Federal Reserve Bulletin, 1989-12

VOLUME 75 • NUMBER 12 • DECEMBER 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 771 THE FORMATION OF PRIVATE the extent of state member banks' compli- BUSINESS CAPITAL: TRENDS, RECENT ance with federal laws that prohibit discrim- DEVELOPMENTS, AND MEASUREMENT ination in mortgage lending and says that ISSUES the Board is committed to vigorously enforcing the antidiscrimination laws for Although various estimates of the value of which it has responsibility, before the Subthe U.S. capital stock have long been pubcommittee on Consumer and Regulatory lished, a widely available series that gauges Affairs of the Senate Committee on Bankthe productiveness of the stock had been ing, Housing, and Urban Affairs, October unavailable until 1983, when the Bureau of 24, 1989. Labor Statistics unveiled a new statistical series called capital input. This article dis- 795 Alan Greenspan, Chairman, Board of Govcusses some basic concepts of capital mea- ernors, testifies in connection with the Zesurement, examines the accumulation of ro-Inflation Resolution and the Federal Reprivate business capital in the United States serve Reform Act of 1989 and says that the after World War II in light of the BLS Zero-Inflation Resolution is an example of measure, and uses that measure to assess a appropriate guidance for the central bank if current controversy over the strength of the Congress chooses to go in that direcinvestment and capital growth in the 1980s. tion; however, the provisions of the Federal Reserve Reform Act could well prove detrimental to the implementation of effective 784 INDUSTRIAL PRODUCTION monetary policy, before the Subcommittee Industrial production decreased 0.1 percent on Domestic Monetary Policy of the House in September. Committee on Banking, Finance and Urban Affairs, October 25, 1989. 786 STATEMENTS TO CONGRESS 803 Manuel H. Johnson, Vice Chairman, Board Martha R. Seger, Member, Board of Gov- of Governors, presents the views of the ernors, gives the views of the Board on the Board on the condition of the nation's bank- Government Check Cashing Act of 1989 ing system and says that the performance of and the Basic Banking Services Access Act most institutions during 1988 and for the of 1989 and says that the Board believes first part of 1989 suggests that progress has that voluntary efforts by financial institu- been made in meeting the problems of the tions and further development of electronic industry, before the Senate Committee on benefits transfer will meet many of the goals Banking, Housing, and Urban Affairs, Ocof the bills, without the burden and cost that tober 25, 1989. rules and regulations inevitably impose, be- 810 Vice Chairman Johnson comments on the fore the Subcommittee on Consumer Af- Treasury Department's report on U.S. infairs and Coinage of the House Committee ternational economic and exchange rate on Banking, Finance and Urban Affairs, policy and says that what underlies the October 17, 1989. (This statement was depolicy dialogue with the Group of Seven livered by Governor LaWare.) countries and with the newly industrializing 790 John P. LaWare, Member, Board of Gov- countries is a recognition that balanced and ernors, presents the views of the Board on mutually consistent economic policies Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

among major countries are essential for a Proposed amendments to Regulation T; healthy and stable world economy, before proposed revisions to Regulation C; the Subcommittee on International Devel- changes to the operating schedule for Fedopment, Finance, Trade and Monetary wire funds transfers and book-entry securi- Policy of the House Committee on Bank- ties transfers. ing, Finance and Urban Affairs, October Publication of Annual Statistical Digest, 1988. 31, 1989. Discontinuance of publication of the Histor- 812 RECORD OF POLICY ACTIONS OF THE ical Chart Book. FEDERAL OPEN MARKET COMMITTEE 823 LEGAL DEVELOPMENTS At its meeting on August 22, 1989, the Committee adopted a directive that called Various bank holding company, bank serfor maintaining the current degree of pres- vice corporation, and bank merger orders; sure on reserve positions and that pro- and pending cases. vided for giving special weight to potential developments that might require some AI FINANCIAL AND BUSINESS STATISTICS slight easing during the intermeeting pe- These tables reflect data available as of riod. With regard to the factors that were October 27, 1989. important in considering any intermeeting changes in reserve conditions, the Com- A3 Domestic Financial Statistics mittee continued to give primary weight to A46 Domestic Nonfinancial Statistics the inflation outlook. Accordingly, slightly A55 International Statistics greater reserve restraint might be acceptable during the intermeeting period, while A71 GUIDE TO TABULAR PRESENTATION, some slight lessening of reserve pressure STATISTICAL RELEASES, AND SPECIAL would be acceptable, depending on prog- TABLES ress toward price stability, the strength of the business expansion, the behavior of A78 BOARD OF GOVERNORS AND STAFF the monetary aggregates, and developments in foreign exchange and domestic A80 FEDERAL OPEN MARKET COMMITTEE financial markets. The reserve conditions AND STAFF; ADVISORY COUNCILS contemplated by the Committee were expected to be consistent with growth of M2 A82 FEDERAL RESERVE BOARD and M3 at annual rates of around 9 percent PUBLICATIONS and around 7 percent respectively over the three-month period from June to Septem- A84 SCHEDULE OF RELEASE DATES FOR ber. The intermeeting range for the federal PERIODIC RELEASES funds rate was left unchanged at 7 to 11 percent. A86 INDEX TO STATISTICAL TABLES 820 ANNOUNCEMENTS A88 INDEX TO VOLUME 75 Meeting of Consumer Advisory Council. A99 FEDERAL RESERVE BANKS, Revised List of Marginable OTC Stocks BRANCHES, AND OFFICES now available. AIOOMAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Formation of Private Business Capital: Trends, Recent Developments, and Measurement Issues Stephen D. Oliner, of the Board's Division of troversy over the strength of investment and Research and Statistics, wrote this article. capital growth in the 1980s.1 Michelle L. Phillips provided research assistance. The rate at which the stock of business plant and CAPITAL STOCK, CAPITAL SERVICES, equipment expands is a major determinant of AND CAPACITY labor productivity, business competitiveness, and ultimately the long-run rate of increase in the The flow of output that a firm can produce in a standard of living. Thus, policymakers, scholars, given period depends on the service flows proand business leaders pay close attention to esti- vided by its capital stock and labor force, both mates of capital accumulation as a key economic working in combination with materials, services, indicator. and energy purchased by the firm. This descrip- In the mid-1950s the Bureau of Economic tion of production—the so-called production Analysis (BEA) developed measures of the value function—implies that the influence of capital of the capital stock to track depreciation in the accumulation on output and productivity is not national income and product accounts and to governed by the growth of the capital stock as estimate national wealth. These BEA estimates such but rather by changes in the flow of services of the capital stock were not intended to measure generated by that stock. The emphasis on the the productive services provided by capital on a services provided by capital parallels the treatperiod-by-period basis; therefore, they are not ment of labor input in studies of production, in well suited for studies relating capital accumula- which the contribution of labor to output reflects tion to economic growth and advances in produc- the number of hours worked by employees rather tivity. It was not until 1983, when the Bureau of than simply the size of the work force. Labor Statistics (BLS) unveiled a new statistical Although data are available on the hours series, called capital input, that data capable of worked by labor, the analogous information on measuring capital services became widely avail- the flow of services from capital is generally able. difficult to obtain. For example, consider a fleet This article discusses some basic concepts of of delivery trucks owned by a furniture store. An capital measurement, examines the accumulation accurate measure of capital services provided by of private business capital in the United States these trucks would have to take into account the after World War II in light of the BLS measure, and uses that measure to assess a current con- 1. A more detailed yet relatively nontechnical introduction to the theory and measurement of capital can be found in NOTE. The author thanks the following reviewers of earlier Charles R. Hulten, "The Measurement of Capital," in Ernst drafts, who bear no responsibility for any errors that remain: R. Berndt and Jack E. Triplett, eds., Fifty Years of Economic- Flint Brayton, Carol A. Corrado, Eileen Mauskopf, Measurement (University of Chicago Press for the National Lawrence Slifman, Charles S. Struckmeyer, and Peter A. Bureau of Economic Research, forthcoming). Hulten also Tinsley, of the Board's staff; John C. Musgrave and Jack E. discusses some of the strengths and weaknesses of the data Tripfett, of the Bureau of Economic Analysis; and Michael J. underlying the BEA and BLS measures of capital, a topic not Harper, of the Bureau of Labor Statistics. covered here in any depth. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

772 Federal Reserve Bulletin • December 1989 number of miles logged by each truck and the then refines these estimates with data on physical share of its carrying capacity used on each deliv- capacity obtained from various industry sources ery. Individual companies probably do not main- and with data on the capital stock. tain information at this level of detail, and gov- The growth of the capital stock, taken alone, ernment surveys certainly do not collect it. has not been a reliable guide to estimating growth In the absence of direct measures of capital in capacity. Long-run differences may reflect a services, analyses of production typically as- variety of factors. Some of these factors, such as sume that such flows are proportional to some improvements in the organization of production measure of the capital stock. In terms of the activities and increases in the productivity of preceding example, the number of trucks might capital, are reflected in the faster trend growth of substitute as an indicator of the services they capacity compared with the capital stock. Other provide. However, the capital stock acts as only differences affect shorter-term comparisons of a rough proxy for the actual service flows from the two series. For example, in the 1970s a capital. For example, when the economy significant portion of capital spending consisted emerges from a recession—a period when the use of equipment to abate pollution and improve of existing plant and equipment becomes more worker health and safety. Although the equipintensive—the flow of service from capital rises ment appeared as part of measured capital, it did faster than the stock of capital. not boost a plant's ability to produce goods, and Just as capital stock and capital services are thus did not affect measured capacity. Another distinct concepts, so are capital stock and capac- difference that weakens the link between annual ity. Capacity can be defined in many ways; the changes in capital stock and capacity has to do Federal Reserve Board's index of industrial ca- with the treatment of retirements of outmoded or pacity measures it as "the greatest level of unprofitable facilities. As noted below, estimates output that a plant can maintain within the frame- of the capital stock assume that each type of work of a realistic work pattern, taking account asset has a constant average service life, regardof normal downtime, and assuming sufficient less of economic conditions, whereas the inforavailability of inputs to operate machinery and mation used to compile the capacity estimates equipment in place."2 Thus, the Federal Reserve reflects the fact that firms tend to extend the defines capacity as the flow of output that could service lives of their capital assets during periods be produced with relatively full utilization of the of strong growth in output. available capital stock, given prevailing wage rates and given prices of materials used in production. PUBLISHED ESTIMATES OF CAPITAL Because capacity is a measure of peak output under normal operating conditions and capital The Bureau of Economic Analysis, in the Derepresents an input to production, estimates of partment of Commerce, and the Bureau of Labor the capital stock play a role in the construction of Statistics, in the Department of Labor, construct the Federal Reserve's index of industrial capac- the principal estimates of capital for the United ity. The Federal Reserve initially estimates ca- States.3 The differences between the estimates of pacity with data obtained by combining its in- the BEA and the BLS are fundamental and dexes of industrial production with survey data on utilization rates from DRI/McGraw-Hill and the Bureau of the Census; the Federal Reserve 3. For further information on the BEA method for constructing capital stock, see Bureau of Economic Analysis, 2. Statistical release, "Capacity Utilization: Manufac- Fixed Reproducible Tangible Wealth in the United States, turing, Mining, Utilities, and Industrial Materials," Board of 1925-85 (Government Printing Office, 1987); and John A. Governors of the Federal Reserve System, September 15, Gorman and others, "Fixed Private Capital in the United 1989. For a description of the method used to construct the States," Survey of Current Business, vol. 65 (July 1985), pp. Federal Reserve's capacity indexes, see Richard Raddock, 36-47. For a detailed description of the BLS method, see "Revised Federal Reserve Rates of Capacity Utilization," Bureau of Labor Statistics, Trends in Multifactor Productiv- Federal Reserve Bulletin, vol. 71 (October 1985), pp. 754-66. ity, 1948-81, Bulletin 2178 (GPO, 1983), app. C. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Formation of Private Business Capital 773 reflect the different objectives of the two agen- stocks, the central characteristic is their identical cies. purchase price. Thus, regardless of whether a In the early 1980s the BLS developed an firm bought the computer or the machine tool, estimate of capital services for use in the mea- the increase in the capital stock as measured by surement of productivity in the U.S. economy. the BEA at the date of purchase would be the The BLS constructed its new estimate, known as same—the amount of the purchase price. Howcapital input and described below in more detail, ever, the increase in capital input as measured by as a weighted aggregate of the stocks of various the BLS—the annual service flow—would be types of capital; the weights are set to account greater if the firm bought the computer than if it for differences in the service flows provided bought the machine tool. during a given period by each type of capital. However, the weights do not capture changes in utilization rates and thus do not give a complete Perpetual Inventory Method measure of service flows. In contrast, the BEA has never attempted to To construct estimates of the stock of individconstruct capital measures that are suitable for ual types of capital (such as office and computthe analysis of output and productivity. Instead, ing equipment, industrial buildings, or metalits main objective has been to develop estimates working machinery, to name a few), the BEA of depreciation for use in the national income and and the BLS both use, with only slight variaproduct accounts (NIPA) and associated esti- tions, a technique known as the perpetual inmates of national wealth. Accordingly, the BEA ventory method. The principal difference in the constructs estimates of capital stocks that repre- measures of the two agencies arises later, when sent the cost of purchasing tangible capital, not they aggregate the individual stocks that have the service flow provided by that capital in a been calculated with the perpetual inventory given period. method. To illustrate the distinction between the pur- The perpetual inventory method expresses chase cost (or value) of a capital good and its the stock of a particular type of capital as a service flow per period, consider two different weighted sum of the investment spending for goods: a computer expected to be used for five the vintages of that good still in service. The years and a machine tool expected to be used for method requires data on investment outlays, fifty years. Assume that the computer and the the average service life of the investment good, machine tool each can be purchased new today and the pattern of retirements around this avfor $100. Given their identical purchase prices, erage life. The BEA and the BLS employ esfirms implicitly place an equal value on the total sentially the same data on current-dollar investstream of future services provided by each good. ment spending, the same price deflators to However, in any single period, the service flows convert investment outlays to constant dollars, from the computer and the machine tool are quite identical estimates of average service lives, and different. Assuming that no discount factor is similar distributions for retirements around the applied to future services, the computer yields an average service lives. The only notable differaverage of $20 in services per year for five years, ence in the way the BEA and the BLS implewhile the machine tool yields $2 per year for fifty ment the perpetual inventory method lies in the years. The computer, then, is ten times more weights they apply to past investment. productive than the machine tool in each year, Because capital input is intended to measure even though both have the same purchase price capital services, the BLS weights each vintage and thus yield the same total amount of service of investment by an estimate of the share of its over their lifetimes. initial productive efficiency remaining at each For the BLS capital input series, the most age. The BLS assumes that as the age of the important characteristic of the two goods in this good increases, its loss of efficiency accelerates example is their tenfold difference in annual (the so-called hyperbolic pattern), reflecting a service flows; for the BEA measures of capital combination of increased wear and downtime. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

774 Federal Reserve Bulletin • December 1989 The BEA constructs two estimates of capital aggregate gross and net measures of capital stock, the "net" stock and the "gross" stock, wealth. In contrast, the BLS arrives at aggregate both of which are intended as measures of the capital input—its approximation of service flow value of capital. Accordingly, the BEA weights per period—by weighting, according to their releach vintage of investment in the perpetual in- ative productivities, the individual stocks calcuventory calculation by the proportion of the lated by the perpetual inventory method. initial value of the investment good assumed to To be more precise, the BLS method—known remain intact as it ages. For the net stock, the as Tornqvist aggregation—multiplies the growth weights decline linearly with age because the net rate of each asset stock by its corresponding measure assumes that the value of a new capital share of total capital income and then sums the good depreciates in a straight-line pattern. The weighted growth rates. This procedure yields an resulting estimates of depreciation are used by estimate of the growth of capital services; these the BEA to calculate corporate profits and capi- period-by-period growth rates are then chained tal consumption allowances in the NIPA. The together from an assumed initial level to generate Federal Reserve employs the BEA's net capital capital input in levels. stocks to estimate tangible wealth in the United The Tornqvist procedure assumes that income States in its biannual publication, Balance Sheets shares indicate the relative productivities of the for the U.S. Economy. In contrast to its calcula- individual capital goods. Income shares will have tion of the net stock, the BEA's construction of this property if firms act to maximize profits, in the gross stock uses weights whose values re- which case they will rent or purchase the costlimain fixed at 1 until the good is retired. The gross est capital goods only if those goods generate the stock therefore represents the total purchase cost greatest output.4 Assuming that income shares of all goods not yet retired from the capital stock. represent relative productivities, the BLS capital Contrary to the BEA's intent, some analysts input measure has several desirable properties. have interpreted the perpetual-inventory weights First, at a given time, the measure takes account employed by the BEA to represent the produc- of the different levels of service provided by tive efficiency of past investment, with efficiency various capital goods. Second, as the income in the net stock assumed to decline linearly with shares evolve over time, the capital input measure the age of the good and efficiency in the gross captures changes in the relative service flows stock assumed to remain unimpaired until retire- across capital goods. Thus, except when service ment. (The hyperbolic pattern, assumed by the flows change because of shifts in the rate of capital BLS, is intermediate to these two patterns.) utilization, capital input can be regarded as a However, even under this interpretation, the reasonable measure of capital services. BEA measures of capital stocks are not well In practice, weighting with income shares suited for analyses of output and production runs into difficulties. By definition, the income because of the method by which the BEA aggre- share for each good equals an imputed rental gates the perpetual-inventory stocks of individ- price for that good multiplied by the stock of the ual goods. good, with the product divided by total capital income. The rental price is generally unobserv- Aggregating the Perpetual-Inventory able, and the BLS estimates it with the tech- Stocks nique employed by Laurits R. Christensen and With the stocks of individual types of capital in hand, the BLS and the BEA part company by 4. For further discussion of the properties of Tornqvist aggregating these individual asset stocks to in- aggregates, see W. E. Diewert, "Aggregation Problems in the Measurement of Capital," in Dan Usher, ed., The Measuredustry totals according to different techniques. In ment of Capital, vol. 45, Studies in Income and Wealth each case, the method used is appropriate for the (University of Chicago Press for the National Bureau of type of capital measure the agency seeks to Economic Research, 1980), chap. 8, pp. 433-528; and Michael F. Mohr, "Capital Inputs and Capital Aggregation in construct. The BEA simply adds together the Production," Discussion Paper 31 (Bureau of Economic value-based stocks of the individual goods to get Analysis, August 1988). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Formation of Private Business Capital 775 Dale W. Jorgenson.5 Unfortunately, economic 1. Growth of business capital input and capital stock, theory provides little guidance on a number of selected periods, 1948-871 decisions required to estimate the rental price, Average annual and therefore the accuracy of the income shares growth (percent) Index value, MMeeaassuurree 1987 used as weights in the share aggregation is 1948-87 1982-87 (1948 = 1) uncertain. All private industry Capital input, Bureau of Labor Statistics2 THE GROWTH OF PRIVATE BUSINESS As published 3.4 3.1 3.70 Narrow measure 3.8 3.5 4.40 CAPITAL SINCE WORLD WAR II Capital stock, Bureau of Economic An examination of the longer-term growth of Analysis3 Gross stock 3.3 3.0 3.55 aggregate U.S. business capital can reveal Net stock 3.5 2.5 3.97 whether important differences exist between Manufacturing the BLS and BEA methods of measuring capi- Capital input, tal. This examination also reveals some of the Bureau of Labor Statistics2 major trends in the formation of private capital As published 3.3 1.1 3.66 Narrow measure 3.5 1.6 3.94 over the postwar period and sets the stage for Capital stock, the discussion of more recent developments. Bureau of Economic The BEA measures of private nonresidential Analysis3 Gross stock 3.4 1.7 3.73 fixed capital cover equipment and nonresiden- Net stock 3.2 .5 3.50 tial structures, which constitute the assets typ- MEMO FRB capacity index4 3.9 2.7 4.57 ically considered in discussions of business capital formation. The BLS capital input mea- 1. Capital stock and capital input are measured in 1982 dollars. The BLS capital input series cover the private business sector. The sector covered by the sure, however, covers a broader range of BEA capital stock series is slightly broader, as it includes nonprofit institutions. goods—not only equipment and nonresidential 2. The published measure of capital input consists of producers' durable equipment, nonresidential structures, residential rental structures, business structures but also rental housing, inventories, inventories, and land. The narrow measure consists of producers' durable and land. To permit comparisons between the equipment and nonresidential structures. measures of the two agencies, I constructed 3. Gross and net stocks consist of producers' durable equipment and nonresidential structures. from unpublished BLS data a capital input 4. Annual average of monthly observations for the Federal Reserve series of narrower scope. This narrower series Board's measure of capacity in manufacturing. SOURCE. Bureau of Economic Analysis, Bureau of Labor Statistics, Board is the Tornqvist aggregate for the stocks of of Governors of the Federal Reserve System, and, for the narrow measure of equipment and nonresidential structures alone, BLS capital input, calculations by the author from unpublished BLS data. and thus its coverage is comparable to that of the BEA measures. capital input and capital stock may seem small on Trend Growth, 1948-87 a yearly basis, but it cumulates significantly over time: If the alternative measures were set equal During the 1948-87 period, the narrow BLS to a common value in 1948, the level of narrowly capital input measure (equipment and nonresi- defined capital input by 1987 would be 11 percent dential structures alone) grew at a faster pace larger than the net capital stock and 24 percent than did the BEA measures of gross and net larger than the gross capital stock. private nonresidential fixed capital (table 1, top The difference in growth rates between the panel); a similar gap exists in the first five years narrow capital input measure and the BEA of the current expansion (the BLS data end in series reveals the significance of applying in- 1987). The difference between the growth of come-share weights to the capital stocks of individual types of assets. As discussed below, the stocks of short-lived assets have grown 5. "The Measurement of U.S. Real Capital Input," Remore quickly than those of longer-lived assets view of Income and Wealth, vol. 15 (December 1969), pp. 293-320. over the postwar period. Moreover, because of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

776 Federal Reserve Bulletin • December 1989 their rapid rate of depreciation, short-lived as- ufacturers. The competitive inroads on U.S. sets have a relatively high rental price and a manufacturing are evidenced in the 1982-87 high share of capital income. An aggregate period by a lag in production gains and by a low whose components are weighted by income rate of capacity utilization relative to the 1948— shares, such as the capital input measure, thus 87 average; in turn, these effects restrained the will take account of the fact that firms have accumulation of capital and the expansion of shifted toward installing assets that deliver a capacity. The slowdown in capital growth durhigh level of service per period; the BEA mea- ing the current expansion is addressed at length sures, with unweighted components, do not later in this article, but in the context of all capture this rise in overall productivity. private industry. The narrow measure of capital input has grown faster than the BEA's estimates of cap- Variations in Postwar Growth ital stock, but the published series for capital input has not. The difference between the The range of the observed annual growth rates growth rates of the two capital input series of capital input and capital stock from 1948 to arises because the postwar growth of equip- 1987 was relatively narrow. For capital meament has outpaced that of all other major asset sures limited to equipment and nonresidential groups. Equipment plays a smaller role in the structures, the vast majority of the annual published BLS measure—which includes land, growth rates stand between 2LA percent and 5LA inventories, and rental housing—than it does in percent (table 2). Thus, the growth of capital the narrower BLS combination of equipment has been fairly smooth in the postwar period, in and nonresidential structures alone. Hence, de- contrast to the annual growth rates of flow spite weighting by income shares, the 1948-87 variables such as business fixed investment, growth in the published measure of BLS capital which have been much more erratic. However, input was about the same as that in the BEA to some degree, the relative smoothness of capital stocks (table 1, top panel). capital growth has likely been an artifact of the The Federal Reserve's index of manufacturing assumption by the BEA and the BLS that capacity has expanded over the postwar period average service lives, and the retirement patmore rapidly than any of the capital measures for terns around these averages, are fixed over the that sector (table 1, bottom panel). This diver- business cycle. In fact the discard rate appears gence of longer-run trends between estimated to change over the course of the cycle, rising peak factory output and measures of capital input and capital stock stems from a number of factors. For example, as discussed earlier, technical improvements not embodied in the capital stock 2. Variability in growth of business capital input and have worked over time to boost efficiency. In capital stock, all private industry, 1948-871 Percent addition, organizational changes, such as the more intensive use of the capital stock through Ninety percent of annual growth rates, 1948-872 an expansion of shiftwork, have tended to raise MMeeaassuurree capacity for any given level of the capital stock.6 Lower bound Upper bound As table 1 also shows, the growth of capital Capital input, Bureau of Labor Statistics and, to a lesser extent, of capacity slowed in the As published 111...666 444...777 manufacturing sector in the 1982-87 period. Narrow measure 222...444 555...222 The slower pace probably resulted in part from Capital stock, Bureau of Economic Analysis the heightening of foreign competition and the Gross stock 222...333 444...333 consequent loss of market share by U.S. man- 222...222 444...999 MEMO Business fixed investment ---999...999 111444...666 6. Murray F. Foss, Changing Utilization of Fixed Capital: 1. Covers the thirty-nine annual growth rates from 1948 to 1987. For An Element in Long-term Growth (American Enterprise description of terms and sources, see notes to table 1. Institute for Public Policy Research, 1984). 2. Excludes lowest 5 percent and highest 5 percent of values. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Formation of Private Business Capital 10 1. Growth of business capital, 1982 dollars1 with the business cycle (chart 1). As a rule, capital growth picks up as an expansion pro- BEA measures of capital stock2 ceeds, peaking in some cases before the expansion ends and in other cases with the onset of recession. During recessions, the growth of capital typically tapers off. This growth pattern contrasts with that for business fixed investment, which grows fastest just after a recovery begins. This difference reflects the fact that the growth of capital depends on the level of investment spending, not on its growth rate (see the appendix), and that investment levels are relatively low early in an expansion. BLS measures of capital input3 The difference between the cyclical pattern of investment and that of capital accumulation As published appears to conform to the so-called accelerator model of firms' investment behavior. As the economy emerges from recession, firms become more optimistic about sales and there- Equipment and fore wish to expand their capital stocks to nonresidential structures accommodate the expected growth in business. 11 B 11 This desire produces the high rate of growth 1950 1960 1970 1980 1988 in investment spending usually observed at 1. The shading represents recessions as defined by the National Bureau of Economic Research. that point in the cycle. As the cycle progresses, 2. Bureau Economic Analysis measures of private nonresidential the rising level of investment produces an infixed capital stock. Gross stock is the cumulative value of past investment not yet discarded. Net stock is gross stock less accumu- creasing rate of capital accumulation. Once the lated depreciation. growth of capital reaches the steady rate 3. The Bureau of Labor Statistics compiles estimates of capital input in the private business sector; its published series covers rental desired by firms, investment spending tends housing, inventories, and land, as well as equipment and nonresiden- to flatten out at a level that supports the contial structures. The series shown here for equipment and nonresidential structures alone is a narrower measure of capital input constructed tinuation of this pace of capital accumuby the author from unpublished BLS data. lation. SOURCE. Bureau of Economic Analysis, Bureau of Labor Statistics, and author's calculation. The Capital-Labor Ratio, 1948-87 A primary factor working to increase the during recessions and falling during exstandard of living in industrialized countries is pansions.7 For example, during periods of the persistent rise in the amount of capital used strong demand and rising prices, firms apparby each worker (the capital-labor ratio). In the ently use plants whose high operating costs United States, the capital-labor ratio in private would otherwise make them unprofitable. Once business has risen over the postwar period demand slackens, these plants become unecoregardless of the measures used for capital or nomic and are removed from service. labor (the options for the latter include hours Despite the smoothing inherent in the BEA paid, hours worked, employment, and the labor and BLS series, the measured growth of capital force). The measure of the capital-labor ratio stock and capital input has moved in tandem shown in chart 2, where capital is represented by the published BLS capital input series and labor by hours paid, rose an average of 2.4 7. Susan G. Powers, "The Role of Capital Discards in percent per year during the four postwar dec- Multifactor Productivity Measurement," Monthly Labor Reades. The capital deepening that resulted acview, vol. Ill (June 1988), pp. 27-35. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

778 Federal Reserve Bulletin • December 1989 2. The capital-labor ratio and the wage-rental both raised the productivity of capital goods and ratio in the private business sector1 lowered the cost of manufacturing these goods Index, 1950 = 1 relative to the general inflation rate—the computer revolution being the prominent example. Such a phenomenon makes capital a progres- • sively cheaper input compared with labor and Wage-rental ratio K y- 2.5 encourages firms to substitute capital for labor. Because the wage-rental ratio and the capital- A/ — labor ratio have moved up together, the shares of total income earned by capital and labor have j r^^y —2.0 been stable over the postwar period. Indeed, for the private business sector, the BLS estimates that the capital share over 1948-87 varied by no / / Capital-labor ratio more than 2 percentage points in any single year from its postwar average of 36 percent. —1.5 The upward movement in the capital-labor ratio has been fairly smooth, as shifts in the growth of the labor supply have tended to be accompanied by similar changes in the growth of 1.0 capital input (chart 3). The relatively weak I l ll 1 • 1 II • 1 1 1 • M1 H i i i i i i i i i i i a ii growth of capital input in the late 1950s and early 1950 1960 1970 1980 1987 1960s was mirrored by slow growth of the labor 1. The wage-rental ratio is compensation per hour divided by the force. Similarly, the robust expansion of capital rental price of the published BLS series for capital input. The capital-labor ratio is published capital input divided by hours paid for input between the mid-1960s and the mid-1970s all persons. was accompanied by the bulge in the labor force SOURCE. Bureau of Labor Statistics. produced by the maturation of the baby boom counts for more than one-third of the rise in 3. Growth in the published BLS measure of labor productivity during the period.8 capital input and in the civilian labor force Since World War II, labor costs generally have Percent risen faster than the rental price for capital (chart 2), with the resulting uptrend in the wage-rental ratio virtually paralleling that for the capitallabor ratio. Although the rise in these ratios reflects a variety of factors, one major influence likely has been the technical advances that have 8. The standard growth-accounting procedure weights the 2.4 percent rate of growth in the capital-labor ratio by the capital share of total income (about 0.36) to obtain the contribution of the capital-labor ratio to growth in labor productivity in private business. The calculation shows that capital deepening accounted for about 37 percent of the 2.3 percent average annual growth in labor productivity over the 1948-87 period. The remainder of the increase in productivity came from a variety of factors captured in the so-called productivity residual. See Stephen D. Oliner, "Capital and the Slowdown of Growth in the United States: A Review," Working Paper Series 87 (Board of Governors of the Federal Reserve System, Division of Research and Statistics, Economic Activity Section, July 1988) for further discussion of [•MIBIMBMiaiMBIMBIMBMIBMI both growth accounting and the role of capital-related factors 1950 1960 1970 1980 1988 in the growth of labor productivity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Formation of Private Business Capital 779 generation. The tendency for the growth of both 4. Measures of the shift within private nonresidential capital and labor to depart from trend simultane- fixed capital stock toward shorter-lived assets1 ously and in the same direction suggests that secular movements in labor supply, along with cyclical effects, account for part of the variation in capital input growth over the postwar period. Changes in the Composition of the Capital Stock As U.S. firms increased their use of capital relative to labor in the postwar period, they replaced long-lived capital assets with short-lived assets. Between 1948 and 1987, the average service life of the gross stock of private nonresidential fixed capital fell from about 30 years to 25 years (chart 4, top panel). The shortened average life largely reflects a shift from structures to equipment in the makeup of the capital stock (middle panel of chart 4); in turn, this shift likely has been driven by the far greater growth in the productivity of equipment relative to structures. In particular, the revolution in computer technology improved the price-performance balance much more for equipment than for structures. 1. Stocks measured in 1982 dollars. Within the aggregate of equipment, investment 2. Weighted average of the BEA estimate of service life for each has shifted toward short-lived assets, especially type of equipment and nonresidential structure, with the weight for each type equal to its share of the BEA gross private nonresidential beginning around 1970, because of the great fixed capital stock. expansion in the use of information-processing 3. BEA gross stock of private producers' durable equipment divided by BEA gross private nonresidential fixed capital stock. and other high-technology equipment—comput- 4. For nonresidential structures, the weighted average of the BEA ers, electronic communications gear, photocopi- estimate of service life for each type of nonresidential structure, with the weight for each type equal to its share of the BEA gross stock of ers, and scientific instruments—at the expense of nonresidential structures. The average service life of equipment more traditional types of industrial equipment. calculated in parallel fashion. SOURCE. Bureau of Economic Analysis and author's calculations. As a result, the average service life for the gross stock of equipment fell roughly 15 percent between 1948 and 1987, from 17.5 years to about 15 through the use of the perpetual inventory equayears (bottom panel of chart 4). In contrast, the tion. average service life for the gross stock of non- The second effect is that, for each dollar of residential structures fell only about 3 percent capital spending, short-lived assets deliver a over this period. greater flow of services during each period of use A shift toward short-lived assets has two ef- (as indicated by their higher rental price), raising fects on measures of capital. First, it raises the the overall productivity of capital. The BLS aggregate rate of efficiency loss for capital, as procedure incorporates this second effect beshorter-lived assets suffer more rapid wear than cause it weights the growth of the stock for each longer-lived goods. Accordingly, while the asset with an estimate of that asset's share of change is under way, the first effect depresses the total capital income. In contrast, the BEA progrowth of measured capital input or capital cedure, which adds together the stocks of difstock, all else equal. Both the BEA and the BLS ferent assets without weighting, does not capture capture this effect in their measures of capital the change in service flows delivered during a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

780 Federal Reserve Bulletin • December 1989 given period. Because the average service life of capital growth from, say, 3 percent to 1 percent assets has steadily declined over the postwar would be an ominous development if the labor period, the unweighted aggregates tend to rise force continued to expand at an unchanged pace. more slowly than the share-weighted measures, However, the same slowdown in capital growth as indicated in table 1. would not be cause for worry if the rate of labor Some observers take the shift toward short- force growth diminished as well, thereby reduclived assets to be an unfavorable development ing the trend pace of economic expansion. precisely because they see that the growth of the Although the capital-labor ratio is a reasonable unweighted measures of capital stock slows with gauge of the adequacy of capital formation, much the rise in the rate of aggregate efficiency loss. of the recent debate has used ratios of investment However, as shown above, this effect is only part spending to GNP as the benchmark. The share of of the story. Given the concomitant rise in cur- investment spending in total output provides rent service flows, the substitution of short-lived information on the resources devoted to capital for long-lived assets is not inherently worrisome accumulation and, in some cases, signals moveif the pace of aggregate capital spending is well ments in the capital-labor ratio; this connection maintained. gives a rationale for examining measures of the investment-to-GNP ratio. However, such measures are one step removed from the more fun- PRIVATE BUSINESS CAPITAL FORMATION damental indicator—the capital services avail- AND INVESTMENT DURING THE CURRENT able per worker in the economy. When the EXPANSION composition of the capital stock changes, the growth in these service flows need not move in As noted at the outset, economists have debated step with ratios of investment to GNP. the strength of capital accumulation by U.S. businesses during the 1980s. This issue fits into a Investment as an Indicator of Capital larger debate about the health of the U.S. econ- Accumulation omy during the current expansion, particularly about the strength of investment given the rela- In large part, the differing views concerning the tively high level of real interest rates over the recent pace of business capital formation turn on period. According to one view, private capital two conflicting ratios of business fixed investaccumulation during the current expansion has ment to GNP. The first is the ratio of gross been robust, with strong investment demand ac- business fixed investment to GNP; the second is counting for both the high real interest rates the ratio of net business fixed investment to GNP during the decade and the large inflow of foreign (net investment equals gross investment minus capital; thus, on this view, neither the high rates the BEA's estimate of depreciation for the prinor the capital inflow indicate a serious imbal- vate nonresidential fixed capital stock). ance. In contrast, a more traditional perspective Chart 5 displays the ratio of gross and net regards the large U.S. federal budget deficit as business fixed investment to GNP, both exmainly responsible for the high real interest rates, pressed in 1982 dollars. The gross investment which in turn have crowded out private capital ratio has trended up through the postwar period, formation. The BLS capital input series provides reaching record levels in the 1980s, whereas the a partial resolution of the differing views. net investment ratio has trended down since the The adequacy of capital accumulation can be mid-1960s and now stands close to the lowest assessed only by reference to some benchmark. levels of the postwar period. Thus, these alterna- One common benchmark is the growth of labor tive ratios yield contrary impressions of the input, because the factor that influences the gains strength of capital formation. The shift toward in labor productivity and ultimately in living short-lived assets, which raised considerably the standards is the expansion of capital input rela- overall rate of depreciation on the nonresidential tive to labor, not of capital input as such. For capital stock after the mid-1970s, has created the example, a slowdown in the pace of annual difference in the ratios. The increase in the ratio of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Formation of Private Business Capital 781 5. Ratio of business fixed investment to GNP, The BLS Measure of Capital Input 1982 dollars1 The concerns about each investment ratio have merit, suggesting that neither the gross investment share nor the net investment share is fully appropriate as an indicator of trends in capital accumulation when the mix of assets in the capital stock changes. As noted above, the more informative yardstick by which to assess the pace of capital formation is the capital-labor ratio. The measure of capital used in the ratio should capture the service flows from capital, taking account of shifts in the composition of the stock and the resulting changes in the rate of aggregate efficiency loss. As already shown, the BLS capital input series was designed specifically to capture these service flows and thus is well suited to the issue at hand. Despite its aptness, the BLS measure has re- 1. Net investment is gross investment less BEA estimate of depreceived little attention in the debate over capital ciation of the gross private nonresidential fixed capital stock. SOURCE. Bureau of Economic Analysis. formation in the 1980s, probably because capital input is not as widely known as the BEA series on investment and capital stock. The following analysis uses the capital input measure to examine gross business fixed investment to GNP has failed whether the pace of capital accumulation has to keep pace with the rising depreciation rate, changed significantly in recent years. Because yielding a decline in the net investment ratio. concerns about capital formation have centered Arguments have been advanced in favor of on plant and equipment, the analysis employs not each investment share. Analysts on the side of only the published BLS measure of capital input the net share have noted that the gross ratio for private business—which includes rental housimproperly ignores the rising rate of depreciation ing, inventories, and land, in addition to equipand efficiency loss associated with the shift ment and nonresidential structures—but also my toward short-lived capital goods. Other observnarrow version of the measure, which is restricted ers prefer the gross investment share when exto equipment and nonresidential structures. amining trends in capital accumulation, for two Several measures of labor can be used to reasons. First, they question the accuracy of the calculate the capital-labor ratio, including total net investment share given the lack of solid hours worked, total hours paid, employment, information available on the rate of depreciation. and the labor force. Computing the capital-labor Second, they note that even if the net share ratio with either hours or employment yields a accurately captures the rise in the aggregate measure that is highly sensitive to the business depreciation rate when investment outlays shift cycle; for example, as the economy comes out toward short-lived assets, it understates in that from a recession, employment and labor hours case the flow of services provided by the capital tend to increase more rapidly than capital input, stock because it does not show the higher service flow per period generated by short-lived goods.9 depressing growth in the capital-labor ratio measured with either of these indicators of labor. To avoid the need for cyclical adjustment, the discussion focuses on the growth of capital input 9. See Frank de Leeuw, "Interpreting Investment- relative to the labor force, which is far less to-Output Ratios: Nominal/Real, Gross/Net, Stock/Flow, sensitive to the business cycle. Narrow/Broad," Discussion Paper 39 (Bureau of Economic Analysis, March 1989). Table 3 displays the growth of capital input per Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

782 Federal Reserve Bulletin • December 1989 person in the labor force over various segments structed as measures of capital wealth, not capof the postwar period. Growth of the ratio slowed ital services. sharply between 1973 and 1979—a period Over the postwar period, the BLS measure of marked by two energy crises and relatively poor capital input in private business has expanded at economic performance. Then, in the 1980s, about a V/i percent annual rate. This advance has growth of the ratio moved back toward the yielded considerable capital deepening—the inpre-1973 pace, although the extent of the pickup crease in the capital used by each worker—and depends on whether one examines the full period accounts for more than one-third of the growth in from 1979 to 1987 or the shorter period limited to labor productivity over the postwar period. In the current expansion. addition, the persistent shift in the composition The data in table 3 shed some light on the of the capital stock toward short-lived assets has debate over the adequacy of capital formation in boosted the growth of capital input for equipment recent years. Regardless of the particular capi- and nonresidential structures relative to the tal-labor ratio examined, the data do not appear growth in estimates of capital stock published by to support the view that private investment the BEA. The gap reflects the high level of spending and capital accumulation have been capital service provided by short-lived assets, a unusually strong during this decade. Table 3 also phenomenon captured only by the capital input casts doubt on the opposing view that private series. capital accumulation in the 1980s has been espe- The growth of capital input has tended to move cially weak, as the growth of capital input rela- up and down with that of the civilian labor force tive to the labor force during 1979-87 did not throughout the postwar period, including the differ much from the average rate over the pre- 1980s. Thus, the pace of capital accumulation has vious thirty years. Instead, this analysis suggests continued to support a rate of capital deepening a more middle-of-the-road assessment: The in recent years not much different from the growth of capital input has continued to exceed postwar average, suggesting that characterizathat of the civilian labor force in the 1980s by a tions of capital formation in the 1980s as unusufairly wide margin, indicating no obvious break ally weak or unusually strong are unwarranted. with the earlier postwar pattern of capital accumulation. APPENDIX: THE RELATION BETWEEN INVESTMENT AND THE CAPITAL STOCK SUMMARY The relationship between investment and the The BEA and the BLS publish a variety of growth of the capital stock is often a point of measures of the tangible capital owned by private confusion. In particular, the assertion is somebusinesses in the United States. Of these, only times made that a large increase in investment the BLS capital input series is intended to be spending, regardless of the initial level of outused in analyses of output and productivity; the lays, should lead to a sizable rise in the capital BEA estimates of the capital stock are con- stock. The discussion here demonstrates that 3. Growth in the ratio of capital input to the labor force, selected periods, 1948-871 Average annual change, percent Capital input measure in numerator of ratio 1948-87 1948-73 1973-79 1979-87 1982-87 1.6 1.8 .8 1.8 1.5 2.1 2.2 1.5 2.0 1.8 1. Capital input measured in 1982 dollars. For description of capital input, see table 1, notes 1 and 2. SOURCE. Author's calculations based on data from the Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Formation of Private Business Capital 783 capital-stock growth depends directly on the the additions to the stock from investment outlevel of net investment spending. For a capital lays minus the deterioration of the existing stock. stock designed to measure the productive ser- The growth of investment plays no direct role in vices from capital, net investment is defined as this equation. When one recalls that capital is a investment outlays minus the physical deteriora- stock and investment is a flow, this equation tion of existing stock. (In contrast, for a capital makes sense: The growth of a stock depends on stock intended to measure the value of capital, the level of flows into the stock, in this case net investment is defined as investment outlays investment flows net of deterioration. minus the depreciation of existing stock.) The equation for growth in the capital stock The link between the level of net investment can be illustrated through a simple example (see and the growth of capital stock follows directly chart). Assume that the constant rate of deteriofrom the perpetual inventory equation, in which ration is 5 percent, the initial level of the capital the estimate of the change in the capital stock at stock is 100, and the initial level of investment is time t can be written as 5. In the initial state, investment just balances deterioration, leaving the capital stock un- K - K_i = I, - aK,_, changed. Then, in period ten, the level of investt t x ment doubles to 10 and remains at this higher level forever. Given the doubling of investment where K is the capital stock, / is investment and no immediate change in the level of deteriooutlays, and a represents the constant rate of ration, the capital stock grows by 5 units in efficiency loss as capital goods age. The equation period ten. As time passes, the capital stock says that the change in the capital stock equals continues to grow, as the fixed level of investment continues to exceed replacement require- Relation between investment and capital stock ments. However, over time, replacement requirements get progressively larger, reflecting the increased size of the capital stock. Eventually the process comes to a halt, with capital stock having doubled in value to 200 and the level of investment once again equaling the amount of deterioration. The example makes clear that, after a one-time rise in the level of investment, the capital stock continues to grow for a long time. Similarly, a one-time decline in the level of investment restrains the growth of capital stock over an extended period. I 1 I I I I I I I I I 10 20 30 40 50 60 70 80 90 100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

784 Industrial Production Released for publication October 17 Output of most other major sectors changed little. At 142.3 percent of the 1977 average, the Industrial production decreased 0.1 percent in total index in September was 2.7 percent higher September after an increase of 0.3 percent in than it was a year earlier. For the third quarter as August. The most significant declines occurred in a whole, growth in total output decelerated to 1.3 the output of trucks, basic metals, and construc- percent at an annual rate after a gain of 3.3 tion supplies. The decline in truck production percent in the second quarter. Manufacturing more than offset a sharp rise in auto assemblies. output declined 0.2 percent in September, and Ratio scale, 1977=100 Total Index Products Materials Manufacturing Nondurable Materials Nondurable Durable Durable Consumer Goods Intermediate Business Products supplies Nondurable Construction Durable supplies Motor Vehicles and Parts Final Products 150 135 120 Business equipment 90 Consumer goods 75 All series are seasonally adjusted. Latest series: September. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

785 1977 = 100 Percentage change from preceding month Percentage ccchhhaaannngggeee,,, Group 1989 1989 SSSeeepppttt... 111999888888 tttooo SSSeeepppttt... 111999888999 Aug. Sept. May June July Aug. Sept. Major market groups Total industrial production 142.4 142.3 .0 .3 .0 .3 -.1 2.7 Products, total 152.6 152.6 .1 .5 -.3 .4 .0 3.5 Final products 151.0 151.1 .2 .5 -.5 .4 .1 3.6 Consumer goods 139.3 139.5 -.3 .6 -.8 .3 .1 3.4 Durable 128.6 128.2 -.7 -.3 -2.5 .9 -.3 1.5 Nondurable 143.3 143.7 -.1 .9 -.2 .1 .3 4.1 Business equipment 169.9 169.8 .8 .3 -.4 .6 .0 5.6 Defense and space 181.0 180.5 .4 .2 .3 -.4 -.3 -2.2 Intermediate products 158.0 157.9 -.1 .4 .4 .3 -.1 3.3 Construction supplies 142.4 141.6 .0 .7 .6 .3 -.6 2.3 Materials 128.6 128.2 -.3 -.1 .4 .2 -.3 1.4 Major industry groups Manufacturing 149.1 148.7 .0 .4 .0 .3 -.2 3.0 Durable 147.6 146.9 .1 .2 -.3 .4 -.5 2.2 Nondurable 151.1 151.3 -.1 .7 .3 .1 .1 4.1 Mining 102.7 103.6 -.3 -.6 .2 1.0 .9 -.1 Utilities 113.6 115.0 -1.3 -1.2 .0 -.5 1.2 1.7 NOTE. Indexes are seasonally adjusted. capacity utilization in manufacturing, at 83.7 million units in August. Production of business percent, declined 0.4 percentage point. Detailed equipment in September was unchanged, and in data for capacity utilization are shown separately the third quarter rose less than 2 percent at an in "Capacity Utilization," Federal Reserve annual rate after having advanced at nearly a 10 monthly statistical release G.3. percent rate during the first half of this year. In market groups, production of consumer Output of construction supplies continued to goods edged up in September as autos and non- be sluggish and has changed little, on balance, durables posted gains, but trucks and home since December. Production of materials degoods declined. Auto assemblies rose to an an- clined 0.3 percent in September as durables, nual rate of 6.8 million units from a rate of 6.4 particularly basic metals and parts for consumer durable goods, fell sharply. Among other mate- Total industrial production—Revisions rials, chemicals, coal, and electricity generation Estimates as shown last month and current estimates posted gains. In industry groups, the decrease in manufac- Percentage change Index (1977=100) from previous turing output mainly reflected widespread weak- MMoonntthh months ness in durables, with the largest decline occurring in primary metals. Nondurables were about Previous Current Previous Current unchanged as chemicals and petroleum products June 141.9 142.0 .2 .3 rose, but textiles declined. Outside manufac- July 142.0 142.0 .1 .0 Aug 142.4 142.4 .3 .3 turing, production at both mines and utilities rose Sept 142.3 -.1 sharply. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

786 Statements to Congress Statement by Martha R. Seger, Member, Board ment of basic transaction accounts and check of Governors of the Federal Reserve System, cashing services by financial institutions. Howbefore the Subcommittee on Consumer Affairs ever, the policy statement also recognizes that and Coinage of the Committee on Banking, addressing these concerns most effectively Finance and Urban Affairs, U.S. House of Rep- means tailoring services to differences in local resentatives, October 17, 1989.1 needs and the characteristics of individual institutions. It reflects the belief that the development Thank you for the opportunity to provide the of truly useful services could be thwarted by the views of the Board of Governors of the Federal rigidities of legislation. Thus, in issuing the basic Reserve System on H.R. 3180, the Government banking policy statement, the Board supported a Check Cashing Act of 1989, and H.R. 3181, the voluntary rather than a mandatory approach. We Basic Banking Services Access Act of 1989. thought that identifying a federal interest in the issue, but giving institutions the necessary flexi- H.R. 3180 would require depository institubility to develop account products for the partictions to cash government checks at cost for ular needs of their communities, would yield the noncustomers who are registered with the instibest results. We continue to support voluntary tution. A companion bill, H.R. 3181, would reefforts as the most effective response. quire depository institutions to offer "basic" transaction accounts. These accounts would be subject to minimal fees and balance requirements and would permit consumers to make up to ten COMMENTS ON CHECK CASHING BILL withdrawals per month. Both bills call upon the Federal Reserve Board to set the price of these For several reasons, we are concerned about services. Virtually identical bills have been intro- enactment of a requirement that depository instiduced in the Senate. tutions cash the government checks of noncus- The Board is familiar with the concerns that tomers. Initially, it is not clear that check cashing motivated the introduction of the House and services are so widely unavailable that imposing Senate bills. Indeed, we share the belief that burdensome federal requirements for mandatory banking services should be widely available to check cashing is warranted. Over the last several all. To encourage financial institutions to offer years, various surveys have been conducted to such services, in 1986, along with other federal assess the availability of check cashing services. and state financial institution regulators, we Perhaps because of varying methodology, the adopted and publicized a Joint Policy Statement results of the surveys differ on the extent to on Basic Financial Services. The basic banking which people without accounts at a financial policy statement recognizes the need of consum- institution have access to check cashing services. ers for a safe and accessible place to keep Surveys by consumer groups found that few money. It also emphasizes that consumers need a institutions offer the service while surveys sponconvenient way to obtain cash (including by sored by industry groups and by the General cashing government checks) and to make pay- Accounting Office (GAO) found that generally ments to third parties. The basic banking policy many do. statement encourages the continued develop- The 1988 survey of the Consumer Federation of America, for example, found that about 30 percent of the institutions they polled would cash government checks for noncustomers. On the 1. This statement was delivered by Governor LaWare. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

787 other hand, at least two surveys found that check for such services. If the government determines cashing services were much more widely avail- that there is a need for low-cost cashing of able. The GAO's recent report to the Congress government checks, it probably should first exon government check cashing states that, as of plore the possibility of making that service avail- 1985, 86 percent of banks and 55 percent of thrift able itself. For example, using federal post ofinstitutions cash U.S. Treasury checks for non- fices to cash government checks might be customers. In addition, a 1988 survey of the considered since they offer financial services American Bankers Association found that more such as money orders and, like financial instituthan 90 percent of the institutions surveyed tions, they are accessible nationwide in urban would cash government checks for noncus- and rural areas. Another idea that should contomers. Taken together these surveys suggest tinue to be developed is electronic delivery of that many institutions are already providing government benefits. Successful delivery syscheck cashing services. And we hope that over tems for electronic benefits are currently operattime even more institutions will offer such ser- ing, including programs in New York City and vices, encouraged by the basic banking policy St. Paul, Minnesota. Further, a pilot program statement and also by the increased emphasis on involving electronic delivery of Social Security institutions having a good Community Reinvest- Supplemental Security Income benefits is exment Act (CRA) record. In this regard, our pected to be launched this fall in Baltimore. recent joint agency policy statement on the CRA Electronic delivery systems offer numerous benlists the cashing of government checks and the efits for beneficiaries, government agencies, and offering of basic banking accounts for low- and financial institutions. They include eliminating moderate-income people as a favorable factor in problems with delayed, lost, or stolen checks, contributing to a positive CRA assessment. providing quicker resolution of problems concerning payments, and lowering costs to all par- Given the available information, the Board has ties. doubts that enough of a problem has been demonstrated to justify sweeping legislation with A more specific concern that we have with the specific requirements. Furthermore, enactment legislation is demonstrated by the process for of check cashing requirements—with all of the determining the fees that may be charged for inevitable regulations—may do little, in fact, to cashing government checks. The bill requires the increase the number of people who are taking Board to study the "actual costs" of financial advantage of such services. For example, the institutions and to set the fees permitted to be state of Connecticut requires institutions to cash charged for these services to recover these costs. state-issued checks for recipients of public assis- It would be extremely difficult and expensive for tance. Yet, informal reports from bank represen- the Board to obtain uniform data from institutatives in that state indicate that there has not tions on their actual costs for providing the check been a noticeable increase in the number of cashing services envisioned by the bill. Furtherpersons using financial institutions to cash these more, the cost to an institution for cashing govchecks since passage of the law. We believe it ernment checks will inevitably vary from instituwould be useful to wait and see if these prelimi- tion to institution based on size and locality. nary reports continue to hold true before launch- Inasmuch as cashing a check for a noncustomer ing a nationwide program that might not be is an interest-free loan by an institution, there effective. also are certain hidden costs to an institution that Besides our doubts about whether the need for may be different from its costs for cashing a check cashing legislation has been demonstrated, customer's check. and whether it will be effective, the Board has Thus, any fees set by the Board would almost several other concerns. As a general matter, we certainly be an average of those costs and, as think that the government should be very cau- such, could never reflect the actual differences tious about mandating the services that every among institutions. With a single federally estabfinancial institution must offer and, in particular, lished fee, some institutions would fail to recover setting the fees that are permitted to be charged their costs while other institutions would be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

788 Federal Reserve Bulletin • December 1989 overcompensated. Finally, it appears inequitable eliminate many of the problems with delivering for financial institutions to be required to cash government benefits by paper checks. The Board government checks at cost while other entities, strongly supports the facilitation of electronic such as check cashers, could continue to offer alternatives for the delivery of government paysuch services at a profit. ments. These "electronic benefits transfer" The Board is also concerned that financial (EBT) arrangements probably are a better longinstitutions could increasingly fall victim to fraud term solution to the problems that motivate the if the check cashing legislation is enacted. Given check cashing legislation. that checks can easily be stolen and identification We have reason to be encouraged about the cards are readily forged, the risks of fraud may prospects of the EBT alternative. Over the be significant. course of the past year, several meetings have The bill recognizes the fraud risk but limits been held among representatives of government regulatory relief to large scale fraud on a "clas- agencies, financial institutions, and consumer sification of checks" as determined by the groups to develop a "blueprint" for a model Board. This fraud provision may be small com- electronic benefits service program. This docufort to institutions since it would likely take a ment is expected to be published by December. long time for the Board to learn of any general In addition, several programs are now operating patterns of fraud. By then, significant losses and others are about to be initiated. The GAO might already have been suffered. Individual has concluded that electronic delivery provides cases of fraud will be very difficult to protect significant advantages over a paper-based system against, since the bill requires that an institution of delivery of government benefits, and the cash any government check upon presentation of Board wholeheartedly agrees. Consequently, we certain limited registration information. are pleased with the increased momentum in We are aware that at present the overall level EBT activity. It is possible, of course, that these of fraud involving U.S. government checks is systems may not prove as efficient or useful as low. However, the level may be high in certain we hope. But, in our view, it seems wise to areas where Social Security or other benefits concentrate on encouraging these farsighted efchecks are stolen directly from recipients or from forts as a solution rather than prematurely immail carriers. Furthermore, the fraud losses of an posing on financial institutions permanent and individual institution may be significant, even unavoidably burdensome new requirements that though the overall level of fraud is low. We also may not solve the problem. believe that there is a good chance that the overall level of fraud with government checks COMMENTS ON BASIC BANKING BILL could increase following enactment of the legislation. For example, a large-scale fraudulent Turning to the basic banking bill, the Board check cashing ring has operated for more than questions the need for mandatory basic banking four years in several eastern states and is respon- for many of the same reasons that it questions the sible for up to $15 million in losses. This check need for mandatory government check cashing. cashing ring had highly sophisticated methods, Initially, it is not clear that the price of banking including a "how-to" manual to train its mem- services is the primary reason why many people bers to pass bad personal checks. It is not do not currently have accounts. Since 1977, we farfetched to think that such techniques might be have sponsored four surveys that provided data applied to government check cashing if all insti- from which we could determine the number of tutions are required to accept checks. The bill families without depository accounts. Our rewould prevent individual institutions from pro- search suggests that the overall percentage of tecting themselves from fraud on a case-by-case families without deposit accounts has remained basis by establishing procedures that are more fairly constant at around 10 percent in the period protective than those included in the bill. 1977-86. (A Census Bureau estimate cited by the As mentioned earlier, other innovative ar- GAO in its report is higher at 18 percent.) Our rangements are being investigated that would research indicates that roughly 30 percent of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 789 families whose income falls in the lowest quintile pending on which national survey is considered, do not hold accounts. Although the percentages the percentage of institutions offering basic bankfor this latter group have fluctuated, the numbers ing accounts ranges from a low of about 15 were more or less the same in 1986 as in 1977. percent to a high of about 74 percent. Assuming Thus, while many low-income families do not that the actual number is somewhere between have accounts—and we think it is unfortunate those extremes, many financial institutions apthat people who may want accounts are outside pear to be providing this service. the nation's financial system—the fact that the Several states have also undertaken studies to percentage has remained relatively constant sug- determine how accessible low-cost banking sergests that recent increases in fees and minimum vices are for their citizens. In a survey of virtubalance requirements have not caused a signifi- ally all financial institutions in New York State, cant decline in account holding. Rather than the the Banking Department found that low-cost cost of opening or maintaining an account, there banking services are widely available. It also are probably more fundamental reasons for much concluded that the vast majority of low- and of the lack of account ownership. For example, moderate-income people have ready access to given the convenience of check cashing alterna- such accounts. Although the New York State tives and the difficulties in managing an account study found that not all institutions offered basic with limited resources, some low-income people accounts, it found that at least some institutions may not choose to open an account. It may be in each rural and metropolitan area offered them. that some people simply prefer not to deal with The Pennsylvania Department of Banking rebanks, especially if they are unfamiliar with them ported in a 1988 study that almost 54 percent of or distrust them. the institutions they surveyed offered a type of The survey on account holding that we con- basic account. The Pennsylvania report recomducted does not contain information about the mended that similar studies be conducted periavailability of basic banking accounts among odically in the state "to measure trends within financial institutions. We have not conducted the banking industry." The State of Virginia such a specific survey. A survey of the availabil- currently is conducting a study of account availity of basic banking accounts would be costly and ability in that state, involving surveys of both time-consuming for the Board to undertake. It consumers and financial institutions and a series would take a minimum of nine to twelve months of public hearings around the state. to design and conduct a survey of this type and to Given the data, in our view the jury still is out analyze the data. In any event, with the account on the extent to which there is a basic banking variety among institutions and the variations in "problem," and on when, if ever, legislation is the needs of people depending on where they needed to fix it. At a minimum, clearer evidence live, survey information on basic banking likely that a problem exists is probably needed before will not present a clear picture. considering taking legislative action. While none There have, in fact, been several surveys by of the surveys found that every institution ofother groups aimed at assessing the availability fered basic accounts, the need for access to these of low-cost banking accounts. As may be ex- accounts can be met as long as some institutions pected, the survey findings vary greatly, in part in each community offer them. And that is what because of different definitions of "basic banking the surveys generally found to be the case. accounts," and thus do not conclusively answer As with the check cashing bill, the Board is the question of how widely basic banking ser- concerned about the many difficulties in setting vices are available. As with the surveys on check fees for transaction accounts, particularly when cashing, surveys by consumer organizations it must determine the "net processing costs" for found that relatively few institutions offer basic financial institutions based on "actual time studbanking accounts—the GAO suggested this as ies." It would be very expensive to obtain uniwell, except in the case of accounts for senior form data from institutions since various compocitizens—while surveys sponsored by industry nents affect their individual costs, and there is no representatives concluded that many do. De- uniform cost accounting system used by all insti- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

790 Federal Reserve Bulletin • December 1989 tutions. As with check cashing, a single federally CONCLUSION established fee would be inequitable because it would not reflect the actual differences in costs We share the concern that people who may want among individual institutions. access to financial services are outside the na- The basic banking policy statement that I tion's financial system, and we recognize the mentioned demonstrates the federal govern- need for institutions to make a greater effort to ment's encouragement of financial institutions reach out to all segments of the public. We to provide basic services. But it has the benefit adopted our basic banking policy statement in of leaving the development and implementation response to these concerns, and we think that of such programs to the creativity of individual voluntary efforts have gone a long way toward institutions. The basic banking bill would result dealing with them. Our general impression, lookin the standardization of basic banking services. ing at banking applications, is that many banks In our view, a better approach is for individual offer some type of low-cost account, and we institutions to address the varying and changing expect to see more and more in the future in light needs of low-income and elderly individuals. A of our policy statement on CRA. number of different account products have In our experience, well-intentioned legislation evolved as a result of voluntary efforts by and regulations, particularly as they pyramid one financial institutions. Some, for example, in- on top of the other, involve a cumulative burden volve savings accounts with money orders used that is sometimes not fully appreciated—espefor third-party payments. Others, based on a cially as it affects the numerous small financial "pay-as-you-go" idea, have fees for each institutions. All of us should be concerned about check, rather than a monthly maintenance fee the expense and burden of new rules when a need as contemplated by the bill. Either of these for legislation has not been clearly demonstrated. accounts could be preferable to the bill's basic In our view, the surveys on check cashing and banking account for the person who writes basic banking do not give a strong enough mesfewer than ten checks each month. Thus the bill sage that such widespread problems exist to the risks thwarting the voluntary development of extent that it is now time to enact new laws. alternative products such as these that may The Board continues to believe that voluntary more directly meet the needs of some low- efforts by financial institutions and further develincome consumers. Indeed, an institution might opment of electronic benefits transfer will meet have little incentive to offer additional, and many of the goals of the bills—probably more potentially cheaper, basic banking services effectively—without the burden and cost that once a standard service is required by law. rules and regulations inevitably impose. • Statement by John P. LaWare, Member, Board which was submitted to the Congress pursuant of Governors of the Federal Reserve System, to Section 1220 of the Financial Institutions before the Subcommittee on Consumer and Reform, Recovery and Enforcement Act of Regulatory Affairs of the Committee on Banking, 1989 (FIRREA). Housing, and Urban Affairs, U.S. Senate, Octo- Section 1220 required the Board and the other ber 24, 1989. federal financial institution supervisory agencies to report to the Congress on their findings I appreciate the opportunity to appear before on the extent of discriminatory lending practhis Senate subcommittee to present the Fed- tices by mortgage lenders subject to their eral Reserve Board's view on the extent of state regulation or supervision (in the Board's case, member banks' compliance with federal laws state member banks) "based on a review of that prohibit discrimination in mortgage lend- currently available loan acceptance and rejecing. In particular, my testimony will summarize tion statistics." In addition, the reports were to the Board's "Report on Loan Discrimination," provide recommendations for appropriate mea- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 791 sures to assure nondiscriminatory lending prac- cause of race, color, religion, sex, national oritices. gin, handicap, or familial status. The primary Although the Board has a comprehensive com- impact of the act with regard to state member pliance examination program to ensure that state banks is to require equal treatment of applicamember banks comply with the Equal Credit tions for mortgage loans from members of a Opportunity Act and the Fair Housing Act, it protected class. does not currently have mortgage loan accep- The Equal Credit Opportunity Act and the tance or rejection statistics of the type contem- Federal Reserve System's Regulation B, which plated by Section 1220. Consequently, we were implements the act, are designed to assure the unable to provide the requested analysis. Recent nondiscriminatory availability of all types of amendments to the Home Mortgage Disclosure credit, including mortgage loans, to all creditwor- Act will require certain state member banks as thy applicants. The act and the regulation prowell as other lenders to report this type of data, hibit creditor practices that discriminate against but it will not be available until fall 1991. an applicant because of race, color, religion, Nevertheless, the Board was able to draw national origin, sex, marital status, or age (prosome conclusions about the possible extent of vided the applicant has the capacity to contract); discriminatory conduct in the mortgage lending the fact that all or part of the applicant's income activities of state member banks as a result of the derives from a public assistance program; or the Federal Reserve System's consumer compliance fact that the applicant has in good faith exercised examination program. In addition, some informa- any right under the Consumer Credit Protection tion was provided by our consumer complaint Act. In addition, there are certain other imporprogram. Finally, we have followed closely the tant requirements in the act and regulation releconcerns over disparities in the amount of resi- vant to mortgage lending procedures that are dential mortgage lending between minority and designed in different ways to further the overall nonminority areas as detailed by studies in At- purpose of promoting the nondiscriminatory lanta, Cleveland, Detroit, and Boston—the latter availability of credit. conducted by the Federal Reserve Bank of Bos- The Board has broad rule writing responsibility ton. These studies provide useful, but limited, for the Equal Credit Opportunity Act but very insight into the issue. limited enforcement authority. The Congress directed the Board to prescribe regulations to carry out the purpose of the act for covered lenders— ANTIDISCRIMINATION LAWS including, for example, all banks, other depository institutions, and mortgage lenders. In con- Two laws directly prohibit discrimination in trast, the Board is given administrative mortgage lending—the Fair Housing Act and the enforcement responsibility for only state member Equal Credit Opportunity Act. These two laws banks. are complementary in some important respects The Fair Housing Act, itself, does not give the relating to mortgage lending. For example, both Board any rulewriting or enforcement authority. set forth criteria that lenders may not consider The Department of Housing and Urban Developwhen making credit decisions. ment and the Attorney General are designated as The objective of the Fair Housing Act is to the responsible federal agencies with regard to help assure nondiscriminatory practices in all such matters. Nevertheless, the procedures for aspects of the housing market. Consequently, it the Board's consumer compliance examination applies to a wide range of persons involved in the program include checking for state member bank sale or rental of housing and regulates many compliance with the Fair Housing Act under our aspects of residential real estate-related transac- general authority to assure that banks are comtions. With regard to mortgage credit, the Fair plying with federal law. Housing Act makes it unlawful for mortgage Before I explain the Board's enforcement prolenders to discriminate in a residential real es- gram, I would like to briefly explain some chartate-related transaction against any person be- acteristics of state member banks to indicate the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

792 Federal Reserve Bulletin • December 1989 type of financial institutions on which our pro- Credit Opportunity Act and the Fair Housing gram is focused and on which our conclusions Act, and put the banks on notice that the Board are based. would vigorously enforce these acts. This re- State member banks are relatively small in size minder took the form of a policy statement that and number and many are rural. As of December stated that failure to comply with certain provi- 31, 1988, there were 1,109 state member banks sions of the acts were viewed by the Board to be out of a total of 13,418 commercial banks in the particularly serious and would require retroac- United States (approximately 8 percent). They tive corrective action. hold about 14 percent of total deposits held by Federal Reserve System efforts to detect loan commercial banks in this country, and 90 percent discrimination by state member banks focus on of state member banks have total assets of less the consumer compliance examination effort. than $500 million. More than 45 percent of state Consumer compliance examinations are conmember banks are not located in a metropolitan ducted by examiners at the Reserve Banks who statistical area (MSA). are specially trained in consumer affairs and civil Moreover, state member banks are not a sig- rights examination techniques. The Board and nificant presence in the mortgage lending area. each of the Reserve Banks maintain staff who Analysis of the most recent aggregated Home work primarily with consumer complaints. The Mortgage Disclosure Act statistics (1987) indi- Board's staff provides general guidance and cate that state member banks originated less than oversight to the Reserve Banks in both areas. 3 percent of all home purchase loans reported. The Federal Reserve System's consumer compliance examinations are scheduled at regular intervals and are comprehensive. As a result, the FEDERAL RESERVE BOARD'S CONSUMER Board has been able to maintain a high-quality AFFAIRS PROGRAM examination program over the years. Each state member bank is examined on a The Board first established a specialized con- regular basis. The Board's examination fresumer compliance examination program in 1977. quency policy calls for an examination to be This program required that the twelve Reserve scheduled every eighteen months for a bank with Banks around the country conduct examinations a satisfactory record. Banks with exceptional of state member banks to determine compliance records can be examined every two years. Those with consumer protection legislation by using a banks with less than satisfactory records are to cadre of specially trained examiners. The scope be examined every six months or every year, of these examinations specifically included the depending on the severity of their problems. Equal Credit Opportunity and Fair Housing The Board believes that expecting a bank Acts. From the beginning, the examiners were examiner to master both the "safety and soundinstructed to place special emphasis on violations ness" and consumer affairs-civil rights aspects involving potential discrimination of the kind of bank examinations is not practical given the prohibited by these statutes. existing complexities of both areas that continue In 1979, the Board reassessed its enforcement to increase. Consequently, the Federal Reserve responsibilities in the areas of consumer affairs has developed a separate career path for conand civil rights and made several changes to its sumer affairs examiners equivalent to that of consumer affairs program. These changes in- commercial examiners at the Reserve Banks. cluded increased training for examiners in detect- The Board provides special training to these ing discriminatory lending practices. Changes examiners. were also made in the System's processing of On average, checking for compliance with the consumer complaints. They also placed in- antidiscrimination laws takes almost nineteen creased emphasis on investigating serious com- hours per examination to complete and results in plaints such as allegations of loan discrimination. a comprehensive assessment of the institution's In 1981, the Board re-emphasized responsibil- lending practices. ities of state member banks under the Equal The procedures focus primarily on comparing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 793 the treatment of members of a protected class additional scrutiny and may provide crucial inwith other loan applicants. First, the bank's loan sights into how the bank is serving the credit policies and procedures are reviewed. This is needs of its local community, particularly those done by reviewing bank documents, as well as individuals in the community protected by the interviewing loan personnel. During this phase, antidiscrimination statutes. the examiner will seek to determine, among other There are, however, two significant reasons things, the bank's credit standards. After the why these procedures, extensive as they are, examiner has identified those standards, he or may not provide absolute assurance that there she will then contrast those standards with a have been no individual instances of discriminajudgmental sampling of actual loan applications, tion. especially applications received by the bank from First, state member banks, like most lenders, members of a protected class. This means that provide a certain amount of flexibility in their the examiner is looking at the same information credit standards. This flexibility reflects the fact that the bank used to make its credit decision, that variations are normally found in each appliincluding such things as credit history, income, cant's request for credit. In addition, numerous and total debt burden. If an instance is discov- factors are used to establish creditworthiness (for ered in which those standards appear not to have example, the amount and reliability of income, been used, it could be an indication of prohibited employment history, other debts, credit history, discrimination. This would provide the basis for adequacy and availability of loan collateral, a discussion with lending personnel or more length of time at present residence, the existence intensive investigation. Finally, an overall anal- and nature of deposit relationships), and this ysis of the bank's treatment of applications from increases the difficulty in determining with any members of protected classes is conducted to degree of certainty whether a member of a prodetermine whether there are any patterns or tected class was denied credit due to the fair individual instances in which such members were application of credit standards or to discriminatreated less favorably than other loan applicants. tion. One other aspect of the examination proce- Second, the pricing, structure, and even availdures is an analysis of the geographic distribution ability of loans also vary. These variations are of the bank's credits. Two ways in which this can primarily due to business considerations that be done are by plotting the location of the bank's might include, for example, the perceived risk of accepted and rejected loans in a selected cate- loan default, usury or other legal requirements, gory on a map, and by using Home Mortgage the bank's cost of funds at any given time, and Disclosure Act data if available. These data are liquidity considerations. Such factors often make then cross-referenced to census data, or other it more difficult to determine whether those who available information that identifies low- and obtained credit, albeit on different terms, were moderate-income and minority neighborhoods. treated equally. The geographic analysis has two functions. First, For these two reasons, making conclusive it may highlight lending practices evidenced by a judgments as to whether any particular variation geographic pattern that has a negative impact on is due to legitimate business reasons or discrimmembers of a protected class. Second, it is used ination is an inexact and difficult task. Discrimiin evaluating the bank's performance under the nation can occur in many subtle ways, and it Community Reinvestment Act. seldom leaves a visible audit trail. As a conse- Another regular part of the examination in- quence, we can rarely be certain that discriminacludes conversations initiated by the examiner tion has occurred, and we seldom make this with persons in the community knowledgeable formal finding. However, it is not uncommon for about local credit needs. The examiners will examiners to fully explore a questionable variaroutinely ask about public perceptions of the tion through conversations with bank personnel. availability of credit to minorities and low- and This aspect of the examination process may play moderate-income persons. This information may a substantial role in sensitizing lenders to the suggest that a particular area of the bank needs issue of discrimination. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

794 Federal Reserve Bulletin • December 1989 As part of the examination procedures, exam- from loan application records. Consequently, iners are instructed to review bank practices and these studies do not specifically address the policies regarding preapplication contact with question raised in section 1220, which is the potential customers. In this regard, it is often extent of mortgage lending discrimination redifficult for compliance examiners to determine, vealed in a review of loan application and dispowith certainty, what type of interaction may have sition records. Nevertheless, the studies do prooccurred between potential applicants and the vide some insights into the relationships between bank before an application is received. If appli- race and home lending. cants are being discouraged from submitting an The studies show the following: application and there is no documented evidence • There are differences in the number and of such treatment, it is possible that the examiner dollar volume of conventional home purchase will not learn of this improper bank conduct and home improvement loans extended to borunless the affected applicants come forward. rowers in different neighborhoods. Overall, the number and nature of the viola- • After accounting for differences in neighbortions of the Equal Credit Opportunity Act and hood income levels, in the number of housing units the Fair Housing Act discovered during our across neighborhoods, as well as in other selected compliance examinations suggest that state control variables, areas with predominantly black member banks are in substantial compliance with populations receive fewer home purchase loans, but the requirements of both acts. While there are more home improvement loans, from commercial several procedural requirements of Regulation B banks and thrift institutions than similar predomiand the Fair Housing Act that some state mem- nantly white neighborhoods. ber banks have not followed, as detailed in our • A significant portion of the home purchase report, these violations do not directly involve finance extended in predominantly black neighthe antidiscrimination provisions. borhoods is supplied by nondepository institu- In summary, we do not find policies or prac- tions, such as mortgage companies, and, except tices that suggest that individual state member for Boston, most of these loans are either govbanks take the race of an applicant into account ernment-insured or guaranteed (apparently high when making a credit decision. Moreover, the home prices in Boston have precluded some very fact that bank personnel know that examin- potential loan applicants from using FHAers will be closely scrutinizing their behavior, insured financing in recent years). through review of bank records, probably has a Each of the studies discusses various factors considerable influence on helping to discourage that may account for these loan patterns. For discriminatory conduct by individual employees. example, the Boston study describes in some detail the complex interaction of demand and supply in both the housing and mortgage markets HOME PURCHASE LENDING DISPARITIES that combine to jointly determine the distribution BY RACE of home purchase loans across different neighborhoods. Because the distribution of loans re- In recent years the staff of the Federal Reserve flects the joint determination of supply and de- System has conducted or reviewed several research mand factors, many of which are closely related studies that have examined the relationship between to each other, interpreting the significance of any the racial composition of neighborhoods and resi- particular variable is extremely difficult. dential mortgage lending. Copies of these materials, The studies, however, do not draw definitive which pertain to Atlanta, Boston, Cleveland, and conclusions about the existence or extent of Detroit, were included in our report. racial discrimination. They are nonetheless use- The Federal Reserve work has all been based ful because they identify the presence of differon information obtained from records of actual ential lending patterns across neighborhoods and loans granted (either from data obtained pursuant thus focus attention on these matters. For examto the Home Mortgage Disclosure Act or from ple, the finding that mortgage bankers and other local government property records) rather than nondepository sources of finance are a dominant Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 795 source of credit in many predominantly minority These amendments will provide new informaareas has raised questions about the adequacy of tion about the characteristics of loan applicants bank and thrift institution marketing and commu- that will enhance the ability of examiners to nity outreach in these communities. In addition, determine whether a lender's credit standards the observation that FHA-insured financing is are being fairly applied. Also, the extension of heavily used in minority middle-income neigh- the coverage of HMDA to include essentially all borhoods suggests that depository institutions mortgage lenders will provide a more complete could garner a larger share of the home loan context in which to judge a bank's mortgage market in these neighborhoods if more of them lending efforts. offered FHA-insured loans or similar low down- FIRREA amends the Community Reinvestpayment, privately insured conventional mort- ment Act to provide that after July 1, 1990, the gage alternatives. Finally, the existence of these written evaluation of a depository institution's disparities, regardless of their cause, should at record of meeting the credit needs of its local the very least prompt mortgage lenders to review community made by the institution's regulatory their marketing and outreach efforts as well as agency must be disclosed to the public. Public their product offerings in minority neighbor- disclosure will increase the significance of the hoods. We have recently stressed this responsi- evaluation of the bank's performance with that bility in a joint agency policy statement on the act because it will likely lead to increased dia- Community Reinvestment Act. logue between banks, examiners, and community groups. The Board believes that the new enhancements to these two statutes will assist in devel- RECOMMENDA TIONS oping a more complete and accurate picture of mortgage lending practices than is possible to- The Board was also asked to provide recommen- day, and that no additional legislation is necesdations for appropriate measures to assure non- sary. There are, however, several additional inidiscriminatory lending practices. In light of the tiatives under review by the Board's staff or recent amendments contained in the FIRREA to subcommittees of the Federal Financial Instituthe Home Mortgage Disclosure Act and the tion Examination Council (FFIEC), which are Community Reinvestment Act, we have no pro- referred to in the report. posals for new legislation. In closing, I would like to emphasize the The amendments to the Home Mortgage Dis- Board's commitment to vigorously enforcing the closure Act will accomplish the following: antidiscrimination laws for which it has respon- • Extend coverage of the Home Mortgage sibility. Since homeownership is an important Disclosure Act to essentially all types of mort- part of the American dream, we all want to gage lenders. assure that every American, regardless of race, is • Require disclosure of data on the disposition treated fairly if he or she pursues that goal. To of loan applications (besides data on loans origi- this end, we think that our enforcement program nated and purchased). helps provide confidence that state member • Require disclosure of data on the race, sex, banks are providing mortgage credit on a nondisand income level of borrowers and applicants. criminatory basis. • Statement by Alan Greenspan, Chairman, Board I appreciate this opportunity to testify in connecof Governors of the Federal Reserve System, tion with two pieces of legislation currently bebefore the Subcommittee on Domestic Monetary fore the Congress—the Zero-Inflation Resolution Policy of the Committee on Banking, Finance and H.R. 2795, the Federal Reserve Reform Act and Urban Affairs, U.S. House of Representa- of 1989. Each of these, in its own way, raises tives, October 25, 1989. issues that go to the heart of monetary policy- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

796 Federal Reserve Bulletin • December 1989 making in this country. The resolution would effective implementation of its special functions clarify congressional intent as to the broad ob- has been perceived to require it. This indepenjectives of policy, while H.R. 2795 would make dence enables the central bank to resist shortchanges in the structure and day-to-day practices term inflationary biases that might be inherent in of the Federal Reserve. some aspects of the political process. The Fed- The possible implications of the proposed leg- eral Reserve must take actions that, while someislation should be given careful consideration. As times unpopular in the short run, are in the our central bank, the Federal Reserve has been long-run best interests of the country. The stanentrusted with a number of responsibilities dard of living of the American people will be deemed essential to the effective functioning of higher over time if we pursue monetary policies our economy, including upholding the purchas- that are consistent with long-term price stability. ing power of the nation's currency, facilitating Deviating from the path of policies directed the smooth operation of payment systems, and toward long-term stability can create a tempostanding ready as the lender of last resort. These rary surge in an economy, but only at a longerresponsibilities and the structure of the Federal term cost in terms of unemployment and lowered Reserve have evolved from many years of delib- standards of living that far exceeds the shorteration about the proper role of a central bank in term benefits of revving up an economy. a democratic society. The question is how such a The structure of the Federal Reserve, as well society can best construct a central bank that as its relationship with other parts of governcombines public accountability with the author- ment, has evolved over time as the Congress and ity necessary to perform effectively. the Executive have sought to define the appro- The answer in the case of the United States has priate role and powers to grant a U.S. central been the complex structure of the Federal Re- bank. The considerable debate and study that serve System, which includes special qualities went into the establishment of the Federal Regermane to the institution's charge. The System serve did not prevent the government from makas a whole, including the twelve Reserve Banks, ing major changes in the central bank's structure was established as a balancing of diverse regional as, over time, the need for those changes was and economic interests. By including representa- clearly demonstrated. In particular, a midcourse tives of the Reserve Banks on the primary deci- correction was undertaken in the 1930s. Further, sionmaking body of our central bank, the Con- less striking refinements have occurred in the gress and the President signaled the importance intervening years. of those regional perspectives and helped ensure The Federal Reserve as it stands today is the that monetary policy would reflect the needs of result of many years of informed discussion and the entire nation. The Federal Reserve also has refinement; that need not imply that its structure been deliberately accorded a significant degree of is the best of all possible structures. But it is one insulation from day-to-day political pressures: that works. It is a system in which the various For example, the members of the Board of Gov- parts mesh, and the job gets done. Changing such ernors are appointed to fourteen-year terms and an organization, even perhaps improving one or our budgets are not subject to oversight by the more parts of it, may well have unforeseen and Administration or, more generally, to the autho- unfortunate consequences elsewhere in the rization and appropriation process. While we structure. In other words, change, while it may have been given broad guidelines for policy and have benefits, also has potential costs. The fact report regularly on our plans to carry them out, that the existing Federal Reserve institutional the near-term conduct of policy has been explic- structure has been unchanged for many years has itly distanced from the political arena. This insu- enabled the organization to develop a means of lation has not meant isolation, as we coordinate operation dedicated to the most efficient carrying and consult extensively with both the executive out of its responsibilities. When elements of the and legislative branches. structure have been less than optimum, relationships have evolved to compensate. If the struc- The System has been given an element of ture is altered, time will be required to recomindependence within government because the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 797 pensate. In short, for a period of time the efficacy would have been. Because price-setting behavior of the organizational structure will decline. in our economy has considerable momentum, the requisite slowing of demand would tend to translate, in the first instance, into a slowing of real H.J. RES. 409 output and only subsequently into restraint on prices. In the longer run, of course, whatever The Zero-Inflation Resolution represents a con- losses are incurred in the pursuit of price stability structive effort to provide congressional guid- would surely be more than made up in increased ance to the Federal Reserve. If passed, it would output thereafter. further clarify the intent of the Congress and the The extent of the near-term slowdown in real President as expressed in prior legislation. Leg- output would be influenced by a variety of facislative direction as to the appropriate goals for tors, including importantly the strength of inflamacroeconomic policy in general and monetary tion expectations. At the moment, after seven policy in particular have been provided before. years of inflation trending around a 4 percent Unfortunately, the instructions have defined annual rate, individuals, businesses, and finanmultiple objectives for policy, which have not cial markets appear to believe with some convicalways been entirely consistent—at least over tion that inflation is likely to remain in this the near term. vicinity. Of course, over the years, monetary The current resolution is laudable, in part policy will be bringing inflation down further, and because it directs monetary policy toward a inflation expectations will adjust downward as single goal, price stability, that monetary policy well, but the mere passage of legislation such as is uniquely suited to pursue. While such influ- this could be helpful in reducing those expectaences as oil price shocks, droughts, depreciation tions even more quickly. Nevertheless, with the of the dollar, or excise tax hikes may boost broad nation's last prolonged period of approximately price indexes at one time or another, sustained stable prices now a generation in the past, the inflation requires at least the acquiescence of the public is likely to remain skeptical until it obcentral bank. serves real, consistent progress. Moreover, the objective set in this legislative The elimination of inflation is not a simple proposal would promote the welfare of the Amer- mechanical operation. To minimize the costs ican people because price stability is a prerequi- associated with the process and to react to unexsite for, over time, maximizing economic growth pected events, the Federal Reserve must retain and standards of living. As the resolution spells significant flexibility. Monetary policy is only out, the elimination of inflation would allow the one of many influences on the economy. The economy to operate more efficiently and produc- stance of fiscal policy, the condition of financial tively by reducing the need to predict and to markets, and the course of foreign economic protect against inflation. The elimination of infla- developments are among the other major factors tion would allow interest rates to decline and affecting the economy. As events unfold, adewould reduce the uncertainty about price trends quate policy responsiveness requires ongoing that can discourage saving and investment. In judgment and flexibility in decisionmaking by the general, as I indicated earlier, over the long run, monetary authorities. price stability is a precondition to the economy Various other influences on the economy can turning in its best possible performance. It is for prove either helpful or harmful in the process of this reason that the Federal Reserve remains eliminating inflation. For example, maintaining determined to reach this goal. free and open markets for products and produc- The resolution explicitly recognizes this long- tive resources is a key factor in facilitating that run relationship, and in an effort to get there, it process. Competitive markets provide the most sets a five-year deadline on eliminating inflation. efficient and complete employment of resources, Such a deadline is attainable, but it would have allowing the economy to grow at its potential. costs. During this transition period, growth could The flexibility provided by free markets is espebe reduced for a while from what it otherwise cially beneficial during periods of transition, such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

798 Federal Reserve Bulletin • December 1989 as that implied by this resolution. Thus, reducing Reserve Board, and the clear intent of the Conunnecessary regulations and rigidities could, by gress in doing so was to assure that the Federal enhancing market flexibility, lessen the strain of Reserve would be insulated from day-to-day poadapting to a stable price environment. This litical pressure and influence by the Treasury conclusion applies with respect both to domestic Department and the Administration. Placing the impediments and to international barriers; pro- Secretary of the Treasury on the FOMC would tectionism can raise the costs of lowering infla- have torn away an essential part of that insulation. tion. Moreover, as the Administration official The federal deficit also would affect the path to responsible for funding the federal government, price stability. To the extent that the federal the Secretary might face conflicting goals—on government restrains its demand, the need for the one hand, the immediate need to finance the restraining private sector credit demand would deficit at the lowest possible interest rates, and, be reduced, and funds would become more avail- on the other, the obligation to support a moneable for that sector. In other words, the degree of tary policy consistent with a stable economic monetary policy restraint implicitly mandated by environment over time. the resolution's five-year deadline would be less- The substitute provision replaces that more ened by better balance in the federal govern- radical change with the requirement to hold ment's accounts. several meetings each year. I am fully in favor of The Federal Reserve Board fully supports the productive exchanges of information and opinthrust of the current resolution because price ions between members of the FOMC and memstability is in the best interests of the nation and bers of the Administration. In fact, there already because it is achievable. But the reminder that exist a large number of forums in which those significant costs could accompany the transition views are aired, providing ample opportunity for to stable prices is also a reminder, both to the the Administration to make us aware of its per- Federal Reserve and to the rest of the govern- spective. We maintain a close working relationment, that efforts would have to be made to ship with the Secretary and the Treasury generminimize those costs. By minimizing the transi- ally, as well as with other departments and tion costs, we ensure the continued willingness agencies, including the Office of Management to pay those costs so that we may realize the and Budget. Board and Treasury staffs are in long-term, and very substantial, benefits of price daily communication with each other, and the stability. Secretary and I meet at least once a week. I also meet often with the Chairman of the Council of Economic Advisers, and I speak frequently by H.R. 2795: SECRETARY OF THE TREASURY telephone with both the Chairman and the Secretary. In the remainder of my testimony, I will take up As a consequence of these contacts, both the each of the provisions of the second piece of Administration and the Federal Reserve are legislation under consideration, H.R. 2795, in the fully informed about each other's views on the order in which it presents them. The first provi- economy and their plans for policy. These sion would make the Secretary of the Treasury a interactions contribute to the coordination that member of the FOMC. I understand, however, is so necessary in carrying out the nation's that this provision is being changed instead to economic policy. Moreover, to ensure the conrequire periodic meetings between the FOMC tinued coordination of macroeconomic policy, and representatives of the Administration. the Full Employment and Balanced Growth Act I was pleased to hear that the original provi- of 1978 already requires us, in our semiannual sion would disappear, because expanding the reports to the Congress, to relate our objectives to the economic goals set forth by the Admin- Secretary's responsibilities in that manner could istration. have significant, adverse effects on monetary policy. As you know, legislation in 1935 explic- Notwithstanding the existing channels, I itly removed the Secretary from the Federal would support expanding these contacts if the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 799 individuals involved feel that it would be useful. Proposals to change to coterminus, or approx- Specifically, more frequent meetings of the so- imately coterminus, terms have been discussed called Quadriad—the Secretary of the Treasury, and debated for more than twenty-five years. The the Chairman of the Council of Economic Advis- main reason advanced for making the change has ers, the Director of Management and Budget, been to promote better coordination of macroand the Chairman of the Federal Reserve Board, economic policy between the Administration and with or without the President—might be useful. the Federal Reserve. The prompt appointment of What I do not favor is the creation of unneces- a compatible Chairman would help ensure that sary and duplicative arrangements, which would monetary policy complements the Administraset up highly formalized channels of communica- tion's policy stance, and it would reduce the tion, such as those apparently called for in the potential for prolonged policy conflicts. In addisubstitute provision. tion, there has been some concern that current Under this proposal, the required meetings, law could result in the Chairman's appointment involving the FOMC and the Quadriad, would regularly occurring during the very politicized take place immediately before certain, key atmosphere of a presidential election. On the FOMC meetings. Although intended only to im- other side of the debate, opponents have argued prove the coordination of economic policymak- that the change would move too much in the ing, the proposal, by subjecting the FOMC to a direction of linking the Federal Reserve to the more intensely political perspective, could risk White House and it would run counter to the bending monetary policy away from long-term important principle of maintaining the Federal strategic goals. Reserve's policy at some arm's length from the The ability of the Federal Reserve to conduct Executive. monetary policy as it does today—with relative At various times over the years, the Federal freedom from day-to-day pressures from the Ad- Reserve has both supported and opposed proposministration, as provided by the Congress it- als of this type. Having looked at the arguments self—has served the nation well over the years on both sides, I do not find those in favor of the and should be retained. change to be particularly persuasive. As I indicated earlier, ample opportunities for coordination of policy already exist. In addition, I am concerned that linking the Chairman's term to H.R. 2795: COTERMINUS TERM the President's would imply less independence from the White House than what has prevailed The satisfactory performance of the status quo up to now. Moreover, some practical problems also enters into the debate surrounding other could arise in response to the need to fill an provisions of the bill. One section would alter the unexpired term. For example, should the Chairschedule on which the Chairman of the Board of manship open up with only a relatively short time Governors is appointed. While generally main- left to run, it might be very difficult to induce the taining the current, four-year length of that term, best qualified person to accept the position on a it would make it begin one year after the begin- short-term basis, as an intervening presidential ning of a presidential term, thereby always allow- election would prevent any assurance of reaping a new President to appoint a new Chairman pointment. about a year after inauguration. Should the To my mind the present arrangement has Chairmanship become vacant prematurely, an worked reasonably well. I do not perceive strong appointment could be made only for the remain- advantages in changing it. der of the unexpired term. By contrast, the present system has an element of chance: All Chairmen are appointed to four-year terms, and H.R. 2795: IMMEDIATE DISCLOSURE because some did not serve out their full terms, the relation of the Chairman's term to that of the Another provision of the bill would affect the President has changed over the years. daily implementation of policy by requiring the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

800 Federal Reserve Bulletin • December 1989 immediate disclosure of all monetary policy ac- enhanced by making our open market objectives tions. The argument for this proposal rests on the public immediately. However, prices can, and importance of openness and accountability in our do, overreact to particular announcements, as government, and on the perceived value of the stock market movements of the last two promptly giving markets all available informa- weeks seem to confirm. The loss of flexibility tion. implied by the announcement requirement would I agree that these are vital characteristics, and be regrettable, especially in view of the inevitable I believe that the Federal Reserve's record on uncertainties surrounding the outlook for finanthis score has been good. We make our decisions cial markets and the economy. public immediately, except when doing so could The need for flexibility is especially pressing in undercut the efficacy of policy or compromise times of acute financial unrest. At those times, it the integrity of policymaking. When we change is imperative that the Federal Reserve remain the discount rate or reserve requirements, those able to respond promptly and in whatever mandecisions are announced at once. When we es- ner is most appropriate to the moment. The tablish new ranges for money and credit growth, fluidity of financial crises requires the same kind those ranges are set forth promptly in our reports of fluidity in our response. Some types of anto the Congress. And when the Congress re- nouncements could well be helpful in such cirquests our views, we come before this committee cumstances—as, for example, the very general and others to testify. Moreover, we publish our statement made at the time of the October 1987 balance sheet every week with a one-day lag. stock market crash appeared to be. However, it What we do not disclose immediately are the would be ill advised and perhaps virtually imposimplementing decisions with respect to our open sible to announce short-run targets for reserves market operations. However, even the operating or interest rates when markets were in flux. Our targets ultimately are released to the public. We open market operations might depend on market publish a lengthy record of the policy delibera- conditions at the moment and might not be tions and decisions from each Federal Open accurately represented by an announcement of a Market Committee meeting shortly after the next particular goal for reserves or interest rates. regular meeting has taken place. In this respect, Moreover, the specific instrument settings might the Federal Reserve compares very favorably themselves be changing as developments unwith the central banks of other major industrial folded. Markets are often prone to overreact at nations. times when the financial system appears fragile, The immediate disclosure of any changes in and under these conditions, the requirement to our operating targets would make this informa- publicize each change could risk further unsettion available more quickly to all who were tling the markets. interested, but it also would have costs. Simply In the normal course of events, a publicput, this provision would take a valuable policy announcement requirement also could impede instrument away from us. It would reduce our timely and appropriate adjustments to policy. In flexibility to implement decisions quietly at times recent years, the Federal Reserve has been most to achieve a desired effect while minimizing successful when it has anticipated pressures on possible financial market disruptions. Currently, the economy and has moved promptly to counter we can choose to make changes either quite them. The immediate announcement of changes publicly or more subtly, as conditions warrant. to our instrument settings could adversely affect With an obligation to announce all changes as the policymaking process that has made this they occurred, this distinction would evaporate; possible and could impart a degree of sluggishall moves would be accompanied by announce- ness to policy responses. The Federal Reserve ment effects akin to those currently associated might be forced to focus more on the announcewith discount rate changes. If markets always ment effect associated with its action, than on the accurately assessed the implications of such an- ultimate economic impact. nouncements, incorporating them into the struc- Currently, the basic policy stance of the Fedture of prices, then market efficiency might be eral Reserve is reviewed by the Congress and the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 801 nation when we present our semiannual report on public discussion of the conduct of monetary monetary policy. The longer-run ranges for policy in this country is not likely to outweigh the money and credit, along with other consider- possible negatives. ations set forth in those reports, constitute the Those negatives would include a potential framework within which shorter-run, implement- compromising of Federal Reserve effectiveness, ing actions are taken. Should the basic policy in part because the FOMC might feel heightened objectives change, that would be announced pressure from the Congress, through this chanpromptly. The current debate concerns only the nel, to exercise other than its best professional immediate disclosure of operational decisions judgment on policy matters. Even aside from the connected with carrying out those basic objec- possibility that this provision might influence the tives. Our conclusion is that mandating such stance of monetary policy, GAO scrutiny of announcements would yield only marginal re- policy deliberations, discussions, and actions wards, but could significantly reduce the effec- could impede the process of formulating policy. tiveness of policy. A free discussion of alternative policies and possible outcomes is essential to minimize the chance of policy errors. The prospect of GAO H.R. 2795: GAO AUDIT review of formative discussions, background documents, and preliminary conclusions could A similar conclusion holds with respect to the have a chilling effect on the free interchange and bill's next provision, which would extend the consensus building that leads to good policy. scope of the General Accounting Office's audits Responsible review of policy results is welof the Federal Reserve by allowing the GAO to come—a function already performed by the Conreview our monetary policy activities. The mon- gress itself—but second-guessing of the policy etary policy area was one of the very few areas of process could prove detrimental to that process, Federal Reserve activity explicitly exempted and ultimately to the effectiveness of policy. from review by the Federal Banking Agency Audit Act of 1978, which authorized GAO audits of the remaining functions. H.R. 2795: THE BUDGET PROCESS We fully appreciate the interest of the Congress and the public in the conduct of monetary At this point, I would like to turn to the final policy. Indeed, surveillance and disclosure of section of the bill, the section related to the governmental activities are essential in a demo- budgetary treatment of the Federal Reserve. This cratic society. It is only when certain aspects of issue of budgetary treatment is one that has been these requirements undercut the capability of an considered many times. After each review, the agency to carry out its mandate from the Con- Congress has concluded that the Federal Regress that they may not be in the public interest. serve's functional independence is inseparable There is a tradeoff of values—the valid desire of from its budgetary independence. Subjecting the the public for surveillance and disclosure relative Federal Reserve's budget to review by the Adto the value to the public of effective policy. ministration and to the appropriations process The benefits proposed by H.R. 2795 would in could allow inappropriate political pressures to my judgment be small because the enhanced be brought to bear on the monetary authorities GAO audit would tend to duplicate functions that and on the making of monetary policy. The are already performed. Specifically, the mone- current proposal exhibits some sensitivity to this tary policy function of the Federal Reserve is, in issue by providing that the Federal Reserve effect, already audited by the Congress itself budget would be included in the budget by the when we present testimony and semiannual mon- President without change. In addition, as we etary policy reports. Moreover, a vast and con- understand it, the bill does not intend to subject tinuously updated literature of expert evaluations the Federal Reserve to the appropriations proof U.S. monetary policy exists. The contribution cess, although it is not explicit on this point. that a GAO audit would make to the active, Nevertheless, the bill represents a potential first Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

802 Federal Reserve Bulletin • December 1989 step toward placing both the Federal Reserve serve would have to incur several million dollars budget and Federal Reserve policy more closely a year in additional expenses. under short-run political control. I certainly share the view that the Federal The benefits of making this change would be Reserve must be fully accountable to the Amerminor compared with the costs because substan- ican people for its spending, as well as for its tial and detailed information on the Federal Re- policy actions. We regard it as our duty to give a serve's spending and operations is already avail- complete, public accounting of our operations. able. Budgets for both the Board of Governors But this proposal would yield very little in the and the Reserve Banks are discussed and ap- way of benefits to the American people while proved in public meetings of the Board. This entailing some real costs. committee holds annual oversight hearings at Integrating Federal Reserve expenditures into which we present testimony on these budgets, the federal budget, contrary to our entire history with a full airing of issues related to our revenues and earlier congressional decisions, would, I and expenditures. The budget of the Board is fear, be interpreted as a clear step toward heightpublished annually as an information item in the ened political influence and control over the appendix to the federal budget, and the estimated central bank. net income of the System is currently included in the budget itself. In addition, since 1986 we have published a separate Budget Review supplement to our annual report; this supplement was devel- CONCLUSION oped explicitly to present the details of our financial stewardship in a comprehensive, yet In reviewing the legislation before us today, it is, accessible, manner. Finally, very detailed data broadly speaking, the appropriate degree of guidon the Federal Reserve's spending, drawn di- ance and control over the Federal Reserve that is rectly from our accounting and management in- at issue. The Zero-Inflation Resolution is an exformation system, are made available to the ample of appropriate guidance for the central public on a quarterly basis. bank if the Congress chooses to go in this direc- Bringing the Federal Reserve into the budget tion. In further clarifying the government's longdocument would not enhance the available infor- run goals for monetary policy, the resolution mation about our revenues and expenditures, nor would provide a broad framework and direction would it change the way our activities affect the to the Federal Reserve. While we at the Federal fiscal balance. The Federal Reserve's large net Reserve sympathize with the desire for openness earnings are paid over to the Treasury each year and accountability embodied in H.R. 2795, our and are properly recorded as a receipt in the U.S. considered view is that the provisions of this bill budget. Thus, the budget already reflects the move only marginally, if at all, in this direction. influence of Federal Reserve operations on the Moreover, the proposed changes could well overall fiscal position of the government. prove detrimental to the implementation of effec- Requiring the Federal Reserve to make budget tive monetary policy. In the Board's judgment— submissions would translate into requiring the as citizens, not just as members of the Federal institution to maintain a dual accounting system. Reserve System—it is a poor tradeoff. The Federal Reserve currently keeps its books In this regard, several points warrant repeataccording to generally accepted accounting prin- ing: First, that the independence of the Federal ciples, and would have to continue to do so for a Reserve has, in practice, served the country variety of reasons, including the requirement of well; second, that the Congress, in revisiting this the Monetary Control Act that we price our issue on numerous occasions, has repeatedly services competitively. Thus, a shift to federal reaffirmed that independence; and third, that budget accounting would require not merely a while each proposal alone might represent only a one-time change, but ongoing duplicate account- small step, taken together they would erode this ing. As a result, to provide meaningful data for independence and, with it, the Federal Reserve's the federal budget document, the Federal Re- ability to carry out its responsibilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 803 The Federal Reserve is part of government, judged to outweigh the pragmatic considerations operating with the other arms of government to of tampering with a structure that has proved further the economic objectives of the nation. resilient and useful, as well as the risks of impair- The Federal Reserve is always subject to change ing our long-run prospects for economic growth. through the legislative process. But in making In the past, the Congress has steadfastly supchanges, I would urge you to be sure there are ported the independence of the Federal Reserve. sufficiently compelling considerations of policy I can only encourage the Congress now to rein favor of the change. Those factors must be affirm this commitment. • Statement by Manuel H. Johnson, Vice Chair- OVERVIEW man, Board of Governors of the Federal Reserve System, before the Committee on Banking, An important theme when describing the recent Housing, and Urban Affairs, U.S. Senate, Octo- performance of the banking industry is that many ber 25, 1989. institutions have made progress toward increasing their earnings and strengthening their reserves and capital base. The pace of improve- I welcome the opportunity to be here today to ment may be slower than we would like, bank present the views of the Federal Reserve about failure rates continue to be unacceptably high, the condition of the nation's banking system. and clear pockets of real and potential problems During the last several years, the U.S. financial remain. Moreover, some large institutions, in system has had to operate in an environment particular, are reporting third-quarter losses due characterized by rapid change that has led to to asset quality problems that will give many of significant pressures on many institutions. The them losses for the year. Nevertheless, the inlandmark legislation that the Congress recently dustry seems to be better prepared to deal with enacted to deal with the savings and loan indus- its problems now than it has been in several try is a visible illustration of the problems that years. certain segments of our depository institutions The progress—and the problems—that the inindustry have encountered in recent times. Al- dustry has seen reflect in large part the length and though the problems of the U.S. banking sys- nature of the current business cycle. Although tem have been far less than those of thrift we are currently benefiting from the longest institutions, the banking industry is only now peacetime expansion in U.S. history, it has not emerging from a difficult period in which histor- been felt equally by all sectors of the economy. ically large numbers of banks have failed. It is The energy sector has been hurt severely by important as we go forward that we remain lower oil prices; the agricultural sector has been vigilant in our supervisory efforts to ensure that buffeted at times by low commodity prices and at the banking system continues to rebuild its other times by poor crop yields; conditions strength and maintain the confidence of the abroad have adversely affected the quality of general public. many foreign loans and the strength of export In my remarks today I will provide the Board's markets; and the volatility of interest and exviews of the general strength and outlook for the change rates has increased the risks in many U.S. banking industry and of the principal issues business sectors. These events have also contribthat we face. I will also discuss some of the uted to excess supplies of real estate properties actions the Board has taken to foster a sounder, in some regions of the country that, at times, more resilient, and competitive banking system. have produced sharp declines in real estate val- In the process, I will generally address the areas ues. Those declines have not only created severe cited in the committee's invitation letter. I would problems for many thrift institutions, but they like to begin with an overview of current banking have also affected some banks. conditions. Technological change, financial innovations, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

804 Federal Reserve Bulletin • December 1989 and increased competition have also altered the commercial banks was 0.80 percent, compared environment for at least the major banking insti- with 0.11 percent in 1987. This recent perfortutions. Foreign institutions, for example, have mance represented the highest reported profitcontinued to increase their market share of U.S. ability measure for the industry in decades. Imbusiness loans. Some of those foreign institutions portantly, the strongest performance was have had lower capital standards and broader reported by many of the largest banks, which powers, providing them with a competitive edge. were responsible for the industry's losses in 1987 Many of the larger U.S. banking organizations and which have the greatest need to strengthen have addressed this challenge, in part, by ex- their capital positions. The twenty-five largest panding their so-called off-balance-sheet activi- bank holding companies, for example, reported a ties, such as interest rate swaps and financial return on assets for 1988 of 0.90 percent, mostly guarantees, and by devoting more energy to reflecting the earnings of their subsidiary banks. developing new financing techniques. They have Their 1988 results, however, reflected loan-loss also requested—and received—somewhat provisions that, as a percent of assets, were broader powers so that they can continue to significantly lower than they had been in recent compete with both nonbank firms and foreign years. banks. For many institutions, last year's relatively The growing movement toward interstate strong earnings performance has continued into banking has further altered the competitive envi- 1989, as well. During the first half of the year, ronment for U.S. banks. The number of mergers both the largest banks and the banking industry and acquisitions of major financial institutions reported annualized average returns on assets of has increased sharply in recent years due to the about 0.90 percent. Most recently, however, failure of some large institutions and to the some of the largest institutions have substantially adoption of regional interstate compacts by many increased their provisions for loan losses, which states. In general, these structural changes will temper the earnings gain that much of the should help U.S. banks compete in world mar- industry has made. kets by increasing their financial strength and Much of the earnings improvement last year operating efficiencies. It may also, however, pre- reflected sharply lower loan-loss provisions by sent them with additional challenges to imple- the largest institutions, but other factors were ment the organizational and operating changes also important, as well. Many of the larger comthey need to manage their risks effectively. As panies, in particular, have increased their emphabanking regulators, we need to monitor these sis on generating noninterest revenues and on developments carefully in the months and years controlling operating expenses. Noninterest inahead as the industry continues to revise its come of the twenty-five largest bank holding structure and as we resolve the insolvent savings companies, from such sources as investment and loan associations. banking, asset sales, service charges, and loan commitments, as well as from foreign exchange and securities trading and other activities, has RECENT FINANCIAL PERFORMANCE more than doubled in the past five years relative to total assets. That trend may continue as the Let me now turn to more specific indicators of largest banking organizations search for ways to recent banking industry performance. In general, improve investor returns while minimizing their these measures have shown an improvement in credit risks and their need for additional sharerecent periods, especially for the regional insti- holder funds. tutions that are less exposed to heavily indebted The relatively low level of loss provisioning foreign countries. continued through the first half of 1989, as well. However, by the third quarter, many of the Profitability. Earnings of the U.S. banking largest companies had announced substantial adindustry rebounded strongly during 1988. Aver- ditions to their reserves, mostly in anticipation of age return on assets during 1988 for all insured further losses among their foreign loans and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 805 domestic real estate credits. The latest provi- omy, could lead to problems for other banking sions give several of the largest U.S. banking institutions, as well. organizations reserves for developing country Relative to total assets, the volume of nonperloans that exceed 50 percent of their exposure. forming assets for the industry increased during The appropriate amount for the reserve de- the first half of 1989, after having declined during pends partly on the strategy of the lender toward 1988. The volume of weak assets remains stubthis business. The indebted countries clearly bornly high for the larger banking organizations, need some access to new financing. Those insti- in large part due to their exposure to foreign tutions that take a long-term view and are pre- borrowers. Nonperforming assets of the twentypared to work with the borrowers may well five largest bank holding companies increased realize higher returns on their loans than will slightly to 3.1 percent of their total assets at those who are willing to take near-term losses midyear, which is well above the average 2.2 and withdraw from that market. There is no percent reported by all holding companies. I will magic number regarding the appropriate volume say more about the foreign debt situation later. of reserves for these loans. Nevertheless, our Exposure to highly leveraged borrowers, inpolicy has been, and remains, to require addi- cluding involvement in leveraged buyouts and tional reserves, when we believe that conditions other highly leveraged financings, also has imwarrant. portant implications for the risk profiles of bank- The third-quarter losses that some large com- ing institutions. Such transactions can be imporpanies have reported, while troubling, should tant vehicles for the necessary restructuring of better position the companies for the future. some companies and, in this way, may contribute Moreover, some companies have coupled their to the operating efficiency and financial perforannouncements of special provisions with disclo- mance of U.S. businesses. Nevertheless, the sure of plans to issue significant amounts of higher debt levels and relatively lower equity additional common stock. While efforts to re- cushions that characterize such transactions can solve asset quality problems must continue, ac- also weaken the borrower's ability to withstand tions that increase loan-loss reserves and financial adversity and, other things being equal, strengthen capital are welcome. can raise the level of risk in bank loan portfolios. At midyear 1989, the fifty largest bank holding Asset Quality. Asset quality remains the prin- companies had total loans and commitments to cipal concern facing the industry. Some earlier highly leveraged borrowers of more than $100 problems seem to have receded, such as those in billion, an increase of 20 percent from the level the agricultural sector that ravaged many mid- they reported at the end of 1988. Although the western banks, but others remain. Loans to some vast majority of these claims are in the form of highly indebted countries continue to undermine senior debt, the amounts outstanding are subthe near-term earnings and competitive positions stantial for many companies, both in absolute of some of the largest organizations, and the real terms and relative to their equity capital. This is estate markets have softened in several formerly clearly an area that warrants particularly close buoyant sections of the country. attention by bank managers and supervisors Real estate markets in New England, parts of alike. the Southeast, and broad areas of the Southwest show the most visible signs of weakness. Prob- Capital Adequacy. An important indicator of lems in the Northeast have recently led several the strength of the banking system is the measure institutions there to make substantial provisions of capital adequacy. Accordingly, developing for real estate losses. Most of those expected both an accurate measure and an appropriate losses, in turn, involve development and con- standard for evaluating the capital adequacy of struction projects, including condominium banking organizations has always been of prime projects, in particular. Recent trends in commer- importance. The international risk-based capital cial vacancy rates, combined with other factors standard adopted during the past year represents that could adversely affect that region's econ- a milestone in international cooperation and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

806 Federal Reserve Bulletin • December 1989 should help to strengthen capital standards The risk-based capital standard imposes spethroughout the world. cific minimum ratios for "Tier 1" (largely equity) Although the new standard is not effective capital as a percent of assets. That emphasis on until the end of 1990 and will not be fully imple- equity should support and, we hope, help to mented until two years later, most banking orga- extend the improvement we have seen in equitynizations are focusing on those requirements to-asset ratios. At the end of 1988, for example, now. We estimate that about 94 percent of the bank holding companies with assets exceeding nation's commercial banks met or exceeded the $150 million reported equity equal to nearly 6.0 minimum risk-based capital standard at midyear, percent of their total assets—more than a pereven under the more rigorous 1992 definitions. centage point higher than at the beginning of the Even many of the large regional and money decade. Although the twenty-five largest compacenter bank holding companies meet the stan- nies reported a lower average equity ratio of 5.33 dard, or are well on their way toward meeting it. percent, their relative improvement was even The actions some companies have taken to greater during that period. raise additional capital in response to the future The problems of the thrift industry have demrisk-based capital requirements also improve onstrated the need for financial institutions to their capital ratios, as measured by current stan- maintain adequate levels of tangible capital to dards. Primary capital, for example, which in- absorb unexpected losses. The Federal Reserve cludes equity capital, loan-loss reserves, and a shall continue to enforce prudent standards for few other components, averaged 8.25 percent of state member banks and bank holding companies adjusted assets at midyear 1989 for all bank and ensure that these capital standards remain holding companies with assets exceeding $150 sound. The role of intangible assets, such as million. That figure compares with 8.08 percent goodwill, in the capital measure for banks is at the end of 1988 and with 7.90 percent the year minor now and will decline further during the before. This general improvement has been wide- next few years as the new standards are put in spread. place. We shall also continue our efforts to Much of the improvement in recent years has coordinate those standards internationally so come through slower asset growth, especially on that they are administered similarly throughout the part of the larger institutions. During 1988, the world and that U.S. banking organizations total assets of all insured commercial banks grew can compete worldwide on a more equitable only 4.4 percent, compared with rates of 7 to 8 basis. percent during the first half of this decade and The committee has asked whether the Federal with rates in the mid-to-low teens during the Reserve believes that the U.S. banking system 1970s. Average asset growth among the twenty- currently has sufficient capital to protect the five largest banks has virtually stopped, increas- public interest and avoid a serious drain of the ing by only 0.6 percent last year after having bank insurance fund. Many bankers will testify been virtually unchanged during 1987. that we seem constantly to urge higher levels of Some of that slowdown reflects efforts to meet capital. Increased risks resulting from greater stronger capital standards, reduce foreign expo- competition, expanding powers, and a rapidly sure, securitize assets, and focus on off-balance- changing environment for banking services sugsheet and other fee-generating activities. Growth gest that some institutions should have materially of outstanding loan commitments and foreign higher levels of shareholder funds. In those exchange and interest rate contracts, for exam- cases, we have and shall continue to urge instiple, has been much stronger than asset growth in tutions to raise the necessary funds. Over all, recent years. Transfers of certain securities ac- though, the committee should recognize the contivities from banks to bank holding company siderable progress the industry has made to imaffiliates also explain some of the slow growth prove its capital position. by these large banks. Measured on a consoli- Besides issuing more equity securities, the dated holding company basis, the twenty-five domestic banking industry has generated sublargest institutions grew 4.2 percent last year. stantial funds through increased retained earn- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 807 ings. Over the past several years, a trend toward attract and retain qualified field examiners and higher earnings and lower dividend payout rates supervisory personnel. of large banks was especially helpful in that regard. During the past five years, the retained earnings of all insured U.S. commercial banks rose $39 billion, or 79 percent. By comparison, INTERNATIONAL DEBT SITUATION their total assets grew only 31 percent. The new risk-based capital standard will iden- A significant area of concern for some of the tify the need for capital by relating the require- nation's largest banking organizations continues ments to the specific composition of risk each to be their exposure to developing countries. The organization accepts. The measure, however, is U.S. banking system is now much less vulneranot a panacea and cannot be put on automatic ble to debt-servicing difficulties by these counpilot and then ignored. An adequate capital stan- tries than it was in the early 1980s. That is not to dard is a critical element of a sound supervisory say that the problem is behind us. At midyear, system, but it is only one of many components. exposure to problem debtor countries still repre- Vigilant supervision, thorough examinations, sented more than 90 percent of the combined and prompt enforcement actions are other essen- primary capital of the nine most internationally tial elements that I will address next. active U.S. banks and almost 40 percent of the capital of thirteen others. Fortunately, though, this vulnerability contin- EXAMINATION EFFORTS ues to decline from much higher levels a few years ago. During 1988, alone, those twenty-two The Federal Reserve believes that frequent on- large banks reduced their net exposure to probsite examinations are a critical component of an lem debtor countries almost $9 billion. In the first effective supervisory framework. In this regard, six months of this year, they reduced it another the Federal Reserve's policy is to examine all $4.5 billion. This progress has been made by state member banks and bank holding companies reducing the exposure through a combination of with significant operations on an annual basis, asset sales, swaps, and chargeoffs, and, more either directly or in conjunction with state super- important, by strengthening the capital and revisory agencies. Problem institutions are exam- serve base of the lending institutions. Indeed, by ined more frequently and are subject to other creating strong levels of reserves, most regional more rigorous supervisory reviews. and superregional banking organizations have Conditions of the past several years, in both nearly removed these exposures as a major dethe banking and thrift industries, have imposed terminant of their financial strength. significant pressures on our field examination Several large banks have recently further inresources. This year, in particular, our involve- creased reserves against developing country ment in thrift institution examinations and clos- debt. On balance, the Board views this as a ings has forced us to postpone the regular peri- positive development toward strengthening the odic examinations of some institutions that banking system. However, both the banks and appear to be healthy and to limit the examination the regulatory agencies must continue to review scope of others. While we can make such adjust- these reserves on an ongoing basis to ensure that ments temporarily, we cannot do so for extended the level of bank reserves and capital is approperiods. Such actions would increase the possi- priate to current circumstances. Moreover, from bility that problems could develop and grow the banks' own perspective as well as from the without early detection. In light of these and perspective of the international economy, comother developments I have discussed in this mercial banks should continue to work with the statement, it is crucial that we continue to devote borrowers and the international institutions in a adequate resources to onsite examinations and continuing cooperative effort to improve the other critical supervisory functions. It is also economies of these countries and, thereby, their essential that we take any steps necessary to ability to service their debts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

808 Federal Reserve Bulletin • December 1989 PROBLEM AND FAILED INSTITUTIONS vided significant examination resources to help identify and resolve insolvent thrifts. Several of During 1988, the number of failed banks had the major new initiatives are summarized below. reached another postwar high of 200 institutions, compared with 184 in 1987. An additional 21 Capital Standards. Late last year the Board banks with assets of $13.5 billion were operating adopted a new risk-based capital standard for with Federal Deposit Insurance Corporation state member banks and bank holding companies (FDIC) assistance while a permanent solution that was based on negotiations conducted was being reached. Since the total failures in- through the Bank for International Settlements. cluded numerous subsidiaries of several of the As I have suggested, this international standard largest Texas banking organizations, the assets emphasizes the need for "core" shareholder of the failed banks soared to $40.3 billion in 1988 funds, recognizes risks in certain off-balancefrom $6.9 billion the year before. sheet activities, and varies the amount of capital Both the number and size of bank failures have required for various types of assets by the continued at high levels this year. Through Sep- amount of perceived credit risk contained in each tember 1989, 160 commercial banks had failed, asset or exposure. This standard should tailor with total assets of $25.7 billion. The failures each institution's capital requirements more were heavily concentrated in the Southwest. closely to its willingness to accept risk and Failures in the West and Midwest declined dur- should also lead to more equitable competition ing 1988 from their 1986-87 peaks and accounted among major banks worldwide. for only twenty failures in the first nine months of The Board fully supports strong capital stanthis year. With respect to the Federal Reserve's dards and has worked hard to improve the capispecific activities, nine state member banks have talization of the banking industry. Our influence failed through September, compared with twenty- comes not only through supervisory actions but one for all of 1988. also from administering the bank holding com- The number and assets of problem institutions pany application process. When deciding realso remain historically and unacceptably high quests of banking organizations to merge with or but also appear to have peaked. Both figures acquire other institutions, the Federal Reserve declined slightly in 1988 and have dropped fur- has required and will continue to require applither during 1989. At the end of the third quarter, cants to raise additional shareholder funds, when 1,166 commercial banks were considered prob- necessary. This process will involve prohibiting lem institutions by the FDIC, compared with a poorly capitalized institutions from expanding high of 1,575 banks at the end of 1987. Most of through mergers and acquisitions and, at times, them are located in the Southwest, while condi- may even require other companies to strengthen tions in the West and Midwest have improved. their financial positions further. In that way, the Softness in the automobile industry could aggra- structural changes occurring within the industry vate economic conditions in the Midwest but, can lead to a stronger banking system. barring new major problems, should not reverse the trends toward fewer problem banks in that Highly Leveraged Financings (HLFs). Early area. this year the Board revised its 1984 examination guidelines on HLFs, including leveraged buyouts, to strengthen its cautionary language and to SUPERVISORY AND REGULATORY stress further the need for lending institutions to INITIATIVES thoroughly evaluate the financial strength of the borrowers. The new statement emphasized the The Federal Reserve, often in cooperation with importance of the following: (1) evaluating cash the other federal bank regulatory agencies, has flows under varying economic conditions, (2) adopted a number of significant measures in setting reasonable "in-house" limits on the conrecent years to address real and potential risks in solidated exposure of HLF borrowers, and (3) banks. As indicated earlier, we have also pro- establishing specific policies, procedures, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 809 controls for HLF lending. The statement also these incremental risks. That approach should urged banks to price these credits prudently to improve the ability of domestic bank holding reflect adequately the trade-off between risk and companies to compete more effectively with forreturn and to avoid compromising sound banking eign and nonbank institutions, while protecting practices in a search for market share and short- the public's interest in a safe and sound banking term gains. system. The Federal Reserve Banks have also employed these guidelines to give special attention Hostile Takeovers. Through past decisions, to loans to customers with exceptionally high the Board has indicated its intent to remain debt profiles. In this connection, the federal neutral on the issue of friendly or unfriendly banking agencies have recently developed a def- acquisitions of domestic banking organizations. inition of highly leveraged financings that they Its principal interest in all acquisitions continues can use for examination and supervisory pur- to be that the resulting organization be financially poses. Such a consistent definition should help sound and have a strong capital position. The identify trends and compare the exposures of Federal Reserve will not, however, allow an individual institutions. institution to weaken its own condition significantly, either in an attempt to consummate an New Securities Powers. Earlier this year, the acquisition or to prevent one. Board agreed to permit several large U.S. bank holding companies to expand their securities Interbank Payments System. An important activities by underwriting, on a limited basis, and ongoing objective of the Federal Reserve has corporate debt and equity within the United been the implementation of policies both to re- States. However, before the companies could duce Federal Reserve risk in providing payments conduct those new activities they were required services and to induce private participants to be to demonstrate that they had adequate capital, more prudent in controlling their daylight credit managerial expertise, and controls. The Board exposures, particularly on private large-dollar granted its permission immediately for them to payment systems. The largest of these, Clearing underwrite commercial debt instruments, and House Interbank Payments System (CHIPS), has by midyear four companies had done that. agreed to adopt rules making settlement of their However, the Board has withheld for at least system more certain through both collateral and one year its consent for them to underwrite loss-sharing devices. In addition, the Board has equities. By its conditional approval, however, adopted guidelines to reduce credit exposures on the Board indicated its willingness to allow other domestic and foreign clearance and pay- U.S. banking organizations to provide that ser- ments systems. vice, if proper systems are in place to control Last spring, the Board also proposed addithe risks. tional measures to encourage depository insti- This decision was made in response to chang- tutions to control their credit exposure by exing market conditions and competitive positions panding the scope of its payments risk and on the basis of existing authority granted in reduction program. Among other features, the the Bank Holding Company Act. The Board was proposals will impose explicit prices on Federal mindful of any increased risks such activities Reserve daylight credits and expand the use of might present to the organization's core banking collateral as a risk control technique for book business and took special steps to ensure that the entry clearance of U.S. government securities. new underwriting powers were separated from When fully implemented, these changes, tothe activities of any subsidiary bank(s) and that gether with private sector initiatives, should appropriate prudential safeguards were in place reduce the overall level of U.S. payments systo protect affiliated banks. It also took special tem risk, shift the mix of domestic risks toward steps to ensure that the banking organizations the private sector, and more accurately assign conducting these activities were well capitalized the risk to the private sector users of payment or that they raised additional equity to support services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

810 Federal Reserve Bulletin • December 1989 CONCLUSION number of failed institutions seems poised to decline; the capital ratios for most banking orga- These past few years have been difficult times for nizations have strengthened; and the most severe the banking industry, and significant problems problem institutions have now been addressed. remain. However, the performance of most insti- We must see further gains, though, before we can tutions during 1988 and for the first part of this say that the problems that have beleaguered the year suggests that progress has been made. The industry are behind us. • Statement by Manuel H. Johnson, Vice Chair- from $18 billion in 1987 to a $10 billion rate in the man, Board of Governors of the Federal Reserve first half of this year. Korea's surplus likewise System, before the Subcommittee on Interna- declined from $14 billion in 1988 to about a $4 tional Development, Finance, Trade and Mone- billion annual rate this year. And the U.K. curtary Policy of the Committee on Banking, Fi- rent account deficit moved from $5 billion in 1987 nance and Urban Affairs, U.S. House of to a deficit rate of $32 billion (3.8 percent of Representatives, October 31, 1989. GNP) in the first half of 1989. On the other hand, there was no reduction in I appreciate the opportunity to appear before this Germany's surplus, which actually rose from $46 subcommittee to comment on the Treasury De- billion in 1987 to a $59 billion annual rate (5 partment's report on U.S. international eco- percent of GNP) in the first half of this year, nomic and exchange rate policy. accounted for by an increase in Germany's sur- As indicated in the report, there has been pluses with its European Community (EC) partconsiderable change in the U.S. trade and cur- ners. rent account balances over the past couple of The dramatic change in U.S. external balances years. The current account deficit (excluding in the past two years was the result of the earlier capital gains or losses reported by direct inves- decline in the dollar against major foreign currentors), which peaked at $160 billion in 1987, had cies and against the Taiwan dollar and the Kodeclined to $106 billion at a seasonally adjusted rean won, increases in productivity and cost annual rate by the first half of this year. As a competitiveness by U.S. producers, the slowing percentage of GNP the decline has been from V/i of the rate of growth in U.S. domestic demand, percent to 2.1 percent over this same period. and a sharp increase in the rate of growth of The decline in our merchandise trade deficit domestic demand abroad. While the adjustment has been of about the same magnitude. The process has continued, there are signs suggesting volume of U.S. exports has been increasing at an it has begun to slow. This reflects, in part, the average annual rate of about 20 percent for necessary actions taken by foreign industrial nearly three years, while the rate of growth of the countries to reduce the growth of domestic devolume of our non-oil imports has slowed sub- mand to contain inflationary pressures and the stantially. continued relative attractiveness of assets de- The counterpart to the reduction in U.S. ex- nominated in U.S. dollars, which has bid up ternal deficits is the reduction in external sur- dollar exchange rates. pluses in a number of countries abroad, notably Since our current account deficits are signifi- Japan, Taiwan, and Korea; a massive movement cantly lower than they were in 1985-87, the into current account deficit in the United King- sustained financing of such deficits is more likely dom; and some further increase in deficits of now than was the case earlier. In thinking about some other European countries. Japan's surplus options to improve our external accounts further, declined from $87 billion (3.6 percent of GNP) in it must be remembered that a significant portion 1987 to $67 billion (2.3 percent of GNP) at a of our current account deficit reflects a worldseasonally adjusted annual rate in the first half of wide saving-investment imbalance. Accordingly, 1989. Taiwan's current account surplus declined any strategy designed to reduce the trade deficit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 811 should focus on policies that address this funda- tries are essential for a healthy and stable world mental structural issue. Removing the many dis- economy underlies the dialogue not just with tortions that adversely affect U.S. savings must other G-7 countries but also with the newly be high on the policy agenda. Recent suggestions industrializing countries. We are pleased to see by Treasury Secretary Brady to increase U.S. that considerable progress has been made in private savings are constructive. Reducing gov- Taiwan and Korea over the past year in terms of ernment deficit spending must also be a high allowing market forces to be reflected in the priority to free up more overall domestic savings operation of their exchange markets. and help lower relative real interest rates. Having said all this with regard to external In present circumstances, with the U.S. econ- adjustment, it is important to emphasize that the omy pressing on capacity constraints and mone- G-7 process of coordination of international ecotary policy focusing on containing inflationary nomic policy properly is not concerned primarily pressures, there is little room for substantial with exchange rates or external adjustment per further reduction in U.S. external deficits absent se. Rather, the aim is to achieve and to sustain a significant reduction of the saving-investment the maximum long-run growth for the world imbalance. In the meantime our efforts should economy consistent with low inflation. Current concentrate on maintaining and improving the account imbalances and exchange rates become environment for the free flow of capital and on matters of policy concern when they threaten to resisting protectionist nonsolutions. lead to financial market and other disturbances The recognition that balanced and mutually that could thwart the attainment of the fundamenconsistent economic policies among major coun- tal goal of sustainable growth with low inflation. • Vice Chairman Johnson presented identical testimony before the Subcommittee on International Finance and Monetary Policy of the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, November 16, 1989. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

812 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON AUGUST 22,1989 cessing industries, operating rates edged lower and were down appreciably since January. Retail sales rose considerably in July, and 1. Domestic Policy Directive revisions for earlier months suggested that consumer spending in the second quarter had not The information reviewed at this meeting sug- been as weak as previously estimated. Purchases gested that economic activity had continued to of nondurable goods advanced appreciably furexpand at a moderate pace in recent months. Job ther in July from the upward revised levels of growth had remained sizable; and final demands, recent months. With a new round of manufacturmost notably in the consumer sector, appeared to ers' incentives boosting sales of motor vehicles, be better maintained than had been indicated spending on durable goods also increased. Housearlier. At the same time, price inflation had ing starts rose slightly further in July following a slowed, in large part reflecting a retracing of large gain in June. The upturn in starts occurred price increases in the food and energy sectors in the wake of a bounceback in sales of both new that had boosted inflation rates earlier this year; and existing homes that was associated with the wage trends gave no signs of upward pressures. sizable decline in mortgage rates since April. Total nonfarm payroll employment rose appre- Recent indicators of business capital spending ciably further in July after a large advance in suggested some slowing of growth from the sub- June. Most of the July increase took place at stantial pace of earlier months in the year. In service establishments and in the construction June, shipments of nondefense capital goods industry where hiring had slowed during the first increased modestly as a brisk rise in outlays for half of the year. Employment was little changed aircraft and computers outweighed a sharp dein manufacturing after three months of declines; cline in spending for other categories of producmuch of the recent weakness had reflected lay- ers' durable equipment. Nonresidential construcoffs in the automobile and electrical equipment tion activity, led by stepped-up outlays for industries. The civilian unemployment rate, at industrial structures, advanced strongly for a 5.2 percent, remained close to its average level in second consecutive month. Inventory investearlier months of the year. ment in manufacturing and trade slowed in June Industrial production edged higher in July, to a pace well below the average rate of increase offsetting the decline of the two previous months observed earlier in the year. In the manufacand continuing the general pattern of slow turing sector, inventories of most types of fingrowth since the beginning of the year. Output of ished goods rose only moderately, while stocks capital equipment posted another strong gain in of materials declined further. Inventories of July. Production of motor vehicles and parts work-in-process in the aircraft industry contindeclined substantially, but output of other con- ued to grow, as the industry expanded producsumer goods continued to rise at a moderate tion to keep pace with mounting orders. At the pace. Production of materials rebounded after retail level, dealer stocks of automobiles rose a declining on balance over the first half of the bit further. Inventories at other retail establishyear. Total industrial capacity utilization held ments also increased, but imbalances with sales steady in July at a relatively high level. In appeared to be limited. manufacturing, despite a pickup in primary pro- In June, the nominal U.S. merchandise trade Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

813 deficit narrowed considerably, and for the sec- conditions that the Committee had directed. At ond quarter as a whole it was about unchanged the same time, to reflect strength in seasonal from a substantially reduced average value in the borrowing, a small technical upward revision first quarter. Exports rebounded in June as in- was made to the assumed level of adjustment creases in both capital and consumer goods out- plus seasonal borrowing. Late in July, as incomweighed a further decline in sales of agricultural ing data continued to portray a softer economy goods. Imports declined appreciably, largely be- and some lessening in inflationary pressures, the cause of a drop in the value of oil imports. In the Manager sought a further slight reduction in the major foreign industrial countries, economic degree of pressure on reserve positions. Adjustgrowth slowed significantly in the second quar- ment plus seasonal borrowing averaged nearly ter, following exceptionally rapid expansion in $600 million over the three reserve maintenance the first quarter. periods completed since the July 5-6 meeting, Partly reflecting further sharp declines in con- while the federal funds rate moved down a little sumer energy prices, producer prices of finished more than VI percentage point to around 9 pergoods fell in July for a second consecutive cent. month. Prices of finished consumer goods other Other market interest rates fluctuated over a than food and energy also declined, while prices wide range during the intermeeting interval. of capital goods held steady. Apart from food and Early in the period, rates tended to decline in energy, prices of materials had fallen somewhat response to weaker-than-anticipated economic on balance at the intermediate level in recent data and related market expectations of further months and had come down markedly at the monetary easing. Subsequently, rates rebounded crude stage. Consumer prices rose modestly in after the release of other economic indicators June after increasing sharply in earlier months of that were viewed as suggesting less weakness in the year. Lower prices were registered for gaso- the expansion and therefore a reduced likelihood line, fuel oil, and electricity; and consumer food of further easing. As a result, most rates ended prices rose more slowly. Prices of consumer the period with only modest net changes. Treaservices continued to advance in June at about sury bill rates were up about VA percentage point the rate observed over the past year and a half. on balance, while private short-term interest Average hourly earnings jumped in July after rates declined by roughly 30 basis points, and showing little change in the previous two major banks lowered their prime rate VI percentmonths, and on balance the data for recent age point to IOI/2 percent. In long-term debt months suggested no change in prevailing wage markets, yields were about unchanged to slightly trends. higher over the period. Most major stock price At its meeting on July 5-6, the Committee indexes reached record highs during the interadopted a directive that called for a slight reduc- meeting period before giving up part of their tion in the existing degree of pressure on reserve gains. positions. The Committee agreed that somewhat In foreign exchange markets, the tradegreater or somewhat lesser reserve restraint weighted value of the dollar in terms of the other would be acceptable in the intermeeting period G-10 currencies moved lower on balance through depending on indications of inflationary pres- July as interest rate differentials favorable to the sures, the strength of the business expansion, the dollar were narrowing. In August, the dollar behavior of the monetary aggregates, and devel- resumed its upward climb, spurred by continued opments in foreign exchange and domestic finan- political uncertainties abroad and a reassessment cial markets. This policy stance was expected to by market participants of the outlook for U.S. be consistent with growth of M2 and M3 over the interest rates in light of a spate of new economic period from June through September at annual data. Over the intermeeting period as a whole, rates of about 7 percent. the dollar rose but at the end of the period Immediately after the Committee meeting, the remained below the highs of last June. Manager for Domestic Operations conducted op- Growth of M2 and M3 accelerated in July and erations to achieve the slight easing in reserve appeared to have continued at a fairly strong Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

814 Federal Reserve Bulletin • December 1989 pace into August, evidently reflecting both the number of members noted that there were no rebuilding of balances drawn down to meet April major imbalances in the economy of the sort that tax liabilities and the substantial narrowing of often lead to a recession or to a surge in business opportunity costs associated with holding liquid activity. However, because of the uncertainties deposits. Through July, expansion of M2 had that were involved, the members differed to been around the lower end of the Committee's some extent in their views regarding the risks of annual range, and M3 remained somewhat above some deviation in the expansion from its present the lower bound of its range. course; some felt that those risks were about The staff projection prepared for this meeting evenly balanced or were tilted toward some suggested that the nonfarm economy was likely strengthening in the months ahead; several othto grow over the remainder of 1989 at about the ers saw some weakening as the most likely pace estimated for the first half of the year but prospect, or at least the one that had to be that some slowing of the expansion would occur guarded against because of the broad economic in 1990. The projection assumed that fiscal policy and social consequences of a downturn in ecowould move noticeably toward restraint over the nomic activity. No member anticipated a sharp projection period and that the contribution of turn in the economy in either direction. The foreign trade to growth would be very limited, members also differed to some degree in their owing in part to the earlier appreciation of the views on the outlook for inflation. Recent develdollar. Consumer demand was likely to be some- opments provided a basis for some optimism, but what stronger over the next several quarters, progress in reducing the underlying rate of inflabolstered by continued job growth and reflecting tion would depend importantly on the strength of the ongoing effects on consumer sentiment of the the business expansion and also on the behavior advance in stock prices this year and the declines of the dollar in foreign exchange markets. in interest rates since spring; in subsequent quar- In their discussion of specific developments ters, gradually mounting slack in labor markets bearing on the economic outlook, members would exert a restraining effect on consumer noted that consumer spending appeared to have spending. The lower levels of interest rates also strengthened somewhat in recent months, and were expected to produce some pickup in resi- most members expected such spending to hold dential construction activity. Growth in business up, or possibly to increase somewhat further, in capital spending, although moderating somewhat the months ahead. Others placed more weight on from the pace in the first half of the year, was the possibility that further gains, if any, might be projected to remain a source of strength. The relatively limited, in part because they expected recent weakening in food and energy prices automotive sales to be curtailed by higher prices pointed to a slower rise in consumer prices for and lower rebates when the new model year the next few quarters; however, with margins of began. In the housing sector, current conditions unutilized labor and other production resources were quite uneven across the country, with an still low, the underlying trend in inflation was not increasing number of areas showing weakness, expected to improve through 1990. and the outlook was clouded to an extent by the In the Committee's discussion of the economic possible effects of the disposition of properties in situation and outlook, members observed that conjunction with the resolution of insolvent savindicators of business activity looked somewhat ings and loan associations. However, recent destronger on balance than at the time of the July clines in mortgage rates would help to sustain the meeting and that, despite some earlier concerns overall demand for houses. Should housing marabout a progressive slowdown, the economy kets weaken, for whatever reason, the effect appeared to be continuing to grow at a moderate could be to depress not only construction activity pace. Several commented that further expansion but consumption spending as well. In the busiat a rate close to that experienced recently was a ness investment sector, current demand condireasonable expectation for the next several quar- tions appeared consistent with further growth in ters and would constitute a desirable economic overall investment spending, though probably at performance under prevailing circumstances. A a much reduced pace from that experienced in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 815 the first half of the year, especially given the remained as to whether significant progress in likely weakness in construction activity in many reducing inflation was possible with the current areas because of earlier overbuilding. With re- degree of pressure on production resources. In gard to the outlook for foreign trade, members this connection, a few expressed concern that emphasized that the strength of the dollar could some intensification of labor-cost pressures have negative implications for the nation's trade could not be ruled out under current economic prospects, and several expressed the view that conditions, and they noted in particular that further improvement in the trade balance, if any, there were indications of growing labor miliwas likely to be limited over the next several tancy in some industries and parts of the counquarters; on the positive side, reports suggested try. The strength of the dollar appeared to have that export markets remained relatively robust damped inflation, but that effect would be refor many products. versed if the dollar were to depreciate substan- In their comments on regional business con- tially in foreign exchange markets. ditions and business attitudes, members re- Turning to the conduct of monetary policy, ported a somewhat mixed picture, depending on all of the members supported a proposal to the industries that were involved. On balance, maintain unchanged conditions of reserve availmost parts of the country continued to experi- ability at least initially during the intermeeting ence a high level of business activity or at least period ahead. The easing steps implemented modest further improvement from relatively since early June had been appropriate in the depressed conditions. However, signs of some- context of earlier indications of some slowing in what slower growth had become more wide- the business expansion and a prospective lessspread and there were indications that business ening of inflation pressures. Partly as a conseactivity might have leveled out or turned down quence of the easing in policy, growth of the in some areas. Many business contacts ap- monetary aggregates had picked up, and both peared to be more bearish on the outlook than M2 and M3 were within the Committee's ranges they had been earlier. In general, these contacts for the year. For the period ahead, a steady expected the overall economy to settle into a policy course was desirable in light of the latest pattern of relatively slow growth. Few ex- evidence suggesting that price pressures were pressed concern about a possible decline in not intensifying; in addition, the expansion apbusiness activity. peared to have stabilized at a moderate and In their comments on the outlook for infla- provisionally acceptable pace, and considerable tion, members noted that the behavior of key uncertainty existed with regard to the timing price and wage measures in recent months was and direction of future deviations from the an encouraging development. From the per- expansion's current momentum. Some memspective of cost pressures, the prices of many bers commented on indications that financial materials had increased less rapidly or had markets anticipated some further easing of actually declined in recent months, and in- monetary policy in the months ahead, if not creases in labor compensation had been rela- immediately. If such easing failed to materialtively moderate despite still tight labor markets ize, the result could be some upward adjustin many parts of the country. While a number of ments in interest rates that could have an admembers observed that little or no progress had verse impact on interest-sensitive sectors of the been made thus far in reducing the underlying economy such as housing and that could place rate of inflation, most remained confident that undesirable upward pressure on the value of the the currently restrained growth in overall eco- dollar in foreign exchange markets. Despite nomic activity had established the necessary such concerns, the members agreed that for conditions for lowering inflation and achieving now an unchanged policy offered the best prosthe Committee's price stability objective over pect of fostering the financial market conditions time. Some anticipated that favorable inflation and the monetary growth that would accommoresults might well emerge sooner rather than date satisfactory economic performance. They later. For some others a troubling question recognized that economic developments would Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

816 Federal Reserve Bulletin • December 1989 have to be monitored closely to assess whether called for by prospective developments was any change in policy might be needed. more likely to be, in the majority view, in the In their consideration of an appropriate policy direction of some reduction in the degree of course, the members took account of a staff reserve restraint and such an expectation analysis indicating that the expansion of M2 and should be reflected in the directive. Most of the M3 was likely to slow substantially from the other members indicated that they could accept recent pace but to remain well within the Com- such a directive, but because they believed that mittee's ranges for the year. The analysis took the risks to the economy were more evenly note of the decline in market interest rates over balanced, they favored a directive that did not the past several months and assumed that they include a presumption as to the likely direction would stabilize at current levels and that the of any intermeeting adjustments. These memexpansion of nominal income would remain near bers also noted that the current directive was its recent pace. The outlook for money growth symmetric in form, and a bias in the new was subject to unusual uncertainty, however, directive toward ease might lead to a misreadstemming from the range of possible responses ing of System policy in the context of an by thrift depository institutions to the recently unacceptably high rate of inflation. enacted legislation and associated government At the conclusion of the Committee's discusstrategy for resolving insolvent institutions. The sion, all but one of the members indicated that expansion of M3 would be slowed as savings and they preferred or could accept a directive that loan associations reduced their funding needs by called for maintaining the current degree of selling assets or curbing the growth of assets; the pressure on reserve positions and that provided expansion of M2 might also be affected depend- for giving special weight to potential developing on the impact of these developments on ments that might require some slight easing deposit offering rates and related opportunity during the intermeeting period. With regard to costs of holding deposits. Any weakness in the factors that were important in considering money growth for these reasons, however, any intermeeting changes in reserve conditions, would not be an indication of a slowing economy, the Committee continued to give primary given the presumption that highly developed weight to the inflation outlook. In that regard, secondary markets would maintain the availabil- they emphasized that policy actions ought to be ity of mortgage credit. Members commented that consistent with furthering achievement of the despite its recent acceleration, monetary growth ultimate objective of price stability. Accordremained damped when measured over a longer ingly, slightly greater reserve restraint might be period, suggesting a basically restrained mone- acceptable during the intermeeting period, tary policy. While continued monetary expan- while some slight lessening of reserve pressure sion at the recent rapid pace clearly would be would be acceptable, depending on progress undesirable in a period when underlying inflation toward price stability, the strength of the busiwas unacceptably high, a renewed shortfall in ness expansion, the behavior of the monetary relation to the Committee's ranges also should be aggregates, and developments in foreign exaverted. change and domestic financial markets. The With regard to possible adjustments in the reserve conditions contemplated by the Comdegree of reserve pressure in the intermeeting mittee were expected to be consistent with period, a majority of the members believed that growth of M2 and M3 at annual rates of around operations should be adjusted more readily 9 percent and around 7 percent respectively toward further easing than toward any firming, over the three-month period from June to Sepand a few indicated that they viewed the incor- tember; in the case of M2, such growth was poration of such an understanding as a key somewhat faster than that anticipated at the element of an acceptable directive. While most time of the July meeting. The intermeeting members anticipated that a steady policy range for the federal funds rate, which provides course might well prove to be appropriate for one mechanism for initiating consultation of the the entire intermeeting period, any adjustment Committee when its boundaries are persistently Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 817 exceeded, was left unchanged at 7 to 11 per- In the implementation of policy for the immediate cent. future, the Committee seeks to maintain the existing At the conclusion of the meeting, the following degree of pressure on reserve positions. Taking account of progress toward price stability, the strength domestic policy directive was issued to the Fedof the business expansion, the behavior of the moneeral Reserve Bank of New York: tary aggregates, and developments in foreign exchange and domestic financial markets, slightly greater reserve restraint might or slightly lesser reserve restraint The information reviewed at this meeting suggests would be acceptable in the intermeeting period. The that economic activity has continued to expand at a contemplated reserve conditions are expected to be moderate pace in recent months. In July, total non- consistent with growth of M2 and M3 over the period farm payroll employment rose appreciably further from June through September at annual rates of about after a large advance in June, and the civilian unem- 9 and 7 percent, respectively. The Chairman may call ployment rate, at 5.2 percent, remained close to its for Committee consultation if it appears to the Manaverage level in earlier months of the year. Industrial ager for Domestic Operations that reserve conditions production edged higher in July, continuing the during the period before the next meeting are likely to slower growth observed since the beginning of the be associated with a federal funds rate persistently year. Retail sales have grown at a moderate pace in outside a range of 7 to 11 percent. recent months. Housing starts rose slightly further in July following a large gain in June. Recent indicators Votes for this action: Messrs. Greenspan, Corof business capital spending suggest slower growth rigan, Angell, Johnson, Keehn, Kelley, LaWare, after the substantial increase in the first half of the Melzer, Ms. Seger, and Mr. Syron. Vote against year. The nominal U.S. merchandise trade deficit this action: Mr. Guffey. narrowed considerably in June and for the second quarter as a whole was about unchanged from a substantially reduced average value in the first quar- Mr. Guffey supported an unchanged policy for ter. Partly reflecting reductions in energy prices, the period ahead, but he could not accept a increases in consumer prices moderated in June and directive that would allow possible intermeeting July. The latest wage data suggest no change in adjustments to be made more readily in an easing prevailing trends. than in a firming direction as new information Interest rates show mixed changes on balance since became available. In his view, the risks to the the Committee meeting on July 5-6. In foreign exchange markets, the trade-weighted value of the dollar expansion were fairly evenly balanced and did in terms of the other G-10 currencies has risen on not warrant an asymmetric directive biased balance over the intermeeting period. toward ease, especially in light of undesirably M2 and M3 grew markedly in July, lifting expansion high rates of inflation both current and prospecof M2 thus far this year to around the lower end of the tive. He also noted his concern that a directive Committee's annual range, and keeping M3 somewhat tilted toward ease could give a misleading indiabove the lower bound of the Committee's range. The Federal Open Market Committee seeks mone- cation of the weight that the Committee contintary and financial conditions that will foster price ued to place on achieving its long-run price stability, promote growth in output on a sustainable stability objective. basis, and contribute to an improved pattern of international transactions. In furtherance of these objectives, the Committee at its meeting in July reaffirmed 2. Authorization for the ranges it had established in February for growth of Foreign Currency Operations M2 and M3 of 3 to 7 percent and V/i to IVi percent, respectively, measured from the fourth quarter of 1988 to the fourth quarter of 1989. The monitoring range for As part of a proposed multilateral bridge figrowth of total domestic nonfinancial debt also was nancing facility for Mexico, the Committee apmaintained at 6V2 to IOV2 percent for the year. For proved a special reciprocal currency arrange- 1990, on a tentative basis, the Committee agreed in July to use the same ranges as in 1989 for growth in ment of $125 million with the Bank of Mexico. each of the monetary aggregates and debt, measured The new facility supplements the regular $700 from the fourth quarter of 1989 to the fourth quarter of million arrangement with the Bank of Mexico set 1990. The behavior of the monetary aggregates will out in paragraph 2 of the Authorization for Forcontinue to be evaluated in the light of movements in eign Currency Operations. The Committee deletheir velocities, developments in the economy and financial markets, and progress toward price level gated to Chairman Greenspan the authority to stability. approve a drawing on both of these arrangements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

818 Federal Reserve Bulletin • December 1989 by the Bank of Mexico, subject to his determi- enable the ESF to finance its continued particination that the appropriate terms and conditions pation in foreign currency operations. had been met. Under the terms of the multilateral facility, the Votes for this action: Messrs. Greenspan, Cor- Bank of Mexico may draw up to $2 billion in rigan, Angell, Guffey, Keehn, Kelley, LaWare, short-term financing in support of the program of Melzer, Ms. Seger, and Mr. Syron. Votes against this action: None. Abstention: Mr. Johnson. the government of Mexico for economic reform and economic growth. Participating with the Effective September 25, 1989, the Committee Federal Reserve in making funds available are approved an increase from $18 billion to $20 the U.S. Treasury through its Exchange Stabilibillion in the limit on holdings of foreign currenzation Fund, central banks from the other Group cies specified in paragraph ID of the Commitof Ten countries acting under the aegis of the tee's Authorization for Foreign Currency Oper- Bank for International Settlements, and the Bank ations. That limit applies to the overall open of Spain. The final maturity date of the facility is position in all foreign currencies held in the February 15, 1990. System Open Market Account; at the time of this action, System holdings had reached nearly $18 Votes for this action: Messrs. Greenspan, Corbillion. The higher limit was approved in light of rigan, Angell, Guffey, Johnson, Keehn, Kelley, the potential for further System acquisitions of LaWare, Melzer, Ms. Seger, and Mr. Syron. Votes against this action: None. foreign currencies in coordination with similar transactions by the U.S. Treasury. In approving On September 14, 1989, the multilateral bridge the increase, the Committee took account of the financing facility became effective, and on Sep- views expressed by the Finance Ministers and tember 22, 1989, Chairman Greenspan, acting Central Bank Governors of the Group of Seven under the delegation of authority from the Com- countries at their meeting on September 23, 1989. mittee, gave final clearance for drawings by the These officials considered the rise of the dollar in Bank of Mexico on the reciprocal currency ar- recent months to be inconsistent with longer-run rangements. economic fundamentals, and they agreed that a rise of the dollar above current levels or an excessive decline could adversely affect pros- 3. Agreement to pects for the world economy. In this context, " Warehouse" Foreign Currencies they agreed to cooperate closely in exchange markets. On September 19, 1989, the Committee agreed to a request by the Treasury for an increase from Votes for this action: Messrs. Greenspan, Cor- $5.0 billion to $10.0 billion in the amount of rigan, Guffey, Keehn, Kelley, LaWare, Melzer, eligible foreign currencies that the System would Ms. Seger, and Mr. Syron. Votes against this be prepared to "warehouse" for the Treasury action: Messrs. Angell and Johnson. and the Exchange Stabilization Fund (ESF). The warehousing facility involves spot purchases of In dissenting from this action, Messrs. Angell foreign currencies from the Treasury or the ESF and Johnson indicated that they could not conand simultaneous forward sales of the same sent to an increase in the authorized limits for currencies at the same exchange rate to the holding foreign currencies when such authoriza- Treasury or the ESF. Such transactions are tion facilitates exchange rate intervention to authorized under Paragraphs l.A and l.B of the drive the dollar lower as compared with interven- Committee's "Authorization for Foreign Cur- tion to avoid disorderly conditions by stabilizing rency Operations," and the maximum size of the or limiting increases in the dollar exchange rate. facility is determined periodically by the Com- Intervention of the former type confuses market mittee; the most recent change involved an in- participants concerning the policy commitment crease from $13A billion to $5.0 billion in Decem- toward price level stability and can contribute to ber 1978. The proposed increase was intended to disorderly markets. It can increase inflation fears Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 819 as can be seen in decreases in long-term bond tion can work to limit flexibility in the exercise of prices and in increases in the price of inflation- fundamental monetary policy options that desensitive commodities. Interest rate risk premi- pend on evidence of improvement in the future ums also may increase. Finally, such interven- inflation environment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

820 Announcements MEETING OF interim between the Board's quarterly publica- CONSUMER ADVISORY COUNCIL tions and will be immediately marginable. The next publication of the Board's list is scheduled The Federal Reserve Board announced that its for January 1990. Consumer Advisory Council held a meeting on Besides NMS-designated securities, the Board October 26. will continue to monitor the market activity of The Council's function is to advise the Board other OTC stocks to determine which stocks on the exercise of the Board's responsibilities meet the requirements for inclusion and continunder the Consumer Credit Protection Act and ued inclusion on the list. on other matters on which the Board seeks its advice. PROPOSED ACTIONS REVISED LIST OF MARGIN ABLE The Federal Reserve Board issued for public OTC STOCKS NOW AVAILABLE comment on October 3, 1989, proposed amendments to Regulation T (Credit by Brokers and The Federal Reserve Board published on Octo- Dealers) to accommodate the settlement and ber 27, 1989, a revised list of over-the-counter clearance of transactions in foreign securities (OTC) stocks that are subject to its margin reg- and to permit marginability at broker-dealers ulations, effective November 13, 1989. for foreign securities. Comments must be sub- This revised List of Marginable OTC Stocks mitted to the Board by November 30, 1989. supersedes the list that was effective on August The Federal Reserve Board issued for public 14,1989. The changes that have been made to the comment on October 4, 1989, proposed changes list, which now includes 2,893 OTC stocks, are to the Fedwire funds transfer and book-entry as follows: securities transfer operating schedule. Com- • Fifty-three stocks have been included for the ments must be submitted to the Board by Decemfirst time, forty-five under National Market Sys- ber 8, 1989. tem (NMS) designation. The Federal Reserve Board on October 5, • Fifty-five stocks previously on the list have 1989, proposed revisions to its Regulation C been removed for substantially failing to meet the (Home Mortgage Disclosure) designed to carry requirements for continued listing. out amendments to the Home Mortgage Disclo- • Forty-four stocks have been removed for sure Act that were approved by the Congress reasons such as listing on a national securities earlier this year. Comment is requested by Noexchange or involvement in an acquisition. vember 3, 1989. This list is published by the Board for the information of lenders and the general public. It includes all over-the-counter securities desig- PUBLICATION OF ANNUAL STATISTICAL nated by the Board pursuant to its established DIGEST, 1988 criteria as well as all stocks designated as NMS securities for which transaction reports are re- The Annual Statistical Digest, 1988 is now quired to be made pursuant to an effective trans- available. This one-year Digest is designed as a action reporting plan. Additional OTC securities compact source of economic, and especially may be designated as NMS securities in the financial, data. The Digest provides a single Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

821 source of historical continuations of the statis- CHART BOOK TO BE DISCONTINUED tics carried regularly in the Federal Reserve Publication of the Historical Chart Book will be Bulletin. discontinued after the 1989 edition. The final This issue of the Digest covers only 1988 edition is available from Publications Services, unless data were revised for earlier years. It Board of Governors of the Federal Reserve Sysserves to maintain the historical series first tem, Washington, D.C. 20551. The price is $1.25 published in Banking and Monetary Statistics, a copy in the United States, its possessions, 1941-1970, and the Digest for 1970-79 and Canada, and Mexico, and $1.50 elsewhere. The yearly issues thereafter. A Concordance of price for ten or more copies sent to one address Statistics will be included with all orders. The is $1.00 each. Concordance provides a guide to tables that cover the same material in the current and the previous two years' issues of the Digest, the CHANGE IN BOARD STAFF ten-year Digest for 1970-79, and the Bulletin. Copies of the Digest at $25.00 each are avail- The Board of Governors announced that Susan J. able from Publications Services, Board of Gov- Lepper, Assistant Director in the Division of ernors of the Federal Reserve System, Washing- Research and Statistics, resigned, effective Noton, D.C. 20551. vember 9, 1989. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

823 Legal Developments FINAL RULE—AMENDMENT TO REGULATIONS Crazy Eddie, Inc.: $.01 par common G, T, U AND X Cronus Industries, Inc.: Warrants (expire 02-01-90) Cytrx Corporation: $.001 par common Warrants (ex- The Board of Governors is amending 12 C.F.R. Parts pire 11-09-91) 207, 220, 221 and 224, its Securities Credit Transactions; List of Marginable OTC Stocks. The List of Datavision, Inc.: $.01 par common Marginable OTC Stocks is comprised of stocks traded Diversified Foods, Inc.: $.003 par common over-the-counter (OTC) that have been determined by Domain Technology, Incorporated: $.01 par common the Board of Governors of the Federal Reserve System to be subject to the margin requirements under Edgcomb Corporation: $1.50 par common certain Federal Reserve regulations. The List is pub- El Polio Asado, Inc.: No par common lished four times a year by the Board as a guide for Equity Bank, The: No par common lenders subject to the regulations and the general public. This document sets forth additions to or dele- Falconbridge Limited: No par common tions from the previously published List which was First Capitol Financial Corp.: $.01 par common effective August 14, 1989, and will serve to give notice Forum Re Group (Bermuda) Ltd: $.40 par capital to the public about the changed status of certain stocks. George Washington Corporation: $1.00 par common Effective November 13, 1989, accordingly, pursuant GMI Group, Inc.: $.01 par common to the authority of sections 7 and 23 of the Securities Great American Corporation: $2.50 par common Exchange Act of 1934, as amended (15 U.S.C. §§ 78g and 78w), and in accordance with 12 C.F.R. 207.2(k) Hi-Port Industries, Inc.: $.05 par common and 207.6(c) (Regulation G), 12 C.F.R. 220.2(s) and Higby's, J., Inc.: $.01 par common 220.17(c) (Regulation T), and 12 C.F.R. 221.2(j) and Home Savings Association of Penna.: $1.00 par com- 221.7(c) (Regulation U), there is set forth below a mon listing of deletions from and additions to the Board's List of Marginable OTC Stocks: Interferon Sciences, Inc.: $.01 par common International Mobile Machines Corporation: Warrants Deletions from the List of Marginable OTC (expire 08-05-89) Stocks Landmark American Corporation: $.01 par common Stocks Removed for Failing Continued Listing LDDS Communications, Inc.: Warrants (expire Requirements 10-13-89) Advanced Computer Techniques Corporation: $.10 Machine Technology, Inc.: No par common par common Maione Companies, Inc.: No par common American Capacity Group, Inc.: $1.00 par common Max & Erma's Restaurants, Inc.: Warrants (expire Andover Controls Corporation: $.01 par common 10-07-89) Meridian Bancorp, Inc.: $25.00 par cumulative con- Bayly Corporation: $1.00 par common vertible preferred Bishop, Incorporated: $.10 par common Metropolitan Financial Savings & Loan Association Brown Transport Company, Inc.: $.10 par common (Texas): $1.00 par common Mischer Corporation, The: $1.00 par common Challenger International, Ltd. $.01 par common Colorocs Corporation: Class C, Warrants (expire National Industrial Bancorp, Inc.: $.01 par common 08-18-89) Comstock Group, Inc.: $.25 par common Ocilla Industries, Inc.: $.01 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

824 Federal Reserve Bulletin • December 1989 Pioneer Financial Corp.: Series A, $1.00 par cumula- Imperial Holly Corporation: No par common tive convertible preferred Integrated Genetics Inc.: $.01 par common Prime Capital Corporation: $.05 par common International, Inc.: $.01 par common QMAX Technology Group, Inc.: $.01 par common Judy's Inc.: $.50 par common Rabbit Software Corporation: $.01 par common Keane, Inc.: $.10 par common Rodime PLC: American Depositary Shares for ordinary shares (Par value 5 pence) Local Federal Savings & Loan Association (Oklahoma): $.01 par common Sooner Federal Savings and Loan Association: $.01 LSI Logic Corporation: $.01 par common par common Stan West Mining Corporation: $.01 par common Micro Mask, Inc.: $1.00 par common Minnetonka Corp.: $1.00 par common Tele-Optics, Inc.: Warrants (expire 08-11-89) Monitor Technologies, Inc. CUC: $.01 par common Telecast, Inc.: $.01 par common Texcel International Inc.: Warrants (expire 12-15-89) Nichols-Homeshield, Inc.: $.01 par common Twistee Treat Corporation: $.001 par common Nodaway Valley Co.: $2.00 par common United Bankers, Inc.: No par common Ogilvy Group, Inc.: $1.00 par common Old Spaghetti Warehouse, Inc.: $.01 par common Ward White Group, PLC: American Depositary Receipts Pancretec, Inc.: No par common Wholesale Club, Inc., The: No par convertible pre- Peoples Bancorporation (North Carolina): No par ferred common Writer Corporation, The: $.10 par common Phonemate, Inc.: $.10 par common Preferred Risk Life Insurance Company: $1.00 par Stocks Removed for Listing on a National common Securities Exchange or Being Involved in an Acquisition Rockingham Bancorp (New Hampshire): $1.00 par common A.M.E., Inc.: No par common Actmedia, Inc.: $.01 par common Satellite Music Network, Inc.: $.10 par common Aim Telephones, Inc.: $.01 par common Scherer, R.P. Corporation: $.33-'/3 par common Southlife Holding Company: $.05 par common Beecham Group, PLC: American Depositary Receipts Sterner Lighting Systems Incorporated: $.10 par com- Bradley Real Estate Trust: $1.00 par shares of benefi- mon cial interest Super Rite Foods, Inc.: $.05 par common Cambridge Analytical Associates, Inc.: $.01 par com- Tyland Corporation: No par common mon CB&T Bancshares, Inc.: $1.00 par common Ultra Bancorporation: $5.00 par common Centel Cable Television Company: Class A, $.01 par common View-Master Ideal Group, Inc.: $.01 par common Chili's Inc.: $.10 par common Wheelabrator Group Inc., The: $.01 par common Fisher Scientific Group, Inc.: $.01 par common Wheelabrator Technologies, Inc.: $.01 par common Fountain Powerboat Industries, Inc.: $.01 par common Additions to the List of Marginable OTC Stocks Harken Energy Corporation: $1.00 par common Harlyn Products, Inc.: $.10 par common 50-0ff Stores, Inc.: $.01 par common Healthsouth Rehabilitation Corporation: $.01 par common Acclaim Entertainment, Inc.: $.02 par common Hemotec, Inc.: Voting, $.01 par common Class B, Warrants (expire 01-30-90) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 825 Allstate Financial Corporation: No par common Novell, Inc.: 1-VA% convertible subordinated deben- Applebee's International, Inc.: $.01 par common tures Archer Communications, Inc.: No par common Nucorp, Inc.: Paired Warrants (expire 10-31-90) BEI Electronics, Inc.: $.001 par common Parlux Fragrances, Inc.: $.01 par common Bizmart, Inc.: $.10 par common Pioneer Financial Services, Inc.: No par cumulative Brite Voice Systems, Inc.: No par common convertible exchangeable preferred Pioneer-Standard Electronics, Inc.: 9% subordinated Calgene, Inc.: $.001 par convertible exchangeable convertible debentures preferred Prime Bancshares, Inc.: $.01 par common Cellcom Corp.: $.001 par common Coca Mines, Inc.: Warrants (expire 05-15-90) Rally's Inc.: $.10 par common Cognex Corporation: $.002 par common Crown Resources Corporation: $.05 par common Security Federal Savings and Loan Association of Cleveland: $.01 par common Digi International, Inc.: $.01 par common Serv-Tech, Inc.: $.50 par common Southeastern Savings Institutions Fund, Inc., The: Eagle Food Centers, Inc.: $.01 par common $.001 par common Surgical Laser Technologies, EFI Electronics Corporation: $.0001 par common Inc.: $.01 par common Electronic Arts: No par common Employee Benefit Plans, Inc.: $.01 par common Valley West Bancorp: $2.00 par common Enclean, Inc.: $.01 par common Vanguard Real Estate Fund I, A Sales Commission- Excalibur Technologies Corporation: $.01 par com- Free Income Properties Fund: Shares of beneficial mon interest Vencor, Incorporated: $.25 par common First City Bancorp, Inc.: No par common First Executive Corporation: Warrants (expire Washington Mutual Savings Bank: $1.00 par preferred 10-09-92) Depository Preference Shares (represent- stock ing one-hundreth of a share Series H preferred) Genetics Institute, Inc.: $1.00 par convertible exchangeable preferred ORDERS ISSUED UNDER BANK HOLDING Giddings & Lewis, Inc.: $.10 par common COMPANY ACT GZA Geoenvironmental Technologies, Inc.: $.01 par common Orders Issued Under Section 3 of the Bank Holding Company Act Heritage Bankcorp, Inc.: $.01 par common Hotelecopy, Inc.: $.01 par common BankAmerica Corporation San Francisco, California Image Bank, Inc., The: $.01 par common Inbancshares: No par common Order Approving Acquisition of a Bank Holding International Broadcast Systems, Inc.: Class A, $.10 Company par common International Lease Finance Corporation: Warrants BankAmerica Corporation, San Francisco, California (expire 1994) ("BankAmerica"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Lechters, Inc.: No par common Act"), has applied for the Board's approval under section 3(a)(3) of the BHC Act (12 U.S.C. Marine Drilling Company: $.10 par common § 1842(a)(3)) to acquire all of the voting shares of Nevada First Development Corporation, and thereby New England Realty Associates Limited Partnership: indirectly to acquire Nevada First Bank and Silver Depositary Receipts evidencing units of limited State Thrift & Loan Association, all of Reno, Nevada. partnership Nevada First Bank and Silver State Thrift & Loan New Image Industries, Inc.: $.001 par common Association are both state-chartered institutions the Newbridge Networks Corporation: No par common deposits of which are insured by the FDIC, and, as a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

826 Federal Reserve Bulletin • December 1989 result, are both "banks" for purposes of the BHC Act. controlling $182.9 million in deposits, representing 2.8 12 U.S.C. § 1841(c).' percent of the total deposits in commercial banks in Notice of the application, affording an opportunity Nevada. for interested persons to submit comments, has been Nevada First Development Corporation's banking duly published (54 Federal Register 24,261 (1989)). affiliates operate solely in Nevada banking markets. The time for filing comments has expired, and the BankAmerica does not currently own or operate any Board has considered the application and all com- banking subsidiary in Nevada. Based upon the facts of ments received in light of the factors set forth in record, consummation of this proposal would not section 3(c) of the Act. result in any adverse effect upon existing or future Section 3(d) of the BHC Act, the Douglas Amend- competition or increase the concentration of banking ment, prohibits the Board from approving an applica- resources in Nevada. Accordingly, the Board contion by a bank holding company to acquire control of cludes that competitive factors are consistent with any bank located outside of the bank holding com- approval. pany's home state, unless such acquisition is "specif- In evaluating this application, the Board has careically authorized by the statute laws of the State in fully considered the financial resources of BankAmerwhich [the] bank is located, by language to that ica and the effect on those resources of the proposed effect and not merely by implication."2 Effective acquisition. The Board has previously stated that it December 31, 1988, the statute laws of Nevada per- expects banking organizations contemplating expanmitted out-of-state bank holding companies, with the sion proposals to maintain strong capital levels subapproval of the Nevada Commissioner of Financial stantially above the minimum levels specified in the Institutions, to acquire established Nevada banks and Board's Capital Adequacy Guidelines, without signifbank holding companies.3 The Nevada Commissioner icant reliance on intangibles, particularly goodwill.5 of Financial Institutions has approved BankAmerica's The Board carefully analyzes the effect of expansion proposal pursuant to the Nevada statute. In light of the proposals on the preservation or achievement of foregoing, the Board has determined that its approval strong capital levels and has adopted a policy that of the proposal is not prohibited by the Douglas there should be no significant diminution of financial Amendment. strength below those levels for the purpose of effecting BankAmerica operates two banking subsidiaries in major expansion.6 California and Washington. BankAmerica is the third As discussed in the companion case,7 the Board largest commercial banking organization in the United notes that BankAmerica has taken the appropriate States and is the largest commercial banking organi- steps over the last few years to strengthen its capital zation in California, where it controls deposits of $51.1 position, both through the issuance of new equity and billion, representing approximately 24.4 percent of the through the retention of earnings. BankAmerica's captotal deposits in commercial banks in California.4 ital ratios are above the minimum requirements under Nevada First Development Corporation is the sixth the Board's Capital Adequacy Guidelines. In addition, largest commercial banking organization in Nevada, BankAmerica would effect this transaction through an exchange of shares, and the proposal will have a de minimis effect on BankAmerica's capital position. 1. Silver State Thrift & Loan Association ("Silver State") was Moreover, this proposal would result in a small inoriginally acquired by Nevada First Development Corporation as an crease in BankAmerica's asset size in relative terms. industrial loan company, pursuant to section 4(c)(8) of the BHC Act In light of these considerations, the Board concludes and section 225.25(b)(2) of the Board's Regulation Y (12 C.F.R. 225.25(b)(2)). Nevada First Development Corporation, 70 FEDERAL that the financial resources of BankAmerica are con- RESERVE BULLETIN 469 (1984). BankAmerica proposes to operate sistent with approval of the proposal. Moreover, man- Silver State as a full-service bank and has already obtained the approval of the Nevada Administrator of Financial Institutions to exercise all of the powers of commercial bank, including accepting demand deposits, through Silver State. Moreover, BankAmerica also anticipates that, after consummation, Silver State will conduct trans- 5. The Bank of New York Company, Inc., 74 FEDERAL RESERVE actions with its affiliates that would cause Silver State to lose its BULLETIN 257 (1988); Capital Adequacy Guidelines, 50 Federal Regexemption as an industrial bank. 12 U.S.C. § 1841(c)(2)(H). ister 16,057 (April 24, 1985). 2. 12 U.S.C. § 1842(d). A bank holding company's home state for 6. Thus, for example, the Board has generally approved proposals purposes of the Douglas Amendment is that state in which the total involving a decline in capital only where the applicants have promptly deposits of its banking subsidiaries were largest on July 1, 1966, or on restored their capital to pre-acquisition levels following consummathe date it became a bank holding company, whichever date is later. tion of the proposals and have implemented programs of capital BankAmerica's home state is California. improvement to raise capital significantly above minimum levels. See, 3. Nev. Rev. Stat. Ann. § 666.335 (Michie 1986) (Expires by e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 726 (1986); Security limitation July 1, 1990). Nevada First Development Corporation, Pacific Corporation, 72 FEDERAL RESERVE BULLETIN 800 (1986). Nevada First Bank and Silver State were in operation on July 1, 1985, 7. BankAmerica Corporation (American Savings Financial Corpoas required by the statute. Id. ration,l, 75 FEDERAL RESERVE BULLETIN 827 (Board Order dated 4. All data are as of December 31, 1988. October 31, 1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 827 agerial resources, future prospects and convenience Notice of the applications, affording an opportunity and needs considerations are also consistent with for interested persons to submit comments, has been approval. duly published (54 Federal Register 25,346 (1989)). Based on the foregoing and all of the facts of record, The time for filing comments has expired, and the the Board has determined that the application should Board has considered the applications and all combe, and hereby is, approved. The transaction shall not ments received in light of the factors set forth in be consummated before the thirtieth calendar day section 3(c) of the Act. following the effective date of this Order, or later than Section 3(d) of the BHC Act, the Douglas Amendthree months after the effective date of the Order, ment, prohibits the Board from approving an applicaunless such period is extended for good cause by the tion by a bank holding company to acquire control of Board or the Federal Reserve Bank of San Francisco, any bank located outside of the bank holding comacting pursuant to delegated authority. pany's home state, unless such acquisition is "specif- By order of the Board of Governors, effective ically authorized by the statute laws of the State in October 31, 1989. which [the] bank is located, by language to that effect and not merely by implication."2 The Washington Voting for this action: Chairman Greenspan and Governors State banking laws permit the acquisition of Washing- Johnson, Seger, Angell, and LaWare. Absent and not voting: ton banks and bank holding companies by an out- Governor Kelley. of-state bank holding company that meets the requirements of Washington law, including a reciprocity JENNIFER J. JOHNSON requirement.3 The Board has determined previously Associate Secretary of the Board that a California bank holding company may acquire a bank holding company and a bank in Washington.4 BankAmerica Corporation Accordingly, Board approval of this proposal is per- San Francisco, California missible under the Douglas Amendment. BankAmerica operates two banking subsidiaries in Seafirst Corporation California and Washington. BankAmerica is the third Seattle, Washington largest commercial banking organization in the United States and is the largest commercial banking organi- Order Approving Acquisition of a Bank Holding zation in California, where it controls deposits of $51.1 Company billion, representing approximately 24.4 percent of the total deposits in commercial banks in California.5 BankAmerica Corporation, San Francisco, California BankAmerica, through Seafirst, is the largest commer- ("BankAmerica"), and Seafirst Corporation, Seattle, cial banking organization in Washington, controlling de- Washington ("Seafirst") (collectively "Applicants"), posits of $8.4 billion, representing approximately 30.1 bank holding companies within the meaning of the percent of the total deposits in commercial banks in Bank Holding Company Act ("BHC Act"), have applied for the Board's approval under section 3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)) to acquire all of the voting shares of American Savings Financial Corporation ("ANPC"). ANPC is engaged in insurance agency and Corporation, and thereby indirectly to acquire Amer- real estate investment activities that have not been permitted under the BHC Act. Applicants have committed to divest ANPC's imperican Savings Bank, both of Tacoma, Washington.1 missible real estate investments and insurance activities within two years of consummation of this proposal. Prior to divestiture of the impermissible insurance agency activities, Applicants will limit ANPC's insurance agency activities to the renewal of existing policies 1. American Savings Bank is an FDIC-insured state-chartered and those credit-related insurance agency activities permitted under savings bank which had previously met the "qualified thrift lender" section 4(c)(8) of the BHC Act. test of the Home Owners Loan Act and elected to be deemed a 2. 12 U.S.C. § 1842(d). A bank holding company's home state for "savings association" under section 10 of that Act. 12 U.S.C. purposes of the Douglas Amendment is that state in which the total § 1730a(o) & (n), to be recodified at 12 U.S.C. § 1467a(m) & (1). As a deposits of its banking subsidiaries were largest on July 1, 1966, or on result, American Savings Financial Corporation has been subject to the date it became a bank holding company, whichever date is later. regulation under the Savings and Loan Holding Company Act. Amer- BankAmerica's home state is California. ican Savings Bank has applied to the Office of Thrift Supervision 3. Wash. Rev. Code § 30.04.232 (1986) (Effective as of July 31, ("OTS") to rescind its election as a "savings association" and to be 1987). California law satisfies the reciprocity requirements of Washtreated as a bank. Consummation of this proposal is conditioned upon ington law. Cal. Financial Code § 3773 (West 1989) (Effective until American Savings Bank obtaining such deregistration from the OTS. January 1, 1991). In addition, American Savings Bank has been Upon the acquisition of American Savings Bank, Applicants propose conducting business longer than three years, which satisfies the to merge American Savings Bank into Seattle-First National Bank, longevity requirements of Washington law. and have sought approval from the Office of the Comptroller of the 4. Security Pacific Corporation, 73 FEDERAL RESERVE BULLETIN Currency to consummate the merger. 746 (1987). Upon consummation, Seafirst also proposes to acquire directly 5. State deposit data are as of December 31, 1988. Market deposit American Savings Bank's only subsidiary, American North Pacific data are as of June 30, 1987. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

828 Federal Reserve Bulletin • December 1989 Washington ("state deposits"). American Savings Finan- expects banking organizations contemplating expancial Corporation is the 8th largest commercial banking sion proposals to maintain strong capital levels suborganization in the state, controlling deposits of $510.4 stantially above the minimum levels specified in the million, representing approximately 1.8 percent of state Board's Capital Adequacy Guidelines, without signifdeposits. Upon consummation, BankAmerica would re- icant reliance on intangibles, particularly goodwill.8 main the largest commercial banking organization in The Board carefully analyzes the effect of expansion Washington, controlling deposits of $8.9 billion, repre- proposals on the preservation or achievement of senting approximately 31.9 percent of state deposits. strong capital levels and has adopted a policy that Consummation of the proposal would not increase signif- there should be no significant diminution of financial icantly the concentration of banking resources in Wash- strength below those levels for the purpose of effecting ington. major expansion.9 BankAmerica competes directly with American In this case, the Board notes that BankAmerica has Savings Financial Corporation in the Seattle and taken the appropriate steps over the last few years to Bremerton banking markets. The proposed acquisition strengthen its capital position, both through the issuwould not increase BankAmerica's ranking in either of ance of new equity and through the retention of these markets or substantially increase its market earnings. BankAmerica's capital ratios are above the share in either market. Upon consummation of this minimum requirements under the Board's Capital Adproposal, the Herfindahl-Hirschman Index ("HHI") equacy Guidelines. In addition, BankAmerica would would increase by less than 200 points in each of these effect this transaction through an exchange of shares, markets,6 and if 50 percent of the deposits held by and the proposal will have a de minimis effect on thrift institutions were included in the calculation of Applicants' capital position. Moreover, this proposal market concentration, upon consummation of the pro- would result in a small increase in BankAmerica's posal both the Seattle and Bremerton banking markets asset size in relative terms. would remain moderately concentrated, and the HHI In light of these considerations, the Board concludes in both markets would increase by less than 100 that the financial resources of Applicants are consistent points.7 In addition, numerous competitors would re- with approval of the proposal. Moreover, managerial main in each market. resources, future prospects and convenience and needs Based on the facts of record in this case, the Board has considerations are also consistent with approval. determined that consummation of the proposal would not Based on the foregoing and all of the facts of record, have a significant adverse effect on existing competition in the Board has determined that the applications should any relevant banking market. Consummation also would be, and hereby are, approved. The transaction shall not have any significant adverse effect on probable future not be consummated before the thirtieth calendar day competition in any relevant banking market. following the effective date of this Order, or later than In evaluating these applications, the Board has three months after the effective date of the Order, carefully considered the financial resources of Appli- unless such period is extended for good cause by the cants and the effect on those resources of the proposed Board or the Federal Reserve Bank of San Francisco, acquisition. The Board has previously stated that it acting pursuant to delegated authority. By order of the Board of Governors, effective October 31, 1989. 6. Under the revised Department of Justice Merger Guidelines (49 Federal Register 26,823 (June 29, 1984)), any market in which the post-merger HHI is greater than 1800 is considered highly concen- Voting for this action: Chairman Greenspan and Governors trated, and the Department is likely to challenge a merger that Johnson, Seger, Angell, and LaWare. Absent and not voting: increases the HHI by more than 50 points unless other factors indicate Governor Kelley. that the merger will not substantially lessen competition. The Department of Justice has informed the Board that a bank merger or JENNIFER J. JOHNSON acquisition is not likely to be challenged (in the absence of other factors indicating an anticompetitive effect) unless the post-merger Associate Secretary of the Board HHI is at least 1800 and the merger increases the HHI by at least 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank acquisitions for anti-competitive effects implicitly recognizes the competitive effects of limited purpose 8. The Bank of New York Company, Inc., 74 FEDERAL RESERVE lenders and other non-depository financial entities. BULLETIN 257 (1988); Capital Adequacy Guidelines, 50 Federal Reg- 7. The Board previously has indicated that thrift institutions have ister 16,057 (April 24, 1985). become, or have the potential to become, important competitors of 9. Thus, for example, the Board has generally approved proposals commercial banks. See National City Corporation, 70 FEDERAL involving a decline in capital only where the applicants have promptly RESERVE BULLETIN 743 (1984); The Chase Manhattan Corporation, restored their capital to pre-acquisition levels following consumma- 70 FEDERAL RESERVE BULLETIN 529 (1984); NCNB Bancorporation, tion of the proposals and have implemented programs of capital 70 FEDERAL RESERVE BULLETIN 225 (1984); General Bancshares improvement to raise capital significantly above minimum levels. See, Corporation, 69 FEDERAL RESERVE BULLETIN 802 (1983); First Ten- e.g., Citicorp, 72 FEDERAL RESERVE BULLETIN 726 (1986); Security nessee Corporation, 69 FEDERAL RESERVE BULLETIN 298 (1983). Pacific Corporation, 72 FEDERAL RESERVE BULLETIN 800 (1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 829 Orders Issued Under Section 4 of the Bank Notice of the applications, affording interested per- Holding Company Act sons an opportunity to submit comments on the proposal, has been published (54 Federal Register 29,940 Bankers Trust New York Corporation (1989)). The time for filing comments has expired, and New York, New York the Board has considered the applications and all comments received in light of the public interest Order Approving Application To Act as Agent in the factors set forth in section 4(c)(8) of the BHC Act. The Private Placement of All Types of Securities and To Board received written comments opposing the appli- Act as Riskless Principal in Buying and Selling cation from the Securities Industry Association Securities ("SIA"), a trade association of the investment banking industry, and the Investment Company Institute Bankers Trust New York Corporation, New York, ("ICI"), a trade association of the mutual fund indus- New York ("Bankers Trust"), a bank holding com- try. pany within the meaning of the Bank Holding Com- Because Company would be affiliated through company Act ("BHC Act"), has applied for the Board's mon ownership with a member bank, Company may approval under section 4(c)(8) of the BHC Act not be "engaged principally" in the "issue, flotation, (12 U.S.C. § 1843(c)(8)) and section 225.23 of the underwriting, public sale, or distribution" of securities Board's Regulation Y (12 C.F.R. 225.23), for its sub- within the meaning of section 20 of the Banking Act of sidiary, BT Securities Corporation, New York, New 1933 (the "Glass-Steagall Act").4 In its earlier deci- York ("Company"), to act as agent in the private sions, the Board has determined that Company is not placement of all types of securities, including provid- "engaged principally" in section 20 activities if reveing related advisory services, and to buy and sell all nues from underwriting and dealing in securities that types of securities on the order of investors as a banks are not authorized to underwrite and deal in "riskless principal". directly ("ineligible securities") do not exceed 10 Bankers Trust has previously received approval percent of Company's gross revenues.5 Bankers Trust under the BHC Act for Company to underwrite and states that the proposed private placement and riskless deal in, to a limited extent, certain securities.1 Com- principal activities are not the kind of securities activpany is also authorized to provide investment advisory ities described in section 20 and therefore should not and securities brokerage services on a combined basis be subject to the revenue limit on ineligible securities to institutional customers.2 activities. Bankers Trust, with approximately $62.2 billion in In addition, the Board must determine whether the consolidated assets, is the eighth largest commercial proposed activity is so closely related to banking as to banking organization in the United States.3 Bankers be a proper incident thereto within the meaning of Trust operates two subsidiary banks and engages section 4(c)(8) of the BHC Act and is, on this basis, a directly and through subsidiaries in a broad range of permissible activity for bank holding companies. permissible nonbanking activities in the United States. Company is and will continue to be a broker-dealer I. Glass-Steagall Analysis registered with the Securities and Exchange Commission and subject to the record-keeping, reporting, A. Private Placements fiduciary standards, and other requirements of the Securities Exchange Act of 1934 and of the National The private placement market involves the placement Association of Securities Dealers. of new issues of securities with a limited number of sophisticated purchasers in a nonpublic offering. A financial intermediary in private placement transactions acts solely as an agent of the issuer in soliciting 1. See J.P. Morgan & Co. Incorporated, The Chase Manhattan Corporation, Bankers Trust New York Corporation, Citicorp and Security Pacific Corporation, 75 FEDERAL RESERVE BULLETIN 192 (1989) C'J.P. Morgan et al."); Chemical New York Corporation, The Chase Manhattan Corporation, Bankers Trust New York Corpora- 4. Section 20 of the Glass-Steagall Act (12 U.S.C. § 377) provides tion, Citicorp, Manufacturers Hanover Corporation and Security that: Pacific Corporation, 73 FEDERAL RESERVE BULLETIN 731 (1987); "... no member bank shall be affiliated . . . with any . . . Citicorp, J.P. Morgan & Co. Incorporated and Bankers Trust New organization engaged principally in the issue, flotation, underwrit- York Corporation, 73 FEDERAL RESERVE BULLETIN 473 (1987); and ing, public sale, or distribution at wholesale or retail or through 12 C.F.R. 225.25(b)(16). syndicate participation of stocks, bonds, debentures, notes, or 2. See Bankers Trust New York Corporation, 74 FEDERAL RESERVE other securities. ..." BULLETIN 695 (1988). 5. Order Approving Modifications to Section 20 Orders, 75 FED- 3. Banking data are as of June 30, 1989. ERAL RESERVE BULLETIN 751 (Order dated September 21, 1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

830 Federal Reserve Bulletin • December 1989 purchasers; it does not purchase the securities and Accordingly, it is now well established that placing attempt to resell them. new issues of securities with a limited number of Securities that are privately placed are not subject to purchasers in transactions that do not involve a public the registration requirements of the Securities Act of offering is not underwriting for purposes of the Glass- 1933.6 Privately placed securities are offered only to Steagall Act.11 In the commercial paper case, the financially sophisticated institutions and individuals Board and the court found that Bankers Trust's activand not to the public.7 In the Board's view, Com- ities did not constitute a public offering because: pany's private placement of debt and equity securities (1) the bank places commercial paper by separately within the limits proposed by Bankers Trust does not contacting large financial and non-financial instituinvolve the underwriting or public sale of securities for tions, purposes of section 20 and the revenues from the (2) the bank does not place commercial paper with proposed activities should not be subject to the individuals, 10 percent revenue limitation on ineligible securities (3) the maximum number of offerees and purchasers activities. of commercial paper placed by the bank in any given Underwriting. In 1977, the Board's staff concluded case is relatively limited, that the private placement of all types of debt or equity (4) the bank makes no general solicitation or adversecurities directly by a bank did not violate sections 16 tisement to the public with respect to the placement and 21 of the Glass-Steagall Act, the Act's provisions of a particular issue of commercial paper, and that apply to the direct activities of banks.8 In partic- (5) the commercial paper placed with the bank's ular, the staff concluded that this activity was not assistance is issued in very large average minimum "underwriting" for purposes of the Act because the denominations, which are not a likely investment of term "underwriting" connotes a public offering of the general public.12 securities and a private placement does not involve a public offering. The activities at issue here would comply with these In 1985, the rationale of the staff opinion was limitations, except that Company would privately adopted by the Board in determining that commercial place securities not only with institutional customers, paper private placement as conducted directly by but also with individuals whose net worth (or joint net Bankers Trust's subsidiary bank as an agent for cus- worth with a spouse) exceeds $1 million. This altertomers does not constitute the "underwriting," "dis- ation in the proposed private placement activities tribution" or impermissible "selling" of such securi- would not, in the Board's opinion, turn them into a ties for purposes of sections 16 or 21.9 The latter public offering. SEC rules governing private placedetermination was upheld by the U.S. Court of Ap- ments allow securities to be placed with individuals, peals for the D,C. Circuit in Securities Industry Asso- along with institutional customers, who qualify as ciation v. Board of Governors, 807 F.2d 1052 (D.C. accredited investors without changing the private Cir. 1986), cert, denied, 483 U.S. 1005 (1987) ("Bank- character of the placement.13 Bankers Trust has stated ers Trust //"). In reliance on the Bankers Trust II precedent, the found not to be the type of activity prohibited to banks by sections 16 Board determined that the private placement of com- and 21, it should not be viewed as the kind of activity described in mercial paper by a bank holding company nonbank section 20. Bankers Trust, 73 FEDERAL RESERVE BULLETIN at 140, citing, Board of Governors v. Investment Company Institute, subsidiary is not underwriting or dealing in securities 450 U.S. 46, 60-61 n. 26 (1981). for purposes of section 20 of the Glass-Steagall Act, 11. The SI A argues that the fact that Bankers Trust is now and is not subject to the quantitative "engaged princi- proposing that Company privately place all types of securities, as opposed to only high grade commercial paper notes, is significant in pally" limits on ineligible securities underwriting in assessing the applicability of the Glass-Steagall Act prohibitions in section 20.10 this case. Because the above-noted analysis by the Board and the court clearly recognized, however, that commercial paper is a security for purposes of the Glass-Steagall Act, the fact that Bankers Trust now wishes to expand its private placement operation to include all 6. 15 U.S.C. § 77d(2). types of securities would not, by itself, change this activity into 7. SEC Regulation D, 17 C.F.R. 230.506. underwriting and dealing, provided the methods the section 20 affiliate 8. 12 U.S.C. §§ 24 Seventh, 378(a)(1); Federal Reserve Board Staff uses to place the securities do not differ materially from those involved Study, Commercial Bank Private Placement Activities 81-99 (June in the commercial paper case. 1977). 12. Bankers Trust 11, 807 F.2d at 1064; Commercial Paper State- 9. Statement Concerning Applicability of the Glass-Steagall Act to ment at 29-30. the Commercial Paper Placement Activities of Bankers Trust Com- 13. Section 5 of the Securities Act of 1933 ("1933 Act") (15 U.S.C. pany (June 4, 1985) ("Commercial Paper Statement"). § 77e) provides that any security offered or sold to the public must be 10. See The Bank of Montreal, 74 FEDERAL RESERVE BULLETIN registered with the SEC, which requires the issuer of such securities 500, 501 (1988); Bankers Trust New York Corporation, 73 FEDERAL to make full disclosure of all material facts relating to the offering. The RESERVE BULLETIN 138 (1987). Supreme Court opinions interpreting 1933 Act provides for limited exceptions from this registration requirethe Glass-Steagall Act indicate that where a particular activity is ment in certain situations. Examples of this are when a particular class Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 831 that all of the individuals with which securities will be terms as the securities. In light of these factors, the placed will qualify as accredited investors under SEC Board finds that the proposed private placement activrules. The fact that a particular offering of securities is ities would not constitute the "public sale" of securia private placement (and not an underwriting) for ties, and thus need not be viewed as an ineligible purposes of the securities laws is "highly relevant" to securities activity for purposes of the 10 percent whether the transaction involves an underwriting for revenue test.17 Glass-Steagall Act purposes.14 In addition, the Board believes that the other limi- B. Riskless Principal Transactions tations on the proposed activity should assure that securities are not offered to the public. Bankers Trust "Riskless principal" is the term used in the securities has agreed that Company would not make any general business to refer to a transaction in which a brokersolicitation or advertisement to the public regarding dealer, after receiving an order to buy (or sell) a the placement of particular securities, and has stated security from a customer, purchases (or sells) the that the minimum denomination of a security being security for its own account to offset a contemporaneprivate placed would likely be $250,000, with a likely ous sale to (or purchase from) the customer.18 average in excess of $1 million. Members of the Description of Riskless Principal Transactions. In general public are unlikely to buy instruments in such acting as a dealer, a securities firm maintains an large denominations. Furthermore, Bankers Trust has inventory of various securities for its own account and agreed that Company will not privately place securi- buys and sells securities as a principal. In contrast, ties that are registered under the Securities Act of riskless principal transactions typically are undertaken 1933, and that Company will be bound by all of as an alternative method of executing orders by cusprovisions of that Act that limit the scope of private tomers to buy or sell securities on an agency basis. For placements to non-public transactions. example, if a customer places an order to purchase In sum, while Company's private placement meth- securities the firm does not maintain in its inventory, ods differ slightly in scope from those previously the broker-dealer must purchase the securities from a approved by the Board, the Board is of the opinion third party and has the option of acting either as an that the operational limitations agreed to by Bankers agent of the customer or as a riskless principal in Trust would assure that Company would not become making the purchase, at the direction of the customer involved in the public offering of any securities.15 or in its own discretion. If the firm elects to act as a Public Sale. In its 1987 Order approving the first riskless principal in executing the transaction, it will section 20 applications, the Board ruled that the term purchase the securities for its own account from a "public sale" used in section 20 is broad enough to third party dealer at that dealer's "inside" price and include activities where the affiliate buys and sells then, acting as a principal, resell them to the customer, securities for its own account as part of its business adding a mark up over its cost. However, the brokeroperations.16 Here, Company would act solely as an dealer does not confirm the transaction with its cusagent in privately placing securities, and would not tomer until the securities have been purchased from purchase for its own account or otherwise inventory the third party dealer. In other words, if the brokerthe securities being placed. Nor would Bankers Trust dealer for some reason does not complete the purchase or any of its subsidiaries extend credit to the issuer of of the securities ordered by the customer, it has no the securities being placed on substantially the same obligation to provide the securities to the customer.19 The SEC's confirmation rules require that a brokerdealer that acts as a riskless principal in executing the of securities, such as United States or state and local government obligations, is involved, or when a particular transaction, such as a private placement, is involved. The SEC's Regulation D contains rules governing the private placement exception. Under these rules, 17. The Board notes that a proposed SEC initiative, Rule 144A, may offers and sales of securities that are limited to accredited investors lead to the creation of an active secondary market for privately placed (defined by the regulation to include sophisticated institutions and securities which may place a section 20 subsidiary under competitive individuals) and 35 other investors are generally considered to be pressure to serve as a dealer in the securities the subsidiary has transactions not involving public offerings. 17 C.F.R. 230.506. privately placed, as is the case with firms that have made a public 14. See Bankers Trust II, 807 F.2d at 1063-64. offering of securities. In this eventuality, if the securities placed are 15. The ICI has objected to Bankers Trust's proposal to the extent ineligible, the revenues derived from serving as a dealer or acting as a that it could be construed to seek approval for Company to privately principal in a private placement would have to be treated as derived place securities of investment companies that are advised by Com- from ineligible securities activities for purposes of the 10 percent pany or Bankers Trust. Bankers Trust has not specifically requested limitation. approval to place such securities, and would be prohibited from doing 18. See Securities and Exchange Commission Rule 10b—10. so under the Board's policy statement relating to investment adviser 17 C.F.R. 240.10b-10(a)(8)(i). activities by bank holding companies and nonbank subsidiaries. 19. Riskless principal operations are described generally in SEC, 12 C.F.R. 225.125(g),(h). Report of Special Study of Securities Markets, H. Doc. No. 95, Pt. 2, 16. 73 FEDERAL RESERVE BULLETIN at 508. 88th Cong., 1st Sess. 611 (1963). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

832 Federal Reserve Bulletin • December 1989 customer's order disclose to the customer the amount by maintaining an inventory of particular issues of of the mark-up, mark-down or other remuneration securities in the secondary market.22 charged by the broker-dealer only if the securities In acting as a riskless principal, however, Company traded are equity securities. If the broker-dealer elects would not, in the Board's opinion, be acting as a dealer to act as an agent, the SEC disclosure rules require for its own account in buying or selling securities in a that the customer be advised of the brokerage fee riskless principal capacity because Company would charged in all cases, regardless of the type of securities never assume the risk of ownership of the securities. traded. In addition, in an agency transaction, if the As shown above, Company would not be obligated to customer requests, the broker-dealer must disclose the its customer to buy or sell securities until after an identity of the person from whom the securities were offsetting purchase or sale of the securities has already purchased or to whom they were sold.20 been executed. If the market price of the securities Bankers Trust envisions that, in accordance with ordered by the customer suddenly were to change industry practice, Company might have an incentive to significantly, before Company is able to arrange an act as a riskless principal (as opposed to an agent) in offsetting open market transaction on terms that would executing customer orders in some of the following protect it from loss, Company can decline to execute situations: the order.23 (1) a customer wishes to avoid disclosure of its Although Company would maintain an inventory of identity to market participants so that the custom- particular issues of securities in connection with its er's strategy with respect to purchases or sales of previously approved ineligible securities activities, certain securities is not ascertainable by others in Company would not engage in any riskless principal the market; transaction for any security carried in its inventory. (2) Company knows that the prospective seller (or Nor would Company hold itself out as making a purchaser) will not wish to deal directly with the market in the securities that it buys and sells as customer;21 or riskless principal and would not enter quotes for (3) the customer (or the Company) wishes a single specific securities in the NASDAQ or any other dealer "all-in" price quotation for the transaction rather quotation system in connection with riskless principal than being charged a separate purchase price plus transactions. Finally, Bankers Trust has also stated brokerage commission. that Company's riskless principal transactions will not be on behalf of its foreign affiliates that engage in Riskless principal transactions are understood in the securities dealing activities overseas.24 industry to include only transactions in the secondary market. Bankers Trust thus proposes that Company would not act as a riskless principal in selling securities at the order of a customer that is the issuer of the 22. Citicorp et al., 73 FEDERAL RESERVE BULLETIN at 507. The securities to be sold or in any transaction where Board interpreted the term "sale" to refer to transactions in which a seller acting as principal transfers title to a buyer. Company has a contractual agreement to place the 23. Bankers Trust also argues that the Board, in its Order approving securities as agent of the issuer. Company also would BankAmerica's acquisition of Charles Schwab & Co., concluded that not act as a riskless principal in any transaction riskless principal transactions "appear to be consistent with permissible brokerage activities, . . . ." BankAmerica Corporation, 69 involving a security for which it makes a market. FEDERAL RESERVE BULLETIN 105, 116 n.55 (1983). In that case, Public Sale. As noted above, the Board, in its 1987 however, the Board also noted that Schwab only engaged in riskless principal transactions with respect to bank eligible municipal securisection 20 Order, stated that the term "public sale" as ties, and even if the activity were covered by section 20, Schwab did used in section 20 is broad enough to encompass not "engage principally" in these transactions. Thus, in the Schwab transactions where a dealer acts for his own account Order, the Board did not squarely rule that riskless principal transactions are not covered by section 20. 24. In 1986, the OCC allowed national banks to act, through an operations subsidiary, as a riskless principal in transactions with foreign securities affiliates. OCC Interpretive Letter No. 371 (June 13, 1986). The Board, however, subsequently ruled that a nonbank subsidiary of a holding company should not participate in such 20. 17 C.F.R. 240.10b-10(a)(8). Company would not be required to transactions. Letter from William Wiles to Security Pacific Corporadisclose to counterparties that it is acting as a "riskless principal". To tion (April 18, 1988). The Board did not state absolutely that riskless other dealers with which it executes trades, Company would be principal activities were covered by section 20 of the Glass-Steagall another dealer acting as a principal in buying and selling for its own Act. The Board's decision in that case was based on the fact that the account. company held itself out as making a market in specific securities, 21. For example, some large direct issuers of commercial paper, entered quotes in a dealer quotation system, and acted in this country which do not use intermediaries to place their paper, do not deal with on behalf of an affiliated foreign securities dealer. Thus, there was a small purchasers not in their traditional investor base, although they substantial potential for evading the requirement of the Board's will sell to a broker-dealer. If a broker-dealer's customer wishes to Regulation K that such affiliates may only engage in securities dealing purchase this commercial paper, the broker-dealer will buy it directly outside the United States. Company will not perform any of these from the issuer as a principal and then resell it to the customer. functions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 833 Company would be subject to the "business" or locks provision of that statute, stating that riskless "credit" risk that its customer (or the counterparty) principal transactions should be regarded as brokermay fail to pay for securities purchased or fail to age activities and not as underwriting or dealing in deliver securities sold in a riskless principal transac- securities for purposes of that provision. The Board tion. In that eventuality, Company would have to noted that because the firm's customers wished to be proceed against the defaulting party for breach of the billed for securities at a net price rather than be agreement to buy or sell securities. However, this charged an explicit fee, it was necessary for the firm risk is not significantly different from the credit risk a in these instances to go into the open market and as broker assumes when it executes a customer's order principal buy the securities for which the firm had solely as agent. It is clear that this risk does not turn received orders. These transactions, the Board dethe agency transaction into one for the broker's own cided, are not materially different from ordinary account.25 Furthermore, like a brokerage transac- brokerage transactions, noting that the securities tion, the origination of riskless principal transactions involved were not in the firm's portfolio or were in general is spurred by customer demand for an securities the firm had committed to take.29 Since the intermediary in a purchase or sale transaction, and securities activities described in sections 32 and 20 not by solicitations on the part of the intermediary.26 are the same, it follows that riskless principal trans- In addition, in differentiating between broker- actions should not be treated as covered by section dealers executing trades as riskless principal and 20. market makers acting for their own account, the SEC Underwriting. In riskless principal transactions, the has found that "[w]hile both may execute on a Company executes orders by an investor and would principal basis, the function of the former is limited not act on behalf of an issuer of new securities. Thus, to execution of the order, and in essence performing Company would not be involved in making any public the function of a broker .... The market maker, on offering of securities as agent for the issuer. Hence, the other hand, in addition to executing the transac- these activities do not constitute underwriting for tion, provides marketability by assuming the risk of Glass-Steagall purposes. taking positions."27 It is clear that brokerage trans- In sum, the Board concludes that Company's actions are not the public sale of securities under riskless principal activity would not be a "public section 20.28 sale", or "underwriting" of securities and thus need This conclusion is fully consistent with the way not be viewed as an ineligible securities activity for riskless principal transactions have been treated by purposes of the 10 percent test. Company now acts the Board in the past. In 1958, the Board issued a as a "risk" principal or market maker with respect to ruling under Regulation R, which implements section ineligible securities and the revenues from these 32 of the Glass-Steagall Act, the management inter- activities are subject to the 10 percent revenue limit. In order to distinguish these "true" principal from riskless principal transactions, which would be excluded from the 10 percent revenue limit, the Board 25. Another reason given for why Company may act as riskless principal and not as agent in specific transactions is that the customer requires Company, as a condition of approval of this may be unwilling to assume the credit risk associated with a particular activity, to maintain specific records that would counterparty. However, Company's assumption of the credit risk in clearly identify all riskless principal transactions. such a case would not mean that the transaction is for Company's own account. Indeed, a broker executing an order as agent on the floor of Thus, examiners will be readily able to trace the an exchange assumes essentially the same risk, since the broker is resulting revenue for assessing compliance with the technically held responsible for the transaction. 10 percent cap. 26. Company enters into a customer account agreement with each of its customers. The agreement is the same regardless of whether Company is acting as broker, dealer or riskless principal with respect to a particular customer, and Company asserts that therefore a II. Section 4(c)(8) Analysis customer's liability to Company is the same regardless of the form of the transaction. Company would have the right to sue a defaulting In every application under section 4(c)(8) of the BHC party for breach of contract. 27. Report of Special Study of Securities Markets of the Securities Act, the Board must find that the proposed activity is and Exchange Commission (Part 2), House Doc. No. 95, Pt. 2, 88th "so closely related to banking ... as to be a proper Cong., 1st Sess. 611 (1963). Because the SEC has found riskless incident thereto." In determining whether the perforprincipal transactions to be "essentially equivalent" to agency transactions, it has subjected riskless principal transactions to the customer mance of an activity meets the proper incident to confirmation and disclosure requirements. Confirmation Disclosure banking test, the Board must determine whether the for Reported Securities, [1984-1985 Transfer Binder] Fed. Sec. L. Rep. (CCH) 1 83,734 (February 4, 1985). These requirements relate to disclosure to customers of remuneration received in certain transactions. 28. Securities Industry Association v. Board of Governors, 468 U.S. 29. Federal Reserve Regulatory Service H 3-903. The staffs of the 207, 216-21 (1984). OCC and the FDIC have reached similar conclusions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

834 Federal Reserve Bulletin • December 1989 public benefits expected from the performance of that wide basis. Bankers Trust asserts that approval of its activity outweigh potential adverse effects.30 application would enable Company to be increasingly competitive in meeting the financing requirements of A. Closely Related to Banking Analysis issuers, would promote the efficiency of the financial markets, and would provide greater convenience for Under the established test for determining when an activ- Company's customers as Bankers Trust continues to ity is closely related to banking, the Board may find that consolidate all of its securities activities in one subsidan activity is closely related to banking if, among other iary. Bankers Trust argues that to be competitive and things, banks generally have in fact provided the proposed efficient, a financial intermediary, such as Company, activity or if banks provide services so similar to the must be able to use either a public offering or a private proposed services that banking organizations are particu- placement, whichever is more suitable in a particular larly well equipped to provide the proposed services.31 As case. the Board has previously acknowledged, commercial The Board recognizes that the transfer of private banks are substantially involved in private placements of placement activities currently being performed by all types of debt and equity securities, and, as the Board Bankers Trust's subsidiary bank to Company is likely noted recently, "banks are among the largest firms that to produce some public benefits. Bankers Trust would act as agent in the private placement of corporate consolidate its placement and underwriting services in securities."32 Bankers Trust's lead bank itself was re- a single entity, with both operations being performed cently ranked among the top placement agents as mea- by the same staff. This should result in greater convesured by amount of securities placed. nience to customers of Company and produce greater The proposed riskless principal activities meet the efficiency by reducing duplication of similar functions closely related to banking test in section 4(c)(8). Al- in the bank and in the section 20 affiliate and through though there is no evidence in the record that banks economies of scale. are significantly involved in riskless principal activi- The proposed riskless principal activities would be ties, at least with respect to ineligible securities, banks likely to result in some increased benefits to the public have long provided brokerage services and, as noted by allowing Company to provide a wider range of above, riskless principal transactions are "essentially services to customers. In at least some cases, it may equivalent" to brokerage services. In the Board's be necessary to act as a riskless principal rather than view, therefore, the proposed riskless principal ser- as agent, in order to serve the needs of the customer, vices are so operationally and functionally similar to where, for example, the customer wants to avoid banking activities that banking organizations are par- disclosing its investment plans. ticularly well equipped to provide the services. Accord- In sum, based upon the factors noted above, the ingly, the Board finds that Bankers Trust's proposed Board finds that approval of Bankers Trust's proposal activities meet the "closely related to banking" test. would result in benefits to the public. B. Proper Incident to Banking Analysis Adverse Effects—Compliance with Firewalls. In its prior Orders approving expanded securities activities Public Benefits. Bankers Trust is proposing that Com- for bank holding companies, the Board has imposed a pany will offer private placement services on a nation- comprehensive framework of restrictions designed to avoid potential conflicts of interest, unsound banking practices and other adverse effects in connection with 30. Section 4(c)(8) provides that in determining whether a particular the approved activities and to insulate the bank, which activity is a proper incident to banking, the Board shall consider: is protected by the federal safety net, from the secuwhether its performance by an affiliate of a holding company can rities marketing operations of the section 20 subsidreasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in effi- iary. These firewall conditions for the most part apply ciency, that outweigh possible adverse effects, such as undue by their terms only when the section 20 subsidiary is concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. engaged in underwriting or dealing activities, because 12 U.S.C. § 1843(c)(8). private placement activities were not involved in these 31. See National Courier Association v. Board of Governors, 516 Orders. Bankers Trust has agreed that it would abide F.2d 1229, 1237 (D.C. Cir. 1975). by most of these firewall conditions in connection with 32. J.P. Morgan & Co. Incorporated et al., 75 FEDERAL RESERVE BULLETIN 192, 199 (1989). See also Federal Reserve Board Staff its proposed private placement and riskless principal Study, Commercial Bank Private Placement Activities (1977). On this activities in the same manner as the firewalls apply to basis, the Board has previously determined that the private placement of commercial paper by a bank holding company subsidiary is underwriting activities. Bankers Trust believes that permissible under section 4(c)(8). See The Bank of Montreal, 74 certain of the firewall conditions in the prior approval FEDERAL RESERVE BULLETIN 500, 501 (1988); Bankers Trust New Orders are unnecessary or inappropriate for activities York Corporation, 73 FEDERAL RESERVE BULLETIN 138 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 835 conducted only or essentially as an agent. The Board Board will expect the Company to maintain specific finds that these few conditions are not necessary in records of its placement transactions, identifying spethis proposal to avoid any adverse effects. cifically those where credit is provided by a depository The most important of these limitations is the mod- affiliate, so that examiners will be able to readily ified firewall condition (Condition 20) permitting the identify and trace all components of the transactions. marketing of securities of affiliates where the securities Finally, the Board notes that there has been little are rated by an unaffiliated, nationally recognized evidence of unsound practices or conflicts of interest rating organization or are issued or guaranteed by as a result of the private placement activities banks FNMA, FHLMC or GNMA (or represent interests in have engaged in directly over the years. such securities). Bankers Trust would adhere to this Nor does it appear that the proposed riskless princondition except that Company seeks to privately cipal operations would result in significant adverse place unrated securities of affiliates with sophisticated effects. As explained above, Company would not institutions. assume the market risk for securities being bought and The purpose of the affiliate securities limitations is sold and the activities would be subject to those to protect investors from the possibility that the secu- firewall limitations applicable to the private placement rities of the affiliate represent its least creditworthy functions. assets and to protect the reputation of affiliated banks, One area of possible conflicts of interest and unfair which could be damaged if the underwriting subsidiary practices not directly addressed by the existing firesells low-quality securities issued by its affiliates to the wall provisions is the potential for charging the cuspublic and those securities subsequently deteriorate in tomer excessive mark-ups or mark-downs in the exequality. Because the sophisticated institutions with cution of the customer's order as a riskless principal. which Company seeks to place affiliates' securities This potential exists because in these transactions the have the expertise to make their own judgments about broker-dealer charges a single "all-in" price, which the creditworthiness of the securities being purchased includes its compensation, rather than charging a and would have only themselves to blame if losses are separately disclosed commission. In these cases the subsequently experienced, the Board believes that any broker-dealer may be tempted to include mark-ups or adverse effects of placing unrated securities of affil- mark-downs in excess of the usual brokerage fee or the iates will be sufficiently mitigated if limited to sales to prevailing market price, especially where unsophistisophisticated institutions.33 cated investors are involved. In addition, requiring Company to include private In the Board's view, however, this potential abuse placements in its policies limiting overall exposure to a does not appear to be serious enough to warrant single customer whose securities are underwritten disapproval. Enforcement decisions of the SEC and (Condition 12) does not appear necessary where Bank- the NASD's Rules of Fair Practice, which apply to ers Trust would not assume any risk of loss on the Company, prohibit a broker-dealer from entering into obligations of any customer. It must be recognized, any transaction that is not reasonably related to the however, that private placement services may be current market price of the security.34 offered as part of a bundle or package of financing In sum, the record shows that consummation of this services to an issuer, the mix of which may affect the proposal is not likely to result in any significant undue organization's consolidated exposure to a customer. concentration of resources, decreased or unfair com- Further, as the Board noted in its January 1989 Order, petition, conflicts of interest, unsound banking practhe combination of fees received by the consolidated tices, or other adverse effects. organization may motivate a bank affiliate to be less Based on the foregoing and other facts of record, the than objective in assessing the credit risk on the loan Board has determined that the balance of public interportions of a financing package. Accordingly, the est factors that it must consider under section 4(c)(8) of the BHC Act is favorable. Accordingly, the Board has determined that the application should be, and 33. Given that Bankers Trust's capital plan and procedures for hereby is, approved. This determination is further underwriting debt securities were approved in late July, there would subject to all of the conditions set forth in this Order, appear to be little need at this time to require additional capital or as well as the Board's Regulation Y, including sections supervisory review before initiating private placement activities already being conducted solely as agent through the bank (Conditions 3, 225.4(d) and 225.23(b), and to the Board's authority to 4 and 28). Moreover, because the activities being approved are not require such modification or termination of the activsubject to the 10 percent revenue limitation, there is no need to limit the transfer of these activities to a subsidiary of Company (Condition 25) to prevent evasions of the revenue limitation, provided that Bankers Trust consults with staff before any such transfer to assure 34. Duker & Duker, 6 S.E.C. 386, 388-89 (1939); NASD Rules of that none of the firewall provisions committed to is evaded by the Fair Practice, Art. Ill, § 4. The NASD rules establish a guideline of 5 transfer. percent over the market price in determining if a mark-up is excessive. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

836 Federal Reserve Bulletin • December 1989 ities of a bank holding company or any of its subsid- Notice of the applications, affording interested periaries as the Board finds necessary to assure compli- sons an opportunity to submit comments, has been ance with the provisions and purposes of the BHC Act published (54 Federal Register 27,426 (1989)). The and the Board's regulations and orders issued there- time for filing comments has expired, and the Board under, or to prevent evasion thereof. has considered the application and all comments re- This transaction shall not be consummated later ceived in light of the factors set forth in sections 3(c) than three months after the effective date of this and 4(c)(8) of the BHC Act. Order, unless such period is extended for good cause First of America operates 42 banking subsidiaries by the Board or by the Federal Reserve Bank of New located in Michigan, Indiana, and Illinois. Midwest York, pursuant to delegated authority. operates eight banking subsidiaries, all of which are By order of the Board of Governors, effective located in Illinois. First of America is the eleventh October 30, 1989. largest banking organization in Illinois, controlling deposits of $1.2 billion, representing approximately Voting for this action: Chairman Greenspan and Governors 1.1 percent of the total deposits in commercial banking Johnson, Seger, Angell, and La Ware. Absent and not voting: organizations in the state.3 Midwest is the seventh Governor Kelley. largest banking organization in Illinois, controlling deposits of $1.9 billion, representing approximately JENNIFER J. JOHNSON 1.7 percent of the total deposits in commercial banking Associate Secretary of the Board organizations in the state. Upon consummation of this proposal, First of America would become the fifth Orders Issued Under Sections 3 and 4 of the largest banking organization in Illinois, controlling Bank Holding Company Act deposits of $3.1 billion, representing approximately 2.8 percent of the total deposits in commercial banking First of America Bank Corporation organizations in the state. Consummation of this pro- Kalamazoo, Michigan posal would not have a significant adverse effect on the concentration of banking resources in the state. Order Approving Merger of Bank Holding Section 3(d) of the BHC Act, the Douglas Amend- Companies ment, prohibits the Board from approving an application by a bank holding company to acquire control of First of America Bank Corporation, Kalamazoo, any bank located outside of the bank holding com- Michigan ("First of America") and First of America pany's home state, unless such acquisition is "specif- Bancorporation-Illinois, Inc., Kalamazoo, Michigan ically authorized by the statute laws of the State in ("FOAB"), bank holding companies within the meanwhich [the] bank is located, by language to that effect ing of the Bank Holding Company Act ("BHC Act"), and not merely by implication."4 The Illinois Bank have applied for the Board's approval under section 3 Holding Company Act permits the acquisition of Illiof the BHC Act (12 U.S.C. § 1842), to acquire Midnois banks and bank holding companies by banking west Financial Group, Inc., Peoria, Illinois ("Midinstitutions located in Michigan (111. Ann. Stat. ch. 17, west"), and thereby acquire its banking and nonbanking subsidiaries.1 para. 2501), and the Board has determined previously that a Michigan bank holding company may acquire a First of America and FOAB also have applied for bank holding company in Illinois.5 Accordingly, conthe Board's approval under section 4(c)(8) of the BHC Act to acquire the nonbanking subsidiaries of Midwest.2 servicing loans secured by mortgages on real estate; Midwest Finan- 1. First of America proposes to merge Midwest into FOAB, and cial Investment Management Company, Peoria, Illinois, and thereby thereby acquire Midwest's subsidiaries. Upon the acquisition of provide portfolio investment advice, furnishing general economic Midwest, First of America will acquire the following banks: BancMid- information and advice, general economic statistical forecasting serwest McLean County, N.A., Bloomington, Illinois; The First Na- vices, and industry studies; Midwest Financial Life Insurance Comtional Bank in Champaign, Champaign, Illinois; The Citizens National pany, Peoria, Illinois, and thereby engage in underwriting as rein- Bank of Decatur, Decatur, Illinois; The DeKalb Bank N.A., DeKalb, surer, credit life, credit accident, and health insurance directly related Illinois; The First Trust Bank N.A., Kankakee, Illinois; Commercial to extensions of credit by First of America's subsidiary banks; and National Bank of Peoria, Peoria, Illinois; United Bank of Illinois, Midwest Financial Group Brokerage Services, Inc., Peoria, Illinois, N.A., Rockford, Illinois; and The Illinois National Bank of Spring- and thereby engage in securities brokerage activities. These activities field, Springfield, Illinois. are authorized for bank holding companies pursuant to the Board's In connection with this application, First of America and FOAB Regulation Y, 12 C.F.R. 225.25(b)(1), (4), (8)(i), and (15). also have applied to acquire warrants representing up to 23.9 percent 3. Deposit data are as of June 30, 1987. of the voting shares of Midwest if certain preconditions occur. 4. 12 U.S.C. § 1842(d). 2. First of America proposes to acquire Midwest Financial Mort- 5. First of America Corporation, 73 FEDERAL RESERVE BULLETIN gage Company, Peoria, Illinois, and thereby engage in marketing and 175 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 837 summation of this proposal is not barred by the to 82.6 percent, and the HHI would increase by 247 Douglas Amendment. points to 2170. First of America and Midwest compete in the Peo- In the Kankakee banking market,9 First of America ria, Kankakee, and Rockford banking markets, all in is the second largest commercial banking organization, Illinois. In the Peoria banking market,6 First of Amer- controlling deposits of $145.1 million, representing ica is the eighth largest commercial banking organiza- 23.8 percent of the total deposits in commercial banktion in the market controlling deposits of $72.6 million, ing organizations in the market. Midwest is the largest representing 3.6 percent of the total deposits in com- commercial banking organization in the Kankakee mercial banking organizations in the market. Midwest banking market, controlling deposits of $165.2 million, is the largest commercial banking organization in the representing 27.1 percent of the total deposits in Peoria banking market, controlling deposits of $541.3 commercial banking organizations in the market. million, representing 26.7 percent of the total deposits Upon consummation of this transaction, First of in commercial banking organizations in the market. America would become the largest commercial bank- Upon consummation of this transaction, First of ing organization in the Kankakee banking market, America would become the largest commercial bank- controlling deposits of $310.3 million, representing ing organization in the Peoria banking market, control- 50.9 percent of the total deposits in commercial bankling deposits of $613.9 million, representing 30.3 per- ing organizations in the market. The four-firm concencent of the total deposits in commercial banking tration ratio would increase by 5.7 percentage points organizations in the market. The four-firm concentra- to 74.2 percent, and the HHI would increase by 1290 tion ratio would increase by 3.6 percentage points to points to 2867. 59.3 percent, and the Herfindahl-Hirschman Index Although consummation of this proposal would ("HHI") would increase by 192 points to 1319.7 eliminate some existing competition between First of In the Rockford banking market,8 First of America America and Midwest in the Rockford and Kankakee is the fourth largest commercial banking organization banking markets, numerous other commercial banks controlling deposits of $194.6 million, representing 9.5 would continue to operate in each market after conpercent of the total deposits in commercial banking summation of this proposal.10 In addition, the Board organizations in the market. Midwest is the third has considered the presence of thrift institutions in largest commercial banking organization in the Rock- these banking markets in its analysis of this proposal.11 ford banking market, controlling deposits of $265.3 These institutions account for a significant percentage million, representing 13.0 percent of the total deposits of the total deposits in each market.12 Based upon the in commercial banking organizations in the market. size and market share of thrift institutions in the Upon consummation of this transaction, First of markets, the Board has concluded that thrift institu- America would become the third largest commercial tions exert a significant competitive influence that banking organization in the Rockford banking market, mitigates the anticompetitive effects of this proposal in controlling deposits of $459.9 million, representing the Rockford and Kankakee banking markets.13 22.5 percent of the total deposits in commercial banking organizations in the market. The four-firm concen- 9. The Kankakee banking market is approximated by Kankakee tration ratio would increase by 4.2 percentage points County except for Essex Township, plus Milks Grove, Chebanse, Papineau, and Beaverville Townships in Iroquois County, all in Illinois. 10. Upon consummation of this transaction, 14 commercial banking organizations will remain in both the Rockford and Kankakee banking 6. The Peoria banking market is defined as Peoria and Tazewell markets. Counties, plus Woodford County excluding Kansas, El Paso, Panola, 11. See National City Corporation, 70 FEDERAL RESERVE BULLEand Minonk Townships, all in Illinois. TIN 743 (1984); The Chase Manhattan Corporation, 70 FEDERAL 7. Under the revised Department of Justice Merger Guidelines, RESERVE BULLETIN 529 (1984); NCNB Bancorporation, 70 FEDERAL 49 Federal Register 26,823 (1984), a market in which the post-merger RESERVE BULLETIN 225 (1984); General Bancshares Corporation, 69 HHI is between 1000 and 1800 is considered moderately concentrated. FEDERAL RESERVE BULLETIN 802 (1983); First Tennessee Corpora- In such markets, the Department of Justice is unlikely to challenge a tion, 69 FEDERAL RESERVE BULLETIN 298 (1983). merger or acquisition if the increase in HHI is less than 100 points. 12. Nine thrift institutions that control 35.4 percent of the combined The Department of Justice has informed the Board that a bank merger deposits of banks and thrifts operate in the Rockford banking market. or acquisition generally will not be challenged (in the absence of other Five thrift institutions that control 41.2 percent of the combined factors indicating anticompetitive effects) unless the post-merger HHI deposits of banks and thrifts operate in the Kankakee banking market. is at least 1800 and the merger or acquisition increases the HHI by at 13. If 50 percent of deposits held by thrift institutions in the least 200 points. The Department of Justice has stated that the higher Rockford banking market were included in the calculation of market than normal HHI thresholds for screening bank mergers for anticom- concentration, First of America's pro forma market share would be petitive effects implicitly recognizes the competitive effect of limited 18.6 percent. The four-firm concentration ratio would increase by 6.9 purpose lenders and other non-depository financial entities. percentage points to 71.5 percent, and the HHI would increase by 169 8. The Rockford banking market is defined as Winnebago and points to 1547. Boone Counties, plus Byron, Marion, Scott, and Monroe Townships If 50 percent of deposits held by thrift institutions in the Kankakee in Ogle County, all in Illinois. banking market were included in the calculation of market concentra- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

838 Federal Reserve Bulletin • December 1989 On the basis of the foregoing and other facts of this proposal would result in undue concentration of record, the Board concludes that consummation of resources, decreased or unfair competition, conflicts of this proposal would not have a substantial adverse interests, unsound banking practices, or other adverse effect on competition in the Peoria, Rockford, and effects on the public interest. Accordingly, the Board has Kankakee banking markets.14 determined that the balance of public interest factors it The financial and managerial resources of First of must consider under section 4(c)(8) of the BHC Act is America, Midwest, and their subsidiaries are consis- favorable and consistent with approval of First of Amertent with approval. Considerations relating to the ica's application to acquire the nonbanking subsidiaries of convenience and needs of the communities to be Midwest. served by First of America's and Midwest's subsidiary Based on the foregoing and other facts of record, the banks are also consistent with approval. Board has determined that the applications should be, and First of America also has applied, pursuant to section hereby are, approved. The transaction shall not be con- 4(c)(8) of the BHC Act, to acquire certain nonbanking summated before the thirtieth calendar day following the subsidiaries of Midwest. First of America operates mort- effective date of this Order, or later than three months gage banking, investment advisory services, credit-related after the effective date of this Order, unless such period is insurance underwriting, and securities brokerage subsid- extended for good cause by the Board or by the Federal iaries that directly compete with Midwest and its subsid- Reserve Bank of Chicago, acting pursuant to delegated iaries in these activities. Each of these subsidiaries has a authority. The determinations as to First of America's small market share and there are numerous competitors nonbanking activities are subject to all of the conditions for these services. Accordingly, consummation of this contained in Regulation Y, including those in sections proposal would have a de minimis effect on existing 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and competition in each of these markets, and the Board 225.23(b)(3)), and to the Board's authority to require such concludes that the proposal would not have any signifi- modification or termination of the activities of a holding cantly adverse effect on competition in the provision of company or any of its subsidiaries as the Board finds these services in any relevant market. Furthermore, there necessary to assure compliance with the provisions and is no evidence in the record to indicate that approval of purposes of the BHC Act and the Board's regulations and orders issued thereunder, or to prevent evasion thereof. By order of the Board of Governors, effective October 2, 1989. tion, First of America's pro forma market share would be 37.7 percent. The four-firm concentration ratio would increase by 7.3 percentage points to 63.8 percent, and the HHI would increase by 708 Voting for this action: Chairman Greenspan and Governors points to 1780. Johnson, Seger, Angell, Kelley, and LaWare. 14. The Board received an untimely comment from an individual asserting that First of America's acquisition of Midwest would substantially lessen competition in the Kankakee banking market. In light JENNIFER J. JOHNSON of the factors discussed above, the allegations raised in the protest do Associate Secretary of the Board not warrant denial of this application. 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. Applicant Bank(s) Effective date First Chicago Corporation, FCBAH Bank, September 29, 1989 Chicago, Illinois Arlington Heights, Illinois First Chicago Corporation Ravenswood Financial Corporation, September 29, 1989 Chicago, Illinois Chicago, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 839 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 AApppplliiccaanntt BBaannkk((ss)) Bank date Alexis Bancorp, Inc., The Bank of Alexis, Chicago October 16, 1989 Carol Stream, Illinois Alexis, Illinois Amarillo Delaware Bancorp, Amarillo National Bank, Dallas October 12, 1989 Inc., Amarillo, Texas Wilmington, Delaware Bainum Bancorp II, Pike County Bank, St. Louis September 21, 1989 Murfreesboro, Arkansas Murfreesboro, Arkansas BancFirst Corp., The First National Bank of Cleveland October 12, 1989 Zanesville, Ohio Zanesville, Zanesville, Ohio Bancook Corporation, Farmers Bank, Kansas City September 29, 1989 Cook, Nebraska Prairie Home, Nebraska The Boston Bank of Commerce The Boston Bank of Commerce, Boston October 3, 1989 Employee Stock Ownership Boston, Massachusetts Trust, Boston, Massachusetts Citizens Bancshares, Inc., The First National Bank of Cleveland October 17, 1989 Salineville, Ohio Chester, Chester, West Virginia The Citizens and Southern The Ocean State Bank, Atlanta October 23, 1989 Corporation, Neptune Beach, Florida Atlanta, Georgia Citrus Financial Services Citrus Bank, National Atlanta September 21, 1989 Corporation, Association, Vero Beach, Florida Vero Beach, Florida Clarke, Inc., Midlands Bancorp, Inc., Kansas City October 12, 1989 Central City, Nebraska Papillion, Nebraska Crosswhite Bankshares, Inc., Rocky Ford National Bank, Kansas City September 20, 1989 Denver, Colorado Rocky Ford, Colorado Farmers State Bankshares, Inc., The Farmers State Bank, Kansas City October 20, 1989 Circle ville, Kansas Circle ville, Kansas Far West Bancorporation, Far West Bank, San Francisco October 12, 1989 Provo, Utah Provo, Utah Fayette County Bancshares, Inc., Fayette County Bank, Atlanta September 19, 1989 Peachtree City, Georgia Peachtree City, Georgia FDH Bancshares, Inc., First State Bank of Fordyce, St. Louis September 20, 1989 Little Rock, Arkansas Fordyce, Arkansas Citizens First State Bank, Arkadelphia, Arkansas 1st AmBanc, Inc., 1st American Bank of Walton Atlanta October 23, 1989 Destin, Florida County, Destin, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

840 Federal Reserve Bulletin • December 1989 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date First Community Bancorp, Inc., First Community Bank & Trust, Atlanta October 20, 1989 Cartersville, Georgia Cartersville, Georgia First Eagle Bancshares, Inc., First National Bank of Roselle, Chicago October 13, 1989 Roselle, Illinois Roselle, Illinois The First National Bankshares of The First National Bank of Atlanta October 5, 1989 Henry County, Inc., Henry County, Stockbridge, Georgia Stockbridge, Georgia F & M National Corporation, The First National Bank of Richmond October 11, 1989 Winchester, Virginia Broadway, Broadway, Virginia Franklin State Bancshares, Inc., Franklin State Bank, Kansas City October 18, 1989 Franklin, Nebraska Franklin, Nebraska GNB Bancshares, Inc., Gainesville National Bank, Dallas September 26, 1989 Gainesville, Texas Gainesville, Texas Guaranty National Bancshares, Inc., Wilmington, Delaware Green Top, Inc., Bank of the Midlands, Kansas City October 12, 1989 Central City, Nebraska Papillion, Nebraska Shelby Insurance, Inc., Central City, Nebraska Growth Financial Corporation, Growth Bank, New York October 4, 1989 Basking Ridge, New Jersey Basking Ridge, New Jersey Illinois Valley Bancshares, Inc., Colonial Trust & Savings Bank, Chicago October 11, 1989 Elmhurst, Illinois Peru, Illinois Illinois Regional Bank, Bureau County, Princeton, Illinois InterCounty Bancshares, Inc., InterCounty Bancshares, Inc., Cleveland October 12, 1989 Employee Stock Ownership Wilmington, Ohio Plan, Wilmington, Ohio Investors Financial Corporation, Community Bank of Pettis Kansas City October 13, 1989 Sedalia, Missouri County, Sedalia, Missouri Lincoln Holding Company, Lincoln State Bank, Minneapolis October 16, 1989 Hankinson, North Dakota Hankinson, North Dakota Livingston & Company First National Bank of North Kansas City October 19, 1989 Southwest, L.P., County, Chicago, Illinois Carlsbad, California Livingston Southwest Corporation, Chicago , Illinois Marseilles Bancorporation, Inc., Union National Bank of Chicago October 6, 1989 Marseilles, Illinois Marseilles, Marseilles, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 841 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date M.O.I. Inc., State Bank of Mount Horeb, Chicago October 6, 1989 Janesville, Wisconsin Mount Horeb, Wisconsin State Bank of Argyle, Argyle, Wisconsin New East Bancorp, New East Bank of Fayetteville, Richmond October 18, 1989 Raleigh, North Carolina Fayetteville, North Carolina New East Bancorp, New East Bank of Greenville, Richmond October 11, 1989 Raleigh, North Carolina Greenville, North Carolina Ocean State Bancshares, Ocean State National Bank, Boston September 22, 1989 Middletown, Rhode Island Middletown, Rhode Island OMNIBANCORP, OMNIBANK Denver, Kansas City September 20, 1989 Denver, Colorado Denver, Colorado The Plains Corporation, The Plains Corporation, Dallas October 16, 1989 Wilmington, Delaware Lubbock, Texas Plains National Bank of Lubbock, Lubbock, Texas P.N.B. Financial Corporation, The First National Bank of Kansas City October 10, 1989 Kingfisher, Oklahoma Hennessey, Hennessey, Oklahoma Prairie State Bancorp, Inc., Farmers State Bank of Danforth, Chicago September 27, 1989 Danforth, Illinois Danforth, Illinois PSB Financial Shares, Inc., Prinsburg State Bank, Minneapolis October 19, 1989 Prinsburg, Minnesota Prinsburg, Minnesota River Forest Bancorp, Inc., Calumet City Bancorp, Inc., Chicago October 17, 1989 Chicago , Illinois Calumet City, Illinois Rodgers Family Bancshares, Bank of Waldron, St. Louis September 29, 1989 Inc., Waldron, Arkansas Waldron, Arkansas South Holt Bancshares, Inc., Zook and Roecker State Bank, Kansas City September 22, 1989 Oregon, Missouri Oregon, Missouri Spearman Bancshares, Inc., First National Bank, Dallas October 26, 1989 Spearman, Texas Spearman, Texas Stearns Financial Services, Inc. Stearns Agency, Inc., Minneapolis October 2, 1989 Albany, Minnesota Albany, Minnesota Financial Services of Evansville, Inc., Evansville, Minnesota Security State Bank of Holdingford, Holdingford, Minnesota Farmers State Bank of Upsala, Upsala, Minnesota The Summit Bancorporation, Growth Financial Corporation, New York October 4, 1989 Summit, New Jersey Basking Ridge, New Jersey Terre Du Lac Bancshares, Inc., First National Bank of Callaway St. Louis October 5, 1989 St. Louis, Missouri County, Fulton, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

842 Federal Reserve Bulletin • December 1989 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Tomball National BancShares, Tomball National Bank, Dallas October 20, 1989 Inc., Tomball, Texas Tomball, Texas Tomball Capital Corporation, Wilmington, Delaware Tulsa National Bancshares, Inc., Tulsa National Bank, Kansas City September 29, 1989 Tulsa, Oklahoma Tulsa, Oklahoma Union Planters Corporation, Citizens Bank & Trust Company, St. Louis September 22, 1989 Memphis, Tennessee Wartburg, Tennessee Union Planters Corporation, National Commerce Corporation, St. Louis September 22, 1989 Memphis, Tennessee New Albany, Mississippi Union Planters Corporation, Steiner Bank, St. Louis October 6, 1989 Memphis, Tennessee Birmingham, Alabama United Nebraska Financial Co., Labanco, Inc., Kansas City October 5, 1989 Ord, Nebraska Burwell, Nebraska Burwell Insurance Agency, Inc., Burwell, Nebraska WB&T Bancshares, Inc., Way cross Bank & Trust, Atlanta October 25, 1989 Way cross, Georgia Waycross, Georgia West-Ark Bancshares, Inc., Arkansas State Bank, St. Louis October 3, 1989 Clarksville, Arkansas Clarksville, Arkansas West Jersey Bancshares, Inc., West Jersey Community Bank, New York October 25, 1989 Fairfield, New Jersey Fairfield, New Jersey Section 4 Nonbanking Reserve Effective Applicant Activity/Company Bank date Algemene Bank Nederland, ABN Capital Markets Chicago October 5, 1989 N.V., Corporation, Amsterdam, The Netherlands New York, New York A.B.N.-Stichting, Amsterdam, The Netherlands Banc One Corporation, Weaver Bros., Inc., Cleveland September 22, 1989 Columbus, Ohio Chevy Chase, Maryland Draper Holding Company, Dave Moore Insurance Agency, Minneapolis September 28, 1989 Draper, South Dakota Vivian, South Dakota MNC Financial, Inc., Royal Credit Corporation, Richmond October 25, 1989 Baltimore, Maryland Spartanburg, South Carolina Mount Sterling National Holding Home Towne Loan Company, Cleveland September 29, 1989 Corporation, Inc., Mount Sterling, Kentucky Stanton, Kentucky Northern Trust Corporation, Berry, Hartell & Evers, Chicago September 22, 1989 Chicago, Illinois San Francisco, California Northern Trust Corporation, Northern Trust Brokerage, Inc., Chicago October 5, 1989 Chicago, Illinois Chicago, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 843 Section 4—Continued Nonbanking Reserve Effective Applicant Activity/Company Bank date Norwest Corporation, Saffer Insurance Services, Inc., Minneapolis October 11, 1989 Minneapolis, Minnesota Lincoln, Nebraska Union Planters Corporation, GulfNet, Inc., St. Louis September 22, 1989 Memphis, Tennessee Mandeville, Louisiana Sections 3 and 4 Bank(s)/Nonbanking Reserve Effective Applicant Company Bank date Fifth Third Bancorp, First Ohio Bancshares, Inc., Cleveland October 26, 1989 Cincinnati, Ohio Toledo, Ohio Johnson International Bancorp, Biltmore Bank Corp., San Francisco September 27, 1989 Ltd., Phoenix, Arizona Racine, Wisconsin Johnson Asset Management, Inc., Milwaukee, Wisconsin Johnson Investment S.A., Zug, Switzerland Plainview Bankshares, Inc., First National Bank, Minneapolis October 16, 1989 Plain view, Minnesota Plainview, Minnesota ValliCorp Holdings, Inc., Bank of Fresno, San Francisco October 20, 1989 Fresno, California Fresno, California Merced Bank of Commerce, N.A., Merced, California Western Commercial Leasing Company, Fresno, 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 A pplicant Bnank(s) , Bank date Central Savings Bank, First of America Bank - Northern Minneapolis October 3, 1989 Sault St. Marie, Michigan Michigan, Cheboygan, Michigan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

844 Federal Reserve Bulletin • December 1989 Reserve Effective Applicant Bank(s) Bank date Chemical Bank and Trust Chemical Bank Bay Area, Chicago October 17, 1989 Company, Bay City, Michigan Midland, Michigan Comerica Bank-Detroit, Dearborn Bank and Trust Chicago September 21, 1989 Detroit, Michigan Company, Dearborn, Michigan Heartland Bank, Lyndon Guaranty Bank of Ohio, Cleveland October 23, 1989 Croton, Ohio Columbus, Ohio Victoria Bank & Trust Company, The Jackson County State Bank, Dallas September 25, 1989 Victoria, Texas Edna, Texas Bank of Commerce Calhoun County, Point Comfort, Texas 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 as a party. Consolidated Bancorp v. Board of Governors, No. American Land Title Association v. Board of Governors, W-89-CA251 (W.D. Tex., filed September 8, 1989); No. 88-1872 (D.C. Cir., filed December 16, 1988). Consolidated Bancorp v. Board of Governors, Ad- MCorp v. Board of Governors, No. CA3-88-2693-F versary Proceeding No. 89-6081 (Bankr. W.D. (N.D. Tex., filed October 28, 1988). Tex., filed September 15, 1989). White v. Board of Governors, No. CU-S-88-623-RDF Synovus Financial Corp. v. Board of Governors, No. (D. Nev., filed July 29, 1988). 89-1394 (D.C. Cir., filed June 21, 1989). Baugh v. Board of Governors, No. C88-3037 (N.D. MCorp v. Board of Governors, No. 89-2816 (5th Cir., Iowa, filed April 8, 1988). filed May 2, 1989). Bonilla v. Board of Governors, No. 88-1464 (7th Cir., Whitney v. Board of Governors, et al., No. 89-1263 filed March 11, 1988). (5th Cir., filed March 22, 1989). Cohen v. Board of Governors, No. 88-1061 (D.N.J., Independent Insurance Agents of America, Inc. v. filed March 7, 1988). Board of Governors, No. 89-4030 (2d Cir., filed The Chase Manhattan Corporation v. Board of Gov- March 9, 1989). ernors, No. 87-1333 (D.C. Cir., filed July 20, 1987). Securities Industry Association v. Board of Gover- Lewis v. Board of Governors, Nos. 87-3455, 87-3545 nors, No. 89-1127 (D.C. Cir., filed February 16, (11th Cir., filed June 25, Aug. 3, 1987). 1989). First Savings Bank v. Federal Reserve System, et al., No. 89-4117, (D.S.D., filed August 31, 1989). 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 WEEKLY REPORTING COMMERCIAL BANKS Domestic Financial Statistics Assets and liabilities A19 All reporting banks MONEY STOCK AND BANK CREDIT A20 Banks in New York City A3 Reserves, money stock, liquid assets, and debt A21 Branches and agencies of foreign banks measures A22 Gross demand deposits—individuals, A4 Reserves of depository institutions, Reserve partnerships, and corporations Bank credit A5 Reserves and borrowings—Depository institutions A6 Selected borrowings in immediately available FINANCIAL MARKETS funds—Large member banks A23 Commercial paper and bankers dollar POLICY INSTRUMENTS acceptances outstanding A23 Prime rate charged by banks on short-term A7 Federal Reserve Bank interest rates business loans A8 Reserve requirements of depository institutions A24 Interest rates—money and capital markets A9 Federal Reserve open market transactions A25 Stock market—Selected statistics A26 Selected financial institutions—Selected assets FEDERAL RESERVE BANKS and liabilities A10 Condition and Federal Reserve note statements All Maturity distribution of loan and security holdings FEDERAL FINANCE MONETARY AND CREDIT AGGREGATES A28 Federal fiscal and financing operations A12 Aggregate reserves of depository institutions A29 U.S. budget receipts and outlays and monetary base A30 Federal debt subject to statutory limitation A13 Money stock, liquid assets, and debt measures A30 Gross public debt of U.S. Treasury—Types A15 Bank debits and deposit turnover and ownership A16 Loans and securities—All commercial banks A31 U.S. government securities dealers—Transactions COMMERCIAL BANKING INSTITUTIONS A32 U.S. government securities dealers—Positions All Major nondeposit funds and financing A18 Assets and liabilities, last-Wednesday-of-month A33 Federal and federally sponsored credit series agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • December 1989 SECURITIES MARKETS AND A56 Foreign official assets held at Federal Reserve CORPORATE FINANCE Banks A57 Foreign branches of U.S. banks—Balance A34 New security issues—State and local sheet data governments and corporations A59 Selected U.S. liabilities to foreign official A35 Open-end investment companies—Net sales institutions and asset position 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 liabilities and business credit A59 Liabilities to and claims on foreigners A60 Liabilities to foreigners A62 Banks' own claims on foreigners REAL ESTATE A63 Banks' own and domestic customers' claims on A37 Mortgage markets foreigners A38 Mortgage debt outstanding A63 Banks' own claims on unaffiliated foreigners A64 Claims on foreign countries—Combined domestic offices and foreign branches CONSUMER INSTALLMENT CREDIT A39 Total outstanding and net change A40 Terms REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES FLOW OF FUNDS A65 Liabilities to unaffiliated foreigners A41 Funds raised in U.S. credit markets A66 Claims on unaffiliated foreigners A43 Direct and indirect sources of funds to credit markets A44 Summary of credit market debt outstanding A45 Summary of credit market claims, by holder SECURITIES HOLDINGS AND TRANSACTIONS Domestic Nonfinancial Statistics A67 Foreign transactions in securities A68 Marketable U.S. Treasury bonds and notes—Foreign transactions SELECTED MEASURES A46 Nonfinancial business activity—Selected measures A47 Labor force, employment, and unemployment INTEREST AND EXCHANGE RATES A48 Output, capacity, and capacity utilization A49 Industrial production—Indexes and gross value A69 Discount rates of foreign central banks A51 Housing and construction A69 Foreign short-term interest rates A52 Consumer and producer prices A70 Foreign exchange rates A53 Gross national product and income A71 Guide to Tabular Presentation, A54 Personal income and saving Statistical Releases, and Special Tables International Statistics SUMMARY STATISTICS SPECIAL TABLE A55 U.S. international transactions—Summary A56 U.S. foreign trade All Assets and liabilities of commercial banks, A56 U.S. reserve assets March 31, 1989 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 Q4 Q1 Q2 Q3 May June July Aug.' Sept. Reserves of depository institutions2 1 Total -.8 -4.2 -8.7 .2 -14.6 -8.0 7.2 1.1 8.6 2 Required -1.5 -4.4 -7.6 .1 -20.0 -5.5 6.0 2.8 8.6 3 Nonborrowed 5.3 .0 -10.2 8.2 -3.2 -3.4 24.2 1.5 8.3 4 Monetary base3 4.8 4.6 1.5 3.0 -1.5 3.1 4.0 1.3 7.2 Concepts of money, liquid assets, and debt4 5 Ml 2.3 -.4 -5.6 1.7 -15.1 -4.6' 10.9 .7 5.9 6 M2 3.6 1.8 1.2 7.3 -3.3 6.2 11.5 7.2 7.5 7 M3 4.8 3.7 2.9 4.7 -1.2 5.7 9.0 2.2 .8 8 L 5.5 5.0r 4.7' n.a. -1.0' 3.3' 8.9' 5.1 n.a. 9 Debt 8.9 8.4 7.6 7.4 7.3 6.5 6.1' 9.3 n.a. Nontransaction components 10 In M2 4.1 2.6 3.5 9.2 .6' 9.8' 11.7 9.4 8.1 11 In M3 only6 9.3 10.6r 9.2 -4.4 6.3 4.0 .1' -15.6 -23.1 Time and savings deposits Commercial banks 12 Savings 4.0 -3.7 -14.2 -.1 -20.5' -6.6 3.5 7.4 8.0 13 Small-denomination time8 18.0 22.5 29.0 10.6 28.4' 12.0 7.5 7.8 5.0 14 Large-denomination time9,10 13.0 18.1 17.7 1.8 10.0 1.8 3.8' -1.9 -5.1 Thrift institutions 15 Savings -2.5 -7.7 -19.0 -6.9 -26.3 -9.1 -5.6 -2.0 3.8 16 Small-denomination time 6.6 4.3 14.1 9.5 22.5 15.4 9.2 4.0 -3.3 17 Large-denomination time9 8.0 1.2 5.9 -9.7 8.0 1.9 -8.4 -22.3 -29.6 Debt components4 18 Federal 7.6 7.7 6.9 5.4 4.2 4.3 .1' 11.0 n.a. 19 Nonfederal 9.2 8.6 7.8 8.0 8.3 7.2 7.9' 8.8 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 depository institutions, credit union 8. Small-denomination time deposits—including retail RPs—are those issued share draft accounts, and demand deposits at thrift institutions. in amounts of less than $100,000. All IRA and Keogh accounts at commercial M2: Ml plus overnight (and continuing contract) repurchase agreements (RPs) banks and thrifts are subtracted from small time deposits. issued by all commercial banks and overnight Eurodollars issued to U .S. residents 9. Large-denomination time deposits are those issued in amounts of $100,000 by foreign branches of U.S. banks worldwide, Money Market Deposit Accounts or more, excluding those booked at international banking facilities. (MMDAs), savings and small-denomination time deposits (time deposits—includ- 10. Large-denomination time deposits at commercial banks less those held by ing retail RPs—in amounts of less than $100,000), and balances in both taxable and money market mutual funds, depository institutions, and foreign banks and tax-exempt general purpose and broker-dealer money market mutual funds. official institutions. Excludes individual retirement accounts (IRA) and Keogh balances at depository Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 DomesticN onfinancial Statistics • December 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 FFFaaaccctttooorrrsss 1989 1989 July Aug. Sept. Aug. 16 Aug. 23 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 11111 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 262,096 259,232 261,299 260,064 257,673 258,726 258,278 259,729 261,949 263,247 22222 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss11111 222,972 218,753 219,475 219,174 217,744 218,682 218,414 219,051 219,444 219,798 33333 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 222,812 218,753 219,018 219,174 217,744 218,682 218,414 219,051 218,362 219,099 44444 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss ..... 160 0 457 0 0 0 0 0 1,082 699 55555 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 6,674 6,609 6,762 6,609 6,609 6,609 6,593 6,555 6,810 7,014 66666 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 6,637 6,609 6,562 6,609 6,609 6,609 6,593 6,555 6,555 6,555 77777 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 37 0 200 0 0 0 0 0 255 459 88888 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 99999 LLLLLoooooaaaaannnnnsssss 685 685 636 580 925 563 512 480 746 818 1111100000 FFFFFllllloooooaaaaattttt 742 568 879 687 424 410 979 592 1,007 1,118 1111111111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 31,024 32,619 33,546 33,013 31,972 32,462 31,780 33,049 33,940 34,498 1111122222 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk22222 11,066 11,066 11,066 11,066 11,066 11,066 11,066 11,066 11,066 11,065 1111133333 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt............... 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 1111144444 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 19,245 19,318 19,391 19,314 19,324 19,334 19,344 19,354 19,372 19,386 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 1111155555 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 249,824 249,102 248,937 249,831 248,984 248,011 249,634 250,214 248,808 247,601 1111166666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss22222 466 429 431 431 426 422 423 424 435 436 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 1111177777 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 6,067 5,437 7,679 5,747 4,662 5,680 4,819 4,549 6,486 12,316 1111188888 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 229 250 257 282 243 208 251 270 243 236 1111199999 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,970 1,889 1,846 1,896 1,859 1,845 1,823 1,769 1,914 1,835 2222200000 OOOOOttttthhhhheeeeerrrrr 262 314 351 261 273 528 306 272 419 412 2222211111 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 8,029 7,948 7,572 7,766 7,667 7,687 7,077 7,378 7,619 7,743 2222222222 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss33333 34,085 32,765 33,201 32,748 32,467 33,262 32,873 33,793 34,980 31,637 End-of-month figures Wednesday figures 1989 1989 July Aug. Sept. Aug. 16 Aug. 23 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 SSSSSUUUUUPPPPPPPPPPLLLLLYYYYYIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 2222233333 RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkk cccccrrrrreeeeedddddiiiiittttt 259,145 256,914 264,137 259,473 261,421 256,932 259,462 260,727 272,423 263,276 2222244444 UUUUU.....SSSSS..... gggggooooovvvvveeeeerrrrrnnnnnmmmmmeeeeennnnnttttt ssssseeeeecccccuuuuurrrrriiiiitttttiiiiieeeeesssss''''' 218,676 217,409 221,051 219,577 219,214 216,339 219,132 219,188 226,447 220,565 2222255555 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 218,676 217,409 221,051 219,577 219,214 216,339 219,132 219,188 218,876 219,058 2222266666 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 0 0 0 0 0 0 0 0 7,571 1,507 2222277777 FFFFFeeeeedddddeeeeerrrrraaaaalllll aaaaagggggeeeeennnnncccccyyyyy ooooobbbbbllllliiiiigggggaaaaatttttiiiiiooooonnnnnsssss 6,609 6,609 6,555 6,609 6,609 6,609 6,555 6,555 8,340 7,613 2222288888 BBBBBooooouuuuuggggghhhhhttttt ooooouuuuutttttrrrrriiiiiggggghhhhhttttt 6,609 6,609 6,555 6,609 6,609 6,609 6,555 6,555 6,555 6,555 2222299999 HHHHHeeeeelllllddddd uuuuunnnnndddddeeeeerrrrr rrrrreeeeepppppuuuuurrrrrccccchhhhhaaaaassssseeeee aaaaagggggrrrrreeeeeeeeeemmmmmeeeeennnnntttttsssss 0 0 0 0 0 0 0 0 1,785 1,058 3333300000 AAAAAcccccccccceeeeeppppptttttaaaaannnnnccccceeeeesssss 0 0 0 0 0 0 0 0 0 0 3333311111 LLLLLoooooaaaaannnnnsssss 594 541 598 579 2,902 561 532 483 962 585 3333322222 FFFFFllllloooooaaaaattttt 351 634 501 856 448 896 1,112 723 1,807 804 3333333333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee aaaaasssssssssseeeeetttttsssss 32,915 31,722 35,433 31,853 32,249 32,528 32,131 33,778 34,866 33,708 3333344444 GGGGGooooolllllddddd ssssstttttoooooccccckkkkk22222 11,066 11,066 11,065 11,066 11,066 11,066 11,066 11,066 11,065 11,065 3333355555 SSSSSpppppeeeeeccccciiiiiaaaaalllll dddddrrrrraaaaawwwwwiiiiinnnnnggggg rrrrriiiiiggggghhhhhtttttsssss ccccceeeeerrrrrtttttiiiiifffffiiiiicccccaaaaattttteeeee aaaaaccccccccccooooouuuuunnnnnttttt............... 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 3333366666 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccuuuuurrrrrrrrrreeeeennnnncccccyyyyy ooooouuuuutttttssssstttttaaaaannnnndddddiiiiinnnnnggggg 19,309 19,344 19,425 19,314 19,324 19,334 19,344 19,354 19,372 19,386 AAAAABBBBBSSSSSOOOOORRRRRBBBBBIIIIINNNNNGGGGG RRRRREEEEESSSSSEEEEERRRRRVVVVVEEEEE FFFFFUUUUUNNNNNDDDDDSSSSS 3333377777 CCCCCuuuuurrrrrrrrrreeeeennnnncccccyyyyy iiiiinnnnn ccccciiiiirrrrrcccccuuuuulllllaaaaatttttiiiiiooooonnnnn 248,637 249,245 247,581 249,722 248,641 248,540 250,465 249,832 248,239 247,644 3333388888 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy cccccaaaaassssshhhhh hhhhhooooollllldddddiiiiinnnnngggggsssss22222 451 420 440 427 422 420 424 424 435 440 DDDDDeeeeepppppooooosssssiiiiitttttsssss,,,,, ooooottttthhhhheeeeerrrrr ttttthhhhhaaaaannnnn rrrrreeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss,,,,, wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss 3333399999 TTTTTrrrrreeeeeaaaaasssssuuuuurrrrryyyyy 5,312 6,652 13,452 4,612 5,648 5,714 4,537 5,458 11,476 9,768 4444400000 FFFFFooooorrrrreeeeeiiiiigggggnnnnn 371 265 326 239 180 207 209 187 192 335 4444411111 SSSSSeeeeerrrrrvvvvviiiiiccccceeeee-----rrrrreeeeelllllaaaaattttteeeeeddddd bbbbbaaaaalllllaaaaannnnnccccceeeeesssss aaaaannnnnddddd aaaaadddddjjjjjuuuuussssstttttmmmmmeeeeennnnntttttsssss 1,592 1,611 1,630 1,608 1,626 1,611 1,613 1,602 1,602 1,630 4444422222 OOOOOttttthhhhheeeeerrrrr 236 273 318 308 258 339 263 265 299 376 4444433333 OOOOOttttthhhhheeeeerrrrr FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee llllliiiiiaaaaabbbbbiiiiillllliiiiitttttiiiiieeeeesssss aaaaannnnnddddd cccccaaaaapppppiiiiitttttaaaaalllll 8,693 7,063 8,776 7,467 7,487 7,465 7,096 7,488 7,636 7,659 4444444444 RRRRReeeeessssseeeeerrrrrvvvvveeeee bbbbbaaaaalllllaaaaannnnnccccceeeeesssss wwwwwiiiiittttthhhhh FFFFFeeeeedddddeeeeerrrrraaaaalllll RRRRReeeeessssseeeeerrrrrvvvvveeeee BBBBBaaaaannnnnkkkkksssss33333 32,747 30,313 30,623 33,990 36,067 31,555 33,784 34,409 41,499 34,392 1. Includes securities loaned—fully guaranteed by U.S. government securities Research and Statistics, Banking Section. pledged with Federal Reserve Banks—and excludes any securities sold and 3. Excludes required clearing balances and adjustments to compensate for scheduled to be bought back under matched sale-purchase transactions. float. 2. Revised for periods between October 1986 and April 1987. At times during NOTE. For amounts of currency and coin held as reserves, see table 1.12. this interval, outstanding gold certificates were inadvertently in excess of the gold Components may not add to totals because of rounding. stock. Revised data not included in this table are available from the Division of 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 averages Reserve classification Mar. Apr. May June July Aug. Sept. 1 Reserve balances with Reserve Banks 37,360 37,673 37,830 34,623 35,832 33,199 33,852 33,902 32,823 33,507 2 Total vault cash 24,077 26,185 27,197 27,059 26,746 27,166 27,151 27,851 28,358 28,085 3 Vault4 22,199 24,449 25,909 25,589 25,456 25,712 25,735 26,351 26,735 26,569 4 Surplus 1,878 1,736 1,288 1,470 1,290 1,454 1,416 1,500 1,622 1,517 5 Total reserves6 59,560 62,123 63,739 60,212 61,288 58,911 59,587 60,254 59,559 60,076 6 Required reserves i 58,191 61,094 62,699 59,255 60,511 57,881 58,681 59,288 58,674 59,187 7 Excess reserve balances at Reserve Banks 1,369 1,029 1,040 957 776 1,031 905 966 885 888 8 Total borrowings at Reserve Banks 827 777 1,716 1,813 2,289 1,720 1,490 694 675 693 9 Seasonal borrowings at Reserve Banks .. 38 93 130 139 213 345 431 497 490 452 10 Extended credit at Reserve Banks 303 483 1,244 1,334 1,707 1,197 917 106 41 22 Biweekly averages of daily figures for weeks ending 1989 June 14 June 28 July 12 July 26 Aug. 9 Aug. 23 Sept. 6 Sept. 20 Oct. 4 Oct. 18 11 Reserve balances with Reserve Banks2 34,608 32,950 34,866 33,410 32,969 32,599 33,053 34,369' 32,573 33,600 12 Total vault cash 26,607 27,630 27,607 27,948 28,166 28,852 27,710 28,095 28,298 29,096 13 Vault4 25,301 26,104 26,191 26,432 26,513 27,212 26,153 26,660 26,691 27,532 14 Surplus5 1,306 1,526 1,416 1,517 1,654 1,640 1,557 1,436 1,607 1,564 15 Total reserves6 59,909 59,054 61,057 59,842 59,481 59,810 59,206 61,028' 59,264 61,132 16 Required reserves 59,012 58,154 60,067 58,807 58,766 58,859 58,247 60,195' 58,341 60,197 17 Excess reserve balances at Reserve Banks 897 901 990 1,035 715 951 959 833' 923 935 18 Total borrowings at Reserve Banks 2,126 965 717 681 676 753 538 614 898 653 19 Seasonal borrowings at Reserve Banks 388 467 483 509 497 489 485 438 453 342 20 Extended credit at Reserve Banks 1,657 287 146 90 55 44 22 21 25 19 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 • December 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 Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 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 66,871 64,904 69,394 69,451 65,767 62,866 66,221 71,087 68,324 2 For all other maturities 10,102 10,187 10,001 9,714 9,443 9,450 8,919 9,090 8,970 From other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 3 For one day or under continuing contract 26,570 26,952 27,114 29,922 26,636 27,000 25,144 28,535 29,991 4 For all other maturities 6,700 6,579 6,629 6,581 6,895 6,273 6,081 6,340 6,386 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 16,304 15,212 15,337 15,072 14,596 13,683 12,927 13,238 13,880 6 For all other maturities 12,587 13,177 12,365 11,524 13,136 13,293 12,723 12,699 12,221 All other customers 7 For one day or under continuing contract 27,452 28,070 27,866 27,761 27,123 27,616 27,876 26,825 28,236 8 For all other maturities 10,559 10,701 10,279 9,691 10,429 10,341 9,629 10,089 9,594 MEMO: Federal funds loans and resale agreements in immediately available funds in maturities of one day or under continuing contract 9 To commercial banks in the United States 35,147 34,797 39,559 34,356 37,066 37,013 39,869 37,509 38,388 10 To all other specified customers2 14,952 14,010 14,263 13,677 14,421 13,079 13,513 14,007 15,296 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. 2. Brokers and nonbank dealers in securities; other depository institutions; These data also appear in the Board's H.5 (507) release. For address, see inside foreign banks and official institutions; and United States government agencies, front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels AAddjjuussttmmeenntt ccrreeddiitt Extended credit2 aanndd FFFeeedddeeerrraaalll RRReeessseeerrrvvveee SSeeaassoonnaall ccrreeddiitt11 First 30 days of borrowing After 30 days of borrowing3 BBBaaannnkkk On Effective Previous On Effective Previous On Effective Previous 10/26/89 date rate 10/26/89 date rate 10/26/89 date rate Effective date Boston 7 2/24/89 6 Vi 7 2/24/89 6Vi 9.20 10/19/89 9.50 10/5/89 New York 2/24/89 2/24/89 10/19/89 10/5/89 Philadelphia 2/24/89 2/24/89 10/19/89 10/5/89 Cleveland 2/24/89 2/24/89 10/19/89 10/5/89 Richmond 2/24/89 2/24/89 10/19/89 10/5/89 Atlanta 2/24/89 2/24/89 10/19/89 10/5/89 Chicago 2/24/89 2/24/89 10/19/89 10/5/89 St. Louis 2/24/89 2/24/89 10/19/89 10/5/89 Minneapolis 2/24/89 2/24/89 10/19/89 10/5/89 Kansas City 2/24/89 2/24/89 10/19/89 10/5/89 Dallas 2/27/89 2/27/89 10/19/89 10/5/89 San Francisco ... 7 2/24/89 6'/i 7 2/24/89 6Vi 9.20 10/19/89 9.50 10/5/89 Range of rates for adjustment credit in recent years4 Range (or F.R. Range(or F.R. Range (or Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. Banks N.Y. Banks N.Y. Banks In effect Dec. 31, 1977. 6 6 1980—July 28 10-11 10 1984—Apr. 9 8Vi-9 9 1978—Jan. 9 6-6 Vi 6 Vi 29 10 10 13 9 9 20 6Vi 1 6V i Sept. 26 11 11 Nov. 21 8Vi-9 8Vi May 1 1 1 2 6V1i- 7 1 N De o c v . . 1 5 7 12 1 - 2 1 3 1 1 2 3 Dec. 2 2 4 6 8 8 > /2 8 8 V i J A u u ly g . 2 1 3 1 0 7 V I-7V' / /4 4 * 7 7 7 3 1 1 / / / 4 4 4 1981—May 5 8 13 1 - 4 1 4 1 1 4 4 1985—May 2 2 0 4 7V 7V i- i 8 7 7 V V i i O Se c p t. t . 2 1 2 6 8-8 8 Vi 8 8 Vi Nov. 2 6 13 1 - 3 1 4 1 1 3 3 1986—Mar. 7 7-7 Vi 7 20 8Vi 8Vi Dec. 4 12 12 10 7 7 Nov. 1 8 Vi-9Vi 9 Vi Apr. 21 6Vi-7 6Vi 3 9 Vi 9Vi 1982—July 20 11Vi—12 11 Vi July 11 6 6 23 nvi llVi Aug. 21 5Vi-6 5Vi 1979— A Ju u ly g . 2 1 0 7 10- 1 1 0 0 '/! 1100 1/2 Aug. 2 3 11 1 -i 1 m 1 1 1 1 22 5Vi 5Vi 20 10Vi 10 Vi 16 101^ 10W 1987—Sept. 4 5Vi-6 6 Sept. 2 1 1 9 10V 11 i- l 1 1 11 1 2 3 7 0 10- 1 10 0 V i 1 1 0 0 11 6 6 Oct. 8 11-12 12 Oct. 12 9Vi-10 9'/> 1988—Aug. 9 6-6 Vi 6Vi 10 12 12 13 9Vi 9>/i 11 6Vi 6Vi Nov. 22 9-9Vi 9 1980—Feb. 15 12-13 13 26 9 9 1989—Feb. 24 6Vi-7 7 19 13 13 Dec. 14 8W-9 9 27 7 7 May 29 12-13 13 15 8Vi-9 8Vi 30 12 12 17 8Vi 8Vi In effect Oct. 26, 1989 7 7 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 Vi 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, 2. Extended credit is available to depository institutions, when similar assist- 1980. There was no surcharge until Nov. 17, 1980, when a 2 percent surcharge was ance is not reasonably available from other sources, when exceptional circum- adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and stances or practices involve only a particular institution or when an institution is to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective experiencing difficulties adjusting to changing market conditions over a longer Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981 the period of time. formula for applying the surcharge was changed from a calendar quarter to a 3. For extended-credit loans outstanding more than 30 days, a flexible rate moving 13-week period. The surcharge was eliminated on Nov. 17, 1981. 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 DomesticN onfinancial Statistics • December 1989 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Depository institution requirements after implementation of the Monetary Control Act Type of deposit, and deposit interval Effective date Net transaction accounts $0 million-$41.5 million.... 12/20/88 More than $41.5 million ... 12/20/88 Nonpersonal time deposits5 By original maturity Less than 1 Vi years 10/6/83 1 >/2 years or more 10/6/83 Eurocurrency liabilities All types 11/13/80 1. Reserve requirements in effect on Dec. 31, 1988. Required reserves must be other transaction accounts, the exemption applies only to such accounts that held in the form of deposits with Federal Reserve Banks or vault cash. Nonmem- would be subject to a 3 percent reserve requirement. bers may maintain reserve balances with a Federal Reserve Bank indirectly on a 3. Transaction accounts include all deposits on which the account holder is pass-through basis with certain approved institutions. For previous reserve permitted to make withdrawals by negotiable or transferable instruments, payrequirements, see earlier editions of the Annual Report and of the FEDERAL ment orders of withdrawal, and telephone and preauthorized transfers in excess of RESERVE BULLETIN. Under provisions of the Monetary Control Act, depository three per month for the purpose of making payments to third persons or others. institutions include commercial banks, mutual savings banks, savings and loan However, MMDAs and similar accounts subject to the rules that permit no more associations, credit unions, agencies and branches of foreign banks, and Edge than six preauthorized, automatic, or other transfers per month, of which no more corporations. than three can be checks, are not transaction accounts (such accounts are savings 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law deposits subject to time deposit reserve requirements). 97-320) requires that $2 million of reservable liabilities (transaction accounts, 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 1989 TTyyppee ooff ttrraannssaaccttiioonn 11998866 11998877 11998888 Feb. Mar. Apr. May June July Aug. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 22,604 18,983 8,223 0 0 3,077 311 0 0 00 2 Gross sales 2,502 6,051 587 3,688 0 0 321 571 5,517 934 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 1,000 9,029 2,200 1,600 0 0 1,200 1,200 2,400 800 Others within 1 year 5 Gross purchases 190 3,659 2,176 0 0 172 0 0 0 0 6 Gross sales 0 300 0 0 0 0 0 0 0 0 7 Maturity shift 18,674 21,504 23,854 5,418 2,646 1,657 2,863 1,828 1,749 4,200 8 Exchange -20,180 -20,388 -24,588 -2,308 -2,322 -110 -3,628 -1,434 -1,073 -4,025 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 1,436 0 0 00 00 11 Gross sales 0 452 800 225 0 0 75 0 13 150 12 Maturity shift -17,058 -17,975 -17,720 -5,319 -2,646 -1,532 -2,036 -1,828 -1,584 -3,321 13 Exchange 16,985 18,938 22,515 2,008 2,322 0 3,328 1,434 787 3,425 5 to 10 years 14 Gross purchases 236 2,441 1,579 0 0 287 0 00 00 00 15 Gross sales 0 0 175 0 0 0 0 0 9 0 16 Maturity shift -1,620 -3,529 -5,946 -100 0 -125 258 0 -165 -879 17 Exchange 2,050 950 1,797 200 0 110 200 0 286 400 Over 10 years 18 Gross purchases 158 1,858 1,398 0 0 284 0 0 00 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift 0 0 -188 0 0 0 -1,086 0 0 0 21 Exchange 1,150 500 275 100 0 0 100 0 0 200 All maturities 22 Gross purchases 24,081 37,170 18,863 0 0 5,255 311 0 0 0 23 Gross sales 2,502 6,803 1,562 3,913 0 0 396 571 5,539 1,084 24 Redemptions 1,000 9,099 2,200 1,600 0 0 1,200 1,200 2,400 800 Matched transactions 25 Gross sales 927,999 950,923 1,168,484 110,393 83,677 77,349 123,029 128,139 123,373 146,611 26 Gross purchases 927,247 950,935 1,168,142 112,472 82,821 78,259 113,041 138,141 118,221 147,228 Repurchase agreements2 27 Gross purchases 170,431 314,621 152,613 0 0 2222,,224444 3311,,441199 66,,220033 44,,996611 00 28 Gross sales 160,268 324,666 151,497 0 0 12,547 41,117 6,203 4,961 0 29 Net change in U.S. government securities 29,988 11,234 15,872 -3,434 -856 15,863 -20,971 8,232 -13,091 -1,267 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 00 00 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 398 276 587 40 0 125 0 0 45 0 Repurchase agreements2 33 Gross purchases 31,142 80,353 57,259 0 0 7,207 1122,,773322 11,,666666 11,,113377 00 34 Gross sales 30,521 81,350 56,471 0 0 3,366 16,573 1,666 1,137 0 35 Net change in federal agency obligations 222 -1,274 198 -40 0 3,716 -3,841 0 -45 0 36 Total net change in System Open Market Account 30,212 9,961 16,070 -3,474 -856 19,579 -24,812 8,232 -13,136 -1,267 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 • December 1989 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1989 1989 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 July Aug. Sept. Consolidated condition statement ASSETS 1 Gold certificate account 11,066 11,066 11,066 11,065 11,065 11,066 11,066 11,065 2 Special drawing rights certificate account 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 3 450 430 434 454 472 450 445 480 Loans 4 To depository institutions 561 532 483 962 585 594 542 598 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 6,609 6,555 6,555 6,555 6,555 6,609 6,609 6,555 8 Held under repurchase agreements 0 0 0 1,785 11,,005588 0 0 0 U.S. Treasury securities Bought outright 9 Bills 93,776 96,568 96,624 96,313 96,495 95,962 94,846 98,487 10 Notes 91,950 91,950 91,950 91,950 91,950 92,300 91,951 91,950 11 Bonds 30,614 30,614 30,614 30,614 30,614 30,414 30,613 30,614 12 Total bought outright' 216,339 219,132 219,188 218,876 219,058 218,676 217,409 221,051 13 Held under repurchase agreements 0 0 0 7,571 1,507 0 0 0 14 Total U.S. Treasury securities 216,339 219,132 219,188 226,447 220,565 218,676 217,409 221,051 15 Total loans and securities 223,509 226,219 226,225 235,749 228,764 225,879 224,560 228,203 16 Items in process of collection 6,266 9,356 6,539 7,722 6,130 4,409 6,206 6,909 1/ Bank premises 769 775 776 776 775 768 776 775 Other assets 18 Denominated in foreign currencies3 22,065 21,511 22,941 23,195 24,286 21,529 21,292 26,411 19 All other4 9,693 9,845 10,062 10,896 8,647 10,618 9,655 8,247 20 Total assets 282,336 287,720 286,561 298,374 288,656 283,237 282,515 290,607 LIABILITIES 21 Federal Reserve notes 230,075 231,974 223311,,333366 222299,,775566 222299,,117711 223300,,222299 223300,,776666 222299,,007766 Deposits 22 To depository institutions 33,166 35,396 36,011 43,101 36,021 34,339 31,924 32,253 23 U.S. Treasury—General account 5,714 4,537 5,458 11,476 9,768 5,312 6,652 13,452 24 Foreign—Official accounts 207 209 187 192 335 371 264 326 25 Other 339 263 265 299 376 236 275 318 26 Total deposits 39,426 40,405 41,921 55,069 46,501 40,258 39,116 46,348 27 Deferred credit items 5,370 8,245 5,816 5,914 5,326 4,057 5,572 6,408 28 Other liabilities and accrued dividends5 2,744 2,931 2,951 2,994 2,903 2,841 3,072 3,080 29 Total liabilities 277,615 283,555 282,024 293,733 283,901 277,384 278,524 284,911 CAPITAL ACCOUNTS 30 Capital paid in 2,161 2,162 2,164 2,197 2,198 2,156 22,,116622 2,199 31 Surplus 2,112 1,879 1,970 2,006 2,112 2,112 11,,880099 2,112 32 Other capital accounts 448 125 402 439 445 1,585 22 1,385 33 Total liabilities and capital accounts 282,336 287,720 286,561 298,374 288,656 283,237 282,515 290,607 34 MEMO: Marketable U.S. Treasury securities held in custody for foreign and international accounts 242,745 240,668 241,320 239,324 239,416 236,847 242,857 237,904 Federal Reserve note statement 35 Federal Reserve notes outstanding issued to bank 276,738 276,474 276,733 276,765 277,492 274,736 276,492 277,676 36 LESS: Held by bank 46,663 44,500 45,397 47,010 48,322 44,507 45,727 48,601 37 Federal Reserve notes, net 230,075 231,974 231,336 229,756 229,171 230,229 230,766 229,076 Collateral held against notes net: 38 Gold certificate account 11,066 11,066 11,066 11,065 11,065 i 1,066 11,066 11,065 39 Special drawing rights certificate account 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 210,492 212,390 211,753 210,172 209,587 210,645 211,182 209,493 42 Total collateral 230,075 231,974 231,336 229,756 229,171 230,229 230,766 229,076 1. Some of these data also appear in the Board's H.4.1 (503) release. For 3. Valued monthly at market exchange rates. address, see inside front cover. Components may not add to totals because of 4. Includes special investment account at the Federal Reserve Bank of Chicago rounding. 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. 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 Holdings1 Millions of dollars Wednesday End of month TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1989 1989 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 July 31 Aug. 31 Sept. 29 1 Loans—Total 561 532 483 962 585 594 541 533 2 Within 15 days 468 247 202 899 511 415 354 455 3 16 days to 90 days 93 285 281 62 75 179 187 78 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 216,339 219,132 219,188 218,876 219,058 218,676 217,409 221,051 10 Within 15 days2 9,316 7,080 8,271 8,986 9,007 9,144 2,459 5,383 11 16 days to 90 days 49,957 52,247 50,681 49,019 51,446 48,395 50,331 54,519 12 91 days to 1 year 65,639 68,617 69,048 69,683 67,417 69,625 73,431 69,961 13 Over 1 year to 5 years 51,777 51,537 51,537 51,537 51,537 51,583 51,537 51,537 14 Over 5 years to 10 years 13,145 13,145 13,145 13,145 13,145 13,623 13,145 13,145 15 Over 10 years 26,506 26,506 26,506 26,506 26,506 26,306 26,506 26,506 16 Federal agency obligations—Total 6,609 6,555 6,555 6,555 6,555 6,609 6,609 6,555 17 Within 15 days2 334 0 16 163 191 101 334 191 18 16 days to 90 days 472 719 773 626 619 721 472 619 19 91 days to 1 year 1,359 1,383 1,343 1,343 1,339 1,332 1,359 1,339 20 Over 1 year to 5 years 3,242 3,260 3,230 3,230 3,213 3,249 3,242 3,213 2 2 1 2 O O v v e e r r 5 1 0 y e y a e r a s r s t o 10 years 1,0 1 1 8 2 9 1,0 1 0 8 4 9 1,0 1 0 8 4 9 1,0 1 0 8 4 9 1,0 1 0 8 4 9 1,0 1 1 8 6 9 1,0 1 1 8 2 9 1,0 1 0 8 4 9 1. Holdings under repurchase agreements are classified as maturing within 15 NOTE: Components may not add to totals due to rounding, days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • December 1989 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1989 IItteemm D 19 e 8 c 5 . D 19 e 8 c 6 . D 19 e 8 c 7 . D 19 e 8 c 8 . Feb. Mar. Apr. May June July Aug. Sept. Seasonally adjusted ADJUSTED FOR . CHANGES IN RESERVE REQUIREMENTS^ 1 Total reserves3 48.49 58.14 58.69 60.71 60.26 59.85 59.46 58.74 58.35 58.70 58.75r 59.17 2 Nonborrowed reserves 47.17 57.31 57.92 58.99 58.77 58.04 57.17 57.02 56.86 58.00 58.08 58.48 3 Nonborrowed reserves plus extended credit 47.67 57.62 58.40 60.23 59.82 59.38 58.88 58.22 57.78 58.11 58.12 58.50 4 Required reserves 47.44 56.77 57.66 59.67 59.11 58.90 58.69 57.71 57.44 57.73 57.87 58.28 5 Monetary base 219.51 241.45 257.99 275.50 277.55 278.61 278.67 278.33 279.06 279.98 280.29 281.98 Not seasonally adjusted 6 Total reserves3 49.59 59.46 60.06 62.21 59.37 58.94 60.01 57.72 58.41 58.95 58.30 58.86 7 Nonborrowed reserves 48.27 58.64 59.28 60.50 57.88 57.13 57.72 56.00 56.92 58.26 57.62 58.16 8 Nonborrowed reserves plus extended credit4 48.77 58.94 59.76 61.74 58.93 58.46 59.43 57.20 57.84 58.37 57.66' 58.19 9 Required reserves 48.53 58.09 59.03 61.17 58.22 57.98 59.23 56.69 57.51 57.99 57.41R 57.97 10 Monetary base5 222.73 245.25 262.08 279.71 274.36 275.62 278.11 277.49 280.18 282.07 281.09 280.64 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS" 11 Total reserves3 48.14 59.56 62.12 63.74 60.69 60.21 61.29 58.91 59.59 60.25 59.56 60.08 12 Nonborrowed reserves 46.82 58.73 61.35 62.02 59.21 58.40 59.00 57.19 58.10 59.56 58.88' 59.38 13 Nonborrowed reserves plus extended credit4 47.32 59.04 61.83 63.27 60.26 59.73 60.71 58.39 59.01 59.67 58.93 59.40 14 Required reserves 47.08 58.19 61.09 62.70 59.54 59.25 60.51 57.88 58.68 59.29 58.67' 59.19 15 Monetary base5 223.53 247.71 266.16 283.18 277.66 278.94 281.52 280.54 283.27 285.36 284.23 283.71 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 IItteemm22 D 19 e 8 c 5 . D 19 e 8 c 6 . D 19 e 8 c 7 . D 19 e 8 c 8 . June July" Aug/ Sept. Seasonally adjusted 1 Ml 620.5 725.9 752.3 790.3 770.3 777.3 777.7 781.5 2 M2 2,567.4 2,811.2 2,909.9 3,069.5 3,088.0 3,117.6 3,136.4 3,156.1 3 M3 3,201.7 3,494.9 3,677.6 3,915.4 3,973.5r 4,003.2 4,010.5 4,013.4 4 L 3,828.5r 4,135.1' 4,336.7f 4,672.2r 4,759. V 4,794.3 4,814.7 n.a. 5 Debt 6,741.5 7,597.0 8,316.1 9,081.1 9,431.6 9,479.2 9,552.6 n.a. Ml components 6 Currency 167.8 180.5 196.4 211.8 217.4 218.0 218.4 219.3 7 Travelers checks 5.9 6.5 7.1 7.6 7.2 7.1 7.2 7.2 8 Demand deposits5 267.3 303.2 288.3 288.6 275.0 278.9 277.6 277.5 9 Other checkable deposits6 179.5 235.8 260.4 282.3 270.7 273.3 274.6 277.6 Nontransactions components 10 In M27 1,946.9 2,085.3 2,157.6 2,279.3 2,317.7 2,340.3 2,358.7 2,374.6 11 In M3 only8 634.3 683.7 767.7 845.9 885.5' 885.6 874.1 857.3 Savings deposits9 12 Commercial Banks 125.0 155.8 178.5 192.5 181.4 181.9 183.1 184.3 13 Thrift institutions 176.6 215.2 237.8 238.8 220.6 219.6 219.2 219.9 Small-denomination time deposits10 14 Commercial Banks 383.3 364.6 385.3 443.1 501.9 505.1 508.4 510.5 15 Thrift institutions 499.2 489.3 528.8 582.2 616.6 621.3 623.4 621.7 Money market mutual funds 16 General purpose and broker-dealer 176.5 208.0 221.1 239.4 265.1 274.6 285.5 294.8 17 Institution-only 64.5 84.4 89.6 87.6 95.1 98.2 100.6 99.1 Large-denomination time deposits" 18 Commercial Banks 285.1 288.8 325.4 364.9 396.4 397.6 397.0 395.3 19 Thrift institutions 151.5 150.1 162.0 172.9 176.6 175.4 172.1 167.9 Debt components 20 Federal debt 1,585.8 1,805.8 1,957.4 2,113.5 2,184.3 2,184.5 2,204.6 n.a. 21 Nonfederal debt 5,155.7 5,791.2 6,358.6 6,967.6 7,247.3 7,294.7 7,348.0 n.a. Not seasonally adjusted 22 Ml 633.5 740.4 766.4 804.4 773.8 781.8 777.8 778.9 23 M2 2,576.2 2,821.1 2,918.7 3,077.2 3,090.8 3,125.4 3,137.4 3,149.5 24 M3 3,213.3 3,507.4 3,688.6 3,925.2 3,974.T 4,004.9 4,012.2 4,011.4 25 L 3,841.5r 4,150.0" 4,350.9' 4,685,6r 4,759.9" 4,785.2 4,809.4 n.a. 26 Debt 6,730.9 7,580.7 8,297.6 9,066.4 9,390.8 9,435.7 9,505.3 n.a. 27M l C c u o rr m en p c o y n ents 170.2 183.0 199.3 214.9 218.5 219.7 219.3 218.6 28 Travelers checks4 5.5 6.0 6.5 6.9 7.5 8.1 8.1 7.7 29 Demand deposits 276.9 314.0 298.6 298.8 276.4 281.5 276.8 276.1 30 Other checkable deposits6 180.9 237.4 262.0 283.7 271.4 272.5 273.6 276.5 Nontransactions components M2 . .. 1,942.7 2,080.7 2,152.3 2,272.9 2,317.0 2,343.6 2,359.6 2,370.6 32 M3 only8 637.1 686.3 769.9 848.0 883.3r 879.5 874.8 862.0 Money market deposit accounts 33 Commercial Banks 332.8 379.6 358.8 352.5 328.1 330.8 335.8 338.9 34 Thrift institutions 180.7 192.9 167.5 150.3 128.8 129.0 129.7 130.2 Savings deposits9 Commercial Banks 123.7 154.2 176.6 190.3 183.2 184.3 184.0 184.0 36 Thrift institutions 174.8 212.7 234.8 235.6 223.3 223.2 221.0 220.7 Small-denomination time deposits10 37 Commercial Banks 384.0 365.3 386.1 444.1 499.7r 504.4 507.9 510.9 38 Thrift institutions 499.9 489.8 529.1 582.4 612.8 619.8 620.9 618.9 Money market mutual funds 39 General purpose and broker-dealer 176.5 208.0 221.1 239.4 265.1 274.6 285.5 294.8 40 Institution-only 64.5 84.4 89.6 87.6 95.1 98.2 100.6 99.1 Large-denomination time deposits" 41 Commercial Banks 285.4 289.1 325.8 365.6 394.9 394.9 397.7 397.4 42 Thrift institutions 151.8 150.7 163.0 174.1 174.8 173.3 171.3 168.2 Debt components 43 Federal debt 1,583.7 1,803.9 1,955.6 2,111.8 2,165.1 2,164.2 2,183.6 n.a. 44 Nonfederal debt 5,147.1 5,776.8 6,342.0 6,954.6 7,225.7 7,271.5 7,321.7 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • December 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. AH 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. 1989 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11998888 Feb. Mar. Apr. May June July DEBITS TO Seasonally adjusted Demand deposits3 1 All insured banks 188,346.0 217,116.2 226,888.4 255,774.3 249,088.3 245,230.1 266,468.1 284,129.2 276,453.7 2 Major New York City banks 91,397.3 104,496.3 107,547.3 121,770.1 111,387.4 107,808.9 120,984.1 129,166.6 114,991.8 3 Other banks 96,948.8 112,619.8 119,341.2 134,004.2 137,700.9 137,421.3 145,483.9 154,962.7 161,461.9 4 ATS-NOW accounts4 2,182.5 2,402.7 2,757.7 3,054.9 3,264.9 2,986.4 3,406.5 3,696.5 3,596.3 5 Savings deposits 403.5 526.5 583.0 649.2 675.2 585.5 647.2 640.0 580.4 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 556.5 612.1 641.2 734.4 721.0 697.5 767.1 824.0 788.4 7 Major New York City banks 2,498.2 2,670.6 2,903.5 3,618.0 3,393.0 3,092.2 3,342.1 3,588.5 3,222.3 8 Other banks 321.2 357.0 376.8 425.9 440.4 433.9 467.5 501.8 512.6 9 ATS-NOW accounts4 15.6 13.8 14.7 16.0 17.1 15.7 18.2 19.8 19.1 10 Savings deposits 3.0 3.1 3.1 3.5 3.6 3.2 3.6 3.6 3.2 DEBITS TO Not seasonally adjusted Demand deposits3 11 All insured banks 188,506.7 217,125.1 227,010.7 231,347.8 264,581.6 238,265.6 274,861.8 295,522.8 268,243.0 12 Major New York City banks 91,500.1 104,518.8 107,565.0 110,047.2 120,202.2 105,461.7 121,507.2 134,020.7 117,276.1 13 Other banks 97,006.7 112,606.2 119,445.7 121,300.6 144,379.4 132,803.9 153,354.6 161,502.1 150,966.9 14 ATS-NOW accounts4 2,184.6 2,404.8 2,754.7 2,762.1 3,228.6 3,205.2 3,325.2 3,770.8 3,549.0 15 MMDA" 1,609.4 1,954.2 2,430.1 2,622.4 2,636.7 2,700.2 2,910.5 3,136.0 2,686.7 16 Savings deposits 404.1 526.8 578.0 573.3 649.6 649.6 637.9 641.4 610.4 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 556.7 612.3 641.7 683.1 782.3 676.6 805.9 855.6 761.3 18 Major New York City banks 2,499.1 2,674.9 2,901.4 3,255.7 3,603.3 3,017.6 3,482.5 3,795.0 3,247.5 19 Other banks 321.2 356.9 377.1 397.8 473.6 418.7 500.9 520.9 477.4 20 ATS-NOW accounts4 15.6 13.8 14.7 14.5 16.9 16.3 18.0 20.3 18.9 21 MMDA 4.5 5.3 6.9 7.8 7.8 8.1 9.0 9.7 8.2 22 Savings deposits 3.0 3.1 3.1 3.1 3.5 3.5 3.5 3.6 3.4 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 • December 1989 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1988 1989 CCaatteeggoorryy Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Seasonally adjusted 1 Total loans and securities2 2,401.4 2,410.2 2,417.2 2,422.8 2,451.9 2,464.9 2,470.9 2,486.3 2,496.8 2,518.1 2,534.4 2,544.1 2 U.S. government securities 355.6 358.8 361.4 360.4 361.8 368.8 370.7 373.5 373.8 374.4 376.6 378.8 i Other securities 196.8 195.9 194.0 189.6 190.4 189.7 187.2 186.4 185.7 184.6 182.8 182.9 4 Total loans and leases2 1,848.9 1,855.6 1,861.9 1,872.9 1,899.7 1,906.5 1,913.1 1,926.5 1,937.3 1,959.1 1,974.9 1,982.4 5 Commercial and industrial .... 601.6 601.8 601.9 606.6 619.0 617.8 620.6 626.3 624.9 632.1 637.3 636.9 6 Bankers acceptances held ... 4.1 4.3 4.1 4.4 4.2 4.0 4.1 4.2 4.2 4.1 4.5 44..88 7 Other commercial and industrial 597.5 597.4 597.8 602.2 614.8 613.7 616.6 622.1 620.7 628.1 632.7' 632.1 8 U.S. addressees4 590.9 591.3 591.8 596.6 609.9 608.3 611.7 616.6 615.2 622.2 627.1 626.7 y Non-U.S. addressees4 6.5 6.1 5.9 5.7 4.9 5.4 4.8 5.4 5.5 5.9 5.7 5.5 10 Real estate 659.8 665.3 672.0 678.9 685.6 691.8 699.5 705.5 712.0 719.9 729.0 734.4 a Individual 351.6 353.0 355.5 357.9 358.9 360.6 362.9 365.4 366.0 367.0 369.3 372.1 12 Security 38.5 38.2 38.5 37.7 44.7 43.6 40.0 38.r 41.3' 4400..55'' 3399..99'' 4400..66 13 Nonbank financial institutions 30.4 30.2 30.0 30.3 30.6 29.7 29.2 29.0 30.5' 31.7 32.0 32.1 14 Agricultural 29.8 30.3 30.7 30.7 30.7 30.7 30.4 30.3 30.3 30.4 30.3' 3300..22 15 State and political subdivisions 48.5 47.7 46.8 44.4 44.5 44.6 44.6 44.7r 44.5' 44.2 43.9 43.5 16 Foreign banks 7.6 8.1 7.6 7.8 8.5 8.2 8.3 9.4 9.3 8.9 9.3 8.5 17 Foreign official institutions 4.9 4.9 4.9 4.8 4.8 4.8 4.9 4.9 4.7 4.5 4.3 4.3 18 Lease financing receivables .... 28.9 29.1 29.2 29.4 29.6 29.6 29.8 30.0 29.9 30.3 30.3 31.0 19 All other loans 47.5 47.0 44.8 44.4 42.7 45.2 42.9 43.0r 43.8' 49.5' 49.3' 48.5 Not seasonally adjusted 20 Total loans and securities2 2,392.6 2,409.2 2,429.6 2,430.7 2,453.6 2,462.8 2,473.9 2,487.4 2,500.9 2,511.8 2,526.9 2,541.2 21 U.S. government securities 352.6 357.5 361.6 362.2 366.3 370.2 370.9 372.6 372.6 373.1 376.8 378.5 22 Other securities 195.6 196.0 193.7 191.7 190.1 188.9 187.2 186.8 186.0 184.1 183.1 182.8 23 Total loans and leases2 1,844.4 1,855.7 1,874.2 1,876.9 1,897.2 1,903.7 1,915.9 1,928.0 1,942.3 1,954.6 1,966.9 1,980.0 24 Commercial and industrial 597.0 599.3 605.0 605.8 618.3 621.1 625.2 630.0 629.0 631.0 632.7 632.2 25 Bankers acceptances held3... 4.2 4.3 4.1 4.1 4.1 4.0 4.0 4.3 4.4 44..22 44..66 55..00 26 Other commercial and industrial 592.8 595.0 600.9 601.7 614.2 617.1 621.3 625.8 624.6 626.8 628.0 627.3 2277 U.S. addressees4 586.6 588.9 594.8 596.4 608.9 611.8 616.0 620.2 619.0 621.1' 622.6 621.8 28 Non-U.S. addressees4 6.2 6.1 6.1 5.3 5.3 5.3 5.3 5.5 5.6 5.6 5.5 5.5 29 Real estate 660.7 667.2 673.3 678.9 683.6 689.2 697.4 704.1 712.1 720.6 730.4 736.5 30 Individual 352.6 354.1 359.4 360.7 358.2 357.7 360.3 363.2 364.5 365.9 369.3 374.0 31 Security 36.9 37.6 38.9 38.2 43.8 44.1 42.0 38.9 4422^^ 4400..22'' 3388..66'' 3399..11 32 Nonbank financial institutions 30.1 30.3 31.1 30.7 30.0 29.1 29.0 29.2 30.7' 31.7 31.9 32.1 3333 Agricultural 30.6 30.5 30.5 30.1 29.8 29.6 29.6 30.1 3300..77 3311..11 3311..22 3311..11 34 State and political subdivisions 48.0 47.1 46.6 45.8 45.5 45.1 44.9' 44.6' 44.1 43.6 43.4 42.9 3355 Foreign banks 7.6 8.2 7.9 8.1 8.5 8.0 8.0 9.0 9.1 9.0 9.1 8.7 36 Foreign official institutions 4.9 4.9 4.9 4.8 4.8 4.8 4.9 4.9 4.7 4.5 4.3 4.3 3/ Lease financing receivables .... 28.7 28.9 29.4 29.7 29.7 29.7 29.8 30.0 30.0 30.2 30.2 30.9 38 All other loans 47.3 47.5 47.3 44.0 45.0 45.4 44.7 44.1' 44.5' 46.9' 45^ 48.1 1. Data have been revised because of benchmarking beginning January 1984 . 2. Excludes loans to commercial banks in the United States. These data also appear in the Board's G.7 (407) release. For address, see inside 3. Includes nonfinancial commercial paper held, front cover. 4. United States includes the 50 states and the District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars 1988 1989 SSoouurrccee Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug.' Sept. Seasonally adjusted 1 Total nondeposit funds2 211.3 217.8 215.2 208.3' 211.5' 212.2' 206.0' 210.1' 227.3' 228.5' 229.9 238.2 2 Net balances due to related foreign offices 5.6 9.3 6.8 8.3' ll.C 8.3' 3.2' .2' 8.2' 11.4' 9.3 9.8 3 Borrowings from other than commercial banks in United States4 205.6 208.4 208.4 200.0 200.6' 203.9' 202.9' 209.9 219.1 217.1 220.5 228.4 4 Domestically chartered banks 167.4 169.1 169.4 163.0 161.3 165.8 164.2 169.2 179.1 175.3 178.2 185.1 5 Foreign-related banks 38.2 39.3 39.0 37.0 39.3' 38.1 38.7 40.7 40.0 41.8 42.3 43.4 Not seasonally adjusted Total nondeposit funds 205.2 214.5 209.6r 207.5' 216.3' 217.8' 208.7' 217.7' 230.4' 224.2' 228.7 234.2 7 Net balances due to related foreign offices 5.3 10.4 9.3' 8.0' 10.7' 7.3' 1.1' 2.8' 8.3' 8.4' 9.0 10.7 8 Domestically chartered banks -20.4 -19.1 -20.6' -20.2' -17.6' -19.5' -22.7' -21.8' -18.2' -16.3' -15.4 -14.1 9 Foreign-related banks 25.7 29.5 29.9 28.2 28.3 26.8 23.8 24.6 26.6 24.7 24.4 24.9 10 Borrowings from other than commercial banks in United States4 200.0 204.1 200.3 199.5 205.6 210.5 207.7' 214.9 222.1' 215.8 219.7 223.4 11 Domestically chartered banks 163.2 167.8 163.3 161.3 165.1 170.9 168.1 173.8 180.4 173.4 177.7 180.9 12 Federal funds and security RP borrowings 159.1 163.2 159.8 157.9 161.9 167.4 163.8 170.0 177.0 170.8 175.1 178.3 13 Other6 4.1 4.6 3.5 3.4 3.2 3.5 4.3 3.7 3.4 2.7 2.6 2.6 14 Foreign-related banks6 36.8 36.3 37.0 38.2' 40.5 39.6 39.5 41.1 41.6 42.4 42.0 42.6 MEMO Gross large time deposits 15 Seasonally adjusted 423.2 424.5 429.2 434.9 440.3 446.7 452.7 456.8 458.7' 461.6 460.5 458.2 16 Not seasonally adjusted 424.7 425.6 429.8 434.5 440.2 448.2 450.6 455.5 457.3 458.9 461.3 460.3 U.S. Treasury demand balances at commercial banks8 17 Seasonally adjusted 27.2 23.0 24.9 20.3 20.3 20.3 20.9 27.1 27.4 22.7 22.9 23.8 18 Not seasonally adjusted 27.7 16.3 22.9 25.0 25.9 18.1 20.2 34.3 26.2 23.0 15.8 24.8 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 • December 1989 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series1 Billions of dollars 1988 1989 AAccccoouunntt Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. ALL COMMERCIAL BANKING INSTITUTIONS2 1 Loans and securities 2,591.6 2,601.6 2,587.0 2,624.0 2,627.1 2,623.0 2,659.8 2,660.7 2,677.1 2,692.5 2,695.7 2 Investment securities 532.9 533.5 533.5 535.8 539.1 538.3 541.1 541.6 538.3 542.8 542.4 3 U.S. government securities 341.5 345.3 347.3 351.3 355.5 356.6 359.1 362.2 360.3 365.3 366.4 4 Other 191.4 188.2 186.2 184.5 183.6 181.7 182.0 179.4 178.1 177.5 176.1 5 Trading account assets 24.8 19.2 21.5 20.1 21.8 17.8 19.2 18.2 19.8 18.7 18.3 6 Total loans 2,033.9 2,048.9 2,032.1 2,068.0 2,066.2 2,066.8 2,099.5 2,100.9 2,119.0 2,131.0 2,135.0 7 Interbank loans 170.3 165.7 159.9 173.2 154.9 150.7 160.5 155.0 162.4 162.9 158.0 8 Loans excluding interbank 1,863.6 1,883.2 1,872.2 1,894.9 1,911.3 1,916.2 1,939.0 1,945.9 1,956.6 1,968.1 1,977.1 9 Commercial and industrial 601.3 608.8 604.6 617.6 622.9 627.3 631.1 628.3 635.3 631.9 630.3 10 Real estate 669.6 676.3 679.7 684.1 692.6 699.4 706.7 715.1 722.8 733.9 737.5 11 Individual 355.3 361.4 360.8 358.3 358.1 361.8 363.8 366.0 366.2 371.4 375.5 12 All other 237.5 236.6 227.0 234.8 237.7 227.7 237.4 236.6 232.3 231.0 233.7 13 Total cash assets 237.5 246.3 216.1 227.4 211.5 215.8 248.3 214.2 211.7 212.0 219.6 14 Reserves with Federal Reserve Banks. 33.8 34.5 31.5 27.7 30.9 33.4 27.8 27.9 30.6 28.7 31.7 15 Cash in vault 28.7 30.3 27.5 26.6 26.8 26.9 27.9 27.6 27.4 28.5 28.0 16 Cash items in process of collection ... 89.8 92.3 76.4 89.1 75.9 78.8 107.6 78.7 75.2 77.4 82.6 17 Demand balances at U.S. depository institutions 32.4 34.4 28.7 33.3 28.8 28.5 34.9 29.6 28.8 29.7 29.0 18 Other cash assets 52.8 54.8 52.0 50.7 49.0 48.3 50.2 50.5 49.7 47.7 48.3 19 Other assets 200.7 200.0 194.6 191.4 194.1 200.7 206.8 198.7 201.1 199.6 203.9 20 Total assets/total liabilities and capital 3,029.7 3,047.9 2,997.8 3,042.8 3,032.7 3,039.5 3,114.9 3,073.6 3,090.0 3,104.0 3,119.3 21 Deposits 2,125.8 2,145.7 2,097.1 2,125.2 2,123.7 2,134.2 2,182.6 2,138.2 2,152.0 2,166.6 2,175.3 22 Transaction deposits 628.6 642.7 586.6 602.6 583.2 594.5 628.5 580.5 579.4 583.4 588.5 23 Savings deposits 541.1 535.6 528.8 527.3 523.2 512.0 509.7 507.4 514.0 518.9 520.7 24 Time deposits 956.1 967.5 981.7 995.3 1,017.3 1,027.6 1,044.3 1,050.2 1,058.6 1,064.4 1,066.1 25 Borrowings 479.0 473.1 493.6 502.9 483.6 486.7 510.6 512.7 510.2 504.6 516.5 26 Other liabilities 229.0 233.7 209.1 216.5 223.9 217.4 218.6 218.4 223.1 226.3 221.4 27 Residual (assets less liabilities) 195.9 195.3 198.0 198.2 201.4 201.2 203.2 204.4 204.7 206.5 206.1 MEMO 28 U.S. government securities (including trading account) 361.0 359.4 364.4 366.2 372.1 369.5 372.3 374.4 373.5 377.5 378.5 29 Other securities (including trading account) 196.7 193.4 190.5 189.7 188.8 186.6 188.0 185.4 184.6 184.0 182.3 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 2,389.8 2,391.9 2,385.1 2,405.9 2,407.8 2,407.8 2,446.0 2,439.9 2,452.1 2,467.6 2,473.6 31 Investment securities 507.1 507.2 507.0 509.0 513.1 513.8 516.1 517.3 514.2 519.4 519.0 32 U.S. government securities 329.9 333.2 334.5 338.1 342.7 344.1 345.9 349.5 347.8 353.5 354.5 33 Other 177.1 174.0 172.6 171.0 170.4 169.7 170.2 167.8 166.5 165.9 164.5 34 Trading account assets 24.8 19.2 21.5 20.1 21.8 17.8 19.2 18.2 19.8 18.7 18.3 35 Total loans 1,858.0 1,865.4 1,856.6 1,876.8 1,872.8 1,876.2 1,910.6 1,904.5 1,918.1 1,929.4 1,936.3 36 Interbank loans 139.7 133.1 131.4 138.9 122.3 120.2 131.5 119.3 126.4 127.0 125.1 37 Loans excluding interbank 1,718.3 1,732.3 1,725.2 1,737.8 1,750.5 1,756.0 1,779.2 1,785.1 1,791.7 1,802.5 1,811.2 38 Commercial and industrial 498.7 500.6 498.9 503.4 506.1 511.3 515.5 511.6 515.6 512.8 510.4 39 Real estate 647.7 654.3 657.7 661.7 669.8 676.0 683.2 691.6 698.2 708.7 712.2 40 Individual 354.9 361.1 360.5 358.0 357.7 361.4 363.5 365.6 365.8 371.1 375.2 41 All other 217.0 216.3 208.1 214.7 216.9 207.3 217.0 216.3 212.0 209.9 213.5 42 Total cash assets 216.6 223.1 193.5 206.4 191.4 195.3 227.0 192.3 190.1 191.7 197.6 43 Reserves with Federal Reserve Banks. 32.6 33.1 30.1 26.6 29.5 30.7 26.7 26.6 29.6 27.0 29.5 44 Cash in vault 28.6 30.3 27.4 26.6 26.8 26.8 27.9 27.6 27.4 28.5 28.0 45 Cash items in process of collection ... 89.0 91.4 75.6 88.1 75.1 77.9 106.6 77.7 74.4 76.5 81.3 46 Demand balances at U.S. depository institutions 30.5 32.4 26.8 31.2 26.6 26.8 32.9 27.5 27.0 28.0 27.3 47 Other cash assets 35.8 35.9 33.6 33.9 33.4 33.1 33.0 32.9 31.7 31.7 31.6 48 Other assets 132.2 135.6 128.1 129.6 130.6 134.6 133.6 131.6 128.4 127.5 131.5 49 Total assets/liabilities and capital 2,738.6 2,750.5 2,706.7 2,741.8 2,729.9 2,737.7 2,806.6 2,763.9 2,770.6 2,786.7 2,802.8 50 Deposits 2,056.3 2,073.0 2,026.1 2,052.7 2,047.4 2,056.2 2,103.0 2,058.8 2,071.3 2,086.9 2,094.5 51 Transaction deposits 618.7 632.9 577.4 593.5 574.1 584.8 618.7 571.2 570.2 574.7 578.8 52 Savings deposits 538.6 533.1 526.4 524.8 520.7 509.4 507.1 504.8 511.3 516.2 517.9 53 Time deposits 899.0 907.0 922.3 934.4 952.6 961.9 977.2 982.9 989.9 995.9 997.7 54 Borrowings 366.1 363.7 377.1 378.7 362.8 368.2 383.0 387.3 380.2 375.5 390.8 55 Other liabilities 123.8 122.0 109.0 115.8 121.7 115.6 120.9 116.9 117.8 121.3 114.9 56 Residual (assets less liabilities) 192.4 191.8 194.5 194.6 197.9 197.7 199.7 200.8 201.2 203.0 202.6 MEMO 57 Real estate loans, revolving 39.7 40.1 40.7 41.7 42.5 43.4 44.3 45.3 45.7 46.4 47.1 58 Real estate loans, other 608.0 614.2 617.0 620.0 627.3 632.6 638.9 646.2 652.5 662.3 665.0 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 Aug. 2r Aug. 9' Aug. 16r Aug. 23r Aug. 3<y Sept. 6 Sept. 13 Sept. 20 Sept. 27 1 Cash and balances due from depository institutions 116,632 105,058 110,555 103,926 104,331 118,718 110,729 117,382 111,758 2 Total loans, leases, and securities, net 1,221,709 1,222,336 1,227,773 1,224,929 1,221,597 1,237,403 1,222,800 1,235,452 1,223,219 3 U.S. Treasury and government agency 142,596 143,518 145,101 145,558 143,784 144,871 144,456 144,905 144,135 4 Trading account 12,858 13,809 15,086 13,979 12,200 13,474 13,260 12,784 12,103 5 Investment account 129,738 129,709 130,015 131,579 131,584 131,397 131,196 132,120 132,031 6 Mortgage-backed securities 61,006 61,125 62,405 63,791 63,713 63,667 64,502 64,722 65,741 All other maturing in 7 One year or less 20,356 20,471 20,280 20,365 20,453 20,299 19,942 20,079 18,723 8 Over one through five years 38,748 38,608 38,927 38,467 37,810 37,539 37,155 37,132 36,882 9 Over five years 9,627 9,505 8,402 8,956 9,607 9,892 9,596 10,187 10,685 10 Other securities 70,322 70,488 70,252 70,180 70,560 70,339 70,240 70,033 69,797 11 Trading account 1,165 1,252 983 845 856 792 836 856 914 12 Investment account 69,157 69,236 69,269 69,335 69,703 69,547 69,403 69,177 68,883 13 States and political subdivisions, by maturity 41,720 41,680 41,586 41,588 41,562 41,408 41,375 41,274 41,220 14 One year or less 4,785 4,770 4,806 4,842 4,874 4,873 4,876 4,861 4,818 15 Over one year 36,935 36,909 36,780 36,747 36,689 36,535 36,499 36,412 36,402 16 Other bonds, corporate stocks, and securities 27,436 27,557 27,683 27,746 28,140 28,139 28,028 27,904 27,662 17 Other trading account assets 4,829 5,021 5,502 5,436 5,676 6,065 6,022 5,487 5,296 18 Federal funds sold4 66,027 67,166 68,348 65,619 63,375 71,050 62,096 69,415 63,022 19 To commercial banks 45,851 46,915 48,776 46,290 45,418 51,473 41,175 48,554 43,942 20 To nonbank brokers and dealers in securities 13,744 14,932 13,923 12,799 12,447 12,517 14,234 13,795 12,668 21 To others 6,432 5,319 5,649 6,529 5,509 7,059 6,686 7,066 6,412 22 Other loans and leases, gross 974,846 972,956 975,389 974,988 974,891 981,738 975,812 981,445 977,533 23 Other loans, gross 950,058 947,702 950,007 949,642 949,526 956,366 950,399 955,806 951,909 24 Commercial and industrial 317,999 317,830 316,338 316,592 316,509 318,146 314,936 316,989 314,697 25 Bankers acceptances and commercial paper 1,934 2,022 2,099 2,077 2,212 2,198 2,116 2,094 2,143 26 All other 316,065 315,807 314,239 314,515 314,297 315,947 312,820 314,895 312,554 27 U.S. addressees 314,373 314,163 312,548 312,845 312,710 314,317 311,242 313,001 310,780 28 Non-U.S. addressees 1,691 1,644 1,692 1,670 1,587 1,630 1,578 1,894 1,774 29 Real estate loans 336,570 337,342 338,762 339,700 341,081 342,592 341,146 342,302 342,740 30 Revolving, home equity 24,960 25,090 25,256 25,373 25,527 25,608 25,771 25,915 26,053 31 All other 311,610 312,251 313,506 314,328 315,554 316,984 315,374 316,386 316,688 32 To individuals for personal expenditures 170,041 170,306 170,874 170,821 171,422 171,751 172,578 173,104 173,382 33 To depository and financial institutions 49,416 48,294 48,329 47,736 46,890 47,751 47,054 46,404 46,386 34 Commercial banks in the United States 21,397 21,623 21,664 21,783 20,739 20,890 20,266 19,880 19,986 35 Banks in foreign countries 5,486 4,539 4,320 4,415 4,336 4,392 4,618 4,415 4,811 36 Nonbank depository and other financial institutions .. 22,533 22,132 22,345 21,538 21,815 22,469 22,170 22,110 21,590 37 For purchasing and carrying securities 16,900 16,281 17,113 17,368 16,284 17,520 17,159 18,871 16,699 38 To finance agricultural production 5,964 5,947 5,945 5,906 5,873 5,850 5,834 5,775 5,720 39 To states and political subdivisions 26,589 26,500 26,555 26,506 26,506 26,374 26,208 26,166 26,222 40 To foreign governments and official institutions 1,544 1,511 1,649 1,592 1,584 1,533 1,586 1,656 1,649 41 All other 25,034 23,692 24,441 23,421 23,377 24,849 23,898 24,537 24,412 42 Lease financing receivables 24,788 25,253 25,381 25,346 25,366 25,372 25,412 25,639 25,624 43 LESS: Unearned income 4,853 4,867 4,877 4,875 4,893 4,858 4,889 4,900 4,904 44 Loan and lease reserve 32,058 31,945 31,942 31,978 31,795 31,802 30,935 30,934 31,660 45 Other loans and leases, net 937,935 936,144 938,570 938,136 938,203 945,078 939,988 945,611 940,970 46 All other assets 127,440 127,888 124,494 122,006 121,558 126,253 128,060 122,256 125,232 47 Total assets 1,465,781 1,455,283 1,462,822 1,450,861 1,447,486 1,482,375 1,461,590 1,475,089 1,460,210 48 Demand deposits 234,222 216,335 227,120 208,480 214,943 236,234 221,539 223,381 222,501 49 Individuals, partnerships, and corporations 185,705 174,801 182,420 166,645 172,079 185,681 179,676 174,561 175,734 50 States and political subdivisions 6,961 5,066 5,645 5,655 5,182 5,905 5,198 6,142 6,415 51 U.S. government 1,869 1,709 3,570 3,040 3,083 4,595 2,202 6,097 3,113 52 Depository institutions in the United States 21,916 19,140 20,082 18,653 19,472 23,643 19,078 20,449 19,506 53 Banks in foreign countries 6,403 5,749 5,770 5,639 6,113 6,078 6,552 6,217 7,049 54 Foreign governments and official institutions 804 763 726 818 677 940 537 859 973 55 Certified and officers' checks 10,563 9,106 8,908 8,030 8,336 9,392 8,296 9,056 9,711 56 Transaction balances other than demand deposits 75,886 76,135 75,651 73,860 73,456 77,7% 75,996 73,890 72,787 57 Nontransaction balances 685,266 686,070 686,388 687,215 686,806 689,928 689,604 687,077 687,094 58 Individuals, partnerships, and corporations 646,160 646,633 646,966 647,159 647,272 650,820 650,573 648,556 648,506 59 States and political subdivisions 29,903 30,300 30,351 30,908 30,631 30,065 30,189 29,714 29,859 60 U.S. government 934 905 905 901 659 888 858 880 872 61 Depository institutions in the United States 7,620 7,578 7,516 7,602 7,596 7,503 7,342 7,274 7,196 62 Foreign governments, official institutions, and banks .. 649 654 650 645 648 652 641 652 661 63 Liabilities for borrowed money 283,179 288,290 286,610 291,616 282,519 287,884 287,242 302,948 293,136 64 Borrowings from Federal Reserve Banks 0 700 0 2,269 0 55 0 370 0 65 Treasury tax-and-loan notes 10,107 4,176 14,255 14,152 15,812 4,027 8,167 24,889 25,038 66 All other liabilities for borrowed money 273,071 283,413 272,355 275,195 266,707 283,802 279,075 277,689 268,098 67 Other liabilities and subordinated notes and debentures .. 85,771 86,731 85,087 87,714 87,621 87,228 84,097 85,299 82,809 68 Total liabilities 1,364,323 1,353,560 1,360,857 1,348,886 1,345,344 1,379,069 1,358,478 1,372,596 1,358,327 69 Residual (total assets minus total liabilities)7 101,458 101,722 101,965 101,975 102,141 103,306 103,111 102,493 101,882 MEMO 70 Total loans and leases (gross) and investments adjusted8 . 1,191,372 1,190,610 1,194,152 1,193,708 1,192,127 1,201,700 1,197,182 1,202,852 1,195,855 71 Total loans and leases (gross) adjusted 973,624 971,583 973,297 972,534 972,108 980,425 976,465 982,426 976,627 72 Time deposits in amounts of $100,000 or more 218,324 219,291 219,051 219,940 219,564 219,066 218,837 218,005 217,552 73 U.S. Treasury securities maturing in one year or less 17,656 17,976 16,785 16,918 16,697 16,305 16,991 17,118 16,427 74 Loans sold outright to affiliates—total 1,585 1,643 1,679 1,698 1,702 1,674 1,598 1,634 1,670 75 Commercial and industrial 1,244 1,302 1,342 1,371 1,374 1,346 1,270 1,312 1,329 76 Other 341 341 337 327 328 328 327 322 340 77 Nontransaction savings deposits (including MMDAs) 252,725 253,358 254,008 253,496 253,369 257,098 256,700 254,516 255,211 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 • December 1989 1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY1 Millions of dollars, Wednesday figures 1989 AAccccoouunntt Aug. 2 Aug. 9 Aug. 16 Aug. 23 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 1 Cash balances due from depository institutions 26,886 23,211 26,743 24,173' 20,658 24,680 21,990 28,005 26,341 2 Total loans, leases, and securities, net2 212,828 214,544 213,553 216,238' 213,405 219,579 212,867 221,294 211,911 Securities 3 U.S. Treasury and government agency3 0 0 0 0 0 0 0 0 0 4 Trading account 0 0 0 0 0 0 0 0 0 5 Investment account 15,762 15,862 15,715 15,687 15,670 15,552 15,584 15,294 14,753 6 Mortgage-backed securities4 8,213 8,324 8,183 88,,110022 8,136 8,224 88,,225511 77,,557744 77,,556677 All other maturing in 7 One year or less 2,864 2,930 2,866 2,914 2,865 2,670 2,673 3,025 2,498 8 Over one through five years 3,110 3,088 3,245 3,247 3,246 3,235 3,236 3,272 3,265 9 Over five years 1,575 1,520 1,421 1,424 1,424 1,423 1,423 1,423 1,422 1 1 0 1 Ot T he ra r d s i e n c g u a ri c t c ie o s u 3 nt3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 Investment account 16,636 16,687 16,706 16,762 17,014 16,977 16,909 16,814 16,796 13 States and political subdivisions, by maturity 10,116 10,082 10,037 10,035 10,084 10,005 9,952 9,834 9,782 14 One year or less 1,051 1,031 1,090 1,103 1,130 1,145 1,156 1,125 1,075 15 Over one year 9,066 9,050 8,947 8,932 8,954 8,860 8,795 8,709 8,707 16 Other bonds, corporate stocks, and securities 6,520 6,605 6,670 6,726 6,930 6,971 6,957 6,980 7,014 17 Other trading account assets3 0 0 0 0 0 0 0 0 0 Loans and leases 18 Federal funds sold5 17,160 19,397 18,539 21,023 18,644 21,178 15,972 21,380 15,675 19 To commercial banks 9,206 12,082 10,965 13,879 11,004 12,746 7,403 13,377 8,544 20 To nonbank brokers and dealers in securities 4,462 4,733 4,642 4,408 4,573 4,682 4,945 4,092 3,988 21 To others 3,492 2,581 2,932 2,735 3,067 3,750 3,624 3,912 3,142 22 Other loans and leases, gross 177,060 176,440 176,447 176,621' 175,931 179,498 178,111 181,507 179,244 23 Other loans, gross 171,403 170,815 170,801 170,984' 170,304 173,882 172,468 175,826 173,575 24 Commercial and industrial 58,910 58,547 58,350 58,894 58,351 59,801 58,619 59,278 58,343 25 Bankers acceptances and commercial paper 506 485 551 526 555 530 525 461 544 26 All other 58,404 58,062 57,799 58,368 57,796 59,271 58,094 58,817 57,799 27 U.S. addressees 57,831 57,528 57,219 57,860 57,280 58,787 57,615 58,079 57,161 28 Non-U.S. addressees 573 534 580 508 516 484 480 738 638 29 Real estate loans 55,632 55,942 56,312 56,759' 57,306 58,180 58,766 59,052 59,130 30 Revolving, home equity 3,596 3,610 3,622 3,635 3,655 3,667 3,682 3,699 3,717 31 All other 52,036 52,332 52,690 53,124' 53,651 54,513 55,084 55,353 55,413 32 To individuals for personal expenditures 19,649 19,716 19,819 19,912 19,883 19,775 19,848 20,017 20,086 33 To depository and financial institutions 20,291 19,263 18,600 18,157 17,583 17,972 17,828 18,375 18,333 34 Commercial banks in the United States 8,446 8,852 8,464 8,234 7,520 7,906 7,463 8,156 7,958 35 Banks in foreign countries 3,960 3,077 2,818 2,810 2,814 2,785 3,126 2,788 3,248 36 Nonbank depository and other financial institutions 7,885 7,334 7,318 7,113 7,250 7,281 7,239 7,431 7,127 37 For purchasing and carrying securities 5,873 6,013 6,349 6,468 6,239 7,049 6,409 7,468 6,186 38 To finance agricultural production 149 153 136 141 144 144 134 136 134 39 To states and political subdivisions 5,852 5,837 5,940 5,934 5,919 5,938 5,928 5,926 5,938 40 To foreign governments and official institutions 395 372 513 452 456 413 427 530 523 41 All other 4,653 4,972 4,782 4,266 4,421 4,609 4,509 5,043 4,903 42 Lease financing receivables 5,657 5,625 5,646 5,637' 5,627 5,616 5,643 5,681 5,669 43 LESS: Unearned income 1,719 1,734 1,744 1,737 1,749 1,735 1,759 1,768 1,770 44 Loan and lease reserve 12,071 12,108 12,110 12,117' 12,106 11,891 11,949 11,934 12,786 45 Other loans and leases, net 163,269 162,598 162,593 162,766' 162,076 165,872 164,403 167,805 164,688 46 All other assets 51,511 54,699 52,942 49,898' 49,638 52,974 51,433 45,745 47,114 47 Total assets 291,225 292,454 293,238 290,309' 283,701 297,233 286,290 295,044 285,366 Deposits 48 Demand deposits 54,126 49,537 51,908 47,267 47,605 51,504 48,315 51,800 53,430 49 Individuals, partnerships, and corporations 37,002 35,062 37,633 32,948 32,976 35,787 34,536 35,283 36,296 50 States and political subdivisions 894 617 695 530 423 757 618 643 836 51 U.S. government 226 216 780 594 594 885 200 1,018 572 52 Depository institutions in the United States 5,615 4,926 4,078 5,041 5,281 4,812 4,379 5,465 4,764 53 Banks in foreign countries 5,129 4,527 4,587 4,423 4,944 4,723 5,264 4,852 5,735 54 Foreign governments and official institutions 637 625 582 651 472 794 379 620 801 55 Certified and officers' checks 4,622 3,565 3,553 33,,007788 22,,991155 33,,774466 22,,994400 33,,991199 44,,442277 56 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers) 8,407 8,271 8,175 8,013 8,095 8,375 8,399 8,140 7,998 57 Nontransaction balances 113,833 113,232 113,407 113,045 113,216 113,437 113,350 112,839 112,107 58 Individuals, partnerships, and corporations 103,590 102,943 103,125 102,597 102,889 103,428 103,386 102,982 102,187 59 States and political subdivisions 7,708 7,736 7,733 7,853 7,775 7,478 7,400 7,318 7,389 60 U.S. government 30 30 30 30 33 29 28 29 29 61 Depository institutions in the United States 2,253 2,257 2,255 2,300 2,264 2,246 2,268 2,239 2,223 62 Foreign governments, official institutions, and banks 251 266 263 265 254 256 266 271 279 63 Liabilities for borrowed money 57,522 63,750 62,808 64,406 58,444 65,984 62,262 64,063 59,378 64 Borrowings from Federal Reserve Banks 0 700 0 1,700 0 0 0 0 0 65 Treasury tax-and-loan notes 2,882 1,172 3,564 3,277 3,876 868 1,810 6,020 5,932 66 All other liabilities for borrowed money8 54,639 61,877 59,244 59,428 54,568 65,116 60,452 58,043 53,445 67 Other liabilities and subordinated notes and debentures 28,515 28,742 27,951 28,691' 27,726 29,200 24,786 29,342 24,759 68 Total liabilities 262,402 263,532 264,248 261,422' 255,085 268,501 257,112 266,184 257,673 69 Residual (total assets minus total liabilities)9 28,824 28,922 28,989 28,887' 28,616 28,733 29,177 28,859 27,693 MEMO 70 Total loans and leases (gross) and investments adjusted2,10 208,967 207,452 207,978 207,978' 208,736 212,553 211,709 213,463 209,966 71 Total loans and leases (gross) adjusted10 176,568 174,902 175,557 175,530' 176,051 180,024 179,217 181,355 178,417 72 Time deposits in amounts of $100,000 or more 42,204 42,856 42,770 42,556 42,365 42,754 42,508 42,423 41,649 73 U.S. Treasury securities maturing in one year or less 2,742 2,821 2,826 2,835 2,788 2,552 2,590 2,880 2,498 1. These data also appear in the Board's H.4.2 (504) release. For address, see 7. Includes trading account securities. inside front cover. 8. Includes federal funds purchased and securities sold under agreements to 2. Excludes trading account securities. repurchase. 3. Not available due to confidentiality. 9. Not a measure of equity capital for use in capital adequacy analysis or for 4. Includes U.S. government-issued or guaranteed certificates of participation other analytic uses. Digitized for FRA in S5 p .E o o IRn ls c l o u f d r e e s s i s d e e c n u t r i i a t l i e m s p o u rt r g c a h g a e s s e . d under agreements to resell. cia 1 l 0 b . a E nk x s c . l usive of loans and federal funds transactions with domestic commerhttp://fraser.stlouis6.f eIndc.loudrges/ allocated transfer risk reserve. Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS' Assets and Liabilities Millions of dollars, Wednesday figures 1989 AAccccoouunntt Aug. 2 Aug. 9 Aug. 16 Aug. 23 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 1 Cash and due from depository institutions ... 11,571 12,502' 12,393' 12,458' 11,345' 12,271 11,342 13,100 12,184 2 Total loans and securities 136,085 137,5^ 137,437' 137,668' 138,376' 138,202 138,782 136,509 136,163 3 U.S. Treasury and government agency securities 7,936 8,089 8,396' 8,226 7,911 8,194 7,896 77,,996677 88,,000000 4 Other securities 6,047 6,088 5,791' 5,815 5,899 5,882 5,859 5,908 5,985 5 Federal funds sold 5,970 6,506 4.492 6,781 7,769 7,377 8,155 6,269 5,923 6 To commercial banks in the United States . 4,658 5,338 2,962 5,707 6,630 6,149 6,696 5,112 4,820 7 To others 1,312 1,168 1,530 1,074 1,139 1,228 1,459 1,157 1,103 8 Other loans, gross 116,132 116,836' 118,758' 116,846' 116,797' 116,749 116,872 116,365 116,255 9 Commercial and industrial 73,476 73,347' 74,581' 73,298 73,193 74,065 73,838 73,302 73,563 10 Bankers acceptances and commercial paper 1,533 1,807' 1,824' 1,794 1,781 2,065 1,887 1,852 2,119 11 All other 71,943 71,540 72,757 71,504 71,412 72,000 71,951 71,450 71,444 12 U.S. addressees 70,079 69,695 70,885 69,644 69,590 70,160 70,088 69,616 69,659 13 Non-U.S. addressees 1,864 1,845 1,872 1,860 1,822 1,840 1,863 1,834 1,785 14 Loans secured by real estate 15,604 16,142 16,326 16,573 16,552 16,408 16,282 16,422 16,452 15 To financial institutions 22,584 22,656 23,022 22,514' 22,889' 21,666 22,431 22,134 22,295 16 Commercial banks in the United States.. 17,233 17,254 17,276 16,787' 17,090^ 16,297 17,040 16,980 16,998 17 Banks in foreign countries 1,409 1,314 1,594 1,590 1,657 1,380 1,249 1,035 1,064 18 Nonbank financial institutions 3,942 4,088 4,152 4,137 4,142 3,989 4,142 4,119 4,233 19 To foreign governments and official institutions 632 623 639 636 629 636 628 647 630 20 For purchasing and carrying securities 2,168 2,050 2,404 2,203 1,775 2,292 1,996 2,216 1,626 21 All other3 1,668 2,018 1,786 1,622 1,759 1,682 1,697 1,644 1,689 22 Other assets (claims on nonrelated parties) .. 35,273 35,767 35,171 35,166 35,828 35,258 35,999 35,242 35,721 23 Net due from related institutions 14,310 12,951 15,459 14,038 13,046 15,760 13,855 14,783 13,700 24 Total assets 197,240 198,736 200,460 199,330 198,597 201,492 199,979 199,633 197,768 25 Deposits or credit balances due to other than directly related institutions 49,792 50,161 51,042 49,959 49,768 50,133 50,212 49,661 50,483 26 Transaction accounts and credit balances . 3,535 3,151 3,741' 3,371' 3,223' 3,300 3,513 3,567 3,915 27 Individuals, partnerships, and corporations 2,182 1,994 2,177 2,119 2,020 2,146 2,135 2,106 2,181 28 Other 1,353 1,157 1,564' 1,252' 1,203' 1,154 1,378 1,461 1,734 29 Nontransaction accounts5 46,257 47,010 47,301' 46,588' 46,545' 46,833 46,699 46,094 46,568 30 Individuals, partnerships, and corporations 38,749 38,939 38,762' 38,728' 38,595' 38,365 38,331 38,118 38,566 31 Other 7,508 8,071 8,539 7,860 7,950 8,468 8,368 7,976 8,002 32 Borrowings from other than directly related institutions 88,163 85,625 87,961 87,881 84,538 89,018 87,127 87,119 82,006 33 Federal funds purchased 42,046 37,070 38,044 38,992 35,462 40,597 36,761 37,984 32,216 34 From commercial banks in the United States 21,884 18,945 19,941 20,380 18,200 22,417 18,089 18,465 17,300 35 From others 20,162 18,125 18,103 18,612 17,262 18,180 18,672 19,519 14,916 36 Other liabilities for borrowed money 46,117 48,555 49,917 48,889 49,076 48,421 50,366 49,135 49,790 37 To commercial banks in the United States 29,547 32,742 33,666 33,634 33,570 32,012 33,915 32,610 33,196 38 To others 16,570 15,813 16,251 15,255 15,506 16,409 16,451 16,525 16,594 39 Other liabilities to nonrelated parties 36,632 37,815 36,536 36,331 37,139 36,391 37,033 36,315 37,206 40 Net due to related institutions 22,653 25,133 24,918 25,159 27,153 25,948 25,606 26,536 28,073 41 Total liabilities 197,240 198,736 200,460 199,330 198,597 201,492 199,979 199,633 197,768 MEMO 42 Total loans (gross) and securities adjusted7 .. 114,194 114,927' 117,199' 115,174 114,656 115,756 115,046 114,417 114,345 43 Total loans (gross) adjusted 100,211 100,750' 103,012' 101,133 100,846 101,680 101,291 100,542 100,360 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 • December 1989 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1 Billions of dollars, estimated daily-average balances, not seasonally adjusted Commercial banks TTyyppee ooff hhoollddeerr 1988 1989 11998844 11998855 11998866 11998877 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. June Sept. Dec. Mar. June 1 All holders—Individuals, partnerships, and corporations 302.7 321.0 363.6 343.5 328.6 346.5 337.8 354.7 330.4 329.3 2 Financial business 31.7 32.3 41.4 36.3 33.9 37.2 34.8 38.6 36.3 33.0 3 Nonfinancial business 166.3 178.5 202.0 191.9 184.1 194.3 190.3 201.2 182.2 185.9 4 Consumer 81.5 85.5 91.1 90.0 86.9 89.8 87.8 88.3 87.4 86.6 5 Foreign 3.6 3.5 3.3 3.4 3.5 3.4 3.2 3.7 3.7 2.9 6 Other 19.7 21.2 25.8 21.9 20.3 21.9 21.7 22.8 20.7 21.0 Weekly reporting banks 1988 1989 11998844 11998855 11998866 11998877 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. June Sept. Dec. Mar. June 7 All holders—Individuals, partnerships, and corporations 157.1 168.6 195.1 183.8 181.8 191.5 185.3 198.3 181.9 182.2 8 Financial business 25.3 25.9 32.5 28.6 27.0 30.0 27.2 30.5 27.2 25.4 9 Nonfinancial business 87.1 94.5 106.4 100.0 98.2 103.1 101.5 108.7 98.6 99.8 10 Consumer 30.5 33.2 37.5 39.1 41.7 42.3 41.8 42.6 41.1 42.4 11 Foreign 3.4 3.1 3.3 3.3 3.4 3.4 3.1 3.6 3.3 2.9 12 Other 10.9 12.0 15.4 12.7 11.4 12.8 11.7 12.9 11.7 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 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 . Feb. Mar. Apr. May June July Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 237,586 298,779 329,991 357,129 455,017 487,771 492,821 494,292 497,369 503,445 506,418 Financial companies' Dealer-placed paper 2 Total 56,485 78,443 101,072 101,958 115599,,994477 173,944 172,950 170,549 167,795 167,681 179,354 3 Bank-related (not seasonally adjusted) 2,035 1,602 2,265 1,428 1,248 n.a. n.a. n.a. n.a. n.a. n.a. Directly placed paper 4 Total 110,543 135,320 151,820 173,939 192,442 201,997 205,374 207,231 206,497 211,020 205,847 5 Bank-related (not seasonally adjusted) ^ 42,105 44,778 40,860 43,173 43,155 n.a. n.a. n.a. n.a. n.a. n.a. 6 Nonfinancial companies 70,558 85,016 77,099 81,232 102,628 111,830 114,497 116,512 123,077 124,744 121,217 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 78,364 68,413 64,974 70,565 66,631 62,812 62,458 64,357 62,396 64,182 65,558 Holder 8 Accepting banks 9,811 11,197 13,423 10,943 9,086 9,401 8,336 9,616 8,908 9,333 9,370 9 Own bills 8,621 9,471 11,707 9,464 8,022 8,497 7,642 8,107 8,115 8,399 8,279 10 Bills bought 1,191 1,726 1,716 1,479 1,064 904 693 1,509 794 934 1,076 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 1,579 1,544 1,400 1,374 1,177 1,026 13 Others 67,881 56,279 50,234 58,658 56,052 51,832 52,579 53,340 52,113'" 53,672 55,163 Basis 14 Imports into United States 17,845 15,147 14,670 16,483 14,984 15,588 14,755 15,234 14,900 15,477 15,231 15 Exports from United States 16,305 13,204 12,960 15,227 14,410 13,927 13,581 14,371 14,452 15,040 15,288 16 All other 44,214 40,062 37,344 38,855 37,237 33,297 34,122 34,752 33,044 33,666 35,040 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 t a e ge Period Av r e a r t a e ge Period —Mar. 7 9.00 198 6 8.33 1987—Jan. ... 7.50 1988 —Jan. Apr. 21 8.50 198 7 8.21 Feb. .. 7.50 Feb. July 11...... 8.00 198 8 9.32 Mar. .. 7.50 Mar. Aug. 26..., 7.50 Apr. .. 7.75 Apr. 1986 —Jan. 9.50 May ... 8.14 May. —Apr. 1 7.75 Feb. 9.50 June .. 8.25 June May 1 8.00 Mar. 9.10 July ... 8.25 July. 15 8.25 Apr. 8.83 Aug. .. 8.25 Aug. Sept. 4 8.75 May 8.50 Sept. .. 8.70 Sept. Oct. 7 9.25 June 8.50 Oct. ... 9.07 Oct.. 22 9.00 July 8.16 Nov. .. 8.78 Nov. Nov. 5 8.75 Aug. 7.90 Dec. .. 8.75 Dec. Sept. 7.50 —Feb. 2 8.50 Oct.. 7.50 1989 —Jan. May 11 9.00 Nov. 7.50 Feb. July 14 9.50 Dec. 7.50 Mar. Aug. 11 10.00 Apr. Nov. 28 10.50 May. June —Feb. 10 11.00 July. 24 11.50 Aug. June 5 11.00 Sept. July 31 10.50 Oct.. 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 • December 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 Instrument 11998866 11998877 11998888 June July Aug. Sept. Sept. 1 Sept. 8 Sept. 15 Sept. 22 MONEY MARKET RATES 1 Federal funds1'2 , 6.80 6.66 7.57 9.53 9.24 8.99 9.02 8.96 8.96 8.96 9.05 2 Discount window borrowing1, ,3 6.32 5.66 6.20 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 9.34 8.95 8.79 8.87 8.88 8.87 8.83 8.84 4 3-month 6.49 6.82 7.66 9.11 8.68 8.57 8.70 8.69 8.72 8.65 8.65 5 6-month 6.39 6.85 7.68 8.80 8.35 8.32 8.50 8.51 8.52 8.45 8.45 Finance paper, directly placed4, 6 1-month 6.57 6.61 7.44 9.24 8.80 8.67 8.76 8.77 8.79 8.73 8.73 7 3-month 6.38 6.54 7.38 8.77 8.32 8.20 8.35 8.33 8.39 8.37 8.34 8 6-month 6.31 6.37 7.14 8.22 7.80 7.49 7.56 7.57 7.62 7.64 7.44 Bankers acceptances ,6 9 3-month 6.38 6.75 7.56 8.97 8.54 8.47 8.59 8.57 8.57 8.53 8.55 10 6-month 6.28 6.78 7.60 8.66 8.19 8.22 8.37 8.38 8.38 8.30 8.33 Certificates of deposit, secondary market7 11 1-month 6.61 6.75 7.59 9.35 8.96 8.77 8.83 8.85 8.82 8.79 8.81 12 3-month 6.51 6.87 7.73 9.20 8.76 8.64 8.78 8.79 8.78 8.71 8.74 13 6-month 6.50 7.01 7.91 9.09 8.59 8.56 8.75 8.77 8.76 8.68 8.69 14 Eurodollar deposits, 3-month8 6.70 7.07 7.85 9.28 8.85 8.71 8.85 8.85 8.86 8.84 8.75 U.S. Treasury bills5 Secondary market9 15 3-month 5.97 5.78 6.67 8.15 7.88 7.90 7.75 7.90 7.82 7.60 7.73 16 6-month 6.02 6.03 6.91 7.93 7.61 7.74 7.74 7.82 7.81 7.60 7.70 17 1-year 6.07 6.33 7.13 7.84 7.36 7.61 7.65 7.72 7.68 7.51 7.61 Auction average10 18 3-month 5.98 5.82 6.68 8.22 7.92 7.91 7.72 7.94 7.88 7.64 7.64 19 6-month 6.03 6.05 6.92 8.00 7.63 7.72 7.74 7.88 7.87 7.64 7.64 20 1-year 6.07 6.33 7.17 8.18 7.58 7.45 7.61 7.68 n.a. n.a. n.a. CAPITAL MARKET RATES U.S. Treasury notes and bonds11 Constant maturities 21 1-year 6.45 6.77 7.65 8.44 7.89 8.18 8.22 8.32 8.27 8.07 8.18 22 2-year 6.86 7.42 8.10 8.41 7.82 8.14 8.28 8.41 8.34 8.15 8.24 23 3-year 7.06 7.68 8.26 8.37 7.83 8.13 8.26 8.37 8.29 8.11 8.19 24 5-year 7.30 7.94 8.47 8.29 7.83 8.09 8.17 8.26 8.18 8.07 8.12 25 7-year 7.54 8.23 8.71 8.31 7.94 8.11 8.23 8.29 8.21 8.14 8.18 26 10-year 7.67 8.39 8.85 8.28 8.02 8.11 8.19 8.25 8.17 8.13 8.15 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. 28 30-year 7.78 8.59 8.96 8.27 8.08 8.12 8.15 8.20 8.11 8.10 8.14 Composite13 29 Over 10 years (long-term) 8.14 8.64 8.98 8.40 8.19 8.26 8.31 8.36 8.27 8.25 8.30 State and local notes and bonds Moody's series14 30 Aaa 6.95 7.14 7.36 6.79 6.69 6.67 6.97 6.65 6.75 6.95 6.96 31 Baa 7.76 8.17 7.83 7.27 7.17 7.03 7.26 7.07 7.07 7.13 7.40 32 Bond Buyer series15 7.32 7.63 7.68 7.02 6.96 7.06 7.26 7.16 7.15 7.16 7.33 Corporate bonds Seasoned issues16 33 All industries 9.71 9.91 10.18 9.50 9.34 9.36 9.41 9.45 9.42 9.39 9.39 34 Aaa 9.02 9.38 9.71 9.10 8.93 8.96 9.01 9.05 9.02 8.98 8.98 35 Aa 9.47 9.68 9.94 9.29 9.14 9.14 9.23 9.24 9.21 9.21 9.21 36 A 9.95 9.99 10.24 9.59 9.42 9.45 9.51 9.55 9.51 9.48 9.48 37 Baa 10.39 10.58 10.83 10.03 9.87 9.88 9.91 9.96 9.94 9.88 9.88 38 A-rated, recently offered utility bonds17 9.61 9.95 10.20 9.65 9.54 9.55 9.55 9.58 9.55 9.49 9.56 MEMO: Dividend/price ratio18 39 Preferred stocks 8.76 8.37 9.23 8.96 8.81 8.75 8.82 8.89 8.83 8.80 8.82 40 Common stocks 3.48 3.08 3.64 3.44 3.38 3.28 3.29 3.25 3.26 3.30 3.28 1. Weekly, monthly and annual figures are averages of all calendar days, places. Thus, average issuing rates in bill auctions will be reported using two where the rate for a weekend or holiday is taken to be the rate prevailing on the rather than three decimal places. preceding business day. The daily rate is the average of the rates on a given day 11. Yields are based on closing bid prices quoted by at least five dealers. weighted by the volume of transactions at these rates. 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields 2. Weekly figures are averages for statement week ending Wednesday. are read from a yield curve at fixed maturities. Based on only recently issued, 3. Rate for the Federal Reserve Bank of New York. actively traded securities. 4. Unweighted average of offering rates quoted by at least five .dealers (in the 13. Averages (to maturity or call) for all outstanding bonds neither due nor case of commercial paper), or finance companies (in the case of finance paper). callable in less than 10 years, including one very low yielding "flower" bond. Before November 1979, maturities for data shown are 30-59 days, 90-119 days, 14. General obligations based on Thursday figures; Moody's Investors Service. and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 15. General obligations only, with 20 years to maturity, issued by 20 state and 150-179 days for finance paper. local governmental units of mixed quality. Based on figures for Thursday. 5. Yields are quoted on a bank-discount basis, rather than in an investment 16. Daily figures from Moody's Investors Service. Based on yields to maturity yield basis (which would give a higher figure). on selected long-term bonds. 6. Dealer closing offered rates for top-rated banks. Most representative rate 17. Compilation of the Federal Reserve. This series is an estimate of the yield (which may be, but need not be, the average of the rates quoted by the dealers). on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 7. Unweighted average of offered rates quoted by at least five dealers early in call protection. Weekly data are based on Friday quotations. the day. 18. Standard and Poor's corporate series. Preferred stock ratio based on a 8. Calendar week average. For indication purposes only. sample often issues: four public utilities, four industrials, one financial, and one 9. Unweighted average of closing bid rates quoted by at least five dealers. transportation. Common stock ratios on the 500 stocks in the price index. 10. Rates are recorded in the week in which bills are issued. Beginning with the NOTE. These data also appear in the Board's H. 15 (519) and G.13 (415) releases. Treasury bill auction held on Apr. 18, 1983, bidders were required to state the For address, see inside front cover. percentage yield (on a bank discount basis) that they would accept to two decimal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.36 STOCK MARKET Selected Statistics 1989 IInnddiiccaattoorr 11998866 11998877 11998888 Jan. Feb. Mar. Apr. May June July Aug. Sept. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 136.03 161.78 149.97 160.35 165.08 164.56 169.38 175.30 180.76 185.15 192.93 193.02 2 Industrial 155.85 195.31 180.83 194.62 200.00 197.58 204.81 211.81 216.75 221.74 231.32 230.86 3 Transportation 119.87 140.52' 134.09" 153.09" 162.66" 153.85' 164.32" 169.05' 173.47' 179.32 197.53 202.02 4 Utility 71.36 74.29 72.22 75.87 77.84 87.16 79.69 84.21 87.95 90.40 92.90 93.44 5 Finance 147.19 146.48 127.41 132.26 137.19 146.14 143.26 146.82 154.08 157.78 164.86 165.51 6 Standard & Poor's Corporation (1941-43 = 10)' 236.39 287.00 265.88 285.41 294.01 292.71 302.25 313.93 323.73 331.92 346.61 347.33 7 American Stock Exchange (Aug. 31, 1973 = 50? 264.91 316.78 295.08 316.14 323.97 327.47 336.82 349.50 362.73 368.52 379.28 382.75 Volume of trading (thousands of shares) 8 New York Stock Exchange 141,020 188,922 161,386 168,204 169,223 159,024 161,863 171,495 180,680 162,501 171,683 151,752 9 American Stock Exchange 11,846 13,832 9,955 10,797 11,780 11,395 11,529 11,699 13,519 11,702 14,538 12,631 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 36,840 31,990 32,740 32,530 31,480 32,130 32,610 33,140 34,730 34,360 33,940 35,020 Free credit balances at brokers4 11 Margin-account 4,880 4,750 5,660 5,790 5,605 5,345 5,450 5,250 6,900 5,420 5,580 5,680 12 Cash-account 19,000 15,640 16,595 15,705 16,195 16,045 16,125 15,965 19,080 16,345 16,015 15,310 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8 , 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance carry"margin securities" (as defined in the regulations) when such credit is companies. With this change the index includes 400 industrial stocks (formerly collateralized by securities. Margin requirements on securities other than options 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 are the difference between the market value (100 percent) and the maximum loan financial. value of collateral as prescribed by the Board. Regulation T was adopted effective 2. Beginning July 5, 1983, the American Stock Exchange rebased its index Oct. 15, 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. effectively cutting previous readings in half. 11, 1968; and Regulation X, effective Nov. 1, 1971. 3. Beginning July 1983, under the revised Regulation T, margin credit at On Jan. 1, 1977, the Board of Governors for the first time established in broker-dealers includes credit extended against stocks, convertible bonds, stocks Regulation T the initial margin required for writing options on securities, setting acquired through exercise of subscription rights, corporate bonds, and govern- it at 30 percent of the current market-value of the stock underlying the option. On ment securities. Separate reporting of data for margin stocks, convertible bonds, Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the and subscription issues was discontinued in April 1984. same as the option maintenance margin required by the appropriate exchange or 4. Free credit balances are in accounts with no unfulfilled commitments to the self-regulatory organization; such maintenance margin rules must be approved by brokers and are subject to withdrawal by customers on demand. the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC 5. New series beginning June 1984. approved new maintenance margin rules, permitting margins to be the price of the 6. These regulations, adopted by the Board of Governors pursuant to the option plus 15 percent of the market value of the stock underlying the option. Securities Exchange Act of 1934, limit the amount of credit to purchase and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • December 1989 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1988 1989 Account 1986 1987 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July SAIF-insured institutions 1 Assets 1,163,851 1,250,855 1,332,878 1,332,905 1,350,500 1,337,382 1,339,115 1,340,500 1,345,458 1,346,639 1,338,895 1,332,212 2 Mortgages 697,451 721,593 760,790 763,001 764,513 767,260 776677,,660033 776699,,440033 777733,,442244 777744,,440077 777733,,003311 777711,,995566 3 Mortgage-backed securities 158,193 201,828 211,833 212,512 214,587 211,308 213,090 215,203 216,176 216,301 211,210 204,181 4 Contra-assets to mortgage assets' . 41,799 42,344 38,297 37,739 37,950 37,157 37,013 37,848 37,781 37,498 37,581 37,219 5 Commercial loans 23,683 23,163 25,413 25,513 33,889 32,974 32,955 32,866 32,808 33,004 33,092 33,181 6 Consumer loans 51,622 57,902 61,053 61,504 61,922 61,998 61,981 61,402 61,739 61,879 60,735 61,081 7 Contra-assets to nonmortgage loans . 3,041 3,467 2,932 2,959 3,056 2,840 2,933 3,074 2,895 2,912 3,147 3,169 8 Cash and investment securities 164,844 169,717 184,637 179,830 186,986 178,813 177,178 177,094 175,913 174,295 175,262 175,304 9 Other3 112,898 122,462 130,388 131,243 129,610 125,026 126,243 125,454 126,074 127,163 126,293 126,897 10 Liabilities and net worth . 1,163,851 1,250,855 1,332,878 1,332,905 1,350,500 1,337,382 1,339,115 1,340,500 1,345,458 1,346,639 1,338,895 1,332,212 11 Savings capital 890,664 932,616 976,163 971,497 971,700 963,820 957,358 956,663 954,495 955,566 960,070 963,138 12 Borrowed money 196,929 249,917 278,301 281,088 299,400 299,415 305,675 312,988 318,662 318,362 312,070 301,541 13 FHLBB 100,025 116,363 124,368 127,548 134,168 135,712 140,089 146,007 147,993 146,513 144,211 141,869 14 Other 96,904 133,554 153,933 153,540 165,232 163,703 165,586 166,981 170,669 171,849 167,859 159,672 15 Other 23,975 21,941 27,558 29,178 24,216 29,751 31,749 29,592 31,662 33,618 29,992 32,003 16 Net worth 52,282 46,382 50,855 51,143 55,185 58,882 58,962 57,159 56,160 54,623 52,981 51,084 SAIF-insured federal savings banks 17 Assets 210,562 284,270 369,682 374,930 425,983 423,846 432,675 443,185 455,152 469,950 495,806 507,026 18 Mortgages 113,638 161,926 207,207 210,732 227,869 234,591 238,415 244,092 249,936 257,184 276,666 285,261 19 Mortgage-backed securities 29,766 45,826 56,630 57,815 64,957 62,773 65,896 68,047 69,967 73,967 73,946 74,343 20 Contra-assets to mortgage assets' . n.a. 9,100 10,894 10,901 13,140 12,258 12,685 12,936 13,053 13,231 13,654 13,932 21 Commercial loans n.a. 6,504 8,880 9,041 16,731 16,172 16,320 16,317 16,498 16,935 18,014 18,264 22 Consumer loans 13,180 17,696 22,421 22,679 24,222 25,033 25,977 26,097 26,767 27,956 28,128 28,968 23 Contra-assets to nonmortgage loans . n.a. 678 789 803 889 814 857 972 863 1,072 975' 980 24 Finance leases plus interest n.a. 591 804 831 880 907 946 1,011 1,047 1,072 1,083 1,088 25 Cash and investment ... n.a. 35,347 48,818 48,028 61,029 57,434 57,986 60,319 61,279 62,002 65,681 65,949 26 Other 19,034 24,069 29,178 29,942 35,428 33,954 34,664 35,006 37,367 38,034 39,808 40,281 27 Liabilities and net worth . 210,562 284,270 369,682 374,930 425,983 423,846 432,675 443,185 455,152 469,950 495,806 507,026 28 Savings capital 157,872 203,1% 262,922 263,984 298,197 298,515 301,770 307,581 315,726 324,369 342,146 352,530 29 Borrowed money 37,329 60,716 80,779 83,628 99,286 98,304 102,902 107,180 109,998 114,848 121,890 121,151 30 FHLBB 19,897 29,617 37,510 39,630 46,265 46,470 48,951 51,532 53,513 55,457 58,500 59,737 31 Other 17,432 31,099 43,269 43,998 53,021 51,834 53,951 55,648 56,485 59,391 63,390 61,414 32 Other 4,263 5,324 7,667 8,319 8,075 8,270 8,884 8,651 9,310 10,179 9,836 10,687 33 Net worth 11,098 15,034 18,194 18,882 20,235 21,625 22,700 23,103 23,411 23,924 25,726 26,306 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.37—Continued 1988 1989 AAccccoouunntt 11998866 11998877 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Credit unions5 34 Total assets/liabilities and capital 147,726 174,722 174,406 174,593 175,027 176,270 178,175 177,417 178,812 180,664 179,029 35 Federal 95,483 113,474 113,717 114,566 114,909 115,543 117,555 115,416 116,705 117,632 117,475 36 State 52,243 61,248 61,135 60,027 60,118 60,727 60,620 62,001 62,107 63,032 61,554 37 Loans outstanding 86,137 n a. 111,624 112,452 113,191 114,012 113,880 114,572 115,249 116,947 119,101 119,720 38 Federal 55,304 72,551 73,100 73,766 74,083 73,917 74,395 75,003 76,052 77,729 78,472 39 State 30,833 39,073 39,352 39,425 39,927 39,963 40,177 40,246 40,895 41,372 41,248 40 Savings 134,327 160,174 159,021 159,010 159,106 161,073 164,322 161,388 162,134 164,415 162,405 41 Federal 87,954 104,184 103,223 104,431 104,629 105,262 107,368 105,208 105,787 106,984 106,266 42 State 46,373 55,990 55,798 54,579 54,477 55,811 56,954 56,180 56,347 57,431 56,139 Life insurance companies 43 Assets 937,551 1,044,459 1,139,490 1,144,854 1,157,140 1,167,184 1,173,325 1,184,963 1,193,032 Securities 44 Government 84,640 84,426 88,883 89,510 88,167 88,747 88,168 88,941 87,938 45 United States6 59,033 57,078 60,621 61,108 60,685 61,042 60,800 61,175 60,220 46 State and local 11,659 10,681 11,069 11,189 11,126 11,036 10,736 10,848 11,068 47 Foreign 13,948 16,667 17,193 17,213 16,356 16,669 16,632 16,918 16,650 48 Business 492,807 569,199 633,390 638,350 644,894 655,149 659,826 665,843 673,826 n.a. n.a. n.a. 49 Bonds 401,943 472,684 527,419 532,197 538,053 545,970 550,630 556,396 563,453 50 Stocks 90,864 96,515 105,971 106,153 106,841 109,179 109,196 109,447 110,373 51 Mortgages 193,842 203,545 227,342 229,234 232,639 233,334 233,827 234,910 236,439 52 Real estate 31,615 34,172 36,892 36,673 37,972 38,112 38,690 38,942 39,071 53 Policy loans 54,055 53,626 53,157 53,148 53,020 53,210 53,265 53,364 53,536 54 Other assets 80,592 89,586 99,826 94,116 95,518 98,632 99,550 102,963 102,222 1. Contra-assets are credit-balance accounts that must be subtracted from the NOTE. FSLlC-insured institutions: Estimates by the FHLBB for all institutions corresponding gross asset categories to yield net asset levels. Contra-assets to insured by the FSLIC and based on the FHLBB thrift Financial Report. mortgage loans, contracts, and pass-through securities include loans in process, FSLlC-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. As of June 1989 Savings bank data are no longer available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • December 1989 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1989 111999888777 111999888888 111999888999 Apr. May June July Aug. Sept. U.S. budget1 1 Receipts, total 854,143 908,953 990,789 128,952 71,115 108,317 66,255 76,257 99,233 2 On-budget 640,741 667,462 727,123 99,679 49,493 84,110 45,737 57,253 75,711 3 Off-budget 213,402 241,491 263,666 29,273 21,622 24,206 20,518 19,004 23,522 4 Outlays, total 1,003,830 1,064,044 1,142,869 88,381 96,581 100,528 84,494 98,407 105,390 5 On-budget 809,998 861,352 931,648 71,798 77,851 83,994 66,688 79,314 86,640 6 Off-budget 193,832 202,691 211,221 16,582 18,730 16,534 17,806 19,092 18,750 7 Surplus, or deficit (—), total -149,687 -155,090 -152,080 40,572 -25,466 7,789 -18,239 -22,150 -6,158 8 On-budget -169,257 -193,890 -204,525 27,881 -28,358 116 -20,951 -22,062 -10,929 9 Off-budget 19,570 38,800 52,445 12,691 2,891 7,673 2,712 -88 4,771 Source of financing (total) 10 Borrowing from the public 150,070 162,062 140,369 -1,291 10,214 1,098 -3,962 35,854 6,672 11 Operating cash (decrease, or increase (-)), -5,052 -7,963 3,425 -38,788 21,396 -11,649 21,564 -3,235 -15,589 12 Other' 4,669 991 8,285 -493 -6,144 2,762 636 -10,469 15,074 MEMO 13 Treasury operating balance (level, end of period) 36,436 44,398 40,973 53,461 32,065 43,713 22,149 25,384 40,973 14 Federal Reserve Banks 9,120 13,024 13,452 22,952 5,289 12,154 5,312 6,652 13,452 15 Tax and loan accounts 27,316 31,375 27,521 30,508 26,776 31,560 16,837 18,732 27,521 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. B UDGET RECEIPTS AND O UTLAYS1 Millions of dollars Calendar year Fiscal Fiscal SSoouurrccee oorr ttyyppee year year 1987 1988 1989 1989 11998877 11998888 H2 HI H2 HI July Aug. Sept. RECEIPTS 1 All sources 854,143 908,166 421,525 475,724 449,394 527,574 66,191 76,161 99,233 7 Individual income taxes, net 392,557 401,181 192,575 207,659 200,299 233,568 29,377 36,932 45,026 3 Withheld 322,463 341,435 170,203 169,300 179,600 174,230 28,343 34,200 28,120 4 Presidential Election Campaign Fund 33 33 4 28 4 28 1 1 1 Nonwithheld 142,957 132,199 31,223 101,614 29,880 121,563 2,424 4,076 18,943 6 Refunds 72,896 72,487 8,853 63,283 9,186 62,255 1,392 1,345 2,038 Corporation income taxes 7 Gross receipts 102,859 109,683 52,821 58,002 56,409 61,585 2,921 2,872 20,085 8 Refunds 18,933 15,487 7,119 8,706 7,250 7,260 880 909 655 9 Social insurance taxes and contributions, net 303,318 334,335 143,755 181,058 157,603 200,127 27,941 28,470 29,259 10 Employment taxes and contributions 273,028 305,093 130,388 164,412 144,983 184,569 25,979 24,127 29,632 11 Self-employment taxes and contributions 13,987 17,691 1,889 14,839 3,032 16,371 0 -733 2,540 1? Unemployment insurance 25,575 24,584 10,977 14,363 10,359 13,279 1,614 3,983 -796 13 Other net receipts4 4,715 4,659 2,390 2,284 2,262 2,277 348 360 424 14 Excise taxes 32,457 35,540 17,680 16,440 19,299 16,818 2,779 2,965 2,428 15 Customs deposits 15,085 15,411 7,806 7,522 8,107 7,918 1,431 1,677 1,352 16 Estate and gift taxes 7,493 7,594 3,610 3,863 4,054 4,583 689 753 631 17 Miscellaneous receipts5 19,307 19,909 10,399 9,950 10,873 10,235 1,933 3,399 1,107 OUTLAYS 18 All types 1,003,830 1,063,318 532,652 512,856 552,801 565,524 84,430 98,310 105,390 19 National defense 281,999 290,361 146,995 143,080 150,496 148,098 21,220 26,018 28,641 70 International affairs 11,649 10,471 4,487 7,150 2,636 6,605 347 848 868 21 General science, space, and technology 9,216 10,841 5,469 5,361 5,852 6,238 1,000 1,202 1,190 77 Energy 4,115 2,297 1,468 555 1,966 2,221 106 287 -182 73 Natural resources and environment 13,363 14,625 7,590 6,776 8,330 7,022 1,164 1,264 1,423 24 Agriculture 26,606 17,210 14,640 7,872 7,725 9,619 499 -274 -61 75 Commerce and housing credit 6,182 18,828 3,852 5,951 20,274 4,129 1,494 2,070 10,095 26 Transportation 26,222 27,272 14,096 12,700 14,922 13,035 2,294 2,623 2,348 27 Community and regional development 5,051 5,294 2,075 2,765 2,690 1,833 535 649 964 28 Education, training, employment, and social services 29,724 31,938 15,592 15,451 16,152 18,083 2,637 3,493 2,937 79 Health 39,968 44,490 20,750 22,643 23,360 24,078 4,124 4,520 3,613 30 Social security and medicare 282,472 298,219 158,469 135,322 149,508 162,195 26,142 27,625 26,909 31 Income security 123,250 129,332 61,201 65,555 64,978 70,937 10,264 11,176 12,126 37 Veterans benefits and services 26,782 29,406 14,956 13,241 15,797 14,891 1,196 2,246 3,628 33 Administration of justice 7,548 8,436 4,104 4,407 4,362 4,801 783 763 836 34 General government 5,948 9,518 3,560 4,337 5,137 3,858 -53 785 997 35 General-purpose fiscal assistance 1,621 1,816 1,175 448 0 0 n.a. n.a. n.a. 3 3 7 6 N Un et d i i s n t t r e ib re u s t t e 6 d offsetting receipts 1 - 1 3 3 6 8 ,4 ,5 5 7 5 0 - 1 3 5 6 1 ,9 ,7 6 4 7 8 -1 7 7 1 , , 6 9 8 3 4 3 -1 7 7 6 , , 7 0 6 9 6 8 -1 7 8 8 , , 7 3 7 1 1 7 -1 8 8 6 , , 1 0 3 0 1 9 - 1 3 4 ,3 ,0 2 0 5 3 - 1 2 6 ,9 ,0 9 1 8 1 - 1 4 3 ,6 ,6 2 8 5 4 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 • December 1989 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1987 1988 1989 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 2,313.1 2,354.3 2,435.2 2,493.2 2,555.1 2,614.6 2,707.3 2,763.6 2,824.0R 2 Public debt securities 2,309.3 2,350.3 2,431.7 2,487.6 2,547.7 2,602.2 2,684.4 2,740.9 2,799.9 3 Held by public 1,871.1 1,893.1 1,954.1 1,996.7 2,013.4 2,051.7 2,095.2 2,133.4 2,142.1 4 Held by agencies 438.1 457.2 477.6 490.8 534.2 550.4 589.2 607.5 657.8r 5 Agency securities 3.8 4.0 3.5 5.6 7.4 12.4 22.9 22.7 24. (f 6 7 H H e e l l d d b b y y p ag u e b n li c c i es 2 1 . . 8 0 3 1 . . 0 0 2. . 7 8 5. . 1 6 7. . 0 5 12. . 2 2 22. . 6 3 22. . 3 4 23. , 6 5 ' r 8 Debt subject to statutory limit 2,295.0 2,336.0 2,417.4 2,472.6 2,532.2 2,586.9 2,669.1 2,725.6 2,784.6 9 Public debt securities 2,293.7 2,334.7 2,416.3 2,472.1 22,,553322..11 22,,558866..77 2,668.9 2,725.5 2,784.3 10 Other debt1 1.3 1.3 1.1 .5 ..11 ..11 .2 .2 .2 11 MEMO: Statutory debt limit 2,320.0 2,800.0 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 Type and holder 1985 1987 1988 Q3 Q4 Q1 Q2 1 Total gross public debt 1,945.9 2,214.8 2,431.7 2,684.4 2,602.2 2,684.4 2,740.9 2,799.9 By type 2 Interest-bearing debt 1,943.4 2,212.0 2,428.9 2,663.1 2,599.9 2,663.1 2.738.3 2,797.4 3 Marketable 1,437.7 1,619.0 1,724.7 1,821.3 1,802.9 1,821.3 1,871.7 1,877.3 4 Bills 399.9 426.7 389.5 414.0 398.5 414.0 417.0 397.1 5 Notes 812.5 927.5 1,037.9 1,083.6 1,089.6 1,083.6 1.121.4 1,137.2 6 7 No B n o m n a d r s k etable1 2 5 1 0 1 5 . .7 1 2 59 4 3 9 . . 1 8 2 70 8 4 2 . . 2 5 3 84 0 1 8 . . 8 9 7 2 9 9 7 9 . . 0 9 3 8 0 4 8 1 . . 9 8 3 86 1 6 8 . .4 6 3 92 2 0 8 . . 1 0 8 State and local government series 87.5 110.5 139.3 151.5 147.6 151.5 154.4 156.0 1 1 1 9 0 1 2 F S o a G P v re u i o n i b v g g l n e s ic r n i b s m o s n u e d e n s s t and notes. 78 7 7 . . . . 1 5 5 0 9 4 4 0 . . . . 7 7 6 0 99 4 4 . . . . 2 0 0 0 10 6 6 7 . . . . 6 6 0 6 10 6 6 6 . . . . 3 3 0 2 10 6 6 7 . . . . 6 6 0 6 11 6 6 0 . . . . 7 7 0 4 11 6 6 2 . . . . 2 2 0 3 13 Government account series 332.2 386.9 461.3 575.6 536.5 575.6 594.7 645.2 14 Non-interest-bearing debt 2.5 2.8 2.8 21.3 2.3 21.3 2.6 2.5 By holder4 15 U.S. government agencies and trust funds 348.9 403.1 477.6 589.2 550.4 589.2 607.5 657.8 16 Federal Reserve Banks 181.3 211.3 222.6 238.4 229.2 238.4 228.6 231.8 17 Private investors 1,417.2 1,602.0 1,745.2 ,852.8 1,819.0 1,852.8 1,900.2 1,905.4 18 Commercial banks 198.2 203.5 201.5r 192.2r 191.5r 192.2'" 203.3 n.a. 19 Money market funds 25.1 28.0 14.6' 18.8 11. V 18.8 13.0 11.6 20 Insurance companies 78.5 105.6 104.9r 111.2 109.6r 111.2 112.5 n.a. 21 Other companies 59.0 68.8 84.6 86.5r 86.0 86.5' n.a. n.a. 22 State and local Treasury s 226.7 262.8 284.6r 313.6 305.7' 313.6 326.3 n.a. Individuals 23 Savings bonds 79.8 92.3 101.1 109.6 107.8 109.6 112.2 114.0 24 Other securities 75.0 70.5 72.3 77.8 76.7 77.8 n.a. n.a. 25 Foreign and international 212.5 251.6 287.3 349.5 333.3 349.5 363.1 355.8 26 Other miscellaneous investors 462.4 518.9 594. y 600.6 591.3r 600.6 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 Transactions' Par value; averages of daily figures, in millions of dollars 1989 1989 1986 1987 1988 Julyr Aug/ Sept. Aug. 23' Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 Immediate delivery 1 U.S. Treasury securities 95,444 110,050 101,623 114,128 119,802 100,270 107,554 75,226' 83,573 93,071 112,499 104,516 By maturity 2 Bills 34,247 37,924 29,387 29,041 30,893 27,667 27,505 21,320' 23,966 25,295 34,218 26,911 3 Other within 1 year 2,115 3,271 3,426 2,699 2,659 2,620 2,289 2,484'' 2,208 2,175 2,528 3,164 4 1-5 years 24,667 27,918 27,777 31,582 36,330 31,526 37,647 23,293 24,682 27,362 31,558 36,966 5 5-10 years 20,455 24,014 24,939 33,580 31,471 24,719 24,892 19.29C 21,016 25,360 28,831 23,080 6 Over 10 years 13,961 16,923 16,093 17,227 18,450 13,737 15,220 8,839 11,701 12,879 15,364 14,395 By type of customer 7 U.S. government securities dealers 3,669 2,936 2,761 3,088 3,824 2,794 3,295 1,934 1,930 2,849 2,641 2,6% 8 U.S. government securities brokers 49,558 61,539 59,844 66,766 71,862 60,193 64,354 45,950 49,945 56,828 67,680 61,873 9 All others3 42,217 45,575 39,019 44,273 44,116 37,283 39,904 27,343'' 31,699 33,394 42,178 39,946 10 Federal agency securities ... 16,747 18,084 15,903 20,849 19,048 19,193 14,418 17,171'' 13,420 19,987 23,126 18,141 11 Certificates of deposit 4,355 4,112 3,369 3,018 2,463 2,677 2,511 2,242 2,070 2,691 2,529 3,137 12 Bankers acceptances 3,272 2,965 2,316 2,592 1,910 2,086 1,576 1,870 2,210 1,925 1,933 2,140 13 Commercial paper 16,660 17,135 22,927 33,548 31,006 29,145 33,687 28,075 30,140 26,424 28,147 32,529 Futures contracts 14 Treasury bills 3,311 3,233 2,627 1,602 1,6% 2,645 1,519 523 1,279 2,779 3,000 2,326 15 Treasury coupons 7,175 8,963 9,695 9,026 10,537 8,7% 11,542 6,754'' 6,887 7,639 10,365 9,328 16 Federal agency securities ... 16 5 1 21 38 0 0 75 23 43 31 Forward transactions' 17 U.S. Treasury securities — 1,876 2,029 2,095 1,629 2,926 2,116 6,013 1,930 1,128 1,885 2,473 2,854 18 Federal agency securities ... 7,830 9,290 10,265 12,067 8,614 10,760 7,869r 6,899 11,098 10,117 7,294 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 • December 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 July Aug/ Sept. Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 Positions Net immediate2 1 U.S. Treasury securities 12,912 -6,216 -22,765 -166' 3,770 12,199 14,486' 13,397 17,202 11,146 8,833 2 Bills 12,761 4,317 2,238 1,339' 10,317 20,423 19,339' 20,123 22,879 19,920 20,227 3 Other within 1 year 3,705 1,557 -2,236 -849 -834 197 -903' -374 322 543 357 4 1-5 years 9,146 649 -3,020 11,639' 8,027 5,303 7,344' 5,062 4,731 5,426 4,593 5 5-10 years -9,505 -6,564 -9,663 -7,693 -8,765 -8,630 -6,460' -6,859 -6,507 -9,186 -10,439 6 Over 10 years -3,197 -6,174 -10,084 -4,600 -4,976 -5,093 -4,834 -4,554 -4,222 -5,556 -5,904 7 Federal agency securities 32,984 31,911 28,230 31,289 35,268 36,091 33,460' 32,403 37,215 40,232 34,416 8 Certificates of deposit 10,485 8,188 7,300 7,029 6,729 7,065 7,353 7,016 7,386 7,098 6,777 9 Bankers acceptances 5,526 3,660 2,486 2,122 1,875 2,154 1,941 1,978 2,420 2,200 2,105 10 Commercial paper 8,089 7,496 6,152 9,893' 7,490 8,258 6,793 7,143 7,960 10,119 7,821 Futures positions 11 Treasury bills -18,059 -3,373 -2,210 -5,792 -5,376 -6,106 -4,724 -4,912 -5,179 -6,523 -6,872 12 Treasury coupons 3,473 5,988 6,224 -3,261' -2,664 -4,797 -2,245' -3,935 -4,801 -5,455 -4,500 13 Federal agency securities -153 -95 0 51 7 -26 0 -19 8 -15 -29 Forward positions 14 U.S. Treasury securities -2,144 -1,211 346 -1,353' -1,463 -603 -1,312' -716 -1,583 -761 202 15 Federal agency securities -11,840 -18,817 -16,348 -19,556 -20,640 -17,478 -19,170' -18,004 -18,957 -18,679 -15,446 Financing3 Reverse repurchase agreements' 16 Overnight and continuing 98,913 126,709 136,327 164,417 162,006 141,797 154,204 160,314 158,749 160,325 148,221 17 Term 108,607 148,288 177,477 231,321 222,799 191,830 217,133 205,450 211,967 215,486 213,871 Repurchase agreements 18 Overnight and continuing 141,823 170,763 172,695 227,095 226,043 206,834 218,650 227,668 233,053 238,234 215,280 19 Term 102,397 121,270 137,056 195,700 189,187 155,612 175,285 164,866 170,114 172,995 178,567 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 1989 AAggeennccyy 11998844 11998855 11998866 11998877 Apr. May June July Aug. 1 Federal and federally sponsored agencies 271,564 293,905 307,361 341,386 402,765r 407,324" 406,837' 411,874 411,979 2 Federal agencies 35,145 36,390 36,958 37,981 36,402 36,275 36,404 36,453 36,453 3 Defense Department' 142 71 33 13 7 7 7 7 7 4 Export-Import Bank2 3 15,882 15,678 14,211 11,978 11,007 11,007 11,014 11,014 11,014 5 Federal Housing Administration 133 115 138 183 182 196 218 245 255 6 Government National Mortgage Association participation certificates5 2,165 2,165 2,165 1,615 0 0 0 00 0 7 Postal Service6 1,337 1,940 3,104 6,103 6,742 6,445 6,445 6,445 6,445 8 Tennessee Valley Authority 15,435 16,347 17,222 18,089 18,464 18,620 18,720 18,742 18,732 9 United States Railway Association 51 74 85 0 0 0 0 0 0 10 Federally sponsored agencies7 237,012 257,515 270,553 303,405 366,363R 371,049' 370,433' 375,421 375,526 11 Federal Home Loan Banks 65,085 74,447 88,752 115,725 154,146 156,354 153,892 151,487 149,269 12 Federal Home Loan Mortgage Corporation 10,270 11,926 13,589 17,645 22,676 21,620 25,243 25,690 27,165 13 Federal National Mortgage Association 83,720 93,896 93,563 97,057 104,675" 105,404 106,308 109,926 110,155 14 Farm Credit Banks8 72,192 68,851 62,478 55,275 51,678 53,375 52,387 53,158 53,511 15 Student Loan Marketing Association 5,745 8,395 12,171 16,503 25,361 26,469 24,256 26,813 27,079 16 Financing Corporation1" 0 0 0 1,200 6,980 6,980 7,500 7,500 7,500 17 Farm Credit Financial Assistance Corporation" 0 0 0 0 847" 847" 847' 847 847 MEMO 18 Federal Financing Bank debt" 145,217 153,373 157,510 152,417 141,162 140,220 139,568 138,814 137,690 Lending to federal and federally sponsored agencies 19 Export-Import Bank 15,852 15,670 1144,,220055 11,972 1111,,000011 11,001 1111,,000088 1111,,000088 1111,,000088 20 Postal Service6 1,087 1,690 2,854 5,853 6,492 6,195 6.195 6,195 6,195 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 17,084 17,240 17,340 17,362 17,352 23 United States Railway Association6 51 74 85 0 0 0 0 0 0 Other Lending13 24 Farmers Home Administration 58,971 64,234 65,374 59,674 57,086 56,311 55,586 54,911 54,611 25 Rural Electrification Administration 20,693 20,654 21,680 21,191 19,230 19,236 19,236 19,257 19,270 26 Other 29,853 31,429 32,545 32,078 25,359 25,327 25,293 25,171 24,344 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 DomesticN onfinancial Statistics • December 1989 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1989 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11998866 11998877 11998888 Feb. Mar. Apr. May June July Aug/ Sept. 1 All issues, new and refunding1 147,011 102,407 114,522 8,054 8,626 7,464 7,435 13,775 8,735 9,824 10,624 Type of issue 2 General obligation 46,346 30,589 30,312 3,955 2,185 2,301 2,342 4,960 3,789 2,199 3,508 3 Revenue 100,664 71,818 84,210 4,099 6,441 5,163 5,093 8,815 4,946 7,625 7,116 Type of issuer 4 State , 14,474 10,102 8,830 1,896 256 1,407 392 1,989 970 694 764 5 Special district and statutory authority 89,997 65,460 74,409 3,832 5,962 4,238 4,979 8,033 4,868 7,027 7,305 6 Municipalities, counties, and townships 42,541 26,845 31,193 2,326 2,408 1,819 2,064 3,753 2,897 2,103 2,555 7 Issues for new capital, total 83,492 56,789 79,665 5,222 6,486 6,061 5,938 10,078 6,816 6,612 7,694 Use of proceeds 8 Education 12,307 9,524 15,021 826 1,055 1,225 1,024 2,678 998 1,302 1,606 9 Transportation 7,246 3,677 6,825 382 445 743 748 576 500 556 977 10 Utilities and conservation 14,594 7,912 8,496 847 901 759 467 1,058 551 813 680 11 Social welfare 11,353 11,106 19,027 743 1,329 1,048 1,376 1,509 1,632 1,553 1,337 12 Industrial aid 6,190 7,474 5,624 250 253 374 361 329 440 447 457 13 Other purposes 31,802 18,020 24,672 2,174 2,503 1,912 1,962 3,928 2,695 1,941 2,637 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 1989 Type of issue or issuer, or use 11998866 11998877 11998888 Jan. Feb. Mar. Apr. May June July Aug. 1 All issues 424,737 392,156 408,843' is,sir 14,843r 26,188 14,384 21,240' 23,905 15,630' 14,735 2 Bonds2 356,304 325,648 351,042r 14,267r 12,308' 25,577 13,396 19,639' 21,085 12,275' 12,700 Type of offering 3 Public, domestic 232,742 209,279 200,164r 11,407'' 10,114' 22,995 11,471 17,733' 18,177 10,855' 11,700 4 Private placement, domestic3 . 80,760 92,070 127,700 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5. Sold abroad 42,801 24,299 23,178 2,860 2,194 2,582 1,925 1,906 2,908' 1,420' 1,000 Industry group 6 Manufacturing 90,788 61,666 69,573r 1,660 1,319 7,456 1,457 7,716 3,273 2,774' 3,000 7 Commercial and miscellaneous 41,909 49,327 61,986r 2,047 1,118 882 843 2,162 1,628 1,204 578 8 Transportation 10,423 11,974 9,976' 0 102 0 100 150 480 0 0 9 Public utility 30,973 23,004 19,318 665 670 153 1,695 385 2,936 1,173 1,451 10 Communication 16,441 7,340 5,902r 0 230 63 453 122 4 300 0 11 Real estate and financial 165,770 172,343 184,287' 9,896' 8,869' 17,023 8,848 9,105' 12,764 6,824' 7,672 12 Stocks2 68,433 66,508 57,802 1,251 2,535 611 988 1,601 2,820 3,355 2,035 Type 13 Preferred 11,514 10,123 6,544 275 975 0 495 325 335 920 1,013 14 Common 50,316 43,225 35,911 976 1,561 611 493 1,276 2,485 2,435 1,023 15 Private placement 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 33 833 127 135 330 626 594 393 17 Commercial and miscellaneous 10,617 12,888 8,449 32 270 26 280 115 508 438 343 18 Transportation 2,427 2,439 1,535 220 0 53 169 39 0 0 0 19 Public utility 4,020 4,322 1,898 50 11 108 0 192 125 25 137 20 Communication 1,825 1,458 515 5 19 0 93 224 25 29 20 21 Real estate and financial 34,517 31,521 37,798 911 1,402 297 310 702 1,536 2,269 1,020 1. Figures which represent gross proceeds of issues maturing in more than one 3. Data are not available on a monthly basis. Before 1987, annual totals include year, are principal amount or number of units multiplied by offering price. underwritten issues only. Excludes secondary offerings, employee stock plans, investment companies other SOURCES. IDD Information Services, Inc., the Board of Governors of the than closed-end, intracorporate transactions, equities sold abroad, and Yankee Federal Reserve System, and before 1989, the U.S. Securities and Exchange bonds. Stock data include ownership securities issued by limited partnerships. Commission. 2. Monthly data include only public offerings. 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 1989 IItteemm 11998877 11998888 Jan. Feb. Mar. Apr. May June Julyr Aug. INVESTMENT COMPANIES1 1 Sales of own shares2 381,260 271,237 29,014 22,741 23,149 25,4% 24,661 25,817 25,330 26,809 2 Redemptions of own shares3 314,252 267,451 24,494 22,252 24,135 26,183 22,483 22,562 20,053 22,262 3 Net sales 67,008 3,786 4,520 489 -986 -687 2,178 3,255 5,277 4,547 4 Assets4 453,842 472,297 487,204 482,697 483,067 497,329 509,781 515,814 535,910 539,553 5 Cash position5 38,006 45,090 49,661 47,908 46,262 48,788 49,177 48,428 47,888 47,209 6 Other 415,836 427,207 437,543 434,789 436,805 448,541 460,604 467,386 488,022 492,344 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 Q3 Q4 Q1 Q2 Q3 Q4 Ql Q2' 1 Corporate profits with inventory valuation and capital consumption adjustment 282.1 298.7 328.6 313.0 308.2 318.1 325.3 330.9 340.2 316.3 307.8 2 Profits before tax 221.6 266.7 306.8 281.0 276.2 288.8 305.3 314.4 318.8 318.0 296.0 3 Profits tax liability 106.3 124.7 137.9 132.7 127.3 129.0 138.4 141.2 143.2 144.4 134.9 4 Profits after tax 115.3 142.0 168.9 148.3 148.9 159.9 166.9 173.2 175.6 173.6 161.1 5 Dividends 91.3 98.7 110.4 100.0 102.8 105.7 108.6 112.2 115.2 118.5 120.9 6 Undistributed profits 24.0 43.3 58.5 48.3 46.1 54.2 58.3 61.1 60.4 55.1 40.2 7 Inventory valuation 6.7 -18.9 -25.0 -19.4 -20.4 -20.7 -28.8 -30.4 -20.1 -38.3 -21.0 8 Capital consumption adjustment 53.8 50.9 46.8 51.5 52.4 49.9 48.9 46.9 41.5 36.6 32.3 ATrade 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. 1988 1989 IInndduussttrryy 11998877 11998888 1199889911 QL Q2 Q3 Q4 QL Q2 Q31 Q41 1 Total nonfarm business 389.67 430.76 473.65 413.34 427.54 435.61 442.11 459.47 470.86 481.24 483.04 Manufacturing 2 Durable goods industries 71.01 78.30 82.23 75.28 77.38 79.15 80.56 81.26 82.97 82.51 82.17 3 Nondurable goods industries 74.88 88.01 99.67 82.69 85.24 89.62 92.76 93.% 98.57 102.90 103.27 Nonmanufacturing 4 Mining 11.39 12.66 12.22 12.61 13.15 12.53 12.38 12.15 12.70 12.34 11.70 Transportation 5 Railroad 5.92 7.06 7.85 6.96 6.99 6.84 7.45 8.02 7.37 7.24 8.75 6 Air 6.53 7.28 9.53 6.33 6.91 8.09 7.69 7.04 9.49 11.30 10.31 7 Other 6.40 7.00 7.37 7.06 7.05 7.08 6.89 8.07 7.40 7.22 6.79 Public utilities 8 Electric 31.63 32.03 34.65 30.80 31.31 32.07 33.69 33.69 35.34 34.96 34.61 9 Gas and other 13.25 14.64 16.11 14.25 14.49 14.61 15.04 17.12 16.67 15.58 15.08 10 Commercial and other 168.65 183.76 204.02 177.37 185.21 185.61 185.65 198.15 200.36 207.18 210.36 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 • December 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 2C7.6 3 Real estate 20.5 23.8 28.0 29.8 31.0 32.6 34.7 36.5 38.0 39.5 4 Total 217.3 251.5 297.4 320.0 326.0 340.6 347.2 359.3 367.9 388.2 Less: 5 Reserves for unearned income 30.3 33.8 39.2 40.7 42.4 41.5 40.4 41.2 42.5 45.3 6 Reserves for losses 3.7 4.2 4.9 5.1 5.4 5.8 5.9 6.2 6.5 6.8 7 Accounts receivable, net 183.2 213.5 253.3 274.2 278.2 293.3 300.9 311.9 318.9 336.1 8 All other 34.4 35.7 45.3 49.5 60.0 58.6 59.0 57.7 64.5 58.2 9 Total assets 217.6 249.2 298.6 323.7 338.2 351.9 359.9 369.6 383.4 394.3 LIABILITIES 10 Bank loans 18.3 20.0 18.0 16.3 16.8 18.6 17.2 17.3 15.9 16.4 11 Commercial paper 60.5 73.1 99.2 108.4 112.8 117.8 119.1 120.4 124.2 128.4 Debt 12 Other short-term 11.1 12.9 12.7 15.8 16.4 17.5 21.8 24.8 26.9 28.0 13 Long-term 67.7 77.2 94.4 106.9 111.7 117.5 118.7 121.8 128.2 137.1 14 All other liabilities 31.2 34.5 41.5 40.9 45.0 44.1 46.5 49.1 48.6 52.8 15 Capital, surplus, and undivided profits 28.9 31.5 32.8 35.4 35.6 36.4 36.6 36.3 39.5 31.5 16 Total liabilities and capital 217.6 249.2 298.6 323.7 338.2 351.9 359.9 369.6 383.4 394.3 1. NOTE. Components may not add to totals because of rounding. 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 1989 TTyyppee 11998866 11998877 11998888 Mar. Apr. May June July Aug. 1 Total 172,060 205,810 234,529 240,186 244,882 245,861 249,322 251,126 253,822 Retail financing of installment sales 2 Automotive 26,015 35,782 36,548 37,696 38,415 38,816 39,042 39,183 39,355 3 Equipment 23,112 25,170 28,298 28,207 28,790 27,638 27,773 28,128 29,039 4 Pools of securitized assets n.a. n.a. n.a. 855 817 846 807 769 793 Wholesale 5 Automotive 23,010 30,507 33,300 33,528 34,383 34,534 34,021 33,233 33,566 6 Equipment 5,348 5,600 5,983 6,088 6,153 6,096 6,165 6,244 6,497 7 All other 7,033 8,342 9,341 9,682 9,852 9,929 9,862 10,001 9,990 8 Pools of securitized assets2 n.a. n.a. n.a. 0 0 0 0 0 0 Leasing 9 Automotive 19,827 21,952 24,673 25,584 25,544 26,011 26,515 26,701 26,739 10 Equipment 38,179 43,335 57,455 59,484 60,246 61,022 63,370 64,086 64,186 11 Pools of securitized assets2 n.a. n.a. n.a. 756 733 824 796 887 990 12 Loans on commercial accounts receivable and factored commercial accounts receivable 15,978 18,078 17,796 17,794 18,677 18,772 19,302 19,989 20,098 13 All other business credit 13,557 17,043 21,134 20,512 21,272 21,371 21,669 21,904 22,571 Net change (during period) 14 15,763 33,750 22,662 2,808 4,696 978 3,462 1,803 2,697 Retail financing of installment sales 15 Automotive 5,355 9,767 766 395 720 401 226 141 172 16 Equipment 629 2,058 1,384 -178 583 -1,152 135 354 911 17 Pools of securitized assets2 n.a. n.a. n.a. 173 -38 29 -39 -38 24 Wholesale 18 Automotive -978 7,497 2,793 -858 856 151 -513 -788 332 19 Equipment 780 252 226 -105 65 -56 69 79 253 20 All other 224 1,309 999 113 170 78 -68 139 -11 21 Pools of securitized assets2 n.a. n.a. n.a. 0 0 0 0 0 0 Leasing 22 Automotive 3,552 2,125 2,721 737 -40 467 504 187 38 23 Equipment 3,411 5,156 9,962 1,439 762 776 2,348 716 99 24 Pools of securitized assets2 n.a. n.a. n.a. 57 -23 91 -28 91 103 25 Loans on commercial accounts receivable and factored commercial accounts receivable 213 2,100 -282 390 883 95 530 687 109 26 All other business credit 2,576 3,486 4,091 645 760 100 298 235 667 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, inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A37 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1989 11998866 11998877 11998888 Mar. Apr. May June July Aug. Sept. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms 1 Purchase price (thousands of dollars) 118.1 137.0 150.0 159.7 169.2 151.8 150.5 174.5 160.8r 160.6 2 Amount of loan (thousands of dollars) 86.2 100.5 110.5 117.7 124.5 112.3 111.0 125.3 119.4' 118.6 3 Loan/price ratio (percent) 75.2 75.2 75.5 74.4 75.0 75.3 75.2 73.8 75.6 75.3 4 Maturity (years) 26.6 27.8 28.0 27.7 28.4 28.3 27.8 28.6 28.3 28.5 5 Fees and charges (percent of loan amount) 2.48 2.26 2.19 2.11 1.70 2.12 1.91 2.42 2.31' 2.13 6 Contract rate (percent per year) 9.82 8.94 8.81 9.63 9.88 9.82 10.09 10.06 9.83' 9.86 Yield (percent per year) 7 FHLBB series5 10.26 9.31 9.18 9.99 10.17 10.18 10.42 10.48 10.22' 10.23 8 HUD series4 10.07 10.17 10.30 10.93 10.84 10.43 10.04 9.70 10.05 10.04 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series)5 9.91 10.16 10.49 11.16 10.88 10.55 10.08 9.61 9.95 9.94 10 GNMA securities6 9.30 9.43 9.83 10.38 10.36 10.11 9.75 9.55 9.48 9.47 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 98,048 95,030 101,329 101,991 102,191 102,564 103,309 104,421 105,8% 107,052 12 FHA/VA-insured 29,683 21,660 19,762 19,337 19,607 19,612 19,586 19,630 19,589 19,608 13 Conventional 68,365 73,370 81,567 82,654 82,584 82,952 83,723 84,791 86,307 87,444 Mortgage transactions (during period) 14 Purchases 30,826 20,531 23,110 1,469 1,163 1,419 1,862 2,091 2,724 2,223 Mortgage commitments7 15 Contracted (during period) 32,987 25,415 23,435 1,771 1,118 1,626 2,573 2,513 2,842 2,328 16 Outstanding (end of period) 3,386 4,886 2,148 4,807 4,661 4,673 5,236 5,648 5,755 5,865 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 13,517 12,802 15,105 18,714 18,918 19,443 20,121 20,533 n.a. n.a. 18 FHA/VA 746 686 620 593 599 586 585 585 n.a. n.a. 19 Conventional 12,771 12,116 14,485 18,121 18,320 18,857 19,535 19,948 n.a. n.a. Mortgage transactions (during period) 20 Purchases 103,474 76,845 44,077 6,373 5,861 5,141 7,392 5,720 n.a. n.a. 21 Sales 100,236 75,082 39,780 6,037 5,554 4,474 6,551 5,180 6,360 n.a. Mortgage commitments9 22 Contracted (during period) 110,855 71,467 66,026 11,227 4,196 5,186 7,948 6,608 5,705 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 • December 1989 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period Type of holder, and type of property 1986 1987 1988 Q2 Q3 Q4 Q1 Q2" 1 All holders. 2,618,324 2,977,293 3,268,285 3,120,536 3,189,132 3,268,285 3,328,824 3,391,259 2 1- to 4-family 1,719,673 1,959,607 2,189,475 2,070,829 2,134,225 2,189,475 2,230,006 2,281,317 3 Multifamily.. 247,831 273,954 290,355 280,239 284,675 290,355 296,139 297,860 4 Commercial . 555,039 654,863 701,652 681,660 683,207 701,652 716,695 725,341 5 Farm 95,781 88,869 86,803 87,808 87,025 86,803 85,984 86,741 6 Selected financial institutions . 1,507,944 1,704,560 1,874,967 1,791,714 1,833,800 1,874,967 1,905,052 1,932,154 Commercial banks 502,534 591,369 669,160 629,617 650,799 669,160 688,662 715,049 1- to 4-family 235,814 276,270 314,283 296,265 307,041 314,283 324,681 338,872 Multifamily.. 31.173 33,330 34,131 34,225 33,960 34,131 34,172 34,954 Commercial .. 222.799 267,340 305,242 283,942 294,398 305,242 313,941 324,878 Farm 12,748 14.429 15,504 15,185 15,400 15,504 15,868 16,345 Savings institutions 777,967 860,467 929,647 898,742 914,280 929,647 936,091 933,694 1- to 4-family 559,067 602,408 678,263 638,638 665,294 678,263 682,658 684,828 Multifamily 97,059 106,359 111,302 107,482 109,287 111,302 112,507 110,009 Commercial 121,236 150,943 139,416 151,870 139,029 139,416 140,255 138,201 Farm 605 Life insurance companies 193,842 ' 212,375 232,639 ' '220,870 ' '225,627 ' '232,639 234,910 '236,160 1- to 4-family 12,827 13,226 15,284 14,172 14,917 15,284 12,690 12,745 Multifamily 20,952 22,524 23,562 23,021 23,139 23,562 24,636 25,103 Commercial 149,111 166,722 184,124 174,086 178,166 184,124 188,073 188,756 Farm 10,952 9,903 9,669 9,591 9,405 9,669 9,511 9,556 Finance companies4 33,601 40,349 43,521 42,485 43,094 43,521 45,389 47,251 23 Federal and related agencies 203.800 192,721 200,570 199,474 198,027 200,570 199,847 201,909 24 Government National Mortgage Association. 889 444 26 42 64 26 26 24 25 1- to 4-family 47 25 26 24 51 26 26 24 26 Multifamily , 842 419 18 13 27 Farmers Home Administration 48,421 43,051 42,018 42,767 41,836 42,018 41,780 '40,711 28 1- to 4-family 21,625 18,169 18,347 18,248 18,268 18,347 18,347 18,391 29 Multifamily 7,608 8,044 8,513 8,213 8,349 8,513 8,615 8,778 30 Commercial 8,446 6,603 5,343 6,288 5,300 5,343 5,101 3,885 31 Farm 10,742 10,235 9,815 10,018 9,919 9,815 9,717 9,657 32 Federal Housing and Veterans Administration. 5,047 5,574 5,973 5,673 5,666 5,973 6,075 6,424 33 1- to 4-family 2,386 2,557 2,672 2,564 2,432 2,672 2,550 2,827 34 Multifamily 2,661 3,017 3,301 3,109 3,234 3,301 3,525 3,597 35 Federal National Mortgage Association 97,895 96,649 103,013 102,368 102,453 103,013 101,991 103,309 36 1- to 4-family 90,718 89,666 95,833 95,404 95,417 95,833 94,727 95,714 37 Multifamily 7,177 6,983 7,180 6,964 7,036 7,180 7,264 7,595 38 Federal Land Banks 39,984 34,131 32,115 33,048 32,566 32,115 31,261 31,467 39 1- to 4-family 2,353 2,008 1,890 1,945 1,917 1,890 1,839 1,851 40 Farm 37,631 32,123 30,225 31,103 30,649 30,225 29,422 29,616 41 Federal Home Loan Mortgage Corporation ... 11,564 12,872 17,425 15,576 15,442 17,425 18,714 19,974 42 1- to 4-family 10,010 11.430 15,077 13,631 13,322 15,077 16,192 17,305 43 Multifamily 1,554 1,442 2,348 1,945 2,120 2,348 2,522 2,669 44 Mortgage pools or trusts 565,428 718,297 810,887 754,045 782,802 810,887 839,684 861,827 45 Government National Mortgage Association. 262,697 317,555 340,527 322,616 333,177 340,527 348,622 353,154 1- to 4-family 256,920 309,806 331,257 314,728 324,573 331,257 337,563 341,951 Multifamily 5,777 7,749 9,270 7,888 8,604 9,270 11,059 11,203 Federal Home Loan Mortgage Corporation . 171,372 212,634 226,406 216,155 220,684 226,406 234,695 242,789 1- to 4-family 166,667 205,977 219,988 209,702 214,195 219,988 228,389 236,404 Multifamily 4,705 6,657 6,418 6,453 6,489 6,418 6,306 6,385 Federal National Mortgage Association 97.174 139,960 178,250 157,438 167,170 178,250 188,071 196,501 1- to 4-family 95,791 137,988 172,331 153,253 162,228 172,331 181,352 188,774 Multifamily 1,383 1,972 5,919 4,185 4,942 5,919 6,719 7,727 Farmers Home Administration5 348 245 104 106 106 104 96 85 1- to 4-family 142 121 26 23 27 26 24 23 Multifamily Commercial 132 63 38 41 38 38 34 26 Farm 74 61 40 42 41 40 38 36 59 Individuals and others 341,152 361,715 381,861 375,303 374,503 381,861 384,241 395,369 60 1- to 4-family 197,868r 201,704' 215,077' 212,017' 209,784' 215,077' 215,379 225,059 61 Multifamily 66,940 75,458' 78,411' 76,736' 77,502' 78,411' 78,814 79,840 62 Commercial 53,315 63,192' 67,489' 65,433' 66,276' 67,489' 69,29) 69,595 63 Farm 23,029 21,361' 20,884' 21,117' 20,941' 20,884' 20,757 20,875 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 I- 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 Dec. Jan. Feb. Mar. Apr. May June July Aug. Amounts outstanding (end of period) 1 Total 607,721 659,507 659,507 682,020 687,397 691,162 693,911 698,132 700,849 700,344' 703,820 By major holder 2 Commercial banks 282,910 318,925 318,925 316,797 318,423 318,242 320,458 323,363 324,438 323,621' 326,811 3 Finance companies 140,281 145,180 145,180 141,795 143,419 143,070 144,378 145,523 146,055 145,488 144,386 4 Credit unions 80,087 86,118 86,118 87,093 87,813 88,514 89,330 89,890 90,073 89,852' 90,061 5 Retailers' 40,975 43,498 43,498 40,986 41,052 41,300 41,301 41,323 41,649 41,798 41,989 6 Savings institutions 59,851 62,099 62,099 62,867 63,109 62,735 61,919 61,311 59,920 60,092 59,731 7 Gasoline companies 3,618 3,687 3,687 3,655 3,677 3,682 3,787 3,897 4,017 3,936 3,976 8 Pools of securitized assets4 n.a. n.a. n.a. 28,827 29,903 33,619^ 32,737 32,826 34,696 35,557' 36,867 By major type of credit 9 Automobile 265,976 281,174 281,174 286,382 288,767 288,850 289,654 290,741 290,192 288,526' 228888,,992255 10 Commercial banks 109,201 123,259 123,259 122,160 122,983 123,062 123,878 125,118 125,592 124,881' 126,819 11 Credit unions 40,351 41,326 41,326 41,707 41,964 42,211 42,510 42,687 42,684 42,624' 42,768 12 Finance companies 98,195 97,204 97,204 87,968 88,789 89,567 90,268 90,976 91,184 90,213 89,439 13 Savings institutions 18,228 19,385 19,385 19,506 19,464 19,231 18,866 18,566 18,032 17,972 17,752 14 Pools of securitized assets4 n.a. n.a. n.a. 15,042 15,568 14,779 14,132 13,395 12,700 12,835 12,147 15 Revolving 153,884 174,792 174,792 176,716 178,570 182,831 184,500 186,502 189,622 191,028' 194,602 16 Commercial banks 99,119 117,572 117,572 111,133 111,706 112,553 114,130 115,407 115,561 115,967' 117,522 17 Retailers 36,389 38,692 38,692 36,176 36,257 36,489 36,497 36,504 36,814 36,963 37,134 18 Gasoline companies 3,618 3,687 3,687 3,655 3,677 3,682 3,787 3,897 4,017 3,936 3,976 19 Savings institutions 10,367 10,151 10,151 10,479 10,722 10,860 10,918 11,008 10,951 11,176 11,301 20 Credit unions 4,391 4,691 4,691 4,785 4,866 4,947 5,035 5,109 5,187 n.a. n.a. 21 Pools of securitized assets4 n.a. n.a. n.a. 10,489 11,342 14,299^ 14,134 14,578 17,117 17,795' 19,424 22 Mobile home 26,387 25,744 25,744 26,036 25,992 24,168 23,993 23,952 23,685 23,630' 22,974 23 Commercial banks 9,220 8,974 8,974 8,974 8,974 8,844 8,836 8,878 8,847 8,830' 8,767 24 Finance companies 7.762 7,186 7,186 7,376 7,308 5,687 5,659 5,684 5,674 5,624 5,100 25 Savings institutions 9,406 9,583 9,583 9,687 9,710 9,637 9,498 9,390 9,163 9,176 9,107 26 Other 161,475 177,798 177,798 192,886 194,068 195,314 195,763 196,936 197,349 197,161' 197,319 27 Commercial banks 65,370 69,120 69,120 74,532 74,760 73,783 73,614 73,960 74,438 73,944' 73,703 28 Finance companies 34,324 40,790 40,790 46,451 47,322 47,816 48,451 48,863 49,197 49,650 49,847 29 Credit unions 35,344 40,102 40,102 40,601 40,983 41,357 41,785 42,094 42,228 42,036' 42,046 30 Retailers 4,586 4,807 4,807 4,809 4,795 4,811 4,804 4,819 4,834 4,835 4,855 31 Savings institutions 21,850 22,981 22,981 23,196 23,214 23,006 22,638 22,347 21,773 21,769 21,571 32 Pools of securitized assets4 n.a. n.a. n.a. 3,296 2,993 4,541' 4,471 4,853 4,879 4,927 5,296 Net change (during period) 33 Total 35,674 51,786 5,094 22,513 5,376r 3,765 2,749 4,221 2,717 -505' 3,476 By major holder 34 Commercial banks 19,884 36,015 2,242 -2,128 1,626 -181 2,216 2,904' 1,076' -817' 3,189 35 Finance companies 6,349 4,899 1,692 -3,385 1,624 -349 1,309' 1,145 532 -567 -1,102 36 Credit unions 3,853 6,031 378 975 720 701 815' 560 184' -222' 209 37 Retailers 1,568 2,523 588 -2,512 67' 247' 2' 21' 326 149 192 38 Savings institutions 3,689 2,248 177 768 242 -375' -815' -609' -1,390' 172 -361 39 Gasoline companies 332 69 16 -32 22 6' 104' 110 120 -81 39 40 Pools of securitized assets4 n.a. n.a. n.a. n.a. 1,076 3,716' -882' 89 1,870 861' 1,310 By major type of credit 41 Automobile 18,663 15,198 1,248 5,208 2,385 82' 804 1,087 -549 -1,667' 400 42 Commercial banks 7,919 14,058 867 -1,099 823 79 816 1,239' 474 -711' 1,938 43 Credit unions 1,916 975 10 381 257 247 300' 177 -3 -60' 144 44 Finance companies 5,639 -991 547 -9,236 821 778 701 708 208 -970 -775 45 Savings institutions 3,188 1,157 -176 121 -42 -233 -366' -300 -533' -61 -220 46 Pools of securitized assets4 n.a. n.a. n.a. n.a. 526 -789 -647 -737 -695 135 -688 47 Revolving 16,871 20,908 1,762 1,924 1,854 4,261 1,670' 2,002 3,120 1,406' 3,574 48 Commercial banks 12,188 18,453 979 -6,439 573 848' 11,,557766'' 1,277 154 405' 1,555 49 Retailers 1,866 2,303 522 -2,516 81 232 88 7 310 149 171 50 Gasoline companies 332 69 16 -32 22 6' 104' 110 120 -81 39 51 Savings institutions 1,771 -216 228 328 243 138 58 90 -57 225 125 52 Credit unions 715 300 18 94 81 81 88 74 78 n.a. n.a. 53 Pools of securitized assets4 n.a. n.a. n.a. n.a. 853 2,957' -165' 444 2,539 678' 1,629 54 Mobile home -968 -643 -261 292 -44 -1,824 -174' -41 -267 -56' -656 55 Commercial banks 192 -246 -250 0 r -131' -7' 42 -31 -18' -63 56 Finance companies -1,052 -576 -11 190 -68 -1,621 -28 25 -10 -50 -524 57 Savings institutions -107 177 -1 104 23 -72' -140' -108 -227 12 -69 58 Other 1,108 16,323 2,346 15,088 1,182 1,246 449 1,173 413 -189' 158 59 Commercial banks -415 3,750 646 5,412 229r -977 -169 346 478 -494' -241 60 Finance companies 1,761 6,466 1,157 5,661 871 494 635 412 334 453 197 61 Credit unions 1,221 4,758 350 499 382 374 428 309 133' -191' 10 62 Retailers -297 221 68 2 -14 16 -7 15 16' 0 21 63 Savings institutions -1,162 1,131 127 215 18 -208 -368 -291 -574 -5 -197 64 Pools of securitized assets4 n.a. n.a. n.a. n.a. -303 1,548' -70r 382 26 48 369 1. The Board's series cover most short- and intermediate-term credit extended 2. More detail for finance companies is available in the G. 20 statistical release. to individuals that is scheduled to be repaid (or has the option of repayment) in 3. Excludes 30—day charge credit held by travel and entertainment companies. two or more installments. 4. Outstanding balances of pools upon which securities have been issued; these These data also appear in the Board's G.19 (421) release. For address, see balances are no longer carried on the balance sheets of the loan originator. inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • December 1989 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent unless noted otherwise 1989 IItteemm 11998866 11998877 11998888 Feb. Mar. Apr. May June July Aug. INTEREST RATES Commercial banks' 1 48-month new car3 11.33 10.45 10.85 11.76 n.a. n.a. 12.44 n.a. n.a. 12.13 2 24-month personal 14.82 14.22 14.68 15.22 n.a. n.a. 15.65 n.a. n.a. 15.45 3 120-month mobile home 13.99 13.38 13.54 14.00 n.a. n.a. 14.35 n.a. n.a. 14.13 4 Credit card 18.26 17.92 17.78 17.83 n.a. n.a. 18.11 n.a. n.a. 18.07 Auto finance companies 5 New car 9.44 10.73 12.60 13.07 13.07 12.10 11.80 11.96 11.94 12.22 6 Used car 15.95 14.60 15.11 15.90 16.12 16.39 16.45 16.45 16.37 16.31 OTHER TERMS4 Maturity (months) / New car 50.0 53.5 56.2 55.7 55.4 53.4 52.7 53.0 52.9 52.9 8 Used car 42.6 45.2 46.7 47.4 47.1 47.8 46.6 46.5 46.4 46.2 Loan-to-value ratio 9 New car 91 93 94 92 92 91 91 91 91 90 10 Used car 97 98 98 98 97 97 97 97 97 96 Amount financed (dollars) 11 New car 10,665 11,203 11,663 11,819 11,867 11,886 11,973 12,065 12,108 11,949 12 Used car 6,555 7,420 7,824 8,022 7,958 7,855 7,908 7,921 7,988 7,874 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 11998866 11998877 11998888 Q4 QL Q2 Q3 Q4 QL Q2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors 750.7 846.3 831.1 693.2 765.9 764.9 727.0 826.0 753.3 757.2 788.2 612.9 By sector and instrument 2 U.S. government 198.8 223.6 215.0 144.9 157.5 175.1 211.6 113.7 162.5 142.1 199.9 70.9 3 Treasury securities 199.0 223.7 214.7 143.4 140.0 170.2 212.0 106.0 141.6 100.5 201.1 65.8 4 Agency issues and mortgages -.2 -.1 .4 1.5 17.4 5.0 -0.5 7.7 20.9 41.6 -1.2 5.1 5 Private domestic nonfinancial sectors 551.9 622.7 616.1 548.3 608.4 589.8 515.5 712.3 590.8 615.1 588.3 542.0 6 Debt capital instruments 320.0 451.4 460.3 458.5 462.6 417.8 386.5 561.0 463.9 438.9 429.3 414.2 7 Tax-exempt obligations 51.0 135.4 22.7 34.1 33.1 25.0 29.1 37.9 34.8 34.3 30.8 23.1 8 Corporate bonds 46.1 73.8 121.3 99.9 120.9 81.6 118.8 143.9 115.9 104.9 111.6 138.9 9 Mortgages 222.8 242.2 316.3 324.5 307.7 311.2 238.7 379.2 313.2 299.7 286.9 252.2 10 Home mortgages 136.7 156.8 218.7 234.9 229.1 225.5 170.7 300.7 231.0 214.0 205.2 201.8 11 Multifamily residential 25.2 29.8 33.5 24.4 18.9 14.9 24.2 14.7 19.5 17.3 27.2 8.7 12 Commercial 62.2 62.2 73.6 71.6 61.7 73.4 48.5 65.4 65.4 67.7 58.8 39.6 13 Farm -1.2 -6.6 -9.5 -6.4 -2.1 -2.6 -4.7 -1.6 -2.6 .7 -4.4 2.1 14 Other debt instruments 231.9 171.3 155.8 89.7 145.8 172.0 128.9 151.3 126.9 176.2 159.0 127.8 1 Consumer credit 81.6 82.5 58.0 32.9 51.1 54.1 43.7 51.9 35.5 73.1 34.8 47.7 16 Bank loans n.e.c 66.3 38.6 66.7 10.8 38.4 71.9 20.8 58.8 7.3 66.6 22.9 -13.6 17 Open market paper 21.7 14.6 -9.3 2.3 11.6 -10.8 2.4 6.8 17.1 20.0 44.1 44.9 18 Other 62.2 35.6 40.5 43.8 44.8 56.7 62.0 33.7 66.9 16.5 57.2 48.8 19 By borrowing sector 551.9 622.7 616.1 548.3 608.4 589.8 515.5 712.3 590.8 615.1 588.3 542.0 20 State and local governments 28.1 90.9 36.2 33.6 29.8 24.3 23.4 37.0 28.1 30.6 29.7 27.7 71 Households 231.5 284.6 289.2 271.9 286.8 278.0 229.0 345.5 290.4 282.1 261.9 220.2 2.2 Nonfinancial business 292.3 247.2 290.7 242.8 291.8 287.4 263.0 329.7 272.3 302.4 296.6 294.2 23 Farm -.4 -14.5 -16.3 -10.6 -7.5 .4 -12.7 -3.3 -2.2 -11.8 -6.3 -2.7 24 Nonfarm noncorporate 123.2 129.3 103.2 107.9 91.9 115.7 85.2 83.6 100.5 98.2 91.1 76.3 25 Corporate 169.6 132.4 203.7 145.5 207.5 171.4 190.5 249.4 174.0 216.0 211.8 220.5 26 Foreign net borrowing in United States 8.4 1.2 9.6 4.3 5.9 13.9 4.8 5.4 4.1 13.0 -2.4 4.2 27 Bonds 3.8 3.8 3.1 7.4 6.9 21.4 14.2 2.6 5.9 5.1 3.2 11.1 28 Bank loans n.e.c -6.6 -2.8 -1.0 -3.6 -1.8 -4.3 1.7 -3.3 * -5.7 4.9 -5.0 29 Open market paper 6.2 6.2 11.5 2.1 9.6 -1.6 .7 6.5 10.3 21.0 10.2 -6.1 30 U.S. government loans 5.0 -6.0 -3.9 -1.0 -7.9 -1.6 -11.8 -.4 -12.1 -7.4 -20.7 4.2 31 Total domestic plus foreign 759.1 847.5 840.9 698.1 772.7 778.8 731.8 831.4 757.3 770.2 785.8 617.2 Financial sectors 32 Total net borrowing by financial sectors 150.7 201.3 318.9 315.0 264.2 240.1 242.5 263.9 232.1 318.3 395.4 133.0 By instrument 33 U.S. government related 74.9 101.5 187.9 185.8 137.5 161.5 128.8 104.3 144.4 172.5 216.1 105.9 34 Sponsored credit agency securities 30.4 20.6 15.2 30.2 44.9 62.8 59.5 11.1 46.5 62.3 84.9 12.7 35 Mortgage pool securities 44.4 79.9 173.1 156.4 92.6 98.8 69.3 93.1 97.8 110.1 131.2 93.3 36 Loans from U.S. government * 1.1 -.4 -.8 * * * * * * 37 Private financial sectors 75.9 99.7 131.0 129.2 126.7 78.6 113.7 159.6 87.7 145.8 179.4 27.1 38 Corporate bonds 34.3 50.9 82.9 78.9 51.7 53.4 60.0 71.1 32.5 43.0 51.8 23.9 39 Mortgages .4 .1 .1 .4 .3 .8 -.1 .1 -.1 1.2 .3 -.1 40 Bank loans n.e.c 1.4 2.6 4.0 -3.3 1.4 -11.1 5.9 5.7 -5.6 -.3 3.0 3.5 41 Open market paper 24.0 32.0 24.2 28.8 53.6 -4.2 38.5 70.5 35.1 70.4 55.2 16.7 42 Loans from Federal Home Loan Banks 15.7 14.2 19.8 24.4 19.7 39.8 9.4 12.3 25.8 31.4 69.1 -16.9 By sector 43 150.7 201.3 318.9 315.0 264.2 240.1 242.5 263.9 232.1 318.3 395.4 133.0 44 Sponsored credit agencies 30.4 21.7 14.9 29.5 44.9 62.8 59.5 11.1 46.5 62.3 84.9 12.7 45 Mortgage pools 44.4 79.9 173.1 156.4 92.6 98.8 69.3 93.1 97.8 110.1 131.2 93.3 46 Private financial sectors 75.9 99.7 131.0 129.2 117.4 78.6 113.7 159.6 87.7 145.8 179.4 27.1 47 Commercial banks 7.3 -4.9 -3.6 7.1 -3.9 11.2 -16.7 -1.6 -.9 3.7 -13.4 12.7 48 Bank affiliates 16.1 16.6 15.2 14.3 5.2 -9.9 -8.8 22.4 6.1 .8 6.4 2.9 49 Savings and loan associations 17.2 17.3 20.9 19.6 19.9 28.3 10.0 19.1 24.1 26.3 71.3 -15.5 50 Mutual savings banks 1.2 1.5 4.2 8.1 1.9 12.6 2.3 1.1 .5 3.8 -2.8 -.2 51 Finance companies 24.0 57.2 54.5 40.3 67.0 28.3 78.4 85.4 40.7 63.6 80.3 29.0 52 REITs .8 .5 1.0 .8 4.1 2.2 5.4 1.7 -5.9 15.0 -.9 .4 53 SCO Issuers 9.3 11.5 39.0 39.1 32.5 6.0 43.0 31.5 23.1 32.5 38.4 -2.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • December 1989 1.57—Continued 1987 1988 1989 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998844 11998855 11998866 11998877 11998888 Q4 Ql Q2 Q3 Q4 Ql Q2 All sectors 54 Total net borrowing 909.8 1,048.8 1,159.8 1,013.2 1,036.9 1,019.0 974.3 1,095.3 989.4 1,088.4 1,181.3 750.2 55 U.S. government securities 273.8 324.2 403.4 331.5 294.9 336.7 340.4 218.0 306.8 314.6 416.0 176.8 56 State and local obligations 51.0 135.4 22.7 34.1 33.1 25.0 29.1 37.9 34.8 34.3 30.8 23.1 57 Corporate and foreign bonds 84.3 128.4 207.3 186.3 179.5 156.3 193.0 217.6 154.3 153.0 166.6 173.9 58 Mortgages 223.1 242.2 316.4 324.9 308.0 312.0 238.6 379.3 313.1 300.8 287.2 252.1 59 Consumer credit 81.6 82.5 58.0 32.9 51.1 54.1 43.7 51.9 35.5 73.1 34.8 47.7 60 Bank loans n.e.c 61.1 38.3 69.7 3.8 38.0 56.6 28.3 61.2 1.7 60.7 30.8 -15.1 61 Open market paper 51.9 52.8 26.4 33.2 74.9 -16.6 41.6 83.9 62.5 111.5 109.4 55.4 62 Other loans 82.9 45.0 56.1 66.5 56.6 94.9 59.6 45.6 80.6 40.5 105.6 36.1 63 MEMO: U.S. government, cash balance 6.3 14.4 * -7.9 10.4 -38.9 47.6 1.2 10.6 -17.9 -22.5 14.5 Totals net of changes in U.S. government cash balances 64 Net borrowing by domestic nonfinancial 744.4 831.9 831.2 701.1 755.5 803.8 679.4 824.8 742.6 775.1 810.7 598.4 65 Net borrowing by U.S. government 192.5 209.3 215.0 152.8 147.1 214.0 164.0 112.5 151.8 160.0 222.4 56.4 External corporate equity funds raised in United States 66 Total net share issues -36.0 20.1 93.9 13.5 -115.0 -90.4 -101.0 -133.7 -73.5 -163.5 -163.4 -52.7 67 Mutual funds 29.3 84.4 161.8 72.3 -.4 1.8 -9.5 -6.6 1.5 11.9 3.6 23.9 68 All other -65.3 -64.3 -68.0 -58.8 -114.5 -92.2 -91.5 -127.0 -75.0 -175.4 -167.0 -76.6 69 Nonfinancial corporations -74.5 -81.5 -80.8 -76.5 -130.5 -88.0 -95.0 -140.0 -92.0 -195.0 -180.0 -105.0 70 Financial corporations 8.2 13.5 11.1 21.4 12.4 10.0 2.4 19.0 14.6 13.5 9.5 13.1 71 Foreign shares purchased in United States .9 3.7 1.2 -2.1 .9 -14.1 1.1 -6.0 2.4 6.1 3.6 15.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; quarterly data are at seasonally adjusted annual rates. 1987 1988 1989 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998844 11998855 11998866 11998877 11998888 Q4 Ql Q2 Q3 Q4 Ql Q2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 750.7 846.3 831.1 693.2 765.9 764.9 727.0 826.0 753.3 757.2 788.2 612.9 By public agencies and foreign 2 Total net advances 157.6 202.0 314.0 262.8 237.5 278.0 278.6 185.5 196.9 289.0 334455..77 49.2 3 U.S. government securities 38.9 45.9 69.4 70.1 85.0 123.3 153.2 43.3 24.1 119.6 97.6 -68.4 4 Residential mortgages 56.5 94.6 170.1 153.2 104.0 105.9 88.9 107.9 98.1 121.2 133.3 106.6 5 FHLB advances to thrifts 15.7 14.2 19.8 24.4 19.7 39.8 9.4 12.3 25.8 31.4 69.1 -16.9 6 Other loans and securities 46.6 47.3 54.7 15.1 28.7 9.0 27.1 22.1 49.0 16.7 45.7 28.0 Total advanced, by sector 7 U.S. government 17.1 17.8 9.7 -7.9 -5.0 6.4 -7.0 -7.6 4.3 -9.6 -0.2 -4.3 8 Sponsored credit agencies 74.3 103.5 187.2 183.4 129.6 160.0 114.3 105.7 130.1 168.5 221.4 45.6 9 Monetary authorities 8.4 18.4 19.4 24.7 10.5 22.8 2.7 5.0 15.5 18.9 5.2 -3.9 10 Foreign 57.9 62.3 97.8 62.7 102.3 88.8 168.6 82.5 47.0 111.2 119.3 11.8 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 74.9 101.5 187.9 185.8 137.5 161.5 128.8 104.3 144.4 172.5 216.1 105.9 12 Foreign 8.4 1.2 9.7 4.9 6.8 13.9 4.8 5.4 4.1 13.0 -2.4 4.2 Private domestic funds advanced n Total net advances 676.3 747.0 714.8 621.1 672.6 662.3 582.0 750.1 704.8 653.7 656.2 673.9 14 U.S. government securities 234.9 278.2 333.9 261.4 209.9 213.3 187.2 174.7 282.8 195.0 318.4 245.3 15 State and local obligations 51.0 135.4 22.7 34.1 34.0 25.0 29.1 37.9 34.8 34.3 30.8 23.1 16 Corporate and foreign bonds 35.1 40.8 84.2 87.5 104.4 101.1 126.5 126.2 91.7 73.0 89.4 132.7 17 Residential mortgages 105.3 91.8 82.0 106.1 144.0 134.5 106.0 207.5 152.3 110.1 99.2 103.9 18 Other mortgages and loans 265.6 214.8 211.8 156.5 200.1 228.2 142.6 216.0 169.0 272.6 187.6 152.0 19 LESS: Federal Home Loan Bank advances 15.7 14.2 19.8 24.4 19.7 39.8 9.4 12.3 25.8 31.4 69.1 -16.9 Private financial intermediation 20 Credit market funds advanced by private financial institutions 585.8 579.9 744.0 560.8 575.9 617.0 650.6 568.6 434.0 650.4 634.2 410.1 21 Commercial banking 169.2 186.0 197.5 136.8 155.3 278.6 87.9 194.5 118.4 220.5 120.3 170.1 22 Savings institutions 154.7 87.9 107.6 136.8 120.9 158.2 96.0 136.2 157.1 94.2 61.5 -24.8 23 Insurance and pension funds 121.8 154.4 174.6 210.9 212.3 149.6 290.6 196.3 156.8 205.5 294.0 142.0 24 Other finance 140.1 151.6 264.2 76.3 87.4 30.5 176.1 41.6 1.7 130.3 158.4 122.7 25 Sources of funds 585.8 579.9 744.0 560.8 575.9 617.0 650.6 568.6 434.0 650.4 634.2 410.1 26 Private domestic deposits and RPs 322.6 214.3 262.6 144.1 206.2 329.6 289.1 91.3 183.0 261.2 137.3 137.9 27 Credit market borrowing 75.9 99.7 131.0 129.2 126.7 78.6 113.7 159.6 87.7 145.8 179.4 27.1 28 Other sources 187.3 265.9 350.4 287.5 243.0 208.8 247.8 317.6 163.3 243.4 317.5 245.2 29 Foreign funds 8.8 19.7 12.9 43.7 9.3 8.0 -60.6 94.5 -42.1 45.5 -28.4 0.1 30 Treasury balances 4.0 10.3 1.7 -5.8 7.3 -27.8 44.2 -16.3 5.6 -4.1 -21.6 -2.7 31 Insurance and pension reserves 124.0 131.9 149.3 176.1 228.4 171.1 256.0 225.8 129.9 301.7 259.1 103.4 32 Other, net 50.5 104.1 186.5 73.6 -2.0 57.4 8.2 13.6 69.9 -99.6 108.4 144.4 Private domestic nonfinancial investors 33 Direct lending in credit markets 166.4 266.8 101.8 189.6 223.4 124.0 45.1 341.1 358.5 149.0 201.4 290.9 34 U.S. government securities 111.4 157.8 60.9 100.0 144.2 85.4 116.1 92.3 222.9 145.7 198.2 180.4 3S State and local obligations 27.1 37.7 -21.7 45.6 27.7 19.7 15.7 31.2 50.4 13.5 27.0 -17.1 36 Corporate and foreign bonds -4.1 4.2 39.3 24.1 17.4 50.4 -36.6 79.5 13.8 12.7 0.8 56.5 37 Open market paper 7.8 47.5 5.4 6.6 18.4 -32.8 -36.7 82.1 62.7 -34.6 6.9 10.5 38 Other 24.2 19.6 17.9 13.3 15.8 1.3 -13.4 56.0 8.8 11.7 -31.6 60.5 39 Deposits and currency 326.1 224.6 283.0 160.2 208.8 364.0 297.1 99.3 206.8 231.9 182.1 153.8 40 Currency 8.6 12.4 14.4 19.0 14.7 31.9 10.7 13.8 29.3 5.1 19.3 10.8 41 Checkable deposits 30.2 41.9 95.0 -3.0 10.4 62.3 1.4 -32.0 -22.7 95.1 -66.1 -100.0 42 Small time and savings accounts 150.7 138.5 120.6 76.0 122.2 141.2 199.5 130.5 72.7 86.0 42.2 100.0 43 Money market fund shares 49.0 8.9 38.3 27.2 22.8 53.6 57.6 -21.0 -3.5 58.1 51.1 103.8 44 Large time deposits 82.9 7.4 -11.4 26.7 29.6 85.4 2.8 -12.6 129.4 -1.2 78.5 30.3 45 Security RPs 9.8 17.7 20.2 17.2 21.2 -13.1 27.9 26.5 7.0 23.3 31.6 3.7 46 Deposits in foreign countries -5.1 -2.1 5.9 -2.8 -12.1 2.5 -2.7 -5.9 -5.5 -34.4 25.5 5.1 47 Total of credit market instruments, deposits, and currency 492.5 491.4 384.8 349.8 432.2 488.0 342.2 440.4 565.2 381.0 383.5 444.7 48 Public holdings as percent of total 20.7 23.8 37.3 37.6 30.7 35.7' 38.r 22.3r 26.0r 37.5' 44.0' 8.0' 49 Private financial intermediation (in percent) 86.6 77.6 104.0 90.2 85.6 93.2' 111.8r 75.8' 61.6r 99.5r 96.6' 60^ 50 Total foreign funds 66.7 82.0 110.7 106.4 111.7 96.8 108.1 177.0 4.9 156.7 90.9 11.9 MEMO: Corporate equities not included above 51 Total net issues -36.0 20.1 90.5 14.3 -117.9 -90.4 -101.0 -133.7 -73.5 -163.5 -163.4 -52.7 52 Mutual fund shares 29.3 84.4 159.0 71.6 -.7 1.8 -9.5 -6.6 1.5 11.9 3.6 23.9 53 Other equities -65.3 -64.3 -68.5 -57.3 -117.2 -92.2 -91.5 -127.0 -75.0 -175.4 -167.0 -76.6 54 Acquisitions by financial institutions 15.8 45.6 53.7 21.4 2.3 -19.5 -33.8 0.4 19.1 23.2 -0.7 24.4 55 Other net purchases -51.8 -25.5 36.8 -7.1 -120.2 -70.9 -67.2 -134.1 -92.7 -186.7 -162.7 -77.1 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 2Aine 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 • December 1989 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING Billions of dollars; period-end levels. 1987 1988 1989 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998833 11998844 11998855 11998866 Q4 Ql Q2 Q3 Q4 Ql Q2 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 5,202.6 5,951.8 6,795.1 7,631.2 8,335.0 8,476.7 8,686.4 8,874.5 9,102.0 9,278.5 9,427.7 By sector and instrument 2 U.S. government 1,177.9 1,376.8 1,600.4 1,815.4 1,960.3 2,003.2 2,022.3 2,063.9 2,117.8 2,155.7 2,165.7 3 Treasury securities 1,174.4 1,373.4 1,597.1 1,811.7 1,955.2 1,998.1 2,015.3 2,051.7 2,095.2 2,133.4 2,142.1 4 Agency issues and mortgages 3.6 3.4 3.3 3.6 5.2 5.0 7.0 12.2 22.6 22.3 23.6 5 Private domestic nonfinancial sectors 4,024.6 4.575.1 5,194.7 5,815.8 6,374.7 6,473.5 6,664.1 6,810.6 6,984.3 7,122.8 7,262.0 6 Debt capital instruments 2,715.1 3,038.0 3,485.5 3,957.5 4.428.0 4.511.0 4.652.6 4,782.0 4.902.1 4,996.6 5.100.7 7 Tax-exempt obligations 469.0 520.0 655.5 679.1 713.2 718.1 727.2 746.1 759.8 765.1 770.3 8 Corporate bonds 423.0 469.2 542.9 664.2 764.1 793.8 829.8 858.8 885.0 912.9 947.6 9 Mortgages 1.823.1 2,048.8 2.287.1 2,614.2 2,950.7 2.999.1 3.095.7 3,177.2 3,257.3 3,318.6 3.382.8 10 Home mortgages 1.200.2 1.336.2 1.490.2 1,720.8 1.943.1 1,978.0 2,055.3 2,118.0 2.174.2 2,215.3 2,267.7 11 Multifamily residential 158.8 183.6 213.0 246.2 270.0 273.0 276.6 281.0 286.8 292.6 294.6 12 Commercial 350.4 416.5 478.1 551.4 648.7 660.2 676.0 691.1 709.6 724.7 733.7 13 Farm 113.7 112.4 105.9 95.8 88.9 88.0 87.8 87.0 86.8 86.0 86.7 14 Other debt instruments 1,309.5 1,537.1 1,709.3 1,858.4 1,946.7 1,962.5 2,011.5 2,028.5 2,082.1 2,126.3 2,161.3 15 Consumer credit 437.7 519.3 601.8 659.8 692.7 688.9 705.8 721.2 743.7 745.0 761.4 16 Bank loans n.e.c 491.1 553.1 592.7 656.1 664.3 668.3 687.2 687.7 702.6 717.5 709.8 17 Open market paper 36.8 58.5 72.2 62.9 73.8 73.5 77.8 80.3 85.4 96.1 110.1 18 Other 344.0 406.2 442.6 479.6 516.0 531.9 540.6 539.4 550.4 567.6 580.0 19 By borrowing sector 4,024.6 4.575.1 5,194.7 5,815.8 6,374.7 6,473.5 6,664.1 6,810.6 6,984.3 7,122.8 7.262.0 20 State and local governments.... 355.0 383.0 473.9 510.1 543.7 547.1 556.0 565.7 573.5 578.5 584.8 21 Households 1,791.6 2.018.2 2.295.5 2,591.8 2,864.5 2,900.4 2.989.6 3.067.4 3,150.8 3,209.6 3,267.9 22 Nonfinancial business 1,878.0 2,173.9 2,425.4 2,714.0 2.966.5 3,026.0 3,118.5 3.177.5 3.260.0 3,334.8 3,409.3 23 Farm 188.4 187.9 173.4 156.6 145.5 141.3 143.9 143.6 137.6 134.9 137.7 24 Nonfarm noncorporate 645.8 769.0 898.3 1,001.6 1,109.4 1,131.7 1,151.9 1.172.6 1,205.3 1,229.1 1,247.5 25 Corporate 1,043.8 1,216.9 1.353.6 1,555.8 1.711.6 1,753.0 1.822.7 1,861.3 1.917.1 1,970.8 2.024.1 26 Foreign credit market debt held in United States . 225.9 233.6 234.7 236.4 242.9 244.6 245.9 246.1 249.7 249.4 259.6 27 Bonds 64.2 68.0 71.8 74.9 82.3 86.1 86.0 87.4 89.2 90.5 92.2 28 Bank loans n.e.c 37.4 30.8 27.9 26.9 23.3 22.8 22.4 22.7 21.5 21.6 30.0 29 Open market paper 21.5 27.7 33.9 37.4 41.2 42.5 44.0 46.3 50.9 54.4 52.7 30 U.S. government loans 102.8 107.1 101.1 97.1 96.1 93.1 93.5 89.8 88.2 82.9 84.6 31 Total domestic plus foreign 5,428.5 6,185.4 7,029.9 7,867.6 8,578.0 8,721.3 8,932.3 9,120.6 9,351.8 9,527.9 9,687.3 Financial sectors 32 Total credit market debt owed by financial sectors 859.9 1,010.2 1,213.2 1,563.6 1,885.5 1,926.0 2,000.5 2,058.2 2,149.7 2,259.0 2,301.6 By instrument 33 U.S. government related 456.7 531.2 632.7 844.2 1,026.5 1,050.6 1,076.9 1,116.3 1,164.0 1,209.0 1,235.8 34 Sponsored credit agency securities 206.8 237.2 257.8 273.0 303.2 313.5 317.9 328.5 348.1 364.3 369.0 35 Mortgage pool securities 244.9 289.0 368.9 565.4 718.3 732.1 754.0 782.8 810.9 839.7 861.8 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 403.2 479.0 580.5 719.5 859.0 875.4 923.6 941.9 985.7 1,050.0 1,065.8 38 Corporate bonds 118.6 153.0 204.5 287.4 366.3 380.5 397.9 406.4 418.0 458.0 463.7 39 Mortgages 2.1 2.5 2.7 2.7 3.1 3.1 3.1 3.1 3.4 3.5 3.4 40 Bank loans n.e.c 28.1 29.5 32.1 36.1 32.8 31.7 34.3 32.9 34.2 32.2 34.6 41 Open market paper 195.5 219.5 252.4 284.6 323.8 330.6 353.4 358.0 377.4 392.5 402.2 42 Loans from Federal Home Loan Banks 59.0 74.6 88.8 108.6 133.1 129.5 134.8 141.6 152.8 163.8 161.9 43 Total, by sector 859.9 1,010.2 1,213.2 1,563.6 1,885.5 1,926.0 2,000.5 2,058.2 2,149.7 2,259.0 2,301.6 44 Sponsored credit agencies 211.8 242.2 263.9 278.7 308.2 318.5 322.9 333.5 353.1 369.3 374.0 45 Mortgage pools 244.9 289.0 368.9 565.4 718.3 732.1 754.0 782.8 810.9 839.7 861.8 46 Private financial sectors 403.2 479.0 580.5 719.5 859.0 875.4 923.6 941.9 985.7 1,050.0 1,065.8 47 Commercial banks 76.8 84.1 79.2 75.6 82.7 76.4 77.2 76.6 78.8 73.3 78.0 48 Bank affiliates 73.5 89.5 106.2 116.8 131.1 131.0 136.3 136.3 136.2 140.0 140.4 49 Savings and loan associations 64.4 81.6 98.9 119.8 139.4 135.3 141.9 148.1 159.3 170.1 168.1 50 Mutual savings banks 1.7 2.9 4.4 8.6 16.7 17.1 17.6 18.1 18.6 17.8 17.9 51 Finance companies 179.0 203.0 261.2 328.1 378.8 393.0 419.8 427.7 445.8 464.3 477.6 52 REITs 3.5 4.3 5.6 6.5 7.3 8.7 9.1 7.6 11.4 11.1 11.2 53 SCO issuers 4.2 13.5 25.0 64.0 103.1 113.9 121.8 127.5 135.7 173.3 172.7 All sectors 54 Total credit market debt 6,288.3 7,195.7 8,243.1 9,431.2 10,463.4 10,647.2 10,932.8 11,178.8 11,501.4 11,786.9 11,988.9 55 U.S. government securities 1,629.4 1,902.8 2,227.0 2,653.8 2,981.8 3,048.8 3,094.2 3,175.2 3,276.7 3,359.7 3,396.5 56 State and local obligations 469.0 520.0 655.5 679.1 713.2 718.1 727.2 746.1 759.8 765.1 770.3 57 Corporate and foreign bonds 605.8 690.1 819.2 1,026.4 1,212.7 1,260.4 1,313.7 1,352.5 1,392.2 1,461.4 1,503.5 58 Mortgages 1,825.4 2,051.4 2,289.8 2,617.0 2,953.8 3,002.2 3,098.8 3,180.3 3,260.7 3,322.1 3,386.3 59 Consumer credit 437.7 519.3 601.8 659.8 692.7 688.9 705.8 721.2 743.7 745.0 761.4 60 Bank loans n.e.c 556.6 613.4 652.7 719.1 720.3 722.7 744.0 743.3 758.3 771.4 774.4 61 Open market paper 253.8 305.7 358.5 384.9 438.8 446.7 475.3 484.6 513.6 543.1 565.0 62 Other loans 510.7 592.9 638.6 691.1 750.2 759.4 773.9 775.7 796.3 819.2 831.4 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 1988 1989 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998833 11998844 11998855 11998866 Q4 Ql Q2 Q3 Q4 Ql Q2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 5,202.6 5,951.8 6,795.1 7,631.2 8,335.0 8,476.7 8,686.4 8,874.5 9,102.0 9,278.5 9,427.7 By public agencies and foreign 2 Total held 1,100.4 1,257.7 1,460.5 1,794.7 2,044.9 2,099.4 2,151.3 2,191.8 2,264.1 2,336.1 2,354.8 3 U.S. government securities 339.0 377.9 423.8 493.2 563.3 595.7 610.1 613.3 648.3 666.2 653.1 4 Residential mortgages 367.0 423.5 518.2 712.3 862.0 880.6 906.1 934.9 966.0 995.3 1,020.5 5 FHLB advances to thrifts 59.0 74.6 88.8 108.6 133.1 129.5 134.8 141.6 152.8 163.8 161.9 6 Other loans and securities 335.4 381.6 429.7 480.5 486.6 493.6 500.3 502.1 496.9 510.9 519.3 7 Total held, by type of lender 1,100.4 1,257.7 1,460.5 1,794.7 2,044.9 2,099.4 2,151.3 2,191.8 2,264.1 2,336.1 2,354.8 8 U.S. government 211.4 228.2 246.7 253.3 238.0 237.1 235.8 226.3 217.0 217.9 217.4 9 Sponsored credit agencies and mortgage pools ... 482.0 556.3 659.8 869.8 1,048.9 1,068.0 1,095.6 1,132.9 1,178.6 1,223.5 1,236.4 10 Monetary authority 159.2 167.6 186.0 205.5 230.1 224.9 229.7 230.8 240.6 235.4 238.4 11 Foreign 247.7 305.6 367.9 466.1 527.9 569.5 590.2 601.9 627.8 659.3 662.6 Agency and foreign debt not in line 1 12 Sponsored credit agencies and mortgage pools ... 456.7 531.2 632.7 844.2 1,026.5 1,050.6 1,076.9 1,116.3 1,164.0 1,209.0 1,235.8 13 Foreign 225.9 233.6 234.7 236.4 242.9 244.6 245.9 246.1 249.7 249.4 259.6 Private domestic holdings 14 Total private holdings 4,784.8 5,458.9 6,202.1 6,917.1 7,559.5 7,672.4 7,857.8 8,045.1 8,251.7 8,400.8 8,568.3 15 U.S. government securities 1,290.4 1,524.9 1,803.2 2,160.6 2,418.5 2,453.1 2,484.1 2,561.9 2,628.4 2,693.5 2,743.5 16 State and local obligations 469.0 520.0 655.5 679.1 713.2 718.1 727.2 746.1 759.8 765.1 770.3 17 Corporate and foreign bonds 441.7 476.8 517.6 601.3 689.6 722.2 752.9 775.7 794.0 817.6 849.4 18 Residential mortgages 992.2 1,096.5 1,185.1 1,254.7 1,351.1 1,370.4 1,425.9 1,464.1 1,494.9 1,512.7 1,541.8 19 Other mortgages and loans 1,650.5 1,915.3 2,129.7 2,330.0 2,520.1 2,538.2 2,602.7 2,638.7 2,727.3 2,775.7 2,825.1 20 LESS: Federal Home Loan Bank advances 59.0 74.6 88.8 108.6 133.1 129.5 134.8 141.6 152.8 163.8 161.9 Private financial intermediation 21 Credit market claims held by private financial institutions 4,115.0 4,699.6 5,283.1 6,025.7 6,604.6 6,740.3 6,903.0 7,017.1 7,185.8 7,337.0 7,462.5 22 Commercial banking 1,622.5 1,791.9 1,978.9 2,176.3 2,313.1 2,327.1 2,382.6 2,421.6 2,468.4 2,490.9 2,541.0 23 Savings institutions 947.4 1,100.7 1,191.2 1,297.9 1,445.5 1,453.6 1,496.2 1,539.2 1,571.7 1,571.0 1,573.7 24 Insurance and pension funds 1,093.5 1,215.3 1,369.7 1,544.3 1,755.2 1,818.9 1,870.7 1,912.4 1,967.6 2,030.5 2,069.2 25 Other finance 451.6 591.7 743.4 1,007.1 1,090.7 1,140.7 1,153.5 1,144.0 1,178.1 1,244.6 1,278.5 26 Sources of funds 4,115.0 4,699.6 5,283.1 6,025.7 6,604.6 6,740.3 6,903.0 7,017.1 7,185.8 7,337.0 7,462.5 27 Private domestic deposits and RPs 2,393.2 2,715.6 2,930.0 3,188.4 3,324.8 3,400.1 3,425.8 3,465.1 3,541.2 3,567.5 3,605.3 28 Credit market debt 403.2 479.0 580.5 719.5 859.0 875.4 923.6 941.9 985.7 1,050.0 1,065.8 29 Other sources 1,318.6 1,504.9 1,772.7 2,117.9 2,420.8 2,464.8 2,553.6 2,610.0 2,658.9 2,719.5 2,791.4 30 Foreign funds -23.0 -14.1 5.6 18.6 62.2 45.9 62.3 51.9 71.6 61.9 55.0 31 Treasury balances 11.5 15.5 25.8 27.5 21.6 23.5 32.6 34.2 29.0 13.5 27.1 32 Insurance and pension reserves 1,036.1 1,160.8 1,289.4 1,427.9 1,597.2 1,665.5 1,721.6 1,761.3 1,813.1 1,876.0 1,893.9 33 Other, net 294.1 342.6 451.8 643.9 739.6 729.9 737.1 762.7 745.3 768.1 815.4 Private domestic nonfinancial investors 34 Credit market claims 1,073.0 1,238.4 1,499.5 1,610.8 1,813.9 1,807.5 1,878.4 1,969.9 2,051.6 2,113.8 2,171.6 35 U.S. government securities 548.5 659.5 814.7 899.1 992.0 1,004.3 1,018.5 1,081.7 1,138.5 1,166.8 1,202.4 36 Tax-exempt obligations 167.3 194.2 231.9 211.2 256.8 256.6 267.6 285.0 297.5 298.9 298.5 37 Corporate and foreign bonds 37.2 33.1 38.0 77.8 102.2 98.4 111.0 117.3 115.5 155.9 162.2 38 Open market paper 75.7 83.5 131.0 136.4 160.7 146.4 170.2 175.4 182.1 179.1 185.6 39 Other 244.3 268.0 283.8 286.2 302.3 301.8 311.1 310.5 317.9 313.2 323.0 40 Deposits and currency 2,569.8 2,895.8 3,120.4 3,399.2 3,553.9 3,623.9 3,655.6 3,695.4 3,772.9 3,802.4 3,848.2 41 Currency 150.9 159.6 171.9 186.3 205.4 204.0 209.9 213.4 220.1 220.7 225.9 42 Checkable deposits 350.5 380.6 422.5 517.4 514.0 494.8 509.4 494.8 523.6 488.1 487.5 43 Small time and savings accounts 1,542.9 1,693.4 1,831.9 1,948.3 2,017.1 2,084.9 2,110.9 2,131.1 2,150.4 2,168.7 2,186.3 44 Money market fund shares 169.5 218.5 227.3 265.6 292.8 318.4 306.1 303.6 315.6 340.3 357.9 45 Large time deposits 249.5 332.5 339.9 328.5 355.2 350.1 343.2 377.0 384.8 396.4 401.2 46 Security RPs 80.8 90.6 108.3 128.5 145.7 151.9 156.2 158.6 166.9 174.1 172.5 47 Deposits in foreign countries 25.7 20.6 18.5 24.5 23.7 19.9 19.9 16.8 11.6 14.3 17.0 48 Total of credit market instruments, deposits, and currency 3,642.8 4,134.2 4,619.9 5,010.0 5,367.8 5,431.5 5,534.1 5,665.2 5,824.4 5,916.2 6,019.8 49 Public holdings as percent of total 20.3r 20.3' 20.8' 22.8r 23.8 24.0 24.0 24.0 24.2 24.5 24.3 50 Private financial intermediation (in percent) 86^ 86. V 85.2r 87.1r 87.3 87.8 87.8 87.2 87.0 87.3 87.0 51 Total foreign funds 224.7 291.5 373.5 484.7 590.2 615.3 652.5 653.8 699.4 721.2 717.6 MEMO: Corporate equities not included above 52 Total market value 2,133.7 2,157.9 2,823.9 3,360.6 3,325.0 3,509.9 3,652.9 3,599.4 3,608.3 3,719.1 4,059.3 53 Mutual fund shares 112.1 136.7 240.2 413.5 460.1 479.2 486.8 478.1 478.3 486.3 516.6 54 Other equities 2,021.6 2,021.2 2,583.7 2,947.1 2,864.9 3,030.8 3,166.2 3,121.3 3,130.0 3,232.8 3,542.8 55 Holdings by financial institutions 612.0 615.6 800.0 972.1 1,013.8 1,088.6 1,144.9 1,136.8 1,156.3 1,210.6 1,340.2 56 Other holdings 1,521.7 1,542.3 2,023.9 2,388.4 2,311.2 2,421.3 2,508.1 2,462.7 2,452.0 2,508.5 2,719.2 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 2/line 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 • December 1989 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures1 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1989 MMeeaassuurree 11998866 11998877 11998888 Jan. Feb. Mar. Apr. May June July" Aug." Sept. 1 Industrial production 125.1 129.8 137.2 140.8 140.5 140.7 141.7 141.6 142.0" 142.0 142.4 142.3 Market groupings 2 Products, total 133.3 138.3 145.9 150.1 150.0 150.5 151.6 151.7 152.5" 152.0 152.6 152.6 i Final, total 132.5 136.8 144.3 148.2 148.6 148.9 150.2 150.4 151.2" 150.4 151.0 151.1 4 Consumer goods 124.0 127.7 133.9 138.5 138.7 138.4 139.5 139.2 139.9" 138.9 139.3 139.5 5 Equipment 143.6 148.8 158.2 161.1 161.6 162.8 164.3 165.4 166.1" 165.7 166.5 166.5 6 Intermediate 136.2 143.3 151.5 156.6 155.1 156.1 156.5 156.3 157.0 157.6 158.0 157.9 7 Materials 113.8 118.3 125.3 128.1 127.4 127.3 128.2 127.9 127.7 128.3 128.6 128.2 Industry groupings 8 Manufacturing 129.1 134.6 142.8 147.2 146.8 147.0 148.0 148.1 148.7" 148.6 149.1 148.7 Capacity utilization (percent)2 9 Manufacturing 79.7 81.1 83.5 84.7 84.3 84.1 84.5 84.3 84.4" 84.1 84.1 83.7 10 Industrial materials industries 78.6 80.5 83.7 84.6 84.0 83.7 84.2 83.8 83.6" 83.7 83.8 83.4 11 Construction contracts (1982 = 100)3 158.3 163.8 160.8 155.0 148.0 150.0 163.0 159.0 157.0 163.0 160.0 175.0 12 Nonagricultural employment, total4 120.7 124.1 128.6 130.3 130.6 130.8 131.1 131.3 131.7 131.9 132.0 132.2 13 Goods-producing, total 100.9 101.8 105.0 105.3 105.3 105.4 105.5 105.5 105.4 105.4 105.6 105.1 14 Manufacturing, total 96.3 96.8 99.2 99.8 99.8 100.0 99.9 99.9 99.8 99.8 99.8 99.3 b Manufacturing, production- worker ... 91.1 91.9 94.3 94.9 95.0 95.1 95.0 95.0 94.8 94.8 94.8 94.1 16 Service-producing 129.0 133.4 138.5 140.8 141.2 141.5 141.8 142.2 142.7 143.0 143.1 143.6 17 Personal income, total 219.4 235.0 252.8 265.8 268.7 271.3 272.9 273.5 274.8 276.4 277.2 278.0 18 Wages and salary disbursements 210.8 226.3 244.4 256.1 257.3 259.5 261.7 262.0 263.8 266.1 266.7 268.1 19 Manufacturing 177.4 183.8 196.5 203.0 204.0 207.5 205.7 205.8 207.0 207.5 208.8 208.5 20 Disposable personal income 218.5 232.4 252.1 264.0 268.1 270.3 269.6 271.7 273.8 275.5 276.2 276.9 21 Retail sales6 199.3 210.8 225.1 233.2 232.2 232.4 235.5 237.4 237.3 239.1 240.7 241.8 Prices7 22 Consumer (1982-84 = 100) 109.6 113.6 118.3 121.1 121.6 122.3 123.1 123.8 124.1 124.4 124.6 125.0 23 Producer finished goods (1982 = 100) ... 103.2 105.4 108.0 111.1 111.7 112.1 113.0 114.2 114.1 114.0 113.3 113.5 1. A major revision of the industrial production index and the capacity 5. Based on data in Survey of Current Business (U.S. Department of Comutilization rates was released in July 1985. See "A Revision of the Index of merce). Industrial Production" and accompanying tables that contain revised indexes 6. Based on Bureau of Census data published in Survey of Current Business. (1977=100) through December 1984 in the FEDERAL RESERVE BULLETIN, vol. 71 1. 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. 1989 CCaatteeggoorryy 11998866 11998877 11998888 Feb. Mar. Apr. May June July" Aug/ Sept. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 182,822 185,010 186,837 187,979 188,102 188,228 188,377 188,518 188,672 188,808 188,948 2 Labor force (including Armed Forces)1 120,078 122,122 123,893 125,383 125,469 125,863 125,806 126,291 126,145 126,228 126,262 3 Civilian labor force 117,834 119,865 121,669 123,181 123,264 123,659 123,610 124,102 123,956 124,018 124,040 Employment 4 Nonagricultural industries 106,434 109,232 111,800 113,630 113,930 114,009 114,102 114,445 114,240 114,290 114,199 5 Agriculture 3,163 3,208 3,169 3,223 3,206 3,104 3,112 3,096 3,219 3,307 3,257 Unemployment 6 Number 8,237 7,425 6,701 6,328 6,128 6,546 6,395 6,561 6,497 6,421 6,584 7 Rate (percent of civilian labor force) .... 7.0 6.2 5.5 5.1 5.0 5.3 5.2 5.3 5.2 5.2 5.3 8 Not in labor force 62,744 62,888 62,944 62,596 62,633 62,365 62,571 62,227 62,527 62,580 62,686 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 99,525 102,310 106,039 107,711 107,888 108,101 108,310 108,607 108,767 108,855 109,064 10 Manufacturing 18,965 19,065 19,536 19,648 19,680 19,672 19,667 19,650 19,649 19,650 19,547 11 Mining 777 721 733 711 714 720 722 715 706 730 725 12 Contract construction 4,816 4,998 5,294 5,270 5,252 5,279 5,283 5,283 5,314 5,316 5,316 13 Transportation and public utilities 5,255 5,385 5,584 5,667 5,666 5,682 5,700 5,716 5,736 5,625 5,717 14 Trade 23,683 24,381 25,362 25,631 25,685 25,695 25,750 25,781 25,823 25,874 25,887 15 Finance 6,283 6,549 6,679 6,763 6,774 6,776 6,790 6,808 6,815 6,834 6,844 16 Service 23,053 24,196 25,464 26,434 26,520 26,651 26,711 26,931 26,973 27,046 27,153 17 Government 16,693 17,015 17,387 17,587 17,597 17,626 17,687 17,723 17,751 17,780 17,875 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 • December 1989 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1988 1989 1989 1988 Series Q4 Ql Q2' Q3 Q4 Ql Q2 Q3 Q4 Ql Q2r Q3 Output (1977 = 100) Capacity (percent of 1977 output) Utilization rate (percent) 1 Total industry 139.9 140.7 141.8 166.3 167.5 168.7 169.9 84.1 84.0 84.1 83.7 2 Mining.. 104.2 101.8 102.0 102.7 125.7 125.1 124.7 124.3 82.9 81.3 81.8 82.6 3 Utilities. 114.3 116.0 115.7 114.3 140.7 141.0 141.4 141.7 81.3 82.3 81.8 80.6 4 Manufacturing. 145.8 147.0 148.3 148.8 172.8 174.3 175.7 84.4 84.4 84.4 84.0 5 Primary processing... 127.7 127.8 127.6 128.8 145.2 146.5 147.8 149.1 87.9 87.3 86.4 86.4 6 Advanced processing. 156.7 158.6 160.8 161.0 189.5 191.0 192.6 194.2 82.7 83.0 83.5 82.9 7 Materials. 128.0 127.6 127.9 128.4 150.8 151.7 152.6 153.5 84.9 84.1 83.9 83.6 8 Durable goods 139.2 138.6 139.0 139.7 169.0 170.1 171.3 172.5 82.4 81.5 81.1 81.0 9 Metal materials 100.8 98.4 96.0 96.4 114.5 115.1 115.6 116.1 88.0 85.5 83.0 83.0 10 Nondurable goods 135.4 136.3 137.1 138.7 151.2 152.7 154.2 155.8 89.5 89.3 88.9 89.0 11 Textile, paper, and chemical 138.1 139.2 139.8 141.7 151.8 153.5 155.3 157.0 91.0 90.7 90.0 90.3 12 Paper 148.6 148.4 146.1 152.3 154.0 155.8 97.6 96.4 93.8 13 Chemical 144.1 145.4 145.7 159.3 161.4 163.7 90.5 90.1 89.0 14 Energy materials. 102.0 100.7 100.7 99.7 118.7 118.4 118.3 118.1 86.0 85.0 85.1 84.4 Previous cycle Latest cycle 1989 High High Low Sept. Jan. Feb. Mar. Apr. May June' Julyr Aug/ Sept Capacity utilization rate (percent) 15 Total industry 88.6 72.1 86.9 69.5 83.7 84.3 83.9 83.8 84.2 84.0 84.0 83.8 83.8 83.6 16 Mining 92.8 87.8 95.2 76.9 82.3 82.2 80.6 81.2 82.0 81.8 81.5 81.8 82.6 83.5 17 Utilities 95.6 82.9 88.5 78.0 80.4 80.9 82.6 83.3 82.9 81.8 80.8 80.7 80.2 81.1 18 Manufacturing 87.7 69.9 86.5 68.0 84.0 84.7 84.3 84.1 84.5 84.3 84.4 84.1 84.1 83.7 19 Primary processing.. 91.9 68.3 89.1 65.0 87.2 88.4 87.0 86.4 86.8 86.2 86.2 86.7 86.7 85.8 86.0 71.1 85.1 69.5 82.4 83.1 83.0 83.0 83.5 83.4 83.5 82.9 83.0 82.8 20 Advanced processing 92.0 70.5 89.1 68.5 84.1 84.6 84.0 83.7 84.2 83.8 83.6 83.7 83.8 83.4 21 Materials 91.8 64.4 89.8 60.9 81.9 82.1 81.5 80.9 81.3 81.0 81.1 81.3 81.2 80.3 22 Durable goods 99.2 67.1 93.6 45.7 88.0 87.7 85.5 83.2 84.9 81.7 82.5 84.2 84.3 80.4 23 Metal materials 91.1 66.7 88.1 70.7 88.2 90.1 89.0 88.8 89.2 88.7 88.7 89.2 88.9 88.8 2 2 2 4 5 6 No T n e d P x u a t r c i p l a h e e b e , r l m e p i a g c p a o e l o r d , s a n . d . 9 9 92 8 2 . . . 5 4 8 6 6 7 4 4 0 . . . 8 4 6 8 9 8 7 9 7 . . . 3 4 9 6 6 7 3 9 8 . . . 5 9 8 9 8 8 7 9 8 . . . 4 9 0 9 9 9 0 8 1 . . . 7 1 5 8 9 9 0 9 5 . . . 3 8 8 9 9 8 0 5 9 . . . 2 7 3 9 9 9 0 0 4 . . . 1 7 5 8 8 93 8 9 . . . 2 4 6 9 8 8 3 9 8 . . . 7 8 5 8 9 9 9 5 0 . . . 5 0 6 8 9 9 0 5 8 . . . 2 7 6 90.0 2278 EnergCyh emmaitcearli als 94.6 86.9 94.0 82.3 85.3 84.9 84.9 85.4 86.0 85.5 83.8 83.7 84.4 85.0 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- aa 1 vv 98 gg 8 .. tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June" July Aug." SSeepptt// Index (1977 = 100) MAJOR MARKET 1 Total index 100.00 137.2 138.6 139.4 139.9 140.4 140.8 140.5 140.7 141.7 141.6 142.0 142.0 142.4 142.3 2 Products 57.72 145.9 147.4 148.1 148.4 149.4 150.1 150.0 150.5 151.6 151.7 152.5 152.0 152.6 152.6 Final products 44.77 144.3 145.8 146.4 146.8 147.7 148.2 148.6 148.9 150.2 150.4 151.2 150.4 151.0 151.1 4 Consumer goods 25.52 133.9 134.8 136.4 136.8 138.2 138.5 138.7 138.4 139.5 139.2 139.9 138.9 139.3 139.5 5 Equipment 19.25 158.2 160.4 159.7 159.9 160.4 161.1 161.6 162.8 164.3 165.4 166.1 165.7 166.5 166.5 6 Intermediate products 12.94 151.5 152.9 154.0 154.2 155.0 156.6 155.1 156.1 156.5 156.3 157.0 157.6 158.0 157.9 7 Materials 42.28 125.3 126.5 127.5 128.3 128.3 128.1 127.4 127.3 128.2 127.9 127.7 128.3 128.6 128.2 Consumer goods 8 Durable consumer goods 6.89 125.4 126.3 129.3 129.2 131.9 131.5 131.6 130.1 132.2 131.2 130.8 127.5 128.6 128.2 9 Automotive products 2.98 125.1 126.4 128.9 129.5 134.5 132.5 131.6 128.9 131.7 128.6 125.6 120.6 122.5 122.0 10 Autos and trucks 1.79 123.0 124.8 128.3 129.5 138.0 135.6 133.1 128.3 131.7 127.4 123.3 114.6 119.4 117.2 11 Autos, consumer 1.16 93.7 97.7 101.3 101.0 105.1 99.6 96.0 95.0 98.8 96.0 91.4 81.2 86.4 92.7 17 Trucks, consumer .63 177.4 175.3 178.4 182.4 199.1 202.3 201.9 190.0 192.8 185.5 182.5 176.7 180.5 162.5 N Auto parts and allied goods 1.19 128.3 128.8 129.8 129.5 129.3 127.9 129.4 129.8 131.7 130.4 129.1 129.6 127.2 129.2 14 Home goods 3.91 125.6 126.2 129.7 128.9 130.0 130.7 131.6 131.1 132.6 133.3 134.8 132.7 133.2 132.9 15 Appliances, A/C and TV 1.24 144.1 144.9 154.4 150.4 151.0 151.0 153.9 151.6 151.7 151.3 155.6 148.3 150.2 150.1 16 Appliances and TV 1.19 143.5 143.7 151.9 148.9 150.0 149.5 153.0 152.3 152.5 151.4 155.0 147.2 151.7 17 Carpeting and furniture .96 136.2 137.1 138.8 139.8 140.5 141.1 141.3 140.7 142.8 144.3 143.1 142.1 141.0 18 Miscellaneous home goods 1.71 106.3 106.6 106.7 107.3 108.9 110.1 110.1 110.9 113.0 114.1 115.0 116.2 116.6 19 Nondurable consumer goods 18.63 137.0 138.0 139.0 139.7 140.5 141.1 141.4 141.4 142.2 142.1 143.3 143.1 143.3 143.7 20 Consumer staples 15.29 144.8 145.8 147.0 147.9 148.9 149.4 149.7 149.9 150.7 150.7 151.9 151.6 151.8 152.4 71 Consumer foods and tobacco 7.80 141.0 141.1 142.4 143.7 144.5 144.8 144.3 143.3 144.7 144.7 145.7 145.2 145.5 22 Nonfood staples 7.49 148.9 150.7 151.8 152.2 153.6 154.2 155.4 156.9 156.9 156.9 158.4 158.3 158.3 159.5 23 Consumer chemical products 2.75 179.8 185.0 186.1 185.7 186.8 187.6 187.8 188.9 187.3 189.1 191.0 191.9 192.7 24 Consumer paper products 1.88 163.3 166.3 167.1 167.8 169.0 174.2 177.0 180.4 180.9 180.9 183.6 181.8 182.5 25 Consumer energy 2.86 109.8 107.6 108.9 109.8 111.6 109.1 110.1 110.7 112.0 110.1 110.7 110.6 109.4 110.8 26 Consumer fuel 1.44 95.4 92.7 95.3 94.1 96.3 96.7 95.0 95.6 97.3 93.6 95.6 97.0 96.1 27 Residential utilities 1.42 124.5 122.8 122.7 125.8 127.1 121.7 125.4 126.1 127.0 127.0 126.1 124.4 Equipment 28 Business and defense equipment 18.01 163.3 165.6 165.1 165.5 166.2 167.1 167.9 168.9 170.3 171.5 172.0 117711..55 117722..22 117722..00 29 Business equipment 14.34 157.6 160.8 160.2 161.2 162.6 163.8 165.0 166.3 167.8 169.1 169.6 168.9 169.9 169.8 30 Construction, mining, and farm 2.08 71.9 74.3 74.2 74.5 74.6 74.3 75.6 76.9 77.6 76.3 74.8 73.3 72.0 72.4 31 Manufacturing 3.27 131.3 135.8 136.2 136.2 137.0 136.3 137.8 138.6 139.7 140.9 142.8 144.4 144.0 143.5 3? Power 1.27 89.4 92.2 91.5 92.1 91.8 92.8 92.7 93.0 93.6 93.3 92.5 92.1 92.1 92.0 33 Commercial 5.22 245.0 248.7 245.4 247.0 248.9 252.4 254.3 257.6 260.1 263.2 264.5 264.0 265.4 265.5 34 Transit 2.49 115.4 116.8 120.3 122.3 124.9 125.7 125.2 123.9 124.8 125.3 124.8 121.2 125.7 125.4 35 Defense and space equipment 3.67 185.9 184.5 184.0 182.2 180.5 180.0 179.3 178.7 179.9 180.7 181.1 181.7 181.0 180.5 Intermediate products 36 Construction supplies 5.95 138.6 138.4 140.0 140.7 141.4 142.3 139.5 139.3 140.2 140.2 141.2 142.0 142.4 141.6 37 Business supplies 6.99 162.4 165.2 165.9 165.7 166.7 168.8 168.4 170.4 170.4 170.0 170.4 170.8 171.4 38 General business supplies 5.67 168.5 171.8 172.3 172.9 173.8 175.9 175.4 177.4 177.9 177.3 177.9 177.9 178.5 39 Commercial energy products 1.31 136.3 136.7 138.2 134.3 135.8 138.2 138.3 140.3 138.0 138.2 138.4 140.1 140.6 Materials 40 Durable goods materials 20.50 135.5 137.8 138.9 139.8 139.0 139.4 138.6 137.9 139.0 138.7 139.4 140.0 140.2 138.9 41 Durable consumer parts 4.92 109.0 111.0 111.4 113.9 112.5 111.7 112.1 110.7 110.8 111.8 111.6 110.3 111.3 109.9 42 Equipment parts 5.94 171.6 174.0 174.9 175.0 174.1 175.2 175.2 175.3 176.9 177.1 177.5 178.9 179.3 179.2 43 Durable materials n.e.c 9.64 126.8 129.2 130.8 131.3 130.9 131.5 129.7 128.8 130.0 128.9 130.0 131.2 130.8 128.8 44 Basic metal materials 4.64 96.1 100.3 101.1 101.4 99.8 100.8 98.4 95.9 98.0 94.4 95.5 97.7 97.9 93.5 45 Nondurable goods materials 10.09 132.0 132.6 134.7 135.1 136.3 137.1 135.9 136.0 137.1 136.8 137.3 138.6 138.6 138.9 46 Textile, paper, and chemical materials 7.53 134.4 134.9 137.4 137.9 139.1 139.9 138.6 139.0 140.3 139.1 140.0 141.7 141.7 141.8 47 Textile materials 1.52 110.0 109.2 109.5 110.1 110.0 112.1 110.7 111.8 114.6 116.4 117.2 116.0 116.8 48 Pulp and paper materials 1.55 147.3 148.1 148.4 147.2 150.3 150.4 147.5 147.3 146.7 145.2 146.5 149.1 150.8 49 Chemical materials 4.46 138.2 139.0 143.1 144.2 145.1 145.7 145.0 145.4 146.8 144.7 145.5 147.9 147.0 50 Miscellaneous nondurable materials ... 2.57 125.0 125.9 126.6 127.0 128.0 129.1 128.0 127.2 127.8 129.9 129.4 129.3 51 Energy materials 11.69 101.5 101.5 101.3 102.3 102.6 100.5 100.5 101.0 101.7 101.1 99.1 98.9 99.7 100.4 52 Primary energy 7.57 106.3 106.8 106.0 108.6 107.6 105.2 104.4 103.7 104.1 104.6 103.0 102.9 103.6 53 Converted fuel materials 4.12 92.7 91.8 92.6 90.7 93.3 92.0 93.3 96.1 97.4 94.7 92.0 91.6 92.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • December 1989 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1977 1988 1989 Groups SIC propor- 1988 code tion avg. Sept. Oct. Nov. Dec Jan. Feb. Mar. Apr. May June' July' Aug/ Sept. Index (1977 = 100) MAJOR INDUSTRY 1 Mining and utilities . 15.79 107.5 107.2 107.2 108.1 108.9 107.2 106.8 107.5 107.9 107.2 106.3 106.4 106.8 2 Mining 9.83 103.5 103.7 103.1 104.7 104.9 103.0 100.9 101.5 102.4 102.0 101.5 101.7 102.7 3 Utilities 5.96 114.0 113.0 113.9 113.7 115.4 114.0 116.5 117.5 117.1 115.6 114.3 114.2 113.6 4 Manufacturing 84.21 142.8 144.4 145.3 145.8 146.3 147.2 146.8 147.0 148.0 148.1 148.7 148.6 149.1 5 Nondurable 35.11 143.9 145.3 146.3 146.7 147.1 148.5 148.1 148.6 149.6 149.5 150.5 150.9 151.1 6 Durable 49.10 142.0 143.8 144.6 145.2 145.7 146.2 145.9 145.8 146.9 147.1 147.4 147.0 147.6 Mining 7 Metal 10 .50 93.6 99.1 101.6 104.6 111.9 106.9 98.6 98.1 96.8 94.0 101.2 108.2 8 Coal 11.12 1.60 138.2 142.2 138.5 149.7 155.1 144.7 134.7 137.7 145.5 137.1 129.2 130.2 135.4 9 Oil and gas extraction.... 13 7.07 93.0 92.0 91.5 90.8 88.9 88.9 89.5 89.6 89.1 90.5 90.6 90.3 90.5 10 Stone and earth minerals. 14 .66 140.0 139.7 142.8 144.0 149.4 150.8 142.5 143.5 144.5 146.6 150.2 150.2 149.1 Nondurable manufactures 11 Foods 7.96 142.7 143.2 144.0 145.7 145.8 146.6 146.3 145.4 146.6 147.2 147.9 147.5 12 Tobacco products .62 105.4 105.0 105.4 102.4 107.0 105.0 104.7 101.5 109.2 105.9 104.2 106.0 13 Textile mill products 2.29 116.4 116.2 117.0 117.2 117.9 120.2 119.4 119.7 122.5 123.6 123.8 123.5 14 Apparel products 2.79 109.1 109.9 109.5 110.1 108.8 110.2 110.2 109.9 111.3 111.5 111.9 111.7 15 Paper and products 3.15 150.2 150.9 151.8 150.7 151.7 153.8 151.7 151.7 150.7 150.1 150.2 152.4 153.5 16 Printing and publishing 4.54 183.8 188.0 188.1 188.5 188.0 193.0 194.6 198.5 200.1 199.0 200.5 199.4 200.0 17 Chemicals and products 8.05 152.0 155.3 156.7 157.5 158.1 159.0 158.5 159.2 159.3 158.2 159.9 161.9 162.0 18 Petroleum products 2.40 96.0 93.7 96.3 95.0 98.0 98.0 96.3 97.0 97.3 96.9 97.9 98.3 97.3 19 Rubber and plastic products . 2.80 174.4 175.3 176.9 177.5 177.5 175.9 175.0 176.4 178.0 180.5 182.3 182.3 182.0 20 Leather and products .53 59.4 59.9 61.0 61.5 60.2 62.9 62.9 61.2 61.4 60.3 60.5 60.8 60.5 Durable manufactures 21 Lumber and products 24 2.30 137.6 133.5 137.5 139.4 143.0 139.9 132.8 133.4 135.1 135.5 137.2 136.9 138.4 22 Furniture and fixtures 25 1.27 162.0 164.9 164.5 165.4 165.4 166.3 164.8 165.8 168.0 170.2 170.8 169.5 169.2 23 Clay, glass, and stone products 32 2.72 122.6 122.6 123.3 124.7 125.1 126.6 125.4 125.5 124.7 123.9 123.9 123.4 124.1 24 Primary metals 33 5.33 89.4 93.1 94.2 92.7 90.0 93.2 91.1 88.4 90.1 87.2 87.3 89.0 89.2 25 Iron and steel 331.2 3.49 78.2 81.4 83.1 80.8 77.6 82.2 79.1 75.9 77.0 73.2 72.9 75.4 75.1 26 Fabricated metal products. 34 6.46 120.9 122.5 122.6 124.6 125.1 124.5 124.5 123.8 123.1 124.8 125.2 125.9 126.1 27 Nonelectrical machinery .. 35 9.54 170.7 174.8 173.8 175.4 177.8 178.7 180.8 183.0 184.7 186.5 187.5 187.0 187.1 28 Electrical machinery 36 7.15 180.1 181.8 183.0 182.2 180.9 180.9 181.7 181.6 182.2 181.6 181.9 181.1 182.5 29 Transportation equipment 37 9.13 132.2 132.7 134.8 135.2 136.8 136.7 136.4 134.8 136.4 135.5 134.2 131.6 133.2 30 Motor vehicles and parts 371 5.25 117.4 118.5 121.7 122.9 125.5 124.9 123.4 120.4 122.0 119.7 116.4 110.4 114.2 31 Aerospace and miscellaneous transportation equipment. 372-6.9 3.87 152.4 151.9 152.7 151.9 152.2 152.7 154.0 154.4 155.9 157.1 158.4 160.3 159.0 32 Instruments 38 2.66 154.4 157.8 159.9 160.4 159.1 161.0 161.3 161.8 163.0 164.3 165.7 166.1 164.9 33 Miscellaneous manufactures .... 39 1.46 107.1 108.5 107.7 109.0 110.9 112.2 110.0 112.5 115.3 117.1 119.1 119.0 118.7 Utilities 34 Electric . 137.0 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKET 35 Products, total 517.5 1,824.5 1,828.9 1,853.4 1,855.5 1,875.3 1,885.1 1,879.2 1,878.0 1,893.9 1,885.5 1,884.4 1,870.9 1,874.4 1,878.9 36 Final 405.7 1,401.2 1,404.3 1,423.5 1,426.3 1,442.1 1,447.5 1,449.6 1,442.8 1,460.4 1,449.6 1,448.8 1,433.5 1,437.3 1,441.4 37 Consumer goods 272.7 902.4 897.2 915.0 918.4 934.4 935.6 934.3 928.0 939.4 928.5 928.0 917.4 917.9 921.6 38 Equipment 133.0 498.8 507.1 508.4 507.9 507.7 511.9 515.2 514.8 521.1 521.1 520.8 516.0 519.4 519.8 39 Intermediate 111.9 423.3 424.5 430.5 429.3 433.2 437.7 429.6 435.3 433.5 435.9 435.6 437.4 437.1 437.5 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 Nov. Dec. Jan. Feb. Mar. Apr. May June July' Aug. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,750 1,535 1,456 1,508 1,518 1,486 1,403 1,230 1,334 1,347 1,308 1,281 1,328 2 1-family 1,071 1,024 994 1,027 1,058 1,052 989 870 954 905 874 906 927 3 2-or-more-family 679 511 462 481 460 434 414 360 380 442 434 375 401 4 Started 1,805 1,621 1,488 1,567 1,577 1,678 1,465 1,409 1,343 1,308 1,406 1,420 1,332 5 1-family 1,180 1,146 1,081 1,138 1,141 1,199 1,029 981 1,029 977 972 1,026 992 6 2-or-more-family 626 474 407 429 436 479 436 428 314 331 434 394 340 7 Under construction, end of period1 . 1,074 987 919 959 956 957 951 942 924 911 914 918 n.a. 8 1-family 583 591 570 603 603 602 594 586 579 572 572 577 n.a. 9 2-or-more-family 490 397 350 356 353 355 357 356 345 339 342 341 n.a. 10 Completed 1,756 1,669 1,530 1,429 1,539 1,537 1,610 1,459 1,552 1,442 1,354 1,369 n.a. 11 1-family 1,120 1,123 1,085 1,037 1,108 1,141 1,189 1,050 1,115 1,041 965 956 n.a. 12 2-or-more-family 636 546 445 392 431 396 421 409 437 401 389 413 n.a. 13 Mobile homes shipped 244 233 218 227 225 232 212 207 198 205 202 178 194 Merchant builder activity in 1-family units 14 Number sold 748 672 675 650 669 700 621 555 607 653' 653' 758 755 15 Number for sale, end of period 357 365 366 364 366 369 375 377 377 38C 377' 369 364 Price (thousands of dollars)' Median 16 Units sold 92.2 104.7 113.3 110.4 121.0 113.0 118.0 123.0 116.7 119.0' 123.0' 116.0 122.9 17 Units sold 112.2 127.9 139.0 137.3 147.7 138.6 145.3 149.0 144.7 145.1' 153.8' 141.6 162.3 EXISTING UNITS (l-family) 18 Number sold 3,566 3,530 3,594 3,710 3,920 3,550 3,480 3,400 3,400 3,210 3,360 3,330 3,480 Price of units sold (thousands of dollars) 19 Median 80.3 85.6 89.2 88.5 88.7 89.7 91.9 92.0 92.9 92.6 93.4 96.7 94.8 20 Average 98.3 106.2 112.5 112.4 112.0 113.0 117.8 116.1 118.0 118.0 118.8 122.1 120.8 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 387,043 397,721 409,663 415,442 425,035 424,791 418,465 419,152 414,834r 420,410' 416,928' 414,539 421,813 22 Private 315,313 320,108 328,738 332,798 336,254 339,481 335,037 340,438 335,480' 334,462' 333,440' 332,834 335,769 23 Residential 187,147 194,656 198,101 202,048 202,480 204,707 202,322 204,456 203,678r 200,854' 198,635' 199,029 198,896 24 Nonresidential, total 128,166 125,452 130,637 130,750 133,774 134,774 132,715 135,982 131,802' 133,608' 134,805' 133,805 136,873 Buildings 25 Industrial 13,747 13,707 14,931 15,413 15,045 15,890 15,098 15,698 16,245' 15,945' 16,302' 16,274 16,643 26 Commercial 56,762 55,448 58,104 56,676 58,659 59,350 58,749 60,653 55,581' 56,796 57,434' 56,612 57,604 27 Other 13,216 15,464 17,278 17,328 17,744 17,976 17,484 17,634 16,645' 17,343' 17,179' 16,790 18,060 28 Public utilities and other 44,441 40,833 40,324 41,333 42,326 41,558 41,384 41,997 43,331' 43,524' 43,890' 44,129 44,566 29 Public 71,727 77,612 80,922 82,644 88,781 85,310 83,428 78,714 80,420 85,130 81,914 80,949 n.a. 30 Military 3,868 4,327 3,579 3,420 3,905 3,440 3,433 3,740 2,054' 3,870' 4,324' 3,264 3,689 31 Highway 22,971 25,343 28,524 28,992 33,674 30,792 27,936 26,091 27,772 27,432' 27,321' 26,147 27,460 32 Conservation and development... 4,646 5,162 4,474 4,134 4,412 4,121 4,742 4,210 3,068' 6,053' 4,699' 4,498 4,736 33 Other 40,242 42,780 44,345 46,098 46,790 46,957 47,317 44,673 47,526' 47,775' 45,57C 47,040 n.a. 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 • December 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 SSSeeepppttt... 11998888 11998899 111999888999''' SSeepptt.. SSeepptt.. Dec. Mar. June Sept. May June July Aug. Sept. CONSUMER PRICES2 (1982-84=100) 1 All items 4.2 4.3 4.1 6.1 5.7 1.6 .6 .2 .2 .0 .2 125.0 2 Food 5.3 4.9 3.0 8.2 5.6 2.9 .6 .2 .3 .2 .2 126.1 3 Energy items -.4 4.4 -.4 10.2 24.8 -13.4 1.6 -1.0 -.7 -2.0 -.9 95.9 45 All items less food and energy 4.4 4.3 4.9 5.2 3.8 3.1 .5 .2 .4 .2 .2 130.0 Commodities 3.5 2.7 4.2 4.1 2.0 .7 .4 -.1 .1 -.3 .4 120.1 6 Services 5.0 5.0 5.4 5.9 4.3 4.5 .5 .4 .6 .3 .2 135.8 PRODUCER PRICES (1982=100) '/ Finished goods 2.7 4.5 3.0 10.2 5.1 .4 .9 -.1 -.4 -.4 .9 113.5 8 Consumer foods 4.2 3.0 2.1 13.1 -2.0 -.7 .8' -.8 .1 .3 -.6 118.5 9 Consumer energy -7.3 11.7 1.4 41.0 31.0 -16.3 2.Y -2.8'' -3.0 -7.3 6.5 65.7 1 1 0 1 O Ca th p e it r a l c o e n q s u u ip m m e e r n g t oods 4 2 . . 2 8 4 3 . . 5 9 4 1 . . 4 7 5 4 . . 4 6 4 5 . . 1 3 2 5. . 2 9 ..6r . . 7 4 ' -.3 .0 . . 5 3 1. . 0 6 1 1 2 1 4 8 . . 2 8 12 Intermediate materials3 5.4 3.7 4.5 8.7 2.5 -.7 .2 -.2 -.3 -.3 .4 112.3 13 Excluding energy 7.4 2.9 6.7 5.5 .3 -.7 .2 -.2 -.2 -.1 .1 120.1 Crude materials 14 Foods 15.9 -3.3 -7.9 16.9 -18.7 -1.1 ,<y -2.4' -1.1 1.7 -.8 108.3 15 Energy -15.6 17.8 12.3 48.3 22.3 -5.6 1.3R -1.3' 2.1 -6.7 3.5 76.2 lb Other 8.5 2.8 12.5 10.3 -9.8 .0 -.6' -1.6' -1.5 1.2 .3 137.2 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 Q3 Q4 Ql Q2 Q3 GROSS NATIONAL PRODUCT 1 Total 4,231.6 4,524.3 4,880.6 4,926.9 5,017.3 5,113.1 5,201.7 5,273.2 By source 2 Personal consumption expenditures 2,797.4 3,010.8 3,235.1 3,263.4 3,324.0 3,381.4 3,444.1 3,509.5 3 Durable goods 406.0 421.0 455.2 452.5 467.4 466.4 471.0 490.4 4 Nondurable goods 942.0 998.1 1,052.3 1,066.2 1,078.4 1,098.3 1,121.5 1,128.9 5 Services 1,449.5 1,591.7 1,727.6 1,744.7 1,778.2 1,816.7 1,851.7 1,890.1 6 Gross private domestic investment 659.4 699.9 750.3 771.1 752.8 769.6 775.0 791.0 7 Fixed investment 652.5 670.6 719.6 726.5 734.1 742.0 747.6 755.8 8 Nonresidential 435.2 444.3 487.2 493.2 495.8 503.1 512.5 521.2 9 Structures 139.0 133.8 140.3 142.0 142.5 144.7 142.4 145.4 10 Producers' durable equipment 296.2 310.5 346.8 351.3 353.3 358.5 370.1 375.8 11 Residential structures 217.3 226.4 232.4 233.2 238.4 238.8 235.1 234.6 12 Change in business inventories 6.9 29.3 30.6 44.6 18.7 27.7 27.4 35.1 13 Nonfarm 8.6 30.5 34.2 41.5 40.8 19.1 23.6 27.6 14 Net exports of goods and services -97.4 -112.6 -73.7 -66.2 -70.8 -54.0 -50.6 -67.7 15 Exports 396.5 448.6 547.7 556.8 579.7 605.6 626.1 618.6 16 Imports 493.8 561.2 621.3 623.0 650.5 659.6 676.6 686.3 17 Government purchases of goods and services 872.2 926.1 968.9 958.6 1,011.4 1,016.0 1,033.2 1,040.5 18 Federal 366.5 381.6 381.3 367.5 406.4 399.0 406.0 403.1 19 State and local 505.7 544.5 587.6 591.0 604.9 617.0 627.2 637.4 By major type of product 20 Final sales, total 4,224.8 4,495.0 4,850.0 4,882.3 4,998.7 5,085.4 5,174.3 5,238.1 21 Goods 1,686.7 1,785.2 1,931.9 1,955.8 1,987.4 2,030.9 2,079.1 2,102.7 22 Durable 724.2 777.6 863.6 884.0 888.5 894.7 905.2 935.4 23 Nondurable 962.5 1,007.6 1,068.3 1,071.8 1,098.9 1,136.2 1,173.9 1,167.4 24 Services 2,119.3 2,304.5 2,499.2 2,520.3 2,570.0 2,620.8 2,667.5 2,711.1 25 Structures 425.6 434.6 449.5 450.8 459.9 461.3 455.1 459.4 26 Change in business inventories 6.9 29.3 30.6 44.6 18.7 27.7 27.4 35.1 27 Durable goods 1.2 22.0 25.0 41.4 32.0 22.0 6.0 10.5 28 Nondurable goods 5.6 7.2 5.6 3.2 -13.3 5.7 21.4 24.6 MEMO 29 Total GNP in 1982 dollars 3,717.9 3,853.7 4,024.4 4,042.7 4,069.4 4,106.8 4,132.5 4,158.1 NATIONAL INCOME 30 Total 3,412.6 3,665.4 3,972.6 4,005.7 4,097.4 4,185.2 4,249.6 n.a. 31 Compensation of employees 2,511.4 2,690.0 2,907.6 2,935.1 2,997.2 3,061.7 3,118.2 3,170.5 32 Wages and salaries 2,094.8 2,249.4 2,429.0 2,452.2 2,505.1 2,560.7 2,608.8 2,653.3 33 Government and government enterprises 393.7 419.2 446.5 449.6 456.3 466.9 473.5 480.2 34 Other 1,701.1 1,830.1 1,982.5 2,002.6 2,048.9 2,093.8 2,135.3 2,173.0 35 Supplement to wages and salaries 416.6 440.7 478.6 482.9 492.0 501.0 509.4 517.2 36 Employer contributions for social insurance 217.3 227.8 249.7 251.8 255.6 259.7 263.4 266.6 37 Other labor income 199.3 212.8 228.9 231.1 236.5 241.3 246.0 250.7 38 Proprietors' income1 282.0 311.6 327.8 327.0 328.3 359.3 355.5 345.4 39 Business and professional 247.2 270.0 288.0 289.3 296.3 300.3 304.2 308.2 40 Farm1 34.7 41.6 39.8 37.7 32.0 59.0 51.3 37.2 41 Rental income of persons2 11.6 13.4 15.7 16.3 16.1 11.8 9.8 4.8 42 Corporate profits1 282.1 298.7 328.6 330.9 340.2 316.3 307.8 n.a. 43 Profits before tax 221.6 266.7 306.8 314.4 318.8 318.0 296.0 n.a. 44 Inventory valuation adjustment 6.7 -18.9 -25.0 -30.4 -20.1 -38.3 -20.7 n.a. 45 Capital consumption adjustment 53.8 50.9 46.8 46.9 41.5 36.6 32.3 26.6 46 Net interest 325.5 351.7 392.9 396.4 415.7 436.1 458.4 470.7 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 • December 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 1988 Q3 Q4 Ql Q2 Q3 PERSONAL INCOME AND SAVING 1 Total personal income 3,526.2 3,777.6 4,064.5 4,097.6 4,185.2 4,317.8 4,400.3 4,456.5 2 Wage and salary disbursements 2,094.8 2,249.4 2,429.0 2,452.2 2,505.1 2,560.7 2,608.8 2,653.3 3 Commodity-producing industries 625.6 649.9 696.3 701.6 714.7 726.6 733.7 742.0 4 Manufacturing 473.2 490.3 524.0 527.2 538.1 546.3 549.9 555.5 5 Distributive industries 498.8 531.9 571.9 578.0 587.5 598.8 610.8 619.6 6 Service industries 576.7 648.3 714.4 723.0 746.7 768.4 790.8 811.5 7 Government and government enterprises 393.7 419.2 446.5 449.6 456.3 466.9 473.5 480.2 8 Other labor income 199.3 212.8 228.9 231.1 236.5 241.3 246.0 250.7 9 Proprietors' income1 282.0 311.6 327.8 327.0 328.3 359.3 355.5 345.4 10 Business and professional 247.2 270.0 288.0 289.3 296.3 300.3 304.2 308.2 11 Farm1 34.7 41.6 39.8 37.7 32.0 59.0 51.3 37.2 12 Rental income of persons 11.6 13.4 15.7 16.3 16.1 11.8 9.8 4.8 85.8 92.0 102.2 103.6 106.4 109.4 111.4 113.2 14 Personal interest income 493.2 523.2 571.1 576.3 598.6 629.0 655.1 669.2 15 Transfer payments 521.5 548.2 584.7 587.4 593.8 616.4 626.8 635.5 16 Old-age survivors, disability, and health insurance benefits ... 269.2 282.9 300.5 301.4 304.0 316.9 322.9 327.6 17 LESS: Personal contributions for social insurance 161.9 172.9 194.9 196.4 199.6 210.0 213.0 215.5 18 EQUALS: Personal income 3,526.2 3,777.6 4,064.5 4,097.6 4,185.2 4,317.8 4,400.3 4,456.5 19 LESS: Personal tax and nontax payments 512.9 571.7 586.6 585.9 597.8 628.3 652.6 646.6 20 EQUALS: Disposable personal income 3,013.3 3,205.9 3,477.8 3,511.7 3,587.4 3,689.5 3,747.7 3,809.8 21 LESS: Personal outlays 2,888.5 3,104.1 3,333.1 3,362.1 3,424.0 3,483.8 3,547.0 3,613.8 22 EQUALS: Personal saving 124.9 101.8 144.7 149.6 163.4 205.7 200.7 196.0 MEMO Per capita (1982 dollars) 23 Gross national product 15,385.5 15,793.9 16,332.8 16,387.1 16,455.3 16,566.4 1166,,662299..88 1166,,669922..55 24 Personal consumption expenditures 10,123.7 10,302.0 10,545.5 10,572.0 10,625.6 10,653.5 10,678.9 10,803.7 25 Disposable personal income 10,905.0 10,970.0 11,337.0 11,377.0 11,466.0 11,625.0 11,622.0 11,726.0 26 Saving rate (percent) 4.1 3.2 4.2 4.3 4.6 5.6 5.4 5.1 GROSS SAVING 27 Gross saving 525.3 553.8 642.4 669.8 647.4 693.5 695.8 n.a. 28 Gross private saving 669.5 663.8 738.6 742.4 769.3 792.1 793.7 n.a. 29 Personal saving 124.9 101.8 144.7 149.6 163.4 205.7 200.7 196.0 30 Undistributed corporate profits 84.5 75.3 80.3 77.6 81.7 53.4 52.0 n.a. 31 Corporate inventory valuation adjustment 6.7 -18.9 -25.0 -30.4 -20.1 -38.3 -20.7 n.a. Capital consumption allowances 32 Corporate 285.9 303.1 321.7 332233..11 332299..77 333355..22 333399..77 n.a. 33 Noncorporate 174.2 183.6 191.9 192.1 194.4 197.8 201.3 n.a. 34 Government surplus, or deficit (-), national income and -144.1 -110.1 -96.1 -72.7 -121.9 -98.7 -97.9 n.a. -206.9 -161.4 -145.8 -122.5 -167.6 -147.5 -145.4 0.0 36 State and local 62.8 51.3 49.7 49.8 45.7 48.8 47.5 n.a. 523.6 549.0 632.8 661.2 630.8 669.3 677.5 675.1 38 Gross private domestic 659.4 699.9 750.3 771.1 752.8 769.6 775.0 791.0 39 Net foreign -135.8 -150.9 -117.5 -109.9 -122.0 -100.3 -97.5 -115.9 40 Statistical discrepancy -1.8 -4.7 -9.6 -8.6 -16.6 -24.1 -18.3 n.a. 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 1988 1989 Item credits or debits 11998866 11998877 11998888 Q2 Q3 Q4 Ql Q2 1 Balance on current account -133,249 -143,700 -126,548 -33,485 -32,340 -28,677 -30,390 -30,988 2 Not seasonally adjusted -33,875 -36,926 -28,191 -25,994 -30,779 3 Merchandise trade balance -145,058 -159,500 -127,215 -31,411 -30,339 -32,019 -28,378 -27,718 4 Merchandise exports 223,367 250,266 319,251 78,471 80,604 83,729 87,919 90,866 5 Merchandise imports -368,425 -409,766 -446,466 -109,882 -110,943 -115,748 -116,297 -118,584 6 Military transactions, net -4,577 -2,856 -4,606 -1,033 -1,006 -1,604 -1,498 -1,630 7 Investment income, net 60,629 71,151 61,974 11,536 12,806 21,329 15,527 14,422 8 Other service transactions, net 10,517 10,585 17,702 4,323 4,971 5,475 5,428 6,469 9 Remittances, pensions, and other transfers . -4,049 -4,063 -4,279 -971 -1,088 -1,090 -1,186 -952 10 U.S. government grants (excluding military) -11,730 -10,149 -10,377 -1,928 -2,288 -3,928 -2,340 -2,142 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -2,024 997 2,999 -885 1,961 3,413 1,049 -372 12 Change in U.S. official reserve assets (increase, -). 312 9,149 -3,566 39 -7,380 2,271 -4,000 -12,095 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -246 -509 474 180 -35 173 -188 68 15 Reserve position in International Monetary Fund. 1,501 2,070 1,025 69 202 307 316 -159 16 Foreign currencies -942 7,588 -5,064 -210 -7,547 1,791 -4,128 -12,004 17 Change in U.S. private assets abroad (increase, -). -97,953 -86,363 -81,544 -15,273 -32,467 -38,332 -28,367 19,943 18 Bank-reported claims -59,975 -42,119 -54,481 -12,602 -26,229 -30,916 -22,132 28,527 19 Nonbank-reported claims -7,396 5,201 -1,684 -6,443 255 4,569 1,835 20 U.S. purchase of foreign securities, net -4,271 -5,251 -7,846 1,333 -1,592 -3,047 -2,568 -5,908 21 U.S. direct investments abroad, net -26,311 -44,194 -17,533 2,439 -4,901 -8,938 -5,502 -2,676 22 Change in foreign official assets in United States (increase, +) 35,594 45,193 38,882 5,895 -2,234 10,589 7,477 -4,948 23 U.S. Treasury securities 34,364 43,238 41,683 5,853 -3,769 11,897 4,634 -9,763 24 Other U.S. government obligations -1,214 1,564 1,309 202 572 697 721 -92 25 Other U.S. government liabilities 2,141 -2,520 -1,284 -517 -232 -232 -304 396 26 Other U.S. liabilities reported by U.S. banks3 1,187 3,918 -331 774 1,703 -1,036 1,974 3,924 27 Other foreign official assets -884 -1,007 -2,495 -417 -508 -737 452 587 28 Change in foreign private assets in United States (increase, + ) , 186,011 172,847 180,417 59,438 48,413 70,170 52,529 1,831 29 U.S. bank-reported liabilities3 79,783 89,026 68,832 30,455 23,291 32,223 13,261 -22,822 30 U.S. nonbank-reported liabilities -2,641 2,450 6,558 -59 2,350 2,702 2,852 31 Foreign private purchases of U.S. Treasury securities, net 3,809 -7,643 20,144 5,458 3,422 5,336 8,590 2,722 32 Foreign purchases of other U.S. securities, net 70,969 42,120 26,448 9,699 7,454 6,871 8,665 9,600 33 Foreign direct investments in United States, net 34,091 46,894 58,435 13,885 11,896 23,038 19,161 12,331 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 11,308 1,878 -10,641 -15,729 24,047 -19,434 1,702 26,629 36 Owing to seasonal adjustments -3,714 -4,556 4,431 4,127 -2,340 37 Statistical discrepancy in recorded data before seasonal adjustment 11,308 1,878 -10,641 -12,015 28,603 -23,865 -2,425 28,969 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) 312 9,149 -3,566 39 -7,380 2,271 -4,000 -12,095 39 Foreign official assets in United States (increase, +) excluding line 25 33,453 47,713 40,166 6,412 -2,002 10,821 7,781 -5,344 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22 above) -9,327 -9,955 -3,109 -1,776 -459 672 7,143 281 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 96 53 92 4 7 40 12 14 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 • December 1989 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data are seasonally adjusted. 1989 IItteemm 11998866 11998877 11998888 Feb. Mar. Apr. May June July' Aug." 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments, f.a.s. value 227,158 254,073 322,426 28,839 30,065 30,759 30,455 31,286 30,468 30,408 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 2 Customs value 365,438 406,241 440,952 38,220 39,549 39,045 40,534 39,293 38,709 41,180 Trade balance 3 Customs value -138,279 -152,169 -118,526 -9,381 -9,485 -8,286 -10,079 -8,007 -8,241 -10,772 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 1989 TTyyppee 11998866 11998877 11998888 Mar. Apr. May June July Aug. Sept." 1 Total 43,186 48,511 45,798 49,854 50,303 54,941 60,502 63,462 62,364 68,418 2 Gold stock, including Exchange Stabilization Fund1 11,090 11,064 11,078 11,061 11,061 11,060 11,063 11,066 11,066 11,065 3 Special drawing rights2'3 7,293 8,395 10,283 9,443 9,379 9,134 9,034 9,340 9,240 9,487 4 Reserve position in International Monetary Fund 11,947 11,730 11,349 9,052 9,132 8,513 8,888 9,055 8,644 8,786 5 Foreign currencies4 12,856 17,322 13,088 20,298 20,731 26,234 31,517 34,001 33,413 39,080 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 1989 AAsssseettss 11998866 11998877 11998888 p Mar. Apr. May June July Aug. Sept. 1 Deposits 287 244 347 351 352 428 275 371 265 325 Assets held in custody 2 U.S. Treasury securities2 155,835 195,126 232,547 234,075 235,145 232,004 229,914 233,170 238,007 235,597 3 Earmarked gold 14,048 13,919 13,636 13,602 13,576 13,612 13,545 13,530 13,516 13,506 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 1989 AAsssseett aaccccoouunntt 11998866 11998877 11998888 Feb. Mar. Apr. May June July Aug. All foreign countries 1 Total, all currencies 456,628 518,618 506,062 501,682 519,740 517,276 521,436 523,674 534,200r 523,689 7 Claims on United States 114,563 138,034 169,111 168,558 177,902 171,136 177,987 177,445 179,615 177,346 Parent bank 83,492 105,845 129,856 128,115 134,002 128,567 134,026 132,380 133,135 134,526 4 Other banks in United States 13,685 16,416 14,918 13,506 14,697 13,459 13,040 14,218 15,744 15,225 5 Nonbanks 17,386 15,773 24,337 26,937 29,203 29,110 30,921 30,847 30,736 27,595 6 Claims on foreigners 312,955 342,520 299,728 296,240 303,906 305,483 302,808 303,720 310,426' 300,185 7 Other branches of parent bank 96,281 122,155 107,179 103,962 110,434 113,824 116,506 115,913 117,438 110,001 8 Banks 105,237 108,859 96,932 95,696 97,723 96,830 94,042 94,902 95,621'' 92,267 9 Public borrowers 23,706 21,832 17,163 16,682 17,020 16,101 16,095 16,709 16,948' 16,660 10 Nonbank foreigners 87,731 89,674 78,454 79,900 78,729 78,728 76,165 76,196 80,419' 81,257 11 Other assets 29,110 38,064 37,223 36,884 37,932 40,657 40,641 42,509 44,159' 46,158 12 Total payable in U.S. dollars 317,487 350,107 358,040 346,990 366,403 359,841 366,315 367,562 371,851' 370,828 13 Claims on United States 110,620 132,023 163,456 161,336 170,091 163,964 169,796 169,520 171,041 170,545 14 Parent bank 82,082 103,251 126,929 124,288 129,431 124,268 128,771 127,352 128,063 130,216 15 Other banks in United States 12,830 14,657 14,167 12,025 13,259 12,539 11,909 13,207 14,734 14,688 16 Nonbanks 15,708 14,115 22,360 25,023 27,401 27,157 29,116 28,961 28,244 25,641 17 Claims on foreigners 195,063 202,428 177,685 168,293 178,134 178,298 177,308 180,013 181,441' 178,808 18 Other branches of parent bank 72,197 88,284 80,736 76,565 82,797 86,767 86,625 88,874 90,077 84,130 19 Banks 66,421 63,707 54,884 50,013 53,893 50,815 49,793 50,627 49,913' 50,685 20 Public borrowers 16,708 14,730 12,131 11,781 11,831 11,467 11,282 11,815 11,616' 11,776 21 Nonbank foreigners 39,737 35,707 29,934 29,934 29,613 29,249 29,608 28,697 29,835' 32,217 22 Other assets 11,804 15,656 16,899 17,361 18,178 17,579 19,211 18,029 19,369' 21,475 United Kingdom 23 Total, all currencies 140,917 158,695 156,835 154,879 154,856 153,146 155,532 153,968 161,882 158,869 24 Claims on United States 24,599 32,518 40,089 40,547 40,715 39,475 39,599 38,014 42,147 41,914 25 Parent bank 19,085 27,350 34,243 34,449 35,315 34,741 35,642 33,763 37,713 38,031 26 Other banks in United States 1,612 1,259 1,123 1,268 1,380 1,227 1,243 1,125 1,121 1,112 77 Nonbanks 3,902 3,909 4,723 4,830 4,020 3,507 2,714 3,126 3,313 2,771 28 Claims on foreigners 109,508 115,700 106,388 103,806 103,443 102,438 104,504 103,773 106,586 102,015 79 Other branches of parent bank 33,422 39,903 35,625 33,650 35,305 32,954 35,537 34,948 35,440 32,392 30 Banks 39,468 36,735 36,765 36,159 35,382 37,079 37,412 37,357 36,519 35,857 31 Public borrowers 4,990 4,752 4,019 3,808 3,757 3,471 3,627 3,599 3,788 3,586 32 Nonbank foreigners 31,628 34,310 29,979 30,189 28,999 28,934 27,928 27,869 30,839 30,180 33 Other assets 6,810 10,477 10,358 10,526 10,698 11,233 11,429 12,181 13,149 14,940 34 Total payable in U.S. dollars 95,028 100,574 103,503 100,863 103,211 98,463 101,612 99,028 103,512 104,416 35 Claims on United States 23,193 30,439 38,012 37,707 38,265 36,772 36,675 34,990 38,506 39,135 36 Parent bank 18,526 26,304 33,252 33,106 34,320 33,499 34,119 32,059 36,041 36,375 37 Other banks in United States 1,475 1,044 964 816 937 872 862 844 821 1,007 38 Nonbanks 3,192 3,091 3,796 3,785 3,008 2,401 1,694 2,087 1,644 1,753 39 Claims on foreigners 68,138 64,560 60,472 57,567 59,201 56,227 58,395 58,746 59,137 57,490 40 Other branches of parent bank 26,361 28,635 28,474 26,475 28,145 25,389 26,036 26,541 27,955 25,368 41 Banks 23,251 19,188 18,494 17,246 17,715 17,680 18,458 18,745 17,080 18,082 42 Public borrowers 3,677 3,313 2,840 2,774 2,786 2,696 2,737 2,606 2,702 2,679 43 Nonbank foreigners 14,849 13,424 10,664 11,072 10,555 10,462 11,164 10,854 11,400 11,361 44 Other assets 3,697 5,575 5,019 5,589 5,745 5,464 6,542 5,292 5,869 7,791 Bahamas and Caymans 45 Total, all currencies 142,592 160,321 170,639 165,862 179,185 172,324 173,137 171,780 172,789' 165,401 46 Claims on United States 78,048 85,318 105,320 103,989 111,951 105,273 111,823 109,800 107,831 106,693 47 Parent bank 54,575 60,048 73,409 71,100 75,234 68,969 73,627 70,735 67,417 69,404 48 Other banks in United States 11,156 14,277 13,145 11,563 12,275 11,563 10,807 12,116 13,712 13,294 49 Nonbanks 12,317 10,993 18,766 21,326 24,442 24,741 27,389 26,949 26,702 23,995 50 Claims on foreigners 60,005 70,162 58,393 54,732 59,615 60,103 53,984 54,537 57,135' 50,808 51 Other branches of parent bank 17,296 21,277 17,954 18,454 20,048 26,261 21,962 22,324 24,462 16,802 57 Banks 27,476 33,751 28,268 24,514 27,727 22,641 21,184 21,202 21,591' 20,688 53 Public borrowers 7,051 7,428 5,830 5,513 5,480 5,374 5,280 5,540 5,405' 5,407 54 Nonbank foreigners 8,182 7,706 6,341 6,251 6,360 5,827 5,558 5,471 5,677' 7,911 55 Other assets 4,539 4,841 6,926 7,141 7,619 6,948 7,330 7,443 7,823' 7,900 56 Total payable in U.S. dollars 136,813 151,434 163,518 158,011 172,148 166,389 166,869 165,676 167,259' 160,821 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 • December 1989 3.14—Continued 1989 Liability account 1986 1987 Feb. Mar. Apr. May June July All foreign countries 57 Total, all currencies 456,628 518,618 506,062 501,682 519,740 517,276 521,436 523,674 534,200r 523,689 58 Negotiable CDs 31,629 30,929 28,511 30,013 30,768 30,278 29,425 28,116 28,882 29,524 59 To United States 152,465 161,390 185,577 174,956 185,831 179,292 178,821 179,858 177,706'' 177,487 60 Parent bank 83,394 87,606 114,720 105,687 113,779 109,164 110,579 113,250 110,121' 110,638 61 Other banks in United States 15,646 20,355 14,737 12,829 14,499 14,307 13,564 12,951 13,323r 13,269 62 Nonbanks 53,425 53,429 56,120 56,440 57,553 55,821 54,678 53,657 54,262' 53,580 63 To foreigners 253,775 304,803 270,923 274,898 280,859 282,920 288,291 289,603 301,422' 289,804 64 Other branches of parent bank 95,146 124,601 111,267 111,582 116,148 115,380 121,135 118,950 119,571' 114,487 65 Banks 77,809 87,274 72,842 70,484 71,447 72,155 72,903 74,213 80,070' 76,024 66 Official institutions 17,835 19,564 15,183 17,323 17,911 17,933 17,795 17,559 18,846 17,589 67 Nonbank foreigners 62,985 73,364 71,631 75,509 75,353 77,452 76,458 78,881 82,935' 81,704 68 Other liabilities 18,759 21,496 21,051 21,815 22,282 24,786 24,899 26,097 26,190' 26,874 69 Total payable in U.S. dollars 336,406 361,438 367,483 357,725 379,610 372,788 376,474 378,331 381,879' 380,934 70 Negotiable CDs 28,466 26,768 24,045 25,452 26,287 25,970 25,411 24,129 24,914 25,483 71 To United States 144,483 148,442 173,190 161,449 173,471 166,666 166,134 167,217 163,771' 165,985 72 Parent bank 79,305 81,783 107,150 96,714 105,534 100,897 102,643 104,929 100,521' 103,117 73 Other banks in United States 14,609 18,951 13,468 11,375 13,195 12,781 11,944 11,537 11,845' 11,964 74 Nonbanks 50,569 47,708 52,572 53,360 54,742 52,988 51,547 50,751 51,405' 50,904 75 To foreigners 156,806 177,711 160,766 160,670 169,407 169,758 173,228 175,393 181,005' 176,482 76 Other branches of parent bank 71,181 90,469 84,021 83,253 88,298 87,716 90,123 90,850 91,713' 87,858 77 Banks 33,850 35,065 28,493 27,060 28,949 28,445 29,567 29,686 31,216 32,354 78 Official institutions 12,371 12,409 8,224 8,740 9,953 9,591 9,255 9,852 11,176 10,680 79 Nonbank foreigners 39,404 39,768 40,028 41,617 42,207 44,006 44,283 45,005 46,900' 45,590 80 Other liabilities 6,651 8,517 9,482 10,154 10,445 10,394 11,701 11,592 12,189' 12,984 United Kingdom 81 Total, all currencies 140,917 158,695 156,835 154,879 154,856 153,146 155,532 153,968 161,882 158,869 82 Negotiable CDs 27,781 26,988 24,528 25,942 26,625 26,157 25,539 24,396 25,342 25.905 83 To United States 24,657 23,470 36,784 35,393 32,757 29,715 30,867 30,013 29,954' 31,551 84 Parent bank 14,469 13,223 27,849 25,562 25,098 20,455 20,329 21,892 19,680 21,561 85 Other banks in United States 2,649 1,536 2,037 1,755 1,824 1,551 1,720 1,648 1,852 1,767 86 Nonbanks 7,539 8,711 6,898 8,076 5,835 7,709 8,818 6,473 8,422' 8,223 87 To foreigners 79,498 98,689 86,026 83,774 85,863 87,478 88,985 88,381 94,335' 88,661 88 Other branches of parent bank 25,036 33,078 26,812 24,553 25,781 25,800 26,867 24,974 26,556' 24,326 89 Banks 30,877 34,290 30,609 28,508 29,094 30,714 30,925 31,066 33,047' 30,790 90 Official institutions 6,836 11,015 7,873 8,627 9,429 8,637 8,946 8,650 9,586 8,868 91 Nonbank foreigners 16,749 20,306 20,732 22,086 21,559 22,327 22,247 23,691 25,146 24,677 92 Other liabilities 8,981 9,548 9,497 9,770 9,611 9,796 10,141 11,178 12,251 12,752 93 Total payable in U.S. dollars 99,707 102,550 105,907 104,430 107,092 102,065 104,356 101,742 105,700 106,915 94 Negotiable CDs 26,169 24,926 22,063 23,419 24,302 24,073 23,568 22,324 23,132 23,679 95 To United States 22,075 17,752 32,588 30,442 29,578 25,493 26,554 25,401 24,618' 27,232 96 Parent bank 14,021 12,026 26,404 22,998 24,013 18,524 18,545 19,411 16,704 19,300 97 Other banks in United States 2,325 1,308 1,752 1,440 1,559 1,227 1,368 1,393 1,477 1,502 98 Nonbanks 5,729 4,418 4,432 6,004 4,006 5,742 6,641 4,597 6,437' 6,430 99 To foreigners 48,138 55,919 47,083 46,062 48,221 47,781 49,006 48,491 52,179' 49,913 100 Other branches of parent bank 17,951 22,334 18,561 17,139 18,335 17,755 18,030 16,467 18,388' 17,060 101 Banks 15,203 15,580 13,407 13,106 12,907 13,439 13,930 13,545 14,173 13,578 102 Official institutions 4,934 7,530 4,348 4,116 5,467 4,365 4,796 5,579 6,131 5,825 103 Nonbank foreigners 10,050 10,475 10,767 11,701 11,512 12,222 12,250 12,900 13,487 13,450 104 Other liabilities 3,325 3,953 4,173 4,507 4,991 4,718 5,228 5,526 5,771 6,091 Bahamas and Caymans 105 Total, all currencies 142,592 160,321 170,639 165,862 179,185 172,324 173,137 171,780 172,789r 165,401 106 Negotiable CDs 847 885 953 1,138 1,073 1,025 872 696 717 691 107 To United States 106,081 113,950 122,332 114,729 124,736 118,164 120,175 117,737 116,261r 113,122 108 Parent bank 49,481 53,239 62,894 57,684 62,689 59,762 64,908 61,642 61,263' 58,765 109 Other banks in United States 11,715 17,224 11,494 9,743 11,464 11,346 10,398 10,034 10,197r 10,076 110 Nonbanks 44,885 43,487 47,944 47,302 50,583 47,056 44,869 46,061 44,801r 44,281 111 To foreigners 34,400 43,815 45,161 47,534 50,855 50,606 48,989 50,477 52,881r 48,769 112 Other branches of parent bank 12,631 19,185 23,686 25,988 28,010 27,655 26,478 27,763 29,085 25,370 113 Banks 8,617 10,769 8,336 7,795 8,495 8,203 8,233 8,322 8,309 9,016 114 Official institutions 2,719 1,504 1,074 1,379 1,234 1,722 1,164 1,102 1,223 1,081 115 Nonbank foreigners 10,433 12,357 12,065 12,372 13,116 13,026 13,114 13,290 14,264' 13,302 116 Other liabilities 1,264 1,671 2,193 2,461 2,521 2,529 3,101 2,870 2,930' 2,819 117 Total payable in U.S. dollars 138,774 152,927 162,950 157,890 172,213 166,489 166,954 165,593 166,988r 160,800 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 1989" IItteemm 11998877 11998888 Feb. Mar. Apr. May June July Aug." 1 Total1 259,556 299,677 304,099 307,667 313,637 306,420 302,048 307,433 317,382 By type 2 Liabilities reported by banks in the United States 31,838 31,414 34,567 33,594 39,116 38,036 37,214 39,108 37,914 3 U.S. Treasury bills and certificates3 88,829 103,722 98,192 95,478 96,109 91,798 87,190 87,734 88,325 U.S. Treasury bonds and notes 4 Marketable 122,432 149,056 155,374 161,923 161,081 160,013 160,462 163,281 173,261 5 Nonmarketable , 300 523 531 534 538 542 545 549 553 6 U.S. securities other than U.S. Treasury securities 16,157 14,962 15,435 16,138 16,793 16,031 16,637 16,761 17,329 By area 7 Western Europe1 124,620 125,097 124,806 125,584 129,254 126,222 122,502 126,361 134,072 8 4,961 9,584 9,856 10,156 9,994 9,938 9,604 9,424 9,560 9 Latin America and Caribbean 8,328 10,099 8,866 7,524 7,168 6,091 5,925 7,166 7,988 10 116,098 145,504 152,159 156,264 158,564 156,073 155,372 155,875 157,135 11 Africa 1,402 1,369 1,143 1,119 1,065 1,182 1,271 949 810 12 Other countries6 4,147 7,501 6,738 6,485 7,053 6,371 6.830 7,113 7,267 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 Sept. Dec. Mar. June 1 Banks' own liabilities 15,368 29,702 55,438 65,379 74,836 76,262 68,312 2 Banks' own claims 16,294 26,180 51,271 63,448 68,983 72,812 62,794 3 Deposits 8,437 14,129 18,861 22,594 25,100 25,846 23,877 4 Other claims 7,857 12,052 32,410 40,854 43,884 46,966 38,917 5 Claims of banks' domestic customers 580 2,507 551 335 364 376 723 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 • December 1989 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1989 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998866 11998877 11998888 Feb.' Mar.' Apr.' May' June' July Aug." 1 All foreigners 540,996 618,874 684,444 677,627 691,295 682,850 678,059 672,049 663,806 679,227 2 Banks' own liabilities 406,485 470,070 513,840 507,364 523,798 516,025 512,334 510,524 501,622 516,180 3 Demand deposits 23,789 22,383 21,863 21,723 22,473 22,325 21,920 21,224 21,351 19,972 4 Time deposits 130,891 148,374 152,020 151,032 157,734 156,982 154,768 152,801 149,189 154,712 5 Other3 42,705 51,677 51,525 50,921 54,552 56,413 58,822 61,317 64,859 63,991 6 Own foreign offices4 209,100 247,635 288,432 283,687 289,039 280,304 276,824 275,183 266,223 277,505 7 Banks' custody liabilities5 .: 134,511 148,804 170,604 170,263 167,497 166,825 165,725 161,525 162,184 163,047 8 U.S. Treasury bills and certificates6 90,398 101,743 115,056 111,064 108,117 106,916 102,734 98,893 99,365 99,624 9 Other negotiable and readily transferable instruments 15,417 16,776 16,426 17,115 16,991 17,278 18,541 17,078 16,893 17,255 10 Other 28,696 30,285 39,121 42,084 42,389 42,631 44,451 45,555 45,925 46,168 11 Nonmonetary international and regional organizations 5,807 4,464 3,224 3,261 3,773 4,002 33,,441155 33,,661177 44,,224400 44,,441188 12 Banks' own liabilities 3,958 2,702 2,527 2,688 2,965 3,216 2,980 2,695 2,716 3,402 13 Demand deposits 199 124 71 74 88 163 76 32 41 66 14 Time deposits 2,065 1,538 1,183 1,135 1,394 1,502 1,202 1,254 918 1,079 15 Other3 1,693 1,040 1,272 1,479 1,482 1,551 1,702 1,409 1,756 2,257 16 Banks' custody liabilities5 1,849 1,761 698 574 808 786 435 922 1,524 1,016 17 U.S. Treasury bills and certificates6 259 265 57 59 74 77 95 181 345 107 18 Other negotiable and readily transferable instruments7 1,590 1,497 641 463 734 693 305 731 1,179 909 19 Other 0 0 0 52 0 16 35 10 0 1 20 Official institutions' 103,569 120,667 135,136 132,759 129,072 135,225 129,835 124,404 126,842 126,239 21 Banks' own liabilities 25,427 28,703 27,004 29,247 27,977 33,036 31,738 31,891 34,024 32,981 22 Demand deposits 2,267 1,757 1,915 1,792 1,605 1,782 1,761 1,801 1,947 1,845 23 Time deposits 10,497 12,843 9,657 12,588 10,852 12,439 11,144 9,924 10,001 8,711 24 Other3 12,663 14,103 15,432 14,867 15,521 18,815 18,833 20,166 22,077 22,425 25 Banks' custody liabilities5 78,142 91,965 108,132 103,512 101,095 102,189 98,097 92,513 92,818 93,258 26 U.S. Treasury bills and certificates6 75,650 88,829 103,722 98,192 95,478 96,109 91,798 87,190 87,734 88,325 27 Other negotiable and readily transferable instruments7 2,347 2,990 4,130 5,076 5,466 5,875 6,114 5,080 4,821 4,735 28 Other 145 146 280 244 152 205 185 244 263 198 29 Banks10 351,745 414,280 458,672 452,347 469,687 453,554 454,442 451,337 441,474 457,198 30 Banks' own liabilities 310,166 371,665 408,854 399,718 417,323 401,646 399,823 395,603 385,608 400,774 31 Unaffiliated foreign banks 101,066 124,030 120,422 116,030 128,283 121,342 122,999 120,421 119,385 123,269 32 Demand deposits 10,303 10,898 9,950 9,584 11,012 10,560 11,162 9,677 10,145 9,135 33 Time deposits 64,232 79,717 80,155 76,659 84,005 80,796 78,901 77,231 74,479 79,995 34 Other3 26,531 33,415 30,318 29,788 33,265 29,987 32,936 33,513 34,761 34,139 35 Own foreign offices4 209,100 247,635 288,432 283,687 289,039 280,304 276,824 275,183 266,223 277,505 36 Banks' custody liabilities5 41,579 42,615 49,818 52,629 52,365 51,908 54,619 55,734 55,865 56,424 37 U.S. Treasury bills and certificates 9,984 9,134 7,602 7,491 7,310 6,921 7,114 7,759 7,674 7,779 38 Other negotiable and readily transferable instruments7 5,165 5,392 5,725 5,938 5,288 5,051 5,686 5,314 5,326 5,280 39 Other 26,431 28,089 36,491 39,200 39,767 39,936 41,819 42,662 42,866 43,365 40 Other foreigners 79,875 79,463 87,411 89,260 88,763 90,068 90,366 92,691 91,250 91,372 41 Banks' own liabilities 66,934 67,000 75,456 75,711 75,533 78,126 77,792 80,335 79,274 79,023 42 Demand deposits 11,019 9,604 9,928 10,272 9,767 9,820 8,921 9,714 9,218 8,926 43 Time deposits 54,097 54,277 61,025 60,651 61,483 62,245 63,521 64,392 63,791 64,926 44 Other3 1,818 3,119 4,503 4,788 4,283 6,060 5,351 6,229 6,265 5,170 45 Banks' custody liabilities5 12,941 12,463 11,956 13,549 13,230 11,942 12,574 12,356 11,976 12,349 46 U.S. Treasury bills and certificates 4,506 3,515 3,675 5,322 5,256 3,809 3,725 3,763 3,612 3,413 47 Other negotiable and readily transferable instruments7 6,315 6,898 5,929 5,638 5,503 5,658 6,436 5,953 5,566 6,332 48 Other 2,120 2,050 2,351 2,589 2,471 2,474 2,412 2,639 2,797 2,604 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 7,496' 7,314' 6,425 6,118 5,645 5,554 5,625 5,337 5,261 5,195 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

Nonbank-Reported Data A61 3.17—Continued 1989 AArreeaa aanndd ccoouunnttrryy 11998866 11998877 11998888 Feb. Mar. Apr. May' June' July Aug." 1 Total 540,996 618,874 684,444 677,627' 691,295' 682,850" 678,059 672,049 663,806 679,227 2 Foreign countries 535,189 614,411 681,219 674,366' 687,522' 678,848' 674,644 668,432 659,566 674,808 3 Europe 180,556 234,641 235,989 228,364' 232,141' 230,769" 228,141 226,058 226,358 232,105 4 Austria 1,181 920 1,155 1,777 1,436 1,608 1,405 1,505 1,414 1,423 5 Belgium-Luxembourg 6,729 9,347 10,022 10,502' 9,316 10,115 8,819 8,624 8,946 9,267 6 Denmark 482 760 2,180 2,082 1,639 1,615 1,642 1,179 1,348 1,959 7 Finland 580 377 284 560 527 397 432 450 435 456 8 France 22,862 29,835 24,762 24,260 26,824 25,629" 24,199 23,864 22,023 24,861 9 Germany 5,762 7,022 6,772 5,257' 5,517' 6,967" 7,791 9,198 8,759 7,463 10 Greece 700 689 672 933 760 927 1,172 889 862 828 11 Italy 10,875 12,073 14,599 11,060' 13,475' 12,959" 12,527 13,951 12,871 14,589 12 Netherlands 5,600 5,014 5,316 6,011 5,600 5,610" 5,870 4,875 5,029 5,097 13 Norway 735 1,362 1,559 1,367 1,547 1,783 1,479 1,485 1,522 1,453 14 Portugal 699 801 903 813 831 824 985 1,089 1,414 1,945 15 Spain 2,407 2,621 5,494 5,174 4,902 5,795 5,419 5,085 5,903 5,333 16 Sweden 884 1,379 1,274 1,319 1,416 1,730 1,552 1,478 1,248 2,002 17 Switzerland 30,534 33,766 34,179 31,659 30,005' 29,239' 28,448 28,806 28,576 28,988 18 Turkey 454 703 1,012 1,246 1,024' 1,051 785 737 1,053 1,284 19 United Kingdom 85,334 116,852 115,954 113,414' 115,338' 111,492 112,622 107,300 109,753 109,688 20 Yugoslavia 630 710 529 434 440 465 478 558 604 708 21 Other Western Europe1 3,326 9,798 8,598 9,929 10,771' 11,519 11,887 14,322 13,653 13,805 22 U.S.S.R 80 32 138 108 102 91 193 164 175 202 23 Other Eastern Europe 702 582 591 458 670' 953' 435 499 771 754 24 Canada 26,345 30,095 21,040 20,732 25,694 23,024 18,353 17,514 17,472 16,978 25 Latin America and Caribbean 210,318 220,372 266,803 263,511' 264,879' 266,446' 270,431 266,509 260,711 269,497 26 Argentina 4,757 5,006 7,804 6,836 6,416' 6,280 6,459 6,320 7,397 8,047 27 Bahamas 73,619 74,767 86,863 83,455 85,673' 86,057' 90,979 82,104 84,526 90,329 28 Bermuda 2,922 2,344 2,621 2,545 2,518' 2,373' 2,451 2,356 2,269 2,209 29 Brazil 4,325 4,005 5,304 4,829 4,926' 5,554 5,302 5,026 5,393 5,617 30 British West Indies 72,263 81,494 109,507 111,113' 110,962' 111,969' 111,270 116,607 107,574 109,553 31 Chile 2,054 2,210 2,936 2,975 3,063 2,933 2,988 2,733 2,683 2,814 32 Colombia 4,285 4,204 4,374 4,460' 4,157' 4,173 4,033 4,127 4,235 4,365 33 Cuba 7 12 10 10 10 10 15 10 9 10 34 Ecuador 1,236 1,082 1,379 1,403 1,422 1,376 1,285 1,351 1,411 1,376 35 Guatemala 1,123 1,082 1,195 1,259 1,271 1,272 1,232 1,251 1,297 1,279 36 Jamaica 136 160 269 170 223 222 188 294 227 231 37 Mexico 13,745 14,480 15,185 14,938' 14,694' 14,367' 14,060 14,211 13,679 13,760 38 Netherlands Antilles 4,970 4,975 6,420 5,641 5,666 5,769' 6,072 6,316 6,434 6,065 39 Panama 6,886 7,414 4,353 4,497 4,391' 4,355 4,454 4,278 4,357 4,400 40 Peru 1,163 1,275 1,671 1,728 1,705' 1,763 1,724 1,761 1,770 1,778 41 Uruguay 1,537 1,582 1,898 2,142 2,243 2,263 2,344 2,429 2,152 2,121 42 Venezuela 10,171 9,048 9,147 9,532 9,489 9,565 9,435 9,431 9,506 9,376 43 Other 5,119r 5,234' 5,868 5,977' 6,048' 6,145' 6,140 5,903 5,790 6,170 44 108,831 121,288 147,230 151,094' 154,770' 148,676' 147,353 148,339 144,061 145,453 China 45 Mainland 1,476 1,162 1,892 1,602 1,588 1,809 1,652 1,432 1,522 1,698 46 Taiwan 18,902 21,503 26,058 26,001 26,143 28,284' 26,928 27,025 27,125 25,430 47 Hong Kong 9,393 10,180 11,738 11,387 10,772' 11,403' 12,215 12,132 11,344 12,271 48 India 674 582 699 838 900 1,787 1,009 812 871 940 49 Indonesia 1,547 1,404 1,180 1,164' 1,588' 1,154' 1,306 1,232 1,096 1,042 50 Israel 1,892 1,292 1,461 1,361' 1,156 967' 1,103 1,088 1,058 1,352 51 Japan 47,410 54,322 73,957 77,374' 83,013' 72,689' 70,468 71,130 68,660 70,154 52 Korea 1,141 1,637 2,541 2,497' 2,827 3,023 3,166 3,047 3,556 2,897 53 Philippines 1,866 1,085 1,163 1,014 977 973 991 984 936 1,083 54 Thailand 1,119 1,345 1,236 1,615 1,151 1,165 1,162 1,274 1,254 1,776 55 Middle-East oil-exporting countries 12,352 13,988 12,083 12,372 12,029 12,098 13,505 13,612 12,368 12,517 56 Other 11,058 12,788 13,223 13,869" 12,625' 13,324' 13,851 14,571 14,271 14,294 57 4,021 3,945 3,991 3,793 3,717 3,665 3,802 3,904 3,618 3,263 58 Egypt 706 1,151 911 819 756 721 702 748 738 549 59 Morocco 92 194 68 69 60 82 68 67 65 72 60 South Africa 270 202 437 212 226 256 324 188 231 201 61 Zaire 74 67 85 75 77 73 92 98 92 87 62 Oil-exporting countries 1,519 1,014 1,017 1,121 1,062 1,017 879 1,100 943 897 63 Other 1,360 1,316' 1,474 1,4%' 1,536 1,516 1,737 1,702 1,548 1,457 64 Other countries 5,118 4,070 6,165 6,872 6,322 6,267 6,563 6,108 7,346 7,513 65 Australia 4,1% 3,327 5,293 6,037 5,490 5,471 5,700 5,192 6,620 6,721 66 All other 922 744 872 836 832 7% 863 916 726 792 67 Nonmonetary international and regional organizations 5,807 4,464 3,224 3,261' 3,773' 4,002" 3,415 3,617 4,240 4,418 68 International 4,620 2,830 2,503 2,106 2,546 2,548" 2,456 2,830 2,881 3,084 69 Latin American regional 1,033 1,272 589 741' 1,004' 981 564 613 %1 690 70 Other regional6 154 362 133 414 223 472" 395 175 398 644 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 Internationa] 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 • December 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 1989 AArreeaa aanndd ccoouunnttrryy 11998866 11998877 11998888 Feb. Mar. Apr. May June July Aug." 1 Total 444,745 459,877 491,275 493,482 504,329 495,060 490,811 490,395 481,333 488,557 2 Foreign countries 441,724 456,472 489,205 491,576 502,290 493,225 487,029 486,918 477,546 485,433 3 Europe 107,823 102,348 117,048 113,939 116,640 111,170 112,975 112,240 106,446 107,453 4 Austria 728 793 485 646 809 805 764 809 854 549 5 Belgium-Luxembourg 7,498 9,397 8,518 7,717 7,834 8,102 8,435 7,780 7,558 7,510 6 Denmark 688 717 480 790 548 770 470 774 562 768 7 Finland 987 1,010 1,065 1,114 909 1,214 1,280 1,175 1,433 1,401 8 France 11,356 13,548 13,243 14,935 15,744 16,524 16,092 15,574 15,978 16,417 9 Germany 1,816 2,039 2,326 1,708 3,110 3,529 3,959 3,695 3,460 3,301 10 Greece 648 462 433 517 586 561 595 632 602 624 11 Italy 9,043 7,460 7,936 5,575 5,866 4,803 5,627 6,813 5,994 5,494 12 Netherlands 3,296 2,619 2,547 2,475 2,808 2,735 3,183 2,025 1,945 1,447 13 Norway 672 934 455 601 432 551 567 667 796 665 14 Portugal 739 477 374 331 367 281 371 328 283 264 15 Spain 1,492 1,853 1,823 2,468 2,449 2,624 2,209 2,190 2,092 1,689 16 Sweden 1,964 2,254 1,977 2,622 2,613 2,164 2,158 1,946 2,003 2,046 17 Switzerland 3,352 2,718 3,895 3,780 3,822 4,540 3,975 55,,448855 4,123 4,571 18 Turkey 1,543 1,680 1,233 1,108 1,039 1,005 910 888866 891 960 19 United Kingdom 58,335 50,823 65,708 62,437 62,908 56,057 58,076 56,891 53,463 54,861 20 Yugoslavia 1,835 1,700 1,390 1,348 1,455 1,369 1,366 1,359 1,406 1,344 ?l 619 1,152 1 550 1 262 1 415 966 22 U.S.S.R 345 389 1,255 1,389 1,298 1,346 1,155 1,212 1,227 1,456 23 Other Eastern Europe3 948 852 754 828 780 775 820 838 801 839 24 Canada 21,006 25,368 18,889 18,079 19,048 19,150 16,072 16,089 14,493 15,077 25 Latin America and Caribbean 208,825 214,789 214,233 211,133 220,812 219,970 217,962 219,267 217,088 215,545 26 Argentina 12,091 11,996 11,826 11,802 11,616 11,516 11,381 10,840 10,724 10,729 2/ Bahamas 59,342 64,587 67,006 69,607 72,804 75,665 70,552 66,611 70,448 68,069 28 Bermuda 418 471 483 535 707 361 449 391 463 522 29 Brazil 25,716 25,897 25,735 25,373 25,618 25,947 25,785 25,675 25,831 25,593 30 British West Indies 46,284 50,042 55,790 51,127 57,602 54,424 57,960 64,870 59,433 61,145 31 Chile 6,558 6,308 5,217 5,161 5,335 5,224 5,266 4,841 4,770 4,780 32 Colombia 2,821 2,740 2,944 2,813 22,,774466 2,661 22,,660000 22,,558811 2,523 22,,550011 33 Cuba 0 1 1 1 11 2 11 11 9 11 34 Ecuador 2,439 2,286 2,075 2,026 2,032 2,025 1,944 1,894 1,932 1,917 35 Guatemala4 140 144 198 188 199 210 207 200 188 202 36 Jamaica4 198 188 212 202 251 266 265 286 270 272 37 Mexico 30,698 29,532 24,637 24,387 24,188 24,077 24,038 23,653 23,356 23,127 38 Netherlands Antilles 1,041 980 1,321 1,159 1,013 1,009 999 1,183 1,168 1,026 39 Panama 5,436 4,744 2,536 2,510 2,460 2,433 2,475 2,438 2,320 22,,002233 40 Peru 1,661 1,329 1,013 952 947 947 938 874 867 888800 41 Uruguay 940 963 910 856 875 876 832 896 854 866 42 Venezuela 11,108 10,843 10,733 10,959 10,761 10,659 10,600 10,551 10,268 9,975 43 Other Latin America and Caribbean 1,936 1,738 1,597 1,475 1,659 1,668 1,670 1,482 1,664 1,917 44 Asia 96,126 106,096 130,906 113399,,662277 113377,,009977 113344,,443399 113311,,557788 130,578 113300,,994488 113377,,880099 China Mainland 787 968 762 881 988 816 952 920 644 575 46 Taiwan 2,681 4,592 4,184 3,960 4,179 3,952 3,715 4,058 3,946 3,356 41 Hong Kong 8,307 8,218 10,148 7,938 7,900 8,293 8,855 8,557 8,153 8,779 48 India 321 510 560 628 563 425 411 537 477 547 49 Indonesia 723 580 674 735 649 726 690 671 645 614 50 Israel 1,634 1,363 1,136 1,043 1,050 1,052 1,045 1,019 961 902 51 Japan 59,674 68,658 90,162 104,524 101,501 97,666 93,447 91,086 91,764 96,339 52 Korea 7,182 5,148 5,219 4,891 5,183 5,198 5,338 5,615 5,774 5,943 53 Philippines 2,217 2,071 1,876 1,900 1,913 1,839 1,810 1,763 1,607 1,535 54 Thailand 578 496 849 931 986 1,018 975 1,058 1,061 1,117 55 Middle East oil-exporting countries 4,122 4,858 6,213 4,681 5,409 5,237 5,522 6,550 5,550 8,883 56 Other Asia 7,901 8,635 9,122 7,515 6,776 8,217 8,818 8,745 10,366 9,218 57 Africa 4,650 4,742 5,718 6,072 5,974 6,087 6,084 6,075 6,066 66,,003377 58 Egypt 567 521 507 567 543 541 541 534 577 448888 59 Morocco 598 542 511 532 541 532 538 531 518 535 60 South Africa 1,550 1,507 1,681 1,718 1,702 1,742 1,753 1,746 1,702 1,709 61 Zaire 28 15 17 16 17 19 19 17 17 16 62 Oil-exporting countries6 694 1,003 1,523 1,522 1,481 1,474 1,504 1,503 1,587 1,614 63 Other 1,213 1,153 1,479 1,718 1,690 1,778 1,729 1,744 1,664 1,674 64 Other countries 3,294 3,129 2,410 2,726 2,720 2,409 2,359 2,670 2,505 3,512 65 Australia 1,949 2,100 1,517 1,686 1,686 1,505 1,167 1,307 1,518 2,515 66 All other 1,345 1,029 894 1,040 1,034 905 1,192 1,363 987 998 67 Nonmonetary international and regional organizations 3,021 3,404 2,071 1,905 2,039 1,835 3,782 3,477 3,787 3,124 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 States' Payable in U.S. Dollars Millions of dollars, end of period 1989 TTyyppee ooff ccllaaiimm 11998866 11998877 11998888 Feb. Mar. Apr. May June July Aug.'' 444444477777778888888,,,,,,,666666655555550000000 444444499999997777777,,,,,,,666666633333335555555 555555533333338888888,,,,,,,777777799999999999999 555555555555557777777,,,,,,,555555500000007777777 555555533333339999999,,,,,,,999999922222227777777 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 444444444444444444444,,,,,,,777777744444445555555 444444455555559999999,,,,,,,888888877777777777777 444444499999991111111,,,,,,,222222277777775555555 493,482 555555500000004444444,,,,,,,333333322222229999999 495,060 490,811 444444499999990000000,,,,,,,333333399999995555555 481,333 488,557 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666664444444,,,,,,,000000099999995555555 66666664444444,,,,,,,666666600000005555555 66666662222222,,,,,,,777777700000000000000 63,521 66666662222222,,,,,,,999999977777773333333 63,248 63,789 66666662222222,,,,,,,666666633333336666666 63,367 62,568 44 OOwwnn ffoorreeiiggnn ooffffiicceess"" 222222211111111111111,,,,,,,555555533333333333333 222222222222224444444,,,,,,,777777722222227777777 222222255555557777777,,,,,,,444444400000005555555 263,388 222222277777771111111,,,,,,,999999966666668888888 259,693 257,271 222222255555558888888,,,,,,,000000022222220000000 248,677 251,818 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222222222222,,,,,,,999999944444446666666 111111122222227777777,,,,,,,666666600000009999999 111111122222229999999,,,,,,,444444488888887777777 123,904 111111133333330000000,,,,,,,111111111111111111111 131,104 130,488 111111122222228888888,,,,,,,333333399999991111111 128,970 132,026 66 DDeeppoossiittss 55555557777777,,,,,,,444444488888884444444 66666660000000,,,,,,,666666688888887777777 66666665555555,,,,,,,888888899999998888888 61,939 66666666666666,,,,,,,555555566666667777777 69,283 67,407 66666668888888,,,,,,,333333300000006666666 68,348 71,678 77 OOtthheerr 66666665555555,,,,,,,444444466666662222222 66666666666666,,,,,,,999999922222222222222 66666663333333,,,,,,,555555588888888888888 61,965 66666663333333,,,,,,,555555544444444444444 61,821 63,081 66666660000000,,,,,,,000000088888885555555 60,622 60,349 88 AAllll ootthheerr ffoorreeiiggnneerrss 44444446666666,,,,,,,111111177777771111111 44444442222222,,,,,,,999999933333336666666 44444441111111,,,,,,,666666688888884444444 42,669 33333339999999,,,,,,,222222277777778888888 41,016 39,263 44444441111111,,,,,,,333333344444449999999 40,319 42,146 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 33333333333333,,,,,,,999999900000005555555 33333337777777,,,,,,,777777755555558888888 44444447777777,,,,,,,555555522222224444444 55555553333333,,,,,,,111111177777778888888 44444449999999,,,,,,,555555533333331111111 4444444,,,,,,,444444411111113333333 3333333,,,,,,,666666699999992222222 8888888,,,,,,,222222288888889999999 11111112222222,,,,,,,000000088888884444444 11111111111111,,,,,,,111111155555553333333 11 Negotiable and readily transferable 22222224444444,,,,,,,000000044444444444444 22222226666666,,,,,,,666666699999996666666 22222225555555,,,,,,,777777700000000000000 22222224444444,,,,,,,999999966666660000000 22222222222222,,,,,,,000000011111117777777 12 Outstanding collections and other 5555555,,,,,,,444444444444448888888 7777777,,,,,,,333333377777770000000 11111113333333,,,,,,,555555533333335555555 11111116666666,,,,,,,111111133333334444444 11111116666666,,,,,,,333333366666662222222 13 MEMO: Customer liability on 22222225555555,,,,,,,777777700000006666666 22222223333333,,,,,,,111111100000007777777 11111119999999,,,,,,,555555566666668888888 11111117777777,,,,,,,111111177777773333333 11111116666666,,,,,,,888888822222225555555 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States- .... 43,984 40,857 45,391 48,830 47,225 47,897 49,491 46,662 48,206 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 States' Payable in U.S. Dollars Millions of dollars, end of period 1988 1989 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998855 11998866 11998877 Sept. Dec. Mar. June'' 1 227,903 232,295 235,130 230,608 233,280 231,454 232,277 By borrower 7 Maturity of 1 year or less" 160,824 160,555 163,997 168,121 172,730 168,377 116688,,228844 3 Foreign public borrowers 26,302 24,842 25,889 29,390 26,602 24,135 23,775 4 All other foreigners 134,522 135,714 138,108 138,731 146,128 144,242 144,509 s Maturity over 1 year2 67,078 71,740 71,133 62,488 60,550 63,077 63,994 6 Foreign public borrowers 34,512 39,103 38,625 35,481 35,315 37,922 38,135 7 All other foreigners 32,567 32,637 32,507 27,007 25,235 25,155 25,859 By area n Maturity of 1 year or less- 8 Europe 56,585 61,784 59,027 54,277 56,031 57,878 5588,,440088 9 Canada 6,401 5,895 5,680 6,410 6,282 5,115 5,693 10 Latin America and Caribbean 63,328 56,271 56,535 55,730 58,004 53,268 50,763 11 Asia 27,966 29,457 35,919 42,368 46,188 45,675 46,054 1? Africa 3,753 2,882 2,833 3,120 3,337 3,610 3,601 13 All other3 2,791 4,267 4,003 6,216 2,888 2,831 3,765 Maturity of over 1 year- 14 Europe 7,634 6,737 6,696 5,307 4,664 4,507 44,,661144 15 Canada 1,805 1,925 2,661 2,031 1,922 2,309 2,593 16 Latin America and Caribbean 50,674 56,719 53,817 48,325 47,548 49,790 50,088 17 Asia 4,502 4,043 3,830 3,943 3,613 3,699 3,818 18 Africa 1,538 1,539 1,747 2,257 2,301 2,292 2,408 19 All other3 926 777 2,381 625 501 480 472 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 • December 1989 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1-2 Billions of dollars, end of period 1987 1988 1989 AArreeaa oorr ccoouunnttrryy 11998855 11998866 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar. 1 Total 385.4 385.1 395.4 384.6 387.7 381.4 371.9 351.9 355.1 350.0 352.1 2 G-10 countries and Switzerland 146.0 156.6 162.7 158.1 155.2 160.0 157.7 151.7 149.9 154.7 150.1 3 Belgium-Luxembourg 9.2 8.3 9.1 8.3 8.2 10.1 9.4 9.2 9.6 9.0 8.6 4 France 12.1 13.7 13.3 12.5 13.7 13.8 11.8 11.0 10.4 10.7 11.2 5 Germany 10.5 11.6 12.7 11.2 10.5 12.6 11.8 10.6 8.8 9.9 10.1 6 Italy 9.6 9.0 8.7 7.5 6.6 7.3 7.4 6.2 5.4 6.6 5.1 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 2.2 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 72.1 70.6 68.0 66.7 66.4 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 29.9 27.9 32.4 35.9 33.6 13 Other developed countries 29.9 25.7 25.7 25.2 25.9 26.2 26.3 23.8 22.8 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 1.0 1.0 16 Finland 1.6 1.4 1.4 1.4 1.4 1.3 1.1 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 2.0 1.7 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 2.4 2.2 24 Australia 5.0 3.5 3.2 3.1 2.9 2.4 2.1 2.2 1.8 1.8 2.4 25 OPEC countries3 21.3 19.3 20.0 18.8 19.0 17.1 17.4 16.7 17.8 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 8.0 28 Indonesia 3.0 2.5 2.4 2.2 2.0 1.9 1.9 1.9 1.9 1.8 1.8 29 Middle East countries 5.3 4.3 5.4 4.4 5.0 3.6 3.8 3.4 4.5 3.3 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 94.4 91.4 87.1 85.3 85.6 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 22.7 34 Chile 6.9 7.1 7.3 7.2 7.0 6.9 6.6 6.4 6.2 5.5 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 18.2 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 2.8 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 3.7 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 6.2 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 4.7 4.5 4.3 46 Thailand 1.4 .9 .9 .8 .7 .7 1.0 1.1 1.2 1.1 1.0 47 Other Asia 1.0 .7 .6 .7 .7 .7 .7 .8 .8 .9 .8 Africa 48 Egypt 1.0 .7 .6 .6 .6 .5 .5 .6 .5 .4 .5 49 Morocco .9 .9 .9 .9 .8 .9 .9 .9 .8 .9 .9 50 Zaire .1 .1 .1 .1 .1 .0 .1 .1 .0 .0 .0 51 Other Africa4 1.9 1.6 1.4 1.3 1.3 1.3 1.2 1.2 1.2 1.1 1.1 52 Eastern Europe 4.1 3.2 3.0 3.3 3.3 3.0 2.9 3.1 3.0 3.6 3.4 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 1.7 1.7 55 Other 1.8 1.4 1.3 1.3 1.2 1.0 .9 1.0 1.0 1.1 1.1 56 Offshore banking centers 62.9 61.3 63.1 60.7 64.3 54.3 51.7 43.0 47.4 45.8 50.9 57 Bahamas 21.2 22.0 23.9 19.9 25.5 17.1 15.7 8.6 12.6 10.8 15.6 58 Bermuda .7 .7 .8 .6 .6 .6 .8 1.0 .9 .8 1.0 59 Cayman Islands and other British West Indies 11.6 12.4 12.2 14.0 12.8 13.3 11.8 10.5 12.3 14.0 14.4 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 Panama5 6.0 4.0 4.3 3.9 3.7 3.7 3.3 3.0 2.7 2.6 2.3 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 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 26.7 22.6 24.5 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 1988 1989 Type, and area or country 11998855 11998866 11998877 Mar. June Sept. Dec. Mar. Junep 1 Total 27,825 25,587 28,302 29,792 30,107 32,196 33,417 36,986 36,639 2 Payable in dollars 24,296 21,749 22,785 24,012 24,805 26,967 27,831 31,195 31,611 3 Payable in foreign currencies 3,529 3,838 5,517 5,780 5,302 5,229 5,586 5,790 5,028 By type 4 Financial liabilities 13,600 12,133 12,424 14,139 13,894 14,877 14,917 17,164 16,697 5 Payable in dollars 11,257 9,609 8,643 10,145 10,234 11,283 11,049 13,084 12,882 6 Payable in foreign currencies 2,343 2,524 3,781 3,994 3,660 3,594 3,868 4,080 3,815 7 Commercial liabilities 14,225 13,454 15,878 15,653 16,213 17,319 18,500 19,822 19,942 8 Trade payables 6,685 6,450 7,305 6,454 6,768 6,480 6,454 6,921 6,165 9 Advance receipts and other liabilities .. 7,540 7,004 8,573 9,200 9,446 10,839 12,045 12,901 13,777 10 Payable in dollars 13,039 12,140 14,142 13,867 14,571 15,684 16,782 18,111 18,729 11 Payable in foreign currencies 1,186 1,314 1,737 1,786 1,642 1,635 1,718 1,711 1,213 By area or country Financial liabilities 12 Europe 7,700 7,917 8,320 9,377 9,030 10,295 9,712 12,143 10,902 13 Belgium-Luxembourg 349 270 213 251 282 339 289 320 357 14 France 857 661 382 408 371 372 267 249 274 15 Germany 376 368 551 553 503 488 548 372 470 16 Netherlands 861 542 866 990 862 996 879 933 834 17 Switzerland 610 646 558 691 638 687 1,163 954 936 18 United Kingdom 4,305 5,140 5,557 6,301 6,201 7,243 6,418 9,121 7,852 19 Canada 839 399 360 394 412 431 650 616 544 20 Latin America and Caribbean 3,184 1,944 1,189 1,452 1,448 1,057 1,239 677 1,406 21 Bahamas 1,123 614 318 289 250 238 184 189 165 22 Bermuda 4 4 0 0 0 0 0 0 0 23 Brazil 29 32 25 0 0 0 0 0 0 24 British West Indies 1,843 1,146 778 1,099 1,154 812 645 471 621 25 Mexico 15 22 13 15 26 2 1 15 17 26 Venezuela 3 0 0 2 0 0 0 0 0 27 Asia 1,815 1,805 2,451 2,836 2,928 3,088 3,312 3,722 3,841 28 Japan 1,198 1,398 2,042 2,375 2,331 2,435 2,563 2,950 3,082 29 Middle East oil-exporting countries . n.a. 8 8 11 11 4 3 1 11 30 Africa 12 1 4 5 2 3 1 5 3 0 1 1 3 1 1 0 3 2 31 Oil-exporting countries3 50 67 100 75 74 3 2 2 0 32 All other4 Commercial liabilities 4,074 4,446 5,505 5,619 5,722 6,688 7,347 7,772 7,781 33 Europe 62 101 132 154 147 206 170 134 116 34 Belgium-Luxembourg 453 352 426 414 408 438 459 574 521 35 France 607 715 908 810 791 1,185 1,699 1,361 1,130 36 Germany 364 424 423 457 508 647 591 668 687 37 Netherlands 379 385 559 527 482 486 417 457 456 38 Switzerland 976 1,341 1,588 1,722 1,771 2,110 2,063 2,444 2,688 39 United Kingdom 40 Canada 1,449 1,405 1,301 1,392 1,167 1,109 1,218 1,152 1,119 41 Latin America and Caribbean 1,088 924 864 980 1,035 997 1,118 1,262 1,660 42 Bahamas 12 32 18 19 61 19 49 35 34 43 Bermuda 77 156 168 325 272 222 286 426 388 44 Brazil 58 61 46 59 54 58 95 102 538 45 British West Indies 44 49 19 14 28 30 34 31 42 46 Mexico 430 217 189 164 233 177 179 197 181 47 Venezuela 212 216 162 122 140 204 177 179 184 48 Asia 6,046 5,080 6,565 5,883 6,279 6,632 6,910 7,435 6,945 49 Japan 1,799 2,042 2,578 2,508 2,659 2,763 3,091 3,048 2,706 50 Middle East oil-exporting countries2, 2,829 1,679 1,964 1,062 1,320 1,298 1,386 1,526 1,430 51 Africa 587 619 574 575 626 477 578 706 768 52 Oil-exporting countries3 238 197 135 139 115 106 202 272 253 53 All other4 982 980 1,068 1,204 1,383 1,415 1,328 1,496 1,670 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 • December 1989 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1988 1989 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998855 11998866 11998877 Mar. June Sept. Dec. Mar. Junep 1 Total 28,876 36,265 30,964 31,089 37,641 38,114 33,412 31,482 34,345 2 Payable in dollars 26,574 33,867 28,502 29,026 35,613 35,695 31,164 29,254 32,188 3 Payable in foreign currencies 2,302 2,399 2,462 2,063 2,028 2,419 2,249 2,227 2,157 By type 4 Financial claims 18,891 26,273 20,363 20,326 26,274 27,011 21,482 19,613 22,334 5 Deposits 15,526 19,916 14,903 12,697 19,492 19,079 15,763 14,733 17,358 6 Payable in dollars 14,911 19,331 13,775 12,121 18,775 18,145 14,744 13,886 16,497 7 Payable in foreign currencies 615 585 1,128 576 718 934 1,019 847 861 8 Other financial claims 3,364 6,357 5,460 7,629 6,781 7,932 5,719 4,881 4,977 9 Payable in dollars 2,330 5,005 4,646 6,509 5,886 6,990 4,995 4,007 4,159 10 Payable in foreign currencies 1,035 1,352 814 1,120 895 942 724 874 818 11 Commercial claims 9,986 9,992 10,600 10,763 11,367 11,103 11,930 11,868 12,010 12 Trade receivables 8,696 8,783 9,535 9,650 10,332 10,109 10,845 10,604 10,811 13 Advance payments and other claims 1,290 1,209 1,065 1,113 1,036 993 1,085 1,264 1,200 14 Payable in dollars 9,333 9,530 10,081 10,397 10,952 10,560 11,425 11,361 11,532 15 Payable in foreign currencies 652 462 519 366 415 542 505 507 478 By area or country Financial claims 16 Europe 6,929 10,744 9,531 9,805 11,512 10,537 9,942 99,,111199 9,237 17 Belgium-Luxembourg 10 41 7 15 16 49 10 1111 155 18 France 184 138 332 308 181 278 224 230 191 19 Germany 223 116 102 92 168 123 138 180 233 20 Netherlands 161 151 350 333 335 356 344 383 290 21 Switzerland 74 185 65 54 105 84 215 203 70 22 United Kingdom 6,007 9,855 8,467 8,789 10,430 9,321 8,659 7,801 7,961 23 Canada 3,260 4,808 2,844 2,669 2,913 3,612 2,338 2,210 2,281 24 Latin America and Caribbean 7,846 9,291 7,012 6,483 10,854 11,814 8,128 7,216 9,092 25 Bahamas 2,698 2,628 1,994 2,329 4,176 4,064 1,847 2,173 1,919 26 Bermuda 6 6 7 43 87 188 19 25 125 27 Brazil 78 86 63 86 46 44 47 49 78 28 British West Indies 4,571 6,078 4,433 3,503 6,045 7,055 5,729 4,549 6,560 29 Mexico 180 174 172 154 146 133 151 117 114 30 Venezuela 48 21 19 34 27 27 21 25 31 31 Asia 731 1,317 879 1,294 876 927 799 928 1,362 32 Japan 475 999 605 1,133 646 737 603 685 965 33 Middle East oil-exporting countries2 n.a. 7 8 5 5 5 4 8 7 34 Africa 103 85 65 53 60 95 106 89 80 35 Oil-exporting countries 29 28 7 7 9 9 10 8 8 36 All other4 21 28 33 24 58 26 169 51 284 Commercial claims 37 Europe 3,533 3,725 4,180 4,170 4,694 4,295 5,010 4,901 4,881 38 Belgium-Luxembourg 175 133 178 193 158 171 176 201 199 39 France 426 431 650 552 684 542 671 752 766 40 Germany 346 444 562 637 773 613 611 643 638 41 Netherlands 284 164 133 150 172 145 208 156 191 42 Switzerland 284 217 185 173 262 183 322 246 218 43 United Kingdom 898 999 1,073 1,059 1,095 1,179 1,306 1,282 1,330 44 Canada 1,023 934 936 1,166 937 977 974 1,100 1,167 45 Latin America and Caribbean 1,753 1,857 1,930 1,930 2,067 2,104 2,229 2,100 2,083 46 Bahamas 13 28 19 14 13 12 36 34 14 47 Bermuda 93 193 170 171 174 161 229 234 236 48 Brazil 206 234 226 209 232 234 298 277 314 49 British West Indies 6 39 26 24 25 22 21 23 29 50 Mexico 510 412 368 374 411 463 457 476 428 51 Venezuela 157 237 283 274 304 266 226 211 229 52 Asia 2,982 2,755 2,915 2,853 2,994 3,029 2,955 3,090 3,128 53 Japan 1,016 881 1,158 1,107 1,168 963 934 1,032 982 54 Middle East oil-exporting countries2 638 563 450 408 446 437 441 421 437 55 Africa 437 500 401 419 425 425 435 386 397 56 Oil-exporting countries 130 139 144 126 136 137 122 95 112 57 All other4 257 222 238 225 250 273 328 290 354 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 1989 Transactions, and area or country 1987 1988 J A a u n g .- . Feb. Mar. Apr. May June July Aug." U.S. corporate securities STOCKS 1 Foreign purchases 249,122 181,185 141,670 18,397 15,819 14,101 17,904 24,311 17,115 22,095 2 Foreign sales 232,849 183,185 133,491 18,500 15,447 14,241 16,846 20,640 15,084 20,938 3 Net purchases, or sales (-) 16,272 -2,000 8,180 -103 372 -141 1,058 3,671 2,030 1,158 4 Foreign countries 16,321 -1,825 8,405 -73 509 -134 1,060 3,689 2,047 1,141 5 Europe 1,932 -3,350 822 -126 73 181 -293 418 778 -110 6 France 905 -281 121 159 70 168 -123 -15 75 -251 7 Germany -70 218 -523 59 59 17 -215 -155 -79 -238 8 Netherlands 892 -535 -52 -64 5 -125 -76 131 12 -63 9 Switzerland -1,123 -2,243 -2,349 -1,181 91 -141 -293 -114 -23 -344 10 United Kingdom 631 -954 3,197 800 -106 287 494 329 545 772 11 Canada 1,048 1,087 137 -361 130 -66 -75 168 8 14 12 Latin America and Caribbean 1,318 1,238 2,854 583 635 120 391 168 108 250 13 Middle East1 -1,360 -2,474 2,934 266 220 -345 206 1,679 456 553 14 Other Asia 12,896 1,365 1,426 -544 -536 -28 784 1,201 729 423 15 Japan 11,365 1,922 1,505 -487 -458 -16 763 1,215 626 424 16 Africa 123 188 86 3 5 10 -1 16 2 22 17 Other countries 365 121 145 106 -19 -7 50 40 -34 -11 18 Nonmonetary international and regional organizations -48 -176 -226 -30 -137 -6 -2 -18 -17 17 BONDS2 19 Foreign purchases 105,856 86,363 76,078 9,610 10,423 9,736 8,329 10,856 10,044 10,943 20 Foreign sales 78,312 58,395 56,179 4,736 7,025 5,270 8,776 9,043 7,526 9,046 21 Net purchases, or sales (—) 27,544 27,968 19,900 4,874 3,398 4,466 -447 1,813 2,518 1,897 22 Foreign countries 26,804 28,510 19,682 4,908 3,358 4,465 -570 1,690 2,550 1,920 23 Europe 21,989 17,243 12,695 2,055 2,794 3,102 -55 2,132 1,976 192 24 France 194 143 343 41 -16 27 93 6 121 -35 25 Germany 33 1,344 -169 38 148 135 -170 -162 -53 -121 26 Netherlands 269 1,514 608 -21 69 51 9 395 -22 96 27 Switzerland 1,587 505 225 131 4 90 -114 -110 81 13 28 United Kingdom 19,770 13,088 11,204 1,751 2,578 2,252 665 1,881 1,937 -9 29 Canada 1,296 711 664 129 213 115 59 -188 79 76 30 Latin America and Caribbean 2,857 1,931 2,169 651 301 219 136 271 300 62 31 Middle East1 -1,314 -178 -528 160 87 3 -100 -613 36 27 32 Other Asia 2,021 8,900 4,480 1,893 -50 990 -615 83 53 1,574 33 Japan 1,622 7,686 2,636 1,567 -285 608 -722 -67 -25 1,167 34 Africa 16 -8 23 2 5 4 0 1 3 5 35 Other countries -61 -89 178 18 8 33 5 4 103 -17 36 Nonmonetary international and regional organizations 740 -542 218 -34 41 1 122 123 -32 -23 Foreign securities 37 Stocks, net purchases, or sales (-) 1,081 -1,918 -8,313 -634 -153 -947 -1,322 -2,077 -748 -1,531 38 Foreign purchases 95,458 75,211 65,030 8,070 9,477 6,686 7,748 9,111 7,594 9,488 39 Foreign sales 94,377 77,128 73,343 8,704 9,630 7,633 9,070 11,188 8,342 11,019 40 Bonds, net purchases, or sales (-) -7,946 -7,221 -3,545 -432 -653 -196 -107 -1,524 -1,414 1,042 41 Foreign purchases 199,089 217,932 155,150 18,705 23,395 15,525 17,242 21,016 20,220 24,125 42 Foreign sales 207,035 225,153 158,695 19,137 24,047 15,721 17,350 22,540 21,634 23,083 43 Net purchases, or sales (—), of stocks and bonds .... -6,865 -9,138 -11,858 -1,066 -805 -1,143 -1,430 -3,601 -2,161 -489 44 Foreign countries -6,757 -9,619 -12,653 -1,144 -998 -1,350 -1,633 -3,401 -2,314 -675 45 Europe -12,101 -7,632 -12,399 -748 -1,402 -1,757 -1,520 -3,876 -2,383 -613 46 Canada -4,072 -3,735 -3,505 -531 -585 194 -555 -699 -692 -258 47 Latin America and Caribbean 828 1,384 679 79 161 197 -90 27 -76 313 48 Asia 9,299 985 3,055 -35 883 70 700 1,191 819 301 49 Africa 89 -54 16 -9 -16 10 13 3 12 -4 50 Other countries -800 -567 -499 100 -40 -64 -180 -47 7 -414 51 Nonmonetary international and regional organizations -108 480 795 78 192 207 203 -200 152 186 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 • December 1989 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1989 1989 Country or area 1987 1988 Jan.- Aug. Feb. Mar. Apr. May June July Aug." Transactions, net purchases or sales (-) during period1 1 Estimated total2 25,587 48,868 42,770 8,783 8,639 29 7,043 -5,202 -1,317 21,968 2 Foreign countries2 30,889 48,206 42,377 9,907 8,296 291 5,520 -5,319 -773 22,416 3 Europe2 23,716 14,353 28,985 3,775 2,142 -1,814 44,,449988 -1,305 4,357 15,191 4 Belgium-Luxembourg 653 923 622 127 -23 -87 8888 13 82 413 5 Germany 13,330 -5,268 3,873 -31 -181 -693 -179 -1,106 2,622 2,503 6 Netherlands -913 -356 94 135 242 -643 -638 -674 100 1,304 7 Sweden 210 -323 1,001 297 -508 398 -69 647 110 241 8 Switzerland2 1,917 -1,074 2,045 438 1,767 440 -83 378 -361 -748 9 United Kingdom 3,975 9,674 15,721 1,533 1,207 -1,298 3,873 -133 1,024 9,863 10 Other Western Europe 4,563 10,786 5,651 1,277 -363 74 1,511 -423 786 1,614 11 Eastern Europe -19 -10 -21 0 0 -5 -5 -6 -5 0 12 Canada 4,526 3,761 304 17 -55 114 157 -478 -533 1,028 13 Latin America and Caribbean -2,192 713 1,424 525 113 -133 -179 643 839 -280 14 Venezuela 150 -109 83 1 -53 -18 0 1 71 120 15 Other Latin America and Caribbean -1,142 1,130 215 247 132 -231 -78 -14 104 217 16 Netherlands Antilles -1,200 -308 1,126 276 34 117 -101 656 665 -617 17 4,488 27,606 12,311 5,955 5,659 1,743 1,734 -5,577 -4,954 7,127 18 Japan 868 21,752 -1,387 2,503 1,855 2,624 1,646 -7,780 -5,360 3,009 19 Africa -56 -13 54 15 -2 32 -3 66 -5 -48 20 All other 407 1,786 -701 -379 439 350 -687 1,332 -477 -603 21 Nonmonetary international and regional organizations -5,302 661 393 -1,124 344 -262 1,523 117 -544 -448 22 International -4,387 1,106 -158 -1,072 424 -252 1,340 -253 -546 -576 23 Latin America regional 3 -31 300 -10 -8 -21 70 191 3 75 Memo 24 Foreign countries2 30,889 48,206 42,377 9,907 8,296 291 5,520 -5,319 -773 22,416 25 Official institutions 31,064 26,624 24,205 4,299 6,549 -842 -1,068 449 2,819 9,980 26 Other foreign -176 21,582 18,171 5,608 1,747 1,133 6,588 -5,768 -3,592 12,436 Oil-exporting countries 27 Middle East3 -3,142 1,963 10,296 3,560 2,607 -471 -299 670 422 3,677 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 Oct. 31, 1989 Rate on Oct. 31, 1989 Rate on Oct. 31, 1989 Country Country Country Percent e M ffe o c n t t i h v e e M ffe o c n t t i h v e Percent e M ffe o c n t t i h v e Austria.. 6.0 June 1989 France 10.25 Oct. 1989 Norway 8.0 June 1983 Belgium . 10.25 Oct. 1989 Germany, Fed. Rep. of. 6.0 Oct. 1989 Switzerland . 6.0 Oct. 1989 Brazil ... 49.0 Mar. 1981 Italy 13.5 Mar. 1989 United Kingdom' Canada.. 12.42 Oct. 1989 Japan 3.75 Oct. 1989 Venezuela Oct. 1985 Denmark 10.5 Oct. 1989 Netherlands 7.0 Oct. 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 1989 CCoouunnttrryy,, oorr ttyyppee 11998866 11998877 11998888 Apr. May ' June July Aug. Sept. Oct. 1 Eurodollars 6.70 7.07 7.85 10.01 9.66 9.28 8.85 8.71 8.85 8.67 2 United Kingdom 10.87 9.65 10.28 13.09 13.08 14.17 13.91 13.86 13.99 15.03 3 Canada 9.18 8.38 9.63 12.58 12.44 12.35 12.24 12.30 12.32 12.29 4 Germany 4.58 3.97 4.28 6.42 6.96 6.92 7.00 6.99 7.37 8.08 5 Switzerland 4.19 3.67 2.94 6.05 7.26 7.09 6.92 7.01 7.42 7.63 6 Netherlands 5.56 5.24 4.72 6.70 7.30 7.11 7.07 7.15 7.53 8.08 7 France 7.68 8.14 7.80 8.61 8.81 8.89 9.05 8.95 9.20 9.89 8 Italy 12.60 11.15 11.04 12.21 12.27 12.35 12.46 12.52 12.40 12.63 9 Belgium 8.04 7.01 6.69 8.17 8.45 8.51 8.46 8.44 8.66 9.51 10 Japan 4.96 3.87 3.96 4.20 4.25 4.46 4.71 4.80 4.88 5.25 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 • December 1989 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar 1989 CCoouunnttrryy//ccuurrrreennccyy 11998866 11998877 11998888 May June July Aug. Sept. Oct. 1 Australia/dollar2 67.095 70.137 78.409 77.360 75.606 75.658 76.345 77.271 77.421 2 Austria/schilling 15.260 12.649 12.357 13.691 13.913 13.308 13.570 13.733 13.140 3 Belgium/franc 44.664 37.358 36.785 40.723 41.414 39.560 40.310 40.841 39.197 4 Canada/dollar 1.3896 1.3259 1.2306 1.1925 1.1986 1.1891 1.1758 1.1828 1.1749 5 China, P.R./yuan 3.4616 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 3.7314 6 Denmark/krone 8.0955 6.8478 6.7412 7.5820 7.7087 7.3527 7.4938 7.5872 7.2781 7 Finland/markka 5.0722 4.4037 4.1933 4.3409 4.4302 4.2699 4.3504 4.4219 4.2817 8 France/franc 6.9257 6.0122 5.9595 6.5815 6.7135 6.4105 6.5085 6.5855 6.3339 9 Germany/deutsche mark 2.1705 1.7981 1.7570 1.9461 1.9789 1.8901 1.9268 1.9502 1.8662 10 Greece/drachma 139.93 135.47 142.00 165.41 170.42 163.84 166.26 169.03 165.88 11 Hong Kong/dollar 7.8038 7.7986 7.8072 7.7800 7.7934 7.8040 7.8078 7.8078 7.8081 12 India/rupee , 12.597 12.943 13.900 16.102 16.420 16.416 16.609 16.745 16.819 13 Ireland/punt 134.14 148.79 152.49 137.39 134.92 141.26 138.43 136.71 142.50 14 Italy/lira 1,491.16 1,297.03 1,302.39 1,415.83 1,434.40 1,367.39 1,384.24 1,404.18 1,369.24 15 Japan/yen 168.35 144.60 128.17 137.86- 143.98 140.42 141.49 145.07 142.21 16 Malaysia/ringgit 2.5831 2.5186 2.6190 2.6967 2.7086 2.6809 2.6825 2.6980 2.6945 17 Netherlands/guilder 2.4485 2.0264 1.9778 2.1938 2.2292 2.1318 2.1726 2.1992 2.1072 18 New Zealand/dollar2 52.457 59.328 65.560 60.718 57.376 57.537 59.217 59.144 55.937 19 Norway /krone 7.3985 6.7409 6.5243 7.0337 7.1852 6.9478 7.0480 7.1264 6.9502 20 Portugal/escudo 149.80 141.20 144.27 160.71 164.92 158.31 161.15 163.36 159.08 21 Singapore/dollar 2.1783 2.1059 2.0133 1.9575 1.9572 1.9589 1.9604 1.9769 1.9622 22 South Africa/rand 2.2919' 2.0385 2.2773' 2.6710 2.7828 2.6909 2.7247 2.7882 2.6403 23 South Korea/won 884.63 825.94 734.52 669.25 669.43 669.84 671.13 672.73 673.86 24 Spain/peseta 140.04 123.54 116.53 121.39 126.55 118.73 120.64 122.14 118.77 25 Sri Lanka/rupee 27.934 29.472 31.820 34.145 33.475 34.764 36.276 39.572 40.018 26 Sweden/krona 7.1273 6.3469 6.1370 6.5756 6.6872 6.4653 6.5481 6.6103 6.4580 27 Switzerland/franc 1.7979 1.4918 1.4643 1.7290 1.7089 1.6281 1.6605 1.6865 1.6302 28 Taiwan/dollar 37.839 31.753 28.636 25.789 26.023 25.816 25.685 25.737 25.739 29 Thailand/baht 26.315 25.775 25.312 25.757 25.909 25.771 25.912 26.012 25.868 30 United Kingdom/pound 146.77 163.98 178.13 163.07 155.30 162.68 159.47 157.15 158.74 MEMO 31 United States/dollar3 112.22 96.94 92.72 100.81 103.09 99.12 100.44 101.87 98.92 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 December 1989 A84 SPECIAL TABLES—Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks June 30, 1988 June 1989 A78 September 30, 1988 August 1989 All December 31, 1988 August 1989 A78 March 31, 1989 December 1989 A72 Terms of lending at commercial banks August 1988 January 1989 All November 1988 April 1989 A72 February 1989 June 1989 A84 May 1989 November 1989 A73 Assets and liabilities of U.S. branches and agencies of foreign banks September 30, 1988 May 1989 All December 31, 1988 June 1989 A90 March 31, 1989 August 1989 A84 June 30, 1989 November 1989 A78 Pro forma balance sheet and income statements for priced service operations June 30, 1987 November 1987 A74 September 30, 1987 February 1988 A80 March 31, 1988 August 1988 A70 March 31, 1989 September 1989 All Digitized for FRASER http://fraserS.sptleocuiisafle dt.oarbgl/e s begin on page A72. Federal Reserve Bank of St. Louis

All Special Tables • December 1989 4.20 DOMESTIC AND FOREIGN OFFICES, Insured Commercial Bank Assets and Liabilities1'2 Consolidated Report of Condition, March 31, 1989 Millions of dollars Banks with foreign offices3,4 Banks with domestic offices only IItteemm TToottaall Total Foreign Domestic Over 100 Under 100 1 Total assets6 3,129,031 1,804,082 429,440 1,430,250 945,283 381,505 2 Cash and balances due from depository institutions 330,576 238,635 120,387 118,248 64,522 27,554 3 Cash items in process of collection, unposted debits, and currency and coin 82,279 1,870 80,409 29,300 k 4 Cash items in process of collection and unposted debits n.a. n.a. 68,980 21,298 5 Currency and coin n.a. n.a. 11,429 8,002 6 Balances due from depository institutions in the United States 34,825 22,698 12,128 19,732 n. a. 7 Balances due from banks in foreign countries and foreign central banks n a. 99,122 95,514 3,608 4,329 8 Balances due from Federal Reserve Banks 22,409 305 22,104 11,161 MEMO 9 Noninterest-bearing balances due from commercial banks in the United States (included in balances due from depository institutions in the United States).... n.a. n.a. 7,710 12,699 9,234 10 Total securities, loans and lease financing receivables, net 2,566,780 1,390,271 n.a. n.a. 840,498 337,690 11 Total securities, book value 539,770 224,037 29,341 194,6% 199,550 116,724 12 U.S. Treasury securities and U.S. government agency and corporation obligations 343,920 122,687 2,648 120,039 133,096 88,136 13 U.S. Treasury securities n a. 58,990 1,472 57,518 69,904 n.a. 14 U.S. government agency and corporation obligations n a. 63,697 1,176 62,521 63,192 n.a. 15 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 91,154 49,823 1,111 48,712 26,314 15,235 16 All other n a. 13,874 65 13,809 36,878 n a. 17 Securities issued by states and political subdivisions in the United States 102,955 44,212 511 43,701 39,712 19,030 18 Taxable 2,496 776 49 727 730 989 19 Tax-exempt 100,323 43,436 462 42,974 38,982 18,041 20 Other securities 84,157 53,162 25,654 27,508 22,891 8,105 ">1 nn..aa.. 2288,,770022 22,,330099 2266,,339933 2222,,444477 22 All holdings of private certificates of participation in pools of residential mortgages 3,933 1,676 0 1,676 1,732 525 23 Federal funds sold and securities purchased under agreements to resell 137,019 76,290 1,710 74,579 38,054 22,676 24 Federal funds sold 110,403 53,746 n.a. n.a. 34,295 22,366 25 Securities purchased under agreements to resell 26,618 22,544 n.a. n.a. 3,759 310 26 Total loans and lease financing receivables, gross 1,952,214 1,129,623 217,996 911,627 618,893 203,698 27 LESS: Unearned income on loans 15,199 7,005 2,220 4,785 6,224 2,115 28 Total loans and leases (net of unearned income) 1,935,718 1,122,618 215,776 906,842 612,669 201,583 29 LESS: Allowance for loan and lease losses 45,553 32,499 n.a. n.a. 9,774 3,293 30 LESS: Allocated transfer risk reserves 175 174 n.a. n.a. 0 1 31 EQUALS: Total loans and leases, net 1,88 ?,990 1,089,945 n.a. n.a. 602,894 198,289 Total loans, gross, by category 32 Loans secured by real estate 691,883 336,680 23,019 313,662 258,249 97,365 3 3 3 4 C Fa o r n m st l r a u n c d t ion and land development A A | i 1 85 2 , , 2 0 3 1 2 2 3 4 7 , , 6 4 3 1 9 4 7 9 , , 2 1 0 7 7 6 35 1-4 family residential properties 1 1 129,837 125,336 53,526 36 Revolving, open-end loans, extended under lines of credit n a. n.a. n.a. 22,417 17,145 2,366 37 All other loans 1 I 107,421 108,191 51,160 38 Multifamily (5 or more) residential properties 1 1 10,103 6,912 1,895 39 Nonfarm nonresidential properties 1 T 86,478 83,948 25,561 40 Loans to depository institutions 56,232 50,433 24,208 26,225 5,221 578 41 To commercial banks in the United States n a. 21,620 1,037 20,583 4,548 n.a. 42 To other depository institutions in the United States n a. 2,272 357 1,914 565 n a. 43 To banks in foreign countries n a. 26,542 22,814 3,728 108 n.a. 44 Loans to finance agricultural production and other loans to farmers 28,577 5,209 227 4,983 6,754 16,652 45 Commercial and industrial loans 601,548 416,913 101,779 315,134 142,562 42,073 46 To U.S. addressees (domicile) n a. 336,078 23,353 312,724 142,151 n a. 47 To non-U.S. addressees (domicile) n a. 80,835 78,425 2,410 411 n.a. 48 Acceptances of other banks 4,894 1,015 574 441 1,978 1,900 49 U.S. banks n a. 297 62 235 n.a. n a. 50 Foreign banks n.a. 717 512 206 n.a. n.a. 51 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 367,694 154,222 12,115 142,106 172,795 40,678 52 Credit cards and related plans 111,321 44,311 n.a. n.a. 64,890 2,169 53 Other (includes single payment and installment) 255,633 109,911 n.a. n.a. 107,905 38,509 54 Obligations (other than securities) of states and political subdivisions in the U.S. (includes nonrated industrial development obligations) 44,128 26,739 325 26,414 15,525 1,864 55 Taxable 1,355 715 21 694 574 77 56 Tax-exempt 42,733 26,024 304 25,720 14,951 1,788 57 All other loans 122,682 110,305 51,978 58,327 10,337 2,040 58 Loans to foreign governments and official institutions n a. 34,872 33,262 1,610 248 n.a. 59 Other loans n a. 75,433 18,716 56,716 10,090 n.a. 60 Loans for purchasing and carrying securities n a. n.a. n.a. 15,349 1,642 n a. 61 All other loans n a. n.a. n.a. 41,367 8,448 n.a. 62 Lease financing receivables 34,126 28,106 3,772 24,335 5,473 547 63 Assets held in trading accounts 42,096 41,166 16,497 24,670 772 158 6 6 5 4 O Pr t e h m er i s r e e s a l a n e d st a fi t x e e o d w a n s e s d e ts (including capitalized leases) 4 1 5 1 , , 7 7 1 1 7 2 24 5 , , 1 3 0 7 3 8 k | n n . . a a . . 1 3 4 , , 7 9 5 8 7 3 6 2 , , 6 5 4 7 4 5 66 Investments in unconsolidated subsidiaries and associated companies 2,816 2,114 1 n.a. 663 39 67 Customers' liability on acceptances outstanding 31,052 30,164 n.a. n.a. 854 20 6 6 8 9 N In e ta t n d g u i e b l f e r o a m ss e o t w s n foreign offices, Edge and agreement subsidiaries, and IBFs n. 5 a , . 1 41 n. 3 a , . 0 77 II n 4 . 0 a , . 7 28 n 1 . , a 8 . 4 9 n.a 2 . 1 7 70 Other assets 93,136 69,173 t n.a. 17,383 6,607 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.20—Continued Banks with foreign offices3 Bank o s f f w ic i e th s o d n o l m y estic Total Foreign Over 100 Under 100 71 Total liabilities, limited-life preferred stock, and equity capital 3,129,031 1,804,082 945,283 72 Total liabilities7 2,928,262 1,705,827 429,606 1,331,829 876,653 73 Limited-life preferred stock 84 0 n.a. 83 74 Total deposits 2,412,338 1,306,521 324,852 981,669 766,638 75 Individuals, partnerships, and corporations 1 A 191^351 888,241 705,111 76 U.S. government 2,539 1,400 77 States and political subdivisions in the United States I 41,083 42,616 78 Commercial banks in the United States n.a. 25,786 8,965 79 Other depository institutions in the United States 5,105 2,273 80 Banks in foreign countries 7,644 391 81 Foreign governments and official institutions 26,082 24,569 1,513 314 82 Certified and official checks 18,166 10,370 612 9,758 5,567 83 Allother8 n.a. 108,319 84 Total transaction accounts 309,874 210,743 85 Individuals, partnerships, and corporations 260,410 186,477 86 U.S. government 1,607 1,104 87 States and political subdivisions in the United States 8,252 9,937 88 Commercial banks in the United States 18,158 6,123 89 Other depository institutions in the United States 3,647 1,312 90 Banks in foreign countries 7,063 188 91 Foreign governments and official institutions 977 36 92 Certified and official checks 9,758 5,567 93 All other 94 Demand deposits (included in total transaction accounts) 235,474 131,537 95 Individuals, partnerships, and corporations 188,138 112,397 96 U.S. government 1,585 1,074 97 States and political subdivisions in the United States 6,149 4,871 98 Commercial banks in the United States 18,158 6,103 99 Other depository institutions in the United States 3,647 1,302 100 Banks in foreign countries 7,063 188 101 Foreign governments and official institutions 975 36 102 Certified and official checks 9,758 5,567 1 1 0 0 3 4 To A ta l l l n o o th n e t r r ansaction accounts 67 i, 796 ' 555^894 105 Individuals, partnerships, and corporations 627,830 518,634 106 U.S. government 931 296 107 States and political subdivisions in the United States 32,831 32,679 108 Commercial banks in the United States 7,628 2,842 109 U.S. branches and agencies of foreign banks 663 129 110 Other commercial banks in the United States 6,965 2,713 111 Other depository institutions in the United States 1,458 961 112 Banks in foreign countries 580 204 113 Foreign branches of other U.S. banks 12 200 114 Other banks in foreign countries 568 4 115 Foreign governments and official institutions 537 278 116 Allother 117 Federal funds purchased and securities sold under agreements to repurchase.. 259,115 195,976 1,138 194,838 60,400 118 Federal funds purchased 157,379 125,597 n.a. n.a. 30,736 119 Securities sold under agreements to repurchase 101,531 70,379 n.a. n.a. 29,664 120 Demand notes issued to the U.S. Treasury n.a. n.a. n.a. 7,863 2,151 121 Other borrowed money 125,355 93,643 38,448 55,195 30,711 122 Banks liability on acceptances executed and outstanding 31,180 30,292 5,424 24,869 854 123 Notes and debentures subordinated to deposits 17,066 14,892 n.a. n.a. 2,016 124 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs... n.a. n.a. n.a. 14,880 n.a. 125 All other liabilities 74,554 56,641 n.a. n.a. 13,883 126 Total equity capital 200,685 98,255 n.a. n.a. 68,547 MEMO 127 Holdings of commercial paper included in total loans, gross 660 1,254 128 Total individual retirement accounts (IRA) and Keogh plan accounts 42,704 40,551 129 Total,brokered deposits 43,096 15,293 130 Total brokered retail deposits 11,378 10,206 131 Issued in denominations of $100,000 or less 3,049 5,438 132 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 8,329 4,768 Savings deposits 133 Money market deposit accounts (MMDAs) 173,178 122,055 134 Other savings deposits (excluding MMDAs) 79,496 75,701 135 Total time deposits of less than $100,000 192,508 238 136 Time certificates of deposit of $100,000 or more 196,402 115,473 137 Open-account time deposits of $100,000 or more 30,212 4,380 138 All NOW accounts (including Super NOW) 72,423 76,683 139 Total time and savings deposits 746,195 635,101 Quarterly averages 140 Total loans 870,699 604,950 141 Obligations (other than securities) of states and political subdivisions in the United States 26,818 15,400 142 Transaction accounts in domestic offices (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) 75,020 78,633 Nontransaction accounts in domestic offices 143 Money market deposit accounts (MMDAs) 172,470 124,377 144 Other savings deposits 79,026 75,592 145 Time certificates of deposit of $100,000 or more 186,760 113,442 146 All other time deposits 211,392 236,651 147 Number of banks 2,522 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 • December 1989 4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices12,6 Consolidated Report of Condition, March 31, 1989 Millions of dollars Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 1 Total assets6 2,375,533 1,890,290 1,507,834 382,455 485,243 2 Cash and balances due from depository institutions 182,770 151,137 121,470 29,667 31,633 Cash items in process of collection and unposted debits 90,277 81,412 65,800 15,611 8,866 4 Currency and coin 19,431 15,930 13,407 2,523 3,501 5 Balances due from depository institutions in the United States 31,860 20,726 16,411 4,315 11,134 6 Balances due from banks in foreign countries and foreign central banks 7,937 6,061 4,667 1,394 1,875 7 Balances due from Federal Reserve Banks 33,265 27,008 21,183 5,825 6,257 8 Total securities, loans and lease financing receivables, (net of unearned income) 2,026,390 1,594,666 1,285,710 308,957 431,723 9 Total securities, book value 394,246 292,881 227,001 65,879 101,365 10 U.S. Treasury securities 127,423 91,896 72,070 19,825 35,527 11 U.S. government agency and corporation obligations 125,713 96,069 76,620 19,449 29,644 12 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 75,026 62,931 50,211 12,720 12,094 n All other 50,687 33,138 26,409 6,729 17,549 14 Securities issued by states and political subdivisions in the United States 83,413 65,846 48,143 17,703 17,567 n Taxable 1,457 1,125 933 192 332 16 Tax-exempt 81,956 64,721 47,210 17,511 17,235 17 Other domestic securities 48,840 34,608 27,046 7,562 14,232 18 All holdings of private certificates of participation in pools of residential mortgages 3,408 2,579 1,574 1,005 829 19 Federal funds sold and securities purchased under agreements to resell10 112,633 96,598 69,471 27,127 16,035 20 Federal funds sold 34,295 22,117 19,805 2,312 12,178 21 Securities purchased under agreements to resell 3,759 2,721 2,241 480 1,038 22 Total loans and lease financing receivables, gross 1,530,520 1,213,584 996,036 217,548 316,936 23 LESS: Unearned income on loans 11,009 8,396 6,799 1,597 2,613 24 Total loans and leases (net of unearned income) 1,519,511 1,205,188 989,237 215,951 314,323 Total loans, gross, by category 25 Loans secured by real estate 571,910 431,726 371,299 60,428 140,184 26 Construction and land development 122,645 98,380 82,938 15,443 24,265 71 Farmland 6,651 4,463 3,920 543 2,188 28 1 4 family residential properties 255,174 187,020 161,139 25,881 68,154 29 Revolving, open-end and extended under lines of credit 39,562 30,769 26,375 4,394 8,793 30 All other loans 215,612 156,251 134,764 21,487 59,361 31 Multifamily (5 or more) residential properties 17,015 13,347 11,602 1,745 3,668 32 Nonfarm nonresidential properties 170,426 128,516 111,700 16,816 41,909 33 Loans to commercial banks in the United States 25,132 21,853 16,590 5,262 3,279 34 Loans to other depository institutions in the United States 2,479 2,256 2,032 224 223 35 Loans to banks in foreign countries 3,836 3,675 1,930 1,745 161 36 Loans to finance agricultural production and other loans to farmers 11,737 9,199 8,232 967 2,538 37 Commercial and industrial loans 457,696 374,161 296,717 77,444 83,535 38 To U.S. addressees (domicile) 454,876 371,714 294,815 76,899 83,162 39 To non-U.S. addressees (domicile) 2,821 2,447 1,902 545 374 40 2,420 1,378 1,136 242 1,042 41 Of U.S. banks 875 549 445 104 326 42 Of foreign banks 309 253 189 64 56 43 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 314,901 246,048 207,538 38,509 68,853 44 Loans to foreign governments and official institutions 1,858 1,788 1,321 467 70 45 Obligations (other than securities) of states and political subdivisions in the United States 41,939 35,235 26,089 9,146 6,704 46 Taxable 1,268 1,012 831 180 257 47 Tax-exempt 40,671 34,223 25,258 8,966 6,447 48 Other loans 66,806 60,469 41,858 18,612 6,337 49 Loans for purchasing and carrying securities 16,991 15,391 9,274 6,117 1,600 50 All other loans 49,815 45,078 32,583 12,495 4,737 51 Lease financing receivables 29,808 25,797 21,295 4,502 4,011 52 Customers' liability on acceptances outstanding 25,129 23,934 17,227 6,707 1,194 53 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 40,728 36,593 23,563 13,029 4,135 54 141,244 120,552 83,428 37,124 20,693 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.21—Continued Members Item Total National State 55 Total liabilities and equity capital 2,375,533 1,890,290 1,507,834 382,455 56 Total liabilities4 2,208,482 1,760,159 1,406,741 353,418 57 Total deposits 1,748,307 1,363,429 1,111,067 252,362 58 Individuals, partnerships, and corporations 1,593,351 1,237,930 1,012,577 225,354 59 U.S. government 3,939 3,324 2,832 492 60 States and political subdivisions in the United States 83,699 64,175 54,031 10,144 61 Commercial banks in the United States 34,752 30,794 22,685 8,109 62 Other depository institutions in the United States 7,378 5,925 5,035 890 63 Banks in foreign countries 8,035 7,263 4,307 2,956 64 Foreign governments and official institutions 1,827 1,644 1,005 638 65 Certified and official checks 15,325 12,376 8,595 3,780 66 Total transaction accounts 520,617 419,551 335,083 84,468 67 Individuals, partnerships, and corporations 446,887 356,124 288,374 67,750 68 U.S. government 2,712 2,204 1,759 444 69 States and political subdivisions in the United States 18,189 14,518 11,933 2,585 70 Commercial banks in the United States 24,282 22,416 16,663 5,753 71 Other depository institutions in the United States 4,959 4,056 3,251 805 72 Banks in foreign countries 7,251 6,921 4,088 2,833 73 Foreign governments and official institutions 1,012 937 419 517 74 Certified and official checks 15,325 12,376 8,595 3,780 75 Demand deposits (included in total transaction accounts) 367,011 301,413 235,430 65,982 76 Individuals, partnerships, and corporations 300,535 243,463 193,214 50,249 77 U.S. government 2,660 2,163 1,719 443 78 States and political subdivisions in the United States 11,020 9,109 7,507 1,602 79 Commercial banks in the United States 24,261 22,395 16,643 5,753 80 Other depository institutions in the United States 4,949 4,050 3,244 805 81 Banks in foreign countries 7,250 6,921 4,088 2,833 82 Foreign governments and official institutions 1,011 936 419 517 83 Certified and official checks 15,325 12,376 8,595 3,780 84 Total nontransaction accounts 1,227,690 943,878 775,984 167,894 85 Individuals, partnerships, and corporations 1,146,464 881,806 724,203 157,604 86 U.S. government 1,228 1,120 1,073 47 87 States and political subdivisions in the United States 65,510 49,656 42,098 7,559 88 Commercial banks in the United States 10,470 8,378 6,022 2,356 89 U.S. branches and agencies of foreign banks 792 491 303 188 90 Other commercial banks in the United States 9,678 7,887 5,719 2,169 91 Other depository institutions in the United States 2,419 1,869 1,784 84 92 Banks in foreign countries 784 342 219 123 93 Foreign branches of other U.S. banks 212 53 51 2 94 Other banks in foreign countries 572 289 168 121 95 Foreign governments and official institutions 815 707 586 121 96 Federal funds purchased and securities sold under agreements to repurchase12 255,238 219,846 164,140 55,706 97 Federal funds purchased 30,736 22,787 19,320 3,467 98 Securities sold under agreements to repurchase 29,664 15,401 12,415 2,986 99 Demand notes issued to the U.S. Treasury 10,014 9,072 6,994 2,078 100 Other borrowed money 85.906 71,335 56,667 14,668 101 Banks liability on acceptances executed and outstanding 25,723 24,528 17,763 6,766 102 Notes and debentures subordinated to deposits 2,016 1,225 1,105 119 103 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 14.907 12,637 10,609 2,029 104 Remaining liabilities 81,280 70,723 49,004 21,719 105 Total equity capital9 167,050 130,130 101,093 29,037 MEMO 106 Holdings of commercial paper included in total loans, gross 1,915 752 614 138 107 Total individual retirement accounts (IRA) and Keogh plan accounts 83,255 64,803 53,741 11,063 108 Total brokered deposits 58,388 45,361 37,734 7,627 109 Total brokered retail deposits 21,585 14,127 11,110 3,017 110 Issued in denominations of $100,000 or less 3,880 3,510 369 111 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 13,097 10,247 7,600 2,647 Savings deposits 112 Money market deposit accounts (MMDAs) 295,232 233,153 191,544 41,609 113 Other savings accounts 155,196 119,282 91,394 27,889 114 Total time deposits of less than $100,000 430,795 322,151 273,657 48,494 115 Time certificates of deposit of $100,000 or more 311,875 239,348 199,479 39,869 116 Open-account time deposits of $100,000 or more 34,591 29,944 19,910 10,034 117 All NOW accounts (including Super NOW accounts) 149,107 115,139 97,164 17,976 118 Total time and savings deposits 1,381,296 1,062,017 875,637 186,380 Quarterly averages 119 Total loans 1,475,649 1,166,535 956,398 210,137 120 Obligations (other than securities) of states and political subdivisions in the United States ... 42,219 35,596 26,279 9,317 121 Transaction accounts (NOW accounts, ATS accounts, and telephone preauthorized transfer accounts) 153,653 118,611 98,658 19,953 Nontransaction accounts 122 Money market deposit accounts (MMDAs) 296,847 233,287 191,140 42,147 123 Other savings deposits 154,618 118,654 91,294 27,360 124 Time certificates of deposits of $100,000 or more 300,202 227,203 188,369 38,835 125 All other time deposits 448,043 337,727 281,356 56,371 126 Number of banks 2,766 1,566 1,321 245 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 • December 1989 4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities6 Consolidated Report of Condition, March 31, 1989 Millions of dollars Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 1 Total assets6 2,757,037 2,044,592 1,631,887 412,706 712,445 2 Cash and balances due from depository institutions 210,324 162,686 130,933 31,753 47,638 3 Currency and coin 22,805 17,309 14,522 2,787 5,496 4 Noninterest-bearing balances due from commercial banks 29,643 16,874 13,895 2,979 12,769 Other 157,875 128,503 102,516 25,986 29,373 6 Total securities, loans, and lease financing receivables (net of unearned income) 2,367,373 1,732,093 1,395,946 336,148 635,279 7 Total securities, book value 510,970 338,628 264,425 74,203 172,343 8 U.S. Treasury securities and U.S. government agency and corporation obligations 341,272 222,514 176,939 45,575 118,758 9 Securities issued by states and political subdivisions in the United States 102,444 73,010 53,961 19,048 29,434 10 Taxable 2,447 1,457 1,199 258 990 11 Tax-exempt 99,997 71,553 52,763 18,790 28,444 12 Other securities 58,503 39,180 30,358 8,821 19,323 13 All holdings of private certificates of participation in pools of residential mortgages 3,933 2,826 1,734 1,092 1,107 14 Federal funds sold and securities purchased under agreements to resell 135,309 106,729 77,598 29,131 28,580 15 Federal funds sold 56,661 32,091 27,835 4,257 24,570 16 Securities purchased under agreements to resell 4,069 2,878 2,339 539 1,191 17 Total loans and lease financing receivables, gross 1,734,218 1,296,035 1,061,405 234,630 438,183 18 LESS: Unearned income on loans 13,124 9,299 7,482 1,816 3,826 19 Total loans and leases (net of unearned income) 1,721,093 1,286,737 1,053,923 232,814 434,357 Total loans, gross, by category 20 Loans secured by real estate 669,276 470,602 402,070 68,532 198,674 21 Construction and land development 129,852 101,349 85,262 16,087 28,503 22 Farmland 15,827 7,517 6,383 1,134 8,310 23 1-4 family residential properties 308,700 208,620 177,996 30,624 100,079 24 Revolving, open-end loans, and extended under lines of credit 41,928 31,818 27,181 4,637 10,110 25 All other loans 266,772 176,802 150,816 25,987 89,970 26 Multifamily (5 or more) residential properties 18,910 14,041 12,163 1,878 4,869 27 Nonfarm nonresidential properties 195,986 139,074 120,265 18,809 56,913 28 Loans to depository institutions 32,024 28,092 20,798 7,294 3,932 29 Loans to finance agricultural production and other loans to farmers 28,389 15,105 12,954 2,151 13,284 30 Commercial and industrial loans 499,769 392,270 310,900 81,370 107,499 31 Acceptances of other banks 4,320 2,141 1,801 341 2,179 32 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 355,578 262,816 220,965 41,852 92,762 33 Obligations (other than securities) of states and political subdivisions in the United States 43,803 35,922 26,663 9,259 7,881 34 Nonrated industrial development obligations 1,345 1,042 859 183 303 35 Other obligations (excluding securities) 42,458 34,880 25,804 9,076 7,578 36 All other loans 70,704 63,108 43,821 19,287 7,5% 37 Lease financing receivables 30,354 25,979 21,434 4,545 4,375 38 Customers' liability on acceptances outstanding 25,149 23,947 17,239 6,708 1,202 39 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 40,728 36,593 23,563 13,029 4,135 40 Remaining assets 154,192 125,866 87,769 38,098 28,326 41 Total liabilities and equity capital 2,757,037 2,044,592 1,631,887 412,706 712,445 42 Total liabilities4 2,555,990 1,901,025 1,520,169 380,856 654,965 43 Total deposits 2,087,487 1,500,698 1,221,735 278,963 586,789 44 Individuals, partnerships, and corporations 1,903,324 1,363,686 1,113,896 249,790 539,638 45 U.S. government 4,463 3,532 2,998 534 931 46 States and political subdivisions in the United States 107,679 73,118 61,400 11,717 34,561 47 Commercial banks in the United States 36,294 31,709 23,335 8,374 4,585 48 Other depository institutions in the United States 8,261 6,336 5,372 964 1,925 49 Certified and official checks 17,554 13,390 9,401 3,989 4,164 50 All other 9,912 8,928 5,333 3,596 984 51 Total transaction accounts 610,213 456,694 365,291 91,403 153,519 52 Individuals, partnerships, and corporations 526,666 389,185 315,334 73,851 137,481 53 U.S. government 3,131 2,369 1,894 475 762 54 States and political subdivisions in the United States 24,279 16,717 13,753 2,964 7,562 55 Commercial banks in the United States 25,062 22,975 17,028 5,947 2,087 56 Other depository institutions in the United States 5,247 4,197 3,372 825 1,050 57 Certified and official checks 17,554 13,390 9,401 3,989 4,164 58 All other 8,274 7,861 4,509 3,352 413 59 Demand deposits (included in total transaction accounts) 414,314 321,736 251,835 69,900 92,578 60 Individuals, partnerships, and corporations 342,143 261,170 207,581 53,589 80,972 61 U.S. government 3,062 2,326 1,852 474 736 62 States and political subdivisions in the United States 13,016 9,847 8,121 1,725 3,170 63 Commercial banks in the United States 25,036 22,955 17,007 5,947 2,081 64 Other depository institutions in the United States 5,231 4,188 3,363 825 1,043 65 Certified and official checks 17,554 13,390 9,401 3,989 4,164 66 All other 8,271 7,860 4,509 3,351 412 67 Total nontransaction accounts 1,477,274 1,044,003 856,444 187,559 433,270 68 Individuals, partnerships, and corporations 1,376,658 974,501 798,562 175,939 402,157 69 U.S. government 1,332 1,163 1,104 59 169 70 States and political subdivisions in the United States 83,400 56,400 47,647 8,753 27,000 71 Commercial banks in the United States 11,232 8,734 6,307 2,426 2,498 72 Other depository institutions in the United States 3,014 2,138 2,000 138 875 7733 All other 11,,663388 11,,006677 882233 224444 557711 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks All 4.22—Continued Members IItteemm TToottaall mmee NN mm oo bb nn ee -- rrss Total National State 74 Federal funds purchased and securities sold under agreements to repurchase12 257,977 221,332 165,219 56,113 36,645 75 Federal funds purchased 31,888 23,490 19,800 3,690 8,398 76 Securities sold under agreements to repurchase 31,251 16,184 13,014 3,170 15,067 77 Demand notes issued to the U.S. Treasury 10,382 9,234 7,124 2,109 1,149 78 Other borrowed money 86,907 71,673 56,913 14,760 15,234 79 Banks liability on acceptances executed and outstanding 25,743 24,541 17,775 6,766 1,202 80 Notes and debentures subordinated to deposits 2,175 1,273 1,147 126 901 81 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 14,907 12,637 10,609 2,029 2,269 82 Remaining liabilities 85,320 72,274 50,256 22,019 13,045 83 Total equity capital9 201,047 143,567 111,717 31,850 57,480 MEMO 84 Assets held in trading accounts 25,600 25,104 13,793 11,310 496 85 U.S. Treasury securities 15,438 15,328 6,989 8,339 110 86 U.S. government agency corporation obligations 3,804 3,798 2,667 1,131 6 87 Securities issued by states and political subdivisions in the United States 963 947 790 158 16 88 Other bonds, notes, and debentures 373 363 177 186 11 89 Certificates of deposit 818 818 414 404 0 90 Commercial paper 55 54 54 0 1 91 Bankers acceptances 1,356 1,336 895 441 20 92 Other 2,305 2,287 1,636 651 18 93 Total individual retirement accounts (IRA) and Keogh plan accounts 99,777 71,191 58,929 12,262 28,586 94 Total brokered deposits 59,345 45,688 38,005 7,684 13,656 95 Total brokered retail deposits 22,390 14,400 11,330 3,069 7,991 96 Issued in denominations of $100,000 or less 9,219 4,139 3,721 417 5,080 97 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 13,172 10,261 7,609 2,652 2,911 Savings deposits 98 Money market deposit accounts (MMDAs) 337,247 251,322 206,204 45,118 85,926 99 Other savings deposits 186,204 131,811 101,326 30,485 54,393 100 Total time deposits of less than $100,000 564,864 373,280 314,661 58,618 191,585 101 Time certificates of deposit of $100,000 or more 352,752 257,143 213,932 43,211 95,609 102 Open-account time deposits of $100,000 or more 36,205 30,448 20,321 10,127 5,757 103 All NOW accounts (including Super NOW) 189,911 131,487 110,603 20,884 58,424 104 Total time and savings deposits 1,673,173 1,178,962 969,900 209,062 494,211 Quarterly averages 105 Total loans 1,674,267 1,246,948 1,020,348 226,600 442277,,331188 106 Transaction accounts (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) 195,978 135,416 112,409 23,007 60,562 Nontransaction accounts 107 Money market deposit accounts (MMDAs) 339,682 251,759 206,069 45,690 87,923 108 Other savings deposits 185,371 131,074 101,156 29,918 54,297 109 Time certificates of deposit of $100,000 or more 340,041 244,577 202,557 42,020 95,464 110 All other time deposits 581,416 388,357 321,977 66,380 193,059 111 Number of banks 12,966 5,336 4,290 1,046 7,630 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

A78 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 RICKI 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 THOMAS D. SIMPSON, Associate Director OFFICE OF THE SECRETARY LAWRENCE SLIFMAN, Associate Director DAVID J. STOCKTON, Associate Director WILLIAM W. WILES, Secretary MARTHA BETHEA, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary PETER A. TINSLEY, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary MYRON L. KWAST, Assistant Director PATRICK M. PARKINSON, Assistant Director MARTHA S. SCANLON, Assistant Director JOYCE K. ZICKLER, Assistant Director DIVISION OF CONSUMER LEVON H. GARABEDIAN, Assistant Director AND COMMUNITY AFFAIRS (Administration ) GRIFFITH L. GARWOOD, Director GLENN E. LONEY, Assistant Director DIVISION OF MONETARY AFFAIRS ELLEN MALAND, Assistant Director DOLORES S. SMITH, Assistant Director DONALD L. KOHN, Director DAVID E. LLNDSEY, Deputy Director BRIAN F. MADIGAN, Assistant Director DIVISION OF BANKING RICHARD D. PORTER, Assistant Director SUPERVISION AND REGULATION NORMAND R.V. BERNARD, Special Assistant to the Board WILLIAM TAYLOR, Staff Director DON E. KLINE, Associate Director OFFICE OF THE INSPECTOR GENERAL FREDERICK M. STRUBLE, Associate Director WILLIAM A. RYBACK, Deputy Associate Director BRENT L. BOWEN, Inspector General STEPHEN C. SCHEMERING, Deputy Associate Director BARRY R. SNYDER, Assistant Inspector General RICHARD SPILLENKOTHEN, Deputy Associate Director HERBERT A. BLERN, Assistant Director JOE M. CLEAVER, Assistant Director ROGER T. COLE, Assistant Director JAMES I. GARNER, Assistant Director JAMES D. GOETZINGER, Assistant Director MICHAEL G. MARTINSON, Assistant Director ROBERT S. PLOTKIN, Assistant Director SIDNEY M. SUSSAN, Assistant Director LAURA M. HOMER, Securities Credit Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 and Official Staff EDWARD W. KELLEY, JR. JOHN P. LAWARE 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 DAY W. RADEBAUGH, JR., Assistant Director ELIZABETH B. RIGGS, Assistant Director DIVISION OF APPLICATIONS DEVELOPMENT AND STATISTICAL SERVICES WILLIAM R. JONES, Director RICHARD C. STEVENS, Assistant Director PATRICIA A. WELCH, Assistant Director ROBERT J. ZEMEL, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • December 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. LAWARE 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. LINDSEY, Associate Economist GARY P. GLLLUM, 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

A81 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

A82 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SER- THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A VICES, MS-138, Board of Governors of the Federal Reserve MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. System, Washington, D.C. 20551 or telephone (202) 452-3244. WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. When a charge is indicated, payment should accompany request PROCESSING AN APPLICATION THROUGH THE FEDERAL REand be made payable to the Board of Governors of the Federal SERVE SYSTEM. August 1985. 30 pp. Reserve System. Payment from foreign residents should be INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. drawn on a U.S. bank. 440 pp. $9.00 each. FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. December 1986. 264 pp. $10.00 each. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- TIONS. 1984. 120 pp. ANNUAL REPORT. ANNUAL REPORT: BUDGET REVIEW, 1988-89. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or CONSUMER EDUCATION PAMPHLETS $2.50 each in the United States, its possessions, Canada, Short pamphlets suitable for classroom use. Multiple copies and Mexico. Elsewhere, $35.00 per year or $3.00 each. are available without charge. BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint of Part I only) 1976. 682 pp. $5.00. Consumer Handbook on Adjustable Rate Mortgages ANNUAL STATISTICAL DIGEST Consumer Handbook to Credit Protection Laws 1974-78. 1980. 305 pp. $10.00 per copy. Federal Reserve Glossary 1981. 1982. 239 pp. $ 6.50 per copy. A Guide to Business Credit and the Equal Credit Opportunity 1982. 1983. 266 pp. $ 7.50 per copy. Act 1983. 1984. 264 pp. $11.50 per copy. A Guide to Federal Reserve Regulations 1984. 1985. 254 pp. $12.50 per copy. How to File A Consumer Credit Complaint 1985. 1986. 231 pp. $15.00 per copy. Series on the Structure of the Federal Reserve System 1986. 1987. 288 pp. $15.00 per copy. The Board of Governors of the Federal Reserve System 1987. 1988. 272 pp. $15.00 per copy. The Federal Open Market Committee 1988. 1989. 256 pp. $25.00 per copy. Federal Reserve Bank Board of Directors SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- Federal Reserve Banks RIES OF CHARTS. Weekly. $30.00 per year or $.70 each in Organization and Advisory Committees the United States, its possessions, Canada, and Mexico. A Consumer's Guide to Mortgage Lock-Ins Elsewhere, $35.00 per year or $.80 each. A Consumer's Guide to Mortgage Settlement Costs THE FEDERAL RESERVE ACT and other statutory provisions A Consumer's Guide to Mortgage Refinancing affecting the Federal Reserve System, as amended Making Deposits: When Will Your Money Be Available? through August 1988. 608 pp. $10.00 When Your Home is on the Line: What You Should Know REGULATIONS OF THE BOARD OF GOVERNORS OF THE About Home Equity Lines of Credit FEDERAL RESERVE SYSTEM. ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— 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 PAMPHLETS FOR FINANCIAL INSTITUTIONS address, $2.00 each. Short pamphlets on regulatory compliance, primarily suit- INTRODUCTION TO FLOW OF FUNDS. 1980.68 pp. $1.50 each; able for banks, bank holding companies, and creditors. 10 or more to one address, $1.25 each. FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; up- Limit of 50 copies dated at least monthly. (Requests must be prepaid.) Consumer and Community Affairs Handbook. $75.00 per The Board of Directors' Opportunities in Community Reinyear. vestment Monetary Policy and Reserve Requirements Handbook. The Board of Directors' Role in Consumer Law Compliance $75.00 per year. Combined Construction/Permanent Loan Disclosure and Securities Credit Transactions Handbook. $75.00 per year. Regulation Z The Payment System Handbook. $75.00 per year. Community Development Corporations and the Federal Re- Federal Reserve Regulatory Service. 3 vols. (Contains all serve three Handbooks plus substantial additional material.) Construction Loan Disclosures and Regulation Z $200.00 per year. Finance Charges Under Regulation Z Rates for subscribers outside the United States are as How to Determine the Credit Needs of Your Community follows and include additional air mail costs: Regulation Z: The Right of Rescission Federal Reserve Regulatory Service, $250.00 per year. The Right to Financial Privacy Act Each Handbook, $90.00 per year. Signature Rules in Community Property States: Regulation B Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A83 Signature Rules: Regulation B 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANK- Timing Requirements for Adverse Action Notices: Regula- ING MARKETS, by James V. Houpt. May 1988. 47 pp. tion B 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR What An Adverse Action Notice Must Contain: Regulation B THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. Understanding Prepaid Finance Charges: Regulation Z Porter, and David H. Small. April 1989. 28 pp. 158. THE ADEQUACY AND CONSISTENCY OF MARGIN RE- QUIREMENTS IN THE MARKETS FOR STOCKS AND DE- STAFF STUDIES: Summaries Only Printed in the RIVATIVE PRODUCTS, by Mark J. Warshawsky with the Bulletin assistance of Dietrich Earnhart. September 1989. 23 pp. Studies and papers on economic and financial subjects that are of general interest. Requests to obtain single copies of the full text or to be added to the mailing list for the series REPRINTS OF BULLETIN ARTICLES may be sent to Publications Services. Most of the articles reprinted do not exceed 12 pages. Staff Studies 114-145 are out of print. Limit of 10 copies 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF Foreign Experience with Targets for Money Growth. 10/83. BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, Intervention in Foreign Exchange Markets: A Summary of by Thomas F. Brady. November 1985. 25 pp. Ten Staff Studies. 11/83. 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) A Financial Perspective on Agriculture. 1/84. INDEXES OF THE MONETARY AGGREGATES, by Helen Survey of Consumer Finances, 1983. 9/84. T. Farr and Deborah Johnson. December 1985. 42 pp. Bank Lending to Developing Countries. 10/84. 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF Survey of Consumer Finances, 1983: A Second Report. THE ECONOMIC RECOVERY TAX ACT: SOME SIMULA- 12/84. TION RESULTS, by Flint Brayton and Peter B. Clark. Union Settlements and Aggregate Wage Behavior in the December 1985. 17 pp. 1980s. 12/84. 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS The Thrift Industry in Transition. 3/85. IN BANKING BEFORE AND AFTER ACQUISITION, by A Revision of the Index of Industrial Production. 7/85. Stephen A. Rhoades. April 1986. 32 pp. Financial Innovation and Deregulation in Foreign Industrial 150. STATISTICAL COST ACCOUNTING MODELS IN BANK- Countries. 10/85. ING: A REEXAMINATION AND AN APPLICATION, by Recent Developments in the Bankers Acceptance Market. John T. Rose and John D. Wolken. May 1986. 13 pp. 1/86. 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT The Use of Cash and Transaction Accounts by American PRICING FROM 1983 THROUGH 1985, by Patrick I. Ma- Families. 2/86. honey, Alice P. White, Paul F. O'Brien, and Mary M. Financial Characteristics of High-Income Families. 3/86. McLaughlin. January 1987. 30 pp. Prices, Profit Margins, and Exchange Rates. 6/86. 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A Agricultural Banks under Stress. 7/86. REVIEW OF THE LITERATURE, by Mark J. Warshawsky. Foreign Lending by Banks: A Guide to International and April 1987. 18 pp. U.S. Statistics. 10/86. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and Recent Developments in Corporate Finance. 11/86. Alice P. White. September 1987. 14 pp. Measuring the Foreign-Exchange Value of the Dollar. 6/87. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF Changes in Consumer Installment Debt: Evidence from the PROPOSED CEILINGS ON CREDIT CARD INTEREST 1983 and 1986 Surveys of Consumer Finances. 10/87. RATES, by Glenn B. Canner and James T. Fergus. Home Equity Lines of Credit. 6/88. October 1987. 26 pp. U.S. International Transactions in 1988. 5/89. 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. Mutual Recognition: Integration of the Financial Sector in the Warshawsky. November 1987. 25 pp. European Community. 9/89 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES—BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM1 (PAYMENT MUST ACCOMPANY REQUESTS.) Annual Approximate Date of period Weekly Releases rate release days to which data refer • Aggregate Reserves of Depository Institutions and $15.00 Thursday Week ended previous the Monetary Base. H.3 (502) Wednesday • Actions of the Board: Applications and Reports $35.00 Friday Received. H.2 (501) Week ended previous Saturday • Assets and Liabilities of Insured Domestically $15.00 Monday Chartered and Foreign Related Banking Wednesday, 3 weeks earlier Institutions. H.8 (510) [1.25] • Factors Affecting Reserves of Depository $15.00 Thursday Week ended previous Institutions and Condition Statement of Federal Wednesday Reserve Banks. H.4.1 (503) [1.11] • Foreign Exchange Rates. H.10 (512) [3.28] $15.00 Monday Week ended previous Friday • Money Stock, Liquid Assets, and Debt Measures. $35.00 Thursday Week ended Monday of H.6 (508) [1.21] previous week • Selected Borrowings in Immediately Available $15.00 Wednesday Week ended Thursday of Funds of Large Member Banks. H.5 (507) [1.13] previous week • Selected Interest Rates. H.15 (519) [1.35] $15.00 Monday Week ended previous Saturday • Weekly Consolidated Condition Report of Large $15.00 Friday Wednesday, 1 week earlier Commercial Banks, and Domestic Subsidiaries. H.4.2 (504) [1.26, 1.28, 1.29, 1.30] Monthly Releases • Capacity Utilization: Manufacturing, Mining, $ 5.00 Midmonth Previous month Utilities, and Industrial Materials. G.3 (402) [2.12] • Changes in Status of Banks and Branches. G.4.5 $15.00 1st of month Previous month (404) • Consumer Installment Credit. G. 19 (421) [1.55, $ 5.00 5th working day of 2nd month previous 1.56] month • Debits and Deposit Turnover at Commercial Banks. $ 5.00 12th of month Previous month G.6 (406) [1.22] • Finance Companies. G.20 (422) [1.51, 1.52] $ 5.00 5th working day of 2nd month previous month • Foreign Exchange Rates. G.5 (405) [3.28] $5.00 1st of month Previous month • Industrial Production. G.12.3 (414) [2.13] $15.00 Midmonth Previous month • Loans and Securities at all Commercial Banks. G.7 $ 5.00 3rd week of month Previous month (407) [1.23] • Major Nondeposit Funds of Commercial Banks. $ 5.00 3rd week of month Previous month G. 10 (411) [1.24] • Monthly Report of Assets and Liabilities of Large $ 5.00 20th of month Wednesday, 2 weeks earlier International Banking Facilities. G. 14 (416) 1. Release dates are those anticipated or usually met. However, please note that for some releases there is normally a certain variability because of reporting or processing procedures. Moreover, for all series unusual circumstances may, from time to time, result in a release date being later than anticipated. The respective BULLETIN tables that report the data are designated in brackets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A85 Annual Approximate Date or period Monthly Releases—Continued rate release days to which data refer • Research Library—Recent Acquisitions. G.15 (417) Free of 1st of month Previous month charge • Selected Interest Rates. G.13 (415) [1.35] $ 5.00 3rd working day of Previous month month Quarterly Releases • Agricultural Finance Databook. E.15 (125) $ 5.00 End of March, January, April, July, and June, September, October and December • Country Exposure Lending Survey. E. 16 (126) $ 5.00 January, April, Previous 3 months July, and October • Flow of Funds: Seasonally Adjusted and $15.00 23rd of February, Previous quarter Unadjusted. Z.l (780) [1.58, 1.59] May, August, and November • Flow of Funds Summary Statistics Z.7 (788) [1.57, $ 5.00 15th of February, Previous quarter 1.58] May, August, and November • Geographical Distribution of Assets and Liabilities $ 5.00 15th of March, Previous quarter of Major Foreign Branches of U.S. Banks. E.ll June, September, (121) and December • Survey of Terms of Bank Lending. E.2 (111) [1.34] $ 5.00 Midmonth of February, May, August, and March, June, November September, and December • List of OTC Margin Stocks. E.7 (117) $ 5.00 January, April, February, May, August, and July, and November October Semiannual Releases • Balance Sheets of the U.S. Economy. C.9 (108) $ 5.00 October and April Previous year Annual Releases • Aggregate Summaries of Annual Surveys of $ 5.00 February End of previous June Securities Credit Extension. C.2 (101) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 Index to Statistical Tables References are to pages A3-A77 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand Deposits—Continued Agricultural loans, commercial banks, 19, 20 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22 Banks, by classes, 18-20, 72-77 Turnover, 15 Domestic finance companies, 36 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 8 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21 Deposits (See also specific types) Automobiles Banks, by classes, 3, 18-20, 21, 73, 75, 77 Consumer installment credit, 39, 40 Federal Reserve Banks, 4, 10 Production, 49, 50 Turnover, 15 Discount rates at Reserve Banks and at foreign central banks and foreign countries (See Interest rates) BANKERS acceptances, 9, 23, 24 Discounts and advances by Reserve Banks (See Loans) Bankers balances, 18-20, 72, 74, 76. (See also Foreigners) Dividends, corporate, 35 Bonds (See also U.S. government securities) New issues, 34 EMPLOYMENT, 47 Rates, 24 Eurodollars, 24 Branch banks, 21, 57 Business activity, nonfinancial, 46 FARM mortgage loans, 38 Business expenditures on new plant and equipment, 35 Federal agency obligations, 4, 9, 10, 11, 31, 32 Business loans (See Commercial and industrial loans) Federal credit agencies, 33 Federal finance Debt subject to statutory limitation, and types and own- CAPACITY utilization, 48 ership of gross debt, 30 Capital accounts Receipts and outlays, 28, 29 Banks, by classes, 18, 73, 75, 77 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 Weekly reporting banks, 19-21 Federal Home Loan Mortgage Corporation, 33, 37, 38 Commercial banks Federal Housing Administration, 33, 37, 38 Assets and liabilities, 18-20 Federal Land Banks, 38 Federal National Mortgage Association, 33, 37, 38 Commercial and industrial loans, 16, 18, 19, 20, 21, 72, Federal Reserve Banks 74, 76 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 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) Credit unions, 26, 39. (See also Thrift institutions) Flow of funds, 41, 43, 44, 45 Currency and coin, 18, 72, 74, 76 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 4, 13 agencies, 21 Customer credit, stock market, 25 Foreign currency operations, 10 Foreign deposits in U.S. banks, 4, 10, 19, 20 Foreign exchange rates, 70 DEBITS to deposit accounts, 15 Foreign trade, 56 Debt (See specific types of debt or securities) Foreigners Demand deposits Claims on, 57, 59, 62, 63, 64, 66 Banks, by classes, 18-21, 73, 75, 77 Liabilities to, 20, 56, 57, 59, 60, 65, 67, 68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 GOLD REAL estate loans Certificate account, 10 Banks, by classes, 16, 19, 20, 38, 74 Stock, 4, 56 Financial institutions, 26 Government National Mortgage Association, 33, 37, 38 Terms, yields, and activity, 37 Gross national product, 53 Type of holder and property mortgaged, 38 Repurchase ajgreements, 6, 17, 19, 20, 21 Reserve requirements, 8 HOUSING, new and existing units, 51 Reserves Commercial banks, 18, 73 INCOME, personal and national, 46, 53, 54 Depository institutions, 3, 4, 5, 12 Industrial production, 46, 49 Federal Reserve Banks, 10 Installment loans, 39, 40 U.S. reserve assets, 56 Insurance companies, 26, 30, 38 Residential mortgage loans, 37 Interest rates Retail credit and retail sales, 39, 40, 46 Bonds, 24 Consumer installment credit, 40 SAVING Federal Reserve Banks, 7 Flow of funds, 41, 43, 44, 45 Foreign central banks and foreign countries, 69 National income accounts, 53 Money and capital markets, 24 Savings and loan associations, 26, 38, 39, 41. (See also Mortgages, 37 Thrift institutions) Prime rate, 23 Savings banks, 26, 38, 39 International capital transactions of United States, 55-69 Savings deposits (See Time and savings deposits) International organizations, 59, 60, 62, 65, 66 Securities (See also specific types) Inventories, 53 Federal and federally sponsored credit agencies, 33 Investment companies, issues and assets, 35 Foreign transactions, 67 Investments (See also specific types) New issues, 34 Banks, by classes, 18, 19, 20, 21, 26 Prices, 25 Commercial banks, 3, 16, 18-20, 38, 72 Special drawing rights, 4, 10, 55, 56 Federal Reserve Banks, 10, 11 State and local governments Financial institutions, 26, 38 Deposits, 19, 20 Holdings of U.S. government securities, 30 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 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 TAX receipts, federal, 29 MANUFACTURING Thrift institutions, 3. (See also Credit unions and Savings Capacity utilization, 48 and loan associations) Production, 48, 50 Time and savings deposits, 3, 13, 17, 18, 19, 20, 21, 73, Margin requirements, 25 75, 77 Member banks (See also Depository institutions) Trade, foreign, 56 Federal funds and repurchase agreements, 6 Treasury cash, Treasury currency, 4 Reserve requirements, 8 Treasury deposits, 4, 10, 28 Mining production, 50 Treasury operating balance, 28 Mobile homes shipped, 51 Monetary and credit aggregates, 3, 12 UNEMPLOYMENT, 47 Money and capital market rates, 24 U.S. government balances Money stock measures and components, 3, 13 Commercial bank holdings, 18, 19, 20 Mortgages (See Real estate loans) Treasury deposits at Reserve Banks, 4, 10, 28 Mutual funds,'35 U.S. government securities Mutual savings banks (See Thrift institutions) Bank holdings, 18-20, 21, 30, 72, 74, 76 Dealer transactions, positions, and financing, 32 Federal Reserve Bank holdings, 4, 10, 11, 30 NATIONAL defense outlays, 29 Foreign and international holdings and transactions, 10, National income, 53 30, 68 Open market transactions, 9 OPEN market transactions, 9 Outstanding, by type and holder, 26, 30 Rates, 24 PERSONAL income, 54 U.S. international transactions, 55-69 Utilities, production, 50 Prices Consumer and producer, 46, 52 VETERANS Administration, 37, 38 Stock market, 25 Prime rate, 23 WEEKLY reporting banks, 19-21 Producer prices, 46, 52 Wholesale (producer) prices, 46, 52 Production, 46, 49 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A88 Index to Volume 75 GUIDE TO PAGE REFERENCES IN MONTHLY ISSUES Issue Text "A" Pages Issue Text "A" pages Index to Index to tables tables January 1-52 1-88 89-90 July 461--526 1-77 78-79 February 53-106 1-78 79-80 August 527--590 1-93 94-95 March 107-226 1-78 79-80 September .... 591--658 1-79 80-81 April 227-320 1-84 85-86 October 659--726 1-77 78-79 May 321-422 1-82 83-84 November 727--770 1-87 88-89 June 423-460 1-102 103-04 December .... 771--844 1-85 86-87 The "A" pages consist of statistical tables and reference information. Statistical tables are indexed separately (see p. A86 of this issue). AGRICULTURE Automated clearinghouses Drought and the economy, article 1 Credit and debit transactions, revised proposal 352 Loans Transactions, proposed action, announcement 288 Recent developments 466 Recent experience of farm lenders 9 Aldrich-Vreeland Act 424 BANK failures, number, 1987-89, statement 808 Allocated Transfer Risk Reserve 137 Bank for International Settlements 591 Alvarez, Scott G., Assistant General Counsel, Bank Holding Company Act of 1956 Legal Division, appointment 152 Orders issued under Amel, Dean F., article 120 1867 Western Financial Corporation 45 American Bankers Association, basic banking data 555 1st AmBanc, Inc 839 American Depository Receipts, international 1st United Bancorp 403 securities markets 560 Abbott Bank Group, Inc 723 American Enterprise Institute 53 Abess Properties, Ltd 220 Angell, Wayne D., Federal Reserve System's Adam Bank Group, Inc 317 budget, statement 677 Adrian Bancshares, Inc 44 Annual Statistical Digest, 1988, publication 820 Advance Banc Shares, Inc 220 Articles AFC Acquisition Corporation 224 Asset securitization: a supervisory perspective 659 Alabama National Bancorporation 402 Drought, agriculture, and the economy 1 Alexis Bancorp, Inc 839 Establishment and evolution of the Federal Algemene Bank Nederland, N.V., Amsterdam, The Netherlands, 653,842 Reserve Board: 1913-23 227 Allegiant Bancorp, Inc 765 Formation of private business capital: trends, recent Allied Irish Banks, PLC, Dublin, Ireland 524 developments, and measurement issues 771 Alpine Banks of Colorado 522 Home equity lending 333 Amboy Bancorp, Inc 765 International gold standard and U.S. monetary Amarillo Delaware Bancorp, Inc 839 policy from World War I to the New Deal 423 American Bancorp of Ponca City, Inc 723 Monetary policy in an era of change 53 American Bancorporation, Inc 102 Monetary policy reports to the Congress 107,527 American Bankshares, Inc 44 Mutual recognition: integration of the financial American Chartered Bancorp, Inc 100 sector in the European Community 591 American Community Bank Group, Inc 220 Priced services, 1988 and 1989 540 American National Corporation 522 Recent developments in the profitability and American State Corporation 100 lending practices of commercial banks 461 ANB Bankcorp, Inc 100 Transfer risk in U.S. banks 255 Annapolis Bancshares, Inc 402 Treasury and Federal Reserve foreign exchange ARSEBECO, Inc 701 operations 58, 259, 485, 670 Artemisia Holdings, Inc 585 Trends in banking structure since the mid-1970s 120 Atcorp, Inc 44 U.S. international transactions in 1988 321 Athens Bancorp, Inc 220 U.S. policy on the problems of international debt 727 B.H.C., Inc 44 Understanding the behavior of M2 and V2 244 B.M.J. Financial Corp 705 Asset-backed securities, article 659 B/W Bancshares, Inc 220 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A89 Page Page Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under—Continued Orders issued under—Continued Bainum Bancorp II 839 Chase Manhattan Corporation 192, 458,725 Bainum Bancorp 100 Chemical Banking Corporation 97, 725 Baldwin Bancshares, Inc 317 Chemical Financial Corporation 522 Banc One Corporation 574,653,842 Chesapeake Bank Corporation 319 Bancook Corporation 839 China Trust Capital B.V., The Netherlands 302 Bancorp II, Inc 44 China Trust Holdings Corp 302 Bancorp of Tomah, Inc 48 China Trust Holdings N. V., Curacao, BancFirst Corp 839 Netherlands Antilles 302 Bancpal, Inc 723 Chisholm Bancshares, Inc 457 Bank of Bermuda Limited 513 Citicorp 85,192,524,716 Bank of Bolivar Employee Stock Ownership Citizens and Southern Corporation 48,839 Plan and Trust 586 Citizens and Southern Georgia Corporation 48 Bank of Boston Corporation 35,79 Citizens Bancorp 402 Bank of Ireland, Dublin, Ireland 39 Citizens Bancorporation, Inc 522 Bank of Maryland Corp 220, 723 Citizens Bancshares, Inc., Bozeman, Montana 522 Bank of New Mexico Holding Company 48 Citizens Bancshares, Inc., Salineville, Ohio 839 Bank of New York Company, Inc 725 Citizens Independent Bancorp, Inc 44 BankAmerica Corporation 78,825,827 Citizens Investment Co., Inc 317 Bankers Trust New York Corporation 192,829 Citizens National Bancorporation 765 Bankers' Bancorporation of Florida, Inc 522 Citizens National Bancshares, Inc 220 Banknorth Group, Inc 703 CitNat Bancorp, Inc 317 Banque Indosuez, Paris, France 717 Citrus Financial Services Corporation 839 Banterra Corp 44 City Bancorp, Inc 522 Barclays Bank PLC, London, England 725 Clarke, Inc 839 Barclays PLC, London, England 725 Cleveland Bancshares, Inc 221 Barnett Banks, Inc 80, 82,100,190,220, 319, 585 CMJR Investments, Inc 402 Baxter County Bancshares, Inc 220 CNB Bancorp, Inc 44 BayBanks, Inc 223,725 CNB Bancshares, Inc 317 Belle Fourche Bancshares, Inc 586 Coal City Corporation 586 Berger Bancorp, Inc 44 Colfax Bancshares, Inc 766 Bermuda (U.S.) Holdings Limited 513 Collins Bankcorp, Inc 221 Big Sioux Financial, Inc 50 Colonial Bancshares, Inc 766 BJS, Inc 522 Colwich Financial Corporation 402 Blairstown Bancorp, Inc 586 Comerica Incorporated 224, 725 Bloomfield Hills Bancorp 765 Commbanc Shares, Inc 100 Blue Ridge Bankshares, Inc 44 Commerce Bancorp, Inc 44 Bluestem Financial Corp 220 Commerce Bancshares, Inc 43 Blunt Bank Holding Company 44 Commercial Bankstock, Inc 651 BMR Financial Group, Inc 586, 651 Commonwealth Trust Bancorp, Inc 586 BOC Bancshares, Inc 651 Community Bancorp, Inc 101 BON, Inc 100 Community Financial Bancorp 457 Bosshard Banco, Ltd 651 Community Financial Corporation 101, 524 Bosshard Financial Group, Inc 100 Community First South Dakota Bankshares, Inc 769 Boston Bank of Commerce Employee Stock Community Illinois Corporation, Rock Falls, 111 651 Ownership Trust 839 Compagnie Financiere de Suez, Paris, France 717 Bradley County Financial Corp 220 Conrad Company 402 Bridge Bancorp, Inc 402 Constellation Bancorp 522 Brooke Holdings, Inc 104 Continental Bancorporation 586 Bryan Bancorp of Georgia, Inc 723 Continental Bank and Trust Company 223 BT Financial Corporation 457 Continental Bank Corporation 304 BTNCCorp 457 Continental Illinois Bancorp, Inc 304 Buena Vista Bancorp, Inc 44 Conway BanCorp, Inc 221 Business Bancorp 768 Cordele Bancshares, Inc 522 C.N. Bancorp, Ltd., Taipei, Taiwan 187 Cordova Bancshares, Inc 221 Cameron Investment Company, Inc 457 Country Bank Shares, Inc 651 Campbell Hill Bancshares, Inc 651 County Bancorporation, Inc 522 Canaan National Bancorp, Inc 220 Credit and Commerce American Holdings, N.V., Capital City Bank Group, Inc 522 Curacao, Netherlands Antilles 302 Capital Holdings, Inc 638 Credit International Bancshares, Ltd 187 Carolina FirstBancShares, Inc 522 Crestar Financial Corporation 382 Cascade Bancorporation, Inc 765 Crosswhite Bankshares, Inc 839 Catherine Stuart Schmoker Family Partnership 317 Crown National Bancorporation, Inc 522 CB&T Bancshares, Inc 319, 381, 402, 723 D & D Bancshares, Inc 101 CB&T Financial Corp 514 Dahlonega Bancorp, Inc 651 CBS Banc-Corp 765 Dassel Investment Company 101 Central Bancompany 44 Dearborn Bancorp, Inc 522 Central of Kansas V, Inc 651 Deerfield Financial Corporation 522 Central of Kansas, Inc 651 Dentel Bancorporation 766 Cenvest, Inc 100 Dickinson Bancorporation, Inc 402 Chandlerville Bancshares, Inc 317 Dickinson Financial Corporation 45 Charter 95 Corporation 100 Draper Holding Company 842 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 Federal Reserve Bulletin • December 1989 Page Page Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under-Continued Orders issued under—Continued Dresdner Bank AG, Frankfurt, Federal First Community Bank 317 Republic of Germany 642 First Dakota Financial Corporation 101 Duke Financial Group, Inc 45 First Eagle Bancshares, Inc 840 Dulaney Bancorp, Inc 45 First Essex Bancorp, Inc 457 Dumas Bancshares, Inc 101 First Essex NH Bancorp, Inc 457 Eastchester Financial Corporation 402 First Financial Bancorp 651 Eastern Bank 319 First Holmes Corporation 652 Eastern Savings Bancorp, Inc 319 First Interstate Bancorp 708 Easton Bancshares, Inc 586 First Interstate Bank of California 708 Edgeley Bancorporation, Inc 45 First Interstate Corporation of Wisconsin 101, 103 Empire Bank Corp 45 First Kansas Holding Company 402 Employee Stock Ownership Trust of the People's First McKinley Corporation 586 Bank & Trust Company of Pickett County 766 First Michigan Bank Corporation 523 Enterprise Bancorp, Inc 402 First National Bancorp 221,523 Equimanagement, Inc 221 First National Bancorp, Inc 101 Equimark Corporation 221,707 First National Bancshares Equity Financial Ventures, Inc 45 ofWinfield, Inc., 102,223,318,402 Evans Bancorp, Inc 101 First National Bancshares, Inc 402 Exchange Bancorp, Inc 101 First National Bank of Blue Island Employee Stock F & M National Corporation 840 Ownership Trust 723 F & P Bancshares, Inc 723 First National Bank of Chicago 43 F.B.H. Corp 457 First National Bankshares of Henry County, Inc 840 F.N.B. Corporation 46, 49 First National Bowie Bancorp 403 F.N.B.A. Holding Company, Inc 711 First National Corporation 766 F.W.S.F. Corporation 651 First National Financial Corporation 652 Fairfield County Bancorp, Inc 101,221 First National Insurance Agency, Inc 457 Family Bancorp 319 First National of Nebraska, Inc 27 Fannin Bancshares, Inc 586 First National Security Company 766 Far West Bancorporation 839 First Oak Brook Bancshares, Inc 221 Farmers & Merchants Bancshares, Inc 221 First of America Bancorporation-Illinois, Inc 45, 318 Farmers Bancshares of Oberlin, Inc 766 First of America Bank Corporation .. 45,102,317,318,836 Farmers Bancshares, Inc 523 First of America Bank Corporation-Indiana 102 Fanners Savings Bank Employee Stock First of Searcy, Inc 318 Ownership Plan and Trust 523 First Paxton Bancorp, Inc 102 Farmers State Bancorp 101 First Security Corporation 766 Farmers State Bankshares, Inc 839 First Shares, Inc 46 Farmington Bancorp, Inc 586 First Southeastern Banc Group, Inc 457 Fayette Bancorporation 766 First Southern Bancorp, Inc 46 Fayette County Bancshares, Inc 839 First State Bancorp, Inc 766 FBC Holding Company, Inc 723 First State Bancorporation 46 FBT Bancshares, Inc 221 First State Bancshares, Inc 403 FDH Bankshares, Inc 839 First State Bankshares, Inc 523 Fidelity Bankshares, Inc 766 First Tennessee National Corporation 103 Fifth Third Bancorp 101,651,766,843 First Tuttle Bancorp, Inc 318 Finacorp, Inc 221 First Union Corporation 645 Financial Future Corporation 402 First United Bancorporation 588 Financial Institutions Holding Corporation 45 First Universal Bancorporation, Inc 766 Financial Partners, Inc 27 First Wachovia Corporation 586 Financial Services Corporation of the Midwest 402 First Wisconsin Corporation 31,102,318 FIRST SUBURBAN BANCORP CORPORATION 102 Firstar Corporation 651 First American Corporation 576 FirstBank Holding Company of Colorado 43, 521, 585 First Banc Securities, Inc 221 FirsTier Financial, Inc 188 First Bancorp, Inc 223,523 FirstMorrill Co 45 First Bancorporation of Akron 45 FirstPerryton Bancorp, Inc 45 First Bank System, Inc 49, 74, 387, 654, 725 Firstshares of Texas, Inc 46 First Bankers Trustshares, Inc 221 FISCORP, Inc., dba First Institutional First Banks, Inc 402 Service Corporation 523 First Busey Corporation 101,651 Fleet/Norstar Financial Group, Inc., .. 49, 50, 223, 404, 654 First Capital Corporation 766 Florida Security Holding Corporation 46 First Cherokee Bancshares, Inc 221 FM Bancorp, Inc 767 First Chicago Corporation 43, 838 FNB Bancshares, Inc 403 First City Bank of Dallas 101 FNB, Inc 46,523 First Clay County Banc Corporation 586 FNC Acquisition Company 586 First Clayton Bancshares, Inc 766 FNW Bancorp, Inc 46 First Colonial Bankshares Corporation 221 Ford Bank Group, Inc 46 First Commerce Bancshares, Inc 317 Foresight Financial Group, Inc 403 First Commercial Bancshares, Inc 221 Fort Wayne National Corporation 638 First Commercial Corporation 45 Fostoria Bankshares, Inc 403 First Commercial Holding Corporation 651 Four County Bancshares, Inc 318 First Commonwealth Financial Corporation 404 Fourth Financial Corporation 46, 723 First Community Bancorp, Inc 840 Fourth St. Financial Corp 767 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 75 A91 Page Page Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under—Continued Orders issued under—Continued Frankford Corporation 403 Johnson Heritage Bancorp, Ltd 318 Franklin Bancorporation, Inc 523 Johnson International Bancorp, Ltd 843 Franklin Financial Corporation 652 Jorgenson Holding Company 318 Franklin State Bancshares, Inc 840 JSB Bancorp 767 Friendship Bancorp 221 JTNB Bancorp, Inc 318 FSB Bancorp, Inc 586 Kellett N.V., Curacao, FSB of Victor, Inc 221 Netherlands Antilles 217,224,455,725 Fuji Bank, Limited, Tokyo, Japan, 94, 577, 654 Kermit State Bancshares, Inc 104 Fulton Bancshares Corporation 586 Kerndt Bank Services, Inc 524 Gateway Financial Corporation 523 Kersey Bancorp, Inc 222 GNB Bancshares, Inc 840 Key Bancshares of Wyoming Inc 50 George Washington Banking Corporation 318 Key Centurion Bancshares, Inc 523, 587 Gold Bancshares, Inc 723 KeyCorp 50 Golden Gate Bancor 457 Klossner Bancorporation, Inc 102 Golden Isles Financial Holdings, Inc 586 Lake Crystal Bancorporation, Inc 104 Golden Triangle Bancshares, Inc 221 Lake Shore Bancorp., Inc 523 Gore-Bronson Bancorp, Inc 46 Lakeland Bancorp, Inc 102 Grand Bank Financial Corporation 654 Lakeland Bancshares, Inc 222 GreatBanc, Inc 524 Lakeside Bank Holding Company 222 Green Top, Inc 840 Lakeside Credit Company, Inc 457 Greene County Bancshares, Inc 767 Lanier Bankshares, Inc 403 Greenville Financial Corporation 222 Lawrence L. Osborn Scholarship Trust 457 Growth Financial Corporation 840 Lawton Partners Holding Company 102 Guaranty Bancshares Corporation 104, 652 Lee National Banc Corp 767 Guaranty National Bancshares, Inc 840 Lexington Bancshares, Inc 587 Gwinnett Bancorp, Inc 222 Liberty National Bancorp, Inc 767 Hampton Park Corporation 104 Lincoln Holding Company 840 Harmonia Bancorp, Inc 767 Litchville State Bank Holding Company 723 Harrogate Corporation 222 Livingston & Company Southwest, L.P. 46, 840 Hastings Financial Corporation 457 Livingston Southwest Corporation 46, 840 Henderson Bancorporation, Inc 767 Logansport Bancorp, Inc 725 Heritage Bancshares Corporation 652 Long-Term Credit Bank of Japan, Limited, Heritage Bancshares, Inc 586 Tokyo, Japan 719 Hershare Financial Corporation 586 Lordsburg Financial Corporation 652 HMC Holding Company 46 Louisville Company 458 HNB Bancorp, Inc 586 Lower Rio Grande Valley Bancshares, Inc 318 Home Interstate Bancorp 725 Lubbock National Bancshares, Inc 767 Hongkong and Shanghai Banking Corporation, M & M Bancorp, Inc 47 Hong Kong, B.C.C 217, 224, 455, 725 M.O. Packard Investment Company 47 Horizon Bancorp, Inc 723 M.O.I. Inc 841 HSBC Holdings B.V., Amsterdam, Mackinaw Valley Financial Services, Inc 724 The Netherlands 217,224,455,725 Madison Agency, Inc 652 HTB, Inc 767 Madison Bancshares Group, Ltd 403 Hub Financial Corporation 222 Magna Group, Inc 318,403 Huntington Bancshares Incorporated 33,765 Main Line Bancshares, Inc 767 Huron Community Financial Services, Inc 457 Main Street Banks Incorporated 46 Huron National Bancorp, Inc 767 Manufacturers Hanover Corporation 725 Hutchinson Financial Corporation 652 Marietta Bancshares, Inc 50 IBT Bancorp, Inc 102 Marine Corporation 767 Illinois Financial Services, Inc 652 Marine Midland Banks, Inc 217, 224, 455, 725 Illinois One Bancorp, Inc 523 Markesan Bancshares, Inc 222 Illinois Valley Bancshares, Inc 840 Marseilles Bancorporation, Inc 840 Indebancorp 767 Marshall & Ilsley Corporation 46,318,724 Indecorp, Inc 222 Martinius Corporation 767 Independent Southern Bancshares, Inc 587 MCB Acquisition Company 318 Indian River Banking Company 457 Mercantile Bancshares, Inc 724 Indiana Bancshares, Inc 46 Mercantile Bankshares Corporation 104 InterCounty Bancshares, Inc., Employee Merchant Bank Corporation 724 Stock Ownership Plan 840 Merchant House 724, 768 International Bancorporation 767 Merchants National Corporation 46, 388, 767 Interstate Bancshares, Inc 767 Meredosia Bancorporation, Inc 47 Investors Financial Corporation 840 Meridian Bancorp, Inc 652 Iowa Financial Bancorporation 723 Metrocorp, Inc 519 J.P. Morgan & Co. Incorporated 192 MGB Bancshares, Inc 457 Jacob Schmidt Company 102 Miami Bancshares, Inc 458 James Stuart, Jr. Family Partnership 317 Miami Corporation 724 Jamestown Bancorp, Inc 46 Michael Bancorporation, Inc 403 Jason Bankshares, Inc 318 Michigan National Corporation 88, 652, 721, 765 JDOB, Incorporated 587 Mid Am, Inc 403 Jefferson Bancshares, Inc., Louisville, Ga 523 MidAmerican Corporation 515 Jefferson Bankshares, Inc., Charlottesville, Va 652 MidConn Bancorp, Inc 318 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 Federal Reserve Bulletin • December 1989 Page Page Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under-Continued Orders issued under-Continued Midlantic Corporation 652 P.N.B. Financial Corporation 841 Midmerica Bank Corporation 523 Panhandle Aviation, Inc 319 MidSouth Bancshares, Inc 587 Parker Bancshares, Inc 47 Midwest Financial Group 386 PBA Bancorporation 458 Midwest Guaranty Bancorp, Inc 102 People's Savings Financial Corp 587 Mineral King Bancorp, Inc 318 Peoples Bancorp Inc 47 Mineral Wells Bancshares, Inc 767 Peoples Bancorp of Winchester Inc 653 Minnesota State Bancshares, Inc 222 Peoples Bancshares of Gambier Incorporated 458 Minonk Bancshares, Inc 724 Peoples Bancshares, Inc., Elba, Alabama 47 Mission-Valley Bancorp 403 Peoples Bankshares, Inc., Parshall, North Dakota 524 Missouri Valley Financial Services, Inc 403 Peoples Community Bancorporation, Inc 403 MNC Financial, Inc 90, 842 Peoples Financial Corp. of Illinois, Inc 768 Monahans Bancshares, Inc 104 Peoples First Corporation 653 Montana Bancsystem, Inc 49 Peoples Heritage Financial Group, Inc 47, 653 Monticello Bankshares, Inc 102 Peoples Investment Corporation 319 Moody Bank Holding Company, Inc 102 Pine Creek Bancorp, Inc 653 Moore Financial Group, Incorporated 222, 223, 458 PINNACLE BANC GROUP, Inc 724 Morris State Bancshares, Inc 587 Pioneer Acquisition Corp 653 Mount Sterling National Holding Corporation 842 Pioneer Bancorp, Inc 47 Mountain West Banking Corporation 652 Plains Corporation 841 Mountain-Valley Bancshares, Inc 102 Plainview Bankshares, Inc 843 Multibank Financial Corp 768 Plainview Holding Company 724 Muncy Bank Financial, Inc 47 PNB Bankshares, Inc 403 Napa Valley Bancorp 222 PNC Financial Corp 47,312,396,588 National Banc of Commerce Company 47 Ponte Vedra Banking Corporation 640 National City Bancshares, Inc 102 Port St. Lucie National Bank Holding Corp 47 National City Corporation 650, 754 Prairie State Bancorp, Inc 841 National Penn Bancshares, Inc 587 Premier Bancshares of Texas, Inc 48 National Westminster Bancorp Inc 653 Princeton Agency, Inc 524 National Westminster Bancorp NJ 652 PSB Financial Shares, Inc 841 National Westminster Bank PLC, PTB Corporation 222 London, England 653, 725 Public Bank Holding Company, Inc 306 NatWest Holdings Inc., Wilmington, Delaware 653 PWB Bancshares, Inc 458 NatWest Holdings, Inc., New York, New York 725 Raymond Acquisition Corporation 48 NB Corporation 653 Raymond Bancorp, Inc 48 NBCC, Inc 47 Readlyn Bancshares, Inc 768 NBD Bancorp, Inc 102,223 Red River Financial Corporation 524 NBM Bancorp, Inc 587 Redwood Empire Bancorp 48 NCNB Corporation 520 Reelfoot Bancshares, Inc 768 NEB Corporation 222 Regency Financial Shares, Inc 524 Nevada National Co 525 Regent Bancshares, Corp 458 New East Bancorp 458,841 Reliable Community Bancshares, Inc 403 New Mexico Bank Corporation, Inc 47 Republic Bancorp, Inc 48 New Mexico Financial Corporation 103 RHNB Corporation 654 New Richland Bancshares, Inc 653 River Forest Bancorp, Inc 841 New Ross Bancorp 523 Rodgers Family Bancshares, Inc 841 Nippon Credit Bank, Ltd., Tokyo, Japan 308 Romney Bankshares, Inc 524 NoDak Bancorporation 523 Royal Bank of Scotland Group PLC, NorCentral Bancshares, Inc 587 Edinburgh, Scotland 41 North East Bancshares, Inc 458 S&T Bancorp, Inc 404 North Georgia National Bancshares, Inc 653 SBK Bancshares, Inc 653 North Linn Corporation 724 Scandinavian Bank Group PLC, London, North Shore Financial Corporation 47 United Kingdom 311 Northeast Bancorp, Inc 725 Schneider Bancorporation 103 Northern New York Bancorp, Inc 403 Scott Bancshares, Inc 222 Northern Trust Corporation 458,523,842 Scott Stuart Family Partnership 317 Northwest Illinois Bancorp, Inc 768 Seafirst Corporation 827 Norton Capital Corporation 523 Sebastian Bankshares, Inc 48 NorwestCorporation 43,100,223,399, Security Bancorp, Inc 768 524, 588, 769, 842 Security Bancshares Company 524 NSB Holdings, Inc 768 Security Bancshares, Inc 649 O.A.K. Financial Corporation 222 Security Exchange Bancorp., Inc 724 Ocean State Bancshares 841 Security National Corporation 222 Oelwein Bancorporation 724 Security Pacific Corporation 76, 192, 726, 756 Old National Bancorp 222,318 Seligman Bancshares, Inc 48 Omega Financial Corporation 222 Sequoyah County Bankshares, Inc 222 OMNIBANCORP 841 Shelby Insurance, Inc 840 ONBANCorp, Inc 724 Sheldon Security Bancorporation, Inc 768 Orono Financial, Inc 587 Sheldon Security Financial Corporation 768 Orrstown Financial Services, Inc 458 Sierra Petroleum Co., Inc 48 P.C.B. Bancorp, Inc 47 Signet Banking Corporation 34 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 75 A93 Page Page Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under—Continued Orders issued under—Continued Sleepy Hollow Bancorp, Inc 404 WB&T Bancshares, Inc 842 Smoky Mountain Bancorp, Inc 587 Wellington Bancorp, Inc 319 Societe Generale 580 Wells Fargo & Company 588 Society for Savings Bancorp, Inc 726 Weslaco Bancshares, Inc 49 South Banking Company 724 West Jersey Bancshares, Inc 843 South Gasconade Investment Corporation 404 West Michigan Financial Corporation 524 South Holt Bancshares, Inc 841 West-Ark Bancshares, Inc 842 Southeast Banking Corporation 92, 459 Western Bancshares, Inc 319 SouthTrust Corporation 48,77,222,223, Western Springs Bancorp, Inc 49 516,524,647,724 WestOne Bancorp 587 Southwest Missouri Bancorporation, Inc 48 Westpac Banking Corporation, Sydney, Australia 398 Sovran Financial Corporation 103 Wheeler County Bancshares 103 Spearman Bancshares, Inc 841 Whiting Bankshares, Inc 223 St. Croix Valley Bancshares, Inc 575 Whitney Holding Corporation 458 St. Landry Bancshares, Inc 524 Widmer Bancshares, Inc 524 State Bancshares, Inc 103, 587 Wilkinson Banking Corporation 725 State National Bancshares, Inc 223 Williams-Augusta Acquisition Corp 187 State Savings Bancorp, Inc 653 WIN Bancorp, Inc 49 Stearns Financial Services, Inc 841 Winter-Park Bancshares, Inc 103 Stone County National Bancshares, Inc 724 Wisdom Holding Corporation 104 Stuart Family Partnership 317 Withee Bank Shares, Inc 725 Sumitomo Bank, Limited, Osaka, Japan 582,587 WNB Bancshares, Inc 103 Summcorp 103 Wood Lake Bancorporation, Inc 319 Summit Bancorporation 712,841 Worthington Bancshares, Inc 49 SunTrust Banks, Inc 43 Wyandotte Ban Corporation 49 Susquehanna Bancshares, Inc 458 Bank holding companies Sweet Water State Bancshares, Inc 319 Capital adequacy guidelines, risk-based measure 171 TB&C Bancshares, Inc 723 Bank insurance fund, state of and adequacy of supervisory TCB Bancshares, Inc 587 framework for banking institutions, statement 738 Terrapin Bancorp, Inc 48 Bank Merger Act Terre Du Lac Bancshares, Inc 841 Orders issued under Teton Bancshares, Inc 724 1st United Interim Bank 405 Texas Bancorporation, Inc 587 BancFirst 726 Texas Peoples National Bancshares, Inc 103 Bank of Mid-Jersey 405 Texop Bancshares II, Inc 404 Bank of New York 654 Texop Bancshares, Inc 404, 640 BankofRomney 525 Thompson Financial, Ltd 48 Central Florida Banc Shares, Inc 50 Thompson Insurance, Inc 524 Central Savings Bank 843 Three Forks Bancorporation 524, 525 Chemical Bank and Trust Company 844 Tokai Bank, Limited, Naka-ku, Nagoya, Japan 224 Citizens Bank of Virginia 405 Tomball Capital Corporation 842 Cole Taylor Bank/Drovers 105 Tomball National BancShares, Inc 842 Comerica Bank-Detroit 844 Tompkins Bancorp, Inc 404 CrestarBank 655 Toronto-Dominion Bank, Toronto, Canada 525 First Bank of Crestview 726 Trenton Bancshares, Inc 404 First Bank of Johnston City 224 Trenton Trust Bancshares, Inc 48 First Bank of Stockton/Warren 588 Tritten Bancshares, Inc 48 First Bank/Dixon 588 Trustcorp, Inc 104 First City Bank of Dallas 50 Tulsa National Bancshares, Inc 843 First Community Bank, Inc 105, 726 U.S. Bancorp 49,404 First Interstate Bank of California 44 U.S. Trust Corporation 654 First of America Bank-Northern Michigan 588, 655 Union Bancorporation 319 First Western Bank Custer 224 Union Planters Corporation 223, 319, 842, 843 Heartland Bank 844 United Bancshares of Nebraska, Inc 319 Indian Head Bank and Trust Company 769 United Community Corporation 307 Kent City State Bank 459 United Counties Bancorporation 714 Liberty Bank 588 United Missouri Bancshares, Inc 223 Manufacturers Hanover Trust Company 761 United Nebraska Financial Co 842 MNC Financial, Inc 588 United Saver's Bancorp, Inc 654 NorstarBank 655 United Security Bancorporation 103 Pioneer Bank and Trust 588 ValliCorp Holdings, Inc 843 Scottscom Bank 50 Veedersburg Bank Corporation 458 Ventura County National Bancorp 769 Security Bank and Trust Company 769 Vineyard National Bancorp 49 Sovran Bank/Central South 722 W-CV Bancorp., Inc 223 Sovran Bank/Memphis 320 W.T.B. Financial Corporation 458 State Savings Bank of South Lyon 50 Wabeno Bancorporation, Inc 768 Texas Bank 224 Washington Bancorporation 29 Texas Commerce Bank-Rio Grande Valley 655 Washington National Holdings, N.V., Union Colony Bank 588 Netherlands Antilles 29 Victoria Bank & Trust Company 844 Wauneta Falls Bancorp, Inc 653 Banking structure trends, article 120 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 Federal Reserve Bulletin • December 1989 Page Page Banking system Chicago Board of Trade's Aurora system, statement on Condition, statement 803 international securities markets 560 Debt-servicing difficulties, statement 136 Chicago Mercantile Exchange's GLOBEX, statement on Basic Banking Services Access Act of 1989, H.R. 3181, international securities markets 560 statements 554, 786 Code of Federal Regulations, correction, amendment 73 Basle Accord 598 Commercial banks, profitability and lending practices, Basle Committee on Banking Regulations article 461 and Supervisory Practices 147, 597 Commodity Credit Corporation 1,113 Board of Governors (See also Federal Reserve System) Community Reinvestment Act of 1980 Consumer Advisory Council (See Consumer Advisory Enforcement, statement 619 Council) Information statement, joint revision 351 Establishment and evolution of the Federal Reserve Statement on legislation 550 Board, article 227 Compensation program and Federal Reserve System Federal Open Market Committee (See Federal Open Market budget, statement 679 Committee) Competitive Equality Banking Act of 1987 Fees (See Fees for Federal Reserve services to depository Federal Reserve System budget, statement 678 institutions) Home equity lending 341,342 Litigation (See Litigation) Thrift industry recovery and reform 280, 349 Members Completing the Internal Market, white paper 592 Heller, H. Robert, resignation 566 Comptroller of the Currency, Office of List, 1913-89 656 Asset-backed securities, article 662 Policy statements (See specific subject) Joint statement on Community Reinvestment Act 351, 551 Publications and releases (See Publications in 1989) Consumer Advisory Council Regulations (See Regulations) Meetings 352,567,820 Rules (See Rules) Members, new appointments 148 Staff Nominations sought for appointees, announcement 631 Changes Consumer Attitudes, 1988 surveys 334 Johnson, Jennifer J 65 Corporate restructuring activity, statements 142, 267 Lepper, Susan J 821 Council of Economic and Finance Ministers 599 McAfee, James 65 Country Exposure Lending Survey 256 Mattingly, J. Virgil, Jr 288 Country Exposure Report 256 Parkinson, Patrick M 352 Crabbe, Leland, article 423 Snyder, Barry R 288 Credit Stockton, David J ...751 Home equity Sfockwell, Eleanor J 19 Brochure 698 Summers, Bruce, J 152 Lending 333,341,342,566 Tigert, Ricki R 152 Stock market (See Over-the-counter stocks, list of Welch, Patricia A 698 marginable) List A78 Truth in Lending (See Regulations: Z) Staff studies (See Staff studies) Cross, Sam Y., reports 58, 259, 485, 670 Statements to the Congress (See Statements to Congress) Thrift Institutions Advisory Council (See Thrift Institutions DEALERS, primary, designations of those controlled by Advisory Council) firms from United Kingdom and Japan, announcement 698 Boemio, Thomas R., article 659 Depository institutions (See specific types) Book-entry securities, expenses to Federal Reserve Banks .... 681 Reserve requirements (See Reserve requirements and Bowen, Brent L., statement 684 Regulations: D) Brady Commission, and international securities markets 561 Deposits, brokered, use by financial institutions 495 Brady, Nicholas F. Deregulation, effects on monetary policy 54 Plan to address economic situation of heavily Developing countries, announcement regarding statement indebted countries 472 on policy on debt 350 Proposal 563 Direct deposit, social security benefits, disclosure Brotman, Daniel, reports 485 requirements 352 Bulletin board, statistical releases computerized, Directors, Federal Reserve Banks and Branches, list 407 announcement 288 Discount rate at Reserve Banks, change 287 Business capital, private Douglas amendment and the banking structure 122 Accumulation during the 1980s 780 Drought, article 1 Distinction between capital stock and capital input 771 Durkin, Thomas A., article 333 Estimates for the United States 772 Dykes, Say re Ellen, article 227 Growth of since World War II 775 Relation between growth of stock and investment 783 EARNINGS and expenses (See Income and expenses) Economic financial developments (See Monetary policy) Economic policy objectives, statement 282 CANNER, GlennB., article 333 Edwards, Gerald A., Jr., article 659 Capital Adequacy Guidelines, home equity lending 343 Electric Cooperative Association and CRA 622 Cassis de Dijon 593 Electronic benefits transfer 556 Check clearing and collection European Community Expedited Funds Availability Act and Regulation CC, Implications for U.S. financial institutions of completion of revision, announcement 443 internal market by 1992, statement 744 New Jersey state law, preemption determination 73 Commission 591 Returned check services, revised prices 351 Program, article 591 Teller's and cashier's checks, delayed disbursement, European Financial Area 591 announcement 443 Exchange Stabilization Fund 61,262,489,674 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 75 A95 Page Page Expedited Funds Availability Act Fees for Federal Reserve services to Legislation and Federal Reserve System budget, depository institutions—Continued statement 678 Priced services—Continued Regulation CC, amendment regarding payable Definitive safekeeping and noncash collection 545 through checks 631 Electronic payments 543 Regulation CC, revisions,announcement 443 Funds transfer service 544 Expenses (See Income and expenses) Treasury book-entry securities 545 Financial Accounting Standards Board Statement No. 77, sales treatment for financial reporting purposes, FAIR Credit and Charge Card Disclosure Act asset-backed securities, article 665 Amendment, announcement 443 Financial Institutions Reform, Recovery and Proposal 65 Enforcement Act of 1989 (FIRREA) Farm Credit System 9 Compliance by banks in home mortgage lending 795 Farming (See Agriculture) Regulation Y, amendment under provisions of the act 753 Federal deficit, statement 15 Financial Institutions Regulatory and Interest Rate Control Federal Deposit Insurance Corporation Act and Federal Reserve System budget, statement 678 Banking structure trends 124 Financing (See specific subject) Brokered deposits effect 496 First Massachusetts Management Corporation, CRA policy statement 551 settlement of enforcement proceedings 632 Joint statement on Community Reinvestment Act 351 Flood insurance enforcement by the Federal Reserve Thrift industry recovery and reform 278,347 System, statement 498 Federal Emergency Management Agency, training Foreign exchange operations of the Treasury and materials, use 500 Federal Reserve, reports 58,259,485,670 Federal Financial Institutions Examination Council Foreign lending by U.S. banks to developing countries, Country exposure report 256 statement on policies 563 A Citizen's Guide to CRA, publication 553 Friedman, Benjamin, article in Journal of Economic Interagency flood insurance examination procedures, Perspectives 54 use by the Federal Reserve System 499 Full Employment and Balanced Growth Act of 1978 Reporting requirements relating to asset-backed (See also Monetary policy: reports to the Congress) .. 107, 527 securities, article 664 Federal Home Loan Bank Board Joint statement regarding Community Reinvestment Act 351,551 GARWOOD, Griffith L., statement 619 Federal Home Loan Bank System, thrift industry General Accounting Office recovery and reform 279, 348 Basic banking data 554 Federal Home Loan Banks, thrift industry recovery Operation of Office of the Inspector General 686 and reform 278,347 Generalized System of Preferences 328 Federal Home Loan Mortgage Corporation, Glass-Steagall Act mortgage-backed securities, article 659 Asset-based securities, proposal to modify restriction on Federal National Mortgage Association, mortgage-backed underwriting 567 securities, article 659 Bank-eligible securities, modifications of Section 20 751 Federal Open Market Committee Revenue limit, proposal to increase 567 Policy actions, record .... 20, 66, 290, 353, 502, 625, 689, 812 Gold Standard Act of 1900 423 Federal Reserve Act, publication 444 Gold standard, international, article 423 Federal Reserve and Treasury foreign exchange operations Government Auditing Standards, and operation (See Foreign exchange operations) of Office of the Inspector General 686 Federal Reserve Banks Government Check Cashing Act of 1989, H.R. 3180, Budget, statement 680 statements 554,786 Directors, list 407 Government National Mortgage Association, Discount rates (See Discount rates at Reserve Banks) mortgage-backed securities, article 659 Fees (See Fees for Federal Reserve services to depository Gramm-Rudman-Hollings legislation 140 institutions) Greenspan, Alan Income from operations, announcement 150 Corporate restructuring activity, statement 142 Federal Reserve Board (See Board of Governors) Corporate restructuring and federal budget deficit, Federal Reserve Reform Act of 1989, H.R. 2795, statement.. 798 statement 267 Federal Reserve System (See also Board of Governors) Economic policy objectives, statement 282 Budget, statement 677, 678 Economic situation, statement 138 Membership, admission of state banks 19, 65, 152, Federal deficit, before the National Economic 445, 632, 699 Commission, statement 15 Federal Savings and Loan Insurance Corporation Federal Reserve Reform Act of 1989, H.R. 2795, and Monetary policy 615 Zero-Inflation Resolution, H.J. Res. 409, statement 795 Thrift industry recovery and reform 278, 347 Internationalization of securities markets, statement 557 Fedline II 543 Monetary policy report to Congress, statements 272, 614 Fedwire funds transfer and book-entry securities transfer, Monetary policy, statement 272 operating schedule, proposed changes 820 Thrift industry, reform and recovery, statement 278, 347 Fees for Federal Reserve services to depository institutions Check clearing and collection Expedited Funds Availability Act and Regulation CC, revision announcement 443 H.R. 176, statement regarding amendment 552 New Jersey state law, preemption determination 73 Hallman, Jeffrey J., staff study 263 Returned check services, revised prices 351 Hearings Priced services February 3, 1989, to rescind rule regarding nonbanking Automated clearinghouse 543,544 activities 65 Check collection services 540 Metrocorp, Inc. application, announcement 512 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 Federal Reserve Bulletin • December 1989 Page Page Heller, H. Robert LABOR Statistics, Bureau of 327 Brokered deposits, use by financial institutions, statement . 495 Large Dollar Payment System Risk, proposed Resignation as member of the Board of Governors 566 changes to policy 567 Historical Chart Book LaWare, John P. Discontinuance of publication 821 Compliance by state member banks with federal laws Publication of latest edition 821 prohibiting discrimination in mortgage lending, Home equity statement 790 Article 333 Legislation (See subject or specific name of act) Lending 341,342 Lepper, Susan J., Assistant Director, Division of Regulation Z, amendment 566 Research and Statistics, resignation 821 Home Equity Lines of Credit, brochure, publication 698 Litigation, cases pending involving Home Equity Loan Consumer Protection Act of 1988, Board of Governors 51, 105, 225, 320,405, 459, amendment to Regulation Z 566 525, 589, 655, 726, 770, 844 Home mortgage disclosure, reporting requirements change ... 19 Loans Home Mortgage Disclosure Act 19 Agricultural, recent developments 466 Hooper, Peter, article 321 Commercial and industrial, lending practices 463 Houpt, James V., article 255 Consumer, recent developments 466 Humphrey-Hawkins Act (See Monetary policy: Foreign addressees, recent developments 466 reports to the Congress) Lending practices of commercial banks, article 461 Real estate, recent developments 465 Security, recent developments 466 Local Initiatives Support Corporation and CRA 622 INCOME and Expenses, Federal Reserve Banks Loney, Glenn E., Flood insurance enforcement Operations, announcement 150 by the Federal Reserve System, statement 498 Statement 680 Luckett, Charles A., article 333 Industrial production, releases .. 13, 63, 134, 265, 345, 441, 491, 548,612,675,736,784 Inspector General Act Amendment of 1988, statement 684 M2 and V2 behavior, article 244 Inspector General, Office of, establishment and operation, M2 per unit of potential GNP as an anchor statement 684 for the price level, staff study 263 Interagency Country Exposure Review Committee 137, 256 Margin requirements Interim Policy Statement on Offshore Netting and Markets for stocks and derivative products, staff study 610 Clearing Arrangements, announcement of issuance 567 Over-the-counter stocks (See Over-the-counter margin Internal Revenue Service and monetary policy 615 stocks, list) International Banking Act and Federal Reserve Martinson, Michael G., article 255 System budget, statement 678 Mattingly, James V. Jr., General Counsel, appointment 288 International debt McAfee, James, Associate Secretary, Exposure of largest banking organizations, statement 806 Office of the Secretary, resignation 65 Problems of developing countries, U.S. policy, article 727 McFadden Act and the banking structure 122 International Lending Supervision Act of 1983 McLaughlin, Mary M., article 461 Debt-servicing difficulties 137 Meade, Ellen E., article 321 Reporting requirements 256 Member banks (See State member banks) U.S. bank lending to developing countries, statement 564 Metzenbaum, Senator Howard M 551, 553 International Monetary Fund 257,472 Monetary Control Act of 1980 International Organization of Securities Commissions, Federal Reserve System, budget, statement 678 statement on international securities markets 562 Income, preliminary figures, announcement 150 International Stock Exchange, statement on international Priced services 540 securities markets 560 Monetary policy International transactions in 1988, article 321 Article 53 Investment Services Directive 598 Reports to the Congress 107, 527 Statements 272, 614 Money stock data, revision 508 Mutual recognition: integration of the financial sector JACOWSKI, Michael J., article 120 in the European Community, article 591 Johnson, Jennifer J., Associate Secretary, Office of the Secretary, appointment 65 Johnson, Manual H. NATIONAL Association of Purchasing Management 140 Condition of the U.S. banking system, statement 803 National Economic Commission, statement to, Implications for U.S. financial institutions of plans by Alan Greenspan 15 by the European Community to complete internal National Information Center, expenses market by 1992, statement 744 to Federal Reserve Banks 681 State of bank insurance fund and adequacy of supervisory National Technical Information Service 288 framework for banking institutions, statement 738 Neighborhood Housing Services and CRA 622 Treasury Department report on U.S. international Neighborhood Reinvestment Corporation and CRA 622 economic and exchange rate policy, statement 810 New Jersey state law, preemption determination 73 U.S. banking system and debt-servicing difficulties, New York state law, preemption determination 25, 351, 362 statement 136 New York State Banking Department, basic Joint Policy Statement on Basic Financial Services 555 banking services survey 555 Nondeposit funds, revision to statistical table 1.24 151 KELLEY, Edward W., Jr., Federal Reserve System's budget, statement 677 OLINER, StephenD., article 771 Key, Sydney J., article 591 Optical Counterfeit Detection System and Federal Kohn, Donald L., article 53 Reserve Bank budget 683 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 75 A97 Page Page Orders Regulations (Board of Governors) - Continued Modifications to authorize bank holding company H, Membership of State Banking Institutions in the Federal subsidiaries to underwrite and deal in bank-eligible Reserve System securities consistent with Section 20 of the Risk-based capital guidelines, amendment 299 Glass-Steagall Act 751 Flood insurance enforcement by the Federal Organisation for Economic Co-operation and Development Reserve System 498 Codes of Liberalisation 609 Investment company stock purchases by state member European Community, integration, article 591 banks, interpretation 297, 299 International securities markets, statement 562 State member bank public information access 287 National Treatment Instrument 601 Stock purchases by state member banks, interpretation Organization of Petroleum Exporting Countries announcement 287 and monetary policy 615 K, International Banking Operations Over-the-counter stocks, list of marginable Banking organizations, statement 137 Revisions, announcements 151,444,447,631,633,820 Q, Interest on Deposits Amendments regarding changes 153,824 Deregulation effects on monetary policy 54 T, Credit by Brokers and Dealers Foreign securities, clearance of transactions PARKINSON, Patrick M., Assistant Director, Division of and marginability at broker-dealers, Research and Statistics, appointment 352 proposed amendments 823 Payment System Risk Reduction, announcement Marginable OTC stocks, list, amendment of issuance of policy statements 567 regarding changes 153, 447, 633, 823 Payments mechanism and systems (See Fees for Federal U, Credit by Banks for the Purpose of Purchasing Reserve services to depository institutions) or Carrying Margin Stocks Poole, William, article in Journal of Economic Marginable OTC stocks, list, amendment Perspectives 54 regarding changes 153, 447, 633, 823 Porter, Richard D. X, Borrowers of Securities Credit Article 244 Marginable OTC stocks, list, amendment Staff study 263 regarding changes 153, 447, 633, 823 Priced services, article 540 Y, Bank Holding Companies and Change in Bank Control Pricing of Federal Reserve services (See Fees for Federal Bank holding companies allowed to acquire savings Reserve services to depository institutions) associations in accordance with FIRREA, Prime Minister Takeshita 485 amendment 751, 753 Private book-entry systems, announcement on issuance Nonbank company share acquisitions, proposal of policy statement 567 to rescind provision 150 Private business capital, formation of, trends, recent Operations subsidiaries 19 developments, and measurement issues, article 771 Risk-based capital guidelines, amendment 156 Private Sector Adjustment Factor, revision to Z, Truth in Lending methodology for computing 567 Fair Credit and Charge Card Disclosure Act of 1988 Production, industrial (See Industrial production) Implementation 443,449 Profitability of commercial banks, article 461 Open-end credit plans, amendment 569 Publications in 1989 Proposed action 65 Annual Report, 75th edition, 1988 444 Home Equity Loan Consumer Protection Act Annual Statistical Digest, 1988 820 Amendment to carry out provisions 566 Federal Reserve Act 444 Proposed action 150 Historical Chart Book, 1989 821 Home Equity Lines of Credit, brochure 698 Reverse mortgages, disclosure questions, List of Marginable OTC Stocks, revisions .. 151, 444, 631, 820 announcement 352, 363 Technical error, correction 636 CC, Availability of Funds and Collection of Checks Clarification of various provisions, amendment 370 QUALIFIED thrift lender test 349 Expedited Funds Availability Act Revisions, amendment 443 Payable through checks, amendment 631,636 REFORM and recovery program support announcement 287 New Jersey state law, preemption determination 73 Regulations (Board of Governors, See also Rules) Teller's and cashier's checks, delayed B, Equal Credit Opportunity disbursement 150, 443 New York state law, preemption determination 25, 352, Wisconsin state law, preemption determination, 361,362 amendment 368 Women's Business Ownership Act, proposal Reserve requirements, increase, Dec. 20, 1988 65 to implement provisions 631 Resolution Trust Corporation 280, 349 C, Home Mortgage Disclosure Act, amendment Resumption Act 423 regarding proposed revisions 820 Risk-based capital D, Reserve Requirements of Depository Institutions Asset securitization provisions 667 Amendment to change reserve requirements 26 Requirement guidelines issued 147, 156 E, Electronic Funds Transfer Rollovers and Continuing Contracts to Reduce Code of Federal Regulations, correction, amendment ... 73 Daylight Overdraft Exposure, announcement Direct deposit, social security benefits, disclosure on issuance of policy statement 567 requirements, announcement 352 Disclosure requirement, revision to official staff Rosine, John, article 1 commentary 362 Rude, Christopher, reports 259 G, Securities Credit by Persons Other than Banks, Rules Brokers, or Dealers Procedure Marginable OTC stocks, list, amendment Update of citations to statutory and regulatory regarding changes 153, 447, 633, 823 provisions, amendment 701 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 Federal Reserve Bulletin • December 1989 Page Page Rules-Continued Statements to Congress—Continued Regarding delegation of authority Flood insurance enforcement by the Federal Reserve Director interlocks granted to Federal Reserve Banks, System (Glenn E. Loney, Assistant Director, decision 380 Division of Consumer and Community Affairs) 498 Government Check Cashing Act of 1989 (Governor Seger) 786 Internationalization of securities markets S. 909, statement regarding legislation 550, 551 (Chairman Greenspan) 557 Second Banking Directive 598 Legislation relating to the Community Reinvestment Act, Second Life Insurance Directive 599 die Government Check Cashing Act of 1989, Second Nonlife Insurance Directive 599 and the Basic Banking Services Access Act Securities (See also specific types), asset-backed, article 659 of 1989 (Governor Seger) 550 Securities and Exchange Commission Monetary policy (Chairman Greenspan) 272,614 International securities markets, statement 562 Mortgage lending, antidiscrimination compliance by U.S. bank lending to developing countries, statement 564 state member banks (Governor LaWare) 790 Securities markets, internationalization of, statement 557 Office of Inspector General, establishment and Seger, Martha R. operation (Brent L. Bowen, Inspector General, Basic Banking Services Access Act of 1989, H.R. 3181, Board of Governors) 684 statement 786 State of the bank insurance fund and adequacy Government Check Cashing Act of 1989, H.R. 3180, of the supervisory framework for banking institutions statement 786 (Vice Chairman Johnson) 738 Legislation relating to the Community Reinvestment Thrift industry, reform and recovery Act, the Government Check Cashing Act of 1989, (Chairman Greenspan) 278, 347 and the Basic Banking Services Access Treasury Department report on U.S. international Act of 1989, statement 550 economic and exchange rate policy Truth in Savings Act, H.R. 736, statement 493 (Vice Chairman Johnson) 810 Senior Loan Officer Opinion Survey of Bank Truth in Savings Act, H.R. 736 (Governor Seger) 493 Lending Practices 464 U.S. banking system, condition (Vice Chairman Johnson) . 803 Single European Act 594 Zero-Inflation Resolution (Chairman Greenspan) 796 Small, David H. Statistical releases, available through computerized Article 244 bulletin board, announcement 288 Staff study 263 Stock market credit, over-the-counter stocks (See Snyder, Barry R., Assistant Inspector General, Over-the-counter stocks, list of marginable; and Office of Inspector General, appointment 288 Regulations: G, T, U, and X) Social security benefits, direct deposit, disclosure Stockwell, Eleanor J., Associate Director, requirements, announcement 352 Division of Research and Statistics, retirement 19 Staff studies Stockton, David J., Associate Director, Division Adequacy and consistency of margin requirements in the of Research and Statistics, promotion 751 markets for stocks and derivative products 610 Summers, Bruce J., Associate Director, Division of Federal M2 per unit of potential GNP as an anchor Reserve Bank Operations, appointment 152 for the price level 263 Supplementary Financing Facility of the International State member bank public information access 287 Monetary Fund 489 State member banks Survey of Terms of Bank Lending 464 Capital adequacy guidelines, risk-based measure 157 Compliance with federal laws prohibiting discrimination in mortgage lending, statement 790 Statement to National Economic Commission, federal deficit TABLES (For index to tables published monthly, see guide (Chairman Greenspan) 15 at top of page A88; for special tables published during Statements to Congress (including reports and letters) the year, see list on page A71. Bank supervisory policies regarding U.S. bank Tandem operations restrictions, proposed action, lending to developing countries announcement 443 (William Taylor, Director, Division of Banking Tax Reform Act of 1986 Supervision and Regulation) 563 Effect on securities 467 Banking system and debt-servicing difficulties Home equity lending, article 334 (Vice Chairman Johnson) 136 Removal of federal income tax deductions for Basic Banking Services Access Act of 1989 interest paid on nonmortgage consumer credit 334 (Governor Seger) 786 Taylor, William, statement 563 Brokered deposits use by financial institutions Testimony (See Statements to the Congress) (Governor Heller) 495 Thrift Institutions Advisory Council, members, Community Reinvestment Act, enforcement (Griffith L. new appointments 148 Garwood, Director, Division of Consumer Thrift institutions, reform and recovery, statements 278, 347 and Community Affairs) 619 Tigert, Ricki R., Associate General Counsel, title change .... 152 Corporate restructuring activity, recent trends Training, bank examiners, on flood insurance requirements .. 500 (Chairman Greenspan) 142 Transfers of funds Corporate restructuring and the federal budget deficit Fees (See Fees for Federal Reserve services to (Chairman Greenspan) 267 depository institutions) Current economic situation (Chairman Greenspan) 138 Regulation E (See Regulations: E) Economic policy objectives (Chairman Greenspan) 282 Treasury and Federal Reserve foreign exchange European Community, internal market, implications for operations (See Foreign exchange operations) U.S. financial institutions (Vice Chairman Johnson) 744 Truman, EdwinM., article 727 Federal Reserve Reform Act of 1989 Truth in Lending Act, Fair Credit and Charge Card (Chairman Greenspan) 796 Disclosure Act, amendments 449 Federal Reserve System's budget for 1989 Truth in Lending, Regulation Z (See Regulations: Z) (Governors Angell and Kelley) 677 Truth in Savings Act, H.R. 736, statement 493 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 75 A99 Page Page U.S. banking system, condition, statement 803 WALRAVEN, Nicholas, article 1 U.S. Department of Agriculture 2 Warshawsky, Mark J., staff study 610 U.S. Department of Commerce Weintraub, Cathy, report 670 Computerized bulletin board 288 Welch, Patricia A., Assistant Director, Division of Drought estimates, article 1 Applications Development and Statistical International transactions, computers 328 Services, resignation 698 U.S. Department of Justice 123 Whitehouse, Michael A., article 227 U.S. Department of the Treasury 150, 489 Wisconsin state law,preemption determination 368 Exchange Stabilization Fund 61,262,489,674 Wolfson, Martin H., article 461 Federal Reserve System Women's Business Ownership Act, Regulation B, Budget 677 proposal to implement provisions 631 Foreign exchange operations 489 World Bank 472 Operating income 150 Payments by the Federal Reserve System for 1988 150 U.S. international economic and ZERO-Inflation Resolution, H.J. Res. 409, statement 797 exchange rate policy, report 810 Uruguay Round of the General Agreement on Tariffs and Trade 591 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A100 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 Donald E. Nelson Birmingham 35283 Nelda P. Stephenson Fred R. Herr1 Jacksonville 32231 Hugh Brown James D. Hawkins1 Miami 33152 Jose L. Saumat James T. Curry III Nashville 37203 Patsy R. Williams Melvin K. Purcell 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 John F. Gardner Leonard W. Fernelius1 (Acting) 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 Los Angeles 90051 Yvonne B. Burke Thomas C. Warren2 Portland 97208 Paul E. Bragdon Angelo S. Carella1 Salt Lake City 84125 Don M. Wheeler E. Ronald Liggett1 Seattle 98124 Carol A. Nygren Gerald R. Kelly1 *Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. Digitized for FRASER 1. Senior Vice President. http://fraser.stlouisfed.org/ 2. Executive Vice President. Federal Reserve Bank of St. Louis

A101 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories April 1984 i i ALASKA i i i i i © i A /p SAN LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch * Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT Three booklets on the mortgage process are also PUBLICATIONS available: A Consumer's Guide to Mortgage Refinancings, A Consumer's Guide to Mortgage Lock-Ins, and The Federal Reserve Board publishes a series of A Consumer's Guide to Mortgage Settlement Costs. pamphlets covering individual credit laws and topics, These booklets were prepared in conjunction with the as pictured below. The series includes such subjects as Federal Home Loan Bank Board and in consultation how the Equal Credit Opportunity Act protects wom- with 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's Guide to Mortgage Lock-Ins 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