Federal Reserve Bulletin, 1990-12

VOLUME 76 • NUMBER 12 • DECEMBER 1990 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 Graphics Center 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 985 THE TRANSMISSION CHANNELS OF 1022 STATEMENTS TO THE CONGRESS MONETARY POLICY: HOW HAVE Alan Greenspan, Chairman, Board of Gov- THEY CHANGED? ernors, discusses deposit insurance reform Over the past two decades, important struc- and says that the Board believes it is importural changes in the economy—resulting tant for the Congress to review options from institutional, regulatory, and techno- other than reduced insurance coverage to logical developments—may have altered address the root cause of the taxpayer exthe nature and stability of the channels posure and potential financial market disthrough which monetary policy affects the tortions associated with our present deposit level of economic activity in the short run. insurance and supervisory approaches, be- To assess the scope and magnitude of pos- fore the Subcommittee on Commerce, Consible structural changes in the economy that sumer, and Monetary Affairs of the House may have affected the transmission chan- Committee on Monetary Affairs, October 3, nels of monetary policy, this article uses the 1990. MPS model of the U.S. economy to examine whether the key links between mone- 1032 William Taylor, Staff Director, Division of tary policy and economic activity appear to Banking Supervision and Regulation, Board have changed appreciably over the 1980s. of Governors, testifies on the role of the Federal Reserve in the supervision of foreign banks operating in the United States and uses the actions taken by the Federal 1009 THE CURRENT FISCAL SITUATION IN Reserve to deal with the problems at the STATE AND LOCAL GOVERNMENTS Atlanta agency of Banca Nazionale del Lavoro to show how the Federal Reserve's The fiscal position of state and local governauthority was used in a particular situation, ments has deteriorated markedly during the before the House Committee on Banking, past several years, with many governments Finance and Urban Affairs, October 16, confronting potential shortfalls in their op- 1990. erating accounts. This article describes the accounts of the state and local sector, discusses the recent spending requirements 1036 ANNOUNCEMENTS and revenue weaknesses that have precip- Meeting of Consumer Advisory Council. itated the current budget woes, and gives a brief perspective on the outlook. Schedules for 1991 for fees charged by the Federal Reserve Banks now available. Requirement for notification of "off-line banks" of receipt of third-party funds on 1019 INDUSTRIAL PRODUCTION Fed wire. Industrial production increased 0.2 percent Revision of Subpart B of Regulation J govin September after increases (revised) of 0.1 erning funds transfers through Fedwire. percent in August and 0.2 percent in July. Industrial capacity utilization was un- Proposed technical changes to the Board's changed in September at 83.6 percent. risk-based capital guidelines; extension of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

period to receive comments on proposed AI FINANCIAL AND BUSINESS change to the pricing structure for the Fed- STATISTICS eral Reserve's Interdistrict Transportation These tables reflect data available as of Service. October 26, 1990. Report, 1983 Survey of Consumer Finances: Design and Methods, now avail- A3 Domestic Financial Statistics able. A46 Domestic Nonfinancial Statistics 1038 RECORD OF POLICY ACTIONS OF THE A55 International Statistics FEDERAL OPEN MARKET COMMITTEE At its meeting on August 21, 1990, the All GUIDE TO TABULAR PRESENTATION, Committee adopted a directive that called STATISTICAL RELEASES, AND for maintaining unchanged conditions of SPECIAL TABLES reserve availability, at least initially, in the intermeeting period ahead and that pro- A86 BOARD OF GOVERNORS AND STAFF vided for giving emphasis to potential developments that might require some easing during the intermeeting period. Accord- A88 FEDERAL OPEN MARKET ingly, slightly greater reserve restraint COMMITTEE AND STAFF; ADVISORY might be acceptable during the intermeeting COUNCILS period, while some easing of reserve pressure would be acceptable, depending on A90 FEDERAL RESERVE BOARD progress toward price stability, the strength PUBLICATIONS of the business expansion, the behavior of the monetary aggregates, and developments in foreign exchange and domestic financial A92 SCHEDULE OF RELEASE DATES FOR markets. The reserve conditions contem- PERIODIC RELEASES plated by the Committee were expected to be consistent with somewhat faster near- A94 INDEX TO STATISTICAL TABLES term growth in money than the members had anticipated earlier, including growth in M2 and M3 at annual rates of about 4 and A96 INDEX TO VOLUME 76 2V2 percent respectively over the threemonth period from June to September. The A109 FEDERAL RESERVE BANKS, intermeeting range for the federal funds rate BRANCHES, AND OFFICES was left unchanged at 6 to 10 percent. 1045 LEGAL DEVELOPMENTS AI 11 MAP OF THE FEDERAL RESERVE SYSTEM Various bank holding company, bank service corporation, and bank merger orders; and pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy: How Have They Changed? Eileen Mauskopf of the Board's Division of Re- this article is to use the MPS model of the U.S. search and Statistics prepared this article. The economy to examine whether the key links between author acknowledges the research assistance of monetary policy and economic activity appear to Sandra Cannon and the advice and assistance of have changed appreciably over the past decade. The Flint Bray ton. Jeffrey Fuhrer and Peter Tinsley MPS model is a large-scale econometric model of wrote the appendix. the United States that reflects mainstream macroeconomic theory and standard econometric prac- Over the past two decades, important structural tice. It was developed in the late 1960s in collabochanges in the economy—resulting from institu- ration with university economists and has been tional, regulatory, and technological develop- maintained and updated by the staff of the Federal ments—may have altered the nature and stability Reserve Board over the past twenty years.2 of the channels through which monetary policy affects the level of economic activity in the short run. For example, the abandonment of fixed exfollowing: M.A. Akhtar and Ethan S. Harris, "Monetary change rates in the early 1970s and the integration Policy Influence on the Economy—An Empirical Analysis," of world capital markets have increased the scope Quarterly Review, Federal Reserve Bank of New York, vol. 11 (Winter 1986-87), pp. 19-34; Barry Bosworth, "Institufor monetary policy to affect a growing tradedtional Change and the Efficacy of Monetary Policy," Brookgoods sector. The introduction of adjustable-rate ings Papers on Economic Activity, 1:1989, pp. 77-110; Benmortgages, the removal of regulatory ceilings on jamin M. Friedman, "Changing Effects of Monetary Policy on Real Economic Activity," Monetary Policy Issues in the deposit rates, and the development of secondary 1990s (Federal Reserve Bank of Kansas City, August 30mortgage markets may have altered the interest September 1, 1989), pp. 55-111; and George A. Kahn, "The sensitivity of residential construction activity. Changing Interest Sensitivity of the U.S. Economy," Economic Review, Federal Reserve Bank of Kansas City, vol. 74 The runup in corporate debt—a consequence of (November 1989), pp. 13-34. In these studies, conclusions the surge of takeovers and leveraged buyouts in are mixed, with some sectors found to be less sensitive to the 1980s—may have altered the response of interest rates over recent years and others to be more sensitive. The papers by Friedman and Kahn, the only ones business capital spending plans to interest rates. that include an aggregate assessment, suggest that the net And the increased sensitivity to interest rates of effect of these changes to sectoral interest-rate sensitivities is household interest income, owing to the removal a reduced sensitivity of aggregate GNP to interest rates. 2. For a detailed description of the MPS model, see Flint of deposit rate ceilings, and of household interest Brayton and Eileen Mauskopf, "The Federal Reserve payments, owing to the growing share of adjust- Board MPS quarterly econometric model of the US econoable-rate financial liabilities, may have had some my," Economic Modelling, vol. 3 (July 1985), pp. 170-292, and "Structure and Uses of the MPS Quarterly Econometbearing on consumption behavior. Such developric Model of the United States," Federal Reserve Bulletin, ments could greatly affect not only the ways in vol. 73 (February 1987), pp. 93-109. Probably the most which monetary policy influences the economy important difference between the theory embedded in the MPS model and that espoused by one of the more popular but also the strength of its overall influence. schools of macroeconomic theory since the 1970s is in the Assessing the scope and magnitude of possible modeling of expectations formation. In the MPS model, structural changes in the economy that may have expected values of future variables are generally assumed to be based on past values of these variables. The alternaaffected the transmission channels of monetary poltive view—the rational expectations approach—argues that icy is a difficult task.1 The approach employed in economic agents are motivated to use all available information in forming expectations, including their knowledge of the structure of the economy. Generally, the implementation of this approach sets expected values of future varia- 1. Other studies of the implications for monetary policy of bles equal to the forecasts generated by the model in which the changing structure of the U.S. economy include the the expectations appear. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

986 Federal Reserve Bulletin • December 1990 The approach taken here is not without its changes in monetary policy. The two versions shortcomings. Evidence that the equations in the represent the distinct responses of financial model have not remained constant over time markets and real spending that have been found could reflect either structural changes in the to be significantly different over the pre- and economy or some underlying misspecification of post-1980 periods. the relationships in the equations. To make the The main findings of the article are as follows: case for structural change rather than misspeci- The sensitivity of aggregate output to changes fication, we augment the results of standard in monetary policy is about the same now as it statistical tests with evidence that the properties was in the 1960s and 1970s, until about the third of the equation are consistent with accepted or fourth year after a change in short-term economic theory and that observed shifts are interest rates. After the first few years, the consistent with the specific hypotheses regarding interest sensitivity of aggregate output to a change. In addition, the simulation and forecast- change in short-term rates is smaller today than ing properties of this model have been well it was in the earlier decades. The changes in the documented and thus provide some perspective response of aggregate output to changes in on the strengths and weaknesses of the model, interest rates mask some larger, but mostly which aids in interpreting the tests undertaken offsetting, changes in the responses of different for structural change. sectors. Both residential and nonresidential The first part of this article describes the three construction are less sensitive to interest rates. main channels through which monetary policy In residential construction, the reduction in actions affect real spending in the model—the sensitivity reflects the absence of disintermedicost of capital, the value of assets, and the ation-induced episodes of credit rationing (disforeign exchange value of the dollar. Model ruptions in the supply of credit that occurred simulations quantify the relative importance of when funds dried up during periods of high each channel in the current structure of the interest rates); it does not reflect any reduction model, which is estimated using economic data in the direct effect of interest rates on the from the past thirty years. demand for housing. The traded goods sector The second and third sections examine, in has become more responsive to changes in turn, the effect of monetary policy on financial interest rates because the exchange rate has market variables and the influence of those var- become more sensitive to the difference beiables on spending decisions. Specifically, the tween U.S. and foreign interest rates. Monetary second section examines whether the relation- policy affects consumption spending and investships underpinning the demand for money, the ment in producers' durable equipment much the term structure of interest rates, the value of same as before. In financial markets, long-term corporate stock, and the foreign exchange value interest rates appear to have responded more of the dollar changed appreciably over the 1980s. quickly in the 1980s than they did before to The third section explores whether the manner in changes in short-term rates. which these financial variables affect consumption and investment has changed in the past ten years. To study the question of structural OVERVIEW OF MONETARY POLICY change, these sections present results of statisti- TRANSMISSION CHANNELS cal tests aimed at identifying changes in the relationship between economic variables. (For In the MPS model, the structure of the monean alternative approach to the issue of identifying tary transmission mechanism draws on two structural change, see the appendix.) critical characteristics of the general "Keynes- In the final section, simulations of two ver- ian" paradigm. First, changes in the supply of sions of the model are used to examine whether real money balances affect spending only the changes of the past decade have, on net, through changes in interest rates. There is no raised or lowered the sensitivity of output to direct channel from a change in money balances Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 987 1. Effects on spending of a reduction of 1 percentage point in the federal funds rate, by spending category1 Investment Quarters after Consumption Net exports Total Residential Business reduction Inventory construction fixed Billions of 1982 dollars 5.1 1.1 1.5 4.9 2.7 15.3 6.9 3.7 1.9 7.3 7.8 27.6 12 9.5 8.5 1.1 13.9 10.2 43.2 16 12.7 14.3 .9 17.3 6.4 51.6 20 13.1 20.7 .7 26.1 2.2 62.8 Percent of total effect 4 33 7 32 18 100 8 25 13 26 28 100 12 22 20 32 24 100 16 25 28 34 12 100 20 21 33 42 4 100 1. These results trace the effect of the changes in the federal funds rate from goods markets to financial markets or prices. The initial conditions are on financial markets and, through financial markets, on final demand those of 1985:1. Details may not sum to totals because of rounding. categories. Not included are multiplier-accelerator interactions or feedbacks to spending. Second, these changes in interest the influence of the cost of borrowed funds on rates generally imply changes in real rates in the business and household investment decisions; short run because wage and price expectations the influence of the value of wealth on conadjust only sluggishly. This article thus identi- sumption; and the influence of the exchange fies the stance of monetary policy with move- rate on the volume of imports and exports. ments in short-term interest rates—specifically Although these channels are not independent of the overnight federal funds rate, which is com- one another, the direct quantitative importance monly regarded to be controllable by Federal of each can be gauged by tracing the effects of a Reserve actions. 1 percentage point reduction in the federal In the MPS model, changes in the central funds rate on spending when each channel bank's monetary stance affect spending and operates alone (tables 1 and 2). To emphasize output directly through three primary channels: the interest sensitivity of each component of 2. Effects on spending of a reduction of 1 percentage point in the federal funds rate, by transmission channel1 Cost of capital Wealth Exchange rate QQuuaarrtteerrss aafftteerr rreedduuccttiioonn TToottaall Investment2 Consumption Total Consumption Net exports Billions of 1982 dollars 4 7.7 2.8 10.5 2.1 2.7 15.3 8 12.5 1.3 13.8 6.0 7.8 27.6 12 19.1 .6 19.7 13.3 10.2 43.2 16 27.9 .5 28.4 16.8 6.4 51.6 20 34.5 .2 34.7 25.9 2.2 62.8 Percent of total effect 4 50 18 68 14 18 100 8 45 5 50 22 28 100 12 45 1 46 31 24 100 16 55 1 56 33 12 100 20 55 * 55 41 4 100 MEMO Average percentage 55 28 17 100 1. See note to table 1. tory investment. See table 1 for details. 2. Includes residential construction, business fixed investment, and inven- * Less than 0.5 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

988 Federal Reserve Bulletin • December 1990 spending, no feedback is allowed from one of the effect of changes in wealth on consumpsector's spending to another sector's spending. tion shown in table 2 takes into account the lag In addition, wages and prices are held fixed so between changes in the federal funds rate and that the change in the federal funds rate is a changes in the corporate bond rate, the yield on change of the same magnitude in the real rate of equity, and the price of land.3 interest. Finally, a decline in U.S. interest rates leads The influence of the federal funds rate on the to a depreciation of the dollar, which boosts net cost of capital and through the cost of capital on exports as domestically produced goods beconsumption and investment is the largest of come more competitive. This channel contribthe three channels and accounts, on average, utes, on average, 17 percent of the total direct for about 55 percent of the total direct effect. effects. The magnitude and the timing of the The cost of capital is a measure of the rate of response of net exports reflect the estimated lag return on an investment that is necessary to between changes in the exchange rate and cover the costs of financing, depreciation, and changes in import and export prices and betaxes. Financing costs, in turn, consist of the tween changes in these prices and changes in interest paid on bank loans or marketable debt the demand for imports and exports. The caland the costs of raising funds in the equity culated contribution of this channel is based on market. In some instances, such as inventory the assumption that foreign interest rates do not investment, spending behavior appears to be respond to the decline in U.S. interest rates, sensitive to movements in short-term interest and thus it tends to overstate the exchange rate rates. For longer-lived investment, such as bus- influence should foreign monetary authorities iness fixed investment or residential construc- correspondingly reduce foreign interest rates. tion, long-term interest rates are more relevant Comparing the estimates in tables 1 and 2 to the investment decision. with calculations DeLeeuw and Gramlich made Variations in the cost of capital alter the more than twenty years ago using an early desired proportions of capital and labor in pro- version of the MPS model provides an interestduction, the desired stock of housing relative to ing historical perspective.4 As they are in the income, and the desired stock of consumer current structure of the model, the cost of durables relative to income. A decline in the capital and the value of wealth were of greatest cost of capital increases the desired stock of importance for the transmission of monetary capital, and spending consequently increases policy. But the link between credit rationing relative to a baseline of higher interest rates— and residential construction, rather than variainitially to obtain the additional capital and then tions in the exchange rate, was identified as the to offset the depreciation on the larger stock of third channel of transmission. This difference capital. The cost of capital has its largest effects on business fixed investment and residential construction activity. The pattern of cost-of- 3. Because equity and land values are the capitalized capital effects over time reflects the lag between values of the income flow expected from the respective assets, the precise effect of a change in the federal funds rate a change in the federal funds rate and changes on wealth depends on the level from which the interest rate is in long-term interest rates and also between assumed to be reduced. For example, if the interest rate fell changes in these interest rates and changes in from 5.0 percent to 4.0 percent, the market value of wealth would rise 20 percent, given a sufficient length of time. If, investment. instead, the interest rate were 9.0 percent, the percentage In terms of the direct effect over five years, a increase in wealth would be approximately 11 percent for the change in the stock of wealth is next in impor- same 1 percentage point reduction. In tables 1 and 2, the federal funds rate averaged 7.7 percent in the base run so that tance in transmitting changes in the federal the effective decline in the interest rate in tables 1 and 2 is 13 funds rate to changes in spending: It contributes percent. on average 28 percent of the total direct effects. 4. Frank de Leeuw and Edward M. Gramlich, "The Channels of Monetary Policy: A Further Report on the In the MPS model, a change in wealth directly Federal Reserve-MIT Econometric Model," Federal Reaffects only consumption spending. The timing serve Bulletin, vol. 55 (June 1969), pp. 472-91. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 989 3. Effects of changes in monetary policy on selected economic variables' Quarters after change Variable 1 8 12 16 20 Partial model: Reduction of 1 percentage point in the federal funds rate Real GNP (billions of dollars) 3.10 6.50 15.30 27.60 43.20 51.60 62.80 (percent) .10 .20 .40 .70 1.10 1.30 1.50 Federal funds rate (percentage points).. -1.00 -1.00 -i.00 -1.00 -1.00 -1.00 -1.00 Corporate bond rate (percentage points) -.19 -.21 -.28 -.38 -.68 -.92 -.98 Dividend-price ratio (percentage points) -.04 -.07 -.12 -.17 -.31 -.43 -.50 Exchange rate (percent) -1.80 -1.90 -2.30 -1.40 -.70 .30 -.60 M2 (percent) .30 .70 1.40 2.30 1.90 1.30 .70 Full model: Phased increase of 1.5 percent in level of M2 Real GNP (percent) .10 .10 .40 .90 1.40 1.20 -.50 GNP implicit price deflator (percent) .. .00 .00 .10 .40 .90 1.80 2.70 Federal funds rate (percentage points).. -.92 -.43 -.63 -.15 .50 1.98 .71 M2 (percent) .25 .50 1.00 1.50 1.50 1.50 1.50 1. The top panel corresponds to the simulation reported in tables 1 and 2, which does not allow for multiplier-accelerator interactions or feedbacks from the goals market to financial markets and prices. reflects some of the structural changes de- production technology, and the rate of technoscribed at the beginning of this article. In the logical progress. 1960s, variations in the exchange rate were A second, related simplification is the assumpinfrequent because exchange rates were, for the tion that monetary policy can peg the rate of most part, fixed under the Bretton Woods interest for an extended period. An attempt to agreement. And mortgage credit and, conse- conduct monetary policy by permanently lowerquently, housing activity were at times con- ing the nominal rate of interest could eventually strained by the regulation of interest rates on lead to an unstable path for real output and savings deposits and the absence of readily prices. Lowering the nominal rate of interest available alternative sources of mortgage funds. lowers real interest rates initially by a similar Although the results presented in tables 1 and amount and leads to an increase in output, a 2 suggest that monetary policy exerts a power- reduction in unemployment, and an increase in ful influence on real output, the simulation inflation. But this last effect further reduces real exaggerates the actual influence on the sustain- interest rates and consequently raises output and able level of real output because it abstracts inflation further. By holding prices fixed, the from two critical aspects of the economy. First, simulation reported in tables 1 and 2 hides the the simulation holds wages and prices constant potential instability created by a policy that pegs and thus creates the impression that the supply nominal interest rates. of labor and the production of output adjust The lower panel of table 3 presents a simulafully to the increase in demand generated by the tion of the full model, which drops both of the decline in interest rates. In fact, wages and simplifying assumptions made earlier.5 A comprices appear to be sufficiently flexible—albeit parison of the upper and lower panels illustrates with some lag—so that, as aggregate demand the transitory effects on real output of a change increases and labor markets tighten, the burden of the adjustment will shift to wages and prices. In the long run, changes in the level of the 5. In this simulation, monetary policy is characterized by a money stock cause changes only in the price phased increase in the level of M2 of IV2 percent, rather than level and are neutral with respect to the level of a once-and-for-all decrease in the federal funds rate. The real production, which is constrained by the 1 Vi percent increase in M2 is the average increase that results under the assumptions made in the top panel about prices and quantities of labor and capital available, the the federal funds rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

990 Federal Reserve Bulletin • December 1990 in the stance of monetary policy when wages Ml demand. The model tended to fit the data and prices are allowed to respond fully. The quite well. According to this theory, the optimal easing of the monetary stance stimulates de- level of money balances was determined by mand pressures that cause a small rise in prices offsetting the interest forgone in the holding of within one year and larger increases subse- non-interest-bearing money, instead of interestquently. The simulated path of real output is bearing but less liquid assets, with the lower cyclical, but the effect on activity is negligible transaction costs resulting from less frequent in the long run. switching between money and interest-bearing assets. The specification led to an inverse relation between the short-term market rate of THE LINK BETWEEN MONEY, FINANCIAL interest and the quantity of money demanded, MARKETS, AND ASSET PRICES and to a positive relation between the level of nominal income and the quantity of money In general, the equations of the MPS model demanded. have been estimated under the assumption that, By 1974, the fit of these equations began to aside from the absence after 1980 of credit- deteriorate. The actual level of Ml (specifically, rationing constraints on housing expenditures, the demand deposit component of Ml) fell far no significant shifts have occurred in economic short of the quantity predicted by the equation. behavior over the estimation period of nearly It is now clear that the shortfall in money thirty years. By examining in more detail the growth was related to various innovations in links among money, interest rates, and asset financial markets, some designed to reduce the values and applying statistical tests aimed at transactions costs of switching between money identifying shifts in these relationships during and an interest-bearing asset and others to the past ten years, this section weighs the reduce the variance and uncertainty of cash validity of that assumption. flow. The introduction and growing use of many of these techniques (for example, overdraft accounts, repurchase agreements, and remote From Money to Short-Term Interest Rates: disbursement of checks) was apparently related The Demand for Money to the spread of computer technology in the banking industry starting in the mid-1970s. A stable empirical relationship between money These innovations ultimately reduced the deand market interest rates has been difficult to mand for the traditional medium of exchange. pin down since the early 1970s. In hindsight, (For more information on this subject and othmost of this instability can be accounted for ers discussed in this article, see the selected either by innovations in financial practices de- reading list at the end of the article.) signed to raise the effective rate of return on At the same time, changes in regulations money balances or by the subsequent removal expanded the range of instruments that could of regulations that constrained the rate of return serve as a medium of exchange, one of the more on deposits. The creation of new depository far-reaching of which was an interest-bearing instruments further weakened the reliability of checkable account for households, state and the relation between money and interest rates. local governments, and nonprofit institutions. The link between money and short-term in- The increasing use of these accounts led the terest rates is usually based on some theory of Federal Reserve in 1980 to distinguish Ml, the transactions demand for money. For a long naming it MIA, from a slightly broader aggretime, a simple model of the demand for mon- gate, M1B, which included these other checkey—popularized by William J. Baumol and able deposits (OCDs). Although the aim in James Tobin and based on models of optimal creating M1B (now referred to as Ml) was to inventory behavior—was used in the MPS construct an aggregate with a predictable and model and many of the other large-scale mac- stable relationship to income and interest rates, roeconomic models to describe the behavior of the empirical stability of M1B was short-lived. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 991 The demand deposit component of M1B be- From Short-Term to Long-Term Interest came increasingly difficult to explain. More- Rates: The Term Structure over, the emergence of two instruments that were close substitutes for the OCD component In the model, short-term interest rates—for exof M1B—money market mutual funds in the late ample, the commercial paper rate—are important 1970s and money market deposit accounts in in explaining inventory behavior and expendi- 1982—argued for emphasizing a larger aggre- tures on consumer durables. They are less imgate that encompassed them. Thus, over the portant in explaining residential construction and past several years, attention has shifted to M2, business fixed investment, which are assumed to where some success has been achieved in mod- be more sensitive to longer-term rates of interest. eling aggregate M2 as a function of nominal Long-term interest rates are also important in the income or consumption and the opportunity transmission process because of their role in cost, defined as the excess of market rates of explaining variations in wealth, itself a key deinterest over the rates paid on M2 components. terminant of consumption. Because most M2 components bear interest A standard view of the determination of longrates that respond gradually to the return on term interest rates is that arbitrage between market instruments such as Treasury bills, M2 short-term and long-term debt instruments is more responsive in the short run than in the should equalize expected returns over common long run to movements in market interest rates. holding periods, except possibly for risk premi- Modeling the sluggish behavior of M2 rates ums. This view implies that the yield on a appears to be important in specifying a stable long-term asset, such as a corporate bond, equation for M2 demand. should be a weighted average of the current and The behavior of the monetary aggregates expected future short-term rates over the life of since the mid-1970s points to changes in and the asset. In the MPS equation, the determigreater uncertainty about the relations between nants of the expected path of future short-term money and income and between money and the interest rates are assumed to be past values of rate of interest. It thus has reduced the indica- the commercial paper rate and of the inflation tor value of money in gauging the present state rate. This specification, based on the work of of the economy and diminished the usefulness Franco Modigliani and Robert J. Shiller, asof money as an intermediate target in the pres- sumes that changes in the commercial paper ence of uncertainties about the economy.6 rate ultimately are reflected in entirety in From the perspective of the model, however, changes in the bond rate and changes in the uncertainty about the demand for money is of inflation rate have only a transitory effect on the limited practical import. The monetary author- bond rate.7 The pattern of lag coefficients is ity remains capable of influencing output in the permitted to vary with the level of recent shortshort run as long as it can directly influence the term rates to reflect the dependence of the short-term interest rate. The instability of the duration of coupon bonds, such as corporate money demand function just makes more dif- bonds, on the interest rate.8 ficult the task of estimating the change in the monetary aggregate that would accompany any given change in the short-term interest rate. 7. Franco Modigliani and Robert J. Shiller, "Inflation, Rational Expectations and the Term Structure of Interest Rates," Economica, vol. 40 (February 1973), pp. 12-43. Of course, long-term interest rates do respond permanently to changes in the inflation rate to the extent that changes in the inflation rate are reflected in the commercial paper rate. 6. Nevertheless, empirical evidence of a stable long-run 8. The higher the current short-term rate, the greater is the relationship between M2 and nominal GNP supports a role contribution of near-term coupon payments to the present for M2 as a nominal anchor for monetary policy. See Jeffrey value of the bond, and thus the shorter the duration of the J. Hallman, Richard D. Porter, and David H. Small, M2 per bond. The hypothesis is that the duration of a bond will Unit of Potential GNP as an Anchor for the Price Level, Staff influence the manner in which past values of interest rates Studies 157 (Board of Governors of the Federal Reserve affect expected values. Specifically, for a bond of long System, 1989). duration, the behavior of interest rates over a long period of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

992 Federal Reserve Bulletin • December 1990 4. Tests for structural stability in MPS equations Probability of Equation and component tested for change no structural Nature of change in interest rate sensitivity change1 1. Corporate bond rate: Interest rate .02 Faster passthrough of changes in short-term interest rate. 2. Dividend-price ratio: Interest rate < .01 Slower passthrough of changes in long-term interest rate. 3. Exchange rate . . . Greater sensitivity to short-term interest rate based on other evidence. 4. Residential construction: Cost of capital .99 No significant change in cost-of-capital sensitivity of desired stock, 5. Residential construction: Cost of capital and intercept .44 but reduction in overall interest sensitivity of construction. 6. Nonresidential construction: All variables <.01 Reduction in cost-of-capital sensitivity after 1985. 7. Producers' durable equipment: All variables .03 No change in cost-of-capital sensitivity according to other evidence. 8. Nondurable consumption: Wealth and property income.... .72 No significant change. 9. Consumer purchases of motor vehicles: Cost of capital .86 No significant change. 10. Consumer purchases of motor vehicles: Cost of capital and intercept .23 No significant change. 11. Other consumer durable purchases: Cost of capital .63 No significant change. 12. Other consumer durable purchases: Cost of capital and intercept .64 No significant change. 13. Nondurable inventory investment: Cost of capital .58 No significant change. 14. Retail durable inventory investment: Cost of capital .90 No significant change. 15. Nonretail durable inventory investment: Cost of capital ... .16 Slight increase in sensitivity, but hypothesis of no change acceptable at usual significance levels. 1. Based on standard F test. The tests are done by estimating each equa- from the second regression relative to those from the first-corrected for the tion over the full sample period, which usually begins in the 1960s and extends number of coefficients permitted to change-the less probable is the hypothethrough 1988:4. The same equation is estimated a second time, now allowing sis that there has been no structural change. The usual convention in statistithe coefficients in question to differ pre- and post-1980. The residuals from cal work of this sort is to accept the hypothesis of no change if the F statistic the first and second estimations are compared. The smaller the residuals is 5 percent or greater. The institutional changes noted earlier—in times be consistent with using past values of a foreign exchange markets, in housing finance, particular variable to forecast its future values, and in household and corporate balance the conditions under which this procedure is sheets—did not in themselves necessitate any optimal are relatively restrictive. change in the behavior of the corporate bond The MPS equation for the corporate bond rate rate in the 1980s. Nevertheless, the relation is subjected to a standard statistical test to deterbetween the bond rate and its determinants may mine whether the relation between the corporate have changed because the assumptions under- bond rate and past short-term interest rates has lying the formation of expectations of future remained constant over time. This test allows the short-term interest rates—that they are based pattern of coefficients on the paper rate to vary on past short-term interest rates and inflation between the 1960s and 1970s as compared with rates—might not be appropriate in all circum- the 1980s but preserves the long-run properties of stances. A popular alternative view of the ex- the equation. Thus, changes in the commercial pectations process—particularly compelling in paper rate are ultimately reflected in entirety in the description of financial markets—empha- the bond rate. sizes the forward-looking nature of expecta- The result of this test suggests that the behavtions, in which informed judgments about the ior of the bond rate in relation to its determinants future course of events are based on knowledge has changed over the 1980s and that the change of the structure of the economy, including the has been in the direction of shortening the lag process whereby economic policy is formed. between changes in the short-term interest rate Although such "rational" expectations may at and changes in the bond rate (table 4, line 1). In the 1960s and 1970s, a rise of 1 percentage point in the commercial paper rate raises the bond rate history is important in forming expectations about future by 0.21 percentage point in the same quarter and rates; for a bond of shorter duration, the more recent pattern by 0.36 percentage point within one year; in the of interest rates is important for the formation of expecta- 1980s, the corresponding responses are 0.32 pertions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 993 centage point in the same quarter and 0.46 within leave the real rate of return on bonds unthe year.9 These results are consistent with the changed. hypothesis that investors believe the current The estimated coefficients in the current vershort-term rate to be a better predictor of future sion of the equation satisfy these a priori valshort-term rates than it was earlier and therefore ues.11 However, the current version was estilink the long-term rate to the current short-term mated using data only through 1973, and rate more quickly than previously. Although the extensions of the estimation period through the faster passthrough of a change in the short-term 1970s or 1980s result in very different estimates rate to a change in the long-term rate is signifi- for the coefficients on the inflation rate. As cant statistically, the change is too small to have Franco Modigliani and Richard A. Cohn first much effect on output in the short run. noted, the coefficient sum on the inflation rate falls dramatically over longer sample periods and is not statistically different from zero.12 From Long-Term Interest Rates to the Thus, equations estimated through the 1970s or Return on Equity 1980s that show the sum of coefficients on the bond rate remaining close to 1.0 suggest that The relation between the return on equity and investors equate the real return on equity with the return on debt also is based on the assump- the nominal return on debt.13 tion that arbitrage equalizes the expected real The test for structural shift is reported with rates of return on the two, apart from a possible the caveat that there is some risk of mistaking risk premium. Arbitrage implies that the price structural change for misspecification in this of equity is based on investors' expectations case because the estimated equation over the about the stream of future dividends payable to extended period does not appear to be consisshareholders and on the rate of return to invest- tent with rational behavior (see table 4, line 2).14 ments that are alternatives to equity. The test results suggest rejecting the hypothesis In the MPS equation, the real rate of return that, at standard statistical significance levels, on equity is represented by the dividend-price the response of the return on equity to changes ratio, and the expected real rate of return on in the bond rate is the same in the 1980s as it long-term debt is represented by recent rates of was in the 1960s and 1970s. Although the estireturn on corporate bonds less the inflation rate mated coefficient sums on the bond rate are averaged over a long period.10 A priori, the estimated coefficients on the bond rate should sum to 1.0, and the estimated coefficients on the 11. Freely estimated through 1973, the coefficient sum on inflation rate should sum to -1.0, so that a rise the bond rate is not statistically different from 1.0; thus it is in the nominal interest rate due to an increase in constrained to 1.0 in the version of this equation used in the the rate of inflation is correctly perceived to MPS model. With this constraint, the coefficient sum on the inflation rate is estimated to be -0.89. 12. Franco Modigliani and Richard A. Cohn, "Inflation, Rational Valuation, and the Market," Financial Analysts 9. Because the distributed lag weights on the commercial Journal, vol. 35 (March/April 1979), pp. 24-44. paper rate are a function of the level of recent commercial 13. Over the estimation period 1963:2-1988:4, the coeffipaper rates, an assumption must be made about the level of cient sum on the bond rate is 0.74 and the sum on the inflation the paper rate in order to compute the distributed lag weights. rate is 0.15. Over the period ending in 1979:4, these sums are We assumed that the commercial paper rate averaged 10 0.95 and 0.28 respectively; over the 1980s, these sums are percent in both subperiods. The exact relation between the 1.08 and -0.14 respectively. distributed lag weights and the level of the commercial paper 14. Attempts to improve the properties of the equation rate appears, however, to have changed between the two have been unsuccessful. For instance, when we try different subperiods. proxies for expected inflation, the estimated long-run coeffi- 10. The earnings-price ratio is commonly used as a mea- cient on expected inflation is statistically different from minus sure of the real rate of return on equity. Because it is highly one and is often not statistically different from zero. If the cyclical, it is probably not a good measure of the long-run long-run coefficient is constrained to minus one, the equation expected return on equity. The dividend-price ratio is far less produces large errors. Although the possibility exists that our cyclical. Thus, the equation uses the product of the dividend- specification of the risk premium is incorrect, that possibility price ratio with an estimated inverse of the average payout is unlikely to explain why the inflation coefficient, when ratio as a proxy for the long-run earnings-price ratio. freely estimated, is close to zero. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

994 Federal Reserve Bulletin • December 1990 similar across periods, the individual coeffi- investors consider assets denominated in difcients indicate some slowing in the response of ferent currencies to be perfect substitutes, that the dividend-price ratio to the bond rate over is, investors are indifferent to risk, expected the 1980s. For the 1980s, the contemporaneous holding-period returns—converted to a comcoefficient on the bond rate is 0.38, compared mon currency—are equalized. with 0.52 for the estimation period ending in The extent to which domestic monetary pol- 1979.15 Other things being equal, this result icy affects exchange rates—and through exwould reduce the effect of monetary policy in change rates, the volume of imports and exthe very short run. However, as was true for ports—depends on how sensitive investors' the behavior of the corporate bond rate, the size desired portfolio allocations are to the differof the change is such that its effect on spending ence between expected holding-period yields. would be negligible in the short run. And the The greater is the sensitivity of demands—that overall response suggests that changes in bond is, the more perfect the substitution between rates continue to influence the return in the foreign and domestic assets—the greater will be equity market in a critical way. the change in the spot value of the domestic currency for a given change in the domestic interest rate, other things being equal. From Interest Rates to Exchange Rates To see this, consider what happens to the demand for domestic currency in the foreign Models of the determination of the exchange exchange market after an increase in the rate unfortunately have not been particularly domestic interest rate. For given values of successful in explaining movements of ex- foreign interest rates, exchange rates, and exchange rates since the floating of the dollar pected future exchange rates, domestic assets in 1973. Equations that fit well over some are now more attractive than they were before estimation period often perform poorly over the rise in the domestic interest rate, and the the postestimation period. Given the rapid demand for assets denominated in the domestic change in the integration of international capital currency increases as holders of foreign assets markets, this lack of success may not be sur- try to switch into domestic assets. But if prising. trade in goods and services is unresponsive in In the MPS model, the determination of ex- the short run to movements in spot exchange change rates is based on the portfolio balance rates, the supply of domestic-currency assets theory. According to this theory, demands of in the foreign exchange market does not increase, investors for assets denominated in different and the prices of domestic currency in terms of currencies depend, aside from possible risk foreign currencies (exchange rates) must rise to premiums, on differences in expected returns. reestablish equilibrium in the foreign exchange Comparing returns on such assets requires that market. The more responsive asset demands are one of the assets be converted to the currency to interest rate differentials, the greater will be the of the other. Thus, to compare dollar- and initial increase in the demand for domestic curyen-denominated assets, for example, an inves- rency and the larger the consequent appreciation tor must know the rates of return offered on of domestic currency that is needed to equilibrate each and must have some expectation of the demand and supply of foreign exchange. From the change in the dollar-yen exchange rate over the perspective of asset holders, the appreciation of holding period. In the special case in which the domestic currency sets up the expectation of a future depreciation of domestic currency (because the expected level of exchange rates is so far unchanged) and has the effect of raising the 15. In another test, which permits coefficients on all explanatory variables to differ across the two subperiods, expected return on foreign assets or, equivathere is an even sharper decline in the coefficient on the lent^, of reducing the expected return on domescontemporaneous value of the bond rate—from 0.78 in the tic assets. early period to 0.42 in the later period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 995 The two equations in the MPS model explain- are 60 percent larger over the 1980s than over ing the U.S. demand for foreign assets and the the 1970s. Thus, the sensitivity of exchange foreign demand for U.S. assets were estimated rates to interest rates appears to have increased using data through the mid-1970s and are fairly significantly in the 1980s, a finding that is conconventional: Demands for assets are related to sistent with views that world capital markets the size of the economy, to the domestic inter- have become more closely integrated. For any est rate, to a trade-weighted average of foreign given change to the differential between U.S. interest rates, and to various proxies for the and foreign interest rates, the change to spot expected change in a trade-weighted average of exchange rates necessary to reequilibrate the the foreign exchange value of the dollar. A balance of payments is larger compared with sense of the nature of any structural change can that in the 1970s. be gained from examining the exchange rate errors produced by these equations.16 These errors indicate a sizable underprediction of both THE LINK BETWEEN FINANCIAL MARKETS the level and the variability of the exchange rate AND SPENDING over the 1980s. The positive correlation of the errors (defined as the actual exchange rate less The efficacy of the monetary transmission the predicted exchange rate) with the size of the mechanism requires not only that short-term interest rate differential (defined as the domes- interest rates influence long-term rates and astic interest rate less the foreign interest rate) set prices but also that subsequent changes in suggests that the asset equations may under- the returns on financial assets, in turn, influence state the interest sensitivity of asset demands, spending. Whereas the preceding section examespecially over the 1980s. One way of attempt- ined the behavior of financial markets and asset ing to quantify the structural change is to raise prices and identified, among other things, an the coefficients in the asset demand equations increased interest sensitivity of the exchange that represent the sensitivity of asset demands rate over recent years, this section examines to the interest differential by enough to elimi- the relation between rates of return on financial nate the correlation between the exchange rate assets and spending. In so doing, it shows that errors and the interest differential.17 The result- the sensitivity of spending to financial variables ing coefficients on the interest rate differential appears to have decreased somewhat over recent years. 16. To derive the exchange rate errors made by the model equations, the equations for asset demands are simulated Residential Construction given historical values for the current account, asset holdings (private and official), and interest rates. The simulated value The component of aggregate demand most comof the exchange rate is that which is consistent with equality of the current account balance and the change in the net asset monly perceived to have undergone major regposition. ulatory and structural changes over the past 17. This section presents a change in method. Rather than decade is expenditure for residential construcestimating the equations over the different subperiods and applying the standard F test to confirm the significance of any tion. These changes are frequently cited as change, the prediction errors are analyzed to indicate the having reduced the interest sensitivity of housnature of behavioral shifts. We make this change because of ing expenditure and, therefore, the likelihood the uncertainty about the reliability of the asset data, especially the breakdown of the net foreign asset position into that this sector will bear a disproportionate U.S. holdings of foreign assets and foreign holdings of U.S. share of the effect on real spending of monetary assets. When we simulate the two equations for asset detightening. First, several innovations and regumands, the errors tend to be offsetting so that the errors for the net position or, consequently, the errors in the exchange latory changes have mitigated the tendency for rate, are considerably smaller in percentage terms than those financial intermediaries to experience deposit of the individual asset demand equations. Under these ciroutflows during a period of high interest rates. cumstances, applying the standard F tests to the two asset demand equations is unlikely to yield meaningful results. In 1978, six-month money market certificates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

996 Federal Reserve Bulletin • December 1990 with rates tied to Treasury bill yields were in financing costs for those buyers whose inauthorized; and in 1979, small-saver certificates tended holding period is relatively short, bewith no minimum denomination and with yields cause of the common practices of offering an based on Treasury securities were introduced. initial-year discount and capping the size of Beginning in 1980 and continuing for several yearly changes permitted in the ARM rate. years, a sequence of regulatory acts lowered Tests of the hypothesis that the interest sensiwithdrawal penalties on time deposits and tivity of housing demand has changed are carried phased out ceilings on deposit rates. out with the MPS equation for residential con- Along with these changes came the growth struction. This equation relates the desired stock in the market for mortgage-backed securi- of housing to a proxy for permanent income and ties, whereby mortgage-originating institutions to the cost of capital for housing and explains pooled and resold their mortgages to third par- actual construction expenditures as adjusting ties. As a share of residential mortgage debt with some lag to the desired housing stock.19 outstanding, mortgage pools backing securities Estimates indicate that expenditures also depend grew from 1 percent in 1970 to 12 percent in on the change in the unemployment rate and 1980 and to 35 percent in 1989.18 By broadening have been constrained at various times by credit the base of potential credit suppliers, the secu- rationing in the mortgage market.20 ritization of mortgages weakened the link be- The residential construction equation is reestween deposit growth at savings institutions and timated so as to permit the intercept and the the availability of new mortgages. This devel- sensitivity of the desired housing stock to the opment, with the regulatory changes affecting cost of capital to differ between the 1960s and deposit rates, reduced nonprice constraints on 1970s on the one hand and the 1980s on the the supply of mortgage funds, which had been other hand.21 Although the estimated coefficient associated with disintermediation at thrift insti- on the cost of capital is smaller over the 1980s tutions. than over the previous two decades, the differ- A third development in the mortgage mar- ence is not statistically significant (table 4, line ket—the emergence and increased use of ad- 5).22 justable-rate mortgages (ARMs)—may have further altered the sensitivity of expenditures on residential construction to changes in inter- 19. Changes in the overall sensitivity of this sector to est rates. Two factors are often cited in support monetary policy also depend on changes in the behavior of of this argument. First, home buyers who might the mortgage rate. In the MPS model, the mortgage rate is have postponed purchases when they thought linked tightly to the corporate bond rate. As described in the preceding section, the corporate bond rate appears to have fixed-rate mortgage terms were unusually high reflected changes in short-term interest rates more quickly in relative to short-term interest rates would now the 1980s than in earlier decades. The same is therefore true be less likely to do so because ARMs are for the mortgage rate. 20. The effects of credit rationing on expenditures are typically indexed to short-term interest rates. In captured by a second-degree distributed lag on a dummy-shift fact, this factor may have little effect on the variable. The dummy-shift variable takes on a nonzero value long-run interest sensitivity of housing demand, during periods when credit appears to have been constrained, based on deposit flows at thrift institutions and on the although it may reduce the effect in the short institutional and regulatory structure in place. The periods of run. Second, compared with a fixed-rate mort- credit constraints are 1966:3-4, 1969:3-1970:3, and 1974:1gage, an ARM may offer a significant reduction 1975:1. 21. The intercept is permitted to differ in the two subperiods because the introduction of ARMs may have enlarged the pool of potential home buyers besides possibly altering the 18. See Federal Reserve Bulletin, various issues, table 1.54 interest sensitivity of home buyers. The intercept would (Mortgage Debt Outstanding). These figures include the prin- capture the former effect. cipal balances of mortgage pools backing securities that are 22. The estimated coefficients indicate that an increase of 1 insured or guaranteed by the Government National Mortgage percentage point in the mortgage rate directly reduces resi- Association, the Federal Home Loan Mortgage Corporation, dential construction expenditures 16 percent in the early the Federal National Mortgage Association, and the Federal period and 9 percent in the later period, in each case within Housing Administration, as well as the principal balances of one year of the initial rise in the rate. The difference is not private pools. statistically significant. In a second test to detect change in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 997 1. Predicted and actual values for nonresidential contrast, the estimated response of residential construction, equation estimated through 19791 construction over the 1980s to the same change Billions of 1982 dollars in the cost of capital is about 9 percent.24 Nonresidential Construction Expenditures Despite significant changes during the first half of the 1980s both in the real rate of interest and in aspects of the tax code pertaining to structures, the MPS equation successfully explains construction spending through 1985.25 The form of 1965 1970 1975 1980 1985 1989 the equation follows the neoclassical theory of 1. The autocorrelation component of the predicted values is set to zero investment, which is that capital is substitutable for the simulation. to some degree for labor, so that the desired Although the demand for housing appears to capital intensity of production is inversely rehave been no less sensitive to the cost of capital lated to the cost of capital relative to the cost of over the 1980s, expenditures on residential con- labor. The higher are the real financing costs— struction may nevertheless have been less inter- either the rate of interest on debt or the rate of est sensitive because disintermediation-induced return on equity—the lower will be the desired episodes of credit rationing were absent during stock of capital relative to output. In the current the 1980s. To quantify the total effect of interest version of the model equation, the long-run derates on housing expenditures—including that gree (or elasticity) of substitution is 0.5, so that a occurring through credit rationing in the 1960s 1.0 percent change in the wage rate relative to the and 1970s—the equation is reestimated without cost of capital will change the long-run ratio of the proxies for credit rationing, while the esti- capital to output by 0.5 percent.26 mated intercepts and coefficients on the cost of A breakdown occurs after 1985 in the relation capital are still allowed to differ for the two between investment and its determinants; it is subperiods. Because of the positive association highlighted by the plots in chart 1 of actual and between credit rationing and interest rates, the predicted values of construction expenditures estimated sensitivity to the cost of capital over where the predicted values are based on an the earlier subperiod increases without these proxies. When credit availability proxies are excluded, the effect on housing expenditures in the first year after a change of 1 percentage point allows the intercept to change between the two subperiods is preferred. in the cost of capital (due, say, to a change of 1 24. Although the estimate of a 9 percent response is percentage point in the after-tax mortgage rate) obtained both when the credit proxies are included and when increases from 16 percent to 21 percent.23 By they are excluded, no built-in constraint guaranteed this result. Because the equation is estimated over the entire sample period, all coefficient estimates could in practice be sensitive to the inclusion or exclusion of the credit proxies. For instance, eliminating the proxies for credit rationing the sensitivity of the desired housing stock to the cost of might have changed the estimated income elasticity of houscapital (table 4, line 4), the intercept is constrained to be ing (depending on the correlation between credit rationing unchanged over the entire period. The probability that the and aggregate income) and this, in turn, might have affected response to the cost of capital is unchanged over the entire the estimated coefficient on the cost of capital (depending on period rises to 99 percent. the correlation between income and the cost of capital) even 23. These calculations are an upper estimate of the impor- over the later subperiod. tance of credit rationing for the overall interest sensitivity of 25. The focus here is on the subset of construction spendhousing expenditures. When the equation is estimated allow- ing that excludes expenditures on petroleum and mining, ing only the cost-of-capital coefficient to differ over the two which are modeled separately, and public utility investment subperiods, the estimated coefficient on the cost of capital is other than telephone and telegraph investment, which is less sensitive to the presence or absence of an explicit exogenous in the model. representation of disintermediation. However, because the 26. The short- and intermediate-run elasticities depend on introduction of ARMs may have led to a shift in the intercept the estimated lag structure. These estimates are such that (that is, to a larger pool of buyers), the specification that these elasticities tend to exceed their long-run values. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

998 Federal Reserve Bulletin • December 1990 equation estimated through 1979. The estimated adjustment speed has increased although it may equation captures the movements in construction be imprecisely estimated given the short estimaspending quite well through 1985. After 1985, tion period. when construction spending stagnates, the pre- Several reasons have been offered for the dictive performance of the equation deteriorates, apparent lessening of the importance of the cost and overprediction errors occur—of almost 18 of capital for post-1985 investment behavior. percent in 1986 and of about 48 percent in 1988. These reasons are based on a more eclectic view Tests for changes in the short- and intermedi- of the determinants of investment than that inate-run interest sensitivity of construction are herent in the standard neoclassical approach. not definitive when applied to this equation be- One argument attributes the investment collapse cause the interest rate does not enter indepen- to high vacancy rates. High vacancy rates could dently of output: The explanatory variables are matter if, by signaling losses in the construction specified as the product of output and the capi- industry, they provide information on expected tal-output ratio (which, in turn, depends on the output or the cost of capital not captured by rate of interest). Thus, a test for possible struc- simple distributed lags on these terms. However, tural shift since 1986 in the sensitivity of con- high vacancy rates do not provide a clear-cut struction to interest rates cannot be performed signal: Although they may suggest an untenable independently of a test for structural shift in the position in the long run, they may not mean that sensitivity to output. Applying the conventional the owners of the buildings are losing money in test without distinguishing between shifts in the short run.28 these sensitivities generates a probability less Another explanation of investment behavior than 1 percent that the response of nonresidential after 1985 is associated with lending institutions' construction expenditures to changes in output eagerness through the middle of the decade to or in the cost of capital is the same after 1985 as support construction activity and their declining before (table 4, line 6).27 interest in providing these funds more recently. The behavior of construction expenditures af- The pattern of errors from the model equation ter 1985 suggests a reduced sensitivity to the cost does not support this explanation: Actual conof capital and a faster adjustment to changes in struction expenditures should have exceeded output. Two pieces of evidence support this predicted expenditures when funds were readily observation. First, for equations estimated available, but they did not. However, the abthrough 1985, the post-1985 prediction errors are sence of underprediction errors in the earlier part smallest when the relative cost of capital is held of the 1980s could reflect offsetting errors in the constant at its 1985 value. Holding the relative model specification. Similarly, because actual cost of capital constant is essentially equivalent construction during this period was not signifito assuming that capital and labor are not substitutes for one another in production. Second, to explain the behavior of construction only over the period from 1986 to 1989, one does best by 28. For instance, the shorter lives for tax depreciation modeling investment as adjusting in proportion introduced by the Economic Recovery Tax Act in 1981 to the change in output and as not responding at reduced the cost of capital. In response, construction activity increased. Unless the owner of the buiding lowered the rents, all to changes in the relative cost of capital. the demand for space would not increase with the supply of Moreover, if the 1986-89 estimated speed at space. However, the consequent rise in vacancy rates and which investment adjusts to output is compared reduction in aggregate rent per building would not mean that the owner was then incurring a loss on the building: The with the pre-1986 estimate, one finds that the change in the tax law implies that the rent on the building that is necessary to cover the costs would fall. The lower breakeven rent could be obtained by higher vacancy rates and unchanged rent per unit occupied or by unchanged vacancy rates and lower rent per unit occupied (or some combination 27. If one tests for structural shift before and after 1980, as of the two). However, the boom in construction subsequently we do for most cases, then the probability of no change in set off a wave of rent reductions as each owner tried to find adjustment speed is higher. But this finding reflects the clients for the vacant office space. Ultimately, the combinastability of the equation through 1985 and ignores the obvious tion of lower rents per unit occupied and higher vacancy rates problem of the fit since 1986. reduced rents per building below break-even levels. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 999 Credit Rationing and the Transmission Channels The discussion of the transmission channels of monetary flow may be more important, and the cost of capital may policy focuses on the link between interest rates, asset be less important, than the MPS model acknowledges. The prices, and real spending. The implicit assumption in the alleged retrenchment of bank loans vis-a-vis the demand MPS model, as in much macroeconomic literature, has for business credit over the past year would fit this broadbeen that the financial system functions so efficiently that, ened view of the transmission mechanism. By emphasizexcept for the occasional disturbance due to institutional ing the role of financial variables other than interest rates, or regulatory factors-such as the episodes of dis- this approach has rejuvenated the interest in the connecintermediation under Regulation Q-interactions be- tion between real activity and financial intermediation centween real and financial variables can be reduced and tral to the work of John Gurley and Edward Shaw in the simplified to interactions between real variables and interest 1950s and important in the work of Irving Fisher and John rates. Maynard Keynes in the 1930s (see the reading list at the During the past decade, economists have influenced the end of the article). debate about the transmission mechanism by their atten- Despite the theoretical plausibility of these new argution to the issue of information and, in particular, to the ments for a more general view of the monetary transmisimplications of imperfect information for the functioning sion mechanism, and despite a series of studies using data of the financial system. An important proposition of this from individual firms that have documented the importance research is that using the interest rate to allocate credit of non-interest-rate credit rationing, empirical support for may not be optimal when creditors have imperfect or this view has yet to be found in the aggregate data. It is incomplete information about debtors. This proposition not clear whether this lack of support is due to problems seems most relevant in explaining investment decisions and of aggregation more severe than usual in applied work or suggests that for these decisions credit availability and cash to the relatively idiosyncratic occurrence of such rationing. cantly stronger than predicted construction, the tive to changes in interest rates. This belief equation errors also fail to support theories that appears to rest on the notion that a high degree of foreign money was more readily available or that substitution between capital and labor is possible business sentiment was more bullish earlier in in production. In the MPS equation for investthe decade. ment in equipment and machinery, the estimated The standard view of investment spending— long-run elasticity of substitution is not signifithat the parameters of the production process cantly different from 1.0, so that a 1 percent along with the relative costs of capital and labor increase in the cost of capital relative to the cost determine the optimal capital stock—may be of labor ultimately leads to a 1 percent decline in basically correct. Even so, the poor performance the ratio of equipment to output. In this regard, of the equation after 1985 may reflect misspeci- the stock of equipment may be thought to be fication in the cost of capital either because the more interest sensitive than is the stock of strucmodel does not use an appropriate proxy for tures. Nevertheless, changes in interest rates expectations of the real return on debt and equity have a smaller effect on the cost of short-lived or because it does not accurately calculate the capital, such as equipment, than they do on the effects of the change in the tax law. In any case, cost of long-lived capital. For instance, when the the bottom line suggests either serious misspeci- life span of capital is five years (a 20 percent fication in the cost of capital or the presence of depreciation rate), an increase in the real fisome factor that reduced the apparent sensitivity nancing costs from 3 to 4 percentage points raises of construction spending to the cost of capital. If the cost of capital from 23 percent to 24 percent. the latter is true, this factor has not yet been By contrast, when the lifespan is twenty years (a identified (see box). 5 percent depreciation rate), the same rise in the real financing costs raises the cost of capital from Investment in Producers' Durable 8 percent to 9 percent—a much larger increase in Equipment percentage terms. The importance of the life span of capital in Outlays for capital equipment are typically con- determining capital's sensitivity to interest sidered one of the areas of spending most sensi- rates has been cited as a potential source of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1000 Federal Reserve Bulletin • December 1990 change in the interest sensitivity of investment propriateness of a long-run unitary elasticity of because the growing share of equipment ac- substitution for computers in the production counted for by computers and high-technology process theoretically can be tested, it is not equipment has reduced the expected life span of tested because the technique used to estimate this aggregate. In 1970, the depreciation rate for this elasticity is imprecise and because the the stock of equipment was 12.5 percent a year estimate may be influenced by the high growth (assuming an exponential pattern of deprecia- rate of computer investment. The test for struction); in 1990, it was over 15 percent a year. tural change thus allows only for a change in the Moreover, investment in computers may be short- and intermediate-run sensitivity of inmore sensitive to product cycles than to fi- vestment to the rate of interest. nancing costs or to expected output. In contrast However, as was true for nonresidential structo these factors, an increase in the interest tures, a test for structural change, based on the sensitivity of aggregate investment might be MPS equation, cannot distinguish between expected if higher leverage ratios increased the change in the short- and intermediate-run sensiinterest sensitivity of a firm's cash flow. tivity to interest rates and change in the sensitiv- Neither of these developments lends itself to a ity to output. The test requires that the determidefinitive test for changes in interest sensitivity, nants of spending enter independently of one given the specification of the MPS equation for another, a condition not satisfied by the equation investment. In the first instance, the model ties specification. Testing for a shift in the overall down a priori the long-run response of invest- response of investment to its determinants—the ment to a change in the real rate of interest: The cost of capital and output—suggests only a 3 capital stock and, consequently, long-run invest- percent probability that there has been no signifment rise by 1 percent for a 1 percent decline in icant change (table 4, line 7). the cost of capital (based on an estimated elas- Whereas the statistical evidence favors ticity of substitution equal to one); and the per- change, other evidence suggests that the imcentage decline in the cost of capital for a given plied change is marginal, especially as it affects percentage decline in the rate of interest varies the interest sensitivity of investment. First, the inversely with the depreciation rate of capital. post-1980 predictions from an equation esti- Thus, as the life span of the aggregate capital mated from 1961 through 1979 are almost idenstock declines (the depreciation rate rises), the tical to the predictions from an equation estielasticity of long-run investment with respect to mated from 1961 through 1987. Second, when the rate of interest declines.29 Although the ap- the equations for the two periods are simulated after a change in interest rates, the patterns of investment are similar. For a 1 percentage point 29. The more technical reader will want to distinguish change in the interest rate, the maximum differbetween the elasticity of long-run investment with respect to ence at any time between the two predicted the interest rate and the absolute change in long-run investpaths is $1 billion. That is, for approximately a ment with respect to the interest rate—and, in particular, the effect of a shortening lifespan for equipment on both of these. 5 percent change in the desired capital stock at In the long run, investment may be expressed as X(g+b)/ current rates of interest and depreciation, the (r+8) where X is the level of output, g is the growth rate of maximum difference is about 8 percent of the real output, 8 is the rate of depreciation of capital, and r is the real rate of interest. In this expression, we assume that the long-run response. Third, more sizable differelasticity of substitution between capital and labor is unity, so ences occur between the patterns of investment that X/(r+8) is the optimal capital stock. The interest elasticity of long-run investment equals the interest elasticity of the optimal capital stock. This elasticity is negative but is less negative the shorter the lifespan of capital is. By contrast, the dollar response of long-run investment to a percentage point short-lived capital than in the stock of long-lived capital, increase in the interest rate is negative, but shortening the replacement investment associated with a unit of short-lived lifespan of capital does not always reduce the size of this capital is greater than that associated with a unit of long-lived effect. The response depends on the relations among the capital. For normal ranges of real interest rates, growth rates, growth rate of the economy, the real rate of interest, and the and equipment depreciation rates, the response of investment rate of depreciation. The intuition is that although a rise in the to a change in the interest rate declines as the life span of real rate of interest causes a smaller reduction in the stock of equipment shortens. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 1001 in response to a change in output. These three may borrow against future income and thus results suggest that a shift in the response of consume in excess of current income and investment to output, rather than in the re- wealth; still, the specification could support an sponse to interest rates, explains the low statis- important role for liquidity constraints dependtical probability of an unchanged response of ing on the estimated coefficients on current investment to its determinants. and recent income relative to those on more distant income and wealth. Estimates for both Consumption of Nondurable Goods subperiods, while statistically significant for and Services current and recent income, suggest that distant income and wealth are also important in deter- Household expenditures for services and nondu- mining consumption behavior. Thus, even if rable goods form the largest component of final household interest income or household interdemand. Thus, any change in the sensitivity of est payments are more interest sensitive now consumption to monetary policy will have impor- than they were earlier, the quantitative effect on tant repercussions for the sensitivity of aggregate the interest sensitivity of consumption may be output to interest rates. small.30 One argument for a change in the interest The influence of monetary policy on consensitivity of consumption is rooted in the idea sumption can change also if the relation of that, since the deregulation of deposit rates, consumption to wealth and property income has household interest income has been linked more changed. These are the determinants of conclosely to movements in interest rates. If house- sumption most closely linked to changes in holds make spending decisions based on current interest rates.31 In the estimation of the conincome because, say, they are unable to borrow sumption equation, when the response to these against future income (that is, they are liquidity determinants is allowed to change, the data constrained), greater interest sensitivity of in- strongly support the existence of a stable relacome will induce greater interest sensitivity of tion over time (table 4, line 8). consumption (where a rise in rates causes a rise Given these findings—that the wealth channel in consumption). If spending depends on aver- has been stable over time and that households age income rather than on current income, appear not to be unduly liquidity constrained— however, the increase in the interest sensitivity any change in the relation between short-term of consumption will be more moderate. interest rates and consumption rests upon a Another argument for a changed interest sen- change in the effect that short-term rates have sitivity of consumption is that the growth in the on the market values of corporate equity and of share of adjustable-rate mortgages and home noncorporate land. (In the MPS model, the equity loans in mortgage debt raises the proba- market values of other components of housebility that households will incur liquidity prob- hold wealth—bonds, consumer durables, and lems when interest rates rise. In this case, however, a rise in interest rates will reduce consumption. An implicit assumption in this 30. Even if households are liquidity constrained, the effect on consumption of the incremental stock of adjustable-rate scenario is that households with adjustable-rate debt (measured as the average stock of adjustable-rate debt debt do not have rate-sensitive assets with over the 1980s relative to that over the 1970s) is small. Under rising returns to offset the increase in debt- the extreme assumption that debt-servicing costs are met one for one by a reduction in consumption spending, the rise in servicing costs. debt-servicing costs for a 1.0 percentage point rise in interest The MPS equation for consumption of non- rates is estimated to reduce consumption spending in the durable goods and services was used to identify 1980s by 0.2 percentage point more than it did before 1980. 31. In the life-cycle model, the propensity to consume out changes in consumption behavior that might of income and wealth depends on the rate of interest. If the reflect the aforementioned changes in the inter- relationship between the rate of interest and the propensity est sensitivity of household cash flow. The to consume out of wealth is assumed to be linear, then separate variables for property income (which is the prodequation is based on the life-cycle model of uct of the interest rate and the stock of wealth) and wealth consumption—which assumes that households belong in the equation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1002 Federal Reserve Bulletin • December 1990 housing—are not tied directly to changes in Business Inventory Investment interest rates.) But changes in the relation between short-term interest rates and corporate As with consumer purchases of durables, moneequity are small because of offsetting changes in tary policy and inventory investment are directly the speeds at which short-term rates pass linked through the cost of capital. The higher are through to long-term rates and at which long- the costs of financing inventories, the lower will term rates pass through to equity prices. Also, be the desired stock of inventories relative to changes in the relation between short-term in- sales. In estimation, the sensitivity of the inventerest rates and noncorporate land values are tory-sales ratio to the cost of capital is generally quantitatively insignificant because of the slow- small but statistically significant. When the beness with which land values are estimated to havior of inventories is examined over the preadjust to changes in interest rates. and post-1980 periods, the response to variations in the cost of capital generally appears to be stable (table 4, lines 13-15). The estimated sen- Consumer Durable Expenditure sitivity of nonretail durable inventories to the cost of capital has increased a bit, although the In the MPS model, the determinants of the increase is not statistically significant at the nordesired stock of consumer durables are income, mal levels of significance. consumption of nondurable goods and services (a proxy for permanent income), and the cost of durable goods relative to that of nondurable THE NET EFFECT OF CHANGE IN THE goods. The cost of a durable good takes into TRANSMISSION CHANNELS account the financing and depreciation expenses associated with the use of the good and The preceding two sections have detailed the is, in this sense, akin to the cost of business particular changes in the interest rate sensitivcapital. Variations in interest rates affect the ity of asset prices and spending components relative cost of consumer durables and there- that have occurred since 1980. In this section, fore the demand for them. By measuring the the MPS model is used to quantify the net effect responsiveness of purchases of durable goods on the economy of the changes found in the to changes in the relative cost of durables, one response of asset prices to short-term interest can determine whether or not this particular rates and in the response of spending to interest channel for monetary policy has changed.32 The rates and asset prices. Changes in the behavior equations relating consumer purchases of mo- of financial markets and asset prices are most tor vehicles and other durables were reesti- notable in the increased sensitivity of exchange mated allowing the response to the relative cost rates to the differential between yields on doof durable goods to differ over the pre- and mestic assets and those on foreign assets. The post-1980 periods. The results strongly favor short-run efficacy of monetary policy is diminthe hypothesis that the response of purchases to ished slightly by the slower passthrough of the cost of capital for consumer durables has changes in bond rates to the yield on equity, but been stable over time (table 4, lines 9-12). this diminution is largely offset by a faster passthrough of changes in short-term rates to long-term rates. Significant changes to the interest sensitivity of spending have occurred in residential and non- 32. As was hypothesized for nondurable consumption, one can argue that the effect of monetary policy on durables residential construction expenditures. In both purchases may have changed because income has become cases, the interest sensitivity has fallen. Institumore interest sensitive. To the extent that permanent income tional and regulatory changes beginning in the is more important than current income in explaining durables purchases, this effect is moderated. late 1970s have eliminated the episodes of credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 1003 5. Effects on spending of a reduction of 1 percentage point in the federal funds rate, by transmission channel1 Percent of total effect, except as noted Quarters after reduction CChhaannnneell AAvveerraaggee22 4 8 12 16 20 Cost of capital Pre-1980s 67 49 45 55 56 54 1980s 52 32 27 40 50 40 Wealth Pre-1980s 12 20 27 31 40 26 1980s 12 15 19 25 42 23 Exchange rate Pre-1980s 21 31 27 14 4 19 1980s 37 53 54 35 8 37 All channels (billions of dollars) Pre-1980s 22.4 41.9 63.2 74.5 81.5 1980s 22.3 43.8 55.0 48.9 50.5 1. See note to table 1. 2. Average of values at 4, 8, 12, 16, and 20 quarters. rationing that constrained housing construction Table 5 presents the effect on real spending in during times of high interest rates in the 1960s the two versions of the model of a 1 percentage and 1970s. No satisfactory explanation has been point reduction in the federal funds rate, when offered for the apparent insensitivity of nonresi- multiplier and accelerator feedbacks to spenddential construction to the cost of capital since ing, and output feedbacks to interest rates and around 1986. prices, are suppressed. As was done in tables 1 To quantify the net effect of these changes on and 2, the separate contributions of the three the ways in which monetary policy influences the principal channels for monetary policy are economy and to assess the overall effect, the quantified. partial and full model simulations presented in The results suggest that the direct effects of tables 1 and 2 are repeated. With the same changes in the federal funds rate on real spending baseline, the simulations first use the equations are about the same before and after 1980 for the that best represent the pre-1980s behavior of first two to three years but are somewhat smaller asset prices and spending and then use the equa- after 1980 during the fourth and fifth years. The tions that best represent post-1980s behavior. principal reason for the apparent reduction over The equations for asset prices and for spending the 1980s in the direct effect of interest rates on differ in the two versions of the model only when spending in the intermediate run is the absence of their estimated sensitivity to interest rates has credit rationing. Previously, the effect that credit changed significantly over time.33 6. Effects of a phased increase of 1.5 percent in the level of M2: Full model Percent 33. The two versions of the model differ in the following ways: (1) The short-term interest rate affects the long-term Quarters after monetary action rate more quickly in the post-1980s version; (2) the bond rate LLeevveell affects the return on equity more slowly in the post-1980s 4 8 12 16 20 version; (3) preferences for assets denominated in specific Real GNP currencies are more sensitive to interest rate differentials in Pre-1980s .5 1.0 1.2 .5 -.8 the post-1980s version; the foreign interest rate is exogenized 1980s .5 1.2 .9 .1 -1.0 in both versions; (4) the sensitivity of residential construction expenditures to the cost of capital is smaller in the post-1980s GNP deflator Pre-1980s .1 .5 1.1 1.8 2.3 version; and (5) nonresidential investment does not respond 1980s .2 .6 1.2 1.8 2.1 to the cost of capital in the post-1980s version. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1004 Federal Reserve Bulletin • December 1990 rationing had on residential expenditure was body of this article is to test for one-time shifts equated with a doubling of the sensitivity of the in coefficients of the MPS model. The assumpdesired housing stock to the cost of capital. That tions of the one-time-shift analysis are that is, in the first year after an increase of 1 percent- selected coefficients of the model may have age point in the mortgage rate, residential con- shifted around 1980 and that these shifts will struction would decline about 9 percent after persist indefinitely.34 1980 and about 21 percent before 1980. At 1990 An alternative method of analyzing structural levels of residential construction, this difference change, outlined in this appendix, permits is about $20 billion dollars, a sizable portion of model coefficients to vary continuously over the difference in aggregate output generated by time. The time-varying-coefficient analysis emthe two versions of the model. Of secondary ploys the less-restrictive assumptions that the importance to the diminished response to interest timing of structural change is generally unprerates is the failure of nonresidential construction dictable and that structural change may be spending to respond to variations in the cost of intrinsically evolutionary, with some coefficapital after 1985. Table 5 also highlights the cients subject to continuous changes and others increase in the importance of the exchange rate to infrequent changes. This analysis assumes channel for the transmission of monetary policy also that coefficient changes may be partly in the post-1980 world as represented by the MPS transient and may provide only partial predicmodel. The changes to the asset demand equa- tions of future values of the model coefficients. tions are such that the relative contribution of the Under these more general assumptions, the exchange rate channel has doubled on average time-varying-coefficient analysis can provide since 1980. The relative importance of the wealth additional evidence on the following three ischannel is about the same in the pre- and post- sues regarding structural change. First, what 19808 versions of the model. proportion of the total variation in variables Both versions of the model are simulated explained by model equations can be ascribed again, allowing all sectors of the model to re- to estimated changes in model coefficients, esspond and assuming a phased increase of 1 Vi per- pecially those coefficients associated with key cent in the level of M2 (table 6). As in the partial channels of policy transmission? Second, are model simulations, the effects on real GNP are the estimated changes in model coefficients similar in the two versions for the first few years. larger in the 1980s than in earlier periods? But, in contrast with the direct effects on spend- Third, to what extent are changes in model ing as demonstrated by the partial simulations of coefficients persistent or transitory? table 5, the difference between the two versions In brief, the results of the time-varying-coeffiin the effect on aggregate output diminishes over cient analysis suggest the following: time because in both versions of the model 1. The coefficients of several representative long-run output depends only on the production policy-sensitive equations in the MPS model technology and the supply of capital and labor. In have exhibited continuous movements over the the long run, the level of money has no effect on past three decades. These movements in coeffioutput. cients are a significant source of the total variation of important economic aggregates. APPENDIX: CONTINUOUS VERSUS ONE-TIME CHANGES IN POLICY 34. One interpretation of a one-time shift in structural TRANSMISSION CHANNELS coefficients is that it is a special case of random walk coefficients in which all unpredictable changes in the coefficients are confined to a preselected historical interval. In Structural change, whether due to changing general, the timing of the shift will be unknown to the markets, altered institutions, or technological modeler. A one-time-shift analysis will more reliably detect a permanent shift if the preselected location of the estimated innovations, is difficult to capture in macroecobreak is close to the true break and there are sufficient nomic models. The approach discussed in the observations before and after the true break. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 1005 2. Even though continuous change in the aggregate consumption, only the subsistence model structure appears in all sample periods, level of consumption (represented by the interthe movements in key policy channels are larger cept) is partially unpredictable under a standard in the 1980s. The sizable changes in the re- fixed-coefficient specification. By contrast, the sponses of the bond rate and a trade-weighted time-varying analysis allows the intercepts and exchange rate to movements in the short-term the coefficients of explanatory variables, such interest rate in the 1980s support the focus in the as the slope multiplier of household income, to body of the article on more recent structural vary both predictably and unpredictably over changes. time.36 Predictable movements in the slope co- 3. The evidence does not support the simpli- efficients of explanatory variables are based on fying assumptions that structural changes are the estimated persistence of past coefficient wholly permanent or that the unpredictable changes and may include, as a special limiting changes are confined to a given historical inter- case, the one-time slope-coefficient shifts specval. Unpredictable structural change occurs ified in the body of this article. Unpredictable throughout the postwar sample. Indeed, in the changes in slope coefficients, ruled out by as- 1980s, the proportion of variation due to unpre- sumption in fixed-coefficient analysis, provide a dictable structural changes has increased for measure of the reliability of the estimated efthe effects of wealth on consumption and for the fects of explanatory variables. effects of the short-term interest rate on the Table A.l presents data-based evidence on the bond rate and the exchange rate. relative importance of continuous movements in Why would one expect changes in economic the estimated structure of four key macroecostructure to be continuous? Traditional econo- nomic relationships in the MPS model. In each metric models assume that coefficients are instance, the total variation of the dependent fixed. In a macroeconomic context, fixed-coef- variable (household consumption, residential conficient models may be rationalized by the sim- struction, the corporate bond rate, and a multilatplifying assumption that all economic agents are identical. However, it is more likely that the estimated coefficients of macroeconomic relathe Keynesian consumption function is tionships are averages of the disparate responses of heterogeneous agents. For example, Cft) = aft) + b(t)Y(t), the aggregate response of consumption to inwhere the slope coefficient, b(t), is now allowed to vary over come is an average over all households of the time. In the time-varying specification, the slope and interunique spending responses of each household. cept include both fixed (a,b) and time-varying [u(t), v(t)] components The aggregate response may be expected to vary over time because of changes in the cross- a(t) = a + u(t) section distributions of household preferences b(t) = b + v(t) , or incomes. whereas v(t) is set to zero in fixed-coefficient analysis. In The traditional fixed-coefficient model as- fixed-coefficient models, the time-varying intercept contains sumes also that the only sources of structural a component that is predictable from past observed behavior and a component that is not. For example, a specification uncertainty are the intercepts of the estimated used widely in the MPS model is equations.35 To continue with the example of u(t) =p u(t-\) + eft), where uft-l) denotes last period's error term, and eft) is the 35. An example of a fixed-coefficient equation is the unpredictable portion of the current time-varying intercept. simplified Keynesian consumption function In time-varying coefficient models, a similar decomposition into predictable and unpredictable elements is extended to Cft) = aft) + bY(t), the time-varying component of the slope coefficient, vft). 36. The method of volatility allocation is based on the where consumption in period t, C(t), is a linear function of regression estimator developed by P.A.V.B. Swamy and a time-varying intercept, a(t), and the product of a fixed P.A. Tinsley, "Linear Prediction and Estimation Methods for slope coefficient, b, times the explanatory income variable, Regression Models with Stationary Stochastic Coefficients," Y(t). By contrast, a time-varying coefficient formulation of Journal of Econometrics, vol. 12 (1980), pp. 103-42. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1006 Federal Reserve Bulletin • December 1990 A.l. Allocations of predictable and unpredictable variability for selected economic variables Fixed structure Time-varying structure TToottaall SSSpppaaannn ooofff Slope effects Intercept effects Slope effects DDDeeepppeeennndddeeennnttt vvvaaarrriiiaaabbbllleee sssaaammmpppllleee,,, qqquuuaaarrrttteeerrrsss Dominant source of Pred. Unpred. Pred. Unpred. Pred. Unpred. slope variability Pred. Unpred. CCoonnssuummppttiioonn 1960:1-88:4 .96 .00 -.01 .02 .03 Household wealth .98 .02 1960:1-79:4 .95 -.01 -.02 .03 .05 .97 .03 1980:1-88:4 .82 -.01 -.05 .08 .16 .89 .11 Residential construction 1960:1-88:4 .69 .10 .00 .17 .04 PPeerr ccaappiittaa ccoonnssuummppttiioonn .96 .04 1960:1-79:4 .67 .12 .00 .16 .05 .95 .05 1980:1-88:4 .78 .07 .00 .13 .02 .98 .02 CCoorrppoorraattee bboonndd rraattee .... 1960:1-88:4 .95 -.01 .00 .04 .02 Short-term interest rate .98 .02 1960:1-79:4 .94 .01 .00 .03 .02 .98 .02 1980:1-88:4 .77 -.08 .00 .21 .10 .90 .10 Exchange rate 1972:2-88:4 .07 .09 .56 .24 .04 Spread between U.S. and .40 .60 1972:2-79:4 .12 .10 .75 .18 -.15 ffoorreeiiggnn iinntteerreesstt rraatteess .40 .60 1980:1-88:4 .04 .09 .53 .24 .10 .37 .63 eral exchange rate) is attributed either to the fixed The first three rows in table A.l examine portion or to the continuously varying portion of allocations of the variation of household conthe model structure. The fixed portion of the sumption in different periods. Over the full sammodel structure is defined by the fixed coefficients ple period (1960-88, line 1), the MPS fixedoriginally estimated for the MPS model. Under structure rendering of the relationship among the simplifying assumption that the explanatory consumption, wealth, and income explains a variables are known, all fluctuations of the depen- sizable portion—96 percent—of the total variadent variables described by the fixed portion of tion in consumption, where much of the predictthe model structure are predictable. The variation able variation in the level of consumption expenassociated with the time-varying portion of the ditures may be attributed to common trends in model structure is further disaggregated into vari- consumption and income. The remainder of the ation due to the intercept and variation due to the first row indicates that an additional 2 percent of slope coefficients. In contrast to the wholly pre- the variation in aggregate consumption may be dictable effects of the fixed portion of the model attributed to predictable changes in the timestructure, the continuous movements in the inter- varying influence of wealth and income, with no cept and slope coefficients are only partially pre- variation in consumption attributed to predictdictable from past behavior. Under the conven- able movements in the intercept. Only 2 percent tion that "predictable" denotes forecasts for one period ahead, table A.l presents an exhaustive allocation of the variation in a dependent variable horizon lengthens. Diminishing predictability is a natural to one of five factors: the fixed structure embodconsequence of the decreasing dependence of today's outied in the MPS model, predictable movements in come on outcomes in the more distant past. With certain the intercept, unpredictable movements in the exceptions, such as near-random-walk coefficients, the allocations to "predictable" variations in table A.l become intercept, predictable movements in the slope wholly unpredictable in lengthy forecast horizons. coefficients, and unpredictable movements in the Given the assumption that the explanatory variables of slope coefficients.37 each model relationship are known, forecast errors are allocated only over unpredictable changes in the slope coefficients or over unpredictable movements in the intercept. These movements may be correlated because of common 37. The allocations of unpredictable volatility in table A.l influences on the slope coefficients and on omitted variables apply only to forecasts of economic activity over the near captured by the moving intercept. In this case, one-half of the term (one quarter). Uncertainty about near-term forecasts is estimated co-movement is allocated to each. If the cousually less than uncertainty about long-term forecasts be- movement is negative and large, the net volatility contribucause the predictable components of the slope and the tion may be negative for either the time-varying slope coefintercept generally become less important as the forecast ficients or the intercept. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Transmission Channels of Monetary Policy 1007 of the variation of total consumption is unpre- tercept, quarter-to-quarter changes in the interdictable, primarily because of unpredictable cept were highly predictable in all sample perichanges in the time-varying structural effects of ods, including the disintermediation effects wealth and income. As table A.l indicates, the embedded in intercept movements in the predominant source of slope variation in the con- 1980 period. Whereas time-varying movements sumption equation is associated with the coeffi- in slope coefficients account for a portion of the cients of wealth. Thus, much of the structural variation in total residential construction, varivariation of this equation includes a primary ations in the slope coefficients of the cost of policy-transmission channel to consumption ex- capital were not the dominant source of strucpenditures—the effect of movements in wealth tural change, as table A.l shows. Thus, the induced by changes in interest rates. results of the time-varying specification appear The next two rows of the table contrast to be similar to the results reported in text table allocations of total variation of consumption in 4, line 5; that line gives little evidence of the 1980s and in earlier decades. The variation time-varying changes in the effects of the cost in consumption explained by the fixed MPS of capital on residential construction if the structure falls from 95 percent in the 1960s and disintermediation periods are represented by 1970s to 82 percent in the 1980s. This decrease time-varying shifts in the intercept.38 is partially offset by an increase in variation due As the next three rows of table A.l show, the to predictable changes in the time-varying co- explanatory power of the MPS fixed structure in efficients of wealth and income. As the right- describing the behavior of corporate bond rates hand "total" columns show, total predictable deteriorated in the 1980s. This deterioration has variation in consumption falls to about 89 per- been accompanied by larger movements in the cent in the 1980s. The increase in net unpredict- slope coefficients. Even if one accounts for the able variation of consumption is due mostly to estimated persistence of past changes of the substantially larger unpredictable movements slope coefficients, the estimated response of in the time-varying effects of wealth. Because long-term interest rates to movements in shortwealth is the dominant source of structural term interest rates apparently was not as prevariability, the policy-transmission channel as- dictable in the 1980s as in earlier decades. In sociated with interest rate effects on household fact, unpredictable changes in the slope-coeffiwealth is more unpredictable in the 1980s. cient effects of short-term interest rates are However, increased unpredictable variation in virtually the sole source of uncertainty in the the response of consumption to wealth is not equation for corporate bond rates throughout inconsistent with stable fixed-coefficient effects the sample. of wealth on consumption. Finally, the last three rows of table A.l show The next three rows in table A.l present the allocations of variation for the MPS exallocations of variability for residential con- change rate. As discussed in the body of this struction: The proportion of total variation explained by the MPS fixed structure increased from 67 percent in the pre-1980s sample to 78 38. The disintermediation episodes in the 1960s and 1970s were triggered when market interest rates breached the percent in the 1980s. The residential construcdeposit rate ceilings imposed by Regulation Q. However, the tion equation used for the table incorporates no effects of disintermediation episodes are captured in the adjustments for the disintermediation effects of time-varying case by movements in the intercept, not by movements in the coefficients of the cost of capital. Thus, bank deposit rate ceilings in the 1960s and although the timing of disintermediation episodes may surely 1970s. Consequently, the sizable reduction in be attributed to positive spreads between market rates and the 1980s of the intercept variation indicates the Regulation Q ceilings, the subsequent effects of disintermediations were not systematically related to the size of the that the effects of disintermediation in the earrate spreads. Whether disintermediation is more approprilier decades were largely captured by intercept ately modeled as changes in the slope coefficients of the cost shifts rather than by movements in the struc- of capital or as changes in the intercept remains an open issue, but either characterization is consistent with shifts in tural slope coefficients. Also, as shown by the the conventional transmission channels of interest rates durallocations of variation associated with the in- ing the historical intervals of deposit disintermediation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1008 Federal Reserve Bulletin • December 1990 article, the dependent variable in this case is the mands for M2 and Ml: The U.S. Experience in exchange rate error produced by the MPS de- the 1980s," in Board of Governors of the mand equations for foreign and domestic as- Federal Reserve System, Financial Sectors in sets. This formulation removes the fixed-coef- Open Economies: Empirical Analysis and Polficient contribution of explanatory variables, icy Issues. Washington: Board of Governors, including those interest rate variables embed- 1990. ded in the MPS specifications. To the extent that Porter, Richard D., Thomas D. Simpson, and the spread between U.S. and foreign interest rates Eileen Mauskopf, "Financial Innovation and is correlated with excluded explanatory variables, the Monetary Aggregates," Brookings Papers the results in table A. 1 cannot distinguish between on Economic Activity, 1:1979, pp. 213-29. structural change associated with the rate spread and structural change associated with excluded Exchange Rates explanatory variables. The overall predictability of the multilateral Meese, Richard. "Currency Fluctuations in the exchange rate was relatively stable from the 1970s Post-Bretton Woods Era," Journal of Ecoto the 1980s, but the composition of predictable nomic Perspectives, vol. 4 (Winter 1990), pp. and unpredictable movements in the exchange 117-34. rate underwent a sizable shift in the 1980s. The Meese, Richard, and Kenneth Rogoff, "Empirismall fraction of predictable variation in the excal Exchange Rate Models of the Seventies: change rate that can be accounted for by the Do They Fit out of Sample?" Journal of Interfixed-coefficient structure appears to have denational Economics, vol. 14 (February 1983), creased in the 1980s. Partially offsetting this effect pp. 3-24. is an increase in variation associated with predictable changes in the slope coefficients of the inter- The "New" Credit Rationing est rate spread, which is similar to the effect of the coefficient shift discussed in the article. In addition, however, the source of unpredictable varia- Jaffee, Dwight M., and Thomas Russell. "Imperfect Information, Uncertainty, and Credit Ration in the exchange rate appears to have shifted tioning," Quarterly Journal of Economics, in the 1980s from the intercept to the slope coefvol. 90 (November 1976), pp. 651-66. ficients of the spread between U.S. and foreign interest rates. Thus, as with the long-term corpo- Stiglitz, Joseph E., and Andrew Weiss. "Credit Rationing in Markets with Imperfect Informarate bond rate, responses of the multilateral extion," American Economic Review, vol. 71 change rate to changes in the short-term interest (June 1981), pp. 393-410. rate appear to be less predictable in the 1980s. Financial Variables and Real Activity SELECTED READING Fisher, Irving. "The Debt-Deflation Theory of Money Demand Great Depressions," Econometrica, vol. 1 (October 1933), pp. 337-57. Enzler, Jared, Lewis Johnson, and John Paulus. Gurley, John G., and Edward S. Shaw. Money "Some Problems of Money Demand," Brook- in a Theory of Finance. Washington: The ings Papers on Economic Activity, 1:1976, pp. Brookings Institution, 1960. 261-80. Keynes, John Maynard. The General Theory of Moore, George R., Richard D. Porter, and David Employment, Interest and Money, Chapter 12. H. Small. "Modeling the Disaggregated De- New York: Harcourt, Brace, 1936. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1009 The Current Fiscal Situation in State and Local Governments This article was prepared by Laura S. Rubin of ation—the relevant portions of the national inthe Board's Division of Research and Statistics. come and product accounts (NIPA), the general Catherine B. Wood provided research assist- fund accounts of the governments, and the acance. counts of the governments' social insurance funds covering their employees. A description of The fiscal position of state and local governments these accounts should help clarify the factors has deteriorated markedly during the past several influencing the budgetary picture and avert poyears, with many governments confronting po- tential misconceptions about, for example, baltential shortfalls in their operating accounts. anced general fund accounts and social insurance Budgetary problems have been most severe in funds. New England, New York, and New Jersey, partly as a consequence of slumping real estate Operating and Capital Accounts in NIPA markets and weakness in the defense, finance, and high-technology industries; but fiscal prob- The combined operating and capital accounts of lems have been widespread. state and local governments as reported in NIPA The last half of the 1980s has seen the financial (prepared by the Bureau of Economic Analysis in resources of the states pressured by several the U.S. Department of Commerce) give a broad concerns: the quality of education and rising view of the fiscal condition of the sector. These school enrollment, the deterioration of the public accounts cover all expenditures and revenues of infrastructure, and mandates to improve the the current fiscal year (proceeds of bond issues health care of the needy and to upgrade correc- are excluded, although interest on state and local tional facilities. Over the same period, revenue debt is part of outlays); NIPA operating and sources have dwindled; early in the 1980s, the capital accounts exclude the social insurance federal government cut back its aid to the sector, funds, which consist of the funds for state and and some states subsequently reduced their local retirement systems plus, in some cases, grants to localities. State and local governments those for worker's compensation and disability. made up some of the difference through tax The aggregate operating account for the sector is policy, but tax collections have been lower than not calculated separately from the aggregate capexpected, particularly in 1988 and 1990. ital account. This article describes the accounts of the state As reported in NIPA, the deficit of state and and local sector, discusses the recent spending local governments grew from $3 billion at the end requirements and revenue shortfalls that have of 1986 to $30 billion in the first half of 1990. precipitated the current budget woes, and gives a When scaled by state and local government exbrief perspective on the outlook. penditures, the current deficit is in the range last seen during the 1974 recession (chart 1). Deficits of a similar magnitude, relative to expenditures, THE FISCAL ACCOUNTS OF STATE were chronic in the 1950s and 1960s, when con- AND LOCAL GOVERNMENTS struction spending for roads, schools, and other infrastructure—which is partly financed through Three fiscal accounts are important to a full the capital markets—made up about one-fourth understanding of the state and local budget situ- of state and local outlays. In contrast, the rise in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1010 Federal Reserve Bulletin • December 1990 1. Budget surpluses and deficits of the state and that the imbalance between revenue collections local sector as a proportion of sector expenditures1 and spending priorities ultimately will have to be corrected through tax increases or reduc- Percent tions in expenditures. The General Fund Budgets = I K The general fund budgets of state and local z governments—their main operating accounts— also have shown deterioration over the last sev- 1 V \ A/ V73 eral years. Among the states, general fund budgets represent an average of 60 percent of total 6 outlays (excluding social insurance funds). The J 9 composition of the state general fund budgets varies considerably.1 On the expenditure side, 111111II1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1960 1965 1970 1975 1980 1985 1990 the budgets include compensation for employees as well as outlays for nondurable goods, other 1. Quarterly data; operating and capital accounts excluding social insurance funds. services, and interest expenses; but they typi- SOURCE. National income and product accounts. cally exclude most spending for construction, which is usually reported in a separate capital the deficit during the second half of the 1980s has account. (In contrast, cities and other local govnot reflected a disproportionate surge in public ernments often include construction in their gencapital spending. Even when building activity eral fund budgets.) advanced in the mid-1980s, outlays for construction remained around 10 percent of expenditures In every state except Vermont, the general (chart 2). fund budget is required constitutionally or stat- The sector's deficits in the last few years have utorily to be balanced, either within each fiscal been the first since 1967 to worsen in the year or over a two-year period. Typically, a absence of a general economic downturn (chart balanced budget requires that revenues be at 1). As spending on infrastructure became less least as large as outlays, but states may use important in the late 1960s and early 1970s, the surpluses from the preceding fiscal year to sector began to experience budgetary sur- achieve balance in the current year. If a shortpluses, except when recessions eroded tax fall is anticipated during the planning stages of a bases and expanded the demand for resources. budget, which occur during the legislative ses- However, the recent deficits evolved during a sion preceding a given fiscal year, state governperiod of economic expansion, which suggests ments usually cut spending and increase taxes, fees, and charges. Proceeds of short-term debt 2. Construction spending by the state and local sector offerings, and occasionally bonds, have been as a proportion of sector expenditures1 used by some states to cover shortfalls and Percent "balance" their general fund budgets. Balancing techniques employed when shortfalls appear toward the end of the fiscal year include the postponement of certain payments until 25 after the end of the year or the acceleration of 15 1. State general fund budgets are reported and analyzed each year by the National Association of State Budget M B it 1 • 1 1 1 • 1 1 i • 111 • 111 m i 1 1 • Officers of the National Governors' Association (Washing- I960 1970 1980 1990 ton, D.C.) in Fiscal Survey of the States and by the National 1. Quarterly data; excludes social insurance funds. Conference of State Legislatures (Denver and Washington, SOURCE. National income and product accounts. D.C.) in State Budget and Tax Actions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Current Fiscal Situation in State and Local Governments 1011 some receipts into the year. In addition, certain designed to reduce property taxes collected by functions may be moved outside the realm of local governments. Within a few years, many the general fund budget. Thus, although a sim- other states had enacted legislation to reduce ple comparison of expected outlays and re- taxes or limit the growth of government. Curceipts from current resources may imply a rently, twenty-one states have either constitudeficit, considerable fiscal maneuvering can tional or statutory limits on spending or produce a "balance," maneuvering that has taxes.3 been characterized as "the twilight zone of A state's difficulties with its general fund state fiscal procedures."2 account often spill over into its capital spend- Even without a legal mandate for a balanced ing. For example, in the energy-producing budget, important considerations push state states of Colorado, Louisiana, Oklahoma, and and local governments to enact general fund Wyoming, construction spending was either cut budgets that show a balance or slight surplus. or postponed during the mid- to late-1980s, with For state and local governments, the long-run the funds diverted to current operations to help cost of fiscal weakness is the higher interest ease the effect of revenue shortfalls associated rates that are required to sell debt when bud- with the drop in the price of crude oil. In 1988, getary pressures affect perceptions of investors, the state of New York used $600 million, prewhether or not such pressures have been for- viously intended for housing and repairs to mally captured in bond ratings. The higher roads and bridges, to help close a gap in the interest rates put further pressure on already general fund budget. The deferred capital strained budgets. Often, just the possibility of projects were built eventually but were funded higher rates may choke off bond issuances. In from different sources—in the case of housing, 1989, when the credit rating of the state of from current revenues. More recent fiscal prob- Massachusetts was being downgraded, local lems in its general fund budget have caused the governments in the state postponed debt offer- state of New York actually to cut back its ings until the situation stabilized. More re- construction programs. Moreover, unlike earcently, in September 1990, Philadelphia was lier years, when current revenues in the general unable to sell short-term securities because of fund were high enough to support about 30 its below-investment-grade debt rating and still percent of capital expenditures, now virtually worsening fiscal situation. Although the fiscal all such spending is financed through the debt position of a state or municipality is not the only markets. factor considered by credit rating agencies, it is Fiscal tightness is damping construction an important one. For example, in the recent spending by cities, as well. To cope with budgetdowngrading of the general obligation debt of ary pressures in 1990, nearly 40 percent of cities New Haven, Connecticut, Moody's Investors surveyed by the National League of Cities re- Service noted the city's weakening fiscal duced the actual level of capital spending.4 health, the projected city budget deficit, the All but three states ended fiscal year 1990 slowing regional economy, and large capital with balanced general fund budgets, according needs. to the National Association of State Budget Although financing costs and balanced budget Officers. However, when resources available requirements tend to move state and local bud- from the preceding year are excluded, expendigets toward surplus, political considerations tures exceeded revenue in thirty-three states. usually do not allow large surpluses to persist. The exclusion of surpluses from the preceding In 1978, after several years of significant state year creates a budget concept somewhat closer surpluses, voters in California approved Proposition 13, a state constitutional amendment 3. Scott Mackey, "Tax and Spending Limitations on the November Ballot," The Fiscal Letter (National Conference of State Legislatures), Sept./Oct. 1990, pp. 5-6. 2. "Fiscal Notes," State Budget and Tax News, July 31, 4. Douglas D. Peterson, City Fiscal Conditions in 1990 1990, p. 11. (Washington: National League of Cities, 1990), p. iv. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1012 Federal Reserve Bulletin • December 1990 to that of NIPA, which includes only current U.S. government securities and in corporate outlays and current receipts; these surpluses bonds and stock. are the source of some of the inconsistency The assets of these funds are considered to be between the fiscal balance reported in the gen- outside the general fund and capital accounts of eral fund data and the fiscal erosion evident in the state and local governments and are rarely NIPA. An additional source of this disparity is touched even in the event of severe fiscal the exclusion of most capital accounts from deterioration. However, public employers state general fund accounts: The capital ac- sometimes reduce their contributions in recounts may well have been in deficit in recent sponse to budgetary distress—the state governyears as construction spending began to rise in ments of Texas, Oklahoma, Louisiana, and the mid-1980s. Moreover, NIPA includes all New York have been examples over the past local governments, which are responsible for few years. To facilitate this type of adjustment, about half of the sector's total expenditures and some accounting device is typically used to many of which also have been experiencing decrease contributions or to lengthen the period fiscal distress in recent years. of amortization of unfunded liabilities. New York State, for example, raised the interest rate assumption on which the earnings were based, Social Insurance Funds leaving it room to cut its payments into the fund. Separate from operating and capital accounts are An important distinction exists between the the accounts of the state and local social insur- state's contributions and the corpus, or assets, of ance funds. For the sector as a whole, the surplus the trust itself, and for states to borrow money of the retirement systems constitutes 90 percent directly from the corpus of their pension funds is to 95 percent of the surplus of all the social extremely rare. Their fiduciary responsibility reinsurance funds, which in some states also in- quires the administrators of pension funds to clude worker's compensation and disability in- guard the corpus and earn the highest return surance. Roughly 90 percent of all state and local possible; hence, investing in state bonds, for government workers are covered by about 10 example, would not be prudent because they pay percent of the approximately 6,000 pension funds a relatively low, tax-exempt rate, and the penin the sector. sion systems are exempt from taxation. And a Inflows to the insurance funds accrue from transfer from a pension fund to an operating contributions by employers and personnel as account would be out of the question; interfund well as from interest earnings. Offsetting these transfers are usually carried out only among revenues are transfer payments to beneficiaries dedicated funds that are under government conand administrative expenses. Surpluses of state trol, like the state highway trust fund or the and local social insurance funds are a source of conservation fund. saving that is available each year to the rest of The fundamental distinction between the sothe economy via the credit and equity markets; cial insurance funds and the fiscal accounts of the surpluses have grown steadily in recent years state and local governments can be better appreand stood near $70 billion at an annual rate in the ciated if the insurance funds are viewed as prisecond quarter of 1990. vate pension balances. Much of the long-run Almost all state and local pension funds are growth in social insurance funds can be attribbased on defined benefits. Government employ- uted to the growth of public sector employment. ees contribute a set percentage of their wages If this employment growth had occurred in the and salaries and the employing state or local private sector instead of the public sector—for government contributes the differential required example, through greater dependence on private to meet a calculated benefit. The funds are man- schools or privately operated services—then, aged like private pension funds in that the assets other things equal, public pension fund balances of the funds are held against future claims by would have been lower and private pension fund annuitants. Fund assets are invested mainly in balances would have been higher. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Current Fiscal Situation in State and Local Governments 1013 THE CURRENT FISCAL SITUATION Education. Outlays on public education account for 50 percent of state general fund bud- The deteriorating fiscal position of state and local gets, more than 40 percent of all purchases of governments stems from gathering pressures for goods and services by state and local governmore spending on facilities and services com- ments, and more than 5 percent of gross national bined with weakened revenues. This section de- product. Such spending is likely to grow substanscribes these problems and discusses the current tially over the next decade, both to improve the fiscal policies of states and localities in dealing quality of education and to accommodate the with them. rising number of school-age children. To improve the quality of education, schools Expenditures have imposed stricter course guidelines and required new competency tests for teachers and In recent years, fundamentals in several areas students, two relatively low-cost strategies. have necessitated greater spending than ex- However, many school systems have added pected by budget planners. Currently, nearly more significantly to costs by starting or extwo-thirds of state general fund budgets are ded- panding special education programs over the icated to education, medicaid, and corrections; past two decades, especially those for handiand current population trends point to further capped children: In 1973, the Congress passed increases in these areas in the coming years the Rehabilitation Act which, among other (chart 3). Court orders in many states and federal things, prohibited discrimination against the mandates have also added to state spending handicapped; and two years later, by adopting requirements, and the repair and expansion of the Education of the Handicapped Act, the the public infrastructure has become an impor- Congress required public school systems to tant goal in many states and localities. make available to all handicapped children a free education appropriate to their needs. Since the passage of these bills, the handicapped have been educated increasingly through the public 3. Selected factors in state and local expenditures school system. In addition, programs for gifted, Millions learning-disabled, and bilingual children have been expanded. These programs likely contrib- 46 uted not only to a lowering in the studentteacher ratio but also to the hiring of additional support personnel and the purchase of special equipment and supplies. The quest for better schools received a boost in 1983 with the publication of a special study, A Nation At Risk, that was commissioned by Secretary of Education T.H. Bell in response to his concern about "the widespread public perception that something is seriously remiss in our educational system."5 Weaknesses identified in Thousands the study centered on the curriculum, expectations about the level of knowledge that should be acquired, the time spent by American students % on schoolwork as compared with the time spent 1977 1979 1981 1983 1985 1987 1989 5. The National Commission on Excellence in Education, SOURCE. U.S. Department of Education; Department of Health and A Nation at Risk: The Imperative for Educational Reform Human Services; U.S. Department of Justice. (Government Printing Office, 1983), p. 1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1014 Federal Reserve Bulletin • December 1990 by children in other countries, and the relative cal services to most recipients of federal cash attractiveness of the teaching profession. In re- assistance programs (Aid to Families with Desponse, some states adopted quality standards pendent Children and Supplemental Security that eventually were viewed by local govern- Income) and to others meeting a separate test of ments as commitments. Growth in real opera- financial need. The program is administered by tional outlays for education accelerated during the states and funded by both the states and the the mid-1980s, a response facilitated by the federal government. States choosing not to parhealthy fiscal position of state and local govern- ticipate in the national program must offer their ments in the early years of the current economic own program; Arizona is the only state not expansion. A report published by the U.S. De- participating. States may have broader propartment of Education in 1988, American Educa- grams than required, and their policies on reimtion: Making it Work, found that substantial bursement and administration differ; as a result, progress had been made. For example, more the medicaid program varies considerably from students were studying basic subjects than state to state. earlier in the decade, and the performance of Each state's federal payment for medicaid is schools was judged to be generally improved. dependent on its per capita income; currently, However, the study concluded that a con- the federal government's share ranges from 50 siderable gap still existed between the current percent to 78 percent. In addition, the medicaid status of the educational system and the objec- program in some states includes recipients that tives. are not eligible for federal matching funds; Adding to the pressures on school budgets hence, those states receive no federal contribuhas been the current rise in the number of tion for the care of such individuals. school children. After falling for twenty years, Between 1987 and 1990, outlays for medicaid births nationwide began to increase during the rose as a share of state expenditures from 10 mid-1970s, resulting in a corresponding rise in percent to 12 percent. About half of the inpublic elementary school enrollment in 1982. crease in medicaid costs during the mid-1980s The number of elementary school teachers also appears to be attributable to inflation, about started to increase that year, and real construc- one-fourth to intensity of use (more services tion spending on educational facilities began to used per individual), and about one-fourth to an rise in 1985. At the secondary level, enrollment increase in the number of recipients—enrollhas continued to decline; however, the number ment has grown 15 percent since 1980. Much of of students in public high schools is expected to the increase in enrollment and intensity of use start increasing in 1991. stems from federal mandates requiring states to Projections by the Department of Education cover individuals at higher levels of income or call for total public school enrollment to rise to include previously optional services. For about 3 million by 1997 and for real expenditures instance, as of April 1, states were required to to increase—by 2VI percent to 3 percent per year cover infants and pregnant women whose inover the next decade; these estimates build-in come is up to 133 percent of the poverty line both a sizable rise in the number of teachers and children up to age six; previously, only and some increase in their real salaries. Spending those whose incomes fell below poverty and on school construction is likely to rise, both children up to age one had to be covered. In to create space for the expanding population of addition, the October 1990 federal budget school children and, in many school systems, agreement further expanded coverage for chilto perform long-delayed repairs and mainte- dren. nance. Clearly, keeping up with rising enroll- In fiscal year 1990, medicaid spending nationments as well as quality goals could prove to be wide totalled $61 billion, with state governa formidable task for any government, but ments paying for 42 percent of the total and particularly for one plagued by revenue short- about 25 million people receiving benefits. The falls. 18 percent advance in state medicaid spending Medicaid. Medicaid provides specific medi- that year strained state general fund budgets Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Current Fiscal Situation in State and Local Governments 1015 that were written in anticipation of a 10 percent concern, and with the support of an improved increase.6 fiscal posture, state and local construction spending; began to advance in 1984. By far the largest Correctional Facilities. Corrections spending, increase was in school building, which makes up which covers outlays for the construction and about one-fifth of state and local construction operation of state prisons, for probation and pa- spending. In addition, real outlays for highways, role programs, and for juvenile justice systems, bridges, and sewer and water facilities increased has been one of the fastest growing components of considerably. Indeed, by the third quarter of state general fund budgets since the mid-1980s. In 1990, the level of real construction spending was the fiscal year just ended, spending on corrections 50 percent above its low at the end of 1983. grew 17 percent, compared with a 9.5 percent rise Despite this rise in outlays, construction activin total general fund outlays. Spending for correc- ity remained low relative to total state and local tions currently accounts for 5 percent of general government expenditures throughout the 1980s. fund budgets. Much of the increase in recent And further examination shows that the state and years arises from growth of the inmate population local stock of structures, net of depreciation and and from court orders addressing various aspects measured in real terms, while still quite high, has of the corrections system. been little changed per capita since the mid- The number of inmates in state prisons had 1970s—falling a bit during the early 1980s and remained fairly steady in the postwar period until then edging up in recent years when outlays for the late 1970s, when it began a rapid increase that construction began to rise; it currently stands 2 has been attributed, in part, to the rise of illegal percent below the high, recorded in 1979 (chart 4). drug use. During the 1980s the number of inmates Among the major components of infrastrucin state prisons more than doubled, to about ture, the per capita stock of highways and streets 650,000, or about 60 percent of all inmates in the fell steadily from its peak in 1974 and then United States. (In 1989, another 35 percent were increased in 1987 and 1988. The stock of educaheld at local jails, and 5 percent were in federal tional facilities, measured against the number of prisons.) school-age children, edged up in the late 1980s, Numerous court orders to improve state prison after falling for six years. However, the per systems in various ways have also added to costs. For example, as of January 1989, guide- 4. Stock of structures and of selected components lines stipulating population limits had been set in in the state and local sector1 twenty-seven states; orders covering other con- Thousands of 1982 dollars per capita ditions in prisons had been handed down in thirty-one states; and the courts had appointed a Schools2 variety of monitors and other overseers in fifteen states. In addition, health care costs have been 6 / Total rising, in part because of the growing incidence of AIDS among inmates in recent years. Infrastructure. Throughout the past decade the 4 nation has become increasingly aware of the deterioration of its public infrastructure, which Highways broadly speaking includes roads and bridges, 2 water supply and treatment facilities, prisons, schools, hospitals, and parks. In response to this Sewer and water 1 I 1 1 1 6. Corina L. Eckl, Anthony M. Hutchison, and Ronald K. 1950 1960 1970 1980 1990 Snell, State Budget and Tax Actions 1990, Legislative Fi- 1. All values are net of depreciation. nance Paper 74 (Denver and Washington: National Confer- 2. Per school-age child. ence of State Legislatures, September 1990). SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1016 Federal Reserve Bulletin • December 1990 The Stock of Public Capital and Productivity The growth in both the stock of public capital and in An analysis using the same framework as that of productivity slowed in the 1970s and 1980s. Some Aschauer suggests that the relationship between analysts, notably David Alan Aschauer, have argued growth in multifactor productivity and growth in the that a strong, contemporaneous, causal link exists public capital stock (nonmilitary federal, state, and between investment in public capital and growth in local equipment and structures) is significant but productivity (see his "Is Public Expenditure Produc- inelastic. Of the total stock of public capital, state tive?" Journal of Monetary Economics, vol. 23, and local structures have the greatest effect on March 1989, pp. 177-200). Adding to the public productivity; neither the stock of federal structures capital stock, these analysts say, would bolster nor that of total equipment is significantly related to potential output in the economy: Adequate public multifactor productivity. The amount of "core" capital lowers private costs, and close associations infrastructure—roads, bridges, sewers, and water can be made, for example, between growth in the supply systems—has the strongest statistical relanation's output and the construction of the interstate tion to productivity, with an elasticity slightly higher highway system. than that for total state and local structures. Educa- A number of contrary arguments, however, raise tional facilities are also significant, but have an questions about the strength of the association be- elasticity lower than that for the total. The remaining tween spending on public works and productivity category, which includes hospitals, office buildings, gains—especially in the short run. Even in the case and ajl other structures, is not statistically signifiof roads and bridges, much repair and modernizing cant. Also, on a more disaggregate basis, only one of would not enhance productivity in the short run. For twelve industries studied—the petroleum industry— example, most of the numerous bridges about which showed a statistically significant relationship beauthorities currently worry are still used each day tween its productivity and the level of core infraand could perhaps remain serviceable for quite a few structure. more years. Educational facilities may also have Most economists think that a multitude of facdirect links to productivity; but many years must tors contributed to the productivity slowdown pass before today's grade schoolers can enter the during the 1970s. Although the slowing in the work force, so any connection between improved growth of the public capital stock may be one of educational facilities and increased output per hour these factors, conventional growth accounting would not be contemporaneous. Also, although the also casts doubts on assigning it a central role, as connection between productivity and the commu- does most work by others that is based on micronity well-being that is promoted by spending on economic or regional data. Maintenance of the correctional facilities, hospitals, and parks is intui- nation's infrastructure is important, and new fative, it is unlikely to be strong, especially in the short cilities must be provided for growing neighborrun. Thus, while modern societies are dependent on hoods and businesses. But given the current evia sound infrastructure, as the foregoing examples dence, we should not expect infrastructure suggest, the qualitative notion that an infusion of investment, by itself, to have a strong effect on capital spending, on the margin, will spur increases productivity growth in the short run. in output per factor input is not clear. capita stock of water supply and treatment sys- priority among state and local governments in the tems has continued to trend up throughout the years ahead, as state and local structures account postwar period as has the per capita stock of for 80 percent of the nondefense public capital miscellaneous capital, which includes correc- stock. Aging highways, bridges, and water systional facilities, hospitals, and other governmen- tems will need to be repaired or replaced, and tal buildings and structures. increased school and prison populations, noted Further spending to expand and upgrade the above, will require more building. Some federal infrastructure is expected to remain an important aid is available, particularly for highways and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Current Fiscal Situation in State and Local Governments 1017 In fiscal 1990, twenty-six state legislatures 5. Selected collections as a proportion of state and local receipts1 enacted tax hikes, some of them unusually large. According to the National Association of Percent State Budget Officers, the 1990 increases will add $10.3 billion to fiscal 1991 receipts, the largest nominal increase on record; the addi- ' Personal taxes and other personal receipts2 25 tional revenue is expected to be concentrated in New Jersey, New York, California, Massachu- ^Federal grants-in-aid setts, and Florida. For fiscal 1991, more than 20 half the rise is expected to come from increases in general sales taxes and personal income taxes. 1 1 1 1 1 1 1 1 I 1980 1982 1984 1986 1988 Local governments also have come under 1. Quarterly data; excludes contributions for social insurance. considerable budgetary pressure this past fiscal 2. See text note 7. year. A survey by the National League of Cities SOURCE. National income and product accounts. reported that, despite tax hikes and spending reductions, expenditures would outstrip remass transit, but financing the bulk of the spendceipts in fiscal 1990 in 54 percent of cities; over ing will be up to state and local governments. the preceding six years, the proportion of such cities ranged between 24 and 40 percent.8 Fur- Revenue ther increases in local taxes may be inevitable as state governments, along with the federal The postwar growth of federal aid to state and government, cut back aid. Massachusetts and local governments ended in the 1980s. During North Carolina reduced their grants to local that decade, federal aid fell as a share of state and government this year, and Virginia is expected local revenues—excluding social insurance to follow suit. Some states have cleared the way funds—from 25 percent to 17 percent (chart 5). for local tax hikes by authorizing such in- Indeed, at the outset of the period, support was creases—for example, higher sales taxes in actually reduced in nominal terms, from nearly Arizona and South Carolina and a "local-op- $89 billion in 1980 to less than $84 billion just two tion" gasoline tax in Florida. Some states inyears later. In addition, tax collections fell below creased the amount of property taxes that loexpected levels as growth in most tax bases calities must raise in order to qualify for state slowed late in the decade and corporate profits aid. In a few states, a change in school-aid declined. formulas could shift some state funds out of With the decline of federal aid, state and local more affluent communities and force them to governments became more dependent on perraise local taxes to maintain their school budsonal receipts—taxes, fees, and charges—to gets; likewise, however, the rise in overall state fund their budgets; during the 1980s, the protax collections and the shift in aid formulas portion of revenue derived from these sources could result in some property tax relief in other grew from 23 percent to 28 percent (chart 5). In communities. addition, many states raised excise tax rates Many local jurisdictions have increased propduring the 1980s, especially on gasoline and cigarettes.7 erty taxes even as several states are experiencing tax revolts and granting some relief. A survey of municipalities revealed that 41 percent raised property tax rates in fiscal year 7. Personal levies, reported collectively as personal tax and nontax receipts, comprise income taxes; estate, gift, and personal property taxes; tuition at state and local universities; hospital and other health-related charges; and fines and other fees. In contrast to these revenues, total sales taxes, set at a fixed amount per unit sold, whereas general sales which include excise taxes, have risen only slightly as a share taxes are levied as a proportion of the dollar amount sold. of the sector's total revenue over the decade; excise taxes are 8. Peterson, City Fiscal Conditions, pp. 8-9. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1018 Federal Reserve Bulletin • December 1990 1990, while 43 percent created new fees, and 76 pected to place even greater reliance on such percent raised the level of fees and charges.9 income. Moreover, for the year ending in the second quarter of 1990, property tax collections rose faster than the NIPA measure of total state and THE OUTLOOK local tax receipts. Many of the local governments that have not raised property tax rates The combined operating and capital account of have seen their collections bolstered by the the state and local government sector has been in increase in assessed values that reflected price deficit now for nearly four years and probably advances during the late 1980s; however, pros- will remain so for several years more. Nonethepects for further increases in assessed values less, the deficits are likely to diminish. Tax hikes are less favorable, given more recent price among states were large and numerous in 1990, developments. and local governments raised property taxes and About one-third of local government receipts fees and charges. On the spending side, some comes from property taxes, with a smaller cuts from earlier plans have been made on the share coming from fees and charges; both types education front, and other spending comproof levies are a logical source of additional mises can be expected. Overall, with rising revrevenue for these governments during periods enues and some constraint on spending, one of budgetary tightness. State governments also might expect to see better fiscal health in the have been raising fees and charges in recent years ahead. years. But local governments are more depen- This outlook is predicated on the assumption dent on fees and charges than are state govern- of continued growth in the economy as a whole. ments, and as local governments are pinched by Tax collections depend not only on tax rates but falling federal and state aid, they can be ex- also on incomes and sales. If the economy weakens in the year ahead, state and local governments will have more difficulty bringing revenues 9. Peterson, City Fiscal Conditions, p. iv. and expenditures into alignment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1019 Industrial Production and Capacity Utilization Released for publication on October 17 however, the average monthly gain during the summer was about one-half of that posted during Industrial production increased 0.2 percent in the preceding quarter. Industrial capacity utiliza- September; because upward revisions were made tion was unchanged in September at 83.6 percent. to estimates for earlier months, the index now In September, the output of motor vehicles shows increases of 0.1 percent in August and 0.2 and parts rose 7.5 percent, boosting the indexes percent in July. On a quarterly average basis, for both consumer goods and business equipindustrial production in the third quarter grew at ment. With production of motor vehicles and nearly the same pace as in the second quarter; parts excluded, industrial output edged down in Industrial production indexes Twelve-month percent change Twelve-month percent change Products Materials Durable manufacturing 1985 1986 1987 1988 1989 1990 1985 1986 1987 1988 1989 1990 Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production =100 —Total industry - 140 - Capacity - 120 — " " - 100 Production - 80 1 1 t 1 1 1 1 1 1 1 1 1 Percent of capacity Total industry Utilization I I I I I I I I L 1978 1980 1982 1984 1986 1988 1990 1978 1980 1982 1984 1986 1988 1990 All series are seasonally adjusted. Latest series, September. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1020 Federal Reserve Bulletin • December 1990 1987 = 100 Percentage change from preceding month PPPeeerrr--ccceeennntttaaagggeee ccchhhaaannngggeee,,, IIInnnddduuussstttrrriiiaaalll ppprrroooddduuuccctttiiiooonnn 1990 1990 SSSeeepppttt... 111999888999 tttooo Juner Julyr Aug/ Sept.p Juner Julyr Aug/ Sept.p SSSeeepppttt... 111999999000 Total index 110.1 110.3 110.4 110.7 .6 .2 .1 .2 2.2 Previous estimates 110.0 110.0 109.8 .5 .0 -.2 Major market groups Products, total 110.9 110.8 110.9 111.5 .3 -.1 .1 .5 2.4 Consumer goods 107.8 107.3 107.8 109.1 .3 -.4 .5 1.2 2.7 Business equipment 124.4 124.6 124.8 125.6 .7 .1 .2 .6 4.1 Construction supplies 106.0 106.4 105.9 104.9 .5 .3 -.5 -.9 -.3 Materials 108.8 109.5 109.7 109.4 1.0 .7 .1 -.2 1.9 Major industry groups Manufacturing 110.8 111.0 111.2 111.4 .5 .1 .2 .2 2.1 Durable 113.4 113.2 113.6 113.8 .7 -.1 .3 .2 2.1 Nondurable 107.6 108.1 108.1 108.3 .2 .5 -.1 .2 2.2 Mining 102.2 103.5 101.8 102.1 .0 1.3 -1.7 .4 .6 Utilities 109.7 109.4 110.8 111.8 2.5 -.4 1.3 .9 5.6 Percent of capacity CCCaaapppaaaccciiitttyyy gggrrrooowwwttthhh,,, CCCaaapppaaaccciiitttyyy uuutttiiillliiizzzaaatttiiiooonnn 1989 1990 SSSeeepppttt... 111999888999 AAvveerraaggee,, LLooww,, HHiigghh,, tttooo 11996677--8899 11998822 11998888--8899 SSSeeepppttt... 111999999000 Sept. June July Aug. Sept.p Total industry 82.2 71.8 85.0 83.9 83.7 83.7 83.6 83.6 2.6 Manufacturing 81.5 70.0 85.1 83.6 83.0 82.9 82.8 82.8 3.1 Advanced processing 81.1 71.4 83.6 82.5 81.9 81.6 81.5 81.7 3.4 Primary processing 82.3 66.8 89.0 86.1 85.5 86.0 86.0 85.4 2.5 Mining 87.3 80.6 87.2 87.2 88.8 90.0 88.6 89.0 -1.5 Utilities 86.8 76.2 92.3 84.3 86.8 86.4 87.4 88.1 1.0 r Revised. NOTE. Indexes are seasonally adjusted, p Preliminary. September: Output of consumer nondurable market category has fallen nearly 3 percent. goods and energy materials rose sharply, but Output of both durable and nondurable materials production in most other major market catego- declined in September. Among durables, the ries declined in September. During the past year, largest drop occurred in the production of basic total industrial output has risen 2.2 percent to metals, in part because steel output, which had 110.7 percent of its 1987 annual average. surged in August, dropped back. Output of non- In market groups, production of consumer durables declined in the past two months, retracgoods other than autos and trucks increased 0.5 ing the sizable gains made in June and July; the percent in September. Nondurables, particularly production of textiles has been particularly foods, posted noticeable gains, but output of weak. The rise in output of energy materials appliances and other goods for the home re- reflected another jump in electricity generation mained sluggish. Excluding motor vehicles, pro- and a rebound in coal mining. duction of business equipment declined 0.3 per- In industry groups, manufacturing output cent, reflecting not only a decrease in industrial edged up 0.2 percent in September, leaving the equipment but also a slowing in information factory operating rate unchanged at 82.8 perprocessing and related equipment. Both of these cent—about the same level of utilization that equipment sectors had posted large production has prevailed throughout most of this year. gains earlier in the summer. Output of construc- Apart from the sharp rise in motor vehicle astion supplies fell sharply in August and Septem- semblies, manufacturing output dropped 0.2 perber after rising a bit in the prior two months; cent, with declines widespread among all prisince the beginning of the year, production in this mary processing industries except petroleum. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 1021 Even though the operating rates for both steel In contrast, the production of nonelectrical maand nonferrous metals dropped back in Septem- chinery declined in September, bringing down ber, they were still well above levels seen earlier the utilization rate, which by August had come in the year. Only construction-related industries close to its 1988-89 high. have experienced a noticeable decline in their The rise in the output in mining and at utilities operating rates since the beginning of this year. moved the operating rate up for both sectors. Other advanced processing industries that The utilization rate for mining has changed little, posted gains in September included food, chem- on balance, since last spring, while the rate for ical products, and miscellaneous manufacturing. utilities has risen sharply. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1022 Statements to the Congress Statement by Alan Greenspan, Chairman, Board mately related to the pressing need to modernize of Governors of the Federal Reserve System, our banking system in other ways. The erosion of before the Subcommittee on Commerce, Con- the domestic and international competitive posisumer, and Monetary Affairs of the Committee tion of U.S. banks must be addressed by exon Government Operations, U.S. House of Rep- panded permissible activities and wider georesentatives October 3, 1990. graphical branching powers, and we believe that legislation in this area should be joined with I am pleased to appear before the committee to deposit insurance reform. I have presented the discuss deposit insurance reform. The issue has Board's proposals on these subjects before the increasingly come to the attention of the Con- Senate and House Banking committees this sumgress and the media as the cost of resolution of mer. Given the narrower focus of the hearings failed thrift institutions becomes more apparent today, and the additional witnesses this morning, and as various government and private reports I have omitted a detailed delineation of the focus on the potential liabilities facing the Bank Board's modernization proposals, but I never- Insurance Fund. Last year the Congress man- theless want to underline their importance, with dated a study of the issues by the Treasury. This the strong endorsement that these issues should, study, in which the Federal Reserve, the Federal in the Board's view, be considered jointly with Deposit Insurance Corporation (FDIC), the Of- deposit insurance reform by this committee and fice of the Comptroller of the Currency (OCC), by both Houses of the Congress. the Office of Thrift Supervision (OTS), and other The fundamental problems with our current agencies will be active participants, will be pub- deposit insurance program are clearly underlished later this year or early next. But hearings stood and are, I believe, subject to little debate on the issues now by this and several other among those with drastically different prescripcommittees of the Congress will, I hope, sharpen tions for reform. The safety net—deposit insurthe focus on the need for legislation promptly ance, as well as the discount window—has so after the release of the Treasury report. lowered the risks perceived by depositors as to Your letter of invitation, Mr. Chairman, fo- make them relatively indifferent to the soundness cuses on the issues associated with the feasibil- of the depository recipients of their funds, except ity, benefits, and risks of some reduction in in unusual circumstances. With depositors exerinsurance coverage and the associated potential cising insufficient discipline through the risk prefor enhanced depositor discipline. The Board has mium they demand on the interest rate they considered these highly complex and important receive on their deposits, the incentive of some questions on several occasions. My statement banks' owners to control risktaking has been today will summarize our views on this approach blunted. Profits associated with risktaking accrue to the problem, but the Board believes it is to owners, while losses in excess of bank capital important for the Congress to review options that would otherwise fall on depositors are abother than reduced insurance coverage to ad- sorbed by the FDIC. dress the root cause of the taxpayer exposure Weak depositor discipline and this moral hazand the potential financial market distortions ard of deposit insurance have two important associated with our present deposit insurance implications. First, the implicit deposit insurance and supervisory approaches. subsidy has encouraged banks to enhance their As you know, Mr. Chairman, the Board also profitability by increasing their reliance on debelieves that deposit insurance reform is inti- posits rather than capital to fund their assets. In Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1023 effect, the deposit insurance funds have been tion that deposit insurance has made to increasingly substituted for private capital as the macroeconomic stability. The existence and use cushion between the asset portfolios of insured of the safety net have shielded the broader finaninstitutions and their liabilities to depositors. A cial system and the real economy from instabilihundred years ago, the average ratio of equity ties in banking markets. More specifically, it has capital to assets of U.S. banks was almost 25 protected the economy from the risk of deposit percent, approximately four times the current runs, especially the risk of such runs spreading level. Much of the decline over the past century from bank to bank, disrupting credit and payno doubt reflects the growing efficiency of our ment flows and the level of trade and commerce. financial system. But it is difficult to believe that Confidence in the stability of the banking and many of the banks operating over recent decades payments system has been the major reason why would have been able to expand their assets so the United States has not suffered a financial much, with so little additional investment by panic or systemic bank run in the last half their owners, were it not for the depositors' century. perception that, despite the relatively small cap- There are thus important reasons to take care ital buffer, their risks were minimal. Regulatory as we modify our deposit insurance system. efforts over the past ten to fifteen years have Reform is required. So is caution. The ideal is an stabilized and partially reversed the sharp de- institutional framework that, to the extent possicline in ratios of bank equity to capital assets. ble, induces banks both to hold more capital and This has occurred despite the sizable write-off of to be managed as if there were no safety net, loans and the substantial buildup in loan-loss while at the same time shielding unsophisticated reserves in the last three years or so. But the depositors and minimizing disruptions to credit capital ratios of many banks are still too low. and payment flows. Second, government assurances of the liquid- The congressional increase in the deposit inity and availability of deposits have enabled surance level in 1980 from $40,000 to $100,000 some banks with declining capital ratios to fund was intended to permit depository institutions to riskier asset portfolios at a lower cost and on a have access to deposits not subject to the rate much larger scale, with governmental regulations ceilings then in force. Disintermediation espeand supervision, rather than market processes, cially suggested the need to facilitate the access the major constraint on risktaking. As a result, of thrift institutions to funds that would substimore resources have been allocated to finance tute for the retail deposits that were at the time risky projects than would have been dictated by bleeding off to higher-yielding market instrueconomic efficiency. ments at rates that thrift portfolios would not In brief, the subsidy implicit in our current permit them to match. Large time deposits— deposit insurance system has stimulated the defined by the regulators as those of more than growth of banks and thrift institutions. In the $100,000—were exempt from rate ceilings on the process the safety net has distorted market sig- thought that their size—more than twice the nals to depositors and bankers about the eco- then-insured level—implied sophisticated holdnomics of the underlying transactions. This dis- ers familiar with market instruments and the tortion has led depositors to be less cautious in evaluation of financial assets. It was argued that choosing among institutions and has induced an increase in deposit insurance coverage to the some owners and their managers to take exces- level that would exempt such deposits from rate sive risk. In turn, the expanded lending to risky ceilings would open up access by smaller and ventures has required increased effort and re- weaker depository institutions to large-denomisources by supervisors and regulators to monitor nation time deposits that previously had been and modify behavior. limited to a smaller set of depositories for whom But in reviewing the list of deficiencies of the the market was willing to provide significant deposit insurance system, particularly if an in- uninsured funding. Such funding at market rates, creased role for depositor discipline is contem- it was contemplated, would not require raising plated, we should not lose sight of the contribu- yields for the retail depositors willing to remain Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1024 Federal Reserve Bulletin • December 1990 at lower rates. The extension of deposit insur- Consumer Finances become available this fall. I ance was thus an increase in a subsidy in lieu of have attached as an appendix to this statement the removal of regulations that were phased out summary tables and descriptive text of the 1983 some time later by the Depository Institutions survey results.1 Briefly, the survey suggests that Deregulation Act. But, as in virtually all other in 1983 between 1.0 and 1.5 percent of U.S. cases, the subsidy remained. households held deposit balances in excess of If we were starting from scratch, the Board $100,000. The demographic characteristics of believes it would be difficult to make the case these account holders suggest that they are that deposit insurance coverage should be as high mainly older, retired citizens with most of their as its current $100,000 level. However, whatever financial assets in insured accounts. These charthe merits of the 1980 increase in the deposit acteristics of heads of households owning deposinsurance level from $40,000 to $100,000, it is its are remarkably stable as the size of deposits clear that the higher level of depositor protection declines to $50,000. has been in place long enough to be fully capital- A 1988 survey of small and medium-sized ized in the market value of depository institu- businesses—described in the second appendix to tions and embedded in the financial decisions of this statement—suggests that 7.1 percent of such millions of households. The associated scale and businesses had at least one account in excess of cost of funding have been incorporated into a $100,000. These firms are generally of modest wide variety of bank and thrift decisions, includ- size: Those with uninsured deposits had median ing portfolio choices, staffing, branch structure, sales of $3.2 million, had less than fifty employand marketing strategy. Consequently, a return ees, and more than 10 percent of these entities to lower deposit insurance coverage—like any were proprietorships or partnerships. The 1988 tightening of the safety net—would reduce in- small business survey suggests a sharp drop-off sured depository market values and involve sig- in the size of firms as the maximum deposit nificant transition costs. It is one thing initially to declines to, say, $50,000. offer and then to maintain a smaller degree of Some have suggested a reduction of deposit insurance coverage, and quite another to reim- insurance to that level, and the available evipose on the existing system a lower level of dence suggests that persons and small businesses insurance, with its associated readjustment and with $50,000 of deposits would probably be as unwinding costs. This is why the granting of capable as current depositors with more than subsidies by the Congress should be considered $100,000 of assessing the health of their banks or so carefully: They not only distort the allocation thrift institutions. As I noted, the demographics of resources but also are extremely difficult to of the two household groups are similar, although eliminate, imposing substantial transition costs the business units with balances between $50,000 on the direct and indirect beneficiaries. For such and $100,000 have significantly smaller scale than reasons, the Board has concluded that, should those with balances of more than $100,000. In the Congress decide to lower deposit insurance addition, it is arguable that, should the insured limits, a meaningful transition period would be deposit limit be reduced to $50,000, and policies needed. adopted that make losses by uninsured deposi- Another relevant factor that should be consid- tors much more likely than they are today, ered in evaluating the $100,000 insurance limit is uninsured depositors with a strong preference for the distribution of deposit holders by size of safety would be able to purchase evaluations of account. Unfortunately, data to analyze this is- banks and thrift institutions from professional sue by individual account holder do not exist. analysts. Such depositors would also have access However, we have been able to use data collected on an individual household basis in our 1983 Survey of Consumer Finances to estimate the distribution of account holders. While these 1. The attachments to this statement are available upon data are seven years old, they are the best request from Publications Services, mail stop 138, Board of Governors of the Federal Reserve System, Washington, D.C. available until results from our 1989 Survey of 20051. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 1025 to alternative safe investments, especially Trea- No matter what the Congress decides on desury securities. posit insurance limits, we must be cautious of our Nevertheless, the characteristics of house- treatment of uninsured depositors—whether deholds and small businesses with deposits be- fined as those in excess of $50,000 or $100,000. tween $50,000 and $100,000 do not suggest that Such depositors should be expected to assess the they, compared with many other market partici- quality of their bank deposits just as they are pants, have the most resources and greatest expected to evaluate any other financial asset abilities to bring market discipline to bear on they purchase. Earlier I noted that our goal depository institutions. Thus it seems reasonable should be for banks to operate as much as to question whether such depositors should be possible as if there were no safety net. In fact, assigned a key role in deposit insurance reform. runs of uninsured deposits from banks under Moreover, as discussed above, the benefits of stress have become commonplace. lowering deposit insurance coverage at this time So far, the pressure transmitted from such must be balanced against the readjustment and episodes to other banks whose strength may be unwinding costs imposed on individuals, institu- in doubt has been minimal. Nevertheless, the tions, and markets that have adapted to the clear response pattern of uninsured depositors to $100,000 deposit insurance level. protect themselves by withdrawing their deposits A decision by the Congress to leave the from a bank under pressure raises the very real $100,000 limit unchanged, however, should not risk that in a stressful environment the flight to preclude other reforms that would reduce current quality could precipitate wider financial market inequities in, and abuses of, the deposit insur- and payments distortions. These systemic effects ance system, often thwarting its purpose. Serious could easily feed back to the real economy, no study should be devoted to the cost and effec- matter how open the discount window and how tiveness of policing the $100,000 limit so that expansive open market operations. Thus, while multiple accounts are not used to obtain more deposits in excess of insurance limits should not protection for individual depositors than the be protected by the safety net at any bank, Congress intends. We at the Federal Reserve reforms designed to rely mainly on increased believe that it is administratively feasible—but market discipline by uninsured depositors raise not costless—to establish controls on the number serious stability concerns. and dollar value of insured accounts per individ- An example of one such approach is depositor ual at one depository institution, at all institu- coinsurance or a deductible under which a detions in the same holding company, and per- positor at a failed institution receives most, but haps—at sharply rising cost and complexity— not all, of his or her deposit in excess of a even across unrelated depositories. But we are reduced (or the current) insurance limit. This concerned about the cost and administrative option has some attractions, coupling depositor complexity of such schemes and would urge the market discipline with relatively modest possible careful weighing of benefits and costs before losses to depositors. The Board believes, howadopting any specific plan. ever, that an explicit policy that requires impo- The same study could consider the desirability sition of uninsured depositor loss—no matter of limiting pass-through deposit insurance—un- how small—is likely to increase the risk of deder which up to $100,000 of insurance protection positor runs and to exacerbate the depositor is now explicitly extended to each of the multiple response to rumors. beneficiaries of some large and otherwise unin- Another option to rely more on private-market sured deposits. Brokered accounts of less than incentives without necessarily reducing the size $100,000 also have been used to abuse deposit of insurance coverage is the use of private deinsurance protection, particularly by undercapi- posit insurance as a replacement for FDIC insurtalized institutions. However, the study should ance. This option would require, of course, that keep in mind the power that the Congress has all relevant supervisory information—much of already provided the agencies to constrain mis- which is now held confidential—be shared with use of brokered accounts. private insurers who would be obligated to use Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1026 Federal Reserve Bulletin • December 1990 that information only to evaluate the risk of tions is the application of risk-based deposit depositor insurance and not for the purposes of insurance premiums by the FDIC. The idea is to adjusting any of their own portfolio options. In make the price of insurance a function of the addition, it is clearly unreasonable to impose on bank's risk, reducing the subsidy to risktaking private insurers any macrostability responsibili- and spreading the cost of insurance more fairly ties in their commercial underwriting of deposit across depository institutions. In principle, this insurance. Private insurers' withdrawal of cover- approach has many attractive characteristics, age in a weakening economy, or their unwilling- and could be designed to augment risk-based ness to forebear in such circumstances would be capital. For example, banks with high risk-based understandable but counterproductive. Private capital ratios might be charged lower insurance insurers' inability to meet their obligations after premiums. But the range of premiums necessary an underwriting error would be disruptive at best to induce genuine behavioral changes in portfolio and involve taxpayer responsibility at worst. management might well be many multiples of the Private insurance and public responsibility unfor- existing premium, thereby raising practical contunately are not always compatible. Many of cerns about its application. Risk-based premiums these concerns are mitigated if private insurance also would have to be designed with some degree is used as a supplement to FDIC insurance, say of complexity if they are to be fair and if uninto cover a coinsurance portion above some min- tended incentives are to be avoided. In any imum. However, we would remain concerned event, the potential additional benefits on top of about mutual assurance among groups of banks an internationally negotiated risk-based capital who would seek to evaluate each other's risk system, while positive, require further evaluaexposure and discipline overly risky entities by tion. expulsion from their mutual guarantee syndicate. Another approach that has induced increasing In addition, a system of mutual guarantees by interest is the insured narrow bank. Such an banks could raise serious anticompetitive issues. institution would invest only in high quality, There has also been support for the increased short-maturity, liquid investments, recovering its use of subordinated debentures in the capital costs for checking accounts and wire transfers structure of banking organizations. Intriguing from user fees. The narrow bank would thus attractions of this option are the thoughts that require drastic institutional changes, especially nonrunnable, but serially maturing, debt would for thousands of our smaller banks and for virtuprovide both enhanced market discipline and a ally all households using checking accounts. periodic market evaluation of the bank. The Movement from the present structure for deliv- Board continues to support the use of subordi- ery of many bank services would be difficult and nated debt for these reasons, as well as the fact costly, placing U.S. banks at a disadvantage that it provides supplementary capital to act as internationally. In addition, this approach might an additional buffer to the FDIC over and above shift and possibly focus systemic risk on larger that provided by the owners' equity capital. But, banks. Banking organizations would have to loin our view, subordinated debentures can only be cate their business and household credit operasupporting players and cannot be awarded the tions in nonbank affiliates funded by uninsured central role in reform. This is a limited source of deposits and borrowings raised in money and capital and one that may prove difficult and capital markets. Only larger organizations could expensive to obtain when advertised as having fund in this way, and these units, unless financed limited returns like debt, but whose holders are longer term than banks today, would, even with expected to absorb losses for the FDIC like the likely higher capital ratio imposed on them by equity. Adding features to make it more attrac- the market, be subject to the same risks of tive adds complications that perhaps are best met creditor runs that face uninsured banks, with all directly by additional pure equity and other re- of the associated systemic implications. If this forms. were the case, we might end up with the same set A promising approach that seeks to simulate of challenges we face today, refocused on a market discipline with minimal stability implica- different set of institutions. We at the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 1027 believe that while the notion of a narrow bank to to move to capital requirements that would, over insulate the insurance fund is intriguing, in our time, be more consistent with what the market judgment further study of these systemic and would require if the safety net were more modoperational implications is required. est. The argument for more capital is strength- If, in fact, proposals that rely on uninsured ened by the necessity to provide banking organidepositor discipline, private insurance, subordi- zations with a wider range of service options in nated debentures, risk-based premiums, and an increasingly competitive world. Indeed, prostructural changes in the delivery of bank ser- jections of the competitive pressures only intenvices raise significant difficulties, reform should sify the view that if our financial institutions are then look to other ways to curb banks' risk to be among the strongest in the world, let alone appetites, and to limit the likelihood that the avoid an extension of the taxpayers' obligation to deposit insurance fund, and possibly the tax- even more institutions, we must increase capital payer, will be called on to protect depositors. requirements. Our international agreements un- The Board believes that the most promising der the Basle Accord permit us to do so. approach is to reform both bank capital and There are three objectives of a higher capital supervisory policies. This would build upon the requirement. First, higher capital would groundwork laid in the Financial Institution Re- strengthen the incentives of bank owners and form, Recovery, and Enforcement Act of 1989 managers to evaluate more prudently the risks (FIRREA), in which the Congress recognized as and benefits of portfolio choices because more of key components of a sound banking system the their money would be at risk. In effect, the moral essentiality of strong capital plus effective super- hazard risk of deposit insurance would be revisory controls. Both would be designed to re- duced. Second, higher capital levels would creduce the value of the insurance subsidy. Neither ate a larger buffer between the mistakes of bank would rule out either concurrent or subsequent owners and managers and the need to draw on additions to deposit insurance reform, such as the deposit insurance fund. For too many instithe changes discussed previously, other propos- tutions, that buffer has been too low in recent als, or new approaches that may emerge in the years. The key to creating incentives to behave years ahead. In fact, higher capital, by reducing as the market would dictate, and at the same time the need for, and thereby the value of, deposit creating these buffers or shock absorbers, is to insurance would make subsequent reform easier. require that those who would profit from an There would be less at stake for the participants institution's success have the appropriate in the system. amount of their own capital at risk. Third, requir- At the end of this year, the phase-in to the ing higher capital imposes on bank managers an International Capital Standards under the Basle additional market test. They must convince in- Accord will begin. This risk-based capital ap- vestors that the expected returns justify the proach provides a framework for incorporating commitment of risk capital. Those banks unable portfolio and off-balance-sheet risk into capital to do so would not be able to expand. calculations. Most U.S. banks have already We are in the process in the Federal Reserve made the adjustment required for the fully System of developing more specific capital prophased-in standard that will be effective at the posals, including appropriate transition arrangeend of 1992. However, the prospect of an in- ments designed to minimize disruptions. Howcreasingly competitive environment suggests ever, at the outset I would like to anticipate that the minimum level of capital called for by the several criticisms. For many banks, raising sig- 1992 requirements may not be adequate, espe- nificant new capital will be neither easy nor cially for institutions that want to take on addi- cheap. Maintaining return on equity will be more tional activities. As a result of the safety net, too difficult, and those foreign banks that only adhere many banking organizations, in our judgment, to the Basle minimums may have lower capital have traveled too far down the road of operating costs relative to some U.S. banks. Higher capital with modest capital levels. It may well be neces- requirements also will tend to accelerate the sary to retrace our steps and begin purposefully move toward bank consolidation and slow bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1028 Federal Reserve Bulletin • December 1990 asset growth. However, these concerns must be insist that additional reserves be created with an balanced against the increasing need for reform associated reduction in the earnings or equity now, the difficulties with all the other options, capital of the bank. and both the desire of and necessity for banking This method of adjusting and measuring capital organizations to broaden their scope of activities by reliance on examiner loan evaluations does to operate successfully. not depend on market value accounting to adjust More generally, many of the arguments about the quality of the assets. Some day, perhaps, we the competitive disadvantages of higher capital may be able to apply generally accepted market requirements are shortsighted. Highly leveraged value accounting precepts to both the assets and banks are less able to respond to rapidly chang- liabilities of a financial going concern with a wide ing situations. In fact, well-capitalized banks are spectrum of financial assets and liabilities. But the ones best positioned to be successful in the the Board is not comfortable with the process as establishment of domestic and foreign long-term it has developed so far, either regarding the relationships, to be the most attractive counter- ability of market value accounting to reflect parties for a large number of financial transac- accurately market values over reasonable peritions and guarantees, and to expand their busi- ods or to avoid being overly sensitive to shortness activities to meet new opportunities and run events. For most banks, loans are the prechanging circumstances. Indeed, many success- dominant asset, assets that do not have ready ful U.S. and foreign institutions would today secondary markets but that the examiners can meet substantially increased risk-based capital evaluate in each of the proposed annual in-bank standards. In addition, the evidence of recent supervisory reviews. We at the Federal Reserve years suggests that U.S. banks can raise sizable believe that the examiners' classification of loan equity. The dollar volume of new stock issues by quality should, as I noted, be fully reflected in the banking organizations has grown at a greater rate banks' loan-loss reserves by a diversion of earnsince the late 1970s than the total dollar volume ings or a reduction in capital. If the resultant of new issues by all domestic corporate firms. capital is not consistent with minimum capital The recent declines in bank stock prices, re- standards, the board of directors and the bank's flecting market concerns about the quality of regulators should begin the process of requiring bank assets, will make the capital building pro- the bank either to reduce those assets or to cess more difficult and costly. However, over rebuild equity capital. time, banks with sound management policies will If credible capital-raising commitments are not be able to continue to build their capital base. forthcoming, and if those commitments are not Higher capital standards should go a long way promptly met, the authorities should pursue such toward inducing marketlike behavior by banks. responses as lowered dividends, slower asset However, the Board believes that, so long as a growth or perhaps even asset contraction, resignificant safety net exists, additional induce- strictions on the use of insured brokered deposments will be needed through an intensification its, if any, and divestiture of affiliates with the of supervisory efforts to deter banks from main- resources used to recapitalize the bank. What is taining return on equity by acquiring riskier important is that the supervisory responses occur assets. When it is not already the practice, full promptly and firmly and that they be anticipated in-bank supervisory reviews—focusing on asset by the bank. This progressive discipline or portfolios and oflf-balance-sheet commitments— prompt corrective action of a bank with inadeshould occur at least annually, and the results of quate capital builds on our current bank supervisuch examinations should promptly be shared sory procedures and is designed to simulate with the board of directors of the bank and used market pressures from risktaking—to link more to evaluate the adequacy of the bank's capital. closely excessive risktaking with its costs— The examiner should be convinced after a rigor- without creating market disruptions. It is also ous and deliberate review that the loan-loss re- intended to help preserve the franchise value of a serves are consistent with the quality of the going concern by acting early and quickly to portfolio. If they are not, the examiner should restore a depository to financial health. In this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 1029 way, the precipitous drop in value that normally explicit support, to act well before technical occurs when a firm is placed in conservatorship insolvency to minimize the ultimate resolution or receivership would, for the large majority of costs. The presence of positive equity capital, cases, be avoided. even if at low levels, when combined with any While some flexibility is certainly required in tier 2 capital, would limit reorganization and this approach, the Board believes that there must liquidation costs. be a prescribed set of responses and a presump- In the Board's view, most of the remedial tion that these responses will be applied unless actions discussed above can be taken, and have the regulator determines that the circumstances been taken, by bank regulators under the current do not warrant them. Even though prompt cor- legal framework. Under current law, however, rective action implies some limit on the discre- action is discretionary and dependent upon a tion of supervisors to delay for reasons that they showing of unsafe or unsound conditions or a perceive to be in the public interest, the Board is violation of law, and implementation of a superof the opinion that it would be a mistake to visory remedial action can be extended over a eliminate completely the discretion of the regu- protracted period of time when the depository lator. institution contests the regulator's determina- Accordingly, the Board believes that a system tion. What is needed is legislation that would that combined a statutorily prescribed course of permit a systematic program of progressive acaction with an allowance for regulatory flexibility tion based on the capital of the institution, inwould result in meaningful prompt resolution. stead of requiring the regulator to determine on a For example, if a depository institution failed to case-by-case basis, as a precondition to remedial meet minimum capital requirements established action, that an unsafe or unsound practice exists. by its primary regulatory agency, the agency This program would introduce a greater level of might be required by statute to take certain consistency of treatment into the supervisory remedial action unless it determined on the basis process, place investors and managers on notice of particular circumstances that such action was regarding the expected supervisory response to not required. The presumption would thus be falling capital levels, and reduce the likelihood of shifted toward supervisory action, and delay protracted administrative actions challenging the would require an affirmative act by the regulatory regulator's actions. agency. The Board is in the process of developing the The prescribed remedial action required in a parameters, processes, and procedures for given case would be dependent upon the ade- prompt corrective action. One of the principles quacy of the institution's capital. As the capital guiding our efforts is the need to balance rules fell below established levels, the supervisor with discretion. In addition, as is the case for could be required, for example, to order the higher capital standards, the Board is mindful of institution to formulate a capital plan, limit its the need for an appropriate transition period growth, limit or eliminate dividends, or divest before fully implementing such a change in sucertain nonbank affiliates. If capital were seri- pervisory policy. ously depleted, the supervisor could require a Higher capital and prompt corrective action merger, sale, conservatorship, or liquidation. would increase the cost and reduce the availabil- In adopting such a statutory framework, the ity of credit from insured institutions to riskier Congress should consider designing the system borrowers. In effect, our proposal would reduce so that forced mergers, divestitures, and, when the incentive some banks currently have to overnecessary, conservatorships could be required invest in risky credits at loan rates that do not while there is still positive equity capital in the fully reflect the risks involved. This implies that depository institution. While existing stockhold- the organizers of speculative and riskier ventures ers should be given a reasonable period of time to will have to restructure their borrowing plans, correct deteriorating capital positions, the Con- including possibly paying more for their credit, gress should specifically provide the bank regu- or seek financing from noninsured entities. Some lators with the clear authority, and therefore borrowers may find their proposals no longer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1030 Federal Reserve Bulletin • December 1990 viable. However, it is just such financing by government to minimize the risk to taxpayers of some insured institutions that has caused so the deposit insurance guarantee, and we believe many of the current difficulties, and it is one of that our proposal does that. While some increase the objectives of our proposals to cause deposi- in insurance premiums is in all likelihood necestories to reconsider the economics of such cred- sary, we must be concerned that attempts to its. As insured institutions reevaluate the risk- accomplish this end by substantially higher insurreturn tradeoff, they are likely to be more ance premiums may well end up—especially if interested in credit extensions to less risky bor- accompanied by higher capital requirements— rowers, increasing the economic efficiency of our simply making deposits so unattractive that resource allocation. banks are unable to compete. Indeed, the Board Despite their tendency to raise the average is concerned that the levels of premiums contemlevel of bank asset quality, higher capital require- plated in some quarters will exacerbate both the ments and prompt corrective action will not short- and the long-run problem by reducing the eliminate bank failures. An insurance fund will profitability of banks, and hence their ability to still be needed, but we believe that, with a fund attract capital. Avoiding taxpayer costs and of reasonable size, the risk to taxpayers should maintaining a competitive banking system are be reduced substantially. As I have noted, higher just two more reasons why basic deposit insurcapital requirements and prompt corrective ac- ance reform is so urgent. tion imply greater caution in bank asset choices Among the deposit insurance reforms that and a higher cushion to the FDIC to absorb bank might be considered on the basis of both strengthlosses. In addition, an enhanced supervisory ening the insurance fund and fairness to smaller approach will not permit deteriorating positions and regional banks is the assessment of insurance to accumulate. premiums on the foreign branch deposits of U.S. But until these procedures have been adopted banks. A substantial proportion of the deposits of and the banking system has adjusted to them, the largest U.S. banks are booked at branches circumstances could put the existing insurance outside the United States, including offshore cenfund under severe pressure. As Chairman ters in the Caribbean. Assessing such deposits Seidman has indicated, the fund is already oper- could yield significant revenue for the FDIC. ating under stress, as its reserves have declined However, foreign deposits may be quite sensitive in recent years and now stand, as a percentage of to a small decline in their yields. Thus imposing insured deposits, at their lowest level in history. premiums on them could lead to deposit with- At the same time, there remain all too many drawals and funding problems at some U.S. bankproblems in the banking system, problems that ing organizations and possibly inhibit the ability of have been growing of late as many banks, includ- these organizations to raise capital. ing many larger banks, have been experiencing a Even if no adjustment is made in the insurance deterioration in the quality of their loan portfo- assessment on foreign deposits, held almost lios, particularly real estate loans. It thus seems solely by large banks, other deposit insurance clear that the insurance fund likely will remain reforms should be equally applicable to banks of under stress for some time to come. Moreover, all sizes. No observer is comfortable with the pressures would intensify if real estate market inequities and adverse incentives of an explicit or conditions were to weaken further or a recession implicit program that penalizes depositors, credwere to develop in the general economy. itors, and owners of smaller banks more than It should, however, be clearly underlined that those of larger ones. The Board believes that no the size or adequacy of the insurance fund does bank should assume that its scale insulates it not change the quality of the deposit insurance from market discipline, nor should any depositor guarantee made by the federal government; it with deposits in excess of the insurance limit at does allocate the cost of meeting any guarantee the largest of U.S. banks assume that he or she between the banking industry, which pays the faces no loss should their bank fail. insurance premiums, and the taxpayers as a Nevertheless, it is clear that there may be whole. It should, in our view, be the policy of the some banks, at some particular times, whose Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 1031 collapse and liquidation would be excessively In summary, events have made it clear that we disruptive to the financial system. But it is only ought not to permit banks, because of their under the very special conditions, which should access to the safety net, to take excessive risk be relatively rare, of significant and unavoidable with inadequate capital. Even if we were to risk to the financial system that our policies for ignore the potential taxpayer costs, we ought not resolving failed or failing institutions should be to permit a system that is so inconsistent with relaxed. The benefits from the avoidance of a efficient market behavior. In the process of recontagious loss of confidence in the financial form, however, we should be certain we consider system accrue to us all. But included in the cost carefully the implications for macroeconomic of such action is the loss of market discipline that stability. The Board believes that higher capital would result if large banks and their customers and prompt corrective action by supervisors to presume a kind of exemption from loss of their resolve problems will go a long way to eliminate funds. The Board's policies of prompt corrective excessive risktaking by insured institutions, and action and higher capital are designed to minimize would not preclude additional deposit insurance these costs. Under these policies, the presump- reform, now or later. Finally, in considering all tion should always be that prompt and predictable proposals, we should remind ourselves that our supervisory action will be taken. For no bank is objective is a strong and stable financial system ever too large or too small to escape the applica- that can deliver the best services at the lowest tion of the same prompt corrective action stan- cost and compete around the world without dards applied to other banks. Any bank can be taxpayer support. This requires the modernizarequired to rebuild its capital to adequate levels tion of our financial system and the weaning of and, if it does not, be required to contract its some institutions from the unintended benefits assets, divest affiliates, cut its dividends, change that accompany the safety net. Higher capital its management, sell or close offices, and the requirements may well mean a relatively leaner resultant smaller entity can be merged or sold to and more efficient banking system, and they will another institution with the resources to recapital- certainly mean one with reduced inclinations ize it. If this is not possible, the entity can be toward risk. placed in conservatorship until it is. As I noted in my opening remarks, the Board It is, by the way, the largest U.S. banks that believes that these reforms should be coupled would be required under our proposals to raise with the modernization of our financial system. the most additional capital, both absolutely and As we address reductions in the subsidy to banks proportionally. Most banks with assets of less from deposit insurance, we should also authorize than $ 1 billion already meet capital requirements wider activities for well-capitalized banking orconsiderably above the fully phased-in Basle ganizations and eliminate the outdated statutes Capital Accord minimums. Also, it bears empha- that prohibit banks from delivering interstate sizing that no deposit insurance reform that truly services in the most cost-effective way—through reduces the subsidy existing in the current sys- branching. These combined reforms will go a tem will be costless for banks. The issue really is long way toward ensuring a safer and more one of achieving maximum benefit from reform at efficient financial system and lay the groundwork minimum cost. We believe that our proposals for other modifications in the safety net in the achieve this goal. years ahead. • Additional statement follows. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1032 Federal Reserve Bulletin • December 1990 Statement by William Taylor, Staff Director, thority arose from the application by the IBA of Division of Banking Supervision and Regulation, part of the Bank Holding Company Act to BNL. Board of Governors of the Federal Reserve Sys- With the enactment of the IBA, the Congress tem, before the Committee on Banking, Finance established a federal role in the licensing and and Urban Affairs, U.S. House of Representa- supervision of branches and agencies of foreign tives, October 16, 1990. banks that paralleled the federal government's role in the dual banking system. Foreign banks were given the option of establishing a banking I appreciate the opportunity to testify on the role office in the United States by obtaining either a of the Federal Reserve in the supervision of federal license from the Office of the Comptroller foreign banks operating in the United States. The of the Currency (OCC) or a license from one of testimony of the Federal Reserve Bank of Atlanta the various states. The IBA permits multiple discusses in some detail the actions taken by the offices to be established using either state or Federal Reserve to deal with the problems at the federal licenses or both. Atlanta agency of Banca Nazionale del Lavoro Federally licensed offices are supervised by the (BNL). Therefore, I will focus more generally on OCC and state-licensed offices by the states. As is the Federal Reserve's role in supervising the U.S. the case with banks, state-licensed offices are also operations of foreign banks, referring to the BNL subject to some federal supervision, by the Fedcase to show how this authority was actually used eral Deposit Insurance Corporation (FDIC), if the in a particular situation. branches have insured deposits, or the Federal The Federal Reserve's authority and responsi- Reserve for uninsured state-licensed offices. It bility for supervising the U.S. operations of should be noted, however, that unlike banks, the foreign banks are derived primarily from two vast majority of branches and agencies of foreign statutes, the Bank Holding Company Act and the banks, including those of BNL, are not insured by International Banking Act of 1978 (IBA). Any the FDIC and do not accept consumer deposits. foreign bank that owns a U.S. bank is subject to The Congress recognized at the time of enactthe Bank Holding Company Act. The IBA for the ment of the IBA that many foreign banks already first time established federal jurisdiction over the operated branches or agencies in a number of U.S. operations of foreign banks that have states and that the trend of operating under a branches or agencies in the United States but do number of different licenses could be expected to not own a U.S. bank and applied certain provi- continue. Therefore, the Congress determined sions of the Bank Holding Company Act to these that there should be one agency responsible for organizations. Thus, the IBA established an overseeing the totality of a foreign bank's operoverall framework for regulating the full range of ations in the United States. The Federal Reserve activities of foreign banks in the United States was given this umbrella supervisory authority. and provided for a federal role in the supervision To carry out this responsibility, the Federal of branches and agencies of foreign banks. Be- Reserve was given residual examination authorfore the passage of the IBA, the operations of ity over all U.S. branches and agencies and the U.S. branches and agencies of foreign banks authority to obtain information from the foreign were licensed and supervised solely by state parent. The Federal Reserve also has the authorbanking authorities. ity to undertake necessary supervisory actions Since I have been asked to focus on the super- against the foreign banking organization and its vision of branches and agencies, I will discuss various U.S. offices. principally the Board's responsibilities under the The Congress, nevertheless, instructed the IBA. However, the two acts need to be looked at Board to rely to the maximum extent possible in tandem. For example, besides operating upon the examinations conducted by the approbranches and agencies in the United States, BNL priate licensing authority and the FDIC. The was a large issuer of commercial paper through a Federal Reserve has made extensive use of the U.S. nonbank subsidiary. In the case of this examination reports of other supervisors, and company, the Federal Reserve's supervisory au- there is a high degree of cooperation and consul- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 1033 tation among the various supervisory agencies at conducted almost exclusively by the State of New both the state and federal levels. York. In Texas the Federal Reserve Bank of The Federal Reserve has exercised its author- Dallas conducts joint examinations with the state. ity by establishing a regular reporting system that Similarly, in other states various arrangements covers all of the U.S. banking operations of have been made depending on the circumstances. foreign banks, working with the other supervi- In some states with a very small foreign presence sors to set examination standards, reviewing all there is currently no direct Federal Reserve parexamination reports of branches and agencies, ticipation in the examination process. obtaining information on the condition of the The Federal Reserve also directly supervises parent bank, meeting on a regular basis with the the U.S. nonbank financial operations of foreign foreign banks operating in the United States, and banks. Such activities require Board approval taking enforcement actions when necessary. The under the Bank Holding Company Act. In acting Federal Reserve has also worked with the other on such applications the Board reviews the confederal bank regulatory agencies and the various dition of the foreign bank to make certain that it states to establish a common examination format can be a source of strength to its U.S.operations. and with their cooperation has sought to assure In addition, the Board reviews all of the existing that each foreign branch or agency is examined at U.S. operations of the foreign bank in an effort to least once every eighteen months, a schedule assure that the overall operations of the foreign bank that is basically being followed. in the United States are in satisfactory condition. The Federal Reserve receives and reviews all The Federal Reserve staff meets on a regular examination reports conducted by the other fed- basis with the management of foreign banks eral and state bank supervisors. It collects and operating in this country to discuss overall operanalyzes quarterly reports of condition and re- ations and to address problem areas. In addition, ports on foreign credit exposure from all the Federal Reserve discusses problems with the branches and agencies of foreign banks. Through home country supervisors. these and other means, the Federal Reserve It is important to keep in mind that branches tracks the condition of all U.S. offices of a and agencies are not U.S. banks. A branch or foreign bank to assess the foreign bank's perfor- agency is an integral part of a foreign bank. The mance on a nationwide basis. The Federal Re- operations of the U.S. branches and agencies serve also monitors the actions taken by other directly affect the condition of the whole bank supervisors to require foreign banks to correct and in turn are affected by developments at the problems in particular offices, and undertakes head office and other branches. The Basle Conenforcement or other corrective actions of its cordat on supervising international banks recogown when appropriate. In some cases, the Fed- nizes this interdependence and emphasizes the eral Reserve conducts examinations itself or par- responsibility of the home country authority to ticipates in examinations conducted by other supervise the foreign branches and agencies of its supervisory agencies. In the case of BNL, our banks. The home country regulator is the authorpractice had been to assign an examiner to the ity most capable of supervising the overall solexaminations conducted by the State of Georgia. vency and activities of the foreign bank. The Federal Reserve's direct role in the exam- To summarize, in the BNL Atlanta case, the ination process varies from state to state. Its role State of Georgia examined the Atlanta agency of depends on such factors as the importance of BNL, with participation by the Federal Reserve. foreign banks in a particular state, the examina- The Federal Reserve was further responsible for tion resources of the states, and the experience of supervising the overall U.S. activities of BNL; the states in this area. For example, in California and the bank of Italy provided BNL with worldthe Federal Reserve Bank of San Francisco and wide supervision. the state banking authority share the examination I would now like to discuss how the Federal work load by each conducting examinations of Reserve used its umbrella oversight authority in particular offices in alternate years. In New York, resolving the BNL problem in an orderly manon the other hand, the examinations are currently ner, and how it interacted with other supervisory Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1034 Federal Reserve Bulletin • December 1990 authorities.1 Let me say at the outset that once nied by Federal Reserve examiners who acted as we became aware of the possible size of the illicit technical advisors to the agents. The Federal operations at BNL Atlanta, we recognized the Reserve also began an examination of the Atlanta potential for a significant disruption of banking agency on that date. At approximately the same markets. Therefore, cooperation among the au- time, Federal Reserve examiners began examinathorities, both here and abroad, was essential in tions of the other U.S. offices of BNL and its dealing effectively with this case. commercial paper operation. State regulatory As to the origin and growth of the illicit oper- agencies were informed that these examinations ations in BNL Atlanta, this was a situation that had commenced and that there were problems in involved massive fraud in which a large number the Atlanta office of BNL. of employees acted together to conceal the oper- Earlier in the week, the Federal Reserve ination and deceive auditors and examiners. Books formed the Bank of Italy that there was an urgent and records concerning the illicit operations were matter that the Federal Reserve needed to disremoved from the office by employees during cuss. Senior Federal Reserve officials were disexaminations and audits. Much of the work as- patched to Rome to meet with officials of the Bank sociated with these transactions was conducted of Italy. The Bank of Italy was notified that it was from employees' homes, and, of course, the likely that the Atlanta office of BNL had a large office did not report the illicit activities on reports unreported business and that federal authorities filed with the supervisory agencies. were going to intervene on Friday, August 4. The The physical segregation of records, together Federal Reserve also advised the Bank of Italy of with the concerted efforts of key employees, its concern that events might affect the dollar makes it extremely difficult for examiners to liquidity of BNL. The need for secrecy was emuncover this type of illicit and fraudulent activ- phasized so as not to jeopardize the seizure of the ity. Examiners also rely to a considerable extent records by law enforcement personnel. on internal and external auditors. In the BNL The Bank of Italy immediately undertook mea- Atlanta case, neither the internal auditors nor the sures to make certain that the head office of BNL large U.S. accounting firm conducting the exter- took appropriate actions once the seizure of the nal audit uncovered the large off-book lending records was completed. The BNL official in and funding operation, although a 1988 audit charge of operations for the whole bank was sent report by the New York branch of BNL did to Atlanta and arrived on Sunday, August 6. criticize procedures at the Atlanta office. Other BNL personnel from Italy and New York Once the Federal Reserve became aware of the were also immediately dispatched to Atlanta. problem in BNL Atlanta, it initiated actions to BNL began marshalling dollar liquidity and determine the full scope of the problem, to assist transferring liquid dollar assets to the New York federal law enforcement personnel, and to ensure branch to meet any funding contingencies that that the problem did not disrupt the financial might arise. The Bank of Italy closely supervised system. After discussions with law enforcement BNL's actions and dispatched its senior examipersonnel, a decision was made to have the Fed- nation officers to Atlanta immediately. eral Bureau of Investigation (FBI) seize the rec- To summarize, the Federal Reserve was able to ords of the Atlanta office late in the day on Friday, use the supervisory authority conferred by the August 4, 1989. The FBI agents were accompa- IBA to conduct simultaneous nationwide examinations of BNL's branches and agencies and to inspect its commercial paper subsidiary. These actions were taken on short notice and in a 1. The committee has requested information on the examination of U.S. offices of BNL and the Federal Reserve's role manner consistent with the need to maintain the in those examinations. Since 1985, there have been twenty- secrecy necessary for the criminal investigation. five examinations of BNL's offices in the United States. Eight The Federal Reserve was able to discuss the of these are Federal Reserve reports (including a joint report with the State of New York) and seventeen are state reports. specific supervisory problem and its systemic Before the discovery of the recent fraud, the Atlanta office implications with the Bank of Italy in order for was examined every year by the State of Georgia with limited Italian officials to make certain that BNL had participation by the Federal Reserve Bank of Atlanta. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 1035 sufficient dollar liquidity to service all of its dollar This is not to say, however, that examination liabilities. I might note that no Federal Reserve procedures can remain static. Over the past few funds were advanced to BNL. Through the Bank years the Federal Reserve has been increasing its of Italy, the Federal Reserve was able to ensure role in the supervision of branches and agencies that BNL acted promptly to place new manage- as these entities have become more important ment in the Atlanta office and to contain the factors in the U.S. banking market. The testiproblem. mony of the Federal Reserve Bank of Atlanta Once initial actions were taken, the Board describes how that Reserve Bank has increased worked with the Bank of Italy and state examina- its examination efforts in Florida and Georgia, tion agencies to document the full scope of the two states in which the presence of branches and problem and to identify the weaknesses in BNL's agencies of foreign banks has grown rapidly. The internal controls that enabled the illicit operations Federal Reserve Bank of New York is increasing to develop undetected. In cooperation with the its examination resources to enable it to expand Bank of Italy and state supervisory authorities, its role as well. In addition, state authorities have corrective actions for BNL's U.S. offices were taken actions to increase their ability to superidentified and implemented. The Federal Reserve vise branches and agencies of foreign banks. A has also continued to provide assistance to federal special committee has been established under the law enforcement personnel when requested. auspices of the Conference of State Bank Super- You have asked what additional authority the visors to review state policies and to increase Federal Reserve might need in this area. As the cooperation in this area among supervisors. The actions described above illustrate, the IB A and Federal Reserve has met with members of this other statutes provide the Federal Reserve with committee to discuss examination matters of muthe broad authority needed to supervise the U.S. tual interest. There are plans next year to have operations of foreign banks and to respond to concurrent examinations of all of the U.S. potential crises. No further authority seems nec- branches and agencies of a select group of large essary in this area. foreign banks to determine if there are significant While audit and internal control standards can benefits to be derived from this type of examinabe improved as the result of lessons learned from tion format. In the international context, the Basle the BNL experience, the operation of BNL At- Committee on Banking Supervision has discussed lanta involved massive fraud accompanied by the BNL case and its implications for the superfalse entries on the agency's books and false vision of banks operating internationally. reporting to the federal authorities. Good con- The Federal Reserve intends to monitor trols can generally defend against this type of closely the effectiveness of all of these efforts in fraud by a single individual or a few individuals, view of the growing presence of foreign banks in but when a number of people within an organi- U.S. financial markets. Historically, as you are zation conspire to "cook the books" it becomes no doubt aware, the principal focus of U.S. much more problematic. More intensive moni- regulators has been on insured U.S. institutions toring and audits will help, but it is also important given the presence of the federal safety net and to deter this type of activity by successful pros- the potential liability represented by the exisecution and punishment of those involved. tence of federal deposit insurance. As the role of In this regard it has come to our attention that foreign banks in our markets evolves, however, some of the federal laws related to fraudulent we need to continually review the adequacy of actions in banks of the type involved in this case the resources devoted to supervising these entiare not applicable to uninsured state licensed ties. The Federal Reserve will continue to work branches and agencies of foreign banks. The closely with the other federal and state regulators Federal Reserve believes that this situation to ensure an adequate supervisory framework for should be corrected and has already furnished foreign banks in this country. If necessary and your committee with proposed legislation in this appropriate, we will not hesitate to propose and area. I would urge that such legislation be adopt further steps to strengthen federal overpromptly adopted. sight of the U.S. activities of foreign banks. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1036 Announcements MEETING OF CONSUMER ADVISORY NOTIFICATION OF RECEIPT OF COUNCIL THIRD-PARTY FUNDS ON FEDWIRE The Federal Reserve Board announced that its The Federal Reserve Board has adopted a re- Consumer Advisory Council met on October 25. quirement that Reserve Banks notify by tele- The Council's function is to advise the Board on phone all "off-line banks" of the receipt of the exercise of its responsibilities under the Con- incoming third-party funds transfers on Fedwire. sumer Credit Protection Act and on other mat- An off-line bank is an institution that does not ters on which the Board seeks its advice. have electronic access to Fedwire. The majority of transfers to off-line banks are currently not subject to telephone notice. With- FEE SCHEDULES FOR SERVICES PROVIDED out telephone notice, the off-line receiving bank BY FEDERAL RESERVE BANKS is unable to credit its customer's account on the day of the transfer. The Federal Reserve Board announced on No- About 45 percent of the institutions using Fedvember 1, 1990, the 1991 fee schedules for ser- wire receive off-line transfers, but these transfers vices provided by the Reserve Banks. The ma- account for less than 1 percent of total Fedwire jority of the 1991 fees are the same as those volume. currently imposed, and they generally become The required notice would also be provided for effective January 1, 1991. settlement transfers and related nonvalue mes- The fee schedules apply to check collection, sages if the off-line receiving bank has notified its automated clearinghouse activities, wire trans- Reserve Bank that it acts on behalf of a responfers of funds and net settlement, definitive safe- dent institution. An off-line bank that does not keeping, noncash collection, book-entry securi- maintain an account for another depository instities, and to electronic connections to the Federal tution will not be required to receive telephone Reserve. The 1991 fee schedules are available notice of incoming settlement transfers but could from the Reserve Banks. request such notice as an optional service. The 1991 total costs for priced services, includ- The off-line receiving bank will be assessed a ing float and the private sector adjustment factor per-transfer surcharge (currently $4) for each (PSAF), are projected to be $771.7 million. Total transfer for which the Reserve Bank attempted to revenue is estimated at $777.2 million, resulting provide telephone notice. The new service will in a 100.7 percent recovery rate. The fees for become effective January 1, 1991. 1991 are based on total costs, including the PSAF, but excluding special project costs. At the same time, the Board approved the 1991 REGULATION J: REVISION PSAF for Reserve Bank priced services of $85.8 million, an increase of $6.4 million or 8.1 percent The Federal Reserve Board approved on Octofrom the $79.4 million targeted for 1990. ber 1, 1990, a comprehensive revision to Subpart The PSAF is an allowance for the taxes that B of Regulation J (Collection of Checks and Other would have been paid and the return on capital Items and Wire Transfers of Funds), governing that would have been provided had the Federal funds transfers through Fedwire. The revision will Reserve's priced services been furnished by a make Regulation J consistent with the new Article private business firm. 4A of the Uniform Commercial Code, which Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1037 governs the rights, responsibilities, and liabilities PUBLICATION OF NEW REPORT of parties to wholesale funds transfers. 1983 Survey of Consumer Finances: The revision to Subpart B becomes effective Design and Methods January 1, 1991, and will accomplish the following: • Provide a more comprehensive set of rules The Federal Reserve Board has published an for funds transfers involving Federal Reserve account of the consumer finance survey it co- Banks than is currently provided by Subpart B. sponsored in 1983 with several other federal • Make Subpart B consistent with state laws agencies. The report, entitled 1983 Survey of applicable to funds transfers as states adopt Consumer Finances: Design and Methods, cov- Article 4A. ers the procedures used for editing the raw • Help to ensure that, subject to their central survey responses, the statistical methods used banking responsibilities, Federal Reserve Banks for imputing missing data, the construction of compete on an equitable basis with private-sec- new variables from the original variables, and tor providers of funds-transfer services. the addition of variables that have been created by matching information from other data PROPOSED ACTIONS sources. It also presents technical material on the survey's design and weights and discusses The Federal Reserve Board issued for public the comparability of other surveys with the comment on October 12, 1990, certain clarifica- 1983 work. tions, modifications, and technical changes to the The narrative was previously available only Board's risk-based capital guidelines. Comment from the National Technical Information Service is requested by December 17, 1990. as part of the 1983 Tech Manual and Codebook, The Federal Reserve Board on October 5, which also lists the set of survey variables devel- 1990, extended the period to receive comments oped at the Federal Reserve Board. on its proposed change to the pricing structure The twenty-five-page report is available upon for the Federal Reserve's Interdistrict Transpor- request from the Board's Publications Services, tation Service. Comment must now be received mail stop 138, Board of Governors of the Federal by January 18, 1991, instead of October 19, 1990. Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1038 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON AUGUST 21, 1990 had prevailed this year after an appreciable reduction in 1989. After declining in earlier months, nominal re- Domestic Policy Directive tail sales rose considerably on balance over June and July. There were substantial upward revi- The information reviewed at this meeting sug- sions to sales for both May and June; neverthegested that economic activity was continuing to less, for the second quarter as a whole, gains in expand at a relatively slow pace. Growth in total personal consumption expenditures apexports and some expansion in consumer spend- peared to have been relatively limited. In July, ing were supporting final demands. At the same housing starts fell for the sixth straight month. time, business capital spending appeared slug- Most of the decline was in multifamily units, but gish, and the demand for new housing had weak- starts in the single-family segment of the market ened further. Labor demand had softened on edged lower as sales of new homes continued balance since the spring and the unemployment sluggish and inventories of unsold homes rerate had risen recently, but labor costs showed mained relatively large. no sign of decelerating. Underlying trends in Shipments of nondefense capital goods rose inflation appeared to be little changed. sharply in June after a decline, on balance, in Total nonfarm payroll employment registered April and May; most of the gain in June reflected a large decline in July after having risen consid- higher outlays for aircraft and for office and comerably over the two previous months. Much of puting equipment. Over the past four quarters, the July drop resulted from layoffs of temporary however, equipment outlays had changed little as census workers; however, payrolls shrank in increases in spending on computers had been manufacturing, construction, and business ser- offset by reduced purchases of industrial equipvices, and hiring remained slow elsewhere. The ment and motor vehicles. A net decline in the civilian unemployment rate rose to 5.5 percent in nominal value of orders for nondefense capital July, just above the narrow range that had pre- goods in recent months pointed to sluggishness in vailed for an extended period. In contrast to the equipment spending in the near term. Nonresidenemployment data, hours worked by production tial construction activity strengthened in June, and nonsupervisory workers edged up in July, especially for office buildings, but the downtrend and initial claims for unemployment insurance in permits and contracts for new construction continued to fluctuate narrowly around the aver- suggested continued softness in this sector. Busiage pace of the first half of the year. ness inventory investment had been moderate in After rising appreciably in the second quarter, the second quarter, and there was no general industrial production was unchanged in July. indication of inventory imbalances in relation to Output of goods other than motor vehicles rose sales. At manufacturing and wholesale establishat about the moderate pace evident thus far this ments, inventories fell appreciably in June, and year. Total industrial capacity utilization re- the ratio of inventories to shipments edged lower. traced its June rise but remained somewhat At the retail level, nonauto stocks climbed someabove its level at the start of the year. The what further in June, but with recent gains in operating rate in manufacturing also slipped in sales, inventory-sales ratios dropped back after July, though it stayed in the narrow range that widespread increases in the two previous months. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1039 The nominal deficit in U.S. merchandise trade ness expansion, the behavior of the monetary narrowed sharply in June. The value of exports aggregates, and developments in foreign exrose substantially from the May level, with most change and domestic financial markets. In the of the increase occurring in civilian aircraft and circumstances, M2 and M3 were expected to parts, consumer goods, and agricultural prod- grow at annual rates of about 3 and 1 percent ucts. The value of imports was down somewhat; respectively over the period from June through about half of the decrease resulted from declines September. in the price and quantity of oil imports. The trade After the Committee meeting, open market deficit for the second quarter was substantially operations were directed initially at maintaining reduced from its first-quarter rate and was the unchanged reserve conditions. Later, in midlowest quarterly average since 1983. Measures of July, pressures on reserve positions were eased economic activity for the second quarter sug- slightly as restrictions on credit supplies at gested that growth had remained robust in Japan banks, signaled in part by lagging money growth, and West Germany but had slowed somewhat in suggested that credit conditions were tighter than other major foreign industrial countries. Mea- appropriate at a time when the economy already sured inflation rates were unchanged or had was growing very slowly. Adjustment plus seadeclined slightly in major industrial nations other sonal borrowing averaged about $500 million in than the United Kingdom, although the recent the three reserve maintenance periods completed rise in oil prices, among other factors, raised since the July meeting. In late July and early concerns about renewed inflationary pressures. August, technical adjustments were made to as- Crude oil prices had risen sharply in spot sumed levels of such borrowing to reflect the markets in the weeks before the Committee continued upswing in seasonal borrowing. The meeting, largely in response to the Iraqi invasion federal funds rate averaged about 8'A percent at of Kuwait. Available aggregate measures of pro- the time of the July meeting but, after the easing ducer and consumer prices predated the increase of reserve conditions in mid-July, federal funds in oil prices, and these data suggested persisting traded around the 8 percent level. Most other price pressures outside the food and energy short-term interest rates had dropped somewhat categories. Producer prices of finished goods since the July meeting, largely in reaction to were little changed on balance in June and July as easier reserve conditions but also to some extent declines in the prices of food and energy prod- in reflection of expectations of some further ucts offset a further rise in the prices of other easing in light of additional indications of a finished goods. Consumer prices rose apprecia- relatively sluggish economy. Bond yields had bly further in July, reflecting an acceleration in remained unchanged on balance through the end prices of nonfood, non-energy items. The latest of July, but the invasion of Kuwait at the begindata on total labor costs indicated that hourly ning of August and the associated rise in energy compensation for private industry workers had prices propelled long-term rates upward. Broad increased more rapidly in the twelve months measures of stock prices, some of which had ended in June than in the year-earlier period. reached record highs earlier in the intermeeting interval, were off substantially on net over the At its meeting on July 2-3, 1990, the Commitperiod. tee adopted a directive that called for maintaining the existing degree of pressure on reserve posi- The trade-weighted foreign exchange value of tions for at least a short period after the meeting the dollar in terms of the other G-10 currencies and that provided for some slight easing subse- declined considerably over the intermeeting pequently unless incoming data on the monetary riod. Tighter monetary conditions in Japan and aggregates and the economy evidenced greater West Germany and some easing of short-term strength. Accordingly, slightly greater reserve interest rates in the United States, along with restraint might be acceptable or somewhat lesser market perceptions that these divergent trends reserve restraint would be acceptable during the might continue, contributed to downward presintermeeting period, depending on progress sures on the dollar. The dollar declined more toward price stability, the strength of the busi- sharply against the German mark than the Japa- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1040 Federal Reserve Bulletin • December 1990 nese yen. Late in the intermeeting period, uncer- government was assumed. The rise in oil prices tainty associated with the Iraqi invasion of Ku- was expected to boost price inflation to an apwait provided a short-lived boost for the dollar. preciable degree for the next few quarters; the M2 grew slowly in June and July, while M3 extent and duration of these effects would dechanged little; available data for August sug- pend on the future behavior of oil prices, but the gested that growth of both aggregates was re- adverse effect on inflation expectations and on bounding. Growth of M2 and especially of M3 wage and price inflation over the longer run had been damped by the continuing contraction would be limited by reduced pressures on reof deposits at thrift institutions resulting from the sources. restructuring of the thrift industry. Through July, In its discussion of the economic situation and expansion of both M2 and M3 was estimated to outlook, the Committee focused on both the state be in the lower portions of their respective ranges of the economy before the increase in oil prices for 1990. Expansion of total domestic nonfinan- and the likely consequences for real output and cial debt appeared to have been near the mid- inflation of that rise. Available data, which perpoint of the Committee's monitoring range. tained to business conditions prior to the inva- The staff projection prepared for this meeting sion of Kuwait, pointed to continuing slow ecorecognized that the recent steep rise in oil prices nomic growth, even though business activity was could have important adverse effects on eco- slipping in various sectors of the economy and nomic activity and inflation. It was not possible, some regions of the country. At the same time, though, to determine with any confidence how oil broad measures of prices and labor costs sugprices might evolve over time, and this was gested that the underlying rate of inflation— clouding further an already uncertain economic abstracting from swings in food and energy outlook. Under a variety of plausible assump- costs—had not turned down despite slow monetions about oil prices, economic activity was tary expansion and the apparent growth of the likely to expand over the balance of the year, but economy at a pace below potential over the past at a weaker pace than had been forecast earlier. several quarters. For some members, these data The retarding effects of higher energy prices on pointed to a relatively even balance, prior to the the growth of disposable incomes were expected surge in oil prices, between the risks of a weakto damp consumer purchases of goods, notably ening economy and rising inflation. For others, a consumer durables, over the quarters immedi- deterioration in consumer and business attitudes ately ahead. If the price of oil were to fall back even before the Iraqi invasion of Kuwait and the somewhat next year, a strengthening of dispos- indications of continuing restrictions on credit able incomes would tend to boost economic availability at banks, among other factors, suggrowth toward a pace that was closer to the gested that the risks had been tilted toward some economy's long-run potential by the latter part of potential further weakening of the economy. next year. If oil prices were to stay at high levels, The steep rise in oil prices was expected to however, the recovery in consumer spending and have a retarding effect on economic activity economic growth would be delayed for several during the months immediately ahead and to quarters. In either event, the staff anticipated exacerbate inflationary pressures. The increase considerable growth in exports over the next in oil prices also added greatly to the uncertainseveral quarters in conjunction with continuing ties about the prospects for economic activity economic expansion in some major foreign in- and inflation over time, because the outcomes dustrial nations and the depreciation that had would depend on the response of consumers to already occurred in the foreign exchange value of reductions in real disposable incomes, the reacthe dollar. Business capital spending was pro- tion of businesses to potentially lower sales, and jected to remain relatively sluggish in the quar- the extent of acceptance by workers of declines ters ahead, though expenditures on producers in their real wages associated with a higher price durable equipment could strengthen were oil of oil. Nonetheless, in the absence of more prices to drop back and retail sales to improve. pronounced or long-lasting disturbances from Moderate restraint in expenditures at all levels of events in the Middle East, the members generally Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 1041 felt that limited growth in economic activity struction in the view of some members might remained a reasonable expectation, and in the weaken somewhat further before it began to circumstances they would anticipate some de- stabilize. With regard to the outlook for fiscal cline in the rate of inflation, though progress was policy, members were concerned that the proslikely to occur only after a nearer-term setback. pects for a political compromise leading to a In their review of business conditions in spe- substantial reduction in the federal budget deficit cific sectors of the economy and regions of the had deteriorated as a consequence of the invacountry, members observed that continuing ex- sion of Kuwait. It might prove more difficult to pansion in consumer spending and further curb spending or to raise taxes in a period of growth in net exports appeared likely to sustain weak economic expansion or in conjunction with at least limited expansion in overall economic any surge in military expenditures. At the state activity. Revised data suggested that total retail and local level, by contrast, the worsening budsales had been reasonably well maintained in getary situation in many jurisdictions seemed recent months despite mixed reports from dif- likely to induce spending curbs and higher taxes. ferent parts of the country. However, as evi- In the course of the Committee's discussion, denced by surveys conducted immediately after members commented on continuing indications the Iraqi invasion of Kuwait, consumer senti- of tightened credit standards. The results of a ment could deteriorate rapidly. Apparently, con- survey showed that credit availability had been sumer attitudes already had been adversely af- reduced since the spring, but some members fected by the softening in home prices and sensed that lending institutions as a group had worsening of employment prospects in many not tightened credit terms further in recent parts of the country; moreover, higher costs for weeks. Many lenders reported that they were energy were likely to limit any increase in discre- making credit readily available to good credit tionary spending. With regard to the prospects risks, and it was clear that a sizable portion of the for foreign trade, a number of members ex- weakness in lending could be attributed to repressed some optimism that the nation's trade duced loan demand on the part of borrowers, balance would continue to improve, given the including consumers, rather than to a curtailed outlook for further economic growth in a number supply of loans. Nonetheless, contacts in many of major industrial countries. The report of a areas indicated that some business borrowers, substantial decline in the trade deficit for the notably builders, were continuing to experience second quarter was viewed as an encouraging serious problems in obtaining credit and that sign, and contacts in many parts of the country riskier borrowers were facing more stringent indicated that export demand was helping to standards at banks at a time when markets for sustain manufacturing activity at many firms. securities of less than investment grade had Higher oil prices would adversely affect foreign virtually disappeared. Members remained coneconomies, but many other countries had cerned about the exposure of many financial trimmed their energy consumption considerably, institutions and of heavily indebted business and the reduction in oil supplies, if it persisted, firms and individuals to adverse economic develshould not disrupt in a major way the upward opments. momentum of their expansion. Turning to the outlook for inflation, the mem- On the other hand, the prospects for business bers continued to express disappointment over capital spending were less favorable, at least in the lack of evidence of a decline in the core rate the absence of faster growth in final demand than of inflation; of particular concern was the failure the members now anticipated. Business senti- of increases in labor costs to moderate. By some ment seemed to have deteriorated in several measures, inflation could be judged to have worsparts of the country. Commercial construction ened marginally even before the recent surge in activity continued to be depressed by high va- oil prices. The future course of oil prices was cancy rates in many areas and appeared to be highly uncertain, but the recent rise in these softening in some others where previously it had prices would undoubtedly raise the measured been relatively well maintained. Housing con- inflation rate in the period ahead. Moreover, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1042 Federal Reserve Bulletin • December 1990 depreciation of the dollar over the course of point to counter weakening tendencies in the previous months would exert upward pressures economy that had been in train before the oil on prices. Whether these pressures from oil price increase. The timing and circumstances of prices and the dollar would be translated into any such easing would have to be weighed carehigher inflation rates over longer periods of time fully, however, to avoid an unfavorable impact would depend not only on their near-term pass- on inflationary attitudes and associated upward through into prices and wages but more funda- pressure on long-term interest rates, especially mentally on their influence on inflation expecta- since the dollar had been under downward prestions. In this regard, the slack that seemed to be sure in the foreign exchange markets. A number developing in resource utilization, while regret- of other members viewed the risks to the econtable in some respects, would help to forestall a omy as more evenly balanced. These members more permanent increase in wage and price in- saw a substantial risk of some intensification in flation. inflationary pressures, particularly in the context In the Committee's discussion of policy for the of higher energy prices. The downward moveweeks ahead, members commented that the ment of the dollar since the fall of 1989, flat or heightened uncertainties and the prospectively even mildly rising commodity prices, and the less satisfactory performance of the economy now upward sloping yield curve argued for a stemming from events in the Middle East had relatively restrictive monetary policy, pending greatly complicated the formulation of an effec- further developments. For the present, all the tive monetary policy. Uncertainties about the members indicated that they could support a developments in the Middle East made it difficult steady policy, given the current uncertainties and to judge an appropriate policy stance, and those the possibility of unsettlement in foreign exuncertainties had been reflected in unusually change and domestic financial markets. volatile financial markets. More fundamentally, In the course of the discussion, the members with the surge in oil prices tending to weaken took account of a staff analysis, which suggested economic activity while also intensifying infla- that, on the assumption of an unchanged degree tionary pressures, an easing in policy would of reserve restraint, growth in M2 and M3 was incur the risk of overcompensating for potential likely to pick up to some extent from the pace in weakness in the economy at the expense of recent months, in part because of a narrowing in greater inflation, while a tightening move to the opportunity costs of holding assets included counter inflation might stall an already weak in those monetary measures. Members noted economic expansion. In these circumstances, the that the very recent strengthening of the monemembers generally concluded that the Federal tary aggregates tended to reinforce the staff as- Reserve could best contribute to the nation's sessment and to diminish the case for any neareconomic goals by fostering a stable policy envi- term easing of reserve conditions, though it also ronment. The prospective performance of the was recognized that some of the strength repreeconomy was very likely to be dominated by sented a greater preference for liquidity in an events that were outside the Committee's con- uncertain environment. Given the particular diftrol, including not only developments in the ficulty of charting an appropriate course for Middle East but decisions to be made with regard monetary policy in current circumstances, some to the federal budget deficit. members suggested that the behavior of the While acknowledging the current uncertainties monetary aggregates needed to be monitored and policy limitations that the Committee was with special care and that greater-than-usual emfacing, several members underscored the need to phasis should be given to fostering desired rates avoid any paralysis of policy as conditions of monetary growth. evolved in the weeks and months ahead and While all the members could support an uncircumstances permitted an effective policy re- changed policy stance for at least some initial sponse. In the opinion of several members, period after today's meeting, their somewhat events appeared likely to unfold in a direction differing assessments of the most likely course that would require an easing of policy at some for monetary policy were associated with some Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 1043 differences in their views with regard to the September. The intermeeting range for the fedpossible need to adjust reserve conditions later eral funds rate, which provides one mechanism during the intermeeting period. A majority indi- for initiating consultation of the Committee when cated a preference for a directive that was tilted its boundaries are persistently exceeded, was left toward potential easing. Some of these members unchanged at 6 to 10 percent. indicated that they had been leaning toward an At the conclusion of the meeting, the following easing move prior to the events in the Middle domestic policy directive was issued to the Fed- East, and they now felt that reserve conditions eral Reserve Bank of New York: should be eased promptly if conditions in domestic financial and foreign exchange markets pro- The information reviewed at this meeting suggests vided an appropriate opportunity. Tightening that economic activity is continuing to expand at a would be especially inappropriate in this view, relatively slow pace. After a sizable rise in May and June, total nonfarm payroll employment registered a given the current indications of weaknesses in large decline in July, much but not all of which the economy and the vulnerability of many finanreflected layoffs of temporary census workers. The cial institutions and heavily indebted borrowers civilian unemployment rate rose to 5.5 percent in July, to higher interest costs. Other members acknowl- just above the narrow range that had prevailed for an edged the threat of a deteriorating economy, but extended period. Industrial production was unchanged in July after rising appreciably in the second quarter. because they also saw a considerable risk that Retail sales rose considerably on balance over June underlying inflationary pressures might worsen, and July after declines in earlier months. Available they preferred a symmetrical directive that gave indicators point to a sluggish trend in business capital equal weight to possible intermeeting adjust- spending. Residential construction weakened further ments in either direction. A few members would in July. The nominal U.S. merchandise trade deficit narrowed sharply in June; for the second quarter, the not rule out the possibility of some tightening, trade deficit was substantially reduced from its firstwhich might foster some decline in long-term quarter rate. Consumer prices rose appreciably further interest rates by having quite beneficial effects on in June and July, while producer prices were about inflation expectations and by reinforcing the pub- unchanged over the two months. The latest data on lic's perception of the Committee's commitment labor costs suggest no improvement in underlying trends. Crude oil prices have risen sharply over the to its price-stability objective. last several weeks. At the conclusion of the Committee's discus- Short-term interest rates have fallen somewhat since sion, all the members indicated that they favored the Committee meeting on July 2-3, while rates in bond or could accept a directive that called for main- markets have risen appreciably, as oil prices have taining unchanged conditions of reserve avail- increased. The trade-weighted foreign exchange value of the dollar in terms of the other G-10 currencies ability, at least initially, in the intermeeting pedeclined considerably over the intermeeting period. riod ahead and that provided for giving emphasis M2 grew slowly in June and July, while M3 was little to potential developments that might require changed; available data for August suggest a partial some easing during the intermeeting period. Ac- rebound in both aggregates. Growth of M2 and especordingly, slightly greater reserve restraint might cially of M3 has been damped by the continuing contraction of deposits at thrift institutions resulting from be acceptable during the intermeeting period, the restructuring of the thrift industry. Through July, while some easing of reserve pressure would be expansion of both M2 and M3 was estimated to be in acceptable, depending on progress toward price the lower portions of their respective ranges for 1990. stability, the strength of the business expansion, Expansion of total domestic nonfinancial debt appears the behavior of the monetary aggregates, and to have been near the midpoint of its monitoring range. The Federal Open Market Committee seeks monedevelopments in foreign exchange and domestic tary and financial conditions that will foster price financial markets. The reserve conditions constability, promote growth in output on a sustainable templated by the Committee were expected to be basis, and contribute to an improved pattern of interconsistent with somewhat faster near-term national transactions. In furtherance of these objecgrowth in money than the members had antici- tives, the Committee at its meeting in July reaffirmed the range it had established in February for M2 growth pated earlier, including growth in M2 and M3 at of 3 to 7 percent, measured from the fourth quarter of annual rates of about 4 and 2VI percent respec- 1989 to the fourth quarter of 1990. The Committee in tively over the three-month period from June to July also retained the monitoring range of 5 to 9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1044 Federal Reserve Bulletin • December 1990 percent for the year that it had set for growth of total degree of pressure on reserve positions. Taking acdomestic nonfinancial debt. With regard to M3, the count of progress toward price stability, the strength Committee recognized that the ongoing restructuring of the business expansion, the behavior of the moneof thrift depository institutions had depressed its tary aggregates, and developments in foreign exchange growth relative to spending and total credit more and domestic financial markets, slightly greater rethan anticipated. Taking account of the unexpectedly serve restraint might or somewhat lesser reserve restrong M3 velocity, the Committee decided in July to straint would be acceptable in the intermeeting period. reduce the 1990 range to 1 to 5 percent. For 1991, the The contemplated reserve conditions are expected to Committee agreed on provisional ranges for mone- be consistent with growth of M2 and M3 over the tary growth, measured from the fourth quarter of period from June through September at annual rates of 1990 to the fourth quarter of 1991, of 2Vi to 6V2 about 4 and 2Vz percent respectively. The Chairman percent for M2 and 1 to 5 percent for M3. The may call for Committee consultation if it appears to the Committee tentatively set the associated monitoring Manager for Domestic Operations that reserve condirange for growth of total domestic nonfinancial debt tions during the period before the next meeting are at 4Vi to 8V2 percent for 1991. The behavior of the likely to be associated with a federal funds rate permonetary aggregates will continue to be evaluated in sistently outside a range of 6 to 10 percent. the light of progress toward price level stability, movements in their velocities, and developments in Votes for this action: Messrs. Greenspan, Corthe economy and financial markets. rigan, Angell, Boehne, Boykin, Hoskins, Kelley, In the implementation of policy for the immediate LaWare, Mullins, Ms. Seger, and Mr. Stern. Votes future, the Committee seeks to maintain the existing against this action: None. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1045 Legal Developments FINAL RULE—AMENDMENT TO REGULATIONS Banc One Corporation: Series B, no par convertible G, T, U AND X preferred Beauty Labs, Inc.: $.01 par common The Board of Governors is amending 12 C.F.R. Parts Brookfield Bancshares Corporation: $1.00 par com- 207, 220, 221, and 224, its Securities Credit Transac- mon tions; List of Marginable OTC Stocks. The List of Brooklyn Savings Bank, The: $1.00 par common Marginable OTC Stocks (OTC List) is comprised of stocks traded over-the-counter (OTC) in the United Capitol Bancorporation: $.55-5/9 par common States that have been determined by the Board of Care Plus, Inc.: Class A, warrants (expire 08-13-90) Governors of the Federal Reserve System to be sub- CCAIR, Inc.: $.01 par common ject to the margin requirements under certain Federal Chemfix Technologies, Inc.: Warrants (expire Reserve regulations. The List of Foreign Margin 12-15-90) Stocks (Foreign List) represents all foreign equity Codenoll Technology Corporation: Warrants (expire securities that have met the Board's eligibility criteria 09-10-90) under Regulation T. The OTC List and the Foreign Community Financial Corporation: $.01 par common List are published four times a year by the Board. This Coral Gold Corporation: No par common document sets forth additions to or deletions from the Cosmo Communications Corporation: $.01 par com- OTC List and additions to the Foreign List previously mon published and effective on August 13, 1990. Country Wide Transport Services, Inc.: $.01 par com- Effective November 13, 1990, accordingly, pursuant mon to the authority of sections 7 and 23 of the Securities CPT Corporation: $.05 par common, 10% convertible Exchange Act of 1934, as amended (15 U.S.C. subordinated debentures §§ 78g and 78w), and in accordance with 12 C.F.R. §§ 207.2(k) and 207.6(c) (Regulation G), 12 C.F.R. DST Systems, Inc.: $.01 par common §§ 220.2(u) and 220.17(e) (Regulation T), and 12 C.F.R. §§ 221.20) and 221.7(c) (Regulation U), there is set forth Eliot Savings Bank (Massachusetts): $.10 par common below a listing of deletions from and additions to the OTC List; and the additions to the Foreign List. First Citizens Bancshares, Inc.: Class B, $1.00 par common Deletions From the List of Marginable OTC First Executive Corporation: Warrants (expire Stocks 11-15-90) First Savings Bank, F.S.B. (New Mexico): $1.00 par Stocks Removed for Failing Continued Listing common Requirements Fleet Aerospace, Inc.: $.01 par common Fulton Federal Savings Bank: $1.00 par common Action Auto Stores, Inc.: No par common General Building Products Corporation: $.05 par com- Airship Industries Limited: American Depositary Receipts representing 80 ordinary shares mon A1 Copeland Enterprises, Inc.: Series 1, 17.5% exchangeable preferred HEI Corporation: $.10 par common Altus Bank, A Federal Savings Bank (Alabama): $.01 Heritage Financial Corporation: $.90 par cumulative par common convertible preferred American Film Technologies, Inc.: Warrants (expire 06-30-93) Independence Federal Savings Bank: $.01 par com- Anthony, Michael Jewelers, Inc.: $.001 par common mon Astec Industries, Inc.: Warrants (expire 12-29-91) Institute of Clinical Pharmacology, PLC: American Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1046 Federal Reserve Bulletin • December 1990 Depositary Receipts for non-restricted B shares Bogert Oil Company: $.10 par common (nominal value FIN 20) Cadence Design Systems, Inc.: $.01 par common Jesup Group Inc., The: $.01 par common Carolina Bancorp, Inc.: $1.00 par common Church & Swight Co., Inc.: $1.00 par common Microwave Laboratories, Inc.: $.01 par common CII Financial, Inc.: No par common Novell, Inc.: 7-!/4% convertible subordinated deben- Diagnostek, Inc.: $.01 par common tures DYCOM Industries, Inc.: $.33-1/3 par common OSICOM Technologies, Inc.: $.01 par common Epsilon Data Management, Inc.: $.01 par common Pacesetter Homes, Inc.: $.01 par common Fidelity Federal Savings Bank (Indiana): $.01 par common QUESTECH, Inc.: $.05 par common Finnigan Corporation: $.01 par common First Home Federal Savings and Loan Association Retailing Corporation of America: $1.00 par common (Florida): $1.00 par common Florida Public Utilities Company: $1.50 par common S.P.I.-Suspension and Parts Industries Limited: Ordinary Shares, IS 250 par value Greenery Rehabilitation Group, Inc.: $.01 par com- SFE Technologies: $1.00 par common mon Structofab, Inc.: $.02 par common SUNF, Inc.: $.50 par common Henley International, Inc.: $.001 par common Symbion, Inc.: $.01 par common Syntech International, Inc.: $.10 par common Integon Corporation: $1.00 par common Intellicall, Inc.: $.01 par common Tele-Optics, Inc.: $.01 par common International Lease Finance Corp.: $.10 par common, Warrants (expire 1994) United Savings Bank (Virginia): $5.00 par common JMB Realty Trust: No par shares of beneficial Vikonics, Inc.: $.02 par common Vinland Property Trust: No par shares of beneficial Mack Trucks, Inc.: $1.00 par common interest Martin Lawrence Limited Editions: $.001 par common Vista Organization Partnership, L.P., The: Depositary Mid-America Bancorp: No par common units of limited partnership interest Mountain West Savings Bank, F.S.B.: $1.00 par common Walker Telecommunications Corporation: $.01 par Mutual Federal Savings and Loan Association (North common Carolina): $1.00 par common Wall to Wall Sound and Video, Inc.: $.01 par common Mutual Federal Savings Bank, A Stock Corp. (Ohio): Washington Bancorporation (Washington, D.C.): $1.00 par common $2.50 par common Western Microwave, Inc.: $.10 par common National Media Corporation: $.10 par common Williams, A.L., Corporation: 7.25% convertible sub- North-West Telecommunications, Inc.: $5.00 par ordinated debentures common World-Wide Technology, Inc.: $.01 par common Old Republic International Corp.: $1.00 par common Stocks Removed For Listing On A National Securities Exchange Or Being Involved In An Pennview Savings Association: $1.00 par common Acquisition Pharmacia AB: American Depositary Receipts for non-restricted B shares (par value Skr 10) Altos Computer Systems: No par common Primebank, Federal Savings Bank (Michigan): $1.00 par common Bio-Medicus, Inc.: $.01 par common Biotech Research Laboratories, Inc.: $.01 par com- Shelby Federal Savings Bank (Indiana): $1.00 par mon common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1047 Stockholder Systems, Inc.: Class A, $.05 par common MARC AM Corporation: $.01 par common Subaru of America, Inc.: $.01 par common Matrix Service Company: $.01 par common Summa Medical Corporation: $.01 par common MECA Software, Inc.: $.01 par common Medical Management of America, Inc.: $.01 par com- Tecogen, Inc.: $.10 par common mon Micrografx, Inc.: $.01 par common UTL Corporation: $.25 par common Modtech, Inc.: $.01 par common Molex Incorporated: Class A, $.05 par common Webster Clothes, Inc., $.01 par common NDE Environmental Corporation: $.0001 par common Additions to the List of Marginable OTC Nord Pacific Limited: $.01 par common Stocks O'Charley's Inc.: No par common Advanced Logic Research, Inc.: $.01 par common Orthopedic Services, Inc.: $.01 par common Allied Clinical Laboratories, Inc.: $.01 par common American Business Computers Corporation: $.01 par Park National Corporation: $6.25 par common common Pinnacle Banc Group, Inc.: $6.25 par common Arcus, Inc.: $.01 par common Astrocom Corporation: $.10 par common Radius Inc.: No par common Republic Health Corporation: $.01 par common Bird Medical Technologies, Inc.: $.01 par common Republic Waste Industries, Inc.: $.01 par common Rocky Mountain Helicopters, Inc.: $.02 par common Canyon Resources Corporation: Warrants (expire 12-31-94) Security Savings Bank, FSB: $1.00 par common Capitol Bancorp Ltd.: No par common Southmark Corporation: $.01 par common, Class A, Circuit Systems, Inc.: No par common $.01 par convertible preferred CMS/Data Corporation: $.01 par common Suburbank Bankshares, Inc. (Florida): Class A, COHO Resources, Inc.: $.01 par common $.10 par common Sylvan Foods Holdings, Inc.: $.001 par common Deprenyl Research Limited: No par common Dreco Energy Services Ltd.: Class A, no par common Tinsley Laboratories, Inc.: No par common DVI Financial Corporation: $.005 par common Trimble Navigation Limited: No par common Easel Corporation: $.01 par common Uranium Resources, Inc.: $.001 par common, ESB Bancorp, Inc.: $1.00 par common Warrants (expire 02-26-94) Failure Group, Inc., The: $.001 par common Vanguard Real Estate Fund II: No par shares of beneficial interest Gerrity Oil & Gas Corporation: $.01 par common VISX, Incorporated: No par common Grant-Norpac, Inc.: $.002 par common Vital Signs, Inc.: No par common Helix Biocore, Inc.: $.01 par common Warrantech Corporation: $.0007 par common High Plains Corporation: $.10 par common Westwood One, Inc.: Warrants (expire 09-04-97) IKOS Systems, Inc.: $.01 par common Additions to the List of Foreign Margin Stocks Illinois Central Corporation: $.001 par common In-Store Advertising, Inc.: $.01 par common Abbey National PLC: Ordinary shares, par value 10 p All Nippon Airways Co., LTD.: ¥50 par common Keene Corporation: $.0001 par common Allied Lyons PLC: Common, par value 25 p ARGYL Group PLC: Ordinary shares, par value 25 p London International Group PLC: American Deposi- Asahi Breweries: ¥50 par common tary Receipts Asahi Chemical Industry: ¥50 par common Lunar Corporation: $.01 par common Asahi Glass Co., LTD.: ¥50 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1048 Federal Reserve Bulletin • December 1990 ASDA Group PLC: Ordinary shares, par value 25 p Glaxo Holdings PLC: Common, par value 50 p Associated British Foods PLC: Ordinary shares, par Great Universal Stores PLC: "A" Ordinary shares value 5 p (non-voting), par value 25 p Guardian Royal Exchange PLC: Ordinary shares, par value 5 p BA.T. Industries LTD. PLC: Ordinary shares 25 p Barclays Bank PLC: Common, par value 100 p Hammerson Property Investment AND Development Bass PLC: Ordinary shares, par value 25 p Corp. PLC: Common, par value 25 p BET PLC: Common, par value 25 p Hanson PLC: Ordinary shares, par value 25 p BICC PLC: Ordinary shares, par value 50 p Harrisons And Crosfield PLC: Common, par value Blue Circle Industries PLC: Common, par value 50 p 25 p BOC Group PLC: Common, par value 25 p Hawker Sisseley Group PLC: Common, par value 25 p Boots Company PLC, The: Common, par value 25 p Hillsdown Holdings PLC: Ordinary shares, par value BPB Industries PLC: Ordinary shares, par value 50 p 10 p Bridgestone Corporation: ¥50 par common Hino Motors LTD.: ¥50 par common British Airways PLC: Ordinary shares, par value 25 p Honda Motor Company LTD.: ¥50 par common British Petroleum Company PLC: Ordinary shares, par value 25 p British Steel PLC: Common, par value 50 p Imperial Chemical Industries PLC: Common, par British Telecommunications PLC: Common, par value value 100 p 25 p Ishikawajima-Harima Heavy Industries Company BTR PLC: Common, par value 25 p LTD.: ¥50 par common Burmah Oil PLC, The: Common, par value 100 p Isuzu Motors LTD.: ¥50 par common Japan Steel Works: ¥50 par common C. Itoh Fuel Company LTD.: ¥50 par common Jujo Paper Company LTD.: ¥50 par common Cable & Wireless PLC: Ordinary shares, par value 50 p Kajima Corporation: ¥50 par common Cadbury Schweppes PLC: Ordinary shares, par value Kanebo LTD.: ¥50 par common 25 p Kansai Electric Power Company Inc.: ¥500 par com- Carlton Communications PLC: Common, par value mon 5 P Kawasaki Heavy Industries LTD.: ¥50 par common Commercial Union Assurance Company PLC: Ordi- Kawasaki Kisen: ¥50 par common nary shares, par value 25 p Kawasaki Steel Corporation: ¥50 par common Courtaulds PLC: Common, par value 25 p Keihin Electric Express Railway: ¥50 par common Keio Teito Electric Railway: ¥50 par common DAI Nippon Printing: ¥50 par common Keisei Electric Railway: ¥50 par common DAI-Ichi Kangyo Bank LTD.: ¥50 par common Kikkoman: ¥50 par common Denki Kagaku Kogyo: ¥50 par common Kingfisher PLC: Ordinary shares, par value 25 p Dowa Mining: ¥50 par common Kirin Brewery Company LTD.: ¥50 par common Kobe Steel: ¥50 par common Konica Corporation: ¥50 par common Ebara Corporation: ¥50 par common Koyo Seiko: ¥50 par common Enterprise Oil PLC: Ordinary shares, par value 25 p Kubota Corporation LTD.: ¥50 par common Fiaona PLC: Common, par value 25 p Kuraray Company LTD.: ¥50 par common Fuji Bank LTD.: ¥50 par common Kyowa Hakko Kogyo Company LTD.: ¥50 par com- Fuji Electric Company LTD.: ¥50 par common mon Fujita Corporation: ¥50 par common Fujitsu LTD.: ¥50 par common Ladbroke Group PLC: Ordinary shares, par value 10 p Furukawa: ¥50 par common Land Securities PLC: Common, par value 100 p Furukawa Electric Company LTD.: ¥50 par common Lamo PLC: Common, par value 25 p Legal and General Group PLC: Common, par value General Accident Fire & Life Assurance Corp. PLC: 25 p Common, par value 25 p Lloyds Bank PLC: Common, par value 100 p GKN PLC: Common, par value 100 p Lonrho LTD. PLC: Ordinary shares, par value 25 p Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1049 Lucas Industries PLC: Ordinary shares, par value Nippon Mining Company LTD.: ¥50 par common 100 p Nippon Oil & Fats: ¥50 par common Nippon Oil Company LTD.: ¥50 par common Marks & Spencer PLC: Ordinary shares, par value Nippon Seiko: ¥50 par common 25 p Nippon Sharyo Seizo: ¥50 par common Marubeni Corporation: ¥50 par common Nippon Sheet Glass Company LTD.: ¥50 par common Matsuzakaya: ¥50 par common Nippon Shinpan Company LTD.: ¥50 par common Maxwell Communication Corporation PLC: Ordinary Nippon Steel Corporation: ¥50 par common shares, par value 25 p Nippon Suisan: ¥50 par common Mazda Motor Corporation: ¥50 par common Nippon Yusen: ¥50 par common Meidensha Electric: ¥50 par common Nissan Motors: ¥50 par common Meiji Milk Products: ¥50 par common Nisshin Flour Milling Company LTD.: ¥50 par com- Meiji Seika Kaisha LTD: ¥50 par common mon MEPC PLC: Common, par value 25 p Nisshin Oil Mills: ¥50 par common Midland Bank PLC: Ordinary shares, par value 100 p NKK Corporation: ¥50 par common Mitsubishi Corporation: ¥50 par common Noritake: ¥50 par common Mitsubishi Electric Corporation: ¥50 par common NTN Toyo Bearing Company LTD.: ¥50 par common Mitsubishi Estate Company LTD.: ¥50 par common Mitsubishi Heavy Industry LTD.: ¥50 par common Obayashi: ¥50 par common Mitsubishi Kaisei Corporation: ¥50 par common Odakyu Electric Railway: ¥50 par common Mitsubishi Metal Corporation: ¥50 par common Oji Paper Company LTD.: ¥50 par common Mitsubishi Oil Company LTD.: ¥50 par common Oki Electric Industry Company Inc.: ¥50 par common Mitsubishi Paper Mills: ¥50 par common Okuma Machinery Works LTD.: ¥50 par common Mitsubishi Rayon Company LTD.: ¥50 par common Onoda Cement Company LTD.: ¥50 par common Mitsubishi Steel Manufacturing: ¥50 par common Osaka Gas Company LTD.: ¥50 par common Mitsubishi Trust & Banking Corporation: ¥50 par common Pearson PLC: Ordinary shares, par value 25 p Mitsubishi Warehouse & Transportation: ¥50 par Peninsular and Oriental Steam Navigation Company: common (Deferred Stock) Ordinary shares, par value 100 p Mitsui & Co. LTD.: ¥50 par common Pilkington PLC: Common, par value 50 p Mitsui Mining & Smelting Company LTD.: ¥50 par Prudential Corporation PLC: Common, par value 5 p common Mitsui Osk Lines LTD.: ¥50 par common Mitsui Real Estate Development Company LTD.: ¥50 Rank Organization PLC: Ordinary shares, par value par common 25 p Mitsui Taiyo Kobe Bank: ¥50 par common Ranks Hovis McDougall PLC: Common, par value Mitsui Toatsu Chemicals: ¥50 par common 25 p Mitsui Trust And Banking Company LTD.: ¥50 par Reckitt and Colman PLC: Ordinary shares, par value 25 p common Redland PLC: Common, par value 25 p Moromaga and Company: ¥50 par common Reed International PLC: Common, par value 25 p Nachi-Fujikoshi: ¥50 par common Reuters Holdings PLC: Common, par value 10 p National Westminister Bank PLC: Common, par value RMC Group PLC: Common, par value 25 p 100 p Rolls Royce PLC: Ordinary shares, par value 20 p Navix Line: ¥50 par common Rothmans International PLC: Common, par value 12-!/2 p NGK Insulators: ¥50 par common Nichirei Corporation: ¥50 par common Royal Bank of Scotland Group PLC: Ordinary shares, Nihon Cement: ¥50 par common par value 25 p Niigata Engineering: ¥50 par common Royal Insurance PLC: Common, par value 25 p Nikko Securities Company LTD.: ¥50 par common RTZ Corporation, The: Common, par value 10 p Nikon Corporation: ¥50 par common Nippon Beet Sugar Manufacturing: ¥50 par common Sainsbury, J. PLC: Ordinary shares, par value 25 p Nippon Denso: ¥50 par common Sankyo Company LTD.: ¥50 par common Nippon Kayaku Company LTD.: ¥50 par common Sanyo Electric Company: ¥50 par common Nippon Light Metal Company LTD.: ¥50 par common Sanyo-Kokusaku Pulp: ¥50 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1050 Federal Reserve Bulletin • December 1990 Sapporo Breweries: ¥50 par common Tonen Corporation: ¥50 par common Sato Kogy Company LTD.: ¥50 par common Toray Industries, Inc.: ¥50 par common Scottish Newcastle Breweries PLC: Ordinary shares, Toshiba Corporation: ¥50 par common par value 20 p Tosoh Corporation: ¥50 par common Sears Holdings PLC: Ordinary shares, par value 25 p Toto LTD.: ¥50 par common Sharp Corporation: ¥50 par common Toyo Seikan: ¥50 par common Shell Transport & Trading Company PLC: Ordinary Totobo Company LTD.: ¥50 par common shares, par value 25 p Trafalgar House PLC: Common, par value 20 p Shimizu Corporation: ¥50 par common Trusthouse Forte PLC: Common, par value 25 p Shinetsu Chemical Company, LTD.: ¥50 par common TSB Group PLC: Common, par value 25 p Shochiku: ¥50 par common Showa Denko K.K.: ¥50 par common UBE Industries: ¥50 par common Showa Electric Wire: ¥50 par common Ultramar PLC: Ordinary shares, par value 25 p Showa Line LTD.: ¥50 par common Unilever PLC: Ordinary shares, par value 5 p Showa Shell Oil: ¥50 par common United Biscuits Holdings PLC: Ordinary shares, par Smith & Nephew Associated Company PLC: Ordi- value 25 p nary shares, par value 10 p Unitika: ¥50 par common Smithkline Beecham PLC: "A" Ordinary shares, par value 25 p Whitbread & COMPANY PLC: Common, par value Standard Chartered Group PLC: Ordinary shares, par 25 p value 100 p STC PLC: Common, par value 25 p Yasuda Fire & Marine Insurance Company LTD.: ¥50 Sumitomo Bank LTD.: ¥50 par common par common Sumitomo Cement Company Ltd.: ¥50 par common Yokogawa Electric Corporation: ¥50 par common Sumitomo Chemical Company LTD.: ¥50 par com- Yokohama Rubber Company LTD.: ¥50 par common mon Yuasa Battery: ¥50 par common Sumitomo Corporation: ¥50 par common Sumitomo Electric Industries LTD.: ¥50 par common Sumitomo Metal Industries: ¥50 par common Sumitomo Metal Mining Company LTD.: ¥50 par FINAL RULE—AMENDMENT TO RULES common REGARDING DELEGATION OF AUTHORITY Sun Alliance Group PLC: Ordinary shares, par value 25 p The Secretary of the Board, in accordance with Suzuki Motor Company LTD.: ¥50 par common 12 C.F.R. Part 265, has approved a technical amendment to the Board's Rules Regarding Delegation of Taisho Marine & Fire Insurance Company LTD.: ¥50 Authority to conform a reference to the Board's Rules par common Regarding Availability of Information (12 C.F.R. Part Takara Shuzo: ¥50 par common 261) to the revised version of that part that became Takashimaya Company LTD.: ¥50 par common effective in 1988. Takeda Chemical Industries LTD.: ¥50 par common Effective October 3, 1990, 12 C.F.R. Part 265 is Tarmac PLC: Common, par value 50 p amended as follows: Taylor Woodrow PLC: Common, par value 25 p Teijin LTD.: ¥50 par common Teikoku Oil: ¥50 par common Part 265—Rules Regarding Delegation of Tekken Construction: ¥50 par common Authority Tesco PLC: Ordinary shares, par value 5 p Thames Water PLC: Ordinary shares, par value 100 p Thorn Emi PLC: Common, par value 25 p 1. The authority citation for Part 265 continues to read Tobu Railway Company LTD.: ¥50 par common as follows: Tokio Marine & Fire Insurance Company LTD.: ¥50 par common Authority: Section ll(k), 38 Stat. 261 and 80 Stat. Tokyo Department Store: ¥50 par common 1314; 12 U.S.C. § 248(k). Tokyo Electric Power Company Incorporated: ¥500 par common 2. In section 265.2(c)(20), the reference "§ 261.6(a)(2) Tokyo Gas Company LTD.: ¥50 par common and (3)" is revised to read "§ 261.8(a)(2) and (3)." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1051 ORDERS ISSUED UNDER BANK HOLDING largest commercial banking organization in the market COMPANY ACT with $9.6 billion in deposits, representing approximately 37 percent of total deposits in commercial Orders Issued Under Section 3 of the Bank banking organizations in the market. Northern Cities Holding Company Act is the 23rd largest commercial banking organization in the market, controlling deposits of $89.8 million, rep- First Bank System, Inc. resenting 0.4 percent of total deposits in commercial Minneapolis, Minnesota banking organizations in the market. The Minneapolis- St. Paul banking market is highly concentrated.3 Upon Order Approving Merger of Bank Holding consummation of this proposal, FBS's share of com- Companies mercial banking deposits would increase to 37.4 percent. The Herfindahl-Hirschman Index ("HHI") First Bank System, Inc., Minneapolis, Minnesota would increase by 26 points to 2377. If 50 percent of ("FBS"), a bank holding company within the meaning the deposits controlled by thrift institutions were inof the Bank Holding Company Act ("BHC Act"), has cluded in the calculation of market concentration, FBS applied for the Board's approval under section 3 of the and Northern Cities would control 34.1 percent and BHC Act (12 U.S.C. § 1842) to merge with Northern 0.3 percent of total thrift-adjusted market deposits, Cities Bancorporation, Inc., Anoka, Minnesota respectively. The HHI would increase by 22 points to ("Northern Cities"), and thereby acquire Northern 2034 upon consummation of this proposal.4 Bank, Anoka, Minnesota, and Northern National The two largest banking organizations in the Minne- Bank, Forest Lake, Minnesota. apolis-St. Paul banking market together control ap- Notice of the application, affording interested per- proximately 61.7 percent of total thrift-adjusted marsons an opportunity to submit comments, has been ket deposits. The third largest depository institution in published (55 Federal Register 31,232 (1990)). The the market controls approximately 6 percent of market time for filing comments has expired, and the Board deposits. During the past two years, the number of has considered the application and all comments re- commercial banks in the market has declined, alceived in light of the factors set forth in section 3(c) of though there are still numerous competitors in the the BHC Act. market. FBS, with total deposits of approximately $15.0 The Board has previously indicated that, in the billion, is the largest commercial banking organization context of the structure of the Minneapolis-St. Paul in the state of Minnesota, controlling 26 subsidiary banking market, the acquisition of any depository banks, representing approximately 26.2 percent of institution in the market by either of the two largest total deposits in commercial banking organizations in firms in the market requires close scrutiny.5 The Board the state.1 Northern Cities controls two subsidiary has indicated that, under the conditions in the Minnebanks with deposits of $91.9 million and is the 46th apolis-St. Paul banking market, the acquisition by largest commercial banking organization in the state, controlling 0.2 percent of total deposits in commercial klin Townships in Wright County; Lanesburgh Township in Le Sueur banking organizations in the state. Upon consumma- County, Minnesota; and the Town of Hudson in St. Croix County, tion of this proposal, FBS would remain the largest Wisconsin. commercial banking organization in the state, control- 3. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 2, 1984), any market in which the ling 26.4 percent of total deposits in commercial bank- post-merger HHI is over 1800 is considered highly concentrated, and ing organizations in the state. Consummation of the the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points unless other factors indicated that the proposal would not result in significantly adverse merger will not substantially lessen competition. The Justice Departeffects on the concentration of banking resources in ment has informed the Board that a bank merger or acquisition Minnesota. generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at Both FBS and Northern Cities compete in the least 1800 and the merger increases the HHI by at least 200 points. The Minneapolis-St. Paul banking market.2 FBS is the Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognizes the competitive effects of limited-purpose lenders and other non-depository financial entities. 1. Market data are as of June 30, 1989. State banking data are as of 4. The Board previously has indicated that thrift institutions have December 31, 1989. become, or have the potential to become, major competitors of 2. The Minneapolis-St. Paul banking market is approximated by the commercial banks. National City Corporation, 70 Federal Reserve Anoka, Hennepin, Ramsey, Washington, Carver, Scott and Dakota Bulletin 743 (1984); NCNB Bancorporation, 70 Federal Reserve Counties; Lent, Chisago Lake, Shafer, Wyoming and Franconia Bulletin 225 (1984); General Bancshares Corporation, 69 Federal Townships in Chisago County; Blue Hill, Baldwin, Orrock, Livonia Reserve Bulletin 802 (1983); and First Tennessee National Corporaand Big Lake Townships and the City of Elk River in Sherburne tion, 69 Federal Reserve Bulletin 298 (1983). County; Monticello, Otsego, Buffalo, Frankfort, Rockford and Fran- 5. Norwest Corporation, 76 Federal Reserve Bulletin 873 (1990). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1052 Federal Reserve Bulletin • December 1990 these two banking organizations of a series of depos- with the capital guidelines established by the Board for itory organizations with relatively small market shares bank holding companies. FBS has proposed to acquire could, on a cumulative basis, lead to significant anti- Northern Cities through an exchange of stock and will competitive effects. not incur additional debt. In addition, Northern Cities The Board recognizes in this case that Northern represents a relatively small acquisition that had been Cities is ranked 23rd in the Minneapolis-St. Paul arranged by prior management of FBS before recent banking market in market share and controls less than improvements initiated by FBS. Consummation of this one-half of one percent of the market deposits. As proposal would not have a material effect on the noted above, consummation of this proposal would tangible capital ratios of FBS. cause the thrift-adjusted HHI for this market to in- In view of these and other facts of record, the Board crease by approximately 22 points. If viewed in the has determined that financial factors of this proposal context of other acquisitions recently made by FBS in are consistent with approval of the application. The the Minneapolis-St. Paul banking market, the effect of Board expects FBS to make further progress in im- Applicant's acquisitions, including this proposal, proving its financial position before seeking to make would be to increase the thrift-adjusted HHI by an any future expansion proposals. amount less than the level that would likely give rise to The managerial resources and future prospects of a challenge of a bank acquisition on competitive FBS and Northern Cities are consistent with approval. grounds under the Department of Justice Merger The Board has also determined that considerations Guidelines. relating to the convenience and needs of the commu- In light of all the facts in this case, including the nities to be served are consistent with approval of this number of competitors remaining in the market, the application. size and location of Northern Cities and other facts of Based on the foregoing and other facts of record, the record, the Board does not believe that the effect of Board has determined that the application should be, the proposed acquisition on competition in the Minne- and hereby is, approved. The transaction shall not be apolis-St. Paul banking market, viewed either as an consummated before the thirtieth calendar day followindividual acquisition or in the context of other recent ing the effective date of this Order, or later than three acquisitions by Applicant, would be so significantly months after the effective date of this Order, unless adverse as to warrant denial of this proposal. such period is extended for good cause by the Board or Section 3(c) of the BHC Act requires in every case by the Federal Reserve Bank of Minneapolis, acting that the Board consider the financial resources of the pursuant to delegated authority. applicant and the banking organization to be acquired. By order of the Board of Governors, effective In evaluating this application, the Board has carefully October 10, 1990. considered the financial resources of FBS and the effect on those resources of the proposed acquisition. Voting for this action: Chairman Greenspan, and Gover- The Board has previously stated that it expects bank- nors Kelley and Mullins. Voting against this action: Governors Angell and LaWare. Absent and not voting: Governor ing organizations contemplating expansion proposals Seger. to maintain strong capital levels substantially above the minimum levels specified in the Board's Capital JENNIFER J. JOHNSON Adequacy Guidelines, without significant reliance on Associate Secretary of the Board intangibles, particularly goodwill. The Board carefully analyzes the effect of expansion proposals on the Concurring Statement of Governor Kelley preservation or achievement of strong capital levels and has adopted a policy that there should be no significant diminution of financial strength below those While voting in favor of this application, I do so by the levels for the purpose of effecting major expansion.6 narrowest of margins. The Board notes that FBS has recently raised ap- On the competitive issue, I believe this proposal proximately $172 million in additional equity capital, merits approval because it does not create significant and that its primary capital ratio is in conformance additional concentration in the relevant banking market. The increase in market concentration resulting from this proposal, viewed in context with other 6. Thus, for example, the Board has generally approved proposals recent acquisitions by Applicant in this market, would involving a decline in capital only where the applicants have promptly restored their capital to pre-acquisition levels following consumma- be well below the level specified in the Department of tion of the proposals and have implemented programs of capital Justice Merger Guidelines. However, the proposal improvement to raise capital significantly above minimum levels. See, does marginally add to already existing concentration e.g., Citicorp, 72 Federal Reserve Bulletin 726 (1986); Security Pacific Corporation, 72 Federal Reserve Bulletin 800 (1986). in this market, and, as a consequence, I will view with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1053 ever greater scrutiny any further combinations that time for filing comments has expired, and the Board will exacerbate this condition. has considered the applications and all comments On the financial issue, I concur with Governors received in light of the factors set forth in section 3(c) Angell and La Ware that Applicant must continue to of the BHC Act. address its announced problems. However, Applicant Bancorp is the largest commercial banking organihas taken aggressive steps to strengthen itself and, in zation in Oregon, controlling two banks in Oregon my view, this relatively small stock-for-stock merger with total deposits of $7.6 billion, representing 42.7 does not warrant rejection on financial grounds. percent of the total deposits in commercial banking organizations in the state.1 Bancorp also operates October 10, 1990 subsidiary banks in Washington, Utah and California. U.S. Bank, a de novo institution, is being organized Dissenting Statement of Governors Angell and as a national bank. The bank will be an FDIC-insured LaWare commercial bank and will place primary emphasis on providing credit cards and other consumer financial We disagree with the Board's action in this case. The services and products to members of various affinity Board requires bank holding companies seeking to groups and customers in the Portland RMS A. In view expand through acquisition to be in overall strong of the de novo status of U.S. Bank and based upon the financial condition. FBS has recently taken a number facts of record, the Board concludes that the proposed of important steps towards addressing publicly known transaction would have no significantly adverse effects financial problems at the organization. However, we on existing or probable future competition, and would believe that FBS must continue to address its an- not significantly increase the concentration of renounced problems and make additional progress sources in any relevant market. Thus, competitive towards improving its financial condition prior to considerations are consistent with approval of the seeking to expand by acquisition. Accordingly, we do application. In addition, the financial and managerial not believe that financial factors favor approval of this resources of U.S. Bank, Bancorp, and Bancorp Finanproposal at this time. While we have also expressed cial are consistent with approval of these applications. concerns about the competitive effects of acquisitions In considering the convenience and needs of the in the St. Paul-Minneapolis banking market by the two community to be served, the Board has taken into largest banking organizations, we need not reach a account the record of Bancorp's subsidiary banks decision on that aspect of this case. under the Community Reinvestment Act ("CRA") (12 U.S.C. § 2901 et seq ). The CRA requires the October 10, 1990 federal financial supervisory agencies to encourage financial institutions to help meet the credit needs of U.S. Bancorp the local communities in which they operate, consis- Portland, Oregon tent with the safe and sound operation of such institutions. To accomplish this end, the CRA requires the Order Approving Acquisition of a Bank appropriate federal supervisory authority to assess the institution's record of meeting the credit needs of its U.S. Bancorp, Portland, Oregon ("Bancorp"), a bank entire community, including low- and moderateholding company within the meaning of the Bank income neighborhoods, consistent with the safe and Holding Company Act ("BHC Act"), has applied for sound operation of the institution, and to take this the Board's approval under section 3(a)(3) of the BHC record into account in its evaluation of bank holding Act (12 U.S.C. § 1842(a)(3)) to acquire 100 percent of company applications.2 the voting shares of U.S. Bank, National Association, In this regard, the Board has received a comment Beaverton, Oregon ("U.S. Bank"), a de novo bank. In filed by the Portland Organizing Project3 ("Protesconnection with this application, Bancorp has applied tant") critical of the CRA performance of the U.S. to acquire U.S. Bancorp Financial Services, Inc., National Bank of Oregon ("USBO"), Bancorp's larg- Portland, Oregon ("Bancorp Financial"), which has est subsidiary in Oregon, in the Portland, Oregon applied for the Board's approval under section 3(a)(1) of the BHC Act (12 U.S.C. § 1842(a)(1)) to become a bank holding company by acquiring 100 percent of the voting shares of U.S. Bank. 1. State banking data are as of June 30, 1990. Notice of the applications, affording interested per- 2. 12 U.S.C. § 2903. 3. The Portland Organizing Project is a coalition of churches sons an opportunity to submit comments, has been representing 5,000 families in working class, low- and moderatepublished (55 Federal Register 31,232 (1990)). The income neighborhoods. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1054 Federal Reserve Bulletin • December 1990 area.4 Protestant states that it has been meeting with mance. The Agency CRA Statement also indicates USBO since January 1990, to put together a national that decisions by agencies to allow financial institudemonstration project to target mortgage loans in tions to expand will be made pursuant to an analysis of lower-income neighborhoods in Portland, Oregon. the institution's overall CRA performance, and will be Protestant alleges that it has urged USBO to reduce based on the actual record of performance of the closing costs and interest rates on loans targeted to institution.8 inner-city neighborhoods and market such loans, but Initially, the Board notes in this case that Bancorp's Protestant's efforts have been unproductive. In addi- subsidiary banks—including USBO—have each retion, Protestant states that in general USBO's market- ceived a satisfactory rating from their primary regulaing strategy to low- and moderate-income neighbor- tors in the most recent examinations of their CRA hoods is insufficient. Protestant alleges that USBO performance. The Agency CRA Statement provides made very few loans to minority areas of Portland that, although CRA examination reports do not produring the period 1987 through 1989 compared to the vide conclusive evidence of an institution's CRA higher-income suburbs.5 Protestant also alleges that record, these reports will be given great weight in the USBO charges higher loan fees for loans under applications process.9 $50,000 than for loans over that amount. Bancorp has In addition, Bancorp and USBO have put in place submitted a detailed response to the comments made various elements outlined in the Agency CRA Stateby Protestant.6 ment that contribute to an effective CRA program. The Board has carefully reviewed the CRA perfor- Specifically, Bancorp has established a program for mance record of USBO, as well as Protestant's com- reviewing and supervising the CRA programs of its ments and Bancorp's response to those comments, in subsidiary banks that is led by an executive director. light of the CRA, the Board's regulations and the In 1990, Bancorp established a CRA/Social Responsi- Statement of the Federal Financial Supervisory Agen- bility Task Force, a committee that includes five cies Regarding the Community Reinvestment Act executive vice presidents of the bank subsidiaries of ("Agency CRA Statement").7 The Agency CRA Bancorp. The committee is an overview committee Statement provides guidance regarding the types of whose purpose is to provide high-level support for the policies and procedures that the supervisory agencies company's CRA effort. Each committee member has believe financial institutions should have in place in corporate-wide responsibility for a single aspect of order to fulfill their responsibilities under the CRA on CRA, including: training, product development, govan ongoing basis and the procedures that the supervi- ernment programs, documentation, mortgage prosory agencies will use during the application process to grams, investment programs, regulatory compliance review an institution's CRA compliance and perfor- and marketing. Each committee member reports his or her activities to the committee, which meets at least bimonthly. Through the committee members, Bancorp 4. Protestant contends that the application is deficient because it provides information to subsidiary banks regarding does not include a complete record of USBO's CRA activities. While the application did not contain a complete record of USBO's CRA evolving areas of emphasis under the CRA, and sugactivities the record has been developed over the course of the gests guidelines to assure that subsidiary banks are application process, and the Board has thoroughly reviewed USBO's meeting their responsibilities to the community under CRA activities in conjunction with this application. 5. As evidence to support this allegation, Protestant has submitted the CRA. a study that appeared in The Oregotiian in September 1990, suggesting The Chair of the CRA/Social Responsibility Comthat, in recent years, there has been a significant disparity in the home mortgage loans made by Portland lenders to high-income and white mittee reports not only to the Corporate Policy Comresidents as opposed to low- and moderate-income and minority mittee of Bancorp, but to the Corporate Policy Comresidents in Portland. In the "Report on Loan Discrimination" mittee of USBO and to the board of directors of USBO submitted to Congress by the Board on October 13, 1989, pursuant to section 1220 of the Financial Institutions Reform, Recovery and through the USBO Social Responsibility Committee. Enforcement Act of 1989 (the "Report"), the Board generally re- This committee reviews and evaluates the CRA proviewed various public studies of mortgage lending in Atlanta, Cleveland, Detroit and Boston. The Report noted that, while these studies gram of USBO. The USBO Social Responsibility appeared to indicate that disparities existed in home mortgage lending Committee reviews the bank's CRA performance and between minority and non-minority areas, they did not provide a basis CRA statement at least two times per year. USBO's for definitive conclusions about the existence or extent of racial discrimination in mortgage lending and did not account for certain board of directors reviews the CRA statement annufactors other than discrimination in lending that might account for ally. USBO's CRA effort is also led by a CRA director these disparities—including differences in demand for mortgage loans, differences in the types of mortgage products offered by depository and nondepository institutions, and the tendency of nondepository lenders to dominate the minority mortgage loan market. 6. USBO has met with Protestant in an effort to clarify the issues presented under the CRA. 8. Id. 7. 54 Federal Register 13,742 (1989). 9. 54 Federal Register at 13,745. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1055 who reports both to the Bancorp CRA director and to creditline product making revolving credit readily the president of USBO. available to small businesses and farms to fund oper- USBO and USBMC use a variety of means to ating costs and capital improvements, as well as parmarket their products and services to low- and mod- ticipating in the FmHA and SB A loan programs. erate-income individuals. USBO and USBMC employ USBO also has been active in lending to farmers, a wide variety of media, including advertisements in public finance, and nonprofit organizations. In 1970, print media, radio, television, billboards, fliers and USBO implemented the Opportunity Loan Program placards in branches, and fliers distributed by neigh- for both consumer and commercial loans to benefit borhood coalition groups. The print media advertising low-income, minority or elderly individuals, people includes not only the traditional city newspapers, but with physical, educational or economic disadvantages, also minority-related media, free newspapers, and minority businesses and non-profit groups. The proneighborhood newspapers. USBO and USBMC con- gram provides flexibility in collateral requirements, ducts many seminars in low- and moderate-income the term of a loan and the risk-rating of the borrower, areas to acquaint the public with the loan products, so that those not eligible for conventional financing programs and services that are of special interest to may be eligible for an opportunity loan. Under this low- and moderate-income individuals. In response to program, USBO currently has 194 borrowers with $6.1 its market research study, USBO and USBMC have million in original loan commitments outstanding. In been marketing their products through sales calls to addition, USBO is one of five Oregon banks who have realtors. For example, the East Portland office of committed to lend $3 million to minority-owned busi- USBMC, located in a low- and moderate-income cen- nesses for start-up and short-term capital. sus tract, has regular contact with 40 realty compa- Bancorp and USBO also actively participate in nies. Moreover, with respect to Protestant's specific community development activities. USBO conducts complaint about the marketing of the Portland Orga- educational seminars for those interested in purchasnizing Project/Home Afifordability Program loans, ing homes, for small businesses, and for nonprofit USBO has agreed in principle to market these loans by organizations seeking assistance in obtaining funding working with realtors, conducting first-time home from grant-makers or foundations. Bancorp's Public buyer seminars, educating its employees about the Finance Department assists cities, counties, the state, program, and publicly announcing program changes. school districts and other nonprofit entities in Oregon Since early 1990, USBO has conducted formal re- to finance capital improvement. In 1988, USBO prosearch studies to identify additional community credit vided construction financing, permanent financing and needs. USBO prepared a comparison of its loan pen- short-term loans to REACH Community Developetration statistics to the state average loan penetration ment, Inc. to acquire and renovate 253 units of inner statistics, for all loans in general and for specific city, low-income housing in Portland. USBO will be product types. Using these results and other informa- participating in several other community development tion, USBO rated its performance throughout the state programs, including one to build or rehabilitate 250 and identified ten geographic areas in need of special homes in Portland. attention. USBO then conducted field research in The Board notes that there have been some disparthese areas, arranging meetings between bank manag- ities in the HMDA data for USBO's and USBMC's ers and officers and local community leaders to discuss home mortgage lending to borrowers in low- and community needs and the best ways to meet the needs. moderate-income versus high-income census tracts The product and service managers use the information and minority versus non-minority census tracts.10 As collected in this way to develop new products, pro- noted above, USBO does little home mortgage lending grams and services, as well as enhancements to exist- generally. However, a significant number of USBO's ing products, programs and services. As the result of home improvement loans are in low- and moderatethis study, USBO created a community liaison posi- income neighborhoods. In 1988, USBO made 26 pertion for one area and test-markets products by obtain- cent of its home improvement loans in low- and ing input from community leaders. moderate-income census tracts. More recently, as USBO offers other products and services to benefit discussed above, USBO has implemented many addilow- and moderate-income customers. Thirty-five per- tional programs and agreed to changes in the Portland cent of USBO's checking accounts are low fee or no Organizing Project/Home Afifordability Program to fee checking accounts, including special accounts for students, senior citizens, and community organizations. USBO participates in a program providing lowrate weatherization loans to homeowners whose 10. Although some disparities appear in the HMDA data of USBO, its affiliate, USBMC, is the second largest FHA and VA lender in homes are heated with fuel oil. USBO has developed a minority and low- and moderate-income census tracts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1056 Federal Reserve Bulletin • December 1990 make its loans more attractive to low- and moderate- Bancorp and USBO and other facts of record, the income individuals. Board concludes that convenience and needs consid- Because USBO is not active in home mortgage erations, including the record of performance under lending generally, USBO refers virtually all of its the CRA of Bancorp, USBO and Bancorp's other home mortgage lending to U.S. Bancorp Mortgage subsidiary banks, are consistent with approval of this Company ("USBMC"), a subsidiary of Bancorp, application. that participates in VA, FHA and other governmen- Based on the foregoing and other facts of record, the tally-insured and guaranteed lending programs. Board has determined that the applications are in the USBMC is the most active lender participating in the public interest and should be, and hereby are, ap- Oregon State Bond Program, which offers lower- proved. The transaction shall not be consummated than-market interest rates to home buyers in targeted before the thirtieth calendar day following the effective low-income areas and to first-time home buyers in date of this Order, or later than three months after the non-targeted areas. USBMC also is the second most effective date of this Order, and U.S. Bank shall be active lender participating in the Mortgage Credit opened for business not later than six months after the Certificate Program which makes home purchases effective date of this Order. The latter two periods may more affordable to first-time home buyers or those be extended for good cause by the Board or the buying in target neighborhoods. Furthermore, Federal Reserve Bank of San Francisco pursuant to USBMC participates in the Portland Organizing delegated authority. Project's Home Aflfordability Program, which offers By order of the Board of Governors, effective modified underwriting guidelines to home buyers October 19, 1990. with incomes below the median income in the county in which they live. USBMC has closed more loans Voting for this action: Chairman Greenspan and Governors under this program than any other lender. Seger, Angell, La Ware, and Mullins. Absent and not voting: Governor Kelley. In 1990, USBMC began participating in a joint program with the General Electric Mortgage Insurance JENNIFER J. JOHNSON Company to make home purchases possible for buyers Associate Secretary of the Board with less than the median income in the county in which they live. Pursuant to a program sponsored by Orders Issued Under Section 4 of the Bank the Federal National Mortgage Association, USBMC Holding Company Act has agreed to lend up to $10 million to senior citizens for a variety of real estate transactions. Finally, USBMC is developing a mortgage program even more Hy-Vee Food Stores, Inc. flexible in its requirements than those programs in Chariton, Iowa which it is currently participating. In this program the underwriting fee will be waived, and the closing costs Order Approving Exemption of Nonbanking may be financed. Activities of Bank Holding Company Moreover, USBO has taken steps to address many of the concerns raised by Protestant. USBO has been working with Protestant in an effort to resolve the Hy-Vee Food Stores, Inc., Chariton, Iowa ("Hyissue of closing costs and interest rates for the mort- Vee"), a bank holding company within the meaning of gage loans that will be offered pursuant to the national the Bank Holding Company Act ("BHC Act"), has demonstration project and to modify the Portland applied for the Board's approval under section 4(d) of Organizing Project/Home Aflfordability Program to the BHC Act for an exemption from the prohibitions of make it more attractive to low- and moderate-income section 4 of the BHC Act (relating to nonbanking individuals. In response to Protestant's assertion re- activities and acquisitions). Hy-Vee, which owns apgarding loan fees on small loans, USBO has ended the proximately 96.6 percent of the voting shares of the practice of charging higher fees for loans with a small National Bank and Trust Company of Chariton, Chariprincipal amount. ton, Iowa ("Bank"), has been exempt from the non- In addition, Bancorp intends to serve the credit banking provisions of the BHC Act on the basis of needs of low- and moderate-income persons through grandfather rights granted under section 4(a)(2) of the the proposed bank. In light of these and all of the BHC Act, which permit Hy-Vee to continue to engage other facts of record, the Board believes that the in those nonbanking activities it has engaged in since CRA record of Bancorp and USBO is consistent with June 30, 1968. Hy-Vee proposes to acquire certain approval of this application. For the foregoing rea- going concerns, which would cause it to lose its sons, and based upon the overall CRA record of grandfather rights under section 4(a)(2). Hy-Vee seeks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1057 an exemption under section 4(d) in order to retain for Hy-Vee's tax savings through its association with ownership of Bank. Bank.1 Notice of the application, affording interested per- In addition, Bank has been able to offer its products sons an opportunity to submit comments, has been and services to approximately 24,000 Hy-Vee employpublished (55 Federal Register 34,347 (1990)). The ees and family members. Approximately 30 percent of time for filing comments has expired, and the Board Bank's loan and deposit customers are Hy-Vee emhas considered the application and all the comments ployees. Finally, during the period of the farm crisis received in light of the factors set forth in section 4(d) from 1983 through 1986, when Bank was in less than of the BHC Act. satisfactory financial condition, the Comptroller of the Section 4(d) of the BHC Act provides that to the Currency permitted Bank to make a substantial finanextent such action would not be substantially at vari- cial contribution to a community center in Chariton, ance with the purposes of the BHC Act and subject to Iowa, due to Hy-Vee's underlying financial commitsuch conditions as the Board considers necessary to ment to Bank. protect the public interest, the Board may grant an Currently, Bank appears to be in satisfactory finanexemption from the provisions of section 4 of the BHC cial condition, and the record contains nothing to Act to a bank holding company that controlled one suggest that Hy-Vee has abused its relationship with bank prior to July 1, 1968, and has not thereafter Bank or misused Bank's resources for the benefit of acquired control of any other bank, in order: Hy-Vee's other interests. The record does not indicate (1) to avoid disrupting business relationships that that permitting Hy-Vee's relationship with Bank to have existed over a long period of years without continue would adversely affect Bank or the commuadversely affecting the banks or communities in- nity involved. volved; Hy-Vee argues that a forced sale of Bank could (2) to avoid forced sales of small locally owned result in loss of local control of Bank. Hy-Vee combanks to purchasers not similarly representative of missioned a consultant for the purpose of determining community interests; or opportunities for the sale of Bank, and was advised (3) to allow retention of banks that are so small in that such opportunities for Bank were virtually nonrelation to the holding company's total interests and existent at this time. In 1982, Hy-Vee received an offer so small in relation to the banking market to be to acquire Bank, but the offer was withdrawn due to served as to minimize the likelihood that the bank's the financial condition of Bank at that time. Hy-Vee powers to grant or deny credit may be influenced by has provided substantial evidence that any potential a desire to further the holding company's other buyer for Bank would be less representative of the interests. community's interests than Hy-Vee. In this regard, Hy-Vee has applied under the first two grounds. In Hy-Vee is uniquely representative of the Chariton 1972, the Board had denied an application by Hy-Vee community. Hy-Vee is an employee-owned company for an exemption under section 4(d). (58 Federal that employs an estimated 40 percent of the workforce Reserve Bulletin 677 (1972)). of Chariton, Iowa, where it is headquartered, and 20 Hy-Vee, an employee-owned company headquar- percent of the workforce of Lucas County, Iowa. tered at Chariton, Iowa, owns and operates 153 super- In light of the unique circumstances of this case, markets in Iowa, Missouri, Minnesota, South Dakota, including Hy-Vee's substantial capital contributions to Nebraska, Kansas, and Illinois, and 20 retail drug and consistent support of Bank, Bank's location in a stores, all in Iowa. Hy-Vee originally obtained control small rural market, the likely effects of not granting an of Bank in 1963 through Hy-Vee's employee profit- exemption on the local community, and other considsharing trust. erations reflected in the record, the Board has con- Hy-Vee has controlled Bank for 27 years, and has cluded that granting an exemption to Hy-Vee would not acquired any additional banks during that period. not be substantially at variance with the purposes of However, Hy-Vee has made several substantial capi- the BHC Act nor adverse to the public interest. tal contributions to Bank. Hy-Vee has never borrowed Accordingly, an exemption pursuant to section 4(d) of from Bank, but uses Bank for deposit and other the BHC Act is hereby granted subject to the condition services. As a result, Bank benefits from a relatively that this determination may be revoked if the facts high volume of lower cost deposits and receives fee upon which it is based change in any material respect. income that would otherwise not be obtainable by a Further, the provision of any credit, property, or bank of such a relatively small size. Hy-Vee has shared its expertise by providing personnel services to Bank without charge. Hy-Vee has never caused Bank 1. Hy-Vee has annually reimbursed to Bank the income tax savings to pay dividends, and Hy-Vee has reimbursed Bank resulting from Hy-Vee's use of Bank's net operating loss. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1058 Federal Reserve Bulletin • December 1990 service by Hy-Vee or any subsidiary thereof shall not ies in ten states in the Midwest and owns a number of be subject to any condition which, if imposed by a subsidiaries engaged in nonbanking activities. bank, would constitute an unlawful tie-in arrangement The Board has previously determined that title under section 106 of the Bank Holding Company Act insurance agency activities are permissible under sec- Amendments of 1970. The determination herein is tion 4(c)(8)(G) of the BHC Act ("exemption G"), subject to the Board's authority to require modifica- which authorizes bank holding companies that ention or termination of the activities of Hy-Vee or any gaged in insurance agency activities, with Board apof its nonbanking subsidiaries as the Board finds proval, prior to 1971, to engage, or control a company necessary to assure compliance with the provisions engaged, in general insurance agency activities.3 Norand purposes of the BHC Act and the Board's regula- west qualifies for exemption G rights.4 tions and orders issued thereunder, or to prevent American Land Title also provides the following evasions thereof. real estate settlement services: By order of the Board of Governors, effective (1) reviewing the status of the title in the title October 11, 1990. commitment, resolving any exceptions to the title, and reviewing the purchase agreement to identify Voting for this action: Chairman Greenspan and Governors any requirements in it in order to ensure compliance Seger, Angell, Kelley, and Mullins. Absent and not voting: with them; Governor LaWare. (2) verifying payoffs on existing loans secured by the real estate and verifying the amount of and then JENNIFER J. JOHNSON calculating the prorating of special assessments and Associate Secretary of the Board taxes on the property; (3) obtaining an updated title insurance commitment Norwest Corporation to the date of closing, preparing the required checks, Minneapolis, Minnesota deeds, affidavits, and obtaining any authorization letters needed; Order Approving the Acquisition of a Title Insurance (4) establishing a time and place for the closing, Agency conducting the closing, and ensuring that all parties properly execute all appropriate documents and Norwest Corporation, Minneapolis, Minnesota ("Normeet all commitments; west"), a bank holding company within the meaning of (5) collecting and disbursing funds for the parties, the Bank Holding Company Act ("BHC Act"), has holding funds in escrow pending satisfaction of applied under section 4(c)(8) of the BHC Act certain commitments, preparing the HUD settle- (12 U.S.C. § 1843(c)(8)) and section 225.23(a) of the ment statement, the deed of trust, mortgage notes, Board's Regulation Y (12 C.F.R. 225.23(a)) for the the Truth-in-Lending statement, and purchaser's Board's approval to acquire all the outstanding shares affidavits; and of American Land Title Co., Inc., Omaha, Nebraska (6) recording all these documents as required under ("American Land Title"), and through American law. Land Title, engage in title insurance agency and real estate settlement activities in Nebraska.1 In order to approve an application submitted under Notice of the application, affording interested persection 4(c)(8) of the BHC Act, the Board is required sons an opportunity to submit comments, has been to determine that the proposed activity is "so closely duly published (55 Federal Register 35,184 (1990)). related to banking as to be a proper incident thereto." The time for filing comments has expired, and the 12 U.S.C. § 1843(c)(8). In considering whether a Board has considered the application and all comproposed activity would be a proper incident to bankments received in light of the public interest factors set ing, the Board is required to determine that the perforth in section 4(c)(8) of the BHC Act. formance of the proposed activity can reasonably be Norwest, with total consolidated assets of $26.8 billion, is the second largest banking organization in Minnesota.2 Applicant controls 34 banking subsidiar- 3. See First Wisconsin Corporation, 75 Federal Reserve Bulletin 31 (1989); affirmed in American Land Title Association v. Board of 1. American Land Title also performs title abstracting activities, Governors, 892 F.2d 1059 (D.C. Cir. 1989). including title searches of real estate. The Board believes that title 4. In 1959, Norwest received Board approval to retain its general abstracting is incidental to conducting title insurance agency activi- insurance agency subsidiaries and, accordingly, is a grandfathered ties, because it provides necessary information needed to authorize bank holding company for purposes of exemption G. Northwest the sale of a title insurance policy. Bancorporation, 45 Federal Reserve Bulletin 963 (1959); Norwest 2. Asset data are as of June 30, 1990. Corporation, 70 Federal Reserve Bulletin 470 and 235 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1059 expected to produce benefits to the public that out- For these reasons, the proposed real estate settleweigh possible adverse effects. Id. ment activities conducted through a permissible title Based on guidelines established in the National insurance agency are closely related to banking for Courier case, a particular activity may be found to be purposes of section 4(c)(8) of the BHC Act. "closely related to banking" for purposes of section In order to approve this application, the Board is 4(c)(8) of the BHC Act if: required to determine that the performance of the (i) banks generally do in fact conduct the pro- proposed activities by Norwest is a proper incident to posed activity; banking and "can reasonably be expected to produce (ii) banks generally provide services that are op- benefits to the public, such as greater convenience, erationally or functionally so similar to the pro- increased competition, or gains in efficiency, that posed activity as to equip them particularly well outweigh possible adverse effects, such as undue to provide the proposed activity; or concentration of resources, decreased or unfair com- (iii) banks generally provide services that are so petition, conflicts of interests, or unsound banking integrally related to the proposed service as to practices." 12 U.S.C. § 1843(c)(8). require their provision in a specialized form.5 Consummation of the proposal can reasonably be expected to result in public benefits that outweigh In this regard, real estate settlement services are, in adverse effects. Norwest's proposal may be expected fact, provided by Norwest's bank subsidiaries in con- to result in increased convenience resulting from the nection with their origination of mortgage loans, and offering of additional services to customers.9 In addibanks in Nebraska are generally permitted to conduct tion, the activities of American Land Title represent a real estate settlement activities.6 Moreover, bank small share of the total market for these services, and holding companies and banks have been authorized to there are numerous competitors in the title insurance provide real estate services that are operationally or agency and real estate settlement markets. Accordfunctionally so similar to the proposed services as to ingly, the Board believes that the proposed activities equip them particularly well to provide real estate are a proper incident to banking. settlement services. The Board has approved the There is also no evidence in the record to indicate provision of escrow and distribution services by bank that consummation of this proposal is likely to result in holding companies under land installment sales con- any significant adverse effects, such as undue concentracts.7 In addition, banks routinely prepare collateral tration of resources, decreased or unfair competition, security agreements and other documentation required conflicts of interests, or unsound banking practices. to close loans in accordance with federal and state Accordingly, the Board has determined that the ballending requirements as part of the general lending ance of public interest factors it must consider under activities authorized under the Board's Regulation Y. section 4(c)(8) of the BHC Act is favorable and con- The Board also believes that aspects of the proposed sistent with approval. real estate settlement activities are directly linked to Based upon the foregoing and all the other facts of permissible title insurance agency activities by bank record, the Board has determined that the proposed holding companies.8 These activities can directly af- application should be, and hereby is, approved. This fect the risks insured against under a title insurance determination is subject to all of the conditions set policy, and title insurance agents have special experi- forth in the Board's Regulation Y, including sections ence in assessing potential title defects that may arise 225.4(d) and 225.23, and the Board's authority to at a real estate settlement. Accordingly, title insurance require such modification or termination of the activagents have the expertise to generally engage in real ities of a holding company or any of its subsidiaries as estate settlements. the Board finds necessary to assure compliance with, or to prevent evasion of, the provisions and purposes of the BHC Act and the Board's regulations and orders 5. National Courier Ass'n v. Board of Governors, 516 F.2d 1229, issued thereunder. 1237 (D.C. Cir. 1975). The Board may also consider any other factor that demonstrates a reasonable or close connection or relationship of The transaction shall be consummated not later than the activity to banking. 49 Federal Register 794, 806 (1984); Securities three months after the effective date of this Order, Industry Ass'n v. Board of Governors, 104 S. Ct. 3003, 3005-06 n.5 (1984). 6. Bank commissioners in Nebraska, Kansas, Colorado, Iowa, Wyoming, and South Dakota have indicated that banks are generally permitted to conduct real estate settlements. 9. Norwest has committed to advise its customers that they are not 7. See Wells Fargo & Co. (Grayco Land Escrow, Ltd.), 59 Federal required to purchase its real estate settlement services in connection Reserve Bulletin 122 (1973); 59 Federal Register 1236 (1973). with the purchase of title insurance in a real estate transaction. In 8. For example, the Board has approved the preparation of a title addition, section 106 of the Bank Holding Company Act Amendments insurance binder in performing title insurance agency activities. See of 1970 would generally prohibit Norwest from tying extensions of First Wisconsin Corporation, supra. credit to the purchase of services from American Land Title. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1060 Federal Reserve Bulletin • December 1990 unless such period is extended for good cause by the public . . . that outweigh possible adverse effects, such Board or by the Federal Reserve Bank of Minneapolis, as undue concentration of resources, decreased or pursuant to delegated authority. unfair competition, conflicts of interests, or unsound By order of the Board of Governors, effective banking practices." 12 U.S.C. § 1843(c)(8). October 15, 1990. SCNC, which operates one subsidiary bank, is the largest depository organization in South Carolina, Voting for this action: Chairman Greenspan and Gover- controlling deposits of $4.7 billion, representing 26.7 nors Seger, LaWare, and Mullins. Absent and not voting: percent of the total deposits in the state.1 SCNC also Governors Angell and Kelly. engages through several subsidiaries in permissible nonbanking activities. Atlantic, which operates two JENNIFER J. JOHNSON offices, both in Hilton Head Island, South Carolina, is Associate Secretary of the Board the 28th largest depository organization in South Carolina, controlling deposits of $63.6 million. After con- South Carolina National Corporation summation of the proposed acquisition, SCNC would Columbia, South Carolina remain the largest depository organization in South Carolina with aggregate deposits of $4.7 billion, repre- Order Approving the Acquisition of a Savings senting 27 percent of the total deposits in the state. In Association the Board's view, consummation of the proposal would not have a significantly adverse effect on the South Carolina National Corporation, Columbia, concentration of resources in depository institutions in South Carolina ("SCNC"), a bank holding company South Carolina. within the meaning of the Bank Holding Company Act SCNC and Atlantic compete directly in one banking ("BHC Act"), has applied pursuant to section 4(c)(8) market in South Carolina. In the Beaufort County of the BHC Act (12 U.S.C. § 1843(c)(8)) and section banking market,2 SCNC is the second largest of eleven 225.23(a) of the Board's Regulation Y (12 C.F.R. depository institutions, controlling $155.9 million in 225.23(a)), to acquire Atlantic Savings Bank, FSB, deposits, representing 23.7 percent of deposits of Hilton Head Island, South Carolina ("Atlantic"), a banks and thrift institutions in the market ("market savings association. SCNC has also applied for Board deposits"). Atlantic is the seventh largest depository approval under these same sections to acquire indi- institution, controlling $55.1 million in deposits, reprectly Atlantic Mortgage Corporation of South Caro- resenting 4.2 percent of market deposits. Upon conlina, Inc., Hilton Head Island, South Carolina, and summation of this proposal, SCNC would become the thereby engage in mortgage banking activities permis- largest depository organization in the Beaufort County sible under the Board's Regulation Y. 12 C.F.R. market, with 30.7 percent of market deposits.3 The 225.25(b)(1). Beaufort County banking market is considered mod- Notice of the application, affording interested per- erately concentrated, with the three largest depository sons an opportunity to submit comments, has been institutions currently controlling 67.2 percent of the published (55 Federal Register 26,507 (1990)). The market deposits. After consummation of the proposal, time for filing comments has expired, and the Board the market would be highly concentrated, and the has considered the application and all comments re- Herfindahl-Hirschman Index ("HHI") would increase ceived in light of the public interest factors set forth in by 279 points, to a level of 1977.4 section 4(c)(8) of the BHC Act. The Board has determined that the operation of a 1. State deposit data are as of December 31, 1989. Market data are savings association is closely related to banking and as of June 30, 1989. permissible for bank holding companies. 12 C.F.R. 2. The Beaufort County banking market consists of Beaufort 225.25(b)(9). In making this determination, the Board County, South Carolina. 3. The pre-consummation market share statistics are based on required that savings associations acquired by bank calculations in which the deposits of Atlantic and all other savings holding companies conform their direct and indirect associations are included at 50 percent. Upon consummation, Atlantic activities to those permissible for bank holding com- will be merged with a commercial banking organization, thus, on a pro forma basis, the deposits of Atlantic are included at 100 percent, while panies under section 4 of the BHC Act. SCNC has the deposits of other savings associations continue to be included at 50 committed to conform all activities of Atlantic to the percent unless otherwise indicated. requirements of section 4 and Regulation Y. In order 4. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), a market in which the post-merger to approve the application, the Board also is required HHI is between 1000 and 1800 is considered moderately concentrated. by section 4(c)(8) of the BHC Act to determine that the In such markets, the Justice Department is unlikely to challenge a ownership and operation of Atlantic by SCNC "can merger if an increase in the HHI is less than 100 points. Any market in which the post-merger HHI is over 1800 is considered highly reasonably be expected to produce benefits to the concentrated, and the Justice Department is likely to challenge a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1061 Although this proposal would eliminate some exist- facts of record, the Board has determined that the ing competition in the Beaufort County banking mar- balance of the public interest factors that it is required ket, the Board believes that a number of factors to consider under section 4(c)(8) of the BHC Act is mitigate the potential anticompetitive effects of this favorable and consistent with approval of SCNC's proposal. The savings associations in the market ac- application to acquire Atlantic. tively compete with commercial banks in the market, Accordingly, the Board has determined that the and have increased their share of market deposits from proposed application pursuant to section 4(c)(8) of the 19.3 percent in 1984 to 25.5 percent in 1989. Each of BHC Act should be, and hereby is, approved. This the remaining thrifts offers a full range of time and determination is subject to all of the conditions set demand deposit services, and has been active in forth in the Board's Regulation Y, including sections making commercial loans.5 225.4(d) and 225.23(b)(3), and to the Board's authority Based on the size, market share, and activities of to require such modification or termination of the Atlantic in this market, the Board has concluded that activities of a bank holding company or any of its thrifts exert a significant competitive influence that subsidiaries as the Board finds necessary to assure mitigates the anticompetitive effects of the proposal.6 compliance with, or to prevent evasion of, the provi- In addition, the Board notes that ten depository insti- sions and purposes of the BHC Act and the Board's tutions would remain as competitors upon consumma- regulations and orders issued thereunder. tion of the proposal, and that the Beaufort County The transactions approved in this Order shall be market is attractive for entry by new banking compet- made not later than three months after the effective itors.7 date of this Order, unless such period is extended for In light of the above considerations, and based on all good cause by the Board or by the Federal Reserve the facts of record, the Board has determined that Bank of Richmond, pursuant to delegated authority. consummation of this proposal is not likely to result in By order of the Board of Governors, effective any other significantly adverse effects, such as undue October 15, 1990. concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking Voting for this action: Chairman Greenspan and Governors practices. The financial and managerial resources and Seger, La Ware and Mullins. Absent and not voting: Governors Angell and Kelley. future prospects of SCNC, its bank subsidiary, and Atlantic are consistent with approval. Upon consum- JENNIFER J. JOHNSON mation of this proposal, SCNC, its bank subsidiary, Associate Secretary of the Board and Atlantic would meet applicable capital requirements. Accordingly, based on consideration of all the Orders Issued Under Sections 3 and 4 of the Bank Holding Company Act merger that increases the HHI by more than 50 points unless other STICHTING PRIORITEIT ABN AMRO factors indicate that the merger will not substantially lessen competi- HOLDING tion. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence Amsterdam, The Netherlands of other factors indicating anticompetitive effects) unless the postmerger HHI market is at least 1800 and the merger increases the HHI by at least 200 points. The Justice Department has stated that the Stichting Administratiekantoor ABN AMRO higher than normal HHI thresholds for screening bank mergers for HOLDING anticompetitive effects implicitly recognizes the competitive effect of Amsterdam, The Netherlands limited-purpose lenders and other non-depository financial entities. 5. Nationwide, thrift institutions hold, on average, 4.5 percent of their assets in consumer loans and 2.8 percent in commercial loans. ABN AMRO Holding N.V. On average, consumer loans represent 8.4 percent of the assets of the thrifts remaining in this market, and commercial and industrial loans Amsterdam, The Netherlands represent 6.9 percent of assets in these thrifts. 6. If 100 percent of thrift deposits are included in the calculation of market concentration, SCNC would control 28 percent of the market Order Approving Acquisition of Two Bank Holding deposits upon consummation. The HHI would increase by 302 points Companies from 1421 to 1723. The Board previously has indicated that it may be appropriate in light of market factors in a specific market to include thrift deposits at a level greater than 50 percent when analyzing the STICHTING PRIORITEIT ABN AMRO HOLDING, competitive effects of a proposal. See, e.g., Fleet Financial Group, Stichting Administratiekantoor ABN AMRO HOLD- Inc., 74 Federal Reserve Bulletin 62, 64 (1988); Hartford National Corporation, 73 Federal Reserve Bulletin 720, 721 (1987). ING, and their subsidiary, ABN AMRO Holding N.V. 7. The Beaufort County market consists of Beaufort County and is (collectively, "ABN Holdings"), all of Amsterdam, an area in which population growth, per capita personal income, The Netherlands, foreign banking organizations subdeposits per banking oflice, and the rate of deposit growth exceed the comparable averages of similar South Carolina banking markets. ject to the Bank Holding Company Act ("BHC Act"), Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1062 Federal Reserve Bulletin • December 1990 have applied for the Board's approval under section ically authorized by the statute laws of the State in 3(a)(1) of the BHC Act (12 U.S.C. § 1842(a)(1)) to which bank is located, by language to that effect and become bank holding companies by acquiring 100 not merely by implication."3 For purposes of the percent of the voting shares of Algemene Bank Ned- Douglas Amendment, ABN Holdings's principal state erland N.V. ("Algemene") and Amsterdam Rotter- of operation will be Illinois, where all of Algemene's dam Bank N.V. ("Amro"), both of Amsterdam, The subsidiary banks are located.4 Amro is a bank holding Netherlands, both of which are bank holding compa- company located in New York. nies with respect to U.S. banks. New York interstate banking law expressly provides ABN Holdings has also applied for the Board's that out-of-state bank holding companies may acquire approval under section 4(c)(8) of the BHC Act banks located in New York upon the prior approval of (12 U.S.C. § 1843(c)(8)) to acquire certain nonbanking the New York superintendent of banks.5 The New subsidiaries of Algemene and Amro.1 ABN Holdings York superintendent of banks has reviewed this prohas also provided notice of its intention to acquire posal and determined to approve it. In granting apindirectly EAB Finance N.V., Amsterdam, The Neth- proval of an interstate acquisition of a New York erlands, under section 4(c)(13) of the BHC Act bank, the superintendent is generally required to find (12 U.S.C. § 1843(c)(13)). In addition, ABN Holdings that the laws of the state where the out-of-state holding has applied to acquire ABN Bank International USA company is located permit the acquisition of banks in Inc., Chicago, Illinois, a corporation chartered pursu- that state by New York bank holding companies on a ant to section 25(a) of the Federal Reserve Act (the reciprocal basis.6 Illinois will permit interstate acqui- "Edge Act") (12 U.S.C. §§ 611-613). sitions on a nationwide basis effective December 1, Notice of the applications, affording interested per- 1990.7 sons an opportunity to submit comments, has been While the Illinois nationwide reciprocal banking duly published (55 Federal Register 25,882 (1990)). statute is not yet effective, the New York state bank- The time for filing comments has expired, and the ing code provides that the New York banking board Board has considered the applications and all com- may waive or vary any requirement of New York ments received in light of the factors set forth in banking law if the board finds that such variation is section 3(c) of the BHC Act, the considerations spec- "necessary because of the existence of unusual and ified in section 4(c) of the BHC Act, and the purposes extraordinary circumstances."8 In this case, the New of the Edge Act. York banking board has determined to waive the Algemene and Amro, both large Dutch banks, have reciprocity finding that the superintendent ordinarily entered into an agreement to form ABN Holdings to must make to approve the transaction. In determining acquire both of these banks. The agreement has been to waive this finding, the New York banking board approved by the Central Bank of The Netherlands. An considered the predominately foreign nature of the application is required under the BHC Act because proposed transaction; the fact that Illinois has enacted Algemene and Amro each own banks in the United a law providing for reciprocal banking acquisitions States. Algemene owns ten banks in Illinois and Amro with New York that will become effective in Decemowns one bank in New York.2 ber of this year; and the potential adverse effects on Section 3(d) of the BHC Act, the Douglas Amend- Algemene and Amro of delaying until December conment, prohibits the Board from approving an applica- summation of the proposed transaction. tion by a bank holding company to acquire control of Because the statute laws of New York authorize the any bank located outside of the bank holding com- interstate acquisition of New York banks in any case pany's home state, unless such acquisition is "specif- in which the New York superintendent's approval has been given and the New York superintendent has given that approval in this case after the New York 1. A list of the nonbanking subsidiaries that ABN Holdings has proposed to acquire pursuant to section 4(c)(8) of the BHC Act is set forth in the Appendix. 2. Upon consummation of the proposed transaction, Applicants will 3. 12 U.S.C. § 1842(d). acquire the following bank holding companies and bank subsidiaries of 4. A bank holding company's principal state of operation for Amroon, Chicago, Illinois, and thereby indirectly acquire LaSalle purposes of the Douglas Amendment is that state in which the Bank Lake View, Chicago, Illinois; LaSalle Bank of Lisle, Lisle, operations of the bank holding company's banking subsidiaries were Illinois; LaSalle National Bank, Chicago, Illinois; LaSalle Bank principally conducted (based on deposits) on July 1, 1966, or the date Northbrook, Northbrook, Illinois; LaSalle Northwest National Bank, on which the company became a bank holding company, whichever is Chicago, Illinois; LaSalle Bank Westmont, Westmont, Illinois; and later. Exchange Bancorp, Inc., Chicago, Ilange Bank of DuPage, Oak 5. N.Y. Banking Law, § 142-b.l. (McKinney 1990). Brook, Illinois; Exchange Bank of River Oaks, Calumet City, Illinois; 6. Id. Exchange Bank of Lake County, Vernon Hills, Illinois; and European 1. 111. Rev. Stat. ch. 17, para. 2510.01 (Smith-Hurd Supp. 1989), American Bancorp, New York, New York, and thereby indirectly effective December 1, 1990. acquire European American Bank, New York, New York. 8. N.Y. Banking Law § 14.1.(p) (McKinney 1990). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1063 banking board lawfully waived the requirement that The subsidiary banks of Algemene and Amro do not the New York superintendent make a finding regarding currently compete directly in any state or in any the reciprocity of the Illinois statute, the Board con- banking market. The New York branch of Algemene, cludes that the proposed transaction is "specifically however, currently competes in the Metropolitan New authorized" under New York law. Accordingly, the York-New Jersey banking market11 with Amro's sub- Board's approval of this proposal is not barred by the sidiary bank holding company, European American Douglas Amendment. Bancorp, Uniondale, New York ("EAB"), and its Algemene, with consolidated assets equivalent to subsidiary bank, European American Bank, as well as approximately $90.7 billion, is the 47th largest banking Amro's New York branch. organization in the world and the third largest banking Algemene's New York branch controls less than organization in The Netherlands.9 In the United one percent of the total deposits in commercial bank- States, Algemene maintains, in addition to its ten ing organizations in the Metropolitan New York-New subsidiary banks, branches in Chicago, New York and Jersey banking market. Amro's New York branch Pittsburgh; limited branches in Boston and Seattle; controls less than one percent of the total deposits in agencies in Atlanta, Houston, Miami, Los Angeles and commercial banking organizations in the market, and San Francisco; and an Edge corporation, ABN Bank EAB controls less than two percent of the total depos- International USA Inc., Chicago, Illinois, with a its in commercial banking organizations in the market. branch in Houston. Upon consummation of the proposed transaction, Amro, with consolidated assets equivalent to ap- ABN Holdings would control less than four percent of proximately $94.1 billion, is the 48th largest banking the total deposits in commercial banking organizations organization in the world and the second largest bank- in the market and the market would remain unconcening organization in The Netherlands. In the United trated. On the basis of the facts of record, the Board States, Amro maintains, in addition to European concludes that consummation of this proposal would American Bank, Uniondale, New York, a branch in not have a significantly adverse effect on competition New York, and representative offices in Chicago, in the Metropolitan New York-New Jersey banking Houston, and Los Angeles. ABN Holdings will con- market. form the deposit-taking activities of Amro's New York Section 3(c) of the BHC Act requires in every case branch to those of an Edge corporation under section that the Board consider the financial resources of the 25(a) of the Federal Reserve Act (12 U.S.C. § 611 applicant organization. In this case, the Board notes et seq.).xo that the primary capital of ABN Holdings, after making certain adjustments to reflect differences in accounting practice, would be approximately at the minimum capital level for U.S. multinational bank 9. Banking data are as of December 31, 1989. Worldwide ranking is as of December 31, 1988. holding companies set forth in the Board's Capital 10. ABN Holdings has indicated that it intends to designate Illinois Adequacy Guidelines. The Board has also considered as its home state for purposes of the International Banking Act ("IBA") (12 U.S.C. § 3101 etseq.). Illinois is currently the home state that the pro forma risk-based capital ratios of ABN of Algemene. Section 5 of the IBA generally provides that no foreign Holdings exceed the 1992 minimum standards adopted bank may establish a state branch outside of its home state unless the by the Basle Committee. In addition, this proposal establishment of such branch is specifically authorized by state law and the foreign bank agrees to limit the deposit-taking activities of represents a consolidation of two foreign banking such branch to those permissible for an Edge corporation. Foreign organizations and does not result in the expansion of banks may also retain branches established before July 27, 1978. The Board has previously determined that in an acquisition or banking or nonbanking activities in the United States. merger of foreign banking organizations, only the surviving organiza- In view of these and other facts of record, the Board tion may retain its out-of-home state branches as full-service has determined that financial factors are consistent branches. Lloyds Bank Pic, 72 Federal Reserve Bulletin 841 (1986); The Mitsui Bank, Limited, 76 Federal Reserve Bulletin 381 (1990). In with approval of the applications. fact, the proposed transaction has the same effect in the United States The managerial resources and future prospects of as a merger in which Algemene is the surviving company since ABN Holdings are consistent with approval. The Algemene has a larger presence in the United States than Amro in terms of controlled U.S. deposits, and ABN Holdings has indicated that it will for purposes of the IBA retain Illinois, Algemene's current home state, as ABN Holdings's home state following consummation Amro's New York branch to those of an Edge corporation, consistent of the proposed transaction. ABN Holdings has also represented that with previous Board decisions. Algemene and Amro will merge sometime in the near future. ABN 11. The Metropolitan New York-New Jersey banking market in- Holdings's retention of Algemene's grandfathered branches will not cludes New York City; Nassau, Orange, Putnam, Rockland, Suffolk, increase the number of foreign banks possessing grandfather rights Sullivan, and Westchester Counties in New York; Bergen, Essex, nor will it increase the number of Algemene's grandfathered branches. Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Accordingly, the Board has determined that ABN Holdings may Somerset, Sussex, Union, and Warren Counties in New Jersey; and succeed to Algemene's grandfathered branches. Since Amro's branch parts of Fairfield County in Connecticut. Under the revised Departis located outside of ABN Holdings's home state, ABN Holdings has ment of Justice Merger Guidelines, 49 Federal Register 26,823 (1984), agreed to conform within six months the deposit-taking activities of this market is considered unconcentrated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1064 Federal Reserve Bulletin • December 1990 Board has also determined that considerations relating subject to all of the conditions contained in the to the convenience and needs of the community to be Board's Regulation Y, including those in sections served are consistent with approval. 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and ABN Holdings has also applied, pursuant to sec- 225.23(b)(3)), and to the Board's authority to require tion 4(c)(8) of the BHC Act, to acquire certain such modification or termination of the activities of a nonbanking subsidiaries of Algemene and Amro. The holding company or any of its subsidiaries as the Board has determined by regulation or order that Board finds necessary to assure compliance with, or each of these activities is permissible for bank hold- prevent evasions of, the provisions and purposes of ing companies under section 4(c)(8) of the BHC Act, the BHC Act and the Board's regulations and orders and ABN Holdings proposes to conduct these activ- issued thereunder. ities in accordance with the Board's regulations and By order of the Board of Governors, effective orders. The nonbanking activities in which both July 23, 1990. Algemene and Amro compete are conducted in geographic markets that are regional or national in Voting for this action: Chairman Greenspan and Governors scope. These markets are served by numerous com- Seger, Angell, Kelley, La Ware, and Mullins. Absent and not voting: Governor Johnson. petitors, and neither Algemene nor Amro has a significant market share. Accordingly, the Board JENNIFER J. JOHNSON concludes that consummation of this proposal would Associate Secretary of the Board not have any significantly adverse effect on competition in the provision of these services in any relevant market. Furthermore, there is no evidence in Appendix the record to indicate that consummation of this proposal will result in undue concentration of resources, decreased or unfair competition, conflicts of Nonbanking Subsidiaries To Be Acquired interests, unsound banking practices, or any other significantly adverse effects. Accordingly, the Board Pierson Capital Management Inc., Philadelphia, Pennhas determined that the balance of public interest sylvania, which engages in investment advisory and factors it must consider under section 4(c)(8) of the discretionary portfolio management activities for high BHC Act is favorable and consistent with approval of net worth individuals, pension funds, trusts and other ABN Holdings's application to acquire the nonbank- institutional clients; The Private Bank & Trust, N.A., ing subsidiaries of Algemene and Amro. Miami, Florida, which engages in trust and investment The financial and managerial resources of ABN advisory services and discretionary management of Holdings are consistent with approval of its indirect financial assets primarily for wealthy individuals living acquisition of ABN Bank International USA Inc. The outside the United States; Amsterdam Pacific Corpoacquisition would result in the continuation of the ration, San Francisco, California, which engages in international services currently provided, and would portfolio investment advisory services for investment be in the public interest. Accordingly, the Board finds partnerships, feasibility studies for corporations, and that the continued operation of ABN Bank Interna- valuation services; Amro Securities, Inc., New York, tional USA Inc. upon acquisition by ABN Holdings is New York, which engages in underwriting and dealing consistent with the purposes of the Edge Act. in bank eligible securities and to a limited extent in Based on the foregoing and other facts of record, the bank ineligible securities, private placement and risk- Board has determined that consummation of the pro- less principal activities, full-service brokerage activiposed transaction would be consistent with the public ties, and various investment advisory related activiinterest. Accordingly, the Board has determined that ties; Pierson Heldring & Pierson Investment Finance the applications under sections 3 and 4 of the BHC Act (U.S.) Inc., New York, New York, which engages in and under the Edge Act should be, and hereby are, private placement and riskless principal activities, approved. The bank acquisitions shall not be consum- full-service brokerage activities, and various investmated before the thirtieth calendar day following the ment advisory related activities; DBI Holding, Inc., effective date of this Order, and the proposed bank and New York, New York, which engages in full-service nonbank acquisitions shall not be consummated later brokerage activities and riskless principal activities; than three months after the effective date of this Henry Krieger/DBI, L.P., New York, New York, Order, unless such period is extended for good cause which engages in full-service brokerage activities and by the Board or by the Federal Reserve Bank of riskless principal activities; Exchange Securities Chicago, acting pursuant to delegated authority. The Corp., Hallandale, Florida, which engages in providdeterminations as to the nonbanking activities are ing a secondary market for certificates of deposits Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1065 issued by the subsidiary banks of Exchange Bancorp, providing lease financing; ABN Credit Corporation, Inc., underwriting and dealing in government obliga- Chicago, Illinois, which engages in providing financtions and money market instruments, and brokerage ing; LaSalle National Trust Company, N.A., Chicago, activities; LaSalle National Services Co., Inc., Chi- Illinois, which engages in fiduciary services. The cago, Illinois, which engages in providing data pro- Board has determined that these activities are closely cessing and courier services; LaSalle National Mort- related to banking and permissible for bank holding gage Co., Inc., Chicago, Illinois, which engages in companies. 12 C.F.R. § 225.25(b)(1), (3), (4), (5), (7), mortgage banking; ABN Capital Markets Corp., New (10), (15), (16) and the Board's Orders dated October York, New York, which engages in providing invest- 1, 1984; May 23, 1986; July 30, 1987; May 10, 1988; ment advisory, brokerage services and underwriting November 30, 1989; and June 4, 1990. and dealing in government obligations; Lease Plan & Holding U.S.A., Atlanta, Georgia, which engages in This Order corrects an Order issued on July 23, 1990. ORDERS ISSUED UNDER THE FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT ("FIRREA ORDERS") Recent orders have been issued by the Staff Director of the Division of Banking Supervision and Regulation and the General Counsel 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. Acquired Surviving Approval Bank Holding Company Thrift Bank(s) Date Bank Shares Incorporated, Midwest Savings Association, Marquette Bank October 5, 1990 Minneapolis, Minnesota F.A., Minneapolis, Minneapolis, Minnesota N.A., (Apache Plaza and Minneapolis, Knollwood Branches) Minnesota First Citizens BancShares, Heritage Federal Savings and First Citizens Bank October 3, 1990 Inc., Loan Association, & Trust Raleigh, North Carolina Monroe, North Carolina Company, Raleigh, North Carolina Jacob Schmidt Company, Midwest Savings Association, American National October 5, 1990 St. Paul, Minnesota F.A., Bank and Trust American Bancorporation, Minneapolis, Minnesota Company, Inc., (Midway and Maplewood St. Paul, St. Paul, Minnesota Branches) Minnesota Jacob Schmidt Company, Midwest Savings Association, Commercial State October 5, 1990 St. Paul, Minnesota F.A., Bank, American Bancorporation, Minneapolis, Minnesota St. Paul, Inc., (Cedar Street Branch) Minnesota St. Paul, Minnesota The Lauritzen Corporation, FirsTier Savings Bank, Farmers and October 5, 1990 Omaha, Nebraska F.S.B., Merchants State Omaha, Nebraska Bank, (Hartington Branch) Bloomfield, Nebraska Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1066 Federal Reserve Bulletin • December 1990 FIRREA Orders—Continued Acquired Surviving Approval Bank Holding Company Thrift Bank(s) Date SunTrust Banks, Inc., Anchor Savings Bank F.S.B., Trust Company October 22, 1990 Atlanta, Georgia Hewlett, New York Bank, Trust Company of Georgia, (Fulton, DeKalb, and Atlanta, Georgia Atlanta, Georgia Douglas County, Georgia Branches)(13 branches) SunTrust Banks, Inc., Anchor Savings Bank F.S.B., Trust Company October 22, 1990 Atlanta, Georgia Hewlett, New York (Cobb Bank of Cobb Trust Company of Georgia, County, Georgia County, N.A., Atlanta, Georgia Branches)(3 branches) Atlanta, Georgia SunTrust Banks, Inc., Anchor Savings Bank F.S.B., Trust Company October 22, 1990 Atlanta, Georgia Hewlett, New York Bank of Trust Company of Georgia, (Gwinnett County, Georgia Gwinnett Atlanta, Georgia Branch) County, Lawrenceville, Georgia SunTrust Banks, Inc., Anchor Savings Bank F.S.B., Trust Company October 22, 1990 Atlanta, Georgia Hewlett, New York Bank of Trust Company of Georgia, (Chatham County, Georgia Savannah, N.A., Atlanta, Georgia Branch) Savannah, Georgia APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Bank(s) ^date^ Boyle Bancorp, Inc., Citizens Bank and Trust Company, October 26, 1990 Danville, Kentucky Burgin, Kentucky FirsTier Financial, Inc., Guaranty Corporation, October 9, 1990 Omaha, Nebraska Denver, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1067 Section 4 Effective Applicant(s) Bank(s) date C&S/Sovran Corporation (formerly Southeast Switch, Inc., October 22, 1990 Avantor Financial Corporation), Maitland, Florida Atlanta, Georgia Bank South Corporation, Atlanta, Georgia Barnett Banks, Inc., Jacksonville, Florida The Citizens and Southern Corporation, Atlanta, Georgia First Florida Banks, Inc., Tampa, Florida Southeast Banking Corporation, Miami, Florida SunTrust Banks, Inc., Atlanta, Georgia Synovus Financial Corporation, Columbus, Georgia TB&C Bancshares, Inc., Columbus, Georgia BB&T Financial Corporation, Wilson, North Carolina First Union Corporation, Charlotte, North Carolina First Wachovia Corporation, Winston-Salem, North Carolina NCNB Corporation, Charlotte, North Carolina South Carolina National Corporation, Columbia, South Carolina Southern National Corporation, Lumberton, North Carolina Sovran Financial Corporation, Norfolk, Virginia KeyCorp, American Pioneer Federal Savings October 11, 1990 Albany, New York Bank, Key Bancshares of New York, Inc., Orlando, Florida Albany, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1068 Federal Reserve Bulletin • December 1990 Section 4—Continued Effective Applicant(s) Bank(s) date SunTrust Banks, Inc., SunTrust/Atlanta Interim Savings October 22, 1990 Atlanta, Georgia Bank, Atlanta, Georgia SunTrust/Cobb Interim Savings Bank, Atlanta, Georgia SunTrust/Gwinnett Interim Savings Bank, Lawrenceville, Georgia SunTrust/Savannah Interim Savings Bank, Savannah, Georgia APPLICATIONS APPROVED UNDER BANK MERGER ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Applicant(s) Bank(s) ^ctete^ Trust Company Bank, SunTrust/Atlanta Interim Savings October 22, 1990 Atlanta, Georgia Bank, Atlanta, Georgia APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant(s) Bank(s) Bank date 7L Corporation, First Florida Banks, Inc., Atlanta September 28, 1990 Tampa, Florida Tampa, Florida Alpine Banks of Colorado, Alpine Bank, Clifton, Kansas City October 23, 1990 Glen wood Springs, Colorado Clifton, Colorado Blue Ridge Bancshares, Inc., Blue Ridge Bank and Trust Kansas City October 17, 1990 Kansas City, Missouri Company, Kansas City, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1069 Section 3—Continued Reserve Effective AApppplliiccaanntt((ss)) BBaannkk((ss)) Bank date Bruning Bancshares, Inc., Bruning State Bank, Kansas City October 4, 1990 Bruning, Nebraska Bruning, Nebraska First Bancorp of Kansas, Valley Center Bancshares, Inc., Kansas City October 16, 1990 Wichita, Kansas Valley Center, Kansas First Blanchester Bancshares, The First National Bank of Cleveland October 1, 1990 Inc., Blanchester, Blanchester, Ohio Blanchester, Ohio First Citizens Financial Corp., Osage Bank Services, Inc., Chicago September 28, 1990 Charles City, Iowa Osage, Iowa First Dakota Financial Security State Bank, Minneapolis October 16, 1990 Corporation, Beulah, North Dakota Bismarck, North Dakota First Farmers Financial Corp., Union State Bank, Chicago October 24, 1990 Converse, Indiana Windfall, Indiana First Financial Corporation, First Citizens of Paris, Inc., Chicago October 25, 1990 Terre Haute, Indiana Paris, Illinois Garwin Bancorporation, Farmers State Bank, Chicago October 16, 1990 Garwin, Iowa Garwin, Iowa High Plains Bancshares, Inc., Muleshoe State Bank, Dallas October 24, 1990 Muleshoe, Texas Muleshoe, Texas Landmark/Community Bancorp, SBT Corp., Boston September 26, 1990 Inc., Old Saybrook, Connecticut Hartford, Connecticut Marshall & Ilsley Corporation, Rosendale Bancshares, Inc., Chicago October 24, 1990 Milwaukee, Wisconsin Rosendale, Wisconsin Monmouth Financial Services, Texas Financial Bancorporation, Chicago September 28, 1990 Inc., Inc., Minneapolis, Minnesota Minneapolis, Minnesota National City Bancshares, Inc., Farmers Bancorp of Sturgis, St. Louis September 28, 1990 Evansville, Indiana Inc., Sturgis, Kentucky New East Bancorp, New East Bank of New Bern, Richmond October 10, 1990 Raleigh, North Carolina New Bern, North Carolina Northern Trust Corporation, Heritage Merger Company, Chicago September 28, 1990 Chicago, Illinois Chicago, Illinois Fiduciary Services, Inc., Houston, Texas Oklahoma Bancorporation, Inc., Custer County State Bank, Kansas City September 28, 1990 Clinton, Oklahoma Arapaho, Oklahoma Lowry Facilities, Inc., Clinton, Oklahoma Old National Bancorp, Farmers Bank & Trust Company, St. Louis September 28, 1990 Evansville, Indiana Henderson, Kentucky PBC Bancshares, Inc., Pelham Banking Company, Atlanta October 3, 1990 Pelham, Georgia Pelham, Georgia Pocahontas Bankstock, Inc., Bank of Pocahontas, St. Louis September 25, 1990 Pocahontas, Arkansas Pocahontas, Arkansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1070 Federal Reserve Bulletin • December 1990 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank date PrivateBancorp, Inc., The PrivateBank and Trust Chicago September 28, 1990 Chicago, Illinois Company, Chicago, Illinois Rocky Mountain Bancorporation, Whitehall Bancorporation, Inc., Minneapolis October 12, 1990 Inc., Billings, Montana Billings, Montana The Harlem Corporation, Billings, Montana State First Financial Corporation, Atlanta National Bank, St. Louis October 19, 1990 Texarkana, Arkansas Atlanta, Texas Texas Financial Bancorporation, First Bancorp, Inc., Dallas September 28, 1990 Inc., Denton, Texas Minneapolis, Minnesota First State Bank of Denton, Denton, Texas West Point Bancorp, Inc., Farmers & Merchants State Kansas City September 28, 1990 West Point, Nebraska Bank, Wayne, Nebraska WNB Bancshares, Inc., Kermit Financial Corporation, Dallas October 10, 1990 Odessa, Texas Kermit, Texas First National Bank of Kermit, Kermit, Texas Section 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank date Bourbon Bancshares, Inc., Kentucky Bank, F.S.B., Cleveland October 12, 1990 Paris, Kentucky Georgetown, Kentucky Carlson Bancshares, Inc., Southern Life Insurance, St. Louis September 26, 1990 West Memphis, Arkansas Limited, West Memphis, Arkansas CS Holding, Winter Partners Inc., New York October 12, 1990 Zurich, Switzerland New York, New York Credit Suisse, Zurich, Switzerland First Financial Bancorp, The Fayette Federal Savings Cleveland October 17, 1990 Monroe, Ohio Bank, Connersville, Indiana First Western Bancorp, Inc., First Federal of Western Cleveland September 28, 1990 New Castle, Pennsylvania Pennsylvania, Sharon, Pennsylvania Norwest Corporation, Gilco Leasing, Inc., Minneapolis October 25, 1990 Minneapolis, Minnesota Omaha, Nebraska Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 1071 Section 4—Continued Nonbanking Reserve Effective Applicant(s) Activity/Company Bank date Tri-County Bancorp, engage in underwriting of credit Chicago October 23, 1990 Roachdale, Indiana life, health and accident The North Salem State insurance Bancorporation, North Salem, Indiana Bright Financial Services, Inc. Flora, Indiana Cloverdale Bank Corporation, Cloverdale, Indiana United Bank Corporation, First Federal Savings and Loan Atlanta September 26, 1990 Barnesville, Georgia Association of Griffin, Griffin, Georgia 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. » i • x/ \ r» i / >> Reserve Effective Applicant(s) Bank(s) ^ date Chemical Bank, The Greater New York Savings New York September 28, 1990 New York, New York Bank, New York, New York North Shore Bank of Commerce, Airport State Bank, Minneapolis October 11, 1990 Duluth, Minnesota Hermantown, Minnesota UniSouth Banking Corporation, Eastover Bank for Savings, St. Louis October 2, 1990 Columbus, Mississippi Jackson, Mississippi PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits tion, and the State of Delaware have moved to against the Federal Reserve Banks in which the Board intervene in the action. of Governors is not named a party. Stanley v. Board of Governors, No. 90-3183 (7th Circuit, filed October 3, 1990). Petition for review of Board order imposing civil money penalties on five Citicorp v. Board of Governors, No. 90-4124 (2d former bank holding company directors. Circuit, filed October 4,1990). Petition for review of Kuhns v. Board of Governors, No. 90-1398 (D.C. Board order requiring Citicorp to terminate certain Cir., filed July 30, 1990). Petition for review of insurance activities conducted pursuant to Delaware Board order denying request for attorney's fees law by an indirect nonbank subsidiary. Insurance pursuant to Equal Access to Justice Act. Oral argutrade associations, the Delaware Bankers Associa- ment is scheduled for February 15, 1991. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1072 Federal Reserve Bulletin • December 1990 Laufman v. State of California, et al., No. CIVS-89- Alabama to Georgia. Oral argument was held on 1755 EJM-EM (E.D. California, filed April 2, 1990). October 11, 1990. On October 15, the court ordered Action to require bank regulatory agencies to exam- the Office of the Comptroller of the Currency to ine or bring enforcement action against bank. Dis- submit a brief regarding an issue in the case. missed on July 25, 1990. MCorp v. Board of Governors, No. 89-2816 (5th Cir., May v. Board of Governors, No. 90-1316 (D.C. Cir., filed May 2, pending and future enforcement actions filed July 27, 1990). Appeal of District Court order against a bank holding company now in bankruptcy. dismissing plaintiffs action under Freedom of Infor- On May 15, 1990, the Fifth Circuit vacated the mation and Privacy Acts. Board's motion for sum- district court's order enjoining the Board from promary affirmance filed October 12, 1990. ceeding with enforcement actions based on section Burke v. Board of Governors, No. 90-9509 (10th 23A of the Federal Reserve Act, but upheld the Circuit, filed February 27, 1990). Petition for review district court's order enjoining such actions based of Board orders assessing civil money penalties and on the Board's source-of-strength doctrine. The issuing orders of prohibition. Board's petition for rehearing was denied on BancTEXAS Group, Inc. v. Board of Governors, No. August 5, 1990. On August 29, the Fifth Circuit CA 3-90-0236-R (N.D. Texas, filed February 2, denied the plaintiffs motion for a stay pending 1990). Suit for preliminary injunction enjoining the petition for certiorari. Board from enforcing a temporary order to cease Independent Insurance Agents of America v. Board of and desist requiring injection of capital into plain- Governors, No. 89-4030 (2d Cir., filed March 9, tiffs subsidiary banks under the Board's source of 1989). Petition for review of Board order ruling that strength doctrine. District court granted preliminary the non-banking restrictions of section 4 of the Bank injunction on June 5, 1990, in light of 5th Circuit's Holding Company Act apply only to non-bank subdecision in MCorp v. Board of Governors. sidiaries of bank holding companies. The Board's Rutledge v. Board of Governors, No. 90-7599 (11th order was upheld on November 29, 1989. Petition Cir., filed August 21, 1990). Appeal of district court for certiorari was denied on October 1, 1990. grant of summary judgment for defendants in tort MCorp v. Board of Governors, No. CA3-88-2693 suit challenging Board and Reserve Bank supervi- (N.D. Tex., filed October 10, 1988). Application for sory actions. injuction to set aside temporary cease and desist Kaimowitz v. Board of Governors, No. 90-3067 (11th orders. Stayed pending outcome of MCorp v. Board Cir., filed January 23, 1990). Petition for review of of Governors in Fifth Circuit. Board order dated December 22, 1989, approving White v. Board of Governors, No. CU-S-88-623-RDF application by First Union Corporation to acquire (D. Nev., filed July 29, 1988). Age discrimination Florida National Banks. Petitioner objects to ap- complaint. Board's motion to dismiss or for sumproval on Community Reinvestment Act grounds. mary judgment pending. Babcock and Brown Holdings, Inc. v. Board of Governors, No. 89-70518 (9th Cir., filed November 22, 1989). Petition for review of Board determination that a company would control a proposed insured FINAL ENFORCEMENT ORDERS ISSUED BY THE bank for purposes of the Bank Holding Company BOARD OF GOVERNORS Act. Awaiting scheduling of oral argument. Consumers Union of U.S., Inc. v. Board of Gover- C.M. Newton, Jr. and C.M. Newton, III nors, No. 90-5186 (D.C. Cir., filed June 29, 1990). Officers and Directors of Appeal of District Court decision upholding amend- First Bank and Trust Company ments to Regulation Z implementing the Home Dawson, Texas Equity Loan Consumer Protection Act. Oral argument scheduled for February 20, 1991. The Federal Reserve Board announced on October 26, Synovus Financial Corp. v. Board of Governors, No. 1990, the issuance of Orders of Assessment of Civil 89-1394 (D.C. Cir., filed June 21, 1989). Petition for Money Penalty against C.M. Newton, Jr. and C.M. review of Board order permitting relocation of a bank Newton, III, officers and directors of the First Bank holding company's national bank subsidiary from and Trust Company, Dawson, Texas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1 Financial and Business Statistics NOTE. The following tables may have some 3.11, 3.15-3.20, 3.22-3.25, 3.27, 3.28, and 4.30. discontinuities in historical data for some series For a more detailed explanation of the changes, beginning with the December 1989 issue: 1.12, see the announcement on page 16 of the January 1.33, 1.44, 1.52, 1.57-1.60, 2.10, 2.12, 2.13, 3.10, 1990 BULLETIN. CONTENTS COMMERCIAL BANKING INSTITUTIONS ALL Major nondeposit funds Domestic Financial Statistics A18 Assets and liabilities, last-Wednesday-of-month series WEEKLY REPORTING COMMERCIAL BANKS MONEY STOCK AND BANK CREDIT Assets and liabilities A3 Reserves, money stock, liquid assets, and debt A19 All reporting banks measures A20 Banks in New York City A4 Reserves of depository institutions, Reserve A21 Branches and agencies of foreign banks Bank credit A22 Gross demand deposits—individuals, A5 Reserves and borrowings—Depository partnerships, and corporations institutions A6 Selected borrowings in immediately available funds—Large member banks FINANCIAL MARKETS A23 Commercial paper and bankers dollar acceptances outstanding POLICY INSTRUMENTS 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 and liabilities FEDERAL RESERVE BANKS FEDERAL FINANCE A10 Condition and Federal Reserve note statements All Maturity distribution of loan and security A28 Federal fiscal and financing operations holdings A29 U.S. budget receipts and outlays A30 Federal debt subject to statutory limitation A30 Gross public debt of U.S. Treasury—Types and ownership MONETARY AND CREDIT AGGREGATES A31 U.S. government securities A12 Aggregate reserves of depository institutions dealers—Transactions and monetary base A32 U.S. government securities dealers—Positions A13 Money stock, liquid assets, and debt measures and financing A15 Bank debits and deposit turnover A3 3 Federal and federally sponsored credit A16 Loans and securities—All commercial banks agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • December 1990 SECURITIES MARKETS AND International Statistics CORPORATE FINANCE A34 New security issues—State and local SUMMARY STATISTICS governments and corporations A55 U.S. international transactions—Summary A35 Open-end investment companies—Net sales A56 U.S. foreign trade and asset position A56 U.S. reserve assets A35 Corporate profits and their distribution A56 Foreign official assets held at Federal Reserve A35 Total nonfarm business expenditures on new Banks plant and equipment A57 Foreign branches of U.S. banks—Balance A36 Domestic finance companies—Assets and sheet data liabilities and business credit A59 Selected U.S. liabilities to foreign official institutions REPORTED BY BANKS REAL ESTATE IN THE UNITED STATES A37 Mortgage markets A59 Liabilities to and claims on foreigners A38 Mortgage debt outstanding A60 Liabilities to foreigners A62 Banks' own claims on foreigners A63 Banks' own and domestic customers' claims on foreigners CONSUMER INSTALLMENT CREDIT A63 Banks' own claims on unaffiliated foreigners A64 Claims on foreign countries—Combined A39 Total outstanding and net change domestic offices and foreign branches 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 SECURITIES HOLDINGS AND TRANSACTIONS A44 Summary of credit market debt outstanding A67 Foreign transactions in securities A45 Summary of credit market claims, by holder A68 Marketable U.S. Treasury bonds and notes—Foreign transactions Domestic Nonfinancial Statistics INTEREST AND EXCHANGE RATES A69 Discount rates of foreign central banks A69 Foreign short-term interest rates A70 Foreign exchange rates SELECTED MEASURES A71 Guide to Tabular Presentation, A46 Nonfinancial business activity—Selected Statistical Releases, and Special measures Tables A47 Labor force, employment, and unemployment A48 Output, capacity, and capacity utilization SPECIAL TABLES A49 Industrial production—Indexes and gross value A51 Housing and construction All Terms of lending at commercial banks, A52 Consumer and producer prices May 31, 1990, and August 31, 1990 A53 Gross national product and income A82 Assets and liabilities of U.S. branches and A54 Personal income and saving agencies of foreign banks, June 30, 1990 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 1989 1990 1990 MMoonneettaarryy aanndd ccrreeddiitt aaggggrreeggaatteess Q4 Ql Q2 Q3 May June July Aug.' Sept. Reserves of depository institutions2 1 Total 5.1 2.4 -1.4 -1.4 -9.8 -1.0 -8.2 8.6 6.7 2 Required 5.0 2.5 -.9 -1.5 -11.3 2.8 -10.1 8.6 5.9 3 Nonborrowed 7.2 -3.9 -1.0 2.0 -4.1 8.3 -5.8 5.2 12.9 4 Monetary base3 4.0 8.5 7.0 8.8 3.5 7.6 6.4 13.1 14.6 Concepts of money, liquid assets, and debt4 5 Ml 5.1 4.8 3.5 4.3 -2.8 6.0 -.3 10.4 9.7 6 M2 7.1 6.4 2.8' 3.1 -2.3r 2.8' 2.C 6.6 5.7 7 8 M L 3 2 3. . 1 0 2i..9r' . ,8 8 r n.a 1 . . 5 --21..31' ' 4 1 . . 8 2 ' ' 2 1 . . 8 2 ' ' 4 3 . . 5 1 n.a. . 9 9 Debt 7.3 6.1 6.8r 7.1 5.2' 6.6' 7.3' 8.7 n.a. Nontrgnsaction components 10 InM2y 7.7 6.9 2.6 2.7 -2.2' 1.8' 2.7' 5.3 4.5 11 In M3 only6 -16.6 -10.3' -7.3' -5.1 -2.3' -5.3' -2.0' -4.1 -19.2 Time and savings deposits Commercial banks 12 Savings 7.2 9.5 5.1 4.0 -1.9 9.3 4.3' .6 4.9 13 MMDAs 12.3 9.1 10.6 9.4 9.9 9.5 8.8 12.0 4.5 1 1 4 5 S L m ar a g l e l- d d e e n n o o m m i i n n a a t t i i o o n n t t i i m m e e ' ,9 1 2 1 . . 7 3 -1 7 . . 1 8 -1i2..r0 1 - 5 .8 .5 2 5 0 . . 8 6 ' ' 1 2 8 . . 4 7 ' 1 5 8 . . 4 9 ' -9 6 . . 9 8 -13 9 . . 9 5 Thrift institutions 16 Savings .2 1.3 .5 -2.4 -2.7 -3.8 -.5 -1.6 -6.5 17 MMDAs 4.7 5.7 2.6 -10.5 -16.7 -15.1 -12.6 -5.5 .9 18 Small-denomination time -2.5 -3.3 -8.0 -13.3 -16.0 -20.9 -15.7 -3.9 -7.5 19 Large-denomination time8 -28.6 -24.7 -30.3' -31.6 -40.3 -29.5' -36.5 -28.4 -26.3 Money market mutual funds 20 General purpose and broker-dealer 29.1 19.8 -.7 12.8 -19.9 5.6 11.9 32.1 22.6 21 Institution-only 3.3 10.2 11.7 21.9 5.6 .0 17.9 56.2 22.1 Debt components4 22 Federal 10.2 6.8 9.5 14.1 7.2 14.3 13.6' 19.1 n.a. 23 Nonfederal 6.4 5.9 5.9 5.0 4.5 4.2' 5.4 5.5 n.a. 1. Unless otherwise noted, rates of change are calculated from average banking offices in the United Kingdom and Canada, and balances in both taxable amounts outstanding in preceding month or quarter. and tax-exempt, institution-only money market mutual funds. Excludes amounts 2. Figures incorporate adjustments for discontinuities associated with regula- held by depository institutions, the U.S. government, money market funds, and tory changes in reserve requirements. (See also table 1.20.) foreign banks and official institutions. Also subtracted is the estimated amount of 3. Seasonally adjusted, break-adjusted monetary base consists of (1) season- overnight RPs and Eurodollars held by institution-only money market mutual ally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally funds. adjusted currency component of the money stock, plus (3) (for all quarterly L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term reporters on the "Report of Transaction Accounts, Other Deposits and Vault Treasury securities, commercial paper and bankers acceptances, net of money Cash" and for all those weekly reporters whose vault cash exceeds their required market mutual fund holdings of these assets. reserves) the seasonally adjusted, break adjusted difference between current vault Debt: Debt of domestic nonfinancial sectors consists of outstanding credit cash and the amount applied to satisfy current reserve requirements. market debt of the U.S. government, state and local governments, and private 4. Composition of the money stock measures and debt is as follows: nonfinancial sectors. Private debt consists of corporate bonds, mortgages, con- Ml: (l) currency outside the Treasury, Federal Reserve Banks, and the vaults sumer credit (including bank loans), other bank loans, commercial paper, bankers of depository institutions', (2) travelers checks of nonbank issuers; (3) demand acceptances, and other debt instruments. Data are derived from the Federal deposits at all commercial banks other than those due to depository institutions, Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial the U.S. government, and foreign banks and official institutions, less cash items in sectors are monthly averages, derived by averaging adjacent month-end levels. the process of collection and Federal Reserve float; and (4) other checkable Growth rates for debt reflect adjustments for discontinuities over time in the levels deposits (OCD), consisting of negotiable order of withdrawal (NOW) and auto- of debt presented in other tables. matic transfer service (ATS) accounts at depository institutions, credit union 5. Sum of overnight RPs and Eurodollars, money market fund balances share draft accounts, and demand deposits at thrift institutions. (general purpose and broker-dealer), MMDAs, and savings and small time M2: Ml plus overnight (and continuing contract) repurchase agreements deposits. (RPs) issued by all depository institutions and overnight Eurodollars issued to 6. Sum of large time deposits, term RPs, term Eurodollars of U.S. residents, U.S. residents by foreign branches of U.S. banks worldwide, money market and money market fund balances (institution-only), less a consolidation adjustdeposit accounts (MMDAs), savings and small-denomination time deposits ment that represents the estimated amount of overnight RPs and Eurodollars held (time deposits—including retail RPs—in amounts of less than $100,000), and by institution-only money market mutual funds. balances in both taxable and tax-exempt general purpose and broker-dealer 7. Small-denomination time deposits—including retail RPs—are those issued money market mutual funds. Excludes individual retirement accounts (IRA) in amounts of less than $100,000. All IRA and Keogh accounts at commercial and Keogh balances at depository institutions and money market funds. Also banks and thrifts are subtracted from small time deposits. excludes all balances held by U.S. commercial banks, money market funds 8. Large-denomination time deposits are those issued in amounts of $100,000 (general purpose and broker-dealer), foreign governments and commercial or more, excluding those booked at international banking facilities. banks, and the U.S. government. 9. Large-denomination time deposits at commercial banks less those held by M3: M2 plus large-denomination time deposits and term RP liabilities (in money market mutual funds, depository institutions, and foreign banks and amounts of $100,000 or more) issued by all depository institutions, term Eurodol- officii institutions. lars held by U.S. residents at foreign branches of U.S. banks worldwide and at all Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics • December 1990 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 1990 1990 July Aug. Sept. Aug. 15 Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 279,684 280,961 285,966 280,153 281,890 280,338 284,951 287,432 287,090 283,761 U.S. government securities1' 2 2 Bought outright-system account 230,592 231,366 233,704 232,406 230,140 230,240 233,529 232,933 233,687 234,214 3 Held under repurchase agreements ... 1,055 2,139 2,797 423 4,416 2,706 3,090 4,443 3,427 1,015 Federal agency obligations 4 Bought outright 6,437 6,408 6,377 6,414 6,414 6,398 6,377 6,377 6,377 6,377 5 Held under repurchase agreements ... 387 551 930 238 714 894 1,095 1,236 1,394 318 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions2 7 Adjustment credit 96 318 240 160 1,148 55 347 29 552 73 8 Seasonal credit 275 433 419 425 438 445 415 398 422 440 9 Extended credit 389 134 5 70 6 10 5 4 5 9 10 Float 674 566 752 407 120 846 153 1,477 393 320 11 Other Federal Reserve assets 39,780 39,045 40,742 39,610 38,495 38,745 39,942 40,535 40,833 40,9% 12 Gold stock 11,065 11,064 11,064 11,064 11,064 11,064 11,065 11,064 11,064 11,063 13 Special drawing rights certificate account . 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 14 Treasury currency outstanding 20,093 20,145 20,198 20,139 20,150 20,160 20,171 20,185 20,199 20,213 ABSORBING RESERVE FUNDS 15 Currency in circulation 268,968 270,536 272,891 270,622 270,835 270,754 273,093 274,085 272,940 271,913 16 Treasury cash holdings 568 544 525 546 545 536 534 528 519 519 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,408 5,415 6,358 5,288 5,501 5,219 5,368 4,690 7,570 6,666 18 Foreign 243 265 258 242 355 239 280 252 247 208 19 Service-related balances and adjustments 2,022 1,873 2,017 1,968 2,132 1,955 1,953 2,026 1,911 2,203 20 Other 243 236 279 212 266 278 229 245 287 295 21 Other Federal Reserve liabilities and capital 9,176 9,219 9,905 9,044 8,990 9,027 10,339 10,544 9,594 9,310 22 Reserve balances with Federal Reserve Banks3 32,731 32,600 33,513 31,952 32,998 32,074 32,907 34,831 33,803 32,442 End-of-month figures Wednesday figures 1990 1990 July Aug. Sept. Aug. 15 Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 279,364 284,445 284,364 279,970 284,227 281,237 292,464 284,054 292,300 285,241 U.S. government securities1, 2 24 Bought outright-system account 232,313 233,498 234,373 230,477 230,092 230,314 233,338 231,517 234,030 233,855 25 Held under repurchase agreements ... 0 2,936 0 2,960 693 3,206 7,063 3,052 4,505 2,720 Federal agency obligations 26 Bought outright 6,414 6,377 6,377 6,414 6,414 6,377 6,377 6,377 6,377 6,377 27 Held under repurchase agreements ... 0 1,186 0 1,667 186 823 1,793 1,424 1,701 564 28 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 29 Adjustment credit 97 50 77 819 7,257 71 2,152 30 3,587 49 30 Seasonal credit 407 412 423 426 447 448 399 404 435 441 31 Extended credit 437 3 5 4 7 13 3 5 5 11 32 Float 643 -97 1,832 -857 747 1,199 941 560 794 87 33 Other Federal Reserve assets 39,053 40,081 41,277 38,060 38,384 38,787 40,398 40,686 40,867 41,138 34 Gold stock 11,065 11,065 11,063 11,064 11,064 11,065 11,065 11,064 11,065 11,063 35 Special drawing rights certificate account . 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 36 Treasury currency outstanding 20,118 20,171 20,227 20,139 20,150 20,160 20,171 20,185 20,199 20,213 ABSORBING RESERVE FUNDS 37 Currency in circulation 268,411 272,690 271,905 271,035 270,693 271,684 274,319 273,820 272,516 271,849 38 Treasury cash holdings 549 534 527 546 537 530 533 519 518 521 Deposits, other than reserve balances, with Federal Reserve Banks 39 Treasury 6,369 4,453 7,638 5,659 5,438 6,130 8,238 4,726 16,758 5,402 40 Foreign 279 337 360 246 217 246 228 201 180 198 41 Service-related balances and adjustments 2,000 1,953 1,942 1,968 2,132 1,955 1,953 2,026 1,911 2,204 42 Other 247 219 374 276 233 276 241 235 308 367 43 Other Federal Reserve liabilities and capital 9,723 10,504 9,606 8,710 8,657 8,759 10,479 9,424 9,241 9,127 44 Reserve balances with Federal Reserve Banks3 31,484 33,509 31,820 31,251 36,052 31,400 36,227 32,871 30,650 35,366 1. Includes securities loaned—fully guaranteed by U.S. government securities 3. Excludes required clearing balances and adjustments to compensate for pledged with Federal Reserve Banks—and excludes any securities sold and float. scheduled to be bought back under matched sale-purchase transactions. NOTE. For amounts of currency and coin held as reserves, see table 1.12. 2. Beginning with the May 1990 Bulletin, this table has been revised to Components may not add to totals because of rounding. correspond with the H.4.1 statistical release. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Monthly averages9 RReesseerrvvee ccllaassssiiffiiccaattiioonn 1987 1988 1989 1990 Dec. Dec. Dec. Mar. Apr. May June July Aug. Sept. 1 Reserve balances with Reserve Banks2 37,691 37,837 35,436 33,407 35,409 32,771 33,878 32,946 32,448' 33,301 2 Total vault cash3 26,675 28,204 29,812 29,581 29,281 29,812 29,632 30,457 30,843 30,622 3 Applied vault cash4 24,449 25,909 27,374 27,251 27,103 27,461 27,318 27,996 28,280 28,147 4 Surplus vault cash5 2,226 2,295 2,439 2,330 2,178 2,351 2,314 2,460 2,563 2,475 5 Total reserves6 62,141 63,746 62,810 60,658 62,512 60,232 61,197 60,943 60,728r 61,448 6 Required reserves 61,094 62,699 61,888 59,797 61,615 59,269 60,423 60,081 59,860 60,541 7 Excess reserve balances at Reserve Banks 1,046 1,047 922 861 897 962 774 862 868' 907 8 Total borrowings at Reserve Banks 777 1,716 265 2,124 1,628 1,335 881 757 927 624 9 Seasonal borrowings at Reserve Banks 93 130 84 78 122 244 311 389 430 418 10 Extended credit at Reserve Banks 483 1,244 20 1,950 1,403 875 346 280 127 6 Biweekly averages of daily figures for weeks ending 1990 May 30 June 13 June 27 July 11 July 25 Aug. 8 Aug. 22 Sept. 5r Sept. 19 Oct. 3 11 Reserve balances with Reserve Banks 31,269 34,385 33,390 33,958 32,390 32,389 32,463 32,477 34,316 32,385 12 Total vault cash3 30,852 28,986 30,097 30,264 30,549 30,597 31,379 30,229 30,291 31,222 13 Applied vault cash . 28,268 26,803 27,676 27,885 28,094 27,974 28,815 27,720 27,976 28,558 14 Surplus vault cash 2,584 2,184 2,421 2,380 2,455 2,623 2,565 2,509 2,315 2,664 15 Total reserves6 59,537 61,188 61,066 61,842 60,484 60,363 61,277 60,197 62,292 60,943 16 Required reserves 58,526 60,709 60,046 60,944 59,609 59,599 60,367 59,304 61,546 59,824 17 Excess reserve balances at Reserve Banks 1,011 479 1,020 898 875 764 910 893 746 1,119 18 Total borrowings at Reserve Banks 1,723 1,291 566 581 832 908 1,124 638 705 516 19 Seasonal borrowings at Reserve Banks 278 282 329 359 396 429 432 430 410 424 20 Extended credit at Reserve Banks 1,098 559 183 182 298 419 38 8 5 9 1. These data also appear in the Board's H.3 (502) release. For address, see in- satisfy current reserve requirements. side front cover. 5. Total vault cash (line 2) less applied vault cash (line 3). 2. Excludes required clearing balances and adjustments to compensate for float 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash and includes other off-balance sheet "as-of" adjustments. (line 3). 3. Total "lagged" vault cash held by those depository institutions currently 7. Total reserves (line 5) less required reserves (line 6). subject to reserve requirements. Dates refer to the maintenance periods in which 8. Extended credit consists of borrowing at the discount window under the the vault cash can be used to satisfy reserve requirements. Under contempora- terms and conditions established for the extended credit program to help neous reserve requirements, maintenance periods end 30 days after the lagged depository institutions deal with sustained liquidity pressures. Because there is computation periods in which the balances are held. not the same need to repay such borrowing promptly as there is with traditional 4. All vault cash held during the lagged computation period by "bound" short-term adjustment credit, the money market impact of extended credit is institutions (i.e., those whose required reserves exceed their vault cash) plus the similar to that of nonborrowed reserves. amount of vault cash applied during the maintenance period by "nonbound" 9. Data are prorated monthly averages of biweekly averages. institutions (i.e., those whose vault cash exceeds their required reserves) to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • December 1990 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Averages of daily figures, in millions of dollars 1990 week ending Monday2 MMaattuurriittyy aanndd ssoouurrccee July 16 July 23 July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 Sept. 3 Sept. 10 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 88,646 80,664 79,671 86,516 85,883 89,773 84,057 87,664 95,172 2 For all other maturities 19,161 21,137 19,311 19,270 19,567 19,298 19,697 19,572 17,839 From other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 3 For one day or under continuing contract 42,193 40,122 37,516 39,342 41,080 39,250 39,306 36,237 38,524 4 For all other maturities 17,858 19,176 18,779 17,596 16,873 16,866 16,386 17,206 17,452 Repurchase agreements on U.S. government and federal agency securities in immediately available funds Brokers and nonbank dealers in securities 5 For one day or under continuing contract 13,311 13,067 13,481 17,406 17,771 18,476 17,044 18,639 16,370 6 For all other maturities 19,735 21,516 21,734 24,262 25,272 24,233 25,459 24,590 22,600 All other customers 7 For one day or under continuing contract 33,347 33,760 32,907 33,487 30,243 32,148 32,102 33,258 33,378 8 For all other maturities 13,572 13,854 14,737 14,266 14,512 13,522 14,649 14,612 13,833 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 45,724 46,841 46,791 52,042 61,601 54,448 48,340 51,861 52,564 10 To all other specified customers3 12,696 13,278 12,576 16,229 16,660 17,025 15,970 16,310 17,741 1. Banks with assets of $1 billion or more as of Dec. 31, 1977. Division of Applications Development and Statistical Services, Financial State- These data also appear in the Board's H.5 (507) release. For address, see inside ment Reports Section, (202) 452-3349. front cover. 3. Brokers and nonbank dealers in securities; other depository institutions; 2. Beginning with the August Bulletin data appearing are the most current foreign banks and official institutions; and United States government agencies. available. To obtain data from May 1, 1989, through April 16, 1990, contact the 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 Effective date 10/25/90 date rate 10/25/90 date rate 10/25/90 date rate Vi Vi Boston 7 2/24/89 6 7 2/24/89 6 8.60 10/18/90 8.70 10/4/90 New York 2/24/89 2/24/89 10/18/90 10/4/90 Philadelphia 2/24/89 2/24/89 10/18/90 10/4/90 Cleveland 2/24/89 2/24/89 10/18/90 10/4/90 Richmond 2/24/89 2/24/89 10/18/90 10/4/90 Atlanta 2/24/89 2/24/89 10/18/90 10/4/90 Chicago 2/24/89 2/24/89 10/18/90 10/4/90 St. Louis 2/24/89 2/24/89 10/18/90 10/4/90 Minneapolis 2/24/89 2/24/89 10/18/90 10/4/90 Kansas City 2/24/89 2/24/89 10/18/90 10/4/90 Dallas 2/27/89 Vi 2/27/89 10/18/90 10/4/90 San Francisco ... 7 2/24/89 6 7 2/24/89 6Vi 8.60 10/18/90 8.70 10/4/90 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or level)— Bank level)— Bank level)— Effective date All F.R. of Effective All F.R. of Effective date All F.R. Banks N.Y. Banks N.Y. Banks In effect Dec. 31, 1977. 6-66 V2 6 Vi 1980-——JJuullyy 78 10-11 10 1984—Apr. 9 8W-9 9 1978—Jan. 9 6V2 66V2 79 10 10 13 SV9 2-9 9m May 2 1 0 1 6V 1 2-7 7 S N e o p v t . . 1 7 7 6 1 1 1 2 1 1 1 2 Nov. 2 2 1 6 m 8 Vi 12 I7 V* Dec. 5 12-13 13 Dec. 24 8 8 July 1 3 0 7 7 - 1 7 / ! 4 * 7V4 1981-——MMaayy 5 13-14 14 1985—May 20 7lWY8i 7I V V i i Aug. 21 73/4 73/4 8 14 14 24 Sept. 22 8 i8V i Nov. ? 13-14 13 Vi Oct. 16 8-m8W Vi 6 13 13 1986—Mar. 7 7-71 7 20 8 Vi Dec. 4 12 12 10 6Y1-I 76 V1 Nov. 1 9V2 99V2 Apr. 21 1979—J A u u ly g . 2 2 1 0 0 7 3 10 l - o 1 1 0 w 0 W 1 1 1 0 0 0 V V 4 i 1982---JJ A uu u llyy g . 7 7 1 , , ? 3 6 3 0 . , . i 1 m 1 1 \m - n m - n 12 w 1 1 11 U 1 1 1 V 0 V S V i 2 1987— J A S u e u p ly g t . . 2 2 1 4 1 2 1 5 5 V 5 V6 4 V - l 6 - i 6 6 5 6 5V Vi i Sept. 19 10W-11 11 77 10-10W 10 11 6 6 21 11 11 30 10 m10 6-6V2 Wi Oct. 1 8 0 11 1 - 2 1 2 1 1 2 2 Oct. 1 1 ? 3 9W 9'/ - 2 1 0 m 1988—Aug. 1 9 1 m 6 Vi Nov. ?? 9-9 Vi 9 evi-i 1 1980—Feb. 1 1 9 5 12 1 - 3 1 3 1 1 3 3 Dec. 7 1 6 4 8W 9 -9 9 9 1989—Feb. 2 2 7 4 1 1 May 3 2 0 9 12 1 - 2 1 3 1 12 3 1 1 7 5 .. 8V 8 S Y -9 i S 8< V /> z In effect Oct. 25, 1990 7 1 June 13 11-12 11 16 11 11 1. Adjustment credit is available on a short-term basis to help depository in no case will the rate charged be less than the basic discount rate plus 50 basis institutions meet temporary needs for funds that cannot be met through reason- points. The flexible rate is reestablished on the first business day of each able alternative sources. After May 19, 1986, the highest rate established for loans two-week reserve maintenance period. At the discretion of the Federal Reserve to depository institutions may be charged on adjustment credit loans of unusual Bank, the time period for which the basic discount rate is applied may be size that result from a major operating problem at the borrower's facility. shortened. Seasonal credit is available to help smaller depository institutions meet regular, 4. For earlier data, see the following publications of the Board of Governors: seasonal needs for funds that cannot be met through special industry lenders and Banking and Monetary Statistics, 1914-1941, and 1941-1970; Annual Statistical that arise from a combination of expected patterns of movement in their deposits Digest, 1970-1979. and loans. A temporary simplified seasonal program was established on Mar. 8, In 1980 and 1981, the Federal Reserve applied a surcharge to short-term 1985, and the interest rate was a fixed rate Yi 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 Domestic Financial Statistics • December 1990 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-$40.4 million 12/19/89 More than $40.4 million ... 12/19/89 Nonpersonal time deposits5 By original maturity Less than 1 Vi years 10/6/83 1 Vi years or more 10/6/83 Eurocurrency liabilities All types 11/13/80 1. Reserve requirements in effect on Dec. 31, 1989. 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. ber institutions may maintain reserve balances with a Federal Reserve Bank 3. Transaction accounts include all deposits on which the account holder is indirectly on a pass-through basis with certain approved institutions. For previous permitted to make withdrawals by negotiable or transferable instruments, payreserve requirements, see earlier editions of the Annual Report or 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 change 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. 19, ment each year for the succeeding calendar year by 80 percent of the percentage 1989 for institutions reporting quarterly and Dec. 26, 1989 for institutions increase in the total reservable liabilities of all depository institutions, measured reporting weekly, the amount was decreased from $41.5 million to $40.4 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 1990 TTyyppee ooff ttrraannssaaccttiioonn 11998877 11998888 11998899 Feb. Mar. Apr. May June July Aug. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 18,983 8,223 14,284 108 543 5,796 3,365 1,732 287 4,264 2 Gross sales 6,051 587 12,818 3,384 0 0 0 0 0 68 3 Exchange 239,740 241,876 231,211 18,113 21,551 17,286 22,894 16,279 16,159 21,912 4 Redemptions 9,029 2,200 12,730 400 0 0 0 0 0 0 Others within 1 year 5 Gross purchases 3,659 2,176 327 0 100 0 0 50 0 0 6 Gross sales 300 0 0 0 0 0 0 0 0 0 7 Maturity shift 21,504 23,854 28,848 2,845 1,876 993 4,387 1,314 1,321 3,235 8 Exchange -20,388 -24,588 -25,783 -5,418 0 -4,304 -2,771 0 -3,577 -4,550 9 Redemptions 70 0 500 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 10,231 5,485 1,436 0 100 100 0 0 0 0 11 Gross sales 452 800 490 0 0 0 0 0 0 0 12 Maturity shift -17,975 -17,720 -25,534 -1,713 -1,876 -739 -3,607 -1,314 -1,234 -2,188 13 Exchange 18,938 22,515 23,250 4,743 0 4,081 2,521 0 3,577 4,200 5 to 10 years 14 Gross purchases 2,441 1,579 287 0 0 0 0 0 0 0 15 Gross sales 0 175 29 0 0 0 0 0 0 0 16 Maturity shift -3,529 -5,946 -2,231 -451 0 -254 -530 0 -87 -697 17 Exchange 950 1,797 1,934 450 0 223 0 0 0 0 Over 10 years 18 Gross purchases 1,858 1,398 284 0 0 0 0 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift 0 -188 -1,086 -681 0 0 -250 0 0 -350 21 Exchange 500 275 600 226 0 0 250 0 0 350 All maturities 22 Gross purchases 37,170 18,863 16,617 108 743 5,896 3,365 1,782 287 4,264 23 Gross sales 6,803 1,562 13,337 3,384 0 0 0 0 0 68 24 Redemptions 9,099 2,200 13,230 400 0 0 0 0 0 0 Matched transactions 25 Gross sales 950,923 1,168,484 1,323,480 116,220 99,104 97,970 121,596 107,896 95,144 113,647 26 Gross purchases 950,935 1,168,142 1,326,542 120,637 97,128 98,643 121,218 110,042 95,787 110,635 Repurchase agreements2 27 Gross purchases 314,621 152,613 129,518 0 8,050 6,409 3,959 11,242 13,106 26,700 28 Gross sales 324,666 151,497 132,688 0 6,627 7,832 3,959 11,242 11,447 23,764 29 Net change in U.S. government securities 11,234 15,872 -10,055 741 190 5,146 2,987 3,928 2,590 4,121 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 0 0 0 0 0 0 0 0 32 Redemptions 276 587 442 0 0 78 0 0 33 37 Repurchase agreements2 33 Gross purchases 80,353 57,259 38,835 0 1,966 2,595 2,314 3,221 4,697 7,130 34 Gross sales 81,350 56,471 40,411 0 1,457 3,104 2,314 3,221 4,137 5,944 35 Net change in federal agency obligations -1,274 198 -2,018 0 509 -587 0 0 527 1,149 36 Total net change in System Open Market Account 9,961 16,070 -12,073 741 699 4,559 2,987 3,928 3,117 5,270 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 Financial Statistics • December 1990 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements' Millions of dollars Wednesday End of month Account 1990 1990 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 July Aug. Sept. Consolidated condition statement ASSETS 1 Gold certificate account 11,065 11,065 11,064 11,065 11,063 11,064 11,065 11,063 2 Special drawing rights certificate account 8,518 8,518 8,518 8,518 8,518 8,518 8,518 8,518 3 Coin 495 480 493 508 523 476 491 533 Loans 4 To depository institutions 531 2,554 438 4,027 501 942 465 505 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 0 0 0 0 0 0 0 0 7 Bought outright 6,377 6,377 6,377 6,377 6,377 6,414 6,377 6,377 8 Held under repurchase agreements 823 1,793 1,424 1,701 564 0 1,186 0 U.S. Treasury securities Bought outright 9 Bills 107,769 110,794 108,972 111,485 111,310 109,768 110,953 111111,,882288 10 Notes 91,582 91,582 91,582 91,582 91,582 91,782 91,582 91,582 11 Bonds 30,963 30,963 30,963 30,963 30,963 30,763 30,963 30,963 12 Total bought outright2 230,314 233,338 231,517 234,030 233,855 232,313 233,498 234,373 13 Held under repurchase agreements 3,206 7,063 3,052 4,505 2,720 0 2,936 0 14 Total U.S. Treasury securities 233,520 240,402 234,569 238,535 236,575 232,313 236,434 234,373 15 Total loans and securities 241,251 251,125 242,808 250,640 244,017 239,668 244,461 241,255 16 Items in process of collection 5,896 9,409 6,253 6,017 5,209 9,103 5,726 8,358 17 Bank premises 831 836 838 840 844 831 836 844 Other assets 18 Denominated in foreign currencies5 32,695 34,060 34,115 34,186 34,292 32,561 34,059 34,454 19 All other4 5,274 5,629 5,676 6,558 5,984 6,577 5,230 6,006 20 Total assets 306,025 321,121 309,765 318,333 310,451 308,798 310,386 311,031 LIABILITIES 21 Federal Reserve notes 252,549 255,160 254,647 253,344 252,681 249,319 253,544 252,738 Deposits 22 To depository institutions 33,334 38,559 35,185 33,108 37,766 34,651 3355,,559922 3333,,883344 23 U.S. Treasury—General account 6,130 8,238 4,726 16,758 5,402 6,369 4,453 7,638 24 Foreign—Official accounts 246 228 201 180 198 279 337 360 25 Other 276 241 235 308 367 247 219 374 26 Total deposits 39,985 47,266 40,346 50,354 43,733 41,546 40,600 42,206 27 Deferred credit items 4,732 8,216 5,348 5,395 4,909 8,210 5,738 6,481 28 Other liabilities and accrued dividends5 3,559 4,258 4,198 4,043 3,925 3,554 4,288 4,021 29 Total liabilities 300,824 314,901 304,539 313,135 305,248 302,629 304,169 305,446 CAPITAL ACCOUNTS 30 Capital paid in 2,396 2,394 2,394 2,395 2,398 2,359 2,399 2,399 31 Surplus 2,243 2,243 2,243 2,243 2,243 2,243 2,243 2,243 32 Other capital accounts 562 1,584 589 560 561 1,566 1,579 943 33 Total liabilities and capital accounts 306,025 321,121 309,765 318,333 310,451 308,798 310,386 311,031 34 MEMO: Marketable U.S. Treasury securities held in custody for foreign and international accounts 233,637 235,236 237,565 234,483 233,886 228,317 236,408 234,926 Federal Reserve note statement 35 Federal Reserve notes outstanding issued to bank 293,783 293,907 294,709 295,430 296,303 290,791 293,807 296,914 36 LESS: Held by bank 41,234 38,747 40,063 42,086 43,621 41,472 40,263 44,176 37 Federal Reserve notes, net 252,549 255,160 254,647 253,344 252,681 249,319 253,544 252,738 Collateral held against notes net: 38 Gold certificate account 11,065 11,065 11,064 11,065 11,063 11,064 11,065 11,063 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 232,966 235,578 235,064 233,761 233,101 229,737 233,961 233,157 42 Total collateral 252,549 255,160 254,647 253,344 252,681 249,319 253,544 252,738 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 Holding Millions of dollars Wednesday End of month TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1990 1990 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 July 31 Aug. 31 Sept. 28 531 2,554 438 4,027 501 942 465 505 2 Within 15 days 432 2,277 197 3,%5 399 723 221 284 3 16 days to 90 days 100 277 241 62 103 218 243 221 4 91 days to 1 year 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 233,520 240,402 234,569 238,535 236,575 232,313 233,498 234,373 10 Within 15 days' 14,178 14,244 9,5% 15,185 12,881 9,872 2,820 7,099 11 16 days to 90 days 54,753 56,537 55,272 53,600 56,418 56,294 60,563 60,033 12 91 days to 1 year 67,422 72,214 72,295 72,344 69,869 69,706 72,709 69,835 13 Over 1 year to 5 years 59,460 59,700 59,700 59,700 59,700 58,239 59,700 59,700 14 Over 5 years to 10 years 13,170 13,170 13,170 13,170 13,170 11,801 13,170 13,170 15 Over 10 years 24,536 24,536 24,536 24,536 24,536 26,402 24,536 24,536 16 Federal agency obligations—Total 7,200 8,170 7,801 8,078 6,941 6,414 6,377 6,377 17 Within 15 days' 1,133 1,823 1,457 1,929 764 115 310 200 18 16 days to 90 days 497 758 725 530 525 712 497 525 19 91 days to 1 year 1,616 1,620 1,668 1,668 1,709 1,468 1,616 1,709 20 Over 1 year to 5 years 2,655 2,670 2,642 2,642 2,634 2,820 2,655 2,634 21 Over 5 years to 10 years 1,110 1,110 1,120 1,120 1,120 1,110 1,110 1,120 22 Over 10 years 188 188 188 188 188 188 188 188 1. Holdings under repurchase agreements are classified as maturing within 15 NOTE: Components may not add to totals because of 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 Financial Statistics • December 1990 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1990 1986 1987 1988 1989 IItteemm Dec. Dec. Dec. Dec. Feb. Mar. Apr. May June July Aug. Sept. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 58.02 58.59 60.59 60.03 60.22 60.30 60.28 59.78 59.73 59.32 59.75 60.08 2 Nonborrowed reserves4 57.20 57.82 58.88 59.77 58.77 58.17 58.65 58.45 58.85 58.56 58.82 59.45 3 Nonborrowed reserves plus extended credit 57.50 58.30 60.12 59.79 59.30 60.12 60.05 59.32 59.20 58.84 58.95 59.46 4 Required reserves 56.65 57.55 59.55 59.11 59.23 59.44 59.38 58.82 58.96 58.46 58.88 59.17 5 Monetary base6 241.43 258.06 275.24 284.95 289.71 291.82 293.54 294.40 296.28 297.86 301.12' 304.78 ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS Not seasonally adjusted 6 Total reserves7 59.46 60.07 62.22 61.67 59.20 59.23 61.05 58.74 59.61 59.47 59.21r 59.81 7 Nonborrowed reserves 58.64 59.30 60.50 61.40 57.75 57.11 59.42 57.41 58.73 58.71 58.29 59.19 8 Nonborrowed reserves plus extended credit 58.94 59.78 61.75 61.42 58.29 59.06 60.82 58.28 59.07 58.99 58.41r 59.19 9 Required reserves8 58.09 59.03 61.17 60.75 58.21 58.37 60.15 57.78 58.84 58.61 58.34 58.90 10 Monetary base9 245.17 262.00 279.54 289.45 286.50 288.86 293.35 293.52 297.37 299.90 301.46' 303.56 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 59.56 62.14 63.75 62.81 60.62 60.66 62.51 60.23 61.20 60.94 60.73 61.45 12 Nonborrowed reserves 58.73 61.36 62.03 62.54 59.17 58.53 60.88 58.90 60.32 60.19 59.80' 60.82 13 Nonborrowed reserves plus extended credit 59.04 61.85 63.27 62.56 59.71 60.49 62.29 59.77 60.66 60.47 59.93 60.83 14 Required reserves 58.19 61.09 62.70 61.89 59.63 59.80 61.62 59.27 60.42 60.08 59.86 60.54 15 Monetary base 247.62 266.06 283.00 292.55 290.02 292.38 296.87 297.03 300.99 303.39 304.99' 307.21 16 Excess reserves13 1.37 1.05 1.05 .92 .99 .86 .90 .96 .77 .86 .87 .91 17 Borrowings from the Federal Reserve .83 .78 1.72 .27 1.45 2.12 1.63 1.33 .88 .76 .93 .62 1. Latest monthly and biweekly figures are available from the Board's H.3(502) 8. To adjust required reserves for discontinuities because of regulatory changes statistical release. Historical data and estimates of the impact on required reserves in reserve requirements, a multiplicative procedure is used to estimate what of changes in reserve requirements are available from the Monetary and Reserves required reserves would have been in past periods had current reserve require- Projections Section. Division of Monetary Affairs. Board of Governors of the ments been in effect. Break-adjusted required reserves includes required reserves Federal Reserve System, Washington, D.C. 20551. against transactions deposits and nonpersonal time and savings deposits (but not 2. Figures reflect adjustments for discontinuities or "breaks" associated with reservable nondeposit liabilities). regulatory changes in reserve requirements. 9. The break-adjusted monetary base equals (1) break-adjusted total reserves 3. Seasonally adjusted, break adjusted total reserves equal seasonally adjusted, (line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3) break-adjusted required reserves (line 4) plus excess reserves (line 16). (for all quarterly reporters on the "Report of Transaction Accounts, Other 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally Deposits and Vault Cash" and for all those weekly reporters whose vault cash adjusted, break-adjusted total reserves (line 1) less total borrowings of depository exceeds their required reserves) the break-adjusted difference between current institutions from the Federal Reserve (line 17). vault cash and the amount applied to satisfy current reserve requirements. 5. Extended credit consists of borrowing at the discount window under 10. Reflects actual reserve requirements, including those on nondeposit liabilthe terms and conditions established for the extended credit program to help ities, with no adjustments to eliminate the effects of discontinuities associated depository institutions deal with sustained liquidity pressures. Because there is with changes in reserve requirements. not the same need to repay such borrowing promptly as there is with traditional 11. Reserve balances with Federal Reserve Banks plus vault cash used to short-term adjustment credit, the money market impact of extended credit is satisfy reserve requirements. similar to that of nonborrowed reserves. 12. The monetary base, not break-adjusted and not seasonally adjusted, 6. The seasonally adjusted, break-adjusted monetary base consists of (1) consists of (1) total reserves (line 11), plus (2) required clearing balances and seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjustments to compensate for float at Federal Reserve Banks, plus (3) the adjusted currency component of the money stock, plus (3) (for all quarterly currency component of the money stock, plus (4) (for all quarterly reporters on reporters on the "Report of Transaction Accounts, Other Deposits and Vault the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all Cash" and for all those weekly reporters whose vault cash exceeds their required those weekly reporters whose vault cash exceeds their required reserves) the reserves, the seasonally adjusted, break-adjusted difference between current vault difference between current vault cash and the amount applied to satisfy current cash and the amount applied to satisfy current reserve requirements. reserve requirements. After the introduction of CRR, currency and vault cash 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) figures are measured over the computation periods ending on Mondays. plus excess reserves (line 16). 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). 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 1990 J 1986 1987 1988 1989 Dec. Dec. Dec. Dec. June July Aug. Sept. Seasonally adjusted 1 Ml 724.7 750.4 787.5 794.8 809.4 809.2 816.2' 822.8 2 M2 2,814.2 2,913.2 3,072.4 3,221.6 3,278.6' 3,284.0' 3,302.C 3,317.7 3 M3 3,494.5 3,678.7 3,918.3 4,044.3 4,069.1' 4,073.3' 4,088.6' 4,091.7 4 L 4,135.4' 4,338.9 4,676. V 4,881.2' 4,906.8' 4,918.4' 4,931.3 n.a. 5 Debt 7,636.2 8,345.1 9,107.6 9,788.9 10,108.7' 10,170.1' 10,244.0 n.a. Ml components 6 Currency 180.6 196.7 211.8 221.9 233.4 235.4 238.3' 241.5 7 Travelers checks4 6.5 7.0 7.5 7.4 7.7 7.7 8.0 8.3 8 Demand deposits5 302.1 287.0 287.0 279.7 274.5 274.8 278.0 279.9 9 Other checkable deposits6 235.5 259.7 281.3 285.7 293.8 291.3 291.9' 293.1 Nontransactions components 10 In M2 2,089.6 2,162.8 2,284.9 2,426.8 2,469.2' 2,474.8' 2,485.7 2,495.0 11 In M3 only8 680.3 765.5 845.9 822.6 790.6' 789.3' 786.6' 774.0 Time and Savings accounts Commercial banks 12 Savings deposits 155.8 178.3 192.0 188.5 195.0 195.7' 195.8' 196.6 13 Money market deposit accounts 377.7 356.4 350.2 351.5 368.2 370.9 374.6 376.0 14 Small time deposits9 366.3 388.1 447.5 528.6 559.3 568.1 571.3' 575.8 15 Large time deposits10, 11 289.8 326.9 368.2 401.5 397.9' 399.7' 396.4' 391.8 Thrift institutions 16 Savings deposits 214.3 236.6 235.9 220.5 220.8 220.7 220.4' 219.2 17 Money market deposit accounts 193.3 167.4 150.1 132.2 133.0 131.6 131.0 131.1 18 Small time deposits9 489.9 529.7 583.5 613.7 587.8 580.1 578.2 574.6 19 Large time deposits10 150.0 161.9 172.9 156.8 134.9 130.8 127.7' 124.9 Money market mutual funds 20 General purpose and broker-dealer 208.7 222.0 240.9 312.4 321.9 325.1 333.8 340.1 21 Institution-only 83.8 89.0 87.1 102.3 107.3 108.9 114.0 116.1 Debt components 22 Federal debt 1,806.1 1,957.9 2,114.2 2,266.7 2,370.9 2,397.8' 2,436.0 n.a. 23 Nonfederal debt 5,830.1 6,387.2 6,993.4 7,522.2' 7,737.8' 7,772.3' 7,808.0 n.a. Not seasonally adjusted 24 Ml 740.5 766.4 804.5 812.1 810.0 812.2 814.0' 818.7 25 M2 2,826.5 2,925.6 3,085.2 3,234.5 3,275.7' 3,289.6' 3,302.0' 3,310.2 26 M3 3,508.8 3,692.7 3,932.5 4,058.3 4,062.8' 4,072.3' 4,088.7' 4,087.8 27 L 4,151.4' 4,355.2 4,692.9' 4,898.9' 4,898.5' 4,906.6' 4,925.8 n.a. 28 Debt 7,619.0 8,329.1 9,093.2 9,774.3 10,065.0' 10,124.6' 10,190.7 n.a. Ml components 29 Currency3 183.0 199.3 214.8 225.3 234.8 237.1 239.2 240.8 30 Travelers checks4 6.0 6.5 6.9 6.9 8.1 8.6 8.9 8.8 31 Demand deposits5 314.0 298.6 298.9 291.6 274.8 277.0 276.7 278.1 32 Other checkable deposits6 237.5 262.0 283.8 288.4 292.3 289.4 289.2' 291.1 Nontransactions components 33 In M2 2,086.0 2,159.2 2,280.7' 2,422.4 2,465.8' 2,477.5' 2,487.9 2,491.6 34 In M3 only8 682.3 767.0 847.3 823.8 787.0' 782.7' 786.7' 777.6 Time and Savings accounts Commercial banks 35 Savings deposits 154.4 176.9 190.6 187.2 196.1 197.3 196.3 196.0 36 Money market deposit accounts 379.8 359.0 353.2 355.0 365.8 368.1 372.9 374.4 37 Small time deposits9 366.1 387.3 446.0 526.4 560.4 569.6' 572.3' 576.2 38 Large time deposits10' 11 289.2 325.8 366.9 399.8 397.4' 397.5' 397.0' 393.1 Thrift institutions 39 Savings deposits 212.7 234.9 234.2 219.0 222.3 223.0 220.9' 218.9 40 Money market deposit accounts 192.9 167.5 150.6 132.8 132.5 131.2 131.1' 131.1 41 Small time deposits9 489.8 529.1 582.4 612.3 586.8 581.6 578.6 573.6 42 Large time deposits10 150.7 162.9 174.2 158.3 133.6' 129.5' 127.1' 125.1 Money market mutual funds 43 General purpose and broker-dealer 208.0 221.5 240.5 312.2 319.8 322.3 332.8 339.1 44 Institution-only 84.4 89.6 87.6 102.9 106.1 108.1 113.2 113.2 Repurchase agreements and Eurodollars 45 Overnight 82.3 83.2 83.3 77.4 82.1' 84.2' 83 .CC 82.1 46 Term 164.3 197.1 227.7 178.0 163.3' 161.7' 165.3' 161.8 Debt components 47 Federal debt 1,803.9 1,955.6 2,111.8 2,264.5 2,359.0 2,382.4' 2,418.2 n.a. 48 Nonfederal debt 5,815.1 6,373.5 6,981.4 7,509.8 7,706.0' 7,742.2' 7,772.5 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • December 1990 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 Money 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. Data are derived from the Federal Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults Reserve Board's flow of funds accounts. Debt data are based on monthly of depository institutions; (2) travelers checks of nonbank issuers; (3) demand 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 depository institutions and overnight Eurodollars issued to U.S. and official institutions, less cash items in the process of collection and Federal residents by foreign branches of U.S. banks worldwide, money market deposit Reserve float. accounts (MMDAs), savings and small-denomination time deposits (time depos- 6. Consists of NOW and ATS balances at all depository institutions, credit its—including retail RPs—in amounts of less than $100,000), and balances in both union share draft balances, and demand deposits at thrift institutions. taxable and tax-exempt general purpose and broker-dealer money market mutual 7. Sum of overnight RPs and overnight Eurodollars, money market fund funds. Excludes individual retirement accounts (IRA) and Keogh balances at balances (general purpose and broker-dealer), MMDAs, and savings and small depository institutions and money market funds. Also excludes all balances held time deposits. by U.S. commercial banks, money market funds (general purpose and broker- 8. Sum of large time deposits, term RPs, term Eurodollars of U.S. residents, dealer), foreign governments and commercial banks, and the U.S. government. and money market fund balances (institution-only), less a consolidation adjust- M3: M2 plus large-denomination time deposits and term RP liabilities (in ment that represents the estimated amount of overnight RPs and Eurodollars held amounts of $100,000 or more) issued by all depository institutions, term Eurodol- by institution-only money market funds. lars held by U.S. residents at foreign branches of U.S. banks worldwide and at all 9. Small-denomination time deposits—including retail RPs—are those issued banking offices in the United Kingdom and Canada, and balances in both taxable in amounts of less than $100,000. All individual retirement accounts (IRA) and and tax-exempt, institution-only money market mutual funds. Excludes amounts Keogh accounts at commercial banks and thrifts are subtracted from small time held by depository institutions, the U.S. government, money market funds, and deposits. foreign banks and official institutions. Also subtracted is the estimated amount of 10. Large-denomination time deposits are those issued in amounts of $100,000 overnight RPs and Eurodollars held by institution-only money market mutual or more, excluding those booked at international banking facilities. funds. 11. Large-denomination time deposits at commercial banks less those held by L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term money market mutual funds, depository institutions, and foreign banks and Treasury securities, commercial paper and bankers acceptances, net of money official institutions. market mutual fund holdings of these assets. 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. 1990 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr Feb. Mar. Apr. May June July DEBITS TO Seasonally adjusted Demand deposits3 1 All insured banks 217,116.2 226,888.4 272,793.1 299,450.2 285,111.5 274,403.6 273,186.2 301,578.2 301,589.9 2 Major New York City banks 104,4%.3 107,547.3 121,894.2 132,031.4 132,470.3 124,988.2 123,314.6 131,042.7 130,590.7 3 Other banks 112,619.8 119,341.2 150,898.9 167,418.8 152,641.2 149,415.4 149,871.6 170,535.5 170,999.2 4 ATS-NOW accounts4 2,402.7 2,757.7 3,501.8 4,115.7 4,075.7 3,993.3 4,165.6 4,004.2 4,163.7 5 Savings deposits 526.5 579.2 636.6 587.3 617.6 583.1 601.1 566.6 608.8 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 612.1 641.2 781.0 851.4 813.3 780.8 791.9 866.2 865.5 7 Major New York City banks 2,670.6 2,903.5 3,401.6 3,677.3 3,760.2 3,551.5 3,590.9 3,742.8 3,838.3 8 Other banks 357.0 376.8 481.5 530.1 484.0 472.5 482.5 544.6 543.8 9 ATS-NOW accounts4 13.8 14.7 18.3 20.6 20.2 19.7 20.5 19.5 20.5 10 Savings deposits 3.1 3.1 3.5 3.1 3.2 3.0 3.2 2.9 3.1 DEBITS TO Not seasonally adjusted Demand deposits3 11 All insured banks 217,125.1 227,010.7 271,957.3 270,852.7 291,868.6 276,077.5 282,747.7 302,181.4 302,826.4 12 Major New York City banks 104,518.8 107,565.0 122,241.8 119,305.2 137,029.5 125,750.6 125,532.4 130,332.7 130,100.1 13 Other banks 112,606.2 119,445.7 149,715.5 151,547.5 154,839.2 150,326.9 157,215.3 171,848.6 172,726.3 14 ATS-NOW accounts4 2,404.8 2,754.7 3,4%.5 3,721.3 4,030.4 4,285.8 4,066.2 4,098.2 4,108.9 15 MMDA 1,954.2 2,430.1 2,790.6 2,551.2 2,714.9 2,848.4 3,016.4 2,992.1 3,033.8 16 Savings deposits 526.8 578.0 635.8 518.7 594.2 646.8 592.6 567.8 640.3 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 612.3 641.7 779.0 791.8 850.4 784.4 834.7 866.5 864.8 18 Major New York City banks 2,674.9 2,901.4 3,415.4 3,314.9 3,836.2 3,564.6 3,7%.3 3,797.6 3,777.5 19 Other banks 356.9 377.1 477.8 495.2 503.6 474.7 514.3 546.6 547.1 20 ATS-NOW accounts4 13.8 14.7 18.3 18.7 20.0 20.5 20.3 20.1 20.4 21 MMDA6 5.3 6.9 8.3 7.2 7.6 7.9 8.4 8.2 8.3 22 Savings deposits 3.1 3.1 3.5 2.8 3.1 3.4 3.1 2.9 3.3 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 Financial Statistics • December 1990 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1989 1990 CCaatteeggoorryy Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Seasonally adjusted 1 Total loans and securities2 2,570.5 2,585.8 2,588.8 2,594.4 2,614.3 2,635.6 2,646.7 2,653.8 2,669.4 2,684.7 2,707.8 2,708.5 2 U.S. government securities 390.9 396.0 396.1 404.7 414.5 422.3 427.3 430.6 438.5 440.6 441.3 447.1 4 3 O To th ta e l r l s o e a c n u s r i a t n ie d s leases2 1,9 1 9 8 8 1 . . 2 4 2,0 1 0 7 9 9 . . 9 9 2,0 1 1 8 1 0 . . 9 8 2,0 1 0 8 9 0 . . 3 4 2,0 1 1 8 9 0 . . 4 5 2,0 1 3 8 3 0 . . 2 1 2,0 1 3 8 9 0 . . 4 0 2,0 1 4 7 5 8 . . 0 3 2,0 1 5 7 3 7 . . 0 9 2,0 1 6 7 6 7 . . 4 8 2,0 1 8 7 7 9 . . 3 2 2,0 1 8 7 2 9 . . 0 4 5 Commercial and industrial ..... 642.0 645.0 641.6 637.9 638.8 644.4 649.0 648.6 651.6 651.7 653.1 651.6 6 Bankers acceptances held ... 7.9 7.6 7.4 7.3 7.6 7.6 7.5 7.6 77..99 7.6 77..33 77..77 7 Other commercial and industrial 634.1 637.4 634.2 630.6 631.2 636.8 641.5 641.0 643.7 644.2 645.7' 643.9 8 U.S. addressees4 629.9 632.4 628.8 623.1 625.4 630.6 635.5 636.4 638.8 641.6 643.2 641.1 9 Non-U.S. addressees4 4.2 5.0 5.4 7.6 5.8 6.2 6.0 4.5 4.9 2.6 2.5 2.8 10 Real estate 746.7 754.0 761.1 765.9 774.7 781.8 786.9 794.6 800.1 808.0 811.9 814.7 11 Individual 372.4 374.4 375.8 378.3 379.5 379.9 378.8 379.8 378.4 378.3 380.1 381.1 12 Security 40.7 40.9 38.8 39.3 40.0 37.1 36.1 34.8 3355..33 3388..88 4466..00 4433..11 13 Nonbank financial institutions 33.2 33.9 33.0 32.5 32.9 33.8 33.9 33.9 34.4 34.8 35.7 36.2 14 Agricultural 30.5 30.5 30.7 30.9 30.8 30.6 30.4 30.0 2299..55 2299..33 2299..22 2299..11 15 State and political subdivisions 41.3 40.8 40.1 38.6 38.9 38.4 38.2 37.9 37.4 36.6 36.1' 35.4 16 Foreign banks 9.1 8.3 8.9 8.1 7.8 8.4 8.8 8.7 7.4 7.0 8.0 7.9 17 Foreign official institutions 3.8 3.7 3.6 3.2 3.1 3.0 3.2 3.2 3.2 3.2 3.2 3.2 18 Lease financing receivables .... 31.9 31.9 31.8 32.1 32.2 32.6 32.3 32.5 32.3 32.6 32.7 32.8 19 All other loans 46.6 46.4 46.5 42.5 40.6 43.2 41.8 40.9 43.4' 46.1 51.5 47.0 Not seasonally adjusted 20 Total loans and securities2 2,570.8 2,587.9 2,596.8 2,600.1 2,616.7 2,629.9 2,647.0 2,653.4 2,669.5 2,678.9 2,701.4 2,707.1 21 U.S. government securities 388.2 396.1 397.2 406.4 419.0 423.8 427.2 429.6 435.6 438.1 442.1 446.1 22 Other securities 182.3 181.2 181.8 180.9 180.3 179.7 179.4 177.7 177.2 176.4 179.3 179.6 23 Total loans and leases2 2,000.2 2,010.6 2,017.9 2,012.8 2,017.3 2,026.4 2,040.4 2,046.1 2,056.7 2,064.4 2,080.0 2,081.4 24 Commercial and industrial ..... 639.4 642.2 641.6 636.4 639.5 646.0 653.3 652.7 654.0 652.1 650.6 647.7 25 Bankers acceptances held3... 8.1 7.7 7.5 7.4 7.7 7.4 7.3 7.5 7.8 7.3 77..44 7.8 26 Other commercial and industrial 631.3 634.5 634.0 629.1 631.8 638.6 645.9 645.2 646.2 644.8 643.1' 639.9 2277 U.S. addressees4 625.7 629.1 628.8 624.1 627.0 633.9 641.3 640.6 641.8 640.3 638.7 635.3 28 Non-U.S. addressees4 5.6 5.4 5.2 4.9 4.8 4.7 4.6 4.6 4.4 4.5 4.5 4.6 29 Real estate 748.0 755.7 761.9 766.0 772.1 779.1 784.9 793.5 800.0 808.7 813.6 816.9 30 Individual 373.5 375.8 380.3 381.8 378.7 376.6 376.0 377.3 376.7 376.7 380.3 383.0 31 Security 39.7 39.7 37.9 37.8 39.5 38.1 38.5 35.3 3377..44 3388..88 4455..33 4422..11 32 Nonbank financial institutions 32.8 34.2 34.1 33.2 32.5 33.0 33.7 33.9 34.7 35.0 35.5 35.7 33 Agricultural 31.2 30.8 30.6 30.4 29.9 29.5 29.5 29.7 29.8' 3300..00 3300..00 3300..00 34 State and political subdivisions 41.2 40.6 39.7 39.5 39.3 38.6 38.2 37.8 37.2 36.2 35.8 3355..33 35 Foreign banks 9.4 8.5 8.7 8.2 7.8 7.8 8.4 8.7 7.6 7.1 7.9 88..11 36 Foreign official institutions 3.8 3.7 3.6 3.2 3.1 3.0 3.2 3.2 3.2 3.2 3.2 3.2 37 Lease financing receivables .... 31.8 31.9 31.9 32.5 32.4 32.5 32.4 32.5 32.2 32.3 32.5 32.6 38 All other loans 49.3 47.5 47.7 43.8 42.6 42.1 42.4 41.6 43.9 44.2' 45.4 46.6 1. These data also appear in the Board's G.7 (407) release. For address, see 3. Includes nonfinancial commercial paper held. inside front cover. 4. United States includes the 50 states and the District of Columbia. 2. Excludes loans to commercial banks in the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1989 1990 SSoouurrccee Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May June July' Aug/ Sept. Seasonally adjusted 1 Total nondeposit funds 254.7 256.5 257.3 258.1 267.6 271.4 267.6 269.2' 270.7' 282.2 283.0 281.0 2 Net balances due to related foreign offices3 10.2 8.6 7.4 10.9 14.7 17.4' 16.6 24.5' 14.8' 16.8 16.7 19.2 3 Borrowings from other than commercial banks in United States4 244.5 247.9 249.9 247.2 252.9 254.0r 250.9 244.8' 255.9' 265.4 266.3 261.8 4 Domestically chartered banks 196.5 198.3 200.4 196.9 201.4 198.4' 192.9 187.8' 197.8' 203.8 203.7 200.1 5 Foreign-related banks 48.0 49.6 49.4 50.4 51.5 55.6 58.0 57.0 58.1 61.7 62.5 61.7 Not seasonally adjusted 6 Total nondeposit funds 249.9 255.4 250.7 254.6 270.8 277.2 270.4 277.8' 275.6' 277.6 282.1 227777..33 7 Net balances due to related foreign offices — 9.6 9.7 9.7 10.5 14.3 16.2 14.4 26.3 15.4 14.7 17.0 20.0 8 Domestically chartered banks -15.0 -15.5 -19.2 -14.5 -11.1 -11.5 -10.6 -1.4 -6.3 -6.1 -3.6 -4.5 9 Foreign-related banks 24.6 25.2 28.9 25.0 25.4 27.7 25.0 27.7 21.7 20.8 20.6 24.4 10 Borrowings from other than commercial banks in United States4 240.3 245.8 241.0 244.1 256.4 261.C 256.0 251.4' 260.1' 262.9 265.2 257.4 11 Domestically chartered banks 193.5 198.5 194.0 192.9 203.3 204.3 197.0 193.6' 199.5' 200.8 203.2 197.0 12 Federal funds and security RP borrowings 190.4 196.1 191.5 190.3 199.6 199.8r 193.3 190.2' 196.4' 197.9 199.6 192.9 N Other6 3.0 2.4 2.5 2.7 3.7 4.5 3.7 3.4 3.2 2.9 3.6 4.0 14 Foreign-related banks6 46.8 47.2 47.0 51.2 53.1 56.8 59.0 57.9 60.6 62.1 61.9 60.4 MEMO Gross large time deposits 15 Seasonally adjusted 461.4 464.0 464.3 462.7 460.6 457.3 455.1 454.7 452.7 454.0 450.9 445.5 16 Not seasonally adjusted 462.6 464.4 462.7 460.4 460.3 460.2 455.1 455.2 452.2 451.8 451.5 446.9 U.S. Treasury demand balances at commercial banks8 17 Seasonally adjusted 21.5 20.4 21.1 20.2 17.8 19.2 21.2 18.6 20.4 14.8 33.2 28.2 18 Not seasonally adjusted 20.6 14.7 19.6 23.2 22.0 16.7 20.0 25.2 20.9 15.2 23.5 31.0 1. Commercial banks are those in the 50 states and the District of Columbia with 4. Other borrowings are borrowings through any instrument, such as a national or state charters plus agencies and branches of foreign banks, New York promissory note or due bill, given for the purpose of borrowing money for the investment companies majority owned by foreign banks, and Edge Act corpora- banking business. This includes borrowings from Federal Reserve Banks and tions owned by domestically chartered and foreign banks. from foreign banks, term federal funds, loan RPs, and sales of participations in These data also appear in the Board's G.10 (411) release. For address, see pooled loans. inside front cover. 5. Based on daily average data reported weekly by approximately 120 large 2. Includes federal funds, RPs, and other borrowing from nonbanks and net banks and quarterly or annual data reported by other banks. balances due to related foreign offices. 6. Figures are partly daily averages and partly averages of Wednesday data. 3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and 7. Time deposits in denominations of $100,000 or more. Estimated averages of U.S. branches and agencies of foreign banks with related foreign offices plus net daily data. positions with own IBFs. 8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at commercial banks. Averages of daily data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • December 1990 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series1 Billions of dollars 1989 1990 AAccccoouunntt Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. ALL COMMERCIAL BANKING INSTITUTIONS2 1 Loans and securities 2,774.7 2,780.1 2,796.0 2,809.2 2,821.2 2,838.3 2,845.9 2,870.9 2,876.4 2,895.8 2,885.6 2 Investment securities 551.0 550.5 563.9 571.2 576.8 582.5 585.9 587.7 587.5 595.8 600.4 i U.S. government securities 376.5 375.1 389.8 398.0 405.9 412.6 416.9 419.9 420.1 427.1 432.2 4 Other 174.5 175.5 174.1 173.2 170.8 169.9 169.0 167.8 167.4 168.7 168.2 5 Trading account assets 26.8 22.8 31.8 30.2 26.0 23.9 21.4 23.7 27.2 29.2 21.3 6 Total loans 2,196.9 2,206.8 2,200.4 2,207.8 2,218.5 2,231.9 2,238.7 2,259.6 2,261.6 2,270.7 2,263.9 7 Interbank loans 185.4 187.0 187.4 187.5 191.6 190.6 192.8 202.7 199.9 198.4 188.8 8 Loans excluding interbank 2,011.6 2,019.8 2,013.0 2,020.3 2,026.9 2,041.3 2,045.9 2,056.9 2,061.7 2,072.4 2,075.1 y Commercial and industrial 641.6 643.2 636.4 642.4 646.2 653.3 650.9 654.1 648.7 646.3 646.7 10 Real estate 758.3 762.8 767.6 774.0 781.6 786.7 796.7 801.3 810.2 813.3 817.4 11 Individual 376.5 382.3 381.7 378.6 375.5 377.5 377.3 378.5 377.7 382.2 383.9 12 All other 235.2 231.5 227.3 225.3 223.6 223.8 220.9 222.9 225.0 230.6 227.1 13 Total cash assets 231.5 255.7 218.9 224.9 212.9 211.6 239.9 222.9 214.1 211.0 217.6 14 Reserves with Federal Reserve Banks. 38.7 42.8 24.6 29.5 32.0 31.6 27.8 32.0 30.1 30.3 33.9 15 Cash in vault 30.7 31.6 28.0 27.8 27.7 28.5 29.9 28.9 28.7 30.2 29.2 16 Cash items in process of collection ... 84.4 99.1 89.9 91.6 80.0 80.0 100.6 86.1 79.5 77.4 80.9 17 Demand balances at U.S. depository institutions 28.5 32.3 29.6 30.8 27.4 26.3 32.0 27.6 27.4 27.5 27.2 18 Other cash assets 49.2 49.9 46.8 45.2 45.8 45.2 49.7 48.3 48.4 45.6 46.4 19 Other assets 203.3 209.9 218.1 212.9 209.1 206.0 199.5 211.1 207.1 216.3 216.9 20 Total assets/total liabilities and capital 3,209.5 3,245.8 3,233.0 3,247.0 3,243.2 3,255.9 3,285.4 3,304.9 3,297.5 3,323.1 3,320.1 21 Deposits 2,225.7 2,270.0 2,247.1 2,262.4 2,251.3 2,257.3 2,293.1 2,280.6 2,289.7 2,295.2 2,298.1 '22 Transaction deposits 600.8 642.0 612.2 616.6 594.3 601.0 618.4 599.6 591.5 590.5 596.3 23 Savings deposits 535.7 538.2 540.8 546.3 551.8 548.7 554.4 556.3 561.3 565.7 563.5 24 Time deposits 1,089.2 1,089.7 1,094.2 1,099.5 1,105.3 1,107.5 1,120.3 1,124.7 1,136.8 1,139.0 1,138.3 25 Borrowings 543.9 531.0 552.8 542.2 545.4 564.7 548.2 578.7 564.4 576.2 564.7 26 Other liabilities 229.5 233.5 221.8 229.3 230.8 218.0 227.8 227.2 224.3 231.7 236.8 27 Residual (assets less liabilities) 210.4 211.3 211.4 213.2 215.7 215.8 216.2 218.4 219.1 220.0 220.5 MEMO 28 U.S. government securities (including trading account) 396.2 391.0 414.7 421.2 423.8 427.8 430.0 433.8 438.9 444444..33 442.9 29 Other securities (including trading account) 181.6 182.3 180.9 180.2 179.0 178.6 177.2 177.6 175.9 180.8 178.9 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 2,534.1 2,542.4 2,557.9 2,566.3 2,570.5 2,581.8 2,585.1 2,602.9 2,610.3 2,627.6 2,616.0 31 Investment securities 524.6 524.4 536.2 543.1 547.2 551.5 557.5 557.3 556.8 565.5 568.7 32 U.S. government securities 363.9 363.8 376.6 384.4 391.2 397.6 404.0 405.5 405.5 413.0 416.9 33 Other 160.7 160.5 159.6 158.7 156.0 154.0 153.5 151.9 151.4 152.5 151.8 34 Trading account assets 26.8 22.8 31.8 30.2 26.0 23.9 21.4 23.7 27.2 29.2 21.3 35 Total loans 1,982.7 1,995.2 1,989.9 1,993.0 1,997.3 2,006.4 2,006.2 2,021.9 2,026.3 2,032.9 2,026.0 36 Interbank loans 147.3 150.3 150.0 148.5 148.3 149.1 144.4 153.6 151.6 151.3 142.4 3/ Loans excluding interbank 1,835.5 1,844.9 1,839.9 1,844.6 1,849.0 1,857.3 1,861.7 1,868.3 1,874.7 1,881.6 1,883.6 38 Commercial and industrial 516.7 517.7 513.8 518.3 519.4 523.4 520.4 519.2 516.9 513.4 513.3 39 Real estate 728.6 733.0 735.9 741.1 747.8 751.8 761.2 765.3 773.5 776.1 780.2 40 Individual 376.5 382.3 381.7 378.6 375.5 377.5 377.3 378.5 377.7 382.2 383.9 41 All other 213.7 211.8 208.5 206.5 206.3 204.6 202.8 205.3 206.7 209.9 206.1 42 Total cash assets 205.5 230.5 195.7 199.9 187.3 186.8 210.7 194.8 186.5 184.2 190.4 43 Reserves with Federal Reserve Banks. 37.9 41.7 22.7 27.5 29.8 29.8 26.6 30.8 28.8 28.1 32.2 44 Cash in vault 30.7 31.5 28.0 27.8 27.7 28.5 29.8 28.8 28.7 30.2 29.2 45 Cash items in process of collection ... 82.5 97.7 88.5 90.2 78.5 78.7 99.2 84.1 78.1 7755..88 7788..99 46 Demand balances at U.S. depository institutions 26.6 30.4 27.6 28.7 25.6 24.6 30.0 25.9 25.6 25.1 25.2 47 Other cash assets 27.9 29.2 28.9 25.7 25.7 25.2 25.1 25.2 25.3 25.0 25.0 48 Other assets 136.0 140.7 143.6 140.2 136.4 133.8 136.3 141.8 138.4 144.3 149.1 49 Total assets/liabilities and capital 2,875.7 2,913.6 2,897.2 2,906.5 2,894.2 2,902.4 2,932.0 2,939.6 2,935.3 2,956.1 2,955.5 50 Deposits 2,143.3 2,186.8 2,164.5 2,179.9 2,169.4 2,174.6 2,210.6 2,197.8 2,207.7 2,213.3 2,218.1 51 Transaction deposits 591.2 632.1 601.9 606.3 584.5 591.2 608.3 589.0 581.1 579.9 585.1 52 Savings deposits 532.9 535.4 537.9 543.4 548.8 545.7 551.4 553.3 558.3 562.7 560.4 53 Time deposits 1,019.2 1,019.3 1,024.7 1,030.2 1,036.1 1,037.6 1,050.9 1,055.4 1,068.2 1,070.7 1,072.5 54 Borrowings 405.2 398.4 405.3 394.2 393.1 405.4 391.7 409.9 395.6 403.5 395.0 55 Other liabilities 120.6 120.9 119.9 123.1 119.9 110.5 117.3 117.2 116.8 123.2 125.8 56 Residual (assets less liabilities) 206.6 207.4 207.5 209.3 211.8 212.0 212.3 214.6 215.3 216.1 216.7 MEMO 57 Real estate loans, revolving 49.2 50.0 51.1 51.4 52.0 53.1 54.0 55.0 56.1 57.4 58.1 58 Real estate loans, other 679.4 683.0 684.8 689.7 695.8 698.7 707.2 710.3 717.4 718.8 722.1 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 1990 AAccccoouunntt Aug. 1 Aug. 8 Aug. 15 Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 1 Cash and balances due from depository institutions 123,886 106,361 119,362 107,130 103,510 124,321 108,191 107,117 110,532 2 Total loans, leases, and securities, net 1,319,467' 1,314,107' 1,337,493' 1,319,434' 1,309,415' 1,331,928 1,312,489 1,318,394 1,293,877 3 U.S. Treasury and government agency 181,389 178,830 182,470 181,098 182,880 184,764 183,701 185,481 177,095 4 Trading account 19,705 16,508 19,683 17,478 17,153 18,954 17,974 19,012 10,619 3 Investment account 161,683 162,322 162,787 163,621 165,726 165,810 165,727 166,470 166,476 6 Mortgage-backed securities 80,001' 80,837' 80,581' 80,394' 81,93y 8811,,555522 8811,,555544 8822,,112233 8822,,333399 All other maturing in 7 One year or less 19,816 18,706 18,500 18,408 18,429 18,136 17,768 17,458 17,024 8 Over one through five years 37,338' 38,012' 39,227' 39,992' 40,340' 40,244 40,470 40,866 40,962 9 Over five years 24,528 24,767 24,478 24,827 25,018 25,878 25,935 26,022 26,151 10 Other securities 63,030 61,991 61,849 62,141 62,322' 61,807 61,688 61,943 61,770 11 Trading account 1,813 708 772 981 946 775 684 971 1,039 12 Investment account 61,216 61,283 61,078 61,160 61,376 61,032 61,004 60,972 60,731 13 States and political subdivisions, by maturity 32,138 32,155 32,121 32,057 32,032 31,959 31,967 31,980 32,037 14 One year or less 3,616 3,632 3,667 3,686 3,699 3,707 3,727 3,742 3,740 15 Over one year 28,522 28,524 28,454 28,371 28,333 28,252 28,240 28,238 28,296 16 Other bonds, corporate stocks, and securities 29,079 29,128 28,957 29,103 29,345 29,072 29,037 28,992 28,694 17 Other trading account assets 8,094' 9,377' 10,245' 9,755' 10,708' 10,383 10,016 9,933 9,272 18 Federal funds sold3 87,589 85,450 98,368 83,717 75,566 92,303 81,445 83,064 70,611 19 To commercial banks 59,363 56,821 68,717 55,767 51,126 64,830 56,520 56,873 49,423 20 To nonbank brokers and dealers in securities 22,540 22,973 23,528 22,373 19,439 20,322 19,630 19,647 15,564 21 Toothers 5,686 5,656 6,123 5,578 5,001 7,150 5,295 6,544 5,624 22 Other loans and leases, gross 1,018,304' 1,017,351' 1,023,492' 1,021,613' 1,017,077' 1,021,631 1,014,457 1,016,755 1,013,657 23 Other loans, gross 991,510' 990,548' 9%,650' 994,702' 989,997' 994,478 987,562 989,907 986,713 24 Commercial and industrial 320,610' 320,098' 322,059' 319,956' 317,633' 317,908 317,253 318,443 316,891 25 Bankers acceptances and commercial paper 1,558' 1,624' 1,71c 1,623' 1,579' 1,720 1,622 1,736 1,622 26 All other 319,052' 318,474' 320,349' 318,332' 316,054' 316,188 315,631 316,707 315,269 27 U.S. addressees 317,549' 317,038' 318,938' 316,917' 314,662' 314,676 314,219 315,083 313,768 28 Non-U.S. addressees 1,503 1,436 1,411 1,416 1,392 1,512 1,412 1,624 1,501 29 Real estate loans 378,988' 379,542' 380,654' 380,500' 379,583' 379,716 380,732 381,025 381,202 30 Revolving, home equity 30,650' 30,758' 30,930' 31,092' 31,259' 31,290 31,410 31,565 31,714 31 All other 348,337' 348,784' 349,724' 349,408' 348,324' 348,425 349,322 349,461 349,488 32 To individuals for personal expenditures 173,229' 173,325' 173,675' 174,271' 174,581' 173,343 173,391 173,684 173,664 33 To depository and financial institutions 49,841 49,446 52,317 51,748 51,512 52,514 49,629 49,198 47,985 34 Commercial banks in the United States 21,915 21,781 23,071 23,499 23,996 23,928 21,414 21,340 20,770 35 Banks in foreign countries 3,957 3,650 4,921 4,907 4,158 4,420 4,264 4,418 3,920 36 Nonbank depository and other financial institutions .. 23,969 24,015 24,325 23,342 23,358 24,166 23,951 23,439 23,294 37 For purchasing and carrying securities 14,848 15,139 14,234 15,434 14,262 16,600 13,962 14,801 13,283 38 To finance agricultural production 6,132' 6,150' 6,171' 6,0%' 6,078' 6,084 6,120 6,123 6,150 39 To states and political subdivisions 22,662' 22,635' 22,561' 22,530' 22,456' 22,423 22,322 22,265 22,194 40 To foreign governments and official institutions 1,480 1,409 1,591 1,404 1,449 1,639 1,412 1,330 1,476 41 All other 23,719' 22,804' 23,388' 22,763' 22,442' 24,252 22,740 23,039 23,869 42 Lease financing receivables 26,794 26,802 26,842 26,911 27,080 27,153 26,895 26,848 26,944 43 LESS: Unearned income 4,411' 4,422' 4,432' 4,450' 4,459' 4,426 4,429 4,442 4,429 44 Loan and lease reserve4 34,529' 34,471' 34,500' 34,442' 34,679' 34,534 34,390 34,341 34,099 45 Other loans and leases, net 979,365' 978,458' 984,560' 982,722' 977,939' 982,671 975,639 977,972 975,129 46 All other assets 130,501' 129,466' 133,642' 131,427' 133,241' 137,934 135,575 137,013 137,790 47 Total assets 1,573,855' 1,549,934' 1,590,497' 1,557,991' 1,546,166' 1,594,183 1,556,255 1,562,524 1,542,199 48 Demand deposits 242,848' 215,563' 244,615' 213,508' 213,279' 241,414 221,494 220,741 221,918 49 Individuals, partnerships, and corporations 190,303' 175,614' 195,532' 172,251' 171,101' 191,403 179,575 175,283 174,022 50 States and political subdivisions 7,393 5,610 6,081 5,956 5,404 5,895 5,539 6,901 7,356 51 U.S. government 2,414 1,392 2,608 1,261 1,440 1,687 2,050 3,508 1,593 52 Depository institutions in the United States 25,325 18,683 24,921' 18,604 18,840 24,515 19,506 19,612 20,342 53 Banks in foreign countries 6,650 4,970' 6,231 6,363 6,202 6,691 6,210 5,768 6,600 54 Foreign governments and official institutions 961 681 1,375 857 809 1,402 932 1,129 1,273 55 Certified and officers' checks 9,801 8,614 7,868 8,216 9,482 9,820 7,680 8,540 10,733 56 Transaction balances other than demand deposits 80,364 80,295 79,805 78,324 77,478 83,215 80,870 78,941 76,989 57 Nontransaction balances 753,999 754,155 758,425 753,907 752,688 755,061 753,471 750,036 748,410 58 Individuals, partnerships, and corporations 716,792' 717,222' 721,384' 716,756' 715,226' 718,135 716,544 714,014 712,501 59 States and political subdivisions 29,116 29,218 29,304 29,359 29,676 29,244 29,253 28,497 28,510 60 U.S. government 1,168 881 887 884 888 745 749 764 776 61 Depository institutions in the United States 6,45<K 6,377' 6,375' 6,455' 6,438' 6,483 6,478 6,310 6,177 62 Foreign governments, official institutions, and banks .. 473 456 475 452 459 454 446 451 445 63 Liabilities for borrowed money 297,066' 299,670' 310,720' 311,995' 299,682' 309,703 299,940 309,422 289,510 64 Borrowings from Federal Reserve Banks 0 100 785 6,837 0 2,102 0 3,405 0 65 Treasury tax-and-Ioan notes 10,007 12,448 14,864 21,735 22,462' 12,527 17,215 30,462 26,492 66 All other liabilities for borrowed money 287,059' 287,122' 295,071' 283,422' 277,219' 295,074 282,725 275,556 263,018 67 Other liabilities and subordinated notes and debentures .. 94,978' 95,298' 92,244' 95,185' 97,754' 99,560 94,818 97,901 100,139 68 Total liabilities 1,469,255' 1,444,981' 1,485,809' 1,452,920' 1,440,882' 1,488,954 1,450,592 1,457,041 1,436,966 69 Residual (total assets minus total liabilities)6 104,60C 104,952' 104,688' 105,072' 105,284' 105,230 105,662 105,483 105,233 MEMO 70 Total loans and leases (gross) and investments adjusted . 1,277,129' 1\j,2m74,,3\9w7' 1,284,636' 1,279,059' 1,273,43c 1,282,130 1,273,374 1,278,965 1,262,212 71 Total loans and leases (gross) adjusted 1,024,616' 1,030,072' 1,026,064' 1,017,521' 1,025,175 1,017,968 1,021,607 1,014,075 72 Time deposits in amounts of $100,000 or more 214,461 213,908 213,799 212,761' 212,279 211,160 211,022 209,193 207,061 73 U.S. Treasury securities maturing in one year or less 19,416 18,394 17,858 17,455 17,481' 16,762 16,340 16,430 14,478 74 Loans sold outright to affiliates—total 282' 285' 283' 286' 2%' 289 291 300 288 75 Commercial and industrial 137 140 138 135 144 140 141 149 151 76 Other 145' 145' 146' 151' 152' 149 150 150 137 77 Nontransaction savings deposits (including MMDAs) 286,787 287,356 291,492 287,758 287,387 290,541 288,784 286,394 285,305 1. Beginning Jan. 6, 1988, the "Large bank" reporting group was revised or more on Dec. 31, 1977, see table 1.13. somewhat, eliminating some former reporters with less than $2 billion of assets 6. This is not a measure of equity capital for use in capital-adequacy analysis or and adding some new reporters with assets greater than $3 billion. for other analytic uses. 2. Includes U.S. government-issued or guaranteed certificates of participation 7. Exclusive of loans and federal funds transactions with domestic commercial in pools of residential mortgages. banks. 3. Includes securities purchased under agreements to resell. 8. Loans sold are those sold outright to a bank's own foreign branches, 4. Includes allocated transfer risk reserve. nonconsolidated nonbank affiliates of the bank, the bank's holding company (if 5. Includes federal funds purchased and securities sold under agreements to not a bank), and nonconsolidated nonbank subsidiaries of the holding company. repurchase; for information on these liabilities at banks with assets of $1 billion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • December 1990 1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY1 Millions of dollars, Wednesday figures 1990 AAccccoouunntt Aug. 1 Aug. 8 Aug. 15 Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 1 Cash balances due from depository institutions 30,759 23,366 30,190 28,032 21,286 24,823 22,609 22,331 26,897 2 Total loans, leases, and securities, net2 228,562' 226,152' 236,562' 230,538' 222,626' 233,134 222,200 226,124 218,728 Securities 3 U.S. Treasury and government agency3 0 0 0 0 0 0 0 0 0 4 Trading account3 0 0 0 0 0 0 0 0 0 5 Investment account 22,646 22,684 23,046 22,896 23,381 23,624 23,589 23,814 24,372 6 Mortgage-backed securities4 11,294 11,471 11,492 10,890 11,329 1111,,332255 1111,,333322 1111,,334422 1111,,889955 All other maturing in 7 One year or less 3,180 3,070 3,270 3,272 3,265 3,255 3,026 3,048 3,023 8 Over one through five years 3,810 3,805 3,924 4,488 4,545 4,548 4,732 4,735 4,768 9 Over five years 4,362 4,338 4,360 4,246 4,241 4,496 4,498 4,689 4,685 10 Other securities3 0 0 0 0 0 0 0 0 0 11 Trading account3 0 0 0 0 0 0 0 0 0 12 Investment account 13,333 13,454 13,258 13,424 13,576 13,315 13,310 13,272 13,044 13 States and political subdivisions, by maturity 6,207 6,194 6,209 6,163 6,116 6,121 6,118 6,113 6,107 14 One year or less 598 596 628 628 615 611 613 615 612 13 Over one year 5,609 5,597 5,581 5,536 5,500 5,509 5,505 5,498 5,495 16 Other bonds, corporate stocks, and securities 7,126 7,260 7,050 7,261 7,461 7,194 7,192 7,159 6,937 17 Other trading account assets3 0 0 0 0 0 0 0 0 0 Loans and leases 18 Federal funds sold5 26,368 24,288 32,245 24,420 19,855 27,737 21,494 24,259 19,105 19 To commercial banks 13,072 12,088 17,834 12,000 9,507 16,687 11,244 13,830 11,770 20 To nonbank brokers and dealers in securities 10,470 9,443 11,882 9,898 8,026 8,764 8,166 8,415 5,517 21 To others 2,826 2,756 2,528 2,523 2,322 2,286 2,082 2,015 1,818 22 Other loans and leases, gross 182,092r 181,483' 183,811' 185,607' 181,899' 184,378 179,444 180,404 177,699 23 Other loans, gross 176,525r 175,894' 178,184' 179,913' 176,214' 178,707 173,751 174,718 171,946 24 Commercial and industrial 58,962' 58,758' 59,968' 59,472' 58,736' 58,751 58,361 58,134 56,876 25 Bankers acceptances and commercial paper 122 117 128 130 124 137 139 138 145 26 All other 58,840' 58,641' 59,839' 59,343' 58,612' 58,614 58,222 57,996 56,730 2/ U.S. addressees 58,093' 57,928' 59,192' 58,695' 57,963' 57,871 57,557 57,141 56,026 28 Non-U.S. addressees 747 713 648 647 649 743 664 855 704 29 Real estate loans 62,859 63,016 62,975 62,816 62,463 62,643 62,602 62,684 62,312 30 Revolving, home equity 4,125 4,132 4,141 4,145 4,151 4,158 4,170 4,180 4,188 31 All other 58,734 58,884 58,834 58,672 58,312 58,485 58,432 58,504 58,123 32 To individuals for personal expenditures 19,771 19,731 19,829 19,893 19,863 19,849 19,902 20,010 20,023 33 To depository and financial institutions 18,689 17,951 19,865 21,010 19,763 19,674 18,636 18,483 17,581 34 Commercial banks in the United States 7,251 6,863 7,537 8,876 8,439 7,840 6,956 6,877 6,614 35 Banks in foreign countries 2,973 2,736 3,809 3,961 3,246 3,409 33,,227722 3,386 2,954 36 Nonbank depository and other financial institutions 8,465 8,352 8,519 8,172 8,078 8,425 88,,440088 8,221 8,013 37 For purchasing and carrying securities 5,327 5,622 4,490 6,039 4,990 6,712 4,557 4,968 4,288 38 To finance agricultural production 136 146 157 147 146 146 145 150 159 39 To states and political subdivisions 4,734 4,720 4,668 4,648 4,592 4,585 4,548 4,515 4,470 40 To foreign governments and official institutions 342 267 448 267 339 535 311 234 374 41 All other 5,704 5,683 5,784 5,620 5,322 5,812 4,689 5,539 5,863 42 Lease financing receivables 5,568 5,589 5,627 5,694 5,685 5,672 5,692 5,686 5,753 43 LESS: Unearned income 1,826 1,829 1,835 1,858 1,869 1,863 1,866 1,873 1,870 44 Loan and lease reserve 14,051 13,928 13,963 13,951 14,218 14,059 13,770 13,752 13,622 43 Other loans and leases, net6 166,215' 165,726' 168,013' 169,797' 165,813' 168,456 163,807 164,779 162,208 46 All other assets7 57,453' 54,257' 57,558' 57,114' 58,650' 60,890 58,156 58,782 54,579 47 Total assets 316,774 303,775 324,311 315,683 302,562 318,846 302,966 307,238 300,204 Deposits 48 Demand deposits 55,134 44,751 58,835 47,894 45,519 50,937 45,219 47,558 52,063 49 Individuals, partnerships, and corporations 36,853 32,363 41,742 33,485 30,876 35,010 32,015 33,036 33,760 30 States and political subdivisions 813 614 657 655 466 641 565 780 1,539 31 U.S. government 288 197 338 152 186 202 161 216 168 32 Depository institutions in the United States 7,806 3,900 7,722 4,628 4,571 4,669 4,302 4,652 5,340 33 Banks in foreign countries 5,330 3,728 4,934 5,154 5,036 5,308 4,977 4,648 5,423 34 Foreign governments and official institutions 836 553 1,216 738 681 1,261 786 986 1,112 33 Certified and officers' checks 3,209 3,397 2,226 33,,008822 33,,770033 33,,884466 22,,441144 33,,224411 44,,772211 36 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers) 8,832 8,737 8,779 8,571 8,489 8,957 8,858 8,782 8,348 37 Nontransaction balances 117,472 116,647 119,678 116,813 116,135 116,329 115,465 114,546 112,195 38 Individuals, partnerships, and corporations 109,254 108,521 111,570 108,796 108,150 108,562 107,786 107,119 104,763 39 States and political subdivisions 6,058 6,022 6,012 5,945 5,891 5,681 5,602 5,501 5,518 60 U.S. government 37 37 41 41 41 38 43 44 47 61 Depository institutions in the United States 1,929 1,877 1,856 1,856 1,870 1,867 1,852 1,700 1,687 62 Foreign governments, official institutions, and banks 194 189 199 175 182 181 181 183 180 63 Liabilities for borrowed money 72,464 69,674 76,139 79,253 70,446 77,416 72,036 72,997 62,433 64 Borrowings from Federal Reserve Banks 0 0 0 6,232 0 1,325 0 525 0 63 Treasury tax-and-loan notes 2,045 2,640 3,040 4,688 4,638 2,574 3,676 7,280 6,114 66 All other liabilities for borrowed money8 70,419 67,033 73,099 68,332 65,807 73,516 68,360 65,192 56,319 67 Other liabilities and subordinated notes and debentures 37,171 38,050 35,298 37,610 36,612 39,747 35,593 37,921 39,867 68 Total liabilities 291,074 277,859 298,730 290,143 277,201 293,386 277,171 281,804 274,906 69 Residual (total assets minus total liabilities)9 25,700 25,916 25,580 25,541 25,362 25,460 25,794 25,434 25,298 MEMO 70 Total loans and leases (gross) and investments adjusted210 224,116' 222,957' 226,989' 225,472' 220,766' 224,528 219,637 221,043 215,836 71 Total loans and leases (gross) adjusted10 188,137' 186,819' 190,684' 189,152' 183,808' 187,588 182,737 183,958 178,420 72 Time deposits in amounts of $100,000 or more 39,617 39,215 39,628 38,643 38,116 37,544 37,585 37,239 35,613 73 U.S. Treasury securities maturing in one year or less 2,683 2,394 2,516 2,524 2,644 2,456 2,200 2,149 2,058 1. These data also appear in the Board's H.4.2 (504) release. For address, see 7. Includes trading account securities. inside front cover. 8. Includes federal funds purchased and securities sold under agreements to 2. Excludes trading account securities. repurchase. 3. Not available due to confidentiality. 9. Not a measure of equity capital for use in capital adequacy analysis or for 4. Includes U.S. government-issued or guaranteed certificates of participation other analytic uses. in pools of residential mortgages. 10. Exclusive of loans and federal funds transactions with domestic commer- Digitized for FRA 5. S I E nc R lu des securities purchased under agreements to resell. cial banks. 6. Includes allocated transfer risk reserve. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS1 Assets and Liabilities Millions of dollars, Wednesday figures 1990 AAccccoouunntt Aug. 1 Aug. 8 Aug. 15 Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 1 Cash and due from depository institutions ... 13,975 15,706 14,755 15,019 14,262 15,218 14,389 14,490 14,492 2 Total loans and securities 154,212 157,005 158,374 160,028' 158,446' 157,326 156,471 159,729 159,915 3 U.S. Treasury and government agency securities 10,629 10,189 10,524 10,591 10,258 10,519 10,302 1100,,557744 11,076 4 Other securities 7,217 7,292 7,263 7,272 7,266 7,317 7,317 7,324 7,324 5 Federal funds sold 7,157 7,994 8,053 8,418 8,267 6,640 5,377 7,016 8,960 6 To commercial banks in the United States. 6,126 6,788 6,996 7,264 7,290 5,710 4,428 5,722 7,883 7 To others 1,031 1,206 1,057 1,154 977 930 949 1,294 1,077 8 Other loans, gross 129,209 131,530 132,534 133,747' 132,655' 132,850 133,475 134,815 132,555 9 Commercial and industrial 75,352' 75,773 77,540 77,064 75,964' 77,426 75,919 76,769 76,633 10 Bankers acceptances and commercial paper 2,129 2,234 2,282 2,149 2,358 2,392 2,414 2,636 2,566 11 All other 73,223' 73,539 75,258 74,915 73,606' 75,034 73,505 74,133 74,067 12 U.S. addressees 71,909' 72,212 73,913 73,531 72,272' 73,690 72,217 72,727 72,699 13 Non-U.S. addressees 1,314 1,327 1,345 1,384 1,334 1,344 1,288 1,406 1,368 14 Loans secured by real estate3 24,06c 24,169 24,149 24,214 24,345' 24,459 24,573 24,632 24,692 15 To financial institutions 26,465 27,580 26,425 27,223' 27,768' 26,660 27,275 27,818 26,488 16 Commercial banks in the United States.. 20,504 21,457 20,239 20,918 20,839 19,731 20,713 21,222 19,682 17 Banks in foreign countries 1,028 1,163 1,320 1,503 1,923 1,770 1,628 1,556 1,688 18 Nonbank financial institutions 4,933 4,960 4,866 4,802' 5,006' 5,159 4,934 5,040 5,118 19 To foreign governments and official institutions 208 227 209 208 214 224 233 219 223300 20 For purchasing and carrying securities .... 1,663 2,174 2,887 3,488' 2,955' 2,726 4,037 3,939 2,983 21 All other3 1,461 1,607 1,324 1,550 1,409 1,355 1,438 1,438 1,529 22 Other assets (claims on nonrelated parties) .. 33,752 33,783 33,249 33,257 32,824 32,703 32,502 31,468 32,071 23 Net due from related institutions 17,175 15,693 19,522 14,844 14,157 15,260 12,044 14,450 11,611 24 Total assets 219,118 222,188 225,902 223,146 219,690 220,508 215,406 220,139 218,091 25 Deposits or credit balances due to other than directly related institutions 48,720' 49,133' 49,364' 49,598' 48,643' 49,373 49,313 49,184 48,299 26 Transaction accounts and credit balances . 4,347' 4,332 4,465 4,321 4,125 4,645 4,558 4,894 4,897 27 Individuals, partnerships, and corporations 2,840 2,778 2,864 2,908 2,796 3,082 2,817 3,046 2,981 28 Other 1,507' 1,554 1,601 1,413 1,329 1,563 1,741 1,848 1,916 29 Nontransaction accounts5 44,373' 44,801' 44,899' 45,277' 44,518' 44,728 44,755 44,290 43,402 30 Individuals, partnerships, and corporations 36,300' 36,314' 35,941' 35,665' 35,139 34,669 34,244 34,012 31 Other 8,073' 8,487' 8,958' 9,612' 9,008' 9,589 10,086 10,046 9,390 32 Borrowings from other than directly related institutions 111,948' 112,608' 117,008' 111144,,997700'' 109,748' 109,432 108,316 110,787 107,506 33 Federal funds purchased6 56,633' 52,051' 56,946' 53,348' 50,093' 52,191 51,631 56,431 49,808 34 From commercial banks in the United States 29,059 25,886 32,304 27,323 25,291 27,407 26,363 29,101 27,001 35 From others 27,574' 26,165' 24,642' 26,025' 24,802' 24,784 25,268 27,330 22,807 36 Other liabilities for borrowed money 55,315 60,557 60,062 61,622 59,655 57,241 56,685 54,356 57,698 37 To commercial banks in the United States 31,749 33,314 34,374 33,980 33,679 32,981 31,287 29,886 29,178 38 To others 23,566 27,243 25,688 27,642 25,976 24,260 25,398 24,470 28,520 39 Other liabilities to nonrelated parties 33,774' 33,273 33,996 33,118 32,946 32,536 33,030 31,997 31,999 40 Net due to related institutions 24,674 27,174 25,532 25,460 28,354 29,167 24,747 28,172 30,287 41 Total liabilities 219,118 222,188 225,902 223,146 219,690 220,508 215,406 220,139 218,091 MEMO 42 Total loans (gross) and securities adjusted7 .. 127,582 128,760 131,139 131,846' 130,317' 131,885 131,330 132,785 132,350 43 Total loans (gross) adjusted7 109,736 111,279 113,352 113,983' 112,793' 114,049 113,711 114,887 113,950 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 Financial Statistics • December 1990 1.31 GROSS DEMAND DEPOSITS Individuals, Partnerships, and Corporations1 Billions of dollars, estimated daily-average balances, not seasonally adjusted Commercial banks TTyyppee ooff hhoollddeerr 1989 1990 11998855 11998866 11998877 11998888 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. June Sept. Dec. Mar. June 1 All holders—Individuals, partnerships, and corporations 321.0 363.6 343.5 354.7 330.4 329.3 337.3 352.2 328.7 334.3 2 Financial business 32.3 41.4 36.3 38.6 36.3 33.0 33.7 33.8 34.1 34.9 3 Nonfinancial business 178.5 202.0 191.9 201.2 182.2 185.9 190.4 202.5 183.3 186.5 4 Consumer 85.5 91.1 90.0 88.3 87.4 86.6 87.9 90.3 86.6 86.4 5 Foreign 3.5 3.3 3.4 3.7 3.7 2.9 2.9 3.1 3.0 3.1 6 Other 21.2 25.8 21.9 22.8 20.7 21.0 22.4 22.5 21.7 23.5 Weekly reporting banks 1989 1990 11998855 11998866 11998877 11998888 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Mar. June Sept. Dec. Mar. June 7 All holders—Individuals, partnerships, and corporations 168.6 195.1 183.8 198.3 181.9 182.2 186.6 196.7 183.7 186.3 8 Financial business 25.9 32.5 28.6 30.5 27.2 25.4 26.3 27.6 25.6 25.0 9 Nonfinancial business 94.5 106.4 100.0 108.7 98.6 99.8 101.6 108.8 100.1 101.7 10 Consumer 33.2 37.5 39.1 42.6 41.1 42.4 43.0 44.1 42.4 43.3 11 Foreign 3.1 3.3 3.3 3.6 3.3 2.9 2.8 3.0 2.8 2.9 12 Other 12.0 15.4 12.7 12.9 11.7 11.7 12.9 13.2 12.8 13.3 1. Figures include cash items in process of collection. Estimates of gross Historical data back to March 1985 have been revised to account for corrections deposits are based on reports supplied by a sample of commercial banks. Types of bank reporting errors. Historical data before March 1985 have not been revised, of depositors in each category are described in the June 1971 Bulletin, p. 466. and may contain reporting errors. Data for all commercial banks for March 1985 Figures may not add to totals because of rounding. were revised as follows (in billions of dollars): all holders, - .3; financial business, 2. Beginning in March 1984, these data reflect a change in the panel of weekly -.8; nonfinancial business, -.4; consumer, .9; foreign, .1; other, -.1. Data for reporting banks, and are not comparable to earlier data. Estimates in billions of weekly reporting banks for March 1985 were revised as follows (in billions of dollars for December 1983 based on the new weekly reporting panel are: financial dollars): all holders, -.1; financial business, -.7; nonfinancial business, -.5; business, 24.4; nonfinancial business, 80.9; consumer, 30.1; foreign, 3.1; other consumer, 1.1; foreign, .1; other, -.2. 9.5. 3. Beginning March 1988, these data reflect a change in the panel of weekly 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 1990 IInnssttrruummeenntt D 19 e 8 c 5 . D 19 e 8 c 6 . D 19 e 8 c 7 . D 19 e 8 c 8 . D 19 e 8 c 9 . Mar. Apr. May June July Aug. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 298,779 329,991 358,056 457,297 529,055 546,786 544,481 538,686 537,023 545,849 546,491 Financial companies' Dealer-placed paper 2 Total 78,443 101,072 102,844 160,094 187,084 184,097 185,107 186,155 191,463 199,466 199,099 3 Bank-related (not seasonally adjusted) 1,602 2,265 1,428 1,248 n.a. n.a. n.a. n.a. n.a. n.a. n.a. Directly placed paper 4 Total 135,320 151,820 173,980 194,537 212,210 215,501 213,843 209,203 202,101 202,829 202,217 5 Bank-related (not seasonally adjusted) 44,778 40,860 43,173 43,155 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6 Nonfinancial companies5 85,016 77,099 81,232 102,666 129,761 147,188 145,531 143,328 143,459 143,554 145,375 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 68,413 64,974 70,565 66,631 62,972 55,865 53,945 54,766 53,750 52,006 52,324 Holder 8 Accepting banks 11,197 13,423 10,943 9,086 9,433 9,574 9,200 9,000 9,972 9,628 9,944 9 Own bills 9,471 11,707 9,464 8,022 8,510 8,386 7,850 7,632 8,639 8,395 7,895 10 Bills bought 1,726 1,716 1,479 1,064 924 1,188 1,350 1,368 1,332 1,233 2,049 Federal Reserve Banks 11 Own account 0 0 0 0 0 0 0 0 0 0 0 12 Foreign correspondents 937 1,317 965 1,493 1,066 1,180 1,141 1,291 1,507 1,571 1,560 13 Others 56,279 50,234 58,658 56,052 52,473 45,111 43,604 44,475 42,271 40,806 40,821 Basis 14 Imports into United States 15,147 14,670 16,483 14,984 15,651 14,418 13,413 13,993 14,801 13,691 13,188 15 Exports from United States 13,204 12,960 15,227 14,410 13,683 12,161 12,610 12,727 12,511 12,186 12,221 16 All other 40,062 37,344 38,855 37,237 33,638 29,286 27,922 28,046 26,438 26,129 26,915 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 panel is revised every January and currently has 4. As reported by financial companies that place their paper directly with about 100 respondents. The current reporting group accounts for over 90 percent investors. of total acceptances activity. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per year Rate Period Av r e a r t a e g e Period Av r e a r t a e g e Period 7.75 1987 8.21 1988—Jan. 8.75 1989— July 8.00 1988 9.32 Feb. 8.51 Aug. 8.25 1989 10.87 Mar. 8.50 Sept. 8.75 Apr. 8.50 Oct. 9.25 1987— Jan. 7.50 May , 8.84 Nov. 9.00 Feb. 7.50 June 9.00 Dec. 8.75 Mar. 7.50 July . 9.29 Apr. 7.75 Aug. 9.84 1990— Jan. 8.50 May 8.14 Sept 10.00 Feb. 9.00 June 8.25 Ocl 10.00 Mar. 9.50 July 8.25 Nov. 10.05 Apr. 10.00 Aug. 8.25 Dec. 10.50 May 10.50 Sept. 8.70 June Oct. 9.07 1989— Jan 10.50 July 11.00 Nov. 8.78 Feb. 10.93 Aug. 11.50 Dec. 8.75 Mar. 11.50 Sept. 11.00 Apr. 11.50 Oct. 10.50 May , 11.50 June 11.07 10.00 NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases. For address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics • December 1990 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. 1990 1990, week ending IInnssttrruummeenntt 11998877 11998888 11998899 June July Aug. Sept. Aug. 31 Sept. 7 Sept. 14 Sept. 21 Sept. 28 MONEY MARKET RATES 1 Federal funds1'2 6.66 7.57 9.21 8.29 8.15 8.13 8.20 8.08 8.25 8.12 8.18 8.26 2 Discount window borrowing1' 5.66 6.20 6.93 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 Commercial paper • 3 1-month 6.74 7.58 9.11 8.21 8.09 7.99 8.09 8.03 7.96 8.02 8.10 8.26 4 3-month 6.82 7.66 8.99 8.14 7.99 7.88 7.96 7.96 7.85 7.88 7.96 8.13 5 6-month 6.85 7.68 8.80 8.06 7.90 7.77 7.83 7.89 7.72 7.75 7.81 8.01 Finance paper, directly placed ' 6 1-month 6.61 7.44 8.99 8.12 7.99 7.88 7.98 7.94 7.88 7.94 7.99 8.08 7 3-month 6.54 7.38 8.72 8.01 7.87 7.69 7.74 7.78 7.66 7.71 7.76 7.82 8 6-month 6.37 7.14 8.16 7.79 7.66 7.46 7.50 7.56 7.47 7.48 7.50 7.55 Bankers acceptances5'6 9 3-month 6.75 7.56 8.87 8.00 7.86 7.75 7.83 7.80 7.68 7.73 7.85 8.02 10 6-month 6.78 7.60 8.67 7.89 7.73 7.64 7.70 7.73 7.57 7.61 7.72 7.89 Certificates of deposit, secondary market7 11 1-month 6.75 7.59 9.11 8.20 8.09 7.98 8.08 8.02 7.94 8.01 8.09 8.25 12 3-month 6.87 7.73 9.09 8.23 8.10 7.97 8.06 8.04 7.94 7.97 8.06 8.24 N 6-month 7.01 7.91 9.08 8.28 8.12 7.99 8.06 8.10 7.95 7.97 8.06 8.25 14 Eurodollar deposits. 3-month 7.07 7.85 9.16 8.23 8.09 7.99 8.07 8.14 7.98 7.95 8.03 8.24 U.S. Treasury bills5 Secondary market 15 3-month 5.78 6.67 8.11 7.73 7.62 7.45 7.36 7.46 7.38 7.38 7.38 7.29 16 6-month 6.03 6.91 8.03 7.63 7.52 7.38 7.32 7.44 7.34 7.32 7.31 7.30 17 1-year 6.33 7.13 7.92 7.53 7.40 7.26 7.24 7.32 7.23 7.24 7.25 7.25 Auction average 18 3-month 5.82 6.68 8.12 7.74 7.66 7.44 7.38 7.49 7.39 7.41 7.39 7.32 19 6-month 6.05 6.92 8.04 7.64 7.57 7.36 7.33 7.48 7.36 7.34 7.30 7.33 20 1-year 6.33 7.17 7.91 7.65 7.52 7.37 7.25 7.40 n.a. n.a. n.a. 7.25 CAPITAL MARKET RATES U.S. Treasury notes and bonds" Constant maturities 21 1-year 6.77 7.65 8.53 8.10 7.94 7.78 7.76 7.85 7.74 7.75 7.77 7.79 22 2-year 7.42 8.10 8.57 8.35 8.16 8.06 8.08 8.16 8.06 8.06 8.08 8.12 23 3-year 7.68 8.26 8.55 8.40 8.26 8.22 8.27 8.33 8.24 8.24 8.25 8.33 24 5-year 7.94 8.47 8.50 8.43 8.33 8.44 8.51 8.56 8.48 8.47 8.52 8.58 25 7-year 8.23 8.71 8.52 8.52 8.46 8.64 8.79 8.79 8.76 8.73 8.80 8.85 26 10-year 8.39 8.85 8.49 8.48 8.47 8.75 8.89 8.88 8.85 8.84 8.92 8.96 27 30-year 8.59 8.96 8.45 8.46 8.50 8.86 9.03 9.00 8.97 8.97 9.06 9.10 Composite 28 Over 10 years (long-term) 8.64 8.98 8.58 8.62 8.64 8.97 9.11 9.11 9.07 9.06 9.14 9.17 State and local notes and bonds Moody's series14 29 Aaa 7.14 7.36 7.00 6.88 6.96 6.99 7.18 7.19 7.13 7.06 7.11 7.40 30 Baa 8.17 7.83 7.40 7.11 7.13 7.21 7.48 7.47 7.41 7.35 7.37 7.80 31 Bond Buyer series15 7.63 7.68 7.23 7.24 7.19 7.32 7.43 7.47 7.41 7.35 7.41 7.53 Corporate bonds Seasoned issues16 32 All industries 9.91 10.18 9.66 9.67 9.65 9.84 10.02 9.98 9.98 9.97 10.00 10.11 33 Aaa 9.38 9.71 9.26 9.26 9.24 9.41 9.56 9.56 9.57 9.54 9.51 9.63 34 Aa 9.68 9.94 9.46 9.49 9.47 9.63 9.77 9.75 9.72 9.71 9.77 9.87 35 A 9.99 10.24 9.74 9.70 9.69 9.89 10.09 10.03 10.06 10.06 10.07 10.16 36 Baa 10.58 10.83 10.18 10.22 10.20 10.41 10.64 10.56 10.54 10.57 10.66 10.76 37 A-rated, recently offered utility bonds17 9.96 10.20 9.79 9.85 9.96 10.29 10.28 10.31 10.23 10.28 10.35 10.25 MEMO: Dividend/price ratio 38 Preferred stocks 8.37 9.23 9.05 9.01 8.94 8.97 9.05 9.02 9.01 9.04 9.00 9.13 39 Common stocks 3.08 3.64 3.45 3.36 3.37 3.65 3.85 3.76 3.76 3.79 3.81 4.03 1. Weekly, monthly and annual figures are averages of all calendar days, places. Thus, average issuing rates in bill auctions will be reported using two where the rate for a weekend or holiday is taken to be the rate prevailing on the rather than three decimal places. preceding business day. The daily rate is the average of the rates on a given day 11. Yields are based on closing bid prices quoted by at least five dealers. weighted by the volume of transactions at these rates. 12. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields 2. Weekly figures are averages for statement week ending Wednesday. are read from a yield curve at fixed maturities. Based on only recently issued, 3. Rate for the Federal Reserve Bank of New York. actively traded securities. 4. Unweighted average of offering rates quoted by at least five dealers (in the 13. Averages (to maturity or call) for all outstanding bonds neither due nor case of commercial paper), or finance companies (in the case of finance paper). callable in less than 10 years, including one very low yielding "flower" bond. Before November 1979, maturities for data shown are 30-59 days, 90-119 days, 14. General obligations based on Thursday figures; Moody's Investors Service. and 120-179. days for commercial paper; and 30-59 days, 90-119 days, and 15. General obligations only, with 20 years to maturity, issued by 20 state and 150-179 days for finance paper. local governmental units of mixed quality. Based on figures for Thursday. 5. Yields are quoted on a bank-discount basis, rather than in an investment 16. Daily figures from Moody's Investors Service. Based on yields to maturity yield basis (which would give a higher figure). on selected long-term bonds. 6. Dealer closing offered rates for top-rated banks. Most representative rate 17. Compilation of the Federal Reserve. This series is an estimate of the yield (which may be, but need not be, the average of the rates quoted by the dealers). on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 7. Unweighted average of offered rates quoted by at least five dealers early in call protection. Weekly data are based on Friday quotations. the day. 18. Standard and Poor's corporate series. Preferred stock ratio based on a 8. Calendar week average. For indication purposes only. sample of ten issues: four public utilities, four industrials, one financial, and one 9. Unweighted average of closing bid rates quoted by at least five dealers. transportation. Common stock ratios on the 500 stocks in the price index. 10. Rates are recorded in the week in which bills are issued. Beginning with the NOTE. These data also appear in the Board's H.15 (519) and G. 13 (415) releases. Treasury bill auction held on Apr. 18, 1983, bidders were required to state the For address, see inside front cover. percentage yield (on a bank discount basis) that they would accept to two decimal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A25 1.36 STOCK MARKET Selected Statistics 1990 IInnddiiccaattoorr 11998877 11998888 11998899 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) 161.78 149.97 180.13 187.96 182.55 186.26 185.61 191.35 196.68 196.61 181.45 173.22 2 Industrial 195.31 180.83 228.04 225.79 220.60 226.14 226.86 234.85 242.42 245.86 226.73 216.81 3 Transportation 140.52 134.09 174.90 173.67 166.69 175.08 173.54 173.53 177.37 173.18 147.41 136.95 4 Utility 74.29 72.22 94.33 95.69 92.15 92.99 91.92 93.29 93.65 89.85 85.81 83.30 5 Finance 146.48 127.41 162.01 150.11 142.68 143.14 138.57 142.94 147.93 143.11 128.14 118.59 6 Standard & Poor's Corporation (1941-43 = 10)1 287.00 265.88 323.05 339.97 330.45 338.47 338.18 350.25 360.39 360.03 330.75 315.41 7 American Stock Exchange (Aug. 31, 1973 = 50? 316.78 295.08 356.67 367.40 355.30 360.77 353.32 353.82 361.62 359.09 333.49 318.53 Volume of trading (thousands of shares) 8 New York Stock Exchange 188,922 161,386 165,568 172,420 155,960 149,240 140,062 163,486 153,634 160,490 174,446 142,054 9 American Stock Exchange 13,832 9,955 13,124 14,831 13,735 15,133 13,961 14,005 12,421 12,529 15,881 11,668 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 31,990 32,740 34,320 32,640 31,480 30,760 31,060 31,600 31,720 32,130 30,350 29,640 Free credit balances at brokers4 11 Margin-account5 4,750 5,660 7,040 6,755 6,575 6,525 6,465 6,215 6,490 6,385 7,140 7,285 12 Cash-account 15,640 16,595 18,505 17,370 16,200 16,510 15,375 15,470 15,625 17,035 16,745 16,185 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance "margin securities" (as defined in the regulations) when such credit is collatercompanies. With this change the index includes 400 industrial stocks (formerly alized by securities. Margin requirements on securities other than options are the 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 difference between the market value (100 percent) and the maximum loan value of financial. collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15, 2. Beginning July 5, 1983, the American Stock Exchange rebased its index 1934; Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968; effectively cutting previous readings in half. and Regulation X, effective Nov. 1, 1971. 3. Beginning July 1983, under the revised Regulation T, margin credit at On Jan. 1, 1977, the Board of Governors for the first time established in broker-dealers includes credit extended against stocks, convertible bonds, stocks Regulation T the initial margin required for writing options on securities, setting acquired through exercise of subscription rights, corporate bonds, and govern- it at 30 percent of the current market-value of the stock underlying the option. On ment securities. Separate reporting of data for margin stocks, convertible bonds, Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the and subscription issues was discontinued in April 1984. same as the option maintenance margin required by the appropriate exchange or 4. Free credit balances are in accounts with no unfulfilled commitments to the self-regulatory organization; such maintenance margin rules must be approved by brokers and are subject to withdrawal by customers on demand. the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC 5. New series beginning June 1984. approved new maintenance margin rules, permitting margins to be the price of the 6. These regulations, adopted by the Board of Governors pursuant to the option plus 15 percent of the market value of the stock underlying the option. Securities Exchange Act of 1934, limit the amount of credit to purchase and carry Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics • December 1990 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1989 1990 AAccccoouunntt 11998877 11998888 Oct. Nov. Dec. Jan/ Feb/ Mar. Apr. May June July SAIF-insured institutions 1 Assets 1,250,855 1,350,500 1,286,710 1,277,191 1,249,055 1,236,507 1,225,091 1,223,351' 1,210,383' 1,197,824 2 Mortgages 721,593 764,513 748,780 745,091 733,729 727,544 721,450 717,687 715,461' 708,574 3 Mortgage-backed securities 201,828 214,587 181,464 176,386 170,532 169,414 167,259 167,683' 166,164 165,713 4 Contra-assets to mortgage assets' . 42,344 37,950 25,950 24,976 25,457 24,135 22,809 23,073' 21,984' 21,992 5 Commercial loans 23,163 33,889 32,572 32,344 32,150 31,916 31,775 31,069' 30,932 30,352 6 Consumer loans 57,902 61,922 59,722 59,372 58,685 57,322 56,821 56,785 56,641' 55,658 7 Contra-assets to nonmortgage loans . 3,467 3,056 3,107 3,194 3,592 2,252 2,279 2,456' 2,229' 1,766 8 Cash and investment securities 169,717 186,986 172,727 172,465 166,053 160,534 157,292 162,313' 153,348' 152,393 n.a. n.a. 9 Other3 122,462 129,610 120,501 119,704 116,955 116,164 115,587 113,342' 112,051' 108,892 10 Liabilities and net worth . 1,250,855 1,350,500 1,286,710 1,277,191 1,249,055 1,236,507 1,225,091 1,223,351' 1,210,383' 1,197,824 11 Savings capital 932,616 971,700 948,500 946,655 945,656 933,843 926,439 929,910' 916,058 902,634 12 Borrowed money 249,917 299,400 275,979 268,462 252,230 252,942 248,134 246,875 246,647 241,983 13 FHLBB 116,363 134,168 130,514 127,671 124,577 121,732 120,633 117,489 115,620 114,047 14 Other 133,554 165,232 145,465 140,791 127,653 131,210 127,501 129,386 131,027 127,936 15 Other 21,941 24,216 30,971 31,991 27,556 26,979 28,101 25,997' 27,366' 28,773 16 Net worth n.a. n.a. 31,260 30,083 23,612 23,021 22,419 20,569' 20,326' 24,357 SAIF-insured federal savings banks 17 Assets 284,270 425,966 502,484 499,995 498,522 583,063 581,983 595,644 593,345 18 Mortgages 161,926 230,734 283,652 282,510 283,844 331,503 330,366 332,995 333,300 19 Mortgage-backed securities 45,826 64,957 72,332 71,204 70,499 76,765 77,016 80,059 81,030 20 Contra-assets to mortgage assets' . 9,100 13,140 13,506 13,216 13,548 12,309 11,615 11,844 11,590 21 Commercial loans 6,504 16,731 18,299 18,172 18,143 20,310 20,244 20,366 20,324 22 Consumer loans 17,696 24,222 28,322 28,079 28,212 20,310 20,244 20,365 20,324 23 Contra-assets to nonmortgage loans . 678 889 1,048 1,082 1,193 949 986 1,001 908 24 Finance leases plus interest 591 880 1,085 1,092 1,101 n.a. n.a. n.a. n.a. n.a. n a. n.a. 25 Cash and investment ... 35,347 61,029 65,193 65,191 64,538 70,742 70,054 76,158 72,618 26 Other 24,069 35,412 40,799 40,852 39,981 45,444 46,238 46,371 46,180 27 Liabilities and net worth . 284,270 425,966 502,484 499,995 498,522 583,063 581,983 595,644 593,345 28 Savings capital 203,196 298,197 355,923 355,874 360,547 418,555 419,246 433,000 429,469 29 Borrowed money 60,716 99,286 114,231 111,369 108,448 126,398 124,171 126,253 126,240 30 FHLBB 29,617 46,265 57,793 56,842 57,032 63,516 63,026 63,550 63,120 31 Other 31,099 53,021 56,438 54,527 51,416 62,882 61,145 62,703 63,120 32 Other 5,324 8,075 10,317 10,749 9,041 9,770 10,347 9,435 9,982 33 Net worth 15,034 20,218 25,983 25,958 22,716 25,986 25,723 24,169 23,505 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.37—Continued 1989 1990 AAccccoouunntt 11998877 11998888 Oct. Nov. Dec. Jan/ Feb/ Mar. Apr. May June July Credit unions4 34 Total assets/liabilities and capital 174,593 181,527 182,856 183,688 183,301 186,119 192,718 193,208 195,020 195,302 194,523 35 Federal 114,566 118,887 119,682 120,666 120,489 122,885 126,690 127,250 128,648 128,142 127,564 36 State 60,027 62,640 63,174 63,022 62,812 63,234 66,028 65,958 66,372 67,160 66,959 37 Loans outstanding n. a. 113,191 122,997 122,899 122,608 122,332 121,968 121,660 122,616 123,205 123,968 124,343 38 Federal 73,766 80,570 80,601 80,272 80,041 79,715 79,407 80,205 80,550 81,063 81,063 39 State 39,425 42,427 42,298 42,336 42,291 42,253 42,253 42,411 42,655 42,905 43,280 40 Savings 159,010 164,695 165,533 167,371 166,629 168,609 175,942 175,745 176,701 178,127 176,360 41 Federal 104,431 107,588 108,319 109,653 109,818 111,246 115,714 115,554 116,402 116,717 115,305 42 State 54,579 57,107 57,214 57,718 56,811 57,363 60,228 60,191 60,299 61,408 61,056 Life insurance companies 43 Assets 1,044,459 1,166,870 1,276,510' 1,288,728' 1,299,756' Securities 44 Government 84,426 84,051 77,999' 77,092' 77,297' 45 United States5 57,078 58,564 53,116' 52,203' 52,517' 46 State and local 10,681 9,136 8,958' 9,013' 9,028' 47 Foreign6 16,667 16,351 15,925' 15,876' 15,752' 48 Business 569,199 660,416 747,782' 755,589' 764,521' n.a. n.a. n.a. n.a. n.a. n.a. n.a. 49 Bonds 472,684 556,043 626,643' 632,563' 638,907' 50 Stocks 96,515 104,373 121,139' 123,026' 125,614' 51 Mortgages 203,545 232,863 250,019' 252,07c 254,215' 52 Real estate 34,172 37,371 39,793' 39,834' 39,908' 53 Policy loans 53,626 54,236 56,963' 57,183' 57,439' 54 Other assets 89,586 93,358 103,954' 106,960' 106,376' 1. Contra-assets are credit-balance accounts that must be subtracted from the International Bank for Reconstruction and Development. corresponding gross asset categories to yield net asset levels. Contra-assets to NOTE. SAIF-insured institutions: Estimates by the OTS for all institutions mortgage loans, contracts, and pass-through securities include loans in process, insured by the SAIF and based on the OTS thrift Financial Report. unearned discounts and deferred loan fees, valuation allowances for mortgages SAIF-insured federal savings banks: Estimates by the OTS for federal savings "held for sale," and specific reserves and other valuation allowances. banks insured by the SAIF and based on the OTS thrift Financial Report. 2. Contra-assets are credit-balance accounts that must be subtracted from the Credit unions: Estimates by the National Credit Union Administration for corresponding gross asset categories to yield net asset levels. Contra-assets to federally chartered and federally insured state-chartered credit unions serving nonmortgage loans include loans in process, unearned discounts and deferred loan natural persons. fees, and specific reserves and valuation allowances. Life insurance companies: Estimates of the American Council of Life Insurance 3. Holding of stock in Federal Home Loan Bank and Finance leases plus for all life insurance companies in the United States. Annual figures are annualinterest are included in "Other" (line 9). statement asset values, with bonds carried on an amortized basis and stocks at 4. Data include all federally insured credit unions, both federal and state year-end market value. Adjustments for interest due and accrued and for chartered, serving natural persons. differences between market and book values are not made on each item separately 5. Direct and guaranteed obligations. Excludes federal agency issues not but are included, in total, in "other assets." guaranteed, which are shown in the table under "Business" securities. As of June 1989 Savings bank data are no longer available. 6. Issues of foreign governments and their subdivisions and bonds of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • December 1990 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 1990 111999888888 111999888999''' 111999999000 Apr. May June July Aug. Sept. U.S. budget1 1 Receipts, total 908,166 990,701 1,031,463 139,624 69,212 110,614 72,357 78,486 102,874 2 On-budget 666,675 727,035 749,809 106,775 45,514 83,717 50,446 56,284 78,542 3 Off-budget 241,491 263,666 281,654 32,849 23,698 26,897 21,911 22,202 24,332 4 Outlays, total 1,063,318 1,144,020 1,251,850 97,795' 111,693' 121,719' 98,28c 131,206' 82,026 5 On-budget 860,627 933,109 1,026,785 79,679' 91,742' 105,759' 79,833' 89,717' 80,613 6 Off-budget 202,691 210,911 225,065 18,116 19,951 15,960 18,447 41,489 1,413 7 Surplus, or deficit (-), total -155,152 -153,319 -220,387 41,829' -42,482' -11,105' -25,924' -52,719' 20,848 8 On-budget -193,952 -206,074 -276,976 27,096' -46,229' -22,042' -29,388' -33,432' -2,071 9 Off-budget 38,800 52,755 56,589 14,733 3,747 10,937 3,464 -19,287 22,919 Source of financing (total) 10 Borrowing from the public 166,139 141,806 264,453 -5,935 23,380 23,520 24,23C 47,329 -2,595 11 Operating cash (decrease, or increase (-)) . -7,962 3,425 818 -20,830 25,594 -20,916 9,862 2,433 17,832 12 Other 2 -3,025 8,088 -44,884 -15,064' -6,492' 8,501' -8,168' 2,957' -421 MEMO 13 Treasury operating balance (level, end of period) 44,398 40,973 40,155 39,296 13,702 34,618 24,756 22,323 40,155 14 Federal Reserve Banks 13,023 13,452 7,638 5,205 4,426 5,470 6,369 4,453 7,638 15 Tax and loan accounts 31,375 27,521 32,517 34,091 9,276 29,148 18,387 17,869 32,517 1. In accordance with the Balanced Budget and Emergency Deficit Control Act international monetary fund; other cash and monetary assets; accrued interest of 1985, all former off-budget entries are now presented on-budget. The Federal payable to the public; allocations of special drawing rights; deposit funds; Financing Bank (FFB) activities are now shown as separate accounts under the miscellaneous liability (including checks outstanding) and asset accounts; agencies that use the FFB to finance their programs. The act has also moved two seigniorage; increment on gold; net gain/loss for U.S. currency valuation adjustsocial security trust funds (Federal old-age survivors insurance and Federal ment; net gain/loss for IMF valuation adjustment; and profit on the sale of gold. disability insurance trust funds) off-budget. SOURCE. Monthly Treasury Statement of Receipts and Outlays of the U.S. 2. Includes SDRs; reserve position on the U.S. quota in the IMF; loans to Government and the Budget of the U.S. Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr 1988 1989 1990 1990 111999888888 111999888999 H2 HI H2 HI July Aug. Sept. RECEIPTS 1 All sources 908,166 990,701 449,330 527,574 470,329 548,977 72,357 78,486 102,874 ? Individual income taxes, net 401,181 445,690 200,300 233,572 218,706' 243,087' 33,308' 36,455' 46,664 3 Withheld 341,435 361,386 179,600 174,230 193,2% 190,219 32,211 34,610 30,806 4 Presidential Election Campaign Fund .... 33 32 4 28 3 30 31 -29 1 5 Nonwithheld 132,199 154,839 29,880 121,563 33,303 117,675' 2,783 3,451 17,420 6 Refunds 72,487 70,567 9,186 62,251 7,898' 64,838' 1,716' 1,577' 1,562 Corporation income taxes 7 Gross receipts 109,683 117,015 56,409 61,585 52,269 58,830 3,364 2,564 1188,,886688 8 Refunds 15,487 13,723 7,250 7,259 6,842 8,326 1,307 956 1,524 9 Social insurance taxes and contributions, net 334,335 359,416 157,603 200,127 162,574 210,476 29,610 32,047 31,010 10 Employment taxes and contributions 305,093 332,859 144,983 184,569 152,407 195,269 27,554 2277,,991199 3300,,448800 11 Self-employment taxes and contributions 17,691 18,504 3,032 16,371 1,947 19,017 0 0 22,,663388 17. Unemployment insurance 24,584 22,011 10,359 13,279 7,909 12,929 1,701 3,712 186 13 Other net receipts 4,659 4,546' 2,262 2,277 2,260 2,278 355 416 344 14 Excise taxes 35,604 34,386 19,299 16,814 16,799' 18,153' 3,052' 2,740' 2,774 IS Customs deposits 15,411 16,334 8,107 7,918 8,667 8,0% 1,505 1,627 1,273 16 Estate and gift taxes 7,594 8,745 4,054 4,583 4,451 6,442 924 883 875 17 Miscellaneous receipts5 19,909 22,839 10,809 10,235 13,704' 12,222' 1,900' 3,127' 2,934 OUTLAYS 18 All types 1,063,318 1,144,020' 554,089' 565,425' 588,448' 640,982' 98,280' 131,206' 82,026 19 National defense 290,361 303,559' 150,496 148,098 149,613 152,733 22,717 28,664 21,497 7.0 International affairs 10,471 9,574' 2,627 6,567 5,971' 6,770 28 1,039 1,957 71 General science, space, and technology 10,841 12,838' 5,852 6,238 7,091 6,974 1,283 1,333 1,132 77 Energy 2,297 3,702' 1,966 2,221 1,597 1,504 211 207 -357 73 Natural resources and environment 14,625 16,182' 9,072 7,022 9,183 7,343 1,375 1,388 1,517 24 Agriculture 17,210 16,948 6,911 9,619 4,132 7,450 417 98 67 75 Commerce and housing credit 18,828 29,091' 19,836 4,129 22,295 38,788 5,142 3,045 12,018 76 Transportation 27,272 27,608' 14,922 12,953 14,982 13,754 2,683 2,734 2,608 27 Community and regional development 5,294 5,361' 2,690 1,833 4,879 3,987 606 614 519 28 Education, training, employment, and social services 31,938 36,694' 16,162 18,083 18,663 1199,,553377 22,,119988 33,,441177 22,,773300 79 Health 44,490 48,390' 23,360 24,078 25,339 29,488 5,103 5,585 4,804 30 Social security and medicare 297,828 317,506 149,017 162,195 162,322 175,997 30,226 49,891 8,623 31 Income security 129,332 136,031' 64,978 70,937 67,950 78,456 11,786 13,475 10,206 3? Veterans benefits and services 29,406 30,066 15,797 14,891 14,864 15,217 1,269 3,624 1,208 33 Administration of justice 8,436 9,422' 4,361 4,801 4,963 4,983 921 866 717 34 General government 9,518 9,124' 5,137 3,858 4,760 4,916 807 691 1,406 35 General-purpose fiscal assistance 1,816 n.a. 0 0 n.a. n.a. n.a. n.a. n.a. 36 Net interest6 151,748 169,317' 78,317 86,009 87,927 91,155 15,153 17,556 15,697 37 Undistributed offsetting receipts -36,967 -37,212 -18,771 -18,131 -18,935 -17,688 -3,634 -2,987 -4,320 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 Financial Statistics • December 1990 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1988 1989 1990 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 2,614.6 2,707.3 2,763.6 2,824.0 2,881.1 2,975.5 3,081.9 3,175.5 3,266.1 2 Public debt securities 2,602.2 2,684.4 2,740.9 2,799.9 2,857.4 2,953.0 3,052.0 3,143.8 3,233.3 3 Held by public 2,051.7 2,095.2 2,133.4 2,142.1 2,180.7 2,245.2 2,329.3 2,368.8 n.a. 4 Held by agencies 550.4 589.2 607.5 657.8 676.7 707.8 722.7 775.0 n.a. 5 Agency securities 12.4 22.9 22.7 24.0 23.7 22.5 29.9 31.7 n.a. 6 Held by public 12.2 22.6 22.3 23.6 23.5 22.4 29.8 31.6 n.a. 7 Held by agencies .2 .3 .4 .5 .1 .1 .2 .2 n.a. 8 Debt subject to statutory limit 2,586.9 2,669.1 2,725.6 2,784.6 2,829.8 2,921.7 2,988.9 3,077.0 3,161.2 9 Public debt securities 2,586.7 2,668.9 2,725.5 2,784.3 2,829.5 2,921.4 2,988.6 3,076.6 3,160.9 10 Other debt1 .1 .2 .2 .2 .3 .3 .3 .4 .4 11 MEMO: Statutory debt limit 2,800.0 2,800.0 2,800.0 2,800.0 2,870.0 3,122.7 3,122.7 3,122.7 3,195.0 1. Includes guaranteed debt of Treasuo* and other federal agencies, specified SOURCES. Treasury Bulletin and Monthly Statement of the Public Debt of the participation certificates, notes to international lending organizations, and District United States. of Columbia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1990 Type and holder 1986 1988 Q4 Q1 Q2 Q3 1 Total gross public debt 2,214.8 2,431.7 2,684.4 2,953.0 2,953.0 3,052.0 3,143.8 3,233.3 By type 2 Interest-bearing debt 2,212.0 2,428.9 2,663.1 2,931.8 2,931.8 3,029.5 3,121.5 3,210.9 3 Marketable 1,619.0 1,724.7 1,821.3 1.945.4 1.945.4 1.995.3 2,028.0 2,092.8 4 Bills 426.7 389.5 414.0 430.6 430.6 453.1 453.5 482.5 5 Notes 927.5 1,037.9 1,083.6 1.151.5 1.151.5 1.169.4 1,192.7 1,218.1 6 Bonds 249.8 282.5 308.9 348.2 348.2 357.9 366.8 377.2 7 Nonmarketable1 593.1 704.2 841.8 986.4 986.4 1,034.2 1,093.5 1,118.2 8 State and local government series 110.5 139.3 151.5 163.3 163.3 163.5 164.3 161.3 9 Foreign issues 4.7 4.0 6.6 6.8 6.8 37.1 36.4 n.a. 10 Government 4.7 4.0 6.6 6.8 6.8 37.1 36.4 36.0 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes... 90.6 99.2 107.6 115.7 115.7 118.0 120.1 122.2 13 Government account series3 386.9 461.3 575.6 695.6 695.6 705.1 758.7 779.4 14 Non-interest-bearing debt 2.8 2.8 21.3 21.2 21.2 22.4 22.3 22.4 By holder4 15 U.S. government agencies and trust funds 403.1 477.6 589.2 707.8 707.8 722.7 775.0 16 Federal Reserve Banks 211.3 222.6 238.4 228.4 228.4 219.3 231.4 17 Private investors 1,602.0 1,731.4 1,858.5 2,015.8 2,015.8 2,115.1 2,135.5 18 Commercial banks 203.5 201.5 193.8 180.6 180.6 182.0 n.a. 19 Money market funds 28.0 14.6 11.8 14.4 14.4 31.3 n.a. 20 Insurance companies 105.6 104.9 107.3 107.9 107.9 108.0 n.a. 21 Other companies 68.8 84.6 87.1 93.8 93.8 95.0 n.a. 22 State and local Treasurys 262.8 284.6 313.6 337.1 337.1 338.0 n.a. Individuals 23 Savings bonds 92.3 101.1 109.6 117.7 117.7 119.9 121.6 24 Other securities 70.4 71.3 79.2 93.8 93.8 95.0 n.a. 25 Foreign and international5 263.4 299.7 362.2 393.4 393.4 386.9 392.7 26 Other miscellaneous investors6 506.6 569.1 593.9 674.3 674.3 754.9 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 and the are actual holdings; data for other groups are Treasury estimates. Treasury 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' Millions of dollars 1990 July Aug. Sept Aug. 1 Aug. 8 Aug. 15 Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 IMMEDIATE TRANSACTIONS^ By type of security U.S. government securities 1 Bills 135,618 150,589 153,579 165,104 180,990 142,351 126,730 165,575 110,101 135,753 170,641 175,870 Coupon securities 2 Maturing in less than 3.5 years 124,839 162,366 143,274 151,200 254,307 144,551 131,341 146,503 99,855 131,682 144,204 169,377 3 Maturing in 3.5 to 7.5 years ... 119,918 120,685 111,268 123,264 182,708 109,405 105,121 100,355 82,269 103,290 115,933 118,763 4 Maturing in 7.5 to 15 years 45,979 67,972 47,187 52,395 103,473 80,974 50,396 52,945 36,014 47,860 51,471 44,935 5 Maturing in 15 years or more .. 69,519 76,686 53,050 68,094 115,514 98,123 60,166 52,514 32,046 57,216 55,014 53,796 Federal agency securities Debt 6 Maturing in less than 3.5 years 22,963 19,543 21,755 28,705 18,522 16,011 17,029 22,775 24,547 16,962 21,489 22,578 7 Maturing in 3.5 to 7.5 years ... 3,382 2,772 2,197 2,877 3,483 3,303 2,788 2,087 1,289 2,482 2,751 1,798 8 Maturing in 7.5 years or more . 5,019 3,894 2,569 3,793 4,451 4,372 3,673 3,761 2,246 2,933 2,314 2,215 Mortgage-backed 9 Pass-throughs 35,119 34,383 44,740 42,700 32,996 33,747 36,272 36,023 26,455 42,756 45,890 51,253 10 All others3 7,323 6,981 5,581 9,407 7,954 6,791 7,184 6,544 4,391 6,033 7,145 3,884 By type of counterparty Primary dealers and brokers 11 U.S. government securities Federal agency 309,875 360,883 322,125 348,483 539,401 353,942 299,091 307,981 224,871 308,573 338,057 356,053 12 Debt securities 10,909 8,240 8,550 11,138 8,761 8,265 6,746 8,551 8,388 8,033 8,577 7,881 13 Mortgage backed securities 20,070 19,094' 24,845 25,175 17,640 17,576 21,023 20,579 14,947 25,319 21,456 29,929 Customers 14 U.S. government securities Federal agency 185,997 217,415 186,234 211,574 297,591 221,462 174,663 209,911 135,414 167,228 199,206 206,688 15 Debt securities 20,455 17,969 17,970 24,237 17,695 15,421 16,744 20,072 19,694 14,344 17,977 18,710 16 Mortgage-backed securities 22,372 22,269r 25,476 26,932 23,310 22,962 22,433 21,988 15,899 23,470 31,579 25,208 FUTURE AND FORWARD TRANSACTIONS By type of deliverable security U.S. government securities 17 Bills 14,786 22,713' 20,912 18,743 40,631' 14,016 20,133 21,121 12,073 21,439 26,281 19,782 Coupon securities 18 Maturing in less than 3.5 years 6,441 8,400 5,852 7,380 12,096 7,893 6,399 9,282 3,730 5,662 6,210 6,209 19 Maturing in 3.5 to 7.5 years ... 3,078 3,405 2,227 1,738 4,284 2,633 2,984 4,476 2,341 1,149 2,709 1,968 20 Maturing in 7.5 to 15 years 4,140 6,829 4,498 3,886 10,686 6,898 5,654 6,031 3,417 4,964 5,068 3,449 21 Maturing in 15 years or more.. 30,248 50,828' 37,658 33,704 72,132' 54,946 45,455 43,631 27,260 40,521 40,188 34,328 Federal agency securities Debt 22 Maturing in less than 3.5 years 452 236 151 101 48 437 108 447 59 83 198 228 23 Maturing in 3.5 to 7.5 years ... 163 287' 565 331 162 928 92 60 31 1,202 836 127 24 Maturing in 7.5 years or more . 775 102 223 155 95 154 104 70 40 36 113 419 Mortgage-backed 25 Pass-throughs 40,660 42,167 37,292 32,094 42,653 55,723 43,127 38,132 19,787 37,102 46,035 39,457 26 All others 7,332 7,223 4,847 6,469 9,843 7,594 7,553 5,358 3,959 4,508 6,383 2,552 OPTION TRANSACTIONS6 By type of underlying securities 27 B U i . l S ls . government securities 26 55' 17 0 0 1 250 0 0 0 0 Coupon securities 28 Maturing in less than 3.5 years 1,978 3,393' 4,660 2,675 3,347 3,255 3,365 3,811 3,235 3,063 5,280 6,108 29 Maturing in 3.5 to 7.5 years ... 1,665 1,446' 1,476 1,956 2,983 748 866 934 1,818 923 1,943 1,335 30 Maturing in 7.5 to 15 years 954 1,550 909 1,051 2,111 1,666 1,549 1,175 1,048 968 340 1,342 31 Maturing in 15 years or more.. 8,099 14,228' 9,293 10,047 16,422 13,568 13,968 16,332 7,871 10,591 7,615 9,959 Federal agency securities Debt 3 3 3 2 3 4 M M M a a a t t t u u u r r r i i i n n n g g g i i i n n n l 7 3 e . . 5 s 5 s t y t o e h a a 7 r n . s 5 3 o y . r 5 e a m y rs e o a re r . s .. . 3 1 5 0 1 1 0 0 5 6 0 0 5 0 0 0 8 0 0 0 40 0 0 80 0 0 0 0 1 3 5 3 0 0 25 0 0 Mortgage-backed 3 3 5 6 P A a ll s s o - t t h h e r r o s u ghs 2,394 0 2,600 0 1,87 3 5 4 2,183 0 3,162 0 3,409 0 2,745 0 1,80 0 2 1,01 0 4 2,9 1 4 1 9 8 1,676 0 1,72 1 9 0 1. Transactions are market purchases and sales of securities as reported to the 3. Includes securities such as CMOs, REMICs; IOs, and POs. Federal Reserve Bank of New York by the U.S. government securities dealers on 4. Futures transactions are standardized agreements arranged on an exchange. its published list of primary dealers. Averages for transactions are based on the Forward transactions are agreements made in the over-the-counter market that number of trading days in the period. Immediate, forward, and future transactions specify delayed delivery. All futures transactions are included regardless of time are reported at principal value, which does not include accrued interest; option to delivery. Forward contracts for U.S. government securities and federal agency transactions are reported at the face value of the underlying securities. debt securities are included when the time to delivery is more than five days. 2. Transactions for immediate delivery include purchases or sales of securities Forward contracts for mortgage-backed securities are included when the time to (other than mortgage-backed agency securities) for which delivery is scheduled in delivery is more than thirty days. five business days or less and "when-issued" securities that settle on the issue 5. Options transactions are purchases or sales of put and call options, whether date of offering. Transactions for immediate delivery of mortgage-backed securities arranged on an organized exchange or in the over-the-counter market and include include purchases and sales for which delivery is scheduled in thirty days or less. options on futures contracts on U.S. government and federal agency securities. Stripped securities are reported at market value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics • December 1990 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1990 1990 IItteemm July Aug. Sept. Aug. 1 Aug. 8 Aug. 15 Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 Positions2 NET IMMEDIATE3 By type of security U.S. government securities 1 Bills 3,032 6,815 0 6,610 6,517 9,520 6,587 4,975 5,733 7,840 1,870 2,183 Coupon securities 2 Maturing in less than 3.5 years 3,183 5,395 0 5,050 7,415 6,879 1,538 6,286 3,685 1,513 -3,123 -1,919 3 Maturing in 3.5 to 7.5 years 3,781 -2,645 0 466 -1,681 -3,352 -4,255 -1,683 -2,829 -4,903 -6,286 -5,421 4 Maturing in 7.5 to 15 years -6,018 -5,740 0 -7,117 -4,837 -5,312 -5,178 -7,079 -6,987 -7,016 -6,780 -8,039 5 Maturing in 15 years or more -10,969 -12,241 0 -10,051 -12,406 -10,398 -12,494 -13,375 -14,352 -14,161 -14,008 -14,317 Federal agency securities Debt 6 Maturing in less than 3.5 years 3,166 4,136 0 4,175 4,837 4,828 3,447 3,849 2,661 3,388 4,597 5,020 7 Maturing in 3.5 to 7.5 years 1,446 1,422 0 1,403 1,235 1,080 1,545 1,723 1,799 1,908 1,907 1,632 8 Maturing in 7.5 years or more 2,899 2,396 0 3,098 2,690 2,535 1,947 2,342 2,292 2,428 1,911 1,662 Mortgage-backed 9 Pass-throughs 17,146 16,696 0 19,612 19,038 19,894 15,815 12,592 13,296 18,592 19,930 14,360 10 All others 0 0 0 0 0 0 0 0 0 0 0 0 Other money market instruments 11 Certificates of deposit 2,877 3,129 0 3,761 3,436 2,795 2,879 3,180 3,600 2,773 2,572 2,903 12 Commercial paper 6,146 7,489 0 7,375 9,049 7,846 5,984 6,541 9,425 7,934 6,674 5,638 13 Bankers'acceptances 1,030 1,193 0 994 1,169 1,508 1,133 1,002 1,148 946 1,219 605 FUTURE AND FORWARD5 By type of deliverable security U.S. government securities 14 Bills -8,317 -15,495 0 -13,051 -18,829 -18,715 -15,794 -10,246 -11,096 -10,398 -12,907 -12,482 Coupon securities 15 Maturing in less than 3.5 years -771 -616 0 -16 -551 -680 -678 -578 -834 -71 -468 -678 16 Maturing in 3.5 to 7.5 years -1,909 -1,728 0 -2,078 -2,465 -1,865 -1,116 -1,659 -878 -888 -1,540 -1,822 17 Maturing in 7.5 to 15 years -798 327 0 -769 143 137 668 565 159 -50 481 588 18 Maturing in 15 years or more -5,098 -2,405 0 -6,006 -3,406 -2,508 -1,621 -1,928 -1,152 91 801 948 Federal agency securities Debt 19 Maturing in less than 3.5 years -69 167 0 -99 45 148 115 397 177 174 113 73 20 Maturing in 3.5 to 7.5 years -104 71 0 -126 -17 282 -2 70 5 194 68 29 21 Maturing in 7.5 years or more 162 -52 0 -17 -42 -139 6 -47 -21 -9 18 287 Mortgage-backed 22 Pass-throughs -11,755 -7,823 0 -11,658 -8,732 -11,313 -6,190 -5,320 -4,989 -10,152 -11,365 -5,536 23 All others 0 0 0 0 0 0 0 0 0 0 0 0 Other money market instruments 24 Certificates of deposit 35,615 47,770 0 29,540 43,378 33,875 63,054 55,075 41,825 52,817 50,326 68,577 25 Commercial paper 0 -3 0 0 0 0 0 -13 0 0 0 0 26 Bankers' acceptances 0 0 0 0 0 0 0 0 0 0 0 0 Financing6 Reverse repurchase agreements 27 Overnight and continuing 148,001 157,064 0 158,942 153,860 161,066 160,550 152,563 156,881 154,733 167,521 149,268 28 Term 217,735 229,319 0 231,348 250,444 212,011 224,848 234,528 212,367 220,311 222,602 225,741 Reverse repurchase agreements 29 Overnight and continuing 223,111 234,871 0 232,171 233,845 241,163 237,704 225,955 239,080 230,982 248,020 222,741 30 Term 179,589 189,849 0 189,706 210,937 177,140 184,504 193,893 165,155 173,862 178,720 180,331 Securities borrowed 31 Overnight and continuing 42,585 45,459 0 45,126 43,148 42,080 47,678 47,948 49,055 49,227 49,383 53,214 32 Term 13,238 13,685 0 12,902 13,036 12,394 13,838 14,973 1155,,882200 16,703 17,988 20,704 Securities lent 33 Overnight and continuing 19,830 19,406 0 18,843 18,518 18,220 19,650 20,810 21,184 21,825 22,504 24,558 34 Term 1,290 480 0 807 539 335 829 203 362 566 1,055 2,490 Collateralized loans 35 Overnight and continuing 4,503 5,058 0 4,839 5,918 4,119 5,000 4,369 8,051 4,203 4,893 3,342 36 Term 824 691 0 394 249 1,580 503 461 737 1,197 836 757 MEMO: Matched book7 Reverse repurchases 37 Overnight and continuing 92,712 100,242 0 102,235 99,169 101,014 105,318 95,007 100,852 100,590 108,545 95,866 38 Term 177,648 184,789 0 190,108 204,184 167,985 180,166 189,082 117744,,220099 180,126 179,354 181,130 Repurchases 39 Overnight and continuing 124,806 131,250 0 134,759 129,610 127,391 137,781 127,388 139,395 137,282 143,847 126,605 40 Term 139,661 148,876 0 152,319 170,604 135,251 144,808 149,716 130,087 137,627 142,581 141,782 1. Data for positions and financing are obtained from reports submitted to the delivery. Forward contracts for U.S. government securities and for federal Federal Reserve Bank of New York by the U.S. government securities dealers on agency debt securities are included when the time to delivery is more than five its published list of primary dealers. Data for positions and financing are averages business days. Forward contracts for mortgage-backed securities are included of close-of- business Wednesday weekly data. when the time to delivery is more than thirty days. 2. Securities positions are reported at market value. 6. Overnight financing refers to agreements made on one business day that 3. Net immediate positions include securities purchased or sold (other than mature on the next business day; continuing contracts are agreements that remain mortgage-backed agency securities) that have been delivered or are scheduled to in effect for more than one business day but have no specific maturity and can be be delivered in five business days or less and "when-issued" securities settle on terminated without a requirement for advance notice by either party; term the issue date of offering. Net immediate positions of mortgage-backed securities agreements have a fixed maturity of more than one business day. include securities purchased or sold that have been delivered or are scheduled to 7. Matched-book data reflect financial intermediation activity in which the be delivered in thirty days or less. borrowing and lending transactions are matched. Matched-book data are included 4. Includes securities such as CMOs, REMICs, IOs, and POs. in the financing breakdowns listed above. The reverse repurchase and repurchase 5. Futures positions are standardized contracts arranged on an exchange. numbers are not always equal due to the "matching" of securities of different Forward positions reflect agreements made in the over-the-counter market that values or types of collateralization. specify delayed delivery. All futures positions are included regardless of time to 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 1990 AAggeennccyy 11998866 11998877 11998888 11998899 Apr. May June July Aug. 1 Federal and federally sponsored agencies 307,361 341,386 381,498 411,805 423,481 424,082 422,261 0 0 2 Federal agencies 36,958 37,981 35,668 35,664 42,526 42,482 42,015 41,978 42,323 3 Defense Department1 33 13 8 7 7 7 7 7 7 4 Export-Import Bank2,3 14,211 11,978 11,033 10,985 11,017 11,017 11,150 11,150 11,150 5 Federal Housing Administration 138 183 150 328 352 365 394 281 316 6 Government National Mortgage Association participation certificates 2,165 1,615 0 0 0 0 0 0 0 7 Postal Service6 3,104 6,103 6,142 6,445 6,445 6,148 6,148 6,148 6,948 8 Tennessee Valley Authority 17,222 18,089 18,335 17,899 24,705 24,945 24,316 24,392 23,902 9 United States Railway Association6 85 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 270,553 303,405 345,830 375,407 380,955 381,600 380,245 0 0 11 Federal Home Loan Banks 88,758 115,727 135,836 136,087 127,401 125,515 123,021 119,692 118,380 12 Federal Home Loan Mortgage Corporation 13,589 17,645 22,797 26,148 28,789 30,444 31,049 27,716 27,589 13 Federal National Mortgage Association 93,563 97,057 105,459 116,064 117,357 118,108 117,964 118,356 119,248 14 Farm Credit Banks8 62,478 55,275 53,127 54,864 53,700 53,795 53,451 53,175 54,015 15 Student Loan Marketing Association 12,171 16,503 22,073 28,705 31,664 31,696 32,392 32,218 32,605 16 Financing Corporation10 0 1,200 5,850 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation 0 0 690 847 847 847 1,172 1,172 1,172 18 Resolution Funding Corporation 0 0 0 4,522 13,026 13,026 13,026 18,052 18,052 MEMO 19 Federal Financing Bank debt13 157,510 152,417 142,850 134,873 136,957 141,536 157,685 162,443 166,017 Lending to federal and federally sponsored agencies 20 Export-Import Bank 14,205 11,972 11,027 10,979 11,011 11,011 11,144 11,144 11,144 21 Postal Service6 2,854 5,853 5,892 6,195 6,195 5,898 5,898 5,898 6,698 22 Student Loan Marketing Association 4,970 4,940 4,910 4,880 4,880 4,880 4,880 4,880 4,880 23 Tennessee Valley Authority 15,797 16,709 16,955 16,519 15,325 15,565 14,936 15,012 14,522 24 United States Railway Association6 85 0 0 0 0 0 0 0 0 Other Lending14 25 Farmers Home Administration 65,374 59,674 58,496 53,311 51,916 51,591 51,901 52,171 52,211 26 Rural Electrification Administration 21,680 21,191 19,246 19,265 19,191 19,182 19,168 19,066 19,043 27 Other 32,545 32,078 26,324 23,724 28,439 33,409 49,758 54,272 57,519 1. Consists of mortgages assumed by the Defense Department between 1957 10. The Financing Corporation, established in August 1987 to recapitalize the and 1963 under family housing and homeowners assistance programs. Federal Savings and Loan Insurance Corporation, undertook its first borrowing in 2. Includes participation certificates reclassified as debt beginning Oct. 1,1976. October 1987. 3. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. 11. The Farm Credit Financial Assistance Corporation (established in January 4. Consists of debentures issued in payment of Federal Housing Administration 1988 to provide assistance to the Farm Credit System) undertook its first insurance claims. Once issued, these securities may be sold privately on the borrowing in July 1988. securities market. 12. The Resolution Funding Corporation, established by the Financial Institu- 5. Certificates of participation issued before fiscal 1969 by the Government tions Reform, Recovery, and Enforcement Act of 1989, undertook its first National Mortgage Association acting as trustee for the Farmers Home Admin- borrowing in October 1989. istration; Department of Health, Education, and Welfare; Department of Housing 13. Includes FFB purchases of agency assets and guaranteed loans; the latter and Urban Development; Small Business Administration; and the Veterans contain loans guaranteed by numerous agencies with the guarantees of any Administration. particular agency being generally small. The Farmers Home Administration item 6. Off-budget. consists exclusively of agency assets, while the Rural Electrification Administra- 7. Includes outstanding noncontingent liabilities: notes, bonds, and deben- tion entry contains both agency assets and guaranteed loans. tures. Some data are estimated. 14. The FFB, which began operations in 1974, is authorized to purchase or sell 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, obligations issued, sold, or guaranteed by other federal agencies. Since FFB shown in line 17. incurs debt solely for the purpose of lending to other agencies, its debt is not 9. Before late 1981, the Association obtained financing through the Federal included in the main portion of the table in order to avoid double counting. Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • December 1990 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1990 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11998877 11998888 11998899 oorr uussee Feb. Mar. Apr. May June July Aug. Sept. 102,407 114,522 113,646 6,329 9,880 8,582 12,032 13,625 8,731 10,035 13,930 Type of issue 2 General obligation 30,589 30,312 35,774 3,010 3,199 3,386 3,166 4,426 2,847 3,358 3,763 3 Revenue 71,818 84,210 77,873 3,319 6,681 5,1% 8,866 9,199 5,884 6,677 10,167 Type of issuer 4 State 10,102 8,830 11,819 1,196 707 1,387 1,003 1,090 1,442 1,610 2,317 5 Special district and statutory authority 65,460 74,409 71,022 3,277 6,247 4,366 7,485 8,556 5,670 6,692 8,188 6 Municipalities, counties, and townships 26,845 31,193 30,805 1,856 2,926 2,243 3,544 3,977 1,742 2,195 3,425 7 Issues for new capital, total 56,789 79,665 84,062 5,635 6,667 7,744 10,486 10,974 7,442 9,346 12,713 Use of proceeds 8 Education 9,524 15,021 15,133 1,420 1,018 1,054 1,694 2,612 2,212 1,389 1,472 9 Transportation 3,677 6,825 6,870 511 1,158 1,215 1,375 1,592 789 931 920 10 Utilities and conservation 7,912 8,496 11,427 718 502 991 1,232 2,159 719 1,015 687 11 Social welfare 11,106 19,027 16,703 432 1,425 2,664 2,628 2,199 2,012 3,508 3,995 12 Industrial aid 7,474 5,624 5,036 115 432 232 681 693 434 495 674 13 Other purposes 18,020 24,672 28,894 2,439 2,132 2,426 2,155 4,366 2,688 3,161 4,965 1. Par amounts of long-term issues based on date of sale. SOURCES, investment Dealer's Digest beginning April 1990. Securities Data/ 2. Includes school districts beginning 1986. Bond Buyer Municipal Data Base beginning 1986. Public Securities Association for earlier data. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 1990 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11998877 11998888 11998899 oorr uussee Jan. Feb. Mar. Apr. May June July Aug. 1 All issues' 392,674 410,811 376,488 15,144 13,811 21,199 15,346' 25,164' 28,893' 19,868' 14,008 2 Bonds2 326,166 353,010 318,617 12,866 10,892 17,405 13,590' 22,813' 26,020' 17,621' 13,200 Type of offering 3 Public, domestic 209,790 202,132 181,230 10,814 9,985 15,498 12,669' 19,663' 22,809' 14,316' 12,000 4 Private placement, domestic 92,070 127,700 114,629 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5. Sold abroad 24,306 23,178 22,758 2,052 907 1,907 921 3,150 3,211 3,305' 1,200 Industry group 6 Manufacturing 60,657 70,574 76,345 2,036 2,488 3,3% 3,612' 2,540 3,729 1,545 404 7 Commercial and miscellaneous 49,773 62,104 49,307 655 157 263 683 1,171 2,999 1,642 215 8 Transportation 11,974 10,075 10,050 35 53 386 194 927 1,001 270 500 9 Public utility 23,004 19,318 17,056 1,043 1,057 317 435 1,004 2,561 655 708 10 Communication 7,340 5,952 8,503 23 35 704 500 326 411 113 15 11 Real estate and financial 173,418 184,990 157,355 9,075 7,103 12,340 8,167 16,840 15,3^ 13,3%' 11,358 12 Stocks2 66,508 57,802 57,870 2,278 2,919 3,794 1,756 2,351 2,873 2,247 808 Type 13 Preferred 10,123 6,544 6,194 50 167 1,028 193 665 310 350 145 14 Common 43,225 35,911 26,030 2,228 2,752 2,767 1,564 1,686 2,563' 1,897 663 15 Private placement3 13,157 15,346 25,647 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Industry group 16 Manufacturing 13,880 7,608 9,308 835 431 521 253 86 265 348 125 17 Commercial and miscellaneous 12,888 8,449 7,611 125' 952' 552 666 706 748' 507 251 18 Transportation 2,439 1,535 1,929 0 0 0 0 22 21 0 71 19 Public utility 4,322 1,898 3,090 106 582 533 219 471 0 173 139 20 Communication 1,458 515 1,904 0 0 0 0 380 29 0 0 21 Real estate and financial 31,521 37,798 34,028 1,213' 954' 2,188 619 686 1,799 862 218 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 1990 IItteemm 11998888 11998899 Jan. Feb. Mar. Apr. May June July' Aug. INVESTMENT COMPANIES' 1 Sales of own shares2 271,237 306,445 35,620 26,118 28,817 29,788 27,431 28,301 29,444 29,227 2 Redemptions of own shares3 267,451 272,165 27,331 20,978 23,777 27,306 23,337 23,340 22,933 24,837 3 Net sales 3,786 34,280 8,289 5,140 5,040 2,482 4,094 4,961 6,511 4,390 4 Assets4 472,297 553,871 535,165 542,725 549,638 542,061 574,302 582,190 586,526 554,722 5 Cash position5 45,090 44,780 48,865 51,356 50,454 55,213 52,741 49,861 48,944 51,103 6 Other 427,207 509,091 486,300 491,369 499,184 486,848 521,560 532,329 537,582 503,619 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. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1988 1989 1990 AAccccoouunntt 11998877 11998888 11998899 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 1 Corporate profits with inventory valuation and capital consumption adjustment 308.3 337.6 311.6 334.4 349.6 327.3 321.4 306.7 290.9 296.8 306.6 2 Profits before tax 275.3 316.7 307.7 320.4 331.1 335.1 314.6 291.4 289.8 296.9 299.3 3 Profits tax liability 126.9 136.2 135.1 137.9 142.1 148.3 140.8 127.8 123.5 129.9 133.1 4 Profits after tax 148.4 180.5 172.6 182.5 189.1 186.7 173.8 163.6 166.3 167.1 166.1 5 Dividends 98.2 110.0 123.5 111.8 115.3 119.1 122.1 125.0 127.7 130.3 133.0 6 Undistributed profits 50.2 70.5 49.1 70.8 73.8 67.6 51.7 38.6 38.6 36.8 33.2 7 Inventory valuation -19.4 -27.0 -21.7 -33.3 -22.5 -43.0 -23.1 -6.1 -14.5 -11.4 -.5 8 Capital consumption adjustment 52.4 47.8 25.5 47.3 40.9 35.2 29.9 21.4 15.6 11.3 7.7 Source. Survey of Current Business (Department of Commerce). 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment A Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1989 1990 IInndduussttrryy 11998888 11998899 11999900 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 1 Total nonfarm business 455.49 507.40 534.76 487.43 502.05 514.95 519.58 532.45 535.49 532.47 538.61 Manufacturing 2 Durable goods industries 77.04 82.56 84.69 80.20 82.44 83.60 83.41 86.35 84.34 83.63 84.45 3 Nondurable goods industries 86.41 101.24 107.75 92.53 98.47 102.40 108.47 105.02 110.82 108.74 106.42 Nonmanufacturing 4 Mining 9.29 9.21 9.96 8.94 9.24 9.24 9.38 9.58 9.84 10.23 10.19 Transportation 5 Railroad 5.52 6.26 5.89 6.02 5.81 6.36 6.80 6.45 6.66 5.34 5.10 6 Air 5.63 6.73 9.09 5.67 6.84 8.89 5.75 9.35 9.36 9.77 7.88 7 Other 5.48 5.85 6.13 6.15 5.78 5.78 5.69 6.33 5.84 5.50 6.83 Public utilities 8 Electric 40.90 44.81 43.79 43.56 46.37 44.44 44.66 43.37 42.62 43.85 45.33 9 Gas and other 19.47 21.47 22.12 22.53 21.72 20.75 21.15 22.34 21.65 22.35 22.13 10 Commercial and other2 205.76 229.28 245.34 221.82 225.39 233.50 234.25 243.66 244.37 243.05 250.27 ATrade and services are no longer being reported separately. They are included 2. "Other" consists of construction; wholesale and retail trade; finance and in Commercial and other, line 10. insurance; personal and business services; and communication. 1. Anticipated by business. SOURCE. Survey of Current Business (Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • December 1990 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities' Billions of dollars, end of period 1988 1989 1990 AAccccoouunntt 11998855 11998866 11998877 Q4 QL Q2 Q3 Q4 QL Q2 ASSETS Accounts receivable, gross2 1 Consumer 111.9 134.7 141.1 146.2 139.1 143.9 146.3 140.8 137.9 138.6 2 Business 157.5 173.4 207.4 236.5 243.3 250.9 246.8 256.0 262.9 274.8 3 Real estate 28.0 32.6 39.5 43.5 45.1 47.1 48.7 48.9 52.1 55.4 4 Total 297.4 340.6 388.1 426.2 427.5 441.9 441.8 445.8 452.8 468.8 Less: 5 Reserves for unearned income 39.2 41.5 45.3 50.0 51.0 52.2 52.9 52.0 51.9 54.3 6 Reserves for losses 4.9 5.8 6.8 7.3 7.4 7.5 7.7 7.7 7.9 8.2 7 Accounts receivable, net 253.3 293.3 336.0 368.9 369.2 382.2 381.3 386.1 393.0 406.3 8 All other 45.3 58.6 58.3 72.4 75.1 81.4 85.2 91.6 92.5 95.5 9 Total assets 298.6 351.9 394.2 441.3 444.3 463.6 466.4 477.6 485.5 501.9 LIABILITIES 10 Bank loans 18.0 18.6 16.4 15.4 11.3 12.1 12.2 14.5 13.9 15.8 11 Commercial paper 99.2 117.8 128.4 142.0 147.8 149.0 147.2 149.5 152.9 152.4 Debt 12 Other short-term 12.7 17.5 28.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Long-term 94.4 117.5 137.1 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Due to parent n.a. n.a. n.a. 50.6 56.9 59.8 60.3 63.8 70.5 72.8 15 Not elsewhere classified n.a. n.a. n.a. 137.9 133.6 140.5 145.1 147.8 145.7 153.0 16 All other liabilities 41.5 44.1 52.8 59.8 58.1 63.5 61.8 62.6 61.7 66.1 17 Capital, surplus, and undivided profits 32.8 36.4 31.5 35.6 36.6 38.8 39.8 39.4 40.7 41.8 18 Total liabilities and capital 298.6 351.9 394.2 441.3 444.3 463.6 466.4 477.6 485.5 501.9 1. Components may not add to totals because of rounding. 2. Excludes pools of securitized assets. 1.52 DOMESTIC FINANCE COMPANIES Business Credit Outstanding and Net Change' Millions of dollars, seasonally adjusted 1990 type Mar. Apr. May June July Aug. 1 Total 205,992 234,578 258,504 261,662 262,379 266,859 273,786 277,616' 283,043 Retail financing of installment sales 2 Automotive 36,139 36,957 39,139 39,264 39,550 39,245 39,716 38,931 38,610 3 Equipment 25,075 28,199 29,674 29,789 30,115 30,635 30,491 30,623 30,707 4 Pools of securitized assets2 n.a. n.a. 698 704 662 622 642 800' 987 Wholesale 5 Automotive 30,070 32,357 33,074 29,963 29,672 29,896 31,815 33,158 34,429 6 Equipment 5,578 5,954 6,896 9,408 9,372 9,429 9,495 9,929 9,812 7 All other 8,329 9,312 9,918 10,030 9,961 9,892 10,043 9,722 9,707 8 Pools of securitized assets2 n.a. n.a. 0 0 0 0 0 0 650 Leasing 9 Automotive 22,097 24,875 27,074 28,325 28,528 28,878 29,575 30,210 30,942 10 Equipment 43,493 57,658 68,112 68,755 69,473 72,715 74,916 76,316 78,714 11 Pools of securitized assets2 n.a. n.a. 1,247 11,,443333 11,,664466 11,,559977 11,,554477 11,,776600 11,,770033 12 Loans on commercial accounts receivable and factored commercial accounts receivable 18,170 18,103 19,081 19,426 18,716 18,700 19,869 20,077 19,974 13 All other business credit 17,042 21,162 23,590 24,565 24,685 25,250 25,677 26,089 26,809 Net change (during period) 14 33,866 22,434 22,580 2,647 717 4,480 6,927 3,830' 5,427 Retail financing of installment sales 15 Automotive 9,925 819 2,182 140 286 -305 471 -785 -321 16 Equipment 2,056 1,386 1,475 306 327 520 -144 132 84 17 Pools of securitized assets n.a. n.a. -26 23 -42 -40 20 158' 187 Wholesale 18 Automotive 7,158 2,288 716 472 -291 224 1,919 1,343 1,271 19 Equipment 250 377 940 254 -37 57 67 434 -118 20 All other 1,293 983 605 153 -69 -69 151 -321 -16 21 Pools of securitized assets2 n.a. n.a. 0 0 0 0 0 0 650 Leasing 22 Automotive 2,174 2,777 2,201 1,164 203 351 696 636 731 23 Equipment 5,271 9,752 9,187 -580 718 3,243 2,201 1,400 2,398 24 Pools of securitized assets n.a. n.a. 526 56 213 -49 -50 213 -57 25 Loans on commercial accounts receivable and factored commercial accounts receivable 2,245 -65 979 272 -711 -16 1,169 208 -103 26 All other business credit 3,498 4,119 3,796 388 120 565 427 412 721 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. 1990 IItteemm 11998877 11998888 11998899 Mar. Apr. May June July Aug. Sept. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 137.0 150.0 159.6 138.2 155.5 162.1 149.8 163.5 161.5 156.6 2 Amount of loan (thousands of dollars) 100.5 110.5 117.0 100.9 114.6 119.7 111.8 120.9 118.3 114.8 3 Loan/price ratio (percent) 75.2 75.5 74.5 74.7 75.4 75.0 76.4 75.3 74.5 74.7 4 Maturity (years) 27.8 28.0 28.1 26.6 26.6 28.1 26.9 28.0 27.2 27.2 5 Fees and charges (percent of loan amount) 2.26 2.19 2.06 1.96 2.00 2.41 1.96 1.93 2.07 1.78 6 Contract rate (percent per year) 8.94 8.81 9.76 9.70 9.83 9.87 9.80 9.75 9.75 9.60 Yield (percent per year) 7 OTS series3 9.31 9.18 10.11 10.03 10.17 10.28 10.13 10.08 10.11 9.90 8 HUD series4 10.17 10.30 10.21 10.20 10.46 10.19 10.12 9.94 10.12 10.18 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series)5 10.16 10.49 10.24 10.30 10.75 10.23 10.18 10.11 10.28 10.24 10 GNMA securities6 9.44 9.83 9.71 9.53 9.77 9.77 9.54 9.48 9.63 9.65 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 95,030 101,329 104,974 112,353 112,463 112,791 112,855 113,378 113,507 113,718 12 FHA/VA-insured 21,660 19,762 19,640 20,688 20,707 20,723 20,830 21,059 21,101 21,364 13 Conventional 73,370 81,567 85,335 91,665 91,756 92,068 92,025 92,319 92,406 92,354 Mortgage transactions (during period) 14 Purchases 20,531 23,110 22,518 1,945 1,705 1,630 1,802 2,304 2,134 2,123 Mortgage commitments7 15 Issued (during period)8 n.a. n.a. n.a. 1,754 1,568 1,960 2,089 2,215 2,302 2,073 16 To sell (during period)9 n.a. n.a. n.a. 398 518 534 853 874 761 644 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)9 17 Total 12,802 15,105 20,105 19,823 19,730 19,874 19,979 20,127 n.a. n.a. 18 FHA/VA 686 620 590 561 555 556 550 546 n.a. n.a. 19 Conventional 12,116 14,485 19,516 19,261 19,174 19,319 19,429 19,581 n.a. n.a. Mortgage transactions (during period) 20 Purchases 76,845 44,077 78,588 6,301 5,719 6,064 5,856 4,527 n.a. n.a. 21 Sales 75,082 39,780 73,446 6,503 5,687 5,792 5,546 4,248 4,705 5,266 Mortgage commitments10 22 Contracted (during period) 71,467 66,026 88,519 6,119 10,441 8,502 11,183 5,851 n.a. n.a. 1. Weighted averages based on sample surveys of mortgages originated by ation guaranteed, mortgage-backed, fully modified pass-through securities, asmajor institutional lender groups; compiled by the Federal Home Loan Bank suming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying Board in cooperation with the Federal Deposit Insurance Corporation. the prevailing ceiling rate. Monthly figures are averages of Friday figures from the 2. Includes all fees, commissions, discounts, and "points" paid (by the Wall Street Journal. borrower or the seller) to obtain a loan. 1. Includes some multifamily and nonprofit hospital loan commitments in 3. Average effective interest rates on loans closed, assuming prepayment at addition to 1- to 4-family loan commitments accepted in FNMA's free market the end of 10 years. auction system, and through the FNMA-GNMA tandem plans. 4. Average contract rates on new commitments for conventional first mort- 8. Does not include standby commitments issued, but includes standby comgages; from Department of Housing and Urban Development. mitments converted. 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing 9. Includes participation as well as whole loans. Administration-insured first mortgages for immediate delivery in the private 10. Includes conventional and government-underwritten loans. FHLMC's secondary market. Based on transactions on first day of subsequent month. Large mortgage commitments and mortgage transactions include activity under mortgage/ monthly movements in average yields may reflect market adjustments to changes securities swap programs, while the corresponding data for FNMA exclude swap in maximum permissable contract rates. activity. 6. Average net yields to investors on Government National Mortgage Associ- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • December 1990 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1989 1990 Type of holder, and type of property 1987 1989 Q2 Q3 Q4 Ql Q2 1 All holders 2,971,019 3,264,348 3,540,084 3,402,082 3,473,550 3,540,084 3,601,132 3,657,741 2 1- to 4-family 1,958,400 2,186,292 2,404,311 2,287,645 2,347,566 2,404,311 2,450,291 2,492,784 3 Multifamily 272,500 289,128 305,582 299,449 302,374 305,582 310,273 314,360 4 Commercial 651,323 702,113 744,856 728,212 737,299 744,856 755,857 765,489 5 Farm 88,797 86,816 85,336 86,777 86,311 85,336 84,710 85,109 6 Selected financial institutions 1,657,937 1,826,668 1,919,243 1,891,210 1,913,914 1,919,243 1,924,635 1,924,617 7 Commercial banks2 592,449 669,237 763,533 715,262 742,0% 763,533 783,100 803,660 8 1- to 4-family 275,613 317,585 368,567 338,799 355,084 368,567 376,616 388,018 9 Multifamily 32,756 33,158 37,990 36,022 37,201 37,990 39,202 40,271 10 Commercial 269,648 302,989 340,285 324,083 333,272 340,285 350,473 358,367 11 Farm 14,432 15,505 16,691 16,358 16,539 16,691 16,809 17,003 12 Savings institutions3 860,467 924,606 910,254 938,714 932,373 910,254 892,022 867,640 13 1- to 4-family 602,408 671,722 669,220 687,000 683,148 669,220 658,440 639,985 14 Multifamily 106,359 110,775 106,014 110,067 108,447 106,014 103,860 101,112 15 Commercial 150,943 141,433 134,370 140,977 140,0% 134,370 129,103 125,944 16 Farm 757 676 650 670 682 650 619 599 17 Life insurance companies 205,021 232,825 245,456 237,234 239,445 245,456 249,513 253,317 18 1- to 4-family 12,676 15,299 13,827 12,814 13,290 13,827 14,173 14,479 19 Multifamily 21,644 23,583 27,195 25,232 26,372 27,195 28,182 29,155 20 Commercial 160,874 184,273 194,871 189,623 190,152 194,871 197,621 200,139 21 Farm 9,828 9.671 9,563 9,565 9,632 9,563 9,537 9,544 22 Finance companies 29,716 37,846 45,476 41,824 43,157 45,476 45,808 47,104 23 Federal and related agencies 192,721 200,570 209,472 202,056 205,809 209,472 216,059 230,511 24 Government National Mortgage Association.. 444 26 23 24 24 23 22 21 25 1- to 4-family 25 26 23 24 24 23 22 21 26 Multifamily 419 0 0 0 0 0 0 0 27 Farmers Home Administration 43,051 42,018 41,176 40,711 41,117 41,176 41,125 41,027 28 1- to 4-family 18,169 18,347 18,422 18,391 18,405 18,422 18,419 18,433 29 Multifamily 8,044 8,513 9,054 8,778 8,916 9,054 9,199 9,351 30 Commercial 6,603 5,343 4,443 3,885 4,366 4,443 4,510 4,418 31 Farm 10,235 9,815 9,257 9,657 9,430 9,257 8,997 8,826 32 Federal Housing and Veterans Administration 5,574 5,973 6,061 6,424 6,023 6,061 6,215 33 1- to 4-family 2,557 2.672 2,850 2,827 2,900 2,850 2,977 3,041 34 Multifamily 3,017 3,301 3,211 3,597 3,123 3,211 3,291 3,243 35 Federal National Mortgage Association 96,649 103,013 110,721 103,309 107,052 110,721 112,353 114,592 36 1- to 4-family 89,666 95,833 102,295 95,714 99,168 102,295 103,300 105,026 37 Multifamily 6,983 7,180 8,426 7,595 7,884 8,426 9,053 9,566 38 Federal Land Banks 34,131 32,115 29,640 31,467 30,943 29,640 29,325 30,517 39 1- to 4-family 2,008 1,890 1,210 1,851 1,821 1,210 1,197 1,957 40 Farm 32,123 30,225 28,430 29,616 29,122 28,430 28,128 28,559 41 Federal Home Loan Mortgage Corporation .. 12,872 17,425 21,851 20,121 20,650 21,851 19,823 20,126 42 1- to 4-family 11,430 15,077 18,248 17,382 17,659 18,248 16,772 16,918 43 Multifamily 1,442 2,348 3,603 2,739 2,992 3,603 3,051 3,208 44 Mortgage pools or trusts6 718,297 810,887 943,932 864,885 899,435 943,932 981,265 1,011,982 45 Government National Mortgage Association.. 317,555 340,527 369,867 353,759 361,291 369,867 378,292 384,289 46 1- to 4-family 309,806 331,257 358,142 342,545 349,838 358,142 366,300 372,051 47 Multifamily 7,749 9,270 11,725 11,214 11,453 11,725 11,992 12,237 48 Federal Home Loan Mortgage Corporation .. 212,634 226,406 272,870 245,242 257,938 272,870 281,736 291,863 49 1- to 4-family 205,977 219,988 266,060 238,446 251,232 266,060 274,084 283,822 50 Multifamily 6,657 6,418 6,810 6,7% 6,706 6,810 7,652 8,041 51 Federal National Mortgage Association 139,960 178,250 228,232 1%,501 208,894 228,232 246,391 259,664 52 1- to 4-family 137,988 172,331 219,577 188,774 200,302 219,577 237,916 250,663 53 Multifamily 1,972 5,919 8,655 7,727 8,592 8,655 8,475 9,002 54 Farmers Home Administration 245 104 80 85 82 80 75 71 55 1- to 4-family 121 26 21 23 22 21 20 18 56 Multifamily 0 0 0 0 0 0 0 0 57 Commercial 63 38 26 26 26 26 25 23 58 Farm 61 40 33 36 35 33 31 30 59 Individuals and others7 402,064 426,223 467,438 443,931 454,392 467,438 479,172 490,631 60 1- to 4-family 242,053 258,639 292,967 273,757 283,445 292,%7 301,573 310,747 61 Multifamily 75,458 78,663 82,899 79,681 80,689 82,899 84,873 86,468 62 Commercial 63,192 68,037 70,861 69,618 69,387 70,861 72,136 72,868 63 Farm 21,361 20,884 20,711 20,875 20,871 20,711 20,589 20,548 1. Based on data from various institutional and governmental sources, with 5. Fanners Home Administration-guaranteed securities sold to the Federal some quarters estimated in part by the Federal Reserve. Multifamily debt refers Financing Bank were reallocated from FmHA mortgage pools to FmHA mortgage to loans on structures of five or more units. holdings in 1986:4, because of accounting changes by the Fanners Home 2. Includes loans held by nondeposit trust companies but not bank trust Administration. departments. 6. Outstanding principal balances of mortgage pools backing securities insured 3. Includes savings banks and savings and loan associations. Beginning 1987:1, or guaranteed by the agency indicated. Includes private pools which are not data reported by FSLIC-insured institutions include loans in process and other shown as a separate line item. contra assets (credit balance accounts that must be subtracted from the corre- 7. Other holders include mortgage companies, real estate investment trusts, sponding gross asset categories to yield net asset levels). state and local credit agencies, state and local retirement funds, noninsured 4. Assumed to be entirely 1- to 4-family loans. pension funds, credit unions, and other U.S. agencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Installment Credit A39 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change, seasonally adjusted Millions of dollars, amounts outstanding, end of period 1989 1990 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998888 11998899 Dec. Jan. Feb. Mar. Apr. May June July Aug. Seasonally adjusted 1 Total 664,701 716,624 716,624 717,829 717,869 720,445 720,835 724,485 724,601 729,32y 731,416 2 Automobile 284,556 290,770 290,770 290,904 289,629 290,932 288,936 288,931 287,168 286,791' 285,050 3 Revolving 174,057 197,110 197,110 199,146 199,927 202,263 203,965 207,153 208,362 212,138' 213,916 4 Mobile home 25,201 22,343 22,343 22,604 22,633 22,708 22,702 22,815 22,733 22,795' 23,003 5 Other 180,887 206,401 206,401 205,175 205,680 204,543 205,232 205,585 206,338 207,605' 209,446 Not seasonally adjusted 6 Total 674,719 727,561 727,561 721,026 717,062 713,138 715,801 720,045 722,953 727,196' 733,543 By major holder 7 Commercial banks 324,792 343,865 343,865 342,266 339,418 334,645 337,576 339,328 335,998 339,124' 342,641 8 Finance companies 146,212 140,832 140,832 140,740 139,115 137,857 138,174 138,384 138,642 138,796 139,496 9 Credit unions 88,340 90,875 90,875 90,452 90,127 89,556 89,689 89,913 90,137 90,631' 91,324 10 Retailers2 48,302 42,638 42,638 39,959 37,904 37,302 37,207 37,347 37,382 36,804 37,231 11 Savings institutions 63,399 57,228 57,228 55,425 54,771 54,095 53,606 53,301 52,902 52,503 52,399 12 Gasoline companies 3,674 3,935 3,935 4,013 3,803 3,792 3,928 4,024 4,192 4,396 4,722 13 Pools of securitized assets .. n.a. 48,188 48,188 48,171 51,924 55,891 55,621 57,748 63,700 64,942' 65,730 By major type of credit3 14 Automobile 284,328 290,421 290,421 288,984 288,036 286,539 286,220 287,140 287,254 287,322 n.a. 15 Commercial banks 123,392 126,613 126,613 127,075 127,149 126,289 126,483 127,056 126,988 126,986' 127,882 16 Finance companies 97,245 82,721 82,721 81,918 80,227 79,523 79,295 78,927 78,273 77,716 77,205 17 Pools of securitized assets2 n.a. 18,191 18,191 17,827 18,931 19,563 19,406 20,151 21,043 21,692' 21,515 18 Revolving 183,909 208,188 208,188 203,288 200,147 199,937 201,783 204,854 206,820 209,582 n.a. 19 Commercial banks 123,020 130,956 130,956 128,384 124,821 122,024 124,039 125,433 122,116 124,569' 125,987 20 Retailers 43,697 37,967 37,967 35,359 33,378 32,794 32,721 32,857 32,884 32,325 32,735 21 Gasoline companies 3,674 3,935 3,935 4,013 3,803 3,792 3,928 4,024 4,192 4,396 4,722 22 Pools of securitized assets2 n.a. 22,977 22,977 23,450 26,204 29,542 29,403 30,913 36,076 36,786 37,601 23 Mobile home 25,143 22,283 22,283 22,717 22,726 22,426 22,484 22,610 22,644 22,843 n.a. 24 Commercial banks 9,025 9,155 9,155 9,109 9,162 9,142 9,231 9,295 9,296 9,443 9,569 25 Finance companies 7,191 4,716 4,716 5,411 5,410 5,178 5,168 5,224 5,266 5,328 5,358 26 Other 181,339 206,669 206,669 206,037 206,153 204,236 205,314 205,441 206,235 207,186 n.a. 27 Commercial banks 69,355 77,141 77,141 77,698 78,286 77,190 77,823 77,544 77,598 78,126' 79,203 28 Finance companies 41,776 53,395 53,395 53,411 53,478 53,156 53,711 54,233 55,103 55,752 56,933 29 Retailers 4,605 4,671 4,671 4,600 4,526 4,508 4,486 4,490 4,498 4,479 4,496 30 Pools of securitized assets2 n.a. 7,020 7,020 6,894 6,789 6,786 6,812 6,684 6,581 6,464 6,614 1. The Board's series cover most short- and intermediate-term credit extended 2. Outstanding balances of pools upon which securities have been issued; these to individuals that is scheduled to be repaid (or has the option of repayment) in balances are no longer carried on the balance sheets of the loan originator. two or more installments. 3. Totals include estimates for certain holders for which only consumer credit These data also appear in the Board's G.19 (421) release. For address, see totals are available. inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • December 1990 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent unless noted otherwise 1990 IItteemm 11998877 11998888 11998899 Feb. Mar. Apr. May June July Aug. INTEREST RATES Commercial banks2 1 48-month new car3 10.45 10.85 12.07 11.80 n.a. n.a. 11.82 n.a. n.a. 11.89 2 24-month personal 14.22 14.68 15.44 15.27 n.a. n.a. 15.41 n.a. n.a. 15.46 3 120-month mobile home3 13.38 13.54 14.11 13.91 n.a. n.a. 14.09 n.a. n.a. 14.09 4 Credit card 17.92 17.78 18.02 18.12 n.a. n.a. 18.14 n.a. n.a. 18.18 Auto finance companies 5 New car 10.73 12.60 12.62 12.67 12.31 12.21 12.23 12.58 12.68 12.62 6 Used car 14.60 15.11 16.18 15.91 15.97 16.02 16.03 16.00 15.96 15.98 OTHER TERMS4 Maturity (months) 7 New car 53.5 56.2 54.2 54.7 54.3 54.2 54.5 54.8 54.9 54.8 8 Used car 45.2 46.7 46.6 46.4 46.4 46.5 46.1 46.2 46.2 46.2 Loan-to-value ratio 9 New car 93 94 91 88 88 87 87 87 86 86 10 Used car 98 98 97 96 95 % 96 95 % % Amount financed (dollars) 11 New car 11,203 11,663 12,001 12,053 12,216 12,089 12,064 12,108 12,125 11,939 12 Used car 7,420 7,824 7,954 8,065 8,132 8,105 8,169 8,2% 8,401 8,415 1. These data also appear in the Board's G.19 (421) release. For address, see home loans was 84 months. inside front cover. 4. At auto finance companies. /sll.56-bul-tel/bUql! 53.5 56.2 54.2 54.7 54.7 54.3 2. Data for midmonth of quarter only. 54.2 54.5 54.8 54.9 45.2 46.7 46.6 45.5 46.4 46.4 46.5 46.1 46.2 46.2 93 94 91 89 88 3. Before 1983 the maturity for new car loans was 36 months, and for mobile 88 87 87 87 86 98 98 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. 1988 1989 1990 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998855 11998866 11998877 11998888 11998899 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors 848.1 836.9 687.0 760.8 676.5 694.9 746.7 666.5 673.3 619.5 749.9 598.1 By sector and instrument 2 U.S. government 223.6 215.0 144.9 157.5 150.2 144.8 147.3 100.1 168.4 185.0 247.6 216.7 Treasury securities 223.7 214.7 143.4 140.0 150.0 103.2 148.5 95.0 166.8 189.6 218.1 211.4 4 Agency issues and mortgages -.1 .4 1.5 17.4 .2 41.6 -1.2 5.1 1.6 -4.6 29.6 5.4 5 Private domestic nonfinancial sectors 624.5 621.9 542.1 603.3 526.3 550.1 599.4 566.3 504.9 434.5 502.3 381.4 6 Debt capital instruments 451.2 465.8 453.2 459.2 379.7 439.0 412.8 390.1 369.2 346.8 362.3 284.4 7 Tax-exempt obligations 135.4 22.7 49.3 49.8 30.4 56.8 39.7 28.7 34.1 19.1 13.5 21.6 8 Corporate bonds 73.5 126.8 79.4 102.9 73.6 87.1 58.2 86.5 62.7 87.2 42.3 60.2 9 Mortgages 242.2 316.3 324.5 306.5 275.7 295.1 314.9 275.0 272.4 240.5 306.5 202.6 10 Home mortgages 156.8 218.7 234.9 231.0 218.0 212.0 225.5 211.3 221.0 214.3 238.4 144.1 11 Multifamily residential 29.8 33.5 24.4 16.7 16.4 19.2 23.1 21.4 11.8 9.5 21.5 17.1 1? Commercial 62.2 73.6 71.6 60.8 42.7 63.9 68.6 41.5 40.9 19.9 47.9 42.2 13 Farm -6.6 -9.5 -6.4 -2.1 -1.5 .0 -2.3 .9 -1.3 -3.2 -1.4 -.8 14 Other debt instruments 173.3 156.1 88.9 144.1 146.6 111.1 186.6 176.2 135.7 87.7 139.9 97.0 15 Consumer credit 82.5 58.0 33.5 50.2 39.1 51.2 38.2 36.9 37.1 44.1 14.6 9.8 16 Bank loans n.e.c 40.6 66.9 10.0 39.8 39.9 22.2 55.9 45.1 50.8 7.7 21.2 17.4 17 Open market paper 14.6 -9.3 2.3 11.9 20.4 39.0 32.3 39.5 16.9 -6.9 69.7 -6.0 18 Other 35.6 40.5 43.2 42.2 47.1 -1.3 60.2 54.7 30.9 42.8 34.5 75.8 19 By borrowing sector 624.5 621.9 542.1 603.3 526.3 550.1 599.4 566.3 504.9 434.5 502.3 381.4 20 State and local governments 90.9 36.2 48.8 45.6 29.6 53.0 40.1 33.3 28.6 16.5 9.0 14.9 7.1 Households 284.5 293.0 302.2 314.9 284.8 288.5 293.2 263.7 290.8 291.3 294.8 197.8 77 Nonfinancial business 249.1 292.7 191.0 242.8 211.9 208.6 266.0 269.4 185.4 126.7 198.5 168.7 23 Farm -14.5 -16.3 -10.6 -7.5 1.6 -14.5 4.7 -5.0 -2.1 8.9 4.3 6.2 24 Nonfarm noncorporate 129.3 99.2 77.9 65.7 50.8 57.3 71.0 56.9 40.2 35.0 32.5 55.9 25 Corporate 134.3 209.7 123.7 184.6 159.5 165.8 190.3 217.4 147.3 82.9 161.6 106.6 26 Foreign net borrowing in United States 1.2 9.7 4.5 6.3 10.9 9.9 3.2 -6.9 30.4 16.9 -3.3 46.3 77 Bonds 3.8 3.1 7.4 6.9 5.3 5.7 2.5 11.5 8.1 -1.0 28.3 27.0 78 Bank loans n.e.c -2.8 -1.0 -3.6 -1.8 -.1 -3.8 3.2 -3.2 3.7 -4.3 -6.7 -5.2 29 Open market paper 6.2 11.5 2.1 8.7 13.3 14.3 16.9 -6.6 20.7 22.2 -16.5 23.0 30 U.S. government loans -6.0 -3.9 -1.4 -7.5 -7.5 -6.3 -19.4 -8.7 -2.1 .1 -8.3 1.4 31 Total domestic plus foreign 849.3 846.6 691.5 767.1 687.4 704.8 749.9 659.6 703.6 636.4 746.6 644.4 Financial sectors 32 Total net borrowing by financial sectors 201.3 285.1 300.2 247.6 205.5 306.1 356.6 154.1 123.9 187.3 201.7 150.1 By instrument 33 U.S. government related 101.5 154.1 171.8 119.8 151.0 149.0 194.0 128.8 124.8 156.4 175.5 145.2 34 Sponsored credit agency securities 20.6 15.2 30.2 44.9 25.2 62.8 70.0 22.5 13.2 -4.7 14.5 17.3 35 Mortgage pool securities 79.9 139.2 142.3 74.9 125.8 86.3 124.0 106.3 111.6 161.1 161.0 127.8 36 Loans from U.S. government 1.1 -.4 -.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 37 Private financial sectors 99.7 131.0 128.4 127.8 54.5 157.1 162.6 25.3 -.9 30.9 26.2 5.0 38 Corporate bonds 50.9 82.9 78.9 51.7 36.8 45.5 52.3 28.5 26.7 39.6 41.6 69.0 .39 Mortgages .1 .1 .4 .3 .0 1.2 .3 .0 .3 -.4 -.7 .0 40 Bank loans n.e.c 2.6 4.0 -3.2 1.4 1.8 1.8 1.0 -.1 2.0 4.2 -2.2 -5.7 41 Open market paper 32.0 24.2 27.9 54.8 26.9 74.9 50.1 10.1 11.0 36.3 9.4 -27.7 42 Loans from Federal Home Loan Banks 14.2 19.8 24.4 19.7 -11.0 33.7 58.9 -13.1 -41.0 -48.8 -21.8 -30.7 By sector 43 201.3 285.1 300.2 247.6 205.5 306.1 356.6 154.1 123.9 187.3 201.7 150.1 44 Sponsored credit agencies 21.7 14.9 29.5 44.9 25.2 62.8 70.0 22.5 13.2 -4.7 14.5 17.3 45 Mortgage pools 79.9 139.2 142.3 74.9 125.8 86.3 124.0 106.3 111.6 161.1 161.0 127.8 46 Private financial sectors 99.7 131.0 128.4 127.8 54.5 157.1 162.6 25.3 -.9 30.9 26.2 5.0 47 Commercial banks -4.9 -3.6 6.2 -3.0 -1.4 6.6 -11.1 2.5 3.5 -.7 -4.9 3.3 48 Bank affiliates 16.6 15.2 14.3 5.2 6.2 1.5 9.4 2.9 16.5 -3.9 -12.8 -32.7 49 Savings and loan associations 17.3 20.9 19.6 19.9 -14.1 31.3 60.8 -16.3 -44.7 -56.2 -15.9 -41.1 50 Mutual savings banks 1.5 4.2 8.1 1.9 -1.4 3.7 -4.1 .0 -2.3 .7 -8.3 4.7 51 Finance companies 57.7 54.7 40.8 67.7 46.3 67.0 68.8 40.4 23.5 52.6 33.8 22.6 57. REITs -.1 .8 .3 3.5 -1.9 14.5 -1.8 -2.8 -3.1 .1 -.5 -2.4 53 SCO Issuers 11.5 39.0 39.1 32.5 20.8 32.5 40.6 -1.4 5.7 38.2 34.7 50.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • December 1990 1.57—Continued 1988 1989 1990 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998855 11998866 11998877 11998888 11998899 Q4 Ql Q2 Q3 Q4 Ql Q2 All sectors 54 Total net borrowing 1,050.6 1,131.7 991.7 1,014.7 892.9 1,010.9 1,106.5 813.7 827.5 823.7 948.3 794.5 55 U.S. government securities 324.2 369.5 317.5 277.2 301.2 293.8 341.3 228.9 293.2 341.4 423.1 361.9 56 State and local obligations 135.4 22.7 49.3 49.8 30.4 56.8 39.7 28.7 34.1 19.1 13.5 21.6 57 Corporate and foreign bonds 128.2 212.8 165.7 161.5 115.7 138.3 113.0 126.5 97.6 125.7 112.1 156.2 58 Mortgages 242.2 316.4 324.9 306.7 275.7 296.2 315.2 275.0 272.7 240.1 305.7 202.6 59 Consumer credit 82.5 58.0 33.5 50.2 39.1 51.2 38.2 36.9 37.1 44.1 14.6 9.8 60 Bank loans n.e.c 40.3 69.9 3.2 39.4 41.5 20.2 60.2 41.9 56.5 7.5 12.2 6.5 61 Open market paper 52.8 26.4 32.3 75.4 60.6 128.2 99.3 42.9 48.5 51.6 62.7 -10.7 62 Other loans 45.0 56.1 65.5 54.4 28.6 26.1 99.7 32.9 -12.2 -6.0 4.3 46.6 63 MEMO: U.S. government, cash balance 14.4 .0 -7.9 10.4 -5.9 -2.8 -14.3 20.7 -22.7 -7.3 21.5 -51.0 Totals net of changes in U.S. government cash balances 64 Net borrowing by domestic nonfinancial 833.7 836.9 694.9 750.4 682.4 697.7 761.0 645.8 696.0 626.8 728.4 649.2 65 Net borrowing by U.S. government 209.3 215.0 152.8 147.1 156.1 147.6 161.6 79.4 191.1 192.4 226.2 267.8 External corporate equity funds raised in United States 66 Total net share issues 17.2 86.8 10.9 -124.2 -60.7 -173.0 -164.7 -38.1 -54.6 14.6 -8.3 55.7 67 Mutual funds 84.4 159.0 73.9 1.1 41.3 9.8 1.0 34.0 57.9 72.4 53.1 76.5 68 All other -67.2 -72.2 -63.0 -125.3 -102.0 -182.8 -165.7 -72.1 -112.5 -57.8 -61.4 -20.8 69 Nonfinancial corporations -84.5 -85.0 -75.5 -129.5 -124.2 -194.5 -172.3 -98.7 -146.3 -79.3 -69.0 -48.0 70 Financial corporations 13.6 11.6 14.6 3.3 5.5 5.0 2.1 9.2 6.3 4.3 6.4 5.5 71 Foreign shares purchased in United States 3.7 1.2 -2.1 .9 16.7 6.8 4.5 17.4 27.5 17.2 1.2 21.7 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. 1988 1989 1990 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998855 11998866 11998877 11998888 11998899 Q4 QL Q2 Q3 Q4 QL Q2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 848.1 836.9 687.0 760.8 676.5 694.9 746.7 666.5 673.3 619.5 749.9 598.1 By public agencies and foreign 2 Total net advances 202.0 280.2 248.8 210.7 187.6 230.2 312.8 15.5 218.3 203.8 234.5 284.1 3 U.S. government securities 45.9 69.4 70.1 85.2 30.7 114.5 83.1 -103.3 115.7 27.1 16.9 96.1 4 Residential mortgages 94.6 136.3 139.1 86.3 137.9 97.7 126.0 119.7 127.7 178.3 181.1 178.7 5 FHLB advances to thrifts 14.2 19.8 24.4 19.7 -11.0 33.7 58.9 -13.1 -41.0 -48.8 -21.8 -30.7 6 Other loans and securities 47.3 54.7 15.1 19.4 30.0 -15.6 44.8 12.1 15.8 47.1 58.3 39.9 Total advanced, by sector 7 U.S. government 17.8 9.7 -7.9 -9.4 -2.4 -28.7 -.2 -6.0 -9.3 5.7 35.1 53.3 8 Sponsored credit agencies 103.5 153.3 169.3 112.0 125.3 146.8 188.2 28.0 126.4 158.4 183.3 138.5 9 Monetary authorities 18.4 19.4 24.7 10.5 -7.3 13.1 8.1 -1.6 -31.2 -4.6 -6.7 39.7 10 Foreign 62.3 97.8 62.7 97.6 72.1 99.0 116.7 -4.9 132.4 44.2 22.8 52.6 Agency and foreign borrowing not in line 1 11 Sponsored credit agencies and mortgage pools 101.5 154.1 171.8 119.8 151.0 149.0 194.0 128.8 124.8 156.4 175.5 145.2 12 Foreign 1.2 9.7 4.5 6.3 10.9 9.9 3.2 -6.9 30.4 16.9 -3.3 46.3 Private domestic funds advanced 13 Total net advances 748.8 720.5 614.5 676.2 650.8 623.6 631.1 772.9 610.1 589.0 687.6 505.5 14 U.S. government securities 278.2 300.1 247.4 192.1 270.5 179.4 258.2 332.2 177.4 314.3 406.2 265.8 15 State and local obligations 135.4 22.7 49.3 49.8 30.4 56.8 39.7 28.7 34.1 19.1 13.5 21.6 16 Corporate and foreign bonds 40.6 89.7 66.9 91.3 66.0 68.5 36.8 91.1 65.6 70.4 54.5 70.8 17 Residential mortgages 91.8 115.9 120.2 161.3 96.5 133.5 122.6 113.0 105.1 45.5 78.8 -17.5 18 Other mortgages and loans 216.9 212.0 155.2 201.4 176.4 219.2 232.8 194.8 187.0 91.0 112.8 134.2 19 LESS: Federal Home Loan Bank advances 14.2 19.8 24.4 19.7 -11.0 33.7 58.9 -13.1 -41.0 -48.8 -21.8 -30.7 Private financial intermediation 20 Credit market funds advanced by private financial institutions 578.0 730.0 528.4 562.3 522.5 621.4 517.4 581.5 361.7 629.2 365.6 309.9 21 Commercial banking 188.4 198.1 135.4 156.3 177.3 144.5 180.4 160.9 183.7 184.3 187.9 127.4 22 Savings institutions 87.9 107.6 136.8 120.4 -91.3 96.2 46.1 -71.7 -138.1 -201.6 -26.6 -177.1 23 Insurance and pension funds 150.1 160.1 179.7 198.7 189.7 209.7 195.7 198.2 156.9 207.8 146.9 195.1 24 Other finance 151.6 264.2 76.6 86.9 246.8 171.0 95.1 294.2 159.2 438.7 57.3 164.6 25 Sources of funds 578.0 730.0 528.4 562.3 522.5 621.4 517.4 581.5 361.7 629.2 365.6 309.9 26 Private domestic deposits and RPs 212.1 277.1 162.8 229.2 223.7 197.5 136.5 278.1 275.4 204.9 122.2 63.3 27 Credit market borrowing 99.7 131.0 128.4 127.8 54.5 157.1 162.6 25.3 -.9 30.9 26.2 5.0 28 Other sources 266.1 321.8 237.1 205.3 244.3 266.9 218.3 278.1 87.2 393.5 217.3 241.7 29 Foreign funds 19.7 12.9 43.7 9.3 -11.7 35.3 -3.8 -43.0 30.5 -30.3 50.0 -18.4 30 Treasury balances 10.3 1.7 -5.8 7.3 -3.4 .5 -12.6 13.9 -19.9 5.0 11.9 -27.1 31 Insurance and pension reserves 131.7 119.9 135.4 177.6 143.8 215.7 179.5 119.5 96.9 179.2 131.1 173.4 32 Other, net 104.4 187.3 63.9 11.0 115.6 15.4 55.2 187.6 -20.2 239.6 24.3 113.8 Private domestic nonfinancial investors 33 Direct lending in credit markets 270.5 121.5 214.6 241.7 182.8 159.3 276.4 216.7 247.5 -9.4 348.1 200.5 34 U.S. government securities 157.8 27.0 86.0 129.0 136.0 82.3 195.1 160.2 188.8 .0 290.9 105.1 35 State and local obligations 37.7 -19.9 61.8 53.5 28.3 57.9 56.7 4.4 39.6 12.3 2.5 3.5 36 Corporate and foreign bonds 3.8 52.9 23.3 -9.4 -12.6 -32.5 -27.9 8.8 -32.1 .7 31.2 45.1 37 Open market paper 51.6 9.9 15.8 36.4 4.1 33.8 44.6 7.6 20.8 -56.7 6.3 24.9 38 Other 19.6 51.7 27.6 32.2 27.1 17.8 7.8 35.8 30.4 34.3 17.1 21.9 39 Deposits and currency 222.8 297.5 179.3 232.8 239.8 153.3 177.8 301.3 250.0 230.2 146.8 88.5 40 Currency 12.4 14.4 19.0 14.7 11.7 7.6 17.8 12.8 6.0 10.1 25.9 22.6 41 Checkable deposits 41.4 96.4 -.9 12.9 1.7 20.2 -31.6 -40.3 16.3 62.2 -9.2 -53.6 42 Small time and savings accounts 138.5 120.6 76.0 122.4 100.5 56.5 20.7 111.6 162.2 107.4 104.6 134.9 43 Money market fund shares 7.2 43.2 28.9 20.2 85.2 60.9 39.4 119.2 116.7 65.6 72.8 5.8 44 Large time deposits 7.4 -3.2 37.2 40.8 23.1 37.0 68.5 61.1 -23.8 -13.4 -31.3 -41.2 45 Security RPs 17.7 20.2 21.6 32.9 13.3 22.9 39.4 26.6 3.9 -16.9 -14.8 17.4 46 Deposits in foreign countries -1.7 5.9 -2.5 -11.2 4.4 -51.8 23.5 10.4 -31.3 15.2 -1.3 2.6 47 Total of credit market instruments, deposits, and currency 493.3 419.0 393.9 474.5 422.7 312.5 454.2 518.1 497.5 220.8 495.0 288.9 48 Public holdings as percent of total 23.8 33.1 36.0 27.5 27.3 32.7 41.7 2.3 31.0 32.0 31.4 44.1 49 Private financial intermediation (in percent) 77.2 101.3 86.0 83.2 80.3 99.6 82.0 75.2 59.3 106.8 53.2 61.3 50 Total foreign funds 82.0 110.7 106.4 106.9 60.4 134.3 112.9 -47.9 162.9 13.9 72.7 34.2 MEMO: Corporate equities not included above 51 Total net issues 17.2 86.8 10.9 -124.2 -60.7 -173.0 -164.7 -38.1 -54.6 14.6 -8.3 55.7 52 Mutual fund shares 84.4 159.0 73.9 1.1 41.3 9.8 1.0 34.0 57.9 72.4 53.1 76.5 53 Other equities -67.2 -72.2 -63.0 -125.3 -102.0 -182.8 -165.7 -72.1 -112.5 -57.8 -61.4 -20.8 54 Acquisitions by financial institutions 46.9 50.9 32.0 -2.9 7.2 17.3 -.2 -14.1 -17.9 60.9 36.7 71.0 55 Other net purchases -29.7 35.9 -21.2 -121.4 -67.9 -190.3 -164.5 -24.0 -36.7 -46.3 -45.0 -15.4 NOTES BY LINE NUMBER. 31. Excludes net investment of these reserves in corporate equities. 1. Line 1 of table 1.57. 32. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 33. Line 13 less line 20 plus line 27. 6. Includes farm and commercial mortgages. 34-38. Lines 14-18 less amounts acquired by private finance plus amounts 11. Credit market funds raised by federally sponsored credit agencies, and net borrowed by private finance. Line 38 includes mortgages. issues of federally related mortgage pool securities. 40. Mainly an offset to line 9. 13. Line 1 less line 2 plus line 11 and 12. Also line 20 less line 27 plus line 33. 47. Lines 33 plus 39, or line 13 less line 28 plus 40 and 46. Also sum of lines 28 and 47 less lines 40 and 46. 48. Line 2/line 1. 18. Includes farm and commercial mortgages. 49. Line 20/line 13. 26. Line 39 less lines 40 and 46. 50. Sum of lines 10 and 29. 27. Excludes equity issues and investment company shares. Includes line 19. 51. 53. Includes issues by financial institutions. 29. Foreign deposits at commercial banks, bank borrowings from foreign NOTE. Full statements for sectors and transaction types in flows and in amounts branches, and liabilities of foreign banking agencies to foreign affiliates, less outstanding may be obtained from Flow of Funds Section, Division of Research claims on foreign affiliates and deposits by banking in foreign banks. and Statistics, Board of Governors of the Federal Reserve System, Washington, 30. Demand deposits and note balances at commercial banks. D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • December 1990 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING Billions of dollars; period-end levels. 1988 1989 1990 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11998855 11998866 11998877 11998888 Q4 Ql Q2 Q3 Q4 Ql Q2 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 6,804.5 7,646.3 8,343.9 9,096.0 9,096.0 9,267.7 9,438.6 9,603.6 9,803.5 9,972.6 10,126.6 By sector and instrument 2 U.S. government 1,600.4 1,815.4 1,960.3 2,117.8 2,117.8 2,155.7 2,165.7 2,204.7 2,268.0 2,359.5 2,397.3 3 Treasury securities 1,597.1 1,811.7 1,955.2 2,095.2 2,095.2 2,133.4 2,142.1 2,180.7 2,245.2 2,329.3 2,365.8 4 Agency issues and mortgages 3.3 3.6 5.2 22.6 22.6 22.3 23.6 24.0 22.8 30.2 31.6 5 Private domestic nonfinancial sectors 5.204.1 5,831.0 6.383.6 6,978.2 6,978.2 7,111.9 7,272.9 7,398.9 7.535.5 7,613.1 7,729.3 6 Debt capital instruments 3.485.2 3.962.7 4,427.9 4,886.4 4,886.4 4.989.1 5,091.4 5,189.9 5.283.2 5,356.3 5,432.2 7 Tax-exempt obligations 655.5 679.1 728.4 790.8 790.8 798.6 804.9 816.4 821.2 822.5 826.8 8 Corporate bonds 542.6 669.4 748.8 851.7 851.7 866.2 887.9 903.5 925.3 935.9 951.0 9 Mortgages 2.287.1 2,614.2 2.950.7 3.243.8 3.243.8 3.324.2 3,398.6 3,470.0 3.536.6 3,597.9 3,654.5 10 Home mortgages 1.490.2 1.720.8 1,943.1 2.173.9 2.173.9 2,229.0 2,287.6 2,347.6 2.404.3 2,450.3 2,492.8 11 Multifamily residential 213.0 246.2 270.0 286.7 286.7 293.1 298.3 301.2 304.4 309.2 313.3 12 Commercial 478.1 551.4 648.7 696.4 696.4 716.2 725.9 734.9 742.6 753.7 763.3 13 Farm 105.9 95.8 88.9 86.8 86.8 86.0 86.8 86.3 85.3 84.7 85.1 14 Other debt instruments 1,718.9 1,868.2 1,955.7 2,091.9 2,091.9 2,122.8 2,181.5 2,208.9 2,252.3 2,256.9 2,297.1 15 Consumer credit 601.8 659.8 693.2 743.5 743.5 741.7 756.7 771.0 790.6 774.3 783.3 16 Bank loans n.e.c 602.3 666.0 673.3 713.1 713.1 725.6 740.3 750.7 763.0 756.6 764.8 17 Open market paper 72.2 62.9 73.8 85.7 85.7 96.1 110.1 113.3 107.1 126.0 128.7 18 Other 442.6 479.6 515.3 549.6 549.6 559.4 574.4 574.0 591.7 599.9 620.3 19 By borrowing sector 5.204.1 5.831.0 6,383.6 6,978.2 6,978.2 7,111.9 7,272.9 7,398.9 7,535.5 7,613.1 7.729.3 20 State and local governments 473.9 510.1 558.9 604.5 604.5 612.4 619.9 629.9 634.1 634.3 636.8 21 Households 2,296.0 2.596.1 2,879.1 3,191.5 3,191.5 3,257.9 3,330.5 3.411.3 3,501.5 3,542.8 3,600.1 22 Nonfinancial business 2.434.2 2,724.8 2,945.6 3,182.2 3,182.2 3,241.6 3.322.5 3,357.6 3,399.9 3.436.0 3.492.4 23 Farm 173.4 156.6 145.5 137.6 137.6 136.7 139.5 139.2 139.2 138.2 143.8 24 Nonfarm noncorporate 898.3 997.6 1,075.4 1,145.1 1,145.1 1,163.9 1.177.6 1,183.0 1,195.9 1.205.1 1,218.6 25 Corporate 1,362.4 1,570.6 1,724.6 1,899.5 1,899.5 1,941.0 2,005.3 2.035.4 2,064.8 2,092.8 2,130.0 26 Foreign credit market debt held in United States 236.7 238.3 244.6 253.9 253.9 254.0 252.2 257.7 261.6 260.5 273.0 27 Bonds 71.8 74.9 82.3 89.2 89.2 90.4 92.1 94.2 94.5 102.1 107.5 28 Bank loans n.e.c 27.9 26.9 23.3 21.5 21.5 21.6 21.5 22.6 21.4 19.0 18.5 29 Open market paper 33.9 37.4 41.2 49.9 49.9 54.4 52.7 57.5 63.0 59.3 65.1 30 U.S. government loans 103.0 99.1 97.7 93.2 93.2 87.5 85.8 83.4 82.7 80.1 81.9 31 Total domestic plus foreign 7,041.1 7,884.7 8,588.5 9,349.9 9,349.9 9,521.7 9,690.7 9,861.3 10,065.1 10,233.1 10,399.7 Financial sectors 32 Total credit market debt owed by financial sectors 1,213.2 1,529.8 1,836.8 2,084.4 2,084.4 2,191.3 2,234.1 2,263.8 2,322.4 2,358.6 2,400.0 By instrument 33 U.S. government related 632.7 810.3 978.6 1,098.4 1,098.4 1,140.8 1,169.5 1,203.6 1,249.3 1,287.5 1,319.7 34 Sponsored credit agency securities .... 257.8 273.0 303.2 348.1 348.1 364.3 369.0 370.4 373.3 376.0 378.9 35 Mortgage pool securities 368.9 531.6 670.4 745.3 745.3 771.5 795.6 828.2 871.0 906.5 935.9 36 Loans from U.S. government 6.1 5.7 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 37 Private financial sectors 580.5 719.5 858.2 986.1 986.1 1,050.5 1,064.6 1,060.2 1,073.0 1,071.1 1,080.3 38 Corporate bonds 204.5 287.4 366.3 418.0 418.0 458.6 466.1 472.7 482.7 492.6 510.4 39 Mortgages 2.7 2.7 3.1 3.4 3.4 3.5 3.5 3.5 3.4 3.2 3.3 40 Bank loans n.e.c 32.1 36.1 32.8 34.2 34.2 32.2 33.8 34.1 36.0 33.2 33.5 41 Open market paper 252.4 284.6 322.9 377.7 377.7 392.5 399.4 398.8 409.1 409.1 406.8 42 Loans from Federal Home Loan Banks 88.8 108.6 133.1 152.8 152.8 163.8 161.9 151.1 141.8 132.9 126.3 43 Total, by sector 1,213.2 1,529.8 1,836.8 2,084.4 2,084.4 2,191.3 2,234.1 2,263.8 2,322.4 2,358.6 2,400.0 44 Sponsored credit agencies 263.9 278.7 308.2 353.1 353.1 369.3 374.0 375.4 378.3 381.0 383.8 45 Mortgage pools 368.9 531.6 670.4 745.3 745.3 771.5 795.6 828.2 871.0 906.5 935.9 46 Private financial sectors 580.5 719.5 858.2 986.1 986.1 1,050.5 1,064.6 1,060.2 1,073.0 1,071.1 1,080.3 47 Commercial banks 79.2 75.6 81.8 78.8 78.8 73.3 75.7 77.0 77.4 73.4 76.1 48 Bank affiliates 106.2 116.8 131.1 136.2 136.2 140.0 141.2 144.0 142.5 140.8 133.0 49 Savings and loan associations 98.9 119.8 139.4 159.3 159.3 170.1 167.9 155.7 145.2 137.0 128.7 50 Mutual savings banks 4.4 8.6 16.7 18.6 18.6 17.8 17.7 17.5 17.2 15.4 16.3 51 Finance companies 261.2 328.1 378.8 446.1 446.1 464.3 478.0 481.2 496.2 501.3 510.9 52 REITs 5.6 6.5 7.3 11.4 11.4 11.1 10.6 10.0 10.1 10.1 9.7 53 SCO issuers 25.0 64.0 103.1 135.7 135.7 173.8 173.5 174.9 184.4 193.1 205.7 All sectors 54 Total credit market debt 8,254.4 9,414.4 10,425.3 11,434.3 11,434.3 11,712.9 11,924.8 12,125.1 12,387.4 12,591.7 12,799.7 55 U.S. government securities 2,227.0 2,620.0 2,933.9 3,211.1 3,211.1 3,291.5 3,330.3 3,403.3 3,512.4 3,642.0 3,712.1 56 State and local obligations 655.5 679.1 728.4 790.8 790.8 798.6 804.9 816.4 821.2 822.5 826.8 57 Corporate and foreign bonds 818.9 1,031.7 1,197.4 1,358.9 1,358.9 1,415.2 1,446.1 1,470.5 1,502.6 1,530.7 1,568.9 58 Mortgages 2,289.8 2,617.0 2,953.8 3,247.2 3,247.2 3,327.7 3,402.1 3,473.6 3,540.1 3,601.1 3,657.7 59 Consumer credit 601.8 659.8 693.2 743.5 743.5 741.7 756.7 771.0 790.6 774.3 783.3 60 Bank loans n.e.c 662.4 729.0 729.5 768.9 768.9 779.5 795.6 807.4 820.3 808.9 816.9 61 Open market paper 358.5 384.9 437.9 513.4 513.4 543.0 562.2 569.6 579.2 594.5 600.5 62 Other loans 640.5 693.1 751.1 800.5 800.5 815.7 827.0 813.4 821.1 817.8 833.6 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. 1988 1989 1990 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11998855 11998866 11998877 11998888 Q4 Q1 Q2 Q3 Q4 Ql Q2 1 Total funds advanced in credit markets to domestic nonfinancial sectors 6,804.5 7,646.3 8,343.9 9,096.0 9,096.0 9,267.7 9,438.6 9,603.6 9,803.5 9,972.6 10,126.6 By public agencies and foreign ?. Total held 1,474.0 1,779.4 2,006.6 2,199.7 2,199.7 2,257.0 2,266.9 2,323.3 2,386.5 22,,442288..99 22,,550044..77 3 U.S. government securities 435.4 509.8 570.9 651.5 651.5 666.1 646.1 674.5 689.4 686.4 714.0 4 Residential mortgages 518.2 678.5 814.1 900.4 900.4 927.2 954.4 991.1 1,038.4 1,078.9 1,120.8 5 FHLB advances to thrifts 88.8 108.6 133.1 152.8 152.8 163.8 161.9 151.1 141.8 132.9 126.3 6 Other loans and securities 431.6 482.4 488.6 495.1 495.1 500.0 504.5 506.6 517.0 530.7 543.6 7 Total held, by type of lender 1,474.0 1,779.4 2,006.6 2,199.7 2,199.7 2,257.0 2,266.9 2,323.3 2,386.5 2,428.9 2,504.7 8 U.S. government 248.6 255.3 240.0 217.6 217.6 212.9 211.5 207.8 207.1 216.6 231.1 9 Sponsored credit agencies and mortgage pools ... 659.8 835.9 1,001.0 1,113.0 1,113.0 1,151.1 1,157.8 1,193.5 1,238.2 1,275.4 1,309.5 10 Monetary authority 186.0 205.5 230.1 240.6 240.6 235.4 238.4 227.6 233.3 224.4 237.8 11 Foreign 379.5 482.8 535.5 628.5 628.5 657.6 659.2 694.5 707.9 712.5 726.3 Agency and foreign debt not in line 1 12 Sponsored credit agencies and mortgage pools ... 632.7 810.3 978.6 1,098.4 1,098.4 1,140.8 1,169.5 1,203.6 1,249.3 1,287.5 1,319.7 13 Foreign 236.7 238.3 244.6 253.9 253.9 254.0 252.2 257.7 261.6 260.5 273.0 Private domestic holdings 14 Total private holdings 6,199.9 6,915.6 7,560.4 8,248.5 8,248.5 8,405.4 8,593.3 8,741.5 8,927.9 9,091.7 9,214.7 15 U.S. government securities 1,791.6 2,110.1 2,363.0 2,559.7 2,559.7 2,625.4 2,684.1 2,728.8 2,823.0 2,955.5 2,998.1 16 State and local obligations 655.5 679.1 728.4 790.8 790.8 798.6 804.9 816.4 821.2 822.5 826.8 17 Corporate and foreign bonds 517.3 606.6 674.3 765.6 765.6 776.5 797.7 814.5 831.6 846.8 862.5 18 Residential mortgages 1,185.1 1,288.5 1,399.0 1,560.2 1,560.2 1,594.9 1,631.5 1,657.7 1,670.4 1,680.6 1,685.2 19 Other mortgages and loans 2,139.3 2,339.8 2,528.7 2,724.9 2,724.9 2,773.7 2,836.9 2,875.2 2,923.5 2,919.1 2,968.4 20 LESS: Federal Home Loan Bank advances 88.8 108.6 133.1 152.8 152.8 163.8 161.9 151.1 141.8 132.9 126.3 Private financial intermediation 21 Credit market claims held by private financial institutions 5,289.4 6,018.0 6,564.5 7,128.6 7,128.6 7,273.3 7,430.5 7,518.2 7,674.1 7,760.9 7,851.6 22 Commercial banking 1,989.5 2,187.6 2,323.0 2,479.3 2,479.3 2,501.4 2,549.0 2,599.6 2,656.6 2,680.4 2,721.1 23 Savings institutions 1,191.2 1,297.9 1,445.5 1,567.7 1,567.7 1,570.6 1,561.0 1,530.3 1,480.3 1,461.2 1,425.4 24 Insurance and pension funds 1,365.3 1,525.4 1,705.1 1,903.8 1,903.8 1,957.8 2,004.9 2,042.7 2,093.4 2,135.7 2,181.4 25 Other finance 743.4 1,007.1 1,091.0 1,177.9 1,177.9 1,243.5 1,315.6 1,345.5 1,443.8 1,483.6 1,523.7 76 Sources of funds 5,289.4 6,018.0 6,564.5 7,128.6 7,128.6 7,273.3 7,430.5 7,518.2 7,674.1 7,760.9 7,851.6 27 Private domestic deposits and RPs 2,926.1 3,199.0 3,354.2 3,599.1 3,599.1 3,629.1 3,680.0 3,741.3 3,822.8 3,849.8 3,843.9 28 Credit market debt 580.5 719.5 858.2 986.1 986.1 1,050.5 1,064.6 1,060.2 1,073.0 1,071.1 1,080.3 79 Other sources 1,782.9 2,099.5 2,352.1 2,543.5 2,543.5 2,593.7 2,685.9 2,716.6 2,778.3 2,840.0 2,927.4 30 Foreign funds 5.6 18.6 62.3 71.5 71.5 61.8 50.0 55.7 59.9 62.8 58.2 31 Treasury balances 25.8 27.5 21.6 29.0 29.0 13.5 34.4 30.3 25.6 16.7 29.1 32 Insurance and pension reserves 1,289.3 1,398.5 1,527.8 1,692.5 1,692.5 1,741.8 1,774.0 1,793.2 1,829.9 1,867.1 1,918.3 33 Other, net 462.1 655.0 740.3 750.5 750.5 776.6 827.5 837.4 862.9 893.3 921.8 Private domestic nonfinancial investors 34 Credit market claims 1,491.0 1,617.0 1,854.1 2,106.0 2,106.0 2,182.6 2,227.4 2,283.6 2,326.8 2,401.9 2,443.4 35 U.S. government securities 803.3 848.7 936.7 1,072.2 1,072.2 1,099.1 1,119.8 1,166.6 1,201.0 1,279.7 1,286.3 36 Tax-exempt obligations 231.5 212.6 274.4 340.9 340.9 348.9 353.6 363.1 369.2 363.0 367.0 37 Corporate and foreign bonds 37.1 90.5 114.0 100.4 100.4 123.6 125.1 121.2 117.2 125.4 136.7 38 Open market paper 135.2 145.1 178.5 218.0 218.0 225.1 233.5 235.9 227.4 219.0 232.6 39 Other 283.8 320.1 350.4 374.4 374.4 386.0 395.3 396.8 412.1 414.7 420.9 40 Deposits and currency 3,116.8 3,410.1 3,583.9 3,832.3 3,832.3 3,865.5 3,927.1 3,977.2 4,072.1 4,098.1 4,103.5 41 Currency 171.9 186.3 205.4 220.1 220.1 220.7 226.4 224.4 231.8 234.4 242.6 42 Checkable deposits 420.3 516.6 515.4 527.2 527.2 494.6 495.8 487.2 528.9 501.9 499.0 43 Small time and savings accounts 1,831.9 1,948.3 2,017.1 2,156.2 2,156.2 2,168.9 2,189.3 2,224.4 2,256.7 2,290.4 2,316.9 44 Money market fund shares 225.6 268.9 297.8 318.0 318.0 342.7 362.1 391.0 403.3 436.7 426.3 45 Large time deposits 339.9 336.7 373.9 414.7 414.7 430.8 435.7 440.0 437.8 429.2 407.1 46 Security RPs 108.3 128.5 150.1 182.9 182.9 192.1 197.1 198.6 196.2 191.6 194.5 47 Deposits in foreign countries 18.8 24.8 24.3 13.1 13.1 15.8 20.7 11.4 17.6 13.9 17.0 48 Total of credit market instruments, deposits, and currency 4,607.8 5,027.2 5,438.0 5,938.2 5,938.2 6,048.1 6,154.5 6,260.8 6,399.0 6,500.0 6,546.9 49 Public holdings as percent of total 20.9 22.6 23.4 23.5 23.5 23.7 23.4 23.6 23.7 23.7 24.1 50 Private financial intermediation (in percent) 85.3 87.0 86.8 86.4 86.4 86.5 86.5 86.0 86.0 85.4 85.2 51 Total foreign funds 385.1 501.3 597.8 700.1 700.1 719.5 709.3 750.2 767.8 775.3 784.5 MEMO: Corporate equities not included above 52 Total market value 2,823.9 3,360.6 3,325.0 3,619.8 3,619.8 3,730.8 4,071.3 4,398.7 4,382.1 4,172.4 4,339.8 53 Mutual fund shares 240.2 413.5 460.1 478.3 478.3 486.3 514.8 543.9 555.1 550.3 587.9 54 Other equities 2,583.7 2,947.1 2,864.9 3,141.6 3,141.6 3,244.5 3,556.5 3,854.8 3,827.0 3,622.1 3,751.9 55 Holdings by financial institutions 800.3 974.6 1,039.5 1,176.1 1,176.1 1,241.6 1,354.4 1,490.5 1,497.8 1,438.4 1,539.8 56 Other holdings 2,023.6 2,385.9 2,285.5 2,443.7 2,443.7 2,489.2 2,716.9 2,908.2 2,884.3 2,734.0 2,800.0 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 8-11. 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 1990 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1990 MMeeaassuurree 11998877 11998888 11998899 Jan. Feb. Mar. Apr. May June' July' Aug.' Sept. 1 Industrial production (1987 = 100)1 100.0 105.4 108.1 107.5 108.5 108.9 108.8 109.4 110.1 110.3 110.4 110.7 Market groupings 2 Products, total (1987 = 100) 100.0 105.3 108.6 108.4 109.4 110.1 109.8 110.5 110.9 110.8 110.9 111.5 3 Final, total (1987 = 100) 100.0 105.6 109.1 108.5 109.7 110.7 110.4 111.2 111.7 111.5 111.7 112.6 4 Consumer goods (1987 = 100) 100.0 104.0 106.7 106.0 107.0 107.5 107.2 107.4 107.8 107.3 107.8 109.1 5 Equipment (1987 = 100) 100.0 107.6 112.3 111.8 113.3 114.9 114.7 116.2 116.8 116.9 116.7 117.1 6 Intermediate (1987 = 100) 100.0 104.4 106.8 108.0 108.4 108.2 108.0 108.3 108.3 108.5 108.4 107.9 7 Materials (1987 = 100) 100.0 105.6 107.4 106.2 107.1 107.1 107.3 107.7 108.8 109.5 109.7 109.4 Industry groupings 8 Manufacturing (1987 = 100) 100.0 105.8 108.9 108.1 109.6 109.8 109.5 110.3 110.8 111.0 111.2 111.4 Capacity utilization (percent)2 9 Manufacturing 81.4 83.9 83.9 82.0 83.0 82.9 82.5 82.8 83.0 82.9 82.8 82.8 10 Construction contracts (1982 = 100)3 164.8 166.4 170.C 158.0 154.0 157.0 147.0 155.0 153.0 148.0 146.0 166.0 11 Nonagricultural employment, total4 123.9 128.0 131.6 133.0 133.3 133.5 133.6 134.1 134.4 134.3 134.2 134.1 12 Goods-producing, total 101.5 103.7 105.3 103.5 104.1 103.8 103.4 103.5 103.4 103.1 102.8 102.4 13 Manufacturing, total 96.7 98.6 99.6 97.4 97.8 97.6 97.5 97.4 97.3 97.2 96.9 96.6 14 Manufacturing, production- worker ... 91.9 93.9 94.8 92.0 92.5 92.4 92.3 92.1 92.0 92.0 91.7 91.3 15 Service-producing 133.3 138.2 142.7 145.3 145.6 146.0 146.2 147.0 147.4 147.3 147.3 147.3 16 Personal income, total 234.3 253.2 272.7 281.9 283.8 285.8 286.4' 287.5' 288.7 290.1 290.7 292.2 17 Wages and salary disbursements 226.4 244.6 258.9 264.9 266.9 268.6 269.9 271.2' 272.8 274.4 274.4 276.2 18 Manufacturing 183.8 196.5 203.1 201.1 203.0 204.6 203.9' 205.8' 206.8 206.9 206.7 206.4 19 Disposable personal income 231.6 252.5 270.1 279.9 281.7 283.9 283.6' 284.4' 285.8 287.0 287.4 288.7 20 Retail sales6 213.6 228.0 240.6 249.6 249.7 248.7 246.3 246.1 248.9 250.1 249.2 251.9 Prices7 21 Consumer (1982-84 = 100) 113.6 118.3 124.0 127.4 128.0 128.7 128.9 129.2 129.9 130.4 131.6 132.7 22 Producer finished goods (1982 = 100) ... 105.4 108.0 113.6 117.6 117.4 117.2 117.2 117.7 117.9 118.0 119.2 120.3 1. A major revision of the industrial production index and the capacity 6. Based on Bureau of Census data published in Survey of Current Business. utilization rates was released in April 1990. See "Industrial Production: 1989 1. Data without seasonal adjustment, as published in Monthly Labor Review. Developments and Historical Revision" in the Federal Reserve Bulletin, vol. 76 Seasonally adjusted data for changes in the price indexes may be obtained from (April 1990), pp. 187-204. 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 latest month are preliminary and the Company, F. W. Dodge Division. prior three months have been revised. See "Recent Developments in Industrial 4. Based on data in Employment and Earnings (U.S. Department of Labor). Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp. Series covers employees only, excluding personnel in the Armed Forces. 411-35. 5. Based on data in Survey of Current Business (U.S. Department of Commerce). 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. 1990 CCaatteeggoorryy 11998877 11998888 11998899 Feb. Mar. Apr. May June July Aug. Sept. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 185,010 186,837 188,601 189,607 189,717 189,844 189,983 190,122 190,275 190,411 190,568 2 Labor force (including Armed Forces)1 122,122 123,893 126,077 126,825 127,017 127,061 127,159 126,981 126,906 126,810 127,134 3 Civilian labor force 119,865 112211,,666699 123,869 112244,,663300 124,829 124,886 125,004 124,836 124,767 124,660 124,967 Employment 4 Nonagricultural industries 109,232 111,800 114,142 114,957 115,133 114,983 115,045 115,041 114,867 114,521 114,717 5 Agriculture 3,208 3,169 3,199 3,079 3,200 3,133 3,305 3,348 3,085 3,137 3,181 Unemployment 6 Number 7,425 6,701 6,528 6,594 6,495 6,770 6,653 6,447 6,814 7,003 7,069 7 Rate (percent of civilian labor force) 6.2 5.5 5.3 5.3 5.2 5.4 5.3 5.2 5.5 5.6 5.7 8 Not in labor force 62,888 62,944 62,524 62,782 62,700 62,783 62,824 63,141 63,369 63,601 63,434 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 102,200 105,584 108,573 109,958 110,122 110,177 110,617 110,829 110,740 110,657' 110,556 10 Manufacturing 19,024 19,403 19,611 19,244 19,217 19,190 19,167 19,148 19,131r 19,083' 19,017 11 Mining 717 721 722 727 729 734 738 744 745' 736 738 12 Contract construction 4,967 5,125 5,302 5,368 5,313 5,256 5,286 5,270 5,229' 5,194' 5,174 13 Transportation and public utilities 5,372 5,548 5,703 5,804 5,808 5,809 5,833 5,846 5,841' 5,845' 5,859 14 Trade 24,327 25,139 25,807 26,115 26,125 26,141 26,164 26,205 26,225' 26,213' 26,202 15 Finance 6,547 6,676 6,814 6,817 6,821 6,823 6,838 6,844 6,842' 6,850' 6,843 16 Service 24,236 25,600 26,889 27,842 27,950 27,969 28,094 28,225 28,287' 28,386' 28,407 17 Government 17,010 17,372 17,726 18,041 18,159 18,255 18,497 18,547 18,44C 18,35c 18,316 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 1990 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1989 1990 1989 1990 1989 1990 SSeerriieess Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Output (1987 = 100) Capacity (percent of 1987 output) Utilization rate (percent) 1 Total industry 108.1 108.3 109.4 110.4 129.5 130.3 131.2 132.1 83.5 83.1 83.4 83.6 2 Manufacturing 108.7 109.2 110.2 111.2 131.1 132.1 133.2 134.2 82.9 82.6 82.8 82.8 3 Primary processing 106.1 106.4 106.3 107.9 123.4 124.2 124.9 125.7 85.9 85.7 85.1 85.8 4 Advanced processing... 109.9 110.5 112.1 112.7 134.7 135.8 137.0 138.2 81.6 81.4 81.8 81.6 5 Durable 110.0 110.4 112.4 113.5 135.2 136.2 137.2 138.3 81.3 81.0 81.9 82.1 61 Lumber and products 104.8 105.1 102.3 101.0 122.3 123.2 124.1 125.0 85.7 85.3 82.5 80.8 Primary metals 105.3 106.1 107.4 112.3 126.9 127.2 127.3 127.4 83.0 83.4 84.3 88.2 8 Iron and steel .. 104.5 107.1 107.5 114.5 131.5 131.9 132.0 132.1 79.5 81.2 81.4 86.7 9 Nonferrous 106.4 104.6 107.1 109.3 120.2 120.4 120.6 120.9 88.5 86.9 88.8 90.4 10 Nonelectrical machinery 121.9 124.4 126.7 128.7 150.1 151.6 153.2 154.9 81.2 82.1 82.7 83.1 11 Electrical machinery 110.1 111.1 112.2 112.3 136.0 137.4 138.8 140.2 81.0 80.9 80.8 80.1 12 Motor vehicles and parts 99.1 91.5 102.6 104.0 132.0 132.5 133.5 134.5 75.1 69.0 76.9 77.3 13 Aerospace and miscellaneous transportation equipment. 106.7 111.6 113.6 113.6 132.5 133.4 134.3 135.2 80.6 83.6 84.6 84.0 14 Nondurable 107.1 107.7 107.5 108.2 125.9 126.9 128.0 129.0 85.0 84.8 84.0 83.8 15 Textile mill products 100.3 101.1 102.4 101.9 115.5 116.0 116.6 117.1 86.9 87.2 87.9 87.1 16 Paper and products 104.2 103.9 104.5 106.1 113.3 113.9 114.7 115.5 92.0 91.2 91.1 91.9 17 Chemicals and products 108.9 109.9 109.9 111.2 132.1 133.4 134.7 135.9 82.5 82.4 81.6 81.8 18 106 2 111 7 116 3 123 7 126 1 128 4 85 8 88 6 90 6 19 Petroleum products 106.8 109.9 106.0 110.2 121.0 121.1 121.1 121.1 88.3 90.8 87.5 91.0 20 Mining 100.6 101.3 102.5 102.5 116.1 115.7 115.2 114.8 86.7 87.6 88.9 89.2 21 Utilities 110.6 105.7 107.8 110.7 125.7 126.0 126.4 126.7 88.0 83.9 85.3 87.3 22 Electric 111.8 108.4 111.0 113.6 120.8 121.1 121.6 122.1 92.6 89.5 91.3 93.0 Previous cycle2 Latest cycle3 1989 1990 High Low High Low Sept. Jan. Feb. Mar. Apr. May June' Julyr Aug/ Sept." Capacity utilization rate (percent) 23 Total industry 89.2 72.6 87.3 71.8 83.9 82.7 83.2 83.4 83.1 83.4 83.7 83.7 83.6 83.6 24 Manufacturing 88.9 70.8 87.3 70.0 83.6 82.0 83.0 82.9 82.5 82.8 83.0 82.9 82.8 82.8 25 Primary processing 92.2 68.9 89.7 66.8 86.1 85.7 86.1 85.2 85.0 84.9 85.5 86.0 86.0 85.4 26 Advanced processing.. 87.5 72.0 86.3 71.4 82.5 80.5 81.7 82.0 81.5 82.0 81.9 81.6 81.5 81.7 27 Durable 88.8 68.5 86.9 65.0 82.8 79.9 81.3 81.9 81.2 82.1 82.4 82.1 82.1 82.1 28 Lumber and products 90.1 62.2 87.6 60.9 84.3 86.3 84.7 85.0 83.4 81.9 82.0 81.9 81.2 79.3 29 Primary metals ... 100.6 66.2 102.4 46.8 86.8 82.6 84.8 82.8 83.6 83.4 86.0 86.5 89.7 88.3 30 Iron and steel . . 105.8 66.6 110.4 38.3 83.7 79.3 83.8 80.4 80.8 79.9 83.6 83.7 89.1 87.3 31 Nonferrous 92.9 61.3 90.5 62.2 91.4 87.8 86.4 86.6 87.9 88.8 89.8 90.8 90.7 89.8 32 Nonelectrical machinery 96.4 74.5 92.1 64.9 82.7 81.9 82.0 82.3 82.3 82.8 82.9 83.1 83.4 82.7 33 Electrical machinery 87.8 63.8 89.4 71.1 82.0 80.5 80.8 81.5 80.5 81.0 81.0 80.3 80.2 80.0 34 Motor vehicles and parts 93.4 51.1 93.0 44.5 78.2 58.1 71.0 77.9 71.9 77.9 80.7 76.5 75.0 80.5 35 Aerospace and miscellaneous transportation equipment 77.0 66.6 81.1 66.9 85.2 83.4 83.9 83.7 84.6 84.5 84.5 84.9 84.0 83.2 36 Nondurable 87.9 71.8 87.0 76.9 84.7 84.9 85.3 84.2 84.2 83.9 83.8 84.0 83.7 83.7 37 Textile mill products 92.0 60.4 91.7 73.8 88.2 86.9 88.8 85.9 86.7 88.1 88.8 87.9 86.9 86.3 38 Paper and products 96.9 69.0 94.2 82.0 90.5 91.3 92.2 90.0 92.0 90.7 90.6 93.6 91.3 90.7 39 Chemicals and products 87.9 69.9 85.1 70.1 81.9 82.6 82.8 81.8 82.2 81.1 81.6 81.6 81.8 82.1 40 Plastics 110022..00 5500..66 9900..99 6633..44 8855..55 8888..55 8888..99 8888..33 9900..88 9900..99 9900..00 9900..55 41 Petroleum products 96.7 81.1 89.5 68.2 89.9 89.7 92.5 90.1 88.2 86.4 87.9 91.2 90.5 91.2 42 Mining 94.4 88.4 96.6 80.6 87.2 87.8 87.3 87.5 89.2 88.7 88.8 90.0 88.6 89.0 43 Utilities 95.6 82.5 88.3 76.2 84.3 84.8 82.5 84.2 84.5 84.7 86.8 86.4 87.4 88.1 44 Electric 99.0 82.7 88.3 78.7 88.9 89.5 88.4 90.4 90.3 90.7 92.9 91.9 93.2 94.0 1. These data also appear in the Board's G.17 (419) release. For address, see 2. Monthly high 1973; monthly low 1975. inside front cover. For a detailed description of the series, see "Recent Devel- 3. Monthly highs 1978 through 1980; monthly lows 1982. opments in Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pages 411-35. 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 1987 1989 1990 1989 GGrroouuppss por- aavvgg.. tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June' Julyr AAuugg// SSeepptt.."" Index (1987 = 100) MAJOR MARKET 1 Total index 100.0 108.1 108.2 107.7 108.1 108.6 107.5 108.5 108.9 108.8 109.4 110.1 110.3 110.4 110.7 2 60.8 108.6 108.8 108.1 108.9 109.7 108.4 109.4 110.1 109.8 110.5 110.9 110.8 110.9 111.5 46.0 109.1 109.6 108.5 109.4 110.3 108.5 109.7 110.7 110.4 111.2 111.7 111.5 111.7 112.6 4 26.0 106.7 106.3 107.3 107.4 108.3 106.0 107.0 107.5 107.2 107.4 107.8 107.3 107.8 109.1 5 5.6 107.9 107.6 106.8 105.7 106.8 99.4 106.2 110.8 107.3 109.3 112.1 108.5 108.0 111.5 6 2.5 106.9 104.9 102.9 102.4 104.5 85.2 99.3 109.3 102.4 107.0 112.2 106.7 104.5 112.5 7 1.5 105.7 103.1 99.7 98.4 100.1 66.3 92.7 107.7 95.8 105.6 112.9 104.8 101.5 115.2 8 .9 101.2 102.0 100.7 92.8 92.6 62.1 86.9 100.5 87.7 96.8 103.8 98.1 97.2 115.1 9 .6 113.3 105.0 98.2 108.0 112.6 73.3 102.3 120.0 109.3 120.4 128.3 116.2 108.8 115.4 1100 Auto parts and allied goods... 1.0 108.7 107.4 107.6 108.2 111.2 113.6 109.4 111.6 112.2 108.9 111.2 109.7 108.9 108.4 nn Other 3.1 108.7 109.8 109.8 108.4 108.6 110.6 111.6 112.0 111.2 111.1 112.0 110.0 110.8 110.8 i? Appliances, A/C, and TV .8 106.7 109.3 107.6 102.0 101.0 108.4 107.8 108.1 104.4 103.6 107.5 100.2 102.0 102.0 N Carpeting and furniture .9 101.5 100.9 101.1 100.4 102.0 103.7 104.7 105.9 107.5 107.6 107.8 107.4 108.0 107.1 14 Miscellaneous home goods ... 1.4 114.5 115.8 116.6 117.1 117.1 116.2 118.2 118.0 117.3 117.5 117.2 117.0 117.5 118.1 IS Nondurable consumer goods 20.4 106.4 106.0 107.4 107.8 108.7 107.8 107.2 106.6 107.1 106.9 106.6 107.0 107.7 108.5 16 9.1 104.2 103.7 105.6 105.8 106.4 105.5 106.2 105.8 105.6 105.2 104.4 104.5 105.2 105.8 17 Clothing 2.6 101.6 101.6 101.9 100.1 99.4 100.6 99.6 97.0 96.0 96.4 95.7 95.8 96.0 95.7 18 Chemical products 3.5 109.4 107.8 110.3 111.3 110.3 112.7 112.0 111.0 113.5 113.0 112.8 112.5 114.1 115.3 19 2.5 114.3 116.2 117.2 118.1 116.9 116.2 117.6 116.4 118.1 118.6 118.3 119.7 119.1 120.7 ">0 2.7 106.7 106.0 106.0 108.0 115.2 107.9 101.5 103.1 104.1 104.1 105.3 106.8 108.4 109.1 7] Fuels .7 102.8 103.4 103.1 103.0 100.5 105.1 106.6 101.8 101.6 98.2 102.6 104.6 105.3 105.7 22 Residential utilities 2.0 108.1 106.9 107.0 109.8 120.7 109.0 99.6 103.6 105.0 106.3 106.3 107.6 109.6 110.3 23 Equipment, total 20.0 112.3 113.8 110.1 112.0 112.9 111.8 113.3 114.9 114.7 116.2 116.8 116.9 116.7 117.1 74 13.9 119.1 120.7 116.0 118.7 119.9 118.0 120.1 122.2 121.6 123.5 124.4 124.6 124.8 125.6 75 5.6 121.7 123.7 119.9 123.5 124.0 124.0 124.7 126.0 126.4 126.8 126.2 125.7 128.6 128.7 7~6> 1 Office and computing 4 1 . . 0 9 1 1 1 3 3 7 . . 8 2 1 11 4 3 1 . . 8 8 1 11 3 2 2 . . 4 8 1 1 1 4 3 1 . . 4 0 1 1 4 1 2 2 . . 7 8 1 1 1 4 3 2 . . 5 7 1 11 4 3 4 . . 4 3 1 1 1 4 3 7. . 2 9 1 11 4 4 9 . . 2 3 1 11 4 5 8 . . 8 9 1 1 1 5 6 0 . . 0 6 1 1 1 5 7 2 . . 1 6 1 15 1 4 7 . . 5 7 1 1 1 5 7 4 . . 1 1 ">8 2.5 123.8 127.0 112.9 117.0 123.4 111.4 122.7 130.6 126.2 132.5 137.4 133.8 132.0 138.3 79 1.2 103.9 103.1 97.6 98.0 97.6 69.6 91.7 104.5 95.2 105.7 112.2 103.0 100.9 113.7 30 Other 1.9 116.5 119.1 116.3 117.8 118.5 118.7 117.4 117.8 117.6 119.4 119.9 119.7 119.3 117.9 31 Defense and space equipment 5.4 97.4 98.9 96.6 96.7 96.6 97.5 97.6 97.5 97.3 97.6 97.6 97.9 97.4 97.0 37 Oil and gas well drilling .6 93.7 97.3 97.3 99.9 100.3 98.3 100.1 106.0 114.3 118.6 119.5 116.2 106.9 107.4 33 Manufactured homes .2 92.3 87.5 87.9 89.4 91.6 91.6 94.3 92.9 89.7 91.3 92.8 90.0 93.4 91.9 34 14.7 106.8 106.3 106.9 107.3 107.9 108.0 108.4 108.2 108.0 108.3 108.3 108.5 108.4 107.9 35 Construction supplies 6.0 106.1 105.2 106.3 107.0 107.4 107.9 108.2 107.3 106.4 105.5 106.0 106.4 105.9 104.9 36 Business supplies 8.7 107.3 107.0 107.3 107.5 108.2 108.0 108.5 108.9 109.1 110.2 109.8 110.0 110.1 110.0 37 Materials, total 39.2 107.4 107.4 107.1 107.0 106.9 106.2 107.1 107.1 107.3 107.7 108.8 109.5 109.7 109.4 38 19.4 111.6 112.0 110.8 110.8 110.4 109.4 110.8 110.9 110.9 112.5 113.8 114.1 115.1 114.4 39 Durable consumer parts 4.2 109.0 108.8 106.9 105.7 102.5 96.5 102.8 104.5 103.2 108.5 108.5 108.3 110.7 109.5 40 7.3 114.7 115.5 114.4 115.3 115.8 116.5 117.6 117.6 117.4 118.1 119.1 119.1 119.3 119.3 41 Other 7.9 110.2 110.6 109.5 109.4 109.5 109.7 108.7 108.1 108.9 109.6 111.8 112.7 113.6 112.5 47 2.8 112.1 112.9 111.0 108.6 109.3 108.5 109.9 107.5 110.2 109.2 113.6 115.3 117.0 115.1 43 Nondurable goods materials 9.0 105.3 104.2 106.1 104.9 104.3 105.4 105.8 105.2 106.1 105.2 106.1 107.7 106.6 106.2 44 1.2 99.8 99.6 98.6 96.1 95.8 94.6 96.2 94.9 95.6 97.4 99.4 99.0 97.8 97.2 4S Pulp and paper materials 1.9 103.8 104.1 107.7 104.6 103.7 105.0 105.3 103.0 106.0 104.5 104.8 109.0 105.9 105.7 46 3.8 106.4 104.5 106.8 105.8 103.8 105.8 107.3 107.5 107.4 105.4 107.3 108.5 108.2 107.7 47 Other 2.1 107.6 106.5 107.5 108.4 110.4 110.9 108.8 108.7 109.8 109.8 108.8 109.8 109.1 108.8 48 10.9 101.4 101.6 101.3 101.9 102.7 101.2 101.7 102.0 101.8 101.1 102.1 102.9 102.5 103.2 49 7.2 99.9 100.7 99.8 100.5 99.0 101.1 102.1 101.2 100.3 100.1 101.2 102.7 101.5 102.0 50 Converted fuel materials 3.7 104.3 103.6 104.2 104.5 110.0 101.4 100.9 103.4 104.6 102.9 103.9 103.3 104.4 105.6 SPECIAL AGGREGATES 51 97.3 108.2 108.4 108.0 108.4 108.9 108.6 108.9 109.0 109.2 109.5 110.0 110.5 110.7 110.6 52 Total excluding motor vehicles and parts ... 95.3 108.3 108.5 108.1 108.6 109.1 109.0 109.2 109.2 109.5 109.7 110.2 110.7 110.9 110.8 53 Total excluding office and computing machines 97.5 107.4 107.4 107.1 107.3 107.7 106.6 107.6 110088..00 110077..88 110088..44 110099..11 110099..22 110099..33 110099..66 54 Consumer goods excluding autos and 24.5 106.8 106.5 107.7 107.9 108.8 108.4 107.8 110077..55 110077..99 110077..66 110077..55 110077..55 110088..22 110088..88 55 Consumer goods excluding energy 23.3 106.7 106.4 107.4 107.3 107.5 105.8 107.6 108.0 107.5 107.8 108.1 107.4 107.7 109.1 56 Business equipment excluding autos and trucks 12.7 120.6 122.4 117.8 120.7 122.1 122.8 122.9 124.0 112244..22 125.3 112255..66 112266..77 112277..22 112266..88 57 Business equipment excluding office and 12.0 116.2 117.3 113.3 115.0 116.2 114.0 116.2 118.2 111177..22 119.4 112200..22 112200..00 112200..00 112211..00 58 Materials excluding energy 28.4 109.6 109.5 109.3 108.9 108.4 108.1 109.2 109.1 109.4 110.2 111.4 112.1 112.4 111.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • December 1990 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1987 Groups c S o I d C e p p r o o r - - a 1 v 98 g 9 . tion Sept. Oct. Nov. Dec Jan. Feb. Mar. Apr. May June' Julyr Aug/ Sept.'' Index (1987 = 100) MAJOR INDUSTRY Total index. 100.0 108.1 108.2 107.7 108.1 108.6 107.5 108.5 108.9 108.8 109.4 110.1 110.3 110.4 110.7 2 Manufacturing 84.4 108.9 109.1 108.4 108.9 108.8 108.1 109.6 109.8 109.5 110.3 110.8 111.0 111.2 111.4 3 Primary processing... 26.7 106.4 105.8 106.6 106.2 105.3 106.2 106.9 106.0 105.9 106.1 107.0 107.9 108.1 107.6 4 Advanced processing , 57.7 110.1 110.6 109.3 110.1 110.4 109.0 110.9 111.7 111.3 112.4 112.6 112.4 112.6 113.2 Durable 47.3 110.9 111.5 109.4 110.1 110.4 108.6 110.7 111.9 111.1 112.6 113.4 113.2 113.6 113.8 Lumber and products .. 24 2.0 103.0 102.6 103.2 104.8 106.4 106.0 104.3 105.0 103.3 101.7 102.0 102.1 101.5 99.4 Furniture and fixtures .. 25 1.4 105.3 105.7 105.6 104.4 105.1 105.1 104.8 105.9 107.6 108.0 108.7 109.4 108.8 106.9 Clay, glass, and stone products 32 2.5 108.0 106.5 107.7 108.2 108.6 110.0 108.0 107.7 105.1 106.4 106.1 105.6 106.5 105.9 Primary metals 33 3.3 109.2 109.9 108.6 104.8 102.6 105.0 107.9 105.4 106.4 106.2 109.5 110.2 114.3 112.5 Iron and steel 331,2 1.9 109.3 109.7 109.2 104.1 100.3 104.6 110.6 106.1 106.7 105.5 110.3 110.6 117.6 115.3 Raw steel .1 108.5 102.9 106.4 100.6 97.6 109.9 109.0 105.9 104.9 107.6 111.8 113.8 118.5 112.5 Nonferrous -6,9 1.4 109.0 109.8 107.6 105.8 105.8 105.6 104.0 104.3 105.9 107.1 108.3 109.7 109.6 108.6 Fabricated metal products 34 5.4 107.2 106.0 105.9 106.9 106.3 105.1 105.6 105.5 105.0 107.1 106.7 107.9 108.2 107.3 Nonelectrical machinery 35 8.6 121.8 123.4 119.0 122.9 123.8 123.7 124.2 125.2 125.7 126.9 127.5 128.3 129.2 128.6 Office and computing machines 357 2.5 137.2 141.8 132.8 141.0 142.7 142.7 144.3 147.3 149.3 149.0 150.6 152.6 154.4 154.1 Electrical machinery ... 36 8.6 109.5 110.8 110.2 110.1 110.1 110.1 111.0 112.3 111.3 112.4 112.8 112.1 112.4 112.5 Transportation equipment 37 9.8 107.2 108.0 102.1 102.8 104.4 94.7 103.5 107.9 105.1 109.0 111.0 108.9 107.6 110.7 Motor vehicles and parts 371 4.7 104.9 103.2 99.7 99.0 98.7 76.8 94.1 103.5 95.8 104.0 108.0 102.7 100.9 108.5 Autos and light trucks. 2.3 105.0 102.9 99.9 97.6 99.0 65.7 91.8 106.7 94.6 104.3 111.6 103.8 100.9 115.2 Aerospace and miscellaneous transportation equipment.. -6,9 5.1 109.3 112.3 104.3 106.3 109.6 111.0 111.9 111.9 113.4 113.5 113.8 114.5 113.6 112.7 Instruments 38 3.3 116.4 116.2 116.1 115.6 114.8 116.0 116.2 115.7 115.8 116.5 115.0 116.1 117.1 117.6 Miscellaneous manufacturers.... 39 1.2 114.9 116.2 116.9 117.0 116.4 117.0 118.1 118.6 118.6 119.1 119.6 120.4 122.7 124.3 Nondurable 37.2 106.4 106.0 107.2 107.3 106.7 107.5 108.3 107.2 107.5 107.4 107.6 108.1 108.1 108.3 Foods 20 8.8 105.5 105.4 106.8 107.4 108.0 106.8 107.4 107.1 107.0 106.8 106.1 106.4 107.0 107.8 Tobacco products 21 1.0 99.7 93.3 99.7 98.8 98.5 101.3 102.3 100.0 98.8 97.2 95.6 97.8 95.4 94.0 Textile mill products ... 22 1.8 101.9 101.5 101.9 99.3 99.8 100.6 103.0 99.8 100.9 102.7 103.6 102.8 101.8 101.2 Apparel products 23 2.4 104.3 104.5 103.9 103.7 102.6 102.4 102.1 99.8 98.7 99.2 99.3 99.3 99.3 99.0 Paper and products .... 26 3.6 103.2 102.2 105.3 104.1 103.4 103.8 105.0 102.8 105.3 104.0 104.2 107.8 105.5 105.0 Printing and publishing . 27 6.4 108.5 109.4 109.3 109.6 109.6 110.7 112.1 111.4 112.0 112.8 112.0 111.8 111.6 111.5 Chemicals and products 28 8.6 108.5 107.5 109.4 109.8 107.6 109.9 110.5 109.5 110.3 109.2 110.3 110.5 111.2 112.0 Petroleum products .... 29 1.3 106.1 108.7 106.9 109.3 104.3 108.6 112.0 109.1 106.8 104.6 106.5 110.5 109.6 110.5 Rubber and plastic products 30 3.0 108.9 108.5 108.8 109.1 110.1 110.7 109.1 109.8 109.0 110.9 112.8 112.3 112.5 112.7 Leather and products .. 31 .3 103.7 103.5 102.2 99.4 103.0 104.3 102.9 103.3 102.6 103.5 102.0 103.2 104.8 103.3 34 Mining 7.9 100.5 101.6 100.7 101.2 100.1 101.7 101.0 101.1 102.9 102.2 102.2 103.5 101.8 102.1 35 Metal 10 .3 141.4 145.4 143.2 145.9 155.5 144.8 143.4 141.4 152.7 148.7 156.7 163.7 162.1 160.6 36 Coal 11,12 1.2 105.7 109.6 109.9 108.1 103.5 114.1 111.9 112.9 114.2 110.0 113.5 118.5 110.2 113.3 37 Oil and gas extraction ... 13 5.7 95.5 95.9 94.3 95.5 94.0 94.4 94.1 94.6 95.7 96.0 94.6 94.8 94.5 94.4 38 Stone and earth minerals 14 .7 113.9 114.1 118.0 115.8 119.7 121.2 120.0 116.5 120.2 119.9 121.1 122.0 120.3 120.5 39 Utilities ... 7.6 107.1 105.9 107.4 108.3 116.1 106.8 104.0 106.2 106.7 107.1 109.7 109.4 110.8 111.8 40 Electric. ,3PT 6.0 108.1 107.1 109.7 109.5 116.3 108.3 107.1 109.7 109.7 110.3 113.1 112.1 113.8 114.9 41 Gas .... ,3PT 1.6 103.0 101.0 99.1 103.9 115.6 101.2 92.3 93.3 95.5 95.2 97.4 99.1 99.9 100.5 SPECIAL AGGREGATES 42 Manufacturing excluding motor vehicles and parts 79.8 109.2 109.5 108.9 109.4 109.3 109.9 110.5 110.2 110.3 110.7 111.0 111.5 111.8 111.6 43 Manufacturing excluding office and computing machines 82.0 108.1 108.1 107.7 107.9 107.7 107.1 108.6 108.7 108.3 109.2 109.6 109.7 109.9 110.1 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKET 44 Products, total 1734.8 1,889.8 1,894.3 1,878.3 1,896.9 1,905.5 1,863.6 1,903.3 1,922.6 1,906.2 1,922.2 1,937.0 1,927.4 1,931.2 1,948.7 45 Final 1350.9 1,480.1 1,486.2 1,465.6 1,482.8 1,492.5 1,447.9 1,488.3 1,507.5 1,493.9 1,506.0 1,523.4 11,,551122..99 11,,551177..22 1,536.4 46 Consumer goods . 833.4 884.6 878.8 883.2 889.0 898.6 864.3 888.6 893.4 883.9 885.9 893.8 888888..88 888899..11 903.3 47 Equipment 517.5 595.5 607.5 582.4 593.8 594.0 583.6 599.8 614.1 610.0 620.1 629.6 624.1 628.1 633.1 48 Intermediate 384.0 409.7 408.1 412.7 414.1 413.0 415.7 415.0 415.1 412.3 416.2 413.6 414.5 414.0 412.4 1. These data also appear in the Board's G.17 (419) release. For requests see utilization rates was released in April 1990. See "Industrial Production: 1989 address inside front cover. Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April A major revision of the industrial production index and the capacity 1990), pp. 187-204. 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. 1989 1990 IItteemm 11998877 11998888 11998899 Nov. Dec. Jan. Feb. Mar. Apr. May June Julyr Aug. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,535 1,456 1,339 1,364 1,416 1,739 1,297 1,232 1,108 1,065 1,108 1,082 1,050 2 1-family 1,024 994 932 984 984 985 974 912 813 802 796 780 762 3 2-or-more-family 511 462 407 380 432 754 323 320 295 263 312 302 288 4 Started 1,621 1,488 1,376 1,347 1,273 1,568 1,488 1,307 1,216 1,206 1,189 1,153 1,142 5 1-family 1,146 1,081 1,003 1,010 931 1,099 1,154 9% 898 897 889 875 841 6 2-or-more-family 474 407 373 337 342 469 334 311 318 309 300 278 301 7 Under construction, end of period1 . 987 919 850 881 886 892 900 887 876 857 849 836 827 8 1-family 591 570 535 558 567 571 575 567 559 546 540 531 525 9 2-or-more-family 397 350 315 323 319 321 325 320 317 311 309 305 302 10 Completed 1,669 1,530 1,423 1,486 1,302 1,443 1,351 1,378 1,295 1,363 1,295 1,280 1,262 11 1-family 1,123 1,085 1,026 1,078 933 1,031 1,041 1,037 942 1,008 946 963 904 12 2-or-more-family 546 445 396 408 369 412 310 341 353 355 349 317 358 13 Mobile homes shipped 233 218 198 189 189 195 200 193 189 191 191 184 195 Merchant builder activity in 1-family units 14 Number sold 672 675 650 687 633 613 606 558 533 536 559 558 550 15 Number for sale, end of period1 366 367 362 363 362 365 366 363 363 360' 354 350 343 Price (thousands of dollars)2 Median 16 Units sold 104.7 113.3 120.4 125.0 125.2 125.0 126.9 119.4 130.0 125.0 125.0 120.0 120.2 Average 17 Units sold 127.9 139.0 148.3 151.4 154.3 151.7 150.9 144.6 153.4 150.6' 150.4 150.2 148.1 EXISTING UNITS (1-family) 18 Number sold 3,530 3,594 3,439 3,560 3,560 3,520 3,400 3,400 3,330 3,300 3,330 3,330 3,500 Price of units sold (thousands of dollars) 19 Median 85.6 89.2 93.0 93.1 92.5 96.3 95.2 96.3 95.6 95.6 97.5 98.3 97.1 20 Average 106.2 112.5 118.0 117.9 118.1 120.0 118.3 119.5 117.8 118.7 121.1 122.0 120.5 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 410,209 422,076 432,068 433,381 431,995 445,959 455,571 457,272 444,737r 443,805' 441,088 442,358 442,529 22 Private 319,641 327,102 333,514 329,847 325,011 338,078 343,118 347,366 338,780' 333,992' 329,556 333,904 327,415 23 Residential 194,656 198,101 196,551 190,855 189,636 200,149 203,013 206,868 200,234' 196,055' 189,462 189,125 186,936 24 Nonresidential, total 124,985 129,001 136,963 138,992 135,375 113377,,992299 114400,,110055 114400,,449988 113388,,554466'' 113377,,993377'' 114400,,009944 114444,,777799 114400,,447799 Buildings 25 Industrial 13,707 14,931 18,506 19,134 18,863 19,680 21,072 21,086 21,039' 20,847' 20,405 23,656 20,683 26 Commercial 55,448 58,104 59,389 59,627 57,090 57,376 58,748 57,210 55,765' 54,698' 56,581 57,181 55,789 27 Other 15,464 17,278 17,848 18,160 16,612 17,706 16,964 17,646 18,227' 18,379' 19,272 19,801 19,927 28 Public utilities and other 40,366 38,688 41,220 42,071 42,810 43,167 43,321 44,556 43,515' 44,013' 43,836 44,141 44,080 29 Public 90,566 94,971 98,551 103,534 106,984 107,881 112,453 109,906 105,957' 109,813' 111,532 108,454 115,113 30 Military 4,327 3,579 3,520 3,664 3,552 3,838 3,886 5,099 5,057' 5,459' 5,868 5,026 5,040 31 Highway 26,958 30,140 29,502 30,376 33,450 31,901 37,018 32,374 29,714' 30,658' 30,311 28,818 31,398 32 Conservation and development... 5,519 4,726 4,969 4,916 5,371 5,192 5,559 4,9% 4,979' 5,504' 3,958 4,403 4,350 33 Other 53,762 56,526 60,560 64,578 64,611 66,950 65,990 67,437 66,207' 68,192' 71,395 70,207 74,325 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 1990 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 1989 1990 1990 SSSeeepppttt... 11998899 11999900 111999999000 SSeepptt.. SSeepptt.. Dec. Mar. June Sept. May June July Aug. Sept. CONSUMER PRICES2 (1982-84=100) 1 All items 4.3 6.2 4.9 8.5 3.5 7.9 .2 .5 .4 .8 .8 132.7 2 Food 4.9 5.6 5.5 11.4 2.1 3.7 .0 .8 .4 .3 .2 133.2 3 Energy items 4.4 13.5 3.9 14.8 -2.0 42.7 -.7 .6 -.7 4.3 5.6 108.8 4 All items less food and energy 4.3 5.5 4.7 7.5 3.9 5.7 .3 .4 .6 .5 .3 137.2 5 Commodities 2.7 3.7 3.4 7.8 .7 2.9 .1 .1 .3 .0 .4 124.5 6 Services 5.0 6.4 5.7 7.2 5.5 7.2 .4 .6 .7 .8 .3 144.5 PRODUCER PRICES (1982=100) 7 Finished goods 4.6 5.9 5.0 7.1 .3 11.7 .1 .2 -.1 1.3 1.6 120.3 8 Consumer foods 3.0 4.7 12.4 10.6 -2.9 -.3 .y -.2' .0 .8 -.9 124.1 9 Consumer energy 12.1 24.4 -5.3 24.7 -14.3 137.4 -1.5' -1.6' -.5 9.5 13.8 82.0 10 Other consumer goods 4.5 3.9 4.2 3.5 5.1 2.5 .4 .7 -.2 .2 .6 129.0 11 Capital equipment 4.0 3.4 2.0 4.0 1.7 6.0 .1' .2' .3 .3 .8 122.9 12 Intermediate materials3 3.7 3.7 -.4 2.5 -1.1 14.2 .0' -.3' -.1 1.5 1.9 116.4 13 Excluding energy 2.9 1.1 -1.0 1.0 .7 4.0 .1 -.1 .1 .3 .6 121.4 Crude materials 14 Foods -2.8 1.7 19.2 9.1 -11.5 -6.6 -2.4' .0' 1.0 -.9 -1.8 110.8 15 Energy 17.6 28.6 13.2 .5 -38.9 293.7 1.9' -6.7' -.1 25.5 12.4 97.9 16 Other 3.2 2.1 -15.3 4.0 10.9 10.9 1.1' -l.C .9 1.8 -.1 140.6 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers and reflect a animal feeds. rental equivalence measure of homeownership after 1982. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A53 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1989 1990 AAccccoouunntt 11998877 11998888 11998899 Q3 Q4 Ql Q2 Q3 GROSS NATIONAL PRODUCT 1 4,515.6 4,873.7 5,200.8 5,238.6 5,289.3 5,375.4 5,443.3 5,514.4 By source 2 Personal consumption expenditures 3,009.4 3,238.2 3,450.1 3,484.3 3,518.5 3,588.1 3,622.7 3,700.6 3 Durable goods 423.4 457.5 474.6 487.1 471.2 492.1 478.4 483.1 4 Nondurable goods 1,001.3 1,060.0 1,130.0 1,137.3 1,148.8 1,174.7 1,179.0 1,202.8 5 Services 1,584.7 1,720.7 1,845.5 1,859.8 1,898.5 1,921.3 1,965.3 2,014.7 6 Gross private domestic investment 699.5 747.1 771.2 775.8 762.7 747.2 759.0 759.6 7 Fixed investment 671.2 720.8 742.9 746.9 737.7 758.9 745.6 750.9 8 Nonresidential 444.9 488.4 511.9 518.1 5U.8 523.1 516.5 530.1 9 Structures 133.7 139.9 146.2 147.0 147.1 148.8 147.2 150.2 10 Producers' durable equipment 311.2 348.4 365.7 371.0 364.7 374.3 369.3 379.9 11 Residential structures 226.3 232.5 231.0 228.9 225.9 235.9 229.1 220.8 1? Change in business inventories 28.3 26.2 28.3 28.9 25.0 -11.8 13.4 8.8 13 Nonfarm 32.3 29.8 23.3 26.2 24.1 -17.0 13.0 7.8 14 Net exports of goods and services -114.7 -74.1 -46.1 -49.3 -35.3 -30.0 -24.9 -49.2 15 Exports 449.6 552.0 626.2 623.7 642.8 661.3 659.7 662.6 16 Imports 564.3 626.1 672.3 673.0 678.1 691.3 684.6 711.8 17 Government purchases of goods and services 921.4 962.5 1,025.6 1,027.8 1,043.3 1,070.1 1,086.4 1,103.4 18 Federal 381.3 380.3 400.0 399.2 399.9 410.6 421.9 425.4 19 State and local 540.2 582.3 625.6 628.6 643.4 659.6 664.6 678.0 By major type of product 70 Final sales, total 4,487.3 4,847.5 5,172.5 5,209.7 5,264.3 5,387.2 5,429.9 55,,550055..66 71 Goods 1,788.4 1,935.1 2,072.7 2,090.2 2,085.9 2,111.0 2,146.6 2,160.8 ?? Durable 780.5 860.2 906.7 922.1 907.4 919.9 930.1 941.6 73 Nondurable 1,007.9 1,074.9 1,166.1 1,168.1 1,178.6 1,191.2 1,216.4 1,219.2 74 Services 2,292.4 2,488.6 2,671.2 2,693.3 2,747.5 2,791.3 2,834.2 2,894.4 25 Structures 434.9 450.0 456.9 455.0 455.9 473.0 462.5 459.2 26 Change in business inventories 28.3 26.2 28.3 28.9 25.0 -11.8 13.4 8.8 77 Durable goods 22.9 19.9 11.9 6.6 13.2 -21.6 .0 6.9 28 Nondurable goods 5.4 6.4 16.4 22.2 11.9 9.8 13.4 1.9 MEMO 29 Total GNP in 1982 dollars 3,845.3 4,016.9 4,117.7 4,129.7 4,133.2 4,150.6 4,155.1 4,173.6 NATIONAL INCOME 30 3,660.3 3,984.9 4,223.3 4,232.1 4,267.1 4,350.3 4,411.3 n.a. 31 Compensation of employees 2,686.4 2,905.1 3,079.0 3,095.2 3,128.6 3,180.4 3,232.5 3,276.1 32 Wages and salaries 2,249.7 2,431.1 2,573.2 2,586.6 2,612.7 2,651.6 2,696.3 2,733.3 33 Government and government enterprises 419.4 446.6 476.6 479.9 486.7 497.1 505.7 511.3 34 Other 1,830.3 1,984.5 2,096.6 2,106.7 2,126.0 2,154.5 2,190.6 2,222.0 35 Supplement to wages and salaries 436.6 474.0 505.8 508.6 515.9 528.8 536.1 542.8 36 Employer contributions for social insurance 227.2 248.5 263.9 265.1 268.4 276.0 279.7 282.7 37 Other labor income 209.4 225.5 241.9 243.5 247.5 252.8 256.4 260.0 38 Proprietors' income1 323.4 354.2 379.3 368.1 381.7 404.0 401.7 398.0 39 Business and professional1 280.6 310.5 330.7 329.5 336.0 346.6 350.8 355.2 40 Farm1 42.8 43.7 48.6 38.7 45.7 57.4 51.0 42.8 41 Rental income of persons2 13.7 16.3 8.2 5.8 4.1 5.5 4.3 7.6 42 Corporate profits1 308.3 337.6 311.6 306.7 290.9 296.8 306.6 n.a. 43 Profits before tax3 275.3 316.7 307.7 291.4 289.8 296.9 299.3 n.a. 44 Inventory valuation adjustment -19.4 -27.0 -21.7 -6.1 -14.5 -11.4 -.5 -30.6 45 Capital consumption adjustment 52.4 47.8 25.5 21.4 15.6 11.3 7.7 2.3 46 Net interest 328.6 371.8 445.1 456.2 461.7 463.6 466.2 468.9 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 1990 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1989 1990 AAccccoouunntt 11998877 11998888 11998899 Q3 Q4 Ql Q2 Q3 PERSONAL INCOME AND SAVING 1 Total personal income 3,766.4 4,070.8 4,384.3 4,402.8 4,469.2 4,562.8 4,622.2 4,677.7 ? Wage and salary disbursements 2,249.7 2,431.1 2,573.2 2,586.6 2,612.7 2,651.6 2,696.3 2,733.3 Commodity-producing industries 649.9 696.4 720.6 722.3 721.4 724.6 731.1 735.1 4 490.3 524.0 541.8 543.2 540.9 541.2 548.1 551.2 5 Distributive industries 531.8 572.0 604.7 607.1 614.6 627.0 637.3 642.4 6 Service industries 648.5 716.2 771.4 777.4 790.0 802.9 822.2 844.6 7 Government and government enterprises 419.4 446.6 476.6 479.9 486.7 497.1 505.7 511.3 8 209.4 225.5 241.9 243.5 247.5 252.8 256.4 260.0 9 Proprietors' income 323.4 354.2 379.3 368.1 381.7 404.0 401.7 398.0 10 Business and professional 280.6 310.5 330.7 329.5 336.0 346.6 350.8 355.2 11 Farm1 42.8 43.7 48.6 38.7 45.7 57.4 51.0 42.8 1? Rental income of persons2 13.7 16.3 8.2 5.8 4.1 5.5 4.3 7.6 N 91.8 102.2 114.4 115.7 118.2 120.5 122.9 124.9 14 Personal interest income 501.3 547.9 643.2 655.2 664.9 670.5 678.0 686.4 IS Transfer payments 549.9 587.7 636.9 641.8 655.9 680.9 686.7 696.0 16 Old-age survivors, disability, and health insurance benefits ... 282.9 300.5 325.3 328.3 334.1 347.2 347.6 350.2 17 LESS: Personal contributions for social insurance 172.9 194.1 212.8 214.0 215.8 222.9 224.1 228.6 18 EQUALS: Personal income 3,766.4 4,070.8 4,384.3 4,402.8 4,469.2 4,562.8 4,622.2 4,677.7 19 LESS: Personal tax and nontax payments 571.6 591.6 658.8 659.5 669.6 675.1 696.5 709.0 20 EQUALS: Disposable personal income 3,194.7 3,479.2 3,725.5 3,743.4 3,799.6 3,887.7 3,925.7 3,968.6 21 LESS: Personal outlays 3,102.2 3,333.6 3,553.7 3,588.8 3,625.5 3,696.4 3,730.6 3,809.2 22 EQUALS: Personal saving 92.5 145.6 171.8 154.5 174.1 191.3 195.1 159.4 MEMO Per capita (1982 dollars) 73 Gross national product 15,759.4 16,302.4 16,550.2 16,578.5 16,546.0 1166,,557755..99 1166,,555544..22 1166,,557755..11 74 Personal consumption expenditures 10,310.7 10,578.3 10,678.5 10,739.9 10,688.2 10,692.1 10,672.5 10,733.5 25 Disposable personal income 10,946.0 11,368.0 11,531.0 11,538.0 11,541.0 11,586.0 11,564.0 11,511.0 26 Saving rate (percent) 2.9 4.2 4.6 4.1 4.6 4.9 5.0 4.0 GROSS SAVING 27 Gross saving 555.5 656.1 691.5 692.4 674.8 664.8 679.3 n.a. 78 Gross private saving 662.6 751.3 779.3 776.0 786.4 795.0 806.7 n.a. 79 Personal saving 92.5 145.6 171.8 154.5 174.1 191.3 195.1 159.4 30 Undistributed corporate profits 83.2 91.4 53.0 53.9 39.8 36.7 40.5 n.a. 31 Corporate inventory valuation adjustment -19.4 -27.0 -21.7 -6.1 -14.5 -11.4 -.5 -30.6 Capital consumption allowances 3? 303.2 332222..11 346.4 335511..66 335566..55 335566..77 335599..77 336655..22 33 Noncorporate 183.8 192.2 208.0 215.9 216.0 210.3 211.4 213.6 34 Government surplus, or deficit (-), national income and product accounts -107.1 -95.3 -87.8 -83.6 -111.6 --113300..22 --112277..33 n.a. 35 -158.2 -141.7 -134.3 -131.7 -150.1 -168.3 -166.0 n.a. 36 State and local 51.0 46.5 46.4 48.1 38.5 38.1 38.6 n.a. 37 Gross investment 544.9 627.8 674.4 676.1 671.8 665.6 676.1 656.1 38 Gross private domestic 699.5 747.1 771.2 775.8 762.7 747.2 759.0 759.6 39 -154.6 -119.2 -96.8 -99.7 -90.9 -81.6 -82.9 -103.6 40 Statistical discrepancy -10.6 -28.2 -17.0 -16.2 -3.0 .7 -3.2 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 Item credits or debits 1988 1989 Q2 Q3 Q4 Ql' Q2P 1 Balance on current account -162,315 -128,862 -110,035 -28,649 -27,591 -26,692 -21,668 -21,844 2 Not seasonally adjusted -27,528 -31,620 -27,926 -17,922 -20,314 Merchandise trade balance2 -159,500 -126,986 -II4,864 -28,222 -29,803 -28,746 -26,283 -22,575 Merchandise exports 250,266 320,337 360,465 91,111 89,349 91,738 %,262 96,741 Merchandise imports -409,766 -447,323 -475,329 -119,333 -119,152 -120,484 -122,545 -119,316 Military transactions, net -3,530 -5,452 -6,319 -1,667 -1,114 -1,776 -1,287 -1,342 Investment income, net 5,326 1,610 -913 -1,957 17 561 1,995 -637 Other service transactions, net 9,964 16,971 26,783 6,203 6,839 7,900 7,292 7,423 Remittances, pensions, and other transfers -4,299 -4,261 -3,758 -962 -909 -889 -983 -855 U.S. government grants -10,276 -10,744 -10,963 -2,044 -2,621 -3,742 -2,402 -3,858 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) 997 2,969 1,185 -303 574 -47 -659 -624 12 Change in U.S. official reserve assets (increase, -). 9,149 -3,912 -25,293 -12,095 -5,9% -3,202 -3,177 371 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -509 127 -535 68 -211 -204 -247 -216 15 Reserve position in International Monetary Fund. 2,070 1,025 471 -159 337 -23 234 493 16 Foreign currencies 7,588 -5,064 -25,229 -12,004 -6,122 -2,975 -3,164 94 17 Change in U.S. private assets abroad (increase, -). -73,092 -83,232 -102,953 11,017 -38,654 -45,4% 36,713 -26,190 18 Bank-reported claims -42,119 -56,322 -50,684 26,829 -21,269 -32,658 52,353 -12,118 19 Nonbank-reported claims 5,324 -2,847 1,391 -2,384 1,877 47 1,202 20 U.S. purchase of foreign securities, net -5,251 -7,846 -21,938 -6,144 -9,623 -4,109 -7,4% -16,939 21 U.S. direct investments abroad, net -31,046 -16,217 -31,722 -7,284 -9,639 -8,776 -9,346 -3,133 22 Change in foreign official assets in United States (increase, +) 45,210 39,515 8,823 -4,961 13,003 -7,016 -8,203 6,284 23 U.S. Treasury securities 43,238 41,741 333 -9,726 12,771 -7,342 -5,897 3,092 24 Other U.S. government obligations 1,564 1,309 1,383 -97 190 569 -521 346 25 Other U.S. government liabilities -2,503 -710 332 470 -350 412 -381 1,147 26 Other U.S. liabilities reported by U.S. banks3 3,918 -319 4,940 3,820 -251 -820 -1,278 1,953 27 Other foreign official assets -1,007 -2,506 1,835 572 643 165 -126 -254 28 Change in foreign private assets in United States (increase, +) < 173,260 181,926 205,829 7,755 61,133 76,336 -24,786 15,673 29 U.S. bank-reported liabilities3 89,026 70,235 61,199 -20,806 27,845 36,674 -32,264 2,867 30 U.S. nonbank-reported liabilities 2,863 6,664 2,867 -407 -2,175 1,732 290 31 Foreign private purchases of U.S. Treasury securities, net -7,643 20,239 29,951 2,339 12,618 5,671 -835 "2,880 32 Foreign purchases of other U.S. securities, net 42,120 26,353 39,568 9,574 10,470 10,793 2,486 4,919 33 Foreign direct investments in United States, net 46,894 58,435 72,244 17,055 12,375 21,466 5,537 5,007 34 Allocation of SDRs 0 0 0 0 0 0 0 0 35 Discrepancy 6,790 -8,404 22,443 27,236 -2,469 6,117 21,780 26,330 36 Owing to seasonal adjustments -1,697 -4,953 3,560 2,804 -1,036 37 Statistical discrepancy in recorded data before seasonal adjustment -8,404 22,443 28,933 2,558 18,976 27,366 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) 9,149 -3,912 -25,293 -12,095 -5,996 -3,202 -3,177 371 39 Foreign official assets in United States (increase, +) excluding line 25 47,713 40,225 8,491 -5,431 13,353 -7,428 -7,822 5,137 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22 above) -9,956 -2,996 10,713 4,532 -1,379 2,953 1. Seasonal factors are not calculated for lines 6, 10, 12-16, 18-20, 22-34, and 4. Primarily associated with military sales contracts and other transactions 38-41. arranged with or through foreign official agencies. 2. Data are on an international accounts (IA) basis. Differs from the Census 5. Consists of investments in U.S. corporate stocks and in debt securities of basis data, shown in table 3.11, for reasons of coverage and timing. Military private corporations and state and local governments. exports are excluded from merchandise data and are included in line 6. NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business 3. Reporting banks include all kinds of depository institutions besides commer- (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 1990 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data are seasonally adjusted. 1990 IItteemm 11998877 11998888 11998899 Feb. Mar. Apr. May June July' Aug." 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments, f.a.s. value 254,073 322,427 363,812 31,576 33,266 32,058 32,774 34,221 32,125 32,633 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 2 Customs value 406,241 440,952 473,211 38,672 41,636 39,364 40,543 39,561 41,244 41,970 Trade balance 3 Customs value -152,169 -118,526 -109,399 -7,096 -8,370 -7,306 -7,770 -5,340 -9,119 -9,336 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 1990 TTyyppee 11998877 11998888 11998899 Mar. Apr. May June July Aug. Sept/ 1 Total 45,798 47,802 74,609 76,303 76,283 77,028 77,298 77,906 78,909 80,024 2 Gold stock, including Exchange Stabilization Fund1 11,078 11,057 11,059 11,060 11,060 11,065 11,065 11,064 11,065 11,063 3 Special drawing rights2'3 10,283 9,637 9,951 10,092 10,103 10,396 10,490 10,699 10,780 10,666 4 Reserve position in International Monetary Fund2 11,349 9,745 9,048 8,727 8,687 8,764 8,449 8,686 8,890 8,881 5 Foreign currencies4 13,088 17,363 44,551 46,424 46,433 46,803 47,294 47,457 48,174 49,414 1. Gold held under earmark at Federal Reserve Banks for foreign and interna- in the IMF also are valued on this basis beginning July 1974. tional accounts is not included in the gold stock of the United States; see table 3. Includes allocations by the International Monetary Fund of SDRs as follows: 3.13. Gold stock is valued at $42.22 per fine troy ounce. $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 1, 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based 1972; $1,139 million on Jan. 1, 1979; $1,152 million on Jan. 1, 1980; and $1,093 on a weighted average of exchange rates for the currencies of member countries. million on Jan. 1, 1981; plus transactions in SDRs. From July 1974 through December 1980, 16 currencies were used; from January 4. Valued at current market exchange rates. 1981, 5 currencies have been used. The U.S. SDR holdings and reserve position 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS' Millions of dollars, end of period 1990 AAsssseettss 11998877 11998888 11998899 Mar. Apr. May June July Aug. Sept.P 1 Deposits 244 347 589 300 402 309 368 279 337 360 Assets held in custody 2 U.S. Treasury securities 195,126 232,547 224,911 250,447 252,759 253,691 255,651 256,585 261,051 261,321 3 Earmarked gold3 13,919 13,636 13,456 13,458 13,458 13,460 13,433 13,422 13,412 13,419 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 at face value. 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 1990 AAsssseett aaccccoouunntt 11998877 11998899 Feb. Mar. Apr. May June July Aug. All foreign countries 1 Total, all currencies 518,618 505,595 545,366 553,815 535,059 535,886 541,439 524,010 531,418' 551,135 2 Claims on United States 138,034 169,111 198,835 188,700 176,096 177,104 182,224 179,258 174,583 178,236 3 Parent bank 105,845 129,856 157,092 145,156 135,172 133,573 140,751 138,384 133,682 137,558 4 Other banks in United States 16,416 14,918 17,042 18,064 15,511 17,965 15,647 15,166 15,239 14,500 5 Nonbanks 15,773 24,337 24,701 25,480 25,413 25,566 25,826 25,708 25,662 26,178 6 Claims on foreigners 342,520 299,728 300,575 313,934 308,117 307,470 306,058 293,730 305,005' 313,914 7 Other branches of parent bank 122,155 107,179 113,810 122,457 120,488 118,835 116,640 108,464 115,520'' 121,855 8 Banks 108,859 96,932 90,703 94,065 89,837 90,812 90,422 85,780 86,007 88,822 9 Public borrowers 21,832 17,163 16,456 15,148 15,973 16,217 16,172 16,323 16,703 16,208 10 Nonbank foreigners 89,674 78,454 79,606 82,264 81,819 81,606 82,824 83,163 86,775 87,029 11 Other assets 38,064 36,756 45,956 51,181 50,846 51,312 53,157 51,022 51,830' 58,985 12 Total payable in U.S. dollars 350,107 357,573 382,717 375,511 358,543 360,224 363,128 350,310 346,515' 358,106 13 Claims on United States 132,023 163,456 191,184 180,738 168,833 169,9% 173,887 171,551 166,294 169,714 14 Parent bank 103,251 126,929 152,294 139,920 130,350 129,162 135,211 133,167 128,066 131,994 15 Other banks in United States 14,657 14,167 16,386 17,187 14,992 17,209 14,818 14,575 14,375 13,513 16 Nonbanks 14,115 22,360 22,504 23,631 23,491 23,625 23,858 23,809 23,853 24,207 17 Claims on foreigners 202,428 177,685 169,690 172,132 167,616 168,419 167,630 158,652 158,09C 163,441 18 Other branches of parent bank 88,284 80,736 82,949 87,403 85,028 84,930 83,381 76,410 79,408' 82,882 19 Banks 63,707 54,884 48,396 46,582 43,408 43,814 44,449 42,918 39,019 40,725 20 Public borrowers 14,730 12,131 10,961 10,529 11,110 11,191 10,912 10,956 10,652 10,927 21 Nonbank foreigners 35,707 29,934 27,384 27,618 28,070 28,484 28,888 28,368 29,011' 28,907 22 Other assets 15,656 16,432 21,843 22,641 22,094 21,809 21,611 20,107 22,131' 24,951 United Kingdom 23 Total, ail currencies 158,695 156,835 161,947 169,727 167,162 173,127 177,947 167,885 175,254' 184,933 24 Claims on United States 32,518 40,089 39,212 40,161 38,809 42,366 43,247 39,904 40,418 40,092 25 Parent bank 27,350 34,243 35,847 36,311 34,648 37,572 39,089 35,924 36,564 36,140 26 Other banks in United States 1,259 1,123 1,058 1,365 1,301 1,262 747 730 894 1,037 27 Nonbanks 3,909 4,723 2,307 2,485 2,860 3,532 3,411 3,250 2,960 2,915 28 Claims on foreigners 115,700 106,388 107,657 110,911 109,227 111,175 114,800 108,080 114,254' 118,423 29 Other branches of parent bank 39,903 35,625 37,728 38,410 39,636 41,613 43,358 38,068 41,181' 43,581 30 Banks 36,735 36,765 36,159 36,488 34,803 35,224 35,730 34,194 35,085 37,623 31 Public borrowers 4,752 4,019 3,293 3,076 3,857 3,980 3,943 3,740 3,619 3,757 32 Nonbank foreigners 34,310 29,979 30,477 32,937 30,931 30,358 31,769 32,078 34,369 33,462 33 Other assets 10,477 10,358 15,078 18,655 19,126 19,586 19,900 19,901 20,582' 26,418 34 Total payable in U.S. dollars 100,574 103,503 103,427 103,752 101,024 107,483 110,186 100,887 103,047' 107,192 35 Claims on United States 30,439 38,012 36,404 37,006 35,752 39,091 39,374 36,158 36,230 35,979 36 Parent bank 26,304 33,252 34,329 34,462 32,697 35,663 36,712 33,509 33,716 33,585 37 Other banks in United States 1,044 964 843 1,036 1,122 1,041 521 552 681 721 38 Nonbanks 3,091 3,796 1,232 1,508 1,933 2,387 2,141 2,097 1,833 1,673 39 Claims on foreigners 64,560 60,472 59,062 58,763 57,166 60,165 63,025 57,802 58,278' 60,390 40 Other branches of parent bank 28,635 28,474 29,872 30,224 30,421 32,885 34,441 30,050 31,220' 32,976 41 Banks 19,188 18,494 16,579 15,984 13,748 14,141 14,635 14,625 13,621 14,570 42 Public borrowers 3,313 2,840 2,371 2,266 3,074 3,131 3,114 2,942 2,839 2,8% 43 Nonbank foreigners 13,424 10,664 10,240 10,289 9,923 10,008 10,835 10,185 10,598 9,948 44 Other assets 5,575 5,019 7,961 7,983 8,106 8,227 7,787 6,927 8,539' 10,823 Bahamas and Caymans 45 Total, all currencies 160,321 170,639 176,006 164,908 155,145 150,767 154,851 154,354 145,813 150,592 46 Claims on United States 85,318 105,320 124,205 114,263 105,466 102,184 105,617 107,244 99,918 103,521 47 Parent bank 60,048 73,409 87,882 76,475 70,535 65,084 69,807 72,115 64,748 68,507 48 Other banks in United States 14,277 13,145 15,071 15,827 13,564 15,902 14,079 13,603 13,412 12,625 49 Nonbanks 10,993 18,766 21,252 21,961 21,367 21,198 21,731 21,526 21,758 22,389 50 Claims on foreigners 70,162 58,393 44,168 43,162 42,393 41,467 42,147 39,812 38,393 39,595 51 Other branches of parent bank 21,277 17,954 11,309 14,409 13,171 13,306 12,917 11,906 11,947 12,203 52 Banks 33,751 28,268 22,611 19,595 19,370 18,499 19,947 18,492 16,761 17,543 53 Public borrowers 7,428 5,830 5,217 4,753 4,684 4,490 4,350 4,393 4,307 4,554 54 Nonbank foreigners 7,706 6,341 5,031 4,405 5,168 5,172 4,933 5,021 5,378 5,295 55 Other assets 4,841 6,926 7,633 7,483 7,286 7,116 7,087 7,298 7,502 7,476 56 Total payable in U.S. dollars 151,434 163,518 170,780 159,484 150,061 145,994 149,467 149,943 140,966 146,000 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 1990 3.14—Continued 1990 Liability account 1987 1988 Feb. Apr. May June July Aug. All foreign countries 57 Total, all currencies 518,618 505,595 545,366 553,815 535,059 535,886 541,439 524,010 531,418' 551,135 58 Negotiable CDs 30,929 28,511 23,500 23,620 21,767 24,113 25,452 23,504 21,805' 23,342 59 To United States 161,390 185,577 197,239 181,164 173,675 168,669 169,791 169,769 163,117 167,307 60 Parent bank 87,606 114,720 138,412 119,967 114,170 109,642 109,831 113,151 105,243 109,715 61 Other banks in United States 20,355 14,737 11,704 11,990 10,799 11,782 10,272 9,092 9,454 10,264 62 Nonbanks 53,429 56,120 47,123 49,207 48,706 47,245 49,688 47,526 48,420 47,328 63 To foreigners 304,803 270,923 2%, 850 317,318 309,756 313,446 315,058 299,951 314,503 320,852 64 Other branches of parent bank 124,601 111,267 119,591 126,786 124,084 120,405 120,722 113,653 119,476 124,510 65 Banks 87,274 72,842 76,452 77,449 75,017 77,875 78,681 73,896 77,940 79,366 66 Official institutions 19,564 15,183 16,750 20,637 17,704 20,683 19,710 17,637 19,718 17,777 67 Nonbank foreigners 73,364 71,631 84,057 92,446 92,951 94,483 95,945 94,765 97,369 99,199 68 Other liabilities 21,496 20,584 27,777 31,713 29,861 29,658 31,138 30,786 31,993' 39,634 69 Total payable in U.S. dollars 361,438 367,483 396,613 385,634 369,306 368,626 369,505 358,681 355,782' 365,759 70 Negotiable CDs 26,768 24,045 19,619 18,783 17,084 19,601 20,579 18,928 16,5^ 18,013 71 To United States 148,442 173,190 187,286 169,669 162,606 157,579 157,851 158,173 150,785 155,068 72 Parent bank 81,783 107,150 132,563 113,487 108,128 103,252 103,389 106,818 98,770 103,252 73 Other banks in United States 18,951 13,468 10,519 10,684 9,296 10,415 8,855 7,741 7,884 8,791 74 Nonbanks 47,708 52,572 44,204 45,498 45,182 43,912 45,607 43,614 44,131 43,025 75 To foreigners 177,711 160,766 176,460 183,378 176,939 178,035 177,888 168,642 174,616 177,009 76 Other branches of parent bank 90,469 84,021 87,636 90,360 86,908 84,090 84,415 78,646 81,332 84,139 77 Banks 35,065 28,493 30,537 28,741 27,639 29,207 28,265 27,434 28,045 29,000 78 Official institutions 12,409 8,224 9,873 11,740 9,248 11,909 11,480 9,066 10,613 9,669 79 Nonbank foreigners 39,768 40,028 48,414 52,537 53,144 52,829 53,728 53,496 54,626 54,201 80 Other liabilities 8,517 9,482 13,248 13,804 12,677 13,411 13,187 12,938 13,862' 15,669 United Kingdom 81 Total, all currencies 158,695 156,835 161,947 169,727 167,162 173,127 177,947 167,885 175,254' 184,933 82 Negotiable CDs 26,988 24,528 20,056 19,656 18,266 20,535 21,846 19,672 17,795' 19,128 83 To United States 23,470 36,784 36,036 32,686 32,780 33,931 33,755 32,291 32,320 33,365 84 Parent bank 13,223 27,849 29,726 23,752 22,970 23,339 23,179 23,158 21,952 23,399 85 Other banks in United States 1,536 2,037 1,256 2,115 1,827 1,841 1,847 1,615 1,626 1,535 86 Nonbanks 8,711 6,898 5,054 6,819 7,983 8,751 8,729 7,518 8,742 8,431 87 To foreigners 98,689 86,026 92,307 101,565 101,160 103,362 106,138 99,279 107,533 108,947 88 Other branches of parent bank 33,078 26,812 27,397 28,074 29,848 28,581 29,193 26,506 28,944 28,967 89 Banks 34,290 30,609 29,780 32,110 29,116 31,026 31,580 28,575 32,420 34,647 90 Official institutions 11,015 7,873 8,551 10,758 9,184 10,829 11,409 10,263 11,314 9,902 91 Nonbank foreigners 20,306 20,732 26,579 30,623 33,012 32,926 33,956 33,935 34,855 35,431 92 Other liabilities 9,548 9,497 13,548 15,820 14,956 15,299 16,208 16,643 17,606' 23,493 93 Total payable in U.S. dollars 102,550 105,907 108,178 106,416 103,544 109,708 110,595 101,530 104,372' 108,532 94 Negotiable CDs 24,926 22,063 18,143 16,910 15,660 17,936 19,012 17,233 14,831' 16,183 95 To United States 17,752 32,588 33,056 28,817 29,383 30,386 29,666 28,160 27,967 28,779 96 Parent bank 12,026 26,404 28,812 22,513 22,219 22,446 22,339 22,190 21,208 22,423 97 Other banks in United States , 1,308 1,752 1,065 1,807 1,552 1,553 1,456 1,325 1,175 1,228 98 Nonbanks 4,418 4,432 3,179 4,497 5,612 6,387 5,871 4,645 5,584 5,128 99 To foreigners 55,919 47,083 50,517 53,751 52,095 54,371 55,163 49,672 54,591 54,827 100 Other branches of parent bank 22,334 18,561 18,384 18,556 19,182 18,799 18,589 16,199 17,408 17,347 101 Banks 15,580 13,407 12,244 11,920 9,976 11,233 11,007 9,911 11,251 13,042 102 Official institutions 7,530 4,348 5,454 6,717 5,192 6,703 7,264 5,305 6,515 5,463 103 Nonbank foreigners 10,475 10,767 14,435 16,558 17,745 17,636 18,303 18,257 19,417 18,975 104 Other liabilities 3,953 4,173 6,462 6,938 6,406 7,015 6,754 6,465 6,983' 8,743 Bahamas and Caymans 105 Total, all currencies 160,321 170,639 176,006 164,908 155,145 150,767 154,851 154,354 145,813 150,592 106 Negotiable CDs 885 953 678 671 522 524 528 535 548 553 107 To United States 113,950 122,332 124,859 113,137 108,003 101,024 103,655 103,592 95,746 100,519 108 Parent bank 53,239 62,894 75,188 64,085 61,528 55,311 57,136 58,880 51,257 55,989 109 Other banks in United States . 17,224 11,494 8,883 8,198 7,310 8,544 6,991 5,984 6,228 7,039 110 Nonbanks 43,487 47,944 40,788 40,854 39,165 37,169 39,528 38,728 38,261 37,491 111 To foreigners 43,815 45,161 47,382 48,726 44,314 46,741 48,410 47,613 47,010 46,922 112 Other branches of parent bank 19,185 23,686 23,414 25,110 20,778 22,446 25,535 24,184 24,560 24,965 113 Banks 10,769 8,336 8,823 8,059 7,983 8,617 8,154 8,969 8,120 7,469 114 Official institutions 1,504 1,074 1,097 1,290 1,078 1,247 962 960 999 943 115 Nonbank foreigners 12,357 12,065 14,048 14,267 14,475 14,431 13,759 13,500 13,331 13,545 116 Other liabilities 1,671 2,193 3,087 2,374 2,306 2,478 2,258 2,614 2,509 2,598 117 Total payable in U.S. dollars .... 152,927 162,950 171,250 160,212 150,758 146,259 149,707 149,680 140,377 145,567 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 1990 IItteemm 11998888'' 11998899'' Feb.' Mar.' Apr.' May' June' July' Aug." 1 Total1 304,132 312,457 304,434 302,096 307,820 308,397 309,541 312,312 320,218 By type 2 Liabilities reported by banks in the United States 31,519 36,481 33,896 35,553 36,642 36,747 37,471 38,596 39,286 3 U.S. Treasury bills and certificates3 103,722 76,985 73,099 73,039 69,454 72,322 71,804 72,694 72,803 U.S. Treasury bonds and notes 4 Marketable 152,429 179,264 178,149 174,411 179,476 177,092 178,016 178,747 185,549 5 Nonmarketable4 523 568 576 580 3,596 3,620 3,644 3,668 3,692 6 U.S. securities other than U.S. Treasury securities 15,939 19,159 18,714 18,513 18,652 18,616 18,606 18,607 18,888 By area 7 Western Europe1 123,752 133,417 132,779 135,691 141,102 142,405 146,928 149,467 151,792 8 Canada 9,513 9,482 7,905 8,315 7,809 6,550 6,961 8,415 11,083 9 Latin America and Caribbean 10,030 8,740 8,260 9,151 9,066 9,147 10,200 9,975 11,190 10 151,887 153,338 147,232 141,068 142,899 141,490 136,325 135,693 136,801 11 1,403 1,030 1,025 936 895 1,074 946 917 1,697 12 Other countries6 7,548 6,453 7,233 6,936 6,047 7,731 8,183 7,848 7,655 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 1989 1990 IItteemm 11998866 11998877 11998888 Sept.' Dec.' Mar. June 1 Banks' own liabilities 29,702 55,438 74,980 73,755 67,805 63,105 68,140 2 Banks' own claims 26,180 51,271 68,983 70,328 65,127 60,999 66,626 3 Deposits 14,129 18,861 25,100 22,962 20,491 21,456 21,046 4 Other claims 12,052 32,410 43,884 47,366 44,636 39,543 45,580 5 Claims of banks' domestic customers2 2,507 551 364 3,044 3,507 1,190 928 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 1990 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1990 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998877 11998888 11998899 Feb. Mar.' Apr.' May June' July' Aug." 1 All foreigners 618,874 685,339 736,627r 697,815' 703,562 702,923 715,613' 707,464 719,552 737,579 2 Banks' own liabilities 470,070 514,532 577,247' 539,568' 543,292 547,193 552,438' 544,1% 554,208 569,421 3 Demand deposits 22,383 21,863 22,080' 20,847' 20,474 21,096 20,578 20,365 19,735 20,729 4 Time deposits 148,374 152,164 168,735' 156,437' 154,865 148,984 151,063' 151,525 154,491 156,619 5 Other3 51,677 51,366 67,650' 58,611' 60,658 65,990 65,367' 64,646 66,130 73,781 6 Own foreign offices4 247,635 289,138 318,782' 303,674' 307,295 311,123 315,430' 307,660 313,853 318,293 7 Banks' custody liabilities5 148,804 170,807 159,380 158,246 160,270 155,730 163,175 163,267 165,344 168,158 8 U.S. Treasury bills and certificates6 110011,,774433 115,056 9911,,110000 8888,,003322 8888,,001155 8833,,664499 8888,,990088 9900,,008822 9911,,997755 9933,,660011 9 Other negotiable and readily transferable instruments7 16,776 16,426 19,526 18,655 18,809 18,132 18,531 17,865 17,509 16,985 10 Other 30,285 39,325 48,754 51,560 53,446 53,948 55,737 55,320 55,860 57,572 11 Nonmonetary international and regional organizations 4,464 3,224 4,772 3,765 4,896 5,727 4,558 5,018 4,112 4,288 12 Banks' own liabilities 2,702 2,527 3,156 2,218 3,334 3,781 2,913 3,619 2,790 2,329 13 Demand deposits 124 71 96 55 156 52 28 29 46 244 14 Time deposits 1,538 1,183 927 624 1,137 2,025 773 1,416 1,038 1,2% 15 Other3 1,040 1,272 2,133 1,539 2,041 1,704 2,112 2,174 1,707 782 16 Banks' custody liabilities5 1,761 698 1,616 1,547 1,562 1,947 1,645 1,399 1,322 1,959 17 U.S. Treasury bills and certificates6 265 57 197 160 191 190 174 147 148 11,,009955 18 Other negotiable and readily transferable instruments7 1,497 641 1,417 1,387 1,371 1,740 11,,446633 1,253 1,159 819 19 Other 0 0 2 0 0 17 88 0 15 45 20 Official institutions9 120,667 135,241 113,466' 106,994' 108,592 106,096 109,069' 109,275 111,290 112,089 21 Banks' own liabilities 28,703 27,109 31,092' 30,705' 31,711 33,864 33,395' 33,378 34,850 35,250 22 Demand deposits 1,757 1,917 2,196 1,654 1,826 2,066 1,644 1,613 1,520 1,916 23 Time deposits 12,843 9,767 10,495' 10,694' 9,730 10,939 11,178 10,179 11,509 11,054 24 Other3 14,103 15,425 18,401' 18,358' 20,155 20,859 20,572' 21,586 21,820 22,281 25 Banks' custody liabilities5 91,965 108,132 82,373 76,289 76,881 72,231 75,674 75,8% 76,440 76,839 26 U.S. Treasury bills and certificates6 88,829 103,722 76,985 73,099 7733,,003399 6699,,445544 7722,,332222 7711,,880044 7722,,669944 7722,,880033 27 Other negotiable and readily transferable instruments7 2,990 4,130 5,028 2,892 3,671 2,605 3,158 3,650 3,5% 3,685 28 Other 146 280 361 298 171 173 195 443 150 351 29 Banks10 414,280 459,523 514,721' 485,669' 489,851 492,708 503,137' 4%, 903 507,149 524,364 30 Banks' own liabilities 371,665 409,501 454,206' 422,180' 423,858 426,048 432,438' 424,810 433,738 449,365 31 Unaffiliated foreign banks 124,030 120,362 135,425' 118,506' 116,562 114,925 117,009' 117,151 119,885 131,079 32 Demand deposits 10,898 9,948 10,325' 10,069' 9,625 9,864 9,673 9,503 9,236 9,804 33 Time deposits2 79,717 80,189 90,557 74,971' 75,389 68,703 71,159' 73,243 74,889 78,365 34 Other3 33,415 30,226 34,543' 33,465' 31,548 36,357 36,177' 34,405 35,760 42,910 35 Own foreign offices4 247,635 289,138 318,782' 303,674' 307,295 311,123 315,430' 307,660 313,853 318,286 36 Banks' custody liabilities5 42,615 50,022 60,514 63,489 65,993 66,660 70,699 72,093 73,411 74,999 37 U.S. Treasury bills and certificates6 9,134 7,602 9,367 9,342 99,,335599 99,,337744 1111,,557788 1133,,550022 1133,,996611 1133,,885555 38 Other negotiable and readily transferable instruments7 5,392 5,725 5,124 4,918 5,390 5,437 5,616 5,757 5,760 5,366 39 Other 28,089 36,694 46,023 49,229 51,244 51,850 53,504 52,833 53,690 55,779 40 Other foreigners 79,463 87,351 103,669' 101,386' 100,223 98,391 98,848' 96,268 97,001 %,838 41 Banks' own liabilities 67,000 75,396 88,793' 84,465' 84,389 83,500 83,692' 82,389 82,831 82,478 42 Demand deposits 9,604 9,928 9,463' 9,069' 8,867 9,114 9,232 9,220 8,932 8,765 43 Time deposits 54,277 61,025 66,757' 70,148 68,608 67,318 67,953' 66,687 67,056 65,905 44 Other3 3,119 4,443 12,573 5,249' 6,914 7,069 6,506 6,481 6,843 7,808 45 Banks' custody liabilities5 12,463 11,956 14,877 16,921 15,834 14,891 15,157 13,879 14,170 14,360 46 U.S. Treasury bills and certificates6 3,515 3,675 4,551 5,431 55,,442255 44,,663322 44,,883344 44,,663300 55,,117733 55,,884499 47 Other negotiable and readily transferable instruments7 6,898 5,929 7,958 9,457 8,378 8,350 8,293 7,205 6,993 7,115 48 Other 2,050 2,351 2,368 2,033 2,031 1,909 2,030 2,044 2,004 1,3% 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 7,314 6,425 7,203 8,457 7,634 7,183 7,282 6,429 5,911 5,713 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 1990 AArreeaa aanndd ccoouunnttrryy 11998877 11998888 11998899 Feb. Mar. Apr. May June' July' Aug." 1 Total 618,874 685,339 736,627' 697,815' 703,562' 702,923' 715,613' 707,464 719,552 737,579 2 Foreign countries 614,411 682,115 731,855r 694,050' 698,666' 697,195' 711,055' 702,446 715,440 733,291 3 Europe 234,641 231,912 237,453 224,837' 225,210' 229,675 236,551' 234,112 235,831 244,759 4 Austria 920 1,155 1,233 1,609' 1,493' 1,549 1,373 1,531 1,497 1,543 5 Belgium-Luxembourg 9,347 10,022 10,611 11,707' 12,3^ 10,128 9,507 10,047 10,564 11,380 6 Denmark 760 2,200 1,415 1,244 1,760 2,244' 2,152 2,411 2,581 2,237 7 Finland 377 285 570 614 431 464 314 387 485 465 8 France 29,835 24,777 26,903 21,844' 21,90C 24,263 23,103 23,566 23,106 24,223 9 Germany 7,022 6,772 7,578 8,718 7,488 8,798' 8,030 8,076 7,571 7,559 10 Greece 689 672 1,028' 1,035' 906 879 860 833 873 937 11 Italy 12,073 14,599 16,169 11,977 12,728 14,138 16,347 16,779 17,107 17,070 12 Netherlands 5,014 5,316 6,613 8,226 9,454 7,731 8,166 7,617 5,967 6,149 13 Norway 1,362 1,559 2,401 997 2,619 1,454 1,582 2,420 1,792 2,186 14 Portugal 801 903 2,407 2,285 2,385 2,354 2,359 3,082 3,073 2,891 15 Spain 2,621 5,494 4,364 4,280 4,911 4,230 4,535 4,391 4,919 4,402 16 Sweden 1,379 1,284 1,491 1,468 1,374' 1,689' 1,655' 1,769 1,586 2,013 17 Switzerland 33,766 34,199 34,496 32,962' 33.89C 33,244 35,260 34,780 33,797 34,655 18 Turkey 703 1,012 1,818 886 1,039 1,459' 1,641 1,596 1,654 2,081 19 United Kingdom 116,852 111,811 102,362 99,771' 96,966' 99,376 104,624 98,530 100,856 107,923 20 Yugoslavia 710 529 1,474 1,402 1,613 1,599 1,934 2,169 2,435 2,260 21 Other Western Europe 9,798 8,598 13,563 12,168' 10,494' 12,239' 11,423' 12,360 14,373 13,182 22 U.S.S.R 32 138 350 376 141 446 158 75 257 46 23 Other Eastern Europe2 582 591 608' 1,266' 1,299 1,392' 1,529 1,695 1,339 1,556 24 Canada 30,095 21,062 18,865' 21,331' 18,538' 19,485' 19,90C 19,956 20,049 21,116 25 Latin America and Caribbean 220,372 271,146 310,948' 306,320' 313,158' 309,109' 315,674' 312,782 316,555 319,992 26 Argentina 5,006 7,804 7,304 7,496 8,036 8,235 8,346 7,993 8,160 7,842 27 Bahamas 74,767 86,863 99,341' 95,055' 98,492' 90,331' 98,658' 99,255 98,290 101,647 28 Bermuda 2,344 2,621 2,884 2,239 2,308 2,807 2,514 3,072 2,825 2,661 29 Brazil 4,005 5,314 6,334 7,128 7,281' 6,729 6,088 6,110 6,082 6,865 30 British West Indies 81,494 113,840 138,263 136,135' 139,120' 143,264 142,129' 137,069 142,266 141,383 31 Chile 2,210 2,936 3,212 3,143' 3,261 3,418 3,517 3,449 3,540 3,552 32 Colombia 4,204 4,374 4,653 4,610 4,510 4,404 4,471 4,508 4,473 4,343 33 Cuba 12 10 10 10 9 9 10 11 15 11 34 Ecuador 1,082 1,379 1,391 1,325 1,337 1,334 1,367 1,368 1,348 1,348 35 Guatemala 1,082 1,195 1,312 1,362 1,403 1,451 1,473 1,473 1,523 1,497 36 Jamaica 160 269 209 217 245 224 215 224 221 213 37 Mexico 14,480 15,185 15,423' 15,824' 15,269' 15,085' 15,116 16,141 16,055 16,337 38 Netherlands Antilles 4,975 6,420 6,310 6,470 6,412 6,460 6,806 6,628 6,810 6,668 39 Panama 7,414 4,353 4,361 4,743 4,766 4,749 4,540' 4,544 4,384 4,624 40 Peru 1,275 1,671 1,984 1,975 1,836 1,703 1,532' 1,473 1,405 1,369 41 Uruguay 1,582 1,898 2,284 2,397 2,513 2,575 2,560 2,529 2,560 2,526 42 Venezuela 9,048 9,147 9,468 9,661' 9,916' 9,673' 9,717 10,292 9,827 10,228 43 Other 5,234 5,868 6,206' 6,531' 6,446' 6,659' 6,614' 6,645 6,772 6,878 44 121,288 147,838 156,201' 132,258' 133,230' 131,027' 129,147' 126,265 134,114 137,558 China 45 Mainland 1,162 1,895 1,773' 1,473' 1,578' 1,844' 1,785' 1,871 1,890 2,319 46 Taiwan 21,503 26,058 19,588' 17,937' 15,579' 15,44C 15,174' 11,006 12,610 12,638 47 Hong Kong 10,180 12,248 12,416' ll.lSC 11,615' 12,277' 12,896' 12,369 13,315 13,823 48 India 582 699 780 762 1,033 1,013 1,148 966 908 806 49 Indonesia 1,404 1,180 1,281 1,174 1,545 1,560 1,192 1,520 1,367 1,120 50 Israel 1,292 1,461 1,243 894 1,497 1,311' 1,227' 1,202 1,112 1,115 51 Japan 54,322 74,015 81,184' 65,136' 66.43C 65,581' 62,101' 62,367 66,293 68,663 52 Korea 1,637 2,541 3,215' 2,563' 2,331' 2,120' 2,049' 2,121 2,157 2,316 53 Philippines 1,085 1,163 1,766' 1,265' 1,216' 1,193' 1,191' 1,329 1,313 1,349 54 Thailand 1,345 1,236 2,093 2,524 1,930 1,595 1,973 2,125 2,745 2,232 55 Middle-East oil-exporting countries 13,988 12,083 13,37C 12,621' 12,452' 11,626 13,049' 13,076 14,047 14,744 56 Other 12,788 13,260 17,491' 14,758' 16,024' 15,466 15,362 16,313 16,358 16,432 57 3,945 3,991 3,823 3,778 3,644 3,722 3,778 3,650 3,411 5,063 58 Egypt 1,151 911 686 722 601 595 646 592 583 1,505 59 Morocco 194 68 78 95 80 111 86 81 95 77 60 South Africa 202 437 205 261 277 236 241 318 239 331 61 Zaire 67 85 86 77 74 70 66 41 38 43 62 Oil-exporting countries 1,014 1,017 1,121' 1,110 1,048 936 1,016 890 873 1,072 63 Other 1,316 1,474 1,648 1,513 1,564' 1,775 1,722 1,728 1,584 2,035 64 Other countries 4,070 6,165 4,564' 5,524' 4,887' 4,176' 6,005' 5,680 5,479 4,803 65 Australia 3,327 5,293 3,867 4,798 3,994 3,469 5,250 5,052 4,891 4,122 66 All other 744 872 697' 726' 893' 707' 755' 628 588 681 67 Nonmonetary international and regional organizations 4,464 3,224 4,772 3,765 4,896 5,727 4,558 5,018 4,112 4,288 68 International5 2,830 2,503 3,825 2,765 3,634 4,147 3,393 3,883 2,981 3,151 69 Latin American regional 1,272 589 684 655 949 1,123 912 920 812 567 70 Other regional6 362 133 263 345 313 457 253 215 319 571 1. Includes the Bank for International Settlements and Eastern European 4. Comprises Algeria, Gabon, Libya, and Nigeria. countries that are not listed in line 23. 5. Excludes "holdings of dollars" of the International Monetary Fund. 2. Comprises Bulgaria, Czechoslovakia, the German Democratic Republic, 6. Asian, African, Middle Eastern, and European regional organizations, Hungary, Poland, and Romania. except the Bank for International Settlements, which is included in "Other 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and Western Europe." United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • December 1990 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States' Payable in U.S. Dollars Millions of dollars, end of period 1990 AArreeaa aanndd ccoouunnttrryy 11998877 11998888 11998899 Feb. Mar.' Apr.' May' June' July' Aug." 1 459,877 491,165 533,992' 499,631' 487,989 488,844 489,028 489,245 488,782 494,078 2 Foreign countries 456,472 489,094 530,553' 495,557' 484,036 484,452 484,443 485,050 484,492 490,662 3 Europe 102,348 116,928 119,024' 104,327' 104,298 105,154 103,615 102,394 102,360 106,089 4 Austria 793 483 415 429 500 592 420 337 399 287 i Belgium-Luxembourg 9,397 8,515 6,478 7,063 6,361 6,330 6,765 5,611 6,744 6,625 6 Denmark 717 483 582 635 608 750 1,004 590 503 676 7 Finland 1,010 1,065 1,027 1,218 1,153 1,025 931 1,035 1,112 1,177 8 France 13,548 13,243 16,146 16,392 15,631 16,087 16,224 14,794 13,746 14,273 9 Germany 2,039 2,329 2,865 2,762 2,783 2,476 3,045 2,870 2,591 2,740 10 Greece 462 433 788 773 664 622 597 514 529 610 11 Italy 7,460 7,936 6,662 5,377 5,050 4,230 4,758 5,133 4,615 4,500 12 Netherlands 2,619 2,541 1,904 1,567 2,142 2,027 1,968 2,041 1,754 1,647 13 Norway 934 455 609 672 777 918 761 745 687 716 14 Portugal 477 261 376 288 273 381 407 540 543 411 15 Spain 1,853 1,823 1,930 2,040 2,241 1,726 1,897 2,084 2,125 2,107 16 Sweden 2,254 1,977 1,773 2,158 2,236 2,206 2,711 2,614 3,361 3,384 17 Switzerland 2,718 3,895 6,141 4,922 5,056 4,826 4,999 5,249 4,297 3,736 18 Turkey 1,680 1,233 1,071 1,088 1,123 1,120 1,138 1,230 1,186 1,377 19 United Kingdom 50,823 65,706 65,527' 52,286' 53,100 55,604 52,333 53,577 54,803 58,546 20 Yugoslavia 1,700 1,390 1,329 1,158 1,157 1,121 1,128 1,095 1,070 1,029 21 Other Western Europe2 619 1,152 1,302 1,271 1,183 970 786 804 960 694 22 U.S.S.R 389 1,255 1,179 1,322 1,356 1,322 945 754 565 624 23 Other Eastern Europe3 852 754 921 905 904 820 800 777 769 928 24 Canada 25,368 18,889 15,450' 16,793' 15,081 15,234 16,355 16,492 16,391 15,432 25 Latin America and Caribbean 214,789 214,264 230,392' 220,252' 210,443 200,361 205,853 208,825 200,224 203,796 26 Argentina 11,996 11,826 9,270 8,718 8,189 8,025 7,689 7,600 7,166 7,099 27 Bahamas 64,587 66,954 77,921 71,891 69,095 63,937 70,508 66,913 66,923 67,754 28 Bermuda 471 483 1,315 401 425 443 774 1,830 1,988 2,476 29 Brazil 25,897 25,735 23,749 23,210 21,885 21,849 21,793 20,699 20,186 18,892 30 British West Indies 50,042 55,888 68,709' 70,052' 72,412 67,706 67,564 74,590 66,425 70,784 31 Chile 6,308 5,217 4,353 4,208 4,079 3,715 3,630 3,453 3,493 3,405 32 Colombia 2,740 2,944 2,784 2,610 2,720 2,649 2,624 2,596 22,,554411 2,703 33 Cuba 1 1 1 0 0 0 0 0 11 2 34 Ecuador 2,286 2,075 1,688 1,570 1,536 1,527 1,503 1,523 1,515 1,506 35 Guatemala4 144 198 197 200 208 207 206 188 196 208 36 Jamaica4 188 212 297 274 265 260 260 258 262 258 37 Mexico 29,532 24,637 23,376' 21,37c 14,268 14,734 14,529 14,665 15,120 14,937 38 Netherlands Antilles 980 1,306 1,921 1,726' 1,692 1,759 1,630 1,722 1,873 1,631 39 Panama 4,744 2,521 1,740 1,688 1,722 1,733 1,643 1,598 1,491 1,508 40 Peru 1,329 1,013 771 752 733 721 679 683 661 631 41 Uruguay 963 910 928 935 926 886 876 842 843 818 42 Venezuela 10,843 10,733 9,647 8,956 8,528 8,405 8,251 8,136 8,064 7,661 43 Other Latin America and Caribbean 1,738 1,612 1,726 1,692' 1,760 1,805 1,693 1,527 1,476 1,523 44 106,096 130,881 157,444' 145,303' 145,906 155,553 150,172 148,963 158,082 157,749 Mainland 968 762 634 619 599 674 517 537 554 586 46 Taiwan 4,592 4,184 2,776 1,824 2,016 1,890 1,941 1,946 1,583 2,025 47 Hong Kong 8,218 10,143 11,128 6,605 7,418 8,965 9,563 9,271 9,434 9,472 48 India 510 560 621 892 721 588 579 802 852 625 49 Indonesia 580 674 651 611 604 560 599 801 814 835 50 Israel 1,363 1,136 813 774' 761 746 738 777 738 785 51 Japan 68,658 90,149 111,270 108,352 108,554 117,560 108,245 107,671 114,683 114,808 52 Korea 5,148 5,213 5,323' 4,902' 5,042 5,011 5,186 5,128 5,515 5,596 53 Philippines 2,071 1,876 1,344 1,163 1,204 1,221 1,351 1,357 1,342 1,369 54 Thailand 496 848 1,140 1,052 992 1,073 1,202 1,279 1,267 1,245 55 Middle East oil-exporting countries 4,858 6,213 10,149 9,475' 8,929 8,376 9,577 10,816 12,318 10,658 56 Other Asia 8,635 9,122 11,594 9,035 9,066 8,891 10,674 8,576 8,981 9,746 57 Africa 4,742 5,718 5,890 5,967 5,984 5,953 5,913 5,787 5,557 5,660 58 Egypt 521 507 502 493 474 491 488 469 421 449 59 Morocco 542 511 559 588 581 5% 587 565 544 539 60 South Africa 1,507 1,681 1,628 1,629 1,648 1,632 1,639 1,573 1,560 1,571 61 Zaire 15 17 16 17 25 19 20 21 20 19 62 Oil-exporting countries6 1,003 1,523 1,648 1,749 1,749 1,705 1,665 1,649 1,604 1,586 63 Other 1,153 1,479 1,537 1,491 1,507 1,509 1,515 1,511 1,408 1,496 64 Other countries 3,129 2,413 2,354 2,914 2,324 2,195 2,535 2,590 1,878 1,937 65 Australia 2,100 1,520 1,781 2,015 1,632 1,551 1,657 1,712 1,422 1,303 66 All other 1,029 894 573 900 692 644 878 878 456 634 67 Nonmonetary international and regional organizations 3,404 2,071 3,439 4,074 3,954 4,393 4,585 4,195 4,291 3,416 1. Reporting banks include all kinds of depository institutions besides commer- 4. Included in "Other Latin America and Caribbean" through March 1978. cial banks, as well as some brokers and dealers. 5. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 2. Includes the Bank for International Settlements. Beginning April 1978, also United Arab Emirates (Trucial States). includes Eastern European countries not listed in line 23. 6. Comprises Algeria, Gabon, Libya, and Nigeria. 3. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German 7. Excludes the Bank for International Settlements, which is included in Democratic Republic, Hungary, Poland, and Romania. "Other Western Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A63 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1990 TTyyppee ooff ccllaaiimm 11998877 11998888 11998899'' Feb.' Mar.' Apr.' May' June' July' Aug.p 1 Total 444444499999997777777,,,,,,,666666633333335555555 555555533333338888888,,,,,,,666666688888889999999 555555599999992222222,,,,,,,444444400000001111111 555555544444441111111,,,,,,,111111155555552222222 555555544444448888888,,,,,,,111111133333335555555 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 444444455555559999999,,,,,,,888888877777777777777 444444499999991111111,,,,,,,111111166666665555555 555555533333333333333,,,,,,,999999999999992222222 499,631 444444488888887777777,,,,,,,999999988888889999999 488,844 489,028 444444488888889999999,,,,,,,222222244444445555555 488,782 494,078 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666664444444,,,,,,,666666600000005555555 66666662222222,,,,,,,666666655555558888888 66666660000000,,,,,,,000000077777773333333 57,129 55555551111111,,,,,,,777777755555555555555 51,355 50,804 44444449999999,,,,,,,111111133333339999999 47,593 46,406 44 OOwwnn ffoorreeiiggnn ooffffiicceess 222222222222224444444,,,,,,,777777722222227777777 222222255555557777777,,,,,,,444444433333336666666 222222299999995555555,,,,,,,999999988888880000000 284,014 222222277777774444444,,,,,,,888888888888886666666 274,354 275,178 222222288888880000000,,,,,,,000000011111116666666 274,722 273,502 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222227777777,,,,,,,666666600000009999999 111111122222229999999,,,,,,,444444422222225555555 111111133333334444444,,,,,,,888888855555554444444 120,311 111111122222223333333,,,,,,,111111188888886666666 125,318 125,908 111111122222221111111,,,,,,,777777700000006666666 129,114 137,5% 66 DDeeppoossiittss 66666660000000,,,,,,,666666688888887777777 66666665555555,,,,,,,888888899999998888888 77777778888888,,,,,,,111111188888884444444 67,737 77777770000000,,,,,,,555555555555551111111 72,633 72,566 66666668888888,,,,,,,333333300000009999999 73,189 79,774 77 OOtthheerr 66666666666666,,,,,,,999999922222222222222 66666663333333,,,,,,,555555522222227777777 55555556666666,,,,,,,666666677777770000000 52,574 55555552222222,,,,,,,666666633333335555555 52,685 53,342 55555553333333,,,,,,,333333399999997777777 55,925 57,821 88 AAllll ootthheerr ffoorreeiiggnneerrss 44444442222222,,,,,,,999999933333336666666 44444441111111,,,,,,,666666644444446666666 44444443333333,,,,,,,000000088888884444444 38,177 33333338888888.......111111166666662222222 37,818 37,138 33333338888888,,,,,,,333333388888884444444 37,353 36,574 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 33333337777777,,,,,,,777777755555558888888 44444447777777,,,,,,,555555522222224444444 55555558888888,,,,,,,444444400000009999999 55555553333333.......111111166666663333333 55555558888888,,,,,,,888888899999990000000 3333333,,,,,,,666666699999992222222 8888888,,,,,,,222222288888889999999 11111112222222,,,,,,,888888833333334444444 11111116666666,,,,,,,777777788888888888888 11111115555555,,,,,,,444444499999999999999 11 Negotiable and readily transferable 22222226666666,,,,,,,666666699999996666666 22222225555555,,,,,,,777777700000000000000 33333330000000,,,,,,,999999988888883333333 22222222222222,,,,,,,000000022222220000000 22222227777777,,,,,,,444444455555551111111 12 Outstanding collections and other 7777777,,,,,,,333333377777770000000 11111113333333,,,,,,,555555533333335555555 11111114444444,,,,,,,555555599999991111111 11111114444444,,,,,,,333333355555554444444 11111115555555,,,,,,,999999944444440000000 13 MEMO: Customer liability on 22222223333333,,,,,,,111111100000007777777 11111119999999,,,,,,,555555599999996666666 11111112222222,,,,,,,777777755555553333333 11111113333333,,,,,,,555555566666663333333 11111112222222,,,,,,,999999944444443333333 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States .... 40,909 45,565' 45,675 45,645 42,112 39,272 41,517 40,182 40,137 n.a. 1. Data for banks' own claims are given on a monthly basis, but the data for parent foreign bank. claims of banks' own domestic customers are available on a quarterly basis only. 3. Assets owned by customers of the reporting bank located in the United Reporting banks include all kinds of depository institutions besides commercial States that represent claims on foreigners held by reporting banks for the account banks, as well as some brokers and dealers. of their domestic customers. 2. U.S. banks: includes amounts due from own foreign branches and foreign 4. Principally negotiable time certificates of deposit and bankers acceptances. subsidiaries consolidated in "Consolidated Report of Condition" filed with bank 5. Includes demand and time deposits and negotiable and nonnegotiable regulatory agencies. Agencies, branches, and majority-owned subsidiaries of certificates of deposit denominated in U.S. dollars issued by banks abroad. For foreign banks: principally amounts due from head office or parent foreign bank, description of changes in data reported by nonbanks, see July 1979 Bulletin, and foreign branches, agencies, or wholly owned subsidiaries of head office or p. 550. 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1989 1990 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa 11998866 11998877 11998888 Sept. Dec. Mar. June'' 1 Total 232,295 235,130 233,184 234,112 237,648' 213,670 211,062 By borrower 2 Maturity of 1 year or less2 160,555 163,997 172,634 170,682' 177,8%' 160,087 157,458 3 Foreign public borrowers 24,842 25,889 26,562 24,102 23,483 22,725 19,421 4 All other foreigners 135,714 138,108 146,071 146,581' 154,413' 137,362 138,037 5 Maturity over 1 year 71,740 71,133 60,550 63,429' 59,752' 53,584 53,603 6 Foreign public borrowers 39,103 38,625 35,291 38,134' 35,822 30,050 31,069 7 All other foreigners 32,637 32,507 25,259 25,295 23,931' 23,533 22,534 By area Maturity of 1 year or less 8 Europe 61,784 59,027 55,909 54,525' 53,912' 48,368 49,101 9 Canada 5,895 5,680 6,282 6,236 5,886 5,694 5,579 10 Latin America and Caribbean 56,271 56,535 57,991 52,227 52,989' 46,719 44,323 11 Asia 29,457 35,919 46,224 50,445 57,766 51,744 50,729 12 Africa 2,882 2,833 3,337 3,514 3,225 3,165 2,991 13 All other3 4,267 4,003 22,,889911 3,735 44,,111188 44,,33%% 44,,773344 Maturity of over 1 year 14 Europe 6,737 6,6% 4,666 4,662' 4,121' 4,407 4,326 15 Canada 1,925 2,661 1,922 2,459 2,353 2,702 2,860 16 Latin America and Caribbean 56,719 53,817 47,547 49,046 45,818' 37,668 35,924 17 Asia 4,043 3,830 3,613 4,203 4,142 5,479 7,036 18 Africa 1,539 1,747 2,301 2,475 2,633 2,764 2,739 19 All other3 777 2,381 501 584 684 564 718 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 1990 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 1988 1989 1990 AArreeaa oorr ccoouunnttrryy 11998866 11998877 June Sept. Dec. Mar. June Sept. Dec. Mar. June 1 Total 386.5 382.4 351.9 354.0 346.3 346.1 340.0 346.2 338.3' 334.4' 322.9' 2 G-10 countries and Switzerland 156.6 159.7 150.7 148.7 152.7 145.4 145.1 146.4 152.9r 147.1' 139.7' 3 Belgium-Luxembourg 8.4 10.0 9.2 9.5 9.0 8.6 7.8 6.9 6.3 6.6 6.2 4 France 13.6 13.7 10.9 10.3 10.5 11.2 10.8 11.1 11.7 10.5 10.3 5 Germany 11.6 12.6 10.6 9.2 10.3 10.2 10.6 10.4 10.5 11.2 11.2 6 Italy 9.0 7.5 6.3 5.6 6.8 5.2 6.1 6.8 7.4 6.0 5.5 7 Netherlands 4.6 4.1 3.2 2.9 2.7 2.8 2.8 2.4 3.1 3.1 2.7 8 Sweden 2.4 2.1 1.9 1.9 1.8 2.3 1.8 2.0 2.0 2.1 2.3 9 Switzerland 5.8 5.6 5.6 5.2 5.4 5.1 5.4 6.1 7.1 6.3 6.4 10 United Kingdom 70.9 68.8 70.4 67.6 66.2 65.6 64.5 63.7 67.2' 64.0' 59.9' 11 Canada 5.2 5.5 5.3 4.9 5.0 4.0 5.1 5.9 5.4 4.8 5.2' 12 Japan 25.1 29.8 27.3 31.6 34.9 30.5 30.2 31.0 32.2 32.6' 29.9 13 Other developed countries 26.1 26.4 24.0 23.0 21.0 21.1 21.2 21.0 20.7 23.1 22.6 14 Austria 1.7 1.9 1.6 1.6 1.5 1.4 1.7 1.5 1.5 1.5 1.5 15 Denmark 1.7 1.7 1.1 1.2 1.1 1.1 1.4 1.1 1.1 1.1 1.1 16 Finland 1.4 1.2 1.2 1.3 1.1 1.0 1.0 1.1 1.0 1.1 .9 17 Greece 2.3 2.0 2.1 2.1 1.8 2.1 2.3 2.4 2.5 2.6 2.7 18 Norway 2.4 2.2 1.9 2.0 1.8 1.6 1.8 1.4 1.4 1.7 1.4 19 Portugal .9 .6 .4 .4 .4 .4 .6 .4 .4 .4 .8 20 Spain 5.8 8.0 7.2 6.3 6.2 6.6 6.2 6.9 7.1 8.3 7.9 21 Turkey 2.0 2.0 1.8 1.6 1.5 1.3 1.1 1.2 1.2 1.3 1.4 22 Other Western Europe 1.5 1.6 1.7 1.9 1.3 1.1 1.1 1.0 .7 1.0 1.1 23 South Africa 3.0 2.9 2.8 2.7 2.4 2.2 2.1 2.1 2.0 2.0 1.9 24 Australia 3.4 2.4 2.2 1.8 1.8 2.4 1.9 2.1 1.6 2.1 1.9 25 OPEC countries3 19.4 17.4 17.0 17.9 16.6 16.2 16.1 16.2 17.1 15.5' 15.4 26 Ecuador 2.2 1.9 1.8 1.8 1.7 1.6 1.5 1.5 1.3 1.2 1.2 27 Venezuela 8.7 8.1 8.0 7.9 7.9 7.9 7.5 7.4 7.0 6.1 6.0 28 Indonesia 2.5 1.9 1.8 1.8 1.7 1.7 1.9 2.0 2.0 2.1 2.0 29 Middle East countries 4.3 3.6 3.5 4.6 3.4 3.3 3.4 3.5 5.0 4.3' 4.4 30 African countries 1.8 1.9 1.9 1.9 1.9 1.7 1.6 1.9 1.7 1.8 1.8 31 Non-OPEC developing countries 99.6 97.8 91.8 87.2 85.3 85.9 83.4 81.2 77.5 68.8' 67.7' Latin America 32 Argentina 9.5 9.5 9.5 9.3 9.0 8.5 7.9 7.6 6.3 5.5 5.1 33 Brazil 25.3 24.7 23.7 22.4 22.4 22.8 22.1 20.9 19.0 17.5 17.2 34 Chile 7.1 6.9 6.4 6.3 5.6 5.7 5.2 4.9 4.6 4.3 3.7 35 Colombia 2.1 2.0 2.2 2.1 2.1 1.9 1.7 1.6 1.8 1.8 1.7 36 Mexico 24.0 23.5 21.1 20.4 18.8 18.3 17.7 17.2 17.7 12.8' 13.(K 37 Peru 1.4 1.1 .9 .8 .8 .7 .6 .6 .6 .5 .5 38 Other Latin America 3.1 2.8 2.6 2.5 2.6 2.7 2.6 2.9 2.8 2.7 2.4 Asia China 39 Mainland .4 .3 .4 .2 .3 .5 .3 .3 .3 .3 .2 40 Taiwan 4.9 8.2 4.9 3.2 3.7 4.9 5.2 4.5 3.8 3.6 41 India 1.2 1.9 2.3 2.0 2.1 2.6 2.4 3.1 3.5 3.6 42 Israel 1.5 1.0 1.0 1.0 1.2 .9 .8 .7 .6 .6 43 Korea (South) 6.7 5.0 5.9 6.0 6.1 6.1 6.6 5.9 5.3 5.6 44 Malaysia 2.1 1.5 1.5 1.7 1.6 1.7 1.6 1.7 1.8 1.8 45 Philippines 5.4 5.2 4.9 4.7 4.5 4.4 4.4 4.1 3.7 3.9 46 Thailand .9 .7 1.1 1.2 1.1 1.0 1.0 1.3 1.3 1.1 1.3 47 Other Asia .7 .7 .8 .8 .9 .8 .8 1.0 1.2 1.1 Africa 48 Egypt .7 .6 .6 .5 .4 .5 .6 .5 .4 .4 .5 49 Morocco .9 .9 .9 .8 .9 .9 .9 .8 .9 .9 .9 50 Zaire .1 .0 .1 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa4 1.6 1.3 1.2 1.2 1.1 1.1 1.1 1.0 1.0 .9 .9 52 Eastern Europe 3.5 3.2 3.3 3.1 3.6 3.5 3.4 3.5 3.5 3.4 3.0 53 U.S.S.R .1 .3 .4 .4 .7 .7 .6 .8 .7 .8 .4 54 Yugoslavia 2.0 1.8 1.9 1.8 1.8 1.7 1.7 1.7 1.6 1.4 1.4 55 Other 1.4 1.1 1.0 1.0 1.1 1.1 1.1 1.1 1.3 1.3 1.2 56 Offshore banking centers 61.5 54.5 43.0 47.3 44.2 48.5 43.1 49.2 36.6 42.y 38.9 57 Bahamas 22.4 17.3 8.9 12.9 11.0 15.8 11.0 11.4 5.5 9.3 8.5 58 Bermuda .6 .6 1.0 .9 .9 1.1 .7 1.3 1.7 .9 2.2 59 Cayman Islands and other British West Indies 12.3 13.5 10.3 11.9 12.9 12.0 10.8 15.3 8.9 10.9 7.3 60 Netherlands Antilles 1.8 1.2 1.2 1.2 1.0 .9 1.0 1.1 2.3 2.6 2.3 61 Panama 4.0 3.7 3.0 2.6 2.5 2.2 1.9 1.5 1.4 11..33 1.4 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 ..11 .1 63 Hong Kong 11.1 11.2 11.6 10.5 9.6 9.6 10.4 10.7 9.7 9.8 10.0 64 Singapore 9.2 7.0 6.9 7.0 6.1 6.8 7.3 7.8 7.0 8.0 7.0 65 Others6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated7 19.8 23.2 22.2 26.7 22.6 25.0 27.4 28.5 29.8 33.2' 35.5' 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 1989 1990 Type, and area or country 11998866 11998877 11998888''"" Mar/ June Sept. Dec.' Mar. Junep 1 Total 25,587 28,302 32,938 38,513 38,460' 36,523' 38,429 38,518' 39,855 2 Payable in dollars 21,749 22,785 27,320 32,706 33,372' 31,685' 33,585 34,229' 35,072 3 Payable in foreign currencies 3,838 5,517 5,618 5,806 5,088' 4,838 4,845 4,289' 4,783 By type 4 Financial liabilities 12,133 12,424 14,507 18,744 18,427' 17,117' 18,380 17,802' 19,769 5 Payable in dollars 9,609 8,643 10,608 14,648 14,551' 13,289' 14,478 14,589' 16,097 6 Payable in foreign currencies 2,524 3,781 3,900 4,096 3,875' 3,829 3,902 3,213' 3,672 7 Commercial liabilities 13,454 15,878 18,431 19,768 20,034' 19,406' 20,050 20,716' 20,086 8 Trade payables 6,450 7,305 6,505 7,094 6,510' 6,902' 7,373 7,275' 6,850 9 Advance receipts and other liabilities .. 7,004 8,573 11,926 12,674 13,524 12,503 12,676 13,440 13,237 10 Payable in dollars 12,140 14,142 16,712 18,058 18,821' 18,397' 19,107 19,639' 18,975 11 Payable in foreign currencies 1,314 1,737 1,719 1,711 1,213 1,009 943 1,076 1,111 By area or country Financial liabilities 12 Europe 7,917 8,320 9,962 13,854 12,575' 11,197' 11,622 10,925' 12,026 13 Belgium-Luxembourg 270 213 289 320 357 308 340 333 347 14 France 661 382 359 224 257' 242' 258 217' 156 15 Germany 368 551 699 561 618' 590' 523 482' 601 16 Netherlands 542 866 880 874 835' 853 946 865 934 17 Switzerland 646 558 1,033 954 938' 799' 541 529' 667 18 United Kingdom 5,140 5,557 6,533 10,721 9,402' 8,207' 8,742 8,212' 8,759 19 Canada 399 360 388 616 626' 575' 573 476' 329 20 Latin America and Caribbean 1,944 1,189 839 677 1,262' 1,367' 1,268 1,814' 2,508 21 Bahamas 614 318 184 189 165 186 157 237 249 22 Bermuda 4 0 0 0 7' 7' 17 0 0 23 Brazil 32 25 0 0 0 0 0 0 0 24 British West Indies 1,146 778 645 471 661' 743' 635 1,0%' 1,717 25 Mexico 22 13 1 15 17 4 6 5 4 26 Venezuela 0 0 0 0 0 0 0 0 0 27 Asia 1,805 2,451 3,312 3,591 3,863' 3,878 4,814 4,483' 4,848 28 Japan 1,398 2,042 2,563 2,825 3,100 3,130 3,963 3,445 3,846 29 Middle East oil-exporting countries2 . 8 8 3 1 12 2 2 3 5 30 Africa 1 4 2 5 3 4 2 3 3 1 1 0 3 2 2 0 0 1 31 Oil-exporting countries 67 100 4 2 97 97 100 102 55 32 All other4 Commercial liabilities 4,446 5,516 7,305 7,834 7,778 8,319 8,883 9,133' 8,304 33 Europe 101 132 158 122 114 137 178 233 295 34 Belgium-Luxembourg 352 426 455 552 535 806 871 881 926 35 France 715 909 1,699 1,373 1,190 1,183 1,362 1,143 959 36 Germany 424 423 587 667 688 548 699 688 606 37 Netherlands 385 559 417 446 447 531 621 583 607 38 Switzerland 1,341 1,599 2,065 2,585 2,709 2,703 2,618 2,925' 2,434 39 United Kingdom 40 Canada 1,405 1,301 1,217 1,163 1,133 1,189 1,067 1,124 1,260 41 Latin America and Caribbean 924 864 1,090 1,253 1,673' 1,086' 1,187 1,304' 1,277 42 Bahamas 32 18 49 35 34 27 41 37 22 43 Bermuda 156 168 286 426 388 305 308 516 412 44 Brazil 61 46 95 103 541 113 100 116 106 45 British West Indies 49 19 34 31 42 30 27 18 29 46 Mexico 217 189 217 250 235' 220' 304 241' 285 47 Venezuela 216 162 114 114 131 107 154 85 119 48 Asia 5,080 6,565 6,915 7,318 7,045' 7,086' 7,038 6,885' 6,970 49 Japan .., 2,042 2,578 3,094 3,059 2,708 2,674 2,772 2,624 3,088 50 Middle East oil-exporting countries • 1,679 1,964 1,385 1,520 1,482' 1,442' 1,401 1,393' 1,125 51 Africa 619 574 576 700 762' 648' 844 753' 885 52 Oil-exporting countries 197 135 202 272 263' 255' 307 263' 277 53 All other4 980 1,057 1,328 1,499 1,642 1,077 1,031 1,517 1,390 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 1990 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1989 1990 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998866 11998877 11998888'' Mar/ June Sept. Dec.' Mar.' June" 1 Total 36,265 30,964 33,874 31,873 34,OSS' 31,738' 31,085 29,488 31,050 2 Payable in dollars 33,867 28,502 31,494 29,514 31,871' 29,513' 28,706 27,334 28,746 3 Payable in foreign currencies 2,399 2,462 2,381 2,359 2,217' 2,225 2,379 2,154 2,304 By type 4 Financial claims 26,273 20,363 21,739 19,734 21,617' 18,827' 17,388 16,286 17,494 5 Deposits 19,916 14,894 15,642 14,594 16,500' 12,143' 10,435 10,458 9,871 6 Payable in dollars 19,331 13,765 14,543 13,680 15,581' 11,278' 9,460 9,564 8,774 7 Payable in foreign currencies 585 1,128 1,099 914 9^ 866' 975 893 1,097 8 Other financial claims 6,357 5,470 6,097 5,140 5,117' 6,684' 6,953 5,828 7,623 9 Payable in dollars 5,005 4,656 5,320 4,202 4,380' 5,822' 6,199 5,140 6,929 10 Payable in foreign currencies 1,352 814 777 938 737' 862 754 688 694 11 Commercial claims 9,992 10,600 12,136 12,139 12,471' 12,912' 13,697 13,202 13,556 12 Trade receivables 8,783 9,535 11,061 10,877 l l^ 11,427' 12,084 11,610 11,865 13 Advance payments and other claims 1,209 1,065 1,075 1,262 1,432 1,485 1,612 1,593 1,691 14 Payable in dollars 9,530 10,081 11,630 11,632 11,911' 12,414' 13,047 12,630 13,043 15 Payable in foreign currencies 462 519 505 507 560 498 650 573 513 By area or country Financial claims 16 Europe 10,744 9,531 10,169 9,018 8,616' 7,253' 6,861 6,727 9,179 17 Belgium-Luxembourg 41 7 18 22 161 166 28 22 127 18 France 138 332 203 193 176' 166' 153 199 142 19 Germany 116 102 120 112 149' 120' 195 507 94 20 Netherlands 151 350 348 384 297 292 303 315 332 21 Switzerland 185 65 218 241 68' 111 95 123 138 22 United Kingdom 9,855 8,467 8,929 7,769 7,468' 6,169' 5,850 5,358 8,139 23 Canada 4,808 2,844 2,325 2,175 2,568' 2,356' 1,934 1,803 1,993 24 Latin America and Caribbean 9,291 7,012 8,139 7,504 9,319' 8,315' 7,428 6,903 5,404 25 Bahamas 2,628 1,994 1,846 2,183 1,875' l,699r 1,516 1,599 920 26 Bermuda 6 7 19 25 33 33 7 4 3 27 Brazil 86 63 47 49 78 70 224 79 84 28 British West Indies 6,078 4,433 5,742 4,826 6,923' 6,125' 5,268 4,806 4,001 29 Mexico 174 172 151 117 114 105 94 152 153 30 Venezuela 21 19 21 25 31 36 20 21 20 31 Asia 1,317 879 844 895 995' 801 831 763 815 32 Japan 999 605 574 571 525' 440 439 416 473 33 Middle East oil-exporting countries2 7 8 5 8 8 7 8 7 6 34 Africa 85 65 106 89 80 75 140 67 62 35 Oil-exporting countries3 28 7 10 8 8 8 12 11 8 36 All other4 28 33 155 52 40' 27 195 23 41 Commercial claims 37 Europe 3,725 4,180 5,170 5,094 5,290 5,423 6,160 6,025 6,118 38 Belgium-Luxembourg 133 178 189 214 205 220 241 219 207 39 France 431 650 670 786 770 824 948 957 902 40 Germany 444 562 667 689 675 688 689 690 661 41 Netherlands 164 133 212 164 413 3% 478 450 475 42 Switzerland 217 185 344 264 231 222 305 270 235 43 United Kingdom 999 1,073 1,323 1,301 1,371 1,396 1,570 1,690 1,654 44 Canada 934 936 983 1,124 1,181 1,278 1,058 1,091 1,108 45 Latin America and Caribbean 1,857 1,930 2,239 2,118 2,100 2,131 2,161 2,046 2,199 46 Bahamas 28 19 36 34 13 10 57 22 17 47 Bermuda 193 170 230 234 238 270 323 242 283 48 Brazil 234 226 298 277 314 232 286 226 230 49 British West Indies 39 26 22 23 30 33 36 38 46 50 Mexico 412 368 461 485 438 508 508 524 593 51 Venezuela 237 283 227 213 229 188 146 187 220 52 Asia 2,755 2,915 2,979 3,113 3,143' 3,299' 3,513 3,249 3,369 53 Japan 881 1,158 946 1,042 998 1,177 1,185 1,061 1,046 54 Middle East oil-exporting countries2 563 450 446 437 430 406 508 432 412 55 Africa 500 401 434 394 407 398' 418 425 402 56 Oil-exporting countries3 139 144 122 95 111 87' 107 89 98 57 All other4 222 238 331 297 350 381 386 367 360 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 1990 1990 Transactions, and area or country 1988 1989 Jan.- Feb. Mar/ Apr/ May' June' July' Aug." Aug. U.S. corporate securities STOCKS 1 Foreign purchases 181,185 213,535' 126,641 13,465' 16,430 11,457 15,231 18,211 17,447 20,652 2 Foreign sales 183,185 203,537 133,627 13,692 19,117 12,356 17,717 18,584 16,080 21,950 3 Net purchases, or sales (—) -2,000 9,998' -6,986 -226' -2,687 -899 -2,486 -372 1,367 -1,298 4 Foreign countries -1,825 10,232' -7,149 -227' -2,733 -937 -2,543 -336 1,315 -1,335 5 Europe -3,350 471' -5,010 -141' -990 -666 -1,048 -590 -12 -1,379 6 France -281 -708 -747 -157 7 -85 -189 32 -25 -175 7 Germany 218 -830 -128 4' 105 6 -57 -66 -41 -119 8 Netherlands -535 167 -274 -38 48 -25 -20 -83 -30 -107 9 Switzerland -2,243 -3,274' -2,113 -242 -441 -221 -347 -198 -170 -253 10 United Kingdom -954 3,729 -1,605 184' -720 -99 -200 -114 255 -637 11 Canada 1,087 -845 28 51 -163 -212 -101 88 174 330 12 Latin America and Caribbean 1,238 3,089 -773 -178 -208 -27 90 -14 -90 -234 13 Middle East1 -2,474 3,531 -770 93 -425 116 -593 -85 -36 187 14 Other Asia 1,365 3,586' -449 -30 -921 -55 -904 243 1,056 -69 15 Japan 1,922 3,340 -458 -104 -764 -92 -750 212 851 22 16 Africa 188 131 -11 -34 1 -2 0 -7 13 16 17 Other countries 121 268 -164 12 -27 -91 13 30 211 -186 18 Nonmonetary international and regional organizations -176 -234 163 1 46 38 57 -37 52 37 BONDS2 19 Foreign purchases 86,381 120,540 81,395 10,297 9,248 8,355 8,467 12,572 10,923 12,009 20 Foreign sales 58,417 86,510 66,721 8,059' 8,636 7,643 6,347 8,456 7,519 12,252 21 Net purchases, or sales (-) 27,964 34,031 14,674 2,238' 612 712 2,120 4,116 3,404 -243 22 Foreign countries 28,506 33,678 14,916 2,211' 451 705 2,195 4,084 3,366 -213 23 Europe 17,239 19,848 9,653 16' 340 864 781 3,380 1,996 1,080 24 France 143 372 488 9 5 -58 108 293 54 -40 25 Germany 1,344 -238 -173 -253 -15 -40 -39 82 33 172 26 Netherlands 1,514 850 112 15 -11 -2 33 37 37 45 27 Switzerland 505 -165 687 55' -185 59 83 186 570 -238 28 United Kingdom 13,084 18,459 8,444 326' 585 1,013 495 2,761 1,145 925 29 Canada 711 1,116 1,839 474 183 353 198 292 70 91 30 Latin America and Caribbean 1,931 3,686 3,356 883 313 411 508 578 273 -103 31 Middle East1 -178 -182 193 100 36 -2 251 -120 17 -176 32 Other Asia 8,900 9,063 -41 7% -461 -993 440 11 999 -986 33 Japan 7,686 6,331 308 1,103 -419 -1,044 331 -131 930 -632 34 Africa -8 56 82 36 -8 48 8 2 -4 -1 35 Other countries -89 91 -167 -93' 48 24 9 -59 15 -118 36 Nonmonetary international and regional organizations -542 353 -242 27 160 6 -76 32 39 -31 Foreign securities 37 Stocks, net purchases, or sales (-)3 -1,959 -13,097' -7,542 -981 -91 -869 -2,422 -2,756 -1,117 -77 38 Foreign purchases 75,356 109,789 88,182 10,483' 11,775 8,368 9,785 11,027 11,376 12,383 39 Foreign sales 77,315 122,886' 95,725 11,465' 11,866 9,237 12,207 13,783 12,493 12,460 40 Bonds, net purchases, or sales (-) -7,434 -6,049 -15,204 -159 -9,605 -1,830 -1,867 -2,030 -324 55 41 Foreign purchases 218,521 234,215 186,558 20,671 22,375 20,184 25,879 25,658 23,443 29,836 42 Foreign sales 225,955 240,264 201,763 20,830 31,981 22,015 27,746 27,688 23,767 29,781 43 Net purchases, or sales (-), of stocks and bonds -9,393 -19,145' -22,747 -1,140' -9,697 -2,699 -4,289 -4,786 -1,441 -22 44 Foreign countries -9,873 -19,178' -21,306 -1,229 -8,096 -2,849 -4,085 -4,333 -1,471 -464 45 Europe -7,864 -17,811' -7,960 -1,227' -306 -666 -1,888 -3,646 -383 -1,243 46 Canada -3,747 -4,180 -4,420 -144 -1,323 -1,797 -721 -219 -328 170 47 Latin America and Caribbean 1,384 426 -6,230 161 -6,648 -171 252 418 -222 -54 48 979 2,540' -1,834 -307 693 -341 -1,403 -1,073 -125 611 49 Africa -54 93 -111 9 -1 -28 6 8 -83 -8 50 Other countries -571 -246 -751 277 -511 154 -331 180 -330 60 51 Nonmonetary international and regional organizations 480 33 -1,440 89 -1,601 150 -205 -453 30 442 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. 3. As a result of the merger of a U.S. and U.K. company in July 1989, the government agencies and corporations. Also includes issues of new debt securi- former stockholders of the U.S. company received $5,453 million in shares of the new combined U.K. company. This transaction is not reflected in the data above. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • December 1990 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1990 1990 Country or area 1988 1989 J A a u n g .- . Feb. Mar/ Apr/ Mayr Juner July' Aug." Transactions, net purchases or sales (-) during period1 1 Estimated total2 48,832 54,269^ 7,604 901' -8,446 3,224 -2,744 3,554 5,496 4,661 2 Foreign countries2 48,170 52,367' 7,890 1,242' -8,251 4,215 -3,154 3,249 5,339 4,020 3 Europe2 14,319 36,286' 6,886 1,776' -2,361 6,150 -3,787 2,587 3,657 -2,125 4 Belgium-Luxembourg 923 1,048 184 -337 -256 458 115 270 180 -391 5 Germany -5,268 7,904 2,283 1,672 -475 633 306 -1,061 -1 1,424 6 Netherlands -356 -1,141 108 -1,400 -411 749 -263 313 196 1,253 7 Sweden -323 693' 20 159' 39 264 -254 -34 133 -266 8 Switzerland2 -1,074 1,097 -1,251 -5 -251 422 -189 -19 -799 -128 9 United Kingdom 9,640 20,198 -646 1,641' -326 2,271 -3,545 1,894 1,051 -3,776 10 Other Western Europe 10,786 6,508' 6,168 46' -684 1,344 43 1,223 2,897 -252 11 Eastern Europe -10 -21 17 0 0 6 0 0 0 11 12 Canada 3,761 701 -2,742 -2,137 -1,383 110 -1,752 367 1,418 1,177 13 Latin America and Caribbean 713 490 7,208 91 672 2,134 478 914 1,934 1,319 14 Venezuela -109 311 -49 -48 38 -49 71 48 -1 0 15 Other Latin America and Caribbean 1,130 -297 3,499 16 270 -35 610 1,021 1,060 295 16 Netherlands Antilles -308 475 3,758 123 365 2,218 -204 -154 874 1,023 17 27,603 13,335' -3,067 2,149' -4,785 -3,880 2,026 -1,086 -1,677 3,354 18 Japan 21,750 -5,167 768' -5,351 -6,111 2,234 -469 161 2,376 19 -13 116 93 13 -43 -4 -8 52 17 57 20 All other 1,786 1,439 -488 -650 -351 -294 -110 416 -9 239 21 Nonmonetary international and regional organizations 661 1,902 -286 -341 -196 -991 410 305 158 641 22 International 1,106 1,473 18 -286 -92 -528 403 462 -25 444 23 Latin America regional -31 231 40 -11 -26 74 25 -109 25 25 Memo 24 Foreign countries2 48,170 52,367' 7,890 1,242' -8,251 4,215 -3,154 3,249 5,339 4,020 25 Official institutions 26,624 26,835' 6,285 -1,493' -3,738 5,066 -2,384 924 731 6,802 26 Other foreign 21,546 25,532' 1,605 2,735' -4,512 -851 -770 2,325 4,608 -2,781 Oil-exporting countries 27 Middle East3 1,963 8,148 529 970 1,020 668 -188 -439 -2,095 -323 28 Africa4 1 -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. 30, 1990 Rate on Oct. 30, 1990 Rate on Oct. 30, 1990 Country Country Country Month Month Month effective effective effective Austria.. 6.5 Oct. 1989 France 9.5 Apr. 1990 Norway 8.0 June 1983 Belgium . 10.25 Oct. 1989 Germany, Fed. Rep. of. 6.0 Oct. 1989 Switzerland . 6.0 Oct. 1989 Canada.. 12.66 Oct. 1990 Italy 12.5 May 1990 United Kingdom' Denmark 10.5 Oct. 1989 Japan 6.0 Aug. 1990 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 1990 CCoouunnttrryy,, oorr ttyyppee 11998877 11998888 11998899 Apr. May June July Aug. Sept/ Oct. 1 Eurodollars 7.07 7.85 9.16 8.44 8.35 8.23 8.09 7.99 8.07 8.06 2 United Kingdom 9.65 10.28 13.87 15.17 15.11 14.95 14.92 14.95 14.88 14.02 3 Canada 8.38 9.63 12.20 13.59 13.77 13.76 13.58 13.13 12.63 12.58 4 Germany 3.97 4.28 7.04 8.20 8.27 8.24 8.17 8.36 8.39 8.51 5 Switzerland 3.67 2.94 6.83 9.01 8.78 8.71 8.81 8.71 8.11 7.88 6 Netherlands 5.24 4.72 7.28 8.46 8.37 8.26 8.16 8.44 8.42 8.39 7 France 8.14 7.80 9.27 9.92 9.70 9.94 9.91 10.03 10.24 9.92 8 Italy 11.15 11.04 12.44 12.11 12.09 11.33 11.38 11.49 10.65 11.40 9 Belgium 7.01 6.69 8.65 10.19 9.90 9.63 9.30 9.30 9.04 8.89 10 Japan 3.87 3.96 4.73 6.62 6.84 6.86 7.02 7.15 7.41 7.53 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 1990 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar 1990 CCoouunnttrryy//ccuurrrreennccyy 11998877 11998888 11998899 May June July Aug. Sept/ Oct. 1 Australia/dollar^ 70.137 78.409 79.186 76.106 77.903 79.076 80.871 82.512 80.060 2 Austria/schilling 12.649 12.357 13.236 11.699 11.843 11.520 11.044 11.044 10.719 3 Belgium/franc 37.358 36.785 39.409 34.325 34.602 33.715 32.280 32.282 31.373 4 Canada/dollar 1.3259 1.2306 1.1842 1.1747 1.1730 1.1570 1.1448 1.1583 1.1600 3 China, P.R./yuan 3.7314 3.7314 3.7673 4.7339 4.7339 4.7339 4.7339 4.7342 4.7339 6 Denmark/krone 6.8478 6.7412 7.3210 6.3349 6.4080 6.2339 6.0033 5.9961 5.8117 7 Finland/markka 4.4037 4.1933 4.2963 3.9270 3.9561 3.8386 3.7051 3.7113 3.6187 8 France/franc 6.0122 5.9595 6.3802 5.5989 5.6613 5.4924 5.2680 5.2575 5.1032 9 Germany/deutsche mark 1.7981 1.7570 1.8808 1.6630 1.6832 1.6375 1.5702 1.5701 1.5238 10 Greece/drachma 135.47 142.00 162.60 163.82 164.78 160.59 154.82 154.93 153.17 11 Hong Kong/dollar 7.7986 7.8072 7.8008 7.7877 7.7855 7.7704 7.7707 7.7647 7.7722 12 India/rupee 12.943 13.900 16.213 17.325 17.421 17.412 17.347 17.860 18.074 13 Ireland/punt2 148.79 152.49 141.80 161.21 159.28 163.75 170.86 170.91 176.04 14 Italy/lira 1,297.03 1,302.39 1,372.28 1,221.93 1,235.60 1,199.65 1,157.07 1,172.87 1,141.62 13 Japan/yen 144.60 128.17 138.07 154.04 153.70 149.04 147.46 138.44 129.59 16 Malaysia/ringgit 2.5186 2.6190 2.7079 2.7024 2.7104 2.7051 2.6956 2.6959 2.6995 17 Netherlands/guilder 2.0264 1.9778 2.1219 1.8704 1.8946 1.8452 1.7692 1.7699 1.7180 18 New Zealand/dollar2 59.328 65.560 59.354 57.293 58.254 59.147 61.294 62.077 61.129 19 Norway/krone 6.7409 6.5243 6.9131 6.4477 6.4700 6.2925 6.0810 6.0735 5.8241 20 Portugal/escudo 141.20 144.27 157.53 147.08 147.90 143.93 138.71 139.18 134.41 21 Singapore/dollar 2.1059 2.0133 1.9511 1.8589 1.8471 1.8193 1.7905 1.7671 1.7257 22 South Africa/rand 2.0385 2.2770 2.6214 2.6468 2.6592 2.6253 2.5734 2.5712 2.5445 23 South Korea/won 825.94 734.52 674.29 711.85 718.07 718.75 718.26 717.87 717.76 24 Spain/peseta 123.54 116.53 118.44 103.98 103.91 100.41 %.90 98.49 95.59 23 Sri Lanka/rupee 29.472 31.820 35.947 40.023 40.018 40.018 40.007 39.953 40.285 26 Sweden/krona 6.3469 6.1370 6.4559 6.0560 6.08% 5.9470 5.7754 5.7663 5.6411 27 Switzerland/franc 1.4918 1.4643 1.6369 1.4198 1.4250 1.3924 1.3076 1.3069 1.2818 28 Taiwan/dollar 31.753 28.636 26.407 26.961 27.391 27.163 27.291 27.302 27.288 29 Thailand/baht 25.775 25.312 25.725 25.928 25.876 25.706 25.579 25.376 25.130 30 United Kingdom/pound2 163.98 178.13 163.82 167.74 171.03 180.98 190.13 187.94 194.56 MEMO 31 United States/dollar3 96.94 92.72 98.60 92.04 92.43 89.68 86.55 86.10 83.43 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 Reserve 2. Value in U.S. cents. 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 1990 A92 SPECIAL TABLES—Published Irregularly, with Latest BULLETIN Reference Title and Date Issue Page Assets and liabilities of commercial banks March 31, 1989 December 1989 All June 30, 1989 January 1990 All September 30, 1989 February 1990 All December 31, 1989 June 1990 All Terms of lending at commercial banks November 1989 March 1990 A79 February 1990 September 1990 A73 May 1990 December 1990 All August 1990 December 1990 All Assets and liabilities of U.S. branches and agencies of foreign banks September 30, 1989 March 1990 A84 December 31, 1989 August 1990 All March 31, 1990 September 1990 A78 June 30, 1990 December 1990 A82 Pro forma balance sheet and income statements for priced service operations June 30, 1989 February 1990 A78 September 30, 1989 March 1990 A88 March 31, 1990 September 1990 A82 June 30, 1990 October 1990 All Special tables follow. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • December 1990 t4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-11, 1990'A A. Commercial and Industrial Loans Weighted Loan rate (percent) Loans Amount of Average average made Partici- Characteristic (tho lo u a s n a s n ds (tho s u iz sa e nds maturity2 Weighted Standard Inter- co u m nd m e i r t - p lo at a i n o s n of dollars) of dollars) average quartile ment (percent) Days effective3 range5 (percent) ALL BANKS 1 Overnight7 12,476,765 6,754 8.80-9.47 65.4 2 One month and under 7,033,812 736 16 9.63 9.00-9.94 82.0 21.4 3 Fixed rate 4,843,216 1,063 16 9.56 9.00-9.80 79.9 28.3 4 Floating rate 2,190,596 438 15 9.78 9.01-10.31 86.8 6.0 5 Over one month and under a year . 10,853,112 144 117 10.45 9.37-11.57 75.6 20.3 6 Fixed rate 5,991,956 173 83 10.06 9.24-10.95 72.3 27.2 7 Floating rate 4,861,157 119 159 10.94 9.95-11.87 79.6 11.7 8 Demand8 12,849,791 198 10.51 9.31-11.57 81.4 9.0 9 Fixed rate 2,103,986 295 9.48 8.84-10.13 74.7 19.6 10 Floating rate 10,745,805 186 10.71 9.87-11.63 82.7 6.9 11 Total short term 43,213,481 284 9.97 8.98-10.64 75.4 13.8 12 Fixed rate (thousands of dollars) .. 25,415,658 528 25 9.49 8.91-9.80 70.6 17.7 13 1-24 255,737 7 119 12.34 11.63-13.03 30.9 .1 14 25-49 111,594 33 108 11.54 10.52-12.50 33.2 .1 15 50-99 188,104 63 164 11.74 10.79-12.75 44.8 .4 16 100-499 455,028 208 133 9.69 9.44-11.52 61.3 3.9 17 500-999 482,145 693 46 9.46 7.75-10.50 56.6 7.1 18 1000 and over 23,923,050 7,364 21 9.43 8.91-9.69 71.8 18.6 19 Floating rate (thousands of dollars) 17,797,824 171 114 10.66 9.47-11.63 82.3 8.1 20 1-24 495,087 10 171 12.19 11.57-12.75 75.2 2.0 21 25-49 519,633 34 155 11.90 11.30-12.68 82.9 2.3 22 50-99 944,865 67 158 11.78 11.02-12.19 85.1 3.4 23 100-499 3,469,881 198 159 11.43 10.52-12.13 83.9 6.8 24 500-999 1,739,135 646 187 11.08 10.47-11.57 84.2 10.1 25 1000 and over 10,629,223 4,247 76 10.11 9.04-10.92 81.6 9.3 Months 26 Total long term 4,879,449 231 11.08 .13 10.38-12.01 71.3 13.8 27 Fixed rate (thousands of dollars) .. 1,101,443 148 10.50 .24 9.34-11.57 66.6 4.8 28 1-99 120,464 18 11.99 .17 11.46-12.96 14.5 .0 29 100-499 164,633 267 11.56 .24 11.35-12.40 58.7 5.2 30 500-999 81,750 762 11.39 .33 10.47-12.52 36.9 27.4 31 1000 and over 734,594 4,564 9.93 .25 9.25-10.52 80.2 2.9 32 Floating rate (thousands of dollars) 3,778,007 276 11.25 .13 10.52-12.01 72.7 16.4 33 1-99 259,014 29 12.05 .08 11.46-12.75 47.6 3.6 34 100-499 698,300 200 11.66 .11 11.02-12.19 66.4 14.0 35 500-999 491,127 700 11.14 .08 10.47-11.63 69.3 12.6 36 1000 and over 2,329,567 3,775 11.06 .20 10.47-12.01 78.1 19.3 Loan rate (percent) Days Prime rate10 Effective3 Nominal9 LOANS MADE BELOW PRIME" 37 Overnight7 11,989,002 8,931 9.12 8.73 10.00 64.3 9.0 38 One month and under 5,938,327 2,784 9.31 8.91 10.01 81.0 21.2 39 Over one month and under a year 5,582,471 691 9.37 9.00 10.12 75.5 28.9 40 Demand8 4,627,334 1,008 9.11 8.79 10.05 69.6 12.7 41 Total short term 28,137,134 1,743 9.21 8.83 10.03 70.9 16.1 42 Fixed rate 21,770,974 2,337 9.18 8.81 10.02 69.0 18.5 43 Floating rate 6,366,160 932 9.30 8.92 10.10 77.3 8.1 Months 44 Total long term 1,329,863 575 43 9.76 9.40 10.55 31.4 45 Fixed rate 584,098 516 9.36 9.10 10.10 81.9 8.9 46 Floating rate 745,765 632 10.07 9.63 10.91 82.0 49.1 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A79 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-11, 1990'—Continued A. Commercial and Industrial Loans—Continued Weighted Loan rate (percent) Loans Amount of Average average made Partici- Characteristic (tho lo u a s n a s n ds (tho s u iz s e a nds maturity2 Weighted Standard Inter- co u m nd m e i r t p l a o t a i n o s n of dollars) of dollars) average quartile ment (percent) Days effective3 range5 (percent) LARGE BANKS 1 Overnight7 11,620,868 8,671 8.80-9.34 63.6 9.3 2 One month and under 5,222,770 3.176 16 9.52 8.86-9.80 79.3 26.1 3 Fixed rate 3,458,240 5,207 17 9.55 8.86-9.88 75.3 37.2 4 Floating rate 1,764,530 1,800 14 9.45 8.83-9.72 87.2 4.3 5 Over one month and under a year ... 6,675,842 1,077 90 10.13 9.27-10.92 81.1 26.6 6 Fixed rate 4,534,940 3,475 71 9.97 9.24-10.59 77.1 32.8 7 Floating rate 2,140,901 437 130 10.46 9.43-11.56 89.5 13.4 8 Demand8 7,612,207 441 10.28 9.09-11.16 74.4 11.2 9 Fixed rate 1,196,682 771 9.39 8.49-10.00 66.5 32.0 10 Floating rate 6,415,525 403 10.45 9.20-11.49 75.9 7.3 11 Total short term 31,131,687 1.177 9.71 8.94-10.38 72.6 16.3 12 Fixed rate (thousands of dollars) 20,810,465 4,283 20 9.43 8.91-9.69 68.7 20.4 13 1-24 8,667 10 121 11.55 11.00-12.00 30.9 1.3 14 25-49 11,422 34 112 11.21 10.50-12.00 35.0 1.2 15 50-99 18,517 67 86 11.12 10.96-11.63 49.8 2.7 16 100-499 150,105 232 60 10.44 9.65-11.07 68.3 5.8 17 500-999 200,451 676 23 10.10 9.48-10.53 83.8 10.8 18 1000 and over 20,421,302 8,355 20 9.42 8.90-9.69 68.6 20.6 19 Floating rate (thousands of dollars).. 10,321,222 478 77 10.28 9.11-11.07 80.6 8.1 20 1-24 79,402 11 161 11.82 11.02-12.68 84.9 .9 21 25-49 111,098 34 152 11.74 11.02-12.40 89.3 1.1 22 50-99 220,298 67 146 11.56 10.75-12.13 90.6 1.5 23 100-499 1,096,644 202 141 11.19 10.47-11.63 92.0 5.1 24 500-999 635,055 650 158 10.91 10.47-11.46 91.7 8.1 25 1000 and over 8,178,724 5,222 64 10.04 9.03-10.75 77.8 Months 26 Total long term 2,527,128 786 10.88 10.14-11.98 91.3 6.2 27 Fixed rate (thousands of dollars) .. 509,771 1,096 10.00 8.93-10.65 80.9 1.4 28 1-99 8,079 31 11.87 10.70-12.75 28.5 .0 29 100-499 19,183 244 10.93 10.47-11.57 36.6 7.9 30 500-999 22,096 755 10.73 10.21-11.57 88.9 10.8 31 1000 and over 460,412 4,897 9.90 8.80-10.14 83.2 32 Floating rate (thousands of dollars) 2,017,358 734 11.10 10.47-12.01 93.9 7.4 33 1-99 38,758 38 11.82 10.94-12.47 85.9 8.8 34 100-499 224,672 228 11.40 10.52-12.01 89.6 13.2 35 500-999 232,072 686 11.09 10.47-11.57 89.6 10.8 36 1000 and over 1,521,856 3,803 11.04 10.47-12.01 95.4 5.9 Loan rate (percent) Days Effective3 Nominal9 LOANS MADE BELOW PRIME" 37 Overnight7 11,150,963 9,811 9.13 8.74 10.00 62.3 9.7 38 One month and under 4,542,416 6,373 9.26 8.87 10.00 77.3 24.9 39 Over one month and under a year 4,211,408 4,427 9.40 9.03 10.00 77.4 33.4 40 Demand8 3,354,839 3,566 9.07 8.77 10.00 60.6 14.9 41 Total short term 23,259,626 6,217 9.19 8.82 10.00 67.7 17.7 42 Fixed rate 18,327,924 7,005 9.20 8.82 10.00 66.1 21.0 43 Floating rate 4,931,702 4,384 9.17 8.80 10.00 73.9 5.7 Months 44 Total long term 662,359 3,552 37 9.30 9.03 10.00 89.2 6.4 45 Fixed rate .... 361,634 3,601 9.27 9.10 10.00 80.4 9.4 46 Floating rate .. 300,726 3,496 9.33 8.95 10.00 99.8 2.8 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • December 1990 4.23—Continued A. Commercial and Industrial Loans—Continued Weighted Loan rate (percent) Loans Amount of Average average made Partici- Characteristic (tho lo u a s n a s n ds (tho s u iz s e a nds maturity2 Weighted Standard Inter- co u m nd m er it - p lo at a i n o s n of dollars) of dollars) average quartile ment (percent) Days effective3 range5 (percent) OTHER BANKS 1 Overnight7 855,897 1,688 9.10 8.86-9.24 2 One month and under 1,811,042 229 14 9.94 9.27-10.48 89.9 7.8 3 Fixed rate 1,384,976 356 12 9.57 9.13-9.59 91.3 6.2 4 Floating rate 426,066 106 20 11.14 10.48-12.19 85.1 13.0 5 Over one month and under a year . 4,177,271 60 159 10.97 10.25-12.13 66.7 10.1 6 Fixed rate 1,457,015 44 118 10.33 9.35-11.84 57.0 9.7 7 Floating rate 2,720,255 75 182 11.32 10.47-12.19 71.9 10.3 8 Demand8 5,237,584 110 10.83 10.38-11.63 91.4 5.9 9 Fixed rate 907,305 163 9.61 9.06-10.47 85.5 3.1 10 Floating rate 4,330,280 103 11.09 10.47-11.85 92.7 6.5 11 Total short term 12,081,794 96 10.62 9.40-11.63 82.5 7.2 12 Fixed rate (thousands of dollars) .. 4,605,193 106 51 9.73 9.03-10.47 79.0 5.6 13 1-24 247,070 7 119 12.37 11.68-13.09 30.9 .0 14 25-49 100,172 33 108 11.58 10.52-12.50 33.0 .0 15 50-99 169,588 62 167 11.80 10.79-12.75 44.3 .1 16 100-499 304,922 198 159 9.32 9.27-11.78 57.8 3.0 17 500-999 281,693 707 59 9.01 7.75-10.14 37.2 4.4 18 1000 and over 3,501,748 4,355 27 9.49 9.01-9.62 90.6 6.7 19 Floating rate (thousands of dollars) 7,476,602 91 160 11.17 10.47-12.04 84.7 8.2 20 1-24 415,685 9 172 12.26 11.57-12.75 73.4 2.2 21 25-49 408,535 34 156 11.94 11.46-12.68 81.2 2.6 22 50-99 724,567 66 161 11.85 11.07-12.40 83.5 4.0 23 100-499 2,373,237 196 164 11.54 10.79-12.19 80.2 7.6 24 500-999 1,104,080 643 198 11.17 10.47-11.63 79.8 11.2 25 1000 and over 2,450,499 2,617 124 10.32 9.18-11.02 94.0 10.8 26 Total long term 2,352,321 131 11.30 10.52-12.13 49.9 21.9 27 Fixed rate (thousands of dollars) .. 591,672 85 10.94 9.58-12.06 54.3 7.6 28 1-99 112,385 18 12.00 11.46-12.% 13.5 .0 29 100-499 145,450 271 11.64 11.35-12.68 61.6 4.8 30 500-999 59,654 764 11.64 10.92-13.24 17.7 33.5 31 1000 and over 274,182 4,096 9.98 9.34-10.52 75.1 6.6 32 Floating rate (thousands of dollars) 1,760,649 161 11.42 10.86-12.13 48.4 26.7 33 1-99 220,256 28 12.09 11.50-12.75 40.9 2.7 34 100-499 473,628 189 11.78 11.07-12.19 55.4 14.4 35 500-999 259,055 712 11.18 10.52-11.63 51.1 14.2 36 1000 and over 807,711 3,724 11.10 10.47-11.57 45.6 44.6 Loan rate (percent) Days Effective3 Nominal9 LOANS MADE BELOW PRIME 37 Overnight7 838,040 4,071 9.05 8.66 10.00 89.8 .0 38 One month and under 1,395,911 983 11 9.47 9.06 10.06 93.0 9.2 39 Over one month and under a year 1,371,063 192 127 9.28 8.91 10.49 69.6 15.2 40 Demand8 1,272,494 349 9.24 8.85 10.19 93.2 6.7 41 Total short term 6,877,508 393 9.28 8.89 10.20 85.9 8.7 42 Fixed rate 3,443,049 514 31 9.10 8.72 10.11 84.7 5.3 43 Floating rate 1,434,458 252 131 9.73 9.32 10.44 89.0 16.7 Months 44 Total long term 667,503 314 49 10.21 11.10 74.8 45 Fixed rate .... 222,464 216 9.50 9.10 10.25 84.4 46 Floating rate .. 445,039 407 10.57 10.10 11.52 69.9 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A79 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-11, 1990—Continued B. Loans to Farmers12 Size class of loans (thousands) Characteristic $1-9 $10-24 $25-49 $50-99 $100-249 ALL BANKS 1 Amount of loans (thousands of dollars). i 1,205,164 I 134,100 5 164,734 $ 141,636 i 139,673 S 144,669 2 Number of loans 56,179 36,759 11,447 4,212 2,179 I,056 3 Weighted average maturity (months)2 .. 13.8 8.7 12.9 14.1 15.1 19.2 4 Weighted average interest rate (percent)3 11.79 12.45 12.30 12.06 12.14 II.69 5 Standard error .37 .24 .25 .21 .18 .39 6 Interquartile range 11.07-12.47 11.96-12.92 11.63-12.75 11.63-12.75 11.57-12.69 11.05-12.47 By purpose of loan 7 Feeder livestock 11.64 12.30 12.07 12.07 12.24 11.49 8 Other livestock 12.20 12.60 12.41 12.35 12.74 12.11 9 Other current operating expenses 11.97 12.42 12.35 11.93 12.02 11.64 10 Farm machinery and equipment 12.43 12.74 12.33 12.49 11.83 11 Farm real estate 12.00 12.01 11.95 12.06 11.50 11.91 12 Other 11.30 12.36 12.25 12.17 12.27 11.67 Percentage of amount of loans 13 With floating rates 73.6 55.4 62.9 66.5 60.5 80.6 14 Made under commitment 71.6 60.9 63.5 56.9 61.3 72.9 By purpose of loan 15 Feeder livestock 25.4 7.4 10.0 13.4 21.7 19.1 16 Other livestock 5.6 10.0 6.5 2.9 8.4 11.8 17 Other current operating expenses 39.5 68.5 65.6 52.7 48.8 44.7 18 Farm machinery and equipment 3.8 8.6 7.3 11.0 1.9 19 Farm real estate 7.5 1.3 3.7 7.3 4.6 4.4 20 Other 18.2 4.2 6.8 12.8 14.7 19.3 LARGE FARM LENDERS12 1 Amount of loans (thousands of dollars). $ 688,060 I 24,324 I 40,626 5 42,369 I 55,026 I 88,939 2 Number of loans 11,923 6,114 2,743 I,241 831 591 3 Weighted average maturity (months)2 .. 9.5 8.0 10.4 10.8 9.3 9.3 4 Weighted average interest rate (percent); 11.43 12.21 12.05 II.80 11.78 11.54 5 Standard error .36 .22 .24 .12 .16 .06 6 Interquartile range5 10.75-12.13 11.57-12.75 11.46-12.68 11.25-12.36 11.31-12.19 10.92-12.00 By purpose of loan 7 Feeder livestock 11.46 12.11 12.00 11.75 11.88 11.54 8 Other livestock 11.64 12.56 12.27 12.38 12.26 12.26 9 Other current operating expenses 11.50 12.20 11.98 11.81 11.79 11.39 10 Farm machinery and equipment 11.98 12.53 12.11 11.84 11.80 11 Farm real estate 12.07 11.89 12.00 11.91 12 Other 11.03 12.17 12.34 11.71 11.42 11.48 Percentage of amount of loans 13 With floating rates 87.4 86.8 87.8 92.6 90.2 95.9 14 Made under commitment 84.0 84.7 82.0 84.4 82.7 85.8 By purpose of loan 15 Feeder livestock 33.5 12.0 14.6 25.4 24.8 27.9 16 Other livestock 3.2 4.2 5.4 2.6 3.0 5.5 17 Other current operating expenses 26.6 68.8 64.1 47.3 49.9 36.5 18 Farm machinery and equipment 1.3 2.5 3.5 4.3 2.4 19 Farm real estate 9.4 1.5 4.4 7.1 20 Other 26.1 11.0 11.0 18.4 15.6 21.9 OTHER BANKS12 1 Amount of loans (thousands of dollars). f 517,104 109,776 ( 124,108 5 99,267 I 84,647 $ 55,730 2 Number of loans 44,256 30,645 8,704 2,971 1,348 465 3 Weighted average maturity (months)2 .. 17.1 13.5 15.0 17.4 28.3 4 Weighted average interest rate (percent) 12.28 12.50 12.39 12.18 12.37 11.92 5 Standard error .06 .08 .05 .17 .06 .38 6 Interquartile range5 11.63-12.75 12.05-13.03 11.81-12.75 11.70-12.82 11.73-12.% 11.35-12.75 By purpose of loan 1 Feeder livestock 12.16 12.38 12.10 8 Other livestock 12.46 12.60 12.45 9 Other current operating expenses 12.27 12.47 12.47 11.98 11.90 10 Farm machinery and equipment 12.54 12.76 12.36 12.58 11 Farm real estate 11.81 11.93 12 Other 12.48 12.54 12.18 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables • December 1990 4.23—Continued B. Loans to Farmers12—Continued Size class of loans (thousands) Characteristic All sizes $1-9 $10-24 $25-49 $50-99 $100-249 and $ 2 o 50 v er Percentage of amount of loans 13 With floating rates 55.3 48.5 54.8 55.3 41.2 * * 14 Made under commitment 55.1 55.6 57.5 45.2 47.4 • * By purpose of loan 15 Feeder livestock 14.7 6.3 8.5 * * * * 16 Other livestock 8.9 11.3 6.9 * * * * 17 Other current operating expenses 56.6 68.4 66.1 55.0 48.0 57.7 * 18 Farm machinery and equipment 7.1 10.0 8.5 13.8 * * * 19 Farm real estate 5.0 * 4.5 * * * * 20 Other 7.8 2.7 5.5 * * * * *Fewer than 10 sample loans. 6. The most common base rate is that rate used to price the largest dollar 1. The survey of terms of bank lending to business collects data on gross loan volume of loans. Base pricing rates include the prime rate (sometimes referred to extensions made during the first full business week in the mid-month of each as a bank's "basic" or "reference" rate); the federal funds rate; domestic money quarter by a sample of 340 commercial banks of all sizes. A subsample of 250 market rates other than the federal funds rate; foreign money market rates; and banks also report loans to farmers. The sample data are blown up to estimate the other base rates not included in the foregoing classifications. lending terms at all insured commercial banks during that week. The estimated 7. Overnight loans are loans that mature on the following business day. terms of bank lending are not intended for use in collecting the terms of loans 8. Demand loans have no stated date of maturity. extended over the entire quarter or residing in the portfolios of those banks. 9. Nominal (not compounded) annual interest rates are calculated from survey Mortgage loans, purchased loans, foreign loans, and loans of less than $1,000 are data on the stated rate and other terms of the loan and weighted by loan size. excluded from the survey. 10. The prime rate reported by each bank is weighted by the volume of loans As of Dec. 31, 1989, assets of most of the large banks were at least $7.0 billion. extended and then averaged. For all insured banks total assets averaged $250 million. 11. The proportion of loans made at rates below prime may vary substantially 2. Average maturities are weighted by loan size and exclude demand loans. from the proportion of such loans outstanding in banks' portfolios. 3. Effective (compounded) annual interest rates are calculated from the stated 12. Among banks reporting loans to farmers (Table B), most "large banks" rate and other terms of the loan and weighted by loan size. (survey strata 1 to 2) had over $20 million in farm loans, and most "other banks" 4. The chances are about two out of three that the average rate shown would (survey strata 3 to 5) had farm loans below $20 million. differ by less than this amount from the average rate that would be found by a The survey of terms of bank lending to fanners now includes loans secured by complete survey of lending at all banks. farm real estate. In addition, the categories describing the purpose of farm loans 5. The interquartile range shows the interest rate range that encompasses the have now been expanded to include "purchase or improve farm real estate." In middle 50 percent of the total dollar amount of loans made. previous surveys, the purpose of such loans was reported as "other." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A79 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, August 6-10, 19901 A. Commercial and Industrial Loans Weighted Loan rate (percent) Loans MMoosstt AAmmoouunntt ooff AAvveerraaggee mmaaddee PPaarrttiiccii-- common Characteristic ( o t f h o l d o u o a s l n a la s n r d s s ) ( o t f h o d s u o iz s l e a la n r d s s ) mmaattuurriittyy22 WW av ee e iigg ra hh g ttee e dd Standard q II u nn a tt r ee t rr i -- le co u m m n e d m n e t i r t - (p pp l e o aa r tt a c ii n e oo s n nn t) pricing Days effective3 range5 (percent) ALL BANKS 1 Overnight7 14,105,344 6,834 * 9.03 .07 8.71-9.24 55.7 12.4 Fed Funds 2 One month and under 8,880,639 1,131 17 9.44 .15 8.73-9.68 88.2 13.7 Domestic 3 Fixed rate 5,882,226 1,384 18 9.28 .17 8.71-9.48 84.4 13.3 Domestic 4 Floating rate 2,998,413 833 17 9.74 .18 8.86-10.48 95.6 14.6 Domestic 5 Over one month and under a year . 11,147,077 168 135 10.14 .19 8.87-11.30 82.8 11.9 Prime 6 Fixed rate 5,560,459 202 101 9.71 .19 8.70-10.47 81.5 13.3 Other 7 Floating rate 5,586,617 144 169 10.56 .21 9.42-11.57 84.1 10.5 Prime 8 Demand8 11,352,304 195 * 10.40 .15 9.12-11.35 80.2 8.3 Prime 9 Fixed rate 2,307,754 413 * 9.41 .11 8.68-10.00 82.6 22.1 Fed Funds 10 Floating rate 9,044,550 172 * 10.66 .16 9.73-11.57 79.5 4.8 Prime 11 Total short term 45,485,364 338 49 9.72 .16 8.79-10.52 74.8 11.5 Fed Funds 12 Fixed rate (thousands of dollars) .. 27,855,783 706 27 9.25 .10 8.71-9.43 69.2 13.6 Fed Funds 13 1-24 208,602 8 119 12.21 .26 11.19-13.10 28.6 .9 Other 14 25-49 110,198 35 110 12.40 .29 11.63-13.30 34.3 .0 Prime 15 50-99 122,524 64 106 11.57 .16 10.55-12.41 37.9 .9 Prime 16 100-499 485,093 193 81 10.52 .11 9.92-11.52 48.2 3.3 Prime 17 500-999 496,049 648 74 10.00 .18 9.04-10.56 75.9 6.7 Other 18 1000 and over 26,433,318 7,452 24 9.17 .06 8.70-9.35 70.0 14.1 Fed Funds 19 Floating rate (thousands of dollars) 17,629,581 185 116 10.47 .18 9.31-11.47 83.7 8.3 Prime 20 1-24 454,671 10 159 12.10 .10 11.46-12.75 75.2 1.8 Prime 21 25-49 512,746 34 181 11.77 .05 11.07-12.31 78.4 1.2 Prime 22 50-99 848,400 67 176 11.64 .05 11.02-12.19 86.9 4.2 Prime 23 100-499 3,303,540 203 184 11.39 .06 10.52-11.91 87.2 6.4 Prime 24 500-999 1,547,820 665 170 11.06 .05 10.47-11.63 87.2 7.5 Prime 25 1000 and over 10,962,404 4,646 89 9.89 .14 8.86-10.66 82.5 9.9 Prime Months 26 Total long term 4,583,101 247 42 10.72 .20 9.73-11.63 70.7 6.9 Prime 27 Fixed rate (thousands of dollars) .. 1,282,981 160 42 10.31 .31 8.95-11.57 66.1 3.9 Other 28 1-99 115,008 17 48 12.15 .18 11.07-12.75 20.1 .1 Prime 29 100-499 165,101 185 44 11.62 .25 11.02-12.41 30.6 26.2 Other 30 500-999 47,352 661 42 10.42 .36 9.11-11.43 93.1 6.6 Other 31 1000 and over 955,521 5,135 41 9.86 .27 8.79-10.88 76.4 .3 Foreign 32 Floating rate (thousands of dollars) 3,300,120 313 42 10.88 .23 10.38-11.85 72.4 8.1 Prime 33 1-99 177,952 25 44 12.08 .11 11.35-12.68 56.4 5.0 Prime 34 100-499 529,497 218 39 11.34 .08 10.52-12.01 75.2 9.4 Prime 35 500-999 308,667 682 42 11.20 .14 10.52-11.63 73.5 9.5 Prime 36 1000 and over 2,284,004 3,483 43 10.64 .37 9.73-11.63 72.9 7.9 Prime Loan rate (percent) DDaayyss Prime rate Effective3 Nominal9 LOANS MADE BELOW PRIME" 37 Overnight7 13,446,713 8,761 * 8.95 8.57 10.00 55.0 13.0 38 One month and under 7,270,241 4,592 16 9.04 8.66 10.00 87.5 10.8 39 Over one month and under a year . 6,236,325 709 121 9.12 8.79 10.09 87.4 13.4 40 Demand8 4,348,107 1,221 * 9.02 8.72 10.07 67.4 14.3 41 Total short term 31,301,386 2,022 33 9.02 8.66 10.03 70.7 12.7 42 Fixed rate 24,658,959 2,654 23 8.99 8.63 10.01 68.5 14.5 43 Floating rate 6,642,427 1,073 85 9.12 8.77 10.09 78.9 6.1 Months 44 Total long term 1,369,561 1,159 39 9.05 8.73 10.07 70.5 7.0 45 Fixed rate .... 632,006 842 40 9.05 8.79 10.02 69.9 3.0 46 Floating rate .. 737,555 1,709 38 9.04 8.69 10.11 71.0 10.5 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Special Tables • December 1990 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, August 6-10, 1990'—Continued A. Commercial and Industrial Loans—Continued Characteristic ( AA o t f h mm o l d o oo u o a uu s l n nn a la s tt n r d oo s s ) ff ( o t AA f h o vv d s u ee o iz s rr l aa e a la gg n r ee d s s ) W mm aavv aa D e tt ee i uu a g rr rr y aa h ii s gg t tt e yy ee d 22 WW e a f v f ee e e iigg c ra t hh i g tt v ee e e dd 3 L oan S r t a e a t r e n r d o ( a r p 4 r e d r cent) q r I u a n a n t r e g t r i e - l 5 e ( c p L o u m m e m n o r a e c d a m d n e n e e t n i r s t t - ) ((pp P p l ee a a o rr r t a cc t i i n ee o c s nn n i - tt)) c p o M r r m a ic o t m i e s n 6 t o g n LARGE BANKS 1 Overnight7 12,774,027 8,107 * 9.03 .08 8.71-9.21 51.4 13.6 Fed Funds 2 One month and under 6,547,458 4,368 17 9.40 .17 8.79-9.57 87.5 11.6 Domestic 3 Fixed rate 4,208,382 5,562 17 9.34 .18 8.80-9.60 82.8 15.4 Domestic 4 Floating rate 2,339,077 3,151 16 9.51 .27 8.73-9.50 95.8 4.7 Domestic 5 Over one month and under a year . 6,873,909 1,105 107 9.72 .15 8.72-10.52 91.3 10.8 Foreign 6 Fixed rate 3,963,118 2,936 82 9.52 .17 8.69-10.06 88.1 12.7 Foreign 7 Floating rate 2,910,791 598 142 10.01 .30 8.86-11.07 95.7 8.3 Prime 8 Demand8 6,579,448 361 * 10.11 .21 8.89-11.02 71.4 9.3 Prime 9 Fixed rate 1,332,742 1,005 * 9.23 .09 8.56-9.72 78.2 25.6 Domestic 10 Floating rate 5,246,707 310 * 10.34 .22 9.11-11.08 69.7 5.1 Prime 11 Total short term 32,774,842 1,190 33 9.47 .10 8.73-9.91 71.0 11.8 Fed Funds 12 Fixed rate (thousands of dollars) .. 22,278,268 4,449 20 9.19 .10 8.71-9.38 65.4 14.5 Fed Funds 13 1-24 8,360 10 127 11.34 .40 10.52-12.00 28.1 .8 Prime 14 25-49 8,267 33 89 11.18 .45 10.68-12.00 38.3 .5 Prime 15 50-99 17,922 66 93 11.02 .14 10.48-11.50 58.2 1.0 Prime 16 100-499 156,534 238 50 10.21 .11 9.27-11.00 66.2 4.9 Prime 17 500-999 234,613 684 48 9.79 .09 8.97-10.54 75.1 9.7 Other 18 1000 and over 21,852,572 8,252 19 9.17 .10 8.71-9.35 65.4 14.7 Fed Funds 19 Floating rate (thousands of dollars) 10,496,574 466 86 10.06 .23 8.91-11.02 82.7 5.9 Prime 20 1-24 85,556 11 169 11.72 .14 11.02-12.40 84.8 .7 Prime 21 25-49 123,023 34 165 11.63 .07 11.02-12.19 89.8 1.3 Prime 22 50-99 238,072 67 157 11.51 .06 10.75-12.13 90.9 1.7 Prime 23 100-499 1,073,783 202 177 11.16 .04 10.47-11.63 91.3 3.6 Prime 24 500-999 644,368 661 172 10.89 .04 10.47-11.57 91.1 7.3 Prime 25 1000 and over 8,331,773 5,904 74 9.77 .22 8.81-10.52 80.6 6.3 Prime Months 26 Total long term 2,892,992 773 45 10.44 .22 9.32-11.42 86.1 6.7 Prime 27 Fixed rate (thousands of dollars) .. 739,598 735 44 9.63 .22 8.77-10.61 78.5 .4 Foreign 28 1-99 12,383 17 40 11.60 .24 10.75-12.40 17.4 .0 None 29 100-499 20,326 218 67 10.66 .33 9.56-12.13 76.8 8.2 None 30 500-999 32,874 703 39 10.39 .43 9.00-11.50 95.2 3.6 Other 31 1000 and over 674,015 5,213 44 9.53 .26 8.75-10.47 78.9 .0 Foreign 32 Floating rate (thousands of dollars) 2,153,395 786 46 10.71 .29 10.25-11.57 88.7 8.9 Prime 33 1-99 35,474 36 37 11.80 .14 11.02-12.25 86.3 5.5 Prime 34 100-499 243,027 227 38 11.24 .11 10.47-11.99 87.1 9.0 Prime 35 500-999 164,740 668 46 11.06 .20 10.47-11.57 89.7 11.9 Prime 36 1000 and over 1,710,154 3,901 47 10.58 .36 9.99-11.46 88.9 8.7 Prime Loan rate (percent) DDaayyss n P * ri me rat te 1 0 Effective3 Nominal9 LOANS MADE BELOW PRIME 37 Overnight7 12,169,369 9,272 8.95 8.57 10.00 50.5 14.3 38 One month and under 5,560,725 7,360 15 9.05 8.67 10.00 86.2 11.7 39 Over one month and under a year 4,663,150 3,977 97 9.05 8.71 10.00 90.4 10.2 40 Demand8 2,991,314 2,946 * 8.90 8.63 10.01 53.4 13.2 41 Total short term 25,384,557 5,965 25 8.98 8.63 10.00 66.0 12.9 42 Fixed rate 20,054,172 6,605 18 8.98 8.62 10.00 63.3 15.3 43 Floating rate 5,330,385 4,370 62 9.01 8.67 10.01 76.3 3.6 Months 44 Total long term 1,020,291 2,629 39 9.07 8.77 10.00 80.6 8.0 45 Fixed rate 483,147 2,084 39 8.86 8.64 10.00 78.6 3.2 46 Floating rate .. 537,144 3,437 39 9.26 8.89 10.01 82.3 12.2 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A79 4.23—Continued A. Commercial and Industrial Loans—Continued Weighted Loan rate (percent) Loans Most Amount of Average made Partici- common Characteristic ( o t f h o l d o u o a s l n l a a s n r d s s ) ( o t f h o d s u o iz s l e a la n r d s s ) mmaa D ttuu a rr y ii s tt yy22 WW e a f v f ee e e ii c gg r t a hh i g tt v ee e e dd 3 Standard q r II u a nn a n tt r g ee t rr e i -- l 5 e ( c p o u e m m n r e c d m n e e t n i r t t - ) (p p l e o a r t a c i n e o s n n t) p r r a ic t i e n 6 g OTHER BANKS 1 Overnight7 1,331,318 2,726 * 9.03 .11 8.73-9.31 97.6 .3 Fed Funds 2 One month and under 2,333,181 367 19 9.54 .23 8.69-10.48 90.3 19.8 Prime 3 Fixed rate 1,673,844 479 18 9.14 .29 8.58-9.34 88.5 8.0 Domestic 4 Floating rate 659,336 231 22 10.54 .18 10.47-10.52 94.9 49.7 Prime 5 Over one month and under a year .. 4,273,168 71 179 10.80 .17 9.64-11.63 69.2 13.6 Prime 6 Fixed rate 1,597,341 61 149 10.19 .27 8.71-11.52 65.3 14.8 Other 7 Floating rate 2,675,826 79 198 11.16 .17 10.47-11.85 71.5 12.9 Prime 8 Demand8 4,772,855 119 * 10.81 .17 10.24-11.63 92.2 7.1 Prime 9 Fixed rate 975,012 229 * 9.65 .16 8.98-10.24 88.6 17.3 Other 10 Floating rate 3,797,843 106 * 11.10 .15 10.47-11.85 93.2 4.4 Prime 11 Total short term 12,710,522 119 102 10.38 .14 9.03-11.57 84.7 10.9 Prime 12 Fixed rate (thousands of dollars) ... 5,577,516 162 59 9.50 .15 8.70-9.91 84.0 9.8 Other 13 1-24 200,241 7 119 12.25 .19 11.41-13.10 28.6 .9 Other 14 25-49 101,931 35 111 12.50 .13 11.74-13.30 34.0 .0 Prime 15 50-99 104,602 63 107 11.66 .15 10.88-12.41 34.4 .8 Prime 16 100-499 328,560 177 94 10.67 .17 10.38-11.52 39.7 2.6 Prime 17 500-999 261,436 619 96 10.19 .37 9.16-11.02 76.7 4.0 Other 18 1000 and over 4,580,746 5,095 49 9.14 .09 8.67-9.38 92.3 11.4 Other 19 Floating rate (thousands of dollars). 7,133,006 98 163 11.07 .13 10.47-11.66 85.2 11.8 Prime 20 1-24 369,115 10 158 12.19 .05 11.57-12.75 72.9 2.1 Prime 21 25-49 389,722 34 183 11.81 .03 11.30-12.40 74.8 1.2 Prime 22 50-99 610,328 67 179 11.69 .04 11.02-12.19 85.4 5.2 Prime 23 100-499 2,229,757 203 186 11.49 .07 10.79-12.13 85.3 7.8 Prime 24 500-999 903,453 668 169 11.17 .06 10.47-11.73 84.4 7.6 Prime 25 1000 and over 2,630,631 2,774 139 10.28 .14 9.52-11.02 88.6 21.1 Prime Months 26 Total long term 1,690,109 114 37 11.21 .29 10.47-12.19 44.3 7.3 Prime 27 Fixed rate (thousands of dollars) .. 543,383 78 39 11.24 .31 10.29-11.91 49.1 8.6 Other 28 1-99 102,625 17 49 12.22 .21 11.07-12.75 20.4 .2 Prime 29 100-499 144,775 181 41 11.75 .25 11.07-12.47 24.1 28.8 Other 30 500-999 14,478 583 49 10.50 .78 10.52-11.18 88.2 13.5 Other 31 1000 and over 281,506 4,958 34 10.67 .55 9.71-11.63 70.5 1.1 Other 32 Floating rate (thousands of dollars) 1,146,726 147 36 11.19 .37 10.52-12.28 42.0 6.6 Prime 33 1-99 142,478 24 46 12.15 .10 11.57-12.68 48.9 4.8 Prime 34 100-499 286,470 211 41 11.43 .12 11.02-12.13 65.0 9.7 Prime 35 500-999 143,927 699 38 11.36 .19 10.52-12.13 55.0 6.9 Prime 36 1000 and over 573,850 2,640 31 10.80 .67 9.73-12.68 25.5 5.5 Prime Loan rate (percent) DDaayyss Prime rate Effective3 Nominal9 LOANS MADE BELOW PRIME" 37 Overnight7 1,277,344 5,747 8.96 8.58 10.00 97.5 .0 38 One month and under 1,709,516 2,065 18 9.00 8.63 10.01 91.9 8.0 39 Over one month and under a year .... 1,573,176 206 194 9.35 9.00 10.35 78.5 22.9 40 Demand8 1,356,793 533 * 9.31 8.92 10.18 98.0 16.5 41 Total short term 5,916,829 527 74 9.16 8.78 10.14 91.0 12.2 42 Fixed rate 4,604,787 736 52 9.04 8.68 10.05 91.4 11.0 43 Floating rate 1,312,042 264 183 9.56 9.17 10.45 89.3 16.3 Months 44 Total long term 349,270 440 37 8.98 8.62 10.27 41.1 4.3 45 Fixed rate 148,859 287 40 9.65 9.25 10.09 41.8 2.0 46 Floating rate .. 200,411 728 34 8.48 8.15 10.41 40.5 6.0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Special Tables • December 1990 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, August 6-10, 1990—Continued B. Loans to Farmers12 Size class of loans (thousands) Characteristic $250 All sizes $1-9 $10-24 $25-49 $50-99 $100-249 and over ALL BANKS 1 Amount of loans (thousands of dollars) $ 1,606,333 $ 118,640 $ 144,270 $ 133,238 $ 123,367 $ 167,011 $ 919,807 2 Number of loans 51,734 34,246 9.868 3,949 1,901 1,165 605 3 Weighted average maturity (months)2 6.6 6.8 7.8 11.0 8.5 13.6 2.8 4 Weighted average interest rate (percent)3 10.95 12.56 12.41 12.20 11.89 11.80 10.05 5 Standard error ... .31 .23 .15 .34 .29 .30 .48 6 Interquartile range 9.44-12.19 12.10-12.96 1.83-12.86 11.57-12.75 11.19-12.64 11.30-12.36 8.60-11.35 By purpose of loan 7 Feeder livestock 11.49 12.82 1122..4411 1122..0022 1122..1155 1111..6699 1111..2244 8 Other livestock 12.37 13.09 12.72 12.44 12.55 12.29 11.40 9 Other current operating expenses 11.17 12.48 12.43 12.30 11.83 11.65 9.70 10 Farm machinery and equipment 12.43 12.69 12.42 12.45 * 11 Farm real estate 11.61 12.84 12.24 11.38 * * 12 Other 9.79 12.38 12.09 12.11 11.30 12.02 9.37 Percentage of amount of loans 13 With floating rates 61.6 54.3 6644..77 7755..55 6688..44 7777..55 5566..22 14 Made under commitment 84.2 59.2 63.5 70.8 70.8 74.9 %.0 By purpose of loan 15 Feeder livestock 24.6 7.2 10.3 2200..55 2277..66 2277..88 2288..66 16 Other livestock 4.3 6.4 5.6 8.2 8.5 13.4 1.0 17 Other current operating expenses 39.8 72.6 67.5 54.7 46.1 37.4 28.6 18 Farm machinery and equipment 1.7 7.1 5.9 3.1 * * * 19 Farm real estate 2.0 1.5 3.7 5.2 * * * 20 Other 27.7 5.2 6.9 8.3 14.1 16.6 40.4 LARGE FARM LENDERS12 1 Amount of loans (thousands of dollars) $ 1,070,693 $ 18,727 $ 29,076 $ 36,866 $ 47,0% $ 92,9% $ 845,933 2 Number of loans 9,880 5,055 1,996 1,071 704 618 436 3 Weighted average maturity (months) 3.7 6.2 7.7 6.8 7.1 6.5 2.7 4 Weighted average interest rate (percent)3 10.30 12.24 11.90 11.72 11.59 11.48 9.94 5 Standard error .25 .19 .07 .23 .10 .09 .34 6 Interquartile range 8.60-11.63 11.63-12.75 1.35-12.47 11.08-12.19 11.02-12.19 11.00-11.91 8.60-11.09 By purpose of loan 7 Feeder livestock 11.29 12.21 1111..8822 1111..7755 1111..6633 1111..4433 1111..2222 8 Other livestock 11.49 12.06 12.07 11.70 11.64 * 11.40 9 Other current operating expenses 10.21 12.25 11.93 11.70 11.53 11.42 9.47 10 Farm machinery and equipment 12.21 13.07 12.04 * * * * 11 Farm real estate 11.56 12.30 11.35 * * * * 12 Other 9.49 12.12 11.88 11.72 11.59 11.62 9.25 Percentage of amount of loans 13 With floating rates 60.3 87.9 8899..99 9922..44 8888..22 9900..44 5522..44 14 Made under commitment 93.5 83.2 83.7 89.5 81.8 86.5 95.7 By purpose of loan 15 Feeder livestock 2288..77 8.6 1133..22 2244..55 3311..99 3311..22 2299..44 16 Other livestock 1.7 3.8 2.5 3.0 3.0 1.1 17 Other current operating expenses 31.2 70.5 59.5 56.0 42.9 45.1 26.0 18 Farm machinery and equipment .3 2.1 3.1 * * * * 19 Farm real estate 1.3 1.2 1.5 * * * * 20 Other 36.9 13.9 20.1 13.0 20.8 17.4 42.1 OTHER BANKS12 1 Amount of loans (thousands of dollars) $ 535,640 $ 99,913 $ 115,194 $ 96,372 $ 76,271 $ 74,016 * 2 Number of loans 41,854 29,191 7,872 2,878 1,197 547 * 3 Weighted average maturity (months)2 10.2 6.9 7.8 12.1 9.1 20.9 4 Weighted average interest rate (percent)3 12.24 12.62 12.54 12.38 12.08 12.20 * 5 Standard error .17 .12 .12 .24 .26 .28 * 6 Interquartile range 11.63-12.75 12.18-13.03 12.04-13.03 11.63-12.97 11.40-12.87 11.75-12.48 By purpose of loan 1 Feeder livestock 1122..2233 1122..9977 1122..6622 1122..1166 1122..5577 * * 8 Other livestock 12.68 13.20 12.78 12.52 * * 9 Other current operating expenses 12.21 12.52 12.54 12.54 12.00 * * 10 Farm machinery and equipment 12.46 12.67 12.46 * * * * 11 Farm real estate 11.65 12.92 12.33 * * 12 Other 12.16 12.57 * * For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A81 4.23—Continued B. Loans to Farmers12—Continued Size class of loans (thousands) Characteristic All sizes $1-9 $10-24 $25-49 $50-99 $100-249 and $ 2 o 50 v er Percentage of amount of loans 13 With floating rates 64.2 48.0 58.3 69.1 56.2 61.3 * 14 Made under commitment 65.5 54.7 58.5 63.6 63.9 60.4 * By purpose of loan 15 Feeder livestock 16.3 7.0 9.6 18.9 24.9 * * 16 Other livestock 9.5 6.8 6.4 10.2 * * 17 Other current operating expenses 57.1 73.0 69.6 54.2 48.1 * * 18 Farm machinery and equipment 4.6 8.1 6.7 * * * 19 Farm real estate 3.3 1.5 4.3 * * * * 20 Other 9.2 3.6 * * # * * *Fewer than 10 sample loans. 1. The survey of terms of bank lending to business collects data on gross loan volume of loans. Base pricing rates include the prime rate (sometimes referred to extensions made during the first full business week in the mid-month of each as a bank's "basic" or "reference" rate); the federal funds rate; domestic money quarter by a sample of 340 commercial banks of all sizes. A sample of 250 banks market rates other than the federal funds rate; foreign money market rates; and reports loans to farmers. The sample data are blown up to estimate the lending other base rates not included in the foregoing classifications. terms at all insured commercial banks during that week. The estimated terms of 7. Overnight loans are loans that mature on the following business day. bank lending are not intended for use in collecting the terms of loans extended 8. Demand loans have no stated date of maturity. over the entire quarter or residing in the portfolios of those banks. Mortgage 9. Nominal (not compounded) annual interest rates are calculated from survey loans, purchased loans, foreign loans, and loans of less than $1,000 are excluded data on the stated rate and other terms of the loan and weighted by loan size. from the survey. 10. The prime rate reported by each bank is weighted by the volume of loans As of Dec. 31, 1989, assets of most of the large banks were at least $7.0 billion. extended and then averaged. For all insured banks total assets averaged $250 million. 11. The proportion of loans made at rates below prime may vary substantially 2. Average maturities are weighted by loan size and exclude demand loans. from the proportion of such loans outstanding in banks' portfolios. 3. Effective (compounded) annual interest rates are calculated from the stated 12. Among banks reporting loans to farmers (Table B), most "large banks" rate and other terms of the loan and weighted by loan size. (survey strata 1 to 2) had over $20 million in farm loans, and most "other banks" 4. The chances are about two out of three that the average rate shown would (survey strata 3 to 5) had farm loans below $20 million. differ by less than this amount from the average rate that would be found by a The survey of terms of bank lending to farmers now includes loans secured by complete survey of lending at all banks. farm real estate. In addition, the categories describing the purpose of farm loans 5. The interquartile range shows the interest rate range that encompasses the have now been expanded to include "purchase or improve farm real estate." In middle 50 percent of the total dollar amount of loans made. previous surveys, the purpose of such loans was reported as "other." 6. The most common base rate is that rate used to price the largest dollar Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Special Tables • December 1990 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, June 30, 19901 Millions of dollars All states2 New York California Illinois IItteemm in I T c B l o u F t d a ' i s l n g I o B nl F y ' s in I T c B l o u F t d a ' i s l n g I o B n F ly 's 3 in I T c B l o u F t d a ' i s l n g I o B n F ly ' s in I T c B l o u F t d a ' i s l n g I o B n F ly 's 3 1 Total assets4 574,238 249,563 419,154 198,685 85,865 27,038 40,913 13,698 2 Claims on nonrelated parties 508,256 195,106 368,595 155,971 77,782 20,273 40,537 13,150 3 Cash and balances due from depository institutions 132,638 109,927 111111,,220022 9911,,225500 88,,774488 88,,001199 1100,,772233 99,,338833 4 Cash items in process of collection and unposted debits 1,222 0 1,169 0 27 0 4 0 5 Currency and coin (U.S. and foreign) 23 n.a. 17 n.a. 1 n.a. 1 n.a. 6 Balances with depository institutions in United States .. 66,524 46,603 5555,,440055 3377,,882222 44,,775588 44,,111177 55,,668888 44,,442222 7 U.S. branches and agencies of other foreign banks (including their IBFs) 58,381 43,748 4488,,881111 3355,,331122 44,,118822 33,,999955 44,,993300 44,,222266 8 Other depository institutions in United States (including their IBFs) 8,142 2,856 66,,559944 22,,551100 575 122 758 197 y Balances with banks in foreign countries and with foreign central banks 64,042 63,323 53,957 53,428 3,905 3,902 4,980 4,961 10 Foreign branches of U.S. banks 1,850 1,778 11,,770077 11,,663366 74 74 6600 6600 li Other banks in foreign countries and foreign central banks 62,192 61,545 52,250 51,792 3,831 3,828 4,921 4,901 12 Balances with Federal Reserve Banks 828 n.a. 654 n.a. 57 n.a. 49 n.a. 13 Total securities and loans 310,651 74,712 205,963 55,878 59,148 11,191 27,227 3,372 14 Total securities, book value 43,660 13,523 38,174 11,630 3,634 1,273 1,208 537 li U.S. Treasury 8,917 n.a. 8,640 n.a. 55 n.a. 161 n.a. 16 Obligations of U.S. government agencies and corporations 6,001 n.a. 5,764 n.a. 142 n.a. 22 n.a. 17 Other bonds, notes, debentures and corporate stock (including state and local securities) 28,742 13,523 23,770 11,630 3,437 1,273 1,025 537 18 Federal funds sold and securities purchased under agreements to resell 15,226 3,693 13,843 3,481 752 143 215 0 19 U.S. branches and agencies of other foreign banks 9,919 2,414 9,077 2,349 533 57 162 0 20 Commercial banks in United States 2,053 33 1,747 33 95 0 13 0 21 Other 3,253 1,245 3,018 1,099 124 86 41 0 22 Total loans, gross 267,176 61,227 167,915 44,282 55,560 9,922 26,028 2,835 23 Less: Unearned income on loans 186 38 125 35 46 3 10 0 24 Equals: Loans, net 266,991 61,189 167,790 44,248 55,514 9,918 26,018 2,835 Total loans, gross, by category 25 Real estate loans 38,720 368 20,334 191 11,753 136 4,155 35 26 Loans to depository institutions 60,215 31,346 41,433 19,579 12,219 7,543 4,396 2,483 27 Commercial banks in United States (including IBFs).... 37,725 10,891 25,288 5,192 8,750 4,182 3,141 1,243 28 U.S. branches and agencies of other foreign banks ... 32,224 10,276 20,793 4,738 8,307 4,073 2,623 1,208 29 Other commercial banks in United States 5,501 615 44,,449955 453 443 109 551188 35 30 Other depository institutions in United States (including IBFs) 157 0 92 0 64 0 0 0 31 Banks in foreign countries 22,333 20,455 16,052 14,388 3,405 3,361 1,255 1,241 32 Foreign branches of U.S. banks 456 455 359 359 67 67 24 24 33 Other banks in foreign countries 21,877 19,999 15,693 14,029 3,338 3,294 1,231 1,217 34 Other financial institutions 7,545 891 5,470 726 977 125 609 27 35 Commercial and industrial loans 138,314 14,536 82,693 12,166 29,006 1,693 16,382 220 36 U.S. addressees (domicile) 119,142 200 68,020 85 26,230 105 15,989 10 37 Non-U.S. addressees (domicile) 19,173 14,335 14,673 12,081 2,776 1,588 393 210 38 Acceptances of other banks 1,985 52 1,388 52 389 0 157 0 39 U.S. banks 852 0 729 0 64 0 12 0 40 Foreign banks 1,133 52 660 52 324 0 145 0 41 Loans to foreign governments and official institutions (including foreign central banks) 14,840 13,691 1122,,116611 1111,,224400 501 425 8833 6699 42 Loans for purchasing or carrying securities (secured and unsecured) 2,870 5 2,240 5 630 0 0 0 43 All other loans 2,687 338 2,196 322 85 0 246 0 44 All other assets 49,742 6,775 37,587 5,362 9,133 919 2,373 395 45 Customers' liability on acceptances outstanding 28,567 n.a. 20,883 n.a. 6,703 n.a. 762 n.a. 46 U.S. addressees (domicile) 19,487 n.a. 12,726 n.a. 5,974 n.a. 760 n.a. 47 Non-U.S. addressees (domicile) 9,080 n.a. 88,,115588 n.a. 729 n.a. 2 n.a. 48 Other assets including other claims on nonrelated parties 21,175 6,775 16,704 5,362 2,431 919 1,611 395 49 Net due from related depository institutions5 65,982 54,457 5500,,555599 4422,,771144 88,,008833 66,,776655 337766 554488 50 Net due from head office and other related depository institutions 65,982 n.a. 5500,,555599 n.a. 88,,008833 n.a. 337766 nn..aa.. 51 Net due from establishing entity, head offices, and other related depository institutions5 n.a. 54,457 n.a. 42,714 n.a. 6,765 n.a. 548 52 Total liabilities4 574,238 249,563 419,154 198,685 85,865 27,038 40,913 13,698 53 Liabilities to nonrelated parties 509,011 216,778 387,794 177,610 77,675 23,097 27,439 8,690 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A83 4.30—Continued Millions of dollars All states2 New York California Illinois IItteemm ex I T c B l o u F t d a 's i l n g I o B n F ly 's 3 ex I T c B l o u F t d a 's i l n g I o B n F ly 's 3 ex I T c B l o u F t d a 's i l n g I o B n F ly 's 3 ex I T c B l o u F t d a 's i l n g I o B n F ly 's 3 54 Total deposits and credit balances 76,900 167,300 64,086 147,300 3,790 10,829 3,034 2,586 55 Individuals, partnerships, and corporations 60,136 15,663 49,144 9,647 2,8% 445 2,374 43 56 U.S. addressees (domicile) 46,065 302 40,615 286 1,042 15 1,521 1 57 Non-U.S. addressees (domicile) 14,071 15,361 8,529 9,361 1,853 430 853 42 58 Commercial banks in United States (including IBFs)... 11,460 50,935 9,922 44,981 813 4, (08 644 748 59 U.S. branches and agencies of other foreign banks .. 5,319 45,607 4,949 40,575 6 4,164 357 598 60 Other commercial banks in United States 6,141 5,327 4,973 4,406 807 643 288 150 61 Banks in foreign countries 2,046 89,253 1,924 81,712 11 5,264 2 1,775 62 Foreign branches of U.S. banks 183 6,579 183 5,979 0 349 0 234 63 Other banks in foreign countries 1,863 82,673 1,741 75,733 11 4,915 2 1,541 64 Foreign governments and official institutions (including foreign central banks) 946 11,402 878 10,912 18 313 2 21 65 All other deposits and credit balances 1,773 48 1,739 48 22 0 1 0 66 Certified and official checks 539 n. a. 479 n.a. 31 n.a. 10 n.a. 67 Transaction accounts and credit balances (excluding IBFs) 7,562 6,490 268 222 68 Individuals, partnerships, and corporations 4,730 3,837 221 .08 69 U.S. addressees (domicile) 3,324 2,817 187 204 70 Non-U.S. addressees (domicile) 1,406 1,021 34 3 71 Commercial banks in United States (including IBFs)... 266 257 1 0 72 U.S. branches and agencies of other foreign banks .. 82 81 0 0 73 Other commercial banks in United States 184 n.a. 176 n.a. 1 n. a. 0 n.a. 74 Banks in foreign countries 1,327 1,252 11 2 75 Foreign branches of U.S. banks 23 23 0 0 76 Other banks in foreign countries 1,304 1,229 11 2 77 Foreign governments and official institutions (including foreign central banks) 313 288 2 1 78 AH other deposits and credit balances 387 376 3 1 79 Certified and official checks 539 479 31 10 80 Demand deposits (included in transaction accounts and credit balances) 6,581 5,753 191 201 81 Individuals, partnerships, and corporations 4,186 3,525 148 187 82 U.S. addressees (domicile) 3,048 2,655 125 184 83 Non-U.S. addressees (domicile) 1,138 870 22 3 84 Commercial banks in United States (including lBF)s... 117 >08 0 0 85 U.S. branches and agencies of other foreign banks .. 14 13 0 0 86 Other commercial banks in United States 103 n.a. 95 n a. 0 n. a. 0 n.a. 87 Banks in foreign countries 1,126 1,057 10 2 88 Foreign branches of U.S. banks 7 7 0 0 89 Other banks in foreign countries 1,118 1,050 10 2 90 Foreign governments and official institutions (including foreign central banks) 258 233 2 1 91 All other deposits and credit balances 356 350 1 1 92 Certified and official checks 539 479 31 10 93 Non-transaction accounts (including MMDAs, excluding IBFs) 69,338 57,5% 3,522 2,812 94 Individuals, partnerships, and corporations 55,406 45,307 2,674 2,166 95 U.S. addressees (domicile) 42,741 37,798 855 1,317 % Non-U.S. addressees (domicile) 12,665 7,509 1,819 849 97 Commercial banks in United States (including IBFs)... 11,194 9,665 812 644 98 U.S. branches and agencies of other foreign banks .. 5,237 4,868 6 357 99 Other commercial banks in United States 5,957 n.a. 4,797 n.a. 807 n.a. 288 n.a. 100 Banks in foreign countries 719 671 0 0 101 Foreign branches of U.S. banks 160 160 0 0 102 Other banks in foreign countries 559 512 0 0 103 Foreign governments and official institutions (including foreign central banks) 633 590 16 1 104 All other deposits and credit balances 1,385 1,362 19 1 105 IBF deposit liabilities 167,300 147,300 10,829 2,586 106 Individuals, partnerships, and corporations 15,663 9,647 445 43 107 U.S. addressees (domicile) 302 286 15 1 108 Non-U.S. addressees (domicile) 15,361 9,361 430 42 109 Commercial banks in United States (including IBFs)... 50,935 44,981 4,808 748 110 U.S. branches and agencies of other foreign banks .. 45,607 40,575 4,164 598 111 Other commercial banks in United States n. a. 5,327 n.a. 4,406 n.a. 643 n.a. 150 112 Banks in foreign countries 89,253 81,712 5,264 1,775 113 Foreign branches of U.S. banks 6,579 5,979 349 234 114 Other banks in foreign countries 82,673 75,733 4,915 1,541 115 Foreign governments and official institutions (including foreign central banks) 11,402 10,912 313 21 116 All other deposits and credit balances 48 48 0 0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Special Tables • December 1990 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, June 30, 1990'—Continued Millions of dollars All states2 New York California Illinois IItteemm in I T c B l o u F t d a ' i s l n g I o B nl F y ' s in I T c B l o u F t d a ' i s l n g I o B n F ly 's 3 in I c T B l o u F t d a ' i s l n g I o B n F ly 's 3 in I c T B l o u F t d a ' i s l n g I o B n F ly ' s 117 Federal funds purchased and securities sold under agreements to repurchase 77,617 5,932 55,542 4,360 14,390 1,095 6,757 441 118 U.S. branches and agencies of other foreign banks .... 15,816 1,806 9,972 864 3,976 634 1,822 309 119 Other commercial banks in United States 30,990 231 19,971 166 6,746 50 3,685 15 120 Other 30,811 3,895 25,599 3,330 3,668 412 1,249 118 121 Other borrowed money 133,500 37,770 79,762 21,252 38,926 10,446 12,927 5,400 12.2 Owed to nonrelated commercial banks in United States (including IBFs) 76,357 13,658 41,537 4,9% 26,063 5,943 7,421 2,160 123 Owed to U.S. offices of nonrelated U.S. banks 31,851 2,290 17,056 887 10,616 950 3,575 212 124 Owed to U.S. branches and agencies of nonrelated foreign banks 44,506 11,368 24,481 4,109 15,447 4,993 3,846 1,949 125 Owed to nonrelated banks in foreign countries 22,571 22,031 14,735 14,271 4,472 4,408 3,247 3,239 126 Owed to foreign branches of nonrelated U.S. banks ... 1,946 1,897 1,020 971 654 654 212 212 127 Owed to foreign offices of nonrelated foreign banks.... 20,625 20,135 13,715 13,299 3,818 3,755 3,035 3,027 128 Owed to others 34,572 2,080 23,490 1,985 8,392 95 2,258 0 129 All other liabilities 53,694 5,777 41,104 4,698 9,740 727 2,134 263 130 Branch or agency liability on acceptances executed and outstanding 34,543 n a. 25,943 n. a. 7,341 n a. 821 n.a. 131 Other liabilities to nonrelated parties 19,151 5,777 15,161 4, 698 2,399 727 1,314 263 132 Net due to related depository institutions5 65,227 32,785 31,360 21,075 8,190 3,941 13,474 5,008 133 Net due to head office and other related depository institutions 65,227 n a. 31,360 n.a. 8,190 n a. 13,474 n.a. 134 Net due to establishing entity, head office, and other related depository institutions n.a. 32,785 n.a. 21,075 n.a. 3,941 n.a. 5,008 MEMO 135 Non-interest bearing balances with commercial banks in United States 1,734 14 1,482 14 103 0 77 0 136 Holding of commercial paper included in total loans 1,215 951 223 37 137 Holding of own acceptances included in commercial and industrial loans 2,619 1,951 402 103 138 Commercial and industrial loans with remaining maturity of one year or less 74,057 42,967 16,316 8,929 139 Predetermined interest rates 42,437 n.a. 22,743 n.a. 10,822 n. a. 5,240 n.a. 140 Floating interest rates 31,621 20,223 5,493 3,689 141 Commercial and industrial loans with remaining maturity of more than one 64,257 39,726 12,690 7,453 142 Predetermined interest rates 21,359 13,193 4,064 3,170 143 Floating interest rates 42,897 26,533 8,626 4,283 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A85 4.30—Continued Millions of dollars All states2 New York California Illinois IItteemm ex T c IB l o u F t d a s i l n g o IB nl F y s ex T c IB l o u t F d a s i l n g o IB nl F y s ex T c IB l o u F t d a s i l n g o IB nl F y s ex T c IB l o u F t d a s i l n g o IB nl F y s 111144444444 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss ooooffff nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnnaaaallll aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss 84,228 t 73,012 1 3,897 t 2,802 t 111144445555 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 48,570 40,851 2,510 1,360 111144446666 OOOOtttthhhheeeerrrr ttttiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 15,262 n.a. 13,166 719 n.a. 1,224 n.a. 111144447777 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee \ n.a. \ * wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss ........ 20,397 18,995 \ 669 218 All states2 New York California Illinois in T c I l B o u t F d a s i l n g o IB nl F y s in T c I l B o u t F d a s i l n g o IB nl F y s inc T I l B o u F t d a s i l n g o IB nl F y s inc T I l B o u F t d a s i l n g o IB nl F y s 111144448888 MMMMaaaarrrrkkkkeeeetttt vvvvaaaalllluuuueeee ooooffff sssseeeeccccuuuurrrriiiittttiiiieeeessss hhhheeeelllldddd 41,943 13,769 36,293 11,919 3,444 1,232 1,600 536 111144449999 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 80,344 n.a. 47,082 n.a. 25,242 n.a. 6,778 n.a. 111155550000 NNNNuuuummmmbbbbeeeerrrr ooooffff rrrreeeeppppoooorrrrttttssss ffffiiiilllleeeedddd6666 555 0 254 0 131 0 54 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, that no IBF data re reported for that item, either because the item is not an eligible "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign IBF asset or liability or because that level of detail is not reported for IBFs. From Banks." Details may not add to totals because of rounding. This form was first December 1981 through September 1985, IBF data were included in all applicable used for reporting data as of June 30, 1980, and was revised as of December 31, items reported. 1985. From November 1972 through May 1980, U.S. branches and agencies of 4. Total assets and total liabilities include net balances, if any, due from or due foreign banks had filed a monthly FR 886a report. Aggregate data from that report to related banking institutions in the United States and in foreign countries (see were available through the Federal Reserve statistical release G. 11, last issued on footnote 5). On the former monthly branch and agencyu report, available through July 10, 1980. Data in this table and in the G. 11 tables are not strictly comparable the G.ll statistical release, gross balances were included in total assets and total because of differences in reporting panels and in definitions of balance sheet liabilities. Therefopre, total asset and total liability figures in this table are not items. comparable to those in the G.ll tables. 2. Includes the District of Columbia. 5. "Related banking institutions" includes the foreign head office and other 3. Effective December 1981, the Federal Reserve Board amended Regulations U.S. and foreign branches and agencies of the bank, the bank's parent holding D and Q to permit banking offices located in the United States to operate company, and majority-owned banking subsidiaries of the bank and of its parent International Banking Facilities (IBFs). As of December 31, 1985 data for IBFs holding company (including subsidiaries owned both directly and indirectly). are reported in a separate column. These data are either included in or excluded 6. In some cases two or more offices of a foreign bank within the same from the total columns as indicated in the headings. The notation "n.a." indicates metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 Federal Reserve Board of Governors ALAN GREENSPAN, Chairman MARTHA R. SEGER 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. SIEGMAN, Senior Associate Director DIANE E. WERNEKE, Special Assistant to the Board DAVID H. HOWARD, Deputy Associate Director ROBERT F. GEMMILL, Staff Adviser DONALD B. ADAMS, Assistant Director LEGAL DIVISION DALE W. HENDERSON, 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 OFFICE OF THE SECRETARY EDWARD C. ETTIN, Deputy Director THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director WILLIAM W. WILES, Secretary DAVID J. STOCKTON, Associate Director JENNIFER J. JOHNSON, Associate Secretary MARTHA BETHEA, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary PETER A. TINSLEY, Deputy Associate Director MYRON L. KWAST, Assistant Director DIVISION OF CONSUMER PATRICK M. PARKINSON, Assistant Director AND COMMUNITY AFFAIRS MARTHA S. SCANLON, Assistant Director JOYCE K. ZICKLER, Assistant Director LEVON H. GARABEDIAN, Assistant Director GRIFFITH L. GARWOOD, Director (Administration) GLENN E. LONEY, Assistant Director ELLEN MALAND, Assistant Director DOLORES S. SMITH, Assistant Director DIVISION OF MONETARY AFFAIRS DIVISION OF BANKING DONALD L. KOHN, Director SUPERVISION AND REGULATION DAVID E. LINDSEY, Deputy Director BRIAN F. MADIGAN, Assistant Director RICHARD D. PORTER, Assistant Director WILLIAM TAYLOR, Staff Director NORMAND R.V. BERNARD, Special Assistant to the Board DON E. KLINE, Associate Director FREDERICK M. STRUBLE, Associate Director WILLIAM A. RYBACK, Deputy Associate Director OFFICE OF THE INSPECTOR GENERAL STEPHEN C. SCHEMERING, Deputy Associate Director RICHARD SPILLENKOTHEN, Deputy Associate Director HERBERT A. BIERN, Assistant Director BRENT L. BOWEN, Inspector General JOE M. CLEAVER, Assistant Director BARRY R. SNYDER, Assistant Inspector General 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

A87 and Official Staff EDWARD W. KELLEY, JR. DAVID W. MULLINS, JR. JOHN P. LA WARE OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES S. DAVID FROST, Staff Director WILLIAM SCHNEIDER, Special Assignment: Project THEODORE E. ALLISON, Staff Director Director, National Information Center PORTIA W. THOMPSON, Equal Employment Opportunity DIVISION OF FEDERAL RESERVE Programs Officer BANK OPERATIONS DIVISION OF HUMAN RESOURCES MANAGEMENT CLYDE H. FARNSWORTH, JR., Director DAVID L. ROBINSON, Associate Director DAVID L. SHANNON, Director BRUCE J. SUMMERS, Associate Director JOHN R. WEIS, Associate Director CHARLES W. BENNETT, Assistant Director ANTHONY V. DIGIOIA, Assistant Director JACK DENNIS, JR., Assistant Director JOSEPH H. HAYES, JR., Assistant Director EARL G. HAMILTON, Assistant Director FRED HOROWITZ, 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 MARIANNE M. EMERSON, Assistant Director EDWARD T. MULRENIN, Assistant Director for Special Projects 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 ROBERT J. ZEMEL, Associate Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director RICHARD C. STEVENS, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A88 Federal Reserve Bulletin • December 1990 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL W. LEE HOSKINS DAVID W. MULLINS, JR. EDWARD G. BOEHNE EDWARD W. KELLEY, JR. MARTHA R. SEGER ROBERT H. BOYKIN JOHN P. LA WARE GARY H. STERN ALTERNATE MEMBERS ROBERT P. BLACK SILAS KEEHN JAMES H. OLTMAN ROBERT P. FORRESTAL ROBERT T. PARRY STAFF DONALD L. KOHN, Secretary and Economist RICHARD W. LANG, Associate Economist NORMAND R.V. BERNARD, Assistant Secretary DAVID E. LINDSEY, Associate Economist GARY P. GILLUM, Deputy Assistant Secretary LARRY J. PROMISEL, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel ARTHUR J. ROLNICK, Associate Economist ERNEST T. PATRIKIS, Deputy General Counsel HARVEY ROSENBLUM, Associate Economist MICHAEL J. PRELL, Economist CHARLES J. SIEGMAN, Associate Economist EDWIN M. TRUMAN, Economist THOMAS D. SIMPSON, Associate Economist JOHN M. DAVIS, Associate Economist DAVID J. STOCKTON, 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 THOMAS H. O'BRIEN, President PAUL HAZEN, Vice President IRA STEPANIAN, First District B. KENNETH WEST, Seventh District WILLARD C. BUTCHER, Second District DAN W. MITCHELL, Eighth District TERRENCE A. LARSEN, Third District LLOYD P. JOHNSON, Ninth District THOMAS H. O'BRIEN, Fourth District JORDAN L. HAINES, Tenth District FREDERICK DEANE, JR., Fifth District RONALD G. STEINHART, Eleventh District VACANCY, 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

A89 and Advisory Councils CONSUMER ADVISORY COUNCIL WILLIAM E. ODOM, Dearborn, Michigan, Chairman JAMES W. HEAD, Berkeley, California, Vice Chairman GEORGE H. BRAASCH, Oakbrook, Illinois KATHLEEN E. KEEST, Boston, Massachusetts BETTY TOM CHU, Arcadia, California A.J. (JACK) KING, Kalispell, Montana CLIFF E. COOK, Tacoma, Washington COLLEEN D. MCCARTHY, Kansas City, Missouri JERRY D. CRAFT, Atlanta, Georgia MICHELLE S. MEIER, Washington, D.C. DONALD C. DAY, Boston, Massachusetts LINDA K. PAGE, Worthington, Ohio R.B. (JOE) DEAN, JR., Columbia, South Carolina BERNARD F. PARKER, JR., Detroit, Michigan WILLIAM C. DUNKELBERG, Philadelphia, Pennsylvania SANDRA PHILLIPS, Pittsburgh, Pennsylvania JAMES FLETCHER, Chicago, Illinois VINCENT P. QUAYLE, Baltimore, Maryland GEORGE C. GALSTER, Wooster, Ohio CLIFFORD N. ROSENTHAL, New York, New York E. THOMAS GARMAN, Blacksburg, Virginia ALAN M. SILBERSTEIN, New York, New York DEBORAH B. GOLDBERG, Washington, D.C. RALPH E. SPURGIN, Columbus, Ohio MICHAEL M. GREENFIELD, St. Louis, Missouri NANCY HARVEY STEORTS, Dallas, Texas ROBERT A. HESS, Washington, D.C. DAVID P. WARD, Chester, New Jersey BARBARA KAUFMAN, San Francisco, California LAWRENCE WINTHROP, Portland, Oregon THRIFT INSTITUTIONS ADVISORY COUNCIL DONALD B. SHACKELFORD, Columbus, Ohio, President MARION O. SANDLER, Oakland, California, Vice President CHARLOTTE CHAMBERLAIN, LOS Angeles, California ELLIOT K. KNUTSON, Seattle, Washington DAVID L. HATFIELD, Kalamazoo, Michigan JOHN WM. LAISLE, Oklahoma City, Oklahoma LYNN W. HODGE, Greenwood, South Carolina PHILIP E. LAMB, Springfield, Massachusetts ADAM A. JAHNS, Chicago, Illinois CHARLES B. STUZIN, Miami, Florida H.C. KLEIN, Jacksonville, Arkansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ASK) Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SER- Each Handbook, $90.00 per year. VICES, MS-138, Board of Governors of the Federal Reserve THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A System, Washington, D.C. 20551 or telephone (202) 452-3244 MULTICOUNTRY MODEL, May 1984. 590 pp. $14.50 each. or FAX (202) 452-3102. When a charge is indicated, payment WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. should accompany request and be made payable to the Board INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. of Governors of the Federal Reserve System. Payment from 440 pp. $9.00 each. foreign residents should be drawn on a U.S. bank. FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. December 1986. 264 pp. $10.00 each. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL TIONS. 1984. 120 pp. ANALYSIS AND POLICY ISSUES. August 1990. 608 pp. ANNUAL REPORT. $25.00 each. ANNUAL REPORT: BUDGET REVIEW, 1988-89. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 each in the United States, its possessions, Canada, and CONSUMER EDUCATION PAMPHLETS Mexico. Elsewhere, $35.00 per year or $3.00 each. Short pamphlets suitable for classroom use. Multiple copies BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint are available without charge. of Part I only) 1976. 682 pp. $5.00. ANNUAL STATISTICAL DIGEST Consumer Handbook on Adjustable Rate Mortgages 1974-78. 1980. 305 pp. $10.00 per copy. Consumer Handbook to Credit Protection Laws 1981. 1982. 239 pp. $ 6.50 per copy. Federal Reserve Glossary 1982. 1983. 266 pp. $ 7.50 per copy. A Guide to Business Credit for Women, Minorities, and 1983. 1984. 264 pp. $11.50 per copy. Small Businesses 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 Home Mortgages: Understanding the Process and Your through August 1988. 608 pp. $10.00. Rights REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- Making Deposits: When Will Your Money Be Available? ERAL RESERVE SYSTEM. When Your Home is on the Line: What You Should Know ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— About Home Equity Lines of Credit 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. INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; Short pamphlets on regulatory compliance, primarily suit- 10 or more to one address, $1.25 each. able for banks, bank holding companies, and creditors. FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updated at least monthly. (Requests must be prepaid.) Limit of 50 copies Consumer and Community Affairs Handbook. $75.00 per year. The Board of Directors' Opportunities in Community Rein- Monetary Policy and Reserve Requirements Handbook. vestment $75.00 per year. The Board of Directors' Role in Consumer Law Compliance Securities Credit Transactions Handbook. $75.00 per year. Combined Construction/Permanent Loan Disclosure and The Payment System Handbook. $75.00 per year. Regulation Z Federal Reserve Regulatory Service. 3 vols. (Contains all Community Development Corporations and the Federal Rethree Handbooks plus substantial additional material.) serve $200.00 per year. Construction Loan Disclosures and Regulation Z Rates for subscribers outside the United States are as Finance Charges Under Regulation Z follows and include additional air mail costs: How to Determine the Credit Needs of Your Community Federal Reserve Regulatory Service, $250.00 per year. Regulation Z: The Right of Rescission Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A91 The Right to Financial Privacy Act 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANK- Signature Rules in Community Property States: Regulation B ING MARKETS, by James V. Houpt. May 1988. 47 pp. Signature Rules: Regulation B 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR Timing Requirements for Adverse Action Notices: Regula- THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. tion B Porter, and David H. Small. April 1989. 28 pp. What An Adverse Action Notice Must Contain: Regulation B 158. THE ADEQUACY AND CONSISTENCY OF MARGIN RE- Understanding Prepaid Finance Charges: Regulation Z QUIREMENTS IN THE MARKETS FOR STOCKS AND DERIV- ATIVE PRODUCTS, by Mark J. Warshawsky with the assistance of Dietrich Earnhart. September 1989. 23 pp. STAFF STUDIES: Summaries Only Printed in the 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUB- Bulletin SIDIARIES OF BANK HOLDING COMPANIES, by Nellie Liang and Donald Savage. February 1990. 12 pp. Studies and papers on economic and financial subjects that are of general interest. Requests to obtain single copies of 160. BANKING MARKETS AND THE USE OF FINANCIAL SERthe full text or to be added to the mailing list for the series VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. Septemmay be sent to Publications Services. ber 1990. 35 pp. Staff Studies 114-145 are out of print. 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF REPRINTS OF Bulletin ARTICLES BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, by Thomas F. Brady. November 1985. 25 pp. Most of the articles reprinted do not exceed 12 pages. 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) IN- DEXES OF THE MONETARY AGGREGATES, by Helen T. Limit of 10 copies Farr and Deborah Johnson. December 1985. 42 pp. Recent Developments in the Bankers Acceptance Market. 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF THE 1/86. ECONOMIC RECOVERY TAX ACT: SOME SIMULATION The Use of Cash and Transaction Accounts by American RESULTS, by Flint Brayton and Peter B. Clark. Decem- Families. 2/86. ber 1985. 17 pp. Financial Characteristics of High-Income Families. 3/86. 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN Prices, Profit Margins, and Exchange Rates. 6/86. BANKING BEFORE AND AFTER ACQUISITION, by Stephen Agricultural Banks under Stress. 7/86. A. Rhoades. April 1986. 32 pp. Foreign Lending by Banks: A Guide to International and 150. STATISTICAL COST ACCOUNTING MODELS IN BANKING: U.S. Statistics. 10/86. A REEXAMINATION AND AN APPLICATION, by John T. Recent Developments in Corporate Finance. 11/86. Rose and John D. Wolken. May 1986. 13 pp. Measuring the Foreign-Exchange Value of the Dollar. 6/87. 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRIC- Changes in Consumer Installment Debt: Evidence from the ING FROM 1983 THROUGH 1985, by Patrick I. Mahoney, 1983 and 1986 Surveys of Consumer Finances. 10/87. Alice P. White, Paul F. O'Brien, and Mary M. Home Equity Lines of Credit. 6/88. McLaughlin. January 1987. 30 pp. Mutual Recognition: Integration of the Financial Sector in the 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A European Community. 9/89. REVIEW OF THE LITERATURE, by Mark J. Warshawsky. The Activities of Japanese Banks in the United Kingdom and April 1987. 18 pp. in the United States, 1980-88. 2/90. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and Industrial Production: 1989 Developments and Historical Alice P. White. September 1987. 14 pp. Revision. 4/90. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF PRO- U.S. International Transactions in 1989. 5/90. POSED CEILINGS ON CREDIT CARD INTEREST RATES, by Recent Developments in Industrial Capacity and Utilization. Glenn B. Canner and James T. Fergus. October 1987. 6/90. 26 pp. Developments Affecting the Profitability of Commercial 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. Banks. 7/90. Warshawsky. November 1987. 25 pp. Recent Developments in Corporate Finance. 8/90. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A92 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 to which data Weekly Releases rate release days refer • Aggregate Reserves of Depository Institutions and $15.00 Thursday Week ended previous the Monetary Base. H.3 (502) [1.20] 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 Commercial Banks. H.5 (507) previous week [1.13] • 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 • 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 and Capacity Utilization G.17 $15.00 Previous month Midmonth (419) [2.12, 2.13] • Loans and Securities at all Commercial Banks. G.7 $ 5.00 Previous month 3rd week of month (407) [1.23] • Major Nondeposit Funds of Commercial Banks. $ 5.00 Previous month 3rd week of month G.10 (411) [1.24] • 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 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

A93 Annual Approximate Date of period to which data Quarterly Releases rate release days refer • 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.l (788) $ 5.00 15th of February, Previous quarter [1.57, 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 to Business. E.2 $ 5.00 Midmonth of February, May, August, and (111) [1-34] 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 for the U.S. Economy. C.9 (108) $ 5.00 October and April Previous year • Report on the Terms of Credit Card Plans. E.5 $ 5.00 March and August January and June (115) 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

A94 Index to Statistical Tables References are to pages A3-A85 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20, 75, 80 Ownership by individuals, partnerships, and corpora- Assets and liabilities (See also Foreigners) tions, 22 Banks, by classes, 18-20 Turnover, 15 Domestic finance companies, 36 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 8 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21, 82-85 Deposits (See also specific types) Automobiles Banks, by classes, 3, 18-20, 21 Consumer installment credit, 39, 40 Federal Reserve Banks, 4, 10 Production, 49, 50 Turnover, 15 Discount rates at Reserve Banks and at foreign central BANKERS acceptances, 9, 23, 24 banks and foreign countries (See Interest rates) Bankers balances, 18-20 (See also Foreigners) Discounts and advances by Reserve Banks (See Loans) Bonds (See also U.S. government securities) Dividends, corporate, 35 New issues, 34 Rates 24 Branch banks, 21, 57, 82-85 EMPLOYMENT, 47 Business activity, nonfinancial, 46 Eurodollars, 24 Business expenditures on new plant and equipment, 35 Business loans (See Commercial and industrial loans) FARM mortgage loans, 38 CAPACITY utilization, 48 Federal agency obligations, 4, 9, 10, 11, 31, 32 Capital accounts Federal credit agencies, 33 Banks, by classes, 18 Federal finance Federal Reserve Banks, 10 Debt subject to statutory limitation, and types and Central banks, discount rates, 69 ownership of gross debt, 30 Certificates of deposit, 24 Receipts and outlays, 28, 29 Commercial and industrial loans Treasury financing of surplus, or deficit, 28 Commercial banks, 16, 19, 76, 81, 82, 83 Treasury operating balance, 28 Weekly reporting banks, 19-21 Federal Financing Bank, 28, 33 Commercial banks Federal funds, 6, 17, 19, 20, 21, 24, 28 Assets and liabilities, 18-20, 76, 81 Federal Home Loan Banks, 33 Commercial and industrial loans, 16, 18, 19, 20, 21, 76, Federal Home Loan Mortgage Corporation, 33, 37, 38 81, 82-85 Federal Housing Administration, 33, 37, 38 Consumer loans held, by type and terms, 39, 40, 76, 81, Federal Land Banks, 38 82-85 Federal National Mortgage Association, 33, 37, 38 Loans sold outright, 19 Federal Reserve Banks Nondeposit funds, 17 Condition statement, 10 Real estate mortgages held, by holder and property, 38 Discount rates (See Interest rates) Terms of lending 72—81 U.S. government securities held, 4, 10, 11, 30 Time and savings deposits, 3 Federal Reserve credit, 4, 5, 10, 11 Commercial paper, 23, 24, 36 Federal Reserve notes, 10 Condition statements (See Assets and liabilities) Federal Savings and Loan Insurance Corporation insured Construction, 46, 51 institutions, 26 Consumer installment credit, 39, 40 Federally sponsored credit agencies, 33 Consumer prices, 46, 48 Finance companies Consumption expenditures, 53, 54 Assets and liabilities, 36 Corporations Business credit, 36 Nonfinancial, assets and liabilities, 35 Loans, 39, 40 Profits and their distribution, 35 Paper, 23, 24 Security issues, 34, 67 Financial institutions Cost of living (See Consumer prices) Loans to, 19, 20, 21 Credit unions, 27, 39. (See also Thrift institutions) Selected assets and liabilities, 26 Currency and coin, 18 Float, 4 Currency in circulation, 4, 13 Flow of funds, 41, 43, 44, 45 Customer credit, stock market, 25 Foreign banks, assets and liabilities of U.S. branches and agencies, 21, 82-85 DEBITS to deposit accounts, 15 Foreign currency operations, 10 Debt (See specific types of debt or securities) Foreign deposits in U.S. banks, 4, 10, 19, 20 Demand deposits Foreign exchange rates, 70 Banks, by classes, 18-21 Foreign trade, 56 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A95 Foreigners REAL estate loans Claims on, 57, 59, 62, 63, 64, 66 Banks, by classes, 16, 19, 20, 38 Liabilities to, 20, 56, 57, 59, 60, 65, 67, 68 Financial institutions, 26 Terms, yields, and activity, 37 GOLD Type of holder and property mortgaged, 38 Certificate account, 10 Repurchase ajgreements, 6, 17, 19, 20, 21 Stock, 4, 56 Reserve requirements, 8 Government National Mortgage Association, 33, 37, 38 Reserves Gross national product, 53 Commercial banks, 18 Depository institutions, 3, 4, 5, 12 HOUSING, new and existing units, 51 Federal Reserve Banks, 10 U.S. reserve assets, 56 INCOME, personal and national, 46, 53, 54 Residential mortgage loans, 37 Industrial production, 46, 49 Retail credit and retail sales, 39, 40, 46 Installment loans, 39, 40 Insurance companies, 26, 30, 38 SAVING Interest rates Flow of funds, 41, 43, 44, 45 Bonds, 24 National income accounts, 53 Commercial banks, 72-81 Savings and loan associations, 26, 38, 39, 41. (See also Consumer installment credit, 40 Thrift institutions) Federal Reserve Banks, 7 Savings banks, 26, 38, 39 Foreign central banks and foreign countries, 69 Savings deposits (See Time and savings deposits) Money and capital markets, 24 Securities (See also specific types) Mortgages, 37 Federal and federally sponsored credit agencies, 33 Prime rate, 23 Foreign transactions, 67 International capital transactions of United States, 55-69 New issues, 34 International organizations, 59, 60, 62, 65, 66 Prices, 25 Inventories, 53 Special drawing rights, 4, 10, 55, 56 Investment companies, issues and assets, 35 State and local governments Investments (See also specific types) Deposits, 19, 20 Banks, by classes, 18, 19, 20, 21, 26 Holdings of U.S. government securities, 30 Commercial banks, 3, 16, 18-20, 38 New security issues, 34 Federal Reserve Banks, 10, 11 Ownership of securities issued by, 19, 20, 26 Financial institutions, 26, 38 Rates on securities, 24 Stock market, selected statistics, 25 LABOR force, 47 Stocks (See also Securities) Life insurance companies (See Insurance companies) New issues, 34 Loans (See also specific types) Prices, 25 Banks, by classes, 18—20 Commercial banks, 3, 16, 18-20 Federal Reserve Banks, 4, 5, 7, 10, 11 Student Loan Marketing Association, 33 Financial institutions, 26, 38 Insured or guaranteed by United States, 37, 38 TAX receipts, federal, 29 Thrift institutions, 3. (See also Credit unions and Savings MANUFACTURING and loan associations) Capacity utilization, 48 Time and savings deposits, 3, 13, 17, 18, 19, 20, 21 Production, 48, 50 Trade, foreign, 56 Margin requirements, 25 Treasury cash, Treasury currency, 4 Member banks (See also Depository institutions) Treasury deposits, 4, 10, 28 Federal funds and repurchase agreements, 6 Treasury operating balance, 28 Reserve requirements, 8 UNEMPLOYMENT, 47 Mining production, 50 U.S. government balances Mobile homes shipped, 51 Commercial bank holdings, 18, 19, 20 Monetary and credit aggregates, 3, 12 Treasury deposits at Reserve Banks, 4, 10, 28 Money and capital market rates, 24 U.S. government securities Money stock measures and components, 3, 13 Bank holdings, 18-20, 21, 30 Mortgages (See Real estate loans) Dealer transactions, positions, and financing, 32 Mutual funds, 35 Federal Reserve Bank holdings, 4, 10, 11, 30 Mutual savings banks (See Thrift institutions) Foreign and international holdings and transactions, 10, 30, 68 NATIONAL defense outlays, 29 Open market transactions, 9 National income, 53 Outstanding, by type and holder, 26, 30 Rates, 24 OPEN market transactions, 9 U.S. international transactions, 55-69 Utilities, production, 50 PERSONAL income, 54 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

A96 Index to Volume 76 GUIDE TO PAGE REFERENCES IN MONTHLY ISSUES Issue Text "A" Pages Issue Text "A" pages Index to Index to tables tables January 1-38 1-77 84-85 July All--592 1-70 78-79 February 39-106 1-79 86-87 August 593--710 1-70 82-83 March 107-186 1-89 96-97 September.... 711--800 1-87 94-95 April 187-266 1-70 78-79 October 801--890 1-73 80-81 May 267-410 1-70 78-79 November .... 891--984 1-70 78-79 June 411-476 1-81 90-91 December 985--1072 1-85 94-95 The "A" pages consist of statistical tables and reference information. Statistical tables are indexed separately (see p. A94 of this issue). Pages Pages 1987 Censuses of Manufactures and Mineral Industries 200 Association of Bank Holding Companies, securities activities statement 317 Aurora system, Chicago Board of Trade, globalization of financial markets, article 509 Agriculture Loans, bank profitability article 481 American Banker, funds availability statement 305 BANC A Nazionale del Lavoro, in foreign banking American Institute of CPAs, in statement regarding statement 1032 regulatory accounting standards 912 Bank Holding Company Act of 1956 American National Standards Institute 213 Orders issued under Angell, Wayne D. 50th State Bancorporation 706 Expedited Funds Availability, statement 304 7L Corporation 1068 Federal Reserve System's expenses and budget, statement . 619 A.B.N. - Sticking, Amsterdam, The Netherlands .. 101, 263 Regulatory accounting standards, statement 911 ABN AMRO Holding, N.V., Amsterdam, Security of large-dollar value electronic funds transfer The Netherlands 786, 974, 1061 systems, statement 211 ABN/LaSalle North America, Inc 101, 263 Armitage, Kenneth, article 187 Ace Gas Inc 36 Articles Alameda Bancorporation 390 Activities of Japanese Banks in the United Kingdom Algemene Bank Nederland N.V., Amsterdam, and in the United States, 1980-88 39 The Netherlands 101,263 Banking markets and the use of financial services Allegheny Bankshares Corporation 34 by small and medium-sized businesses 801 Allegiant Bancorp, Inc 884 Current fiscal situation in state and local governments 1009 Alliance Bancorporation 101 Developments affecting the profitability of commercial Allied Irish Banks pic, Dublin, Ireland 586 banks 477 Alpha Banco, Inc 884 Federal Reserve in the payments system, white paper 293 Alpine Banks of Colorado 1068 Industrial production: 1989 developments Alton Bancshares, Inc 261 and historial revision 187 AMBANCCorp 471 Monetary Policy Reports to the Congress 107, 711 AMCORE Financial, Inc 390, 392, 588 Mortgage refinancing 604 American Capital Corporation 794 Nonbank activities of bank holding companies 280 American National Corporation 390 Policy targets and operating procedures in the 1990s 1 American State Financial Corporation of Delaware 34 Recent developments in corporate finance 593 AmeriFirst Bancorporation, Inc 471 Recent developments in industrial capacity and utilization . 411 Ameritrust Company National Association 579 Transmission channels of monetary policy : Ameritrust Corporation 253 How have they changed? 985 AmeriWest Corporation 971 Treasury and Federal Reserve Foreign AmSouth Bancorporation 957 Exchange Operations 8, 205, 500, 818 AmSouth Bank of Tennessee 957 U.S. exchange rate policy: Bretton Woods to present 891 Amsterdam-Rotterdam Bank N. V., Amsterdam, U.S. international transactions in 1989 267 The Netherlands 29, 682, 974 Aschauer, David, in article on fiscal status 1016 ANB Financial Corporation 586 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A97 Pages Pages Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under—Continued Orders issued under-Continued Appleton City Bancshares, Inc 68 C.B. Bancshares, Inc 794 Area Bancshares Corporation 474 C.S.B. Company 972 Arkansas Bank and Trust Company 705 Cameron Bancorp, Inc 471 Arkansas Bankers'Bancorporation, Inc 471 Campagnie Financiere de Suez, Paris, France 183 Arkansas Union Bankshares, Inc 974 Canadian Imperial Bank of Commerce, Toronto, Arrow Bank Corporation 706 Ontario, Canada 158, 548 Aurora First National Company 971 Capital InterAmerican Bancorp 754 Avantor Financial Corporation 779 Capitol Bancorp, Ltd 34, 794 B & T Holding Company 473 Carlson Bancshares, Inc 471,1070 Banc One Corporation 756, 971 Carolina First Corporation 887 Banc One Financial Corporation 884 Carrollton Bancorp 390 BancaCommercialeltalianaS.p.A., Milan, Italy 649 Cascade Bancorp 884 Banco Bilbao Vizcaya, S.A., Bilbao, Spain 971 Casey County Bancorp, Inc 471 Bancommunity Service Corporation 101 Cass Commercial Corporation 706 Bancorp Hawaii, Inc 759 Cathay Bancorp, Inc 971 Bancroft State Bancshares, Inc 34 Catherine Stuart Schmoker Family Partnership 974 Bancshares 2000, Inc 390 CBR Bancshares Corp 971 Bancshares of McLouth, Inc 34 CCNB Corporation 392 Bank Corporation of Georgia 884 Cedar Vale Bank Holding Company 257 Bank of Montana Acquisition Corporation 471 Center Banks Incorporated 261 Bank of Montana System 471, 971 Center Financial Corporation 23 Bank of Montreal, Montreal, Quebec, Canada 971, 975 Central Banc, Inc 706 Bank of Montreal, Toronto, Ontario, Canada 652 Central Bancorporation 586 Bank of New York Company, Inc 100, 867 Central Community Corporation 971 Bank of Nova Scotia, Toronto, Ontario, Canada 455 Central National Bank Corporation 390 Bank of Novia Scotia, Toronto, Ontario, Canada 545 Centura Banks, Inc 869 Bank of Southside Virginia Corporation 850 Century Bancshares, Inc 706 Bank of Tokyo, Ltd., Tokyo, Japan 546,654 Century Financial Corporation 101 Bank Shares, Incorporated 588, 975 Century National Corporation 471 Bank South Corporation 1067 Century South Banks, Inc 261 BankAmerica Corporation 244, 248, 585, 970 Chalybeate Springs Corporation 971 Bankers Corp 101 Chase Manhattan Corporation 100,263, 658 Bankers Trust of Alabama, Inc 34 Chemical Banking Corporation 100, 660, 662 Bankmont Financial Corp 971, 975 Cheshire Financial Corporation 453 Banque Indosuez, Paris, France 183, 887 Cho Hung Bank, Seoul, Korea 755 Barclays Bank PLC, London, England ... 100, 158, 588, 794 Chrisman-Sawyer Bancshares, Inc 181 Barclays PLC, London, England 100,158, 588, 794 Church Green Bancorp, Inc 473 Barclays U.S. Holdings, Inc 588 Citicorp 70, 263, 549, 664, 666 Barclays USA Inc 588 Citizens & Merchants Corporation 101 BarclaysAmericanCorporation 588 Citizens and Southern Corporation 181, 1067 Barnett Banks, Inc 68, 970, 1067 Citizens and Southern Florida Corporation 181 Barrett Bancorporation, Inc 586 Citizens Bancorp of Winfield, Inc 794 Barrett Holding Company 794 Citizens Corporation 101 Barrow Bancshares, Inc 34 Citizens Financial Services, Inc 887 Bay banks, Inc 100 Citizens National Bancorp, Inc 884 BB&T Financial Corporation 796, 1067 Citizens National Corporation 261 BB&T Financial Services, Inc 887 Claremont Financial Services, Inc 261 Benton State Bank 705 Cloverdale Bank Corporation 1071 Bergen Bank A/S, Bergen, Norway 457 CNB Bancorp 971 BHC Holdings 104 CNB Bancshares, Inc 887, 971 Blackhawk Bancorp, Inc 471 CNB Financial Corporation 706 Blackhawk Bancorporation 884 Columbus Corp 471 Blue Ridge Bancshares, Inc 1068 Commercial Bancorp of Gwinnett, Inc 586 Blue Valley Ban Corp 34 Commercial National Financial Corporation 471 BMR Financial Group, Inc 471 Commonwealth Bancshares Corporation 706 Bonduel Bancorp, Inc -971 Community Bancorporation 971 Border Bancshares, Inc 261 Community Bancshares of Wisconsin, Inc 885 Boscobel Bancorp, Inc 884 Community Bank Corporation 885 Bourbon Bancshares, Inc 1070 Community Bankshares, Inc 390 Boyle Bancorp, Inc 1066 Community Financial Bancorp., Inc 706 Bradford Bankshares, Inc 181 Community Investment Bancorporation, Inc 471 Brewer Bancorp, Inc 586 Community National Bancorporation 261 Bright Financial Services, Inc 1071 Community National Bancorporation Britton Bancshares, Inc 471 of South Carolina, Inc 971 Broadway Bancshares of Delaware, Inc 101 Compagnie Financiere de Suez, Paris, France 887 Brotherhood Bankshares, Inc 181 Conrad Company 972 Bruning Bancshares, Inc 1069 Constitution Bancorp, Inc 34 Buckley Bancorp, Inc 34 Constitution Bank 34 Bumpushares, Inc 884 CoreStates Financial Corp 176 Business Banc of America, Inc 586 Corn Belt Bancorp, Inc 471 C&S/Sovran Corporation 779, 853, 857,1067 Country Bank Shares Corporation 101 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A98 Federal Reserve Bulletin • December 1990 Pages Pages Bank Holding Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under—Continued Orders issued under—Continued Country Bank Shares, Inc 794, 972 First Citizens BancShares, Inc 975 Credit Suisse, Zurich, Switzerland 1070 First Citizens Financial Corp 1069 Creditanstalt-Bankverein, Vienna, Austria 761 First City, Inc 182 Crestar Financial Corporation 34 First Colonial Bankshares Corporation 390,472 CS Holding, Zurich, Switzerland 1070 First Commerce Bancorp, Inc 102 CSRA Bank Corp 586 First Commerce Bancshares, Inc 974 Cumberland Savings Bancshares, Inc 706 First Commercial Corporation 180, 705 D.R.N.B.,Inc 471 First Commonwealth Financial Corporation 470 Dai-Ichi Kangyo Bank, Limited, First Community Bank Group, Inc 885 Tokyo, Japan 75,960,975 First Dakota Financial Corporation 1069 Dakota Bankshares, Inc 101 First Eastern Corporation 764 Dassel Investment Company 706 First Eldorado Bancshares, Inc 182 DBT Holding Company 101 First Empire State Corporation 970 Decatur Bancshares, Inc 972 First Exchange Corp 390 Del Rio National Bancshares, Inc 471 First Farmers Financial Corp 1069 Deposit Guaranty Corporation 24 First Fidelity Bancorp, Inc 707 Diamond State Bancorp, Inc 586 First Financial Bancorp 885, 887, 1070 Donnelly Bancshares, Inc 103 First Financial Corporation 671, 885,1069 Drummond Banking Company 34 First Florida Banks, Inc 1067 Dunlap Iowa Holding Co 183 First Formoso, Inc 541 Durand Bancorp, Inc 181 First Grayson Bancorp, Inc 707 E & A Associates 885 First Gwinnett Bancshares, Inc 794 Eagle Bancorp, Inc 586 First Howard Bancshares, Inc 885 East Texas Financial Corporation 101 First Illinois Corporation 586 Eastern Bank Corporation 794 First Interstate Corporation of Wisconsin 375 EastPark Bancshares, Inc 472 First Lockney Bancshares, Inc 102 El Capitan Bancshares, Inc 34 First Maiden Bancshares, Inc 182 El Paso Bancshares, Inc 390 First Maryland Bancorp 586 Elmwood Bancshares, Inc 36 First Mid-America Bancorp, Inc 182 Emclaire Financial Corp 261 First Midwest Bancorp, Inc 707 Empire Capital Corporation 472 First Midwest Corporation of Delaware 794 ENB Holding Company 472 First Mutual Bancorp of Illinois, Inc 182 Enterprise Financial Corporation 706 First National Bank of Woodville 587 Estes Park Bank Restated Employee Stock First National Financial Corporation 390 Ownership 401(k) Plan 102 First National Insurance Agency, Inc 972 Evergreen Bancshares, Inc 706 First National of Nebraska, Inc 587 Exchange Bankshares Corporation of Kansas 390 First New Mexico Financial Corporation 472 F & M Bancorporation, Inc 472 First of America Bank Corporation 36, 474,796, 972 F & M Financial Services Corporation 34 First of America Bank Corporation-Indiana 972 F.N.B. Corporation 261,796 First of American Bank Corporation 796 F.W.S.F. Corporation 707 First of Fort Morgan, Inc 707 Farmers National Bancorp, Inc 261 First Patriot Bankshares Corporation 182 Farmers National Bancshares of Bethany, Inc 972 First Perryton Bancorp, Inc 472 Farmers State Bancorporation, Inc 261 First Place Financial Corporation 472 Fanners State Bank Corporation of Fort Morgan 261 First Regional Bancorp, Inc 859 FB&T Corporation 796 First Regional Corporation 766 FBOP Corporation 551 First Security Bankshares, Inc 885 FCB Corporation 390 First Security Corporation 181, 470, 586 FCFTInc 261 First Seven Day Financial, Inc 587 FDH Bancshares, Inc 392 First Sioux Bancshares, Ltd 588 Financial Bancshares, Inc 181, 586 First Southern Bancorp, Inc 102 Financial Center Corporation 885 First State Bancorp of Monticello, Inc 182 Financial Institutions, Inc 34 First State Bancorp of Princeton 182 Financial Trust Corporation 474 First State Bancorp, Inc 36, 885 First Affiliated Bancorp, Inc 472 First State Corporation 376 First American Bancshares, Inc 472 First Sterling Bancorp, Inc 102 First American Bank Corporation 706 First Union Corporation 83,174, 1067 First Ascension Bancorp, Inc 885 First Virginia Banks, Inc 261 First Bancorp of Kansas 1069 First Wachovia Corporation 705, 1067 First Bancorporation of Ohio 796 First Western Bancorp, Inc 1070 First Bank Corp 102 Firstar Corporation 35,707 First Bank Group, Inc 885 Firstar Corporation of Illinois First Bank System, Inc 1051 Firstar Corporation of Minnesota 7 First Banks, Inc 181,669,794 FirsTier Financial, Inc 33, 10 First Blanchester Bancshares, Inc 1069 FirsTrust, Inc 8 First Busey Corporation 36 Fleet/Norstar Financial Group, Inc 459, 6 First Camden Bancshares, Inc 794 Fleet/Norstar New York, Inc 4 First Canadian Bancorp, Inc 972 FMS Bancorp, Inc 1 First Charlotte Financial Corporation 707 FNB Newton Bankshares, Inc 9 First Chicago Corporation 793, 970 FNB Rochester Corp i First Citizens Banc Corp 374 Ford Bank Group, Inc Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 76 A99 Pages Pages Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under—Continued Orders issued under Fortune 44 Company 102 Key Bancshares of New York, Inc 1067 Fourth Financial Corporation 102,472 Key Bancshares of Wyoming 884 Fuji Bank, Limited, Tokyo, Japan 104, 768 Key Centurion Bancshares, Inc 707 Fulton Financial Corporation 390 KeyCorp 884, 970, 1067 Gadsden Corporation 972 Kirbyville Bancshares, Inc 587 Garfield County Bancshares 972 L.B.T. Bancorporation 102 Garwin Bancorporation 1069 L.S.B. Bancshares, Inc 472 Gaylord Bancorporation, Ltd 885 La Plata Bancshares, Inc 795 George Gale Foster Corporation 972 Lafayette Bancshares 587 Georgetown National Bank Holding Company Inc 587 Landmark/Community Bancorp, Inc 1069 Globalshare, Limited, Road Town, Tortola, Las Cruces B.R.G., Inc 182 British Virgin Islands 472 LaSalle National Corporation 101,263 GNW Financial Corporation 885 Liberty National Bancorp, Inc 35, 37,461 Gold Coast Bancshares, Inc 104 Lincoln County Bancorp, Inc 887 Goodenow Bancorporation 182 Lincoln Financial Corporation 102, 182 Gore-Bronson Bancorp, Inc 182 Lincoln Holding Company 102 Graymont Bancorp, Inc 35 Lisco State Company 31 Great River Bancshares, Inc 391 Logan Bancorporation, Inc 795 Greater Chicago Financial Corp 102 Long-Term Credit Bank of Japan, Limited, Greeley Bancshares, Inc 261 Tokyo, Japan 554 Gulfstream Financial Services, Inc 104 Lonoke Bancshares, Inc 262 H. Pat Henson Company 35 Lowry Facilities, Inc 972, 1069 Hampton Family Partnership 794 M & B Capital Company 886 Happy Bancshares, Inc 972 M & F Financial Corp 391 Harris Bankcorp, Inc 971, 975 Main Street Banks Incorporated 886 HartsvilleBancshares, Inc., Employee Manning Financial Services, Inc 707 Stock Ownership Plan 885 Manufacturers Hanover Corporation 100, 674, 774, 960 Heartland Bankshares, Inc 885 Manufacturers National Corporation 795 Hi-Bancorp, Inc 35 Marathon Financial Corporation 886 High Plains Bancshares, Inc 1069 Marine Midland Banks, Inc 100 High Point Bank Corporation 262 Marshall & Ilsley Corporation 556, 795, 886,1069 Highlands Bankshares, Inc 794 Maryland Publick Banks, Inc 35 HNB Corporation 391 MC Bancshares, Inc 886 Hogue Holding Company, Inc 102 Mercantile Bancorp, Inc 473 Holly Grove Bancshares, Inc 35 Mercantile Bankshares Corporation 182, 973 Home Credit Corporation 102 Merchant Bankshares Group, Inc 182 HomeTown Bancorp, Inc 885 Merchants Holding Company 973 Hometown Bancshares, Inc 35, 391 Meridian Bancorp, Inc 705 Hongkong and Shanghai Banking Corporation Metro Armored Courier, Inc 676 Limited, Hong Kong, B.C.C 37, 100 Metro Financial Corporation 262 Hongkong and Shanghai Banking Corporation, Metrocorp, Inc 676 Hong Kong 770 Mid Am, Inc 392, 962 Honor Bancorp, Inc 587 Mid-Michigan Bancorp, Inc 262 Hope Bancshares, Inc 472 Mid-South Bancoip, Inc 181, 454 HSBC Holdings, B.V., Amsterdam, Mid-Wisconsin Financial Service, Inc 473 The Netherlands 37, 100, 770 MidAmerican Corporation 559, 587 Huntington Bancshares Incorporated 33, 100 Midland Bank, PLC, London, England 860 Huntington Bancshares of West Virginia, Inc 33 Midland States Bancorp, Inc 102 Huxley Bancorp 885 Midlothian State Bank Employees Stock Hy-Vee Food Stores, Inc 1056 Ownership Trust 587 INB Financial Corporation 391, 795, 972 Midstates Bancshares, Inc 973 Industrial Bank of Japan, Limited, Tokyo, Japan 708 Midwest Banco Bancorporation 887 International Brotherhood of Boilermakers, Minden Exchange Company 795 Iron Ship Builders, Blacksmiths, Mission-Valley Bancorp 391 Forgers, and Helpers 182 Missouri Quad Bancshares, Inc 473 Iowa National Bankshares Corp 391 Mitsubishi Trust and Banking Corporation, Irwin Union Corporation 392 Tokyo, Japan 588 J.P. Morgan & Company Incorporated 26, 552 Mitsui Bank, Limited, Tokyo, Japan 381 J.R. Montgomery Bancorporation 391 Mitsui Taiyo Kobe Bank, Limited, Tokyo, Japan 563 Jackson Bancorporation 972 MNC Financial, Inc 37, 89, 263 James Stuart, Jr. Family Partnership 974 Monmouth Financial Services, Inc 1069 JDJ Banco, Inc 972 Montfort Bancorporation, Inc 795 Jessup Family Limited Partnership 472 Montgomery Bancorp, Inc 262 John Warner Financial Corporation 707 Montgomery County Bancshares, Inc 707 Jonesboro Bancompany, Inc 885 Monticello Bankshares, Inc 102 Kansas Bank Corporation 35 Morley Bancshares Corporation 473 Kaw Valley Bancshares, Inc 472 Mountain Parks Financial Corporation 102 KBT Bancshares, Inc 35 Mountain West Banking Corporation 103 KD Bancshares, Inc 474 Multibank Financial Corp 473 Kellett, N. V., Curacao, Netherlands Antilles ... 37, 100, 770 Muskingum Valley Bancshares, Inc 643 Keweenaw Financial Corporation 472 Nashoba Bancshares, Inc 391 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A100 Federal Reserve Bulletin • December 1990 Pages Pages Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under-Continued Orders issued under-Continued National Bank of Canada, Montreal, Canada 588 Prairie Capital, Inc 708 National City Bancshares, Inc 1069 Prairie Farm Bank Shares, Inc 795 National City Corporation 77, 887 Premier Bancorp, Inc 82 National Penn Bancshares, Inc 182 Premier Bankshares Corporation 708 National Westminster Bank, PLC, London, England .... 100 Premier Financial Corp 474 Natwest Holdings, Inc 100 Prime Banc Corp 708 NBC Bancorporation, Inc 103 Primo Financial Services, Inc 36 NBN Corporation 707 Principal National Bancorp, Inc 795 NBRC Company 473 PrivateBancorp, Inc 1070 NCNB Corporation 391, 702, 864, 886, 1067 Provident Bancorp, Inc 93 New East Bancorp, Inc 262, 1069 PSB Financial Corporation 263 Newfield Bancorp Inc 707 Putnam County Bancshares, Inc 473 NI Bancshares Corporation 707 Raymond Bancorp, Inc 103 Nichols Financial, Inc 973 Readlyn Bancshares, Inc 708 Nippon Credit Bank, Ltd., Tokyo, Japan 645 Redwood Empire Bancorp 887 NoDak Bancorporation 886 Republic Bancshares, Inc 103 North Bancorp, Inc 35 Resource Bancshares Corporation 708 North Cascades Bancshares, Inc 795 Rising Sun Bancorp 973 North Fulton Bancshares, Inc 886 River Forest Bancorp, Inc 587 North Salem State Bancorporation 1071 Rocky Mountain Bancorporation, Inc 1070 Northeast Bancorp, Inc 100, 973 Rogers County Bank Holding Company 886 Northern Illinois Bancorp, Inc 706 Royal Bancshares, Inc 183, 973 Northern Interstate Financial, Inc 391 Royal Bank of Canada, Montreal, Northern Missouri Bancshares, Inc 183 Quebec, Canada 158, 567 Northern Trust Corporation 1069 Royal Bank of Scotland Group pic, Edinburg, Northwest Bancorp, Inc 886 Scotiand 866 Norton Bankshares, Inc 708 Saastopankkien, Keskus-Osake-Pankki (Shopbank), Norwest Corporation 35, 79,183, 386, 565, 702, Helsinki Finland 588 7%, 873, 887,975, 1058, 1070 Saban S.A., Panama City, Republic of Panama 103, 587 Norwest Financial Inc 796 Salin Bancshares of North Central Indiana, Inc 474 Norwest Financial Services, Inc 796 San Diego Bancshares, Inc 795 Norwest Holding Company 873 Sand Springs Bancshares, Inc 973 Oesterreichische Laenderbank Aktiengesellschaft, Sandwich Banco, Inc 587 Vienna, Austria 37 Sanwa Bank, Limited, Osaka, Japan 568 Ogle County Bancshares, Inc 886 Savannah Bancorp, Inc 795 Oklahoma Bancorporation, Inc 1069 SBC Financial Corporation 588 Old National Bancorp 973, 1069 Scott Stuart Family Partnership 974 Old York Road Bancorp, Inc 795 Screven Bancshares, Inc 973 Olney Bancshares, Inc 587 Seafirst Coiporation 248 Omega Financial Coiporation 262 Second National Financial Corporation 708 Overton Bancorporation, Inc 973 Security Bancshares, Inc 975 Overton Bank Shares, Inc 182 Security Chicago, Corp 183 Owego National Financial Corporation 182 Security Pacific Bancorporation Northwest 884 Oxford Financial Corporation 795 Security Pacific Bancorporation Southwest 586 Pacific Capital Bancorp 973 Security Pacific Corporation 37, 462, 586, 793, 970 Palm Desert Investments 707 Shelby Financial Corporation 473 Palmer Bancorp, Inc 795 Sierra Tahoe Bancorp 795 Park National Corporation 705 Silsbee Financial Corporation 973 Parkway Financial, Inc 103 Societe Generale, Paris, France 776, 797, 887 PBC Bancshares, Inc 1069 Society Corporation 104 PBM Bancorp, Inc 103 Sooner Southwest Bankshares, Inc 975 Pennyrile Bancshares, Inc 262 Soperton Naval Stores, Inc 973 Peoples Bancorp, Inc. of Bullitt County 795 South Carolina National Corporation 1060, 1067 Peoples Bancorporation 254 Southeast Banking Corporation 1067 Peoples Bank Employee Stock Ownership Plan 708 Southern Bancorp, Inc 391 Peoples Banking Company 391 Southern Colorado Bancshares, Inc 886 Peoples Bankshares, Inc 391 Southern Crescent Financial Corp 36 Peoples Financial Services, Inc 473 Southern National Corporation 887,1067 Peoples Heritage Financial Group, Inc 975 Southside Bancshares Corp 36 Peotone Bancorp, Inc 35 SouthTrust Corporation 647, 886, 965 Piedmont Bancshares Corporation 183 SouthTrust of Florida, Inc 647 Pikeville National Corporation 587 Southwest Bancshares, Inc 973 Pioneer Bancorp, Inc 103 Southwest Holdings, Inc 473 Pioneer Bancshares, Inc 391 Sovran Financial Corporation 256, 857,1067 Pittsburg Bancshares, Inc 391 Springfield Investment Company 263 PKbanken, Stockholm, Sweden 104 Stamford Bank Corp 795 Planters & Merchants Bancshares, Inc 262 Standard Chartered PLC, London, England 681 Pleasant Hope Bancshares, Inc 473 Star Banc Corporation 183 PNC Financial Corp 104 State First Financial Corporation 1070 Pocahontas Bankstock, Inc 1069 States National Bancshares, Inc 391 Prairie Bancorp, Inc 35, 473 Steuben Trust Corporation 587 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 76 A101 Pages Pages Bank Holding Company Act of 1956-Continued Bank Holding Company Act of 1956-Continued Orders issued under—Continued Order issued under—Continued STICHTING PRIORITEIT Weld State Company 36 ABN AMRO HOLDING, Amsterdam, Wells Fargo & Company 250, 465, 585 The Netherlands 786, 1061 West Central Banque Shares, Inc 103 Stichting Administratiekantoor West One Bancorp 181 ABN AMRO HOLDING, Amsterdam, West One Bancorp, Washington 181 The Netherlands 786, 1061 West Point Bancorp, Inc 103, 886, 1070 Stichting Administratiekantoor West Suburban Bancorp, Inc 391, 797 ABN AMRO Holding, Amsterdam, WilberCo 796 The Netherlands 974 WM Bancorp 788 Stichting Amro, Amsterdam, WNB Bancshares, Inc 1070 The Netherlands 29, 682, 794, 974 WRZ Bankshares, Inc 36 Stichting Priorieit ABN-AMRO Holding, Yale Bancorporation 391 Amsterdam, The Netherlands 974 Yasuda Trust & Banking Co., Ltd., Tokyo, Japan 184 Stuart Family Partnership 974 Yellowstone Trail Bancorporation 473 Sumitomo Bank, Limited, Osaka, Japan 975 Yutan Bancorp, Inc 473 Summit Bancorp, Inc 587 Bank holding companies, nonbank activities, article 280 Summit Financial Corporation 587 Bank Merger Act Sun State Capital Corporation 262 Orders issued under SunTrust Banks, Inc 542, 685, 1067, 1068 Albemarle Bank and Trust Company d/b/a Surety Capital Corporation 103 F&M Bank - Charlottesville 797 Synovus Financial Corp 36, 262, 974 American Bank of St. Louis 37 Synovus Financial Corporation 1067 Bank of Commerce 709 T.C.N.B., Inc 708 Central State Bank 184 Taiyo Kobe Bank, Limited, Kobe, Japan 381 Chemical Bank 1071 Taylor Bancshares, Inc 473 Citizens Trust and Savings Bank 797 TB&C Bancshares, Inc 36, 262, 974, 1067 CivicBank of Commerce 37 Team Bancshares, Inc 588 Clanton Interim Bank 888 TeamBanc, Inc 796 Crestar Bank 474, 879 TeamBanc, Inc. Employees' Stock Ownership Plan 796 DeLand State Bank 474 Texas Financial Bancorporation, Inc 1070 First Business Bank of Arizona 709 Texas Security Bancshares Corporation 103 First Illini Bank 184 Texop Bancshares II, Inc 588 First of America Bank-Northern Michigan 37, 588, 797 Thompson Financial, Ltd 183 First Virgina Bank-Planters 888 Three Forks Bancorporation 886 First Virginia Bank-Damascus 392 Toronto-Dominion Bank, Toronto, Ontario, Canada .... 573 First Virginia Bank-South Central 392 Trans Financial Bancorp, Inc 970 First Virginia Bank-Piedmont 888 Tri-County Bancorp 1071 Iron and Glass Bank 392 Trimpe'slnc 103 Kent City State Bank 392 TwinCo, Inc 796 Landmark Bank of Highland 104 Tysons Financial Corporation 974 Liberty Bank-Oakland 37 U.S. Bancorp 793,1053 Manufacturers and Traders Trust Company 180 U.S.B. Corporation 796 Marine Bank of Monticello 709 UNC Holding, Inc 796 Metro Bank 263 UniBancCorp 796 New Bank 263 Unibanc Corp. Employee Stock Ownership Plan 796 North Shore Bank of Commerce 1071 Union Bancshares, Inc 262 Northern Neck State Bank 709 Union Colony Bancorp 473 Ohio Citizens Bank 184 Union of Arkansas Corporation 36 Pacific Western Bank 392 Union Planters Corporation 183,474 Peoples Bank of Montross 975 United Bank Corporation 1071 Peoples Bank of Mullens 392 United Bank Corporation of New York 36 Signet Bank/Virginia 797 United Missouri Bancshares, Inc 974 Star Bank, Kenton County 975 United Nebraska Financial Co 887 Trust Company Bank 709, 1068 Univest Corporation 708 Union Bank/Streator 104 USTCorp 975 UniSouth Banking Corporation 1071 Valley Bancorporation 183,796 United Jersey Bank/Commercial Trust 392 Valley Bancshares, Inc 708 United Nebraska Bank 588 Valley Capital Corporation 36 Valley Bank of Nevada 797 Vandalia National Corporation 391 Villa Grove State Bank 37 Village Bankshares, Inc 103 Bank of Italy, foreign bank operations in the U.S., Village Financial Services, Ltd 36 statement 1034 Vista Bancorp, Inc 886 Bank Secrecy Act, statement on money laundering 309, 517 Wainwright Capital Management Company 473 Bell, T.H., Secretary of Education 1013 Walden Holding Company 262 Bentley, George G., foreign exchange reports 8, 205 WallCo, Inc 183 Black, Robert P., President, Federal Reserve of Bank of Wasatch Bancorp, Inc 587 Richmond, statement 142 Wayne Bancorp, Inc 587 Board of Governors (See also Federal Reserve System) Wayne City Bancorp, Inc 974 Consumer Advisory Council WCC Management Corp 473 (See Consumer Advisory Council) Weatherford Bancorporation, Inc 974 Federal Open Market Committee Weetamore Bancorp 103 (See Federal Open Market Committee) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A102 Federal Reserve Bulletin • December 1990 Pages Pages Board of Governors-Continued Consumer Advisory Council—Continued Fees (See Fees for Federal Reserve services Members, new appointments 151 to depository institutions Mortgage lending discrimination, statement 516 Inspector General, Office of, hotline telephone number .... 231 Contingency Processing Center, Federal Reserve Litigation (See Litigation) Bank of Richmond, budget statement 623 Members Corporate finance, article on recent developments 593 Johnson, Manuel H., resignation 524 Corrigan, E. Gerald, President, Federal Reserve Kelley, Edward W., reappointment 324 Bank of New York, statement 132 List, 1913-90 591,799 Council of Economic Advisors 141 Mullins, David W., Jr., appointment 524 Counterfeit-detection system, in statement Policy statements (See specific subject) on System's budget 628 Publications and releases (See Publications in 1990) Crabbe, Leland E., article 593 Regulations (See Regulations) Criminal Referral Form, money laundering, statement 517 Staff Cross, Sam Y., foreign exchange reports 8, 205, 500, 818 Changes Emerson, Marianne M 231 Henderson, Dale W. 525 Kim, Po Kyung 231 D'AMATO, Senator [Alfonse M.], mention Massey, Raymond H 231 in statement regarding money laundering 518 Mulrenin, Edward T. 525 Data collection system for nonbank activities 282 Schleicher, C. William, Jr 525 Depository institutions (See specific types) Werneke, Diane E 836 Reserve requirements (See Reserve requirements and Zemel, Robert J 231 Regulations: D) List A86 Deposit insurance system reform, statement 917 Staff studies (See Staff studies) Depository Institution Money Laundering Amendments Statements to the Congress of 1990, H.R. 3848, statement 309 (See Statements to the Congress) DiLeo, Paul, foreign exchange report 818 Thrift Institutions Advisory Council Directors, Federal Reserve Banks and Branches, list 395 (See Thrift Institutions Advisory Council) Dohner, Robert S., article 39 Bonds Douglas Amendment, Bank Holding Company Act, Original-issue-discount 597 and nonbank activities 281 Payment-in-kind 597 Drexel Burnham Lambert Boston Federal Home Loan Bank, mortgage lending Corporate finance statement 596 discrimination, statement 516 Deposit insurance system reform, statement 736 Brady, Nicholas F., mention in statement Federal Reserve's role in decision to liquidate, statement... 301 on securities regulation 522 Drug Enforcement Administration, statement Bretton Woods System, in article on exchange rate policy 891 regarding money laundering 311,517 Bureau of Labor Statistics 200 Duca, John V., article 477 Bureau of Mines 201 Dun's Market Identifier file 816 CALIFORNIA Community Reinvestment Corporation, mortgage lending discrimination, statement 516 EARNINGS and expenses (See Income and expenses) Canner, Glenn B., article 604 Economic financial developments (See Monetary Policy) Capital adequacy guidelines, amendment to Economy (Monetary policy report to the Congress) Regulations H and Y 847 1989 Census Bureau 192, 606, 811, 837 Business Ill Check clearing and collection External 112 Amendment to Regulation CC regarding state Government 112 and federal law preemption 371 Household 109 Expedited Funds Availability Act and Regulation CC, Labor markets 113 statement 306 Price developments 114 Clearing House Interbank Payments System (CHIPS) 211 Statement by Chairman Greenspan 128 Commercial bank profitability, article 477 1990 Committee on Reform of the International Monetary Business 716 System and Related Issues 897 External 718 Commodities Exchange Act Government 717 Financial markets globalization, article 511 Household 715 Securities market regulation 322, 521 Labor markets 719 Commodity Futures Trading Commission Price developments 719 Financial markets globalization, article 511 Statement by Chairman Greenspan 928 Securities market regulation 319, 519 Education of the Handicapped Act 1013 Community Reinvestment Act Elliehausen, Gregory E. Amendment to implement changes 638 Article 801 Mortgage lending discrimination, statement 512 Staff study 726 Community Reinvestment Act Performance Evaluations 638 Emerson, Marianne M., appointed Assistant Director, Comptroller of the Currency, Office of, Office of Executive Director for Information securities activities statement 317 Resources Management 231 Congressional Budget Office 225 Exchange Rate Mechanism, European Monetary System 819 Congressional Budget Office, Economic and Expedited Funds Availability Act Budget Outlook 140 Amendment to Regulation CC regarding state Consumer Advisory Council and federal law preemption 371 Meetings 638, 1036 Amendment to Regulation CC to implement 525 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 76 A103 Pages Pages Expedited Funds Availability Act—Continued Fees for Federal Reserve services to depository institutions Federal Reserve System's budget statement 620 Check clearing and collection Payments system, article 293 Schedules for services 1991 announced 1036 Statement 304 Schedules for services 1990 announced 15 Expenditures, state and local government, article 1013 Priced services Expenses (See Income and expenses) Federal Reserve in the payments system, white paper .... 293 Payments mechanism, the Federal Reserve's role 324 Schedules for services, 1991 1036 Financial Accounting Standards Board, in statement FAIR Credit and Charge Card Disclosure Act of 1988 regarding regulatory accounting standards 912 Amendment to Regulation Z 325, 345 Financial Institutions Deregulation and Interest Rate Control Farming (See Agriculture) Acts, in statement on Federal Reserve System's budget 625 Farnsworth, Clyde H., statements on money laundering . 308, 517 Financial Institutions Reform, Recovery, Federal Bureau of Investigation, foreign bank and Enforcement Act of 1989 operations in the U.S., statement 1034 Amendment to Regulation Y 242 Federal Deposit Insurance Corporation Credit availability, statement 630 Commercial bank profitability, article 478 Deposit insurance system reform, statement 731, 917 Deposit insurance system reform, statement 731, 917, 1022 Federal Reserve System's budget, statement 621 Regulatory accounting standards, statement 912 Monetary policy, report 107, 215 Texas banks, statement 634 Money laundering, statement 309, 518 Federal Financial Institutions Examination Council Mortgage lending discrimination, statement 513 Federal Reserve System's budget statement 621 Order terminating state exemptions 241 Mortgage lending discrimination, statement 513 Orders issued under Regulatory accounting standards, statement 912 American Bancorporation, Inc 1065 Federal Open Market Committee Atico Financial Corporation 688 Exchange rate policy, article 894 Aurora First National Company 882 Policy actions, record 17, 55, 233, 331, Banc One Corporation 259, 579, 967 526, 747, 837, 1038 Bank Shares Incorporated 1065 Federal Reserve Act BankAmerica Corporation 967 Deposit insurance reform, statement 737, 926 Barnett Banks, Inc 467, 967 Orders issued under Bankers International Corporation 881 Bremer Financial Corporation 790 Morgan Guaranty International Finance Corporation .... 881 Brenton Banks, Inc 690, 882 Federal Reserve and Treasury foreign exchange operations Brunini, Grantham, Grower & Hewes 701 (See Foreign exchange operations) Central Bank 96 Federal Reserve Banks Citizens Bancshares, Inc 968 Atlanta, mortgage lending discrimination, statement 516 Citizens Corporation 882 Boston, mortgage lending discrimination, statement 516 Comerica Incorporated 968 Chicago, mortgage lending discrimination, statement 516 Community First Bankshares, Inc 791 Cleveland, statement on System's budget 625 Community First North Dakota Bankshares, Inc 968 Dallas, foreign bank operations in U.S., statement 1033 Coopers & Lybrand 692 Directors, list 395 County Bancorporation, Inc 580 Fees (See Fees for Federal Reserve services to depository Crestar Financial Corporation 968 institutions) Dickinson, Throckmorton, Parker, Federal Reserve Board (See Board of Governors) Mannheimer & Raife 693 Federal Reserve System (See Federal Reserve System and F.N.B. Corporation 97 Board of Governors) Farmers & Merchants Investments, Inc 883 Income from operations, announcement 153 Fessenden Bancshares, Inc 968 New York First Affiliated Bancorp, Inc 968 Drexel Burnham Lambert, statement 301 First Alabama Bancshares, Inc 883, 968 Exchange rate policy, article 892 First Banks, Inc 581 Fedwire security, assessment 213 First Bankshares of Las Animas, Inc 581 Foreign bank operations in the U. S., statement 1035 First Chicago Corporation 968 Securities subsidiaries, statement 314 First Citizens BancShares, Inc 968, 1065 Richmond, Contingency Processing Center, First Empire State Corporation 968 budget statement 623 First Forest Corporation 968 San Francisco First Wachovia Corporation 691 Foreign banking in the U.S., statement 1033 FirsTier Financial, Inc 968 Mortgage lending discrimination, statement 516 Fourth Financial Corporation 692 Federal Reserve System (See also Board of Governors) Heidelberg & Woodliff 690, 695, 697 Expenses and budget, statement 619 Hy-Vee Food Stores, Inc 883 Membership, admission of state banks 16, 231 Integra Financial Corporation 582 System's Pricing Policy Committee, payments International Bancshares Corporation 694 system article 298 Jacob Schmidt Company 1065 Federal Reserve's Planning and Control System Key Bancshares of Wyoming 883 (PACS), payments system article 297 KeyCorp 883, 969 Fedwire Kirkland&Ellis 696 Amendment to Regulation J governing Lauritzen Corporation 1065 funds transfers 933,1036 Meridian Bancorp, Inc 98 Security 211 Midwest Banco Bancorporation 883 Services, uniform operating hours established 448 National City Corporation 883 Third-party funds 1036 NCNB Corporation 98, 388, 389, 469, 696 Fedwire and Clearinghouse Interbank Payments System Norwest Corporation 792 (CHIPS), statement regarding money laundering 311 Peoples Heritage Financial Group, Inc 969 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A104 Federal Reserve Bulletin • December 1990 Pages Pages Financial Institutions Reform, Recovery, Greenspan, Alan—Continued and Enforcement Act of 1989—Continued Globalization of financial markets, statement 507 Orders issued under-Continued Monetary policy report to the Congress, Peoples State Bank 260 statements 215, 226, 738 Peper, Martin, Jensen, Maichel & Hetlage 701 Regulation of securities markets, statement 519 Piper & Marbury 689 Retirement security in present and future generations, Rebank Netherlands Antilles, N.V 883 statement 222 Republic Banking Corporation of Florida 883 Securities markets, regulation, statement 319 River Bend Bancshares 583 Statement regarding nomination of David Mullins, Rolla Holding Company, Inc 969 announcement 53 SCB Bancorp, Inc 698, 969 Schatz & Schatz, Ribicoff & Kotkin 468 Security Bancorp of Tennessee, Inc 699 H.R. 4044, statement regarding money laundering 310 Security Pacific Corporation 699, 700,969 H.R. 4064, statement regarding money laundering 310 Southeast Banking Corporation 99 Henderson, Dale W., appointed Assistant Director, SouthTrust Corporation 584 Division of International Finance 525 SunTrust Banks, Inc 1066 Home Equity Loan Consumer Protection Act, Thompson & Mitchell 583,585,694 amendment to Regulation Z 325, 345 Trust Company of Georgia 1066 Home equity lines of credit, amendment to U.S. Bancorp 792 Regulation Z 931,956 Union Bancshares, Inc 469 Home Mortgage Disclosure Act United Nebraska Financial Co 883 Mortgage lending discrimination, statement 513 USTCorp 969 Order terminating state exemptions 241 Valley Bancshares, Inc 969 Hoskins, W. Lee, President, Federal Reserve Vedder, Price, Kaufman & Kammholz 688 Bank of Cleveland, statement 135 Watford City Bancshares, Inc 969 House Joint Resolution 409 132, 135, 142, 146 West Point Bancorp, Inc 883 Humphrey-Hawkins Act (See Monetary policy: Reports Real estate appraisal standards provisions 638 to the Congress) Regulatory accounting standards, statement 911 Securities subsidiaries, statement 319 Financial markets globalization, statements 439, 507 Financial services use by small and medium-sized IBM Corporation 192 businesses, article 801 Income and Expenses, Federal Reserve Banks, Financial services, article 726, 808 announcement 153 Financing (See Loans) Industrial production and capacity utilization Fiscal position, state and local governments, article 1009 Developments, industrial capacity, article 411 Foreign exchange operations of the Treasury Historical revision and developments, article 187 and Federal Reserve, reports 8, 205, 500, 818 Releases 13,51, 122,209, Foreign investment in United States, statement 124 299, 436, 505,613,728, 824, 909, 1019 Foreign stocks, list of marginable 744 Statistical release, changes 448 Full Employment and Balanced Growth Act of 1978 Inspector General, Office of, hotline telephone number 231 (See also Monetary policy: report to the Congress) .... 107, 711 Internal Revenue Service, money laundering, statement 517 International Banking Act of 1978 Federal Reserve budget, statement 625 Federal Reserve supervision of foreign banks GENERAL Accounting Office operating in U.S., statement 1032 "Bank Powers: Activities of Securities Subsidiaries International banking operations, amendment to extend of Bank Holding Companies," statement 312 the scope of U. S. banking organizations 931 Glass-Steagall Act, report on repeal of 316 International Capital Standards (Basle Accord), in statement Recommendations on the payments mechanism 324 on reform of die deposit insurance system 733, 1027 Security of large-dollar value electronic funds International Monetary Fund transfer systems, statement 211 Articles of Agreement, in article on exchange rate policy .. 891 General fund budgets, state and local governments, article ... 1010 Foreign exchange article 822 General Services Administration, amendment to Regulations International transactions in 1989, article 267 Regarding Foreign Gifts and Decorations 373 Glass-Steagall Act of 1933 Deposit insurance system reform, statement 736,926 GAO report on repeal, securities subsidiaries, statement ... 316 JAPANESE banks, activities in the United Kingdom Nonbank activities 280 and in the United States, article 39 Securities subsidiaries, statement 313 Johnson, Manuel H. Globex systems, Chicago Mercantile Exchange, "Bank Powers: Activities of Securities Subsidiaries globalization of financial markets, article 509 of Bank Holding Companies," statement 312 Government Services Administration 157 Merchants National case, statement 444 Gramm-Rudman-Hollings legislation, in statement Resignation as Vice Chairman of the Board of Governors .. 524 on System's budget 619 Greenspan, Alan Credit availability, statement 629 Deposit insurance system reform, statement 731,917 KELLEY, Edward W., Jr. Drexel Burnham Lambert decision, the Federal Federal Reserve System's expenses and budget, Reserve's role, statement 301 statement 619 Economy in 1990, statement 928 Reappointment as member of the Board of Governors 324 Foreign investment in U.S., statement 124 Kim, Po Kyung, appointed Assistant Director, Division of Global environment in which U.S. financial firms Applications Development and Statistical Services 231 will operate, statement 439 Kohn, Donald L., article 1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 76 A105 Pages Pages LARGE-DOLLAR value electronic funds transfer systems, Mortgage refinancing, article 604 security of, statement 211 Moynihan [Daniel Patrick], Senator 222, 224, 225, 228 La Ware, John P. Mullins, David W., Jr. Credit availability to small businesses, statement 615 Appointed Member of the Board of Governors 524 Mortgage lending discrimination, statement 512 Statement by Chairman Greenspan regarding Real estate lending by commercial banks, statement 827 nomination 53 Legislation (See subject or specific name of act) Mulrenin, Edward T., transfer to the Office of the Executive Lending Practices Survey, bank profitability, article 479, 481 Director for Information Resources Management 525 Leverage ratios 744, 915 Liang, Nellie J. Article 280 NATIONAL Association of Affordable Housing Lenders, Staff study 120 mortgage lending discrimination, statement 516 Litigation National Association of Securities Dealers, Issuance of final orders in statement on corporate finance 603 Bank Dagang Negara, Jakarta, Indonesia 265 National Commission on Social Security Reform 222 Bank of New England Corporation 394 National Fair Housing Alliance, mortgage lending Bank South Corporation 889 discrimination, statement 516 Bruce F Dailey, First Security Bank of Missoula 15, 185 National Federation of Independent Businesses, EVCO, Inc 185 in statement on credit availibility 616 First Bank and Trust Company 1072 National Income and Product Accounts 225,229 Flower Mound Bank 265 National Information Center, in statement Household International, Inc 889 on Federal Reserve System's budget 621 National Bank of Greece 15 National League of Cities 1017 National Bank of Greece, Athens, Greece 186 National Survey of Small Business Finances National Mortgage Bank of Greece 15 Financial services, article 802 National Mortgage Bank of New York 15 Financial services, staff study 726 Northwest Indiana Bancshares, Inc 976 New York Stock Exchange, Drexel Burnham Prineville Bank 889 Lambert, statement 302 Stasio, Andrew F., Jr., Former Director of Commonwealth Bank 977 Stockgrowers State Bank Company, Inc 185 List of pending cases 38, 105, 184, 264, OFFICE of the Comptroller of the Currency 393, 475, 589,709,797, 888,976, 1071 Deposit insurance system reform, statement 1022 Petitions for Enforcement Regulatory accounting standards, statement 912 Citicorp 977 Office of the Inspector General, Federal Reserve Family Guardian Life Insurance Company 977 System's budget, statement 622 Loans Office of Thrift Supervision Bank profitability, article Deposit insurance system reform, statement 1022 Agricultural 481 Regulatory accounting standards, statement 912 Commercial and industrial 479 Old Age, Survivors, and Disability Insurance 224 Consumer 480 Over-the-counter stocks, list of marginable Foreign addressees 481 Revision, announcements 153, 744 Real estate 480 Credit availability, statements 615, 629 Real estate, statement on loan discrimination 512 PARRY, Robert T., President, Federal Reserve Bank Lowrey, BarbaraR., article 39 of San Francisco, statement 146 Luckett, Charles A., article 604 Pauls, DianneB., article 891 Payments mechanism and systems (See Fees for Federal Reserve services to depository institutions) MAGNETIC Ink Character Recognition (MICR), payments Philadelphia Mortgage Plan, mortgage lending system article 294 discrimination, statement 514 Margin requirements, over-the-counter stocks (See Pickering, Margaret H., article 593 Over-the-counter margin stocks, list) Policy targets and operating procedures in the 1990s, article .. 1 Massey, Raymond H., appointed Assistant Director, Pricing of Federal Reserve services (See Fees for Federal Division of Applications Development Reserve services to depository institutions) and Statistical Services 231 Private sector adjustment factor, payments system article 297 Mauskopf, Eileen, article 985 Production, industrial (See Industrial production McFadden Act and capacity utilization Deposit insurance reform, statement 737, 927 Proposed actions McLaughlin, Mary M., article 477 Bank holding company reporting requirements, Meech Lake Accord 819 May 3,1990 525 Merchants National Corporation, statement Change in Bank Control Act filing requirements, regarding the case 444 July 2, 1990 638 Monetary Control Act of 1980 Federal Reserve Banks to notify off-line institutions Federal Reserve System's budget statement 619 of receipt of incoming Fedwire funds transfers, Payments system article 293 April 30,1990 448 Monetary policy Interdistrict Transportation Service, change to the Reports to the Congress 107, 711 pricing structure, October 5,1990 1037 Statements 215,226,738 Interim procedures for notification of changes in Senior Transmission channels of, changes, article 985 Executive Officers and Directors at bank holding Money laundering, statement on proposed legislation .... 308, 517 companies, Feb. 14,1990 231 Money stock, data revision 325 Investment advisory activities of Bank Holding Moody's Investors Service, in statement on corporate finance . 598 Companies, June 19, 1990 638 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A106 Federal Reserve Bulletin • December 1990 Pages Pages Proposed actions—Continued Regulations (Board of Governors)—Continued List of permissible activities in Regulation Y, Amendments May25, 1990 525 E, Electronic Fund Transfers Modification to underwriting and dealing in securities, Interpretation of requirements of the regulation 342 July 3, 1990 745 Transfer of enforcement functions from Federal Home Regulation K, to permit U.S. banking organizations Loan Bank Board to Office of Thrift Supervision ... 63 to expand international activities, August 1, 1990 745 G, Securities Credit by Persons Other than Banks, Regulation P, revision, April 4, 1990 448 Brokers, or Dealers Regulation Y, to permit bank holding companies to Foreign Margin Stocks, list 1045 provide financial advisory services to institutions, Marginable OTC stocks, list 155, 451, 1045 August 30, 1990 836 H, Membership of State Banking Institutions Regulation Y, to reduce filing requirements, Real estate appraisal standards, to implement July 2, 1990 745 provisions of FIRREA 638,639 Regulation Z, to freeze credit line when rate cap Transition capital standards and capital is reached, March 19, 1990 325 leverage guidelines 847 Risk-based capital guidelines, clarification, J, Collection of Checks and Wire Transfers of Funds October 12,1990 1037 Funds transfers through Fedwire, made State member bank, standards set for appraisals consistent with Uniform Commercial Code ... 933, 1036 conducted in federally related transactions, K, International Banking Operations Feb. 6, 1990 231 U.S. banking organizations to extend the scope State member banks and bank holding companies, of their international activities 931 capital standards, Nov. 22, 1989 16 M, Consumer Leasing Tie-in prohibitions, exemption, June 22, 1990 638 Transfer of enforcement functions from Federal Home Transition capital standards for state member banks, Loan Bank Board to Office of Thrift Supervision ... 63 December 29, 1989 54 T, Credit by Brokers and Dealers Prowse, Stephen D., article 593 Foreign Margin Stocks, list 1045 Publications in 1990 Foreign securities, settlement and 1983 Survey of Consumer Finances: Design and Methods .. 1037 clearance of transactions 324, 343 76th Annual Report, 1989 449 Interpretation of application to unregistered A Guide to Business Credit for Women, Miniorities securities 745, 753 and Small Businesses, revised brochure 931 Marginable OTC stocks, list 155, 451, 1045 Annual Report: Budget Review, 1989-90 449, 619 U, Credit by Banks for the Purpose Financial Sectors in Open Economies: Empirical of Purchasing or Carrying Margin Stocks Analysis and Policy Issues 745 Foreign Margin Stocks, list 1045 Home Mortgages: Understanding the Process Marginable OTC stocks, list 155, 451, 1045 and Your Rights, a brochure 931 X, Borrowers of Securities Credit Foreign Margin Stocks, list 1045 451 Marginable OTC stocks, list 155, 1045 Y, Bank Holding Companies and Change in Bank Control RADDOCK, Richard D., article 411 Notification of change in Board of Directors Rambouillet Economic Summit 899 or Senior Executive Officers 242 Real estate Real estate appraisal standards, implement Lending by commercial banks, statement 827 provisions of FIRREA 638, 639 Mortgage lending discrimination, statement 512 Transition capital standards and capital Mortgage refinancing, article 604 leverage guidelines 847 Regional Delivery System, in statement Z, Truth in Lending on System's budget 626 Home equity lines of credit 931, 956 Regulations (Board of Governors, See also Rules) Interpretation of requirements of the regulation 345 Amendments Transfer of enforcement functions from Federal Home B, Equal Credit Opportunity Loan Bank Board to Office of Thrift Supervision ... 63 Creditors to give business applicants written Staff commentaries, proposed revisions notice regarding written statement of reasons Regulation B for credit denial 61 December 4, 1989 54 Implementation of amendments on business March 29,1990 325 credit and data collection 341 Regulation C Transfer of enforcement functions from Federal Home December 12, 1989 54 Loan Bank Board to Office of Thrift Supervision ... 63 Regulation CC Women's Business Ownership Act of 1988, December 8,1989 54 requirements 53 Regulation E C, Home Mortgage Disclosure March 29, 1990 325 Financial Institutions Reform, Recovery November 16, 1989 15 and Enforcement Act (FIRREA), requirements 53 Regulation Z Financial Institutions Reform, Recovery March 30,1990 325 and Enforcement Act, revision to implement November 16, 1989 15 amendments 64 Regulations Regarding Foreign Gifts and Decorations, Order terminating state exemptions 241 amendment regarding acceptance of gifts 373 CC, Availability of Funds and Collection of Checks Regulatory accounting standards, statement 911 California state laws preempted by federal law 371 Rehabilitation Act 1013 Expedited Funds and Availabilility Act Research Triangle Institute, in article on financial services ... 817 implementation 525, 535 Reservable Transaction Accounts, decrease 53 Statement 306 Reserve requirement, decrease 53 D, Reserve Requirements of Depository Institutions Resolution Trust Corporation Transactions accounts decrease 67 Monetary policy report 217 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 76 A107 Pages Pages Resolution Trust Corporation—Continued Statements to Congress (including reports and letters)- Monetary policy report—Continued Continued Statement 739 Federal Reserve System's expenses and budget Texas banks' condition statement 633, 636 (Governors Angell and Kelley) 619 Retirement security, statement 222 Federal Reserve's role in developments surrounding Risk-based capital framework Drexel Burnham Lambert (Chairman Greenspan) 301 Deposit insurance system reform, statement 1027 Foreign investment in the United States Regulatory accounting standards, statement 915 (Chairman Greenspan) 124 Rubin, Laura S., article 1009 Global environment in which U.S. financial Rules Regarding Delegation of Authority firms will operate (Chairman Greenspan) 439 Foreign margin stocks list, approval delegated to Staff Globalization of financial markets (Chairman Greenspan) .. 507 Director of Division of Banking House Joint Resolution 409 Supervision and Regulation 754 E. Gerald Corrigan, President, Federal Reserve Technical amendment to conform reference Bank of New York 132 to Rules Regarding Availability of Information 1050 Robert P. Black, President, Federal Reserve Rules Regarding Foreign Gifts and Decorations, amendment Bank of Richmond 142 changing the minimum value of gifts 157 Robert T. Parry, President, Federal Reserve Bank of San Francisco 146 W. Lee Hoskins, President, Federal Reserve Bank of Cleveland 135 SAVAGE, Donald T. Large-dollar value electronic funds transfer systems, Article 280 security of (Governor Angell) 211 Staff study 120 Merchants National Corporation case Schleicher, C. William, Associate Director, Division of (Vice Chairman Johnson) 444 Federal Reserve Bank Operations, resignation 525 Monetary policy report to the Congress Securities (Chairman Greenspan) 215, 226, 738 Bank profitability, article 481 Money laundering, proposed legislation Foreign, settlement and clearance, amendment (Clyde H. Farnsworth, Jr., Director, Division of to Regulation T 324 Federal Reserve Bank Operations) 308, 517 Markets, statements on regulation 319, 519 Mortgage lending discrimination (Governor LaWare) 512 Subsidiaries, statement 312 Real estate lending by commercial banks Securities and Exchange Act of 1934 (Governor LaWare) 827 Securities market regulation 321, 521 Regulatory accounting standards (Governor Angell) 911 Securities subsidiaries, statement 315 Retirement security in present and future Securities and Exchange Commission generations (Chairman Greenspan) 222 Corporate finance statement 593, 601 Securities market regulation (Chairman Greenspan) ... 319, 519 Drexel Burnham Lambert, statement 302 Texas banks' condition (William Taylor, Staff Director, Regulatory accounting standards, statement 911 Division of Banking Supervision and Regulation) 632 Securities market regulation 319, 519 U.S. agencies and branches of Japanese banks, Securities subsidiaries, statement 315 activities (Henry Terrell, Senior Economist, Small Business Administration Division of International Finance) 831 Article on use of financial services by businesses 802 Stevens, Guy V.G., article 267 Staff study on use of financial services by businesses 726 Stock market credit, over-the-counter stocks Social insurance funds, state and local governments, (See Over-the-counter stocks, list of marginable; article 1012 and Regulations: G, T, U, and X) Social Security Administration 228 Structural Impediments Initiative 820 Social Security Board of Trustees 225 Supervision, Federal Reserve of foreign banks Social security and federal budget deficit, statement by Alan operating in U.S 1032 Greenspan 228 System's Pricing Policy Committee, payments Society for Worldwide Interbank Financial system article 298 Telecommunication (S.W.I.F.T.) 211 Sprinkel, Beryl, Undersecretary of the Treasury 904 Staff studies TABLES (For index to tables published monthly, Banking markets and the use of financial services see guide at top of page A94; for special tables published by small and medium-sized businesses 726 during the year, see list on page A71.) New data on the performance of nonbank subsidiaries Change in database 16 of Bank Holding Companies 120 Tax Reform Act of 1986 Standard and Poor's, in statement on corporate finance 598 Commercial bank profitability, effects 480 Standard Industrial Classification codes, nonbank Corporate finance statement 595 activities, article 282 Mortgage refinancing statement 609 Statements to the Congress (including reports and letters) Taylor, William "Bank Powers: Activities of Securities Subsidiaries of Role of Federal Reserve in supervision of foreign banks Bank Holding Companies," (Vice Chairman Johnson) ... 312 operating in U.S 1032 Credit availability (Chairman Greenspan) 629 Texas banks, condition statement 632 Credit availability to small business (Governor La Ware) ... 615 Terrell, Henry S. Deposit insurance system reform Article 39 (Chairman Greenspan) 731,917,1022 Statement 831 Economy in 1990 (Chairman Greenspan) 928 Testimony (See Statements to the Congress) Economy, the state of (Chairman Greenspan) 128 Texas banks, condition statement 632 Expedited Funds Availability Act (Governor Angell) 304 Thrift Institutions Advisory Council, members, Federal Reserve supervision of foreign banks new appointments 152 operating in the U.S. (William Taylor, Staff Director, TransData Corporation, survey conducted Division of Banking Supervision and Regulation) 1032 for American Banker regarding funds availability 305 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A108 Federal Reserve Bulletin • December 1990 Pages Pages Transfers of funds U.S. Department of the Treasury-Continued Fees (See Fees for federal reserve services to depository Financial Crimes Enforcement Network, institutions) statement on money laundering 311 Regulation E (See Regulation E) Foreign exchange, article 822 Tranum, Dixon A., article 187 Money laundering, statement 517 Treasury and Federal Reserve foreign exchange Office of Financial Enforcement, operations (See Foreign exchange operations) statement regarding money laundering 311 Truth in Lending, Regulation Z (See Regulations: Z) Wire transfer requirements to prevent money laundering ... 310 University of Michigan, Survey Research Center, in statement on mortgage refinancing 611 U.S. agencies and branches of Japanese banks, activities, statement 831 VETERANS Administration, in statement on mortgage U.S. Customs Service, statement regarding money refinancing 607 laundering 311, 517 Voluntary Foreign Credit Restraint Program, U.S. Department of Agriculture in article on foreign exchange rates 895 Food and Nutrition Service, in statement on System budget 625 U.S. Department of Commerce WERNEKE, Diane E., appointed Special Assistant Bureau of Economic Analysis 192, 200 to the Board for Congressional Liaison 836 U.S. Department of Energy 201 Wire transfer, recordkeeping requirements legislation U.S. Department of Housing and Urban Development to prevent money laundering 310 Mortgage lending discrimination, statement 513 Wolken, John D. U.S. Department of Justice Article 801 Criminal division, statement regarding Staff study 726 money laundering 311,517 Women's Business Ownership Act of 1988 Mortgage lending discrimination, statement 516 Staff commentary, revision to Regulation B 325 U.S. Department of the Treasury Bank profitability, article 481 Drexel Burnham Lambert, statement 302 ZEMEL, Robert J., promoted to Associate Director, Exchange rate policy, article 892 Division of Applications Development Federal Reserve System's budget, statement 619 and Statistical Services 231 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A109 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 Richard N. Cooper Richard F. Syron Richard L. Taylor Robert W. Eisenmenger NEW YORK* 10045 Cyrus R. Vance E. Gerald Corrigan Ellen V. Futter James H. Oltman Buffalo 14240 Mary Ann Lambertsen James O. Aston 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 Kate Ireland Charles A. Cerino1 Pittsburgh 15230 Robert P. Bozzone Harold J. Swart1 RICHMOND* 23219 Hanne M. Merriman Robert P. Black Anne Marie Whittemore Jimmie R. Monhollon Baltimore 21203 John R. Hardesty, Jr. Robert D. McTeer, Jr.1 Charlotte 28230 William E. Masters Albert D. Tinkelenberg1 Culpeper Communications John G. Stoides1 and Records Center 22701 ATLANTA 30303 Larry L. Prince Robert P. Forrestal Edwin A. Huston Jack Guynn Donald E. Nelson Birmingham 35283 A. G. Trammell Fred R. Herr1 Jacksonville 32231 Lana Jane Lewis-Brent James D. Hawkins1 Miami 33152 Robert D. Apelgren James T. Curry III Nashville 37203 Victoria B. Jackson Melvyn K. Purcell New Orleans 70161 Andre M. Rubenstein Robert J. Musso CHICAGO* 60690 Marcus Alexis Silas Keehn Charles S. McNeer Daniel M. Doyle Detroit 48231 Phyllis E. Peters Roby L. Sloan1 ST. LOUIS 63166 H. Edwin Trusheim Thomas C. Melzer Robert H. Quenon James R. Bowen Little Rock 72203 L. Dickson Flake Karl W. Ashman Louisville 40232 Raymond M. Burse Howard Wells Memphis 38101 Katherine H. Smythe Ray Laurence MINNEAPOLIS 55480 Michael W. Wright Gary H. Stern Delbert W. Johnson Thomas E. Gainor Helena 59601 J. Frank Gardner John D. Johnson KANSAS CITY 64198 Fred W. Lyons, Jr. Roger Guffey Burton A. Dole, Jr. Henry R. Czerwinski Denver 80217 Barbara B. Grogan Kent M. Scott Oklahoma City 73125 John F. Snodgrass David J. France Omaha 68102 Herman Cain Harold L. Shewmaker DALLAS 75222 Bobby R. Inman Robert H. Boykin Hugh G. Robinson William H. Wallace Tony J. Salvaggio1 El Paso 79999 Donald G. Stevens Sammie C. Clay Houston 77252 Andrew L. Jefferson, Jr. Robert Smith, III1 San Antonio 78295 Roger R. Hemminghaus 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 William A. Hilliard Angelo S. Carella1 Salt Lake City 84125 Don M. Wheeler E. Ronald Liggett1 Seattle 98124 Bruce R. Kennedy 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. 1. Senior Vice President. Digitized for FR2.A ESxEecRu tive Vice President. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

Federal Reserve Statistical Releases Available on the Commerce Department's Electronic Bulletin Board The Board of Governors of the Federal Reserve scription. For further information regarding a System makes some of its statistical releases avail- subscription to the electronic bulletin board, able to the public through the U.S. Department of please call (703) 487-4630. The releases transmit- Commerce's electronic bulletin board. Computer ted to the electronic bulletin board, on a regular access to the releases can be obtained by sub- basis, are the following: Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H. 8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H. 10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z.7 Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis