates of deposit 4,355 4,112 3,369 3,203 2,946 2,652 2,798 2,158 2,383 2,876 2,998 2,589 12 Bankers acceptances 3,272 2,965 2,316 2,112 2,562 2,113 2,490 2,579 1,875 2,312 2,005 2,177 13 Commercial paper 1166,,666600 17,135 22,927 30,481 30,858 29,109 28,918 32,245 28,774 29,517 27,657 29,387 Futures contracts 14 Treasury bills 3,311 3,233 2,627 3,139 2,788 2,501 2,269 2,121 2,337 2,975 2,529 2,726 15 Treasury coupons 7,175 8,963 9,695 9,087 8,655 10,282 7,111 8,521 8,868 11,999 12,358 9,471 16 Federal agency securities 16 5 1 0 0 0 0 0 0 0 0 0 Forward transactions 17 U.S. Treasury securities 1,876 2,029 2,095 1,819 2,019 2,756 1,954 2,981 2,478 2,846 2,388 2,932 18 Federal agency securities 7,830 9,290 8,008 8,322 7,875 9,976 5,667' 7,386 9,038 14,034 10,462 6,885 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 • August 1989 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Averages of daily figures, in millions of dollars 1989 1989 IItteemm 11998866 11998877 11998888 Mar. Apr/ May May 3 May 10 May 17 May 24 May 31 Positions Net immediate2 1 U.S. Treasury securities 12,912 -6,216 -22,765 -32,313 -22,587 -14,753 -20,700 -17,051 -12,794 -14,112 -10,986 2 Bills 12,761 4,317 2,238 -2,056 1,445 1,171 -67 3,658 746 576 190 3 Other within 1 year 3,705 1,557 -2,236 -4,240 -963 -1,733 -1,612 -2,082 -2,465 -1,439 -768 4 1-5 years 9,146 649 -3,020 -7,631 -5,651 -2,110 -4,508 -4,109 -1,515 -1,921 1,253 5 5-10 years -9,505 -6,564 -9,663 -8,724 -9,138 -6,056 -7,327 -6,617 -4,426 -6,636 -5,839 6 Over 10 years -3,197 -6,174 -10,084 -9,661 -8,279 -6,025 -7,186 -7,901 -5,133 -4,693 -5,823 7 Federal agency securities 32,984 31,911 28,230 30,770 28,604 27,119 28,135 27,623 27,938 26,669 25,287 8 Certificates of deposit 10,485 8,188 7,300 7,121 6,170 5,775 5,712 5,463 5,613 5,888 6,301 9 Bankers acceptances 5,526 3,660 2,486 1,929 2,534 1,948 2,190 1,868 2,131 1,942 1,812 10 Commercial paper 88,,008899 77,,449966 66,,115522 66,,773344 99,,115588 8,600 99,,552266 77,,663344 88,,334411 99,,110077 9,328 Futures positions 11 Treasury bills -18,059 -3,373 -2,210 1,829 -5,134 -5,731 -4,938 -5,482 -5,704 -6,531 -5,711 12 Treasury coupons 3,473 5,988 6,224 2,925 878 -287 1,111 1,206 -706 -1,073 -1,840 13 Federal agency securities -153 -95 0 0 0 0 0 0 0 0 0 Forward positions 14 U.S. Treasury securities -2,144 -1,211 346 -641 -1,317 -1,380 -415 -1,353 -1,780 -1,611 -982 15 Federal agency securities -11,840 -18,817 -16,348 -15,662 -15,334 -16,746 -16,313 -16,265 -17,107 -16,820 -17,277 Financing3 Reverse repurchase agreements 16 Overnight and continuing 98,913 126,709 136,327 160,212 158,544 155,545 154,119 142,143 159,652 158,881 162,357 17 Term 110088,,660077 114488,,228888 117777,,447777 222266,,885555 222266,,337788 229,085 223377,,005533 224444,,662299 222211,,667755 230,710 214,547 Repurchase agreements 18 Overnight and continuing 141,823 170,763 172,695 204,454 206,914 202,363 196,594 183,937 201,920 205,841 221,214 19 Term 102,397 121,270 137,056 163,104 172,623 185,410 190,786 206,472 176,888 187,814 167,241 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 1989 AAggeennccyy 11998844 11998855 11998866 11998877 Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies 271,220 293,905 307,361 341,386 381,498 385,959 390,803 397,318 n.a. 2 Federal agencies 35,145 36,390 36,958 37,981 35,668 35,727 35,768 36,348 36,402 3 Defense Department1 142 71 33 13 8 8 8 8 7 4 Export-Import Bank • 15,882 15,678 14,211 11,978 11,033 11,033 11,033 11,007 11,007 5 Federal Housing Administration 133 115 138 183 150 143 165 172 182 6 Government National Mortgage Association participation certificates5 2,165 2,165 2,165 1,615 0 0 0 0 0 7 Postal Service 1,337 1,940 3,104 6,103 6,142 6,142 6,142 6,742 6,742 8 Tennessee Valley Authority 15,435 16,347 17,222 18,089 18,335 18,401 18,420 18,419 18,464 9 United States Railway Association 51 74 85 0 0 0 0 0 0 10 Federally sponsored agencies7 237,012 257,515 270,553 303,405 345,830 350,232 355,035 360,970 n.a. 11 Federal Home Loan Banks 65,085 74,447 88,752 115,725 135,834 139,804 144,343 149,950 154,146 12 Federal Home Loan Mortgage Corporation 10,270 11,926 13,589 17,645 22,797 22,874 21,320 23,392 22,676 13 Federal National Mortgage Association 83,720 93,896 93,563 97,057 105,459 104,843 105,201 104,666 104,675 14 Farm Credit Banks8 72,192 68,851 62,478 55,275 53,127 52,319 52,441 52,069 51,678 15 Student Loan Marketing Association 5,745 8,395 12,171 16,503 22,073 23,852 25,190 23,753 n.a. 16 Financing Corporation n.a. n.a. n.a. 1,200 5,850 5,850 5,850 6,450 6,950 17 Farm Credit Financial Assistance Corporation n.a. n.a. n.a. n.a. 690 690 690 690 846 MEMO 18 Federal Financing Bank debt12 145,217 153,373 157,510 152,417 142,850 142,447 142,123 141,864 141,102 Lending to federal and federally sponsored agencies 19 Export-Import Bank 15,852 15,670 14,205 11,972 11,027 11,027 1111,,002277 11,001 1111,,000011 20 Postal Service6 1,087 1,690 2,854 5,853 5,892 5,892 5,892 6,492 6,492 21 Student Loan Marketing Association 5,000 5,000 4,970 4,940 4,910 4,910 4,910 4,910 4,910 22 Tennessee Valley Authority 13,710 14,622 15,797 16,709 16,955 17,021 17,040 17,039 17,084 23 United States Railway Association 51 74 85 0 0 0 0 0 0 Other Lending13 24 Farmers Home Administration 58,971 64,234 65,374 59,674 58,496 58,496 58,496 57,841 57,086 25 Rural Electrification Administration 20,693 20,654 21,680 21,191 19,246 19,225 19,245 19,195 19,230 26 Other 29,853 31,429 32,545 32,078 26,324 25,876 25,513 25,386 25,299 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 • August 1989 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1988 Type of issue or issuer, or use 1988 Oct. Nov. Dec. Jan. Apr/ May 1 All issues, new and refunding1 147,011 102,407 108,078 10,455 8,551 11,268 6,640 8,054 8,626 7,464 6,585 Type of issue 2 General obligation 46,346 30,589 29,662 2,058 2,368 2,491 1,784 3,955 2,185 2,301 2,043 3 Revenue 100,664 71,818 78,417 8,397 6,183 8,777 4,856 4,099 6,441 5,163 4,542 Type of issuer 4 State 14,474 10,102 9,254 734 525 1,011 280 1,896 256 1,407 392 5 Special district and statutory authority 89,997 65,460 69,447 7,283 5,550 7,690 4,882 3,832 5,962 4,238 4,439 6 Municipalities, counties, and townships 42,541 26,845 29,377 2,438 2,476 2,567 1,478 2,326 2,408 1,819 1,754 7 Issues for new capital, total 83,492 56,789 75,064 6,965 5,830 8,738 4,141 5,222 6,486 6,061 5,458 Use of proceeds 8 Education 12,307 9,524 13,722 512 827 2,564 827 826 1,055 1,225 1,157 9 Transportation 7,246 3,677 6,974 559 237 636 344 382 445 743 661 10 Utilities and conservation 14,594 7,912 7,929 1,238 1,055 463 1,335 847 901 759 399 11 Social welfare 11,353 11,106 17,824 2,478 1,991 2,072 509 743 1,329 1,048 1,200 12 Industrial aid 6,190 7,474 6,276 393 294 1,010 293 250 253 374 356 13 Other purposes 31,802 18,020 22,339 1,785 1,426 1,993 834 2,174 2,503 1,912 1,685 1. Par amounts of long-term issues based on date of sale. SOURCES. Securities Data/Bond Buyer Municipal Data Base beginning 1986. 2. Includes school districts beginning 1986. Public Securities Association for earlier data. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 1988 1989 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11998866 11998877 11998888'' Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 All issues' 423,726 392,156 408,790 23,933 21,818 24,531 12,389 17,369 14,269r 26,230' 14,488 2 Bonds2 355,293 325,648 350,988 20,928 19,031 21,096 10,338 14,208 11,734' 25,308' 13,500 Type of offering 3 Public, domestic 231,936 209,279 200,110 18,240 17,519 16,798 10,203 11,348 9,540' 22,726' 11,000 4 Private placement, domestic3 80,760 92,070 127,700 n.a. n.a. n.a. n.a. n.a. n.a. 5. Sold abroad 42,596 24,299 23,178 2,688 1,512 4,298 135 2,860 2,194' 2,582' 2,500 Industry group 6 Manufacturing 91,548 61,666 69,669 3,750 3,552 2,890 1,485 1,660 1,319 7,455' 1,400 7 Commercial and miscellaneous 40,124 49,327 61,836 1,035 764 3,260 748 2,047 l,097r 883' 783 8 Transportation 9,971 11,974 9,975 150 605 45 0 0 102 0 100 9 Public utility 31,426 23,004 19,318 856 1,346 672 264 635 640 153 1,650 10 Communication 16,659 7,340 5,901 1,064 100 289 158 0 230 63 450 11 Real estate and financial 165,564 172,343 184,286 14,072 12,664 13,940 7,683 9,867 8,346r 16,753' 9,117 12 Stocks3 68,433 66,508 57,802 3,005 2,787 3,435 2,051 3,161 2,535r 921 988 Type 13 Preferred 11,514 10,123 6,544 385 865 478 495 275 975 310 495 14 Common 50,316 43,225 35,911 2,620 1,922 2,957 1,556 2,886 1,560' 611 493 15 Private placement3 6,603 13,157 15,346 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 16 Manufacturing 15,027 13,880 7,608 244 288 430 425 33 832 127 135 17 Commercial and miscellaneous 10,617 12,888 8,449 525 222 52 89 32 270 336 280 18 Transportation 2,427 2,439 1,535 5 25 20 0 220 0 53 169 19 Public utility 4,020 4,322 1,898 215 282 70 20 1,960 11 108' 0 20 Communication 1,825 1,458 515 23 0 20 59 5 19 0 93 21 Real estate and financial 34,517 31,521 37,798 1,993 1,970 2,843 1,459 911 1,402 297 310 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., the Board of Governors of the bonds. Stock data include ownership securities issued by limited partnerships. Federal Reserve System, and before 1989, the U.S. Securities and Exchange Commission. 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 1989 IItteemm 11998877 11998888 Sept. Oct. Nov. Dec. Jan. Feb. Mar/ Apr. INVESTMENT COMPANIES1 1 Sales of own shares2 381,260 271,237 19,872 20,494 20,327 25,780 29,014 22,741 23,149 25,496 2 Redemptions of own shares3 314,252 267,451 21,330 19,362 20,599 25,976 24,494 22,252 24,135 26,183 3 Net sales 67,008 3,786 -1,458 1,132 -272 -196 4,520 489 -986 -687 4 Assets4 453,842 472,297 474,662 481,571 470,660 472,297 487,204 482,697 483,067 497,329 5 Cash position5 38,006 45,090 46,706 45,976 43,488 45,090 49,661 47,908 46,262 48,788 6 Other 415,836 427,207 427,956 435,595 427,172 427,207 437,543 434,789 436,805 448,541 1. Data on sales and redemptions exclude money market mutual funds but 4. Market value at end of period, less current liabilities. include limited maturity municipal bond funds. Data on asset positions exclude 5. Also includes all U.S. government securities and other short-term debt both money market mutual funds and limited maturity municipal bond funds. securities. 2. Includes reinvestment of investment income dividends. Excludes reinvest- NOTE. Investment Company Institute data based on reports of members, which ment of capital gains distributions and share issue of conversions from one fund comprise substantially all open-end investment companies registered with the to another in the same group. Securities and Exchange Commission. Data reflect newly formed companies after 3. Excludes share redemption resulting from conversions from one fund to their initial offering of securities. another in the same group. SOURCE. Survey of Current Business (Department of Commerce). 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1987 1988 1989 AAccccoouunntt 11998866 11998877 11998888 Q2 Q3 Q4 Ql Q2 Q3 Q4 Qr 1 Corporate profits with inventory valuation and capital consumption adjustment 298.9 310.4 328.1 305.2 322.0 316.1 316.2 326.5 330.0 340.9 319.4 2 Profits before tax 236.4 276.7 306.4 273.7 289.4 281.9 286.2 305.9 313.9 320.6 320.2 3 Profits tax liability 106.6 133.8 142.6 132.6 140.0 136.2 136.9 143.2 144.8 146.1 147.6 4 5 Pro D f i i v ts i d a e f n te d r s tax 1 8 2 8 9 . . 2 8 1 9 4 5 2 . . 5 9 1 10 6 4 3 . . 5 8 1 9 4 4 1 . . 0 1 1 9 4 7 9 . . 0 5 1 9 4 9 5 . . 3 7 1 1 4 0 9 1 . . 4 3 1 10 6 3 2 . . 1 7 1 1 6 0 9 5 . . 1 7 1 10 7 8 4 . . 0 5 117121..61 6 Undistributed profits 41.6 47.4 59.2 47.0 52.4 46.4 48.1 59.6 63.4 66.4 61.5 7 Inventory valuation 8.3 -18.0 -23.8 -20.0 -19.5 -18.2 -19.4 -27.4 -29.3 -19.2 -34.1 8 Capital consumption adjustment 54.2 51.7 45.6 51.5 52.1 52.4 49.4 48.0 45.4 39.6 33.3 •Trade and services are no longer being reported separately. They are included in Commercial and other, line 10. 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment • Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1987 1988 1989 IInndduussttrryy 11998877 11998888 1199889911 Q4 Ql Q2 Q3 Q4 Ql Q21 Q31 1 Total nonfarm business 389.67 429.67 468.78 417.25 422.75 429.01 440.42 445.73 465.51 467.50 478.79 Manufacturing 2 Durable goods industries 71.01 78.12 82.65 76.40 80.13 79.00 80.59 78.97 83.12 80.21 84.08 3 Nondurable goods industries 74.88 87.58 96.01 86.05 81.00 83.82 85.78 90.00 96.77 96.89 98.61 Nonmanufacturing 4 Mining 11.39 12.67 11.79 11.74 12.26 12.87 12.74 11.97 11.89 13.08 12.21 Transportation 5 Railroad 5.92 7.06 25.17 7.08 7.29 6.78 7.07 8.07 8.17 7.10 7.13 6 Air 6.53 7.25 8.04 7.03 7.72 7.44 9.31 6.84 10.15 8.60 10.94 7 Other 6.40 7.04 9.95 6.48 7.48 6.58 7.06 7.20 7.11 7.42 7.78 Public utilities 8 Electric 31.63 31.90 33.09 33.32 31.59 32.55 33.79 33.54 32.70 35.71 34.39 9 Gas and other 13.25 14.60 16.47 12.84 14.56 13.81 14.26 15.25 16.92 15.71 15.79 10 Commercial and other 168.65 183.44 203.60 176.29 180.72 186.15 189.82 193.87 198.70 202.79 207.86 1. Anticipated by business. insurance; personal and business services; and communication. 2. "Other" consists of construction; wholesale and retail trade; finance and SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • August 1989 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period 1986 1987 AAccccoouunntt 11998833 11998844 11998855 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ASSETS Accounts receivable, gross 1 Consumer 83.3 89.9 111.9 123.4 135.3 134.7 131.1 134.7 141.6 141.1 2 Business 113.4 137.8 157.5 166.8 159.7 173.4 181.4 188.1 188.3 207.6 3 Real estate 20.5 23.8 28.0 29.8 31.0 32.6 34.7 36.5 38.0 39.5 4 Total 217.3 251.5 297.4 320.0 326.0 340.6 347.2 359.3 367.9 388.2 Less: 5 Reserves for unearned income 30.3 33.8 39.2 40.7 42.4 41.5 40.4 41.2 42.5 45.3 6 Reserves for losses 3.7 4.2 4.9 5.1 5.4 5.8 5.9 6.2 6.5 6.8 7 Accounts receivable, net 183.2 213.5 253.3 274.2 278.2 293.3 300.9 311.9 318.9 336.1 8 All other 34.4 35.7 45.3 49.5 60.0 58.6 59.0 57.7 64.5 58.2 9 Total assets 217.6 249.2 298.6 323.7 338.2 351.9 359.9 369.6 383.4 394.3 LIABILITIES 10 Bank loans 18.3 20.0 18.0 16.3 16.8 18.6 17.2 17.3 15.9 16.4 It Commercial paper 60.5 73.1 99.2 108.4 112.8 117.8 119.1 120.4 124.2 128.4 Debt 12 Other short-term 11.1 12.9 12.7 15.8 16.4 17.5 21.8 24.8 26.9 28.0 13 Long-term 67.7 77.2 94.4 106.9 111.7 117.5 118.7 121.8 128.2 137.1 14 All other liabilities 31.2 34.5 41.5 40.9 45.0 44.1 46.5 49.1 48.6 52.8 15 Capital, surplus, and undivided profits 28.9 31.5 32.8 35.4 35.6 36.4 36.6 36.3 39.5 31.5 16 Total liabilities and capital 217.6 249.2 298.6 323.7 338.2 351.9 359.9 369.6 383.4 394.3 1. NOTE. Components may not add to totals because of rounding. Data after 1987:4 are currently unavailable. It is anticipated that these data will be available later this year. 1.52 DOMESTIC FINANCE COMPANIES Business Credit Outstanding and Net Change1 Millions of dollars, seasonally adjusted 1988 1989 TTyyppee Nov. Dec. Jan. Feb. Mar. Apr. 1 Total 156,297 172,060 205,810 233,699 234,529 235,969 237,378 240,186 244,882 Retail financing of installment sales ? Automotive 20,660 26,015 35,782 36,444 36,548 37,041 37,301 37,696 38,415 3 Equipment 22,483 23,112 25,170 28,214 28,298 28,429 28,385 28,207 28,790 4 Pools of securitized assets2 n.a. n.a. n.a. n.a. n.a. 724 682 855 817 Wholesale 5 Automotive 23,988 23,010 30,507 32,201 33,300 33,664 34,386 33,528 34,383 6 Equipment 4,568 5,348 5,600 5,980 5,983 6,183 6,193 6,088 6,153 7 All other 6,809 7,033 8,342 9,037 9,341 9,493 9,569 9,682 9,852 8 Pools of securitized assets n.a. n.a. n.a. n.a. n.a. 0 0 0 0 Leasing 9 Automotive 16,275 19,827 21,952 24,621 24,673 24,558 24,847 25,584 25,544 10 Equipment 34,768 38,179 43,335 56,973 57,455 58,354 58,045 59,484 60,246 11 Pools of securitized assets n.a. n.a. n.a. n.a. n.a. 721 699 756 733 12 Loans on commercial accounts receivable and factored commercial accounts receivable 15,765 15,978 18,078 19,407 17,796 16,688 17,404 17,794 18,677 13 All other business credit 10,981 13,557 17,043 20,822 21,134 20,114 19,867 20,512 21,272 Net change 14 19,607 15,763 33,750 2,396 829 -4 1,409 2,808 4,696 Retail financing of installment sales 15 Automotive 5,067 5,355 9,767 -235 105 493 260 394 720 16 Equipment -363 629 2,058 371 84 131 -43 -178 583 17 Pools of securitized assets n.a. n.a. n.a. n.a. n.a. n.a. -42 173 -38 Wholesale 18 Automotive 5,423 -978 7,497 -15 1,099 364 722 -858 856 19 Equipment -867 780 252 104 3 200 10 -105 65 20 All other 1,069 224 1,309 146 303 152 76 114 170 21 Pools of securitized assets n.a. n.a. n.a. n.a. n.a. n.a. 0 0 0 Leasing V, Automotive 3,896 3,552 2,125 346 52 -115 289 736 -40 23 Equipment 2,685 3,411 5,156 699 482 -506 -310 1,439 762 24 Pools of securitized assets n.a. n.a. n.a. n.a. n.a. n.a. -22 57 -23 25 Loans on commercial accounts receivable and factored commercial accounts receivable 2,161 213 2,100 480 -1,611 -1,108 716 390 883 26 All other business credit 536 2,576 3,486 501 312 385 -247 645 760 1. These data also appear in the Board's G.20 (422) release. For address, see 2. Data on pools of securitized assets are not seasonally adjusted, Digitized for FRiAnsSidEe Rfro nt cover. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A37 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1988 1989 IItteemm 11998866 11998877 11998888 Nov. Dec. Jan. Feb. Mar. Apr. May Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms 1 Purchase price (thousands of dollars) 118.1 137.0 150.0 155.3 150.0 165.2 153.7 159.7 169.2' 151.0 2 Amount of loan (thousands of dollars) 86.2 100.5 110.5 115.6 110.8 121.3 111.8 117.7 124.5' 111.5 3 Loan/price ratio (percent) 75.2 75.2 75.5 76.1 75.6 75.2 73.5 74.4 75.C 75.2 4 Maturity (years) 26.6 27.8 28.0 28.4 28.3 28.8 28.3 27.7 28.4' 28.2 5 Fees and charges (percent of loan amount) 2.48 2.26 2.19 2.28 2.08 1.90 2.14 2.11 1.7C 2.11 6 Contract rate (percent per year) 9.82 8.94 8.81 9.05 9.04 9.20 9.46 9.63 9.88' 9.82 Yield (percent per year) 7 FHLBB series3 10.26 9.31 9.18 9.43 9.39 9.52 9.82 9.99 10.17' 10.18 8 HUD series4 10.07 10.17 10.30 10.37 10.67 10.55 10.75 10.93 10.84 10.43 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series) 9.91 10.16 10.49 10.63 10.81 10.69 10.88 11.16 10.88 10.55 10 GNMA securities6 9.30 9.43 9.83 9.85 10.07 10.02 10.07 10.38 10.36 10.11 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 98,048 95,030 101,329 102,6% 103,013 102,370 101,922 101,991 102,191 102,564 12 FHA/V A-insured 29,683 21,660 19,762 19,467 19,415 19,354 19,275 19,337 19,607 19,612 13 Conventional 68,365 73,370 81,567 83,228 83,598 83,016 82,647 82,654 82,584 82,952 Mortgage transactions (during period) 14 Purchases 30,826 20,531 23,110 1,5% 1,726 1,037 905 1,469 1,163 1,419 Mortgage commitments1 15 Contracted (during period) 32,987 25,415 23,435 1,289 1,350 1,087 3,557 1,771 1,118 1,742 16 Outstanding (end of period) 3,386 4,886 2,148 2,740 2,148 2,081 4,520 4,807 4,661 4,789 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)* 17 Total 13,517 12,802 15,105 15,419 17,425 18,378 18,473 18,714 n.a. n.a. 18 FHA/VA 746 686 620 595 590 594 594 593 n.a. n.a. 19 Conventional 12,771 12,116 14,485 14,824 16,834 17,785 17,880 16,135 n.a. n.a. Mortgage transactions (during period) 20 Purchases 103,474 76,845 44,077 4,109 5,843 3,586 5,088 6,373 n.a. n.a. 21 Sales 100,236 75,082 39,780 4,231 5,510 3,408 4,385 6,037 5,491 4,440 Mortgage commitments9 22 Contracted (during period) 110,855 71,467 66,026 5,419 10,101 5,206 8,411 11,227 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 • August 1989 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1988 Type of holder, and type of property 1986 1987 1988 Q4 Q1 Q2 Q3 1 All holders. 2,597,175 2,943,222 3,200,411 2,943,222 2,984,027 3,058,006 3,132,353 2 1- to 4-family 1,698,524 1,925,189 2,115,184 1,925,189 1,951,400 2,012,270 2,067,929 3 Multifamily.. 247,831 273,899 287,611 273,899 278,144 278,919 281,468 4 Commercial . 555,039 655,266 711,093 655,266 666,461 679,037 695,774 5 Farm 95,781 88,868 86,523 88,868 88,022 87,780 87,182 6 Selected financial institutions . 1,507,289 1,700,820 1,852,593 1,700,820 1,723,937 1,764,221 1,813,470 7 Commercial banks2 502,534 591,151 665,458 591,151 604,468 628,383 649,135 8 1- to 4-family 235,814 275,761 313,897 275,761 280,757 295,425 306,118 9 Multifamily 31.173 33,296 34,715 33,296 33,728 34,184 33,855 10 Commercial 222.799 267,663 301,236 267,663 275,360 283,598 293,772 11 Farm 12,748 14,431 15,610 14,431 14,623 15,176 15,390 Savings institutions 777,312 856,945 908,355 856,945 863,245 872,450 895,230 1- to 4-family 558,412 598,886 648,275 598,886 603,516 615,795 636,794 Multifamily 97,059 106,359 108,319 106,359 107,722 106.367 106,377 Commercial 121,236 150,943 151,016 150,943 151,251 149,536 151,307 Farm 605 Life insurance companies 193,842 ''212,iii ' 233,814 ' 2i2,375 ' 2i4,815 ' 220,870 ''225,627 1- to 4-family 12,827 13,226 15,361 13,226 13,653 14,172 14,917 Multifamily 20,952 22,524 23,681 22,524 22,723 23,021 23,139 Commercial 149,111 166,722 185,592 166,722 168,774 174,086 178,166 Fin F a a n rm ce companies4 3 1 3 0 , , 6 9 0 5 1 2 40 9 , , 3 9 4 0 9 3 44 9 , , 9 1 6 8 6 0 4 9 0 , ,3 9 4 0 9 3 4 9 1 , , 6 4 6 0 5 9 4 9 2, , 5 5 1 9 8 1 4 9 3, , 4 4 7 0 8 5 23 Federal and related agencies 203.800 192,721 198,549 192,721 196,909 199,474 198,027 24 Government National Mortgage Association. 889 444 67 444 434 42 64 25 1- to 4-family 47 25 53 25 25 24 51 26 Multifamily 842 419 14 419 409 18 13 27 Farmers Home Administration 48,421 43,051 42,018 43,051 43,076 42,767 41,836 28 1- to 4-family 21,625 18,169 18,347 18,169 18,185 18,248 18,268 29 Multifamily 7,608 8,044 8,513 8,044 8,115 8,213 8,349 30 Commercial 8,446 6,603 5,343 6,603 6,640 6,288 5,300 31 Farm 10,742 10,235 9,815 10,235 10,136 10,018 9,919 Federal Housing and Veterans Administration. 5,047 5,574 5,975 5,574 5,660 5,673 5,666 1- to 4-family 2,386 2,557 2,649 2,557 2,608 2,564 2,432 Multifamily 2,661 3,017 3,326 3,017 3,052 3,109 3,234 Federal National Mortgage Association 97,895 96,649 103,013 96,649 99,787 102.368 102,453 1- to 4-family 90,718 89,666 95,833 89,666 92,828 95,404 95,417 Multifamily 7,177 6,983 7,180 6,983 6,959 6,964 7,036 Federal Land Banks 39,984 34,131 32,115 34,131 33,566 33,048 32,566 1- to 4-family 2,353 2,008 1,890 2,008 1,975 1,945 1,917 Farm 37,631 32,123 30,225 32,123 31,591 31,103 30,649 Federal Home Loan Mortgage Corporation ... 11,564 12,872 15,361 12,872 14,386 15,576 15,442 1- to 4-family 10,010 11,430 13,058 11,430 12,749 13,631 13,322 Multifamily 1,554 1,442 2,303 1,442 1,637 1,945 2,120 44 Mortgage pools or trusts 565,428 718,297 809,448 718,297 732,071 754,045 782,802 45 Government National Mortgage Association. 262,697 317,555 340,527 317,555 318,703 322,616 333,177 1- to 4-family 256,920 309,806 331,257 309,806 310,473 314,728 324,573 Multifamily 5,777 7,749 9,270 7,749 8,230 7,888 8,604 Federal Home Loan Mortgage Corporation . 171,372 212,634 224,967 212,634 214,724 216,155 220,684 1- to 4-family 166,667 205,977 218,513 205,977 208,138 209,702 214,195 Multifamily 4,705 6,657 6,454 6,657 6,586 6,453 6,489 Federal National Mortgage Association 97.174 139,960 178,250 139,960 145,242 157,438 167,170 1- to 4-family 95,791 137,988 172,331 137,988 142,330 153,253 162,228 Multifamily 1,383 1,972 5,919 1,972 2,912 4,185 4,942 Farmers Home Administration 348 245 104 245 172 106 106 1- to 4-family 142 121 26 121 65 23 27 Multifamily Commercial 132 63 38 63 58 41 38 Farm 74 61 40 61 49 42 41 59 Individuals and others 320,658 331,384 339,821 331,384 331,110 340,266 338,054 60 1- to 4-family 177,374 171,317 173,128 171,317 169,459 177,108 172,527 61 Multifamily 66,940 75,437 77,917 75,437 76,071 76,572 77,310 62 Commercial 53,315 63,272 67,868 63,272 64,378 65,488 67,191 63 Farm 23,029 21,358 20,908 21,358 21,202 21,098 21,026 1. Based on data from various institutional and governmental sources, with 5. FmHA-guaranteed securities sold to the Federal Financing Bank were some quarters estimated in part by the Federal Reserve. Multifamily debt refers reallocated from FmHA mortgage pools to FmHA mortgage holdings in 1986:4, to loans on structures of five or more units. because of accounting changes by the Farmers Home Administration. 2. Includes loans held by nondeposit trust companies but not bank trust 6. Outstanding principal balances of mortgage pools backing securities insured departments. or guaranteed by the agency indicated. Includes private pools which are not 3. Includes savings banks and savings and loan associations. Beginning 1987:1, shown as a separate line item. 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. 4. Assumed to be entirely 1- to 4-family loans. 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 1989 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998877 11998888 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr. Amounts outstanding (end of period) 1 Total 607,721 659,507 644,666 646,556 649,132 654,413 659,507 682,022 687,397 691,084 693,815 By major holder 2 Commercial banks 282,910 318,925 307,355 310,132 312,588 316,683 318,925 316,797 318,423 318,558 320,745 3 Finance companies 140,281 145,180 143,992 143,019 143,012 143,488 145,180 141,7% 143,419 143,070 144,378 4 Credit urnons 80,087 86,118 84,647 84,900 85,338 85,740 86,118 87,093 87,813 88,412 89,135 5 Retailers3 40,975 43,498 42,121 42,349 42,614 42,910 43,498 40,986 41,052 41,300 41,301 6 Savings institutions 59,851 62,099 62,843 62,502 61,926 61,922 62,099 62,867 63,109 62,575 61,727 7 Gasoline companies 3,618 3,687 3,709 3,655 3,654 3,671 3,687 3,655 3,677 3,682 3,787 By major type of credit 8 Automobile 265,976 281,174 279,585 279,243 278,902 279,926 281,174 286,382 288,768 288,755 289,507 9 Commercial banks 109,201 123,259 119,383 120,525 120,939 122,392 123,259 122,160 122,983 123,065 123,882 10 Credit unions 40,351 41,326 41,296 41,250 41,293 41,316 41,326 41,707 41,964 42,162 42,418 11 Finance companies 98,195 97,204 98,705 97,257 96,877 96,657 97,204 87,968 88,789 89,567 90,268 12 Savings institutions 18,228 19,385 20,201 20,211 19,793 19,561 19,385 19,506 19,464 19,182 18,807 13 Revolving 153,884 174,792 167,125 168,273 170,131 173,030 174,792 176,716 178,570 182,615 184,382 14 Commercial banks 99,119 117,572 111,516 112,691 114,180 116,593 117,572 111,133 111,706 112,499 114,056 15 Retailers 36,389 38,692 37,471 37,682 37,919 38,170 38,692 36,176 36,257 36,489 36,497 16 Gasoline companies 3,618 3,687 3,709 3,655 3,654 3,671 3,687 3,655 3,677 3,682 3,787 17 Savings institutions 10,367 10,151 9,809 9,614 9,724 9,923 10,151 10,479 10,722 10,832 10,884 18 Credit unions 4,391 4,691 4,621 4,632 4,653 4,673 4,691 4,785 4,866 4,941 5,024 19 Mobile home 26,387 25,744 26,277 26,185 26,033 26,005 25,744 26,036 25,992 24,143 23,964 20 Commercial banks 9,220 8,974 9,140 9,119 9,225 9,224 8,974 8,974 8,974 8,844 8,836 21 Finance companies 7,762 7,186 7,369 7,334 7,194 7,197 7,186 7,376 7,308 5,687 5,659 22 Savings institutions 9,406 9,583 9,768 9,732 9,614 9,584 9,583 9,687 9,710 9,613 9,468 23 Other 161,475 177,798 171,679 172,855 174,066 175,452 177,798 192,887 194,068 195,571 195,963 24 Commercial banks 65,370 69,120 67,316 67,798 68,244 68,474 69,120 74,532 74,760 74,151 73,971 25 Finance companies 34,324 40,790 37,918 38,428 38,941 39,633 40,790 46,453 47,322 47,816 48,451 26 Credit unions 35,344 40,102 38,730 39,018 39,392 39,752 40,102 40,601 40,983 41,309 41,694 27 Retailers 4,586 4,807 4,650 4,667 4,694 4,739 4,807 4,809 4,795 4,811 4,804 28 Savings institutions 21,850 22,981 23,065 22,945 22,794 22,854 22,981 23,196 23,214 22,947 22,568 Net change (during period) 29 Total 35,674 51,786 5,459 1,890 2,576 5,281 5,094 22,514 5,375 3,687 2,731 By major holder 30 Commercial banks 19,884 36,015 5,072 2,777 2,457 4,094 2,242 -2,127 1,626 135 2,187 31 Finance companies 6,349 4,899 -782 -973 -7 476 1,692 -3,383 1,622 -349 1,308 32 Credit unions 3,852 6,032 761 254 438 402 378 975 720 599 723 33 Retailers 1,568 2,523 98 228 265 296 589 -2,513 67 247 2 34 Savings institutions 3,689 2,249 306 -341 -576 -4 178 768 242 -535 -848 35 Gasoline companies 331 69 4 -54 -1 17 15 -32 22 6 104 By major type of credit 36 Automobile 18,663 15,198 1,926 -342 -341 1,024 1,248 5,208 2,386 -13 752 37 Commercial banks 7,919 14,058 2,531 1,142 414 1,453 868 -1,100 823 82 817 38 Credit unions 1,917 975 204 -46 42 23 10 381 257 198 256 39 Finance companies 5,639 -991 -1,026 -1,448 -380 -220 547 -9,236 821 778 701 40 Savings institutions 3,188 1,157 218 10 -418 -233 -176 121 -42 -282 -375 41 Revolving 16,871 20,908 1,782 1,148 1,858 2,899 1,762 1,924 1,854 4,046 1,766 42 Commercial banks 12,188 18,452 1,748 1,175 1,489 2,413 979 -6,439 573 793 1,557 43 Retailers 1,866 2,303 85 211 237 251 521 -2,515 81 232 8 44 Gasoline companies 331 69 4 -54 -1 17 15 -32 22 6 104 45 Savings institutions 1,771 -216 -94 -195 111 198 228 328 243 110 52 46 Credit unions 715 300 39 11 21 19 18 94 81 75 83 47 Mobile home -968 -643 65 -93 -152 -27 -262 293 -44 -1,849 -179 48 Commercial banks 191 -245 43 -21 106 -1 -250 -1 1 -131 -7 49 Finance companies -1,052 -576 -43 -35 -140 3 -11 189^ -68 -1,621 -28 50 Savings institutions -108 177 64 -36 -118 -29 -1 104 23 -97 -145 51 Other 1,108 16,324 1,686 1,177 1,211 1,386 2,346 15,089 1,180 1,503 392 52 Commercial banks -415 3,749 750 482 447 230 646 5,412 229 -609 -180 53 Finance companies 1,761 6,466 287 511 512 693 1,156 5,663 869 494 635 54 Credit unions 1,221 4,758 518 288 374 359 350 500 382 326 385 55 Retailers -297 221 13 16 28 45 68 3 -14 16 -7 56 Savings institutions -1,162 1,131 117 -120 -150 59 127 215 18 -266 -380 I. The Board's series cover most short- and intermediate-term credit extended These data also appear in the Board's G.19 (421) release. For address, see to individuals that is scheduled to be repaid (or has the option of repayment) in inside front cover. two or more installments. 2. More detail for finance companies is available in the G. 20 statistical release. 3. Excludes 30-day charge credit held by travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • August 1989 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent unless noted otherwise 1988 1989 IItteemm 11998866 11998877 11998888 Oct. Nov. Dec. Jan. Feb. Mar. Apr. INTEREST RATES Commercial banks2 1 48-month new car3 11.33 10.45 10.85 n.a. 11.22 n.a. 11.76 2 24-month personal 14.82 14.22 14.68 n.a. 15.06 15.22 3 120-month mobile home3 13.99 13.38 13.54 n.a. 13.61 n.a. n.a. 14.00 4 Credit card 18.26 17.92 17.78 n.a. 17.77 n.a. nn..aa.. 1177..8833 nn..aa.. nn..aa.. Auto finance companies 5 New car 9.44 10.73 12.60 13.10 13.20 13.25 13.27 13.07 13.07 12.10 6 Used car 15.95 14.60 15.11 15.67 15.75 15.80 15.57 15.90 16.12 16.39 OTHER TERMS4 Maturity (months) 7 New car 50.0 53.5 56.2 56.3 56.2 56.3 56.2 55.7 55.4 53.4 8 Used car 42.6 45.2 46.7 46.3 46.2 46.0 47.8 4477..44 4477..11 4477..88 Loan-to-value ratio 9 New car 91 93 94 94 94 94 94 92 92 91 10 Used car 97 98 98 99 98 9988 9977 9988 9977 9977 Amount financed (dollars) 11 New car 10,665 11,203 11,663 11,845 11,975 12,068 11,956 11,819 11,867 11,886 12 Used car 6,555 7,420 7,824 7,944 7,991 8,022 8,006 8,022 7,958 7,855 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' 1989 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998844 11998855 11998866 11998877 11998888 Q3 Q4 Qi Q2 Q3 Q4 Ql' Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors 750.8 846.3 837.5 689.0 741.4 659.8 780.3 723.9 710.4 767.8 763.7 742.6 By sector and instrument 2 U.S. government 198.8 223.6 215.0 144.9 157.5 103.1 168.2 227.7 89.2 188.6 124.4 214.4 3 Treasury securities 199.0 223.7 214.7 143.4 140.0 104.0 163.2 228.2 81.5 167.7 82.8 215.6 4 Agency issues and mortgages -.2 -.1 .4 1.5 17.4 -.9 5.0 -.5 7.7 20.9 41.6 -1.2 5 Private domestic nonfinancial sectors 552.0 622.7 622.5 544.0 584.0 556.6 612.2 496.2 621.2 579.3 639.3 528.2 6 Debt capital instruments 319.3 452.3 468.4 459.0 426.1 441.2 430.3 358.9 474.8 446.7 423.9 372.2 7 Tax-exempt obligations 50.4 136.4 30.8 34.5 33.1 32.7 33.5 22.8 30.6 41.4 37.5 19.7 8 Corporate bonds 46.1 73.8 121.3 99.9 97.2 100.7 81.6 101.4 117.9 90.3 79.1 82.1 9 Mortgages 222.8 242.2 316.3 324.5 295.8 307.8 315.3 234.6 326.3 315.0 307.3 270.3 10 Home mortgages 136.7 156.8 218.7 234.9 220.0 225.0 222.8 169.6 270.7 231.9 207.8 187.4 11 Multifamily residential 25.2 29.8 33.5 24.4 16.3 23.3 16.1 23.9 4.2 16.0 20.9 26.6 12 Commercial 62.2 62.2 73.6 71.6 61.6 64.3 78.3 47.3 52.7 69.4 77.1 61.5 13 Farm -1.2 -6.6 -9.5 -6.4 -2.1 -4.7 -1.9 -6.1 -1.4 -2.4 1.5 -5.2 14 Other debt instruments 232.7 170.3 154.1 85.1 157.9 115.4 181.8 137.3 146.4 132.5 215.4 156.1 15 Consumer credit 81.6 82.5 58.0 32.9 51.1 54.0 56.5 38.6 57.5 31.8 76.3 34.9 16 Bank loans n.e.c 67.1 38.6 65.0 10.8 47.5 21.7 75.2 34.7 72.4 10.7 72.1 38.3 17 Open market paper 21.7 14.6 -9.3 2.3 11.6 1.0 3.9 -3.8 4.0 11.1 35.1 34.4 18 Other 62.2 34.6 40.5 39.1 47.7 38.7 46.2 67.8 12.5 78.9 31.9 48.4 19 By borrowing sector 552.0 622.7 622.5 544.0 584.0 556.6 612.2 496.2 621.2 579.3 639.3 528.2 20 State and local governments 27.4 91.8 44.3 34.0 32.0 34.8 32.9 17.5 27.6 43.5 39.4 26.0 21 Households 231.5 283.6 289.2 267.8 276.5 287.3 277.8 212.6 330.6 282.9 279.8 251.7 22 Nonfinancial business 293.1 247.3 288.9 242.2 275.5 234.5 301.5 266.0 262.9 252.9 320.1 250.5 23 Farm -.4 -14.5 -16.3 -10.6 -4.0 -9.4 3.3 -15.7 -3.4 -2.6 5.5 -2.7 24 Nonfarm noncorporate 123.2 129.3 103.2 107.9 85.3 97.4 116.0 86.3 72.3 96.0 86.7 78.5 25 Corporate 170.3 132.4 202.0 144.9 194.2 146.6 182.1 195.5 194.0 159.5 227.8 174.6 26 Foreign net borrowing in United States 8.4 1.2 9.6 4.3 5.9 12.3 13.9 -1.0 5.2 4.4 15.0 -7.9 27 Bonds 3.8 3.8 3.0 6.8 6.7 6.7 21.6 16.8 -2.7 6.5 6.3 9.5 28 Bank loans n.e.c -6.6 -2.8 -1.0 -3.6 -1.8 -3.7 -6.1 .7 -3.5 2.9 -7.4 1.5 29 Open market paper 6.2 6.2 11.5 2.1 9.6 21.6 -2.5 1.5 6.4 10.7 20.0 11.6 30 U.S. government loans 5.0 -5.9 -3.9 -1.0 -8.6 -12.3 .8 -19.9 5.1 -15.8 -3.9 -30.4 31 Total domestic plus foreign 759.2 847.5 847.1 693.3 747.3 672.0 794.2 722.9 715.6 772.2 778.6 734.7 Financial sectors 32 Total net borrowing by financial sectors 148.7 198.3 307.0 303.3 254.9 306.4 250.2 193.3 263.3 227.2 335.7 358.1 By instrument 33 U.S. government related 74.9 101.5 187.9 185.8 137.5 185.5 167.5 120.3 101.8 150.6 177.2 205.7 34 Sponsored credit agency securities 30.4 20.6 15.2 30.2 44.9 32.0 71.6 56.8 9.4 42.8 70.5 81.7 35 Mortgage pool securities 44.4 79.9 173.1 156.4 92.6 153.5 95.9 63.4 92.4 107.8 106.7 124.0 36 1.1 -.4 -.7 37 Private financial sectors 73.8 96.7 119.1 117.5 117.4 120.8 82.7 73.1 161.5 76.6 158.5 152.4 38 Corporate bonds 33.0 47.9 70.9 67.2 50.7 77.7 42.4 70.1 60.5 32.5 39.7 31.0 39 Mortgages .4 .1 .1 .4 -.1 .2 .8 -.1 * * -.2 .1 40 Bank loans n.e.c .7 2.6 4.0 -3.3 -6.6 6.3 -10.7 -26.8 8.7 -8.6 .6 -4.6 41 Open market paper 24.1 32.0 24.2 28.8 53.6 14.3 5.4 24.6 82.2 26.1 81.7 61.6 42 Loans from Federal Home Loan Banks 15.7 14.2 19.8 24.4 19.7 22.2 44.9 5.4 10.1 26.6 36.8 64.4 By sector 43 148.7 198.3 307.0 303.3 254.9 306.4 250.2 193.3 263.3 • 227.2 335.7 358.1 44 Sponsored credit agencies 30.4 21.7 14.9 29.5 44.9 32.0 71.6 56.8 9.4 42.8 70.5 81.7 45 Mortgage pools 44.4 79.9 173.1 156.4 92.6 153.5 95.9 63.4 92.4 107.8 106.7 124.0 46 Private financial sectors 73.8 96.7 119.1 117.5 117.4 120.8 82.7 73.1 161.5 76.6 158.5 152.4 47 Commercial banks 7.3 -4.9 -3.6 7.1 -3.9 -13.1 15.0 -22.4 6.2 -8.3 8.9 1.8 48 Bank affiliates 15.6 14.5 4.6 2.9 1.4 11.3 -22.6 -8.5 11.4 7.6 -4.9 8.8 49 Savings and loan associations 22.7 22.3 29.8 34.9 37.8 43.4 48.7 8.6 17.1 54.4 71.0 72.7 50 Finance companies 18.2 52.7 48.4 32.7 47.8 34.0 33.4 51.4 93.7 1.2 45.1 53.6 51 REITs .8 .5 1.0 .8 1.7 2.5 2.2 1.0 1.7 -1.4 5.8 .8 52 CMO Issuers 9.3 11.5 39.0 39.1 32.5 42.7 6.0 43.0 31.5 23.1 32.5 14.7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • August 1989 1.57—Continued 1987 1988 1989 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998844 11998855 11998866 11998877 11998888'' Q3 Q4 Q1 Q2 Q3' Q4' Ql All sectors 53 Total net borrowing 907.9 1,045.7 i,i54.r 996.6' 1,002.2 978.4' 1,044.4' 916.2' 978.9' 999.4 1,114.4 1,092.8 54 U.S. government securities 273.8 324.2 403.4' 331.5 294.9 288.6 335.7 347.9 191.0 339.2 301.6 420.1 55 State and local obligations 50.4 136.4 30.8 34.5 33.1 32.7 33.5 22.8' 30.6' 41.4 37.5 19.7 56 Corporate and foreign bonds 83.0 125.4 195.2 174.0 154.6 185.1 145.6 188.2' 175.8' 129.4 125.1 122.7 57 Mortgages 223.1 242.2 316.4' 324.9' 295.7 308.0' 316.1' 234.5' 326.3' 315.0 307.1 270.4 58 Consumer credit 81.6 82.5 ss^ 32.9' 51.1 54.0' 56.5' 38.6' 57.5' 31.8 76.3 34.9 59 Bank loans n.e.c 61.1 38.3 3.8' 39.1 24.3' 58.4' 8.6' 77.6' 5.0 65.3 35.1 60 Open market paper 52.0 52.8 26.4 33.2 74.9 36.9 6.7 22.3 92.5 48.0 136.8 107.6 61 Other loans 82.9 44.0 56.1 61.8' 58.8 48.7 91.9' 53.3' 27.7' 89.7 64.7 82.4 62 MEMO: U.S. government, cash balance 6.3 14.4 * -7.9 10.4 -19.6 -54.7 60.9 3.3 16.2 -38.8 -4.3 Totals net of changes in U.S. government cash balances 63 Net borrowing by domestic nonfinancial 744.5 831.9 837.5' 696.9' 731.1 679.4' sss.o' 663.0' 707.1' 751.7 802.5 747.0 64 Net borrowing by U.S. government 192.5 209.3 215.0 152.8 147.1 122.7 222.8 166.8 86.0 172.4 163.2 218.7 External corporate equity funds raised in United States 65 Total net share issues -36.0 20.1 93.9 13.5 -115.0 -47.1 -82.7 -75.6 -131.1 -84.1 -169.1 -143.1 66 Mutual funds 29.3 84.4 161.8 72.3 -.4 13.8 -9.1 5.0 -8.0 0.3 1.1 19.1 67 All other -65.3 -64.3 -68.0 -58.8 -114.5 -60.9 -73.6 -80.5 -123.1 -84.4 -170.2 -162.2 68 Nonfinancial corporations -74.5 -81.5 -80.7' -76.5 -130.5 -78.0 -88.0 -95.0 -140.0 -92.0 -195.0 -180.0 69 Financial corporations 8.2 13.5 11.5 20.1 15.2 18.4 26.4 15.2 23.4 6.4 15.9 13.7 70 Foreign shares purchased in United States .9 3.7 1.3 -2.4 .7 -1.3 -12.0 -.7 -6.5 1.2 9.0 4.1 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. 1987r 1988r 1989 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998844 11998855 11998866 11998877 11998888 Q3 Q4 Ql Q2 Q3 Q4 Ql 1 Total funds advanced in credit markets to domestic nonfinancial sectors 750.8 846.3 837.5 689.0 741.4 659.8 780.3 723.9 710.4 767.8 763.7 742.6 By public agencies and foreign 7 Total net advances 157.6 193.1 314.0 256.7 239.1 211.1 265.4 226622..55 166.1 222222..55 330055..11 333366..22 3 U.S. government securities 38.9 37.9 69.4 68.2 84.8 35.1 123.3 148.6 42.4 25.8 122.3 87.6 4 Residential mortgages 56.5 94.6 170.1 153.2 104.0 146.0 102.7 83.6 106.7 108.3 117.5 126.2 5 FHLB advances to savings and loans 15.7 14.2 19.8 24.4 19.7 22.2 44.9 5.4 10.1 26.6 36.8 64.4 6 Other loans and securities 46.6 46.3 54.6 10.9 30.5 7.8 -5.5 24.9 6.8 61.9 28.4 58.1 Total advanced, by sector 7 U.S. government 17.1 16.8 9.7 -11.9 -7.3 -24.1 -2.6 -8.8 -20.3 9.4 -9.5 7.3 8 Sponsored credit agencies 74.3 95.5 187.2 181.4 131.2 187.0 156.6 103.1 103.4 138.9 179.2 216.0 9 Monetary authorities 8.4 18.4 19.4 24.7 10.5 29.0 30.4 -5.5 4.1 17.1 26.5 -4.9 10 Foreign 57.9 62.3 97.8 62.5 104.7 19.1 81.0 173.7 78.9 57.2 108.9 117.8 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 74.9 101.5 187.9 185.8 137.5 185.5 167.5 120.3 101.8 115500..66 117777..22 220055..77 12 Foreign 8.4 1.2 9.6 4.3 5.9 12.3 13.9 -1.0 5.2 4.4 15.0 -7.9 Private domestic funds advanced 13 Total net advances 676.4 756.0 721.0 622.5 645.7 646.4 696.3 580.6 651.3 700.3 650.8 660044..22 14 U.S. government securities 234.9 286.2 333.9 263.3 210.2 253.5 212.4 199.3 148.6 313.4 179.3 332.5 15 State and local obligations 50.4 136.4 30.8 34.5 33.1 32.7 33.5 22.8 30.6 41.4 37.5 19.7 16 Corporate and foreign bonds 35.1 40.8 84.1 86.5 81.0 83.7 102.9 115.7 90.2 65.1 53.0 54.6 17 Residential mortgages 105.3 91.8 82.0 106.1 132.2 102.3 136.2 109.9 168.2 139.7 111.1 87.9 18 Other mortgages and loans 266.3 214.9 210.0 156.5 209.0 196.4 256.3 138.3 223.8 167.3 306.6 173.8 19 LESS: Federal Home Loan Bank advances 15.7 14.2 19.8 24.4 19.7 22.2 44.9 5.4 10.1 26.6 36.8 64.4 Private financial intermediation 70 Credit market funds advanced by private financial institutions 581.0 569.8 747.0 566.6 587.6 643.7 553.8 658.1 593.3 473.2 626.0 558866..99 71 Commercial banking 168.9 186.3 194.8 136.7 156.0 151.4 253.1 56.8 213.8 141.3 212.2 96.8 7? Savings institutions 150.2 83.0 106.2 141.7 121.1 191.5 155.6 85.3 92.9 186.3 119.9 80.6 73 Insurance and pension funds 121.8 148.9 181.9 211.9 222.2 247.5 154.3 279.3 228.9 173.9 206.8 259.1 24 Other finance 140.1 151.6 264.2 76.3 88.3 53.3 -9.2 236.7 57.8 -28.4 87.2 150.3 75 Sources of funds 581.0 569.8 747.0 566.6 587.6 643.7 553.8 658.1 593.3 473.2 626.0 586.9 76 Private domestic deposits and RPs 321.9 210.6 264.7 145.6 198.4 193.9 265.6 283.6 135.1 167.3 207.5 127.3 77 Credit market borrowing 73.8 96.7 119.1 117.5 117.4 120.8 82.7 73.1 161.5 76.6 158.5 152.4 78 Other sources 185.3 262.5 363.2 303.5 271.8 329.0 205.5 301.3 296.7 229.2 260.0 307.2 79 Foreign funds 8.8 19.7 12.9 43.7 9.2 99.5 25.2 -80.1 106.6 -50.4 60.7 -36.3 30 Treasury balances 4.0 10.3 1.7 -5.8 7.3 6.1 -36.1 53.3 -17.5 8.7 -15.2 -8.4 31 Insurance and pension reserves 124.0 131.9 144.3 176.1 219.9 196.1 120.3 265.2 240.0 149.9 224.3 263.6 32 Other, net 48.5 100.7 204.4 89.6 35.4 27.2 96.0 62.9 -32.4 121.0 -9.9 88.3 Private domestic nonfinancial investors 33 Direct lending in credit markets 169.2 282.9 93.1 173.3 175.5 123.6 225.1 -4.4 219.5 303.7 183.3 169.7 34 U.S. government securities 115.4 175.7 59.9 104.4 146.5 70.3 117.8 114.4 87.3 247.0 137.2 194.6 35 State and local obligations 26.5 39.6 -13.6 46.1 20.0 42.4 56.0 -.5 18.3 27.9 34.4 7.7 36 Corporate and foreign bonds -.8 2.4 32.6 5.3 -12.7 28.3 42.1 -39.0 36.6 -29.2 -19.4 -.2 37 Open market paper 4.0 45.6 -3.6 4.3 14.9 -29.7 -9.5 -71.5 76.1 54.0 1.0 -2.0 38 Other 24.2 19.6 17.9 13.3 6.8 12.2 18.7 -7.8 1.2 3.9 30.1 -30.3 39 Deposits and currency 325.4 220.9 285.0 161.8 205.9 229.3 316.3 278.6 136.3 194.1 214.4 138.1 40 Currency 8.6 12.4 14.4 19.0 14.7 17.3 36.8 8.2 11.9 28.6 10.2 9.8 41 Checkable deposits 28.0 40.9 93.2 -2.1 12.2 35.4 14.3 4.5 18.5 -23.8 49.6 -59.6 47 Small time and savings accounts 150.7 138.5 120.6 76.0 120.6 80.2 124.1 189.1 152.4 70.5 70.4 50.7 43 Money market fund shares 49.0 8.9 41.5 28.2 23.8 32.7 63.3 59.1 -34.8 3.0 67.9 59.5 44 Large time deposits 84.3 7.7 -11.4 26.7 32.3 -1.0 89.4 11.7 -15.7 122.0 11.2 55.9 45 Security RPs 10.0 14.6 20.8 16.9 9.5 46.6 -25.6 19.3 14.7 -4.4 8.2 20.7 46 Deposits in foreign countries -5.1 -2.1 5.9 -2.8 -7.3 18.1 13.9 -13.3 -10.7 -1.8 -3.3 1.0 47 Total of credit market instruments, deposits, and currency 494.6 503.7 378.1 335.1 381.4 352.9 541.5 274.2 355.8 497.8 397.7 307.8 48 Public holdings as percent of total 20.7 22.7 37.0 37.0 31.9 31.4 33.4 36.3 23.2 28.8 39.1 45.7 49 Private financial intermediation (in percent) 85.8 75.3 103.6 91.0 90.9 99.5 79.5 113.3 91.0 67.5 96.1 97.1 50 Total foreign funds 66.7 82.0 110.7 106.2 113.9 118.7 106.2 93.6 185.5 6.8 169.7 81.5 MEMO: Corporate equities not included above 51 Total net issues -36.0 20.1 93.9 13.5 -115.0 -47.1 -82.7 -75.6 -131.1 -84.1 -169.1 -143.1 57 Mutual fund shares 29.3 84.4 161.8 72.3 -.4 13.8 -9.1 5.0 -8.0 0.3 1.1 19.1 53 Other equities -65.3 -64.3 -68.0 -58.8 -114.5 -60.9 -73.6 -80.5 -123.1 -84.4 -170.2 -162.2 54 Acquisitions by financial institutions 15.8 45.6 48.5 22.6 4.8 5.2 -16.5 -35.7 -6.8 22.4 39.1 4.1 55 Other net purchases -51.8 -25.5 45.4 -9.1 -119.7 -52.4 -66.2 -39.9 -124.3 -106.5 -208.2 -147.2 NOTES BY LINE NUMBER. 31. Excludes net investment of these reserves in corporate equities. 1. Line 1 of table 1.57. 32. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 33. Line 13 less line 20 plus line 27. 6. Includes farm and commercial mortgages. 34-38. Lines 14-18 less amounts acquired by private finance plus amounts 11. Credit market funds raised by federally sponsored credit agencies, and net borrowed by private finance. Line 38 includes mortgages. issues of federally related mortgage pool securities. 40. Mainly an offset to line 9. 13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. 47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46. Also sum of lines 28 and 47 less lines 40 and 46. 48. Line 2/line 1. 18. Includes farm and commercial mortgages. 49. Line 20/line 13. 26. Line 39 less lines 40 and 46. 50. Sum of lines 10 and 29. 27. Excludes equity issues and investment company shares. Includes line 19. 51. 53. Includes issues by financial institutions. 29. Foreign deposits at commercial banks, bank borrowings from foreign NOTE. Full statements for sectors and transaction types in flows and in amounts branches, and liabilities of foreign banking agencies to foreign affiliates, less outstanding may be obtained from Flow of Funds Section, Division of Research claims on foreign affiliates and deposits by banking in foreign banks. and Statistics, Board of Governors of the Federal Reserve System, Washington, 30. Demand deposits and note balances at commercial banks. D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • August 1989 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING Billions of dollars; period-end levels. 1987 193 8' 1989 11998866 Q3' Q4 QI Q2 Q3 Q4 QL Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 5,204.3 5,953.7 6,797.0 7,638.4' 8,099.4 8,330.0' 8,471.0 8,658.1 8,828.8 9,049.7 9,209.4 By sector and instrument 2 U.S. government 1,177.9 1,376.8 1,600.4 1,815.4 1,897.8 1,960.3 2,003.2 2,022.3 2,063.9 2,117.8 2,155.7 3 Treasury securities 1,174.4 1,373.4 1,597.1 1,811.7 1,893.8 1,955.2 1,998.1 2,015.3 2,051.7 2,095.2 2,133.4 4 Agency issues and mortgages 3.6 3.4 3.3 3.6 3.9 5.2 5.0 7.0 12.2 22.6 22.3 5 Private domestic nonfinancial sectors 4,026.4 4,577.0 5,196.6 5,823.0' 6,201.7 6,369.7' 6,467.8 6,635.8 6,764.9 6,931.9 7,053.7 6 Debt capital instruments 2,717.8 3,040.0 3,488.4 3,967.6' 4,327.4 4,438.5' 4,512.2 4,635.3 4,737.8 4,848.3 4,933.0 / Tax-exempt obligations 471.7 522.1 658.4 689.2 715.5 723.7 727.5 734.8 747.6 756.8 764.9 8 Corporate bonds 423.0 469.2 542.9 664.2 743.7 764.1 789.5 819.0 841.5 861.3 881.8 9 Mortgages 1,823.1 2,048.8 2,287.1 2,614.2' 2,868.2 2,950.7' 2,995.3 3,081.6 3,148.6 3,230.2 3,286.3 10 Home mortgages 1,200.2 1,336.2 1,490.2 1,720.8' 1,884.2 1,943.1' 1,972.0 2,043.3 2,105.0 2,160.9 2,195.6 11 Multifamily residential 158.8 183.6 213.0 246.2' 265.0 270.0 274.5 276.3 279.5 285.9 291.4 12 Commercial 350.4 416.5 478.1 551.4 629.1 648.7' 660.8 674.1 677.1 696.6 713.1 13 Farm 113.7 112.4 105.9 95.8 90.0 88.9 88.0 87.8 87.0 86.8 86.2 14 Other debt instruments 1,308.6 1,536.9 1,708.2 1,855.5' 1,874.3 1,931.1' 1,955.6 2,000.5 2,027.1 2,083.6 2,120.8 15 Consumer credit 437.7 519.3 601.8 659.8' 674.8 692.7' 688.9 705.8 721.2 743.7 746.6 16 Bank loans n.e.c 490.2 552.9 592.6 654.2' 637.6 654.4' 665.6 685.7 686.5 701.9 713.5 1/ Open market paper 36.8 58.5 72.2 62.9 68.1 73.8 73.5 77.8 80.3 85.4 95.5 18 Other 344.0 406.2 441.6 478.6 493.7 510.3' 527.5 531.2 539.1 552.7 565.1 19 By borrowing sector 4,026.4 4,577.0 5,196.6 5,823.0' 6,201.7 6,369.7' 6,467.8 6,635.8 6,764.9 6,931.9 7,053.7 20 State and local governments 357.7 385.1 476.9 520.2 546.2 554.2 556.7 563.2 576.0 585.6 595.2 21 Households 1,811.6 2,038.2 2,314.5 2,614.6' 2,787.3 2,864.3' 2,892.1 2,982.3 3,058.2 3,137.4 3,183.8 22 Nonfinancial business 1,857.1 2,153.7 2,405.2 2,688.3 2,868.2 2,951.2' 3,019.0 3,090.2 3,130.7 3,208.9 3,274.6 2i Farm 188.4 187.9 173.4 156.6 148.5 145.5 141.3 143.9 143.6 141.1 140.1 24 Nonfarm noncorporate 645.8 769.0 898.3 1,001.6 1,076.4 1,109.4' 1,131.7 1,148.9 1,167.3 1,193.3 1,213.6 25 Corporate 1,022.9 1,196.8 1,333.5 1,530.1 1,643.3 1,696.3' 1,746.0 1,797.4 1,819.9 1,874.5 1,920.9 26 Foreign credit market debt held in United States 227.3 235.1 234.7' 236.2' 237.0 242.3' 243.2 244.4 244.6 248.2 248.4 2277 Bonds 64.2 68.0 71.8 74.8 75.9 81.6 85.4 85.2 86.5 88.3 90.3 28 Bank loans n.e.c 37.4 30.8 27.9 26.9 24.2 23.3 22.8 22.4 22.7 21.5 21.1 29 Open market paper 21.5 27.7 33.9 37.4 40.6 41.2 42.5 44.0 46.3 50.9 55.5 30 U.S. government loans 104.1 108.6 101.R 97.1' 96.3 96.1' 92.4 92.7 89.1 87.5 81.5 31 Total domestic plus foreign 5,431.6 6,188.8 7,031.7' 7,874.7' 8,336.4 8,572.3' 8,714.1 8,902.4 9,073.4 9,297.9 9,457.9 Financial sectors 32 Total credit market debt owed by financial sectors 857.9 1,006.2 1,206.2 1,544.7' 1,783.8 1,862.8 1,897.7 1,969.7 2,027.3 2,117.7 2,196.8 By instrument 33 U.S. government related 456.7 531.2 632.7 844.2' 981.6 1,026.5 1,050.6 1,076.9 1,116.3 1,164.0 1,209.0 34 Sponsored credit agency securities 206.8 237.2 257.8 273.0 283.7 303.2 313.5 317.9 328.5 348.1 364.3 35 Mortgage pool securities 244.9 289.0 368.9 565.4' 692.9 718.3 732.1 754.0 782.8 810.9 839.7 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 37 Private financial sectors 401.2 475.0 573.4 700.5 802.1 836.3 847.1 892.8 911.1 953.8 987.8 38 Corporate bonds 115.8 148.9 197.5 268.4 324.2 335.6 352.2 367.1 375.6 386.3 393.1 39 Mortgages 2.1 2.5 2.7 2.7 2.9 3.1 3.1 3.1 3.1 3.0 3.1 40 Bank loans n.e.c 28.9 29.5 32.1 36.1 42.2 40.8 31.7 34.3 32.9 34.2 30.6 41 Open market paper 195.5 219.5 252.4 284.6 312.7 323.8 330.6 353.4 358.0 377.4 397.4 42 Loans from Federal Home Loan Banks... 59.0 74.6 88.8 108.6 120.1 133.1 129.5 134.8 141.6 152.8 163.8 43 857.9 1,006.2 1,206.2 1,544.7' 1,783.8 1,862.8 1,897.7 1,969.7 2,027.3 2,117.7 2,196.8 44 Sponsored credit agencies 211.8 242.2 263.9 278.7 288.7 308.2 318.5 322.9 333.5 353.1 369.3 45 Mortgage pools 244.9 289.0 368.9 565.4' 692.9 718.3 732.1 754.0 782.8 810.9 839.7 46 Private financial sectors 401.2 475.0 573.4 700.5 802.1 836.3 847.1 892.8 911.1 953.8 987.8 47 Commercial banks 76.8 84.1 79.2 75.6 78.6 82.7 76.4 77.2 76.6 78.8 78.9 48 Bank affiliates 71.0 86.6 101.2 101.3 109.5 104.2 103.5 106.6 106.4 105.6 109.3 49 Savings and loan associations 73.9 93.2 115.5 145.1 165.0 180.0' 176.1 186.8 197.8 218.7 230.7 50 Finance companies 171.7 193.2 246.9 308.1 340.7 359.1' 369.6 392.5 395.1 406.0 420.4 51 REITs 3.5 4.3 5.6 6.5 6.8 7.3 7.6 8.0 7.6 9.1 9.3 52 CMO issuers 4.2 13.5 25.0 64.0 101.6 103.1 113.9 121.8 127.5 135.7 139.3 All sectors 53 Total credit market debt 6,289.5 7,195.0 8,237.9' 9,419.4' 10,120.2 10,435.1' 10,611.8 10,872.1 11,100.8 11,415.6 11,654.7 54 U.S. government securities 1,629.4 1,902.8 2,227.0 2,653.8' 2,874.4 2,981.8 3,048.8 3,094.2 3,175.2 3,276.7 3,359.7 55 State and local obligations 471.7 522.1 658.4 689.2 715.5 723.7 727.5 734.8 747.6 756.8 764.9 56 Corporate and foreign bonds 603.0 686.0 812.1 1,007.4 1,143.9 1,181.4 1,227.1 1,271.3 1,303.6 1,336.0 1,365.2 5/ Mortgages 1,825.4 2,051.4 2,289.8 2,617.0' 2,871.1 2,953.8' 2,998.4 3,084.7 3,151.7 3,233.3 3,289.3 58 Consumer credit 437.7 519.3 601.8 659.8' 674.8 692.7' 688.9 705.8 721.2 743.7 746.6 59 Bank loans n.e.c 556.5 613.2 652.6 717.2' 704.0 718.4' 720.1 742.4 742.1 757.5 765.2 60 Open market paper 253.8 305.7 358.5 384.9 421.4 438.8 446.7 475.3 484.6 513.6 548.4 61 Other loans 512.1 594.4 637.6' 690.1' 715.1 744.5' 754.4 763.7 774.7 797.9 815.4 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' 1988r 1989 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998833 11998844 11998855 11998866'' Q3 Q4 Ql Q2 Q3 Q4 Ql 1 Total funds advanced in credit markets to domestic nonfinancial sectors 5,204.3 5,953.7 6,797.0 7,638.4 8,099.4 8,330.0 8,471.0 8,658.1 8,828.8 9,049.7 9,209.4 By public agencies and foreign 2 Total held 1,101.7 1,259.2 1,457.5 1,791.2 1,965.1 2,036.2 2,092.2 2,138.8 2,188.3 2,269.9 2,343.9 3 U.S. government securities 339.0 377.9 421.8 491.2 525.6 559.4 592.7 607.1 610.3 644.2 662.1 4 Residential mortgages 367.0 423.5 518.2 712.3 834.6 862.0 880.6 906.1 934.9 966.0 995.1 5 FHLB advances to savings and loans 59.0 74.6 88.8 108.6 120.1 133.1 129.5 134.8 141.6 152.8 163.8 6 Other loans and securities 336.8 383.1 428.7 479.0 484.8 481.8 489.4 490.8 501.6 506.9 522.9 7 Total held, by type of lender 1,101.7 1,259.2 1,457.5 1,791.2 1,965.1 2,036.2 2,092.2 2,138.8 2,188.3 2,269.9 2,343.9 8 U.S. government 212.8 229.7 245.7 252.3 •235.2 233.0 231.4 227.0 224.3 220.3 222.8 9 Sponsored credit agencies and mortgage pools ... 482.0 556.3 657.8 867.8 1,003.7 1,044.9 1,064.0 1,091.6 1,128.9 1,176.1 1,223.0 10 Monetary authority 159.2 167.6 186.0 205.5 219.6 230.1 224.9 229.7 230.8 240.6 235.4 11 Foreign 247.7 305.6 367.9 465.7 506.7 528.2 572.0 590.5 604.4 632.9 662.7 Agency and foreign debt not in line 1 12 Sponsored credit agencies and mortgage pools ... 456.7 531.2 632.7 844.2 981.6 1,026.5 1,050.6 1,076.9 1,116.3 1,164.0 1,209.0 13 Foreign 227.3 235.1 234.7 236.2 237.0 242.3 243.2 244.4 244.6 248.2 248.4 Private domestic holdings 14 Total private holdings 4,786.6 5,460.8 6,207.0 6,927.6 7,353.0 7,562.5 7,672.5 7,840.5 8,001.3 8,192.0 8,323.0 15 U.S. government securities 1,290.4 1,524.9 1,805.2 2,162.6 2,348.8 2,422.4 2,456.0 2,487.0 2,564.9 2,632.6 2,697.6 16 State and local obligations 471.7 522.1 658.4 689.2 715.5 723.7 727.5 734.8 747.6 756.8 764.9 17 Corporate and foreign bonds 441.7 476.8 517.6 601.7 663.4 688.1 716.3 740.6 756.9 769.1 782.1 18 Residential mortgages 992.2 1,096.5 1,185.1 1,254.7 1,314.6 1,351.1 1,366.0 1,413.6 1,449.6 1,480.8 1,491.9 19 Other mortgages and loans 1,649.6 1,915.2 2,129.5 2,328.1 2,430.7 2,510.2 2,536.2 2,599.2 2,623.8 2,705.4 2,750.2 20 LESS: Federal Home Loan Bank advances 59.0 74.6 88.8 108.6 120.1 133.1 129.5 134.8 141.6 152.8 163.8 Private financial intermediation 21 Credit market claims held by private financial institutions 4,111.2 4,691.0 5,264.4 6,010.1 6,434.5 6,594.8 6,728.4 6,895.8 6,999.4 7,169.6 7,294.3 22 Commercial banking 1,622.1 1,791.1 1,978.5 2,173.2 2,249.0 2,309.9 2,322.7 2,378.2 2,417.3 2,465.9 2,490.1 23 Savings institutions 944.0 1,092.8 1,178.4 1,283.6 1,397.3 1,436.2 1,441.7 1,484.6 1,513.0 1,544.4 1,551.9 24 Insurance and pension funds 1,093.5 1,215.3 1,364.2 1,546.0 1,716.0 1,758.0 1,823.3 1,879.5 1,925.0 1,980.5 2,040.1 25 Other finance 451.6 591.7 743.4 1,007.1 1,072.2 1,090.7 1,140.7 1,153.5 1,144.0 1,179.0 1,212.2 26 Sources of funds 4,111.2 4,691.0 5,264.4 6,010.1 6,434.5 6,594.8 6,728.4 6,895.8 6,999.4 7,169.6 7,294.3 27 Private domestic deposits and RPs 2,389.8 2,711.5 2,922.1 3,182.6 3,226.9 3,320.6 3,376.5 3,409.8 3,438.1 3,519.0 3,530.3 28 Credit market debt 401.2 475.0 573.4 700.5 802.1 836.3 847.1 892.8 911.1 953.8 987.8 29 Other sources 1,320.2 1,504.5 1,768.9 2,127.0 2,405.4 2,437.9 2,504.8 2,593.2 2,650.1 2,696.9 2,776.1 30 Foreign funds -23.0 -14.1 5.6 18.6 52.7 62.2 45.9 62.3 51.9 71.5 69.3 31 Treasury balances 11.5 15.5 25.8 27.5 33.0 21.6 23.5 32.6 34.2 29.0 14.1 32 Insurance and pension reserves 1,036.1 1,160.8 1,289.5 1,427.9 1,556.7 1,597.2 1,662.4 1,718.6 1,758.0 1,804.6 1,862.0 33 Other, net 295.6 342.2 448.0 653.0 763.1 756.8 773.1 779.7 806.0 791.8 830.7 Private domestic nonfinancial investors 34 Credit market claims 1,076.6 1,244.8 1,516.0 1,618.1 1,720.6 1,804.0 1,791.2 1,837.5 1,913.0 1,976.1 2,016.5 35 U.S. government securities 548.6 663.6 830.7 915.1 971.0 1,012.3 1,022.4 1,036.2 1,102.4 1,155.4 1,183.9 36 Tax-exempt obligations 170.0 196.3 235.9 222.3 255.9 268.3 265.1 271.9 281.2 288.4 292.1 37 Corporate and foreign bonds 45.4 44.5 47.6 80.1 80.6 84.8 82.7 88.9 83.5 72.1 80.5 38 Open market paper 68.4 72.4 118.0 114.3 114.9 136.3 119.1 139.4 143.9 151.2 156.8 39 Other 244.3 268.0 283.8 286.2 298.2 302.3 301.9 301.1 302.0 309.1 303.2 40 Deposits and currency 2,566.4 2,891.7 3,112.5 3,393.4 3,437.0 3,547.6 3,598.3 3,637.6 3,666.3 3,753.4 3,763.4 41 Currency 150.9 159.6 171.9 186.3 192.4 205.4 204.0 209.9 213.4 220.1 219.1 42 Checkable deposits 350.9 378.8 419.7 512.9 487.5 510.4 491.0 506.0 490.7 522.6 486.7 43 Small time and savings accounts 1,542.9 1,693.4 1,831.9 1,948.3 1,983.4 2,017.1 2,070.7 2,105.9 2,117.0 2,137.7 2,154.3 44 Money market fund shares 169.5 218.5 227.3 268.9 286.4 297.1 322.1 310.4 308.6 320.9 347.0 45 Large time deposits 247.7 332.1 339.8 328.4 326.0 355.1 350.0 343.1 376.9 387.4 390.0 46 Security RPs 78.8 88.7 103.3 124.1 143.6 141.0 142.6 144.4 144.9 150.5 152.3 47 Deposits in foreign countries 25.7 20.6 18.5 24.5 17.8 21.6 17.8 17.8 14.7 14.4 14.0 48 Total of credit market instruments, deposits, and currency 3,643.0 4,136.5 4,628.5 5,011.4 5,157.6 5,351.6 5,389.5 5,475.0 5,579.3 5,729.6 5,780.0 49 Public holdings as percent of total 20.2 20.3 20.7 22.7 23.5 23.7 24.0 24.0 24.1 24.4 24.7 50 Private financial intermediation (in percent) 85.8 85.9 84.8 86.7 87.5 87.2 87.6 87.9 87.4 87.5 87.6 51 Total foreign funds 224.7 291.5 373.5 484.2 559.4 590.5 617.8 652.8 656.3 704.3 731.9 MEMO: Corporate equities not included above 52 Total market value 2,134.0 2,158.2 2,824.5 3,362.0 4,316.0 3,318.5 3,500.2 3,619.7 3,572.5 3,600.9 3,732.4 53 Mutual fund shares 112.1 136.7 240.2 413.5 525.1 460.1 479.2 486.8 478.1 478.3 486.3 54 Other equities 2,021.9 2,021.5 2,584.3 2,948.5 3,790.9 2,858.3 3,021.0 3,133.0 3,094.4 3,122.6 3,246.0 55 Holdings by financial institutions 612.0 615.6 800.0 972.2 1,306.7 1,011.1 1,079.4 1,131.1 1,126.9 1,156.3 1,226.2 56 Other holdings 1,522.0 1,542.6 2,024.5 2,389.8 3,009.3 2,307.4 2,420.8 2,488.7 2,445.6 2,444.6 2,506.2 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. 6. Includes farm and commercial mortgages. 35-39. Lines 15-19 less amounts acquired by private finance plus amounts 12. Credit market debt of federally sponsored agencies, and net issues of borrowed by private finance. Line 39 includes mortgages. federally related mortgage pool securities. 41. Mainly an offset to line 10. 14. Line 1 less line 2 plus line 12 and 13. Also line 21 less line 28 plus line 34. 48. Lines 34 plus 40, or line 14 less line 29 plus 41 and 47. Also sum of lines 29 and 48 less lines 41 and 47. 49. Line 2Aine 1 and 13. 19. Includes farm and commercial mortgages. 50. Line 21/line 14. 27. Line 40 less lines 41 and 47. 51. Sum of lines 11 and 30. 28. Excludes equity issues and investment company shares. Includes line 20. 52-54. Includes issues by financial institutions. 30. Foreign deposits at commercial banks plus bank borrowings from foreign NOTE. Full statements for sectors and transaction types in flows and in amounts affiliates, less claims on foreign affiliates and deposits by banking in foreign banks. outstanding may be obtained from Flow of Funds Section, Stop 95, Division of 31. Demand deposits and note balances at commercial banks. Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • August 1989 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures1 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1988 1989 MMeeaassuurree 11998866 11998877 11998888 Sept. Oct. Nov. Dec. Jan. Feb.1" Mar.' Apr/ May 1 Industrial production 125.1 129.8 137.2 138.6 139.4 139.9 140.4 140.8 140.5 140.6 141.4 141.4 Market groupings 2 Products, total 133.3 81.1 145.9 147.4 148.1 148.4 149.4 150.1 150.0 150.4 151.1 150.8 3 Final, total 132.5 136.8 144.3 145.8 146.4 146.8 147.7 148.2 148.6 148.8 149.7 149.4 4 Consumer goods 124.0 127.7 133.9 134.8 136.4 136.8 138.2 138.5 138.7 138.3 139.1 138.5 5 Equipment 143.6 148.8 158.2 160.4 154.0 159.9 160.4 161.1 161.6 162.6 163.8 163.9 6 Intermediate 136.2 143.5 151.5 152.9 154.0 154.2 155.0 156.6 155.1 155.9 155.9 155.7 7 Materials 113.8 118.2 125.3 126.5 127.5 128.3 128.3 128.1 127.4 127.3 128.3 128.5 Industry groupings 8 Manufacturing 129.1 134.6 142.8 144.4 145.3 145.8 146.3 147.2 146.8 146.7 147.7 147.6 Capacity utilization (percent)2 9 Manufacturing 79.7 81.1 83.5 84.0 84.3 84.4 84.4 84.7 84.3 84.0 84.3 84.0 10 Industrial materials industries 78.6 80.5 83.7 84.1 84.7 85.1 84.9 84.6 84.0 83.8 84.2 84.2 11 Construction contracts (1982 = 100)3 158.0 164.0 161.0 157.0 164.0 158.0 163.0 155.0 148.0 150.0 163.0 159.0 12 Nonagricultural employment, total4 120.7 124.1 128.6 128.8r 129.1' 129.5' 129.9' 130.3' 130.6 130.8 131.1 131.2 13 Goods-producing, total 100.9 101.8 105.0 104.0' 104.3' 104.6' 104.8' 105.3' 105.3 105.4 105.4 105.3 14 Manufacturing, total 96.3 96.8 99.2 98.7' 99.1' 99.3' 99.5' 99.8' 99.8 100.0 99.9 99.8 15 Manufacturing, production-worker.... 91.1 91.9 94.3 93.8' 94.2' 94.5' 94.7' 94.9' 95.0 95.1 95.0 95.0 16 Service-producing 129.0 133.4 138.5 139.2' 139.5' 140.0' 140.4' 140.8' 141.2 141.5 141.8 142.0 17 Personal income, total 219.7 235.1 252.7' 256.0 259.8 259.1 261.3 265.8' 268.6 271.0 272.3 273.1 18 Wages and salary disbursements 210.7 226.2 245.2 249.0 252.2 253.0 254.5 257.5 258.7 261.0 262.7 263.2 19 Manufacturing 177.4 183.8 195.9 198.1 202.2 201.1 200.8 202.7 203.6 207.2 205.2 205.3 20 Disposable personal income5 218.9 232.7 251.7 255.6 259.6 258.7 261.0 263.8' 267.3 269.4 267.6 271.4 21 Retail sales6 199.3 210.8 225.lr 226.1 229.6 232.4 231.8 233.2 232.2 232.4 234.7 235.0 Prices7 22 Consumer (1982-84 = 100) 109.6 113.6 118.3 119.8 120.2 120.3 120.5 121.1 121.6 122.3 123.1 123.8 23 Producer finished goods (1982 = 100) ... 103.2 105.4 108.0 108.6 109.4 109.8 110.0 111.1' 111.7 112.2 113.0 114.2 1. A major revision of the industrial production index and the capacity 5. Based on data in Survey of Current Business (U.S. Department of Comutilization rates was released in July 1985. See "A Revision of the Index of merce). Industrial Production" and accompanying tables that contain revised indexes 6. Based on Bureau of Census data published in Survey of Current Business. (1977= 100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 7. Data without seasonal adjustment, as published in Monthly Labor Review. (July 1985), pp. 487-501. The revised indexes for January through June 1985 were Seasonally adjusted data for changes in the price indexes may be obtained from shown in the September BULLETIN. the Bureau of Labor Statistics, U.S. Department of Labor. 2. Ratios of indexes of production to indexes of capacity. Based on data from Federal Reserve, McGraw-Hill Economics Department, Department of Com- NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5,and 6, merce, and other sources. and indexes for series mentioned in notes 3 and 7 may also be found in the Survey 3. Index of dollar value of total construction contracts, including residential, of Current Business. nonresidential and heavy engineering, from McGraw-Hill Information Systems Figures for industrial production for the last two months are preliminary and Company, F. W. Dodge Division. estimated, respectively. 4. Based on data in Employment and Earnings (U.S. Department of Labor). Series covers employees only, excluding personnel in the Armed Forces. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1988' 1989' CCaatteeggoorryy 11998866 11998877 11998888 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 182,822 185,010 186,837 187,333 187,471 187,618 187,859 187,979 188,102 188,228 188,377 7. Labor force (including Armed Forces)1 120,078 122,122 123,893 124,310 124,737 124,779 125,643 125,383 125,469 125,863 125,806 3 Civilian labor force 117,834 119,865 121,669 122,091 122,510 122,563 123,428 123,181 123,264 123,659 123,610 4 Nonagricultural industries2 106,434 109,232 111,800 112,335 112,709 112,816 113,411 113,630 113,930 114,009 114,102 5 Agriculture 3,163 3,208 3,169 3,238 3,238 3,193 3,300 3,223 3,206 3,104 3,112 Unemployment 6 Number 8,237 7,425 6,701 6,518 6,563 6,554 6,716 6,328 6,128 6,546 6,395 7 Rate (percent of civilian labor force) 7.0 6.2 5.5 5.3 5.4 5.3 5.4 5.1 5.0 5.3 5.2 8 Not in labor force 62,744 62,888 62,944 63,023 62,734 62,839 62,216 62,596 62,633 62,365 62,571 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 99,525 102,310 106,039 106,475 106,824 107,097 107,442 107,711 107,888 108,094 108,195 10 Manufacturing 18,965 19,065 19,536 19,505 19,557 19,589 19,648 19,648 19,680 19,669 19,651 11 Mining 777 721 733 717 712 711 711 711 714 720 719 12 Contract construction 4,816 4,998 5,294 5,162 5,191 5,213 5,267 5,270 5,252 5,275 5,261 13 Transportation and public utilities 5,255 5,385 5,584 5,596 5,616 5,634 5,654 5,667 5,666 5,682 5,694 14 23,683 24,381 25,362 25,315 25,386 25,453 25,553 25,631 25,685 25,698 25,717 15 Finance 6,283 6,549 6,679 6,710 6,726 6,744 6,746 6,763 6,774 6,781 6,788 16 23,053 24,196 25,464 25,986 26,111 26,230 26,318 26,434 26,520 26,647 26,711 17 Government 16,693 17,015 17,387 17,484 17,525 17,523 17,545 17,587 17,597 17,622 17,654 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 • August 1989 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1988 1989 1988 1989 1988 1989 SSeerriieess Q2 Q3 Q4 Qlr Q2 Q3 Q4 Ql Q2 Q3 Q4 Qlr Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 136.0 138.4 139.9 140.6 164.2 165.2 166.3 167.5 82.8 83.8 84.1 84.0 2 Mining 103.4 103.9 104.2 101.9 127.0 126.3 125.7 125.1 81.5 82.3 82.9 81.5 3 Utilities 111.9 115.1 114.3 115.8 140.1 140.4 140.7 141.0 79.9 81.9 81.3 82.1 4 Manufacturing 141.5 144.0 145.8 146.9 170.2 171.5 172.8 174.3 83.2 84.0 84.4 84.3 5 Primary processing 123.9 125.9 127.7 127.8 142.7 143.9 145.2 146.5 86.8 87.5 87.9 87.2 6 Advanced processing 152.3 154.9 156.7 158.5 186.7 188.1 189.5 191.0 81.5 82.4 82.7 83.0 7 Materials 124.0 126.5 128.0 127.6 149.3 150.1 150.8 151.7 83.0 84.3 84.9 84.1 8 Durable goods 134.1 137.1 139.2 138.6 166.8 167.9 169.0 170.1 80.4 81.6 82.4 81.5 9 Metal materials 88.1 92.7 94.8 92.3 109.1 109.5 109.8 110.2 80.8 84.8 86.3 83.8 10 Nondurable goods 130.4 132.8 135.4 136.4 148.3 149.8 151.2 152.7 87.9 88.6 89.5 89.3 11 Textile, paper, and chemical ... 132.4 135.3 138.1 139.2 148.5 150.2 151.8 153.5 89.2 90.0 91.0 90.7 12 Paper 145.9 148.9 148.6 148.5 149.2 150.7 152.3 154.0 97.8 98.8 97.6 96.4 13 Chemical 135.7 139.4 144.1 145.4 155.4 157.4 159.3 161.4 87.3 88.6 90.5 90.1 14 Energy materials 100.6 102.5 102.0 100.8 119.4 119.0 118.7 118.4 84.2 86.0 86.0 85.1 Previous cycle2 Latest cycle3 1988 1988 1989 High Low High Low May Sept. Oct. Nov. Dec. Jan. Feb/ Mar/ Apr/ May Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 82.9 83.7 84.0 84.1 84.3 84.3 83.9 83.8 84.1 83.8 16 Mining 92.8 87.8 95.2 76.9 80.8 82.3 81.9 83.3 83.6 82.2 80.6 81.5 82.4 83.5 17 Utilities 95.6 82.9 88.5 78.0 79.7 80.4 81.0 80.8 82.0 80.9 82.6 82.9 82.8 82.3 18 Manufacturing 87.7 69.9 86.5 68.0 83.3 84.0 84.3 84.4 84.4 84.7 84.3 84.0 84.3 84.0 19 Primary processing 91.9 68.3 89.1 65.0 87.0 87.2 87.9 88.1 87.9 88.4 87.0 86.3 86.6 86.3 20 Advanced processing.. 86.0 71.1 85.1 69.5 81.7 82.4 82.6 82.6 82.8 83.1 83.0 82.8 83.2 83.0 21 Materials 92.0 70.5 89.1 68.5 83.0 84.1 84.7 85.1 84.9 84.6 84.0 83.8 84.2 84.2 22 Durable goods 91.8 64.4 89.8 60.9 80.8 81.9 82.4 82.7 82.1 82.1 81.5 80.8 81.0 80.8 23 Metal materials 99.2 67.1 93.6 45.7 82.1 86.0 87.3 86.9 84.6 86.1 83.8 81.5 82.7 82.9 24 Nondurable goods .... 91.1 66.7 88.1 70.7 87.7 88.2 89.3 89.4 89.8 90.1 89.0 88.9 89.4 89.3 25 Textile, paper, and chemical 92.8 64.8 89.4 68.8 88.8 89.4 90.9 90.9 91.8 91.5 90.3 90.3 90.8 90.7 ">6 98.4 70.6 97.3 79.9 98.1 97.9 97.8 96.7 98.4 98.1 95.8 95.4 95.9 ?7 92.5 64.4 87.9 63.5 86.9 88.0 90.2 90.5 90.7 90.7 89.8 89.7 90.2 28 Energy materials 94.6 86.9 94.0 82.3 83.3 85.3 85.3 86.2 86.5 84.9 84.9 85.6 86.6 87.2 1. These data also appear in the Board's G.3 (402) release. For address, see 2. Monthly high 1973; monthly low 1975. inside front cover. 3. Monthly highs 1978 through 1980; monthly lows 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data are seasonally adjusted 1977 1988 1989 GGrroouuppss por- A 19 V 8 G 8 . tion May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar. Apr/ May* Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 137.2 136.1 136.5 138.0 138.5 138.6 139.4 139.9 140.4 140.8 140.5 140.6 141.4 141.4 2 Products 57.72 145.9 145.0 145.3 146.5 147.3 147.4 148.1 148.4 149.4 150.1 150.0 150.4 151.1 150.8 Final products 44.77 144.3 143.5 144.0 145.0 145.8 145.8 146.4 146.8 147.7 148.2 148.6 148.8 149.7 149.4 4 Consumer goods 25.52 133.9 132.7 133.0 134.2 135.0 134.8 136.4 136.8 138.2 138.5 138.7 138.3 139.1 138.5 Equipment 19.25 158.2 157.7 158.5 159.4 160.1 160.4 159.7 159.9 160.4 161.1 161.6 162.6 163.8 163.9 6 Intermediate products 12.94 151.5 150.4 150.0 151.6 152.3 152.9 154.0 154.2 155.0 156.6 155.1 155.9 155.9 155.7 7 Materials 42.28 125.2 123.9 124.5 126.4 126.5 126.5 127.5 128.3 128.3 128.1 127.4 127.3 128.3 128.5 Consumer goods 8 Durable consumer goods 6.89 125.3 125.6 125.3 125.3 125.7 126.3 129.3 129.2 131.9 131.5 131.6 130.1 131.8 130.8 9 Automotive products 2.98 124.9 127.1 127.1 124.4 124.2 126.4 128.9 129.5 134.5 132.5 131.6 128.9 131.2 128.5 10 Autos and trucks 1.79 122.7 126.9 125.3 120.8 123.1 124.8 128.3 129.5 138.0 135.6 133.1 128.3 131.7 127.3 11 Autos, consumer 1.16 93.4 98.9 99.0 93.8 93.0 97.7 101.3 101.0 105.1 99.6 96.0 95.0 98.8 96.0 12. Trucks, consumer .63 177.0 178.9 174.1 170.8 179.0 175.3 178.4 182.4 199.1 202.3 201.9 190.0 192.8 N Auto parts and allied goods 1.19 128.1 127.4 129.7 129.9 125.9 128.8 129.8 129.5 129.3 127.9 129.4 129.9 130.5 130.4 14 Home goods 3.91 125.6 124.4 123.9 125.9 126.8 126.2 129.7 128.9 130.0 130.7 131.6 131.1 132.3 132.5 15 Appliances, A/C and TV 1.24 144.1 142.2 138.0 143.3 146.5 144.9 154.4 150.4 151.0 151.0 153.9 151.6 151.8 151.7 16 Appliances and TV 1.19 143.6 143.0 137.1 143.8 146.1 143.7 151.9 148.9 150.0 149.5 153.0 152.3 152.6 17 Carpeting and furniture .96 136.2 135.8 135.9 136.6 137.2 137.1 138.8 139.8 140.5 141.1 141.3 140.7 143.0 18 Miscellaneous home goods 1.71 106.3 105.2 107.0 107.4 106.8 106.6 106.7 107.3 108.9 110.1 110.1 110.8 112.2 19 Nondurable consumer goods 18.63 137.1 135.4 135.8 137.5 138.5 138.0 139.0 139.7 140.5 141.1 141.4 141.3 141.8 141.3 20 Consumer staples 15.29 144.9 143.1 143.5 145.3 146.6 145.8 147.0 147.9 148.9 149.4 149.7 149.8 150.2 149.8 71 Consumer foods and tobacco 7.80 140.9 139.2 139.3 141.1 141.3 141.1 142.4 143.7 144.5 144.8 144.3 143.5 144.1 22 Nonfood staples 7.49 149.1 147.0 147.9 149.6 152.1 150.7 151.8 152.2 153.6 154.2 155.4 156.3 156.7 155.9 n Consumer chemical products 2.75 180.0 177.9 179.5 181.8 183.8 185.0 186.1 185.7 186.8 187.6 187.8 188.7 186.9 24 Consumer paper products 1.88 163.4 162.4 162.8 164.0 165.3 166.3 167.1 167.8 169.0 174.2 177.0 180.0 182.6 25 Consumer energy 2.86 110.0 107.3 107.7 109.3 113.0 107.6 108.9 109.8 111.6 109.1 110.1 109.7 110.6 26 Consumer fuel 1.44 95.4 94.3 93.0 94.6 95.5 92.7 95.3 94.1 96.3 96.7 95.0 95.6 97.0 27 Residential utilities 1.42 124.8 120.6 122.6 124.4 130.9 122.8 122.7 125.8 127.1 121.7 125.4 124.1 Equipment 28 Business and defense equipment 18.01 163.3 162.7 163.5 164.6 165.2 165.6 165.1 165.5 166.2 167.1 167.9 168.7 169.7 116699..99 79 Business equipment 14.34 157.6 156.9 158.1 159.3 160.2 160.8 160.2 161.2 162.6 163.8 165.0 166.2 167.4 167.8 30 Construction, mining, and farm 2.08 71.9 71.8 72.4 73.6 73.1 74.3 74.2 74.5 74.6 74.3 75.6 77.2 76.9 76.6 31 Manufacturing 3.27 131.3 128.3 130.3 132.4 134.0 135.8 136.2 136.2 137.0 136.3 137.8 138.8 140.2 140.6 3? Power 1.27 89.4 87.4 88.3 89.8 90.9 92.2 91.5 92.1 91.8 92.8 92.7 92.3 92.7 93.0 33 Commercial 5.22 245.2 245.7 247.1 248.2 249.8 248.7 245.4 247.0 248.9 252.4 254.3 257.2 258.5 260.0 34 Transit 2.49 114.9 115.3 115.7 115.9 115.2 116.8 120.3 122.3 124.9 125.7 125.2 123.9 126.3 124.7 35 Defense and space equipment 3.67 185.9 185.5 184.6 184.9 184.9 184.5 184.0 182.2 180.5 180.0 179.3 178.2 178.6 178.0 Intermediate products 36 Construction supplies 5.95 138.6 138.8 137.6 138.4 138.1 138.4 140.0 140.7 141.4 142.3 139.5 138.9 138.5 137.4 37 Business supplies 6.99 162.5 160.3 160.6 162.8 164.4 165.2 165.9 165.7 166.7 168.8 168.4 170.3 170.8 38 General business supplies 5.67 168.5 165.5 165.9 168.6 170.6 171.8 172.3 172.9 173.8 175.9 175.4 177.3 178.0 39 Commercial energy products 1.31 136.3 137.8 137.5 137.6 137.7 136.7 138.2 134.3 135.8 138.2 138.3 140.3 139.5 Materials 40 Durable goods materials 20.50 135.4 134.8 134.9 136.8 136.6 137.8 138.9 139.8 139.0 139.4 138.6 137.8 138.5 138.4 41 Durable consumer parts 4.92 108.9 110.0 110.3 110.1 109.8 111.0 111.4 113.9 112.5 111.7 112.1 110.7 110.1 109.3 47 Equipment parts 5.94 171.7 170.8 171.6 174.1 173.5 174.0 174.9 175.0 174.1 175.2 175.2 175.0 176.6 177.1 43 Durable materials n.e.c 9.64 126.7 125.3 124.8 127.5 127.6 129.2 130.8 131.3 130.9 131.5 129.7 128.6 129.5 129.5 44 Basic metal materials 4.64 95.9 94.8 93.7 98.4 97.3 100.3 101.1 101.4 99.8 100.8 98.4 95.9 97.0 97.3 45 Nondurable goods materials 10.09 132.0 130.1 130.1 132.8 133.1 132.6 134.7 135.1 136.3 137.1 135.9 136.2 137.4 137.7 46 Textile, paper, and chemical materials 7.53 134.4 131.9 132.1 135.3 135.7 134.9 137.4 137.9 139.1 139.9 138.6 139.1 140.5 140.9 47 Textile materials 1.52 109.9 107.5 107.5 108.5 110.1 109.2 109.5 110.1 110.0 112.1 110.7 111.6 113.0 48 Pulp and paper materials 1.55 147.3 146.4 145.4 150.3 148.3 148.1 148.4 147.2 150.3 150.4 147.5 147.5 148.8 49 Chemical materials 4.46 138.3 135.1 135.8 139.2 140.0 139.0 143.1 144.2 145.1 145.7 145.0 145.5 147.0 50 Miscellaneous nondurable materials ... 2.57 124.9 125.1 124.2 125.6 125.6 125.9 126.6 127.0 128.0 129.1 128.0 127.6 51 Energy materials 11.69 101.5 99.5 101.3 102.7 103.2 101.5 101.3 102.3 102.6 100.5 100.5 101.3 102.5 103.1 52 Primary energy 7.57 106.3 104.0 105.6 106.8 106.2 106.8 106.0 108.6 107.6 105.2 104.4 104.2 105.1 53 Converted fuel materials 4.12 92.8 91.2 93.5 95.3 97.7 91.8 92.6 90.7 93.3 92.0 93.3 96.0 97.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • August 1989 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 11997777 1988 1989 Groups SSIICC pprrooppoorr-- 11998888 ccooddee ttiioonn aavvgg.. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar. Apr Maye Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities 15.79 107.5 106.0 106.8 108.1 109.0 107.2 107.2 108.1 108.9 107.2 106.8 107.6 108.2 108.7 2 Mining 9.83 103.4 102.6 103.0 104.3 103.8 103.7 103.1 104.7 104.9 103.0 100.9 101.9 102.9 104.1 3 Utilities 5.% 114.3 111.6 113.2 114.4 117.8 113.0 113.9 113.7 115.4 114.0 116.5 116.9 116.9 116.4 4 Manufacturing 84.21 142.7 141.8 142.1 143.6 144.0 144.4 145.3 145.8 146.3 147.2 146.8 146.7 147.7 147.6 5 Nondurable 35.11 143.9 142.1 142.6 144.6 145.1 145.3 146.3 146.7 147.1 148.5 148.1 148.4 149.3 149.3 6 Durable 49.10 141.9 141.5 141.7 142.9 143.2 143.8 144.6 145.2 145.7 146.2 145.9 145.6 146.6 146.4 Mining 7 Metal 10 .50 93.2 86.0 82.2 94.0 96.6 99.1 101.6 104.6 111.9 106.9 98.6 98.1 8 Coal 11.12 1.60 137.9 127.8 126.9 141.5 137.2 142.2 138.5 149.7 155.1 144.7 134.7 137.7 145.5 145.8 9 Oil and gas extraction 13 7.07 92.9 94.6 95.8 93.3 93.2 92.0 91.5 90.8 88.9 88.9 89.5 90.2 89.7 10 Stone and earth minerals 14 .66 139.9 140.1 137.4 140.2 141.3 139.7 142.8 144.0 149.4 150.8 142.5 143.5 143.1 Nondurable manufactures 11 Foods 20 7.96 142.7 141.0 141.3 143.3 143.3 143.2 144.0 145.7 145.8 146.6 146.3 145.5 146.3 12 Tobacco products 21 .62 105.2 107.2 104.5 100.6 105.1 105.0 105.4 102.4 107.0 105.0 104.7 13 Textile null products 22 2.29 116.2 114.6 114.3 117.1 116.4 116.2 117.0 117.2 117.9 120.2 119.4 120.1 121.4 14 Apparel products 23 2.79 109.1 108.6 109.3 109.4 108.9 109.9 109.5 110.1 108.8 110.2 110.2 109.6 15 Paper and products 26 3.15 150.3 149.5 148.6 152.3 151.0 150.9 151.8 150.7 151.7 153.8 151.7 151.8 153.7 16 Printing and publishing 27 4.54 184.2 180.7 182.3 184.9 186.7 188.0 188.1 188.5 188.0 193.0 194.6 197.4 199.3 200.0 17 Chemicals and products 28 8.05 151.9 149.1 150.5 153.4 154.8 155.3 156.7 157.5 158.1 159.0 158.5 159.1 159.2 18 Petroleum products 29 2.40 96.0 95.2 94.1 95.0 96.0 93.7 96.3 95.0 98.0 98.0 96.3 97.1 97.8 95.8 19 Rubber and plastic products.... 30 2.80 174.4 173.4 174.4 175.4 175.3 175.3 176.9 177.5 177.5 175.9 175.0 174.5 175.1 20 Leather and products 31 .53 59.5 57.1 58.9 59.1 59.4 59.9 61.0 61.5 60.2 62.9 62.9 61.1 61.6 Durable manufactures 21 Lumber and products 24 2.30 137.3 139.8 136.4 136.6 133.8 133.5 137.5 139.4 143.0 139.9 132.8 133.1 132.5 22 Furniture and fixtures 25 1.27 162.1 160.5 161.2 162.9 164.9 164.9 164.5 165.4 165.4 166.3 164.8 165.8 167.8 23 Clay, glass, and stone products. 32 2.72 122.6 121.5 123.4 122.2 122.6 122.6 123.3 124.7 125.1 126.6 125.4 125.2 124.8 24 Primary metals 33 5.33 89.2 89.2 87.5 91.5 90.8 93.1 94.2 92.7 90.0 93.2 91.1 88.4 89.4 89.4 25 Iron and steel 331.2 3.49 78.1 78.6 74.2 80.2 78.9 81.4 83.1 80.8 77.6 82.2 79.1 75.9 77.4 26 Fabricated metal products 34 6.46 120.9 119.8 120.4 121.7 122.1 122.5 122.6 124.6 125.1 124.5 124.5 124.0 123.6 124.0 27 Nonelectrical machinery 35 9.54 170.8 170.3 171.2 173.1 174.1 174.8 173.8 175.4 177.8 178.7 180.8 182.3 183.6 184.4 28 Electrical machinery 36 7.15 180.1 179.1 179.5 181.5 182.2 181.8 183.0 182.2 180.9 180.9 181.7 181.4 182.9 182.3 29 Transportation equipment 37 9.13 132.1 133.1 132.8 131.9 131.8 132.7 134.8 135.2 136.8 136.7 136.4 134.7 136.7 135.3 30 Motor vehicles and parts 371 5.25 117.2 119.6 119.1 116.6 117.5 118.5 121.7 122.9 125.5 124.9 123.4 120.4 122.7 120.1 31 Aerospace and miscellaneous transportation equipment 372-6.9 3.87 152.4 151.5 151.4 152.7 151.3 151.9 152.7 151.9 152.2 152.7 154.0 154.2 155.7 156.0 32 Instruments 38 2.66 154.3 151.3 153.0 156.4 156.8 157.8 159.9 160.4 159.1 161.0 161.3 161.0 162.4 163.5 33 Miscellaneous manufactures 39 1.46 107.1 106.0 107.6 107.8 108.3 108.5 107.7 109.0 110.9 112.2 110.0 112.3 113.8 Utilities 34 Electric 44..1177 113322..00 112299..77 113322..11 113344..66 113388..88 113322..22 113322..88 113311..66 113322..99 113311..00 113355..33 113366..11 113366..11 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKET 35 Products, total. 517.5 1,824.5 1,820.1 1,813.9 1,822.3 1,828.6 1,828.9 1.853.4 1,855.5 1,875.3 1,885.1 1,879.2 1,877.8 1,892.7 1,879.5 36 Final 405.7 1,401.2 1,397.1 1,394.3 1,398.9 1,404.2 1,404.3 1.423.5 1,426.3 1,442.1 1,447.5 1,449.6 1,442.7 1,457.7 1,444.2 37 Consumer goods. 272.7 902.4 898.9 893.6 895.6 900.4 897.2 915.0 918.4 934.4 935.6 934.3 927.8 937.2 926.1 38 Equipment 133.0 498.8 498.3 500.7 503.2 503.8 507.1 508.4 507.9 507.7 511.9 515.2 514.9 520.5 518.1 39 Intermediate 111.9 423.3 423.0 419.6 423.4 424.3 424.5 430.0 429.3 433.2 437.7 429.6 435.1 434.9 435.3 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 1989 IItteemm 11998866 11998877 11998888 July Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar/ Apr. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,750 1,535 1,456 1,425 1,466 1,432 1,526 1,508 1,518 1,486 1,403 1,230 1,334 2 1-family 1,071 1,024 994 976 1,007 980 1,029 1,027 1,058 1,052 989 870 954 3 2-or-more-family 679 511 462 449 459 452 497 481 460 434 414 360 380 4 Started 1,805 1,621 1,488 1,478 1,459 1,463 1,532 1,567 1,577 1,678 1,465 1,409 1,339 5 1-family 1,180 1,146 1,081 1,067 1,076 1,039 1,136 1,138 1,141 1,199 1,029 981 1,027 6 2-or-more-family 626 474 407 411 383 424 396 429 436 479 436 428 312 7 Under construction, end of period1 . 1,074 987 919 973 962 955 951 959 956 957 951 944 928 8 1-family 583 591 570 605 601 596 597 603 603 602 594 587 581 9 2-or-more-family 490 397 350 368 361 359 354 356 353 355 357 357 347 10 Completed 1,756 1,669 1,530 1,528 1,539 1,536 1,516 1,429 1,539 1,537 1,610 1,453 1,555 11 1-family 1,120 1,123 1,085 1,077 1,074 1,092 1,088 1,037 1,108 1,141 1,189 1,045 1,112 12 2-or-more-family 636 546 445 451 465 444 428 392 431 396 421 408 443 13 Mobile homes shipped 244 233 218 207 223 224 216 227 225 232 212 207 198 Merchant builder activity in 1-family units 14 Number sold 748 672 675 701 712 691 718 650 669 700 621 547 597 15 Number for sale, end of period .... 357 365 366 365 363 361 353 364 366 369 375 377 377 Price (thousands of dollars)2 Median 16 Units sold 92.2 104.7 113.3 118.0 110.0 116.6 112.9 110.4 121.0 113.0 118.0 124.0 116.0 17 Units sold 112.2 127.9 139.0 141.3 140.6 142.7 137.3 137.3 147.7 138.6 145.3 148.4 145.9 EXISTING UNITS (1-family) 18 Number sold 3,566 3,530 3,594 3,650 3,690 3,650 3,680 3,710 3,920 3,550 3,480 3,400 3,400 Price of units sold (thousands of dollars) 19 Median 80.3 85.6 89.2 90.7 91.5 88.5 88.9 88.5 88.7 89.7 91.9 92.0 9922..99 20 Average 98.3 106.2 112.5 114.7 115.4 112.6 112.3 112.4 112.0 113.0 117.8 116.1 118.0 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 386,093 398,848 403,122 404,164 403,172 406,906 407,697 411,517 420,999 417,953 415,744 414,621 414,857 22 Private 314,651 323,819 325,110 324,658 326,763 327,164 330,735 332,279 335,641 336,504 333,780 339,574 335,602 23 Residential 187,147 194,772 195,280 194,215 195,393 196,945 199,971 200,601 201,738 201,441 199,727 201,135 200,694 24 Nonresidential, total 127,504 129,047 129,830 130,443 131,370 130,219 130,764 131,678 133,903 135,063 134,053 138,439 134,908 Buildings 25 Industrial 13,747 13,707 14,239 13,928 14,006 13,546 15,275 15,957 14,949 15,789 15,028 16,054 16,429 26 Commercial 56,762 55,448 55,588 56,687 56,404 55,815 54,525 53,806 55,889 57,549 58,211 60,601 56,341 27 Other 13,216 15,464 16,761 16,166 16,613 16,600 17,127 16,798 17,177 17,915 17,437 17,617 16,911 28 Public utilities and other 43,779 44,428 43,242 43,662 44,347 44,258 43,837 45,117 45,888 43,810 43,377 44,167 45,227 29 Public 71,437 75,028 78,011 79,506 76,409 79,742 76,963 79,238 85,358 81,449 81,964 75,046 79,255 30 Military 3,868 4,327 3,952 4,350 3,984 4,897 2,718 3,521 4,006 3,440 3,433 3,740 3,326 31 Highway 22,681 22,758 25,721 27,673 23,491 23,841 25,958 26,433 30,955 27,396 26,121 23,516 25,595 32 Conservation and development... 4,646 5,162 4,534 4,861 4,793 5,045 4,339 3,630 4,369 4,079 4,650 3,951 3,394 33 Other 40,242 42,781 43,804 42,622 44,141 45,959 43,948 45,654 46,028 46,534 47,760 43,839 46,940 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 • August 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 1988 1989 1989 MMMaaayyy 11998888 11998899 111999888999 MMaayy MMaayy June Sept. Dec. Mar. Jan/ Feb/ Mar. Apr. May CONSUMER PRICES2 (1982-84=100) 1 All items 3.9 5.4 4.9 4.8 4.1 6.1 .6 .4 .5 .7 .6 123.8 2 Food 3.3 6.8 6.4 8.8 3.0 8.2 .7 .4 .8 .5 .6 124.9 3 Energy items 1.5 9.8 3.7 2.7 -.4 10.2 .8 .6 1.1 5.1 1.6 97.4 4 All items less food and energy 4.3 4.6 4.3 4.3 4.9 5.2 .5 .4 .4 .2 .5 128.3 5 Commodities 3.4 3.6 3.9 3.1 4.2 4.1 .5 .2 .3 .2 .4 119.7 6 Services 4.7 5.1 4.5 4.8 5.4 5.9 .5 .5 .5 .2 .5 133.4 PRODUCER PRICES (1982=100) 7 Finished goods 2.0 6.2 3.0 5.7 3.0 10.2 1.1 .9 ..44 .4 ..99 114.2 8 Consumer foods .5 7.1 5.5 9.2 2.1 13.5 1.3 1.0 ..88 -.6 ..88 119.1 9 Consumer energy .0 16.9 -5.2 -2.7 1.4 39.2 4.9 2.6 .9 7.2 3.3 72.0 1U Other consumer goods 3.4 4.8 3.5 5.9 4.4 6.1 .5 .6 .4 -.1 .5 123.3 11 Capital equipment 2.0 3.6 2.9 6.1 1.7 4.6 .6 .3 .2 -.1 .4 117.9 12 Intermediate materials3 5.5 5.8 7.4 4.6 4.5 9.1 1.0 .5 .6 .4 .3 112.6 13 Excluding energy 6.9 5.6 6.9 7.2 6.7 6.2 .8 .3 .4 .0 .2 120.8 Crude materials 14 Foods 3.1 9.8 21.3 29.1 -7.9 16.5 2.3 -1.4 3.0 -2.8 .4 115.0 15 Energy -4.2 10.2 7.8 -27.0 12.3 45.9 6.9 1.1 1.7 5.2 2.2 78.7 lb Other 18.8 6.5 -6.5 8.5 12.5 10.9 2.5 -1.8 2.0 -1.1 -.4 139.8 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. 1988 1989 AAccccoouunntt 11998866 11998877 11998888 Ql Q2 Q3 Q4 Ql' GROSS NATIONAL PRODUCT 1 Total 4,240.3 4,526.7 4,864.3 4,724.5 4,823.8 4,909.0 4,999.7 5,099.0 By source 2 Personal consumption expenditures 2,807.5 3,012.1 3,227.5 3,128.1 3,194.6 3,261.2 3,326.4 3,378.1 3 Durable goods 406.5 421.9 451.1 437.8 449.8 452.9 464.0 459.9 4 Nondurable goods 943.6 997.9 1,046.9 1,016.2 1,036.6 1,060.8 1,073.9 1,092.7 5 Services 1,457.3 1,592.3 1,729.6 1,674.1 1,708.2 1,747.5 1,788.5 1,825.5 6 Gross private domestic investment 665.9 712.9 766.5 763.4 758.1 772.5 772.0 788.9 7 Fixed investment 650.4 673.7 718.1 698.1 714.4 722.8 737.2 748.5 8 Nonresidential 433.9 446.8 488.4 471.5 487.8 493.7 500.6 511.3 9 Structures 138.5 139.5 142.8 140.1 142.3 143.8 145.0 148.0 10 Producers' durable equipment 295.4 307.3 345.6 331.3 345.5 349.9 355.6 363.3 11 Residential structures 216.6 226.9 229.7 226.6 226.5 229.1 236.6 237.2 12 Change in business inventories 15.5 39.2 48.4 65.3 43.7 49.7 34.7 40.4 13 Nonfarm 17.4 40.7 42.2 49.4 33.1 41.9 44.6 25.7 14 Net exports of goods and services -104.4 -123.0 -94.6 -112.1 -90.4 -80.0 -96.1 -79.3 15 Exports 378.4 428.0 519.7 487.8 507.1 536.1 548.0 573.8 16 Imports 482.8 551.1 614.4 599.9 597.5 616.0 644.0 653.2 17 Government purchases of goods and services 871.2 924.7 964.9 945.2 961.6 955.3 997.5 1,011.3 18 Federal 366.2 382.0 381.0 377.7 382.2 367.7 396.3 397.6 19 State and local 505.0 542.8 583.9 567.5 579.4 587.6 601.2 613.7 By major type of product 20 Final sales, total 4,224.7 44,,448877..55 4,815.9 4,659.2 4,780.1 4,859.3 4,965.0 5,058.6 21 Goods 1,697.9 1,792.5 1,938.7 1,879.5 1,928.0 1,960.1 1,987.1 2,032.9 22 Durable 725.3 776.3 858.3 819.3 849.5 881.6 882.7 893.0 23 Nondurable 972.6 1,016.3 1,080.4 1,060.1 1,078.5 1,078.5 1,104.4 1,140.0 24 Services 2,118.3 2,295.7 2,478.0 2,405.2 2,451.5 2,501.6 2,553.5 2,603.9 25 Structures 424.0 438.4 447.7 439.9 444.3 447.3 459.1 462.2 26 Change in business inventories 15.5 39.2 48.4 65.3 43.7 49.7 34.7 40.4 27 Durable goods 4.3 26.6 30.9 26.6 17.8 45.1 34.1 30.0 28 Nondurable goods 11.3 12.6 17.4 38.6 25.9 4.6 0.6 10.5 MEMO 29 Total GNP in 1982 dollars 3,721.7 3,847.0 3,996.1 3,956.1 3,985.2 4,009.4 4,033.4 4,077.5 NATIONAL INCOME 30 3,437.1 3,678.7 3,968.2 3,850.8 3,928.8 4,000.7 4,093.4 4,188.9 31 Compensation of employees 2,507.1 2,683.4 2,904.7 2,816.4 2,874.0 2,933.2 2,995.3 3,060.9 32 Wages and salaries 2,094.0 2,248.4 2,436.9 2,358.7 2,410.0 2,462.0 2,516.8 2,574.7 33 Government and government enterprises 393.7 420.1 446.1 437.1 442.9 449.1 455.4 465.9 34 Other 1,700.3 1,828.3 1,990.7 1,921.6 1,967.1 2,012.9 2,061.4 2,108.8 35 Supplement to wages and salaries 413.1 435.0 467.8 457.7 464.0 471.1 478.5 486.2 36 Employer contributions for social insurance 217.0 227.1 249.6 243.1 247.5 251.7 256.0 260.8 37 Other labor income 196.1 207.9 218.3 214.6 216.5 219.5 222.5 225.4 38 Proprietors' income1 286.7 312.9 324.5 323.9 328.8 321.6 323.8 358.1 39 Business and professional 250.3 270.0 288.2 279.2 285.3 290.7 297.7 300.9 40 Farm1 36.4 43.0 36.3 44.7 43.4 30.9 26.0 57.1 41 Rental income of persons2 12.4 18.4 19.3 20.5 19.1 19.7 18.1 14.4 42 Corporate profits1 298.9 310.4 328.1 316.2 326.5 330.0 340.9 319.4 43 Profits before tax 236.4 276.7 306.4 286.2 305.9 313.9 320.6 320.2 44 Inventory valuation adjustment 8.3 -18.0 -23.8 -19.4 -27.4 -29.3 -19.2 -34.1 45 Capital consumption adjustment 54.2 51.7 45.6 49.4 48.0 45.4 39.6 33.3 46 Net interest 331.9 353.6 391.5 373.9 380.6 396.2 415.4 436.2 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 • August 1989 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1988 1989 AAccccoouunntt 11998866 11998877 11998888 Ql Q2 Q3 Q4 Qlf PERSONAL INCOME AND SAVING 1 Total personal income 3,531.1 3,780.0 4,062.1 3,951.4 4,022.4 4,094.0 4,180.5 4,315.7 2 Wage and salary disbursements 2,094.0 2,248.4 2,436.9 2,358.7 2,410.0 2,462.0 2,516.8 2,574.7 3 Commodity-producing industries 625.5 649.8 695.4 676.0 689.1 701.3 715.4 727.7 4 Manufacturing 473.1 490.3 522.5 509.6 517.4 525.9 537.1 545.4 5 Distributive industries 498.9 531.7 578.7 558.2 572.1 585.8 598.6 611.8 6 Service industries 575.9 646.8 716.6 687.4 705.9 725.8 747.4 769.3 7 Government and government enterprises 393.7 420.1 446.1 437.1 442.9 449.1 455.4 465.9 8 Other labor income 196.1 207.9 218.3 214.6 216.5 219.5 222.5 225.4 9 Proprietors' income1 ( 286.7 312.9 324.5 323.9 328.8 321.6 323.8 358.1 10 Business and professional 250.3 270.0 288.2 279.2 285.3 290.7 297.7 300.9 11 Farm1 36.4 43.0 36.3 44.7 43.4 30.9 26.0 57.1 12 Rental income of persons2 12.4 18.4 19.3 20.5 19.1 19.7 18.1 14.4 13 Dividends 82.8 88.6 96.3 93.5 95.0 97.3 99.4 102.1 14 Personal interest income 499.1 527.0 575.9 554.2 563.7 581.9 603.7 634.2 15 Transfer payments 521.1 548.8 586.0 576.3 582.8 588.6 596.4 617.1 16 Old-age survivors, disability, and health insurance benefits ... 269.3 282.9 301.8 298.1 300.4 303.1 305.7 317.8 17 LESS: Personal contributions for social insurance 161.1 172.0 195.1 190.2 193.5 196.7 200.1 210.2 18 EQUALS: Personal income 3,531.1 3,780.0 4,062.1 3,951.4 4,022.4 4,094.0 4,180.5 4,315.7 19 LESS: Personal tax and nontax payments 511.4 570.3 590.3 575.8 601.0 586.5 598.0 635.1 20 EQUALS: Disposable personal income 3,019.6 3,209.7 3,471.8 3,375.6 3,421.5 3,507.5 3,582.5 3,680.6 21 LESS: Personal outlays 2,898.0 3,105.5 3,327.5 3,225.7 3,293.6 3,361.8 3,428.7 3,482.7 22 EQUALS: Personal saving 121.7 104.2 144.3 149.9 127.8 145.7 153.8 197.9 MEMO Per capita (1982 dollars) 23 Gross national product 15,401.2 15,772.9 16,231.1 16,127.6 16,213.2 16,265.3 16,322.9 16,461.4 24 Personal consumption expenditures 10,160.1 10,336.2 10,528.8 10,435.4 10,492.3 10,563.1 10,628.1 10,637.5 25 Disposable personal income 10,929.0 11,012.0 11,326.0 11,260.0 11,237.0 11,362.0 11,445.0 11,592.0 26 Saving rate (percent) 4.0 3.2 4.2 4.4 3.7 4.2 4.3 5.4 GROSS SAVING 27 Gross saving 537.2 560.4 644.4 627.0 634.1 665.4 651.9 698.8 28 Gross private saving 681.6 665.3 731.6 726.3 711.2 732.9 756.7 783.1 29 Personal saving 121.7 104.2 144.3 149.9 127.8 145.7 153.8 197.9 30 Undistributed corporate profits1 104.1 81.1 81.0 78.1 80.1 79.5 86.8 60.7 31 Corporate inventory valuation adjustment 8.3 -18.0 -23.8 -19.4 -27.4 -29.3 -19.2 -34.1 Capital consumption allowances 32 Corporate 282.4 297.5 315.7 309.8 313.3 316.8 323.0 328.2 33 Noncorporate 173.5 182.5 190.6 188.5 189.9 190.9 193.1 196.4 34 Government surplus, or deficit (-), national income and product accounts -144.4 -104.9 -87.3 -99.2 -77.1 -67.5 -104.8 -84.3 35 Federal -205.6 -157.8 -142.4 -155.1 -133.3 -123.5 -157.5 -139.5 36 State and local 61.2 52.9 55.1 55.8 56.2 56.0 52.6 55.2 37 Gross investment 523.6 552.3 630.3 612.0 629.0 651.4 628.7 667.3 38 Gross private domestic 665.9 712.9 766.5 763.4 758.1 772.5 772.0 788.9 39 Net foreign -142.4 -160.6 -136.2 -151.3 -129.1 -121.1 -143.3 -121.6 40 Statistical discrepancy -13.6 -8.1 -14.1 -15.0 -5.1 -14.0 -23.2 -31.5 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 1988r 1989 Item credits or debits 11998866'' 11998877'' 11998888rr Qi Q2 Q3 Q4 Qlp 1 Balance on current account --113333,,224499 --114433,,770000 --112266,,554488 -32,046 -33,485 -32,340 -28,677 -30,685 2 Not seasonally adjusted -27,556 -33,875 -36,926 -28,191 -26,131 3 Merchandise trade balance -145,058 -159,500 -127,215 -33,446 -31,411 -30,339 -32,019 -27,634 4 Merchandise exports 223,367 250,266 319,251 76,447 78,471 80,604 83,729 88,4% 5 Merchandise imports -368,425 -409,766 -446,466 -109,893 -109,882 -110,943 -115,748 -116,130 6 Military transactions, net -4,576 -2,857 -4,606 -964 -1,033 -1,006 -1,604 -1,482 7 Investment income, net 21,647 22,283 2,227 2,795 -2,465 -2,590 4,489 -3,508 8 Other service transactions, net 10,517 10,586 17,702 2,933 4,323 4,971 5,475 5,359 9 Remittances, pensions, and other transfers -4,049 -4,063 -4,279 -1,131 -971 -1,088 -1,090 -1,192 10 U.S. government grants (excluding military) -11,730 -10,149 -10,377 -2,233 -1,928 -2,288 -3,928 -2,228 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -2,024 997 2,999 -1,490 -885 1,961 3,413 1,012 12 Change in U.S. official reserve assets (increase, -) 312 9,149 -3,566 1,503 39 -7,380 2,272 -4,000 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -246 -509 474 155 180 -35 173 -188 15 Reserve position in International Monetary Fund 1,501 2,070 1,025 446 69 202 307 316 16 Foreign currencies -942 7,588 -5,064 901 -210 -7,547 1,791 -4,128 17 Change in U.S. private assets abroad (increase, -) -97,954 -86,363 -81,543 4,528 -15,273 -32,467 -38,332 -28,828 18 Bank-reported claims -59,975 -42,119 -54,481 15,266 -12,602 -26,229 -30,916 -22,601 19 Nonbank-reported claims -7,396 5,201 -1,684 -65 -6,443 255 4,569 20 U.S. purchase of foreign securities, net -4,271 -5,251 -7,846 -4,539 1,333 -1,592 -3,047 -2,554 21 U.S. direct investments abroad, net -26,312 -44,194 -17,533 -6,134 2,439 -4,901 -8,938 -3,673 22 Change in foreign official assets in United States (increase, +) 35,594 45,193 38,882 24,631 5,895 -2,234 10,589 6,914 23 U.S. Treasury securities 34,364 43,238 41,683 27,702 5,853 -3,769 11,897 4,585 24 Other U.S. government obligations -1,214 1,564 1,309 -162 202 572 697 716 25 Other U.S. government liabilities 2,141 -2,520 -1,284 -304 -517 -232 -232 -377 26 Other U.S. liabilities reported by U.S. banks3 1,187 3,918 -331 -1,772 774 1,703 -1,036 1,538 27 Other foreign official assets -884 -1,007 -2,495 -833 -417 -508 -737 452 28 Change in foreign private assets in United States (increase, +) < 186,011 172,847 180,418 2,396 59,438 48,413 70,170 42,163 29 U.S. bank-reported liabilities3 79,783 89,026 68,832 -17,137 30,455 23,291 32,223 10,398 30 U.S. nonbank-reported liabilities -2,641 2,450 6,558 1,565 -59 2,350 2,702 31 Foreign private purchases of U.S. Treasury securities, net 3,809 -7,643 20,144 5,928 5,458 3,422 5,336 8,745 32 Foreign purchases of other U.S. securities, net 70,969 42,120 26,448 2,424 9,699 7,454 6,871 8,591 33 Foreign direct investments in United States, net 34,091 46,894 58,436 9,616 13,885 11,896 23,038 14,429 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 1111,,330088 11,,887788 --1100,,664411 479 -15,729 24,047 -19,434 13,424 36 Owing to seasonal adjustments 3,843 -3,714 -4,556 4,431 4,264 37 Statistical discrepancy in recorded data before seasonal adjustment 11,308 1,878 -10,641 -3,364 -12,015 28,603 -23,865 9,160 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) 312 9,149 -3,566 1,503 39 -7,380 2,272 -4,000 39 Foreign official assets in United States (increase, +) excluding line 25 33,453 47,713 40,166 24,935 6,412 -2,002 10,821 7,291 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22 above) -9,327 -9,955 -3,109 -1,547 -1,776 -459 672 7,059 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 96 53 92 41 4 7 40 13 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 • August 1989 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data are seasonally adjusted. 1988 1989 IItteemm 11998866 11998877 11998888 Oct. Nov. Dec. Jan. Feb. Mar. Apr." 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments, f.a.s. value 227,159 254,122 321,813 27,816 27,542 29,062 28,747 28,664 30,323 30,572 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 2 Customs value 365,438 406,241 441,574 36,600 38,200 40,052 37,425 38,483 39,868 38,836 Trade balance 3 Customs value -138,279 -152,119 -119,760 -8,784 -10,658 -10,991 -8,678 -9,819 -9,545 -8,264 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 1989 TTyyppee 11998855 11998866 11998877 Nov. Dec. Jan. Feb. Mar. Apr. May" 1 Total 43,186 48,511 45,798 48,944 47,802 48,190 49,373 49,854 50,303 54,941 2 Gold stock, including Exchange Stabilization Fund1 11,090 11,064 11,078 11,059 11,057 11,056 11,061 11,061 11,061 11,060 3 Special drawing rights2'3 7,293 8,395 10,283 9,785 9,637 9,388 9,653 9,443 9,379 9,134 4 Reserve position in International Monetary Fund 11,947 11,730 11,349 10,103 9,745 9,422 9,353 9,052 9,132 8,513 5 Foreign currencies4 12,856 17,322 13,088 17,997 17,363 18,324 19,306 20,298 20,731 26,234 1. Gold held under earmark at Federal Reserve Banks for foreign and interna- 3. Includes allocations by the International Monetary Fund of SDRs as follows: tional accounts is not included in the gold stock of the United States; see table $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1, 3.13. Gold stock is valued at $42.22 per fine troy ounce. 1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based million on Jan. 1, 1981; plus transactions in SDRs. on a weighted average of exchange rates for the currencies of member countries. 4. Valued at current market exchange rates. From July 1974 through December 1980, 16 currencies were used; from January 1981, 5 currencies have been used. The U.S. SDR holdings and reserve position in the IMF also are valued on this basis beginning July 1974. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 1988 1989 AAsssseettss 11998855 11998866 11998877 p Nov. Dec. Jan. Feb. Mar. Apr. May 1 Deposits 480 287 244 251 347 279 325 351 352 428 Assets held in custody 2 U.S. Treasury securities 121,004 155,835 195,126 229,926 232,547 228,399 230,860 234,075 235,145 232,004 3 Earmarked gold 14,245 14,048 13,919 13,640 13,636 13,635 13,609 13,602 13,576 13,612 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 1989 AAsssseett aaccccoouunntt 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr. All foreign countries 1 Total, all currencies 458,012 456,628 518,618 497,514 516,360 505,790 496,509 501,438 519,522 516,849 2 Claims on United States 119,706 114,563 138,034 157,317 171,304 169,111 167,143 168,558' 177,929' 170,046 3 Parent bank 87,201 83,492 105,845 117,494 130,834 129,856 127,403 128,115 134,029' 127,476 4 Other banks in United States 13,057 13,685 16,416 15,039 16,366 14,918 14,559' 13,506' 14,697' 13,460 5 Nonbanks 19,448 17,386 15,773 24,784 24,104 24,337 25,181' 26,937' 29,203' 29,110 6 Claims on foreigners 315,676 312,955 342,520 302,855 307,043 299,504 291,681' 2%,028' 303,702' 306,933 7 Other branches of parent bank 91,399 96,281 122,155 102,050 106,639 107,176 102,478 103,960 110,433 114,834 8 Banks 102,960 105,237 108,859 102,285 100,758 96,866 93,760 95,784 97,799' 97,075 9 Public borrowers 23,478 23,706 21,832 18,234 18,191 17,138 16,751 16,504 16,858 16,077 10 Nonbank foreigners 97,839 87,731 89,674 80,286 81,455 78,324 78,692' 79,780' 78,612 78,947 11 Other assets 22,630 29,110 38,064 37,342 38,013 37,175 37,685' 36,852 37,891 39,870 12 Total payable in U.S. dollars 336,520 317,487 350,107 341,132 355,652 358,027 345,506 346,971 366,414 359,818 13 Claims on United States 116,638 110,620 132,023 151,598 165,017 163,456 160,520 161,336 170,118' 162,955 14 Parent bank 85,971 82,082 103,251 115,109 127,692 126,929 124,4% 124,288 129,458' 123,258 15 Other banks in United States 12,454 12,830 14,657 13,560 15,062 14,167 12,908' 12,025' 13,259' 12,540 16 Nonbanks 18,213 15,708 14,115 22,929 22,263 22,360 23,116' 25,023' 27,401' 27,157 17 Claims on foreigners 210,129 195,063 202,428 173,467 173,826 177,672 167,271 168,274 178,118' 179,283 18 Other branches of parent bank 72,727 72,197 88,284 74,949 77,384 80,736 76,221 76,563 82,796 87,777 19 Banks 71,868 66,421 63,707 54,870 53,632 54,884 49,544 50,153 54,028' 50,804 20 Public borrowers 17,260 16,708 14,730 12,787 12,415 12,131 11,596 11,638 11,698 11,467 21 Nonbank foreigners 48,274 39,737 35,707 30,861 30,395 29,921 29,910 29,920 29,596 29,235 22 Other assets 9,753 11,804 15,656 16,067 16,809 16,899 17,715 17,361 18,178 17,580 United Kingdom 23 Total, all currencies 148,599 140,917 158,695 155,580 159,556 156,835 156,529 154,879 154,856 153,146 24 Claims on United States 33,157 24,599 32,518 36,260 39,242 40,089 40,954 40,547' 40,715' 39,394 25 Parent bank 26,970 19,085 27,350 30,569 33,138 34,243 34,928 34,449 35,315' 34,660 26 Other banks in United States 1,106 1,612 1,259 994 1,343 1,123 1,128 1,268 1,380 1,227 27 Nonbanks 5,081 3,902 3,909 4,697 4,761 4,723 4,898 4,830' 4,020' 3,507 28 Claims on foreigners 110,217 109,508 115,700 109,743 110,336 106,388 104,668 103,806' 103,443' 102,438 29 Other branches of parent bank 31,576 33,422 39,903 33,103 33,243 35,625 35,322 33,650 35,305 32,954 30 Banks 39,250 39,468 36,735 40,236 40,875 36,765 34,907 36,159 35,382' 37,079 31 Public borrowers 5,644 4,990 4,752 4,190 4,276 4,019 4,090 3,808 3,757 3,471 32 Nonbank foreigners 33,747 31,628 34,310 32,214 31,942 29,979 30,349 30,189' 28,999 28,934 33 Other assets 5,225 6,810 10,477 9,577 9,978 10,358 10,907 10,526 10,698 11,314 34 Total payable in U.S. dollars 108,626 95,028 100,574 99,868 101,341 103,503 102,873 100,863 103,211 98,463 35 Claims on United States 32,092 23,193 30,439 34,184 36,881 38,012 38,591 37,707 38,265' 36,772 36 Parent bank 26,568 18,526 26,304 29,667 32,115 33,252 33,925 33,106 34,320' 33,499 37 Other banks in United States 1,005 1,475 1,044 606 849 964 678 816 937 872 38 Nonbanks 4,519 3,192 3,091 3,911 3,917 3,7% 3,988 3,785 3,008' 2,401 39 Claims on foreigners 73,475 68,138 64,560 60,984 59,405 60,472 58,798 57,567 59,201' 56,227 40 Other branches of parent bank 26,011 26,361 28,635 25,703 25,574 28,474 27,939 26,475 28,145 25,389 41 Banks 26,139 23,251 19,188 20,488 19,452 18,494 16,778 17,246 17,715' 17,680 42 Public borrowers 3,999 3,677 3,313 2,984 2,898 2,840 2,869 2,774 2,786 2,6% 43 Nonbank foreigners 17,326 14,849 13,424 11,809 11,481 10,664 11,212 11,072 10,555 10,462 44 Other assets 3,059 3,697 5,575 4,700 5,055 5,019 5,484 5,589 5,745 5,464 Bahamas and Caymans 45 Total, all currencies 142,055 142,592 160,321 159,147 169,034 170,639 162,352 165,862 179,212 172,319 46 Claims on United States 74,864 78,048 85,318 96,287 106,240 105,320 103,016 103,989 111,978' 105,274 47 Parent bank 50,553 54,575 60,048 64,249 73,654 73,409 71,065 71,100 75,261 68,%9 48 Other banks in United States 11,204 11,156 14,277 12,799 14,065 13,145 12,742' 11,563' 12,275' 11,564 49 Nonbanks 13,107 12,317 10,993 19,239 18,521 18,766 19,209' 21,326' 24,442' 24,741 50 Claims on foreigners 63,882 60,005 70,162 56,526 56,128 58,393 52,503 54,732 59,615' 60,096 51 Other branches of parent bank 19,042 17,296 21,277 18,772 18,534 17,954 15,982 18,454 20,048 26,261 52 Banks 28,192 27,476 33,751 25,636 25,549 28,268 24,755 24,514 27,727' 22,633 53 Public borrowers 6,458 7,051 7,428 6,045 5,861 5,830 5,422 5,513 5,480 5,374 54 Nonbank foreigners 10,190 8,182 7,706 6,073 6,184 6,341 6,344 6,251 6,360 5,828 55 Other assets 3,309 4,539 4,841 6,334 6,666 6,926 6,833 7,141 7,619 6,949 56 Total payable in U.S. dollars 136,794 136,813 151,434 151,363 161,238 163,518 154,981 158,011 172,175 166,384 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 • August 1989 3.14—Continued 1988 1989 LLiiaabbiilliittyy aaccccoouunntt 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr. All foreign countries 57 Total, all currencies 458,012 456,628 518,618 497,514 516,360 505,790 496,509 501,438 519,522 516,849 58 Negotiable CDs 34,607 31,629 30,929 27,969 30,734 28,511 28.538 30,013 30,768 30,278 59 To United States 156,281 152,465 161,390 163,526 174,437 185,555 172,035 174,936r 185,664 177,561 60 Parent bank 84,657 83,394 87,606 97,102 106,207 114,700 102,501 105,667 113,612' 107,434 61 Other banks in United States 16,894 15,646 20,559 14,029 13,584 14,897 13.539 12,989' 14,659' 14,306 62 Nonbanks 54,730 53,425 53,225 52,395 54,646 55,958 55,995 56,280 57,393 55,821 63 To foreigners 245,939 253,775 304,803 283,282 287,759 270,676 273,794 274,684' 280,818 284,735 64 Other branches of parent bank 89,529 95,146 124,601 107,532 112,310 111,262 109,116 111,577 116,284 117,166 65 Banks 76,814 77,809 87,274 82,282 82,636 72,623 71,998 70,296' 71,290 72,205 66 Official institutions 19,520 17,835 19,564 18,786 17,743 15,183 18,866 17,322 17,910 18,019 67 Nonbank foreigners 60,076 62,985 73,364 74,682 75,070 71,608 73,814 75,489 75,334 77,345 68 Other liabilities 21,185 18,759 21,496 22,737 23,430 21,048 22,142 21,805 22,272 24,275 69 Total payable in U.S. dollars 353,712 336,406 361,438 347,019 363,425 367,075 353,661 356,578 378,435 371,014 70 Negotiable CDs 31,063 28,466 26,768 23,218 26,130 24,045 23,696 25,452 26,287 25,970 71 To United States 150,905 144,483 148,442 152,240 161,080 173,189 159,650 161,449 173,323 164,955 72 Parent bank 81,631 79,305 81,783 90,122 97,898 107,150 94,531 96,714 105,386 99,187 73 Other banks in United States 16,264 14,609 19,155 12,868 12,230 13,628 12,413 11,535 13,355 12,780 74 Nonbanks 53,010 50,569 47,504 49,250 50,952 52,411 52,706 53,200 54,582 52,988 75 To foreigners 163,583 156,806 177,711 160,653 164,817 160,359 160,615 159,523 168,380 169,696 76 Other branches of parent bank 71,078 71,181 90,469 79,945 82,810 84,021 82,145 83,253 88,434 89,219 77 Banks 37,365 33,850 35,065 29,167 31,133 28,480 27,220 27,044 28,938 28,432 78 Official institutions 14,359 12,371 12,409 10,624 9,121 8,224 10,879 8,739 9,952 9,677 79 Nonbank foreigners 40,781 39,404 39,768 40,917 41,753 39,634 40,371 40,487 41,056 42,368 80 Other liabilities 8,161 6,651 8,517 10,908 11,398 9,482 9,700 10,154 10,445 10,393 United Kingdom 81 Total, all currencies 148,599 140,917 158,695 155,580 159,556 156,835 156,529 154,879 154,856 153,146 82 Negotiable CDs 31,260 27,781 26,988 23,345 26,013 24,528 24,253 25,942 26,625 26,157 83 To United States 29,422 24,657 23,470 31,575 32,420 36,784 34,535 35,393r 32,609 29,715 84 Parent bank 19,330 14,469 13,223 22,800 23,226 27,849 24,130 25,562 24,950 20,455 85 Other banks in United States 2,974 2,649 1,740 2,192 1,768 2,197 2,568 1,915' 1,984 1,551 86 Nonbanks 7,118 7,539 8,507 6,583 7,426 6,738 7,837 7,916 5,675 7,709 87 To foreigners 78,525 79,498 98,689 89,934 90,404 86,026 87,519 83,774' 86,011 87,478 88 Other branches of parent bank 23,389 25,036 33,078 25,743 26,268 26,812 26,815 24,553 25,929 25,800 89 Banks 28,581 30,877 34,290 32,385 33,029 30,609 29,329 28,508' 29,094 30,714 90 Official institutions 9,676 6,836 11,015 10,656 9,542 7,873 10,010 8,627 9,429 8,637 91 Nonbank foreigners 16,879 16,749 20,306 21,150 21,565 20,732 21,365 22,086 21,559 22,327 92 Other liabilities 9,392 8,981 9,548 10,726 10,719 9,497 10,222 9,770 9,611 9,796 93 Total payable in U.S. dollars 112,697 99,707 102,550 101,689 102,933 105,514 104,462 103,302 105,942 100,514 94 Negotiable CDs 29,337 26,169 24,926 20,864 23,543 22,063 21,500 23,419 24,302 24,073 95 To United States 27,756 22,075 17,752 28,063 27,123 32,588 30,032 30,442 29,430 25,493 96 Parent bank 18,956 14,021 12,026 21,665 21,003 26,404 22,069 22,998 23,865 18,524 97 Other banks in United States . 2,826 2,325 1,512 1,978 1,366 1,912 2,362 1,600 1,719 1,227 98 Nonbanks 5,974 5,729 4,214 4,420 4,754 4,272 5,601 5,844 3,846 5,742 99 To foreigners 51,980 48,138 55,919 47,278 46,843 46,690 48,421 44,934 47,219 46,230 100 Other branches of parent bank 18,493 17,951 22,334 17,384 17,443 18,561 18,936 17,139 18,483 17,755 101 Banks 14,344 15,203 15,580 13,436 14,029 13,407 13,090 13,106 12,907 13,439 102 Official institutions 7,661 4,934 7,530 6,186 4,713 4,348 5,897 4,116 5,467 4,365 103 Nonbank foreigners 11,482 10,050 10,475 10,272 10,658 10,374 10,498 10,573 10,362 10,671 104 Other liabilities 3,624 3,325 3,953 5,484 5,424 4,173 4,509 4,507 4,991 4,718 Bahamas and Caymans 105 Total, all currencies 142,055 142,592 160,321 159,147 169,034 170,639 162,352 165,862 179,212 172,319 106 Negotiable CDs 610 847 885 1,092 1,361 953 1,118 1,138 1,073 1,025 107 To United States 104,556 106,081 113,950 108,858 116,952 122,332 113,562 114,729 124,736 118,162 108 Parent bank 45,554 49,481 53,239 53,197 59,883 62,894 56,643 57,684 62,689 59,761 109 Other banks in United States 12,778 11,715 17,224 10,824 10,823 11,494 9,890 9,743 11,464 11,345 110 Nonbanks 46,224 44,885 43,487 44,837 46,246 47,944 47,029 47,302 50,583 47,056 111 To foreigners 35,053 34,400 43,815 46,775 48,113 45,161 45,602 47,534 50,882 50,604 112 Other branches of parent bank 14,075 12,631 19,185 24,805 24,508 23,686 24,973 25,988 28,010 27,654 113 Banks 10,669 8,617 10,769 8,490 10,035 8,336 7,179 7,795 8,522 8,202 114 Official institutions 1,776 2,719 1,504 972 1,060 1,074 1,337 1,379 1,234 1,808 115 Nonbank foreigners 8,533 10,433 12,357 12,508 12,510 12,065 12,113 12,372 13,116 12,940 116 Other liabilities 1,836 1,264 1,671 2,422 2,608 2,193 2,070 2,461 2,521 2,528 117 Total payable in U.S. dollars 138,322 138,774 152,927 151,600 160,786 162,950 154,663 157,890 172,213 166,484 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 1989 IItteemm 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr." 1 Total1 211,834 259,556 295,219 300,956 299,749 301,730 304,220' 307,560 312,917 By type 2 Liabilities reported by banks in the United States 27,920 31,838 34,796 35,089 31,507 36,744 34,712r 33,516 38,411 3 U.S. Treasury bills and certificates3 75,650 88,829 100,814 103,841 103,722 9988,,445577 9988,,119922 9955,,447788 9966,,110099 U.S. Treasury bonds and notes 4 Marketable 91,368 122,432 144,617 146,813 149,025 151,040 155,338 161,887 161,043 5 Nonmarketable 1,300 300 516 520 523 527 531 534 538 6 U.S. securities other than U.S. Treasury securities 15,596 16,157 14,476 14,693 14,972 14,962 15,447 16,145 16,816 By area 7 Western Europe1 88,629 124,620 125,407 128,665 125,099 126,057 124,801' 125,324 128,613 8 2,004 4,961 11,014 10,066 9,584 9,668 9,856 10,156 9,994 9 Latin America and Caribbean 8,417 8,328 9,849 10,525 10,094 9,943 8,875 7,533 7,209 10 Asia 105,868 116,098 139,439 142,768 145,579 147,273 152,277' 156,409 158,659 11 1,503 1,402 1,094 993 1,369 1,093 1,143 1,119 1,065 12 Other countries6 5,412 4,147 7,903 7,418 7,501 7,169 6,738 6,485 6,837 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. 3. Includes nonmarketable certificates of indebtedness (including those payable NOTE. Based on Treasury Department data and on data reported to the in foreign currencies through 1974) and Treasury bills issued to official institutions Treasury Department by banks (including Federal Reserve Banks) and securities of foreign countries. dealers in the United States. 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 1988 1989 IItteemm 11998855 11998866 11998877 June Sept. Dec. Mar. 1 Banks' own liabilities 15,368 29,702 55,438 54,552 61,311 71,001 70,760 2 Banks' own claims 16,294 26,180 51,271 51,017 59,775 66,093 67,255 3 Deposits 8,437 14,129 18,861 17,660 20,769 23,831 21,810 4 Other claims 7,857 12,052 32,410 33,357 39,006 42,261 45,445 5 Claims of banks' domestic customers 580 2,507 551 1,004 335 364 376 1. Data on claims exclude foreign currencies held by U.S. monetary author- 2. Assets owned by customers of the reporting bank located in the United ities. States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • August 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 1989 Holder and type of liability 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb/ Mar. Apr." 1 All foreigners 435,726 540,996 618,874 651,865 678,147 685,084 661,918 677,813 690,053 684,261 2 Banks' own liabilities 341,070 406,485 470,070 482,647 503,610 513,070 493,248 507,533 523,581 518,256 3 Demand deposits 21,107 23,789 22,383 21,833 22,052 21,801 20,605 21,731 22,480 22,238 4 Time deposits 117,278 130,891 148,374 142,181 149,438 150,980 145,557 151,464 158,804 157,516 5 Other. 29,305 42,705 51,677 57,046 53,939 52,074 52,165 50,712 53,300 57,880 6 Own foreign offices4 173,381 209,100 247,635 261,587 278,180 288,215 274,922 283,625 288,997 280,621 7 Banks' custody liabilities5 94,656 134,511 148,804 169,218 174,537 172,015 168,669 170,281 166,472 166,005 8 U.S. Treasury bills and certificates6 69,133 90,398 101,743 112,267 116,861 114,976 111,141 110,992 108,035 106,191 9 Other negotiable and readily transferable instruments 17,964 15,417 16,776 16,400 16,662 16,371 16,763 17,061 16,958 17,283 10 Other 7,558 28,696 30,285 40,551 41,015 40,668 40,765 42,228 41,479 42,531 11 Nonmonetary international and regional organizations8 5,821 5,807 4,464 6,109 4,978 3,224 2,704 3,252 3,739 4,094 12 Banks' own liabilities 2,621 3,958 2,702 4,297 3,722 2,527 1,910 2,679 2,931 3,308 13 Demand deposits 85 199 124 143 76 71 67 74 88 163 14 Time deposits 2,067 2,065 1,538 1,301 1,584 1,183 565 1,126 1,360 1,484 15 Other 469 1,693 1,040 2,853 2,062 1,272 1,278 1,479 1,482 1,661 1 1 6 7 Ba U nk .S s' . c T u r s e t a o s d u y r y l i b a i b l i l l s i t a ie n s d 5 certificates6 3 1 , , 2 7 0 3 0 6 1,8 2 4 5 9 9 1,7 2 6 6 1 5 1,81 6 2 2 1,2 8 5 3 6 69 5 8 7 79 6 5 9 57 5 4 9 8 7 0 4 8 7 7 8 7 6 18 Other negotiable and readily transferable instruments 1,464 1,590 1,497 1,750 1,163 641 711 463 734 693 19 Other 0 0 0 0 10 0 15 52 0 16 20 Official institutions9 79,985 103,569 120,667 135,610 138,930 135,229 135,201 132,904 128,993 134,520 21 Banks' own liabilities 20,835 25,427 28,703 31,017 31,107 27,097 32,023 29,392 27,898 32,331 22 Demand deposits 2,077 2,267 1,757 1,780 1,583 1,915 1,627 1,792 1,605 1,717 23 Time deposits 10,949 10,497 12,843 11,407 12,176 9,784 13,476 12,748 11,104 12,399 24 Other 7,809 12,663 14,103 17,830 17,348 15,398 16,920 14,852 15,189 18,215 2 2 5 6 Ba U nk .S s . ' T cu re st a o s d u y ry l i b a i b l i ls li t a ie n s d 5 certificates6 5 5 9 3 , , 1 2 5 5 0 2 7 75 8 , , 6 1 5 4 0 2 9 8 1 8 , , 9 8 6 2 5 9 1 10 0 0 4 , , 8 5 1 9 4 3 1 10 0 3 7 , , 8 8 4 2 1 3 1 1 0 0 8 3 , , 1 7 3 2 2 2 1 9 0 8 3 , , 4 1 5 7 7 8 1 9 0 8 3 , , 1 5 9 1 2 2 1 9 0 5 1 , , 4 0 7 9 8 5 1 9 0 6 2 , , 1 1 0 8 9 9 27 Other negotiable and readily transferable instruments 5,824 2,347 2,990 3,622 3,768 4,130 4,598 5,076 5,466 5,875 28 Other 75 145 146 158 214 280 124 244 152 205 29 Banks10 275,589 351,745 414,280 424,966 447,246 459,924 437,173 452,485 468,662 455,778 30 Banks' own liabilities 252,723 310,166 371,665 374,398 395,437 408,615 385,240 399,766 417,241 404,602 31 Unaffiliated foreign banks 79,341 101,066 124,030 112,811 117,258 120,400 110,318 116,141 128,244 123,980 32 Demand deposits 10,271 10,303 10,898 10,232 10,402 9,980 9,460 9,585 11,012 10,559 33 Time deposits 49,510 64,232 79,717 70,887 76,415 80,279 72,537 76,921 84,888 81,455 34 Other 19,561 26,531 33,415 31,693 30,442 30,141 28,321 29,635 32,344 31,967 35 Own foreign offices4 173,381 209,100 247,635 261,587 278,180 288,215 274,922 283,625 288,997 280,621 3 3 6 7 Ba U nk .S s . ' c T u r s e t a o s d u y ry l i b a i b l i ls li t a ie n s d 5 certificates6 2 9 2 , , 8 8 3 6 2 6 41 9 , , 5 98 7 4 9 42 9 , , 6 1 1 3 5 4 50 7 , , 5 9 6 7 9 6 51 8 , , 8 0 0 8 9 7 5 7 1, , 3 6 0 0 9 2 5 7 1 , , 8 93 1 3 9 5 7 2 , , 4 7 9 1 1 9 5 7 1 , , 3 4 1 2 0 1 5 6 1 , , 2 1 8 7 5 7 38 Other negotiable and readily transferable instruments 6,040 5,165 5,392 5,225 5,696 5,666 5,870 5,884 5,254 5,057 39 Other 6,994 26,431 28,089 37,367 38,025 38,041 38,243 39,344 38,857 39,835 40 Other foreigners 74,331 79,875 79,463 85,179 86,992 86,707 86,840 89,172 88,659 89,868 41 Banks' own liabilities 64,892 66,934 67,000 72,935 73,343 74,832 74,076 75,695 75,510 78,015 42 Demand deposits 8,673 11,019 9,604 9,678 9,991 9,835 9,452 10,279 9,774 9,799 43 Time deposits 54,752 54,097 54,277 58,586 59,264 59,734 58,979 60,670 61,451 62,179 44 Other 1,467 1,818 3,119 4,671 4,088 5,263 5,645 4,746 4,285 6,037 4 4 5 6 Ba U nk .S s . ' T cu re st a o s d u y ry l i b a i b l i ls li t a ie n s d 5 certificates6 4 9 , , 3 4 1 3 4 9 1 4 2 , , 5 9 0 4 6 1 1 3 2 , , 5 4 1 6 5 3 1 3 2 , , 4 2 1 4 5 4 1 4 3 , , 8 6 4 5 9 0 1 3 1 , , 5 8 9 7 5 6 1 4 2 , , 7 7 9 6 7 4 1 5 3 , , 2 4 5 7 0 6 1 5 3 , , 1 1 7 4 4 8 1 3 1 , , 7 8 2 5 0 3 47 Other negotiable and readily transferable instruments 4,636 6,315 6,898 5,803 6,035 5,933 5,584 5,638 5,504 5,658 48 Other 489 2,120 2,050 3,026 2,766 2,347 2,383 2,589 2,471 2,474 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 9,845 7,496 7,314 6,117 6,128 6,366 6,296 6,064 5,809 5,533 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. International Settlements. 10. Excludes central banks, which are included in "Official institutions." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A61 3.17—Continued 1988 1989 AArreeaa aanndd ccoouunnttrryy 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr." 1 Total 435,726 540,9% 618,874 651,865 678,147 685,084 661,918 677,813' 690,053 684,261 2 Foreign countries 429,905 535,189 614,411 645,755 673,169 681,860 659,213 674,561' 686,314 680,166 3 Europe 164,114 180,556 234,641 227,258 233,958 236,243 223,965 228,383' 231,925 229,445 4 Austria 693 1,181 920 1,271 1,599 1,155 1,129 1,777 1,436 1,608 Belgium-Luxembourg 5,243 6,729 9,347 10,247 11,117 10,043 9,006 10,508' 9,315 10,114 6 Denmark 513 482 760 2,362 3,089 2,180 1,833 2,082 1,639 1,615 7 Finland 496 580 377 339 339 284 375 560 527 397 8 France 15,541 22,862 29,835 23,259 24,564 24,758 22,263 24,260' 26,844 25,655 9 Germany 4,835 5,762 7,022 5,898 7,981 6,781 5,794 5,263 5,514 6,975 10 Greece 666 700 689 675 683 672 919 933 760 927 11 Italy 9,667 10,875 12,073 12,512 13,337 14,610 11,322 11,073 13,480 12,964 12 Netherlands 4,212 5,600 5,014 6,377 5,939 5,311 5,248 6,011 5,600 5,602 13 Norway 948 735 1,362 1,143 1,342 1,559 1,502 1,367 1,547 1,783 14 Portugal 652 699 801 915 738 903 870 813 831 827 15 Spain 2,114 2,407 2,621 6,838 5,976 5,490 5,750 5,174' 4,902 5,794 16 Sweden 1,422 884 1,379 1,579 1,815 1,270 1,299 1,319 1,416 1,730 17 Switzerland 29,020 30,534 33,766 31,325 31,919 34,224 32,564 31,659' 29,816 29,033 18 Turkey 429 454 703 876 793 1,012 939 1,246 1,023 1,093 19 United Kingdom 76,728 85,334 116,852 109,976 111,747 116,103 110,894 113,409 115,325 111,486 20 Yugoslavia 673 630 710 655 569 529 489 434 440 465 21 Other Western Europe1 9,635 3,326 9,798 10,245 9,627 8,633 10,917 9,929 10,730 10,808 22 U.S.S.R 105 80 32 100 74 138 155 108' 102 90 23 Other Eastern Europe 523 702 582 667 711 589 697 458' 677 477 24 Canada 17,427 26,345 30,095 26,697 26,188 21,029 19,267 20,732 25,694 24,466 25 Latin America and Caribbean 167,856 210,318 220,372 240,109 257,330 267,147 259,423 263,539' 263,752 267,433 26 Argentina 6,032 4,757 5,006 7,065 7,307 7,749 7,628 6,836 6,415 6,280 27 Bahamas 57,657 73,619 74,767 76,844 83,725 86,590 82,009 83,455 85,540 85,887 28 Bermuda 2,765 2,922 2,344 2,577 2,752 2,621 2,381 2,545 2,578 2,367 29 Brazil 5,373 4,325 4,005 4,726 5,137 5,268 4,675 4,829 4,925 5,554 30 British West Indies 42,674 72,263 81,494 95,869 105,016 110,626 108,343 111,213' 109,985 113,119 31 Chile 2,049 2,054 2,210 2,727 2,653 2,917 2,969 2,975 3,063 2,931 32 Colombia 3,104 4,285 4,204 4,136 4,221 4,317 4,300 4,453 4,148 4,175 33 Cuba 11 7 12 12 9 10 10 10 10 10 34 Ecuador 1,239 1,236 1,082 1,265 1,360 1,356 1,365 1,402 1,422 1,376 35 Guatemala 1,071 1,123 1,082 1,150 1,178 1,186 1,236 1,259 1,271 1,272 36 Jamaica 122 136 160 177 164 186 180 170 223 222 37 Mexico 14,060 13,745 14,480 15,636 15,457 15,093 15,277 14,867' 14,625 14,269 38 Netherlands Antilles 4,875 4,970 4,975 5,354 5,907 6,705 6,083 5,641 5,666 5,765 39 Panama 7,514 6,886 7,414 4,117 4,046 4,206 4,284 4,496 4,388 4,347 40 Peru 1,167 1,163 1,275 1,605 1,650 1,626 1,716 1,728 1,707 1,763 41 Uruguay 1,552 1,537 1,582 1,788 1,887 1,895 2,011 2,142 2,243 2,255 42 Venezuela 11,922 10,171 9,048 9,547 9,301 9,095 9,159 9,532 9,483 9,553 43 Other 4,668 5,119 5,234 5,512 5,560 5,702 5,800 5,986 6,059 6,288 44 72,280 108,831 121,288 114411,,994400 114455,,776688 114477,,229933 114466,,555599 115511,,224444'' 115544,,990066 114488,,889977 China 45 Mainland 1,607 1,476 1,162 1,479 1,401 1,892 1,566 1,602 1,590 1,809 46 Taiwan 7,786 18,902 21,503 23,380 24,747 26,057 26,178 26,001 26,142 28,265 47 Hong Kong 8,067 9,393 10,180 11,532 12,437 11,727 10,941 11,387' 10,761 11,411 48 India 712 674 582 778 761 695 689 838' 900 1,787 49 Indonesia 1,466 1,547 1,404 1,286 995 1,189 1,189 1,198 1,611 1,168 50 Israel 1,601 1,892 1,292 2,323 1,063 1,471 1,216 1,366' 1,156 973 51 Japan 23,077 47,410 54,322 70,478 73,100 73,989 75,391 77,407' 83,006 72,301 52 Korea 1,665 1,141 1,637 2,440 2,681 2,541 2,454 2,502 2,827 3,444 53 Philippines 1,140 1,866 1,085 1,146 1,155 1,163 976 1,014 977 981 54 Thailand 1,358 1,119 1,345 1,363 1,205 1,236 1,373 1,615 1,151 1,165 55 Middle-East oil-exporting countries3 14,523 12,352 13,988 13,232 12,871 12,053 12,262 12,371' 12,029 12,206 56 Other 9,276 11,058 12,788 12,503 13,352 13,281 12,323 13,943' 12,758 13,389 57 Africa 4,883 4,021 3,945 3,702 3,530 3,974 3,688 3,791 3,714 3,665 58 Egypt 1,363 706 1,151 850 757 912 771 819 756 721 59 Morocco 163 92 194 66 64 68 90 69 60 82 60 South Africa 388 270 202 245 267 437 250 212 226 256 61 Zaire 163 74 . 67 71 72 71 74 75 77 73 62 Oil-exporting countries4 1,494 1,519 1,014 993 952 1,017 1,024 1,121 1,062 1,017 63 Other 1,312 1,360 1,316 1,477 1,418 1,470 1,479 1,494 1,534 1,516 64 Other countries 3,347 5,118 4,070 6,049 6,396 6,173 6,312 6,872 6,322 6,260 65 Australia 2,779 4,196 3,327 5,199 5,426 5,303 5,485 6,037 5,490 5,471 66 All other 568 922 744 849 970 870 827 836 832 789 67 Nonmonetary international and regional organizations 5,821 5,807 4,464 6,109 4,978 3,224 2,704 3,252' 3,739 4,094 68 International 4,806 4,620 2,830 4,142 3,491 2,503 1,725 2,106 2,521 2,664 69 Latin American regional 894 1,033 1,272 1,662 1,276 589 747 732 995 961 70 Other regional6 121 154 362 306 211 133 232 414' 223 469 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 • August 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 1989 AArreeaa aanndd ccoouunnttrryy 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr." 1 Total 401,608 444,745 459,877 465,538 485,973 490,183 481,408 493,246r 505,002 496,183 2 Foreign countries 400,577 441,724 456,472 462,434 481,192 488,177 478,954 491,341' 502,672 494,300 3 Europe 106,413 107,823 102,348 105,859 108,273 117,000 107,506 113,887r 116,700 111,593 4 Austria 598 728 793 812 721 485 544 646 809 804 5 Belgium-Luxembourg 5,772 7,498 9,397 8,902 8,954 8,573 8,356 7,926 7,890 8,102 6 Denmark 706 688 717 631 599 480 410 790 548 770 7 Finland 823 987 1,010 912 1,157 1,065 911 1,114 909 1,214 8 France 9,124 11,356 13,548 12,327 12,478 13,242 13,315 14,920 15,730 16,598 9 Germany 1,267 1,816 2,039 2,317 2,307 2,327 2,398 1,696' 3,106 4,010 10 Greece 991 648 462 493 601 433 448 517 584 560 11 Italy 8,848 9,043 7,460 6,022 7,100 7,946 5,526 5,581 5,856 4,890 12 Netherlands 1,258 3,296 2,619 2,666 2,763 2,547 2,514 2,475 2,806 2,725 13 Norway 706 672 934 534 478 455 472 601 432 551 14 Portugal 1,058 739 477 261 253 374 339 331 367 281 15 Spain 1,908 1,492 1,853 1,800 2,054 1,823 2,182 2,153 2,134 2,309 16 Sweden 2,219 1,964 2,254 1,852 2,083 1,977 2,619 2,622 2,613 2,164 17 Switzerland 3,171 3,352 2,718 2,918 2,983 3,895 3,511 3,799 3,786 4,871 18 Turkey 1,200 1,543 1,680 1,344 1,265 1,233 1,152 1,108 1,039 1,005 19 United Kingdom 62,566 58,335 50,823 57,924 58,095 65,594 58,037 62,465r 63,292 55,731 20 Yugoslavia 1,964 1,835 1,700 1,472 1,450 1,390 1,371 1,348 1,455 1,369 21 Other Western Europe2 998 539 619 1,120 916 1,152 1,275 1,560 1,262 1,511 22 U.S.S.R 130 345 389 754 1,218 1,255 1,286 1,389' 1,298 1,346 23 Other Eastern Europe3 1,107 948 852 798 799 755 839 845' 784 782 24 Canada 16,482 21,006 25,368 22,482 23,285 18,988 16,731 18,079' 19,042 19,035 25 Latin America and Caribbean 202,674 208,825 214,789 201,047 211,079 213,272 210,294 210,3%' 221,761 221,010 26 Argentina 11,462 12,091 11,996 12,077 12,023 11,804 11,880 11,801 11,635 11,681 27 Bahamas 58,258 59,342 64,587 59,345 67,238 67,003 68,874 69,479' 72,761 75,500 28 Bermuda 499 418 471 596 511 483 475 535 707 366 29 Brazil 25,283 25,716 25,897 25,461 26,399 25,735 25,835 25,367' 25,662 25,990 30 British West Indies 38,881 46,284 50,042 48,859 50,650 54,739 50,358 50,542' 58,322 55,244 31 Chile 6,603 6,558 6,308 5,459 5,319 5,401 5,156 5,139 5,347 5,234 32 Colombia 3,249 2,821 2,740 3,016 2,978 22,,993388 22,,886677 22,,880055 22,,773399 2,655 33 Cuba 0 0 1 0 0 11 11 11 11 2 34 Ecuador 2,390 2,439 2,286 2,168 2,162 2,075 2,048 2,026 2,037 2,029 35 Guatemala 194 140 144 175 167 198 185 188 198 210 36 Jamaica4 224 198 188 201 205 211 214 202 211 266 37 Mexico 31,799 30,698 29,532 25,645 25,386 24,636 24,445 24,386 24,226 24,122 38 Netherlands Antilles 1,340 1,041 980 1,491 1,427 1,309 1,222 1,150 1,005 1,007 39 Panama 6,645 5,436 4,744 2,214 2,350 2,506 2,535 2,534 2,455 2,431 40 Peru 1,947 1,661 1,329 1,065 1,012 1,012 11,,001111 952 947 947 41 Uruguay 960 940 963 850 888 910 888800 856 875 876 42 Venezuela 10,871 11,108 10,843 10,803 10,736 10,732 10,748 10,956' 10,810 10,680 43 Other Latin America and Caribbean 2,067 1,936 1,738 1,623 1,626 1,580 1,560 1,475 1,825 1,768 44 66,212 96,126 106,096 124,686 130,282 113300,,778866 113355,,777799 114400,,118822 113366,,447788 113344,,116600 China Mainland 639 787 968 756 777 762 830 881 992 813 46 Taiwan 1,535 2,681 4,592 3,040 3,845 4,184 3,902 3,960 4,168 3,955 47 Hong Kong 6,797 8,307 8,218 9,500 10,831 10,134 8,739 8,004' 7,884 8,314 48 India 450 321 510 627 568 560 645 628 563 425 49 Indonesia 698 723 580 808 767 730 669 735 649 726 50 Israel 1,991 1,634 1,363 1,174 1,231 1,137 1,097 1,044 1,050 1,052 51 Japan 31,249 59,674 68,658 87,276 89,520 90,137 99,032 104,842 100,843 97,379 52 Korea 9,226 7,182 5,148 5,187 5,390 5,219 4,961 4,891 5,178 5,197 53 Philippines 2,224 2,217 2,071 1,912 1,900 1,876 1,847 1,900 1,913 1,839 54 Thailand 845 578 496 766 778 850 887 931 986 1,023 55 Middle East oil-exporting countries 4,298 4,122 4,858 5,388 6,657 6,110 5,341 4,807' 5,399 5,129 56 Other Asia 6,260 7,901 8,635 8,253 8,018 9,087 7,829 7,559' 6,853 8,307 57 Africa 5,407 4,650 4,742 5,633 5,629 5,720 5,924 6,072 5,967 6,086 58 Egypt 721 567 521 540 532 509 495 567 543 541 59 Morocco 575 598 542 476 488 511 524 532 541 532 60 South Africa 1,942 1,550 1,507 1,707 1,698 1,681 1,688 1,718 1,695 1,742 61 Zaire 20 28 15 17 18 17 16 16 17 19 62 Oil-exporting countries 630 694 1,003 1,483 1,491 1,523 1,534 1,522 1,482 1,474 63 Other 1,520 1,213 1,153 1,410 1,402 1,479 1,666 1,717 1,691 1,778 64 Other countries 3,390 3,294 3,129 2,728 2,645 2,410 2,720 2,726 2,724 2,417 65 Australia 2,413 1,949 2,100 1,879 1,586 1,517 1,711 1,686 1,689 1,505 66 All other 978 1,345 1,029 849 1,059 894 1,009 1,040 1,034 912 67 Nonmonetary international and regional organizations 1,030 3,021 3,404 3,104 4,781 2,006 2,454 1,905' 2,330 1,883 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 1989 TTyyppee ooff ccllaaiimm 11998855 11998866 11998877 Oct. Nov. Dec. Jan. Feb/ Mar. Apr." 1 Total 444444433333330000000,,,,,,,444444488888889999999 444444477777778888888,,,,,,,666666655555550000000 444444499999997777777,,,,,,,666666633333335555555 555555533333337777777,,,,,,,333333388888880000000 555555555555558888888,,,,,,,111111188888880000000 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 444444400000001111111,,,,,,,666666600000008888888 444444444444444444444,,,,,,,777777744444445555555 444444455555559999999,,,,,,,888888877777777777777 465,538 485,973 444444499999990000000,,,,,,,111111188888883333333 481,408 493,246 555555500000005555555,,,,,,,000000000000002222222 496,183 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666660000000,,,,,,,555555500000007777777 66666664444444,,,,,,,000000099999995555555 66666664444444,,,,,,,666666600000005555555 61,940 64,949 66666661111111,,,,,,,777777766666668888888 63,670 63,080 66666662222222,,,,,,,888888888888888888888 63,111 44 OOwwnn ffoorreeiiggnn ooffffiicceess 111111177777774444444,,,,,,,222222266666661111111 222222211111111111111,,,,,,,555555533333333333333 222222222222224444444,,,,,,,777777722222227777777 237,455 255,005 222222255555556666666,,,,,,,555555511111115555555 256,726 262,866 222222277777772222222,,,,,,,666666666666668888888 259,591 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111111111116666666,,,,,,,666666655555554444444 111111122222222222222,,,,,,,999999944444446666666 111111122222227777777,,,,,,,666666600000009999999 122,071 123,299 111111122222229999999,,,,,,,555555544444442222222 119,009 124,561 111111133333330000000,,,,,,,111111122222227777777 131,411 66 DDeeppoossiittss 44444448888888,,,,,,,333333377777772222222 55555557777777,,,,,,,444444488888884444444 66666660000000,,,,,,,666666688888887777777 54,372 55,980 66666665555555,,,,,,,999999999999991111111 58,605 62,940 66666666666666,,,,,,,333333344444442222222 68,446 77 OOtthheerr 66666668888888,,,,,,,222222288888882222222 66666665555555,,,,,,,444444466666662222222 66666666666666,,,,,,,999999922222222222222 67,699 67,318 66666663333333,,,,,,,555555555555552222222 60,404 61,621 66666663333333,,,,,,,777777788888885555555 62,965 88 AAllll ootthheerr ffoorreeiiggnneerrss 55555550000000,,,,,,,111111188888885555555 44444446666666,,,,,,,111111177777771111111 44444442222222,,,,,,,999999933333336666666 44,072 42,720 44444442222222,,,,,,,333333355555559999999 42,003 42,740 33333339999999,,,,,,,333333311111118888888 42,070 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 22222228888888,,,,,,,888888888888881111111 33333333333333,,,,,,,999999900000005555555 33333337777777,,,,,,,777777755555558888888 44444447777777,,,,,,,111111199999996666666 55555553333333,,,,,,,111111177777778888888 3333333,,,,,,,333333333333335555555 4444444,,,,,,,444444411111113333333 3333333,,,,,,,666666699999992222222 8888888,,,,,,,222222288888889999999 11111112222222,,,,,,,000000088888884444444 11 Negotiable and readily transferable 11111119999999,,,,,,,333333333333332222222 22222224444444,,,,,,,000000044444444444444 22222226666666,,,,,,,666666699999996666666 22222225555555,,,,,,,333333377777772222222 22222224444444,,,,,,,999999966666660000000 12 Outstanding collections and other 6666666,,,,,,,222222211111114444444 5555555,,,,,,,444444444444448888888 7777777,,,,,,,333333377777770000000 11111113333333,,,,,,,555555533333335555555 11111116666666,,,,,,,111111133333334444444 13 MEMO: Customer liability on 22222228888888,,,,,,,444444488888887777777 22222225555555,,,,,,,777777700000006666666 22222223333333,,,,,,,111111100000007777777 11111119999999,,,,,,,444444488888884444444 11111117777777,,,,,,,111111166666661111111 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States .... 38,102 43,984 40,587 42,362 49,297 43,023 45,087R 47,765 45,308 n.a. 1. Data for banks' own claims are given on a monthly basis, but the data for parent foreign bank. claims of banks' own domestic customers are available on a quarterly basis only. 3. Assets owned by customers of the reporting bank located in the United Reporting banks include all kinds of depository institutions besides commercial 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, and foreign branches, agencies, or wholly owned subsidiaries of head office or 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 1988 1989 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998855 11998866 11998877 June Sept. Dec. Mar.'' 1 227,903 232,295 235,130 228,348 230,356 233,043 231,136 By borrower 2 Maturity of 1 year or less2 160,824 160,555 163,997 163,819 167,861 172,447 168,167 3 Foreign public borrowers 26,302 24,842 25,889 27,520 29,361 26,382 24,262 4 All other foreigners 134,522 135,714 138,108 136,299 138,499 146,064 143,905 5 Maturity over 1 yean 67,078 71,740 71,133 64,530 62,495 60,597 62,%9 6 Foreign public borrowers 34,512 39,103 38,625 35,598 34,985 34,827 37,792 7 All other foreigners 32,567 32,637 32,507 28,932 27,510 25,770 25,177 By area Maturity of 1 year or less 8 Europe 56,585 61,784 59,027 55,986 54,243 56,025 57,557 9 Canada 6,401 5,895 5,680 6,664 6,410 6,275 5,127 10 Latin America and Caribbean 63,328 56,271 56,535 56,166 55,532 57,866 53,356 11 Asia 27,966 29,457 35,919 38,997 42,340 46,119 45,393 12 Africa 3,753 2,882 2,833 2,914 3,120 3,338 3,612 13 All other3 2,791 4,267 4,003 3,092 6,216 2,824 3,121 Maturity of over 1 year 14 Europe 7,634 6,737 6,6% 5,337 5,327 4,736 4,446 15 Canada 1,805 1,925 2,661 2,344 2,062 1,929 2,284 16 Latin America and Caribbean 50,674 56,719 53,817 49,762 48,260 47,484 49,792 17 Asia 4,502 4,043 3,830 3,645 3,954 3,646 3,685 18 Africa 1,538 1,539 1,747 2,433 2,257 2,301 2,282 19 All other3 926 777 2,381 1,008 635 501 480 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 • August 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 1987 1988 1989 AArreeaa oorr ccoouunnttrryy 11998855 11998866 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar.'' 1 Total 385.4 385.X 395.4 384.6 387.7 381.4 370.0 350.5 353.7 348.8 352.5 2 G-10 countries and Switzerland 146.0 156.6 162.7 158.1 155.2 160.0 157.2 151.2 149.5 154.5 150.0 3 Belgium-Luxembourg 9.2 8.3 9.1 8.3 8.2 10.1 9.3 9.2 9.5 9.0 8.6 4 France 12.1 13.7 13.3 12.5 13.7 13.8 11.5 10.8 10.0 10.7 11.2 5 Germany 10.5 11.6 12.7 11.2 10.5 12.6 11.8 10.6 8.9 9.9 10.0 6 Italy 9.6 9.0 8.7 7.5 6.6 7.3 7.4 6.1 5.9 6.4 4.9 7 Netherlands 3.7 4.6 4.4 7.3 4.8 4.1 3.3 3.3 3.0 2.8 2.9 8 Sweden 2.7 2.4 3.0 2.4 2.6 2.1 2.1 1.9 2.0 2.0 2.4 9 Switzerland 4.4 5.8 5.8 5.7 5.4 5.6 5.1 5.6 5.2 5.7 5.2 10 United Kingdom 63.0 71.0 73.7 72.0 72.1 69.1 71.7 70.5 68.1 66.7 66.5 11 Canada 6.8 5.3 5.3 4.7 4.7 5.5 4.9 5.4 5.2 5.5 4.6 12 Japan 23.9 24.9 26.9 26.3 26.5 29.8 30.0 27.9 31.7 35.9 33.6 13 Other developed countries 29.9 25.7 25.7 25.2 25.9 26.2 26.2 23.7 22.7 20.9 20.8 14 Austria 1.5 1.7 1.9 1.8 1.9 1.9 1.6 1.6 1.6 1.6 1.4 15 Denmark 2.3 1.7 1.7 1.5 1.6 1.7 1.4 1.0 1.1 .9 1.0 16 Finland 1.6 1.4 1.4 1.4 1.4 1.3 1.0 1.2 1.3 1.2 1.0 17 Greece 2.6 2.3 2.1 2.0 1.9 2.0 2.3 2.2 2.1 1.9 2.2 18 Norway 2.9 2.4 2.2 2.1 2.0 2.3 2.0 2.0 2.0 1.8 1.5 19 Portugal 1.2 .8 .9 .8 .8 .5 .4 .4 .4 .5 .5 20 Spain 5.8 5.8 6.3 6.1 7.4 8.0 9.0 7.2 6.3 6.2 6.3 21 Turkey 1.8 1.8 1.7 1.7 1.5 1.6 1.6 1.5 1.3 1.3 1.0 22 Other Western Europe 2.0 1.4 1.4 1.5 1.6 1.6 1.9 1.6 1.9 1.3 1.4 23 South Africa 3.2 3.0 3.0 3.0 2.9 2.9 2.8 2.8 2.7 22..44 2.2 24 Australia 5.0 3.5 3.2 3.1 2.9 2.4 2.1 2.2 1.8 11..88 2.4 25 OPEC countries3 21.3 19.3 20.0 18.8 19.0 17.1 17.2 16.4 17.6 16.5 16.3 26 Ecuador 2.1 2.2 2.1 2.1 2.1 1.9 1.9 1.8 1.8 1.7 1.7 27 Venezuela 8.9 8.6 8.5 8.4 8.3 8.1 8.0 8.0 7.9 7.9 88..00 28 Indonesia 3.0 2.5 2.4 2.2 2.0 1.9 1.9 1.9 1.9 1.9 11..88 29 Middle East countries 5.3 4.3 5.4 4.4 5.0 3.6 3.6 3.1 4.3 3.2 3.2 30 African countries 2.0 1.7 1.6 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.6 31 Non-OPEC developing countries 104.2 99.1 100.7 100.4 97.7 97.6 94.3 91.3 87.0 85.5 85.8 Latin America 32 Argentina 8.8 9.5 9.5 9.5 9.3 9.4 9.5 9.4 9.2 8.9 8.4 33 Brazil 25.4 25.2 26.2 25.1 25.1 24.7 23.9 23.7 22.4 22.5 22.8 34 Chile 6.9 7.1 7.3 7.2 7.0 6.9 6.6 6.4 6.2 5.7 5.6 35 Colombia 2.6 2.1 2.0 1.9 1.9 2.0 1.9 2.1 2.1 2.0 1.9 36 Mexico 23.9 23.8 24.1 25.3 24.8 23.7 22.5 21.1 20.6 19.0 18.3 37 Peru 1.8 1.4 1.4 1.3 1.2 1.1 1.1 .9 .8 .8 .7 38 Other Latin America 3.4 3.1 3.0 2.9 2.8 2.7 2.8 2.6 2.5 2.6 2.9 Asia China 39 Mainland .5 .4 .9 .6 .3 .3 .4 .3 .2 .3 .5 40 Taiwan 4.5 4.9 5.5 6.6 6.0 8.2 6.1 4.9 3.2 3.6 4.9 41 India 1.2 1.2 1.8 1.7 1.9 1.9 2.1 2.3 2.0 2.1 2.6 42 Israel 1.6 1.5 1.4 1.3 1.3 1.0 1.0 1.0 1.0 1.2 .9 43 Korea (South) 9.2 6.6 6.2 5.6 4.9 4.9 5.6 5.9 6.0 6.1 6.1 44 Malaysia 2.4 2.1 1.9 1.7 1.6 1.5 1.5 1.5 1.6 1.6 1.7 45 Philippines 5.7 5.4 5.4 5.4 5.4 5.1 5.1 4.9 4.5 44..55 4.3 46 Thailand 1.4 .9 .9 .8 .7 .7 1.0 1.1 1.2 11..11 11..00 47 Other Asia 1.0 .7 .6 .7 .7 .7 .7 .8 .8 .9 ..88 Africa 48 Egypt 1.0 .7 .6 .6 .6 .5 .5 .6 .5 .4 .5 49 Morocco .9 .9 .9 .9 .8 .9 .9 ..99 .8 .9 .9 50 Zaire .1 .1 .1 .1 .1 .0 .1 ..11 .0 ..00 ..00 51 Other Africa4 1.9 1.6 1.4 1.3 1.3 1.3 1.2 1.2 1.2 11..11 11..11 52 Eastern Europe 4.1 3.2 3.0 3.3 3.3 3.0 2.9 3.1 3.0 3.7 3.5 53 U.S.S.R .1 .1 .1 .3 .5 .4 .3 .4 .4 .7 .7 54 Yugoslavia 2.2 1.7 1.6 1.7 1.7 1.6 1.7 1.7 1.7 1.8 1.7 55 Other 1.8 1.4 1.3 1.3 1.2 1.0 .9 1.0 1.0 1.2 1.2 56 Offshore banking centers 62.9 61.3 63.1 60.7 64.3 54.3 50.8 42.4 .46.5 45.5 50.5 57 Bahamas 21.2 22.0 23.9 19.9 25.5 17.1 15.1 8.6 12.5 1111..55 15.5 58 Bermuda .7 .7 .8 .6 .6 .6 .8 1.0 .9 ..88 1.0 59 Cayman Islands and other British West Indies 11.6 12.4 12.2 14.0 12.8 13.3 11.7 10.0 11.5 13.1 14.0 60 Netherlands Antilles 2.2 1.8 1.7 1.3 1.2 1.2 1.3 1.2 1.2 1.0 .9 61 Panama 6.0 4.0 4.3 3.9 3.7 3.7 3.3 33..00 22..77 22..66 22..33 62 Lebanon .1 .1 .1 .1 .1 .1 .1 ..11 ..11 ..11 ..11 63 Hong Kong 11.4 11.1 11.4 12.5 12.3 11.2 11.3 11.7 10.6 10.2 9.9 64 Singapore 9.8 9.2 8.6 8.3 8.1 7.0 7.4 6.8 7.0 6.2 6.7 65 Others6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated7 16.9 19.8 20.1 18.1 22.3 23.2 21.5 22.3 27.0 21.8 25.1 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 Type, and area or country 11998844 11998855 11998866 Dec. Mar. June Sept. Dec. 1 Total 29,357 27,825 25,587 27,889 29,416 29,564 31,560 33,492r 2 Payable in dollars 26,389 24,296 21,749 22,504 23,869 24,319 26,391 28,128' 3 Payable in foreign currencies 2,968 3,529 3,838 5,385 5,547 5,244 5,168 5,363' By type 4 Financial liabilities 14,509 13,600 12,133 11,882 13,635 13,219 14,076 14,740r 5 Payable in dollars 12,553 11,257 9,609 8,358 10,000 9,746 10,719 n,i3r 6 Payable in foreign currencies 1,955 2,343 2,524 3,525 3,635 3,473 3,357 3,609' 7 Commercial liabilities 14,849 14,225 13,454 16,006 15,780 16,345 17,484 18,752' 8 Trade payables 7,005 6,685 6,450 7,433 6,581 6,899 6,610 6,750' 9 Advance receipts and other liabilities 7,843 7,540 7,004 8,573 9,199 9,445 10,874 12,002' 10 Payable in dollars 13,836 13,039 12,140 14,146 13,869 14,573 15,673 16,998' 11 Payable in foreign currencies 1,013 1,186 1,314 1,860 1,912 1,771 1,811 1,754 By area or country Financial liabilities 12 Europe 6,728 7,700 7,917 8,078 9,411 8,890 10,092 9,840' 13 Belgium-Luxembourg 471 349 270 202 241 269 326 287' 14 France 995 857 661 364 390 353 354 326 15 Germany 489 376 368 583 585 625 709 726' 16 Netherlands 590 861 542 884 1,008 880 1,014 897 17 Switzerland 569 610 646 493 777 706 797 1,232 18 United Kingdom 3,297 4,305 5,140 5,358 6,228 5,885 6,722 6,206' 19 Canada 863 839 399 360 394 403 391 651' 20 Latin America and Caribbean 5,086 3,184 1,944 889 1,177 1,188 801 1,246' 21 Bahamas 1,926 1,123 614 293 264 225 213 191 22 Bermuda 13 4 4 0 0 0 0 0 23 Brazil 35 29 32 25 0 0 0 0 24 British West Indies 2,103 1,843 1,146 503 849 919 581 645' 25 Mexico 367 15 22 13 15 26 2 1 26 Venezuela 137 3 0 0 2 0 0 0 27 Asia 1,777 1,815 1,805 2,452 2,573 2,662 2,785 2,999' 28 Japan 1,209 1,198 1,398 2,042 2,112 2,066 2,196 2,248' 29 Middle East oil-exporting countries' 155 82 8 8 11 11 4 3 30 Africa 14 12 1 4 5 2 3 1 0 0 1 1 3 1 1 0 31 Oil-exporting countries 41 50 67 100 75 74 3 2' 32 All other4 Commercial liabilities 4,001 4,074 4,446 5,616 5,738 5,844 6,845 7,730' 33 Europe 48 62 101 134 156 150 208 171 34 Belgium-Luxembourg 438 453 352 451 441 436 470 480 35 France 622 607 715 916 818 799 1,204 1,690 36 Germany 245 364 424 428 463 514 653 568 37 Netherlands 257 379 385 559 527 482 486 594 38 Switzerland 1,095 976 1,341 1,657 1,798 1,848 2,186 2,115 39 United Kingdom 40 Canada 1,975 1,449 1,405 1,301 1,392 1,167 1,109 1,200 41 Latin America and Caribbean 1,871 1,088 924 865 976 1,032 999 1,025' 42 Bahamas 7 12 32 19 15 58 20 45 43 Bermuda 114 77 156 168 325 272 222 184 44 Brazil 124 58 61 46 59 54 58 91 45 British West Indies 32 44 49 19 14 28 30 31 46 Mexico 586 430 217 189 164 233 178 179 47 Venezuela 636 212 216 162 122 140 204 176 48 Asia 5,285 6,046 5,080 6,573 5,888 6,285 6,653 6,905 49 Japan 1,256 1,799 2,042 2,580 2,510 2,661 2,769 3,095 50 Middle East oil-exporting countries' 2,372 2,829 1,679 1,964 1,062 1,320 1,312 1,386 51 Africa 588 587 619 574 575 626 465 564 52 Oil-exporting countries 233 238 197 135 139 115 106 201 53 All other4 1,128 982 980 1,078 1,211 1,391 1,414 1,327 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 • August 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 Dec. Mar. June Sept. Dec/ 1 Total 29,901 28,876 36,265 31,086 31,154 37,599 37,345 33,252 2 Payable in dollars 27,304 26,574 33,867 28,514 28,997 35,421 34,660 31,057 3 Payable in foreign currencies 2,597 2,302 2,399 2,572 2,157 2,178 2,686 2,195 By type 4 Financial claims 19,254 18,891 26,273 20,440 20,368 26,194 26,336 21,450 5 Deposits 14,621 15,526 19,916 14,923 13,056 19,858 19,574 14,519 6 Payable in dollars 14,202 14,911 19,331 13,706 12,402 19,009 18,358 13,571 7 Payable in foreign currencies 420 615 585 1,217 653 849 1,216 948 8 Other financial claims 4,633 3,364 6,357 5,517 7,312 6,336 6,762 6,931 9 Payable in dollars 3,190 2,330 5,005 4,703 6,192 5,440 5,863 6,207 10 Payable in foreign currencies 1,442 1,035 1,352 814 1,120 895 899 724 11 Commercial claims 10,646 9,986 9,992 10,647 10,786 11,405 11,010 11,802 12 Trade receivables 9,177 8,696 8,783 9,581 9,673 10,370 10,025 10,727 13 Advance payments and other claims 1,470 1,290 1,209 1,065 1,113 1,036 985 1,075 14 Payable in dollars 9,912 9,333 9,530 10,105 10,403 10,971 10,439 11,279 15 Payable in foreign currencies 735 652 462 541 383 434 571 523 By area or country Financial claims 16 Europe 5,762 6,929 10,744 9,581 10,116 11,754 10,934 10,567 17 Belgium-Luxembourg 15 10 41 7 15 16 49 11 18 France 126 184 138 335 335 185 212 252 19 Germany 224 223 116 105 97 170 113 129 20 Netherlands 66 161 151 351 336 337 364 350 21 Switzerland 66 74 185 84 54 82 84 215 22 United Kingdom 4,864 6,007 9,855 8,472 9,062 10,642 9,543 9,240 23 Canada 3,988 3,260 4,808 2,851 2,696 2,960 3,545 2,606 24 Latin America and Caribbean 8,216 7,846 9,291 6,983 6,607 10,951 11,166 7,192 25 Bahamas 3,306 2,698 2,628 1,998 2,371 4,164 4,109 1,785 26 Bermuda 6 6 6 7 43 126 188 19 27 Brazil 100 78 86 63 86 46 44 47 28 British West Indies 4,043 4,571 6,078 4,399 3,574 6,111 6,359 4,853 29 Mexico 215 180 174 172 154 147 133 151 30 Venezuela 125 48 21 19 35 28 27 22 31 Asia 961 731 1,317 888 874 422 570 806 32 Japan 353 475 999 607 707 187 385 605 33 Middle East oil-exporting countries2 13 4 7 10 7 6 6 6 34 Africa 210 103 85 65 53 60 96 106 35 Oil-exporting countries 85 29 28 7 7 10 9 10 36 All other4 117 21 28 72 23 47 26 173 Commercial claims 37 Europe 3,801 3,533 3,725 4,209 4,201 4,725 4,281 4,972 38 Belgium-Luxembourg 165 175 133 179 194 159 172 176 39 France 440 426 431 652 554 686 535 673 40 Germany 374 346 444 562 637 773 605 611 41 Netherlands 335 284 164 135 151 173 146 266 42 Switzerland 271 284 217 185 172 262 183 317 43 United Kingdom 1,063 898 999 1,097 1,084 1,121 1,197 1,228 44 Canada 1,021 1,023 934 931 1,155 927 933 970 45 Latin America and Caribbean 2,052 1,753 1,857 1,944 1,927 2,080 2,104 2,146 46 Bahamas 8 13 28 19 14 13 12 31 47 Bermuda 115 93 193 170 171 174 161 156 48 Brazil 214 206 234 226 209 232 233 295 49 British West Indies 7 6 39 26 24 25 22 20 50 Mexico 583 510 412 368 374 412 463 460 51 Venezuela 206 157 237 296 274 318 266 226 52 Asia 3,073 2,982 2,755 2,919 2,857 2,994 2,994 2,952 53 Japan 1,191 1,016 881 1,160 1,109 1,169 957 936r 54 Middle East oil-exporting countries2 668 638 563 450 408 446 411 441 55 Africa 470 437 500 401 419 425 425 434 56 Oil-exporting countries3 134 130 139 144 126 136 137 122 57 All other4 229 257 222 241 227 254 273 329 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 1989 1988 1989 Transactions, and area or country 1987 1988 J A a p n r . . - Oct. Nov. Dec. Jan. Feb. Mar. Apr. " U.S. corporate securities STOCKS 1 Foreign purchases 249,122 181,048 60,196 13,232 11,973 11,224 11,923 18,384' 15,811 14,078 2 Foreign sales 232,849 183,039 59,961 14,852 11,861 12,467 11,789 18,495' 15,442 14,235 3 Net purchases, or sales (—) 16,272 -1,991 235 -1,620 112 -1,243 134 -NR 370 -157 4 Foreign countries 16,321 -1,816 442 -1,507 89 -1,198 167 —81R 507 -151 5 Europe 1,932 -3,353 28 -128 -901 -771 -99 -126 71 182 6 France 905 -281 435 89 -49 -64 38 159 70 168 7 Germany -70 218 162 107 -20 -53 30 59 59 14 8 Netherlands 892 -535 -56 17 -30 -1 128 -64 4 -125 9 Switzerland -1,123 -2,242 -1,576 -217 -268 -273 -345 -1,181 91 -141 10 United Kingdom 631 -954 1,055 -41 -579 -424 74 800 -107 288 11 Canada 1,048 1,087 23 -116 576 274 320 -361 130 -66 12 Latin America and Caribbean 1,318 1,249 1,914 374 98 -21 599 575' 636 103 13 Middle East1 -1,360 -2,473 40 -846 151 -132 -100 265 220 -345 14 Other Asia 12,896 1,365 -1,712 -693 138 -567 -603 -544 -536 -28 15 Japan 11,365 1,922 -1,524 -626 133 -407 -563 -487 -458 -16 16 Africa 123 188 48 5 21 -1 29 4 5 10 17 Other countries 365 121 101 -102 6 19 21 106 -19 -7 18 Nonmonetary international and regional organizations -48 -176 -207 -112 23 -45 -33 -30 -137 -6 BONDS2 19 Foreign purchases 105,856 86,362 35,906 7,552 7,650 8,423 6,137 9,610 10,423 9,736 20 Foreign sales 78,312 58,301 21,511 4,674 4,795 4,441 4,593 4,736' 7,025 5,157 21 Net purchases, or sales (—) 27,544 28,062 14,396 2,878 2,856 3,982 1,544 4,874R 3,398 4,579 22 Foreign countries 26,804 28,608 14,368 3,002 2,825 3,978 1,524 4,908R 3,358 4,578 23 Europe 21,989 17,338 8,727 2,341 1,240 2,560 663 2,055' 2,794 3,215 24 France 194 143 158 45 13 -130 107 41r -16 27 25 Germany 33 1,344 337 34 -122 75 15 38 148 135 26 Netherlands 269 1,514 130 545 171 17 30 -21 69 51 27 Switzerland 1,587 513 355 175 -13 273 130 131 4 90 28 United Kingdom 19,770 13,088 7,008 1,339 1,141 2,468 313 1,751 2,578 2,365 29 Canada 1,296 711 637 20 5 178 180 129 213 115 30 Latin America and Caribbean 2,857 1,930 1,400 198 58 240 229 651 301 219 31 Middle East1 -1,314 -174 122 -45 143 159 -128 160 87 3 32 Other Asia 2,021 8,900 3,385 485 1,353 840 552 1,893 -50 990 33 Japan 1,622 7,686 2,283 381 1,210 746 392 1,567 -285 608 34 Africa 16 -8 14 4 -1 0 3 2 5 4 35 Other countries -61 -89 83 -1 26 2 24 18 8 33 36 Nonmonetary international and regional organizations 740 -547 28 -124 31 3 20 -34 41 1 Foreign securities 37 Stocks, net purchases, or sales (-) 1,081 -1,850 -2,623 -126 -222 -1,102 -891 -629 -147 -956 38 Foreign purchases 95,458 74,792 31,124 6,070 7,625 7,472 6,856 8,070 9,477 6,721 39 Foreign sales 94,377 76,642 33,746 6,196 7,846 8,573 7,748 8,698 9,624 7,676 40 Bonds, net purchases, or sales (-) -7,946 -10,170 -1,586 -3,407 433 -1,720 -247 -484r -651 -204 41 Foreign purchases 199,089 216,461 72,773 20,525 20,873 20,510 14,835 18,711' 23,395 15,831 42 Foreign sales 207,035 226,631 74,359 23,932 20,440 22,230 15,083 19,195 24,046 16,036 43 Net purchases, or sales (—), of stocks and bonds .... -6,865 -12,020 -4,209 -3,533 211 -2,822 -1,139 -1,112' -798 -1,160 44 Foreign countries -6,757 -12,496 -4,649 -3,582 175 -2,916 -1,115 -991 -1,353 45 Europe -12,101 -10,319 -3,999 -2,881 -476 -1,543 -80 -797 -1,399 -1,724 46 Canada -4,072 -3,799 -1,334 -273 392 -658 -378 -530 -584 158 47 Latin America and Caribbean 828 1,386 504 -120 23 -32 68 79r 161 195 48 9,299 856 52 112 166 -189 -872 -34 886 71 49 Africa 89 -54 1 -189 18 -33 6 -9 -16 19 50 Other countries -800 -567 127 -230 52 -461 139 100 -40 -73 51 Nonmonetary international and regional organizations -108 476 440 49 36 94 -23 78 192 193 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 • August 1989 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1989 1988 1989 Country or area 1987 1988 Jan.- Oct. Nov. Dec. Jan. Feb. Mar. Apr/ Apr. Transactions, net purchases or sales (-) during period1 1 Estimated total2 25,587 48,770 20,427 2,193 8,582 337 2,826 8,922 8,640 38 2 Foreign countries2 30,889 48,084 20,682 -244 8,247 2,348 2,038 10,046 8,297 301 3 Europe2 23,716 14,260 6,425 -175 1,719 304 2,191 3,905 2,143 -1,814 4 Belgium-Luxembourg 653 923 37 -3 133 -90 10 137 -23 -87 5 Germany 13,330 -5,348 18 277 -1,015 -406 931 -39 -181 -693 6 Netherlands -913 -356 2 41 135 -114 268 135 242 -643 7 Sweden 210 -323 72 -162 355 118 -115 297 -508 398 8 Switzerland2 1,917 -1,074 2,916 87 -411 -18 271 437 1,768 440 9 United Kingdom 3,975 9,667 1,190 -1,019 1,945 -231 -320 1,601 1,207 -1,298 10 Other Western Europe 4,563 10,781 2,194 615 577 1,059 1,145 1,337 -363 74 11 Eastern Europe -19 -10 -5 -10 -2 -15 0 0 0 -5 12 Canada 4,526 3,761 113 633 -368 788 43 12 -55 114 13 Latin America and Caribbean -2,192 703 419 -574 582 -104 -95 529 113 -127 14 Venezuela 150 -109 -108 1 0 0 -37 1 -53 -18 15 Other Latin America and Caribbean -1,142 1,120 4 -331 506 140 -154 252 132 -226 16 Netherlands Antilles -1,200 -308 523 -244 77 -244 96 276 34 117 17 4,488 27,585 13,948 -107 6,870 1,011 577 5,964 5,659 1,747 18 Japan 868 21,752 7,099 220 4,224 -157 115 2,505 1,855 2,624 19 -56 -13 44 0 -8 -7 -1 15 -2 32 20 All other 407 1,786 -267 -21 -548 358 -676 -379 439 350 21 Nonmonetary international and regional organizations -5,300 689 -256 2,438 335 -2,011 788 -1,125 344 -263 22 International -4,387 1,142 -124 2,365 489 -2,019 777 -1,072 424 -252 23 Latin America regional 3 -31 -39 0 10 10 0 -10 -8 -21 Memo 24 Foreign countries2 30,889 48,084 20,682 -244 8,247 2,348 2,038 10,046 8,297 301 25 Official institutions 31,064 26,593 12,018 577 2,196 2,212 2,014 4,299 6,549 -844 26 Other foreign -181 21,489 8,664 -821 6,050 136 24 5,748 1,747 1,145 Oil-exporting countries 27 Middle East3 -3,142 1,943 5,823 -1,023 2,121 1,080 121 3,568 2,607 -473 28 Africa4 16 1 0 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 June 30, 1989 Rate on June 30, 1989 Rate on June 30, 1989 Country Country Country Month Month Month effective Percent effective effective Austria.. 6.0 June 1989 France 8.75 June 1989 Norway 8.0 June 1983 Belgium . 9.25 June 1989 Germany, Fed. Rep. of. 5.0 June 1989 Switzerland 4.5 Apr. 1989 Brazil ... 49.0 Mar. 1981 Italy 13.5 Mar. 1989 United Kingdom' Canada.. 12.31 June 1989 Japan 3.25 May 1989 Venezuela Denmark 8.0 June 1989 Netherlands 6.0 June 1989 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 1989 CCoouunnttrryy,, oorr ttyyppee 11998866 11998877 11998888 Dec. Jan. Feb. Mar. Apr. May June 1 Eurodollars 6.70 7.07 7.86 9.30 9.28 9.61 10.18 10.01 9.66 9.28 2 United Kingdom 10.87 9.65 10.28 13.07 13.06 12.97 13.00 13.09 13.08 14.17 3 Canada 9.18 8.38 9.63 11.15 11.34 11.69 12.22 12.58 12.44 12.35 4 Germany 4.58 3.97 4.28 5.32 5.63 6.36 6.57 6.42 6.96 6.93 5 Switzerland 4.19 3.67 2.94 4.77 5.31 5.69 5.75 6.05 7.26 7.09 6 Netherlands 5.56 5.24 4.72 5.60 5.99 6.75 6.88 6.70 7.30 7.11 7 France 7.68 8.14 7.80 8.36 8.55 9.11 9.07 8.61 8.81 8.89 8 Italy 12.60 11.15 11.04 11.96 11.84 12.26 12.88 12.21 12.27 12.35 9 Belgium 8.04 7.01 6.69 7.38 7.59 8.04 8.28 8.17 8.45 8.51 10 Japan 4.96 3.87 3.96 4.16 4.24 4.21 4.21 4.20 4.25 4.46 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 • August 1989 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar 1989 CCoouunnttrryy//ccuurrrreennccyy 11998866 11998877 11998888 Jan. Feb. Mar. Apr. May June 1 Australia/dollar2 67.093 70.136 78.408 87.05 85.64 81.69 80.35 77.36 75.61 2 Austria/schilling 15.260 12.649 12.357 12.904 13.022 13.148 13.161 13.691 13.912 3 Belgium/franc 44.662 37.357 36.783 38.441 38.792 39.136 39.148 40.723 41.414 4 Canada/dollar 1.3896 1.3259 1.2306 1.1913 1.1891 1.1954 1.1888 1.1925 1.1986 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 7.1143 7.2094 7.2912 7.2803 7.5820 7.7087 7 Finland/markka 5.0721 4.4036 4.1933 4.2553 4.3006 4.2994 4.1961 4.3409 4.4302 8 France/franc 6.9256 6.0121 5.9594 6.2538 6.3004 6.3321 6.3223 6.5815 6.7135 9 Germany/deutsche mark 2.1704 1.7981 1.7569 1.8356 1.8505 1.8686 1.8697 1.9461 1.9789 10 Greece/drachma 139.93 135.47 142.00 152.25 154.72 157.34 159.23 165.41 170.42 11 Hong Kong/dollar 7.8037 7.7985 7.8071 7.8047 7.8009 7.7969 7.7828 7.7799 7.7934 12 India/rupee 12.597 12.943 13.899 15.092 15.240 15.467 15.718 16.102 16.420 13 Ireland/punt2 134.14 148.79 152.49 145.82 144.10 142.84 142.67 137.39 134.92 14 Italy/lira 1491.16 1297.03 1302.39 1345.12 1355.28 1372.50 1371.80 1415.83 1434.40 15 Japan/yen 168.35 144.60 128.17 127.36 127.74 130.55 132.04 137.86 143.98 16 Malay sia/ringgit 2.5830 2.5185 2.6189 2.7221 2.7307 2.7535 2.7211 2.6967 2.7086 17 Netherlands/guilder 2.4484 2.0263 1.9778 2.0723 2.0895 2.1085 2.1098 2.1938 2.2292 18 New Zealand/dollar2 52.456 59.327 65.558 62.412 61.629 61.547 61.167 60.718 57.376 19 Norway/krone 7.3984 6.7408 6.5242 6.6808 6.7254 6.8059 6.7964 7.0337 7.1852 20 Portugal/escudo 149.80 141.20 144.26 150.74 152.10 154.05 154.54 160.71 164.92 21 Singapore/dollar 2.1782 2.1059 2.0132 1.9404 1.9285 1.9407 1.9497 1.9575 1.9572 22 South Africa/rand 2.2918 2.0385 2.1900 2.3847 2.4570 2.5393 2.5480 2.6710 2.7828 23 South Korea/won 884.61 825.93 734.51 685.28 680.28 675.68 672.10 669.25 669.43 24 Spain/peseta 140.04 123.54 116.52 114.78 115.67 116.40 116.146 121.39 126.55 25 Sri Lanka/rupee 27.933 29.471 31.847 33.132 33.115 33.416 34.021 34.145 33.475 26 Sweden/krona 7.1272 6.3468 6.1369 6.2725 6.3238 6.3933 6.3689 6.5756 6.6872 27 Switzerland/franc 1.7979 1.4918 1.4642 1.5619 1.5740 1.6110 1.6469 1.7290 1.7089 28 Taiwan/dollar 37.837 31.756 28.636 27.821 27.716 27.591 26.998 25.788 26.023 29 Thailand/baht 26.314 25.774 25.312 25.322 25.386 25.542 25.524 25.757 25.909 30 United Kingdom/pound2 146.77 163.98 178.13 177.37 175.34 171.34 170.08 163.07 155.30 MEMO 31 United States/dollar3 112.22 96.94 92.72 95.12 95.77 96.99 97.24 100.81 103.09 1. Averages of certified noon buying rates in New York for cable transfers. currencies of 10 industrial countries. The weight for each of the 10 countries is the Data in this table also appear in the Board's G.5 (405) release. For address, see 1972-76 average world trade of that country divided by the average world trade of inside front cover. all 10 countries combined. Series revised as of August 1978 (see FEDERAL 2. Value in U.S. cents. RESERVE BULLETIN, vol. 64, August 1978, p. 700). 3. Index of weighted-average exchange value of U.S. dollar against the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 Guide to Tabular Presentation, Statistical Releases, and Special Tables GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading when IPCs Individuals, partnerships, and corporations about half of the figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 SMSAs Standard metropolitan statistical areas when the smallest unit given is millions) . . . Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other 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 June 1989 A101 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference Assets and liabilities of commercial banks, March 31, 1988 June 1989 A72 Assets and liabilities of commercial banks, June 30, 1988 June 1989 A78 Assets and liabilities of commercial banks, September 30, 1988 August 1989 A72 Assets and liabilities of commercial banks, December 31, 1988 August 1989 A78 Terms of lending at commercial banks, May 1988 September 1988 A70 Terms of lending at commercial banks, August 1988 January 1989 All Terms of lending at commercial banks, November 1988 April 1989 A72 Terms of lending at commercial banks, February 1989 June 1989 A84 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1988 January 1989 A78 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1988 May 1989 All Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1988 June 1989 A90 Assets and liabilities of U.S. branches and agencies of foreign banks, March 31, 1989 August 1989 A84 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 FSRpAeScEiaRl tables begin on next page. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Special Tables • August 1989 4.20 DOMESTIC AND FOREIGN OFFICES, Insured Commercial Bank Assets and Liabilities1-2 Consolidated Report of Condition, September 30, 1988 Millions of dollars Banks with foreign offices3'4 Bank o s f f w ic i e th s o d n o l m y estic IItteemm Total Total Foreign Domestic Over 100 Under 100 1 Total assets6 3,078,975 1,784,873 432,719 1,406,286 895,016 399,085 2 Cash and balances due from depository institutions 341,133 241,207 123,050 118,157 67,484 32,443 3 Cash items in process of collection, unposted debits, and currency and coin A 81,097 1,757 79,339 28,227 A 4 Cash items in process of collection and unposted debits t n.a. n.a. 68,309 20,795 t 5 Currency and coin n.a. n.a. 11,030 7,432 1 6 Balances due from depository institutions in the United States 1 36,555 23,779 12,776 21,624 n.a. 7 Balances due from banks in foreign countries and foreign central banks n.a. 100,621 97,235 3,386 6,072 8 Balances due from Federal Reserve Banks 22,934 278 22,656 11,561 9 ME N M o O ni nterest-bearing balances due from commercial banks in the United States I T 1 (included in balances due from depository institutions in the United States) • n.a. n.a. 7,990 13,082 10,354 10 Total securities, loans and lease financing receivables, net 2,509,600 1,370,346 n.a. n.a. 789,996 349,258 11 Total securities, book value 526,964 222,892 28,106 194,786 186,857 117,216 12 U.S. Treasury securities and U.S. government agency and corporation obligations 324,255 117,692 1,600 116,092 112211,,007733 8855,,449911 13 U.S. Treasury securities n.a. 61,780 1,028 60,752 66,301 n.a. 14 U.S. government agency and corporation obligations n.a. 55,912 571 55,341 54,771 n.a. 15 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 82,493 44,952 523 44,428 2222,,884444 1144,,669988 16 All other n.a. 10,960 48 10,912 31,928 n.a. 17 Securities issued by states and political subdivisions in the United States 109,828 48,210 609 47,601 40,302 21,317 2,129 431 47 384 731 968 19 Tax-exempt 107,699 47,779 562 47,217 39,571 20,349 20 Other securities 92,881 56,990 25,898 31,093 25,482 10,409 nn..aa.. 3322,,007711 11,,999977 3300,,007755 2255,,009933 22 All holdings of private certificates of participation in pools of residential mortgages 4,068 1,693 0 1,693 1,670 770055 23 All other 63,505 30,378 1,997 28,381 23,423 9,704 24,919 23,901 1,018 389 25 Federal funds sold and securities purchased under agreements to resell 138,045 77,589 814 76,776 39,013 21,442 26 Federal funds sold 110,924 55,907 n.a. n.a. 34,028 20,990 27 Securities purchased under agreements to resell 27,121 21,682 n.a. n.a. 4,986 453 28 Total loans and lease financing receivables, gross 1,909,340 1,113,373 214,310 899,063 579,552 216,414 29 LESS: Unearned income on loans 15,674 7,157 2,259 4,899 6,153 2,364 30 Total loans and leases (net of unearned income) 1,893,665 1,106,216 212,051 894,165 573,400 214,050 31 LESS: Allowance for loan and lease losses 48,928 36,205 n.a. n.a. 9,273 3,450 32 LESS: Allocated transfer risk reserves 148 147 n.a. n.a. 1 0 33 EQUALS: Total loans and leases, net 1,844,590 1,069,864 n.a. n.a. 564,126 210,600 Total loans, gross, by category 34 Loans secured by real estate 655,811 318,707 21,200 297,507 223355,,554499 110011,,555544 35 Construction and land development A A A 84,618 34,724 7,814 t t t 1,875 4,245 9,239 37 1-4 family residential properties 1 1 1 121,384 114,842 56,052 38 Revolving, open-end loans, extended under lines of credit n.a. n.a. n.a. 20,293 14,914 2,373 39 All other loans 101,091 99,928 53,678 40 Multifamily (5 or more) residential properties 1 1 1 9,510 6,294 1,941 41 Nonfarm nonresidential properties T t T 80,120 75,445 26,509 42 Loans to depository institutions 59,911 53,799 25,585 28,214 5,393 718 43 To commercial banks in the United States n.a. 21,761 867 20,894 4,653 n.a. 44 To other depository institutions in the United States n.a. 2,944 468 2,476 620 n.a. 45 To banks in foreign countries n.a. 29,094 24,251 4,843 120 n.a. 46 Loans to finance agricultural production and other loans to farmers 31,028 5,556 264 5,292 6,909 18,563 47 Commercial and industrial loans 592,720 414,084 102,631 311,453 133,912 44,725 48 To U.S. addressees (domicile) n.a. 329,663 20,902 308,762 133,605 n.a. 49 To non-U.S. addressees (domicile) n.a. 84,421 81,729 2,692 306 n.a. 50 Acceptances of other banks 4,101 911 370 540 1,718 1,472 51 U.S. banks n.a. 271 6 265 n.a. n.a. n.a. 640 364 275 n.a. n.a. 53 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 364,004 154,857 11,439 143,417 164,766 4444,,338822 54 Credit cards and related plans 107,593 43,926 n.a. n.a. 60,821 2,846 55 Other (includes single payment and installment) 256,411 110,930 n.a. n.a. 103,945 41,536 56 Obligations (other than securities) of states and political subdivisions in the U.S. (includes nonrated industrial development obligations) 48,148 29,857 575 29,282 1166,,111122 22,,117799 1,195 611 145 467 493 91 58 Tax-exempt 46,953 29,245 430 28,815 15,620 2,088 59 All other loans 120,431 107,958 48,226 59,732 10,260 2,213 60 Loans to foreign governments and official institutions n.a. 35,374 35,058 2,316 264 n.a. 61 Other loans n.a. 72,584 15,168 57,416 9,996 n.a. 62 Loans for purchasing and carrying securities n.a. n.a. n.a. 14,128 1,666 n.a. 63 All other loans n.a. n.a. n.a. 43,288 8,329 n.a. 64 Lease financing receivables 33,186 27,644 4,018 23,626 4,934 609 65 Assets held in trading accounts 41,951 40,930 19,128 21,802 741 279 66 Premises and fixed assets (including capitalized leases) 45,160 23,933 A n.a. 14,269 6,959 67 Other real estate owned 12,807 6,292 t1 n.a. 3,815 2,699 68 Investments in unconsolidated subsidiaries and associated companies 2,333 1,546 n.a. 731 56 69 Customers' liability on acceptances outstanding 33,328 32,909 n.a. n.a. 397 22 70 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs n.a. n.a. 37,685 n.a. n.a. 71 Intangible assets 5,109 3,380 I n.a. 1,537 192 72 Other assets 87,552 64,330 t n.a. 16,045 7,178 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.20—Continued Banks with foreign offices3'4 Bank o s f f w ic i e th s o d n o l r y n estic Total Total Foreign Domestic Over 100 Under 100 73 Total liabilities, limited-life preferred stock, and equity capital ,078,975 1,784,873 n.a. n.a. 895,016 399,085 74 Total liabilities7 .886.560 1,691,479 430,451 1,315,159 831,351 363,730 75 Limited-life preferred stock 92 0 n.a. n.a. 80 13 76 Total deposits ,362,061 1,287,042 328,362 958,680 722,119 352,900 7 7 7 8 U In . d S i . v i g d o u v a e l r s n , m pa e r n t t n erships, and corporations 4 4 189 I ,1 38 863 2 , , 5 2 6 4 1 7 661 1 , , 1 4 7 7 0 4 322,8 5 8 9 1 2 79 States and political subdivisions in the United States I 40,357 41,608 23,991 80 Commercial banks in the United States n.a. n.a. n.a. 28,494 9,210 1,922 81 Other depository institutions in the United States 1 4,271 2,478 1,107 82 Banks in foreign countries 1 1 7,891 335 n.a. 83 Foreign governments and official institutions 1 25,718 24,370 1,348 289 n.a. 84 Certified and official checks 18,995 11,074 563 10,511 5,554 2,367 85 Allother8 114 29? 40 86 Total transaction accounts k J 316,893 205,0% 94,218 87 Individuals, partnerships, and corporations 265,722 180,443 83,849 88 U.S. government 1,376 1,113 454 89 States and political subdivisions in the United States 1 8,621 9,942 6,362 90 Commercial banks in the United States n.a. n.a. n. a. 19,508 6,429 862 91 Other depository institutions in the United States 3,442 1,386 310 92 Banks in foreign countries 6,934 215 n.a. 93 Foreign governments and official institutions 780 14 n.a. 9 9 4 5 A Ce ll r t o if th ie e d r and official checks \ i 10,511 5,554 2,36 1 7 5 96 Demand deposits (included in total transaction accounts) 244,487 130,7% 50,875 97 Individuals, partnerships, and corporations 195,511 111,074 44,659 98 U.S. government 1,352 1,091 441 99 States and political subdivisions in the United States 6,451 5,044 2,233 100 Commercial banks in the United States 19,508 6,425 860 101 Other depository institutions in the United States 3,442 1,378 304 102 Banks in foreign countries 6,934 215 n.a. 103 Foreign governments and official institutions 780 14 n.a. 104 Certified and official checks 1100,,551111 5,554 2,367 105 All other 12 106 Total nontransaction accounts 641,787 517,022 258,682 107 Individuals, partnerships, and corporations n.a. n. a. n.a. 597,839 480,727 239,033 108 U.S. government 871 362 139 109 States and political subdivisions in the United States 31,737 31,666 17,629 110 Commercial banks in the United States 8,987 2,780 1,060 111 U.S. branches and agencies of foreign banks 432 79 n.a. 112 Other commercial banks in the United States 8,555 2,701 n.a. 113 Other depository institutions in the United States 829 1,092 797 114 Banks in foreign countries 957 120 n.a. 115 Foreign branches of other U.S. banks 232 118 n.a. 116 Other banks in foreign countries 724 1 n.a. 117 Foreign governments and official institutions 568 276 n.a. 118 Allother 25 119 Federal funds purchased and securities sold under agreements to repurchase.. 248,330 188,453 831 187,621 56,138 3,739 120 Federal funds purchased 150,837 122,321 n.a. n.a. 27,012 1,504 121 Securities sold under agreements to repurchase 97,493 66,132 n.a. n.a. 29,126 2,236 122 Demand notes issued to the U.S. Treasury n a. n.a. n.a. 25,565 4,998 648 123 Other borrowed money 120,439 85,690 37,903 47,787 32,895 1,854 124 Banks liability on acceptances executed and outstanding 33,449 33,030 6,548 26,481 397 22 125 Notes and debentures subordinated to deposits 17,098 14,706 n.a. n.a. 2,087 305 126 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs... n a. n. a. n. a. 16,447 n.a. n.a. 127 All other liabilities 73,973 56,993 n. a. n.a. 12,718 4,262 128 Total equity capital9 19'. ,323 93,395 n.a. n.a. 63,585 35,343 MEMO 129 Holdings of commercial paper included in total loans, gross 2,391 1,005 1,386 1,057 n.a. 130 Total individual retirement accounts (IRA) and Keogh plan accounts 39,740 36,545 16,450 131 Total brokered deposits 33,878 13,226 1,340 132 Total brokered retail deposits 7,534 7,954 1,165 133 Issued in denominations of $100,000 or less 1,027 4,282 866 134 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 6,507 3,672 299 Savings deposits 135 Money market deposit accounts (MMDAs) 176,864 123,567 48,457 136 Other savings deposits (excluding MMDAs) 80,656 73,916 33,618 137 Total time deposits of less than $100,000 172,612 208 133,071 138 Time certificates of deposit of $100,000 or more n a. n.a. n.a. 182,550 108,000 41,983 139 Open-account time deposits of $100,000 or more 29,105 3,907 1,553 140 All NOW accounts (including Super NOW) 70,491 72,012 41,835 141 Total time and savings deposits 714,193 591,323 302,025 Quarterly averages 142 Total loans 866,171 561,303 209,942 143 Obligations (other than securities) of states and political subdivisions in the United States 29,890 15,948 n.a. 144 Transaction accounts in domestic offices (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) 73,799 74,020 43,247 Nontransaction accounts in domestic offices 145 Money market deposit accounts (MMDAs) 179,351 125,485 49,115 146 Other savings deposits 80,676 74,576 33,534 147 Time certificates of deposit of $100,000 or more r 175,058 103,825 41,028 148 All other time deposits 194,099 207,993 133,0% 149 Number of banks 13,206 250 n a. n.a. 2,384 10,572 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Special Tables • August 1989 4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices1-2-6 Consolidated Report of Condition, September 30, 1988 Millions of dollars Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 1 Total assets6 2,301,302 1,841,030 1,459,564 381,466 460,272 2 Cash and balances due from depository institutions 185,641 153,252 120,964 32,288 32,388 3 Cash items in process of collection and unposted debits 89,104 81,045 65,134 15,911 8,059 4a C Ba u l r a r n en ce c s y d a u n e d f c r o o i m n depository institutions in the United States 3 1 4 8 , , 4 4 0 6 0 2 2 1 2 5 , , 8 3 7 8 9 2 1 1 8 2 , ,7 5 2 8 1 0 4 2 , , 2 6 9 6 9 1 1 3 1 , , 0 5 8 2 1 1 6 Balances due from banks in foreign countries and foreign central banks 9,458 5,735 4,526 1,210 3,723 7 Balances due from Federal Reserve Banks 34,217 28,212 20,004 8,208 6,005 8 Total securities, loans and lease financing receivables, (net of unearned income) 1,964,996 1,556,955 1,249,894 307,061 408,041 9 Total securities, book value 381,642 284,515 221,057 63,458 97,127 10 U.S. Treasury securities 127,053 93,739 73,716 20,022 33,314 11 U.S. government agency and corporation obligations 110,112 84,286 67,741 16,544 25,827 12 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 67,272 56,303 44,538 11,765 10,969 n Mother 42,840 27,983 23,204 4,779 14,857 14 Securities issued by states and political subdivisions in the United States 87,903 69,271 50,539 18,732 18,632 IS Taxable 1,115 763 571 192 352 16 Tax-exempt 86,788 68,508 49,968 18,539 18,280 17 Other domestic securities 55,168 36,055 28,495 7,560 19,113 18 All holdings of private certificates of participation in pools of residential mortgages 3,363 2,713 1,571 1,142 650 19 All other 51,805 33,342 26,924 6,419 18,462 20 Foreign securities 1,407 1,165 566 600 241 21 Federal funds sold and securities purchased under agreements to resell10 115,789 97,265 71,324 25,941 18,524 22 Federal funds sold 34,029 21,617 19,006 2,611 12,412 23 Securities purchased under agreements to resell 4,986 3,504 2,969 534 1,482 24 Total loans and lease financing receivables, gross 1,478,616 1,183,680 964,182 219,498 294,936 25 LESS: Unearned income on loans 11,051 8,506 6,669 1,837 2,546 26 Total loans and leases (net of unearned income) 1,467,565 1,175,174 957,513 217,662 292,390 Total loans, gross, by category 27 Loans secured by real estate 553333,,005566 406,085 346,500 59,585 126,971 28 Construction and land development 119,342 97,217 81,148 16,070 22,124 29 Farmland 6,120 4,160 3,645 515 1,960 30 1-4 family residential properties 236,226 173,979 148,908 25,071 62,247 31 Revolving, open-end and extended under lines of credit 35,207 27,465 23,519 3,947 7,742 32 All other loans 201,019 146,513 125,389 21,124 54,506 33 Multifamily (5 or more) residential properties 15,804 12,464 10,962 1,503 3,340 34 Nonfarm nonresidential properties 155,565 118,265 101,838 16,427 37,300 35 Loans to commercial banks in the United States 25,547 22,683 18,469 4,215 2,864 36 Loans to other depository institutions in the United States 3,097 2,828 2,508 320 269 37 Loans to banks in foreign countries 4,963 4,849 2,566 2,282 115 38 Loans to finance agricultural production and other loans to farmers 12,201 9,608 8,568 1,039 2,593 39 Commercial and industrial loans 445,365 365,726 287,432 78,294 79,639 40 To U.S. addressees (domicile) 442,367 362,993 285,199 77,794 79,373 41 To non-U.S. addressees (domicile) 2,998 2,733. 2,233 500 265 42 Acceptances of other banks11 2,258 1,374 1,184 190 884 43 Of U.S. banks 765 478 440 39 286 44 Of foreign banks 428 338 261 77 90 45 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 308,183 243,798 203,121 40,677 64,385 46 Loans to foreign governments and official institutions 2,580 2,484 1,803 680 97 47 Obligations (other than securities) of states and political subdivisions in the United States 45,394 38,218 28,487 9,731 7,176 48 959 688 562 126 271 49 44,435 37,530 27,925 9,605 6,905 50 Other loans 67,411 60,864 43,010 17,854 6,547 51 Loans for purchasing and carrying securities 15,794 14,528 9,403 5,125 1,266 52 51,618 46,336 33,608 12,728 5,281 53 Lease financing receivables 28,560 25,163 20,533 4,631 3,3% 54 Customers' liability on acceptances outstanding 26,207 25,116 17,646 7,470 1,091 55 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 37,685 34,311 22,819 11,492 3,375 56 Remaining assets 124,459 105,707 71,061 34,647 18,752 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.20—Continued Members Total Total National State 57 Total liabilities and equity capital 2,301,302 1,841,030 1,459,564 381,466 58 Total liabilities4 2,146,510 1,720,141 1,364,449 355,693 59 Total deposits 1,680,799 1,316,352 1,062,174 254,178 60 Individuals, partnerships, and corporations 1,524,731 1,188,904 963,135 225,768 61 U.S. government 3,721 3,065 2,680 385 62 States and political subdivisions in the United States 81,965 62,925 53,000 9,925 63 Commercial banks in the United States 37,704 33,920 25,331 8,589 64 Other depository institutions in the United States 6,749 5,480 4,183 1,297 65 Banks in foreign countries 8,226 7,435 4,179 3,255 66 Foreign governments and official institutions 1,637 1,504 699 805 67 Certified and official checks 16,065 13,119 8,966 4,153 68 Total transaction accounts 521,990 426,007 335,132 90,875 69 Individuals, partnerships, and corporations 446,165 359,789 287,323 72,466 70 U.S. government 2,488 1,990 1,654 335 71 States and political subdivisions in the United States 18.562 14,944 12,120 2,824 72 Commercial banks in the United States 25,937 24,473 18,070 6,403 73 Other depository institutions in the United States 4,828 4,208 3,039 1,168 74 Banks in foreign countries 7,149 6,755 3,664 3,091 75 Foreign governments and official institutions 794 729 296 433 76 Certified and official checks 16,065 13,119 8,966 4,153 77 Demand deposits (included in total transaction accounts) 375,283 312,781 240,037 72,744 78 Individuals, partnerships, and corporations 306,585 252,066 196,732 55,334 79 U.S. government 2,443 1,949 1,618 332 80 States and political subdivisions in the United States 11,494 9,492 7.662 1,830 81 Commercial banks in the United States 25,933 24,471 18,068 6,403 82 Other depository institutions in the United States 4,820 4,201 3,033 1,168 83 Banks in foreign countries 7,149 6,754 3.663 3,091 84 Foreign governments and official institutions 793 729 2% 433 85 Certified and official checks 16,065 13,119 8,966 4,153 86 Total nontransaction accounts 1,158,809 890,345 727,042 163,303 87 Individuals, partnerships, and corporations 1,078,566 829,115 675,812 153,302 88 U.S. government 1,233 1,075 1,026 50 89 States and political subdivisions in the United States 63,403 47,980 40,880 7,101 90 Commercial banks in the United States 11,767 9,447 7,261 2,185 91 U.S. branches and agencies of foreign banks 511 204 107 97 92 Other commercial banks in the United States 11,256 9,243 7,154 2,089 93 Other depository institutions in the United States 1,920 1,273 1,144 129 94 Banks in foreign countries 1,077 680 516 1641 95 Foreign branches of other U.S. banks 351 233 232 96 Other banks in foreign countries 726 446 284 163 97 Foreign governments and official institutions 843 775 403 372 98 Federal funds purchased and securities sold under agreements to repurchase12 243,759 211,043 163,395 47,648 99 Federal funds purchased 27,012 20,210 16,899 3,311 100 Securities sold under agreements to repurchase 29,129 15,429 12,202 3,226 101 Demand notes issued to the U.S. Treasury 30.563 28,508 20,621 7,886 102 Other borrowed money 80,682 65,447 53,301 12,145 103 Banks liability on acceptances executed and outstanding 26,878 25,787 18,263 7,523 104 Notes and debentures subordinated to deposits 2,087 1,197 1,063 134 105 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 16,447 13,832 8,817 5,014 106 Remaining liabilities 81,743 71,808 45,630 26,178 107 Total equity capital9 154,792 120,889 95,115 25,773 MEMO 108 Holdings of commercial paper included in total loans, gross 2,443 695 580 115 109 Total individual retirement accounts (IRA) and Keogh plan accounts 76,284 59,122 48,858 10,264 110 Total brokered deposits 47,104 35,630 28,385 7,245 111 Total brokered retail deposits 15,489 9,776 7,611 2,165 112 Issued in denominations of $100,000 or less 5,310 2,008 1,896 111 113 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 10,179 7,769 5,715 2,054 Savings deposits 114 Money market deposit accounts (MMDAs) 300,432 235,871 192,144 43,727 115 Other savings accounts 154,572 119,304 92,459 26,845 116 Total time deposits of less than $100,000 380,244 285,782 240,987 44,795 117 Time certificates of deposit of $100,000 or more 290,550 220,567 181,180 39,387 118 Open-account time deposits of $100,000 or more 33,011 28,821 20,272 8,549 119 All NOW accounts (including Super NOW accounts) 142,503 110,394 92,550 17,845 120 Total time and savings deposits 1,305,516 1,003,571 822,137 181,433 Quarterly averages 121 Total loans 1,427,474 1,142,854 929,888 212,965 122 Obligations (other than securities) of states and political subdivisions in the United States ... 45,838 38,779 28,542 10,236 123 Transaction accounts (NOW accounts, ATS accounts, and telephone preauthorized transfer accounts) 114,510 95,111 19,398 Nontransaction accounts 124 Money market deposit accounts (MMDAs) 304,836 239,347 194,570 44,776 125 Other savings deposits 155,252 119,608 92,911 26,697 126 Time certificates of deposits of $100,000 or more 278,883 212,094 174,064 38,030 127 All other time deposits 402,092 304,607 252,417 52,190 128 Number of banks 2,634 1,508 1,269 239 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Special Tables • August 1989 4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities12-6 Consolidated Report of Condition, September 30, 1988 Millions of dollars Members NNoonn-- IItteemm mmeemmbbeerrss Total National State 1 Total assets6 2,700,388 2,003,363 1,590,871 412,492 697,025 2 Cash and balances due from depository institutions 218,083 166,819 132,206 34,613 51,264 3 Currency and coin 22,093 16,874 13,933 2,941 5,220 4 Noninterest-bearing balances due from commercial banks 31,426 17,977 14,997 2,980 13,449 164,564 131,968 103,276 28,692 32,596 6 Total securities, loans, and lease financing receivables (net of unearned income) 2,317,704 1,700,061 1,365,305 334,756 617,642 7 Total securities, book value 498,858 330,391 258,484 71,907 168,467 8 U.S. Treasury securities and U.S. government agency and corporation obligations 322,656 211,347 168,576 42,771 111,308 9 Securities issued by states and political subdivisions in the United States 109,219 77,505 57,256 20,249 31,714 2,082 1,085 834 251 997 107,137 76,420 56,422 19,998 30,717 12 Other securities 66,983 41,539 32,652 8,887 25,445 13 All holdings of private certificates of participation in pools of residential mortgages 4,069 3,061 1,795 1,267 1,008 14 All other 62,930 38,488 30,868 7,620 24,442 15 Federal funds sold and securities purchased under agreements to resell 137,231 107,111 79,336 27,775 30,121 16 Federal funds sold 55,018 31,223 26,817 4,405 23,795 17 Securities purchased under agreements to resell 5,438 3,743 3,170 573 1,695 18 Total loans and lease financing receivables, gross 1,695,030 1,272,101 1,034,966 237,134 422,929 19 LESS: Unearned income on loans 13,416 9,541 7,481 2,060 3,874 20 Total loans and leases (net of unearned income) 1,681,614 1,262,560 1,027,486 235,074 419,055 Total loans, gross, by category 21 Loans secured by real estate 634,611 447,161 379,339 67,822 118877,,445500 22 Construction and land development 127,156 100,449 83,765 16,684 26,707 23 Farmland 15,359 7,265 6,130 1,134 8,094 24 1-4 family residential properties 292,277 197,073 167,179 29,894 95,204 25 Revolving, open-end loans, and extended under lines of credit 37,580 28,466 24,300 4,166 9,114 26 All other loans 254,697 168,607 142,879 25,728 86,091 27 Multifamily (5 or more) residential properties 17,745 13,198 11,561 1,637 4,547 28 Nonfarm nonresidential properties 182,074 129,176 110,704 18,472 52,898 29 Loans to depository institutions 34,325 30,665 23,804 6,861 3,660 30 Loans to finance agricultural production and other loans to farmers 30,764 16,121 13,709 2,412 14,642 31 Commercial and industrial loans 490,090 385,143 302,879 82,264 104,947 32 Acceptances of other banks 3,730 1,972 1,709 263 1,758 33 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 352,565 262,416 218,188 44,228 90,148 34 Obligations (other than securities) of states and political subdivisions in the United States 47,572 39,035 29,168 9,867 8,538 35 Nonrated industrial development obligations 1,050 722 591 131 328 36 Other obligations (excluding securities) 46,523 38,313 28,577 9,736 8,210 37 All other loans 72,205 64,230 45,490 18,740 7,975 38 Lease financing receivables 29,168 25,358 20,681 4,677 3,810 39 Customers' liability on acceptances outstanding 26,229 25,127 17,656 7,472 1,102 40 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 37,685 34,311 22,819 11,492 3,375 41 Remaining assets 138,371 111,355 75,704 35,651 27,016 42 Total liabilities and equity capital 2,700,388 2,003,363 1,590,871 412,492 697,025 43 Total liabilities4 2,510,240 1,868,420 1,484,566 383,853 641,821 2,033,699 1,460,367 1,178,985 281,381 573,332 45 Individuals, partnerships, and corporations 1,847,613 1,320,893 1,070,151 250,742 526,720 4,313 3,295 2,869 426 1,018 47 States and political subdivisions in the United States 105,956 71,943 60,396 11,547 34,014 48 Commercial banks in the United States 39,626 35,062 26,201 8,861 4,564 49 Other depository institutions in the United States 7,856 6,029 4,646 1,383 1,827 50 Certified and official checks 18,431 14,190 9,829 4,361 4,242 51 All other 9,903 8,955 4,894 4,062 947 52 Total transaction accounts 616,208 465,278 367,199 98,079 150,929 53 Individuals, partnerships, and corporations 530,014 394,656 315,854 78,802 135,358 2,942 2,167 1,803 364 775 55 States and political subdivisions in the United States 24,924 17,344 14,106 3,238 7,580 56 Commercial banks in the United States 26,799 25,068 18,468 6,600 1,731 57 Other depository institutions in the United States 5,139 4,365 3,177 1,188 774 58 Certified and official checks 18,431 14,190 9,829 4,361 4,242 59 All other 7,958 7,488 3,963 3,526 470 60 Demand deposits (included in total transaction accounts) 426,158 334,662 257,778 76,884 91,496 61 Individuals, partnerships, and corporations 351,243 271,104 212,232 58,872 80,139 62 U.S. government 2,885 2,123 1,763 361 761 63 States and political subdivisions in the United States 13,727 10,337 8,360 1,978 3,390 64 Commercial banks in the United States 26,793 25,064 18,464 6,600 1,729 65 Other depository institutions in the United States 5,124 4,356 3,168 1,188 768 66 Certified and official checks 18,431 14,190 9,829 4,361 4,242 67 All other 7,954 7,488 3,962 3,525 467 68 Total nontransaction accounts 1,417,491 995,088 811,786 183,302 422,403 69 Individuals, partnerships, and corporations 1,317,599 926,237 754,297 171,940 391,362 70 U.S. government 1,371 1,128 1,066 62 244 71 States and political subdivisions in the United States 81,032 54,599 46,289 8,309 26,434 72 Commercial banks in the United States 12,827 9,994 7,733 2,260 2,833 73 Other depository institutions in the United States 2,717 1,665 1,470 195 1,053 74 All other 1,945 1,467 931 536 478 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks All 4.22—Continued Members IItteemm TToottaall NNoonn-mmeemmbbeerrss Total National State 75 Federal funds purchased and securities sold under agreements to repurchase 247,498 212,687 164,639 48,048 34,811 76 Federal funds purchased 28,516 21,057 17,491 3,566 7,459 77 Securities sold under agreements to repurchase 31,365 16,226 12,854 3,372 15,139 78 Demand notes issued to the U.S. Treasury 31,210 28,793 20,849 7,943 2,417 79 Other borrowed money 82,536 66,088 53,757 12,331 16,448 80 Banks liability on acceptances executed and outstanding 26,900 25,798 18,273 7,525 1,102 81 Notes and debentures subordinated to deposits 2,392 1,250 1,110 140 1,142 82 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 16,447 13,832 8,817 5,014 2,615 83 Remaining liabilities 86,005 73,437 46,952 26,485 12,569 84 Total equity capital9 190,147 134,943 106,305 28,639 55,204 MEMO 85 Assets held in trading accounts 22,823 22,273 13,168 9,105 550 86 U.S. Treasury securities 13,296 13,242 6,759 6,484 54 87 U.S. government agency corporation obligations 3,846 3,838 2,841 998 7 88 Securities issued by states and political subdivisions in the United States 1,190 1,181 994 187 8 89 Other bonds, notes, and debentures 314 281 180 101 33 90 Certificates of deposit 492 492 306 186 0 91 Commercial paper 50 50 49 1 0 92 Bankers acceptances 1,763 1,748 1,068 680 15 93 Other 1,272 1,272 812 460 0 94 Total individual retirement accounts (IRA) and Keogh plan accounts 92,734 65,529 54,085 11,444 27,206 95 Total brokered deposits 48,445 36,064 28,751 7,313 12,381 96 Total brokered retail deposits 16,654 10,141 7,918 2,223 6,513 97 Issued in denominations of $100,000 or less 6,176 2,343 2,180 163 3,834 98 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 10,478 7,798 5,738 2,060 2,680 Savings deposits 99 Money market deposit accounts (MMDAs) 348,888 256,688 209,099 47,589 92,201 100 Other savings deposits 188,190 133,103 103,396 29,707 55,087 101 Total time deposits of less than $100,000 513,315 337,151 282,400 54,751 176,165 102 Time certificates of deposit of $100,000 or more 332,533 238,804 196,204 42,600 93,730 103 Open-account time deposits of $100,000 or more 34,564 29,343 20,688 8,655 5,221 104 All NOW accounts (including Super NOW) 184,338 127,301 106,471 20,829 57,037 105 Total time and savings deposits 1,607,541 1,125,705 921,208 204,497 481,836 Quarterly averages 106 Total loans 1,637,416 1,228,824 998,855 229,969 408,593 107 Transaction accounts (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) 191,066 131,871 109,370 22,501 59,195 Nontransaction accounts 108 Money market deposit accounts (MMDAs) 353,952 260,415 211,741 48,675 93,536 109 Other savings deposits 188,786 133,370 103,837 29,533 55,417 110 Time certificates of deposit of $100,000 or more 319,911 229,957 188,796 41,161 89,954 Ill All other time deposits 535,188 355,859 293,782 62,077 179,329 112 Number of banks 13,206 5,452 4,385 1,067 7,754 1. Effective Mar. 31, 1984, the report of condition was substantially revised for refers to those respondents whose assets, as of June 30 of the previous calendar commercial banks. Some of the changes are as follows: (1) Previously, banks with year, were less than $100 million. (These respondents filed the FFIEC 034 call international banking facilities (IBFs) that had no other foreign offices were report.) considered domestic reporters. Beginning with the Mar. 31, 1984 call report these 6. Since the domestic portion of allowances for loan and lease losses and banks are considered foreign and domestic reporters and must file the foreign and allocated transfer risk reserve are not reported for banks with foreign offices, the domestic report of condition; (2) banks with assets greater than $1 billion have components of total assets (domestic) will not add to the actual total (domestic). additional items reported; (3) the domestic office detail for banks with foreign 7. Since the foreign portion of demand notes issued to the U.S. Treasury is not offices has been reduced considerably; and (4) banks with assets under $25 million reported for banks with foreign offices, the components of total liabilities (foreign) have been excused from reporting certain detail items. will not add to the actual total (foreign). 2. The "n.a." for some of the items is used to indicate the lesser detail available 8. The definition of 'all other' varies by report form and therefore by column in from banks without foreign offices, the inapplicability of certain items to banks this table. See the instructions for more detail. that have only domestic offices and/or the absence of detail on a fully consolidated 9. Equity capital is not allocated between the domestic and foreign offices of basis for banks with foreign offices. banks with foreign offices. 3. All transactions between domestic and foreign offices of a bank are reported 10. Only the domestic portion of federal funds sold and securities purchased in "net due from" and "net due to." All other lines represent transactions with under agreements to resell are reported here, therefore, the components will not parties other than the domestic and foreign offices of each bank. Since these add to totals for this item. intraoffice transactions are nullified by consolidation, total assets and total 11. "Acceptances of other banks" is not reported by domestic respondents less liabilities for the entire bank may not equal the sum of assets and liabilities than $300 million in total assets, therefore the components will not add to totals for respectively, of the domestic and foreign offices. this item. 4. Foreign offices include branches in foreign countries, Puerto Rico, and in 12. Only the domestic portion of federal funds purchased and securities sold U.S. territories and possessions; subsidiaries in foreign countries; all offices of are reported here, therefore the components will not add to totals for this item. Edge act and agreement corporations wherever located and IBFs. 13. Components of assets held in trading accounts are only reported for banks 5. The 'over 100' column refers to those respondents whose assets, as of June with total assets of $1 billion or more; therefore the components will not add to the 30 of the previous calendar year, were equal to or exceeded $100 million. (These totals for this item. respondents file the FFIEC 032 or FFIEC 033 call report.) The 'under 100' column Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Special Tables • August 1989 4.20 DOMESTIC AND FOREIGN OFFICES, Insured Commercial Bank Assets and Liabilities1-2 Consolidated Report of Condition, December 31, 1988 Millions of dollars Banks with foreign offices3'4 Bank o s f f w ic i e th s o d n o l m y5 e stic IItteemm TToottaall Total Foreign Domestic Over 100 Under 100 1 Total assets6 3,114,672 1,791,142 420,638 1,431,591 916,540 406,858 2 Cash and balances due from depository institutions 352,410 246,374 118,918 127,456 71,820 34.208 3 Cash items in process of collection, unposted debits, and currency and coin [ 89,282 1,325 87,958 32,652 i 4 Cash items in process of collection and unposted debits n.a. n.a. 73,515 23,482 T 5 Currency and coin n.a. n.a. 14,443 9,170 1 6 Balances due from depository institutions in the United States 1 35,373 23,030 12,342 21,862 n.a. 7 Balances due from banks in foreign countries and foreign central banks n.a. 97,944 94,361 3,583 5,021 8 Balances due from Federal Reserve Banks 23,775 203 23,572 12,285 1 MEMO t 9 Noninterest-bearing balances due from commercial banks in the United States 1 (included in balances due from depository institutions in the United States) T n.a. n.a. 8,078 13,809 11,440 10 Total securities, loans and lease financing receivables, net 2,536,951 1,375,045 n.a. n.a. 806,197 355,596 11 Total securities, book value 533,333 224,016 29,487 194,529 189,697 119,605 12 U.S. Treasury securities and U.S. government agency and corporation obligations 332,287 118,284 2,005 116,279 125,489 88,514 13 U.S. Treasury securities n.a. 57,931 884 57,047 67,300 n.a. 14 U.S. government agency and corporation obligations n.a. 60,352 1,121 59,231 58,189 n.a. 15 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 87,701 48,064 1,080 46,984 24,217 15,409 16 All other n.a. 12,288 41 12,247 33,972 n.a. 17 Securities issued by states and political subdivisions in the United States 105,682 46,371 518 45,853 38,683 20,628 18 Taxable 2,083 395 47 348 689 1,000 19 Tax-exempt 103,599 45,976 471 45,505 37,994 19,628 20 Other securities 95,348 59,361 26,964 32,397 25,525 10,462 ">1 nn..aa.. 3333,,661155 22,,442244 3311,,119911 2255,,112211 22 All holdings of private certificates of participation in pools of residential mortgages 4,197 1,930 0 1,930 1,607 660 23 All other 65,002 31,685 2,424 29,261 23,514 9,803 ">4 25,746 24,540 1,206 404 25 Federal funds sold and securities purchased under agreements to resell 126,845 66,380 604 65,776 37,166 23,298 26 Federal funds sold 102,021 47,278 n.a. n.a. 32,008 22,738 27 Securities purchased under agreements to resell 24,820 19,102 n.a. n.a. 5,158 560 28 Total loans and lease financing receivables, gross 1,938,544 1,125,351 210,689 914,663 594,743 218,449 29 LESS: Unearned income on loans 15,345 7,009 2,107 4,902 6,015 2,320 30 Total loans and leases (net of unearned income) 1,923,297 1,118,342 208,581 909,761 588,728 216,129 31 LESS: Allowance for loan and lease losses 46,315 33,492 n.a. n.a. 9,393 3,429 32 LESS: Allocated transfer risk reserves 209 201 n.a. n.a. 1 8 33 EQUALS: Total loans and leases, net 1,876,773 1,084,649 n.a. n.a. 579,334 212,692 Total loans, gross, by category 34 Loans secured by real estate 674,602 328,857 22,128 306,730 242,601 103,101 35 Construction and land development i 85,799 35,356 7,918 36 Farmland T T T 1,895 4,275 9,282 37 1 4 family residential properties 1 1 1 125,575 118,180 56,950 38 Revolving, open-end loans, extended under lines of credit n.a. n.a. n.a. 21,603 15,693 2,539 39 All other loans 103,972 102,487 54,411 40 Multifamily (5 or more) residential properties 1 1 1 9,694 6,492 2,011 41 Nonfarm nonresidential properties t t t 83,767 78,299 26,940 42 Loans to depository institutions 58,416 51,637 24,194 27,443 6,009 770 43 To commercial banks in the United States n.a. 22,280 988 21,293 5,307 n.a. 44 To other depository institutions in the United States n.a. 2,777 467 2,311 614 n.a. 45 To banks in foreign countries n.a. 26,580 22,740 3,840 88 n.a. 46 Loans to finance agricultural production and other loans to farmers 30,101 5,748 277 5,471 6,669 17,683 47 Commercial and industrial loans 596,508 415,851 99,351 316,499 135,342 45,315 48 To U.S. addressees (domicile) n.a. 333,000 19,160 313,840 135,047 n.a. 49 To non-U.S. addressees (domicile) n.a. 82,851 80,192 2,659 294 n.a. 50 Acceptances of other banks 5,012 819 376 443 2,074 2,119 51 U.S. banks n.a. 230 34 196 n.a. n.a. 52 Foreign banks n.a. 589 341 247 n.a. n.a. 53 Loans to individuals for household, family and other personal expenditures (includes purchased paper) 374,120 158,510 12,126 146,384 171,094 44,515 54 Credit cards and related plans 116,522 46,666 n.a. n.a. 66,636 3,219 55 Other (includes single payment and installment) 257,583 111,844 n.a. n.a. 104,458 41,296 56 Obligations (other than securities) of states and political subdivisions in the U.S. (includes nonrated industrial development obligations) 44,951 27,495 340 27,155 15,370 2,085 57 Taxable 1,265 669 21 648 501 95 58 Tax-exempt 43,686 26,826 319 26,508 14,869 1,990 59 All other loans 120,538 107,741 47,859 59,882 10,544 2,252 60 Loans to foreign governments and official institutions n.a. 35,148 33,398 1,749 255 n.a. 61 Other loans n.a. 72,594 14,461 58,133 10,289 n.a. 62 Loans for purchasing and carrying securities n.a. n.a. n.a. 14,158 1,601 n.a. 63 All other loans n.a. n.a. n.a. 43,975 8,688 n.a. 64 Lease financing receivables 34,340 28,692 4,038 24,654 5,039 608 65 Assets held in trading accounts 35,463 34,602 16,465 18,137 661 200 66 Premises and fixed assets (including capitalized leases) 45,468 24,014 i n.a. 14,416 7,035 67 Other real estate owned 11,218 4,749 T n.a. 3,827 2,642 68 Investments in unconsolidated subsidiaries and associated companies 2,774 2,087 1 n.a. 642 45 69 Customers' liability on acceptances outstanding 33,040 32,602 n.a. n.a. 410 28 70 Net due from own foreign offices, Edge and agreement subsidiaries and, IBFs n.a. n.a. 44,833 n.a. n.a. 71 Intangible assets 5,079 3,108 1 n.a. 1,752 219 72 Other assets 92,270 68,562 t n.a. 16,815 6,885 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks All 4.22—Continued Banks with foreign offices3 Bank o s f f w ic i e th s o d n o l m y estic Item Total Foreign Domestic Over 100 Under 100 73 Total liabilities, limited-life preferred stock, and equity capital 114,672 1,791,142 n.a. n.a. 916,540 406,858 74 Total liabilities7 ,918,768 1,694,771 420,625 1,335,232 852,249 371,625 75 Limited-life preferred stock 84 0 n.a. n.a. 83 2 76 Total deposits ,418,263 1,314,877 315,079 999,798 742,052 361,334 77 Individuals, partnerships, and corporations i i 184,858 900,909 679,608 329,939 78 U.S. government i 2,949 1,933 725 79 States and political subdivisions in the United States 41,273 41,675 24,836 80 Commercial banks in the United States n.a. n. a. n.a. 28,781 9,482 1,864 81 Other depository institutions in the United States 5,182 2,401 1,060 82 Banks in foreign countries 1 8,163 440 n.a. 83 Foreign governments and official institutions 23,892 22,178 1,713 289 n.a. 84 Certified and official checks 20,425 11,343 514 10,829 6,223 2,859 85 All other8 n a nn.. a. 1(V7 51 86 Total transaction accounts J JJ i 340,447 217,124 99,901 87 Individuals, partnerships, and corporations 285,659 190,375 88,420 88 U.S. government 2,017 1,589 597 89 States and political subdivisions in the United States 9,602 10,902 6,789 90 Commercial banks in the United States n.a. n.a. n.a. 19,708 6,430 883 91 Other depository institutions in the United States 3,873 1,356 337 92 Banks in foreign countries 7,528 233 n.a. 93 Foreign governments and official institutions 1,232 16 n.a. 94 Certified and official checks 1100,,882299 6,223 2,859 95 All other * < < 17 96 Demand deposits (included in total transaction accounts) 262,599 138,954 54,711 97 Individuals, partnerships, and corporations 210,099 117,571 47,770 98 U.S. government 1,988 1,568 581 99 States and political subdivisions in the United States 7,343 5,566 2,275 100 Commercial banks in the United States 19,707 6,429 881 101 Other depository institutions in the United States 3,873 1,348 330 102 Banks in foreign countries 7,527 232 n.a. 103 Foreign governments and official institutions 1,231 15 n.a. 104 Certified and official checks 1100,,882299 6,223 2,859 105 All other 16 106 Total nontransaction accounts 659,351 524,928 261,433 107 Individuals, partnerships, and corporations n.a. n.a. n.a. 615,250 489,233 241,519 108 U.S. government 932 344 128 109 States and political subdivisions in the United States 31,671 30,773 18,047 110 Commercial banks in the United States 9,073 3,052 981 111 U.S. branches and agencies of foreign banks 686 167 n.a. 112 Other commercial banks in the United States 8,387 2,886 n.a. 113 Other depository institutions in the United States 1,308 1,044 724 114 Banks in foreign countries 635 207 n.a. 115 Foreign branches of other U.S. banks 4 206 n.a. 116 Other banks in foreign countries 631 1 n.a. 117 Foreign governments and official institutions 482 274 n.a. 118 Mother 34 119 Federal funds purchased and securities sold under agreements to repurchase.. 233,521 172,875 424 172,451 57,232 3,413 120 Federal funds purchased 144,851 114,903 n.a. n.a. 28,459 1,475 121 Securities sold under agreements to repurchase Si ,686 57,972 n.a. n.a. 28,773 1,939 122 Demand notes issued to the U.S. Treasury n.a. n.a. n.a. 20,000 4,323 454 123 Other borrowed money 118,055 83,121 34,497 48,624 33,179 1,755 124 Banks liability on acceptances executed and outstanding 33,184 32,745 5,947 26,798 410 28 125 Notes and debentures subordinated to deposits 17,226 14,879 n.a. n.a. 2,031 315 126 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs.., n.a. n.a. n.a. 16,254 n.a. n.a. 127 All other liabilities 73,621 56,273 n.a. n.a. 13,021 4,325 128 Total equity capital9 195,819 96,371 n. a. n.a. 64,208 35,232 MEMO 129 Holdings of commercial paper included in total loans, gross 1.566 831 734 1,339 n.a. 130 Total individual retirement accounts (IRA) and Keogh plan accounts 41,105 37,240 16,736 131 Total brokered deposits 37,889 13,951 1,345 132 Total brokered retail deposits 9,379 8,760 1,205 133 Issued in denominations of $100,000 or less 1,634 4,813 888 134 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 7,745 3,946 317 Savings deposits 135 Money market deposit accounts (MMDAs) 178,372 122,502 47,764 136 Other savings deposits (excluding MMDAs) 81,512 73,749 33,132 137 Total time deposits of less than $100,000 181,085 216 135,938 138 Time certificates of deposit of $100,000 or more n.a. n.a. n.a. 189,271 108,760 42,963 139 Open-account time deposits of $100,000 or more 29,110 3,862 1,637 140 All NOW accounts (including Super NOW) 76,107 75,841 43,595 141 Total time and savings deposits 737,199 603,098 306,623 Quarterly averages 142 Total loans 878,719 572,534 211,925 143 Obligations (other than securities) of states and political subdivisions in the United States 28,914 15,348 n.a. 144 Transaction accounts in domestic offices (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) 75,275 74,870 43,873 Nontransaction accounts in domestic offices 145 Money market deposit accounts (MMDAs) 178,522 123,306 48,025 146 Other savings deposits 81,652 74,270 33,113 147 Time certificates of deposit of $100,000 or more 182,516 106,784 41,770 148 M other time deposits 207,166 216,038 135,828 149 Number of banks 13,079 251 n a. n.a. 2,357 10,471 Digitized for FRASER http://fraser.stFloooutinsofteesd a.opprgea/r at the end of table 4.22 Federal Reserve Bank of St. Louis

All Special Tables • August 1989 4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices1-2-6 Consolidated Report of Condition, December 31, 1988 Millions of dollars Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 1 Total assets6 2,348,131 1,873,730 1,496,524 377,206 474,401 2 Cash and balances due from depository institutions 199,276 165,099 131,322 33,776 34,178 Cash items in process of collection and unposted debits 96,997 87,538 69,457 18,081 9,459 4 Currency and coin 23,613 19,553 16,352 3,200 4,061 Balances due from depository institutions in the United States 34,204 22,656 18,292 4,364 11,548 6 Balances due from banks in foreign countries and foreign central banks 8,605 6,009 4,938 1,071 2,5% 7 Balances due from Federal Reserve Banks 35,857 29,344 22,284 7,060 6,513 8 Total securities, loans and lease financing receivables, (net of unearned income) 1,985,657 1,566,986 1,266,978 300,007 418,671 9 Total securities, book value 384,226 285,825 221,219 64,606 98,401 10 U.S. Treasury securities 124,347 90,400 70,629 19,771 33,947 11 U.S. government agency and corporation obligations 117,420 90,186 71,974 18,212 27,234 12 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 71,201 60,056 47,482 12,574 1111,,114455 n All other 46,219 30,130 24,492 5,639 16,089 14 Securities issued by states and political subdivisions in the United States 84,536 66,332 48,498 17,835 18,204 15 Taxable 1,037 725 533 191 312 16 Tax-exempt 83,499 65,608 47,964 17,643 17,892 17 Other domestic securities 56,312 37,564 29,563 8,000 18,748 18 All holdings of private certificates of participation in pools of residential mortgages 3,537 2,860 1,759 1,101 676 19 All other 52,775 34,703 27,804 6,899 18,072 20 Foreign securities 1,610 1,343 555 788 268 21 Federal funds sold and securities purchased under agreements to resell10 102,943 87,055 65,616 21,439 15,887 7.2 Federal funds sold 32,009 20,284 17,720 2,564 11,725 23 Securities purchased under agreements to resell 5,158 3,717 3,164 553 1,441 24 Total loans and lease financing receivables, gross 1,509,406 1,202,512 986,797 215,715 306,894 25 LESS: Unearned income on loans 10,917 8,407 6,653 1,753 2,511 26 Total loans and leases (net of unearned income) 1,498,489 1,194,106 980,143 213,962 304,383 Total loans, gross, by category 27 Loans secured by real estate 549,331 416,582 357,046 59,535 132,750 28 Construction and land development 121,155 97,509 81,899 15,610 23,646 79 Farmland 6,169 4,183 3,682 501 1,986 30 1-4 family residential properties 243,755 179,425 153,916 25,510 64,330 31 Revolving, open-end and extended under lines of credit 37,296 29,062 24,846 4,216 8,234 37 All other loans 206,459 150,363 129,070 21,294 56,096 33 Multifamily (5 or more) residential properties 16,186 12,698 11,177 1,521 3,488 34 Nonfarm nonresidential properties 162,066 122,766 106,372 16,393 39,300 35 Loans to commercial banks in the United States 26,600 23,085 18,610 4,475 3,515 36 Loans to other depository institutions in the United States 2,925 2,697 2,390 307 228 n Loans to banks in foreign countries 3,928 3,773 2,066 1,707 154 38 Loans to finance agricultural production and other loans to farmers 12,141 9,624 8,639 986 2,516 39 Commercial and industrial loans 451,841 369,541 293,707 75,834 82,300 40 To U.S. addressees (domicile) 448,887 366,859 291,476 75,383 82,029 41 To non-U.S. addressees (domicile) 2,954 2,682 2,231 451 271 42 Acceptances of other banks11 2,517 1,519 1,318 202 998 43 Of U.S. banks 844 534 470 64 310 44 Of foreign banks 379 301 244 56 78 45 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 317,478 250,046 209,637 40,409 67,432 46 Loans to foreign governments and official institutions 2,005 1,934 1,376 557 71 47 Obligations (other than securities) of states and political subdivisions in the United States 42,526 35,776 26,500 9,276 6,750 48 Taxable 1,149 858 729 129 291 49 41,377 34,917 25,770 9,147 6,460 50 Other loans 68,422 62,187 44,160 18,027 6,234 51 Loans for purchasing and carrying securities 15,758 14,707 9,562 5,145 1,051 52 All other loans 52,663 47,480 34,598 12,882 5,183 53 Lease financing receivables 29,693 25,747 21,347 4,400 3,946 54 Customers' liability on acceptances outstanding 26,483 25,342 17,990 7,352 1,141 55 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 44,833 40,621 24,770 15,851 4,212 56 136,714 116,304 80,233 36,071 20,411 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.20—Continued Members Total National State 57 Total liabilities and equity capital 2,348,131 1,873,730 1,496,524 377,206 58 Total liabilities4 2.187.482 1,748,071 1,399,091 348,980 59 Total deposits 1,741,850 1,362,711 1,103,387 259,324 60 Individuals, partnerships, and corporations 1,580,517 1,231,746 1,001,623 230,123 61 U.S. government 4,883 3,997 3,506 491 62 States and political subdivisions in the United States 82,948 64,013 53,517 10,496 63 Commercial banks in the United States 38,263 33,644 25,510 8,135 64 Other depository institutions in the United States 7,582 5,985 5,017 967 65 Banks in foreign countries 8,603 7,679 4,068 3,611 66 Foreign governments and official institutions 2,003 1,871 870 1,001 67 Certified and official checks 17,052 13,776 9,276 4,500 68 Total transaction accounts 557,571 453,021 358,620 94,401 69 Individuals, partnerships, and corporations 476,033 382,887 307,063 75,824 70 U.S. government 3,606 2,881 2,448 433 71 States and political subdivisions in the United States 20,504 16,491 13,489 3,002 72 Commercial banks in the United States 26,138 24,194 18,538 5,656 73 Other depository institutions in the United States 5,230 4,281 3,420 861 74 Banks in foreign countries 7,761 7,320 3,831 3,489 75 Foreign governments and official institutions 1,247 1,191 555 637 76 Certified and official checks 17,052 13,776 9,276 4,500 77 Demand deposits (included in total transaction accounts) 401,552 332,119 256,835 75,284 78 Individuals, partnerships, and corporations 327,670 267,900 210,248 57,652 79 U.S. government 3,556 2,834 2,405 430 80 States and political subdivisions in the United States 12,909 10,630 8,569 2,061 81 Commercial banks in the United States 26,136 24,193 18,537 5,656 82 Other depository institutions in the United States 5,222 4,276 3,415 861 83 Banks in foreign countries 7,760 7,319 3,830 3,488 84 Foreign governments and official institutions 1,246 1,191 .555 637 85 Certified and official checks 17,052 13,776 9,276 4,500 86 Total nontransaction accounts 1,184,278 909,690 744,767 164,923 87 Individuals, partnerships, and corporations 1.104.483 848,859 694,559 154,300 88 U.S. government 1,277 1,116 1,059 57 89 States and political subdivisions in the United States 62,443 47,522 40,028 7,494 90 Commercial banks in the United States 12,125 9,450 6,972 2,479 91 U.S. branches and agencies of foreign banks 852 541 387 154 92 Other commercial banks in the United States 11,273 8,909 6,584 2,235 93 Other depository institutions in the United States 2,352 1,704 1,598 106 9 9 4 5 Ba F n o k r s e i in g n f o b r r e a i n g c n h c e o s u o n f t r o i t e h s er U.S. banks 8 21 42 0 36 4 0 237 1 12 3 2 96 Other banks in foreign countries 632 355 236 119 97 Foreign governments and official institutions 756 680 315 365 98 Federal funds purchased and securities sold under agreements to repurchase12 229,683 198,817 154,647 44,169 99 Federal fijnds purchased 28,564 21,226 17,559 3,666 100 Securities sold under agreements to repurchase 28,855 15,099 12,041 3,058 101 Demand notes issued to the U.S. Treasury 24,323 22,304 17,264 5,040 102 Other borrowed money 81,803 67,961 56,023 11,938 103 Banks liability on acceptances executed and outstanding 27,208 26,067 18,621 7,445 104 Notes and debentures subordinated to deposits 2,031 1,226 1,082 144 105 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 16,254 12,974 10,472 2,502 106 Remaining liabilities 80,583 68,986 48,066 20,920 107 Total equity capital9 160,649 125,659 97,432 28,226 MEMO 108 Holdings of commercial paper included in total loans, gross 2,073 1,100 941 159 109 Total individual retirement accounts (IRA) and Keogh plan accounts 78,344 60,892 50,349 10,544 110 Total brokered deposits 51,840 39,236 31,897 7,339 111 Total brokered retail deposits 18,139 12,043 9,562 2,480 112 Issued in denominations of $100,000 or less 6,448 2,511 2,395 116 113 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 11,691 9,531 7,167 2,364 Savings deposits 114 Money market deposit accounts (MMDAs) 300,873 236,742 193,196 43,545 115 Other savings accounts 155,261 119,829 92,841 26,988 116 Total time deposits of less than $100,000 397,141 299,349 253,580 45,769 117 Time certificates of deposit of $100,000 or more 298,031 225,073 185,400 39,673 118 Open-account time deposits of $100,000 or more 32,972 28,698 19,750 8,948 119 All NOW accounts (including Super NOW accounts) 151,948 118,150 99,337 18,813 120 Total time and savings deposits 1,340,297 1,030,592 846,552 184,039 Quarterly averages 121 Total loans 1,451,253 1,157,259 948,700 208,559 122 Obligations (other than securities) of states and political subdivisions in the United States ... 44,262 37,618 27,646 9,972 123 Transaction accounts (NOW accounts, ATS accounts, and telephone preauthorized transfer accounts) 150,145 116,474 97,174 19,300 Nontransaction accounts 124 Money market deposit accounts (MMDAs) 301,828 236,737 193,210 43,527 125 Other savings deposits 155,922 120,093 93,496 26,597 126 Time certificates of deposits of $100,000 or more 289,300 219,936 181,190 38,746 127 All other time deposits 423,204 322,539 270,302 52,237 128 Number of banks 2,608 1,495 1,261 234 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Special Tables • August 1989 4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities1'2'6 Consolidated Report of Condition, December 31, 1988 Millions of dollars Members NNoonn-- IItteemm mmeemmbbeerrss Total National State 1 Total assets6 2,754,989 2,039,521 1,630,552 408,969 715,468 2 Cash and balances due from depository institutions 233,484 179,454 143,183 36,271 54,029 3 Currency and coin 27,563 21,188 17,680 3,508 6,375 4 Noninterest-bearing balances due from commercial banks 33,327 18,642 15,564 3,078 14,685 5 Other 172,594 139,625 109,939 29,685 32,969 6 Total securities, loans, and lease financing receivables (net of unearned income) 2,344,689 1,712,805 1,384,529 328,276 631,884 7 Total securities, book value 503,830 332,805 259,481 73,324 171,025 8 U.S. Treasury securities and U.S. government agency and corporation obligations 330,282 215,292 170,816 44,476 114,989 9 Securities issued by states and political subdivisions in the United States 105,164 74,241 54,931 19,310 30,923 10 Taxable 2,036 1,060 804 256 976 11 Tax-exempt 103,128 73,181 54,127 19,054 29,947 12 Other securities 68,385 43,272 33,735 9,537 25,113 13 All holdings of private certificates of participation in pools of residential mortgages 4,197 3,176 1,959 1,217 1,021 14 All other 64,393 40,302 31,981 8,320 24,092 15 Federal funds sold and securities purchased under agreements to resell 126,241 97,655 74,305 23,350 28,586 16 Federal funds sold 54,747 30,553 26,121 4,432 24,194 17 Securities purchased under agreements to resell 5,718 4,048 3,452 596 1,671 18 Total loans and lease financing receivables, gross 1,727,855 1,291,763 1,058,182 233,581 436,092 19 LESS: Unearned income on loans 13,238 9,419 7,440 1,979 3,818 20 Total loans and lfeases (net of unearned income) 1,714,617 1,282,344 1,050,742 231,602 432,273 Total loans, gross, by category 21 Loans secured by real estate 652,432 458,297 339900,,440044 67,894 119944,,113355 22 Construction and land development 129,073 100,804 84,551 16,254 28,269 15,451 7,313 6,190 1,123 8,138 24 1-4 family residential properties 300,705 202,843 172,420 30,423 97,863 25 Revolving, open-end loans, and extended under lines of credit 39,835 30,135 25,685 4,450 9,701 26 All other loans 260,870 172,708 146,735 25,973 88,162 27 Multifamily (5 or more) residential properties 18,197 13,453 11,794 1,659 4,744 28 Nonfarm nonresidential properties 189,006 133,884 115,449 18,435 55,122 29 Loans to depository institutions 34,222 29,939 23,404 6,535 4,283 30 Loans to finance agricultural production and other loans to farmers 29,824 15,944 13,666 2,279 13,880 31 Commercial and industrial loans 497,156 389,103 309,216 79,887 108,053 32 Acceptances of other banks 4,636 2,353 2,038 314 2,283 33 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 361,993 268,619 224,603 44,016 93,375 34 Obligations (other than securities) of states and political subdivisions in the United States 44,611 36,557 27,154 9,403 8,054 35 Nonrated industrial development obligations 1,244 898 762 135 346 36 Other obligations (excluding securities) 43,367 35,659 26,392 9,268 7,708 72,679 65,009 46,201 18,808 7,670 38 Lease financing receivables 30,302 25,942 21,497 4,445 4,360 39 Customers' liability on acceptances outstanding 26,512 25,357 18,001 7,356 1,155 40 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 44,844 40,621 24,770 15,851 4,223 150,305 121,906 84,840 37,066 28,399 42 Total liabilities and equity capital 2,754,989 2,039,521 1,630,552 408,969 715,468 43 Total liabilities4 2,559,106 1,899,836 1,521,980 377,856 659,270 2,103,184 1,510,266 1,223,011 287,255 592,918 45 Individuals, partnerships, and corporations 1,910,456 1,366,776 1,111,043 255,732 543,680 5,608 4,286 3,742 544 1,322 47 States and political subdivisions in the United States 107,784 73,308 61,138 12,170 34,476 48 Commercial banks in the United States 40,128 34,768 26,363 8,405 5,360 49 Other depository institutions in the United States 8,643 6,507 5,464 1,044 2,135 50 Certified and official checks 19,911 15,053 10,306 4,748 4,858 51 All other 10,656 9,569 4,955 4,614 1,088 52 Total transaction accounts 657,473 494,637 392,593 102,044 162,835 53 Individuals, partnerships, and corporations 564,453 419,708 337,191 82,517 144,745 4,203 3,117 2,644 473 1,087 55 States and political subdivisions in the United States 27,294 18,962 15,519 3,443 8,332 56 Commercial banks in the United States 27,021 24,835 18,977 5,858 2,186 57 Other depository institutions in the United States 5,567 4,448 3,567 881 1,119 58 Certified and official checks 19,911 15,053 10,306 4,748 4,858 59 All other 9,025 8,515 4,389 4,127 509 60 Demand deposits (included in total transaction accounts) 456,264 355,652 275,935 79,716 100,612 61 Individuals, partnerships, and corporations 375,440 288,282 226,843 61,439 87,158 62 U.S. government 4,137 3,068 2,598 469 1,069 63 States and political subdivisions in the United States 15,185 11,460 9,263 2,197 3,724 64 Commercial banks in the United States 27,018 24,843 18,976 5,858 2,184 65 Other depository institutions in the United States 5,552 4,441 3,560 880 1,111 66 Certified and official checks 19,911 15,053 10,306 4,748 4,858 67 All other 9,022 8,514 4,388 4,126 508 68 Total nontransaction accounts 1,445,711 1,015,629 830,418 185,211 430,082 69 Individuals, partnerships, and corporations 1,346,002 947,068 773,852 173,216 398,935 70 U.S. government 1,405 1,169 1,099 71 235 71 States and political subdivisions in the United States 80,490 54,346 45,620 8,726 26,144 72 Commercial banks in the United States 13,106 9,933 7,386 2,547 3,173 73 Other depository institutions in the United States 3,076 2,060 1,8% 163 1,017 74 All other 1,632 1,053 566 487 578 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks All 4.22—Continued Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 75 Federal funds purchased and securities sold under agreements to repurchase 233,096 200,477 155,916 44,561 32,619 76 Federal funds purchased 30,039 22,054 18,154 3,900 7,985 77 Securities sold under agreements to repurchase 30,793 15,932 12,715 3,217 14,862 78 Demand notes issued to the U.S. Treasury 24,778 22,506 17,430 5,076 2,271 79 Other borrowed money 83,558 68,560 56,432 12,127 14,999 80 Banks liability on acceptances executed and outstanding 27,237 26,082 18,633 7,449 1,155 81 Notes and debentures subordinated to deposits 2,346 1,281 1,128 152 1,066 82 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 16,254 12,974 10,472 2,502 3,280 83 Remaining liabilities 84,907 70,665 49,430 21,235 14,242 84 Total equity capital9 195,883 139,685 108,572 31,113 56,198 MEMO 85 Assets held in trading accounts 18,998 18,549 11,203 7,345 450 86 U.S. Treasury securities 9,915 9,913 5,068 4,845 3 87 U.S. government agency corporation obligations 3,286 3,281 2,257 1,024 5 88 Securities issued by states and political subdivisions in the United States 1,178 1,165 960 205 13 89 Other bonds, notes, and debentures 212 212 99 113 0 90 Certificates of deposit 847 797 456 341 50 91 Commercial paper 19 19 19 0 0 92 Bankers acceptances 1,582 1,566 1,112 454 17 93 Other 1,448 1,434 1,074 360 14 94 Total individual retirement accounts (IRA) and Keogh plan accounts 95,081 67,420 55,674 11,746 27,660 95 Total brokered deposits 53,185 39,631 32,229 7,401 13,554 96 Total brokered retail deposits 19,344 12,370 9,835 2,535 6,974 97 Issued in denominations of $100,000 or less 7,336 2,809 2,644 165 4,528 98 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 12,008 9,562 7,191 2,370 2,446 Savings deposits 99 Money market deposit accounts (MMDAs) 348,637 257,426 210,029 47,397 91,211 100 Other savings deposits 188,393 133,436 103,634 29,802 54,957 101 Total time deposits of less than $100,000 533,079 351,728 295,776 55,952 181,350 102 Time certificates of deposit of $100,000 or more 340,993 243,800 200,791 43,009 97,193 103 Open-account time deposits of $100,000 or more 34,609 29,238 20,188 9,050 5,371 104 All NOW accounts (including Super NOW) 195,543 135,717 113,818 21,900 59,826 105 Total time and savings deposits 1,646,920 1,154,615 947,076 207,539 492,306 Quarterly averages 106 Total loans 1,663,178 1,243,954 1,018,132 222255,,882222 441199,,222244 107 Transaction accounts (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) 194,018 134,054 111,597 22,457 59,964 Nontransaction accounts 108 Money market deposit accounts (MMDAs) 349,853 257,485 210,101 47,384 92,368 109 Other savings deposits 189,035 133,698 104,311 29,387 55,337 110 Time certificates of deposit of $100,000 or more 331,071 238,100 196,135 41,965 92,971 Ill All other time deposits 559,032 374,668 312,287 62,381 184,364 112 Number of banks 13,079 5,396 4,338 1,058 7,683 1. Effective Mar. 31, 1984, the report of condition was substantially revised for respondents file the FFIEC 032 or FFIEC 033 call report.) The 'under 100' column commercial banks. Some of the changes are as follows: (1) Previously, banks with refers to those respondents whose assets, as of June 30 of the previous calendar international banking facilities (IBFs) that had no other foreign offices were year, were less than $100 million. (These respondents filed the FFIEC 034 call considered domestic reporters. Beginning with the Mar. 31, 1984 call report these report.) banks are considered foreign and domestic reporters and must file the foreign and 6. Since the domestic portion of allowances for loan and lease losses and domestic report of condition; (2) banks with assets greater than $1 billion have allocated transfer risk reserve are not reported for banks with foreign offices, the additional items reported; (3) the domestic office detail for banks with foreign components of total assets (domestic) will not add to the actual total (domestic). offices has been reduced considerably; and (4) banks with assets under $25 million 7. Since the foreign portion of demand notes issued to the U.S. Treasury is not have been excused from reporting certain detail items. reported for banks with foreign offices, the components of total liabilities (foreign) 2. The "n.a." for some of the items is used to indicate the lesser detail available will not add to the actual total (foreign). from banks without foreign offices, the inapplicability of certain items to banks 8. The definition of 'all other' varies by report form and therefore by column in that have only domestic offices and/or the absence of detail on a fully consolidated this table. See the instructions for more detail. basis for banks with foreign offices. 9. Equity capital is not allocated between the domestic and foreign offices of 3. All transactions between domestic and foreign offices of a bank are reported banks with foreign offices. in "net due from" and "net due to." All other lines represent transactions with 10. Only the domestic portion of federal funds sold and securities purchased parties other than the domestic and foreign offices of each bank. Since these under agreements to resell are reported here, therefore, the components will not intraoffice transactions are nullified by consolidation, total assets and total add to totals for this item. liabilities for the entire bank may not equal the sum of assets and liabilities 11. "Acceptances of other banks" is not reported by domestic respondents less respectively, of the domestic and foreign offices. than $300 million in total assets, therefore the components will not add to totals for 4. Foreign offices include branches in foreign countries, Puerto Rico, and in this item. U.S. territories and possessions; subsidiaries in foreign countries; all offices of 12. Only the domestic portion of federal funds purchased and securities sold Edge act and agreement corporations wherever located and IBFs. are reported here, therefore the components will not add to totals for this item. 5. The 'over 100' column refers to those respondents whose assets, as of June 13. Components of assets held in trading accounts are only reported for banks 30 of the previous calendar year, were equal to or exceeded $100 million. (These with total assets of $1 billion or more; therefore the components will not add to the totals for this item. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Special Tables • August 1989 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 19891 Millions of dollars All states2 New York California Illinois IItteemm in T c I l B o u t F d a s i l n g o IB nl F y s 3 in T c I l B o u t F d a s i l n g o IB nl F y s in T c I l B o u t F d a s i l n g o IB nl F y s inc T I l B o u t F d a s i l n g o IB nl F y s 1 Total assets4 522,853 253,822 385,878 200,836 74,356 32,754 37,466 13,021 2 Claims on nonrelated parties 467,283 205,939 344,125 162,800 67,736 27,612 37,074 12,110 3 Cash and balances due from depository institutions 126,991 110077,,668899 110033,,998899 8877,,665544 1122,,662277 1111,,882255 88,,668811 77,,116688 4 Cash items in process of collection and unposted debits ...;; 702 1 656 1 28 0 6 0 5 Currency and coin (U.S. and foreign) 26 n.a. 18 n.a. 2 n.a. 1 n.a. 6 Balances with depository institutions in United States .. 65,496 48,304 53,017 3388,,447744 66,,449966 55,,779988 55,,441133 33,,996600 7 U.S. branches and agencies of other foreign banks (including their IBFs) 56,786 45,679 45,819 3366,,007722 55,,997733 55,,666600 44,,668888 33,,889955 8 Other depository institutions in United States (including their IBFs) 8,709 2,625 7,198 22,,440022 523 138 725 65 9 Balances with banks in foreign countries and with foreign central banks 59,934 59,383 49,637 49,179 6,051 6,027 3,217 3,208 10 Foreign branches of U.S. banks 1,011 925 849 768 121 116 15 15 11 Other banks in foreign countries and foreign central banks 58,923 58,458 48,788 48,411 5,930 5,911 3,202 3,193 12 Balances with Federal Reserve Banks 834 n.a. 661 n.a. 50 n.a. 44 n.a. 13 Total securities and loans 279,855 88,813 191,291 67,895 46,774 14,108 26,120 4,515 14 Total securities, book value 33,509 10,139 27,469 7,734 3,862 1,689 1,351 556 15 U.S. Treasury 5,934 n.a. 5,553 n.a. 141 n.a. 171 n.a. 16 Obligations of U.S. government agencies and corporations 4,883 n.a. 4,823 n.a. 47 n.a. 0 n.a. 17 Other bonds, notes, debentures and corporate stock (including state and local securities) 22,692 10,139 17,093 7,734 3,674 1,689 1,180 556 18 Federal funds sold and securities purchased under agreements to resell 13,546 1,951 11,814 1,512 1,103 413 348 5 19 U.S. branches and agencies of other foreign banks 8,208 1,243 6,782 868 958 353 322 5 20 Commercial banks in United States 2,774 40 2,549 16 85 20 26 0 21 Other 2,564 668 2,482 628 60 40 0 0 22 Total loans, gross 246,589 78,716 163,979 60,199 42,969 12,423 24,793 3,959 23 Less: Unearned income on loans 244 42 156 38 57 3 23 0 24 Equals: Loans, net 246,345 78,673 163,822 60,160 42,912 12,420 24,769 3,958 Total loans, gross, by category 25 Real estate loans 23,254 206 12,435 168 5,658 31 3,108 0 26 Loans to depository institutions 63,718 43,462 45,873 29,691 11,679 9,084 4,620 3,483 27 Commercial banks in United States (including IBFs) 33,030 15,295 23,000 9,009 6,649 4,219 3,105 1,980 28 U.S. branches and agencies of other foreign banks ... 29,467 14,698 19,952 8,524 6,379 4,109 2,892 11,,997799 29 Other commercial banks in United States 3,563 597 33,,004488 485 270 111 213 11 30 Other depository institutions in United States (including IBFs).. 139 0 91 0 47 0 0 0 31 Banks in foreign countries 30,549 28,166 22,782 20,682 4,983 4,865 1,515 1,503 32 Foreign branches of U.S. banks 395 346 308 260 73 73 12 12 33 Other banks in foreign countries 30,155 27,820 22,474 20,422 4,910 4,792 1,503 1,492 34 Other financial institutions 6,035 579 3,713 443 946 74 687 40 35 Commercial and industrial loans 129,494 17,740 81,134 14,925 22,788 2,211 15,991 319 36 U.S. addressees (domicile) 106,785 165 63,063 116 19,656 44 15,512 5 37 Non-U.S. addressees (domicile) 22,709 17,575 18,071 14,810 3,132 2,167 479 313 38 Acceptances of other banks 772 19 648 17 61 0 29 2 39 U.S. banks 290 0 218 0 55 0 2 0 40 Foreign banks 482 19 430 17 6 0 27 2 41 Loans to foreign governments and official institutions (including foreign central banks) 18,576 16,471 16,587 14,721 11,,007777 11,,002233 132 115 42 Loans for purchasing or carrying securities (secured and unsecured) 2,549 51 1,848 51 685 0 0 0 43 All other loans 2,192 188 1,741 181 75 0 225 0 44 All other assets 46,892 7,487 37,032 5,739 7,232 1,266 1,925 422 45 Customers' liability on acceptances outstanding 26,486 n.a. 20,632 n.a. 4,704 n.a. 846 n.a. 46 U.S. addressees (domicile) 17,595 n.a. 12,261 n.a. 4,402 n.a. 826 n.a. 47 Non-U.S. addressees (domicile) 8,891 n.a. 8,371 n.a. 302 n.a. 19 n.a. 48 Other assets including other claims on nonrelated parties 20,406 7,487 16,399 5,739 2,528 1,266 1,079 422 49 Net due from related depository institutions 55,570 47,884 41,753 3388,,003377 66,,662200 55,,114422 391 911 50 Net due from head office and other related depository institutions 55,570 n.a. 41,753 n.a. 66,,662200 n.a. 391 n.a. 51 Net due from establishing entity, head offices, and other related depository institutions n.a. 47,884 n.a. 38,037 n.a. 5,142 n.a. 911 52 Total liabilities4 522,853 253,822 385,878 200,836 74,356 32,754 37,466 13,021 53 Liabilities to nonrelated parties 450,792 226,428 344,899 180,897 67,790 30,600 22,384 8,141 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A85 4.30—Continued Millions of dollars All states2 New York California Illinois IItteemm ex T c IB l o u t F d a s i l n g o IB nl F y s ex T c IB l o u t F d a s i l n g o IB nl F y s ex T c IB l o u t F d a s i l n g o IB nl F y s ex T c IB l o u t F d a s i l n g o IB nl F y s 54 Total deposits and credit balances 72,068 180,633 58,944 158,769 3,280 12,295 3,402 4,008 55 Individuals, partnerships, and corporations 58,245 14,939 47,063 9,903 2,264 341 2,721 56 56 U.S. addressees (domicile) 45,111 457 38,840 432 666 0 1,850 23 57 Non-U.S. addressees (domicile) 13,134 14,482 8,224 9,471 1,597 341 871 32 58 Commercial banks in United States (including IBFs)... 9,521 56,170 7,947 48,179 887 5,388 654 2,278 59 U.S. branches and agencies of other foreign banks .. 4,078 48,865 2,999 42,388 88 4,188 567 1,998 60 Other commercial banks in United States 5,443 7,306 4,947 5,791 399 1,200 87 280 61 Banks in foreign countries 1,811 100,153 1,670 91,609 40 6,479 7 1,655 62 Foreign branches of U.S. banks 211 8,013 191 6,517 20 1,087 0 362 63 Other banks in foreign countries 1,600 92,140 1,480 85,092 20 5,392 7 1,293 64 Foreign governments and official institutions (including foreign central banks) 923 9,123 828 8,829 21 87 1 19 65 All other deposits and credit balances 988 249 947 249 33 0 1 0 66 Certified and official checks 581 n.a. 490 n a. 36 n a. 16 n. a. 67 Transaction accounts and credit balances (excluding IBFs) 6,773 5,716 270 225 68 Individuals, partnerships, and corporations 4,495 3,640 217 203 69 U.S. addressees (domicile) 3,281 2,766 170 198 70 Non-U.S. addressees (domicile) 1,213 874 47 5 71 Commercial banks in United States (including IBFs)... 225 218 1 1 72 U.S. branches and agencies of other foreign banks .. 105 104 0 0 73 Other commercial banks in United States 120 n. a. 113 n a. 1 n. a. 1 n. a. 74 Banks in foreign countries 828 766 10 2 75 Foreign branches of U.S. banks 7 7 0 0 76 Other banks in foreign countries 821 759 10 2 77 Foreign governments and official institutions (including foreign central banks) 336 306 2 1 78 All other deposits and credit balances 308 296 5 1 79 Certified and official checks 581 490 36 16 80 Demand deposits (included in transaction accounts and credit balances) 5,760 4,938 203 211 81 Individuals, partnerships, and corporations 3,872 3,242 151 189 82 U.S. addressees (domicile) 2,859 2,478 121 184 83 Non-U.S. addressees (domicile) 1,014 763 30 5 84 Commercial banks in United States (including IBF)s... 83 77 1 1 85 U.S. branches and agencies of other foreign banks .. 32 32 0 0 86 Other commercial banks in United States 50 n a. 45 n a. 1 n.a. 1 n.a. 87 Banks in foreign countries 706 648 10 2 88 Foreign branches of U.S. banks 7 7 0 0 89 Other banks in foreign countries 699 642 10 2 90 Foreign governments and official institutions (including foreign central banks) 293 267 2 1 91 All other deposits and credit balances 225 215 3 1 92 Certified and official checks 581 490 36 16 93 Non-transaction accounts (including MMDAs, excluding IBFs) 65,296 53,228 3,010 3,177 94 Individuals, partnerships, and corporations 53,750 43,423 2,046 2,518 95 U.S. addressees (domicile) 41,829 36,074 497 1,652 96 Non-U.S. addressees (domicile) 11,921 7,350 1,550 866 97 Commercial banks in United States (including IBFs)... 9,296 7,729 885 653 98 U.S. branches and agencies of other foreign banks .. 3,973 2,895 487 567 99 Other commercial banks in United States 5,324 n.a. 4,834 n.a. 398 n.a. 86 n. a. 100 Banks in foreign countries 983 904 30 5 101 Foreign branches of U.S. banks 204 184 20 0 102 Other banks in foreign countries 779 720 10 5 103 Foreign governments and official institutions (including foreign central banks) 587 521 20 0 104 All other deposits and credit balances 680 650 28 1 105 IBF deposit liabilities 180,633 158,769 12,295 4,008 106 Individuals, partnerships, and corporations 14,939 9,903 341 56 107 U.S. addressees (domicile) 457 432 0 23 108 Non-U.S. addressees (domicile) 14,482 9,471 341 32 109 Commercial banks in United States (including IBFs)... 56,170 48,179 5,388 2,278 110 U.S. branches and agencies of other foreign banks .. 48,865 42,388 4,188 1,998 111 Other commercial banks in United States n.a. 7,306 n.a. 5,791 n. a. 1,200 n. a. 280 112 Banks in foreign countries 100,153 91,609 6,479 1,655 113 Foreign branches of U.S. banks 8,013 6,517 1,087 362 114 Other banks in foreign countries 92,140 85,092 5,392 1,293 115 Foreign governments and official institutions (including foreign central banks) 9,123 8,829 87 19 116 All other deposits and credit balances 249 249 0 0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Special Tables • August 1989 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 1989'—Continued Millions of dollars All states2 New York California Illinois IItteemm in T c IB l o u t F d a s i l n g o IB nl F y s in T c I l B o u t F d a s i l n g o IB nl F y s inc T I l B o u t F d a s i l n g o IB nl F y s inc T I l B o u t F d a s i l n g o IB nl F y s 117 Federal funds purchased and securities sold under agreements to repurchase 42,722 2,507 30,209 1,501 8,853 732 3,075 146 118 U.S. branches and agencies of other foreign banks 9,371 1,151 6,104 458 2,455 533 647 / 5 119 Other commercial banks in United States 18,221 245 10,345 52 5,620 193 1,980 0 120 Other 15,129 1,110 13,760 991 777 5 449 /I 121 Other borrowed money 109,178 36,708 61,598 15,416 35,180 16,581 10,038 3,689 122 Owed to nonrelated commercial banks in United States (including IBFs) 64,753 14,464 33,086 3,190 23,504 9,146 6,215 1,473 123 Owed to U.S. offices of nonrelated U.S. banks 29,621 2,832 17,048 931 8,706 1,610 3,214 107 124 Owed to U.S. branches and agencies of nonrelated foreign banks 34,952 11,632 16,037 2,259 14,798 7,536 3,001 1,367 125 Owed to nonrelated banks in foreign countries 20,401 19,783 10,409 9,851 7,366 7,348 2,226 2,215 126 Owed to foreign branches of nonrelated U.S. banks ... 2,631 2,442 1,152 963 1,201 1,201 174 174 127 Owed to foreign offices of nonrelated foreign banks.... 17,770 17,341 9,257 8, 588 6,165 6,147 2,052 2,041 128 Owed to others 24,205 2,462 18,103 2,374 4,309 87 1,597 0 129 All other liabilites 46,190 6,580 35,379 5,212 8,182 991 1,861 299 130 Branch or agency liability on acceptances executed and outstanding 29,690 n.a. 21,849 n. a. 6,256 n. a. 1,061 n. a. 131 Other liabilities to nonrelated parties 16,500 6,580 13,529 5,212 1,926 991 799 299 132 Net due to related depository institutions5 72,060 27,394 40,979 19,939 6,566 2,155 15,082 4,880 133 Net due to head office and other related depository institutions 72,060 n.a. 40,979 n.a. 6,566 n.a. 15,082 n.a. 134 Net due to establishing entity, head office, and other related depository institutions n.a. 27,394 n.a. 19,939 n.a. 2,155 n.a. 4,880 MEMO 135 Non-interest bearing balances with commercial banks in United States 2,313 8 2,091 6 122 0 46 0 136 Holding of commercial paper included in total loans 991 711 214 66 137 Holding of own acceptances included in commercial and industrial loans 2,546 1,404 956 93 138 Commercial and industrial loans with remaining maturity of one year or less 66,587 37,857 13,124 8,991 139 Predetermined interest rates 39,697 n.a. 20,858 n. a. 9,675 n.a. 5,000 n. a. 140 Floating interest rates 26,890 16,999 3,449 3,991 141 Commercial and industrial loans with remaining maturity of more than one year 62,907 43,278 9,664 7,000 142 Predetermined interest rates 20,341 14,505 3,345 1,999 143 Floating interest rates 42,566 28,773 6,318 5,000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A87 4.30—Continued Millions of dollars All states2 New York California Illinois IItteemm ex T c IB l o u t F d a s i l n g o IB nl F y s ex T c IB l o u t F d a s i l n g o IB nl F y s ex T c IB l o u F t d a s i l n g o IB nl F y s 3 ex T c IB l o u F t d a s i l n g o IB nl F y s 3 111144444444 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss ooooffff nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnnaaaallll aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss 88,375 76,054 2,918 3,648 111144445555 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 48,907 40,760 1,772 1,824 111144446666 OOOOtttthhhheeeerrrr ttttiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 11,465 n.a. 9,512 n.a. 633 n.a. 1,171 n.a. 111144447777 TTTTiiiimmmmeeee wwww CCCC iiiitttthhhh DDDD ssss rrrr eeee iiii mmmm nnnn aaaa dddd iiii eeee nnnn nnnn iiiinnnn oooo gggg mmmm mmmm iiiinnnn aaaa aaaa tttt tttt uuuu iiiioooo rrrriiii nnnn tttt ssss yyyy oooo oooo ffff ffff $$$$ mmmm 1111 oooo 00000000 rrrreeee ,,,,0000 tttt 0000 hhhh 0000 aaaa nnnn oooo rrrr 1111 mmmm 2222 oooo mmmm rrrreeee oooo nnnntttthhhhssss ........ 28,003 • 25,783 t 513 t 653 t All states2 New York California Illinois in T c I l B o u t F d a s i l n g o IB nl F y s in T c I l B o u t F d a s i l n g o IB nl F y s in T c I l B o u t F d a s i l n g o IB nl F y s in T c I l B o u t F d a s i l n g o IB nl F y s 111144448888 MMMMaaaarrrrkkkkeeeetttt vvvvaaaalllluuuueeee ooooffff sssseeeeccccuuuurrrriiiittttiiiieeeessss hhhheeeelllldddd 3311,,112233 9,615 2255,,335533 7,359 33,,661166 1,542 11,,333388 556 111144449999 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 6655,,332277 n.a. 3366,,221188 n.a. 2244,,331177 n.a. 33,,661111 n.a. 552244 224433 112266 5544 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, that no IBF data re reported for that item, either because the item is not an eligible "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign IBF asset or liability or because that level of detail is not reported for IBFs. From Banks." Details may not add to totals because of rounding. This form was first December 1981 through September 1985, IBF data were included in all applicable used for reporting data as of June 30, 1980, and was revised as of December 31, items reported. 1985. From November 1972 through May 1980, U.S. branches and agencies of 4. Total assets and total liabilities include net balances, if any, due from or due foreign banks had filed a monthly FR 886a report. Aggregate data from that report to related banking institutions in the United States and in foreign countries (see were available through the Federal Reserve statistical release G. 11, last issued on footnote 5). On the former monthly branch and agencyu report, available through July 10, 1980. Data in this table and in the G.ll tables are not strictly comparable the G.ll statistical release, gross balances were included in total assets and total because of differences in reporting panels and in definitions of balance sheet liabilities. Therefopre, total asset and total liability figures in this table are not items. comparable to those in the G.ll tables. 2. Includes the District of Columbia. 5. "Related banking institutions" includes the foreign head office and other 3. Effective December 1981, the Federal Reserve Board amended Regulations U.S. and foreign branches and agencies of the bank, the bank's parent holding D and Q to permit banking offices located in the United States to operate company, and majority-owned banking subsidiaries of the bank and of its parent International Banking Facilities (IBFs). As of December 31, 1985 data for IBFs holding company (including subsidiaries owned both directly and indirectly). are reported in a separate column. These data are either included in or excluded 6. In some cases two or more offices of a foreign bank within the same from the total columns as indicated in the headings. The notation "n.a." indicates metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 88 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 J. VIRGIL MATTINGLY, JR., General Counsel KAREN H. JOHNSON, Assistant Director RICHARD M. ASHTON, Associate General Counsel RALPH W. SMITH, JR., Assistant Director OLIVER IRELAND, Associate General Counsel RLCKI R. TIGERT, Associate General Counsel SCOTT G. ALVAREZ, Assistant General Counsel DIVISION OF RESEARCH AND STATISTICS MARYELLEN A. BROWN, Assistant to the General Counsel MICHAEL J. PRELL, Director EDWARD C. ETTIN, Deputy Director OFFICE OF THE SECRETARY THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director MARTHA BETHEA, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary MYRON L. KWAST, Assistant Director BARBARA R. LOWREY, Associate Secretary SUSAN J. LEPPER, Assistant Director PATRICK M. PARKINSON, Assistant Director MARTHA S. SCANLON, Assistant Director DIVISION OF CONSUMER DAVID J. STOCKTON, Assistant Director AND COMMUNITY AFFAIRS JOYCE K. ZICKLER, Assistant Director LEVON H. GARABEDIAN, Assistant Director GRIFFITH L. GARWOOD, Director (Administration) GLENN E. LONEY, Assistant Director ELLEN MALAND, Assistant Director DOLORES S. SMITH, Assistant Director DIVISION OF MONETARY AFFAIRS DONALD L. KOHN, Director DIVISION OF BANKING DAVID E. LINDSEY, Deputy Director SUPERVISION AND REGULATION BRIAN F. MADIGAN, Assistant Director RICHARD D. PORTER, Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board WILLIAM TAYLOR, Staff Director DON E. KLINE, Associate Director FREDERICK M. STRUBLE, Associate Director OFFICE OF THE INSPECTOR GENERAL WILLIAM A. RYBACK, Deputy Associate Director STEPHEN C. SCHEMERING, Deputy Associate Director RICHARD SPILLENKOTHEN, Deputy Associate Director BRENT L. BOWEN, Inspector General HERBERT A. BIERN, Assistant Director BARRY R. SNYDER, Assistant Inspector General 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

A 89 and Official Staff EDWARD W. KELLEY, JR. JOHN P. LA WARE 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 DAVID L. SHANNON, Director C. WILLIAM SCHLEICHER, JR., Associate Director JOHN R. WEIS, Associate Director BRUCE J. SUMMERS, Associate Director ANTHONY V. DLGLOIA, Assistant Director CHARLES W. BENNETT, Assistant Director JOSEPH H. HAYES, JR., Assistant Director JACK DENNIS, JR., Assistant Director FRED HOROWITZ, Assistant Director EARL G. HAMILTON, Assistant Director JOHN H. PARRISH, Assistant Director LOUISE L. ROSEMAN, Assistant Director OFFICE OF THE CONTROLLER FLORENCE M. YOUNG, Assistant Director 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 Digitized for FDRAAYS EWR. RADEBAUGH, Assistant Director http://fraser.stRloIuCiHsfAeRdD.o rCg./ STEVENS, Assistant Director Federal ResePrvAeT RBIaCnIkA oAf .S Wt. ELoLuCiHs, Assistant Director

90 Federal Reserve Bulletin • August 1989 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL SILAS KEEHN THOMAS C. MELZER ROGER GUFFEY EDWARD W. KELLEY, JR. MARTHA R. SEGER MANUEL H. JOHNSON JOHN P. LA WARE RICHARD F. SYRON ALTERNATE MEMBERS EDWARD G. BOEHNE W. LEE HOSKINS JAMES H. OLTMAN ROBERT H. BOYKIN GARY H. STERN STAFF DONALD L. KOHN, Secretary and Economist THOMAS E. DAVIS, Associate Economist NORMAND R.V. BERNARD, Assistant Secretary DAVID E. LLNDSEY, Associate Economist GARY P. GILLUM, Deputy Assistant Secretary ALICIA H. MUNNELL, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel LARRY J. PROMISEL, Associate Economist ERNEST T. PATRIKIS, Deputy General Counsel KARL A. SCHELD, Associate Economist MICHAEL J. PRELL, Economist CHARLES J. SLEGMAN, Associate Economist EDWIN M. TRUMAN, Economist THOMAS D. SIMPSON, Associate Economist ANATOL B. BALBACH, Associate Economist LAWRENCE SLIFMAN, Associate Economist RICHARD G. DAVIS, 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 DONALD N. BRANDIN, President SAMUEL A. McCULLOUGH, Vice President J. TERRENCE MURRAY, First District B. KENNETH WEST, Seventh District WILLARD C. BUTCHER, Second District DONALD N. BRANDIN, Eighth District SAMUEL A. MCCULLOUGH, Third District LLOYD P. JOHNSON, 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

A 91 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. CZARNECKI, 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

A 92 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SER- Federal Reserve Regulatory Service, $250.00 per year. VICES, MS-138, Board of Governors of the Federal Reserve Each Handbook, $90.00 per year. System, Washington, D.C. 20551 or telephone (202) 452- THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A 3244. When a charge is indicated, payment should accom- MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 pany request and be made payable to the Board of Governors each. of the Federal Reserve System. Payment from foreign resi- WELCOME TO THE FEDERAL RESERVE. MARCH 1989. 14 PP. dents should be drawn on a U.S. bank. PROCESSING AN APPLICATION THROUGH THE FEDERAL RE- SERVE SYSTEM. August 1985. 30 pp. INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 440 pp. $9.00 each. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. TIONS. 1984. 120 pp. December 1986. 264 pp. $10.00 each. ANNUAL REPORT. ANNUAL REPORT: BUDGET REVIEW, 1988-89. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 each in the United States, its possessions, Canada, CONSUMER EDUCATION PAMPHLETS and Mexico. Elsewhere, $35.00 per year or $3.00 each. Short pamphlets suitable for classroom use. Multiple copies BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint are available without charge. of Part I only) 1976. 682 pp. $5.00. ANNUAL STATISTICAL DIGEST 1974-78. 1980. 305 pp. $10.00 per copy. Consumer Handbook on Adjustable Rate Mortgages 1981. 1982. 239 pp. $ 6.50 per copy. Consumer Handbook to Credit Protection Laws 1982. 1983. 266 pp. $ 7.50 per copy. Federal Reserve Glossary 1983. 1984. 264 pp. $11.50 per copy. A Guide to Business Credit and the Equal Credit Opportunity 1984. 1985. 254 pp. $12.50 per copy. Act 1985. 1986. 231 pp. $15.00 per copy. A Guide to Federal Reserve Regulations 1986. 1987. 288 pp. $15.00 per copy. How to File A Consumer Credit Complaint 1987. 1988. 272 pp. $15.00 per copy. If You Use A Credit Card SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- Series on the Structure of the Federal Reserve System RIES OF CHARTS. Weekly. $30.00 per year or $.70 each in The Board of Governors of the Federal Reserve System the United States, its possessions, Canada, and Mexico. The Federal Open Market Committee Elsewhere, $35.00 per year or $.80 each. Federal Reserve Bank Board of Directors THE FEDERAL RESERVE ACT and other statutory provisions Federal Reserve Banks affecting the Federal Reserve System, as amended Organization and Advisory Committees through August 1988. 608 pp. $10.00 A Consumer's Guide to Mortgage Lock-Ins REGULATIONS OF THE BOARD OF GOVERNORS OF THE A Consumer's Guide to Mortgage Closings FEDERAL RESERVE SYSTEM. A Consumer's Guide to Mortgage Refinancing ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Making Deposits: When Will Your Money Be Available? Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one address, $2.00 each. INTRODUCTION TO FLOW OF FUNDS. 1980.68 pp. $1.50 each; PAMPHLETS FOR FINANCIAL INSTITUTIONS 10 or more to one address, $1.25 each. Short pamphlets on regulatory compliance, primarily suit- FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; up- able for banks, bank holding companies, and creditors. dated at least monthly. (Requests must be prepaid.) Consumer and Community Affairs Handbook. $75.00 per year. Limit of 50 copies Monetary Policy and Reserve Requirements Handbook. $75.00 per year. The Board of Directors' Opportunities in Community Rein- Securities Credit Transactions Handbook. $75.00 per year. vestment The Payment System Handbook. $75.00 per year. The Board of Directors' Role in Consumer Law Compliance Federal Reserve Regulatory Service. 3 vols. (Contains all Combined Construction/Permanent Loan Disclosure and three Handbooks plus substantial additional material.) Regulation Z $200.00 per year. Community Development Corporations and the Federal Re- Rates for subscribers outside the United States are as serve follows and include additional air mail costs: Construction Loan Disclosures and Regulation Z Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 93 Finance Charges Under Regulation Z 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF How to Determine the Credit Needs of Your Community PROPOSED CEILINGS ON CREDIT CARD INTEREST Regulation Z: The Right of Rescission RATES, by Glenn B. Canner and James T. Fergus. The Right to Financial Privacy Act October 1987. 26 pp. Signature Rules in Community Property States: Regulation B 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. Signature Rules: Regulation B Warshawsky. November 1987. 25 pp. Timing Requirements for Adverse Action Notices: Regula- 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANKtion B ING MARKETS, by James V. Houpt. May 1988. 47 pp. What An Adverse Action Notice Must Contain: Regulation B 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR Understanding Prepaid Finance Charges: Regulation Z THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. Porter, and David H. Small. April 1989. 28 pp. STAFF STUDIES: Summaries Only Printed in the REPRINTS OF BULLETIN ARTICLES Bulletin Most of the articles reprinted do not exceed 12 pages. Studies and papers on economic and financial subjects that Limit of 10 copies are of general interest. Requests to obtain single copies of the full text or to be added to the mailing list for the series Foreign Experience with Targets for Money Growth. may be sent to Publications Services. 10/83. Intervention in Foreign Exchange Markets: A Summary of Staff Studies 114-145 are out of print. Ten Staff Studies. 11/83. A Financial Perspective on Agriculture. 1/84. 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF Survey of Consumer Finances, 1983. 9/84. BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, Bank Lending to Developing Countries. 10/84. by Thomas F. Brady. November 1985. 25 pp. Survey of Consumer Finances, 1983: A Second Report. 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) 12/84. INDEXES OF THE MONETARY AGGREGATES, by Helen Union Settlements and Aggregate Wage Behavior in the T. Farr and Deborah Johnson. December 1985. 42 pp. 1980s. 12/84. 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF The Thrift Industry in Transition. 3/85. THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- A Revision of the Index of Industrial Production. 7/85. TION RESULTS, by Flint Brayton and Peter B. Clark. Financial Innovation and Deregulation in Foreign Industrial December 1985. 17 pp. Countries. 10/85. 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS Recent Developments in the Bankers Acceptance Market. IN BANKING BEFORE AND AFTER ACQUISITION, by 1/86. Stephen A. Rhoades. April 1986. 32 pp. The Use of Cash and Transaction Accounts by American 150. STATISTICAL COST ACCOUNTING MODELS IN BANK- Families. 2/86. ING: A REEXAMINATION AND AN APPLICATION, by Financial Characteristics of High-Income Families. 3/86. John T. Rose and John D. Wolken. May 1986. 13 pp. Prices, Profit Margins, and Exchange Rates. 6/86. 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT Agricultural Banks under Stress. 7/86. PRICING FROM 1983 THROUGH 1985, by Patrick I. Ma- Foreign Lending by Banks: A Guide to International and honey, Alice P. White, Paul F. O'Brien, and Mary M. U.S. Statistics. 10/86. McLaughlin. January 1987. 30 pp. Recent Developments in Corporate Finance. 11/86. 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A Measuring the Foreign-Exchange Value of the Dollar. 6/87. REVIEW OF THE LITERATURE, by Mark J. Warshawsky. Changes in Consumer Installment Debt: Evidence from the April 1987. 18 pp. 1983 and 1986 Surveys of Consumer Finances. 10/87. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and Home Equity Lines of Credit. 6/88. Alice P. White. September 1987. 14 pp. U.S. International Transactions in 1988. 5/89. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 94 Index to Statistical Tables References are to pages A3-A87 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20, 87 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20, 72-83 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, 84-87 Deposits (See also specific types) Automobiles Banks, by classes, 3, 18-20, 21, 73, 75, 77, 79, 81, 83 Consumer installment credit, 39, 40 Federal Reserve Banks, 4, 10 Production, 49, 50 Turnover, 15 Discount rates at Reserve Banks and at foreign central BANKERS acceptances, 9, 23, 24 banks and foreign countries (See Interest rates) Bankers balances, 18-20, 72, 74, 76, 78, 80, 82. (See also Discounts and advances by Reserve Banks (See Loans) Foreigners) Dividends, corporate, 35 Bonds (See also U.S. government securities) EMPLOYMENT, 47 New issues, 34 Eurodollars, 24 Rates, 24 Branch banks, 21, 57, 84-87 FARM mortgage loans, 38 Business activity, nonfinancial, 46 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business expenditures on new plant and equipment, 35 Federal credit agencies, 33 Business loans (See Commercial and industrial loans) 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, 73, 75, 77, 79, 81, 83 Treasury financing of surplus, or deficit, 28 Federal Reserve Banks, 10 Treasury operating balance, 28 Central banks, discount rates, 69 Federal Financing Bank, 28, 33 Certificates of deposit, 24 Federal funds, 6, 17, 19, 20, 21, 24, 28 Commercial and industrial loans Federal Home Loan Banks, 33 Commercial banks, 16, 19, 72, 74, 76, 78, 80, 82, 84-85 Federal Home Loan Mortgage Corporation, 33, 37, 38 Weekly reporting banks, 19-21 Federal Housing Administration, 33, 37, 38 Commercial banks Federal Land Banks, 38 Assets and liabilities, 18-20 Federal National Mortgage Association, 33, 37, 38 Commercial and industrial loans, 16, 18, 19, 20, 21, 72, Federal Reserve Banks 74, 76, 78, 80, 82 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 Number by classes, 73, 75, 77, 79, 81, 83 Federal Reserve notes, 10 Real estate mortgages held, by holder and property, 38 Federal Savings and Loan Insurance Corporation insured Time and savings deposits, 3 institutions, 26 Commercial paper, 23, 24, 36 Federally sponsored credit agencies, 33 Condition statements (See Assets and liabilities) Finance companies Construction, 46, 51 Assets and liabilities, 36 Consumer installment credit, 39, 40 Business credit, 36 Consumer prices, 46, 48 Loans, 39, 40 Consumption expenditures, 53, 54 Paper, 23, 24 Corporations Financial institutions Nonfinancial, assets and liabilities, 35 Loans to, 19, 20, 21 Profits and their distribution, 35 Selected assets and liabilities, 26 Security issues, 34, 67 Float, 4 Cost of living (See Consumer prices) Flow of funds, 41, 43, 44, 45 Credit unions, 26, 39. (See also Thrift institutions) Foreign banks, assets and liabilities of U.S. branches and Currency and coin, 18, 72, 74, 76, 78, 80, 82 agencies, 21, 84-87 Currency in circulation, 4, 13 Foreign currency operations, 10 Customer credit, stock market, 25 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, 73, 75, 77, 79, 81, 83 Liabilities to, 20, 56, 57, 59, 60, 65, 67, 68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 95 GOLD Real estate loans—Continued Certificate account, 10 Terms, yields, and activity, 37 Stock, 4, 56 Type of holder and property mortgaged, 38 Government National Mortgage Association, 33, 37, 38 Repurchase agreements, 6, 17, 19, 20, 21 Gross national product, 53 Reserve requirements, 8 Reserves HOUSING, new and existing units, 51 Commercial banks, 18, 73, 79 Depository institutions, 3, 4, 5, 12 INCOME, personal and national, 46, 53, 54 Federal Reserve Banks, 10 Industrial production, 46, 49 U.S. reserve assets, 56 Installment loans, 39, 40 Residential mortgage loans, 37 Insurance companies, 26, 30, 38 Retail credit and retail sales, 39, 40, 46 Interest rates Bonds, 24 SAVING Consumer installment credit, 40 Flow of funds, 41, 43, 44, 45 Federal Reserve Banks, 7 National income accounts, 53 Foreign central banks and foreign countries, 69 Savings and loan associations, 26, 38, 39, 41. (See also Money and capital markets, 24 Thrift institutions) Mortgages, 37 Savings banks, 26, 38, 39 Prime rate, 23 Savings deposits (See Time and savings deposits) International capital transactions of United States, 55-69 Securities (See also specific types) International organizations, 59, 60, 62, 65, 66 Federal and federally sponsored credit agencies, 33 Inventories, 53 Foreign transactions, 67 Investment companies, issues and assets, 35 New issues, 34 Investments (See also specific types) Prices, 25 Banks, by classes, 18, 19, 20, 21, 26 Special drawing rights, 4, 10, 55, 56 Commercial banks, 3, 16, 18-20, 38, 72, 78 State and local governments Federal Reserve Banks, 10, 11 Deposits, 19, 20 Financial institutions, 26, 38 Holdings of U.S. government securities, 30 New security issues, 34 LABOR force, 47 Ownership of securities issued by, 19, 20, 26 Life insurance companies (See Insurance companies) Rates on securities, 24 Loans (See also specific types) Stock market, selected statistics, 25 Banks, by classes, 18—20 Stocks (See also Securities) Commercial banks, 3, 16, 18-20, 72, 74, 76, 78, 80, 83 New issues, 34 Federal Reserve Banks, 4, 5, 7, 10, 11 Prices, 25 Financial institutions, 26, 38 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, 73, 75, Federal funds and repurchase agreements, 6 77, 79, 81, 83 Reserve requirements, 8 Trade, foreign, 56 Mining production, 50 Treasury cash, Treasury currency, 4 Mobile homes shipped, 51 Treasury deposits, 4, 10, 28 Monetary and credit aggregates, 3, 12 Treasury operating balance, 28 Money and capital market rates, 24 UNEMPLOYMENT, 47 Money stock measures and components, 3, 13 U.S. government balances Mortgages {See Real estate loans) Commercial bank holdings, 18, 19, 20 Mutual funds, 35 Treasury deposits at Reserve Banks, 4, 10, 28 Mutual savings banks (See Thrift institutions) U.S. government securities Bank holdings, 18-20, 21, 30, 72, 74, 76, 78, 80, 82 NATIONAL defense outlays, 29 Dealer transactions, positions, and financing, 32 National income, 53 Federal Reserve Bank holdings, 4, 10, 11, 30 OPEN market transactions, 9 Foreign and international holdings and transactions, 10, 30, 68 PERSONAL income, 54 Open market transactions, 9 Prices Outstanding, by type and holder, 26, 30 Consumer and producer, 46, 52 Rates, 24 Stock market, 25 U.S. international transactions, 55-69 Prime rate, 23 Utilities, production, 50 Producer prices, 46, 52 Production, 46, 49 VETERANS Administration, 37, 38 Profits, corporate, 35 WEEKLY reporting banks, 19-21 REAL estate loans Wholesale (producer) prices, 46, 52 Banks, by classes, 16, 19, 20, 38, 74 Financial institutions, 26 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 96 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 Merriman Robert P. Black Leroy T. Canoles, Jr. Jimmie R. Monhollon Baltimore 21203 Thomas R. Shelton Robert D. McTeer, Jr.1 Charlotte 28230 William E. Masters 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 Nelda P. Stephenson Fred R. Herr1 Jacksonville 32231 Winnie F. Taylor James D. Hawkins1 Miami 33152 Jose L. Saumat James Curry III Nashville 37203 Patsy R. Williams Donald E. Nelson New Orleans 70161 James A. Hefner 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 L. Dickson Flake John F. Breen1 Louisville 40232 Thomas A. Alvey Howard Wells Memphis 38101 Seymour B. Johnson Ray Laurence MINNEAPOLIS 55480 Michael W. Wright Gary H. Stern John A. Rollwagen Thomas E. Gainor Helena 59601 Warren H. Ross Robert F. McNellis KANSAS CITY 64198 Fred W. Lyons, Jr. Roger Guffey Burton A. Dole, Jr. 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. Boykin Hugh G. Robinson William H.Wallace Tony J. Salvaggio1 El Paso 79999 Diana S. Natalicio Sammie C. Clay Houston 77252 Andrew L. Jefferson, Jr. Robert Smith, III1 San Antonio 78295 Lawrence E. Jenkins 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 060%; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. 1. Senior Vice President. Digitized for FRASER 2. Executive Vice President. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 97 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories April 1984 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. A Consumer'!, A Cji.nsumiT's A Consumer'! xGuisde tor Guidr 10 Guide to Mortgage Mortgage Refinancing Lock-Ins Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis