Federal Reserve Bulletin, 1991-01

VOLUME 77 • NUMBER 1 • JANUARY 1991 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 1 HOUSEHOLD SPENDING AND SAVING: Committee on Banking, Finance and Urban MEASUREMENT, TRENDS, AND Affairs, November 28, 1990. ANALYSIS This article introduces the basic framework 30 ANNOUNCEMENTS used in the national income accounts of the Increase in the amount of net transaction United States to describe the economic accounts to which a 3 percent reserve retransactions of the household sector and quirement will apply. reviews recent trends in household spend- Restructuring of interest rates on borrowing. It also discusses the standard economic ings from the discount window for seasonal theories of household spending and saving credit. behavior and presents some of the evidence that has been brought to bear on the validity Amendments to Regulation Y. of those theories. Proposal to modify the criteria for offering a tiered pricing structure in the check collec- 18 TREASURY AND FEDERAL RESERVE tion service; proposed revisions to the staff FOREIGN EXCHANGE OPERATIONS commentary on Regulation B; proposed During the August-October period, the dol- amendments to Regulations H and Y relar moved generally lower, declining almost garding real estate appraisal standards; pro- 5 percent on a trade-weighted basis as mea- posed revisions to the staff commentary on sured by the index of the staff of the Board Regulation Z. of Governors. U.S. authorities did not intervene in the foreign exchange market dur- 32 RECORD OF POLICY ACTIONS OF THE ing the period. FEDERAL OPEN MARKET COMMITTEE At its meeting on October 2, 1990, the 23 INDUSTRIAL PRODUCTION Committee adopted a directive that called Industrial production dropped 0.8 percent for maintaining the existing degree of presin October after having grown slowly be- sure on reserve positions for at least a short tween June and September. Industrial ca- period after this meeting. It was presumed pacity utilization dropped 0.9 percentage that some slight easing would be implepoint in October to 82.6 percent, just above mented later in the intermeeting period, its 1967-89 average. assuming passage of a federal budget resolution calling for a degree of fiscal restraint comparable to that now being negotiated 26 STATEMENT TO THE CONGRESS and the absence of major unexpected eco- Alan Greenspan, Chairman, Board of Gov- nomic or financial developments. After ernors, discusses the economic implications such an easing, the directive provided that of developments in the Persian Gulf and slightly greater reserve restraint might be says that the world economy is being pro- acceptable during the intermeeting period foundly influenced by these developments, or somewhat lesser reserve restraint would including their effects on oil markets during be acceptable depending on progress the past four months, before the House toward price stability, the strength of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

business expansion, the behavior of the A71 GUIDE TO TABULAR PRESENTATION, monetary aggregates, and developments in STATISTICAL RELEASES, AND SPECIAL foreign exchange and domestic financial TABLES markets. The reserve conditions contemplated by the Committee were expected to A78 BOARD OF GOVERNORS AND STAFF be consistent with growth of M2 and M3 at annual rates of about 4 and 2 percent respectively over the period from September A80 FEDERAL OPEN MARKET COMMITTEE through December. AND STAFF; ADVISORY COUNCILS 41 LEGAL DEVELOPMENTS A82 FEDERAL RESERVE BOARD Various bank holding company, bank ser- PUBLICATIONS vice corporation, and bank merger orders; and pending cases. A84 INDEX TO STATISTICAL TABLES AI FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of A86 FEDERAL RESERVE BANKS, November 28, 1990. BRANCHES, AND OFFICES A3 Domestic Financial Statistics A46 International Statistics A87 MAP OF THE FEDERAL RESERVE A55 Domestic Nonfinancial Statistics SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis David W. Wilcox, of the Board's Division of Because of this universal participation, many of Research and Statistics, prepared this article. the basic terms and concepts used in the national Stephen J. Helwig provided research assistance. income accounts to describe these activities are familiar, and many everyday ideas find a direct Spending by households on final goods and ser- correspondence in the national income accounts. vices accounts for about two-thirds of the gross There are some potential pitfalls, however: Lanational product. Developments in this area thus bels may mean one thing in common parlance but are crucial both in determining the course of quite another to economists. Thus, it is important aggregate economic activity and in signaling the to lay out a few definitions and establish some level of well-being of the nation's population. basic orders of magnitude.1 This article has three objectives: The first is to The national income and product accounts introduce the basic framework used in the na- (NIPA) are one of the basic sources of data on tional income accounts of the United States to the aggregate economy in the United States.2 describe the economic transactions of the house- The NIPA are compiled by the Bureau of Ecohold sector. Some attention is paid to aspects of nomic Analysis (BEA) in the Department of the accounting definitions and methods that have Commerce. For accounting purposes, the U.S. implications for the economic interpretation of economy is treated as consisting of various secthe data. Second, the article reviews recent tors: household, business, government, and fortrends in household spending, focusing espe- eign. The household sector, which is the focus of cially on the period since 1980 and highlighting this article, consists mainly of the roughly 250 some of the economic forces shaping these de- million residents of the United States. The sector velopments. Finally, the article briefly reviews is not limited to individuals, however; it is dethe standard economic theories of household fined to include certain nonprofit organizations as spending and saving behavior and discusses well. Further, saving of trust funds and private some of the evidence that has been brought to pension funds—and most saving of life insurance bear on the validity of those theories. carriers—is attributed to the household sector. The household sector does not include for-profit businesses or government entities; the activity of BACKGROUND these units is recorded separately in the national income accounts. In many respects, the study of the economics of Spending on goods and services by the housethe household sector is straightforward. We all hold sector is referred to as personal consumpparticipate in the economy, purchasing food, tion expenditures (PCE) in the NIPA. In most clothing, medical care, and furniture; earning areas, PCE measures expenditures rather than income from jobs and accumulated assets; and consumption. The distinction between expendisetting aside some portion of our income in the form of saving to provide for our future needs. 1. This section draws on material contained in U.S. Department of Commerce (1990). 2. The flow of funds accounts, prepared at the Federal NOTE. The author thanks Christopher Carroll for helpful Reserve Board, are another important source of aggregate discussions. economic data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 1991 tures and consumption arises in the case of dura- so it is classified as a nondurable good. Of course, ble goods and is made clear by way of a simple there are degrees of durability even among nonexample. Consider the purchase of a television durable goods: A pair of shoes may last many set: The expenditure on the TV takes place at the months even if worn every day, while a match will time of the sale, but the consumption of the go up in smoke in a matter of seconds. services provided by the TV occurs over the Students of the business cycle pay close useful lifetime of the TV. It is the purchase of the attention to the durable goods category despite TV that is recorded as PCE in the national income its relatively small size because spending in this accounts and not the consumption of its services. category varies a great deal over the cycle. In the national income accounts, this category comprises a diverse collection of items. About COMPOSITION OF PCE two-fifths of PCE for durable goods is spending on motor vehicles and parts, including new and PCE frequently is broken down into three major used cars and light trucks, mini vans, and RVs. categories: durable goods (which currently ac- (Auto and truck rentals are not included here; count for about one-sixth of total PCE), nondurathey are treated as services.) More than a third ble goods (another third of PCE), and services of PCE for durable goods is outlays for furni- (the remaining half)- Within this three-part systure and household equipment, a category that tem, services are defined as "commodities that includes, among other things, couches, dishcannot be stored and that are consumed at the washers, stereo equipment, and personal computplace and time of purchase."3 By contrast, goods ers. The remaining 15 percent or so of durable are items that can be stored. These distinctions goods spending is on a miscellany consisting of help to explain seemingly arbitrary designations: jewelry, books, boats, pleasure aircraft, and bicy- For example, fuel oil and coal are considered cles, to name a few. nondurable goods, whereas electricity and natural PCE for nondurable goods in recent years has gas are treated as services, even though all four been about twice as large as PCE for durable commodities are used for the same purpose— goods. Purchases in this category also show home heating. sensitivity to the stage of the business cycle, In some cases, the classification of an item as a although they are relatively more stable than are good or a service is especially difficult because the purchases of durable goods. In part, this relative item has characteristics of both categories; these stability may reflect the fact that outlays for items are classified according to the dominant food—for which, presumably, there is only limcharacteristic. For example, restaurant meals are ited scope to speed up or postpone purchases treated as goods in recognition of the leading role over the course of the business cycle—account of their food content, even though the total dining for about half of PCE for nondurable goods. experience depends heavily on the cooking and Another important category of nondurables is serving, both of which are services. clothing and shoes; this collection of goods accounts for about one-fifth of PCE for nondurable Goods goods. Like food purchases, the acquisition of apparel is driven in part by necessity, a fact that Within the category of goods, BE A defines dulimits its sensitivity to the business cycle. The rables as goods with an average service life of at remainder of nondurable goods includes gasoline least three years, and nondurable goods as the and motor oil, household supplies, magazines remainder. In this regard, it is important to and newspapers, fuel oil and coal, tobacco proddistinguish the service life of a good from its ucts, and drugs. storability: A bottle of wine may have a shelf life of many years, but its service life is quite short, Services The largest major category in PCE also turns out 3. U.S. Department of Commerce (1990), p. 13. to be the least sensitive cyclically: services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis 3 Fully one-quarter of this category is accounted PERSONAL OUTLAYS AND SAVINGS for by housing. The consumption of housing services is captured in the NIPAs by estimating Personal saving in the national income accounts the rental value of occupied housing units, be is computed as the difference between personal they occupied by owners or renters. This treat- outlays and disposable personal income. Thus, ment ensures that PCE is not affected by whether BEA's approach is to measure personal saving people own or rent their homes. Spending on from the "real" side of the economy, where additions to the housing stock is treated as resi- production takes place and household incomes dential investment. are generated. In addition to PCE, personal Another major component of services is med- outlays include interest payments to the business ical care, which in real terms accounts for about sector other than mortgage interest; the accountone-fifth of the total. A basic feature of these ing method with regard to these interest payexpenditures is that the consumer—the pa- ments is such that, for personal saving, it does tient—pays directly for only a relatively small not matter whether consumers pay cash for their proportion of them: Most expenses are paid by purchases or finance them by borrowing (see a third party, such as an insurance company, appendix A). the federal government under the medicare Some familiar, everyday transactions are not program, or state governments under medicaid. included either in PCE or in personal outlays. To sidestep the fact that households in many Transfers of used goods between households cases do not foot the bills for medical care are not included in PCE because they cancel out directly, BEA measures the receipts of health for the sector as a whole. Expenses associated care providers—doctors, dentists, other health with the construction of new housing are care professionals, and privately controlled treated as residential investment rather than hospitals and nursing homes. In this way, PCE consumption expenditures. Also, mortgage measures the consumption of medical care payments do not enter directly into the calcularather than consumers' out-of-pocket expendi- tion of either personal outlays or personal savtures. ing. Rather, they are captured indirectly in the A separate item in the PCE accounts measures cost of housing services for owner-occupied the cost to consumers of health insurance. This housing. Some payments to government entities item is intended to capture only the cost of the are deducted from disposable personal income services the insurance company provides the rather than added to PCE. Payments to county consumer—chiefly the risk-spreading—and not hospitals for medical care fall into this category, the value of the medical care provided under the as does tuition paid to state universities. These insurance plan. PCE for health insurance pro- items are functionally very similar to ones invided by for-profit carriers is estimated as the cluded in PCE, and so it may seem more natural difference between premiums received and ben- to include them there. Under either approach, efits paid out. Between these two general cate- however, personal saving is the same.4 gories—the medical care itself and the cost to An alternative approach to the measurement of households of health insurance services—PCE personal saving, taken in the flow of funds (FOF) for medical care services captures the sum of accounts constructed at the Federal Reserve, is out-of-pocket expenses of households and premi- to measure personal saving from the financial ums paid for health insurance, both by house- side of the economy by totaling the household holds and by employers. sector's net acquisition of assets (including hous- The remainder of the services category con- ing) and subtracting its net accumulation of liasists of a variety of smaller items, including bilities. In principle, these two approaches must transportation services (such as air travel and arrive at the same answer; in practice, many taxis), personal care services (for example, barber shops and dry cleaners), and recreation 4. For a more complete treatment of items included in PCE services (including movies and spectator and excluded from PCE, see U.S. Department of Commerce sports). (1990). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 Federal Reserve Bulletin • January 1991 recovery in aggregate economic activity took 1. Growth in real personal consumption expenditures firm hold. Since then, the growth in real PCE Percent change, fourth quarter from fourth quarter has slowed on balance. Real PCE is estimated to have grown 1 lA percent in 1989. The fastest-growing major category of real PCE during the 1980s was durable goods outlays, which expanded at an average rate of 5 percent per year. Because this growth was more rapid than that of the other components of PCE, I I I I I I I I I I I outlays for durable goods claimed a larger share 1981 1983 1985 1987 1989 of total real PCE in 1989, rising from 12.3 difficult issues of definition and measurement percent in 1980 to 16.1 percent. The share of cause differences between the NIPA and FOF outlays for nondurable goods shrank, while the measures.5 share of services held about even. It is important to distinguish both of these statis- The increase in the share of real PCE devoted tics from a related concept—the change in the net to durable goods during the 1980s extended a worth of the household sector. This concept differs longer-term trend: Since 1960, that share has from the NIPA and FOF measures of saving be- increased about 7 percentage points (see chart 2). cause those two measures ignore the effects of Over the same period, the relative decline in changes in the prices of assets already in the port- spending on nondurables has been even more folio of the household sector—that is, capital gains dramatic—from 46 percent of real PCE in 1960 to or losses. As a result, the NIPA and FOF saving 35 percent in 1989. Of course, the share of PCE measures cannot be compared directly with the for services made up the difference, increasing change in household net worth. about 5 Vi percentage points between 1960 and 1980 before flattening out during the 1980s.6 As noted above, PCE for durable goods has DEVELOPMENTS IN PCE SINCE 1980 been by far the most cyclically sensitive of the major categories of PCE: When personal income Growth in the nominal value of personal con- and total outlays are increasing, PCE for durable sumption expenditures averaged 8.2 percent goods typically rises even faster. Outlays for per year between 1980 and 1989. In substantial nondurable goods and services exhibit some cypart, this increase reflected the general rise in clical sensitivity, but much less than do outlays consumer prices during the period. Adjusted for durable goods.7 Graphically, these discrepanfor inflation, PCE grew 2.9 percent on average cies in cyclical sensitivities can be depicted in during the 1980s. Per capita, real PCE increased two ways. First, as chart 2 shows, the share of at an average annual pace of 1.9 percent between 1980 and 1989, a shade slower than the 2.2 percent average over the period 1946-79. 6. A difficult problem in evaluating these changes in spend- During the 1980s, there were marked varia- ing shares is that the quality of different components of PCE may have been changing at different rates. If the quality of, tions in the rate of growth of consumer spendsay, medical services was increasing faster than the quality of ing (see chart 1). Real PCE was roughly flat on other components of PCE, then one could reasonably argue net between the end of 1979 and the end of 1981. that households were consuming relatively more services in real terms than the NIPA statistics captured. In most cate- The year 1982 marked a transition, when congories of PCE, BEA's price indexes do not reflect an adjustsumer spending increased 3 percent despite a 2 ment for changes in quality. percent decline in overall GNP. PCE acceler- 7. The relative procyclicality of the various major compoated further in 1983, to 5Vi percent, as the nents of consumption can be quantified by statistical methods. On a quarterly basis, using data since 1960, the results are as follows: A 1 percent increase in real PCE typically is associated with a 33/4 percent increase in PCE for durable 5. See Wilson and others (1989) for an investigation into the goods. By contrast, a 1 percent increase in real PCE is sources of the discrepancies between the NIPA and FOF associated with an increase of 0.8 percent in nondurables measures of personal saving. spending and of only 0.4 percent in services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis 5 2. Composition of real personal 3. Cyclical behavior of major components of consumption expenditures personal consumption expenditures Percent of total real PCE Percent change from four quarters earlier Durables Durables I 20 ~~~15 J n~~10 10 1 1 1 1 1 1 1 1 1 1M IL 1 1 1 1 1 1 1 1 1 Nondurables w Services | v\ J Nondurables 10 45 1 1 1 1 1 1 1 1 II 1 1 1 M1 I1L ILI LLJ I 1 1 II 1 1 1960 1965 1970 1975 1980 1985 1989 | 40 purchases grew most rapidly between 1982 and 35 1986, when the growth in the overall economy was quite strong. As a result of this rapid rise, 1 1 1 1 II 1 II 1 II II 1 1 II II I I 1 1 1 II 1 1 over the course of the 1980s the real net stock of Services durable goods owned by the household sector __ ^ 50 increased nearly 60 percent, according to BEA estimates, or about 45 percent per capita. 45 A key component of PCE for durable goods is spending on motor vehicles; it accounts for about 1 1 1 1 1 1 1 1 1 1 11 1 1 1 1 1 1 1 1 1 II II 1 1 1 1 1 two-fifths of the total. PCE for motor vehicles 1960 1965 1970 1975 1980 1985 1989 and parts dropped about 15 percent during the Here and in the following charts, the shaded areas denote recessions as defined by the National Bureau of Economic Research. recessions of 1980 and 1981-82 from the levels of the late 1970s (see chart 4). Beginning in late PCE accounted for by durables purchases falls 1982, however, those outlays began to revive, below its longer-run trend during cyclical down- and they continued to move up well into the turns (the shaded regions in the chart) and rises recovery. Real spending was about flat, on net, above trend during expansions. PCE for services between 1986 and 1989. behaves in exactly the opposite fashion, rising in PCE for motor vehicles is very sensitive to the recessions and falling during expansions. The stage of the business cycle. During the past few share of nondurable goods, which exhibits nearly years, another factor has been important in deaverage cyclical sensitivity, shows little cyclical termining the timing of PCE for new cars and variation about the trend. trucks: manufacturers' incentive programs. A second method for comparing the cyclical These programs strongly influenced the pattern behavior of the three categories is simply to plot their growth rates and examine differences in their 4. Real personal consumption expenditures behavior during expansions and contractions as for motor vehicles and parts defined by the National Bureau of Economic Billions of 1982 dollars, annual rate Research (see chart 3). The chart makes clear that Ratio scale durables, nondurables, and services tend to accel- 200 erate and decelerate at roughly the same times, 175 but by strikingly different percentages. 150 Durables 125 In view of these historical regularities, it is not r i i V 100 1 i 1 1 1 i i i i surprising that during the 1980s, durable goods 1979 1981 1983 1985 1987 1989 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 Federal Reserve Bulletin • January 1991 of sales in 1985, 1986,1987, and 1989. Most of the 5. Prices and expenditures for gasoline and oil incentive programs were timed to expire at the Index, 1982 = 100 Billions of 1982 dollars end of the model year. The programs took sev- Real personal Relative price eral different forms: direct payments from the consumption A manufacturer to the customer in the form of a 100 expenditures J 1\ J v\ —100 price rebate; the provision of financing at belowmarket interest rates; and sales-based payments 80 f A/ \ 90 to dealers, who at their discretion could pass on part (or all) of their incentive receipts to customers. V 80 In practice, these incentive programs seem 1 I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1970 1975 1980 1985 1989 mainly to have induced consumers to shift the timing of their purchases rather than to make from the 1970s, when the price of gasoline rose purchases they had not otherwise planned. Con- substantially, suggest that the price elasticity of sumers moved their purchases up into the incen- gasoline is rather low, in the neighborhood of 0.2 tive period because they perceived that prices or 0.3; that is, a 10 percent increase in the price were likely to be much higher in the near future, of gasoline (relative to other consumer prices) after the programs expired. Indeed, the coordi- appears to cause a reduction in gasoline connated expiration of incentive programs generally sumption of only about 2 to 3 percent. was associated with a marked softening in sales, reflecting the "payback" for sales that had been Services pulled forward into the incentive period. The incentive programs account for much of the PCE for services grew at an average annual pace quarter-to-quarter jaggedness since 1985 in PCE of 3 percent during the 1980s. PCE for medical for motor vehicles that is evident in chart 4. care was an especially rapidly growing compo- In this respect, the effect of the auto incentive nent of consumer spending, as expenditures inprograms on consumer spending parallels the creased at an average annual rate of 4.0 percent effect of investment tax credits on business in real terms, outstripping total PCE by 1.2 spending for plant and equipment.8 That is, an percentage points per year on average (see chart investment tax credit that is explicitly known to 6). By 1989, this category represented nearly 14 be temporary tends to have a much larger effect percent of total real PCE. This increase in share within a given time span than one that is ex- occurred despite the fact that prices for medical pected to be in force for a long time. In the same care items were growing more rapidly than prices way, during the late 1980s, consumers appeared for PCE taken as a whole—by a margin of 2 to react more strongly to incentives that were percentage points—and thus, one might think, expected to expire in the near future than to ones consumers would have economized in using them. that were assumed to be available for some time. 6. Real personal consumption expenditures for Nondurables medical care and relative price of medical care Index, 1982 = 100 Percent Real outlays for nondurable goods grew at an Ratio scale Ratio scale average annual rate of 1.8 percent during the 120 1980s. Among the components of nondurable Share of total real PCE , 12 goods, outlays for gasoline rose about 10 percent 110 in real terms over the decade, responding in part — 11 to the drop in gasoline prices during the mid- 100 Relative price 1980s (see chart 5). Data from this episode and 10 90 1 1 1 II 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 8. See Jorgenson (1971) and Bischoff (1971). 1970 1975 1980 1985 1989 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis 7 Two factors help to explain the dramatic in- ing decisions used by most economists have been crease in the consumption of medical care de- the life-cycle theory and the permanent-income spite the rise in its relative price. First, patients theory.10 At the core of both theories are three probably faced declining incentives to limit their fundamental assumptions: First, consumers consumption of medical care, in that they were think about the future; they make spending decipaying less of the total costs directly.9 A patient sions in light of their income, both current and who is covered by medical insurance and is expected, and their current holdings of assets. contemplating, say, making a visit to a doctor's Second, financial markets are sufficiently well office may be more inclined to do so if the developed that consumers can, if they choose, out-of-pocket share of the cost of that visit is borrow against future income to consume now. only 20 percent—the typical copayment—and Third, households prefer more consumption certainly will be more inclined if it is zero. rather than less; and, less obviously, they prefer A second factor that may help to explain the to consume in a regular, smooth way than to increase in medical care expenditures is the aging consume in fits and starts. of the population of the United States since 1960: These three assumptions turn out to have The share of the population aged 65 or older has strong implications, which can be discussed eigrown nearly a third, from 9.2 percent to 12.2 ther in terms of income and consumption or in percent. Inasmuch as the elderly tend to spend terms of saving. The first implication is that more, per capita, on medical care than does the consumption and income will not always move population at large, such a demographic shift together in the short run. When income is temimplies an increase in the share of outlays going porarily higher than normal, households will rectoward medical care. ognize that though, in the short run, they may be able to consume at the rate at which they are currently receiving income, they cannot sustain PERSONAL SAVING that rate of spending in the long run; therefore, they will set consumption relatively low com- Besides spending their incomes on durables, pared with their temporarily high level of innondurables, and services, consumers allocate come. Viewed from the perspective of personal funds to personal saving. This section begins by saving, the theories predict that saving should be summarizing the standard economic theories high when income is temporarily high, and low used to analyze the spending and saving behavior when income is temporarily low. of households. It lays out key assumptions, and it A second implication of the life-cycle theory describes a few essential implications. Then, to is that saving by individual households will help evaluate the validity of the theories, it sets change as the members of the household age. out some empirical evidence, focusing in turn on Consumers who have just entered the workthe predictions for the behavior of the personal force typically have incomes below what they saving rate in the long run, the intermediate term, will be earning later in their careers, and they and, finally, the short run. may want to spend heavily, for, say, durable goods. Consequently, this theory predicts, the Theories of Consumption and Saving saving rate of this demographic group will be low. Middle-aged consumers earn more income Since the mid-fifties, the standard frameworks than younger ones and may have fewer extraorfor analysis of household consumption and sav- dinary expenses, and so they are predicted to save at relatively high rates to provide for their retirement. Retired consumers are presumed to 9. Summers and Carroll (1987) present evidence that the have lower income than they did before their share of health care expenses covered by direct patient payments declined from 65 percent in 1950 to only 28 percent in 1985. In part, the decline in the patient payment ratio can be traced to the growth in the federal medicare and medicaid programs, from virtually nothing in 1965, when they were 10. See Modigliani and Brumberg (1954), Ando and getting under way, to $150 billion in 1989. Modigliani (1963), and Friedman (1957). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 Federal Reserve Bulletin • January 1991 retirement, and so to be drawing down their 7. Personal saving rate stock of assets; in other words, according to the Percent of disposable personal income simple versions of the theories, the elderly will have negative saving rates. — / \ Annual 20 Given the "hump shaped" saving pattern that / \ Average, 1946-89 is posited at the individual household level, the 10 life-cycle theory asserts that the aggregate personal saving rate is a function of the demo- ^ RJ W ~ " graphic composition of the population. An un- 11 ml llll llllllllliilllll II II III III IIII III IIII III usually large proportion of the young or the 1930 1940 elderly in the population will tend to depress the aggregate saving rate, whereas a proportionally larger group of the middle-aged will tend to in 1938. During World War II, the personal boost the saving rate. If the age distribution of saving rate soared to 25 percent, at least in part the population were stationary—that is, if the because durable goods output was suppressed as relative size of each age cohort were the same production capacity was converted to wartime from year to year—then the aggregate saving purposes. For the period after World War II, the rate would fluctuate around some given level. saving rate has been essentially trendless, with However, if the demographic composition of an average value of about 6V2 percent. the population were to change over time, the aggregate saving rate would change, according The Decline in Personal Saving during the to the theory, even if there were no change in 1980s behavior at the individual household level. If, for example, the proportion of the elderly in the Despite its essentially trendless long-run behavtotal population were increasing, and if the ior, the saving rate, as chart 7 indicates, can elderly saved at relatively low rates, then, ac- deviate significantly from the average value for cording to the simple hypothesis outlined protracted periods. A particularly noteworthy above, the aggregate personal saving rate would feature of the postwar experience from the point fall. of view of public policy is the downward tilt in A third implication of the life-cycle and perma- the personal saving rate since the mid-1970s— nent-income theories is that an increase in the from about 9lA percent in 1973-75 to roughly 4V2 wealth, or net worth, of the household sector percent in the late 1980s. Indeed, since 1985, the should be associated with a decrease in the rate has not exceeded 5 percent in any year. personal saving rate. The notion is that house- Before 1985, the personal saving rate had not holds will consume not only the extra income fallen below 5 percent for any postwar year generated by the increment in wealth but some of except for twice in the late 1940s, when housethe principal as well, causing spending to in- holds presumably were releasing the demand crease relative to current income. pent up during the war. This recent decade-long decline has raised concerns about the adequacy Long-Run Trends in Personal Saving of personal saving to provide for capital accumulation, as well as questions about the sources of The evidence on how well these propositions possible changes in the behavior of the household up in the real world is, in some respects, hold sector. controversial. To begin with the long-term per- A number of factors appear to have played a spective, the personal saving rate has shown role in elevating the measured personal saving wide variation since 1929, the period covered by rate during the 1970s and depressing it during the Commerce Department statistics (see chart 7). 1980s. These include the slowing of inflation Personal saving as measured in the national between the 1970s and the mid- to late 1980s, income accounts was actually negative in changes in household wealth, changes in the 1932-34, during the Great Depression, and again composition of income, and demographic effects. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis 9 Inflation. One factor that has affected the path taking capital losses on their principal; and the of the measured personal saving rate during the adjustment procedure deducts these losses from past two decades is changes in inflation. Of measured disposable personal income. Because course, inflation affects personal income and of the differences in inflation rates during the past expenditure flows in a very obvious way—by thirty years, the inflation adjustment significantly scaling up over time their current-dollar values. affects the profile of the personal saving rate over This scaling up by itself has no effect on the time. The adjusted saving rate did not trend up measured personal saving rate. But inflation does during the 1960s and early 1970s, as did the affect NIPA saving through another channel. official measure; instead, it was about flat from Inflation causes the owners of certain assets 1960 through the mid-1970s. Then, the two mea- (such as bonds and bank deposits) to suffer sures both began to trend down; but the decline capital losses as the ongoing increases in prices in the adjusted rate was a bit less steep than that erode the purchasing power of those assets. To in the official figures. Overall, the inflation adjustsome extent, asset owners may be compensated ment may explain about 1 percentage point of the for these inflation-induced capital losses by in- difference between the measured personal saving creases in market interest rates, and hence in rates of the 1970s and the 1980s. interest income. Even if the owners are fully compensated, however, they will be only as well Household Wealth. Another factor that may off as they would have been in the absence of help to explain changes in the saving rate during inflation. Nonetheless, their measured personal the past two decades is variation in the net income and their saving will be higher than it worth, or wealth, of the household sector. As would be in a noninflationary economy, even on indicated earlier, one implication of the life-cycle a constant-dollar basis. In this case, it is natural and permanent-income theories is that, all else to adjust their income and saving to remove the equal, increases in wealth should lead to declines compensation for capital losses. Appendix B in personal saving. Statistical evidence suggests explores these issues in greater detail, presenting that for every dollar increase in their net worth, a simple illustration of how inflation influences households increase their consumption roughly 5 measured income and saving, and showing how cents. This adjustment takes place over two such influences can be removed. years or so. Chart 8 presents a measure of the personal Household net worth declined relative to dissaving rate adjusted for the inflation premium. posable personal income over the course of the The adjusted rate during the past three decades 1960s, reaching a low in the mid-1970s at about has always been been below the unadjusted one: the same time that the saving rate was especially Over this period, consumer prices have been high (see chart 9). Between the mid-1970s and trending upward. Therefore, owners of nomi- 1987, the ratio of wealth to income increased nally denominated assets have, on average, been markedly, driven by the boom in the stock market and by the rise in the value of real estate. Econometric evidence suggests that this increase 8. Personal saving rate, NIPA and adjusted for inflation premium in household wealth is, all else equal, consistent 9. Net worth of household sector Percent of disposable perse> nal income / 1 n 475 1-^450 425 400 M il I NN IMM R M ii ii ii 11 it i 1 1 1 I960 1965 1970 1975 1980 1985 1989 I960 1965 1970 1975 1980 1985 1989 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 Federal Reserve Bulletin • January 1991 A second consideration is that the elderly are 1. Transfer payments, selected years, 1965-89 Percent of disposable personal income disproportionately represented among the recipients of transfer income; such recipients may Nontaxable have shorter planning horizons than the popula- YYeeaarr TToottaall'' Total1 Me a d n ic d a re O n t o h n e - r TTaaxxaabbllee tion at large, and may have a higher MPC for this medicaid taxable reason as well. Finally, some transfer payments, 1965 8.6 8.0 .3 7.7 .6 such as welfare payments and unemployment 1970 12.0 11.1 1.7 9.4 .9 benefits, go to households that are under extreme 1975 16.9 15.5 2.6 12.9 1.4 1980 16.9 15.1 3.1 12.0 1.8 financial stress, and presumably need to spend 1985 17.3 14.7 3.9 10.8 2.6 1989 17.1 14.02 4.3 9.9' 2.92 everything they receive. Transfer income has expanded as a share of 1. Details may not add to totals because of rounding. total disposable personal income, from 8.6 per- 2. Calculated using data from 1988; detail on 1989 is not yet available. cent in 1965 to 17.1 percent in 1989 (see table 1). Nearly half of the growth in transfer income can with a decline in the personal saving rate of about be attributed to payments under the medicare Vh percentage points after full adjustment. In the and medicaid programs, which increased from wake of the 1987 break in the stock market, the 0.3 percent of disposable personal income in wealth-to-income ratio fell sharply from its peak in 1965, when the programs were in their infancy, to that year. By the end of 1989, however, it had 4.3 percent in 1989. Estimates from the Federal retraced about half of its decline; and, during 1988 Reserve's MPS econometric model suggest that and 1989, the NIPA personal saving rate rose about the marginal propensity to consume out of trans- 1 Yi percentage points from its low in 1987. fer income is about 0.9, whereas that out of labor income is roughly 0.65. Thus, the increase The Composition of Income. A good deal of of 8»/4 percentage points in the share of transfer empirical research suggests that the marginal income in total disposable income between 1965 propensity to consume, or MPC, out of transfer and 1975 is consistent with a decline in the income is substantially higher than that out of aggregate personal saving rate during the peother forms of income. Three considerations riod, all else equal, of about 2 percentage underlie this difference. First, changes in transfer points.12 However, given the stability in the income are less likely to be reversed than are share of transfer income since the mid-1970s, changes in other forms of income. For example, this factor does not help explain more recent when a social security recipient receives an in- changes in the saving rate. crease in benefits, he knows with a high degree of certainty that his benefits will remain at the Demographics. As suggested earlier, one imhigher level. Even if social security is his only plication of the hump-shaped pattern of lifetime source of income and he had been spending all of saving predicted by the life-cycle hypothesis is it, he could boost his spending upon receipt of an that changes in the age structure of the nation's increase in benefits and be fairly sure that he population could influence the aggregate saving could maintain his nominal spending in the fu- rate. As shown in table 2, the share of houseture. Not so with farmers. Even if a farmer holds with heads aged 65 or over increased 3!/2 receives income in one month from, say, the sale of a crop, he may well not receive income in the following month. As a result, his marginal pro- 12. Overall, the taxability of transfer payments appears to pensity to consume out of current income will be have increased during the past thirty years, probably because relatively low because, for him, income contains pension benefits paid to state and local government employa large transitory component.11 ees have become increasingly important, and because, more recently, social security benefits have been made partially taxable. As a result, the implications for spending and the personal saving rate of the shift in the composition of 11. It was precisely observations such as these that moti- personal income toward transfer payments are somewhat vated Milton Friedman's early work on the permanent- overstated by the increase in total transfer payments. Still, income hypothesis. See Friedman (1957). the direction of the trend is clear. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis 11 2. Households, by age of head traditional theories, they should have been al- Percent distribution most entirely saved. The personal saving rate did rise sharply, from 8.1 percent in 1975:1 to 11 Year Under 25 25-44 45-64 Over 65 percent in 1975:2, and then fell back again to 8.7 1960 4.9 40.3 36.9 17.8 1970 5.9 38.2 36.8 19.2 percent in 1975:3. Similarly, when the Congress 1980 8.1 40.3 31.2 20.4 imposed a temporary income-tax surcharge in 1988 5.7 43.8 29.1 21.3 1968, the saving rate fell, from 7.8 percent in SOURCE. Bureau of the Census. Details may not add to 100 percent 1968:2 to 6.2 percent in 1968:3—the direction because of rounding. predicted by the theory.14 This casual evidence percentage points between 1960 and 1988 (latest has not been seen as conclusive, however, and a data available). famous debate ensued over the effectiveness of Data from the Federal Reserve Board's 1983 temporary fiscal actions in stimulating or reand 1986 Surveys of Consumer Finances suggest, straining consumer demand.15 Blinder reviewed however, that saving rates do not differ much the evidence from the 1968 and 1975 episodes among age groups.13 Indeed, the elderly appear and concluded that the MPC out of transitory to be net savers, contrary to the prediction of income flows is smaller than the MPC out of simple versions of the life-cycle model. As a permanent flows: He estimated that 16 cents out result, even the sizable demographic shifts of the of every rebate dollar is spent in the same quarter past three decades have affected the aggregate in which it is received, about half as much saving rate only a little. Demographic factors consumption as he estimated for a permanent tax seem to have had virtually no net effect on the cut.16 These figures suggest two things: Consumsaving rate between 1960 and 1970, and they may ers recognize the difference between transitory have depressed it only about 3A percentage point and permanent income and adjust their spending in 1988 relative to its level in 1970. according to these differences; nonetheless, their spending may be more sensitive to transitory Short-Run Fluctuations in the Personal changes in income than the life-cycle and perma- Saving Rate nent-income models predict. Further evidence on the short-run variability A focal issue in the recent professional literature of the saving rate comes from consumer rehas been whether the saving rate exhibits enough sponses to predictable changes in income. The short-run variability in the face of transitory life-cycle and permanent-income models postumovements in income. Given that the life-cycle late that consumers should take predictable fuand permanent-income theories predict relatively ture changes in income into account when decidsmooth consumption, transitory fluctuations in ing on their current level of spending. Then, income should be reflected in swings in the when the predicted changes in income actually saving rate; that is, the marginal propensity to occur, spending should change little, if at all; that save out of transitory income should be high. is, predictable changes in income should be fully Some evidence on this question can be gleaned reflected in saving. Much statistical evidence from episodes in which fiscal policy was clearly suggests that, contrary to the life-cycle and peraimed at inducing transitory variation in income. manent-income theories, expenditure is affected For example, in response to the recession of even by changes in income that should have been 1973-75, the Congress voted a one-time partial predictable, and that saving does not fully absorb rebate of income taxes and a special payment to those changes.17 recipients of social security benefits, most of which was paid out in the second quarter of 1975. These payments were widely known to be of a 14. Similar before-and-after comparisons are set out in temporary nature; therefore, according to the Blinder (1981). 15. See, among others, Okun (1971) and Springer (1975). 16. Blinder (1981). 17. For an important early contribution along this line, see 13. See Kennickell (1990). Flavin (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 Federal Reserve Bulletin • January 1991 One possible explanation for the seeming "ex- theories because it would imply a consumption cess smoothness" of the saving rate is that stream that is more uneven than necessary. Achouseholds are liquidity constrained—that is, cording to Campbell and Mankiw, as much as they would like to borrow against future in- half of all income goes to households that behave creases in income but, for any one of a number of in this fashion—setting consumption equal to reasons, cannot. As a result, consumption is income even when future changes in income are lower than the liquidity-constrained household predictable and absorbing none of the predictable would like it to be. In response to an increase in variation in income into saving.20 actual income, a liquidity-constrained household Myopic behavior such as this may not be very likely would increase spending even if the irrational if it is very costly to gather and process higher income had been predicted because the information about future changes in income. household would have been unable to act previ- However, even high information costs may not ously on its expectation of higher income. Much explain the degree of myopia that the data seem of the evidence collected to date suggests that to reveal. For example, increases in social securliquidity constraints are important in determining ity benefits seem to be reflected in personal aggregate consumption. Suggestive evidence saving only dimly, if at all, despite the widealong these lines is that the life-cycle model spread availability of information about such satisfactorily describes the behavior of high- increases.21 wealth households—for whom liquidity presum- What does all this say about the life-cycle and ably is not an issue—but not the behavior of permanent-income theories? The evidence seems low-wealth households.18 This finding is consis- reasonably clear that the simplest versions of tent with the hypothesis that the spending deci- these theories do not fit reality in every respect: sions of the low-wealth households are influ- Consumption expenditures appear to be too senenced by liquidity constraints. sitive to transitory fluctuations in income (such Another recent study uses data from the Fed- as one-time income-tax rebates), and too inseneral Reserve's 1983 Survey of Consumer Fi- sitive to predictable future changes in income nances on whether a consumer has been denied (such as announced changes in social security credit.19 The survey data suggest that 19 percent benefits), for the predictions of the theories to fit. of U.S. families are liquidity constrained by this Substantial evidence has been marshaled to supdefinition; these families account for an esti- port the view that some portion of aggregate mated 13 percent of total income. If such a consumption tracks income closely in the short proportion of consumers were constrained by run. Put another way, perhaps as little as half of liquidity, important implications would follow for income is smoothed according to the predictions aggregate consumption. One is that the MPC of the simple theories. Nonetheless, despite within one quarter out of an income tax rebate these acknowledged deficiencies, these theories would be in excess of 13 percent, substantially remain indispensable both as reference points for larger than a pure life-cycle model—one without academic research and as frameworks for policy liquidity constraints—would imply. analysis. Another possible explanation for the excess smoothness of personal saving is that consumers In summary, the personal saving rate seems to are myopic; that is, for whatever reason, they drift up and down for periods of a decade or behave as if they ignore available information more. In the most recent such episode, which about future changes in income, and they adjust began in the mid-1970s, consumption has tended their consumption only when income actually to rise faster than disposable income, and the changes. Such behavior would confound the pre- NIPA saving rate has trended down. This downdictions of the life-cycle and permanent-income ward movement in the measured saving rate can 18. See Zeldes (1989). 20. See Campbell and Mankiw (1989, 1990). 19. See Jappelli (1990). 21. See Wilcox (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis 13 be accounted for largely by the slowing of infla- A.l. Blanche buys a car tion, the rise in household wealth relative to income, and shifts in the age composition of the End-of- End-of population. In the very short run—that is, peri- year year PCE Outlays Income Saving financial ods of a few months to a few years—consump- Year (1) (2) (3) (4) ac b c a o n u k n t net worth tion tends to track income more closely than (5) (6) standard economic theories predict. This close A. Blanche pays cash tracking suggests either that some consumers face liquidity constraints that restrict their con- 11999900 111000000...000000 111000000...000000 119999 11 111000 111000 555...000000 --- 555...000000 999555...000000 999555...000000 sumption choices, or that, for whatever reason, 1992 000 000 444...777555 444...777555 999999...777555 999999...777555 some consumers behave as though they are B. Blanche takes out a two-year loan shortsighted in forming their expectations about 111999999000 111000000...000000000 111000000...000000 the course of their income over time. In either 111999999111 111000 111000 555...000000 --- 555...000000 999999...888777888 999555...000000 case, it appears that in their strictest forms, the 1992 000 ...222444 444...999999 444...777555 999999...777555000 999999...777555 life-cycle and permanent-income hypotheses higher than it otherwise would have been regardprobably are not wholly appropriate for interless of how Blanche chooses to pay for the car. preting short-run movements in income, con- To keep the example as simple as possible, sumption, and saving. But augmenting the theory suppose that Blanche's only source of income is to take account of consumers who seem to an interest-bearing checking account, which at behave as though they are myopic or constrained the end of 1990 had $100,000 in it. Blanche has by liquidity appears to yield a useful framework two options for financing the car: Either she for analyzing short-run movements in consumpdraws down her bank account by $10,000 and tion and saving. Moreover, such a framework pays cash for the car, or she takes out a loan from seems to provide a fairly reliable guide to underthe bank and pays off the debt over time. The standing the longer-run implications for cononly crucial assumption is that the rate Blanche sumption of changes in income, wealth, demowould pay on the loan is the same as the rate she graphics, and inflation. can earn on her checking account—say, 5 percent.22 Panel A of table A. 1 summarizes the account- APPENDIX A: FINANCE CHARGES AND ing for the case in which Blanche pays for the car PERSONAL SAVING with cash drawn from her bank account (the amounts are in thousands of dollars). As columns The national income accounts are constructed in 1 and 2 show, the purchase of the car for $10,000 such a way that personal saving is the same is recorded as PCE in 1991, and, because there whether consumers finance their purchases by was no debt outstanding at the end of 1990, paying cash or by borrowing. If consumers deoutlays equal PCE. Income in 1991 is interest on cide to pay for a larger fraction of their purchases the amount held in the bank account at the end of by borrowing, then personal outlays will be 1990. Saving, shown in column 4, is the differhigher because of higher interest payments. If ence between income and outlays. Columns 5 consumers pay for this same proportion of their and 6 display two quantities that are not tracked purchases in cash, then their interest income will be lower because the stock of assets on which they are earning interest income will be lower. In 22. This assumption guarantees that Blanche will be either case, personal saving will be the same, equally well off whether she pays cash for the car or borrows. given one key assumption: that consumers can If the loan rate exceeded the bank account rate, then she borrow at the same rate of interest as they would be better off—aside from considerations that may be introduced by uncertainty or liquidity constraints—paying receive on their saving. cash for the car, whereas the opposite would be true if the As an illustration of this important point, sup- bank account rate exceeded the loan rate. Moreover, any time the two interest rates differed, the national income pose that Blanche decides to buy a new car in accounting data (properly) would vary according to which 1991 for $10,000. Then, PCE will be $10,000 method of financing Blanche chose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 Federal Reserve Bulletin • January 1991 in the national income accounts: the consumer's of $4,878, which is the amount that was outstandbank balance and her financial net worth. In this ing on the loan after the first payment. Column 3 case, there is no distinction between the two, and shows that income also is higher than in the case both her bank balance and her net worth fall by reported in panel A because Blanche was accuthe excess of the purchase price of the car over mulating interest in her bank account on the interest income. In 1992, PCE and outlays are difference between the purchase price and the zero; income consists of interest earned on the first payment on the loan. Not coincidentally, bank account; and saving is the same as in- this higher income exactly offsets the outlays come—because outlays are zero. The bank ac- recorded in 1992, and NIPA saving in 1992 is count and net worth both are simply scaled up exactly the same as it was in the first case. The from the previous period by the factor 1.05. balance in the bank account reflects the addition Panel B of the table sets out the case in which of interest received on the previous balance and Blanche takes out a two-year loan. She is as- the deduction of the second loan payment. Fisumed to pay off the loan by making two equal nancial net worth, as before, is simply scaled up payments, the first in 1991, before any interest from the previous period by the factor 1.05. charges have been allowed to accumulate, and the Thus, NIPA saving in every period is the second in 1992. In this simplified world, the loan same, no matter whether the consumer pays cash payment turns out to be $5,122.23 (The choice of a or borrows from the bank. In the former case, two-year loan is made for simplicity; the princi- income is lower in succeeding periods because ples illustrated here would apply equally if the the consumer is accumulating interest on a consumer took out a longer-term loan.) As in the smaller stock of assets. But, in the latter case, previous case, the full purchase price of the car is outlays are higher because the consumer has paid recorded as PCE in 1991; and again, outlays equal interest to the bank on the loan. PCE in 1991 because there was no debt outstanding at the end of 1990. Income and saving in 1991 also are the same as before. Thus, in 1991, it is APPENDIX B: PERSONAL SAVING AND THE impossible to recognize from the national income INFLATION PREMIUM accounting data (columns 1 through 4) whether Blanche paid cash for the car or financed it with a As noted in the text, personal income generally loan. As column 5 shows, however, data on includes an "inflation premium" that compen- Blanche's bank account would help to distinguish sates the owners of certain assets such as bonds the two cases because the bank balance has been and bank deposits for capital losses induced by credited with $5,000 of interest income and deb- inflation. The following example illustrates the ited only by the loan payment of $5,122 and not influence of the inflation premium on personal the full purchase price of $10,000. Nonetheless, a interest income, by comparing transactions data full balance sheet for the household sector would from two hypothetical economies that are idenalso show the outstanding balance on the loan as tical in every respect except one: In the first a liability of Blanche's, and, as a result, the economy, there is no inflation in the prices of financial net worth of the household sector, consumer items; in the second economy, prices shown in column 6, would be unchanged from the are rising 10 percent per year.24 The example case set out in panel A. shows that, although real consumer spending and In 1992, interesting differences emerge from the real net worth of the household sector are the the earlier case. First, as shown in column 2, the same in the two economies, saving differs. national income accounts record interest paid by Suppose that a fictitious consumer, Winston, Blanche to the bank (which is in the business has $1,000 in a checking account paying 2 persector) in the amount of $244—that is, 5 percent cent interest per year. Winston's only other 23. The size of the loan payment is set so as to make the discounted present value of the stream of payments equal to 24. This example conveys some of the main ideas that the purchase price of the car. Jump set out in his 1980 article. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis 15 B.l. Winston's outlays and income tionary one depicted in panel A.25 Panel B sets out Winston's outlays and income assuming that End-of- the nominal interest rate does rise to 12.2 percent year Year Outlays Income Saving financial CPI per year when inflation increases to 10 percent. (1) (2) (3) net worth (5) The values are shown in current-dollar terms— (4) that is, not adjusted for the change in the price A. The noninflationary economy level from 1990 to 1991. 1990 1,000 1 As before, Winston's bank account begins 1991 120 120 ' 0 ' 1,000 1 with a balance of $1,000. For the sake of conve- B. The inflationary economy (current dollars) nience, the consumer price index (CPI) shown in 1990 11,,000000 11..00 column 5 is assumed to equal 1 in 1990. By 1991, 1991 132 232 100 11,,110000 11..11 with inflation at 10 percent per year, the price C. The inflationary economy (constant dollars) level has risen to 1.1, and, as shown in columns 1 through 4, this rise in prices—together with the 1990 111,,,000000000 111...000 1991 112200 221100..9911 9900..9911 111,,,000000000 111...111 increase in the nominal interest rate—has important effects. First, as shown in column 2, income in 1991 now is $232, consisting of $110 of wages source of income is his wages, at $100 per year; (equal to the original $100 scaled up by the 10 there is no inflation. Winston decides to spend percent rise in prices—Winston's wages are subonly at a rate that he can sustain without reduc- ject to a COLA), plus $122 in interest income— ing the balance in his checking account. (He which is just the nominal interest rate of 12.2 may, for example, want to leave a $1,000 bequest percent multiplied by the ending balance in the to his children.) bank account from 1990. To purchase the same Panel A of table B.l summarizes Winston's bundle of goods as he did in the noninflationary transactions in 1991 from the perspective of the economy, Winston must boost his nominal outnational income accounts. As column 1 shows, lays by 10 percent in 1991 to $132. Given income income in 1991 is $120, consisting of $100 in of $232 and spending of $132, saving (shown in wages and $20 in interest income. In this non- column 3) is $100; and, accordingly, the increase inflationary economy, Winston can spend all his in nominal financial net worth between 1990 and income and the purchasing power of his bank 1991 (column 4) is $100. Thus, the increase in account will be the same at the end of the year as inflation is associated with an increase in perit was at the beginning. With outlays of $120, sonal saving from zero to $100 in 1991. But the Winston's saving (and his saving rate) is zero, crucial point is that, despite the increase in and his financial net worth at the end of 1991 is personal saving and the associated rise in nomi- $1,000. Because inflation is assumed to be zero, nal financial net worth in 1991, Winston is no this $1,000 buys just as much at the end of 1991 better off than he was in the noninflationary as it did at the end of 1990. economy: The purchasing power of his financial Now suppose that the inflation rate increases net worth at the end of 1991 is the same as from zero to 10 percent. If the nominal interest before, after adjustment for the higher level of rate does not rise at the same time, Winston will prices. be worse off even if his nominal wages rise fast enough to keep pace with the increase in prices. The reason Winston will be worse off is that the 25. The appropriate increase in the nominal interest rate rising level of prices will erode the purchasing can be computed from the following formula: power of the $1,000 in the checking account. 1 + i = (1 + r) • (1 + p), However, an increase in the nominal interest rate where / is the nominal rate, r is the real rate, and p is the rate could compensate Winston for that erosion; inof inflation. In the noninflationary economy, r equaled 0.02, p deed, if the nominal interest rate rose to 12.2 equaled 0, and, consequently, i equaled 0.02—the nominal percent, Winston would be just as well off in this interest rate was the same as the real rate. In the inflationary economy, r still equals 0.02 but p equals 0.10, implying that i inflationary economy as he was in the noninflamust rise to 0.122, or 12.2 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 Federal Reserve Bulletin • January 1991 This fact is more apparent once the nominal Income," Journal of Political Economy, vol. 89 quantities in panel B have been translated into (October 1981), pp. 974-1009. constant (that is, inflation-adjusted) dollars. This Friedman, Milton. A Theory of the Consumption translation is accomplished by dividing each of Function. Princeton, N.J.: Princeton University the nominal quantities by the CPI for that period. Press for National Bureau of Economic Research, Panel C, which contains these inflation-adjusted 1957. figures, shows that, in every fundamental way, Hall, Robert E., and Dale W. Jorgenson. "Ap- Winston is no better or worse off in the infla- plication of the Theory of Optimum Capital Actionary economy than he was in the noninfla- cumulation," in Gary Fromm, ed., Tax Incentionary economy: He is consuming the same tives and Capital Spending. Washington: amount in 1991, and the purchasing power of his Brookings Institution, 1971, pp. 9-60. financial net worth at the end of the year is the Jappelli, Tullio. "Who Is Credit Constrained in same as it was in the noninflationary economy. In the U.S. Economy?" Quarterly Journal of Ecothe inflationary economy, Winston does receive nomics, vol. 105 (February 1990), pp. 219-34. $90.91 in "extra" real income, but this is com- Jump, Gregory V. "Interest Rates, Inflation pensation for the real capital loss that he is taking Expectations, and Spurious Elements in Meaon his checking account due to inflation. To sured Real Income and Saving," American Ecomaintain his consumption in the inflationary econ- nomic Review, vol. 70 (December 1980), omy at the same level as he did in the noninfla- pp. 990-1004. tionary economy, he must save all of this "extra" Kennickell, Arthur B. "Demographics and income. Thus, increases in inflation cause the Household Savings." Finance and Economics saving rate as measured in the NIPAs to rise. Discussion Series 123. Washington: Board of Governors of the Federal Reserve System, Division of Research and Statistics, 1990. REFERENCES Modigliani, Franco, and Richard Brumberg. "Utility Analysis and the Consumption Func- Ando, Albert, and Franco Modigliani. "The tion: An Interpretation of Cross-Section Data," 'Life Cycle' Hypothesis of Saving: Aggregate in Kenneth K. Kurihara, ed., Post-Keynesian Implications and Tests," American Economic Economics. New Brunswick, N.J.: Rutgers Uni- Review, vol. 53 (March 1963), pp. 55-84. versity Press, 1954, pp. 388-436. Bischoff, Charles W. "The Effect of Alternative Okun, Arthur M. "The Personal Tax Sur- Lag Distributions," in Gary Fromm, ed., Tax charge and Consumer Demand, 1968-70," Incentives and Capital Spending. Washington: Brookings Papers on Economic Activity, 1:1971, Brookings Institution, 1971, pp. 61-130. pp. 167-211. Blinder, Alan S. "Temporary Income Taxes Springer, William L. "Did the 1968 Surcharge and Consumer Spending," Journal of Political Really Work?" American Economic Review, Economy, vol. 89 (February 1981), pp. 26-53. vol. 65 (September 1975), pp. 644-59. Campbell, John Y., and N. Gregory Mankiw. Summers, Lawrence, and Chris Carroll. "Why "Consumption, Income, and Interest Rates: Is U.S. National Saving So Low?" Brookings Reinterpreting the Time Series Evidence," in Papers on Economic Activity, 2:1987, pp. 607-35. Olivier Jean Blanchard and Stanley Fischer, U.S. Department of Commerce, Bureau of Ecoeds., NBER Macroeconomics Annual 1989. nomic Analysis. "Personal Consumption Expendi- Cambridge, Mass.: MIT Press for National Bu- tures." Methodology Paper Series MP-6. Washingreau of Economic Research, 1989, pp. 185-245. ton: Government Printing Office, June 1990. , and . "Permanent Wilcox, David W. "Social Security Benefits, Income, Current Income, and Consumption," Consumption Expenditure, and the Life Cycle Journal of Business and Economic Statistics, Hypothesis," Journal of Political Economy, vol. 8 (July 1990), pp. 265-79. vol. 97 (April 1989), pp. 288-304. Flavin, Maijorie A. "The Adjustment of Con- Wilson, John F., and others. "Measuring Housesumption to Changing Expectations about Future hold Saving: Recent Experience from the Flow-of- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Household Spending and Saving: Measurement, Trends, and Analysis 17 Funds Perspective," in Robert E. Lipsey and Helen Zeldes, Stephen P. "Consumption and Liquid- Stone Tice, eds., The Measurement of Saving, ity Constraints: An Empirical Investigation," Investment, and Wealth. Chicago: University of Journal of Political Economy, vol. 97 (April Chicago Press, 1989, pp. 101-52. 1989), pp. 305-46. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report, covering the period August percent on a trade-weighted basis as measured through October 1990, provides information on by the index of the staff of the Federal Reserve Treasury and System foreign exchange opera- Board of Governors. Against individual currentions. It was presented by Sam Y. Cross, Man- cies, the dollar declined between 4 percent and ager of Foreign Operations of the System Open 4Vi percent on balance against the major Euro- Market Account and Executive Vice President in pean currencies, reaching record lows against the charge of the Foreign Group of the Federal German mark and the Swiss franc. It declined Reserve Bank of New York. Thaddeus D. Russell against the Japanese yen almost 11 percent to was primarily responsible for preparation of the trade at its lowest levels against that currency report.1 since January 1989. The dollar was relatively unchanged against the Canadian dollar. The U.S. During the August-October period, sentiment authorities did not intervene in the foreign extoward the dollar was generally negative. Ex- change market during the period. change market participants continued to focus on The outlook for the U.S. economy was a focus signs of sluggish economic activity in the United of attention in the exchange market throughout States and on the movement of interest rates the period under review as market participants against the dollar. The growth prospects of the looked to each new economic statistic for signs U.S. economy were widely perceived as weak, of how significantly the U.S. economy was slowand the adverse trend in interest rate differen- ing. A report released just before the period had tials, which had narrowed several hundred basis shown second-quarter GNP growth to be less points since early 1989, was expected to con- rapid than had been expected at an annual rate of tinue. 1.2 percent. In early August, several data re- The crisis in the Persian Gulf had both positive leases and reports reinforced impressions of and negative effects on the dollar. Immediately slowing economic activity, including data on after the Iraqi seizure of Kuwait on August 2, the employment, industrial production, and capacity dollar rose to its highs of the period amid expec- utilization as well as the Federal Reserve's Beige tations that the conflict would trigger heavy flows Book survey of economic conditions around the into the dollar. Thereafter, although market par- country. ticipants were attracted to U.S. assets at times As the period progressed, subsequent data when fears of war intensified, the dollar was releases provided mixed and hard-to-interpret undermined by concerns that the U.S. economy signals about the U.S. economy. But the view of was more vulnerable than other major economies the economy in the exchange market and among to the steep rise in oil prices caused by the observers more generally became increasingly conflict. negative, in large part due to concern over the economic impact of the sharp increases in oil In this environment, the dollar moved generprices resulting from the Persian Gulf crisis. ally lower during the period, declining almost 5 Market participants believed that the U.S. economy was less able to cope than some of the other industrial economies with the potential effects of 1. The charts for the report are available on request from sharply higher oil prices on business activity and Publications Services, Board of Governors of the Federal prices. A September 25 report revising second- Reserve System, mail stop 138, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

19 quarter economic growth downward to a 0.4 period highs on August 2 of DM1.6215 against percent rate suggested to market participants the mark and ¥151.60 against the yen, it quickly that the U.S. economy was weakening markedly, started to decline against the European curreneven before the economic effects associated with cies as market participants became more conthe Persian Gulf crisis had begun to affect it. cerned over U.S. economic prospects. At this Other economic data released over the period time, the dollar showed little net movement provided a more mixed impression, including against the Japanese yen, the currency initially preliminary U.S. GNP data released on October the most negatively affected by fears of a disrup- 30 estimating growth of 1.8 percent at an annual tion of oil flow from the Middle East. rate for the third quarter. The second wave took place around mid-Sep- Spreading perceptions of slowing U.S. eco- tember, when the dollar declined against the yen nomic activity added to the view that interest but traded relatively steadily against other major rates in the United States would continue to go currencies. The dollar's decline against the yen down and that interest rate differentials would stalled for a time around the September 22 meetmove further against the dollar. Expectations of ing in Washington of the Group of Seven Finance lower interest rates were reinforced by the pros- Mi listers and Central Bank Governors. The pect that some form of compromise would be co nmunique released after the meeting stated reached to reduce the U.S. fiscal deficit. After a tht t the officials had noted the yen's appreciation major U.S. money center bank announced large since their last meeting and that they had "constaff cuts and increased provisions for problem ch ded that exchange rates were now broadly in loans late in September, U.S. banks also became lin s with continued adjustment of external imbala focus of discussion in the exchange market, an ;es." with some market participants believing that the 7rom late September through mid-October, condition of U.S. banks added to the likelihood th< third wave occurred, with the yen leading a that the Federal Reserve would ease. gei leralized rise of foreign currencies against the On September 30, news of a budget accord dollar. At that time, market participants became between negotiators from the White House and increasingly concerned about the impasse over the Congress also increased expectations that the the U.S. government budget, and perceptions Federal Reserve would soon allow an easing in developed in the market that officials, both in the the federal funds rate. After that initial budget United States and abroad were not concerned package failed to pass the Congress on October about the dollar's decline. The dollar traded as 5, however, the focus of market attention shifted low as ¥123.75 against the yen on October 18 away from interest rates. As the budget negotia- and DM1.4910 against the mark the next day, its tions became protracted, the market grew preoc- lows for the period. cupied with the stalemate itself, which was Late in October, steps were taken toward widely viewed as evidence of the unmanageabil- dispelling the impression of a lack of official ity of the budget process and of serious disarray concern. Treasury officials made clear in statewithin the U.S. government over economic man- ments to the press that the Administration was agement generally. Thus, concern over the im- concerned about the dollar and rejected suggespasse continued to weigh on the dollar until the tions that the decline was welcomed. At about closing days of the period. Even when a new the same time, market rumors of U.S. intervenbudget acceptable to the President was finally tion served as a reminder to market participants approved by the Congress on October 27, it gave of the possibility of official action to support the little lift to market sentiment toward the dollar. dollar. In fact, the U.S. monetary authorities did The decline in the dollar during the period not intervene during the three months under occurred principally during three waves of selling review. pressure. The extent to which the dollar moved against The first occurred during the first three weeks individual currencies was further influenced by of August. Although the dollar initially firmed on developments in their respective countries. With news of Iraq's invasion of Kuwait, reaching its the formal unification of Germany on October 3, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 Federal Reserve Bulletin • January 1991 the pressures and anticipated costs associated the United Kingdom's North Sea oil fields. Also, with the integration of the East German economy through much of the period, sterling was buoyed into that of West Germany were a matter for by expectations that the currency would soon reevaluation in the exchange market. The Ger- join the Exchange Rate Mechanism (ERM) of the man mark continued to benefit from the percep- European Monetary System. On October 5, tion that a large fiscal deficit and the fast pace of these expectations were borne out when it was domestic economic expansion under way in the announced that the pound was entering the ERM western part of the country, driven in part by with a 6 percent margin of fluctuation. During the demand from the East, would keep German rest of October, the pound declined, moving interest rates firm or rising. Market participants below its ERM parity rate against the mark of noted repeated assurances from the Bundesbank DM2.95. that it would adhere to a strict, anti-inflationary Like the mark, the Swiss franc closed the policy stance, as well as the call for a strong mark three-month period almost 4V2 percent higher on to keep inflation in check and to help attract balance against the dollar. Early in the period, capital to finance economic integration. The the Swiss franc led the rise against the dollar and mark's strength was dampened periodically dur- strengthened against all major currencies. At that ing the period, as large upward revisions in time, the franc appeared to benefit to some estimates of the expenses associated with unifi- extent from the nervousness and uncertainties cation suggested that the costs and difficulties surrounding the situation in the Middle East. Its had been misgauged. Concerns about these prob- strength was also based on the Swiss National lems and the upward trend in German interest Bank's tight, anti-inflationary policy stance. Afrates also contributed to the sharp declines in ter moving up to an all-time high of SF1.2525 German stock prices during the period. against the dollar on August 23, the franc fluctu- Among other European currencies, the pound ated below this level through the end of October sterling moved higher against the dollar during while other foreign currencies subsequently the period. It thereby moved broadly in line with moved higher. The franc's rise stalled after the the rise of the mark, despite signs of a weakening Swiss central bank took advantage of the leeway in economic activity, rising unemployment, and provided by the currency's strength to moderate declining output and retail sales. The pound its tight monetary policy slightly, a move acgained some support from safe-haven flows and knowledged in public comments toward the end the perception that sterling would benefit from of August. The Japanese yen appreciated significantly 1. Federal Reserve reciprocal currency arrangements against other major currencies during all but the Millions of dollars initial days of the three-month period. The first Amount of effect of the invasion of Kuwait was to push the Institution facility, October 31, 1990 yen down against other currencies as the exchange market initially reacted to Japan's heavy Austrian National Bank 250 National Bank of Belgium 1,000 dependence on imported oil and fears of a com- Bank of Canada 2,000 National Bank of Denmark 250 plete disruption of Persian Gulf oil shipments. Bank of England 3,000 However, the yen soon began moving higher Bank of France 2,000 Deutsche Bundesbank 6,000 against both the dollar and other currencies as Bank of Italy 3,000 Bank of Japan 5,000 these concerns receded and market participants came to focus more on the rising cost of oil—a Bank of Mexico 700 Netherlands Bank 500 cost that the Japanese economy seemed better Bank of Norway 250 Bank of Sweden 300 able to absorb than other countries. Further- Swiss National Bank 4,000 more, market participants expected that move- Bank for International Settlements ments in interest rate differentials would con- Dollars against Swiss Francs 600 Dollars against other authorized European tinue to favor the yen. Market participants currencies 1,250 believed that the Bank of Japan, already con- Total 3300,,110000 cerned about the fast pace of Japan's economic Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 21 Drawings and repayments by foreign central banks under special swap arrangements with the U.S. Treasury Millions of dollars; drawings or repayments (—) Outstanding as Outstanding as Central bank drawing Amount of of July 31, August September October of October 31, on the U.S. Treasury facility 1990 1990 Bank of Guyana1 31.8 13.4 0 -13.4 National Bank of Hungary2 20.0 20.0 -12.1 -7.9 Central Bank of Honduras3 82.3 57.3 -22.6 0 0 34.8 NOTE . Data are on a value-date basis. Components may not add to totals due 2. Represents the ESF portion of a $280 million short-term credit facility, to rounding. The ESFs special facility with the Bank of Mexico, inactive since which expired on September 14, 1990. July 31, 1990, expired on September 14, 1990. 3. Represents the ESF portion of a $ 147.3 million short-term credit facility 1. Represents the ESF portion of a $178 million short-term credit facility, established on June 28, 1990. which expired on September 20, 1990. expansion and inflationary pressures, would be market. Then, various remarks by U.S., Japaquick to raise interest rates in response to the nese, and French officials renewed market parincrease in energy costs resulting from the Per- ticipants' wariness that the authorities might sian Gulf crisis. In fact, the Japanese central intervene to support the dollar. bank did raise its discount rate 3A percentage The U.S. dollar rose slightly on balance point on August 30. against the Canadian dollar during the three In response to rising market interest rates that months. In the early part of August, the Canaboth preceded and followed the discount rate dian currency firmed to its highest levels in hike, talk spread that Japanese investors were twelve years against the U.S. dollar. At that finding the returns they were getting at home to time, market concerns over a possible disruption be adequate and would no longer be investing of Persian Gulf oil shipments helped buoy the abroad as much as before, especially in the currency because of Canada's position as a net United States. Meanwhile, the decline in Japa- exporter of oil. However, the currency subsenese equity prices resumed, with the Nikkei quently began to move lower, particularly after index of the Tokyo Stock Exchange down 48 Canadian officials confirmed that the economy percent at the beginning of October from its had entered a recession and that they were levels at the start of the year. Accordingly, prepared to lower interest rates. several Japanese banks, in response to the sharp The Exchange Stabilization Fund (ESF) refalls in values of their domestic stock invest- newed warehousing arrangements with the Fedments as well as their bond holdings, repatriated eral Reserve, which fell due within the period. funds to shore up their domestic capital positions These transactions resulted in realized profits of ahead of the end of the fiscal half year on $415.6 million for the ESF, reflecting the differ- September 30. The yen's rise gained more mo- ence between the rates at which the Treasury had mentum as Japanese companies and investors also moved to raise their hedge ratios on foreign 3. Net profits or losses (-) holdings from below-average to above-average on U.S. Treasury and Federal Reserve current foreign exchange operations1 levels. Millions of dollars As the yen rose, Japanese officials were increasingly questioned about their attitudes U.S. Treasury Federal Exchange Period and item toward exchange rates as some small- and medi- Reserve Stabilization Fund um-sized Japanese firms began to report that Valuation profits and losses on they were losing export competitiveness. Official outstanding assets and liabilities comments at first left questions in the market as as of July 31,1990 33,,554477..55 11,,551199..55 to whether either the Japanese or the U.S. au- August 1,1990-0ctober 30,1990 Realized 00 441155..66 thorities cared if the yen continued to rise. But, Valuation profits and losses in late October, a large customer purchase of on outstanding assets and liabilities as of dollars against yen carried out by the Federal October 31,1990 55,,336633..33 22,,887766..33 Reserve Bank of New York was seen in the 1. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 Federal Reserve Bulletin • January 1991 acquired the funds and the rates at which the ber, including final repayment on September 20, warehousing agreements were renewed. As of the facility's expiration date. October 31, the last day of the period under review, the ESF's outstanding warehousing of Hungary. The Treasury's $20 million share of foreign currencies with the Federal Reserve to- the first two drawings by Hungary was outstandtaled $7,000 million, unchanged for the period ing at the start of the period. Hungary reduced under review. the amount outstanding on its second drawing The U.S. Treasury, however, had initiated $4.8 million on August 1 and the amount outsteps before the end of the period that resulted in standing on its first drawing $7.3 million on the reversal of $2,500 million of the warehousing August 20. The drawings were fully repaid on of foreign currencies effective November 1, the September 5. Hungary also completed repayday after the period's close. The reversal of ments to the Bank for International Settlements warehousing of foreign currencies finalized on (representing certain member central banks) be- November 1 was financed, in part, by the Trea- fore the September 14 expiration date of the sury's issue on October 31 of an additional $1,500 facility. million of Special Drawing Right (SDR) certificates to Federal Reserve Banks. The remainder Honduras. On August 1, Honduras made a was financed from ESF cash balances. As of partial repayment of $22.6 million to the Trea- November 1, outstanding warehousing of foreign sury, leaving an outstanding balance of $34.8 currencies with the Federal Reserve totaled million on the Treasury's part of a multilateral $4,500 million, half the level outstanding earlier facility. in the year. As of the end of October, cumulative book- The Treasury also continued to exchange keeping or valuation gains on outstanding foreign SDRs for dollars with foreign monetary authori- currency balances were $5,363.3 million for the ties that needed SDRs for payment of IMF Federal Reserve and $2,876.3 million for the ESF charges and for repurchases, exchanging a total (the latter figure includes valuation gains on of $558.4 million equivalent of SDRs during the warehoused funds). These valuation gains repreperiod. sent the increase in dollar value of outstanding Multilateral credit facilities previously estab- currency assets valued at end-of-period exlished for Guyana and Hungary, in which the change rates, compared with rates prevailing at ESF participated, were repaid in full during this the time the foreign currencies were acquired. period while a similar facility for Honduras was The Federal Reserve and the ESF invest their partially repaid. On September 14, a special foreign currency balances in a variety of instru- Mexican short-term credit facility established in ments that yield market-related rates of return March by the U.S. monetary authorities expired. and that have a high degree of quality and All drawings on the facility had been repaid liquidity. A portion of the balances is invested in before the period under review. securities issued by foreign governments. As of the end of October, holdings of such securities by Guyana. At the beginning of the period, Guy- the Federal Reserve amounted to $8,238.7 milana's outstanding commitment to the Treasury lion equivalent, and holdings by the Treasury on its multilateral financing facility totaled $13.4 amounted to the equivalent of $8,331.6 million million. Guyana made four payments in Septem- valued at end-of-period exchange rates. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

23 Industrial Production and Capacity Utilization Released for publication on November 13 among most other major market and industry groups. Industrial capacity utilization dropped 0.9 Industrial production dropped 0.8 percent in Oc- percentage point in October to 82.6 percent, just tober after having grown slowly between June above its 1967-89 average. During the past year, and September. A fall of 4.5 percent in the output total industrial production has risen 1.8 percent to of motor vehicles and parts in October accounted 109.6 percent of its 1987 annual average. for about one-fourth of the decline in the overall In market groups, the output of consumer index; output declines also were widespread goods, business equipment, and materials all Industrial production indexes Twelve-month percent change Twelve-month percent change Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production =100 Total industry — — 90 Utilization - 80 70 1 1 1 1 1 1 1978 1980 1982 1984 1986 1988 1990 All series are seasonally adjusted. Latest series, October. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 Federal Reserve Bulletin • January 1991 were affected by the reductions in production of percent in October, with much of the decline autos, trucks, and related parts in October. the result of cutbacks in electricity generation Production of consumer durable goods other and in production of parts for motor vehicles. than motor vehicles also decreased in October, Steel production dropped sharply in October as the output of appliances, carpeting, and after having increased in prior months, and the furniture continued to be weak. Output of non- output of textile materials decreased at least a durable consumer goods declined in October percent for the third consecutive month. as well, reflecting reductions in production of In industry groups, manufacturing output electricity for residential use, gasoline, and dropped 0.8 percent in October; the factory clothing. utilization rate fell 0.8 percentage point to 81.7 Excluding motor vehicles, output of business percent, its lowest level since September 1987. equipment fell about Vi percent in October. The operating rate for utilities fell back to the Production of industrial equipment showed level that prevailed earlier in the summer. The widespread weakness. Information processing utilization rate for mining also dropped in Ocand related equipment dipped in October after tober, despite an increase in coal mining. having grown at a robust pace during the third Excluding motor vehicles and parts, manuquarter. The production of construction sup- facturing production fell 0.6 percent in October plies is estimated to have contracted sharply for after having decreased 0.4 percent in Septema third month in October; since March, output ber. Output of primary processing industries in this grouping has fallen an average of 3A dropped about 0.7 percent in October, after a percent a month. Output of materials fell 0.8 similar decline in September. Last month, the 1987 = 100 Percentage change from preceding month PPPeeerrr--ccceeennntttaaagggeee ccchhhaaannngggeee,,, IIInnnddduuussstttrrriiiaaalll ppprrroooddduuuccctttiiiooonnn 1990 1990 OOOcccttt... 111999888999 tttooo Julyr Aug/ Sept/ Oct." Juner Julyr Aug/ Sept.p OOOcccttt... 111999999000 Total index 110.4 110.4 110.5 109.6 .3 .0 .2 -.8 1.8 Previous estimates 110.3 110.4 110.7 .2 .1 .2 Major market groups Products, total 110.9 110.9 111.1 110.1 .0 .0 .2 -.9 1.9 Consumer goods 107.5 107.8 108.4 107.2 -.3 .3 .5 -1.1 -.1 Business equipment 125.0 125.3 126.3 125.0 .5 .2 .8 -1.0 7.7 Construction supplies 106.7 105.2 103.8 102.3 .6 -1.4 -1.4 -1.4 -3.7 Materials 109.6 109.6 109.7 108.8 .8 .0 .1 -.8 1.6 Major industry groups Manufacturing 111.1 111.1 111.1 110.2 .2 .0 .0 -.8 1.6 Durable 113.4 113.4 113.8 112.4 .0 .0 .3 -1.3 2.7 Nondurable 108.1 108.1 107.6 107.4 .5 .0 -.4 -.2 .2 Mining 104.0 102.4 103.3 102.8 1.8 -1.6 .8 -.4 2.2 Utilities 109.7 111.1 112.1 110.3 -.1 1.3 .9 -1.6 2.7 Percent of capacity CCCaaapppaaaccciiitttyyy gggrrrooowwwttthhh,,, CCCaaapppaaaccciiitttyyy uuutttiiillliiizzzaaatttiiiooonnn 1989 1990 OOOcccttt... 111999888999 AAvveerraaggee,, LLooww,, HHiigghh,, tttooo 11996677--8899 11998822 11998888--8899 OOOcccttt... 111999999000 Oct. Julyr Aug/ Sept/ Oct.? Total industry 82.2 71.8 85.0 83.3 83.8 83.5 83.5 82.6 2.7 Manufacturing 81.5 70.0 85.1 82.9 83.0 82.7 82.5 81.7 3.1 Advanced processing 81.1 71.4 83.6 81.4 81.7 81.4 81.5 80.6 3.4 Primary processing 82.3 66.8 89.0 86.6 86.0 85.8 85.0 84.2 2.5 Mining 87.3 80.6 87.2 86.5 90.5 89.2 90.0 89.7 -1.5 Utilities 86.8 76.2 92.3 85.5 86.6 87.6 88.4 86.8 1.1 r Revised, NOTE. Indexes are seasonally adjusted. p Preliminary. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 25 largest declines occurred in primary metals, cent in October, about 2 percentage points lumber, stone, clay, and glass products, petro- above its 1967-89 average. leum products, and textiles. The drop for pri- The output decline for advanced processing mary metals of 3.0 percent in October about industries in October lowered the operating rate reversed its increases in August and Septem- to 80.6 percent. Utilization at auto and light truck ber. The operating rate for primary processing, assembly facilities dropped to about 75 percent. which had changed little, on balance, during the Among other advanced processing industries, first half of the year, has dropped, on average, output for nonelectrical machinery, furniture, Vi percentage point per month during the past apparel, and leather products fell more than 1 three months. Even so, it remains at 84.2 per- percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 Statement to the Congress Statement by Alan Greenspan, Chairman, Board jumped after August 2, some easing of underlying of Governors of the Federal Reserve System, price pressures might well have become evident before the Committee on Banking, Finance and by now. Urban Affairs, U.S. House of Representatives, The data that we have received during the past November 28, 1990. four months indicate that, before August 2, the economy was expanding at a moderate pace and I appreciate the opportunity to participate in underlying inflation pressures probably were beyour examination of the economic implications ginning to ease. This suggests that things were of developments in the Persian Gulf. developing in line with our policy objectives, The world economy is being profoundly influ- which were to achieve a slowing of inflation in the enced by these developments, including their context of continued expansion of real activity. effects on oil markets during the past four Regrettably, however, the events in the Permonths. However, before turning to an examina- sian Gulf have altered the immediate economic tion of the effects of higher oil prices on the U.S. situation rather substantially. Consumer and proand world economy, it is useful to step back for ducer price indexes have jumped in the past a moment and review the trends that our econ- couple of months because of surges in the prices omy appeared to be following before the Iraqi of energy products. Other, less direct, effects are invasion of Kuwait. On the positive side, the data becoming evident as the higher oil costs are being released in recent weeks have confirmed that the passed through into the prices of items that are economy was still expanding when the oil shock heavily dependent on oil—notably airline fares hit. Indeed, real GNP currently is estimated by and other transportation costs and materials that the Commerce Department to have increased in rely heavily on petroleum feedstocks. Over time, the third quarter. In addition, the index of indus- the higher prices may feed through to labor costs, trial production increased at a 3.7 percent annual as workers seek to delay the inevitable declines rate last quarter, indicating that much of the in their real incomes. These same influences are strength in the economy during the summer was being felt, in one degree or another, in most other in the goods-producing sectors, in which a weak- economies regardless of whether they are net oil ening of overall activity typically would be ex- importers or net oil exporters. pected to show through most clearly. On the Not only have the higher oil prices added to negative side, however, growth of private pay- overall price pressures here and abroad, they rolls was at a virtual standstill in July, and the also have begun to restrain real activity. These unemployment rate, which had fluctuated nar- effects work through several channels and are rowly for several quarters, began to rise around difficult to sort out with great precision. First, to midyear, albeit from a level that was quite low by the extent that the United States is a net importer recent historical standards. of oil, a hike in oil prices drains away purchasing On the inflation front, data through July sug- power from American energy users to foreign oil gest that price increases had not yet begun to producers. Specifically, the higher prices cut into decelerate as of midsummer. In fact, there were the real disposable income of households, which disturbing signs in the first half of the year that in turn reduces their spending on all categories of the core rate of inflation had crept up somewhat. goods and services. Second, the weaker path for However, the latest data on hourly compensation consumption subsequently is likely to spill over hint that labor cost increases were beginning to to business investment as many firms—their slow in the third quarter, and, had oil prices not profit margins already squeezed by higher energy Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 27 costs—lower capital spending in response to the Higher oil prices, however, are not the only reduced demand for their output. force restraining activity. In particular, as I re- Besides the effects of the higher oil prices per ported to the Congress in July, there was considse, the enormous uncertainty about how, and erable evidence at that time that banks—along when, the tensions in the Persian Gulf will be with other lenders—had tightened the terms and resolved also affects the economy in a negative other conditions for supplying credit. Data since way. Such uncertainty tends to engender with- then, including Federal Reserve surveys of bank drawal by producers and consumers from their lending officers as well as the recent sluggishness normal activities as they respond cautiously to of the monetary aggregates, suggest that the new developments. However, the surveys of tightening of credit has proceeded somewhat people's concerns about the outlook have further since July. pointed to greater weakness than has been re- As yet, there is only limited statistical evivealed by what people, at least to date, are dence on the extent to which tighter credit conactually doing. ditions have directly affected businesses and Most of these same influences on prices and consumers. However, the available anecdotal activity are affecting the economies of our major information clearly suggests that many types of trading partners. Although countries that are not businesses are encountering greater difficulty obnet oil importers, such as Canada and the United taining financing. This has been seen most clearly Kingdom, do not face the net drain on real in the commercial real estate market, but it national income from higher oil prices, they are extends to borrowing for a variety of other adversely affected by economic developments in purposes as well. the oil-importing countries and by higher oil The interaction of rising oil prices, Persian prices, which tend to depress real personal in- Gulf uncertainties, and credit tightening is apparcome, at least in the short run. Consumers and ently creating a greater suppression of economic producers in these countries are also affected by activity than the sum of the forces individually. the uncertainties surrounding the entire situa- Thus, although economic activity seems to have tion. All this has negative feedback effects on our been better maintained through the summer than own economy through lower exports. many forecasters had expected, all indications In the current episode, the clearest manifesta- are that a meaningful downturn in aggregate tion of the actual effects on U.S. activity is in the output occurred as we moved through October labor market, in which private employment and and into November. hours of work dropped markedly in October, and Amidst these adverse developments, the dein which initial claims for unemployment insur- preciation of the dollar, which we have seen this ance have moved significantly higher over the year, other influences aside, may be expected to past several weeks. In addition, industrial pro- provide some stimulus to our exports and reduction—especially in the motor vehicle and strain our imports. However, a weaker dollar construction supplies sectors—fell in October, also is a cause for concern: It adds upward and the weekly data through mid-November pressure to U.S. import prices, compounds the point to pronounced further weakness. The drop inflation impulse emanating from the higher oil in employment and hours is causing personal prices, and may put at risk our ready access to income to decline at the very time that rising net inflows of foreign saving. energy prices are squeezing many household In the oil market itself, rates of overall producbudgets; this drop in real purchasing power, tion of crude petroleum currently appear to have along with plunging consumer sentiment, does been restored to precrisis levels after a temponot bode well for the near-term trends in con- rary disruption in the wake of the Iraqi invasion. sumer demand, especially in the context of an At the end of July, OPEC had agreed to reduce already low saving rate. It is noteworthy that its production rate from about 23 Vi million barretail sales in October were about unchanged in rels per day to 22Vi million barrels per day. nominal terms and undoubtedly fell significantly Before the new accord could take hold, of in real terms. course, Iraq invaded Kuwait. The subsequent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 Federal Reserve Bulletin • January 1991 United Nations-sanctioned embargo removed 4.3 and demand for crude oil, spot prices might have million barrels per day of Iraqi and Kuwaiti crude been expected to be substantially lower were it oil production from the market, an amount equal not for the uncertainties associated with the to almost 10 percent of production in market situation in the Gulf. What we have seen in economies. varying degrees since August 2 is a general This loss has since been fully replaced through scramble for existing inventories by refiners here increased liftings by other members of OPEC, and abroad to guard against a possible further chiefly Saudi Arabia, as well as significantly short-term disruption of supplies. This has conincreased production in the North Sea. As a tributed to the bidding up of prices on spot result, in October, crude production in market markets. economies was back up to about the same rate as The situation in markets for a few specific oil during the first half of this year, almost 46 million derivatives may be somewhat tighter than in barrels per day. Although the replacement markets for crude. The shutdown and blockade crudes are slightly "heavier" than the lost oil, of refineries in Kuwait and Iraq removed about 2 and therefore yield less output of light products percent of the world's refinery capacity from the such as gasoline and kerosene, such differences market. The lighter-end products, such as keroappear manageable. sene or jet fuel, produced by these refineries While the response of world crude oil produc- went primarily to Japan and other Asian countion to the Iraqi invasion can be gauged fairly tries. Attempts by Asian consumers to replace readily, the reaction of world oil consumption is the lost products, coupled with increased Gulfmore difficult to discern. Available data on world related military demand, resulted in a bidding up shipments of petroleum products actually show a of world kerosene and jet fuel prices during greater-than-normal increase in the third quarter. September and October relative to crude and But a substantial portion of this increase is other petroleum products. But these spreads thought to have been reflected in secondary and have since retraced most of their earlier increase. tertiary stockbuilding, rather than in an increase At the time of the invasion, refineries in Western in actual consumption. Secondary stocks, inci- Europe had been operating at relatively low dentally, are those held by product retailers and utilization rates, and there appeared to be some distributors, while tertiary stocks are held at the excess capacity, globally, in operations that conpoint of consumption, such as industrial plants. vert heavier products into lighter ones. Produc- Primary commercial stocks of petroleum and tion rates have presumably risen in these areas products held on land by refiners and marketers since the invasion. in the industrial countries appear to be a bit In the United States, gasoline markets were above normal for this time of year. In addition, relatively tight over the period before the invarough indicators of the level of stocks afloat sion, owing to strong demand and a series of suggest that after a small decline in the third disruptions at refineries. Stocks of gasoline fell quarter, these stocks may be increasing. Some of further in August, rebounded through September these stocks, which are held in ocean tankers, and the first half of October, and have edged off represent unsold heavier crude oil from Saudi over the past six weeks. The level of stocks last Arabia and Iran. Overall, world stocks of petro- week was roughly in line with its level a year ago, leum and products currently are at levels that, and about 6 percent more than what is considunder normal circumstances, probably would be ered the minimum operating inventory required viewed as being comfortable or perhaps even to ensure against normal operating problems and slightly excessive. This relatively comfortable shortages. situation is consistent with the current pattern of The rapid rise in crude oil prices after the Iraqi futures prices, which shows a decline of about $6 invasion helped boost the domestic average price to $8 a barrel by the second half of next year from of gasoline from $1.10 per gallon in the second the recent spot price levels of about $33 per quarter to an average of roughly $1.40 per gallon barrel for West Texas intermediate crudes. In- during the past two months. However, average deed, at the current apparent balance of supply margins between the cost of crude to refiners and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 29 retail prices at the pump fell significantly from to its current level of around IVi percent. Our July through October. Recently, margins have latest policy adjustments have been in response recovered somewhat, but they still appear to be to indications of a weaker economy, partly as a about 5 to 10 cents per gallon below their average consequence of the prospects for a degree of level in the second quarter this year. fiscal restraint as a result of the budget agree- Turning to the question of how the Gulf crisis ment, and partly because of some further tighthas affected monetary policy, the first point is ening in the availability of credit since midsumthat the uncertainties surrounding the situation mer. In this context, we shall want to make are considerable and that it is difficult to isolate certain that money and credit remain on approthe Federal Reserve's response to this particular priate growth tracks, with due attention to the event when so many other things are affecting the credit situation. Whether further adjustments to policy equation. Moreover, we must not lose policy will be needed cannot be spelled out in sight of the fact that there is no policy initiative advance and will depend on the specifics of the that can, in the end, prevent the transfer of circumstances as they develop. wealth, and cut in our standard of living, that In the final analysis, I can only offer the stems from higher prices for imported oil. assurance that the Federal Reserve will seek, as The role of monetary policy is to provide the we have in the past, to foster economic stability financial environment that is consistent with the and sustainable growth. As in the past, this will nation's longer-run economic objectives. Since require not only attention to the level of ecothe spring of 1989, this role has implied some nomic activity but also the pursuit over time of easing of reserve conditions, and the federal price stability—a task made all the more chalfunds rate has come down from near 10 percent lenging by the effects of the Gulf crisis. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 Announcements INCREASE IN THE AMOUNT years. The rate will be based on the level of the OF NET TRANSACTION ACCOUNTS federal funds rate and the rate in the secondary TO WHICH A 3 PERCENT market for ninety-day certificates of deposit. RESERVE REQUIREMENT WILL APPLY Under current conditions, this rate would be 8.05 percent. The Federal Reserve Board announced on No- No charge was made in the basic discount rate for vember 28, 1990, an increase from $40.4 million adjustment credit, which is currently 7 percent. to $41.1 million in the net transaction accounts to During 1990, more than 700 banks borrowed which a 3 percent reserve requirement will apply under the seasonal program. The largest amount in 1991. of seasonal credit outstanding during any one The Board left unchanged the amount of re- week in 1990 was $445 million for the week servable liabilities that are exempt from reserves ending August 29, 1990. Historically, the largest at $3.4 million of total reservable liabilities. amount of seasonal credit outstanding during any Also, the Board increased from $43.4 million one week was $513 million for the week ending to $44.0 million the deposit cutoff level, which July 26, 1989. along with the reserve requirement exemption amount, determines the reporting frequency and detail. Institutions with total deposits below the REGULATION Y: AMENDMENTS exemption level of $3.4 million are excused from reporting if their deposits can be estimated from The Federal Reserve Board announced on Noother sources. vember 8, 1990, approval of an amendment to Regulation Y (Bank Holding Companies and Change in Bank Control) to allow banks owned by RESTRUCTURING OF INTEREST RATES ON bank holding companies to offer a price reduction BORROWINGS FROM THE DISCOUNT on credit cards issued to their customers if the WINDOW FOR SEASONAL CREDIT customer also obtains a traditional banking product from any of the credit card bank's affiliates. The Federal Reserve Board announced on No- The amendment is effective December 18, 1990. vember 7, 1990, a restructuring of interest rates This limited exemption for reduced-rate credit that are charged on borrowings from the discount cards is granted in accordance with the Board's window for seasonal credit. The new structure exemptive authority under section 106 of the will become effective on January 9, 1992. Bank Holding Company Act Amendments of Seasonal credit is designed to make funds 1970 ("section 106"). Section 106, generally proavailable at the discount window to small and hibiting banks from offering reduced considermidsized agricultural banks that do not have ation for credit on the condition that the cusaccess to the national money markets. It is also tomer also obtain some additional service from used to some extent by banks in resort areas. A the holding company affiliate of the bank, authotypical use of the program is to fund farmers over rizes the Board to grant exemptions that are not the planting and production cycle. contrary to its purpose of preventing anticompet- Under the restructuring, the interest rate itive practices. charged on seasonal borrowings will be a market- To be eligible for the exemption, the credit related rate instead of the basic discount rate that card and traditional banking products offered as was charged on this type of borrowing in past part of an arrangement must also be available for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

31 separate purchase by a customer. In addition, Board anticipates that the revised criteria would the Board retains the right to terminate any become effective midyear 1991. Comment on the exemption if it results in anticompetitive prac- proposed modifications is requested by January tices. 25, 1991. On November 9, 1990, the Board announced The Board issued for public comment on Noapproval of another amendment to Regulation Y vember 27, 1990, proposed revisions to its staff to reduce the filing requirements under the commentary to Regulation B (Equal Credit Op- Change in Bank Control Act. The amendment is portunity). The proposed interpretations address essentially the same as the proposal the Board the definition of adverse action and state law issued for public comment in July this year. preemption. Comment is requested by January The amendment will remove the current regu- 28, 1991. latory requirement that a person who has already The Board issued for comment on November received regulatory clearance to acquire 10 per- 20, 1990, proposed amendments to Regulation H cent or more of the shares of a state member (Membership of State Banking Institutions in the bank or bank holding company must file addi- Federal Reserve System) and Regulation Y (Bank tional notices under the Change in Bank Control Holding Companies and Change in Bank Control) Act for subsequent acquisitions resulting in own- regarding real estate appraisal standards. Comership of between 10 and 25 percent of the shares ment is requested by January 25, 1991. of the bank or bank holding company. The Board issued for public comment on November 27, 1990, proposed revisions to its staff commentary for Regulation Z (Truth in Lending). PROPOSED ACTIONS The proposed interpretations address such issues The Federal Reserve Board issued for public as renewals of home equity lines of credit, credit comment on November 9, 1990, modifications to card substitution, and renewable balloon paythe criteria for offering a tiered pricing structure ment mortgages. Comment is requested by Janin the check collection service. If adopted, the uary 28, 1991. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON OCTOBER 2, 1990 averaged over the two months, spending was significantly above the level for the second quar- Domestic Policy Directive ter. Outlays for services rose in August at a pace well below that registered over the previous The information reviewed at this meeting sug- several months. Spending for motor vehicles and gested that economic activity had expanded at a parts fell, but outlays for other consumer goods slow pace in the third quarter. The available data posted moderate increases. Major surveys of provided only limited evidence of a retarding consumer attitudes indicated a sharp deterioraeffect of the recent large increase in oil prices on tion in the confidence of consumers. Total priproduction and aggregate spending. Key mea- vate housing starts declined for the seventh consures of inflation had been boosted by the rise in secutive month. Single-family starts slid further, oil prices, but on the consumer level the upward evidently in response to continued weakness in march in prices of items other than food and sales of new homes. energy also appeared to have quickened some- In August, shipments of nondefense capital what. Data on labor costs suggested no improve- goods retraced part of a large July decline. Avment in underlying trends. erage shipments for the July-August period were Total nonfarm payroll employment declined in below their second-quarter level, which sug- July and August, largely because of layoffs of gested that overall equipment spending remained temporary census workers. Employment in the in a relatively flat trend. Shipments of office and private sector was little changed over the two computing equipment appeared to be somewhat months as widespread declines in jobs at manu- weaker, while shipments of aircraft in July were facturing and construction establishments offset well above their second-quarter average. New limited gains in the service-producing sector. In orders for nondefense capital goods changed the weeks after the August employment survey, little in July and August from their level in the initial claims for unemployment insurance moved second quarter, which pointed to continued sluginto a slightly higher range than had prevailed in gish equipment spending in coming months. the preceding few months. The civilian unem- Nonresidential construction put in place inployment rate edged up to 5.6 percent in August. creased in June and July, but anecdotal informa- After showing strong gains over the previous tion and other indicators suggested a downward two months, industrial production was about flat trend in nonresidential building activity, reflecton balance in July and August. Output of con- ing the persistence of high vacancy rates for struction supplies continued to fall, but produc- commercial properties and the financial prestion of consumer goods other than motor vehi- sures on builders and their lenders. Manufaccles firmed a bit on balance after declining earlier turing inventories rebounded in July from a sizin the year. Total industrial capacity utilization able June decline; the stock-shipments ratio slipped in July and August. In manufacturing, remained near the lows of the current business operating rates declined further in most indus- expansion. Wholesale and non-auto retail trade tries and were appreciably below year-earlier inventories expanded in July at a pace near the levels. average rate of accumulation over the second quarter. Consumer spending in real terms was up slightly on balance in July and August; however, The nominal U.S. merchandise trade deficit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

33 widened sharply in July from the revised, unusu- percent respectively over the three-month period ally low rate in June. The value of exports more from June to September. than retraced its sizable June pickup, with de- With price pressures, even outside of the encreases widespread among major trade catego- ergy sector, not abating and the economy conries that had risen in June. The value of imports tinuing to advance, albeit slowly, open market increased in July for a range of commodities, but operations during the intermeeting period were the total remained below peak monthly rates directed at maintaining unchanged reserve conreached earlier in the year. Higher oil imports in ditions. In the three reserve maintenance periods July reflected a rise in the quantity of oil im- completed since the August meeting, adjustment ported as prices paid edged lower that month plus seasonal borrowing averaged about $800 before turning up in August and September in million, an amount inflated by circumstances that response to developments in the Middle East. gave rise to sharply higher federal funds rates Markedly higher domestic oil prices in August and unusually heavy adjustment credit extencontributed to substantial increases that month in sions on the final day of each of these mainteproducer and consumer prices. Producer prices nance periods. The federal funds rate generally of finished goods reflected a rapid pass-through remained near 8 percent over the intermeeting of the higher oil costs into consumer energy period, but it edged higher late in the period in products. Prices of non-energy, nonfood items the context of quarter-end pressures and more rose in August at about the moderate average cautious reserve management policies at some monthly pace evident thus far this year. Con- banks. Treasury bill rates fell somewhat over the sumer prices surged in August, largely reflecting intermeeting period, apparently reflecting heightthe higher oil prices. Excluding food and energy ened investor preference for liquidity and safety, items, consumer inflation picked up in July and while rates on private market instruments August from the second-quarter rate; the accel- changed little on balance. In the bond markets, eration resulted from price advances for non- yields on investment-grade securities edged energy services as prices of commodities flat- down. Interest rates on lower-rated instruments tened out in August after rising moderately in rose considerably, as higher oil prices were seen July. Average hourly earnings rose in August at a as presaging a sluggish real economy and greater little slower pace; however, over the twelve strains on issuers of such debt. In addition, yields months ended in August, hourly earnings in- on subordinated debt obligations of some major creased at about the same rate as that recorded banking organizations increased sharply, reflectduring the previous twelve months. ing growing investor concerns about the effects of softening real estate values and sluggish eco- At its meeting on August 21, the Committee nomic activity on the quality of bank loan portadopted a directive that called for maintaining folios. Broad indexes of stock prices moved unchanged conditions of reserve availability, at lower over the period. least initially, in the intermeeting period ahead and that provided for giving emphasis to poten- The trade-weighted foreign exchange value of tial developments that might require some easing the dollar in terms of the other G-10 currencies later in the period. Accordingly, the directive declined slightly further on balance from the low indicated that slightly greater reserve restraint level reached at the time of the August meeting. might be acceptable during the intermeeting pe- The dollar changed little against most major riod, while some easing of reserve pressure currencies, but it depreciated substantially would be acceptable, depending on progress against the yen as monetary conditions were toward price stability, the strength of the busi- tightened further in Japan in response to continness expansion, the behavior of the monetary ued strength in economic activity and potential aggregates, and developments in foreign ex- price pressures in that country. Economic change and domestic financial markets. The re- growth in the other G-10 countries slowed, on serve conditions contemplated by the Committee average, in the second quarter, but recent indiwere expected to be consistent with growth of cators suggested a rebound in some of those M2 and M3 at annual rates of about 4 and 2Vi countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 Federal Reserve Bulletin • January 1991 M2 expanded at an appreciably faster rate in tion assumed that deficit reduction measures August, and available data suggested continued about in line with the proposal now before the strength in September. M3 also accelerated in Congress would be adopted. The outlook for August, but its growth appeared to have slowed inflation remained clouded by the very uncertain somewhat in September. More rapid expansion prospects for oil prices. The sizable decline in oil of Ml and a surge in money market funds, as prices projected for next year along with the investors apparently switched out of the stock opening up of slack in resource utilization would and bond markets, contributed to the greater foster a lower rate of consumer price inflation, strength of the broader aggregates over the two but the improvement would be limited by the months. Through September, expansion of M2 lagged effects of the decline that had occurred in was estimated to be a little below the middle of the foreign exchange value of the dollar. the Committee's range for the year, and growth In the Committee's discussion of the economic of M3 was in the lower portion of its range. situation and outlook, members commented that Expansion of total domestic nonfinancial debt despite weaknesses in some sectors of the econappeared to have been near the midpoint of its omy and parts of the country, overall economic monitoring range. activity appeared to be continuing to expand, The staff projection was prepared against the although at a relatively slow pace. Many of the background of unpredictable developments in members observed that, insofar as could be the Middle East and the substantial adverse judged on the basis of traditional indicators, the effects of high oil prices on domestic inflation and available data did not point to cumulating weakeconomic activity. While it was recognized that a ness and the onset of a recession. At the same range of plausible assumptions could be made time, however, the risks of a recession were felt about the prospective behavior of oil prices, the to have increased. These risks stemmed to an projection assumed no further major disruption important extent from developments in the Midto oil supplies and an appreciable drop in oil dle East and the continuing financial strains in prices in the first half of next year as production the economy that were adding to stringency in expanded worldwide to fill the void left by Ku- credit markets. Business and consumer confiwait and Iraq. In the interim, the retarding effects dence appeared to have deteriorated considerof higher energy costs would depress the growth ably, especially since early August. The memof real disposable incomes and consumer spend- bers generally agreed that some tendency for ing. Weaker consumer demand along with uncer- economic growth to moderate and inflation to tainty about the outlook would retard business worsen for a time could not be avoided as a result capital spending. Construction spending—both of oil price developments. residential and nonresidential—was expected to Despite the relatively limited growth of the continue to decline, reflecting the effects of softer economy and the apparent fragility of the expanhousing prices, reduced credit availability, and sion, the prospects for inflation were viewed with high vacancy rates for commercial structures. concern. To a considerable extent, recent in- Under the circumstances, a mild downturn in creases in key measures of inflation reflected the overall economic activity was projected for the pass-through effects of the surge in oil prices, but near term. However, the staff continued to an- many of the members felt that the underlying rate ticipate considerable growth in exports over the of inflation also had worsened even apart from next several quarters in conjunction with further the effects of higher oil prices. Reduced preseconomic expansion in several major foreign sures on resources would help to contain inflaindustrial nations and in response to the substan- tionary forces, but there was still some risk that tial depreciation that had occurred in the foreign upward movements of oil and import prices exchange value of the dollar. The impetus from would intensify inflationary expectations, fosterthe external sector and a rebound in consumer ing increases in wages and other costs that would expenditures fostered by the assumed drop in oil become more deeply embedded in the cost strucprices in coming quarters would bring a resump- ture of the economy. tion of moderate economic growth. The projec- Many of the members observed that the re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 35 cently negotiated federal budget proposal incor- resiliency, and in important respects many finanporated a significant degree of fiscal restraint, a cial institutions had improved their ability to potentially workable enforcement mechanism, resist adverse developments by raising capital and a desirable multi-year commitment. Final and taking corrective measures, such as adjustenactment of a budget along the lines of the ing their lending policies and loan portfolios. proposal would establish a sounder basis for a In their review of developments in key sectors satisfactory performance of the economy. How- of the economy and parts of the country, many of ever, the federal budget deficit would still be the members stressed that a considerable diverextraordinarily large, and the commitment to gence appeared to have developed between enforce fiscal restraint measures in the future available economic indicators, which suggested remained to be tested. continued if only sluggish growth, and deterio- In the course of the Committee's discussion, rating business confidence. Such business attimembers focused considerable attention on de- tudes in association with adverse credit market velopments in credit markets. The financial conditions could lead to efforts to curb inventostrains being experienced currently by many ries and cut back on investments and thus trigger lending institutions reflected especially the prob- the recessionary conditions that underlay current lems in the real estate sector, although the concerns. While business activity clearly seemed buildup in earlier years of debt owed by less to have weakened in some areas of the country, developed countries and the tenuous condition of slow to moderate growth continued to charactersome highly leveraged domestic business firms ize business conditions in most parts of the tended to aggravate current difficulties. Efforts nation. by banks and other lenders to protect or improve The prospects for consumer spending retheir capital positions in the face of deteriorating mained a key element in the outlook for the loan portfolios were reflected in widespread signs economy. Available data indicated that real conof growing constraints on the availability of sumer outlays in July and August were well credit and increases in its cost, especially to less above the second-quarter average. Nonetheless, than prime borrowers that lack direct access to there was evidence that consumer sentiment had securities markets. This pullback was not limited worsened considerably in response to a variety to domestic lenders; foreign institutions, which of developments including a decline in the value previously had been quite aggressive suppliers of of many consumer assets, especially homes in funds to U.S. credit markets, now seemed less numerous parts of the country, the heavy debt willing to fill the gap left by domestic lenders. It burdens of many consumers, declining employwas difficult to judge the extent of the reduced ment opportunities in a number of areas, and availability of credit because the weakness in more generally the reduced purchasing power loan growth also reflected an apparently substan- associated with rising prices of energy. These tial cutback in the demand for credit. In the view developments appeared likely to hold down conof a number of members, the exposure of the sumer spending for some period of time. With economy to a severe downturn in business activ- regard to the outlook for business capital spendity did not stem in present circumstances from ing, commercial construction would continue to potential adjustments of the usual cyclical kind to be curtailed by widespread overbuilding and conovercapacity and overproduction, including ex- straints on credit availability. More generally, cessive inventories in relation to orders and business concerns about a possible recession and sales, but from the possible aggravation of the sluggish consumer spending had induced a caustrains in financial markets, further retrenchment tious approach to planned investment spending, in lending by banks and others, and the increased although many producers of capital goods redifficulty of many heavily indebted businesses ported that their orders, including demand from and individuals to meet and service their debt abroad, were continuing to hold up. Nonetheobligations in a sluggish economy. On the posi- less, even in the oil industry the sharp rise in oil tive side, the financial system and the economy prices had elicited a quite limited investment continued to display a remarkable degree of response to date apparently because of the un- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 Federal Reserve Bulletin • January 1991 certainties that continued to surround the out- reserve conditions at least slightly during the look for oil prices and the difficulty of obtaining intermeeting period ahead. In their view, an skilled labor, at least in the short run. The outlook easing move was warranted in light of the indifor housing construction also was restrained by cations that there was a significant risk of a much soft housing markets and the difficulties that many weaker economy, partly as a consequence of builders continued to experience in securing con- some further tightening in the availability of struction loans. On the other hand, business in- credit since midsummer; in this context, moreventories generally appeared to be at or near over, the budget proposal, if enacted, would desired levels, and while business contacts provide a degree of fiscal restraint. Some of these around the country pointed to increasingly cau- members emphasized that the stronger expantious inventory management policies, there was sion of the monetary aggregates in recent months little evidence of any current or impending cycli- did not seem to reflect a healthier intermediation cal inventory adjustments of the sort that had process or a more accommodative monetary characterized past recessions. Areas of current or policy, but rather sizable increases in compopotential strength in the economy included agri- nents of M2, notably currency and money market cultural conditions in many parts of the country funds, that under prevailing circumstances apand demand for exports that continued to buttress peared to be related to uncertainty about ecomany industries. The substantial decline in the nomic and financial prospects and unsettlement foreign exchange value of the dollar over the past in some foreign countries. Growth in the core year and the prospects for relatively strong eco- components of M2 had remained sluggish, and in nomic growth in some major industrial countries the view of these members that development pointed to further improvement in the nation's tended to reinforce the conclusion that the overexports, although some members questioned the all availability of credit had continued to tighten. potential strength of further expansion in some In these circumstances, many of the members key foreign countries. concluded that some modest easing of reserve With regard to the outlook for inflation, several pressure would represent a stable monetary polmembers commented that inflation appeared to icy in the sense that such a move would serve to have intensified even apart from the direct effects maintain the appropriate degree of overall credit of the higher oil prices. There were reports of restraint. In the view of most members, any business efforts to raise prices in markets where change in reserve pressures should be limited in demand was relatively vigorous, though it was light of the danger of leaning too far in either unclear to what extent competitive forces would direction in circumstances that were characterpermit sizable increases in prices to be sustained. ized by a sluggish economy and upward pres- More generally, members expected the decline in sures on prices. It was argued that the Committhe value of the dollar to be reflected over time in tee should not try to offset, indeed it could not greater pressure on domestic prices. Under fore- avoid, some tendency for economic growth to seeable circumstances and assuming no sharp moderate and for inflation to intensify as a result movements in oil prices, whose course remained of the oil price developments. One member gave highly uncertain, overall prices were likely to more weight to the recessionary risks in the remain under upward pressure for some time, but economy and called for the prompt easing of the members still anticipated eventual progress in reserve conditions, preferably by more than a reducing inflation as continued sluggish demand modest amount, although an acceptable comprowas reflected in diminished pressures on produc- mise in this view would be a slight easing move at tion resources. A major concern in the interim this meeting to be followed by some further was that the rise in oil prices would become more easing upon passage of the new budget. firmly entrenched in the cost structure of the Members who favored some easing of reserve economy, thereby making more difficult and de- conditions agreed that it would be desirable to laying progress toward price stability. hold such a move until passage of the federal In the Committee's discussion of policy, a budget package was more certain. The reasons majority of the members were in favor of easing for the easing were not keyed to the enactment of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 37 the new federal budget alone but more broadly to such move would need to take account of the developments in credit markets and the econ- response to the initial easing as well as developomy, with the prospects for fiscal restraint only ments in the economy and credit markets. one element in the outlook. Nonetheless, market At the conclusion of the Committee's discusparticipants expected a monetary policy re- sion, a majority of the members indicated that sponse to the fiscal policy actions, and a change they favored or could accept a directive that in monetary policy while the latter were still called for maintaining the existing degree of under consideration might create unnecessary pressure on reserve positions for at least a short uncertainty and unwarranted reactions in finan- period after this meeting. It was presumed that cial markets. The easing could give rise to expec- some slight easing would be implemented later tations of a further move once the budget pack- in the intermeeting period, assuming passage of age was enacted. In the view of some members, a federal budget resolution calling for a degree however, associating any easing move too of fiscal restraint comparable to that now being closely with a fiscal policy action might set an negotiated and the absence of major unexpected undesirable precedent in terms of producing ex- economic or financial developments. Subsepectations of similar monetary policy adjust- quently, some slight further easing of reserve ments in the future. conditions could be implemented if such a move A number of members expressed strong reser- was deemed to be warranted by incoming data vations about any easing of reserve conditions on economic and financial conditions in the under prevailing circumstances. In their view, context of an already sluggish economy. On the even a modest move toward ease would be other hand, the Committee did not rule out the undesirable or at least premature in the weeks potential need for some slight firming should ahead. These members acknowledged the risks inflationary pressures appear to be intensifying. of a weakening economy, but they believed that In keeping with this policy, the directive propolicy should continue to focus on controlling vided that slightly greater reserve restraint inflation. In the absence of more evidence that might be acceptable during the intermeeting economic activity might deteriorate substan- period or somewhat lesser reserve restraint tially, such a focus was likely to involve un- would be acceptable depending on progress changed reserve conditions for a time. In the toward price stability, the strength of the busiprevailing circumstances, they were concerned ness expansion, the behavior of the monetary that any easing in the near term would worsen aggregates, and developments in foreign exinflationary expectations by tending to erode the change and domestic financial markets. The credibility of the System's anti-inflationary ef- intermeeting range for the federal funds rate, fort. Thus, such easing might well have the which provides one mechanism for initiating unintended effects of generating upward pres- consultation of the Committee when its boundsures on long-term interest rates and adding to aries are persistently exceeded, was left unthe downward pressures on the dollar in foreign changed at 6 to 10 percent. exchange markets. In support of this view, some At the conclusion of the meeting, the following members expressed satisfaction that the overall domestic policy directive was issued to the Fedexpansion of M2 for the year was well within the eral Reserve Bank of New York: Committee's target ranges and according to a staff forecast was likely to remain comfortably within that range through year-end. The information reviewed at this meeting suggests that economic activity expanded at a slow pace in the The members also discussed whether any fur- third quarter. The recent large increase in oil prices ther adjustments in policy should be contem- has boosted key measures of inflation and eroded real plated for the intermeeting period in the event personal income; however, data available thus far that a decision was made to implement some provide only limited evidence of a retarding effect on production and aggregate spending. Total nonfarm modest easing in the near term. A majority payroll employment declined in July and August, opinion emerged in favor of retaining a bias in the reflecting layoffs of temporary census workers; emdirective toward some further easing, but any ployment in the private sector changed little over the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 Federal Reserve Bulletin • January 1991 two months. The civilian unemployment rate edged up nancial debt at 4V2 to 8V2 percent for 1991. The to 5.6 percent in August. Consumer spending appeared behavior of the monetary aggregates will continue to to be about unchanged in real terms over July and be evaluated in the light of progress toward price August but was at a level significantly above the level stability, movements in their velocities, and average for the second quarter. Advance indicators of developments in the economy and financial markets. business capital spending point to some softening in In the implementation of policy for the immediate investment in coming months. Residential construc- future, the Committee seeks to maintain the existing tion weakened further in August. The nominal U.S. degree of pressure on reserve positions. Taking acmerchandise trade deficit increased sharply in July count of progress toward price stability, the strength from the low rate in June. Markedly higher oil prices of the business expansion, the behavior of the monecontributed to substantial increases in consumer and tary aggregates, and developments in foreign exchange producer prices in August; excluding energy and food and domestic financial markets, slightly greater reitems, consumer inflation has picked up from the serve restraint might or somewhat lesser reserve resecond-quarter rate. Data on labor costs suggest no straint would be acceptable in the intermeeting period. improvement in underlying trends. The contemplated reserve conditions are expected to In short-term debt markets, Treasury bill rates be consistent with growth of M2 and M3 over the have fallen somewhat since the Committee meeting period from September through December at annual on August 21, while rates on private market instru- rates of about 4 and 2 percent respectively. The ments are little changed. In the bond markets, most Chairman may call for Committee consultation if it rates have edged lower on balance over this period. appears to the Manager for Domestic Operations that The trade-weighted foreign exchange value of the reserve conditions during the period before the next dollar in terms of the other G-10 currencies has meeting are likely to be associated with a federal funds declined slightly further on balance from the low rate persistently outside a range of 6 to 10 percent. level reached at the time of the August meeting. M2 and M3 expanded at appreciably faster rates in Votes for this action: Messrs. Greenspan, Cor- August; available data for September suggest continued rigan, Boehne, Kelley, LaWare, Mullins, and strength in M2 and some slowing in the growth of M3. Stern. Votes against this action: Messrs. Angell, More rapid expansion of Ml and money market funds Boy kin, Hoskins, and Ms. Seger. has contributed to the greater strength in the broad aggregates over the two months. Through September, Ms. Seger dissented because she favored an expansion of M2 was estimated to be a little below the immediate easing of reserve conditions. In her middle of the Committee's range for the year and growth of M3 in the lower portion of its range. Expan- view, such a move was needed at this time in light sion of total domestic nonfinancial debt appears to have of the spreading weakness in the economy, the been near the midpoint of its monitoring range. growing difficulty being experienced by many The Federal Open Market Committee seeks monborrowers in obtaining credit, and more generally etary and financial conditions that will foster price the increasing fragility of the financial system. She stability, promote growth in output on a sustainable basis, and contribute to an improved pattern of also felt that enactment of the deficit-reduction international transactions. In furtherance of these measures now under consideration would provide objectives, the Committee at its meeting in July a desirable opportunity for some additional easing reaffirmed the range it had established in February later during the intermeeting period. for M2 growth of 3 to 7 percent, measured from the Messrs. Angell, Boykin, and Hoskins disfourth quarter of 1989 to the fourth quarter of 1990. The Committee in July also retained the monitoring sented because they were opposed to the easing range of 5 to 9 percent for the year that it had set for of reserve conditions contemplated by the majorgrowth of total domestic nonfinancial debt. With ity. Not only was there a presumption of some regard to M3, the Committee recognized that the easing in the near term, but the bias in the ongoing restructuring of thrift depository institutions language of the directive suggested the possibilhad depressed its growth relative to spending and total credit more than anticipated. Taking account of ity of some further easing later in the intermeetthe unexpectedly strong M3 velocity, the Committee ing period. To a considerable extent, this policy decided in July to reduce the 1990 range to 1 to 5 seemed to be a response to short-run softening in percent. For 1991, the Committee agreed on provithe economy that was an inevitable outcome of sional ranges for monetary growth, measured from the disruption to oil supplies. By paying close the fourth quarter of 1990 to the fourth quarter of 1991, of 21/2 to 6Y2 percent for M2 and 1 to 5 percent attention to those near-term developments, the for M3. The Committee tentatively set the associated Committee risked losing sight of its fundamental monitoring range for growth of total domestic nonfi- objective of controlling and ultimately bringing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 39 down inflation. Moreover, the timing of the pro- Hoskins also questioned the adequacy of the spective easing was linked to fiscal policy ac- fiscal policy measures being considered in the tions, and such a linkage could establish an Congress and the desirability of adjusting moneundesirable precedent that could limit the flexi- tary policy in response to the enactment of those bility of monetary policy in the future. Mr. measures. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

41 Legal Developments FINAL RULE—AMENDMENT TO REGULATION D of the Garn St-Germain Depository Institutions Act of 1982 (12 U.S.C. 461). The Board of Governors is amending 12 C.F.R. Part 204, its Regulation D, Reserve Requirements of De- 2. In section 204.9, paragraph (a)(1) is revised to read pository Institutions, to increase the amount of trans- as follows: action accounts subject to a reserve requirement ratio of three percent, as required by section 19(b)(2)(C) of Section 204.9—Reserve requirement ratios the Federal Reserve Act (12 U.S.C. § 461(b)(2)(C)), from $40.4 million to $41.1 million of net transaction (a)(1) Reserve percentages. The following reserve accounts. This adjustment is known as the low reserve ratios are prescribed for all depository institutions, tranche adjustment. The Board has left at $3.4 million Edge and Agreement Corporations, and United the amount of reservable liabilities of each depository States branches and agencies of foreign banks: institution that is subject to a reserve requirement of zero percent. This action is required by section 19(b)(ll)(B) of the Federal Reserve Act (12 U.S.C. § 461(b)(l 1)(B)>, and the adjustment is known as the reservable liabilities exemption adjustment. The Category Reserve Requirement Board has also increased from $43.4 million to $44.0 million the deposit cutoff level that is used in conjunc- Net transaction accounts1 $0 to $41.1 million 3 percent of amouni tion with the reservable liabilities exemption amount over $41.1 million $1,233,000 plus 12 percent of to determine the frequency of deposit reporting. amount over $41.1 million Effective December 18, 1990,1 12 C.F.R. Part 204 is Nonpersonal time deposits amended as follows: By original maturity (or notice period): Less than V/2 years 3 percent Part 204—Reserve Requirements of Depository 1 xh years or more 0 percent Institutions Eurocurrency liabilities 3 percent 1. Dollar amounts do not reflect the adjustment to be made by the 1. The authority citation for Part 204 continues to read next paragraph. as follows: Authority: Sections 11(a), 11(c), 19, 25, 25(a) of the Federal Reserve Act (12 U.S.C. 248(a), 248(c), 371a, FINAL RULE—AMENDMENT TO REGULATION Y 371b, 461, 601, 611); section 7 of the International Banking Act of 1978 (12 U.S.C. 3105); and section 411 The Board of Governors is amending 12 C.F.R. Part 225, its Regulation Y. Section 106 of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1971, 1972(1)) ("section 106") generally prohibits banks from offering reduced consideration for credit or other 1. Compliance Dates: For depository institutions that report weekly, the low reserve tranche adjustment will be effective starting services on the condition that the customer also obtain with the reserve computation period beginning Tuesday, Decem- some additional service from the bank or a holding ber 25,1990, and with the corresponding reserve maintenance periods company affiliate of the bank. This exemption would beginning Thursday, December 27,1990, for net transaction accounts, and Thursday, January 24, 1991, for other reservable liabilities. For permit banks to offer a price reduction on credit cards institutions that report quarterly, the low reserve tranche adjustment issued to their customers if the customer also obtains will be effective with the computation period beginning Tuesday, December 18, 1990, and with the reserve maintenance period begin- a traditional banking product from any of the credit ning Thursday, January 17, 1991. For all depository institutions, the card bank's affiliates. increase in the deposit cutoff level will be used to screen institutions Effective December 18, 1990, 12 C.F.R. Part 225 is in the second quarter of 1991 to determine reporting frequency beginning September 1991. amended as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 Federal Reserve Bulletin • January 1991 Part 225—Bank Holding Companies and Effective November 9, 1990, 12 C.F.R. Part 225 is Change in Bank Control amended as follows: 1. The authority citation for Part 225 is revised to read Part 225—Bank Holding Companies and as follows: Change in Bank Control Authority: 12 U.S.C. 18170(13), 1818, 1831i, 1843(c)(8), 1. The authority citation for Part 225 continues to read 1844(b), 1972(1), 3106, 3108, 3907, 3909, 3310, and 3331- as follows: 3351. Authority: 12 U.S.C. 1817(j)(13), 1818, 1831i, 2. In section 225.4, the heading to paragraph (d) is 1843(c)(8), 1844(b), 3106, 3108, 3907, 3909, 3310, and revised, paragraph (d) is redesignated as paragraph 3331-3351. (d)(1) and new paragraph (d)(2) is added to read as follows: 2. In section 225.42, the heading to paragraph (a) is revised, paragraph (a) is redesignated as paragraph Section 225.4—Corporate Practices (a)(1), and new paragraph (a)(2) is added to read as follows: (d)(1) Limitation on tie-in arrangements. Section 225.42—Transactions not requiring prior notice (2) Exemption for credit cards. A bank (including a credit card bank) owned by a bank holding company (a)(1) Increase of previously authorized acquisitions may vary the consideration (including interest rates above 25 percent. * * * and fees) charged on extensions of credit made (2) Increase of previously authorized acquisitions pursuant to a credit card offered by the bank on the between 10 percent and 25 percent. Unless the basis of the condition or requirement that a cus- Board or Reserve Bank otherwise provides by ortomer also obtain a loan, discount, deposit, or trust der, the acquisition of additional shares of a class of service (but no other products) from another subsid- voting securities of a state member bank or bank iary of the card-issuing bank's parent holding com- holding company by any person (or persons acting pany, if the credit card and the loan, discount, in concert) who has lawfully acquired and maindeposit, or trust service offered in the arrangement tained control of 10 percent or more of that class of are also separately available for purchase by a voting securities either after filing the notice recustomer. The exemption granted pursuant to this quired under section 225.41(b)(2) of this subpart to paragraph shall terminate upon a finding by the acquire voting securities of the bank or bank holding Board that the arrangement is resulting in anticom- company or in connection with an application appetitive practices. proved under section 3 of the Bank Holding Company Act or section 18(c) of the Federal Deposit Insurance Act, if the aggregate amount of voting FINAL RULE—AMENDMENT TO REGULATION Y securities held following the acquisition is less than 25 percent of any class of voting securities of the The Board of Governors is amending 12 C.F.R. Part institution. 225, its Regulation Y (the Change in Bank Control Act) ("CIBC Act") to remove the current regulatory requirement that a person that has already received AMENDMENT TO RULES REGARDING regulatory clearance to acquire 10 percent or more of AVAILABILITY OF INFORMATION the voting shares of a state member bank or bank holding company file additional notices under the The Board of Governors is amending 12 C.F.R. Part CIBC Act for subsequent acquisitions resulting in 261, its Rules Regarding Availability of Information; ownership of between 10 and 25 percent of the shares Freedom of Information Reform Act, to reflect of the bank or bank holding company. This amend- changes in the direct costs to the Board to conduct ment is intended to reduce the regulatory burden searches, review documents, and copy documents in under the CIBC Act without impairing the Board's response to requests made under the Freedom of ability to properly evaluate acquisitions under the Information Act by adding an "Appendix A" to Secstatutory factors set forth under the CIBC Act. tion 261.10—Freedom of Information Fee Schedule. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 43 Effective January 2, 1991 (comments must be re- search time. For requesters qualifying for 100 free ceived on or before January 2, 1991), 12 C.F.R. Part pages of reproduction, the fees for duplicate micro- 261 is amended as follows: fiche will be prorated to eliminate the charge for 100 frames. Part 261—Rules Regarding Availability of The Board will waive in full fees that total less than Information $5. The Secretary of the Board or his or her designee 1. The authority citation for Part 261 continues to read will also waive or reduce fees, upon proper request, if as follows: disclosure of the information is in the public interest because it is likely to contribute significantly to public Authority: 5 U.S.C. 552, 12 U.S.C. 248(k), 321, and understanding of the operations or activities of the 1844. government and is not primarily in the commercial interest of the requester. A fee reduction is available to 2. Appendix A is added at the end of section 261.10 to employees, and applicants for employment who reread as follows: quest records for use in prosecuting a grievance or complaint against the Board. Section 261.10—Fee schedules; waiver of fees ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT Appendix A to Section 261.10—Freedom of Information Fee Schedule Orders Issued Under Section 3 of the Bank Holding Company Act Duplication: Photocopy, per standard page $ 0.10 BanPonce Corporation Paper copies of microfiche, per frame $ 0.10 Hato Rey, Puerto Rico Duplicate microfiche, per microfiche $ 0.30 Search and Review: Order Approving Acquisition of a Bank and Clerical/Technical, hourly rate $ 17.00 Merger of Banks Professional/Supervisory, hourly rate $ 32.00 Manager/Senior Professional, hourly rate $ 53.00 BanPonce Corporation, Hato Rey, Puerto Rico ("Ap- Computer search and production: plicant"), a bank holding company within the meaning Operator search time, hourly rate $ 25.00 of the Bank Holding Company Act ("BHC Act"), has Cassette tapes $ 5.00 applied for the Board's approval under section 3(a)(3) PC computer output, per minute $ 0.10 of the BHC Act (12 U.S.C. § 1842(a)(3)) to acquire all Mainframe computer output Actual Cost of the shares of Banco Popular de Puerto Rico, Hato Rey, Puerto Rico ("Banco Popular"). In connection Special Services: with the proposed acquisition, Banco de Ponce, The Secretary of the Board may agree to provide, Ponce, Puerto Rico, a state member bank subsidiary of and set fees to recover the costs of, special services Applicant, has applied under the Bank Merger Act not covered by the Freedom of Information Act, such (12 U.S.C. § 1828(c)) to merge with Banco Popular as certifying records or information and sending rec- under the charter of Banco de Ponce.1 In addition, ords by special methods such as express mail. The Banco de Ponce has applied under section 9 of the Secretary may provide self-service photocopy ma- Federal Reserve Act (12 U.S.C. § 321) to retain the chines and microfiche printers as a convenience to United States branches of Banco Popular following the requesters. proposed merger. Banco de Ponce also has applied Fee Waivers: under section 24A of the Federal Reserve Act (12 U.S.C. § 371d) to make an additional investment For qualifying educational and noncommercial scientific institution requesters and representatives of the news media, the Board will not assess fees for review time, for the first 100 pages of reproduction, or, when 1. BanPonce proposes to effect the acquisition and merger through the records sought are reasonably described, for a series of transactions. In the first step, Newco, a wholly owned search time. For other noncommercial use requests, subsidiary of BanPonce, will merge with and into BanPonce, with BanPonce being the surviving corporation. Immediately after that no fees will be assessed for review time, for the first merger, Banco Popular will merge into Banco de Ponce, and Banco de 100 pages of reproduction, or for the first two hours of Ponce will change its name to Banco Popular de Puerto Rico. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 Federal Reserve Bulletin • January 1991 in bank premises. In addition, Banco de Ponce has trolling deposits of $178.3 million, representing apapplied under section 25(a) of the Federal Reserve Act proximately 50.0 percent of the total deposits in com- (12 U.S.C. § 611) to retain the United States Virgin mercial banking organizations in the market. Upon Islands branches of Banco Popular following the pro- consummation of this proposal, Applicant would beposed merger.2 come the largest commercial banking organization in Notice of the applications, affording interested par- the market, controlling deposits of $213.6 million, ties opportunity to comment, has been duly published representing approximately 59.9 percent of the total (55 Federal Register 26,775 (1990)). As required by the deposits in commercial banking organizations in the Bank Merger Act, reports of the competitive effects of market. The Aguadilla banking market is considered to the merger were requested from the United States be highly concentrated. The Herfindahl-Hirschman Attorney General, the Office of the Comptroller of the Index ("HHI") would increase by 987 points to 4302 Currency, and the Federal Deposit Insurance Corpo- upon consummation of the proposal.6 ration. The time for filing comments has expired and Although consummation of the proposal would rethe Board has considered the applications and all sult in the elimination of competition in the Aguadilla comments received in light of the factors set forth in banking market, the Board believes that a number of section 3(c) of the BHC Act and in the Bank Merger factors mitigate the potentially anticompetitive effects Act. of this proposal. Following consummation, four commercial banking organizations and two thrift institu- Competitive Considerations tions would remain in the market. The Board believes that thrift institutions are active competitors in provid- BanPonce is the fourth largest commercial banking ing bank services in the Aguadilla banking market. The organization in Puerto Rico, controlling deposits of Board previously has indicated that thrift institutions $2.2 billion, representing approximately 9.8 percent of have become, or have the potential to become, signifthe deposits in commercial banks and savings banks icant competitors of commercial banks.7 In a limited ("bank deposits") in Puerto Rico. Banco Popular is number of decisions, the Board has considered 75 to the largest commercial bank in Puerto Rico, control- 100 percent of a market's thrift deposits in analyzing ling deposits of $4.6 billion, representing approxi- the competitive effects of a proposed transaction.8 mately 20.2 percent of bank deposits in Puerto Rico. Such Board decisions have emphasized that the sub- Upon consummation of the proposed transaction, ject thrifts not only were empowered to exercise virtually the same powers granted commercial banks, BanPonce would become the largest commercial bankbut also did in fact exercise such powers to a signifiing organization in Puerto Rico, controlling deposits of cant extent. $6.8 billion, representing approximately 30.0 percent of the bank deposits in Puerto Rico.3 Consummation The record indicates that, in general, thrifts in of the proposal would not have a significantly adverse Puerto Rico compete actively in the full range of effect on the concentration of banking resources in banking products and services. Thrifts in Puerto Rico Puerto Rico. provide transaction as well as traditional savings ac- BanPonce and Banco Popular compete in all four counts. In addition, thrifts in Puerto Rico are active in banking markets in Puerto Rico4 and in the Metropol- providing commercial and consumer loans. Commeritan New York banking market. In the Aguadilla market,5 Applicant is the third largest of five commercial banking organizations, controlling deposits of 6. Under the revised Department of Justice Merger Guidelines, 49 $35.3 million, representing approximately 9.9 percent Federal Register 26,823 (1984), a market in which the post-merger HHI is above 1800 is considered highly concentrated. In such marof the total deposits in commercial banking organizakets, the Department of Justice is likely to challenge a merger that tions in the market. Banco Popular is the largest increases the HHI by more than 50 points. The Department of Justice commercial banking organization in the market, con- has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI market is at least 1800 and the merger increases the HHI by 200 points. The Department 2. Banco de Ponce has also applied under section 25 of the Federal of Justice has stated that the higher than normal HHI thresholds for Reserve Act (12 U.S.C. § 601) and section 211.4(f) of the Board's screening bank mergers and acquisitions for anticompetitive effects Regulation K (12 C.F.R. 211.4(f)) to acquire Consumer Services, Inc., implicitly recognize the competitive effect of limited-purpose lenders a consumer finance company that is affiliated with Banco Popular. and other non-depository financial entities. 3. Island-wide deposit data are as of September 30, 1989. All other 7. WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); First Union deposit data are as of June 30, 1989. Corporation, 76 Federal Reserve Bulletin 83 (1990); Midwest Finan- 4. The banking markets in Puerto Rico are Aguadilla, Mayaguez, cial Group, 75 Federal Reserve Bulletin 386 (1989). Ponce, and San Juan. 8. See, e.g., Centura Banks, Inc., 76 Federal Reserve Bulletin 869 5. The Aguadilla banking market is approximated by the Aguadilla (1990) (considering 75 percent of market thrift deposits); Banknorth Metropolitan Statistical Area ("MSA"), with the addition of the town Group, Inc., 75 Federal Reserve Bulletin 703 (1989) (considering 100 of Rincon. percent of market thrift deposits). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 45 cial lending constitutes on average 6.6 percent of the In order to mitigate further the potential anticomtotal assets of Puerto Rico thrifts, in comparison to an petitive effects of this proposal, Applicant has commitaverage of 2.8 percent of total assets for thrifts nation- ted to divest between $18.5 and $21.0 million of wide. Consumer lending constitutes on average 19.1 deposits in the Aguadilla market. Applicant has subpercent of the total assets of Puerto Rico thrifts, as mitted a plan of divestiture and has commenced discompared with the average of 4.5 percent for thrifts cussions with potential purchasers regarding the sale nationally. In addition, thrifts in Puerto Rico on aver- of the branch to be divested. Applicant expects to age devote only approximately 29.3 percent of their complete the divestiture within six months of the total assets to the traditional thrift activity of con- consummation of the proposal. Upon consummation sumer real estate lending, a significantly lower per- of the planned divestiture and after consideration of centage than the 45.6 percent average of thrifts nation- thrift institutions and cooperatives, as discussed wide. On the basis of the activities, size, number, and above, Applicant's pro forma market share would be market shares of thrift institutions in Puerto Rico, the 37.7 percent of market deposits and the HHI would Board has concluded that thrift institutions exert a increase by 200 points to 2166. The Board believes that competitive influence that mitigates in part the poten- the planned divestiture substantially mitigates the potially anticompetitive effects of this proposal.9 tential anticompetitive effects of the proposal. On the The Board has also considered the presence of basis of the facts of record, including the divestiture savings and credit union cooperative societies ("coop- plan, the competition offered by thrift institutions and eratives") in the Aguadilla banking market. Coopera- cooperatives, the number of competitors remaining in tives are commonwealth-insured depository institu- the market, and other facts of record, the Board has tions unique to Puerto Rico.10 Although they are concluded that consummation of the proposal is not membership organizations, few impose membership likely to result in a significantly adverse effect on restrictions, and cooperatives are authorized to pro- competition in the Aguadilla banking market. vide a full range of products and services to nonmem- In the Ponce banking market,12 Applicant is the bers. Cooperatives provide transaction accounts and second largest of eight commercial banking organizaare authorized to lend to both members and nonmem- tions, controlling deposits of $132.5 million, representbers for any purpose, including business purposes. In ing approximately 18.4 percent of the total deposits in addition, the Puerto Rico Inspector of Cooperatives is commercial banking organizations in the market. authorized to grant broad lending authority, including Banco Popular is the largest commercial banking orcommercial lending authority, to cooperatives upon ganization in the market, controlling deposits of $260.5 request. The record indicates that cooperatives are million, representing approximately 36.1 percent of significant providers of credit to individuals to fund the total deposits in commercial banking organizations small businesses in Puerto Rico. On the basis of the in the market. Upon consummation of this proposal, activities, size, number, and market shares of cooper- Applicant would become the largest commercial bankatives in Puerto Rico, the Board has concluded that ing organization in the market, controlling deposits of cooperatives exert a competitive influence that miti- $393.0 million, representing approximately 54.5 pergates in part the potential anticompetitive effects of cent of the total deposits in commercial banking orgathis proposal.11 nizations in the market. The Ponce banking market is considered to be highly concentrated. The HHI would increase by 1328 points to 3500 upon consummation of the proposal. 9. Thrift institutions exert a considerable competitive influence in the Aguadilla market. Commercial lending constitutes on average 9.5 The Board has considered a number of factors that percent of the total assets of Aguadilla thrifts, which is significantly mitigate the potentially anticompetitive effects of the greater than the national thrift average of 2.8 percent. Their average ratio of consumer loans to total assets is 17.3 percent, in comparison proposal in this market. As discussed above, the to the national thrift average of 4.5 percent. Aguadilla thrift institu- record indicates that thrifts are active competitors in tions also provide approximately 13.0 percent of the market's conthis market, and exert a considerable competitive sumer and small business transaction accounts. Upon consummation and after including 100 percent of the deposits of thrift institutions in influence in the Ponce market.13 In addition, following market share calculation, the HHI would increase 583 points to 2993. 10. The Shares and Deposits Insurance Program, an agency of the Commonwealth of Puerto Rico, insures deposits in cooperatives to a maximum of $40,000 per person. P.R. Stat. Ann. tit. 7, § 1151(b). cooperatives in the calculation of market share, the HHI would 11. Seven cooperatives compete with banks in the Aguadilla bank- increase by 470 points to 2432. ing market, and they are significant competitiors in that market. 12. The Ponce banking market is approximated by the Ponce MSA, Cooperatives account for 18.6 percent of total deposits in the market with the addition of the towns of Adjuntas, Coamo, Guanica, Guayand, according to a survey conducted by the Federal Reserve Bank of nilla, Peneulas, Santa Isabel, Villalba, and Yauco. Atlanta, cooperatives account for an estimated 24.4 percent of the . 13. Commercial lending constitutes on average 10.5 percent of total consumer loans and 11.1 percent of small business loans in the market. assets of Ponce thrifts, which is significantly greater than the national Upon consummation and after including 50 percent of the deposits of thrift average of 2.8 percent. The average ratio of consumer loans to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 Federal Reserve Bulletin • January 1991 consummation, seven commercial banks (including number of competitors, including large foreign banks, four large foreign banks) and two thrifts would remain would remain in the markets following consummation. in the market. For the reasons discussed above, the The New York market is unconcentrated, and would Board has also considered the presence of coopera- remain so following consummation, with numerous tives, which are significant competitors for bank prod- competitors remaining in the market.18 In light of the ucts and services in the Ponce banking market.14 facts of record, the Board concludes that consumma- In order to mitigate further the potential anticom- tion of the proposal would not result in significantly petitive effects of this proposal, Applicant has commit- adverse effects on competition in the San Juan, Mayted to divest branches in the Ponce market that control aguez, or New York banking markets. deposits of approximately $70.0 million. Applicant has For these reasons, and based on all the facts of submitted a plan of divestiture and has commenced record, the Board concludes that consummation of this negotiations regarding the sale of the branches to be proposal would not have a significantly adverse effect divested. Applicant expects to complete the divesti- on competition in any relevant banking market. In tures within six months of consummation of the pro- making this determination, the Board has relied on the posal. Upon consummation of the planned divestitures plan of divestiture offered by Applicant and expects and after consideration of thrift institutions and coop- that Applicant will complete the planned divestitures eratives, as discussed above, Applicant's pro forma within six months of consummation of the proposal. market share would be 29.1 percent of market deposits and the HHI would increase by 193 points to 1864. The Financial, Managerial, and Convenience and Needs Board believes that the planned divestiture substan- Considerations tially mitigates the potential anticompetitive effects of the proposal. On the basis of the facts of record, The financial and managerial resources and future including the divestiture plan, the competition offered prospects of Applicant, its subsidiary bank, and Banco by thrift institutions and cooperatives, the number of Popular are consistent with approval. competitors remaining in the market, and other facts In considering the convenience and needs of the comof record, the Board has concluded that consummamunities to be served, the Board has reviewed the perfortion of the proposal is not likely to result in a signifimance of both Banco de Ponce and Banco Popular under cantly adverse effect on competition in the Ponce the Community Reinvestment Act (12 U.S.C. § 2901, et banking market. seq.) (the "CRA") and the Joint Statement of the Federal Applicant and Banco Popular also compete in the Financial Supervisory Agencies Regarding the Commu- San Juan and Mayaguez, Puerto Rico; and New York, nity Reinvestment Act (the "Joint Statement").19 Appli- New York, banking markets. The San Juan15 and cant has initiated a plan that implements many of the Mayaguez16 markets are moderately concentrated, elements of an effective CRA plan as outlined in the Joint and would remain moderately concentrated following Statement. The Board expects Applicant to continue the consummation of the proposal.17 In addition, a large steps it has already taken in implementing this plan and intends to monitor Applicant's progress in connection with future proposals by Applicant. On the basis of the total assets is 18.3 percent, in comparison to the national thrift average overall CRA records of Applicant and Banco Popular and of 4.5 percent. Ponce thrift institutions also provide approximately 11.5 percent of the consumer and small business transaction accounts in the market. Upon consummation of the proposal and after including 100 percent of the deposits of thrift institutions in the market share calculation, the HHI would increase 623 points to 2484. calculation, Applicant would become the largest of 25 commercial 14. Twenty-seven cooperatives compete with banks in the Ponce banking and thrift organizations, controlling 32.3 percent of bank banking market. Cooperatives account for 10.0 percent of total deposits. The HHI would increase by 471 points to 1763. In the deposits and, according to a survey conducted by the Federal Reserve Mayaguez banking market, upon consummation of the proposal and Bank of Atlanta, cooperatives account for approximately 19.0 percent after including 100 percent of thrift deposits in the market share of the total consumer loans in the market. Upon consummation and calculation, Applicant would become the largest of ten commercial after including 50 percent of the deposits of cooperatives in the banking and thrift organizations, controlling 26.0 percent of bank calculation of market share, the HHI would increase by 560 points to deposits. The HHI would increase by 319 points to 1755. 2231. 18. The New York, New York banking market is approximated by 15. The San Juan banking market is approximated by the San New York City; Nassau, Orange, Putnam, Rockland, Suffolk, Sulli- Juan-Caguas Consolidated Metropolitan Statistical Area, with the van, and Westchester Counties in New York; Bergen, Essex, Hudaddition of the Arecibo MSA and the following towns: Aibonito, son, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Arroyo, Barranquitas, Ceiba, Ciales, Comerio, Guayama, Jayuya, Somerset, Sussex, Union, and Warren Counties in New Jersey: and Lares, Maunabo, Morovis, Naguabo, Orocovis, Patillas, Salinas, part of Fairfield County in Connecticut. Upon consummation, the Utuado, and Yabucoa. HHI would increase by less than 1 point to 663. 16. The Mayaguez banking market is approximated by the May- 19. The Community Coalition for Fair Banking of East Harlem aguez MSA, with the addition of the towns of Lajas, Las Marias, ("CCFB") submitted comments critical of the CRA performance of Maricao, and Sabana Grande. the New York branches of both Applicant and Banco Popular. 17. In the San Juan market, upon consummation of the proposal and Following discussions with Applicant and Banco Popular, CCFB has after including 100 percent of thrift deposits in the market share withdrawn its comments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 47 other facts of record, the Board concludes that conve- institution.20 In its previous review of this question, nience and needs considerations, including the records the Board noted that a broad interpretation of section of performance under the CRA of both Applicant and 5 of the IBA to permit a foreign bank to operate a Banco Popular, are consistent with approval of these branch established by another bank prior to the releapplications. vant grandfather date would allow foreign banks to acquire extensive branch networks in the United International Banking Act Considerations States outside of the foreign bank's home state, and beyond the branching networks grandfathered in the As banks chartered in Puerto Rico, Banco de Ponce IBA. This result is contrary to the purpose of section and Banco Popular are deemed to be foreign banks for 5 of the IBA of limiting the branching activities of purposes of the requirements of the International foreign banks outside their home states, and would Banking Act of 1978 ("IB A"). Applicant and Banco de give foreign banks a significant competitive advantage Ponce have selected New York as their home state for over domestic banks in establishing new interstate purposes of section 5 of the IB A, and, consistent with branch networks in the United States that was not that section, Banco de Ponce currently operates 14 intended by the IBA.2* state-licensed branches in New York, New York. For these reasons, and consistent with its previous Banco Popular has selected Illinois as its home state, decisions, the Board has determined that the grandfaand operates a branch in Chicago, Illinois, as well as ther privileges accorded to Banco Popular to operate a eight state-licensed branches in New York; a branch in branch in California would not survive the merger of Los Angeles, California; and a limited purpose agency Banco Popular into Banco de Ponce. Because the in Florida. Banco Popular is permitted to retain its home state for Banco de Ponce would continue to be branches in New York and California pursuant to New York following the merger, the resulting bank section 5(b) of the IB A, which permits foreign banking would be without authority under the IBA to operate a organizations to continue to operate branches estab- branch in Illinois. Accordingly, Applicant must divest lished before July 27, 1978, outside their home state. or conform the activities of the California and Illinois 12 U.S.C. § 3103(b). branches of the resulting bank within six months of Following consummation of the proposed transac- consummating the proposed merger. tions, Applicant and Banco de Ponce, the bank that will survive the proposed merger, propose to con- Other Considerations tinue to designate New York as their home state for purposes of section 5 of the IB A. Accordingly, Applicant has applied under section 9 of the Federal Banco de Ponce may retain all of its domestic Reserve Act (12 U.S.C. § 321 et seq.) to retain the branches as well as the branches of Banco Popular in Banco Popular branches located in New York follow- New York. ing the merger. The Board has considered the factors Applicant contends that, following the bank merger, it is required to consider when reviewing applications the resulting bank should also be permitted to retain for the establishment of branches pursuant to section 9 the branches of Banco Popular in California and of the Federal Reserve Act and finds those factors to Illinois. Applicant argues that a foreign bank that be consistent with approval. results from the merger of two foreign banks should be Applicant also has requested permission under secpermitted to retain all of the branches in the United tion 24A of the Federal Reserve Act (12 U.S.C. States of each of the merging banks. In the alternative, § 37Id) to make an additional investment in bank Applicant argues that the resulting foreign bank should premises in connection with this proposal. The Board be permitted to choose to retain the grandfather rights concludes that Applicant's additional investment in of either of the merging banks. bank premises is consistent with approval. Section 5 of the IBA generally provides that no Applicant also has applied under section 25 of the foreign bank may establish and operate a branch Federal Reserve Act (12 U.S.C. § 601 et seq.) to retain outside of its home state unless operation of the the branches of Banco Popular located in the United branch is expressly permitted by state law and the foreign bank agrees to limit the deposit-taking activities of that branch to those permissible for an Edge 20. See The Mitsui Bank, Limited, 76 Federal Reserve Bulletin 381 (1990) (merger of two foreign banking organizations); Lloyds Bank corporation. 12 U.S.C. § 3103. The Board has previ- Pic, 72 Federal Reserve Bulletin 841 (acquisition of stock of a second ously determined that grandfather rights to retain foreign bank) (1986). The Board has reached this conclusion both branches established outside of a foreign bank's home when the acquisition has been a stock acquisition in which both foreign banks survive, and in the case of a merger of two foreign banks state before July 27, 1978, are extinguished when that in their home country in which only one institution would survive. foreign bank is acquired by another foreign banking 21. See Lloyds Bank Pic, 72 Federal Reserve Bulletin 841 (1986). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 Federal Reserve Bulletin • January 1991 States Virgin Islands following the merger. The Board become a bank holding company by acquiring all of the concludes that Applicant's retention of these branches voting shares of Texas Commerce's subsidiary banks is consistent with approval. located in Texas.1 Applicant also has applied under section 25 of the Notice of the applications, affording interested per- Federal Reserve Act for permission to acquire Con- sons an opportunity to submit comments, has been sumer Services, Inc., through the resulting bank. published (55 Federal Register 31,231 (1990)). The Applicant has agreed to conform the activities of time for filing comments has expired, and the Board Consumer Services, Inc. to the requirements of sec- has considered the applications and all comments tion 25 of the Federal Reserve Act and the Board's received in light of the factors set forth in section 3(c) Regulation K. The Board concludes that Applicant's of the BHC Act. acquisition of Consumer Services, Inc. is consistent Chemical, with total consolidated assets of $75.2 with approval and with the purposes of the Federal billion, is the sixth largest banking organization in the Reserve Act. nation.2 Chemical operates banking subsidiaries in On the basis of the foregoing and other facts of New York, New Jersey, Delaware, and Texas, and record, including the commitments and divestiture engages through certain other subsidiaries in a variety proposals made in this case by Applicant, the Board of nonbanking activities. In Texas, where it operates has determined that the applications should be, and 18 banks, Chemical has total assets of $16.9 billion and hereby are, approved. The transactions shall not be is the second largest banking organization. This proconsummated before the thirtieth day following the posal represents a corporate reorganization. effective date of this Order, or later than three months The Board has received comments alleging that two after the effective date of this Order, unless such Texas Commerce subsidiary banks, Texas Commerce period is extended for good cause by the Board or the Bank-Houston, Houston, Texas ("TCB-Houston"), Federal Reserve Bank of New York, acting pursuant and Texas Commerce Bank-Rio Grande, National to delegated authority. Association, McAllen, Texas ("TCB-Rio Grande"), By order of the Board of Governors, effective have been unresponsive in meeting the credit needs of November 5, 1990. their local communities. The comments regarding TCB-Houston are based on a non-profit organization's Voting for this action: Chairman Greenspan and Governors business dealings with the bank to secure loans and Seger, Angell, Kelley, LaWare, and Mullins. grants from the bank for community projects.3 The comments regarding TCB-Rio Grande allege deficien- JENNIFER J. JOHNSON cies in the bank's service to the Hispanic community, Associate Secretary of the Board especially small businesses.4 The Board has carefully reviewed these comments Chemical Banking Corporation in considering whether this proposal is consistent with New York, New York the convenience and needs of the community to be served. This review requires the Board to take into Texas Commerce Bancshares, Inc. account the record of Chemical's and Texas Com- Houston, Texas merce's subsidiary banks under the Community Rein- Texas Commerce Equity Holdings, Inc. Wilmington, Delaware 1. This reorganization is for the purpose of reducing corporate tax liability and does not represent an expansion of existing activities. Order Approving Formation of Bank Holding 2. All financial data are as of June 30, 1990. 3. Freedmen's Town Association, Inc. ("FTA") is a non-profit Company and Acquisition of Banks organization supporting economic and social development in Freedmen's Town, a community of predominately low- and moderateincome black residents. Although FTA has been unsuccessful in Chemical Banking Corporation, New York, New York obtaining loans for proposed projects or substantial grants, including ("Chemical"), and Texas Commerce Bancshares, foreclosed real property, from the bank, TCB-Houston has contributed approximately $9,000 to FTA as grants and reimbursement for Inc., Houston, Texas ("Texas Commerce"), bank loan application expenses. FTA also alleges that TCB-Houston's CRA holding companies within the meaning of the Bank officer recommends funding for projects on a discriminatory basis. Holding Company Act ("BHC Act"), have applied for 4. According to the individual commenting, TCB-Rio Grande's Hispanic loan officers are inadequately trained to receive and process the Board's approval under section 3 of the BHC Act loan applications. In addition, the commenter generally criticizes the (12 U.S.C. § 1842) to acquire, as part of a corporate bank's visitation program to the Hispanic small business community reorganization, a wholly owned new subsidiary, Texas and states that Hispanics are inadequately represented on TCB-Rio Grande's board of directors. Finally, the commenter alleges that loan Commerce Equity Holdings, Inc., Wilmington, Delaprocedures and required documentation are applied in a discriminaware ("Equity Holdings"). Equity Holdings would tory manner against Hispanic borrowers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 49 vestment Act ("CRA") (12 U.S.C. § 2901 et seq.). bank's CRA performance.10 In addition, all banking The CRA requires the federal financial supervisory subsidiaries of Texas Commerce, except one subsidagencies to encourage financial institutions to help iary, have received satisfactory CRA performance meet the credit needs of the local communities in ratings in recent CRA examinations of these instituwhich they operate, consistent with the safe and sound tions.11 operation of such institutions. To accomplish this end, In addition, Texas Commerce has put in place the CRA requires the appropriate federal supervisory various elements outlined in the Agency CRA Stateauthority to assess the institution's record of meeting ment that contribute to an effective CRA program. the credit needs of its entire community, including Specifically, Texas Commerce has established a prolow- and moderate-income neighborhoods, consistent gram for reviewing and supervising the CRA programs with the safe and sound operation of the institution, of its subsidiary banks, including a training program and to take this record into account in its evaluation of that increases CRA awareness throughout the system bank holding company applications.5 at officer and staff levels. This program includes regu- The Board has carefully reviewed the CRA perfor- lar review of reports made by each subsidiary bank to mance record of TCB-Houston and TCB-Rio Grande, Texas Commerce concerning the bank's CRA proas well as the responses to those comments by appli- gram, and annual review of each bank's CRA statecants, in light of the CRA, the Board's regulations and ment. Texas Commerce provides information to subthe Statement of the Federal Financial Supervisory sidiary banks regarding evolving areas of emphasis Agencies Regarding the Community Reinvestment Act under the CRA, and suggests guidelines to assure that ("Agency CRA Statement").6 The Agency CRA subsidiary banks are meeting their responsibilities to Statement provides guidance regarding the types of the community under the CRA. policies and procedures that the supervisory agencies Regarding TCB-Houston CRA programs, the bank believe financial institutions should have in place in has formed a CRA Board Committee of outside direcorder to fulfill their responsibilities under the CRA on tors and has established an Advisory Council coman ongoing basis and the procedures that the supervi- posed of representative community leaders. In addisory agencies will use during the application process to tion, TCB-Houston has established several programs review an institution's CRA compliance and perfor- aimed at serving the needs of low- and moderatemance. The Agency CRA Statement also indicates income residents in its community.12 TCB-Houston that decisions by agencies to allow financial institu- has special mortgage, checking account, and student tions to expand will be made pursuant to an analysis of loan programs that are targeted to low- and moderatethe institution's overall CRA performance, and will be income individuals in bilingual promotional materials. based on the actual record of performance of the The bank also makes grants to specific community institution.7 organizations.13 Initially, the Board notes in this case that TCB- TCB-Rio Grande's board of directors has estab- Houston and TCB-Rio Grande have received satisfac- lished a committee to oversee its CRA program by tory ratings from their primary regulator in the most meeting quarterly and reporting to the full board of recent examination of their CRA performance.8 The directors as well as a CRA self-assessment program to Agency CRA Statement provides that, although CRA meet the needs of its community, especially Hispanic examination reports do not provide conclusive evidence of an institution's CRA record, these reports will be given great weight in the application process.9 The record also indicates that substantially all of 10. The CRA performance of one of Chemical's recently formed Chemical's subsidiary banks outside of Texas, consubsidiary banks has never been examined. trolling substantially all of Chemical's assets, have 11. The subsidiary bank with a less than satisfactory rating accounts received satisfactory ratings from their primary regu- for less than 2 percent of the total assets of Texas Commerce. The Board notes that Texas Commerce has taken steps to improve the lators during the most recent examinations of each CRA performance of this bank, and the Board expects that Texas Commerce will continue to improve the CRA performance of this bank. 12. For example, TCB-Houston's three-year commitment to New Foundations, a program established in conjunction with the United Way of Houston to support community-based groups working to build 5. 12 U.S.C. § 2903. affordable housing in Houston, totals $216,000. 6. 54 Federal Register 13,742 (1989). 13. In 1989, TCB-Houston contributed $20,000 to Sunnyside Up, an 7. Id. organization placing individuals in formerly vacant homes as part of a 8. The Board also notes that the record contains no evidence to rent-to-buy program. This year, the bank contributed a single family support protestants' allegations of discriminatory practices by officers dwelling and $15,000 to Houston Habitat for Humanity, a non-profit of TCB-Houston and TCB-Rio Grande. organization, to assist disadvantaged individuals to build and own 9. 54 Federal Register at 13,745. homes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 Federal Reserve Bulletin • January 1991 residents.14 The bank uses a variety of means to First Community Bancshares, Inc. market its products and services to Hispanic busi- Milton, Wisconsin nesses and to determine their credit needs.15 The officers and directors of TCB-Rio Grande are active in Order Approving Acquisition of Shares of a Bank promoting minority business in the community, including a loan call program targeted to Hispanic bus- First Community Bancshares, Inc., Milton, Wisconsin inesses.16 The bank estimates that it will make calls on ("First Community"), a bank holding company within over 1,000 Hispanic small businesses in 1990. the meaning of the Bank Holding Company Act (the Based on the record of this case, including the past "BHC Act"), has applied for the Board's approval CRA performance of TCB-Houston and TCB-Rio under section 3(a)(3) of the BHC Act (12 U.S.C. Grande, the generally satisfactory record of perfor- § 1842(a)(3)) to acquire up to 24.9 percent of the mance under the CRA as indicated by the examination outstanding voting shares of Ottawa National Bank, ratings received by substantially all of Chemical's Ottawa, Illinois ("Ottawa Bank"). banks, and the actions taken by Texas Commerce in Notice of the application, affording interested perthe past to address deficiencies identified in its CRA sons an opportunity to submit comments, has been performance record, the Board concludes that consid- published (55 Federal Register 32,304 (1990)). The erations relating to the convenience and needs of the time for filing comments has expired, and the Board community to be served are consistent with approval. has considered the application and all comments re- The Board has also considered the competitive ceived, including comments by Ottawa Bank ("Protaspects of this reorganization, as well as the financial, estant") opposing this proposal, in light of the factors managerial and future prospects of the applicants. set forth in section 3(c) of the BHC Act.1 After reviewing all of these factors, and based on all of Section 3(d) of the BHC Act, the Douglas Amendthe facts of record, the Board has determined that the ment, prohibits the Board from approving an applicaapplication should be, and hereby is, approved. This tion by a bank holding company to acquire control of transaction shall not be consummated before the thir- any bank located outside of the bank holding comtieth calendar day following the effective date of this pany's home state, unless such acquisition is "speciforder, or later than three months after the effective ically authorized by the statute laws of the State in date of this order, unless such period is extended for which bank is located, by language to that effect and good cause by the Board or by the Federal Reserve not merely by implication."2 First Community's home Bank of New York, acting pursuant to delegated state is Wisconsin,3 Ottawa Bank's home state is authority. Illinois. The Board has determined that the interstate By order of the Board of Governors, effective banking statutes of Illinois and Wisconsin expressly November 30, 1990. authorize a Wisconsin bank holding company, such as First Community, to acquire banking organizations in Voting for this action: Chairman Greenspan and Governors Illinois.4 In light of the foregoing, the Board has Seger, Angell, LaWare, and Mullins. Abstaining from this determined that its approval of the proposal is not action: Governor Kelley. barred by the Douglas Amendment. The Board has previously indicated that the acqui- JENNIFER J. JOHNSON sition of less than a controlling interest in a bank is not Associate Secretary of the Board a normal acquisition for a bank holding company.5 14. The senior lending officer and executive vice president of the bank is Hispanic, as are three of the bank's eleven directors. 1. An Ottawa resident also has protested the application on the 15. TCB-Rio Grande's primary consumer brochures for basic grounds that, in the past, banking services to the local community checking, special mortgages and student loans are available in all have in the past diminished when banks are acquired by institutions branches in Spanish and English. located outside the community and reorganized. As discussed in this 16. In addition to the Hispanic community, TCB-Rio Grande assists order, however, First Community will not exercise a controlling other minority businesses. The bank and The Brownsville Minority influence over Ottawa Bank. In addition, First Community has Business Development Center ("MBDC"), an organization which committed that it will do nothing to affect the level of services focuses on preparing loan packages for area minority business ven- provided to the local community. tures, have worked together since the MBDC began its Brownsville 2. 12 U.S.C. § 1842(d). operation in late 1988. The bank meets periodically with MBDC to 3. A bank holding company's home state is that state in which the review services and loan packages available to small minority busi- operations of the bank holding company's banking subsidiaries were nesses. The bank's commercial loan officers also periodically meet principally conducted on July 1, 1966, or the date on which the with the staff of The Center of Entrepreneurship and Economic company became a bank holding company, whichever is later. Development to discuss loan proposals and small business loan 4. First Interstate Corporation of Wisconsin, 76 Federal Reserve services. TCB-Rio Grande is also involved in other loan programs Bulletin 375 (1990). aimed at minority small businesses and is in the preferred lending 5. State Street Boston Corporation, 67 Federal Reserve Bulletin program of the Small Business Administration. 862, 863 (1981). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 51 However, the requirement in section 3(a)(3) of the (5) have or seek to have any employees or represen- BHC Act that the Board's approval be obtained before tatives serve as an officer, agent or employee of a bank holding company acquires more than 5 percent Ottawa Bank; of the voting shares of a bank suggests that Congress (6) propose a director or slate of directors in oppocontemplated the acquisition by bank holding compa- sition to a nominee or slate of nominees proposed by nies of between 5 percent and 25 percent of the voting the management or board of directors of Ottawa shares of banks. Moreover, nothing in section 3(c) of Bank; the BHC Act requires denial of an application solely (7) solicit or participate in soliciting proxies with because a bank holding company proposes to acquire respect to any matter presented to the shareholders less than a controlling interest in a bank or a bank of Ottawa Bank; holding company. On this basis, the Board has previ- (8) attempt to influence the dividend policies or ously approved the acquisition by a bank holding practices of Ottawa Bank; company of less than a controlling interest in a bank.6 (9) attempt to influence the loan and credit decisions For these reasons, the Board concludes that the pur- or policies of Ottawa Bank, the pricing of services, chase by First Community of less than a controlling any personnel decision, the location of any offices, interest in Ottawa Bank is not a factor that, by itself, branching, the hours of operation or similar activiwarrants denial of this application. ties of Ottawa Bank; Protestant argues that, through the control of 24.9 (10) enter into any other banking or nonbanking percent of the voting shares of Ottawa Bank, First transactions with Ottawa Bank, except in the ordi- Community will be able to exercise a controlling nary course of business and on substantially the influence over Ottawa Bank because the Articles of same terms as comparable transactions entered into Association of Ottawa Bank require approval of 75 with other unaffiliated banks; or percent of the shares voting at a meeting to approve (11) without the prior written approval of the Board, any proposed shareholder action to merge, consolidate dispose or threaten to dispose of shares of Ottawa or exchange the shares of Ottawa Bank. First Com- Bank in any manner as a condition of specific action munity contends that it has no intention to exercise a or nonaction by Ottawa Bank. controlling influence over Ottawa Bank and has offered a number of commitments that the Board has The Board also has relied on these commitments to previously found helpful in determining that an invest- address concerns that a shareholder may attempt to ing bank holding company will not be able to exercise exercise control over issues requiring a two-thirds a controlling influence over another bank for purposes vote of shareholders in light of historical voting patof the BHC Act.7 In particular, First Community has terns of a bank holding company's shareholders.8 committed not to: Accordingly, based on the facts of record, including (1) take any action causing Ottawa Bank to become commitments by First Community, the Board does not a subsidiary of First Community; believe that First Community would acquire control of (2) acquire or retain shares that would cause the Ottawa Bank for purposes of the BHC Act through combined interest of First Community and its of- this transaction.9 The Board notes, however, that this ficers, directors and affiliates to equal or exceed 25 determination does not preclude the Board from initipercent of the outstanding voting shares of Ottawa ating a control proceeding under the BHC Act later if Bank; (3) exercise or attempt to exercise a controlling influence over the management or policies of Ottawa Bank; (4) seek or accept representation on the board of 8. See letter dated August 5, 1987, from James McAfee, Associate directors of Ottawa Bank: Secretary of the Board, to H. Rodgin Cohen, Esq. 9. Protestant also has requested that the Board hold a public hearing in this case. Generally under the Board's rules, the Board may, in its discretion, hold a public hearing on an application to clarify factual 6. See, e.g., Marine Midland Banks, Inc., 75 Federal Reserve issues related to the application and to provide an opportunity for Bulletin 455 (1989) (retention of warrants to acquire up to 24.99 testimony, if appropriate. 12 U.S.C. §§ 262.3(e) and 262.25(d). percent of the voting shares of a bank holding company); Midlantic The Board has carefully considered the Protestant's request for a Banks, Inc., 70 Federal Reserve Bulletin 776 (1984) (acquisition of public hearing in this case. In the Board's view, the parties have had 24.9 percent of the voting shares of a bank holding company); ample opportunity to present their arguments in writing and to Comerica Incorporated, 69 Federal Reserve Bulletin 911 (1983) (ac- respond to one another's submissions, and have submitted substantial quisition of 21.6 percent of the voting shares of a bank). written comments that have been considered by the Board. In light of 7. See, e.g., First State Corporation, 76 Federal Reserve Bulletin these facts, the Board has determined that a public hearing is not 376 (1990); United Counties Bancorporation, 75 Federal Reserve necessary to clarify the factual record in this application, or otherwise Bulletin 714 (1989); The Summit Bancorporation, 75 Federal Reserve warranted in this case. Accordingly, Protestant's request for a public Bulletin 712 (1989). hearing on this application is hereby denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 Federal Reserve Bulletin • January 1991 facts indicate that First Community controls Ottawa the Herfindahl-Hirschman Index ("HHI") would in- Bank for purposes of the BHC Act.10 crease by 14 points to 893 upon consummation of this Section 3(c) of the BHC Act requires the Board in proposal.14 Based on these and other facts of record, every case under section 3 of the BHC Act to analyze the Board believes that consummation of this proposal competitive, financial, managerial, future prospects, would not have a significantly adverse effect on comand convenience and needs considerations. In accord- petition in the La Salle banking market. ance with the terms of this section of the BHC Act, the On the basis of all of the facts of record, and after Board has considered these factors in its analysis of careful review of the comments submitted by Protesthis application, even though First Community's pro- tant, the Board believes that the financial and manaposal involves the acquisition of less than a controlling gerial resources of First Community, its subsidiary interest in Ottawa Bank.11 bank, and Ottawa Bank and the future prospects of First Community is the 260th largest commercial these organizations are consistent with approval. Conbanking organization in Wisconsin, controlling one siderations relating to the convenience and needs of bank subsidiary with $18 million in deposits, repre- the communities to be served also are consistent with senting less than one percent of total deposits in approval. commercial banking organizations in Wisconsin.12 Ot- Based on the foregoing and other facts of record, the tawa Bank is the 393rd largest commercial banking Board has determined that the application should be, organization in Illinois, controlling deposits of $41.2 and hereby is, approved. The acquisition shall not be million, representing 0.3 percent of total deposits in consummated before the thirtieth calendar day followcommercial banking organizations in Illinois. Consum- ing the effective date of this Order, unless such period mation of this proposal would not have a significantly is extended for good cause by the Board or by the adverse effect on the concentration of commercial Federal Reserve Bank of Chicago, acting pursuant to banking resources in Wisconsin or Illinois. delegated authority. First Community and Ottawa Bank do not compete By order of the Board of Governors, effective directly in any banking markets. However, Marseilles November 26, 1990. Bancorporation, Inc., Marseilles, Illinois ("Marseilles"), a bank holding company controlled by a Voting for this action: Chairman Greenspan and Governors principal of First Community, does compete with Ot- Seger, Angell, Kelley, LaWare, and Mullins. tawa Bank in the La Salle banking market.13 Marseilles, JENNIFER J. JOHNSON a one-bank holding company controlling Union Na- Associate Secretary of the Board tional Bank of Marseilles, Marseilles, Illinois, is the 16th largest commercial banking organization in the First Hawaiian, Inc. market, controlling deposits of $15.6 million, represent- Honolulu, Hawaii ing 1.6 percent of total deposits in commercial banking organizations in the market. Ottawa Bank is the ninth Order Approving the Acquisition of a Bank Holding largest commercial banking organization in the market, Company controlling deposits of $41.2 million, representing 4.3 percent of total deposits in commercial banking organi- First Hawaiian, Inc., Honolulu, Hawaii ("Applizations in the market. If considered a combined bankcant"), a bank holding company within the meaning of ing organization upon consummation of the proposal, the Bank Holding Company Act ("BHC Act"), has First Community would become the seventh largest applied for the Board's approval under section 3 of the commercial banking organization in the market, con- BHC Act (12 U.S.C. § 1842) to acquire First Interstate trolling $56.8 million in deposits, representing 5.9 perof Hawaii, Inc., Honolulu, Hawaii ("FIH"), and cent of total deposits in commercial banking organizathereby indirectly acquire FIH's subsidiary bank, tions in the market. The market is not concentrated and First Interstate Bank of Hawaii, Honolulu, Hawaii ("Bank").1 Applicant has also applied to acquire indi- 10. The Board notes that the Douglas Amendment would not bar Board approval of a proposal by First Community to acquire control of Ottawa Bank for the reasons set forth above. 14. Under the revised Department of Justice Merger Guidelines 11. State Street Boston Corporation, supra. In the event that First (49 Federal Register 26,823 (June 29, 1984)), any market in which the Community would be required to submit an application for such an post-merger HHI is below 1000 is considered unconcentrated, and the acquisition, and the Board would reexamine the competitive effects of Department of Justice will not challenge a merger with a post-merger such an acquisition as well as all of the other factors in section 3(c) of HHI below 1000, except in extraordinary circumstances. the BHC Act in view of the new facts and circumstances. 12. All data are as of June 30, 1990. 13. The La Salle banking market consists of La Salle County, 1. Applicant proposes to effect the acquisition of FIH through the Illinois. merger of a newly-formed direct subsidiary of Applicant with FIH. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 53 rectly the shares of FIH International, Inc., a corpo- cance beyond the individual products and services that ration chartered pursuant to section 25(a) of the Fed- constitute the cluster.4 The courts have continued to eral Reserve Act (12 U.S.C. § 611 et seq.) (the "Edge follow this position.5 Act"). A recent study conducted by Board staff supports Notice of the applications, affording interested per- the conclusion that customers still seek to obtain this sons an opportunity to submit comments, has been cluster of services.6 In particular, the businesses surpublished (55 Federal Register 18,177 (1990)). The veyed tended to purchase other banking products and time for filing comments has expired, and the Board services from the financial institutions where they has considered the applications and all comments maintained their primary transaction accounts.7 Conreceived, including comments from the United States sistent with these precedents and the recent staff Department of Justice, in light of the factors set forth study, and on the basis of the facts of record in this in section 3(c) of the BHC Act. case, the Board believes that the cluster of banking products and services represents the appropriate line Competitive Considerations of commerce for analyzing the competitive effects of this acquisition proposal.8 Section 3(c)(2) of the BHC Act provides that the Board may not approve an application by a bank holding Geographic Market company to acquire another bank holding company if the effect of the acquisition in any section of the Once the relevant line of commerce or product market country "may be substantially to lessen competition has been defined, the appropriate geographic market in . . . unless [the Board] finds that the anticompetitive which competition for the supply and demand of this effects of the proposed transaction are clearly out- line of commerce occurs must be defined. In defining weighed in the public interest by the probable effect of the relevant geographic market, the Board consisthe transaction in meeting the convenience and needs tently has sought to identify the area in which the of the community to be served." 12 U.S.C. cluster of products and services is provided by the § 1842(c)(2). In order to determine whether a particu- competing institutions and in which purchasers of the lar transaction is likely to lessen competition and, products and services seek to obtain these products consequently, would be prohibited under the BHC and services.9 The Supreme Court has indicated that Act, it is necessary first to determine the area of effective competition between the parties. The courts have determined that the area of effective competition 4. U.S. v. Phillipsburg, 399 U.S. at 361 (1969). is decided by reference to the "line of commerce" or 5. See United States v. Central State Bank, 621 F.Supp. 1276 (W.D. Mich. 1985), affd per curiam, 817 F.2d 22 (6th Cir. 1987). product market, and a geographic market. 6. Elliehausen and Wolken, Banking Markets and the Use of Financial Services by Small- and Medium-Sized Businesses, 76 Federal Reserve Bulletin 726 (1990). Product Market 7. According to the study, businesses surveyed obtained a mean of 2.29 services from financial institutions where they maintained trans- The Board traditionally has recognized that the appro- action accounts and a mean of 1.08 services from institutions where the businesses did not maintain transaction accounts. The study also priate product market for evaluating bank mergers and concluded that, on average, businesses surveyed obtained 2.37 seracquisitions is the cluster of products (various kinds of vices from their primary financial institutions. credit) and services (such as checking accounts and 8. The Board believes that its practice of recognizing the significant competitive influence of thrift institutions in analyzing bank acquisitrust administration) offered by banking institutions.2 tion proposals is consistent with its definition of the relevant product The Supreme Court has emphasized that it is this market. As the Board previously has explained, thrift institutions have been granted statutory authority in recent years to offer virtually all of cluster of products and services that as a matter of the products and services that previously were available only through trade reality makes banking a distinct line of com- commercial banks, including authority to offer personal and commermerce.3 According to the Court, this clustering facili- cial transaction accounts, to make all types of commercial and consumer loans, and to engage in certain leasing, credit card, and tates the convenient access to these products and other activities. WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); services, and vests the cluster with economic signifi- First Union Corporation, 76 Federal Reserve Bulletin 83 (1990); Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989). As noted below, thrift institutions do in fact exercise these broader powers to compete directly in providing the full cluster of banking FIH would be the surviving corporation, thereby becoming a wholly products and services. Thus, inclusion of thrift institutions in the owned subsidiary of Applicant. analysis of the competitive effects of bank acquisition proposals 2. The Bank of New York Company, Inc., 74 Federal Reserve reflects the fact that thrift institutions have become significant partic- Bulletin 257, 261 (1988). ipants in marketing the cluster of products and services. 3. United States v. Philadelphia National Bank, 374 U.S. 321, 357 9. See, e.g., Sunwest Financial Services, Inc., 73 Federal Reserve (1963) ("Philadelphia National"). Accord United States v. Connect- Bulletin 463 (1987); Pikeville National Corporation, 71 Federal Reicut National Bank, 418 U.S. 656 (1974); United States v. Phillipsburg serve Bulletin 240 (1985); Wyoming Bancorporation, 68 Federal National Bank, 399 U.S. 350 (1969) ("U.S. v. Phillipsburg"). Reserve Bulletin 313 (1982), affd, 729 F.2d 687 (10th Cir. 1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • January 1991 this is the area in which the effect of an acquisition will the state. FIH is the fourth largest commercial banking be direct and immediate.10 In applying these standards organization in Hawaii, controlling deposits of $770.9 to bank acquisition proposals, the Board and the Court million, representing approximately 5.6 percent of the consistently have held that the geographic market for total deposits in commercial banking organizations in the cluster of services is local in nature.11 the state. Upon consummation of the proposal and all In applying these principles in Hawaii, the Board planned divestitures, Applicant would remain the secpreviously has identified five local geographic markets ond largest banking organization in Hawaii, controlin Hawaii in which effects of bank expansion proposals ling deposits of approximately $5.2 billion, representon competition must be analyzed.12 The Board's def- ing approximately 37.3 percent of the total deposits in initions of Hawaii's local banking markets are based commercial banking organizations in the state.14 on a number of factors, including an analysis of Applicant and FIH compete directly in all five relevant commuting data, recognition of the state's banking markets in Hawaii. In the Maui banking mountainous island geography, the economic integra- market,15 Applicant is the second largest of six comtion of the local areas identified as banking markets, mercial banking organizations, controlling deposits of and evidence that banking customers actually conduct $316.1 million, representing approximately 37.6 permost of their banking business in local markets.13 cent of the total deposits in commercial banks in the Based on these and all of the other facts of record, market. FIH is the third largest commercial banking the Board continues to believe that Hawaii comprises organization in the market, controlling deposits of five local markets and that the record in this case $52.3 million, representing approximately 6.2 percent supports a competitive analysis based on these five of the total deposits in commercial banks in the local markets. market. The Maui banking market is considered to be highly concentrated. Upon consummation of the pro- Competitive Analysis posal, Applicant would control approximately 43.8 percent of the total deposits in commercial banks in Applicant is the second largest commercial banking the market, and the Herfindahl-Hirschman Index ("HHI") would increase by 467 points to 4313.16 organization in Hawaii, controlling deposits of $4.5 billion, representing approximately 32.3 percent of the There are a number of other significant and relevant total deposits in commercial banking organizations in factors that must be considered in analyzing the effects of this proposal on competition in this market. First, Applicant has committed to divest two branches of 10. Philadelphia National, 374 U.S. at 357 (1963). In that case, the Bank in this market, controlling approximately $27.5 Court stated that the "area of effective competition in the known line million in deposits, to either a smaller competitor in of commerce must be charted by careful selection of the market area the market or a new entrant into the market.17 With in which the seller operates, and to which the purchaser can practicably turn for supplies." Id. at 359 (emphasis in original) (quoting Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 327 (1961)). 11. Philadelphia National, 374 U.S. at 361 (1963). The Court has reasoned that banking is a service industry in which "convenience of 14. State deposit data are as of June 30, 1990; market specific location is essential to effective competition," and that "the factor of deposit data are as of June 30, 1989. inconvenience localizes banking competition as effectively as high 15. The Maui banking market is approximated by Maui County, transportation costs in other industries." Id. at 358. Hawaii, which is coextensive with the Islands of Maui, Molokai, and 12. Bancorp Hawaii, Inc., 76 Federal Reserve Bulletin 759 (1990). Lanai. The following are the banking markets identified by the Board in 16. Under the revised Department of Justice Merger Guidelines, 49 Hawaii: Honolulu; Maui; East Hawaii Island; West Hawaii Island; Federal Register 26,823 (1984), a market in which the post-merger and Kauai. HHI is above 1800 is considered highly concentrated. In such mar- 13. Data on commuting patterns in Hawaii reveal negligible inter- kets, the Department of Justice is likely to challenge a merger that island commuting. For example, only 4.0 percent of the workers living increases the HHI by more than 50 points. The Department of Justice on Kauai work on another island; 3.2 percent of Oahu workers work has informed the Board that, as a general matter, a bank merger or on another island; and 1.4 percent of workers in Maui County acquisition will not be challenged, in the absence of other factors (comprising the islands of Maui, Molokai, and Lanai) work outside of indicating anticompetitive effects, unless the post-merger HHI is at Maui County. least 1800 and the merger increases the HHI by 200 points. The Justice This evidence was confirmed by a telephone survey conducted by Department has stated that the higher than normal HHI thresholds for the Federal Reserve Bank of San Francisco, which found that banking screening bank mergers for anticompetitive effects implicitly recogmarkets in Hawaii tend to be limited to either a major island, or a nize the competitive effect of limited-purpose lenders and other major island and certain dependent islands that are not individually non-depository financial entities. As explained below, the Justice large enough to support economically distinct local markets. All of the Department has indicated that it believes that the more lenient consumers surveyed reported that they maintain their primary trans- thresholds normally applied in bank merger cases are not applicable in action accounts within local markets. All of the businesses surveyed this case. maintained their primary transaction accounts with the local offices of 17. Applicant has submitted a plan of divestiture and has comdepository institutions, and all the businesses that borrowed from menced discussions with potential purchasers regarding the sale of the depository institutions received their loans from local offices. In branches discussed in this Order. Applicant has committed that it will addition, only three of the 25 businesses surveyed reported that obtain signed agreements for each of the proposed divestitures prior to depository institutions located outside their local markets had solic- consummating the acquisition of FIH. The Board expects that the ited them for banking business. proposed divestitures will be consummated within six months of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 55 this proposed divestiture, the HHI would increase by tion of the proposal and the planned divestitures, and at most 233 points as a result of consummation of this after including 50 percent of market thrift deposits in acquisition.18 the calculation of market share, the HHI in the Maui The Board also believes that thrift institutions must banking market would increase by at most 183 points be recognized as competitors in the market. As ex- to 3131.21 plained above, the Board has previously indicated that In addition, the Board notes that five commercial thrift institutions have become, or have the potential banks, including the largest banking organization in to become, significant competitors of commercial Hawaii, and five thrift institutions, including a large banks. During the evolutionary period of the past thrift institution owned by the current owners of Bank, several years in which thrifts have begun to act in the would remain in the market following consummation marketplace increasingly like banks, the Board's prac- of this proposal. Credit unions and industrial loan tice has been to shade down the market share of banks companies also have a strong presence in the market.22 to account for the growing competition from thrifts. In light of these and all of the other facts of record, Thus, the Board has regularly included thrift deposits the Board has concluded that consummation of the in the calculation of market share on a 50 percent proposal would not result in a significantly adverse weighted basis. In this case, the Board notes that the effect on competition in the Maui banking market. thrifts in Hawaii in fact offer all or virtually all of the In the East Hawaii Island market,23 Applicant is the cluster of products and services, and that one thrift, second largest of six commercial banking organiza- American Savings Bank, has a significant portion of its tions, controlling deposits of $192.8 million, representportfolio invested in commercial loans.19 The Board ing approximately 34.1 percent of the total deposits in believes that the actual provision of most of these commercial banks in the market. FIH is the fourth products and services by thrifts in Hawaii as well as largest commercial bank in the market, controlling the potential that these institutions will exercise their deposits of $30.4 million, representing approximately existing authority to expand these activities justify 5.4 percent of the total deposits in commercial banks including thrift institutions on at least a 50 percent in the market. The East Hawaii Island banking market weighted basis in the calculation of market share in is considered to be highly concentrated. Upon coneach banking market in this case.20 Upon consumma- summation of the acquisition, Applicant would control approximately 39.5 percent of the market deposits and the HHI would increase by 367 points to 3956. consummation of the proposal. Should any divestiture agreement be Applicant has committed to divest a branch office terminated without consummation of the planned divestiture, Applicant will assign the assets and liabilities of the branch being divested controlling approximately $17.9 million in deposits in to an independent trustee with irrevocable instructions to sell the the East Hawaii Island banking market. Following this branch immediately. divestiture, the HHI in this market would increase by 18. Applicant has committed to sell these branches, and each of the other branches that it proposes to divest, to purchasers that are new at most 181 points to 3770.24 entrants into the market or that control a smaller market share than For the reasons discussed above, the Board also has Applicant. The increase in the HHI in the Maui banking market as a result of this proposal would be 202 points if these branches are sold considered the competitive influence of thrift instituto a new entrant into the market. tions in this market. After including 50 percent of the 19. The Department of Justice suggests that only thrift institutions market thrift deposits in the calculation of market that conduct a significant amount of commercial lending should be included in the analysis of the competitive effects of this proposal. The share and the planned divestiture in this market, the Department contends that recent changes in federal legislation regu- HHI would increase by at most 121 points to 2909.25 lating the activities of thrift institutions and the costs associated with developing a commercial lending business make it unlikely that thrift institutions will respond to any anticompetitive price manipulation in the commercial lending market. The record indicates that thrift institutions in Hawaii provide the full weighted basis where the record indicates this approach is approprirange of banking products and services, including providing FDIC- ate. insured transaction accounts, consumer loans, commercial real estate 21. The HHI would increase by only 136 points to 3084 if Applicant loans and other commercial loans, as well as mortgage and home transfers the two offices that it proposes to divest to a new entrant into improvement loans. The Board does not believe that enactment of the the market. Financial Institutions Reform, Recovery, and Enforcement Act or its 22. Credit unions control approximately 12.0 percent of the deposits implementing regulations will prevent thrift institutions from exercis- in financial institutions in the market. See Bancorp Hawaii, Inc., 76 ing their authority to offer bank products and services, including Federal Reserve Bulletin 759, 760-61 (1990). commercial loans, in competition with banks. 23. The East Hawaii Island banking market is approximated by the 20. The Board has recognized in other cases that thrifts in certain northeastern half of Hawaii Island, including Hilo and nearby commarkets compete fully with banks and should be fully weighted in munities. analyzing the competitive effect of bank expansion proposals. See, 24. This assumes the sale of the branch to a smaller competitor in e.g., BanPonce Corporation, 77 Federal Reserve Bulletin 43 (1991); the market. If the branch is sold to a new market entrant, the HHI Fleet Financial Group, Inc., 74 Federal Reserve Bulletin 62 (1988). would increase by 137 points to 3726 as a result of this proposal. The Board believes that thrift institutions are becoming more bank- 25. If the divestiture is to a new market entrant, this proposal would like in their operations and products and services, and the Board will cause the HHI to increase by 88 points to 2876 after the inclusion of continue to consider the competitive effects of thrifts on a fully thrift institutions on a 50 percent weighted basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • January 1991 Following consummation of the proposal, five banks not increase Applicant's market share in either marand four thrift institutions, including the largest finan- ket.29 cial institutions in Hawaii, would remain in the mar- Although both markets are considered to be highly ket. In addition, a number of credit unions and indus- concentrated, after taking into account the planned trial loan companies would continue to exert a divestitures, the competitive effects of thrift institucompetitive influence in the market. tions, the number of competitors remaining in these In light of these and all of the other facts of record, markets, the role of credit unions in these markets, the Board has concluded that consummation of the and the other facts of record, the Board has concluded proposal would not result in a significantly adverse that consummation of the proposal would not result in effect on competition in the East Hawaii Island bank- a significantly adverse effect in competition in the ing market. West Hawaii Island or Kauai banking markets. In the Honolulu market,26 Applicant is the second largest of eight commercial banking organizations, Report of the Department of Justice controlling deposits of $3.0 billion, representing approximately 30.5 percent of the total deposits in com- The United States Department of Justice (the "Demercial banks in the market. FIH is the fourth largest partment") has submitted comments to the Board that commercial bank in the market, controlling deposits of set forth its analysis of the likely competitive effects of $551.2 million, representing approximately 5.6 percent the proposed transaction (the "Report"). The Report of the total deposits in commercial banks in the concludes that the proposed acquisition would result market. Upon consummation of the proposal, Appli- in a substantially adverse effect on competition for cant would control approximately 36.1 percent of the banking services in Hawaii. The Report's conclusion total deposits in commercial banks in the market and appears to be based primarily on the determination the HHI would increase by 341 points to 3656. that commercial lending to small- and medium-sized After including 50 percent of the market thrift de- businesses30—rather than the cluster of banking prodposits in the calculation of market share, consumma- ucts and services—constitutes the relevant product tion of the proposal would cause the HHI to increase market, and the State of Hawaii in its entirety constiby 172 points to 2696. Following consummation of the tutes the relevant geographic market. On the basis of proposal, seven commercial banks and five thrift insti- these market definitions, the Report states that the tutions would remain in the Honolulu banking market, HHI would increase by 440 points to 2925 upon as well as a significant number of credit unions. In light consummation of the transaction.31 of all of the facts of record, the Board has concluded The Report's structural analysis appears to be based that consummation of the proposal would not result in on a definition of the relevant product market that a significantly adverse effect on competition in the differs from the traditional definition of the product Honolulu banking market. market established by the Supreme Court, and is not The Board also has examined the effects of the supported by recent studies of the market behavior of proposal in the other two banking markets in which Applicant and FIH compete. Applicant has committed to divest the sole FIH branch in each of the West 29. If Applicant divests the branch office in the West Hawaii Island Hawaii Island27 and Kauai28 banking markets. With banking market to a competitor in the market, the HHI would increase the planned divestitures, Applicant would continue to by at most 49 points to 3455. If the planned divestiture were made to a banking organization that does not operate currently in the market, control approximately 39.6 percent of the market the market would become less concentrated and the HHI would deposits in the West Hawaii Island banking market, decline by 33 points to 3373. If Applicant divests the branch office in the Kauai banking market to and approximately 40.4 percent of the market deposits a competitor in the market, the HHI would increase by at most 62 in the Kauai banking market, after including 50 per- points to 3224. If the planned divestiture were made to a new entrant cent of market thrift deposits in the calculation of into the Kauai market, the market would become less concentrated and the HHI would decrease by 19 points to 3143. market share. Consummation of the proposal would 30. The Report defines commercial loans as loans to businesses, including term loans and lines of credit, that are not secured by mortgages. Small- and medium-sized businesses are defined as businesses that are not large enough to obtain commercial loans in excess of $5 million. 31. The Department has concluded in this case that potential entry 26. The Honolulu banking market is approximated by Honolulu into the small- and medium-sized commercial lending field by small County, Hawaii, which is coextensive with the Island of Oahu. commercial banks, thrift institutions, and nonbank financial organiza- 27. The West Hawaii Island banking market is approximated by the tions would be unlikely within three years. Based on this analysis, the southwest half of Hawaii Island, including Kailua-Kona and nearby Department has applied the general standards of the merger guidelines communities. rather than the more lenient standards that the Department routinely 28. The Kauai banking market is approximated by Kauai County, applies to bank mergers and acquisitions to account for nonbank Hawaii. competition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 57 bank customers. The Department has not provided um-sized commercial loan market were obtained by detailed legal or empirical justification for its position. the Department from a limited number of banks in As explained above, after reviewing the record in this Hawaii. These data are proprietary, and comparable case in light of relevant Board and judicial precedents, information from the other competing banks in Hawaii the Board believes that the appropriate product mar- was not available to the Department or the Board, and ket in this case is the cluster of banking products and is not publicly available. As a result, the Board is services, and the relevant geographic markets for unable to reconcile or evaluate the contrasting asseranalyzing the effects of this expansion proposal are the tions of the Department and Applicant regarding the five local markets identified above.32 appropriate interpretation of these data. In addition, the competitive analysis of the Report The Board also notes that, since the Report was filed relies on data that are disputed by Applicant. Appli- with the Board, Applicant has proposed a number of cant, for example, contends strenuously that the Re- divestitures, with the result that Applicant will not port exaggerates significantly both the size of the increase its market share in two markets as a result of small- and medium-sized business loan market and the proposal. The Board believes that each of these Applicant's post-consummation share of this business. divestitures significantly mitigates the potentially anti- The Report estimates that the size of the small- and competitive effects of the proposal in the relevant medium-sized business loan market is $1.8 billion, and markets. The Board also notes that the Commissioner that Applicant and FIH together control loans in that of Financial Institutions for the State of Hawaii has market of $619.7 million, representing 35 percent of considered the competitive effects of this proposal, the market. Applicant contends that the Report over- and has determined that consummation of the transstates the size of the market by including participa- action would not have a significantly adverse effect on tions in loans that exceed $5 million, loans with competition in Hawaii or any part of Hawaii. current balances of less than $5 million but with After consideration of these matters and all the facts original balances that exceeded $5 million, and certain of record in this case, the Board believes, for the loans supported by personal guarantees. According to reasons discussed in this order, that consummation of Applicant, Applicant and FIH together control only the proposed transaction, as amended to include the approximately $56.6 million in loans to small- and divestitures proposed by Applicant, would not result medium-sized businesses as those loans are defined in in a substantially anticompetitive effect in any relevant the Report. Applicant suggests that the market is so market. Accordingly, competitive considerations are small that the type of loan identified by the Report consistent with approval. cannot be the principal type of credit used by small- The financial and managerial resources and future and medium-sized businesses in Hawaii. Moreover, prospects of Applicant, FIH, and their subsidiary the Report does not appear to address the competition banks are consistent with approval. The Board also offered by a significant number of nonfinancial institufinds that considerations relating to the convenience tions providing credit to small- and medium-sized and needs of the communities to be served are consisbusinesses, including finance companies, vendors that tent with approval.33 provide trade credit, and sellers of capital goods that The Board also has considered Applicant's proposal provide financing. to acquire FIH International, Inc., under the Edge The data referenced in the Report on which the Act. Based on all of the facts of record, the Board has Department based its analysis of the small- and medi- determined that disapproval of this proposed investment is not warranted. Based on the foregoing and other considerations 32. The Report indicates that, even if the relevant product market is reflected in the record, and subject to all the commitviewed to be a "package" of banking services that includes loans and transaction accounts, the market share of a particular institution does ments made by Applicant in this case, the Board has not differ significantly when measured by reference to the commercial determined that the applications should be, and hereby loan market or measured by reference to transaction accounts. are, approved. The transactions shall not be consum- Comparable loan data are not readily available, and the Board believes that deposits represent the best available measure of an mated before the thirtieth calendar day following the institution's market share. The Report also states summarily that the proposal would be anticompetitive if market share were measured on the basis of deposit data. According to the Report, the HHI would increase by 273 points to 3379 on that basis. This calculation does not 33. The Board received comments after the close of the comment account for the presence of thrift institutions in the market (with the period from an individual alleging that Applicant unlawfully foreexception of one thrift that is fully included), does not account for any closed on certain property in which the commenter claims an interest. of Applicant's planned divestitures, and assumes a statewide geo- The commenter's allegations are only tangentially related to the graphic market. As explained above, the Board believes that an statutory financial and managerial factors that the Board is required to analysis of these data, as well as the other relevant factors, supports consider under the BHC Act in analyzing this application, and the the conclusion that the proposal is not likely to lessen competition record in this case does not support the commenter's allegations substantially in any relevant market. regarding Applicant, or warrant denial of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • January 1991 effective date of this Order, or later than three months out-of-state banks, thereby reducing the procompetiafter the effective date of this Order, unless such tive effect of potential competition in Hawaiian bankperiod is extended for good cause by the Board or by ing markets. Thus, potential competition is a signifithe Federal Reserve Bank of San Francisco, pursuant cant consideration in this case. However, in contrast to delegated authority. to some recent Board decisions where potential com- By order of the Board of Governors, effective petition has offset rather substantial structural effects, November 30, 1990. it is weak in this case. For these reasons, I agree with the conclusion of the U.S. Department of Justice and Voting for this action: Governors Seger, Kelley, and La- would deny this proposal. Ware. Voting against this action: Governors Angell and Mullins. Abstaining from this action: Chairman Greenspan. November 30, 1990 JENNIFER J. JOHNSON Dissenting Statement of Governor Mullins Associate Secretary of the Board I believe that the competitive factors in this case Dissenting Statement of Governor Angell warrant denial of the proposal, though I believe this is, in many respects, a close and difficult case. As a I believe that the competitive effects of this proposed starting point, I agree with the analysis of the majority merger of the second- and fourth-largest banking regarding the appropriate definition of the product organizations in Hawaii are substantial enough to market in this case, and I strongly disagree with the warrant denial, and therefore I dissent from the definition suggested by the Department of Justice. I Board's action in this case. While the resulting also generally agree with and support the Board's increases in concentration, as measured by the Her- screening guidelines for bank mergers. findahl-Hirschman Index (HHI), are not so large as However, I believe that a number of factors indicate to violate the guidelines used by the Board to screen that the proposed acquisition will substantially lessen bank acquisitions, I believe that an analysis based competition in the relevant banking markets in Hawaii. entirely upon structural measures does not accu- Each of the five banking markets is very highly concenrately reflect the anticompetitive effects of this par- trated without giving effect to the merger, with a ticular merger. In my judgment, an analysis that goes Herfindahl-Hirschman Index in excess of 2500 in each beyond structural indexes indicates that this pro- market, and in excess of 3000 in two markets, after posal would have substantial adverse effects on giving effect to the presence of thrifts in the market. An competition even though the immediate structural HHI in excess of 3000 is roughly equivalent to the effect does not exceed the levels specified in the concentration level resulting from three firms sharing Board's screening guidelines. an entire market with equal market shares. Consumma- The five Hawaiian banking markets where these tion of the proposal would further increase the concentwo firms both compete are very highly concentrated tration level in four of these markets, even with the even before this acquisition. In four of these five divestitures proposed by the Applicant. markets, the two largest firms control over 70 per- The performance data for banks in Hawaii indicates cent of market deposits, and the HHI is well over that banks in Hawaii may be able to take advantage of 2500. Extensive economic research indicates that this high concentration in pricing their products and bank behavior is less competitive in such markets services. Banks in Hawaii appear to have higher profit than in relatively unconcentrated markets. More- ratios than similar banks outside of Hawaii, and higher over, information specific to the five Hawaiian bank- ratios of market value to book value. The premium ing markets indicates that loan prices are higher and paid for First Interstate Bank of Hawaii in this case interest rates paid on deposits are lower in Hawaii indicates that this higher profit expectation has been than in local markets in other states; also, profits of capitalized into the price paid for the Bank. Hawaiian banks have been consistently higher than The presence of these factors is particularly trouprofits of other U.S. banks. Thus, competition in bling in this case because Hawaii does not permit Hawaiian banking markets appears to be weak prior interstate banking. This bar to out-of-state banking to this acquisition. Approval of the proposal is likely organizations substantially limits new entrants into the to further diminish the intensity of competition. Hawaii markets that would be able to offset the In addition, Hawaii is one of only four states that existing concentration levels or the increased concenprohibits entry by all out-of-state banking organiza- tration that would result from this proposal. tions. Information in the record suggests that the Applicant has not presented evidence that the applicant has opposed attempts to allow entry by merger would result in significant public benefits, such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 59 as increased banking services or substantial cost sav- banks in Illinois.1 This proposal represents a change in ings from operational improvements, that would offset the corporate structure of Bank, which will convert the anti-competitive effects of this proposal. Accord- from a unit bank to part of a one-bank holding comingly, I believe that consummation of the proposal pany. Accordingly, the Board has concluded that conwould substantially lessen competition in the relevant summation of this proposal would not have a signifi- Hawaii markets. cantly adverse effect on the concentration of banking In reaching this conclusion, I note that the Board is resources in Illinois, or have a significantly adverse likely to be presented in the future with a number of effect upon competition in any relevant banking marin-market bank merger proposals that would in fact ket. The financial and managerial resources and future represent useful and beneficial acquisitions. Usually prospects of First Marengo and Bank are also considthese cases do not include any significant performance ered satisfactory and consistent with approval. advantage or pricing differential that can be attributed In considering the convenience and needs of the to high market concentration, and often the possible communities to be served, the Board has taken into anti-competitive effects of these mergers are mitigated account the record of Bank under the Community substantially by other factors. I believe that this case Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). stands apart because of the severe barriers to entry The CRA requires the federal financial supervisory into the Hawaii banking markets, the very high con- agencies to encourage financial institutions to help meet centration levels in these markets in conjunction with the credit needs of the local communities in which they the performance and price data, and the absence of operate, consistent with the safe and sound operation of crucial mitigating factors. such institutions. To accomplish this end, the CRA requires the appropriate federal supervisory authority November 30, 1990 to "assess an institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution," and to First Marengo Financial Corporation "take this record into account in its evaluation of bank Marengo, Illinois holding company applications."2 In this regard, the Board has received comments filed by an individual ("Protestant") who is critical of Order Approving Acquisition of a Bank the CRA performance of Bank. Specifically, Protestant has alleged that: (1) Bank has not made any significant effort to First Marengo Financial Corporation, Marengo, Illi- ascertain the credit needs of its community; nois ("First Marengo"), has applied for the Board's (2) Bank's board of directors has not participated in approval pursuant to section 3(a)(1) of the Bank Hold- the development of a CRA policy in a significant ing Company Act (12 U.S.C. § 1841, et seq.) ("BHC manner; Act"), to become a bank holding company by acquir- (3) Bank's record of lending to Hispanics and ing First National Bank of Marengo, Marengo, Illinois women is deficient; ("Bank"). Bank will be the surviving institution of a (4) Bank is not participating in local community and merger of Bank and a newly chartered national bank civic development; that has been formed to effect the acquisition by First (5) Bank is not lending to small businesses and Marengo of all of the shares of Bank. farmers, especially with regard to farm mortgage lend- Notice of the application, affording interested per- ing; and sons an opportunity to submit comments, has been (6) Bank is not participating in any government duly published (55 Federal Register 38,391 (1990)). insured or subsidized loan programs.3 The time for filing comments has expired, and the Board has considered the application and all com- 1. Deposit data are as of June 30, 1990. Market data are as of ments received in light of the factors set forth in December 31, 1988. section 3(c) of the BHC Act. 2. 12 U.S.C. § 2903. First Marengo, a non-operating corporation with no 3. Protestant also alleged that Bank has failed to comply with the notice provisions of the National Bank Act (12 U.S.C. § 1, et seq.) subsidiaries, was formed for the purpose of becoming a and that Bank insiders have violated certain securities laws. The bank holding company by acquiring Bank. Bank is the record contains no evidence to support these allegations. Moreover, 557th largest commercial banking organization in Illi- the Board notes that violations of such laws would be appropriately addressed by the Office of the Comptroller of the Currency ("OCC") nois, with deposits of $27.7 million, representing less and the Securities Exchange Commission ("SEC"), which are the than one percent of the total deposits in commercial agencies with primary responsibility for enforcing securities laws as Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

60 Federal Reserve Bulletin • January 1991 The Board has carefully reviewed the CRA perfor- practices. Despite Protestant's claims, Bank has an mance record of Bank, as well as Protestant's comments adequate record of extending credit to Hispanics and and Bank's response to those comments, in light of the women; denials of credit to these two groups appear to CRA, the Board's regulations, and the jointly issued have been based on valid credit criteria. Moreover, "Statement of the Federal Financial Supervisory Agen- discussions with several community groups did not cies Regarding the Community Reinvestment Act" result in any charges of discrimination. ("CRA Joint Statement").4 The CRA Joint Statement Protestant has alleged that Bank is not participating in provides guidance regarding the types of policies and local community and civic development projects. Howprocedures that the supervisory agencies believe financial ever, Bank has frequently purchased government bonds institutions should have in place in order to fulfill their and provided credit and financial services to local governresponsibilities under the CRA on an ongoing basis, and ments. For example, Bank has committed to extend the procedures that the supervisory agencies will use credit for building a new library and a Children's Center. during the application process to review an institution's The Board also notes that members of Bank's board of CRA compliance and performance. directors are active in local civic groups. Initially, the Board notes that Bank has received a Contrary to Protestant's assertion that Bank does not satisfactory rating from its primary regulator in the extend credit to small businesses and farmers, the record most recent examination of its CRA performance. The indicates that Bank actively lends to these enterprises. CRA Joint Statement provides that, although CRA Bank has a satisfactory record with regard to considering examination reports do not provide conclusive evi- commercial loan applications to farmers and small busidence of an institution's CRA record, these reports will nesses. Bank extends credit to farmers to finance machinbe given great weight in the applications process.5 ery, equipment, and livestock needs. Many farmers in In addition, the Board notes that the record does Bank's community obtain farm mortgage loans through not substantiate Protestant's claims. In response to programs sponsored by the Farmers Home Administra- Protestant's allegations, the Federal Reserve Bank of tion, which mitigates Protestant's concern that Bank is Chicago conducted an on-site examination over a not actively making mortgage loans to farmers, since the three-day period. The record indicates that the com- farmers have access to this form of credit. munity in which Bank is located is a small rural Protestant contends that Bank does not participate community, and that Bank's management is involved in government sponsored lending programs. However, in a number of community outreach programs. All Bank is a member of the Federal National Mortgage members of the board of directors reside within the Association, which is an important tool in addressing delineated community, own or operate businesses in affordable housing needs. Bank also participates in the the local area, are very knowledgeable of the area's Guaranteed Student Loan Program. credit needs, and are involved with numerous local On the basis of the record of this case, including the organizations. Further, all of the directors are mem- past CRA performance of Bank, the Board concludes bers of Bank's loan review committee. The Board that considerations relating to the convenience and believes that, taking into account the size of Bank needs of the community to be served are consistent and its community, Bank's ascertainment efforts to with approval. establish the credit needs of its community and the Based on the foregoing and other facts of record, the involvement of the members of Bank's board of Board has determined that the application should be, directors are currently satisfactory. and hereby is, approved. This transaction shall not be Further, the record presented to the Board does not consummated before the thirtieth calendar day followindicate that Bank engages in discriminatory lending ing the effective date of this Order, or later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or they apply to national banks. In this regard, the OCC and SEC have by the Federal Reserve Bank of Chicago, acting purreviewed the allegations made by Protestant and have taken no action suant to delegated authority. against Bank or anyone affiliated with Bank. Protestant also makes an unsubstantiated allegation that Bank will breach certain verbal prom- By order of the Board of Governors, effective ises made to existing shareholders of Bank if the proposal is consum- November 13, 1990. mated. Even if this allegation were substantiated, the contractual dispute does not reflect adversely on the factors that the Board is to consider when reviewing an application under section 3 of the BHC Voting for this action: Chairman Greenspan and Governors Act. See Western Bancshares, Inc. v. Board of Governors, 480 F.2d 740 (10th Cir. 1973). Finally, Protestant alleges that a management Seger, Kelley, La Ware, and Mullins. Absent and not voting: interlock between Bank and another financial institution currently Governor Angell. exists in violation of the Board's Regulation L (12 C.F.R. Part 212). However, there are no interlocks between the institutions in question. JENNIFER J. JOHNSON 4. 54 Federal Register 13,742 (1989). 5. 54 Federal Register at 13,745. Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 61 Towerbank Corporation is extended for good cause by the Board or the Federal Miami, Florida Reserve Bank of Atlanta, acting pursuant to delegated authority. Order Approving Formation of a Bank Holding By order of the Board of Governors, effective Company November 30, 1990. Towerbank Corporation, Miami, Florida ("Appli- Voting for this action: Chairman Greenspan and Governors cant"), has applied for the Board's approval, pursuant Seger, Angell, Kelley, La Ware, and Mullins. to section 3(a)(1) of the Bank Holding Company Act ("BHC Act") (12 U.S.C. § 1841 et seq.), to become a JENNIFER J. JOHNSON Associate Secretary of the Board bank holding company by acquiring 100 percent of the voting shares of Key Biscayne Bank and Trust Com- Orders Issued Under Section 4 of the Bank pany, Key Biscayne, Florida ("Bank"). Holding Company Act Notice of the application, affording interested persons an opportunity to submit comments, has been Banc One Corporation published (55 Federal Register 2698 (1990)). The time Columbus, Ohio for filing comments has expired, and the Board has considered the application and all comments received Order Approving Application to Engage in Acting as in light of the factors set forth in section 3(c) of the Agent in the Private Placement of All Types of BHC Act. Securities and Acting as "Riskless Principal" Applicant is a non-operating company formed for the purpose of acquiring Bank. Bank is the 86th largest Banc One Corporation, Columbus, Ohio ("Banc commercial banking organization in Florida, control- One"), a bank holding company within the meaning of ling deposits of $95.1 million, representing less than the Bank Holding Company Act ("BHC Act"), has one percent of the total deposits in commercial banking organizations in the state.1 Applicant will be applied under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23(a)(2) of the owned by the three family trusts that currently control Board's Regulation Y (12 C.F.R. 225.23(a)(2)) for its Bank. The Federal Deposit Insurance Corporation wholly owned subsidiary, Banc One Capital Corpora- ("FDIC"), and the State of Florida, following a heartion, Columbus, Ohio ("Company"), to act as agent in ing, have previously reviewed and approved the acquisition of control of Bank by these family trusts.2 the private placement of all types of securities, including providing related advisory services, and to buy and This proposal represents only a restructuring of existsell securities on the order of customers as a "riskless ing ownership interests. Principals of Applicant and principal." Bank are not associated with any other banking orga- Company is currently authorized to underwrite and nizations in the market. Based on the facts of record, deal in securities eligible to be underwritten and dealt consummation of this proposal would not result in any in by U.S. member banks, and to underwrite and deal significantly adverse effect on competition or the conin, to a limited extent, municipal revenue bonds, 1-4 centration of banking resources in Florida or in any family mortgage-related securities, commercial paper, relevant market. Accordingly, the Board concludes and consumer receivable-related securities. Company that competitive considerations are consistent with is also authorized to provide futures commission merapproval of this application. chant services pursuant to sections 225.25(b)(18) and The financial and managerial resources and future (19) of Regulation Y (12 C.F.R. 225.25(b)(18) and prospects of Applicant and Bank appear to be consis- (19)), financial advisory services, and investment adtent with approval. Considerations relating to the visory and securities brokerage services both sepaconvenience and needs of the communities to be rately and on a combined basis.1 Company is regisserved also are consistent with approval. tered as a broker-dealer under the securities laws of Based on the foregoing and other facts of record, the the United States (and certain states) and is a member Board has determined that the application should be, of the National Association of Securities Dealers, Inc. and hereby is, approved. The proposal shall not be Banc One, with approximately $12.5 billion in asconsummated before the thirtieth calendar day followsets, is the second largest commercial banking organiing the effective date of this Order, unless such period 1. Banking data are as of June 30, 1990. 2. The State of Florida's approval is dated April 20, 1990, and the 1. See Banc One Corporation, 76 Federal Reserve Bulletin 756 FDIC's approval is dated February 27, 1990. (1990). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 Federal Reserve Bulletin • January 1991 zation in Ohio.2 It operates 51 subsidiary banks and will closely review loan documentation of bank affilengages directly and through subsidiaries in a broad iates to ensure that an independent and thorough range of permissible nonbanking activities in the credit evaluation has been undertaken with respect to United States. the participation of the bank in these credit extensions Notice of the application, affording interested per- to issuers of securities privately placed by an agent sons an opportunity to submit comments, has been affiliated with the bank. duly published (55 Federal Register 39,210 (1990)). Banc One also proposes to have Company place The time for filing comments has expired, and the securities with its parent holding company or with a Board has considered the application and all com- nonbank subsidiary of the parent company consistent ments received in light of the public interest factors set with the Board's ruling in J.P. Morgan. In this regard, forth in section 4(c)(8) of the BHC Act. Banc One will establish both individual and aggregate The Board has previously determined by order that, limits on the investment by affiliates of the section 20 subject to certain prudential limitations established to subsidiary in any particular issue of securities that is address the potential for conflicts of interests, unsound placed by the section 20 subsidiary and will establish banking practices or other adverse effects, the pro- appropriate internal policies, procedures, and limitaposed private placement and "riskless principal" ac- tions regarding the amount of securities of any partictivities are so closely related to banking as to be a ular issue placed by Company that may be purchased proper incident thereto within the meaning of section by Banc One and each of its nonbanking subsidiaries, 4(c)(8) of the BHC Act. The Board has also previously individually and in the aggregate.5 These policies and determined that acting as agent in the private place- procedures, as well as the purchases themselves, will ment of securities and purchasing and selling securities be reviewed by the Federal Reserve Bank of Cleveon the order of investors as "riskless principal" do not land. constitute underwriting and dealing in securities for In order to approve this application, the Board is purposes of section 20 of the Glass-Steagall Act, and required to determine that the performance of the that revenue derived from these activities is not sub- proposed activities by Banc One "can reasonably be ject to the 10 percent revenue limitation on ineligible expected to produce benefits to the public . . . that securities underwriting and dealing.3 Banc One has outweigh possible adverse effects, such as undue committed that Company will conduct its private concentration of resources, decreased or unfair complacement and "riskless principal" activities using the petition, conflicts of interests, or unsound banking same methods and procedures, and subject to the practices." 12 U.S.C. § 1843(c)(8). same prudential limitations established by the Board in Under the framework established in this and prior the Bankers Trust order, as modified by the J.P. decisions, consummation of this proposal is not likely Morgan order. to result in any significantly adverse effects, such as Banc One proposes to have its affiliated banks undue concentration of resources, decreased or unfair extend credit to an issuer whose debt securities have competition, conflicts of interests, or unsound banking been placed by the section 20 subsidiary where the practices. Consummation of the proposal would proproceeds would be used to pay the principal amount of vide added convenience to Banc One's customers. In the securities at maturity. Banc One has committed addition, the Board expects that the de novo entry of that these extensions of credit will conform to the Banc One into the market for these services would limitations set forth in the Board's decision in J.P. increase the level of competition among providers of Morgan, including the requirement that a period of at these services. Accordingly, the Board has determined least three years elapse from the time of the placement that the performance of the proposed activities by of the securities to the decision to extend credit, that Banc One can reasonably be expected to produce Banc One maintain adequate documentation of these public benefits which would outweigh adverse effects transactions and decisions, and that the extensions of under the proper incident to banking standard of credit meet prudent and objective standards, as well as section 4(c)(8) of the BHC Act. the standards set out in section 23B of the Federal Reserve Act.4 The Federal Reserve Bank of Cleveland 5. The limit established shall not exceed 50 percent of the issue being placed. Additionally, in the development of these policies and procedures, Banc One will incorporate, with respect to placements of securities, the limitations established by the Board in condition 12 of 2. Asset data and ranking, based on deposits, are as of June 30, its order regarding aggregate exposure of the holding company on a 1990. consolidated basis to any single customer whose securities are under- 3. J.P. Morgan and Company, Inc., 76 Federal Reserve Bulletin 26 written or dealt in by Company. J.P. Morgan & Company, Incorpo- (1990)("J./>. Morgan"); Bankers Trust New York Corporation, 75 rated, The Chase Manhattan Corporation, Bankers Trust New York Federal Reserve Bulletin 829 (19S9W'Bankers Trust"). Corporation, Citicorp and Security Pacific Corporation, 75 Federal 4. 12 U.S.C. § 371c-l. Reserve Bulletin 192 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 63 Based on the above, the Board has determined to, Notice of the application, affording interested perand hereby does, approve the application subject to sons an opportunity to submit comments, has been the commitments made by Banc One, as well as all of published (55 Federal Register 21,652 (1990)). The the terms and conditions set forth in this order and in time for filing comments has expired, and the Board the above-noted Board orders that relate to these has considered the application and all comments reactivities. The Board's determination is also subject to ceived in light of the public interest factors set forth in all of the conditions set forth in Regulation Y, includ- section 4(c)(8) of the BHC Act. ing those in sections 225.4(d) and 225.23(b), and to the Bancshares, with approximately $54.5 million in Board's authority to require modification or termina- banking assets, is the 128th largest commercial banktion of the activities of a bank holding company or any ing organization in Wisconsin.2 It operates one comof its subsidiaries as the Board finds necessary to mercial bank in the state. assure compliance with, and to prevent evasion of, the The Board has recognized the benefit of allowing provisions of the BHC Act and the Board's regulations bank holding companies to participate in community and orders issued thereunder. development activities based on their unique role in This transaction shall not be consummated later the community.3 Section 225.25(b)(6) of Regulation Y than three months after the effective date of this order, permits bank holding companies to make equity and unless such period is extended for good cause by the debt investments in corporations or projects designed Board or by the Federal Reserve Bank of Cleveland, primarily to promote community welfare and the pursuant to delegated authority. Board has approved advisory services to community By order of the Board of Governors, effective development programs as a permissible activity for November 21, 1990. bank holding companies.4 To provide bank holding companies flexibility in Voting for this action: Chairman Greenspan and Governors approaching community problems, the Board has not Seger, Kelley, and Mullins. Absent and not voting: Gover- defined the full scope of investments that may be made nors Angell and La Ware. through community development corporations. The Board has noted, however, that projects organized to JENNIFER J. JOHNSON rehabilitate office or commercial facilities that are not Associate Secretary of the Board designed explicitly to create improved job opportunities for low-income persons are presumed not to be Luxemburg Bancshares, Inc. designed primarily to promote community welfare, Luxemburg, Wisconsin unless there is substantial evidence to the contrary, even though to some extent the investment may ben- Order Approving Application to Engage in efit the community.5 Community Development Activities As an example of the type of investment ADC proposes to conduct, ADC has outlined a project to Luxemburg Bancshares, Inc., Luxemburg, Wisconsin acquire and redevelop the only medical clinic in Lux- ("Bancshares"), a bank holding company within the emburg, Wisconsin. Bancshares maintains the project meaning of the Bank Holding Company Act ("BHC is primarily designed to promote community welfare Act"), has applied for the Board's approval under because it would assure the continuation of medical section 4(c)(8) of the BHC Act (12 U.S.C. services currently available in Luxemburg.6 In light of § 1843(c)(8)) and section 225.23 of the Board's Regurecent efforts by Luxemburg to recruit physicians, lation Y (12 C.F.R. 225.23), to acquire all the voting Bancshares states that a renovated facility is necesshares of a de novo subsidiary, Area Development Corporation, Luxemburg, Wisconsin ("ADC"), and through ADC to make equity investments in projects 2. Asset data are as of June 30, 1990. Ranking is as of December 31, designed to promote community welfare and provide 1988. advice on community development projects to com- 3. See 12 C.F.R. 225.127 ("Bank holding companies possess a munity groups.1 unique combination of financial and managerial resources making them particularly suited for a meaningful and substantial role in remedying our social ills."). 4. See First Financial Corporation, 76 Federal Reserve Bulletin 671 1. To ensure that ADC's activities conform with Regulation Y, (1990); First American Corporation, 75 Federal Reserve Bulletin 576 Bancshares has committed that ADC's corporate by-laws will require (1989); Shorebank Corporation, 74 Federal Reserve Bulletin 140 any proposed project to "be accompanied with a detailed plan . . . (1988). specifying how the proposed project is primarily designed to provide 5. 12 C.F.R. 225.127(e). necessary services to and/or create jobs for the low to moderate 6. Luxemburg is a town in rural Wisconsin with a population of income segment of the community." In addition, the Federal Reserve approximately 1,000 individuals. The nearest alternative medical Bank of Chicago will monitor ADC's compliance with Regulation Y facility is located about 30 miles from the town and there is no public through periodic on-site visitations. transportation system connecting the two areas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Federal Reserve Bulletin • January 1991 sary to attract physicians to the clinic to replace the There is no evidence in the record to indicate that current physicians who will be retiring in the near consummation of this proposal is likely to result in any future. significant adverse effects, such as undue concentra- Bancshares also contends that the redeveloped med- tion of resources, decreased or unfair competition, ical facility would specifically benefit the low- and conflicts of interests, or unsound banking practices. moderate-income communities in Luxemburg. The Accordingly, the Board has determined that the balfacility is located within five blocks of the communi- ance of public interest factors it must consider under ty's low-income housing projects. Under the proposed section 4(c)(8) of the BHC Act is favorable and conmanagement plan, the clinic would accept all patients sistent with approval. equally and low- and moderate-income patients would Based on the foregoing and all the other facts of be eligible in certain instances to make time payments record, including the commitments by Bancshares, the for services or have fees for services waived. In Board has determined that the proposed application addition, office space, supplies, and equipment would should be, and hereby is, approved. This determinabe provided to a visiting nurse for administering med- tion is subject to all of the conditions set forth in the ical tests and certain immunizations to low- and mod- Board's Regulation Y, including sections 225.4(d) and erate-income groups at no cost. Free transportation 225.23, and to the Board's authority to require such for the elderly to the clinic also would be provided. In modification or termination of the activities of a holdthe event of a disaster, the clinic would provide ing company or any of its subsidiaries as the Board immediate medical attention to patients before making finds necessary to assure compliance with, or to prea compensation determination. vent evasion of, the provisions and purposes of the Under these circumstances, the Board believes that BHC Act and the Board's regulations and orders Bancshares's proposal presents substantial evidence issued thereunder. that the promotion of community welfare is its primary The transaction shall be consummated not later than purpose, and that it is the type of investment permis- three months after the effective date of this Order, sible for bank holding companies under section unless such period is extended for good cause by the 225.25(b)(6) of the Board's Regulation Y. Board or by the Federal Reserve Bank of Chicago, In order to approve this application, the Board is pursuant to delegated authority. required to determine that the performance of the By order of the Board of Governors, effective proposed activity by Bancshares "can reasonably be November 15, 1990. expected to produce benefits to the public, such as greater convenience, increased competition, or gains Voting for this action: Governors Angell, Kelley, La Ware, in efficiency, that outweigh possible adverse effects, and Mullins. Absent and not voting: Chairman Greenspan and Governor Seger. such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or un- JENNIFER J. JOHNSON sound banking practices." 12 U.S.C. § 1843(c)(8). Associate Secretary of the Board Consummation of this proposal can reasonably be expected to result in public benefits that outweigh adverse effects.The Board expects that ADC's The Sanwa Bank, Limited de novo entry into the market for community devel- Osaka, Japan opment services will increase competition in this market. Bancshares's financial investment is compara- Order Approving Application to Engage in Various tively small—$200,000 in ADC, with $50,000 to be Interest Rate and Currency Swaps, Foreign invested in the medical clinic—and is unlikely to pose Exchange, Brokerage of Futures Contracts on Stock any significant risk to its safety or soundness.7 Officers and Bond Indexes and Options Thereon, Private of Bancshares and its subsidiary bank will serve as Placement, "Riskless Principal" and Related ADC officers to ensure proper staffing and supervi- Investment Advisory Activities sion. Although the community development activities will be conducted for profit, Bancshares intends to retain any earnings as an additional equity investment The Sanwa Bank, Limited, Osaka, Japan ("Sanwa"), in ADC. a registered bank holding company, has applied for the Board's approval under section 4(c)(8) of the Bank Holding Company Act ("BHC Act"), 12 U.S.C. § 1843(c)(8), and section 225.23(a)(3) of the Board's 7. Also, Bancshares has committed to seek prior approval from the Regulation Y, 12 C.F.R. 225.23(a)(3), for its wholly Federal Reserve Bank of Chicago before making any additional investments in ADC. owned subsidiary, Sanwa Securities (Delaware) Inc., Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 65 Dover, Delaware ("Company"), to engage de novo in cies in Atlanta, Georgia; and Dallas, Texas; and the following activities: representative offices in Houston, Texas; and Lex- (1)(a) Intermediating in the international swap mar- ington, Kentucky. Applicant engages in various ackets by acting as an originator and principal in tivities in the United States under section 4(c)(8) of interest rate swap and currency swap transac- the BHC Act. tions; Company owns a 90 percent partnership interest in (b) Acting as an originator and principal with and is the sole general partner of Sanwa-BGK Securirespect to certain risk-management products, ties, a primary dealer in United States government such as caps, floors and collars, as well as options securities, which is currently authorized to engage in a on swaps, caps, floors and collars ("swap deriv- variety of nonbanking activities including securities ative products"); brokerage, underwriting, investment advisory, and (c) Acting as a broker or agent with respect to the futures commission merchant activities.2 foregoing transactions and instruments; (d) Acting as an advisor to institutional customers Swap Activities regarding financial strategies involving interest rate and currency swaps and swap derivative Applicant proposes to intermediate in the internaproducts; tional swap markets by acting as an originator and (2) Through Sanwa-BGK Securities Company, New principal in interest rate swap and currency swap York, New York ("Sanwa-BGK Securities"), en- transactions; act as an originator and principal with gaging in foreign exchange spot, forward, options, respect to certain risk-management products, such as futures and options on futures transactions for the caps, floors, collars, and swap derivative products; Company's own account for hedging purposes and act as a broker or agent with respect to the foregoing for other purposes; transactions and instruments; and act as an advisor (3) Through Company's indirect subsidiary, Sanwa- to institutional customers regarding financial strate- BGK Futures, Inc., Chicago, Illinois ("Sanwa-BGK gies involving interest rate and currency swaps and Futures"), a futures commission merchant swap derivative products.3 The Board has previously ("FCM"), providing investment advice and execu- determined by order that these proposed activities tion and clearance services to affiliates and nonaffil- are closely related to banking and permissible for iated persons and institutions regarding futures con- bank holding companies within the meaning of sectracts and options thereon on certain stock and bond tion 4(c)(8) of the BHC Act.4 Sanwa proposes to indexes traded on major commodity exchanges; engage in these swap activities in accordance with all of the provisions and conditions set forth in these (4) Through Company's broker/dealer subsidiary, orders. acting as agent in the private placement of all types of securities, including providing related advisory Company appears to be capable of managing the services, and buying and selling all types of securi- risks associated with the proposed activities. Sanwa, ties on the order of investors as "riskless principal." which has extensive experience in lending and financing services worldwide, has undertaken to pro- Notice of the application, affording interested per- vide credit screening for all potential counterparties of sons an opportunity to submit comments, has been Company through Sanwa's main credit desk. In approduly published (55 Federal Register 40,715 (1990)). priate cases, Company will obtain a letter of credit on The time for filing comments has expired, and the behalf of, or collateral from, a counterparty.5 In addi- Board has considered the application and all com- tion, Company will establish separate credit and exments received in light of the public interest factors set posure limits for each swap counterparty. Company forth in section 4(c)(8) of the BHC Act. will monitor this exposure on an ongoing basis, in the Sanwa, with total consolidated assets equivalent to aggregate and with respect to each counterparty. Senapproximately U.S. $387 billion, is the fifth largest banking organization in the world.1 Applicant owns a bank subsidiary in San Francisco, California, and 2. The Sanwa Bank, Limited, 76 Federal Reserve Bulletin 568 operates branches in New York, New York; Chi- (1990); The Sanwa Bank, Limited, 74 Federal Reserve Bulletin 578 cago, Illinois; Boston, Massachusetts; San Fran- (1988). 3. Sanwa proposes to engage in these activities through a newlycisco, California; and Los Angeles, California; agenformed subsidiary of Company that it expects to name Sanwa Financial Products. 4. The Fuji Bank, Limited, 76 Federal Reserve Bulletin 768 (1990); The Sumitomo Bank, Limited, 75 Federal Reserve Bulletin 582 (1989). 1. Asset data are as of March 31, 1990. Ranking is as of July 26, 5. Sanwa has indicated that it may be the provider of the letter of 1990. credit through a non-United States office or its New York branch. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 1991 ior management will be informed periodically of the place undue reliance on investment advice received potential risk to which Company is exposed. and better able to detect investment advice motivated In order to manage the risk associated with adverse by self-interest. changes in interest rates ("price risk"), Company will The Board has expressed its concerns regarding match all the swaps and related instruments in which it conflicts of interest and related adverse effects that, is a principal and will hedge any unmatched positions absent certain limitations, may be associated with pending a suitable match. Company will not enter into financial advisory activities. In order to address unmatched or unhedged swaps for speculative pur- these potential adverse effects, Sanwa has committed poses. Company's management will set absolute limits that: on the level of risk to which its swap portfolio may be (i) Company's financial advisory activities will exposed. Company's exposure to price risk will be not encompass the performance of routine tasks monitored by both business management and internal or operations for a client on a daily or continuauditing personnel to guarantee compliance with the ous basis; risk limitations imposed by management. Auditing (ii) Disclosure will be made to each potential personnel will report directly to senior management to client of Company that Company is an affiliate ensure that any violations of portfolio risk limitations of Sanwa; are reported and corrected. (iii) Company will not make available to Sanwa With respect to the risk associated with the poten- or any of Sanwa's subsidiaries confidential intial for differences between the floating rate indexes formation received from Company's clients, on two matched or hedged swaps ("basis risk"), except with the client's consent; and Company's management will impose absolute limits (iv) Advice rendered by Company on an explicit on the aggregate basis risk to which Company's fee basis will be without regard to corresponswaps portfolio may be exposed. If the level of risk dent balances maintained by a client of Comthreatens to exceed the limits at any time, Company pany at Sanwa or any of Sanwa's depository will actively seek to enter into matching transactions subsidiaries. for its unmatched positions. Company's internal auditing staff, together with management, will monitor Foreign Exchange compliance with the management-imposed basis risk limits.6 Sanwa proposes to engage through Sanwa-BGK Se- In addition, Company intends to minimize opera- curities in foreign exchange spot, forward, options, tions risk through the recruitment and training of an futures and options on futures transactions for the experienced back-office support staff and the use of a Company's own account for hedging purposes and separate operational and data processing structure for for other purposes. The Board has previously deterprocessing swap and hedging transactions. mined that these activities are permissible nonbank- In order to minimize any possible conflicts of inter- ing activities.8 Sanwa will conduct these activities in est between Company's role as a principal or broker in accordance with the prudential and other limitations swap transactions and its role as advisor to potential and conditions relied upon by the Board in those counterparties, Company will disclose to each cus- cases. tomer the fact that Company may have an interest as a As a primary dealer, Sanwa-BGK Securities has counterparty principal or broker in the course of broad experience trading and monitoring futures and action ultimately chosen by the customer. Also, in any options positions, and its affiliated bank, Sanwa Bank case in which Company has an interest in a specific California, has extensive experience in foreign extransaction as an intermediary or principal, Company change transactions, including futures and options. will advise its customer of that fact before recom- The resulting familiarity with the operations and conmending participation in that transaction.7 In addition, trols associated with these derivative products should Company's advisory services will be offered only to serve to ensure prudent operations, since Sanwa-BGK sophisticated customers who would be unlikely to Securities already has the operational, accounting and control systems in place to properly monitor positions resulting from trading these contracts. 6. In addition to rate and basis risk, the value of a swap option is subject to market expectations of the future direction and rate of change in interest rates, or volatility risk. Company's management will impose absolute limits on the level of volatility risk to which 8. See The Bank of Tokyo, Ltd., 76 Federal Reserve Bulletin 654 Company's swap portfolio may be exposed. (1990) (trading for its own account for other than hedging purposes); 7. In any transaction in which Company arranges a swap transaction The Hongkong and Shanghai Banking Corporation, 75 Federal Rebetween an affiliate and a third party, the third party will be informed serve Bulletin 217 (1989) (trading for its own account for hedging and that Company is acting on behalf of an affiliate. other purposes). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 67 In this regard, the board of directors of Sanwa- Securities' staff. Sanwa-BGK Securities' staff will BGK Securities will establish, and periodically re- have limited trading authority, based upon established view and revise, written policies, position limits, position limits, as determined by senior management. internal review procedures and financial controls to Accordingly, the activity proposed by Sanwa should govern these transactions. Management will review not involve the type and degree of financial risks such activities on a regular basis, and the internal associated with pit arbitrage activities previously disaudit department will review contract positions daily approved by the Board. to ensure conformity with established policies and The Board also has denied an application to act as position limits. a specialist in options on French francs traded on the The proposed foreign exchange activities will simi- Philadelphia Stock Exchange.10 In a second applicalarly be monitored in connection with the overall risk tion, the Board permitted acting as a trader by management and monitoring of Sanwa-BGK Securi- making a market in foreign currency options.11 ties' primary business activities. Sanwa has indicated Sanwa-BGK Securities will not engage in marketthat the proposed foreign exchange activities would making or specialist activities without further apbear a reasonable relationship to the size of Sanwa- proval of the Board, and, as noted above, will trade BGK Securities' government securities portfolio, that in foreign currency only within specified and regurevenues to be generated from these activities are larly monitored limits. expected to represent only a small percentage of Sanwa-BGK Securities does not propose to advise Sanwa-BGK Securities' gross revenues, and that the third parties regarding foreign exchange matters.12 trading of foreign exchange products will comprise Based on the facts of record, the Board believes that only a small portion of Sanwa-BGK Securities' total Sanwa-BGK Securities' proposed foreign exchange trading volume. Moreover, as a primary dealer, operations do not involve significant conflicts of Sanwa-BGK Securities is subject to regular reporting interest. requirements and review by the Federal Reserve Bank of New York. Futures Commission Merchant Activities Accordingly, the Board finds that these controls and limitations should minimize any potential financial Sanwa has proposed to expand the execution and risks involved in the proposed activities of engaging in investment advisory services of Sanwa-BGK Futures foreign exchange spot, forward, options, futures and to include futures contracts and options on futures options on futures transactions for the Company's contracts on certain stock and bond indexes traded on own account. major commodity exchanges set forth in the attached The Board has previously reviewed other applica- Appendix. The Board has, by order, previously aptions that involved trading by a bank holding company proved the execution and clearance of futures conin foreign exchange. The issue of trading for a holding tracts and options on futures contracts on most of the company's own account in commodities generally was stock and bond indexes proposed by Sanwa in this raised by an application to engage through a FCM case, and the provision of related investment advisory subsidiary in pit arbitrage activities on several com- services.13 Sanwa-BGK Futures is currently conductmodities exchanges. Pit arbitrage involves the actions of floor traders on commodities exchanges in taking advantage of temporary price differentials between 10. Compagnie Financiere de SuezlBanque Indosuez, 72 Federal futures contracts.9 The Board determined that this Reserve Bulletin 141 (1986). type of speculative trading in commodities for a hold- 11. Societe Generale, 76 Federal Reserve Bulletin 116 (1990). ing company's own account would involve significant 12. An affiliate of Sanwa-BGK Securities, Sanwa-BGK Futures, has authority under sections 225.25(b)(18) and (19) of the Board's Regufinancial risks and would represent an unsound bank- lation Y to act as a FCM and provide related investment advice as to ing practice. futures contracts and options on futures contracts for foreign exchange. Sanwa has committed that in any transaction in which Sanwa will not engage in pit arbitrage activities. Sanwa-BGK Futures purchases futures contracts or options on fu- Floor traders who execute Sanwa-BGK Securities tures contracts from an affiliate, Sanwa-BGK Futures will make prior transactions will not have any discretion to engage in disclosure of that fact to the customer and obtain the customer's consent. This disclosure will occur both at the beginning of the transactions other than those directed by Sanwa-BGK relationship with the customer and upon confirmation of each order. The Board has previously found that these disclosure procedures are adequate to address potential adverse effects. See The Hongkong and Shanghai Banking Corporation, 76 Federal Reserve Bulletin 770 (1990). See also Bankers Trust New York Corporation, 74 Federal 9. Futures market spread positions are taken by floor traders at their Reserve Bulletin 695 (1988). own discretion in anticipation of favorable price movements that will subsequently enable traders to close out positions at a profit. See 13. See, e.g., Chemical Banking Corporation, 76 Federal Reserve Citicorp/Citicorp Futures Corporation, 68 Federal Reserve Bulletin Bulletin 660 (1990); The Long-Term Credit Bank of Japan, Limited, 76 776, 111 (1982). Federal Reserve Bulletin 554 (1990); The Long-Term Credit Bank of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Federal Reserve Bulletin • January 1991 ing FCM activities, including providing investment subject to the 10 percent revenue limitation on ineligiadvice, on futures contracts for bullion, foreign ex- ble securities underwriting and dealing.15 Sanwa has change, government securities, certificates of deposit, committed that the broker/dealer subsidiary of Sanwaand other money market instruments that a bank may BGK Securities will conduct its private placement and buy or sell in the cash market for its own account. "riskless principal" activities using the same methods Sanwa-BGK Futures is conducting these activities and procedures, and subject to the same prudential pursuant to sections 225.25(b)(18) and (19) of the limitations established by the Board in the Bankers Board's Regulation Y, and Sanwa commits that the Trust and J.P. Morgan orders, as modified to reflect proposed FCM activities will also be conducted in Sanwa's status as a foreign bank.16 accordance with the limitations imposed by those Sanwa has proposed to have its U.S. affiliates, sections. Furthermore, a FCM is subject to regulation branches or agencies extend credit to an issuer whose under the Commodity Exchange Act and the regula- debt securities have been placed by the broker/dealer tions of the Commodity Futures Trading Commission subsidiary where the proceeds would be used to pay in order to prevent potential abuses by a registered the principal amount of the securities at maturity.17 advisor. Sanwa has committed that these extensions of credit One instrument that Sanwa proposes to execute and will conform to the limitations set forth in the Board's clear as a FCM—options on the Long-Term Municipal decision in J.P. Morgan, including the requirement Bond Index futures contract—has not been previously that a period of at least three years elapse from the approved by the Board for execution, clearance, or time of the placement of the securities to the decision investment advisory services. The Long-Term Munic- to extend credit, that Sanwa maintain adequate docuipal Bond Index is a broad based bond index similar to mentation of these transactions and decisions, and that other bond indexes approved by the Board, and the the extensions of credit meet prudent and objective proposed activities in options on futures on this index standards as well as the standards set out in section are functionally identical to the activities on other 23B of the Federal Reserve Act.18 The Federal Rebond indexes previously approved by the Board.14 serve Bank of San Francisco will closely review loan Accordingly, the Board finds that these proposed documentation of Sanwa's U.S. affiliates, branches or activities in this index are closely related to banking. agencies to ensure that an independent and thorough In light of the Board's previous approval of all of the credit evaluation has been undertaken with respect to other indexes for purposes of execution and clearance the participation of the affiliates, branches or agencies activities, the Board believes that the proposed exe- in these credit extensions to issuers of securities cution, clearance, and investment advisory services privately placed by an agent affiliated with the affilare closely related to banking. iates, branches or agencies. Sanwa also has proposed to have the broker/dealer Private Placement and "Riskless Principal" subsidiary place securities with Sanwa or a nonbank Activities subsidiary of Sanwa consistent with the Board's ruling in J.P. Morgan. In this regard, Sanwa will establish The Board has previously determined that, subject to both individual and aggregate limits on the investment certain prudential limitations established to address by affiliates of the broker/dealer subsidiary in any the potential for conflicts of interests, unsound bank- particular issue of securities that is placed by the ing practices, or other adverse effects, the proposed broker/dealer subsidiary and will establish appropriate private placement and "riskless principal" activities internal policies, procedures, and limitations regarding are so closely related to banking as to be a proper the amount of securities of any particular issue placed incident thereto within the meaning of section 4(c)(8) by the broker/dealer subsidiary that may be purchased of the BHC Act. The Board has also previously by Sanwa and each of its nonbanking subsidiaries, determined that acting as agent in the private placement of securities and purchasing and selling securities on the order of investors as a "riskless principal" do not constitute underwriting and dealing in securities 15. See J.P. Morgan & Company Inc., 76 Federal Reserve Bulletin for purposes of section 20 of the Glass-Steagall Act, 26 (1990) {"J.P. Morgan"); Bankers Trust New York Corporation, 75 and that revenue derived from these activities is not Federal Reserve Bulletin 829 (1989) ("Bankers Trust"). 16. See The Sanwa Bank, Limited, 76 Federal Reserve Bulletin 568 (1990); Canadian Imperial Bank of Commerce, The Royal Bank of Canada, Barclays PLC, and Barclays Bank PLC, 76 Federal Reserve Japan, Limited, 74 Federal Reserve Bulletin 573 (1988); The Chase Bulletin 158 (1990). Manhattan Corporation, 72 Federal Reserve Bulletin 203 (1986). 17. See The Toronto-Dominion Bank, 76 Federal Reserve Bulletin 14. E.g., The Hongkong and Shanghai Banking Corporation, 76 573 (1990). Federal Reserve Bulletin 770 (1990). 18. 12 U.S.C. § 371c-l. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 69 individually and in the aggregate.19 These policies and activities by Sanwa can reasonably be expected to procedures, as well as the purchases themselves, will produce public benefits that would outweigh adverse be reviewed by the Federal Reserve Bank of San effects under the proper incident to banking standard Francisco. of section 4(c)(8) of the BHC Act. Based on the above, the Board has determined to, Financial Factors, Managerial Resources and Other and hereby does, approve the application subject to Considerations the commitments made by Sanwa, as well as all of the terms and conditions set forth in this order and in the In order to approve this application, the Board is above-noted Board orders that relate to these activirequired to determine that the performance of the ties. The Board's determination is also subject to all of proposed activities of Sanwa "can reasonably be the conditions set forth in Regulation Y, including expected to produce benefits to the public . . . that those in sections 225.4(d) and 225.23(b), and to the outweigh possible adverse effects, such as undue Board's authority to require modification or terminaconcentration of resources, decreased or unfair com- tion of the activities of a bank holding company or any petition, conflicts of interests, or unsound banking of its subsidiaries as the Board finds necessary to practices." 12 U.S.C. § 1843(c)(8). assure compliance with, and to prevent evasion of, the In every case involving a nonbanking acquisition by provisions of the BHC Act and the Board's regulations a bank holding company under section 4 of the BHC and orders issued thereunder. Act, the Board considers the financial condition and This transaction shall not be consummated later resources of the applicant and its subsidiaries and the than three months after the effective date of this order, effect of the transaction on these resources.20 In this unless such period is extended for good cause by the case, the primary capital ratio of Sanwa, as publicly Board or by the Federal Reserve Bank of San Franreported, is below the minimum level specified in the cisco, pursuant to delegated authority. Board's Capital Adequacy Guidelines. After making By order of the Board of Governors, effective adjustments to reflect Japanese banking and account- November 6, 1990. ing practices, however, including consideration of a portion of the unrealized appreciation in Sanwa's Voting for this action: Chairman Greenspan and Governors portfolio of equity securities consistent with the prin- Angell, Kelley, LaWare, and Mullins. Voting against this ciples in the Basle capital framework, Sanwa's capital action: Governor Seger. ratio meets United States standards. JENNIFER J. JOHNSON Consummation of the proposal would provide added Associate Secretary of the Board convenience to Sanwa's customers. In addition, the Board expects that the de novo entry of Sanwa into the market for these services in the United States would Dissenting Statement of Governor Seger increase the level of competition among providers of these services. Under the framework established in I dissent from the Board's action in this case. I believe this and prior decisions, consummation of this pro- that foreign banking organizations whose primary capposal is not likely to result in any significant undue ital, based on U.S. accounting principles, is below the concentration of resources, decreased or unfair com- Board's minimum capital guidelines for U.S. banking petition, conflicts of interests, unsound banking prac- organizations have an unfair competitive advantage in tices, or other adverse effects. Accordingly, the Board the United States over domestic banking organizahas determined that the performance of the proposed tions. In my view, such foreign organizations should be judged against the same financial and managerial standards, including the Board's capital adequacy 19. The limit established shall not exceed 50 percent of the issue guidelines, as are applied to domestic banking organibeing placed. Additionally, in the development of these policies and zations. The majority concludes that Applicant's priprocedures, Sanwa will incorporate, with respect to placements of securities, the limitations established by the Board in condition 12 of mary capital meets United States standards. To do so, its order regarding aggregate exposure of the holding company on a however, the majority makes adjustments that are not consolidated basis to any single customer whose securities are underavailable for United States banks under guidelines that written or dealt in by Sanwa-BGK Securities. J.P. Morgan & Company, Incorporated, The Chase Manhattan Corporation, Bankers have not yet become effective for U.S. or foreign Trust New York Corporation, Citicorp and Security Pacific Corpora- banking organizations. tion, 75 Federal Reserve Bulletin 192 (1989). Sanwa has committed that the broker/dealer subsidiary will not place any securities with the In addition, I am concerned that while some progprimary dealer subsidiary. ress is being made in opening Japanese markets to 20. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal Reserve U.S. banking organizations and other financial institu- Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin 155, 156 (1987). tions, U.S. banking organizations, in my opinion, are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Bulletin • January 1991 still far from being afforded the full opportunity to Singapore International Monetary Exchange compete in Japan. — Nikkei Stock Average futures contract.7 November 6, 1990 Orders Issued Under Sections 3 and 4 of the Bank Holding Company Act APPENDIX Young Americans Education Foundation Futures Contracts and Options Thereon Denver, Colorado Chicago Mercantile Exchange Order Approving Formation of a Bank Holding Company and Provision of Community Development — Standard & Poor's 100 Stock Price Index futures Activities contract; — Standard & Poor's 500 Stock Price Index futures Young Americans Education Foundation, Denver, contract ("S&P 500"); Colorado ("Young Americans"), has applied for the — options on the S&P 500; Board's approval under section 3(a)(1) of the Bank — Standard & Poor's Over-the-Counter 250 Stock Holding Company Act (12 U.S.C. § 1842(a)(1)) Index futures contract;1 ("BHC Act") to become a bank holding company by acquiring 100 percent of the voting shares of Young Chicago Board of Trade Americans Bank, Denver, Colorado ("Bank"). Young Americans has also applied for the Board's approval — Bond Buyer Municipal Bond Index futures conunder section 4(c)(8) of the BHC Act (12 U.S.C. tract; § 1843(c)(8)) to continue to engage in community de- — options on the Bond Buyer Municipal Bond velopment activities pursuant to section 225.25(b)(6) Index futures contract; of the Board's Regulation Y (12 C.F.R. 225.25(b)(6)) — Long-Term Municipal Bond Index futures conafter becoming a bank holding company. tracts Notice of the applications, affording an opportunity — options on the Long-Term Municipal Bond Index for interested persons to submit comments, has been futures contract;3 published (55 Federal Register 33,392 (1990)). The — Major Market Index futures contract; time for filing comments has expired, and the Board — Major Market Index Maxi Stock Index futures has considered the applications and all comments contract; received in light of the factors set forth in section 3(c) — Major Market Index Mini Stock Index futures of the BHC Act. contract;4 Young Americans is a nonprofit, tax-exempt corporation under section 501(c)(3) of the Internal Revenue London International Financial Futures Exchange Code developed for the purpose of sponsoring educa- — Financial Times Stock Index;5 tional workshops and programs for young people on — FT-SE 100 Equity Index futures contract;6 economic and banking topics. Young Americans has no banking subsidiaries and its principals are not associated with any other banking organizations in the New York Futures Exchange (a subsidiary of the relevant banking market.1 Bank is a very small insti- New York Stock Exchange) tution that was recently organized specifically to further the economic and financial education of young — New York Stock Exchange Composite Index people. Bank provides checking and savings accounts futures contract ("NYSE Composite"); and personal loans exclusively to customers under the — options on the NYSE Composite; age of twenty-two. Bank is the 215th largest banking organization in Colorado with total deposits of $6.7 million, representing less than one percent of total 1. Chemical Banking Corporation, 76 Federal Reserve Bulletin 660 (1990) ("Chemical"). 2. The Hongkong and Shanghai Banking Corporation, 76 Federal Reserve Bulletin 770 (1990) ("Hongkong and Shanghai"). 7. Chemical. 3. These options have not been previously approved. 4. Hongkong and Shanghai. 5. The Chase Manhattan Corporation, 72 Federal Reserve Bulletin 1. The relevant banking market is the Denver-Boulder, Colorado, 203 (1986) ("Chase"). market, which is approximated by the Denver RMA and all of Boulder 6. Chase (execution and clearance only). County, Colorado. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 71 deposits in commercial banks in the State.2 Bank community development activities based on their ranks as the 71st largest banking organization in the unique role in the community and has determined that Denver-Boulder, Colorado market with less than one the provision of community development activities is percent of total market deposits. Based on all the facts closely related to banking. Section 225.25(b)(6) of of record, the Board believes that consummation of Regulation Y permits bank holding companies to make this proposal would not result in any adverse effects debt and equity investments in community developupon competition or increase in concentration of com- ment corporations or projects.4 The Board also has mercial banking resources in the relevant banking determined that the provision of advisory and related market. Accordingly, the Board concludes that com- services designed to promote community development petitive considerations under the BHC Act are consis- is permissible for bank holding companies.5 The edutent with approval. cational activities that Young Americans proposes to Section 3(c) of the BHC Act requires in every case continue are designed to promote community welfare that the Board consider the financial resources of the by providing financial education to young people in its applicant and the banking organization to be acquired. community. Upon consummation, Young Americans and Bank will Accordingly, the Board believes that the nonbankmeet all applicable regulatory capital requirements. ing activities that Young Americans proposes to en- All of Bank's stock will be donated to Young Ameri- gage in after acquiring Bank are community developcans and Young Americans will not incur any debt in ment activities that are closely related to banking for connection with this proposal. In addition, Young purposes of section 4(c)(8) of the BHC Act. There is Americans's founder has, in the past, made contribu- no evidence in the record to indicate that approval of tions to Bank sufficient to cover any operating losses, these proposals would result in any significant adverse and has committed that he and his estate will continue effects, such as undue concentration of resources, to maintain Bank's capital at required levels and decreased or unfair competition, conflicts of interests, provide funds to offset any future net operating losses. or unsound banking practices. Accordingly, the Board In view of the unique circumstances of this case, the has determined that the balance of public interest Board has determined that the financial factors are factors it must consider under section 4(c)(8) of the consistent with approval. BHC Act is favorable and consistent with approval of The managerial resources and future prospects of these applications. Young Americans and Bank are consistent with ap- Based on the foregoing and other facts of record, the proval. Considerations relating to the convenience and Board has determined that consummation of the proneeds of the community to be served also are consis- posed transactions would be consistent with the public tent with approval. interest. In light of the unique nature of this case, the Young Americans also has applied, pursuant to Board expects that prior to any alteration in the section 4(c)(8) of the BHC Act, to continue to engage operational characteristics of Bank, by Young Amerin community development activities pursuant to sec- icans or Bank, Young Americans will consult the tion 225.25(b)(6) of Regulation Y after acquiring Bank. Federal Reserve Bank of Kansas City to determine Specifically, Young Americans seeks to continue of- whether Young Americans may retain its ownership of fering educational programs to children. These pro- Bank following such alteration. Accordingly, the grams include week-long educational programs focus- Board has determined that the applications should be, ing on the American economic system; a series of and hereby are, approved. The acquisition of Bank presentations on banking and finance; and courses on shall not be consummated before the thirtieth calendar how to start a business, college financial planning, day following the effective date of this Order, or later personal financial planning, personal investment plan- than three months following the effective date of this ning and career opportunities in banking. Young Order, unless such period is extended for good cause Americans also will publish a quarterly newsletter by the Board or by the Federal Reserve Bank of announcing these programs.3 Kansas City, acting pursuant to delegated authority. The Board previously has recognized the benefit of allowing bank holding companies to participate in 4. See 12 C.F.R. 225.127 ("Bank holding companies possess a unique combination of financial and managerial resources making them particularly suited for a meaningful and substantial role in 2. State and market deposit data are as of December 31, 1989. remedying our social ills."). 3. Young Americans also seeks to continue conducting limited 5. See Luxemburg Bancshares, Inc., 11 Federal Reserve Bulletin 63 fundraising activities to finance its educational and scholarship pro- (1991); First Financial Corporation, 76 Federal Reserve Bulletin 671 grams. The fundraising activities are designed exclusively to support (1990); First American Corporation, 75 Federal Reserve Bulletin 576 the educational functions of Young Americans described above, and (1989); Shorebank Corporation, 74 Federal Reserve Bulletin 140 are incidental to these programs. (1988). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin • January 1991 The determination as to the nonbanking activities BHC Act and the Board's regulations and Orders approved in this case are subject to all the conditions issued thereunder. contained in Regulation Y, including those in sections By order of the Board of Governors, effective 225.4(d) and 225.23(b)(3) (12 C.F.R. 225.4(d) and November 26, 1990. 225.23(b)(3)), and to the Board's authority to require Voting for this action: Chairman Greenspan and Governors such notification or termination of the activities of a Seger, Angell, Kelley, La Ware, and Mullins. holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, or to JENNIFER J. JOHNSON prevent evasion of, the provisions and purposes of the Associate Secretary of the Board ORDERS ISSUED UNDER THE FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT CTIRREA 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 American National Corporation, Heritage Federal Savings American National November 30, 1990 Omaha, Nebraska Bank, Bank, Omaha, Nebraska Omaha, Nebraska (Omaha and Allison Branches) Anmer Corporation, Heritage Federal Savings Schuyler State Bank November 30, 1990 Neligh Nebraska Bank, & Trust Co., Omaha, Nebraska Schuyler, Nebraska (Schuyler Branch) Archer, Inc., Heritage Federal Savings The First National November 30, 1990 Palmer, Nebraska Bank, Bank of Osceola, Osceola Insurance, Inc., Omaha, Nebraska Osceola, Nebraska Osceola, Nebraska (Osceola Branch) Arvest Bank Group, Inc., First Federal Savings and First National Bank November 2, 1990 Bentonville, Arkansas Loan Association of and Trust of Fayetteville, Rogers, Fayetteville, Arkansas Rogers, Arkansas (Eureka Springs and Rogers Branches) Arvest Bank Group, Inc., First Federal Savings and First National Bank November 2, 1990 Bentonville, Arkansas Loan Association of of Siloam Springs, Fayetteville, Siloam Springs, Fayetteville, Arkansas Arkansas (Siloam Springs Branch) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 73 FIRREA Orders—Continued Acquired Surviving Approval Bank Holding Company Thrift Bank(s) date Arvest Bank Group, Inc., First Federal Savings and Mcllroy Bank and November 2, 1990 Bentonville, Arkansas Loan Association of Trust, Fayetteville, Fayetteville, Fayetteville, Arkansas Arkansas (Fayetteville and Prairie Grove Branches) BankAmerica Corporation, Southwest Federal Bank of America November 16, 1990 San Francisco, California Savings Association, National Trust and Los Angeles, California Savings Association, San Francisco, California Bankers Corp., Carteret Savings Bank, Bankers Savings, November 13, 1990 Perth Amboy, New Jersey FA, Perth Amboy, New Morristown, New Jersey Jersey (5 Branches) BankWorcester Corporation, Home Federal Savings Worcester County November 9, 1990 Worcester, Massachusetts Bank of Worcester, Institution for Worcester, Savings, Massachusetts Worcester, Massachusetts CB&T Financial Corp., First Standard Savings, Community Bank & November 2, 1990 Fairmont, West Virginia F.S.A., Trust, N.A., Fairmont, West Fairmont, West Virginia Virginia Citizens State Bankshares of Madison Guaranty Citizens State Bank, November 30, 1990 Bald Knob, Inc., Savings and Loan Bald Knob, Bald Knob, Arkansas Association, Arkansas McCrory, Arkansas (Bradford Branch) Continental Bancorporation, Inc., Colonial Savings and The First National November 9, 1990 Sikeston, Missouri Loan Association, Bank of Sikeston, F.A., Sikeston, Missouri Cape Girardeau, Missouri (Chaffee and Caruthersville Branches) Farmers & Merchants Heritage Federal Savings Union Bank & Trust November 30, 1990 Investment Company, Inc., Bank, Co., Lincoln, Nebraska Omaha, Nebraska Lincoln, Nebraska (David City Branch) Firstbank of Illinois, Co., New Athens Federal United Illinois Bank November 16, 1990 Springfield, Illinois Savings and Loan of New Athens, Association, New Athens, New Athens, Illinois Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Bulletin • January 1991 FIRREA Orders—Continued Acquired Surviving Approval Bank Holding Company Thrift Bank(s) date First Dodge City Bancshares, Valley Savings, A Federal First National Bank November 9, 1990 Inc., Savings and Loan and Trust Company Dodge City, Kansas Association, in Dodge City, Hutchinson, Kansas Dodge City, (Dodge City Branch) Kansas Firstier Financial, Inc., Equitable Federal Savings Firstier Bank, N.A., November 16, 1990 Omaha, Nebraska Bank, Omaha, Nebraska Fremont, Nebraska First Midwest Bancorp, Inc., Community Federal First Midwest November 2, 1990 Naperville, Illinois Savings Bank, Bank/Western East Moline, Illinois Illinois, (Kennedy and Moline Moline, Illinois Branches) First Midwest Bancorp, Inc., Home Savings, A Federal First Midwest November 21, 1990 Naperville, Illinois Savings and Loan Bank/Illinois, N.A., Association, Joliet, Illinois Joliet, Illinois First National Nebraska, Inc., FirsTier Savings Bank, First National Bank, November 21, 1990 Omaha, Nebraska FSB, North Platte, Omaha, Nebraska Nebraska (Chadron Branch) Old National Bancorp, Henderson Home Savings Farmers Bank & November 30, 1990 Evansville, Indiana and Loan Association, Trust Company, F.A., Henderson, Henderson, Kentucky Kentucky Southeast Texas Bancshares, Deep East Texas Savings Community Bank, November 2, 1990 Inc., Association, Kirbyville, Texas Beaumont, Texas Jasper, Texas Union Bancshares, Inc., Valley Savings, A Federal Union National Bank November 9, 1990 Wichita, Kansas Savings and Loan of Wichita, Association, Wichita, Kansas Hutchinson, Kansas (Hutchinson Branch) Union Illinois Company, Frontier Federal Savings Union Bank of East November 29, 1990 East St. Louis, Illinois Bank, St. Louis, Belleville, Illinois East St. Louis, Illinois United Missouri Bancshares, Midwest Home Federal UMB First National November 30, 1990 Inc., Savings Bank, Bank, Kansas City, Missouri Belleville, Illinois Collinsville, Illinois FCB Corp., Collinsville, Illinois Western Bancorp, Inc., Valley Savings, A Federal Western State Bank, November 9, 1990 Garden City, Kansas Savings and Loan Garden City, Association, Kansas Hutchinson, Kansas (Garden City Branch) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 4 Effective Applicant(s) Bank(s) ^ ate BankAmerica Corporation, BAC Interim Federal Savings Bank, November 16, 1990 San Francisco, California Los Angeles, California 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 Community Bankshares of Oregon Trail Bank, Kansas City November 15, 1990 Wyoming, Guernsey, Wyoming Guernsey, Wyoming Decatur Investment, Inc., Western Kansas Kansas City November 15, 1990 Oberlin, Kansas Investment Corp., Inc., Winona, Kansas Exeter Bancorporation, Inc. First State Bank of Ada, Minneapolis November 15, 1990 St. Paul, Minnesota Ada, Minnesota Karlstad State Bank, Karlstad, Minnesota Crookston Financial Services, Inc., Crookston, Minnesota Fidelity Company, Clarence Bancshares, Chicago November 2, 1990 Dyersville, Iowa Inc., Clarence, Iowa First Abilene Bankshares, Inc., First Abilene Bankshares Dallas November 13, 1990 Abilene, Texas of Delaware, Inc., Wilmington, Delaware First National Bank in Cleburne, Cleburne, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • January 1991 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank date First National Bancorp, Inc., Bank of Lockport, Chicago October 26, 1990 Joliet, Illinois Lockport, Illinois First Norton Corporation, First Security Bank and Kansas City November 13, 1990 Norton, Kansas Trust Company, Norton, Kansas First Peoria Corp., The Tazewell County Chicago November 13, 1990 Peoria, Illinois National Bank of Delavan, Delavan, Illinois First State Management Kanopolis Bankshares, Kansas City November 13, 1990 Corporation, Inc., Inc., Salina, Kansas Kanopolis, Kansas First York Ban Corp., Albion National Kansas City November 6, 1990 York, Nebraska Management Company, Albion, Nebraska F & M Bank Services, Inc., Farmers and Merchants Kansas City November 9, 1990 Wichita, Kansas State Bank, Derby, Kansas FS Banco, Inc., The First State Bank of Minneapolis November 16, 1990 Malta, Montana Malta, Malta, Montana Grand Valley Corporation, Grand Valley National Kansas City November 13, 1990 Grand Junction, Colorado Bank, Grand Junction, Colorado GSB Holding, Inc., Guarantee State Kansas City October 26, 1990 Mangum, Oklahoma Bancshares, Inc., Mangum, Oklahoma Guaranty Bancshares, Inc. Guaranty Bank, Dallas November 13, 1990 Mount Pleasant, Texas Mount Pleasant, Texas The Talco State Bank, Talco, Texas Guaranty Financial Corp., Guaranty Bank, Dallas November 13, 1990 Wilmington, Delaware Mount Pleasant, Texas The Talco State Bank, Talco, Texas INB Financial Corporation, F L & T Financial Chicago November 14, 1990 Indianapolis, Indiana Corporation, Columbia City, Indiana Kirkwood Bancorporation Co., Kirkwood Bank & Trust Minneapolis November 9, 1990 Bismarck, North Dakota Co., Bismarck, North Dakota Klossner Bancorporation, Inc., Security State Minneapolis November 1, 1990 Klossner, Minnesota Investments, Inc., Houston, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 79 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank date Libanco, Inc., The First State Bank of Chicago November 20, 1990 Gowrie, Iowa Gowrie, Gowrie, Iowa Mechanicsville Trust & Savings Mechanicsville Chicago November 19, 1990 Bank Employee Stock Bancshares, Inc., Ownership Plan and Trust, Mechanicsville, Iowa Mechanicsville, Iowa Mountain-Valley Bancshares, Bank of Mill Creek, Richmond November 7, 1990 Inc., Mill Creek, West Parsons, West Virginia Virginia Nebraska Bankshares, Inc., Cozad Interim Federal Kansas City October 30, 1990 Farnam, Nebraska Savings Bank, Cozad, Nebraska Nebraska State Bank, Cozad, Nebraska North Milwaukee Bancshares, North Milwaukee State Chicago November 9, 1990 Inc., Bank, Milwaukee, Wisconsin Milwaukee, Wisconsin Owatonna Bancshares, Inc., Farmers State Bank, Minneapolis November 2, 1990 Owatonna, Minnesota Hope, Minnesota Paloma Bancshares, Inc., Paloma Exchange Bank, St. Louis November 13, 1990 Paloma, Illinois Paloma, Illinois Piper Bankshares, Inc., First National Bancorp of Chicago October 31, 1990 Piper City, Illinois Cullom, Inc., Cullom, Illinois Plains Bancorp Delaware, Inc., The First State Bank of Dallas November 6, 1990 Wilmington, Delaware Dimmitt, Dimmitt, Texas Plains Bancorp, Inc., Seagraves Bancshares, Dallas November 6, 1990 Dimmitt, Texas Inc., Seagraves, Texas Rock Rivers Bancorp, Rock Rapids State Bank, Chicago October 25, 1990 Rock Rapids, Iowa Rock Rapids, Iowa Rurban Financial Corp., The First National Bank Cleveland November 5, 1990 Defiance, Ohio of Ottawa, Ottawa, Ohio Southwest Florida Banks, Southwest Florida Bank, Atlanta October 31, 1990 Incorporated, National Association, Murdock, Florida Murdock, Florida Staples Financial Services, Inc., Staples State Bank, Minneapolis October 29, 1990 Staples, Minnesota Staples, Minnesota Stockmen's Management Co., Cozad Interim Federal Kansas City October 30, 1990 Rushville, Nebraska Savings Bank, Cozad, Nebraska Nebraska State Bank, Cozad, Nebraska Summit Bancorp, The Summit Bank, Cleveland October 30, 1990 Akron, Ohio Akron, Ohio Taylor Bancshares, Inc., Valley Bank Minnesota, Minneapolis November 9, 1990 North Mankato, Minnesota Jordan, Minnesota TNB Bancorp, Inc., Tuscola National Bank, Chicago October 26, 1990 Digitized for FRATSuEscRo la, Illinois Tuscola, Illinois http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Bulletin • January 1991 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank date United Nebraska Financial Co., United Nebraska Savings Kansas City November 7, 1990 Ord, Nebraska and Loan Association, O'Neill, Nebraska United Nebraska Bank, O'Neill, Nebraska Valley Bancorporation, Independent Community Chicago November 2, 1990 Appleton, Wisconsin Bancshares, Kiel, Wisconsin Section 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank date Bankers Corp., Interim Federal Savings New York November 13, 1990 Perth Amboy, New Jersey Bank, Perth Amboy, New Jersey Boatmen's Bancshares, Inc., Credit Systems St. Louis November 2, 1990 St. Louis, Missouri Incorporated, Mercantile Bancorporation Inc., St. Louis, Missouri St. Louis, Missouri Caisse Nationale de Credit Index Futures Group, Chicago October 26, 1990 Agricole S.A., Inc., Paris, France Chicago, Illinois First Bank System, Inc., Binsfield & Associates, Minneapolis November 21, 1990 Minneapolis, Minnesota Inc., Duluth, Minnesota First Commercial Corporation, in providing trust services St. Louis November 16, 1990 Little Rock, Arkansas and investment advice Guaranty Bancshares, Inc., Guaranty Leasing Dallas November 13, 1990 Mount Pleasant, Texas Company, Inc., Guaranty Financial Corp., Mount Pleasant, Texas Wilmington, Delaware National Penn Bancshares, Inc., Sellersville Savings and Philadelphia November 8, 1990 Boyertown, Pennsylvania Loan Association, Perkasie, Pennsylvania United Missouri Bancshares, Credit Systems, Inc., Kansas City November 2, 1990 Inc., St. Louis, Missouri Kansas City, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 79 APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Reserve Effective Applicant(s) Bank(s) Bank date Crestar Bank, Community Trust Bank, Richmond November 14, 1990 Richmond, Virginia Portsmouth, Virginia State Bank of Croswell, First Federal Savings Chicago November 16, 1990 Croswell, Michigan Bank and Trust, Pontiac, Michigan PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits Burke v. Board of Governors, No. 90-9509 (10th against the Federal Reserve Banks in which the Board Circuit, filed February 27, 1990). Petition for review of Governors is not named a party. of Board orders assessing civil money penalties and issuing orders of prohibition. BancTEXAS Group, Inc. v. Board of Governors, No. State of Illinois v. Board of Governors, No. 90-C-6863 CA 3-90-0236-R (N.D. Texas, filed February 2, (N.D. Illinois, filed November 27, 1990). Action 1990). Suit for preliminary injunction enjoining the seeking to restrain the Board from providing state Board from enforcing a temporary order to cease examination materials in response to a Congresand desist requiring injection of capital into plainsional subpoena. tiff's subsidiary banks under the Board's source of Citicorp v. Board of Governors, No. 90-4124 (2d strength doctrine. District court granted preliminary Circuit, filed October 4, 1990). Petition for review of injunction on June 5, 1990, in light of MCorp v. Board order requiring Citicorp to terminate certain Board of Governors, 900 F.2d 852 (5th Cir. 1990). insurance activities conducted pursuant to Delaware Rutledge v. Board of Governors, No. 90-7599 (11th law by an indirect nonbank subsidiary. Insurance Cir., filed August 21, 1990). Appeal of district court trade associations, the Delaware Bankers Associagrant of summary judgment for defendants in tort tion, and the State of Delaware have moved to suit challenging Board and Reserve Bank superviintervene in the action. sory actions. Board's brief filed November 27, 1990. Stanley v. Board of Governors, No. 90-3183 (7th Kaimowitz v. Board of Governors, No. 90-3067 (11th Circuit, filed October 3, 1990). Petition for review of Cir., filed January 23, 1990). Petition for review of Board order imposing civil money penalties on five Board order dated December 22, 1989, approving former bank holding company directors. application by First Union Corporation to acquire Sibille v. Federal Reserve Bank of New York and Florida National Banks. Petitioner objects to ap- Board of Governors, No. 90-CIV-5898 (S.D. New proval on Community Reinvestment Act grounds. York, filed September 12, 1990). Appeal of denial of Babcock and Brown Holdings, Inc. v. Board of Gov- Freedom of Information Act request. ernors, No. 89-70518 (9th Cir., filed November 22, Kuhns v. Board of Governors, No. 90-1398 (D.C. Cir., 1989). Petition for review of Board determination filed July 30, 1990). Petition for review of Board that a company would control a proposed insured order denying request for attorney's fees pursuant bank for purposes of the Bank Holding Company to Equal Access to Justice Act. Oral argument is Act. Awaiting scheduling of oral argument. scheduled for February 15, 1991. Consumers Union of U.S., Inc. v. Board of Gover- May v. Board of Governors, No. 90-1316 (D.C. Cir., nors, No. 90-5186 (D.C. Cir., filed June 29, 1990). filed July 27, 1990). Appeal of District Court order Appeal of District Court decision upholding amenddismissing plaintiffs action under Freedom of Infor- ments to Regulation Z implementing the Home mation and Privacy Acts. Board's motion for sum- Equity Loan Consumer Protection Act. Oral argu- Digitized for FRASER http://fraser.stloumisaferdy. oarfgf/i rmance filed October 12, 1990. ment scheduled for February 20, 1991. Federal Reserve Bank of St. Louis

A80 Federal Reserve Bulletin • January 1991 Synovus Financial Corp. v. Board of Governors, No. the Board from proceeding with enforcement ac- 89-1394 (D.C. Cir., filed June 21, 1989). Petition for tions based on section 23A of the Federal Reserve review of Board order permitting relocation of a Act, but upheld the district court's order enjoining bank holding company's national bank subsidiary such actions based on the Board's source-offrom Alabama to Georgia. Oral argument was held strength doctrine. 900 F.2d 852 (5th Cir. 1990). on October 11, 1990. On October 15, the court MCorp v. Board of Governors, No. CA3-88-2693 ordered the Office of the Comptroller of the Cur- (N.D. Tex., filed October 10, 1988). Application for rency to submit a brief regarding an issue in the injunction to set aside temporary cease and desist case. orders. Stayed pending outcome of MCorp v. Board MCorp v. Board of Governors, No. 89-2816 (5th Cir., of Governors, 900 F.2d 852 (5th Cir. 1990). filed May 2, 1989). Appeal of preliminary injunction against the Board enjoining pending and future White v. Board of Governors, No. CU-S-88-623-RDF enforcement actions against a bank holding com- (D. Nev., filed July 29, 1988). Age discrimination pany now in bankruptcy. On May 15, 1990, the Fifth complaint. Board's motion to dismiss or for sum- Circuit vacated the district court's order enjoining mary judgment pending. FINAL ENFORCEMENT ORDERS ISSUED BY THE Money Penalty against Provident Bancorp of Texas, Inc., BOARD OF GOVERNORS Dallas, Texas. Celestino Torres Romero Provident Bancorp of Texas, Inc. Dallas, Texas The Federal Reserve Board announced on November 27, 1990, the issuance of an Order of Prohibition against The Federal Reserve Board announced on November 27, Celestino Torres Romero, a former employee of the 1990, the issuance of an Order of Assessment of Civil Banco de Ponce, Hato Rey, San Juan, Puerto Rico. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A19 All reporting banks A20 Banks in New York City A21 Branches and agencies of foreign banks A22 Gross demand deposits—individuals, partnerships, and corporations MONEY STOCK AND BANK CREDIT A3 Reserves, money stock, liquid assets, and debt measures FINANCIAL MARKETS A4 Reserves of depository institutions, Reserve A23 Commercial paper and bankers dollar Bank credit acceptances outstanding A5 Reserves and borrowings—Depository A23 Prime rate charged by banks on short-term institutions business loans A6 Selected borrowings in immediately available A24 Interest rates—money and capital markets funds—Large member banks A25 Stock market—Selected statistics A26 Selected financial institutions—Selected assets and liabilities POLICY INSTRUMENTS A7 Federal Reserve Bank interest rates FEDERAL FINANCE A8 Reserve requirements of depository institutions A9 Federal Reserve open market transactions A28 Federal fiscal and financing operations A29 U.S. budget receipts and outlays A30 Federal debt subject to statutory limitation A30 Gross public debt of U.S. Treasury—Types FEDERAL RESERVE BANKS and ownership A10 Condition and Federal Reserve note statements A31 U.S. government securities All Maturity distribution of loan and security dealers—Transactions holdings A32 U.S. government securities dealers—Positions and financing A33 Federal and federally sponsored credit agencies—Debt outstanding MONETARY AND CREDIT AGGREGATES A12 Aggregate reserves of depository institutions and monetary base SECURITIES MARKETS AND CORPORATE FINANCE A13 Money stock, liquid assets, and debt measures A15 Bank debits and deposit turnover A34 New security issues—State and local A16 Loans and securities—All commercial banks governments and corporations A35 Open-end investment companies—Net sales and asset position A35 Corporate profits and their distribution COMMERCIAL BANKING INSTITUTIONS A35 Total nonfarm business expenditures on new A17 Major nondeposit funds plant and equipment A18 Assets and liabilities, last-Wednesday-of-month A36 Domestic finance companies—Assets and series liabilities and business credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin • January 1991 Domestic Financial Statistics—Continued Real Estate A57 Foreign branches of U.S. banks—Balance sheet data A37 Mortgage markets A59 Selected U.S. liabilities to foreign official A38 Mortgage debt outstanding institutions CONSUMER INSTALLMENT CREDIT REPORTED BY BANKS IN THE UNITED STATES A39 Total outstanding and net change A40 Terms A59 Liabilities to and claims on foreigners A60 Liabilities to foreigners A62 Banks' own claims on foreigners FLOW OF FUNDS A63 Banks' own and domestic customers' claims on foreigners A41 Funds raised in U.S. credit markets A63 Banks' own claims on unaffiliated foreigners A43 Direct and indirect sources of funds to credit A64 Claims on foreign countries—Combined markets domestic offices and foreign branches A44 Summary of credit market debt outstanding A45 Summary of credit market claims, by holder REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES Domestic Nonfinancial Statistics A65 Liabilities to unaffiliated foreigners A66 Claims on unaffiliated foreigners SELECTED MEASURES A46 Nonfinancial business activity—Selected SECURITIES HOLDINGS AND TRANSACTIONS measures A47 Labor force, employment, and unemployment A67 Foreign transactions in securities A48 Output, capacity, and capacity utilization A68 Marketable U.S. Treasury bonds and A49 Industrial production—Indexes and gross value notes—Foreign transactions A51 Housing and construction A52 Consumer and producer prices INTEREST AND EXCHANGE RATES A53 Gross national product and income A54 Personal income and saving A69 Discount rates of foreign central banks A69 Foreign short-term interest rates A70 Foreign exchange rates International Statistics A71 Guide to Tabular Presentation, Statistical Releases, and Special SUMMARY STATISTICS Tables A55 U.S. international transactions—Summary A56 U.S. foreign trade SPECIAL TABLE A56 U.S. reserve assets A56 Foreign official assets held at Federal Reserve All Assets and liabilities of commercial banks, Banks March 31, 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 Q1 Q2 Q3r June July Aug.' Sept. Oct. Reserves of depository institutions2 1 Total 5.1 2.4 -1.4 -1.4 -1.0 -8.2 8.6 6.7 -9.4 2 Required 5.0 2.5 -.9 -1.5 2.8 -10.1 8.6 6.0' -8.3 3 Nonborrowed 7.2 -3.9 -1.0 2.0 8.3 -5.8 5.2 13.0^ -5.2 4 Monetary base3 4.0 8.5 7.0 8.8 7.6 6.4 13.1 14.6 6.9 Concepts of money, liquid assets, and debt4 5 Ml 5.1 4.8 3.5 4.1 6.0 -.6r 10.1 9.3' -2.9 6 M2 7.1 6.4 3.2r 3.1 3.0' 1.9' 6.4 s.o' .3 7 M3 2.0 2.9 1.1' 1.5 1.4r i.r 4.3 .3' -1.2 8 L 3.1 2.7 i.r 2.4 4.8 2.4' 2.7 6.2 n.a. 9 Debt 7.3 6.1 6.8 6.8 6.6 6.9' 7.5 7.2 n.a. Nontrgnsaction components 10 In M2* 7.7 6.9 3.r 2.8 2.<r 2.7 5.2 3.7' 1.3 11 In M3 only6 -16.6 -10.4r -7.3 -5.3 -5.4' -2.0 -4.6 -19.7' -7.8 Time and savings deposits Commercial banks 12 Savings 7.2 9.5 5.1 3.9 9.3 3.7' 1.2 4.9 7.9 13 MMDAs 12.3 9.1 10.6 9.4 9.5 8.8 12.0 4.5 1.0 14 Small-denomination time 11.3 7.8 12.0 15.3 18.7 18.9 6.5 8.2' 21.3 15 Large-denomination time8'9 2.7 -1.1 -2.7 -.9 2.4 5.1' -10.2 -13.9 -7.7 Thrift institutions 16 Savings .2 1.3 .5 -2.3 -3.8 -.5 -1.1 -6.5 -13.7 17 MMDAs 4.7 5.7 2.6 -10.4 -15.1 -12.6 -5.5 1.8' -10.1 18 Small-denomination time -2.5 -3.3 -7.r -12.9 -20.0' -15.3' -4.1 -8.7' -19.2 19 Large-denomination time8 -28.6 -24.7 -30.3 -31.6 -29.5 -36.5 -28.4 -26.3 -37.5 Money market mutual funds 20 General purpose and broker-dealer 29.1 19.8 1.3r 13.1 6.0r 11.9 32.3 21.4' 9.8 21 Institution-only 3.3 10.2 11.7 21.9 .0 17.9 56.2 22.1 38.2 Debt components4 22 Federal 10.2 6.8 9.5 14.2 14.3 13.6 19.1 11.0 n.a. 23 Nonfederal 6.4 5.9 5.9 4.6 4.2 4.8' 3.9 6.0 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: (1) 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- official 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 Nonfinancial Statistics • January 1991 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT Millions of dollars Monthly averages of Weekly averages of daily figures for week ending daily figures 1990 1990 Aug. Sept. Oct. Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit 280,961 285,966 284,920 287,090 283,761 285,290 286,452 284,709 283,846 284,370 U.S. government securities1, 2 2 Bought outright-system account 231,366 233,704 234,588 233,687 234,214 234,131 234,890 234,224 234,623 234,880 3 Held under repurchase agreements 2,139 2,797 1,050 3,427 1,015 1,341 2,289 1,451 0 0 Federal agency obligations 4 Bought outright 6,408 6,377 6,366 6,377 6,377 6,377 6,377 6,377 6,362 6,343 5 Held under repurchase agreements 551 930 284 1,394 318 456 549 365 0 0 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions2 7 Adjustment credit 318 240 62 552 73 95 42 44 27 104 8 Seasonal credit 433 419 331 422 440 408 357 333 318 295 9 Extended credit 134 5 18 5 9 8 11 15 20 31 10 Float 566 752 704 393 320 1,294 652 580 914 665 11 Other Federal Reserve assets 39,045 40,742 41,517 40,833 40,996 41,182 41,285 41,320 41,582 42,052 12 Gold stock 11,064 11,064 11,061 11,064 11,063 11,063 11,062 11,062 11,061 11,060 13 Special drawing rights certificate account . 8,518 8,518 8,566 8,518 8,518 8,518 8,518 8,518 8,518 8,732 14 Treasury currency outstanding 20,145 20,198 20,254 20,199 20,213 20,223 20,237 20,251 20,265 20,279 ABSORBING RESERVE FUNDS 15 Currency in circulation 270,536 272,891 274,662 272,940 271,913 272,344 274,601 275,467 274,829 274,533 16 Treasury cash holdings 544 525 529 519 519 526 526 525 530 536 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,415 6,358 5,544 7,570 6,666 7,701 4,461 5,505 4,931 6,274 18 Foreign 265 258 250 247 208 298 257 241 255 249 19 Service-related balances and adjustments 1,873 2,017 2,024 1,911 2,203 1,942 1,872 2,274 1,945 2,039 20 Other 236 279 309 287 295 331 240 259 225 524 21 Other Federal Reserve liabilities and capital 9,219 9,905 9,375 9,594 9,310 9,597 9,552 9,332 9,162 9,346 21 Reserve balances with Federal Reserve Banks3 32,600 33,513 32,108 33,803 32,442 32,356 34,759 30,936 31,812 30,940 End-of-month figures Wednesday figures 1990 1990 Aug. Sept. Oct. Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit 284,445 284,364 288,586 292,300 285,241 288,919 286,837 285,482 281,627 288,586 U.S. government securities1'2 24 Bought outright-system account 233,498 234,373 237,763 234,030 233,855 233,913 236,724 233,484 232,764 237,763 25 Held under repurchase agreements ... 2,936 0 0 4,505 2,720 4,594 0 2,532 0 0 Federal agency obligations 26 Bought outright 6,377 6,377 6,343 6,377 6,377 6,377 6,377 6,377 6,343 6,343 27 Held under repurchase agreements ... 1,186 0 0 1,701 564 1,454 0 737 0 0 28 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 29 Adjustment credit 50 77 297 3,587 49 213 45 49 23 297 30 Seasonal credit 412 423 262 435 441 376 346 323 314 262 31 Extended credit 3 5 33 5 11 10 15 16 27 33 32 Float -97 1,832 918 794 87 517 2,162 785 401 918 33 Other Federal Reserve assets 40,081 41,277 42,972 40,867 41,138 41,466 41,168 41,177 41,755 42,972 34 Gold stock 11,065 11,063 11,060 11,065 11,063 11,062 11,062 11,061 11,061 11,060 35 Special drawing rights certificate account . 8,518 8,518 10,018 8,518 8,518 8,518 8,518 8,518 8,518 10,018 36 Treasury currency outstanding 20,171 20,227 20,279 20,199 20,213 20,223 20,237 20,251 20,265 20,279 ABSORBING RESERVE FUNDS 37 Currency in circulation 272,690 271,905 275,043 272,516 271,849 273,307 275,645 275,292 274,779 275,043 38 Treasury cash holdings 534 527 544 518 521 527 525 530 535 544 Deposits, other than reserve balances, with Federal Reserve Banks 39 Treasury 4,453 7,638 7,607 16,758 5,402 7,977 4,397 6,244 5,547 7,607 40 Foreign 337 360 297 180 198 254 270 201 283 297 41 Service-related balances and adjustments 1,953 1,942 2,039 1,911 2,204 1,942 1,872 2,274 1,945 2,039 42 Other 219 374 1,777 308 367 262 249 302 202 1,777 43 Other Federal Reserve liabilities and capital 10,504 9,606 9,995 9,241 9,127 9,421 9,174 9,015 8,917 9,995 44 Reserve balances with Federal Reserve Banks3 33,509 31,820 32,642 30,650 35,366 35,034 34,521 31,452 29,263 32,642 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. Apr. May June July Aug. Sept/ Oct. 1 Reserve balances with Reserve Banks 37,691 37,837 35,436 35,409 32,771 33,878 32,946 32,448 33,303 32,130 2 Total vault cash 26,675 28,204 29,812 29,281 29,812 29,632 30,457 30,843 30,622 31,516 3 Applied vault cash 24,449 25,909 27,374 27,103 27,461 27,318 27,996 28,280 28,149 28,925 4 Surplus vault cash5 2,226 2,295 2,439 2,178 2,351 2,314 2,460 2,563 2,473 2,591 5 Total reserves6 62,141 63,746 62,810 62,512 60,232 61,197 60,943 60,728 61,452 61,054 6 Required reserves 61,094 62,699 61,888 61,615 59,269 60,423 60,081 59,860 60,544 60,206 7 Excess reserve balances at Reserve Banks 1,046 1,047 922 897 962 774 862 868 909 849 8 Total borrowings at Reserve Banks 777 1,716 265 1,628 1,335 881 757 927 624 410 9 Seasonal borrowings at Reserve Banks 93 130 84 122 244 311 389 430 418 335 10 Extended credit at Reserve Banks 483 1,244 20 1,403 875 346 280 127 6 18 Biweekly averages of daily figures for weeks ending 1990 June 27 July 11 July 25 Aug. 8 Aug. 22 Sept. 5 Sept. 19 Oct. 3r Oct. 17 Oct. 31 11 Reserve balances with Reserve Banks 33,390 33,958 32,390 32,389 32,463 32,477 34,316 32,389 32,833 31,370 12 Total vault cash 30,097 30,264 30,549 30,597 31,379 30,229 30,291 31,222 31,673 31,422 13 Applied vault cash 27,676 27,885 28,094 27,974 28,815 27,720 27,976 28,565 29,171 28,756 14 Surplus vault cash 2,421 2,380 2,455 2,623 2,565 2,509 2,315 2,657 2,502 2,666 15 Total reserves6 61,066 61,842 60,484 60,363 61,277 60,197 62,292 60,954 62,004 60,126 16 Required reserves 60,046 60,944 59,609 59,599 60,367 59,304 61,546 59,832 61,021 59,471 17 Excess reserve balances at Reserve Banks7 1,020 898 875 764 910 893 746 1,122 984 655 18 Total borrowings at Reserve Banks 566 581 832 908 1,124 638 705 516 401 397 19 Seasonal borrowings at Reserve Banks 329 359 396 429 432 430 410 424 345 307 20 Extended credit at Reserve Banks8 183 182 298 419 38 8 5 9 13 26 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 Nonfinancial Statistics • January 1991 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Averages of daily figures, in millions of dollars 1990, week ending Monday2 Maturity and source Aug. 6 Aug. 13 Aug. 20 Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1 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 86,516 85,883 89,773 84,057 87,664 95,172 91,246 79,956 81,974 2 For all other maturities 19,270 19,567 19,298 19,697 19,572 17,839 18,103 17,796 16,572 From other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 3 For one day or under continuing contract 39,342 41,080 39,250 39,306 36,237 38,524 38,249 37,308 31,985 4 For all other maturities 17,596 16,873 16,866 16,386 17,206 17,452 17,425 16,585 16,960 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 17,406 17,771 18,476 17,044 18,639 16,370 14,524 16,336 15,586 6 For all other maturities 24,262 25,272 24,233 25,459 24,590 22,600 23,224 21,774 19,072 All other customers 7 For one day or under continuing contract 33,487 30,243 32,148 32,102 33,258 33,378 32,726 31,776 29,621 8 For all other maturities 14,266 14,512 13,522 14,649 14,612 13,833 13,415 12,863 13,021 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 52,042 61,601 54,448 48,340 51,861 52,564 51,336 46,590 49,163 10 To all other specified customers3 16,229 16,660 17,025 15,970 16,310 17,741 17,243 17,230 14,620 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 11/ O 30 n / 90 Ef d fe a c t t e i ve Pr r e a v t i e o us 11/ O 30 n / 90 Ef d fe a c t t e i ve Pr r e a v t i e o us 11/ O 30 n / 90 Ef d fe a c t t e i ve Pre ra v t i e o us Effective date Boston 7 2/24/89 6Vl 7 2/24/89 6 Vl 8.35 11/29/90 8.45 11/15/90 New York 2/24/89 2/24/89 11/29/90 11/15/90 Philadelphia 2/24/89 2/24/89 11/29/90 11/15/90 Cleveland 2/24/89 2/24/89 11/29/90 11/15/90 Richmond 2/24/89 2/24/89 11/29/90 11/15/90 Atlanta 2/24/89 2/24/89 11/29/90 11/15/90 Chicago 2/24/89 2/24/89 11/29/90 11/15/90 St. Louis 2/24/89 2/24/89 11/29/90 11/15/90 Minneapolis 2/24/89 2/24/89 11/29/90 11/15/90 Kansas City 2/24/89 2/24/89 11/29/90 11/15/90 Dallas 2/27/89 2/27/89 11/29/90 11/15/90 San Francisco ... 7 2/24/89 6 Vl 7 2/24/89 6 Vl 8.35 11/29/90 8.45 11/15/90 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. Ba o n f k Efifectiv A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977. 6 6 1980-——JJuullyy 78 10-11 10 11998844——AApprr.. 9 8^-9 9 1978—Jan. 9 6-6l/l 6 Vl ?4 10 10 13 9 9 20 6 Vl 6V1 Sept. ?6 11 11 Nov. 21 81/2-9 m May 11 6l/i-7 1 Nov. 17 12 12 26 8 Vl 8 Vi 12 1 7 Dec. 5 12-13 13 Dec. 24 8 8 July 3 7-7!/4 7!/4 10 71/4 7V4 1981-——MMaayy 5 13-14 14 11998855——MMaayy 20 71/2-8 IVi Aug. 21 73/4 73/4 8 14 14 24 7 Vi 7Vi Sept. 22 8 8 Nov. 7 13-14 13 Oct. 16 8-8 Vl SVi 6 13 13 1986—Mar. 7 7-7 Vl 7 20 8 Vl m Dec. 4 12 12 10 7 7 Nov. 1 m-m 9 Vi Apr. 21 6Vl-7 6 Vi 3 9 Vi m 1982---JJuullyy 20 111/2-12 11 Vi July 11 6 6 ?3 11 Vl im AAuugg.. 21 51/2-6 5W 1979—July 20 10 10 Aug. 7 ll-W/l 11 22 5 Vi 5 Vi Aug. 17 10-10 Vl W'A 3 20 \m 10'/2 16 10W 10 Vi 11998877——SSeepptt.. 4 51/2-6 6 Sept. 19 wvi-n 11 77 10-10V5 10 11 6 6 21 11 11 30 10 10 Oct. 8 11-12 12 Oct. 1? 9Vi-lO 91Vi 11998888——AAuugg.. 9 6-6 Vl 6 Vi 10 12 12 13 9 Vi 9 Vi 11 6 Vl 6 Vi Nov. 77 9-9 Vl 9 1980—Feb. 15 12-13 13 ?6 9 9 1989—Feb. 24 6Vi-7 7 19 13 13 Dec. 14 8'/J-9 9 27 7 7 May 3 2 0 9 12 1 - 2 1 3 1 1 3 2 1 1 5 7 81 m /2 -9 S 8 l V A i In effect Nov. 30, 1990 7 7 June 13 11-12 11 16 11 11 1. Adjustment credit is available on a short-term basis to help depository in no case will the rate charged be less than the basic discount rate plus 50 basis institutions meet temporary needs for funds that cannot be met through reason- points. The flexible rate is reestablished on the first business day of each able alternative sources. After May 19, 1986, the highest rate established for loans two-week reserve maintenance period. At the discretion of the Federal Reserve to depository institutions may be charged on adjustment credit loans of unusual Bank, the time period for which the basic discount rate is applied may be size that result from a major operating problem at the borrower's facility. shortened. Seasonal credit is available to help smaller depository institutions meet regular, 4. For earlier data, see the following publications of the Board of Governors: seasonal needs for funds that cannot be met through special industry lenders and Banking and Monetary Statistics, 1914-1941, and 1941-1970; Annual Statistical that arise from a combination of expected patterns of movement in their deposits Digest, 1970-1979. and loans. A temporary simplified seasonal program was established on Mar. 8, In 1980 and 1981, the Federal Reserve applied a surcharge to short-term 1985, and the interest rate was a fixed rate Vl percent above the rate on adjustment adjustment credit borrowings by institutions with deposits of $500 million or more credit. The program was reestablished for 1986 and 1987 but was not renewed for that had borrowed in successive weeks or in more than four weeks in a calendar 1988. quarter. A 3 percent surcharge was in effect from Mar. 17, 1980 through May 7, 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 Nonfinancial Statistics • January 1991 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Percent of deposits Depository institution requirements after implementation of the Monetary Control Act TTyyppee ooff ddeeppoossiitt,, aanndd ddeeppoossiitt iinntteerrvvaall Percent of deposits Effective date Net transaction accounts3'4 33333 1111122222/////1111188888/////9999900000 1111122222 1111122222/////1111188888/////9999900000 00000 1111122222/////2222277777/////9999900000 00000 1111122222/////2222277777/////9999900000 1. Reserve requirements in effect on Dec. 31, 1990. Required reserves must be three per month for the purpose of making payments to third persons or others. held in the form of deposits with Federal Reserve Banks or vault cash. Nonmem- However, MMDAs and similar accounts subject to the rules that permit no more ber institutions may maintain reserve balances with a Federal Reserve Bank than six preauthorized, automatic, or other transfers per month, of which no more indirectly on a pass-through basis with certain approved institutions. For previous than three can be checks, are not transaction accounts (such accounts are savings reserve requirements, see earlier editions of the Annual Report or the Federal deposits). Reserve Bulletin. Under provisions of the Monetary Control Act, depository 4. The Monetary Control Act of 1980 requires that the amount of transaction institutions include commercial banks, mutual savings banks, savings and loan accounts against which the 3 percent reserve requirement applies be modified associations, credit unions, agencies and branches of foreign banks, and Edge annually by 80 percent of the percentage change in transaction accounts held by corporations. all depository institutions, determined as of June 30 each year. Effective Dec. 18, 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law 1990 for institutions reporting quarterly and Dec. 25, 1990 for institutions 97-320) requires that $2 million of reservable liabilities of each depository reporting weekly, the amount was increased from $40.4 million to $41.1 million. institution be subject to a zero percent reserve requirement. The Board is to adjust 5. The reserve requirements on nonpersonal time deposits with an original the amount of reservable liabilities subject to this zero percent reserve require- maturity of less than 1-1/2 years were reduced from 3 percent to 1-1/2 percent on ment each year for the succeeding calendar year by 80 percent of the percentage the maintenance period that began December 13, 1990, and to zero for the increase in the total reservable liabilities of all depository institutions, measured maintenance period that began December 27, 1990, for institutions that report on an annual basis as of June 30. No corresponding adjustment is to be made in weekly. The reserve requirement on nonpersonal time deposits with an original the event of a decrease. On Dec. 20, 1988, the exemption was raised from $3.2 maturity of 1-1/2 years or more has been zero since October 6, 1983. million to $3.4 million. In determining the reserve requirements of depository 6. For institutions that report quarterly, the reserves on nonpersonal time institutions, the exemption shall apply in the following order: (1) net NOW deposits with an original maturity of less than 1-1/2 years will be reduced from 3 accounts (NOW accounts less allowable deductions); and (2) net other transaction percent to zero on January 17, 1991. accounts. The exemption applies only to accounts that would be subject to a 3 7. The reserve requirements on Euroccurrency liabilities were reduced from 3 percent reserve requirement. percent to zero in the same manner and on the same dates as were the reserves on 3. Transaction accounts include all deposits on which the account holder is nonpersonal time deposits with an original maturity of less than 1-1/2 years (see permitted to make withdrawals by negotiable or transferable instruments, pay- notes 5 and 6). ment orders of withdrawal, and telephone and preauthorized transfers in excess of 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 Type of transaction 1988 1989 Mar. Apr. May June July Aug. Sept U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 18,983 8,223 14,284 543 5,796 3,365 1,732 287 4,264 2 Gross sales 6,051 587 12,818 0 0 0 0 0 68 4 3 R Ex ed ch em an p g t e i ons 23 9 9 , , 0 74 2 0 9 24 2 1 , ,8 2 7 0 6 0 23 1 1 2 , , 2 7 1 3 1 0 19,051 0 17,286 0 22,894 0 16,279 0 16,159 0 21,912 0 Others within 1 year 5 Gross purchases 3,659 2,176 327 100 0 0 50 0 0 6 Gross sales 300 0 0 0 0 0 0 0 0 7 Maturity shift 21,504 23,854 28,848 1,876 993 4,387 1,314 1,321 3,235 8 Exchange -20,388 -24,588 -25,783 0 -4,304 -2,771 0 -3,577 -4,550 9 Redemptions 70 0 500 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 10,231 5,485 1,436 100 100 0 0 0 0 11 Gross sales 452 800 490 0 0 0 0 0 0 12 Maturity shift -17,975 -17,720 -25,534 -1,876 -739 -3,607 -1,314 -1,234 -2,188 13 Exchange 18,938 22,515 23,250 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 15 Gross sales 0 175 29 0 0 0 0 16 Maturity shift -3,529 -5,946 -2,231 -254 -530 -87 -697 17 Exchange 950 1,797 1,934 223 0 0 0 Over 10 years 18 Gross purchases 1,858 1,398 284 0 0 19 Gross sales 0 0 0 0 0 20 Maturity shift 0 -188 -1,0 -250 -350 21 Exchange 500 275 250 350 All maturities 22 Gross purchases 37,170 18,863 16,617 743 5,896 3,365 1,782 287 4,264 23 Gross sales 6,803 1,562 13,337 0 0 0 0 0 68 24 Redemptions 9,099 2,200 13,230 0 0 0 0 0 0 Matched transactions 25 Gross sales 950,923 1,168,484 1,323,480 99,104 97,970 121,596 107,896 95,144 113,647 26 Gross purchases 950,935 1,168,142 1,326,542 97,128 98,643 121,218 110,042 95,787 110,635 Repurchase agreements2 27 Gross purchases 314,621 152,613 129,518 8,050 6,409 3,959 11,242 13,106 26,700 28 Gross sales 324,666 151,497 132,688 6,627 7,832 3,959 11,242 11,447 23,764 29 Net change in U.S. government securities 190 2,987 3,928 FEDERAL AGENCY OBLIGATIONS Outright transactions 0 0 0 30 Gross purchases 0 0 0 3 3 1 2 R G e r d o e ss m s p a t l i e o s n s 276 587 442 Repurchase agreements2 33 Gross purchases 80,353 57,259 38,835 1,966 2,595 2,314 3,221 4,697 7,130 34 Gross sales 81,350 56,471 40,411 1,457 3,104 2,314 3,221 4,137 5,944 35 Net change in federal agency obligations . -2,018 509 527 1,149 36 Total net change in System Open Market Account 9,961 16,070 -12,073 699 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 Nonfinancial Statistics • January 1991 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1990 1990 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 Aug. Sept. Oct. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,062 11,060 11,061 11,061 11,060 11,065 11,063 11,060 2 Special drawing rights certificate account 8,518 10,018 8,518 8,518 10,018 8,518 8,518 10,018 3 Coin 535 551 547 546 551 491 533 551 Loans 4 To depository institutions 601 591 389 364 591 465 505 591 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 6,343 6,377 6,343 6,343 6,377 6,377 6,343 8 Held under repurchase agreements 1,454 0 737 0 0 1,186 0 0 U.S. Treasury securities Bought outright 9 Bills 111,368 115,218 110,940 110,219 115,218 110,953 111,828 115,218 10 Notes 91,582 91,582 91,582 91,582 91,582 91,582 91,582 91,582 11 Bonds 30,963 30,963 30,963 30,963 30,963 30,963 30,963 30,963 12 Total bought outright2 233,913 237,763 233,484 232,764 237,763 233,498 234,373 237,763 13 Held under repurchase agreements 4,594 0 2,532 0 0 2,936 0 0 14 Total U.S. Treasury securities 238,506 237,763 236,017 232,764 237,763 236,434 234,373 237,763 15 Total loans and securities 246,938 244,697 243,519 239,471 244,697 244,461 241,255 244,697 16 Items in process of collection 6,602 5,992 6,699 5,412 5,992 5,726 8,358 5,992 17 Bank premises 845 853 847 849 853 836 844 853 Other assets 18 Denominated in foreign currencies3 34,456 34,488 34,561 34,590 35,669 34,059 34,454 35,669 19 All other4 6,156 7,408 6,070 6,213 6,227 5,230 6,006 6,227 20 Total assets 315,111 315,067 311,823 306,660 315,067 310,386 311,031 315,067 LIABILITIES 21 Federal Reserve notes 254,145 255,860 256,119 255,594 255,860 253,544 252,738 255,860 Deposits 22 To depository institutions 37,335 34,546 34,046 31,428 34,546 35,592 33,834 34,546 23 U.S. Treasury—General account 7,977 7,607 6,244 5,547 7,607 4,453 7,638 7,607 24 Foreign—Official accounts 254 297 201 283 297 337 360 297 25 Other 262 1,777 302 202 1,777 219 374 1,777 26 Total deposits 45,827 44,226 40,793 37,460 44,226 40,600 42,206 44,226 71 Deferred credit items 5,718 4,986 5,896 4,688 4,986 5,738 6,481 4,986 28 Other liabilities and accrued dividends5 4,038 3,569 3,761 3,687 3,569 4,288 4,021 3,569 29 Total liabilities 309,729 308,641 306,569 301,429 308,641 304,169 305,446 308,641 CAPITAL ACCOUNTS 30 Capital paid in 2,399 2,402 2,402 2,402 2,402 2,399 2,399 2,402 31 Surplus 2,243 2,243 2,243 2,243 2,243 2,243 2,243 2,243 32 Other capital accounts 740 1,781 610 586 1,781 1,579 943 1,781 33 Total liabilities and capital accounts 315,111 315,067 311,823 306,660 315,067 310,386 311,031 315,067 34 MEMO: Marketable U.S. Treasury securities held in custody for foreign and international accounts 235,691 235,262 236,110 306,660 239,933 236,408 234,926 240,993 Federal Reserve note statement 35 Federal Reserve notes outstanding issued to bank 297,523 300,234 299,060 299,904 300,234 293,807 296,914 300,234 36 LESS: Held by bank 43,387 44,375 42,941 44,310 44,375 40,263 44,176 44,375 37 Federal Reserve notes, net 254,145 255,860 256,119 255,594 255,860 253,544 252,738 255,860 Collateral held against notes net: 38 Gold certificate account 11,062 11,060 11,061 11,061 11,060 11,065 11,063 11,060 39 Special drawing rights certificate account 8,518 10,018 8,518 8,518 10,018 8,518 8,518 10,018 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 234,565 234,782 236,539 236,015 234,782 233,961 233,157 234,782 42 Total collateral 254,145 255,860 256,119 255,594 255,860 253,544 252,738 255,860 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 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 Aug. 31 Sept. 28 Oct. 31 599 406 389 364 429 465 505 429 3 2 4 W 9 1 1 6 i t d d h a a in y y s s 1 t t 5 o o d 9 1 a 0 y y d e s a a r y s 2 3 4 5 0 0 9 2 1 3 7 0 4 2 35 3 1 8 0 3 4 2 1 3 0 37 5 9 1 0 2 2 2 4 1 3 0 2 22 8 1 4 0 3 5 7 1 0 9 0 0 0 0 0 0 0 0 7 6 W 16 i t d h a in ys 1 t 5 o d 9 a 0 y d s ays 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 9 1 0 2 U. 9 W S 1 1 . 6 i t T d d h a a r in e y y a s s s 1 t u t 5 o o r d y 9 1 a 0 s y y e e d s c a 1 a u r y r s i ties—Total 2 6 3 5 7 1 0 8 6 1 1 , , , , , 7 5 5 6 8 9 0 7 0 2 4 6 7 7 2 23 5 7 6 1 6 5 1 0 1 , , , , , 7 3 6 5 5 2 1 2 5 2 4 9 3 4 2 2 5 3 7 6 1 5 6 0 1 0 , , , , , 9 0 4 4 5 5 1 3 2 3 7 7 1 7 9 2 5 3 6 6 7 8 2 0 9 , , , , , 2 4 7 2 1 3 6 8 3 5 1 4 0 1 9 23 5 7 5 1 7 4 1 9 3 , , , , , 7 9 8 4 7 6 7 4 9 8 3 0 7 9 4 2 6 3 7 5 0 3 2 2 9 , , , , , 5 4 8 7 7 6 9 2 0 0 3 8 0 9 0 2 6 3 6 5 0 7 4 9 9 , , , , , 0 3 0 8 7 3 7 9 3 0 3 3 9 5 0 23 5 7 5 1 7 4 9 1 3 , , , , , 7 9 4 8 7 6 7 4 8 9 3 0 7 4 9 14 Over 5 years to 10 years 2 1 4 3 , , 5 1 3 7 6 0 2 1 4 3 , , 5 1 3 7 6 0 2 1 4 3 , , 5 1 3 2 6 6 2 1 4 3 , , 5 1 3 2 6 6 2 1 4 3 , , 5 1 3 2 6 6 2 1 4 3 , , 5 1 3 7 6 0 2 1 4 3 , , 5 1 3 7 6 0 2 1 4 3 , , 5 1 3 2 6 6 2 2 1 1 1 1 0 1 6 7 8 9 Fe O O 9 W d 1 1 e 6 v v i r e d e t d a h r r a a l i y y n 5 1 a s s g y y 1 t e t e e o 5 o n a a c d r 9 r 1 y s 0 a t y y o t o d e o s b a a 5 ' l r y 1 i y g s 0 e a a y ti r e o s a n r s s — Total 7 2 1 1 1 , , , , , 8 6 5 8 4 1 1 3 7 5 3 5 2 8 1 1 8 4 9 0 8 6 2 1 1 , , , , 3 5 7 6 1 1 3 7 6 9 7 2 8 1 7 1 9 2 5 8 7 2 1 1 , , , , 1 5 7 9 6 1 1 3 1 6 0 0 2 8 1 4 1 8 0 5 8 2 6 1 1 , , , , 5 3 6 1 7 1 1 2 4 0 2 7 3 8 1 3 0 5 2 7 8 6 2 1 1 , , , , 3 5 7 7 1 1 4 1 0 9 2 1 8 3 6 5 9 5 0 8 6 2 1 1 , , , , 3 6 4 6 3 1 1 7 5 9 1 1 1 8 7 5 7 6 0 0 8 6 2 1 1 , , , , 3 6 2 5 7 1 1 7 3 2 0 0 2 8 7 4 5 9 0 0 8 6 2 1 1 , , , , 3 5 7 7 1 1 4 1 0 9 1 2 8 3 6 5 9 0 5 8 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 Nonfinancial Statistics • January 1991 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. Mar. Apr. May June July Aug. Sept. Oct. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 58.02 58.59 60.59 60.03 60.30 60.28 59.78 59.73 59.32 59.75 60.08 59.61 2 Nonborrowed reserves4 57.20 57.82 58.88 59.77 58.17 58.65 58.45 58.85 58.56 58.82 59.46' 59.20 3 Nonborrowed reserves plus extended credit5 57.50 58.30 60.12 59.79 60.12 60.05 59.32 59.20 58.84 58.95 59.46 59.22 4 Required reserves 56.65 57.55 59.55 59.11 59.44 59.38 58.82 58.96 58.46 58.88 59.17 58.76 5 Monetary base6 241.43 258.06 275.24 284.95 291.82 293.54 294.40 296.28 297.86 301.12 304.78 306.54 ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 Not seasonally adjusted 6 Total reserves7 59.46 60.07 62.22 61.67 59.23 61.05 58.74 59.61 59.47 59.21 59.81 59.25 7 Nonborrowed reserves 58.64 59.30 60.50 61.40 57.11 59.42 57.41 58.73 58.71 58.29 59.19 58.84 8 Nonborrowed reserves plus extended credit5 58.94 59.78 61.75 61.42 59.06 60.82 58.28 59.07 58.99 58.41 59.20'' 58.85 9 Required reserves8 58.09 59.03 61.17 60.75 58.37 60.15 57.78 58.84 58.61 58.34 58.90 58.40 10 Monetary base9 245.17 262.00 279.54 289.45 288.86 293.35 293.52 297.37 299.90 301.46 303.56 305.00 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 59.56 62.14 63.75 62.81 60.66 62.51 60.23 61.20 60.94 60.73 61.45 61.05 12 Nonborrowed reserves 58.73 61.36 62.03 62.54 58.53 60.88 58.90 60.32 60.19 59.80 60.83' 60.64 13 Nonborrowed reserves plus extended credit 59.04 61.85 63.27 62.56 60.49 62.29 59.77 60.66 60.47 59.93 60.83 60.66 14 Required reserves 58.19 61.09 62.70 61.89 59.80 61.62 59.27 60.42 60.08 59.86 60.54 60.21 15 Monetary base12 247.62 266.06 283.00 292.55 292.38 296.87 297.03 300.99 303.39 304.99 307.21 308.85 16 Excess reserves13 1.37 1.05 1.05 .92 .86 .90 .96 .77 .86 .87 .91 .85 17 Borrowings from the Federal Reserve .83 .78 1.72 .27 2.12 1.63 1.33 .88 .76 .93 .62 .41 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 1986 1987 1988 1989 Dec. Dec. Dec. Dec. July' Aug/ Sept/ Oct. Seasonally adjusted 1 Ml 724.7 750.4 787.5 794.8 809.0 815.8 822.1 820.1 7 M2 2,814.2 2,913.2 3,072.4 3,221.6 3,287.8 3,305.3 3,319.2 3,320.1 M3 3,494.5 3,678.7 3,918.3 4,044.3 4,076.9 4,091.5 4,092.4 4,088.2 4 4,135.4 4,338.9 4,676.1 4,881.2 4,919.9 4,931.1 4,956.6 n.a. 5 7,636.2 8,345.1 9,107.6 9,788.9 10,166.5 10,230.1 10,291.2 n.a. Ml components 6 Currency 180.6 196.7 211.8 221.9 235.4 238.4 241.5 244.0 7 Travelers checks 6.5 7.0 7.5 7.4 7.7 8.0 8.3 8.4 8 Demand deposits 302.1 287.0 287.0 279.7 274.7 277.9 279.7 276.8 9 Other checkable deposits6 235.5 259.7 281.3 285.7 291.2 291.6 292.6 291.0 Nontransactions components 10 In M2 2,089.6 2,162.8 2,284.9 2,426.8 2,478.8 2,489.5 2,497.1 2,499.9 11 In M3 only8 680.3 765.5 845.9 822.6 789.1 786.1 773.2 768.2 Time and Savings accounts Commercial banks 17, Savings deposits 155.8 178.3 192.0 188.5 195.6 119955..88 119966..66 119977..99 n Money market deposit accounts 377.7 356.4 350.2 351.5 370.9 374.6 376.0 376.3 14 Small time deposits'. 366.3 388.1 447.5 528.6 568.1 571.2 575.1 585.3 15 Large time deposits10, 289.8 326.9 368.2 401.5 399.6 396.2 391.6 389.1 Thrift institutions 16 Savings deposits 214.3 236.6 235.9 220.5 220.7 220.5 219.3 221166..88 17 Money market deposit accounts 193.3 167.4 150.1 132.2 131.6 131.0 131.2 130.1 18 Small time deposits9. 489.9 529.7 583.5 613.7 582.2 580.2 576.0 566.8 19 Large time deposits 0 150.0 161.9 172.9 156.8 130.8 127.7 124.9 121.0 Money market mutual funds 20 General purpose and broker-dealer 208.7 222.0 240.9 312.4 327.1 333355..99 334411..99 334444..77 21 Institution-only 83.8 89.0 87.1 102.3 108.9 114.0 116.1 119.8 Debt components V 1,806.1 1,957.9 2,114.2 2,266.7 22,,339977..88 22,,443366..00 22,,445588..44 n.a. 23 Nonfederal debt 5,830.1 6,387.2 6,993.4 7,522.2 7,768.6 7,794.1 7,832.8 n.a. Not seasonally adjusted ?4 Ml 740.5 766.4 804.5 812.1 812.0 813.7 818.1 816.8 75 M2 2,826.5 2,925.6 3,085.2 3,234.5 3,293.4 3,305.4 3,311.8 3,316.7 ?6 M3 3,508.8 3,692.7 3,932.5 4,058.3 4,075.9 4,091.6 4,088.5 4,087.5 77 L 4,151.4 4,355.2 4,692.9 4,898.9 4,908.1 4,925.7 4,951.2 n.a. 28 Debt 7,619.0 8,329.1 9,093.2 9,774.3 10,121.2 10,177.5 10,241.5 n.a. Ml components 79 Currency3 183.0 199.3 214.8 225.3 237.1 223399..22 224400..88 224422..66 30 Travelers checks 6.0 6.5 6.9 6.9 8.6 8.9 8.8 8.4 31 Demand deposits3 314.0 298.6 298.9 291.6 277.0 276.5 277.9 277.6 32 Other checkable deposits6 237.5 262.0 283.8 288.4 289.3 289.0 290.6 288.1 Nontransactions components 33 In M2 2,086.0 2,159.2 2,280.7 2,422.4 22,,448811..44 22,,449911..77 22,,449933..77 22,,449999..99 34 In M3 only8 682.3 767.0 847.3 823.8 782.5 786.2 776.8 770.8 Time and Savings accounts Commercial banks 35 Savings deposits 154.4 176.9 190.6 187.2 197.3 196.3 196.0 197.9 36 Money market deposit accounts 379.8 359.0 353.2 355.0 368.1 372.9 374.4 375.2 37 Small time deposits® 366.1 387.3 446.0 526.4 569.6 572.2 575.5 584.8 38 Large time deposits ' 289.2 325.8 366.9 399.8 397.4 396.9 392.9 390.3 Thrift institutions 39 Savings deposits 212.7 234.9 234.2 219.0 223.1 221.0 219.0 217.7 40 Money market deposit accounts 192.9 167.5 150.6 132.8 131.2 131.2 131.2 130.4 41 Small time deposits9 489.8 529.1 582.4 612.3 583.7 580.6 575.0 566.9 42 Large time deposits10 150.7 162.9 174.2 158.3 129.5 127.1 125.1 122.2 Money market mutual funds 43 General purpose and broker-dealer 208.0 221.5 240.5 312.2 324.3 334.9 340.9 342.9 44 Institution-only 84.4 89.6 87.6 102.9 108.1 113.2 113.2 117.0 Repurchase agreements and Eurodollars 45 Overnight 82.3 83.2 83.3 77.4 84.1 82.7 81.5 84.2 46 164.3 197.1 227.7 178.0 161.6 165.0 161.0 157.4 Debt components 47 Federal debt 1,803.9 1,955.6 2,111.8 2,264.5 2,382.4 2,418.2 2,440.6 n.a. 48 Nonfederal debt 5,815.1 6,373.5 6,981.4 7,509.8 7,738.8 7,759.3 7,800.9 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • January 1991 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 Bank group, or type of customer 11998877 11998888 11998899 Mar. Apr. May June July Aug. DEBITS TO Seasonally adjusted Demand deposits 1 All insured banks 217,116.2 226,888.4 272.793.1 285,111.5 274,403.6 273,186.2 301,578.2 301,589.9 309.441.0 2 Major New York City banks 104,4%.3 107,547.3 121.894.2 132,470.3 124,988.2 123,314.6 131,042.7 130,590.7 133,491.9 3 Other banks 112,619.8 119,341.2 150,898.9 152,641.2 149,415.4 149,871.6 170,535.5 170,999.2 175.949.1 4 ATS-NOW accounts4 2,402.7 2,757.7 3,501.8 4,075.7 3,993.3 4,165.6 4,004.2 4,163.7 4,478.9 5 Savings deposits 526.5 579.2 636.6 617.6 583.1 601.1 566.6 608.8 593.0 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 612.1 641.2 781.0 813.3 780.8 791.9 866.2 865.5 888.6 7 Major New York City banks 2,670.6 2,903.5 3,401.6 3,760.2 3,551.5 3,590.9 3,742.8 3,838.3 3,777.5 8 Other banks 357.0 376.8 481.5 484.0 472.5 482.5 544.6 543.8 562.3 9 ATS-NOW accounts4 13.8 14.7 18.3 20.2 19.7 20.5 19.5 20.5 21.9 10 Savings deposits 3.1 3.1 3.5 3.2 3.0 3.2 2.9 3.1 3.1 DEBITS TO Not seasonally adjusted Demand deposits 11 All insured banks 217.125.1 227,010.7 271,957.3 291,868.6 276.077.5 282,747.7 302,181.4 302,826.4 321,168.8 12 Major New York City banks 104,518.8 107,565.0 122,241.8 137,029.5 125.750.6 125,532.4 130,332.7 130,100.1 137.460.3 13 Other banks 112.606.2 119,445.7 149,715.5 154,839.2 150,326.9 157,215.3 171,848.6 172,726.3 183.708.4 14 ATS-NOW accounts4 2,404.8 2,754.7 3.496.5 4,030.4 4,285.8 4,066.2 4,098.2 4,108.9 4.274.0 15 MMDA 1,954.2 2,430.1 2.790.6 2,714.9 2,848.4 3,016.4 2,992.1 3,033.8 3.171.1 16 Savings deposits5 526.8 578.0 635.8 594.2 646.8 592.6 567.8 640.3 598.1 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 612.3 641.7 779.0 850.4 784.4 834.7 866.5 864.8 938.3 18 Major New York City banks 2,674.9 2,901.4 3,415.4 3,836.2 3,564.6 3,796.3 3,797.6 3,777.5 4,109.2 19 Other banks 356.9 377.1 477.8 503.6 474.7 514.3 546.6 547.1 594.8 20 ATS-NOW accounts4 13.8 14.7 18.3 20.0 20.5 20.3 20.1 20.4 21.1 21 MMDA6 5.3 6.9 8.3 7.6 7.9 8.4 8.2 8.3 8.6 22 Savings deposits5 3.1 3.1 3.5 3.1 3.4 3.1 2.9 3.3 3.1 1. Historical tables containing revised data for earlier periods may be obtained 4. Accounts authorized for negotiable orders of withdrawal (NOW) and acfrom the Monetary and Reserves Projections Section, Division of Monetary counts authorized for automatic transfer to demand deposits (ATS). ATS data are Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. available beginning December 1978. 20551. 5. Excludes ATS and NOW accounts, MMDA and special club accounts, such These data also appear on the Board's G.6 (406) release. For address, see inside as Christmas and vacation clubs. front cover. 6. Money market deposit accounts. 2. Annual averages of monthly figures. 3. Represents accounts of individuals, partnerships, and corporations and of states and political subdivisions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • January 1991 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1989 1990 Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Seasonally adjusted 1 Total loans and securities2 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 2,710.9 2 U.S. government securities 396.0 396.1 404.7 414.5 422.3 427.3 430.6 438.5 440.6 441.3 447.1 451.6 3 Other securities 179.9 180.8 180.4 180.5 180.1 180.0 178.3 177.9 177.8 179.2 179.4 176.9 4 Total loans and leases 2,009.9 2,011.9 2,009.3 2,019.4 2,033.2 2,039.4 2,045.0 2,053.0 2,066.4 2,087.3 2,082.0 2,082.5 5 Commercial and industrial ..... 645.0 641.6 637.9 638.8 644.4 649.0 648.6 651.6 651.7 653.1 651.6 649.5 6 Bankers acceptances held3... 7.6 7.4 7.3 7.6 7.6 7.5 7.6 7.9 7.6 7.3 7.7 7.6 7 Other commercial and industrial 637.4 634.2 630.6 631.2 636.8 641.5 641.0 643.7 644.2 645.7 643.9 641.9 8 U.S. addressees4 632.4 628.8 623.1 625.4 630.6 635.5 636.4 638.8 641.6 643.2 641.1 638.8 9 Non-U.S. addressees 5.0 5.4 7.6 5.8 6.2 6.0 4.5 4.9 2.6 2.5 2.8 3.1 10 Real estate 754.0 761.1 765.9 774.7 781.8 786.9 794.6 800.1 808.0 811.9 814.7 820.6 11 Individual 374.4 375.8 378.3 379.5 379.9 378.8 379.8 378.4 378.3 380.1 381.1 381.2 12 Security 40.9 38.8 39.3 40.0 37.1 36.1 34.8 35.3 38.8 46.0 43.1 41.4 13 Nonbank financial institutions 33.9 33.0 32.5 32.9 33.8 33.9 33.9 34.4 34.8 35.7 36.1' 36.1 14 Agricultural 30.5 30.7 30.9 30.8 30.6 30.4 30.0 29.5 29.3 29.2 29.1 29.2 15 State and political subdivisions 40.8 40.1 38.6 38.9 38.4 38.2 37.9 37.4 36.6 36.1 35.4 34.9 16 Foreign banks 8.3 8.9 8.1 7.8 8.4 8.8 8.7 7.4 7.0 8.0 7.9 8.9 17 Foreign official institutions 3.7 3.6 3.2 3.1 3.0 3.2 3.2 3.2 3.2 3.2 3.2 3.1 18 Lease financing receivables 31.9 31.8 32.1 32.1r 32.4' 32.4' 32.7' 32.4' 32.8' 32.9' 32.9' 33.3 19 All other loans 46.4 46.5 42.5 40.7r 43.3' 41.8 40.7' 43.3' 45^ 51.3' 46^ 44.3 Not seasonally adjusted 20 Total loans and securities2 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 2,711.0 21 U.S. government securities 396.1 397.2 406.4 419.0 423.8 427.2 429.6 435.6 438.1 442.1 446.1 448.6 22 Other securities 181.2 181.8 180.9 180.3 179.7 179.4 177.7 177.2 176.4 179.3 179.6 177.7 23 Total loans and leases2 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 2,084.7 24 Commercial and industrial ..... 642.2 641.6 636.4 639.5 646.0 653.3 652.7 654.0 652.1 650.6 647.7 647.1 25 Bankers acceptances held3... 7.7 7.5 7.4 7.7 7.4 7.3 7.5 7.8 7.3 7.4 7.8 7.8 26 Other commercial and industrial 634.5 634.0 629.1 631.8 638.6 645.9 645.2 646.2 644.8 643.1 639.9 639.3 27 U.S. addressees 629.1 628.8 624.1 627.0 633.9 641.3 640.6 641.8 640.3 638.7 635.3 634.7 28 Non-U.S. addressees 5.4 5.2 4.9 4.8 4.7 4.6 4.6 4.4 4.5 4.5 4.6 4.6 29 Real estate 755.7 761.9 766.0 772.1 779.1 784.9 793.5 800.0 808.7 813.6 816.9 822.1 30 Individual 375.8 380.3 381.8 378.7 376.6 376.0 377.3 376.7 376.7 380.3 383.0 382.3 31 Security 39.7 37.9 37.8 39.5 38.1 38.5 35.3 37.4 38.8 45.3 42.1 40.5 32 Nonbank financial institutions 34.2 34.1 33.2 32.5 33.0 33.7 33.9 34.7 35.0 35.5 35.6' 35.7 33 Agricultural 30.8 30.6 30.4 29.9 29.5 29.5 29.7 29.8 30.0 30.0 30.0 30.0 34 State and political subdivisions 40.6 39.7 39.5 39.3 38.6 38.2 37.8 37.2 36.2 35.8 35.3 34.8 35 Foreign banks 8.5 8.7 8.2 7.8 7.8 8.4 8.7 7.6 7.1 7.9 8.1 9.2 36 Foreign official institutions 3.7 3.6 3.2 3.1 3.0 3.2 3.2 3.2 3.2 3.2 3.2 3.1 37 Lease financing receivables .... 31.9 31.9 32.5 32.3'' 32.4' 32.5' 32.7' 32.3' 32.5' 32.7' 32.8' 33.2 38 All other loans 47.5 47.7 43.9' 42.7' 42.2' 42.3' 41.4' 43.8' 43.9' 45.2' 46.5' 46.8 1. These data also appear in the Board's G.7 (407) release. For address, see 3. Includes nonfinancial commercial paper held. inside front cover. 4. United States includes the 50 states and the District of Columbia. 2. Excludes loans to commercial banks in the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1989 1990 Nov. Dec. Jan. Feb. Mar. Apr. May June July' Aug.' Sept.' Oct. Seasonally adjusted 1 Total nondeposit funds2 256.5 257.3 258.1 267.6 271.4 267.6 269.2 270.8r 282.1 282.3 280.0 289.8 2 Net balances due to related foreign offices3... 8.6 7.4 10.9 14.7 17.4 16.6 24.5 14.8 16.8 16.7 19.2 28.2 3 Borrowings from other than commercial banks in United States4 247.9 249.9 247.2 252.9 254.0 250.9 244.8 256.0' 265.3 265.6 260.8 261.6 4 Domestically chartered banks 198.3 200.4 196.9 201.4 198.4 192.9 187.8 197.8 203.4 202.8 198.6 197.1 5 Foreign-related banks 49.6 49.4 50.4 51.5 55.6 58.0 57.0 58.2' 61.9 62.8 62.2 64.5 Not seasonally adjusted 6 Total nondeposit funds2 255.4 250.7 254.6 270.8 277.2 270.4 277.8 275.7' 277.5 281.5 276.3 284.8 7 Net balances due to related foreign offices3... 9.7 9.7 10.5 14.3 16.2 14.4 26.3 15.4 14.7 17.0 19.9 27.8 8 Domestically chartered banks -15.5 -19.2 -14.5 -11.1 -11.5 -10.6 -1.4 -6.3 -6.1 -3.6 -4.5 -1.1 9 Foreign-related banks 25.2 28.9 25.0 25.4 27.7 25.0 27.7 21.7 20.8 20.6 24.4 28.9 10 Borrowings from other than commercial banks in United States 245.8 241.0 244.1 256.4 261.0 256.0 251.4 260.2' 262.8 264.5 256.4 257.0 11 Domestically chartered banks 198.5 194.0 192.9 203.3 204.3 197.0 193.6 199.5 200.5 202.3 195.5 194.1 12 Federal Kinds and security RP borrowings 196.1 191.5 190.3 199.6 199.8 193.3 190.2 196.4 197.6 198.7 191.5 190.8 13 Other6 2.4 2.5 2.7 3.7 4.5 3.7 3.4 3.2 2.9 3.6 4.0 3.3 14 Foreign-related banks5 47.2 47.0 51.2 53.1 56.8 59.0 57.9 60.7' 62.3 62.2 60.9 63.0 MEMO Gross large time deposits 15 Seasonally adjusted 464.0 464.3 462.7 460.6 457.3 455.1 454.7 452.7 454.0 450.7 445.5 441.6 16 Not seasonally adjusted 464.4 462.7 460.4 460.3 460.2 455.1 455.2 452.2 451.8 451.4 446.9 442.8 U.S. Treasury demand balances at commercial banks8 17 Seasonally adjusted 20.4 21.1 20.2 17.8 19.2 21.2 18.6 20.4 14.9 33.2 28.2 21.9 18 Not seasonally adjusted 14.7 19.6 23.2 22.0 16.7 20.0 25.2 20.9 15.2 23.5 31.0 20.9 1. Commercial banks are those in the 50 states and the District of Columbia romissory note or due bill, given for the purpose of borrowing money for the with national or state charters plus agencies and branches of foreign banks, New anking business. This includes borrowings from Federal Reserve Banks and York investment companies majority owned by foreign banks, and Edge Act from foreign banks, term federal funds, loan RPs, and sales of participations in corporations owned by domestically chartered and foreign banks. pooled loans. These data also appear in the Board's G.10 (411) release. For address, see 5. Based on daily average data reported weekly by approximately 120 large inside front cover. banks and quarterly or annual data reported by other banks. 2. Includes federal funds, RPs, and other borrowing from nonbanks and net 6. Figures are partly daily averages and partly averages of Wednesday data. balances due to related foreign offices. 7. Time deposits in denominations of $100,000 or more. Estimated averages of 3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and daily data. U.S. branches and agencies of foreign banks with related foreign offices plus net 8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at compositions with own IBFs. mercial banks. Averages of daily data. 4. Other borrowings are borrowings through any instrument, such as a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • January 1991 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series1 Billions of dollars 1989 1990 AAccccoouunntt Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. ALL COMMERCIAL BANKING INSTITUTIONS2 1 Loans and securities 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 2,924.3 2 Investment securities 550.5 563.9 571.2 576.8 582.5 585.9 587.7 587.5 595.8 600.4 602.8 3 U.S. government securities 375.1 389.8 398.0 405.9 412.6 416.9 419.9 420.1 427.1 432.2 436.2 4 Other 175.5 174.1 173.2 170.8 169.9 169.0 167.8 167.4 168.7 168.2 166.6 5 Trading account assets 22.8 31.8 30.2 26.0 23.9 21.4 23.7 27.2 29.2 21.3 27.3 6 Total loans 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 2,294.2 7 Interbank loans 187.0 187.4 187.5 191.6 190.6 192.8 202.7 199.9 198.4 188.8 205.0 8 Loans excluding interbank 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 2,089.2 9 Commercial and industrial 643.2 636.4 642.4 646.2 653.3 650.9 654.1 648.7 646.3 646.7 649.0 10 Real estate 762.8 767.6 774.0 781.6 786.7 796.7 801.3 810.2 813.3 817.4 823.5 11 Individual 382.3 381.7 378.6 375.5 377.5 377.3 378.5 377.7 382.2 383.9 382.4 12 All other 231.5 227.3 225.3 223.6 223.8 220.9 222.9 225.0 230.6 227.1 234.2 13 Total cash assets 255.7 218.9 224.9 212.9 211.6 239.9 222.9 214.1 211.0 217.6 224.3 14 Reserves with Federal Reserve Banks. 42.8 24.6 29.5 32.0 31.6 27.8 32.0 30.1 30.3 33.9 29.9 15 Cash in vault 31.6 28.0 27.8 27.7 28.5 29.9 28.9 28.7 30.2 29.2 29.3 16 Cash items in process of collection ... 99.1 89.9 91.6 80.0 80.0 100.6 86.1 79.5 77.4 80.9 85.3 17 Demand balances at U.S. depository institutions 32.3 29.6 30.8 27.4 26.3 32.0 27.6 27.4 27.5 27.2 28.6 18 Other cash assets 49.9 46.8 45.2 45.8 45.2 49.7 48.3 48.4 45.6 46.4 51.1 19 Other assets 209.9 218.1 212.9 209.1 206.0 199.5 211.1 207.1 216.3 216.9 223.9 20 Total assets/total liabilities and capital 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 3,372.5 21 Deposits 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 2,327.9 22 Transaction deposits 642.0 612.2 616.6 594.3 601.0 618.4 599.6 591.5 590.5 596.3 613.1 23 Savings deposits 538.2 540.8 546.3 551.8 548.7 554.4 556.3 561.3 565.7 563.5 570.1 24 Time deposits 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 1,144.7 25 Borrowings 531.0 552.8 542.2 545.4 564.7 548.2 578.7 564.4 576.2 564.7 585.8 26 Other liabilities 233.5 221.8 229.3 230.8 218.0 227.8 227.2 224.3 231.7 236.8 238.7 27 Residual (assets less liabilities) 211.3 211.4 213.2 215.7 215.8 216.2 218.4 219.1 220.0 220.5 220.2 MEMO 28 U.S. government securities (including trading account) 391.0 414.7 421.2 423.8 427.8 430.0 433.8 438.9 444.3 442.9 452.4 29 Other securities (including trading account) 182.3 180.9 180.2 179.0 178.6 177.2 177.6 175.9 180.8 178.9 177.7 DOMESTICALLY CHARTERED COMMERCIAL BANKS3 30 Loans and securities 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 2,649.7 31 Investment securities 524.4 536.2 543.1 547.2 551.5 557.5 557.3 556.8 565.5 568.7 569.7 32 U.S. government securities 363.8 376.6 384.4 391.2 397.6 404.0 405.5 405.5 413.0 416.9 419.6 33 Other 160.5 159.6 158.7 156.0 154.0 153.5 151.9 151.4 152.5 151.8 150.0 34 Trading account assets 22.8 31.8 30.2 26.0 23.9 21.4 23.7 27.2 29.2 21.3 27.3 35 Total loans 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 2,052.7 36 Interbank loans 150.3 150.0 148.5 148.3 149.1 144.4 153.6 151.6 151.3 142.4 160.7 37 Loans excluding interbank 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 1,892.0 38 Commercial and industrial 517.7 513.8 518.3 519.4 523.4 520.4 519.2 516.9 513.4 513.3 514.1 39 Real estate 733.0 735.9 741.1 747.8 751.8 761.2 765.3 773.5 776.1 780.2 785.6 40 Individual 382.3 381.7 378.6 375.5 377.5 377.3 378.5 377.7 382.2 383.9 382.4 41 All other 211.8 208.5 206.5 206.3 204.6 202.8 205.3 206.7 209.9 206.1 210.0 42 Total cash assets 230.5 195.7 199.9 187.3 186.8 210.7 194.8 186.5 184.2 190.4 192.1 43 Reserves with Federal Reserve Banks. 41.7 22.7 27.5 29.8 29.8 26.6 30.8 28.8 28.1 32.2 28.5 44 Cash in vault 31.5 28.0 27.8 27.7 28.5 29.8 28.8 28.7 30.2 29.2 29.3 45 Cash items in process of collection ... 97.7 88.5 90.2 78.5 78.7 99.2 84.1 78.1 75.8 78.9 83.6 46 Demand balances at U.S. depository institutions 30.4 27.6 28.7 25.6 24.6 30.0 25.9 25.6 25.1 25.2 26.7 47 Other cash assets 29.2 28.9 25.7 25.7 25.2 25.1 25.2 25.3 25.0 25.0 24.0 48 Other assets 140.7 143.6 140.2 136.4 133.8 136.3 141.8 138.4 144.3 149.1 151.8 49 Total assets/liabilities and capital 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 2,993.6 50 Deposits 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 2,249.6 51 Transaction deposits 632.1 601.9 606.3 584.5 591.2 608.3 589.0 581.1 579.9 585.1 602.2 52 Savings deposits 535.4 537.9 543.4 548.8 545.7 551.4 553.3 558.3 562.7 560.4 567.0 53 Time deposits 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 1,080.4 54 Borrowings 398.4 405.3 394.2 393.1 405.4 391.7 409.9 395.6 403.5 395.0 399.2 55 Other liabilities 120.9 119.9 123.1 119.9 110.5 117.3 117.2 116.8 123.2 125.8 128.5 56 Residual (assets less liabilities) 207.4 207.5 209.3 211.8 212.0 212.3 214.6 215.3 216.1 216.7 216.3 MEMO 57 Real estate loans, revolving 50.0 51.1 51.4 52.0 53.1 54.0 55.0 56.1 57.4 58.1 60.4 58 Real estate loans, other 683.0 684.8 689.7 695.8 698.7 707.2 710.3 717.4 718.8 722.1 725.2 1. Back data are available from the Banking and Monetary Statistics section, the last Wednesday of the month based on a weekly reporting sample of Board of Governors of the Federal Reserve System, Washington, D.C., 20551. foreign-related institutions and quarter-end condition reports. These data also appear in the Board's weekly H.8 (510) release. 2. Commercial banking institutions include insured domestically chartered Figures are partly estimated. They include all bank-premises subsidiaries and commercial banks, branches and agencies of foreign banks, Edge Act and other significant majority-owned domestic subsidiaries. Loan and securities data Agreement corporations, and New York State foreign investment corporations. for domestically chartered commercial banks are estimates for the last Wednes- 3. Insured domestically chartered commercial banks include all member banks day of the month based on a sample of weekly reporting banks and quarter-end and insured nonmember banks. condition report data. Data for other banking institutions are estimates made for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A19 1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS1 Millions of dollars, Wednesday figures Account Sept. 5 Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 1 Cash and balances due from depository institutions ... 124,321 108,191 107,117 110,132' 109,008 120,151 103,111 97,211 2 Total loans, leases, and securities, net 1,331,782' 1,312,489 1,318,468' 1,293,936' 1,311,362 1,305,240 1,309,663 1,301,079 3 U.S. Treasury and government agency 184,764 183,701 185,481 177,095 183,350 184,287 184,893 182.543 4 Trading account 18,954 17,974 19,012 10,619 17,595 18,494 18,718 16,108 5 Investment account 165,810 165,727 166,470 166,476 165,756 165,793 166,174 166,435 6 Mortgage-backed securities2 81,472R 81,475' 82,044' 82,26C 82,063 81,902 82,278 82,594 All other maturing in 7 One year or less 18,136 17,768 17,458 17,024 15,612 15,603 15,243 15,250 8 Over one through five years 40,241' 40,467' 40,863' 40,958' 41,030 41,105 41,623 41,484 9 Over five years 25,961' 26,018' 26,104' 26,233' 27,051 27,183 27,030 27,108 10 Other securities 61,807 61,688 61,943 61,770 61,726 61,432 61,055 61,008 11 Trading account 775 684 971 1,039 1,055 1,140 1,079 1,166 12 Investment account 61,032 61,004 60,972 60,731 60,671 60,291 59,976 59,842 13 States and political subdivisions, by maturity 31,959 31,967 31,980 32,037 31,881 31,800 31,751 31,675 14 One year or less 3,707 3,727 3,742 3,740 3,811 3,784 3,773 3,795 15 Over one year 28,252 28,240 28,238 28,296 28,070 28,016 27,979 27,880 16 Other bonds, corporate stocks, and securities 29,072 29,037 28,992 28,694 28,790 28,492 28,225 28,167 17 Other trading account assets 10,383 10,016 9,933 9.272 10,185 9,998 9,905 9,043 18 Federal funds sold3 92,303 81,445 83,064 70,611 77,845 73,147 74,692 70,955 19 To commercial banks 64,830 56,520 56,873 49,423 55,811 51,168 52,350 47,901 20 To nonbank brokers and dealers in securities 20,322 19,630 19,647 15,564 16,997 17,504 18,136 18,164 21 Toothers 7,150 5,295 6,544 5,624 5,037 4,476 4,207 4,890 22 Other loans and leases, gross 1,021,484' 1,014,457 1,016,755 1,013,657 1,016,992 1,015,627 1,018,761 1,017,242 23 Other loans, gross 994,331' 987,562 989,907 986,714' 989,584 988,208 991,332 989,842 24 Commercial and industrial 317,821' 317,167' 318,214' 316,658' 318,522 316,974 317,657 318,055 25 Bankers acceptances and commercial paper — 1,720 1,622 1,736 1,622 1,598 1,671 1,646 1,606 26 All other 316,101' 315,545' 316,478' 315,036' 316,924 315,303 316,011 316,449 27 U.S. addressees 314,134' 314,854' 313,535' 315,409 313,929 314,605 314,822 28 Non-U.S. addressees 1,512 1,412 1,624 1,501 1,515 1,374 1,406 1,627 29 Real estate loans 379,717' 380,878' 381,314' 381,477' 381,614 382,101 382,738 382,383 30 Revolving, home equity 31,297' 31,415' 31,569' 31,724' 32,122 32,285 32,854 32,559 31 All other 348,420' 349,464' 349,744' 349,753' 349,492 349,816 349,883 349,824 32 To individuals for personal expenditures 173,276' 173,324' 173,618' 173,635' 173,318 173,054 173,467 173.544 33 To depository and financial institutions 52.514 49,629 49,198 47,984' 47,720 49,262 50,288 50,013 34 Commercial banks in the United States 23,925' 21,410' 21,336' 20,764' 20,315 21,108 22,587 23,101 35 Banks in foreign countries 4,420 4,264 4,418 3,920 3,698 4,374 4,336 3,847 36 Nonbank depository and other financial institutions 24,169' 23,955' 23,443' 23,298' 23,707 23,779 23,365 23,065 37 For purchasing and carrying securities 16,600 13,962 14,801 13,283 14,540 13,944 14,008 13,898 38 To finance agricultural production 6,087' 6,123' 6,126' 6,153' 6,137 6,136 6,151 6,166 39 To states and political subdivisions 22,423 22,322 22,265 22,192' 21,954 21,902 21,922 21,779 40 To foreign governments and official institutions ... 1,639 1,412 1,330 1,476 1,400 1,483 1,490 1,357 41 All other 24,255' 22,744' 23,043' 23,856' 24,377 23,352 23,610 22,646 42 Lease financing receivables 27,153 26,895 26,848 26,943' 27,408 27,419 27,429 27,400 43 LESS: Unearned income 4,426 4,429 4,442 4,429 4,350 4,329 4,310 4,302 44 Loan and lease reserve 34,534 34,390 34,267' 34,040' 34,386 34,922 35,333 35,410 45 Other loans and leases, net 982,525' 975,639 978,046' 975,188' 978,255 976,376 979,118 977,530 46 All other assets 137,930' 135,425' 136,678' 137,455' 142,999 140,773 139,062 136.969 47 Total assets 1,594,033' 1,556,105' 1,562,263' 1,541,524' 1,563,369 1,566,165 1,551,836 1,535,259 48 Demand deposits 241,422' 221,502' 220,750' 221,876' 225,353 233,509 221,795 208,207 49 Individuals, partnerships, and corporations 191,412' 179,583' 175,292' 173,980' 179,887 185,477 178,301 168,242 50 States and political subdivisions 5,895 5,539 6,901 7,356 6,068 6,392 6,003 6,045 51 U.S. government 1,687 2,050 3,508 1,593 1,898 1,394 1,382 1,469 52 Depository institutions in the United States 24.515 19,506 19,612 20,342 21.783 24,637 21,875 18,568 53 Banks in foreign countries 6,691 6,210 5,768 6,600 6,187 6,405 5,763 5,218 54 Foreign governments and official institutions 1,402 932 1,129 1.273 753 670 749 662 55 Certified and officers' checks 9,820 7,680 8,540 10,733 8,777 8,534 7,722 8,004 56 Transaction balances other than demand deposits 83,215 80,870 78,941 76,989 81,621 80,466 79,176 77,582 57 Nontransaction balances 755,061 753,471 750,036 748,410 755,156 755,453 755,040 754,177 58 Individuals, partnerships, and corporations 718,400' 716,824' 714,002' 712,490' 719,112 719,078 718,689 717,842 59 States and political subdivisions 28,972' 28,965' 28,497 28,510 28,217 28,597 28,447 28,507 60 U.S. government 74 C 747' 764 776 1,020 1,006 1,011 1,015 61 Depository institutions in the United States 6,495' 6,490' 6,322' 6,189' 6,013 5,966 6,087 6,010 62 Foreign governments, official institutions, and banks 454 446 451 445 794 805 807 802 6 6 4 3 Lia B b o i r li r t o ie w s i n fo g r s b fr o o r m ro w Fe ed d e m ra o l n R ey e serve Banks 30 2 9 , , 1 9 0 8 2 5' 300,21 0 9' 30 3 9 , , 4 7 0 0 5 1 ' 289,78 0 9' 297,3 1 8 2 5 0 291,914 0 289,362 0 289,025 0 65 Treasury tax-and-loan notes 12,528' 17,215 30,464' 26,492 8,116 5,270 11,878 24,056 66 All other liabilities for borrowed money3 295,355' 283,004' 275,832' 263,297' 289,149 286,644 277,485 264.970 67 Other liabilities and subordinated notes and debentures 99,12c 94,380' 97,463' 99,351' 98,992 99,919 102,294 101,948 68 Total liabilities 1,488,804' 1,450,442' 1,456,891' 1,436,416' 1,458,506 1,461,260 1,447,669 1,430,940 69 Residual (total assets minus total liabilities)6 105,230 105,662 105,372' 105,107' 104,863 104,904 104,167 104,319 70 T M o E t M al O l oans and leases (gross) and investments adjusted 7 1,281,987' 1,273,377' 1,278,968' 1,262,217' 1,273,972 1,272,216 1,274,369 1,269,790 71 Total loans and leases (gross) adjusted7 1,025,032' 1,017,972' 1,021,611' 1,014,08c 1,018,710 1,016,498 1,018,517 1,017,196 72 Time deposits in amounts of $100,000 or more 211,473' 211,335' 209,504' 207,361' 207,268 206,604 208,015 208,432 73 U.S. Treasury securities maturing in one year or less .. 16,762 16,340 16,430 14,478 13.784 14,217 14,357 14,855 74 Loans sold outright to affiliates—total 289 291 300 288 284 286 286 288 75 Commercial and industrial 140 141 149 151 139 140 141 142 76 Other 149 150 150 137 145 146 146 146 77 Nontransaction savings deposits (including MMDAs)... 290,541 288,784 286,394 285,305 289,384 290,426 289,107 287,910 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 Nonfinancial Statistics • January 1991 1.28 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY1 Millions of dollars, Wednesday figures 1990 Account Sept. 5 Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 1 Cash balances due from depository institutions 24,823 22,609 22,331 26,897 23,707 28,792 21,257 20,882 21,704 2 Total loans, leases, and securities, net2 233,134 222,200 226,124 218,728 223,394 217,602 218,316 213,658 220,234 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 23,624 23,589 23,814 24,372 23,519 23,480 23,658 23,485 24,195 6 Mortgage-backed securities4 11,325 11,332 11,342 11,895 11,916 11,866 12,035 11,685 11,850 All other maturing in 7 One year or less 3,255 3,026 3,048 3,023 2,137 2,151 2,148 2,374 2,338 8 Over one through five years 4,548 4,732 4,735 4,768 4,779 4,778 4,795 4,823 5,017 9 Over five years 4,496 4,498 4,689 4,685 4,687 4,686 4,680 4,603 4,990 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 13,315 13,310 13,272 13,044 13,095 13,049 12,987 12,853 12,781 13 States and political subdivisions, by maturity 6,121 6,118 6,113 6,107 6,097 6,067 6,030 5,916 5,859 14 One year or less 611 613 615 612 613 620 618 614 616 15 Over one year 5,509 5,505 5,498 5,495 5,483 5,447 5,411 5,302 5,242 16 Other bonds, corporate stocks, and securities 7,194 7,192 7,159 6,937 6,998 6,982 6,957 6,936 6,922 17 Other trading account assets3 0 0 0 0 0 0 0 0 0 Loans and leases 18 Federal funds sold5 27,737 21,494 24,259 19,105 24,177 18,621 19,262 15,640 19,082 19 To commercial banks 16,687 11,244 13,830 11,770 16,194 11,227 12,161 9,218 13,450 20 To nonbank brokers and dealers in securities 8,764 8,166 8,415 5,517 6,168 5,908 6,094 5,481 5,136 21 To others 2,286 2,082 2,015 1,818 1,815 1,486 1,006 942 496 22 Other loans and leases, gross 184,378 179,444 180,404 177,699 177,926 178,388 178,362 177,614 180,168 23 Other loans, gross 178,707 173,751 174,718 171,946 172,188 172,633 172,618 171,863 174,436 24 Commercial and industrial 58,751 58,361 58,134 56,876 57,068 56,716 56,837 57,291 58,210 25 Bankers acceptances and commercial paper 137 139 138 145 148 141 161 164 153 26 All other 58,614 58,222 57,996 56,730 56,920 56,575 56,676 57,126 58,056 27 U.S. addressees 57,871 57,557 57,141 56,026 56,209 55,971 56,045 56,475 57,430 28 Non-U.S. addressees 743 664 855 704 711 604 630 651 626 29 Real estate loans 62,723' 62,682' 62,763' 62,391' 62,354 62,465 62,613 62,522 62,369 30 Revolving, home equity 4,158 4,170 4,180 4,188 4,329 4,334 4,344 4,356 4,364 31 All other 58,564' 58,512' 58,584' 58,203' 58,024 58,130 58,270 58,166 58,005 32 To individuals for personal expenditures 19,77c 19,823' 19,931' 19,944' 19,878 20,004 19,940 20,016 19,969 33 To depository and financial institutions 19,674 18,636 18,483 17,581 17,340 18,848 18,554 17,595 18,572 34 Commercial banks in the United States 7,840 6,956 6,877 6,614 6,340 6,927 6,929 6,523 6,438 35 Banks in foreign countries 3,409 3,272 3,386 2,954 2,884 3,563 3,462 2,966 3,642 36 Nonbank depository and other financial institutions 8,425 8,408 8,221 8,013 8,116 8,358 8,163 8,106 8,492 37 For purchasing and carrying securities 6,712 4,557 4,968 4,288 4,737 4,380 4,413 4,440 5,284 38 To finance agricultural production 146 145 150 159 164 150 164 160 153 39 To states and political subdivisions 4,585 4,548 4,515 4,470 4,398 4,395 4,311 4,293 4,343 40 To foreign governments and official institutions 535 311 234 374 314 402 406 275 199 41 All other 5,812 4,689 5,539 5,863 5,936 5,272 5,379 5,271 5,336 42 Lease financing receivables 5,672 5,692 5,686 5,753 5,738 5,754 5,744 5,751 5,732 43 LESS: Unearned income 1,863 1,866 1,873 1,870 1,844 1,833 1,834 1,831 1,810 44 Loan and lease reserve 14,059 13,770 13,752 13,622 13,478 14,102 14,119 14,104 14,183 45 Other loans and leases, net 168,456 163,807 164,779 162,208 162,604 162,452 162,409 161,679 164,176 46 All other assets7 60,890 58,156 58,782 54,579 60,862 61,171 60,107 55,482 56,300 47 Total assets 318,846 302,966 307,238 300,204 307,963 307,566 299,680 290,023 298,238 Deposits 48 Demand deposits 50,937 45,219 47,558 52,063 46,530 49,726 46,493 43,428 45,437 49 Individuals, partnerships, and corporations 35,010 32,015 33,036 33,760 32,124 35,093 32,725 30,746 31,968 50 States and political subdivisions 641 565 780 1,539 868 582 594 577 641 51 U.S. government 202 161 216 168 198 122 153 183 294 52 Depository institutions in the United States 4,669 4,302 4,652 5,340 4,853 5,193 5,379 4,632 4,482 53 Banks in foreign countries 5,308 4,977 4,648 5,423 4,832 5,053 4,522 3,955 4,752 54 Foreign governments and official institutions 1,261 786 986 1,112 598 542 619 538 419 55 Certified and officers' checks 3,846 2,414 3,241 4,721 3,058 3,140 2,501 2,797 2,882 56 Transaction balances other than demand deposits (ATS, NOW, Super NOW, telephone transfers) 8,957 8,858 8,782 8,348 8,646 8,648 8,431 8,278 8,406 57 Nontransaction balances 116,329 115,465 114,546 112,195 113,013 112,888 113,086 112,095 112,559 58 Individuals, partnerships, and corporations 108,562 107,786 107,119 104,763 105,366 105,156 105,355 104,268 104,752 59 States and political subdivisions 5,681 5,602 5,501 5,518 5,391 5,485 5,522 5,630 5,631 60 U.S. government 38 43 44 47 128 124 122 119 119 61 Depository institutions in the United States 1,867 1,852 1,700 1,687 1,612 1,586 1,548 1,546 1,527 62 Foreign governments, official institutions, and banks ... 181 181 183 180 516 537 537 532 530 63 Liabilities for borrowed money 77,416 72,036 72,997 62,433 72,747 70,874 63,691 58,722 62,290 64 Borrowings from Federal Reserve Banks 1,325 0 525 0 0 0 0 0 0 65 Treasury tax-and-loan notes *... 2,574 3,676 7,280 6,114 2,262 911 2,534 5,486 5,010 66 All other liabilities for borrowed money8 73,516 68,360 65,192 56,319 70,486 69,963 61,156 53,236 57,279 67 Other liabilities and subordinated notes and debentures ... 39,747 35,593 37,921 39,867 41,425 40,210 43,001 42,560 44,093 68 Total liabilities 293,386 277,171 281,804 274,906 282,362 282,346 274,702 265,082 272,785 69 Residual (total assets minus total liabilities)9 25,460 25,794 25,434 25,298 25,601 25,219 24,978 24,941 25,452 MEMO 70 Total loans and leases (gross) and investments adjusted2'10 224,528 219,637 221,043 215,836 216,182 215,384 215,179 213,852 216,338 71 Total loans and leases (gross) adjusted10 187,588 182,737 183,958 178,420 179,569 178,855 178,534 177,514 179,362 72 Time deposits in amounts of $100,000 or more 37,544 37,585 37,239 35,613 35,699 35,626 36,222 35,328 35,893 73 U.S. Treasury securities maturing in one year or less 2,456 2,200 2,149 2,058 1,746 1,764 1,846 1,862 1,791 1. These data also appear in the Board's H.4.2 (504) release. For address, see 7. Includes trading account securities. inside front cover. 8. Includes federal funds purchased and securities sold under agreements to 2. Excludes trading account securities. repurchase. 3. Not available due to confidentiality. 9. Not a measure of equity capital for use in capital adequacy analysis or for 4. Includes U.S. government-issued or guaranteed certificates of participation other analytic uses. Digitized for FiRn ApoSoEls Rof residential mortgages. 10. Exclusive of loans and federal funds transactions with domestic commerhttp://fraser.stlou5.i sIfnecldu.doesr gse/ curities purchased under agreements to resell. cial banks. 6. Includes allocated transfer risk reserve. Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS1 Assets and Liabilities Millions of dollars, Wednesday figures 1990 Account Sept. 5 Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 1 Cash and due from depository institutions .. 15,218 14,389 14,490 14,492 14,691 15,098 15,041 14,193 17,407 2 Total loans and securities 157,326 156,471 159,729 159,915 159,203 162,091 160,558 160,544 163,578 3 U.S. Treasury and government agency securities 10,519 10,302 10,574 11,076 10,740 10,869 11,046 11,117 11,869 4 Other securities 7,317 7,317 7,324 7,324 7,415 7,372 7,332 7,235 7,480 5 Federal funds sold2 6,640 5,377 7,016 8,960 8,628 9,405 6,645 6,905 7,369 6 To commercial banks in the United States 5,710 4,428 5,722 7,883 7,589 8,155 5,520 5,306 4,099 7 To others 930 949 1,294 1,077 1,039 1,250 1,125 1,599 3,270 8 Other loans, gross 132,850 133,475 134,815 132,555 132,420 134,445 135,535 135,287 136,860 9 Commercial and industrial 77,426 75,919 76,769 76,633 76,355 76,422 76,320 76,954 77,590 10 Bankers acceptances and commercial paper 2,392 2,414 2,636 2,566 2,503 2,493 2,374 2,787 2,517 11 All other 75,034 73,505 74,133 74,067 73,852 73,929 73,946 74,167 75,073 12 U.S. addressees 73,690 72,217 72,727 72,699 72,468 72,537 72,583 72,749 73,656 13 Non-U.S. addressees 1,344 1,288 1,406 1,368 1,384 1,392 1,363 1,418 1,417 14 Loans secured by real estate3 24,459 24,573 24,632 24,692 24,974 25,135 25,328 25,306 25,454 15 To financial institutions 26,660 27,275 27,818 26,488 26,353 27,051 28,335 29.486 30,519 16 Commercial banks in the United States. 19,731 20,713 21,222 19,682 18,690 19,652 20,496 21.487 22,515 17 Banks in foreign countries 1,770 1,628 1,556 1,688 2,358 2,179 2,612 2,729 2,732 18 Nonbank financial institutions 5,159 4,934 5,040 5,118 5,305 5,220 5,227 5,270 5,272 19 To foreign governments and official institutions 224 233 219 230 201 207 195 195 200 20 For purchasing and carrying securities ... 2,726 4,037 3,939 2,983 3,031 4,174 3,745 1,791 1,561 21 All other3 1,355 1,438 1,438 1,529 1,506 1,456 1,612 1,555 1,536 22 Other assets (claims on nonrelated parties) . 32,703 32,502 31,468 32,071 30,708 31,430 31,407 32,024 33,264 23 Net due from related institutions 15,260 12,044 14,450 11,611 10,165 9,989 11,021 11,010 12,980 24 Total assets 220,508 215,406 220,139 218,091 214,767 218,611 218,029 217,771 227,231 25 Deposits or credit balances due to other than directly related institutions 49,28V 49,263' 49,124' 48,249' 47,141 47,240 47,593 45,622 45,602 26 Transaction accounts and credit balances4 4,645 4,558 4,884' 4,897 4,267 4,429 4,377 4,180 4,117 27 Individuals, partnerships, and corporations 3,082 2,817 3,046 2,981 2,854 2,932 2,926 2,698 2,790 28 Other 1,563 1,741 1,838' 1,916 1,413 1,497 1,451 1,482 1,327 29 Nontransaction accounts3 44,636r 44,705' 44,240' 43,352' 42,874 42,811 43,216 41,442 41,485 30 Individuals, partnerships, and corporations 35,139 34,669 34,244 34,012 33,549 32,962 32,876 32,163 32,059 31 Other 9,497' 10,036' 9,996' 9,340' 9,325 9,849 10,340 9,279 9,426 32 Borrowings from other than directly related institutions 109,475' 108,316 110,787 107,506 104,904 107,607 106,750 112,169 118,318 33 Federal funds purchased6 52,234' 51,631 56,431 49,808 53,347 51,620 49,187 52,101 55,676 34 From commercial banks in the United States 27,191' 26,105' 28,843' 26,743' 27,516 25,505 24,812 24,333 28,863 35 From others 25,043' 25,526' 27,588' 23,065' 25,831 26,115 24,375 27,768 26,813 36 Other liabilities for borrowed money 57,241 56,685 54,356 57,698 51,557 55,987 57,563 60,068 62,642 37 To commercial banks in the United States 32,981 31,287 29,886 29,178 28,063 29,388 31,044 32,825 35,365 38 To others 24,260 25,398 24,470 28,520 23,494 26,599 26,519 27,243 27,277 39 Other liabilities to nonrelated parties 32,536 33,030 32,007' 31,999 30,730 31,747 32,026 32,020 33,065 40 Net due to related institutions 29,217' 24,797' 28,222' 30,337' 31,992 32,017 31,657 27,961 30,245 41 Total liabilities 220,508 215,406 220,139 218,091 214,767 218,611 218,029 217,771 227,231 MEMO 42 Total loans (gross) and secmities adjusted7 . 131,885 131,330 132,785 132,350 132,924 134,284 134,542 133,751 136,964 43 Total loans (gross) adjusted7 114,049 113,711 114,887 113,950 114,769 116,043 116,164 115,399 117,615 1. Effective Jan. 4,1989, the reporting panel includes a new group of large U.S. separate component of Other loans, gross. Formerly, these loans were included in branches and agencies of foreign banks. Earlier data included 65 U.S. branches "All other", line 21. and agencies of foreign banks that included those branches and agencies with 4. Includes credit balances, demand deposits, and other checkable deposits. assets of $750 million or more on June 30, 1980, plus those branches and agencies 5. Includes savings deposits, money market deposit accounts, and time that had reached the $750 million asset level on Dec. 31, 1984. These data also deposits. appear in the Board's H.4.2 (504) release. For address, see inside front cover. 6. Includes securities sold under agreements to repurchase. 2. Includes securities purchased under agreements to resell. 7. Exclusive of loans to and federal funds sold to commercial banks in the 3. Effective Jan. 4, 1989, loans secured by real estate are being reported as a United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • January 1991 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.. June Sept. Dec. Mar. June Sept. 1 All holders—Individuals, partnerships, and corporations 321.0 363.6 343.5 354.7 329.3 337.3 352.2 328.7 334.3 f 2 Financial business 32.3 41.4 36.3 38.6 33.0 33.7 33.8 34.1 34.9 1 3 Nonfinancial business 178.5 202.0 191.9 201.2 185.9 190.4 202.5 183.3 186.5 n.a. 4 Consumer 85.5 91.1 90.0 88.3 86.6 87.9 90.3 86.6 86.4 1 5 Foreign 3.5 3.3 3.4 3.7 2.9 2.9 3.1 3.0 3.1 1 6 Other 21.2 25.8 21.9 22.8 21.0 22.4 22.5 21.7 23.5 I Weekly reporting banks 1989 1990 11998855 11998866 11998877 11998888 DDeecc.. DDeecc.. DDeecc.. DDeecc.. June Sept. Dec. Mar. June Sept. 7 All holders—Individuals, partnerships, and corporations 168.6 195.1 183.8 198.3 182.2 186.6 196.7 183.7 186.3 185.1 8 Financial business 25.9 32.5 28.6 30.5 25.4 26.3 27.6 25.6 25.0 27.0 9 Nonfinancial business 94.5 106.4 100.0 108.7 99.8 101.6 108.8 100.1 101.7 100.0 10 Consumer 33.2 37.5 39.1 42.6 42.4 43.0 44.1 42.4 43.3 43.1 11 Foreign 3.1 3.3 3.3 3.6 2.9 2.8 3.0 2.8 2.9 2.8 12 Other 12.0 15.4 12.7 12.9 11.7 12.9 13.2 12.8 13.3 12.3 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 follow:; (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 1985 1986 1987 1988 1989 IInnssttrruummeenntt Dec. Dec. Dec. Dec. Dec. Apr. May June July Aug. Sept. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 298,779 329,991 358,056 457,297 529,055 544,481 538,686 537,023 545,849 546,691' 559,593 Financial companies1 Dealer-placed paper 2 Total 78,443 101,072 102,844 160,094 187,084 185,107 186,155 191,463 199,466 199,099' 205,093 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 135,320 151,820 173,980 194,537 212,210 213,843 209,203 202,101 202,829 202,217 204,065 5 Bank-related (not seasonally adjusted)3 . 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 81,232 102,666 129,761 145,531 143,328 143,459 143,554 145,375 150,435 Bankers dollar acceptances (not seasonally adjusted) 7 Total 68,413 64,974 70,565 66,631 62,972 53,945 54,766 53,750 52,006 52,324 50,469 Holder 8 11,197 13,423 10,943 9,086 9,433 9,200 9,000 9,972 9,628 99,,994444 99,,336666 9 9,471 11,707 9,464 8,022 8,510 7,850 7,632 8,639 8,395 7,895 7,944 10 Bills bought 1,726 1,716 1,479 1,064 924 1,350 1,368 1,332 1,233 2,049 1,421 Federal Reserve Banks 11 Own account 0 0 0 0 0 0 0 0 0 00 00 1? Foreign correspondents 937 1,317 965 1,493 1,066 1,141 1,291 1,507 1,571 1,560 1,333 13 Others 56,279 50,234 58,658 56,052 52,473 43,604 44,475 42,271 40,806 40,821 39,770 14 Imports into United States 15,147 14,670 16,483 14,984 15,651 13,413 13,993 14,801 13,691 13,188 1122,,772233 15 Exports from United States 13,204 12,960 15,227 14,410 13,683 12,610 12,727 12,511 12,186 12,221 11,889 16 All other 40,062 37,344 38,855 37,237 33,638 27,922 28,046 26,438 26,129 26,915 25,856 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— 8.75 1989— July ... 8.00 1988 9.32 Feb. .. 8.51 Aug. .. 8.25 1989 10.87 8.50 Sept. .. 8.75 8.50 Oct. ... 9.25 1987— Jan. 7.50 8.84 9.00 Feb. 7.50 June .. 9.00 Dec. .. 8.75 Mar. 7.50 July ... 9.29 Apr. 7.75 Aug. .. 9.84 1990— 8.50 May 8.14 Sept. .. 10.00 Feb. .. 9.00 June 8.25 Oct. ... 10.00 9.50 July 8.25 Nov. .. 10.05 10.00 Aug. 8.25 Dec. .. 10.50 May . 10.50 Sept. 8.70 Oct. 9.07 1989— 10.50 July ... 11.00 Nov. 8.78 Feb. .. 10.93 Aug. .. 11.50 Dec. 8.75 11.50 Sept. .. 11.00 Apr. . 11.50 Oct. ... 10.50 11.50 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 Nonfinancial Statistics • January 1991 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 July Aug. Sept. Oct. Sept. 28 Oct. 5 Oct. 12 Oct. 19 Oct. 26 MONEY MARKET RATES 1 Federal funds1,2,3 6.66 7.57 9.21 8.15 8.13 8.20 8.11 8.26 8.23 8.20 7.96 7.99 2 Discount window boirowing ' 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 8.09 7.99 8.09 8.04 8.26 8.06 8.10 8.09 8.02 4 3-month 6.82 7.66 8.99 7.99 7.88 7.96 7.98 8.13 7.94 8.00 8.04 8.01 5 6-month 6.85 7.68 8.80 7.90 7.77 7.83 7.81 8.01 7.80 7.85 7.86 7.81 Finance paper, directly placed3,4,6 6 1-month 6.61 7.44 8.99 7.99 7.88 7.98 7.92 8.08 7.96 7.99 7.98 7.89 7 3-month 6.54 7.38 8.72 7.87 7.69 7.74 7.80 7.82 7.78 7.80 7.87 7.80 8 6-month 6.37 7.14 8.16 7.66 7.46 7.50 7.50 7.55 7.50 7.51 7.54 7.51 Bankers acceptances ,4,7 9 3-month 6.75 7.56 8.87 7.86 7.75 7.83 7.85 8.02 7.80 7.97 7.92 7.82 10 6-month 6.78 7.60 8.67 7.73 7.64 7.70 7.67 7.89 7.60 7.77 7.73 7.64 Certificates of deposit, secondary market3,8 11 1-month 6.75 7.59 9.11 8.09 7.98 8.08 8.03 8.25 8.02 8.10 8.08 8.02 12 3-month 6.87 7.73 9.09 8.10 7.97 8.06 8.06 8.24 8.02 8.11 8.11 8.05 13 6-month 7.01 7.91 9.08 8.12 7.99 8.06 8.05 8.25 8.02 8.10 8.10 8.05 14 Eurodollar deposits, 3-month3,9 7.07 7.85 9.16 8.09 7.99 8.07 8.06 8.24 8.11 8.09 8.13 8.09 U.S. Treasury bills Secondary market3'4 15 3-month 5.78 6.67 8.11 7.62 7.45 7.36 7.17 7.29 7.13 7.16 7.20 7.19 16 6-month 6.03 6.91 8.03 7.52 7.38 7.32 7.16 7.30 7.14 7.18 7.20 7.15 17 1-year 6.33 7.13 7.92 7.40 7.26 7.24 7.06 7.25 7.07 7.12 7.09 7.02 Auction average3' '12 18 3-month 5.82 6.68 8.12 7.66 7.44 7.38 7.19 7.32 7.18 7.19 7.18 7.20 19 6-month 6.05 6.92 8.04 7.57 7.36 7.33 7.20 7.33 7.21 7.21 7.22 7.16 201 -YEAR 6.33 7.17 7.91 7.52 7.37 7.25 7.01 7.25 n.a. n.a. n.a. 7.01 Capital Market Rates U.S. Treasury notes and bonds Constant maturities 21 1-year 6.77 7.65 8.53 7.94 7.78 7.76 7.55 7.79 7.58 7.62 7.58 7.50 22 2-year 7.42 8.10 8.57 8.16 8.06 8.08 7.88 8.12 7.88 7.97 7.90 7.83 23 3-year 7.68 8.26 8.55 8.26 8.22 8.27 8.07 8.33 8.07 8.18 8.10 7.99 24 5-year 7.94 8.47 8.50 8.33 8.44 8.51 8.33 8.58 8.33 8.47 8.34 8.24 25 7-year 8.23 8.71 8.52 8.46 8.64 8.79 8.59 8.85 8.59 8.75 8.61 8.50 26 10-year 8.39 8.85 8.49 8.47 8.75 8.89 8.72 8.96 8.69 8.87 8.74 8.64 27 30-year 8.59 8.96 8.45 8.50 8.86 9.03 8.86 9.10 8.83 9.02 8.88 8.77 Composite14 28 Over 10 years (long-term) 8.64 8.98 8.58 8.64 8.97 9.11 8.93 9.17 8.90 9.09 8.94 8.84 State and local notes and bonds Moody's series15 29 Aaa 7.14 7.36 7.00 6.96 6.99 7.18 7.23 7.40 7.35 7.20 7.27 7.12 30 Baa 8.17 7.83 7.40 7.13 7.21 7.48 7.43 7.80 7.50 7.40 7.44 7.39 31 Bond Buyer series16 7.63 7.68 7.23 7.19 7.32 7.43 7.49 7.53 7.48 7.56 7.48 7.43 Corporate bonds Seasoned issues17 32 All industries 9.91 10.18 9.66 9.65 9.84 10.02 10.03 10.11 9.99 10.06 10.07 10.00 33 Aaa 9.38 9.71 9.26 9.24 9.41 9.56 9.53 9.63 9.54 9.59 9.57 9.45 34 Aa 9.68 9.94 9.46 9.47 9.63 9.77 9.77 9.87 9.74 9.82 9.81 9.74 35 A 9.99 10.24 9.74 9.69 9.89 10.09 10.06 10.16 10.04 10.08 10.09 10.05 36 Baa 10.58 10.83 10.18 10.20 10.41 10.64 10.74 10.76 10.65 10.74 10.79 10.75 37 A-rated, recently offered utility bonds18 9.96 10.20 9.79 9.96 10.29 10.28 10.23 10.25 10.16 10.34 10.23 10.20 MEMO: Dividend/price ratio 38 Preferred stocks 8.37 9.23 9.05 8.94 8.97 9.05 9.10 9.13 9.09 9.20 9.15 9.10 39 Common stocks 3.08 3.64 3.45 3.37 3.65 3.85 4.01 4.03 3.94 4.09 4.10 3.91 1. The daily effective federal funds rate is a weighted average of rates on 13. Yields on actively traded issues adjusted to constant maturities. Source: trades through N.Y. brokers. U.S. Treasury. 2. Weekly figures are averages of 7 calendar days ending on Wednesday of the 14. Unweighted average of rates on all outstanding bonds neither due nor current week; monthly figures include each calendar day in the month. callable in less than 10 years, including one very low yielding "flower"bond. 3. Annualized using a 360-day year or bank interest. 15. General obligation based on Thursday figures; Moody's Investors Service. 4. Quoted on a discount basis. 16. General obligations only, with 20 years to maturity, issued by 20 state and 5. An average of offering rates on commercial paper placed by several leading local governmental units of mixed quality. Based on figures for Thursday. dealers for firms whose bond rating is AA or the equivalent. 17. Daily figures from Moody's Investors Service. Based on yields to maturity 6. An average of offering rates on paper directly placed by finance companies. on selected long-term bonds. 7. Representative closing yields for acceptances of the highest rated money 18. Compilation of the Federal Reserve. This series is an estimate of the yield center banks. on recently-offered, A-rated utility bonds with a 30-year maturity and 5 years of 8. An average of dealer offering rates on nationally traded certificates of call protection. Weekly data are based on Friday quotations. deposit. 19. Standard and Poor's corporate series. Preferred stock ratio based on a 9. Bid rates for Eurodollar deposits at 11 a.m. London time. sample of ten issues: four public utilities, four industrials, one financial, and one 10. One of several base rates used by banks to price short-term business loans. transportation. Common stock ratios on the 500 stocks in the price index. 11. Rate for the Federal Reserve Bank of New York. NOTE. These data also appear in the Board's H.15 (519) and G. 13 (415) releases. 12. Auction date for daily data; weekly and monthly averages computed on an For address, see inside front cover. issue-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.36 STOCK MARKET Selected Statistics 1990 IInnddiiccaattoorr 11998877 11998888 11998899 Feb. Mar. Apr. May June July Aug. Sept. Oct. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 161.78 149.97 180.13 182.55 186.26 185.61 191.35 196.68 196.61 181.45 173.22 168.05 2 Industrial 195.31 180.83 228.04 220.60 226.14 226.86 234.85 242.42 245.86 226.73 216.81 208.58 3 Transportation 140.52 134.09 174.90 166.69 175.08 173.54 173.53 177.37 173.18 147.41 136.95 131.99 4 Utility 74.29 72.22 94.33 92.15 92.99 91.92 93.29 93.65 89.85 85.81 83.30 87.27 5 Finance 146.48 127.41 162.01 142.68 143.14 138.57 142.94 147.93 143.11 128.14 118.59 108.01 6 Standard & Poor's Corporation (1941-43 = 10)1 287.00 265.88 323.05 330.45 338.47 338.18 350.25 360.39 360.03 330.75 315.41 307.12 7 American Stock Exchange (Aug. 31, 1973 = 50? 316.78 295.08 356.67 355.30 360.77 353.32 353.82 361.62 359.09 333.49 318.53 296.67 Volume of trading (thousands of shares) 8 New York Stock Exchange 188,922 161,386 165,568 155,960 149,240 140,062 163,486 153,634 160,490 174,446 142,054 159,590 9 American Stock Exchange 13,832 9,955 13,124 13,735 15,133 13,961 14,005 12,421 12,529 15,881 11,668 11,294 Customer financing (end-of-period balances, in millions of dollars) 10 Margin credit at broker-dealers3 31,990 32,740 34,320 31,480 30,760 31,060 31,600 31,720 32,130 30,350 29,640 28,650 Free credit balances at brokers4 11 Margin-account 4,750 5,660 7,040 6,575 6,525 6,465 6,215 6,490 6,385 7,140 7,285 7,245 12 Cash-account 15,640 16,595 18,505 16,200 16,510 15,375 15,470 15,625 17,035 16,745 16,185 15,820 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June i , 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 Nonfinancial Statistics • January 1991 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1989 1990 AAccccoouunntt 11998877 11998888 Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. SAIF-insured institutions 1 Assets 1,250,855 1,350,500 1,277,191 1,249,055 l,236,517r 1,225,087' 1,223,350' 1,210,351' 1,197,828' 1,174,632 1,162,605 2 Mortgages 721,593 764,513 745,091 733,729 727,559' 721,450 717,687 715,416' 708,538' 691,244 689,700 3 Mortgage-backed securities 201,828 221144,,558877 176,386 170,532 169,414 167,26C 167,683 166,167' 165,725' 159,172 157,113 4 Contra-assets to mortgage assets1 . 42,344 37,950 24,976 25,457 24,162R 22,729' 23,073 21,991' 21,977' 20,344 23,390 5 Commercial loans 23,163 33,889 32,344 32,150 31,91T 31,770' 31,069 30,931' 30,352 28,753 28,482 6 Consumer loans 57,902 61,922 59,372 58,685 57,321' 56,821 56,805' 56,639' 55,658 55,171 54,655 7 Contra-assets to nonmortgage loans . 3,467 3,056 3,194 3,592 2,251' 2,279 2,476' 2,229 1,766 1,976 1,966 8 Cash and investment securities 169,717 186,986 172,465 166,053 160,519' 157,314' 162,313 153,346' 152,393 155,688 149,368 n.a. 9 Other3 122,462 129,610 119,704 116,955 116,206' 115,480' 113,341' 112,071' 108,904' 106,924 108,643 10 Liabilities and net worth . 1,250,855 1,350,500 1,277,191 1,249,055 1,236,517' 1,225,087' 1,223,350' 1,210,351' 1,197,828' 1,174,632 1,162,605 11 Savings capital 932,616 971,700 946,655 945,656 933,835' 926,439 929,910 916,069' 902,642' 890,497 88C1 ,963 12 Borrowed money 249,917 299,400 268,462 252,230 252,942 248,135' 246,875 246,646' 241,983 230,169 222,441 13 FHLBB 116,363 134,168 127,671 124,577 121,732 120,633 117,489 115,620 114,047 109,733 106,127 14 Other 133,554 165,232 140,791 127,653 131,210 127,502' 129,386 131,026' 127,936 120,436 116,314 15 Other 21,941 24,216 31,991 27,556 26,987' 28,096' 25,997 27,352' 28,767' 25,166 26,746 16 Net worth n.a. n.a. 30,083 23,612 22,754' 22,417' 20,568' 20,296' 24,361' 28,805 28,455 SAIF-insured federal savings banks 17 Assets 284,270 425,966 499,995 498,522 583,063 581,983 595,644 593,345 18 Mortgages 116611,,992266 223300,,773344 282,510 283,844 331,503 330,366 332,995 333,300 19 Mortgage-backed securities 45,826 64,957 71,204 70,499 76,765 77,016 80,059 81,030 20 Contra-assets to mortgage assets1 . 9,100 13,140 13,216 13,548 12,309 11,615 11,844 11,590 21 Commercial loans 6,504 16,731 18,172 18,143 20,310 20,244 20,366 20,324 22 Consumer loans 17,696 24,222 28,079 28,212 20,310 20,244 20,365 20,324 23 Contra-assets to nonmortgage loans . 678 889 1,082 1,193 949 986 1,001 908 24 Finance leases plus interest 591 880 1,092 1,101 n.a. n.a. n.a. n.a. n. a. n.a. n.a. n.a. 25 Cash and investment ... 35,347 61,029 65,191 64,538 70,742 70,054 76,158 72,618 26 Other 24,069 35,412 40,852 39,981 45,444 46,238 46,371 46,180 27 Liabilities and net worth . 284,270 425,966 499,995 498,522 583,063 581,983 595,644 593,345 28 Savings capital 203,196 298,197 355,874 360,547 418,555 419,246 433,000 429,469 29 Borrowed money 60,716 99,286 111,369 108,448 126,398 124,171 126,253 126,240 30 FHLBB 29,617 46,265 56,842 57,032 63,516 63,026 63,550 63,120 31 Other 31,099 53,021 54,527 51,416 62,882 61,145 62,703 63,120 32 Other 5,324 8,075 10,749 9,041 9,770 10,347 9,435 9,982 33 Net worth 15,034 20,218 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 A23 1.37—Continued 1989 1990 AAccccoouunntt 11998877 11998888 Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Credit unions4 34 Total assets/liabilities and capital 174,593 182,856 183,688 183,301 186,119 192,718 193,208 195,020 195,302 194,523 35 Federal 114,566 119,682 120,666 120,489 122,885 126,690 127,250 128,648 128,142 127,564 36 State 60,027 63,174 63,022 62,812 63,234 66,028 65,958 66,372 67,160 66,959 37 Loans outstanding n. a. 113,191 122,899 122,608 122,332 121,968 121,660 122,616 123,205 123,968 124,343 n a. 38 Federal 73,766 80,601 80,272 80,041 79,715 79,407 80,205 80,550 81,063 81,063 39 State 39,425 42,298 42,336 42,291 42,253 42,253 42,411 42,655 42,905 43,280 40 Savings 159,010 165,533 167,371 166,629 168,609 175,942 175,745 176,701 178,127 176,360 41 Federal 104,431 108,319 109,653 109,818 111,246 115,714 115,554 116,402 116,717 115,305 42 State 54,579 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 1,288,728 1,299,756 Securities 44 Government 84,426 84,051 77,092 77,297 45 United States5 57,078 58,564 52,203 52,517 46 State and local 10,681 9,136 9,013 9,028 47 Foreign6 16,667 16,351 15,876 15,752 48 Business 569,199 660,416 755,589 764,521 n.a. n.a. n.a. n.a. n.a. n. a. n.a. n.a. 49 Bonds 472,684 556,043 632,563 638,907 50 Stocks 96,515 104,373 123,026 125,614 51 Mortgages 203,545 232,863 252,070 254,215 52 Real estate 34,172 37,371 39,834 39,908 53 Policy loans 53,626 54,236 57,183 57,439 54 Other assets 89,586 93,358 106,960 106,376 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 Nonfinancial Statistics • January 1991 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 May June July Aug. Sept. Oct. U.S. budget1 1 Receipts, total 908,166 990,701 1,031,463 69,212 110,614 72,357 78,486 102,874 78,711 2 On-budget 666,675 727,035 749,809 45,514 83,717 50,446 56,284 78,542 58,751 3 Off-budget 241,491 263,666 281,654 23,698 26,897 21,911 22,202 24,332 19,960 4 Outlays, total 1,063,318 1,144,020 1,251,850 111,693 121,719 98,280 131,206 82,026 110,173 5 On-budget 860,627 933,109 1,026,785 91,742 105,759 79,833 89,717 80,613 91,261 6 Off-budget 202,691 210,911 225,065 19,951 15,960 18,447 41,489 1,413 18,912 7 Surplus, or deficit (-), total -155,152 -153,319 -220,387 -42,482 -11,105 -25,924 -52,719 20,848 -31,462 8 On-budget -193,952 -206,074 -276,976 -46,229 -22,042 -29,388 -33,432 -2,071 -32,510 9 Off-budget 38,800 52,755 56,589 3,747 10,937 3,464 -19,287 22,919 1,048 Source of financing (total) 10 Borrowing from the public 166,139 141,806 264,453 23,380 23,520 24,230 47,329 -2,595 32,265 11 Operating cash (decrease, or increase (-)) . —7,962 3,425 818 25,594 -20,916 9,862 2,433 17,832 4,720 12 Other ^ -3,025 8,088 -44,884 -6,492 8,501 -8,168 2,957 -421 -5,523 MEMO 13 Treasury operating balance (level, end of period) 44,398 40,973 40,155 13,702 34,618 24,756 22,323 40,155 35,435 14 Federal Reserve Banks 13,023 13,452 7,638 4,426 5,470 6,369 4,453 7,638 7,607 15 Tax and loan accounts 31,375 27,521 32,517 9,276 29,148 18,387 17,869 32,517 27,828 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 Fiscal Fiscal Source or type year year 1988 1989 1990 1989 1990 H2 HI H2 HI Aug. Sept. Oct. RECEIPTS 1 All sources 990,701 1,031,462 449,330 527,574 470,329 548,977 78,486 102,874 78,711 2 Individual income taxes, net 445,690 466,884 200,300 233,572 218,706 243,087 36,455 46,664 40,691 4 5 6 3 P N R W r o e i e f n t s u h w i n h d i d e e t l n h s d t h ia e l l d E lection Campaign Fund . 3 1 7 6 5 0 1 4 , , , 5 3 8 6 8 3 3 7 6 9 2 3 1 7 9 4 2 0 9 , , , 8 4 1 1 8 8 3 7 9 0 2 1 2 7 9 9 9 , , , 8 1 6 8 8 0 0 6 0 4 1 1 6 2 7 2 1 4 , , , 2 5 2 5 6 3 2 1 3 0 8 1 3 9 7 3 3 , , , 8 3 2 0 9 9 3 8 6 3 1 1 6 1 9 4 7 0 , , , 8 6 2 7 3 1 3 5 8 9 0 3 3 4 1 , , , - 4 6 5 2 5 1 7 9 1 0 7 3 1 0 7 1 , , , 8 4 5 0 2 6 6 0 2 1 3 3 7 , , 8 7 9 6 7 5 3 7 0 0 7 8 Co G R rp e r o f o u r s a n s t d r i s o e n c e i i n p c ts o me taxes 11 1 7 3 , , 0 7 1 2 5 3 11 1 0 6 , , 0 5 1 1 7 0 5 7 6 , , 2 4 5 0 0 9 61 7 , , 5 2 8 5 5 9 5 6 2 , , 8 2 4 6 2 9 5 8 8 , , 3 8 2 3 6 0 2,5 9 6 5 4 6 18 1 , ,5 8 2 6 4 8 2 3 , , 0 6 7 9 7 1 9 Social insurance taxes and contributions net 359,416 380,047 157,603 200,127 162,574 210,476 32,047 31,010 26,598 10 Employment taxes and contributions2 332,859 353,891 144,983 184,569 152,407 195,269 27,919 30,480 25,144 11 Self-employment taxes and contributions3 18,504 21,795 3,032 16,371 1,947 19,017 0 2,638 0 12 Unemployment insurance '22,011 21,635 10,359 13,279 7,909 12,929 3,712 186 1,082 13 Other net receipts4 4,546 4,522 2,262 2,277 2,260 2,278 416 344 373 14 Excise taxes 34,386 35,345 19,299 16,814 16,799 18,153 2,740 2,774 3,011 15 Customs deposits 16,334 16,707 8,107 7,918 8,667 8,096 1,627 1,273 1,528 16 Estate and gift taxes 8,745 11,500 4,054 4,583 4,451 6,442 883 875 1,065 17 Miscellaneous receipts5 22,839 27,470 10,809 10,235 13,704 12,222 3,127 2,934 4,203 OUTLAYS 18 All types 1,144,020 1,251,850 554,089 565,425 587,448R 640,982 131,206 82,026 110,173 19 National defense 303,559 299,335 150,496 148,098 149,613 152,733 28,664 21,497 24,990 2 2 2 2 2 4 3 0 1 2 A I N E G n g n a e t r t n e e u i r r e c r g n r u a y a a l l l t t u i r o s r e c n e s i a o e l n u a c r f c e f , e a s i s r p a s a n c d e , e n a v n i d r o t n e m ch e n n o t logy . 1 1 1 9 3 6 6 2 , , , , , 5 9 7 8 1 4 0 7 3 8 8 2 4 8 2 1 1 1 1 2 1 7 3 4 , , , , , 9 4 0 7 4 9 7 0 6 2 8 0 9 0 0 6 9 2 5 1 , , , , , 9 0 6 8 9 1 2 7 5 6 1 7 2 2 6 9 6 6 2 7 , , , , , 6 5 2 0 2 1 6 2 3 2 1 9 7 8 2 4 5 7 9 1 , , , , , 1 9 0 1 4 3 7 9 8 4 2 1 1 3 9 ' 7 6 6 7 1 , , , , , 4 3 7 9 2 5 4 7 7 1 0 3 0 4 6 ' 1 1 1, , , 3 3 0 1 8 3 3 7 8 3 9 2 ' - 1 1 1 3 , , , 5 9 1 5 6 1 5 3 7 7 7 7 2 1 1 1 , , , 6 7 5 6 4 5 0 1 7 0 6 1 5 9 9 25 Commerce and housing credit 29,091 67,495 19,836 4,129 22,295 38,672' 3,045 12,018 8,590 26 Transportation 27,608 29,495 14,922 12,953 14,982 13,754 2,734 2,608 2,780 27 Community and regional development .. 5,361 8,466 2,690 1,833 4,879 3,987 614 519 912 28 Education, training, employment, and social services 36,694 16,162 18,083 18,663 19,537 3,417 3,660 29 Health 48,390 58,101 23,360 24,078 25,339 29,488 5,585 4,804 5,491 30 Social security and medicare 317,506 346,383 149,017 162,195 162,322 175,997 49,891 8,623 28,339 31 Income security 136,031 148,299 64,978 70,937 67,950 78,475' 13,475 10,206 12,819 32 Veterans benefits and services 30,066 29,112 15,797 14,891 14,864 15,217 3,624 1,208 2,899 33 Administration of justice 9,422 10,076 4,361 4,801 4,963 4,983 866 717 983 34 General government 9,124 10,822 5,137 3,858 4,760 4,916 691 1,406 1,227 35 General-purpose fiscal assistance n.a. n.a. 0 0 n.a. n.a. n.a. n.a. n.a. 36 Net interest6 169,317 183,790 78,317 86,009 87,927 91,155 17,556 15,697 14,744 37 Undistributed offsetting receipts' -37,212 -36,615 -18,771 -18,131 -18,935 -17,688 -2,987 -4,320 -3,222 1. Functional details do not add to total outlays for calendar year data because 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous revisions to monthly totals have not been distributed among functions. Fiscal year receipts. total for outlays does not correspond to calendar year data because revisions from 6. Net interest function includes interest received by trust funds. the Budget have not been fully distributed across months. 7. Consists of rents and royalties on the outer continental shelf and U.S. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. government contributions for employee retirement. 3. Old-age, disability, and hospital insurance. SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of 4. Federal employee retirement contributions and civil service retirement and Receipts and Outlays of the U.S. Government, and the U.S. Office of Managedisability fund. ment and Budget, Budget of the U.S. Government, Fiscal Year 1990. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • January 1991 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 Treasury and other federal agencies, specified SOURCES. Treasury Bulletin and Monthly Statement of the Public Debt of the participation certificates, notes to international lending organizations, and District United States. of Columbia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1989 1990 TTyyppee aanndd hhoollddeerr 11998866 11998877 11998888 11998899 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 5 927.5 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 issues2 4.7 4.0 6.6 6.8 6.8 37.1 36.4 36.0 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. 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 Transactions1 Millions of dollars, daily averages 1990 1990 July' Aug.' Sept Sept. 5' Sept. 12' Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 IMMEDIATE TRANSACTIONS By type of security U.S. government securities 1 Bills 27,936 30,596 31,542 27,525 27,151 34,128 35,174 32,996 25,978 27,997 31,295 Coupon securities 2 Maturing in less than 3.5 years . 25,574 32,907 29,399 24,964 26,336 28,841 33,875 33,909 30,186 27,030 23,708 3 Maturing in 3.5 to 7.5 years 24,612 24,495 22,876 20,567 20,658 23,187 23,753 28,914 32,605 24,794 22,529 4 Maturing in 7.5 to 15 years 9,406 13,751 9,708 9,004 9,572 10,294 8,987 11,437 12,709 10,986 11,436 5 Maturing in 15 years or more... 14,235 15,476 10,850 8,012 11,443 11,003 10,759 13,472 15,301 14,882 12,318 Federal agency securities Debt 6 Maturing in less than 3.5 years . 4,759 4,015 4,535 6,137 3,392 4,298 4,516 5,630 4,365 3,856 3,843 7 Maturing in 3.5 to 7.5 years — 698 560 449 322 496 550 360 492 651 422 605 8 Maturing in 7.5 years or more ., 1,023 789 531 562 587 463 443 733 879 1,751 413 Mortgage-backed 9 Pass-throughs 7,202 6,992 9,146 6,614 8,551 9,178 10,251 11,595 9,897 7,206 7,805 10 All others3 1,502 1,415 1,149 1,098 1,207 1,429 777 1,313 1,189 1,215 955 By type of counterparty Primary dealers and brokers 11 U.S. government securities 63,558 73,154 66,111 56,218 61,715 67,611 71,211 75,446 73,747 67,902 65,864 Federal agency 12 Debt securities 2,243 1,685 1,773 2,097 1,607 1,715 1,576 2,339 2,207 2,373 1,543 13 Mortgage backed securities. 4,118 3,884 5,081 3,737 5,064 4,291 5,986 6,854 4,566 3,112 4,655 Customers 14 U.S. government securities 38,205 44,072 38,262 33,854 33,446 39,841 41,338 45,282 43,032 37,787 35,421 Federal agency 15 Debt securities 4,237 3,679 3,742 4,924 2,869 3,595 3,742 4,517 3,688 3,656 3,318 16 Mortgage-backed securities. 4,586 4,523 5,214 3,975 4,694 6,316 5,042 6,054 6,520 5,309 4,106 FUTURE AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. government securities 17 Bills 3,019 4,595 4,273 3,018 4,288 5,256 3,956 4,451 2,736 3,982 2,792 Coupon securities 18 Maturing in less than 3.5 years . 1,314 1,696 1,198 933 1,132 1,242 1,242 1,545 1,232 1,464 1,385 19 Maturing in 3.5 to 7.5 years 641 691 463 585 230 542 394 839 697 360 501 20 Maturing in 7.5 to 15 years 850 1,381 925 854 993 1,014 690 1,231 873 912 795 21 Maturing in 15 years or more... 6,202 10,284 7,731 6,815 8,104 8,038 6,866 9,571 9,516 9,604 9,438 Federal agency securities Debt 22 Maturing in less than 3.5 years 93 47 31 17 40 46 29 143 79 23 Maturing in 3.5 to 7.5 years 33 58 113 240 167 25 38 37 148 24 Maturing in 7.5 years or more . 156 21 45 7 23 84 150 182 21 Mortgage-backed 25 Pass-throughs 8,263 8,519 7,607 4,947 7,420 9,207 7,891 7,351 10,948 6,966 26 All others3 1,513 1,462 999 990 902 1,277 510 1,786 274 354 1,051 OPTION TRANSACTIONS6 By type of underlying securities U.S. government securities 27 Bills 3 0 0 0 1 30 108 68 Coupon securities 28 Maturing in less than 3.5 years . 407 693 956 809 613 1,056 1,222 1,124 679 704 433 29 Maturing in 3.5 to 7.5 years 340 297 309 455 185 389 267 306 216 257 133 30 Maturing in 7.5 to 15 years 196 315 190 262 194 68 268 179 243 274 140 31 Maturing in 15 years or more... 1,671 1,918 1,968 2,118 1,523 1,992 2,142 2,612 2,704 Federal agency securities Debt 32 Maturing in less than 3.5 years 33 Maturing in 3.5 to 7.5 years 34 Maturing in 7.5 years or more .. Mortgage-backed 35 Pass-throughs 489 524 383 254 590 335 346 268 927 370 371 36 All others3 0 0 7 0 24 0 2 3 0 0 2 1. Transactions are market purchases and sales of securities as reported to the Stripped securities are reported at market value by maturity of coupon or corpus. Federal Reserve Bank of New York by the U.S. government securities dealers on 3. Includes securities such as CMOs, REMlCs; IOS, and POs. its published list of primary dealers. Averages for transactions are based on the 4. Futures transactions are standardized agreements arranged on an exchange. number of trading days in the period. Immediate, forward, and future transactions Forward transactions are agreements made in the over-the-counter market that are reported at principal value, which does not include accrued interest; option specify delayed delivery. All futures transactions are included regardless of time transactions are reported at the face value of the underlying securities. to delivery. Forward contracts for U.S. government securities and federal agency Dealers report cumulative transactions for each week ending Wednesday. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • January 1991 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1990 1990 IItteemm July Aug. Sept. Sept. 5 Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 Positions2 NET IMMEDIATE3 By type of security U.S. government securities 1 Bills 3,032 6,815 3,664 5,733 7,840 1,870 2,183 -499 2,025 3,775 2,556 6,284 Coupon securities 2 Maturing in less than 3.5 years . 3,183 5,395 -352 3,685 1,513 -3,123 -1,919 -1,071 -495 -3,553 -3,097 -1,326 3 Maturing in 3.5 to 7.5 years.... 3,781 -2,645 -5,090 -2,829 -4,903 -6,286 -5,421 -5,570 -6,369 -5,172 -5,884 -6,250 4 Maturing in 7.5 to 15 years -6,018 -5,740 -7,271 -6,987 -7,016 -6,780 -8,039 -7,591 -6,629 -7,396 -6,662 -7,253 5 Maturing in 15 years or more .. -10,969 -12,241 -14,195 -14,352 -14,161 -14,008 -14,317 -14,173 -15,057 -15,085 -15,399 -16,483 Federal agency securities Debt 6 Maturing in less than 3.5 years . 3,166 4,136 4,047 2,661 3,388 4,597 5,020 4,269 4,672 4,185 4,464 3,314 7 Maturing in 3.5 to 7.5 years 1,446 1,422 1,797 1,799 1,908 1,907 1,632 1,698 1,780 1,845 1,827 1,512 8 Maturing in 7.5 years or more.. 2,899 2,3% 2,128 2,292 2,428 1,911 1,662 2,593 2,612 4,961 4,898 4,640 Mortgage-backed 9 Pass-throughs 17,146 16,696 16,330 13,2% 18,592 19,930 14,360 13,311 17,770 22,122 19,287 14,324 10 All others Other money market instruments 11 Certificates of deposit 2,877 3,129 2,953 3,600 2,773 2,572 2,903 3,210 2,889 2,568 2,171 2,327 12 Commercial paper 6,146 7,489 7,307 9,425 7,934 6,674 5,638 7,590 7,484 6,093 4,769 6,845 13 Bankers'acceptances 1,030 1,193 954 1,148 946 1,219 605 873 1,122 1,017 1,195 1,668 FUTURE AND FORWARD5 By type of deliverable security U.S. government securities 14 Bills -8,317 -15,495 -11,881 -11,0% -10,398 -12,907 -12,482 -12,607 -13,769 -18,581 -18,855 -19,207 Coupon securities 15 Maturing in less than 3.5 years . -771 -616 -573 -834 -71 -468 -678 -1,124 -935 -170 -705 -742 16 Maturing in 3.5 to 7.5 years -1,909 -1,728 -1,403 -878 -888 -1,540 -1,822 -1,984 -1,671 -1,6% -1,559 -1,050 17 Maturing in 7.5 to 15 years -798 327 143 159 -50 481 588 -913 -981 -1,067 -1,0% -814 18 Maturing in 15 years or more .. -5,098 -2,405 90 -1,152 91 801 948 -1,103 -751 -2,323 -3,342 -3,103 Federal agency securities Debt 19 Maturing in less than 3.5 years . -69 167 132 177 174 113 73 141 109 123 264 180 20 Maturing in 3.5 to 7.5 years -104 71 76 5 194 68 29 58 79 115 176 29 21 Maturing in 7.5 years or more.. 162 -52 100 -21 -9 18 287 256 163 22 71 156 Mortgage-backed 22 Pass-throughs -11,755 -7,823 -7,704 -4,989 -10,152 -11,365 -5,536 -4,199 -8,221 -11,498 -8,%1 -5,919 23 All others Other money market instruments 24 Certificates of deposit 35,615 47,770 56,474 41,825 52,817 50,326 68,577 70,761 79,981 86,674 92,928 91,599 25 Commercial paper -3 26 Bankers' acceptances Financing6 Reverse repurchase agreements 27 Overnight and continuing 148,001 157,064 159,515 156,881 154,733 167,521 149,268 175,098 169,662 166,622 177,104 188,134 28 Term 217,735 229,319 219,855 212,367 220,311 222,602 225,741 213,308 222,431 225,827 230,502 231,045 Reverse repurchase agreements 29 Overnight and continuing 223,101r 234,871 235,588 239,080 231,513 248,020 222,741 239,083 243,629 246,194 256,061 250,874 30 Term 179,599' 189,849 174,610 165,155 173,865 178,720 180,331 170,528 178,431 181,163 191,173 189,769 Securities borrowed 31 Overnight and continuing 43,153' 45,914' 50,783 49,588' 49,804 49,928 53,861 50,103 51,733 49,279 48,948 50,536 37. Term 13,242' 1133,,668866'' 18,003 15,827' 16,706 17,994 20,710 18,270 18,440 18,916 19,965 19,798 Securities lent 33 Overnight and continuing 19,262' 18,951' 22,156 20,651' 21,248 21,959 23,911 22,899 22,640 20,840 19,%2 19,286 34 Term 1,286r 478' 1,062 355' 563 1,049 2,484 356 518 659 765 763 Collateralized loans 35 Overnight and continuing 4,503 5,058 4,870 8,051 4,203 4,893 3,342 4,694 4,757 4,206 3,954 4,652 36 Term 824 691 863 737 1,197 836 757 665 553 1,169 1,820 1,048 MEMO: Matched book7 Reverse repurchases 37 Overnight and continuing 92,712 100,242 102,856 100,852 100,590 108,545 95,866 111,606 109,117 105,657 112,100 114,7% 38 Term 177,648 184,789 178,083 174,209 180,126 179,354 181,130 171,794 177,459 177,937 184,982 180,545 39 Overnight and continuing 124,62c 131,250 137,034 139,395 137,282 143,847 126,605 139,980 140,387 138,181 142,267 145,099 40 Term 139,666' 148,876 137,764 130,087 137,627 142,581 141,782 132,135 140,675 139,076 147,304 147,338 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 May June July Aug. Sept. 1 Federal and federally sponsored agencies 307,361 341,386 381,498 411,805 424,082 422,261 420,529 421,554 421,308 2 Federal agencies 36,958 37,981 35,668 35,664 42,482 42,015 41,978 42,323 42,920 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 11,150 11,150 11,150 11,346 5 Federal Housing Administration4 138 183 150 328 365 394 281 316 357 6 Government National Mortgage Association participation certificates5 2,165 1,615 0 0 0 0 0 0 0 7 Postal Service6 3,104 6,103 6,142 6,445 6,148 6,148 6,148 6,948 6,948 8 Tennessee Valley Authority 17,222 18,089 18,335 17,899 24,945 24,316 24,392 23,902 24,262 9 United States Railway Association6 85 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 270,553 303,405 345,830 375,407 381,600 380,245 378,551 379,231 378,388 11 Federal Home Loan Banks 88,758 115,727 135,836 136,087 125,515 123,021 119,692 118,380 116,336 12 Federal Home Loan Mortgage Corporation 13,589 17,645 22,797 26,148 30,444 31,049 27,716 27,589 27,985 13 Federal National Mortgage Association 93,563 97,057 105,459 116,064 118,108 117,964 118,356 119,248 118,826 14 Farm Credit Banks8 62,478 55,275 53,127 54,864 53,795 53,451 53,175 54,015 54,382 15 Student Loan Marketing Association9 12,171 16,503 22,073 28,705 31,696 32,392 32,218 32,605 33,376 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 1,172 1,172 1,172 1,261 18 Resolution Funding Corporation12 0 0 0 4,522 13,026 13,026 18,052 18,052 18,052 MEMO 19 Federal Financing Bank debt13 157,510 152,417 142,850 134,873 141,536 157,685 162,443 166,017 173,318 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 14,205 11,972 11,027 10,979 11,011 11,144 11,144 11,144 11,340 21 Postal Service6 2,854 5,853 5,892 6,195 5,898 5,898 5,898 6,698 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 15,565 14,936 15,012 14,522 14,882 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 51,591 51,901 52,171 52,211 52,049 26 Rural Electrification Administration 21,680 21,191 19,246 19,265 19,182 19,168 19,066 19,043 19,042 27 Other 32,545 32,078 26,324 23,724 33,409 49,758 54,272 57,519 64,427 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 • January 1991 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1990 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11998877 11998888 11998899 Mar. Apr. May June July Aug. Sept.' Oct. 1 All issues, new and refunding1 102,407 114,522 113,646 9,880 8,582 12,032 13,625 8,731 10,035 13,930 8,521 Type of issue 2 General obligation 30,589 30,312 35,774 3,199 3,386 3,166 4,426 2,847 3,358 3,763 3,435 3 Revenue 71,818 84,210 77,873 6,681 5,196 8,866 9,199 5,884 6,677 10,167 5,086 Type of issuer 4 State 10,102 8,830 11,819 707 1,387 1,003 1,090 1,442 1,610 22,,331177 1,470 5 Special district and statutory authority2 65,460 74,409 71,022 6,247 4,366 7,485 8,556 5,670 6,692 88,,118888 4,521 6 Municipalities, counties, and townships 26,845 31,193 30,805 2,926 2,243 3,544 3,977 1,742 2,195 3,425 2,530 7 Issues for new capital, total 56,789 79,665 84,062 6,667 7,744 10,486 10,974 7,442 9,346 12,713 8,043 Use of proceeds 8 Education 9,524 15,021 15,133 1,018 1,054 1,694 2,612 2,212 1,389 1,472 1,614 9 Transportation 3,677 6,825 6,870 1,158 1,215 1,375 1,592 789 931 920 1,043 10 Utilities and conservation 7,912 8,4% 11,427 502 991 1,232 2,159 719 1,015 687 731 11 Social welfare 11,106 19,027 16,703 1,425 2,664 2,628 2,199 2,012 3,508' 3,995 1,343 12 Industrial aid 7,474 5,624 5,036 432 232 681 693 434 495 674 386 13 Other purposes 18,020 24,672 28,894 2,132 2,426 2,155 4,366 2,688 3,161 4,965 2,926 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 ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11998877 11998888 11998899 Feb. Mar. Apr. May June July Aug. Sept. 1 All issues1 392,261' 410,713' 376,171' 13,811 21,199 15,346 25,204' 28,90c 19,975' 14,052' 14,126 2 Bonds2 325,753' 352,912' 318,300' 10,892 17,405 13,590 22,853' 26,027' 17,728' 13,244' 13,700 Type of offering 3 Public, domestic 209,377' 202,034' 180,913' 9,985 15,498 12,669 19,703' 22,816' 14,423' 12,048' 11,800 4 Private placement, domestic3 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 22,758 907 1,907 921 3,150 3,211 3,305 1,1%' 1,900 Industry group 6 Manufacturing 60,657 70,575' 76,345 2,488 3,3% 3,612 2,58c 3,812' 1,838' 775' 2,077 7 Commercial and miscellaneous 49,773 62,089' 49,307 157 263 683 1,171 2,999 1,728' 223' 117 8 Transportation 11,974 10,075 10,105' 53 386 194 927 1,001 270 500 533 9 Public utility 22,991' 19,528' 17,059' 1,057 317 435 1,004 2,561 703' 835' 1,000 10 Communication 7,340 5,952 8,503 35 704 500 326 411 137' 35' 268 11 Real estate and financial 173,018' 184,692' 156,983' 7,103 12,340 8,167 16,845' 15,243' 13,052' 10,876' 9,705 12 Stocks2 66,508 57,802 57,870 2,919 3,794 1,756 2,351 2,873 2,247 808 426 Type 13 Preferred 10,123 6,544 6,194 167 1,028 193 665 310 350 145 100 14 Common 43,225 35,911 26,030 2,752 2,767 1,564 1,686 2,563 1,897 663 326 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 9,308 431 521 253 86 265 348 125 0 17 Commercial and miscellaneous 12,888 8,449 7,446 952 552 666 706 748 507 251 172 18 Transportation 2,439 1,535 1,929 0 0 0 22 21 0 71 0 19 Public utility 4,322 1,898 3,090 582 533 219 471 0 173 139 39 20 Communication 1,458 515 1,904 0 0 0 380 29 0 0 0 21 Real estate and financial 31,521 37,798 34,028 954 2,188 619 686 1,799 862 218 215 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 Feb. Mar. Apr. May June July Aug. Sept. INVESTMENT COMPANIES1 1 Sales of own shares2 271,237 306,445 26,118 28,817 29,788 27,431 28,301 29,444 29,227 23,408 267,451 272,165 20,978 23,777 27,306 23,337 23,340 22,933 24,837 21,068 3 Net sales 3,786 34,280 5,140 5,040 2,482 4,094 4,961 6,511 4,390 2,340 4 Assets4 472,297 553,871 542,725 549,638 542,061 574,302 582,190 586,526 554,722 535,787 45,090 44,780 51,356 50,454 55,213 52,741 49,861 48,944 51,103 51,256 6 Other 427,207 509,091 491,369 499,184 486,848 521,560 532,329 537,582 503,619 486,580 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 Q4 Q1 Q2 Q3 Q4 Q1 Q2 r Q3 1 Corporate profits with inventory valuation and capital consumption adjustment 308.3 337.6 311.6 349.6 327.3 321.4 306.7 290.9 296.8 306.6 229944..99 2 Profits before tax 275.3 316.7 307.7 331.1 335.1 314.6 291.4 289.8 296.9 299.3 315.4 3 Profits tax liability 126.9 136.2 135.1 142.1 148.3 140.8 127.8 123.5 129.9 133.1 138.1 4 Profits after tax 148.4 180.5 172.6 189.1 186.7 173.8 163.6 166.3 167.1 166.1 177.2 5 Dividends 98.2 110.0 123.5 115.3 119.1 122.1 125.0 127.7 130.3 133.0 135.1 6 Undistributed profits 50.2 70.5 49.1 73.8 67.6 51.7 38.6 38.6 36.8 33.2 42.1 7 Inventory valuation -19.4 -27.0 -21.7 -22.5 -43.0 -23.1 -6.1 -14.5 -11.4 -.5 -22.4 8 Capital consumption adjustment ' 52.4 47.8 25.5 40.9 35.2 29.9 21.4 15.6 11.3 7.7 1.9 Source. Survey of Current Business (Department of Commerce). 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment • Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1989 1990 IInndduussttrryy 11998888 11998899 11999900 Q1 Q2 Q3 Q4 Q1 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 • January 1991 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period 1989 1990 AAccccoouunntt 11998855 11998866 11998877 Q1 Q2 Q3 Q4 Q1 Q2 Q3 ASSETS Accounts receivable, gross2 1 Consumer 111.9 134.7 141.1 139.1 143.9 146.3 140.8 137.9 138.6 140.9 2 Business 157.5 173.4 207.4 243.3 250.9 246.8 256.0 262.9 274.8 275.4 3 Real estate 28.0 32.6 39.5 45.1 47.1 48.7 48.9 52.1 55.4 57.7 4 Total 297.4 340.6 388.1 427.5 441.9 441.8 445.8 452.8 468.8 474.0 Less: 5 Reserves for unearned income 39.2 41.5 45.3 51.0 52.2 52.9 52.0 51.9 54.3 55.1 6 Reserves for losses 4.9 5.8 6.8 7.4 7.5 7.7 7.7 7.9 8.2 8.6 7 Accounts receivable, net 253.3 293.3 336.0 369.2 382.2 381.3 386.1 393.0 406.3 410.3 8 All other 45.3 58.6 58.3 75.1 81.4 85.2 91.6 92.5 95.5 102.8 9 Total assets 298.6 351.9 394.2 444.3 463.6 466.4 477.6 485.5 501.9 513.1 LIABILITIES 10 Bank loans 18.0 18.6 16.4 11.3 12.1 12.2 14.5 13.9 15.8 15.6 11 Commercial paper 99.2 117.8 128.4 147.8 149.0 147.2 149.5 152.9 152.4 148.6 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. 56.9 59.8 60.3 63.8 70.5 72.8 82.0 15 Not elsewhere classified n.a. n.a. n.a. 133.6 140.5 145.1 147.8 145.7 153.0 156.6 16 All other liabilities 41.5 44.1 52.8 58.1 63.5 61.8 62.6 61.7 66.1 68.7 17 Capital, surplus, and undivided profits 32.8 36.4 31.5 36.6 38.8 39.8 39.4 40.7 41.8 41.6 18 Total liabilities and capital 298.6 351.9 394.2 444.3 463.6 466.4 477.6 485.5 501.9 513.1 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 Change1 Millions of dollars, seasonally adjusted 1990 type Apr. May June July Aug. Sept. 1 Total 205,992 234,578 258,504 262,379 266,859 273,786 277,616 283,043 285,654 Retail financing of installment sales 2 Automotive 36,139 36,957 39,139 39,550 39,245 39,716 38,931 38,610 38,470 3 Equipment 25,075 28,199 29,674 30,115 30,635 30,491 30,623 30,707 30,607 4 Pools of securitized assets2 n.a. n.a. 698 662 622 642 800 987 946 Wholesale 5 Automotive 30,070 32,357 33,074 29,672 29,896 31,815 33,158 34,429 37,082 6 Equipment 5,578 5,954 6,896 9,372 9,429 9,495 9,929 9,812 9,791 7 All other 8,329 9,312 9,918 9,961 9,892 10,043 9,722 9,707 9,567 8 Pools of securitized assets2 n.a. n.a. 0 0 0 0 0 650 863 Leasing 9 Automotive 22,097 24,875 27,074 28,528 28,878 29,575 30,210 30,942 30,453 10 Equipment 43,493 57,658 68,112 69,473 72,715 74,916 76,316 78,714 79,158 11 Pools of securitized assets n.a. n.a. 1,247 1,646 11,,559977 11,,554477 11,,776600 11,,770033 11,,665555 12 Loans on commercial accounts receivable and factored commercial accounts receivable 18,170 18,103 19,081 18,716 18,700 19,869 20,077 19,974 20,538 13 All other business credit 17,042 21,162 23,590 24,685 25,250 25,677 26,089 26,809 26,495 Net change (during period) 14 33,866 22,434 22,580 717 4,480 6,927 3,830 5,427 2,611 Retail financing of installment sales 15 Automotive 9,925 819 2,182 286 -305 471 -785 -321 -141 16 Equipment 2,056 1,386 1,475 327 520 -144 132 84 -100 17 Pools of seguritized assets n.a. n.a. -26 -42 -40 20 158 187 -41 Wholesale 18 Automotive 7,158 2,288 716 -291 224 1,919 1,343 1,271 2,653 19 Equipment 250 377 940 -37 57 67 434 -118 -21 20 All other 1,293 983 605 -69 -69 151 -321 -16 -110 21 Pools of securitized assets2 n.a. n.a. 0 0 0 0 0 650 213 Leasing 22 Automotive 2,174 2,777 2,201 203 351 696 636 731 -488 23 Equipment 5,271 9,752 9,187 718 3,243 2,201 1,400 2,398 444 24 Pools of securitized assets2 n.a. n.a. 526 213 -49 -50 213 -57 -48 25 Loans on commercial accounts receivable and factored commercial accounts receivable 2,245 -65 979 -711 -16 1,169 208 -103 564 26 All other business credit 3,498 4,119 3,796 120 565 427 412 721 -314 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 Apr. May June July Aug. Sept. Oct. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes 1 Purchase price (thousands of dollars) 137.0 150.0 159.6 155.5 162.1 149.8 163.5 161.5 156.6 146.1 2 Amount of loan (thousands of dollars) 100.5 110.5 117.0 114.6 119.7 111.8 120.9 118.3 114.8 105.1 3 Loan/price ratio (percent) 75.2 75.5 74.5 75.4 75.0 76.4 75.3 74.5 74.7 73.5 4 Maturity (years) 27.8 28.0 28.1 26.6 28.1 26.9 28.0 27.2 27.2 26.9 5 Fees and charges (percent of loan amount)2 2.26 2.19 2.06 2.00 2.41 1.96 1.93 2.07 1.78 1.80 6 Contract rate (percent per year) 8.94 8.81 9.76 9.83 9.87 9.80 9.75 9.75 9.60 9.68 Yield (percent per year) 7 OTS series3 9.31 9.18 10.11 10.17 10.28 10.13 10.08 10.11 9.90 9.98 8 HUD series4 10.17 10.30 10.21 10.46 10.19 10.12 9.94 10.12 10.18 10.11 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series)5 10.16 10.49 10.24 10.75 10.23 10.18 10.11 10.28 10.24 10.23 10 GNMA securities6 9.44 9.83 9.71 9.77 9.77 9.54 9.48 9.63 9.65 9.66 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 95,030 101,329 104,974 112,463 112,791 112,855 113,378 113,507 113,718 114,216 12 FHA/VA-insured 21,660 19,762 19,640 20,707 20,723 20,830 21,059 21,101 21,364 21,495 13 Conventional 73,370 81,567 85,335 91,756 92,068 92,025 92,319 92,406 92,354 92,721 Mortgage transactions (during period) 14 Purchases 20,531 23,110 22,518 1,705 1,630 1,802 2,304 2,134 2,123 2,077 Mortgage commitments1 15 Issued (during period) n.a. n.a. n.a. 1,568 1,960 2,089 2,215 2,302 2,073 1,849 16 To sell (during period) n.a. n.a. n.a. 518 534 853 874 761 644 92 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 12,802 15,105 20,105 19,730 19,874 19,979 20,127 20,564 n.a. n.a. 18 FHA/VA 686 620 590 555 556 550 546 541 n.a. n.a. 19 Conventional 12,116 14,485 19,516 19,174 19,319 19,429 19,581 20,023 n.a. n.a. Mortgage transactions (during period) 20 Purchases 76,845 44,077 78,588 5,719 6,064 5,856 4,527 5,417 n.a. n.a. 21 Sales 75,082 39,780 73,446 5,687 5,792 5,546 4,248 4,808' 5,707' 5,714 Mortgage commitments10 22 Contracted (during period) 71,467 66,026 88,519 10,441 8,502 11,183 5,851 5,646 n.a. n.a. 1. Weighted averages based on sample surveys of mortgages originated by ciation guaranteed, mortgage-backed, fully modified pass-through securities, major institutional lender groups; compiled by tne Federal Home Loan Bank assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages Board in cooperation with the Federal Deposit Insurance Corporation. carrying the prevailing ceiling rate. Monthly figures are averages of Friday figures 2. Includes all fees, commissions, discounts, and "points" paid (by the from the Wall Street Journal. borrower or the seller) to obtain a loan. 7. 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 gages; from Department of Housing and Urban Development. commitments 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 Asso- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • January 1991 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1989 1990 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11998877 11998888 11998899 Q2 Q3 Q4 Q1 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 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 companies4 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 Administration5 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 6,087' 6,424 6,023 6,087' 6,355' 6,792 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 3,237' 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 6,796 6,706 6,810 7,652 8,041 51 Federal National Mortgage Association 139,960 178,250 228,232 196,501 208,894 228,232 246,391 259,664 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 Fanners 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 242,053 258,639 292,967 273,757 283,445 292,967 301,573 310,747 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. Farmers 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 1990 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11998888 11998899 Jan. Feb. Mar. Apr. May June July Aug/ Sept. Seasonally adjusted 11 TToottaall 664,701 716,624 717,829 717,869 720,445 720,835 724,485 724,601 729,329 732,385 735,386 22 AAuuttoommoobbiillee 284,556 290,770 290,904 289,629 290,932 288,936 288,931 287,168 286,791 285,283 285,446 33 RReevvoollvviinngg 174,057 197,110 199,146 199,927 202,263 203,965 207,153 208,362 212,138 214,492 216,397 44 MMoobbiillee hhoommee 25,201 22,343 22,604 22,633 22,708 22,702 22,815 22,733 22,795 22,976 22,757 55 OOtthheerr 180,887 206,401 205,175 205,680 204,543 205,232 205,585 206,338 207,605 209,635 210,787 Not seasonally adjusted 6 Total 674,719 727,561 721,026 717,062 713,138 715,801 720,045 722,953 727,196 734,511 737,430 By major holder 7 Commercial banks 324,792 343,865 342,266 339,418 334,645 337,576 339,328 335,998 339,124 342,987 344,699 8 Finance companies 146,212 140,832 140,740 139,115 137,857 138,174 138,384 138,642 138,796 139,4% 140,890 9 Credit unions 88,340 90,875 90,452 90,127 89,556 89,689 89,913 90,137 90,631 91,306 91,852 10 Retailers2 48,302 42,638 39,959 37,904 37,302 37,207 37,347 37,382 36,804 37,231 36,659 11 Savings institutions 63,399 57,228 55,425 54,771 54,095 53,606 53,301 52,902 52,503 52,399 51,930 12 Gasoline companies 3,674 3,935 4,013 3,803 3,792 3,928 4,024 4,192 4,3% 4,722 4,723 13 Pools of securitized assets .. n.a. 48,188 48,171 51,924 55,891 55,621 57,748 63,700 64,942 66,370 66,677 By major type of credit3 14 Automobile 284,328 290,421 288,984 288,036 286,539 286,220 287,140 287,254 287,322 288,221 289,442 15 Commercial banks 123,392 126,613 127,075 127,149 126,289 126,483 127,056 126,988 126,986 128,079 128,956 16 Finance companies 97,245 82,721 81,918 80,227 79,523 79,295 78,927 78,273 77,716 77,205 78,116 17 Pools of securitized assets2 n.a. 18,191 17,827 18,931 19,563 19,406 20,151 21,043 21,692 21,562 20,971 18 Revolving 183,909 208,188 203,288 200,147 199,937 201,783 204,854 206,820 209,582 213,119 214,449 19 Commercial banks 123,020 130,956 128,384 124,821 122,024 124,039 125,433 122,116 124,569 125,%7 126,901 20 Retailers 43,697 37,967 35,359 33,378 32,794 32,721 32,857 32,884 32,325 32,735 32,212 21 Gasoline companies 3,674 3,935 4,013 3,803 3,792 3,928 4,024 4,192 4,3% 4,722 4,723 22 Pools of securitized assets n.a. 22,977 23,450 26,204 29,542 29,403 30,913 36,076 36,786 38,194 39,1% 23 Mobile home 25,143 22,283 22,717 22,726 22,426 22,484 22,610 22,644 22,843 23,033 22,900 24 Commercial banks 9,025 9,155 9,109 9,162 9,142 9,231 9,295 9,296 9,443 9,541 9,392 25 Finance companies 7,191 4,716 5,411 5,410 5,178 5,168 5,224 5,266 5,328 5,358 5,423 26 Other 181,339 206,669 206,037 206,153 204,236 205,314 205,441 206,235 207,186 210,138 210,639 27 Commercial banks 69,355 77,141 77,698 78,286 77,190 77,823 77,544 77,598 78,126 79,400 79,450 28 Finance companies 41,776 53,395 53,411 53,478 53,156 53,711 54,233 55,103 55,752 56,933 57,351 29 Retailers 4,605 4,671 4,600 4,526 4,508 4,486 4,490 4,498 4,479 4,4% 4,447 30 Pools of securitized assets2 n.a. 7,020 6,894 6,789 6,786 6,812 6,684 6,581 6,464 6,614 6,510 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 • January 1991 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent unless noted otherwise 1990 IItteemm 11998877 11998888 11998899 Mar. Apr. May June July Aug. Sept. INTEREST RATES Commercial banks2 1 48-month new car3 10.45 10.85 12.07 n.a. n.a. 11.82 n.a. n.a. 11.89 n.a. 2 24-month personal 14.22 14.68 15.44 n.a. n.a. 15.41 n.a. n.a. 15.46 n.a. 3 120-month mobile home 13.38 13.54 14.11 n.a. n.a. 14.09 n.a. n.a. 14.09 n.a. 4 Credit card 17.92 17.78 18.02 n.a. n.a. 18.14 n.a. n.a. 18.18 n.a. Auto finance companies 5 New car 10.73 12.60 12.62 12.31 12.21 12.23 12.58 12.68 12.62 1122..3344 6 Used car 14.60 15.11 16.18 15.97 16.02 16.03 16.00 15.96 15.98 16.03 OTHER TERMS4 Maturity (months) 7 New car 53.5 56.2 54.2 54.3 54.2 54.5 54.8 54.9 54.8 54.3 8 Used car 45.2 46.7 46.6 46.4 46.5 46.1 46.2 46.2 46.2 46.1 Loan-to-value ratio 9 New car 93 94 91 88 87 87 87 86 86 85 10 Used car 98 98 97 95 % 96 95 96 96 95 Amount financed (dollars) 11 New car 11,203 11,663 12,001 12,216 12,089 12,064 12,108 12,125 11,939 11,837 12 Used car 7,420 7,824 7,954 8,132 8,105 8,169 8,296 8,401 8,415 8,403 1. These data also appear in the Board's G.19 (421) release. For address, see 3. Before 1983 the maturity for new car loans was 36 months, and for mobile inside front cover. home loans was 84 months. 2. Data for midmonth of quarter only. 4. At auto finance companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1988 1989 1990 Transaction category, sector 11998855 11998866 11998877 11998888 11998899 Q4 Qi Q2 Q3 Q4 Q! Q2 Nonfinancial sectors 1 Total net borrowing by domestic nonftnancial 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 3 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 12 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 21 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 22 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 27 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 28 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 5500..99 82.9 78.9 51.7 36.8 45.5 52.3 28.5 26.7 39.6 41.6 69.0 39 Mortgages ..11 .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 Total 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 52 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 • January 1991 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 Q1 Q2 Q3 Q4 Q1 Q2 1 Total funds advanced in credit markets to domestic nonfinancia] sectors 848.1 836.9 687.0 760.8 676.5 694.9 746.7 666.5 673.3 661199..55 774499..99 559988..11 By public agencies and foreign ? Total net advances 202.0 280.2 248.8 221100..77 187.6 223300..22 331122..88 1155..55 221188..33 220033..88 223344..55 228844..11 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 --99..33 55..77 3355..11 5533..33 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 112288..88 112244..88 115566..44 117755..55 114455..22 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 13 748.8 720.5 614.5 676.2 650.8 623.6 631.1 777722..99 661100..11 558899..00 668877..66 550055..55 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 70 Credit market funds advanced by private financial 578.0 730.0 528.4 562.3 522.5 621.4 517.4 581.5 361.7 662299..22 336655..66 330099..99 71 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 V 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 73 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 ?S 578.0 730.0 528.4 562.3 522.5 621.4 517.4 581.5 361.7 629.2 365.6 309.9 76 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 77 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 78 266.1 321.8 237.1 205.3 244.3 266.9 218.3 278.1 87.2 393.5 217.3 241.7 79 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 nonfinancia1 investors 33 Direct lending in credit markets 270.5 121.5 214.6 241.7 182.8 159.3 276.4 221166..77 224477..55 --99..44 334488..11 220000..55 34 U.S. government securities 157.8 27.0 86.0 129.0 136.0 82.3 195.1 160.2 118888..88 .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 3399..66 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 88..88 -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 77..66 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 4? 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 --3388..11 -54.6 1144..66 --88..33 5555..77 5? 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 Financial Statistics • January 1991 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING Billions of dollars; period-end levels. 1988 1989 1990 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 1 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 Ql 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 1100,,112266..66 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 22,,332233..33 22,,338866..55 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 11,,224499..33 11,,228877..55 11,,331199..77 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 88,,774411..55 88,,992277..99 99,,009911..77 99,,221144..77 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 22,,113399..33 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 8888..88 108.6 133.1 152.8 152.8 163.8 161.9 151.1 141.8 132.9 126.3 Private financial intermediation 71 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 77,,551188..22 7,674.1 7,760.9 77,,885511..66 77 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 73 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 ?4 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 77 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 37 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 22,,440011..99 22,,444433..44 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 4? 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 21Aine 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 • January 1991 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1977 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1990 MMeeaassuurree 11998877 11998888 11998899 Feb. Mar. Apr. May June July Aug. Sept. Oct. 1 Industrial production (1987 = 100)' 100.0 105.4 108.1 108.5 108.9 108.8 109.4 110.1 110.4' 110.4 110.5' 109.6 Market groupings 2 Products, total (1987 = 100) 100.0 105.3 108.6 109.4 110.1 109.8 110.5 110.9 110.9' 110.9 111.1' 110.1 3 Final, total (1987 = 100) 100.0 105.6 109.1 109.7 110.7 110.4 111.2 111.7 111.7' 111.8' 112.4' 111.4 4 Consumer goods (1987 = 100) 100.0 104.0 106.7 107.0 107.5 107.2 107.4 107.8 107.5' 107.8 108.4' 107.2 5 Equipment (1987 = 100) 100.0 107.6 112.3 113.3 114.9 114.7 116.2 116.8 117.2' 117.1' 117.6' 116.8 6 Intermediate (1987 = 100) 100.0 104.4 106.8 108.4 108.2 108.0 108.3 108.3 108.4' 107.8' 107.1' 106.3 7 Materials (1987 = 100) 100.0 105.6 107.4 107.1 107.1 107.3 107.7 108.8 109.6' 109.6' 109.7' 108.8 Industry groupings 8 Manufacturing (1987 = 100) 100.0 105.8 108.9 109.6 109.8 109.5 110.3 110.8 111.1' 111.1' 111.1' 110.2 Capacity utilization (percent)2 9 Manufacturing 81.4 83.9 83.9 83.0 82.9 82.5 82.8 83.0 83 .or 82.7' 82.5' 81.7 10 Construction contracts (1982 = 100)3 164.8 166.4 170.0 154.0 157.0 147.0 155.0 153.0 148.0 146.0 166.0 n.a. 11 Nonagricultural employment, total4 123.9 128.0 131.7 133.3 133.5 133.6 134.1 134.4 134.3 134.1' 134.1 134.0 12 Goods-producing, total 101.5 103.7 105.3 104.1 103.8 103.4 103.5 103.4 103.1 102.8 102.4 101.9 13 Manufacturing, total 96.7 98.6 99.6 97.8 97.6 97.5 97.4 97.3 97.2 96.9 96.6 96.3 14 Manufacturing, production- worker ... 91.9 93.7 94.6 92.5 92.4 92.3 92.1 92.0 92.0 91.7 91.3 91.0 15 Service-producing 133.3 138.2 142.7 145.6 146.0 146.2 147.0 147.4 147.3 147.3 147.3 147.4 16 Personal income, total 234.3 253.2 272.7 283.8 285.8 286.4 287.5 288.7 290.1 290.7 292.2 n.a. 17 Wages and salary disbursements 226.4 244.6 258.9 266.9 268.6 269.9 271.2 272.8 274.4 274.4 276.2 n.a. 18 Manufacturing 183.8 196.5 203.1 203.0 204.6 203.9 205.8 206.8 206.9 206.7 206.4 n.a. 19 Disposable personal income5 231.6' 252.2r 270.1' 281.7 283.9 283.6 284.4 285.8 287.0 287.4 288.7 n.a. 20 Retail sales 213.6r 228.0" 240.6' 249.7 248.7 246.3 246.1 248.9 250.1 250.2' 253.4' 253.7 Prices7 21 Consumer (1982-84 = 100) 113.6 118.3 124.0 128.0 128.7 128.9 129.2 129.9 130.4 131.6 132.7 133.5 22 Producer finished goods (1982 = 100) ... 105.4 108.0 113.6 117.4 117.2 117.2 117.7 117.8' 118.0 119.2 120.3 122.3 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 7. 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 Mar. Apr. May June July Aug. Sept. Oct. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 185,010 186,837 188,601 189,717 189,844 189,983 190,122 190,275 190,411 190,568 190,717 2 Labor force (including Armed Forces)1 122,122 123,893 126,077 127,017 127,061 127,159 126,981 126,906 126,810 127,134 126,976 3 Civilian labor force 111199,,886655 112211,,666699 123,869 112244,,882299 112244,,888866 112255,,000044 112244,,883366 112244,,776677 112244,,666600 112244,,996677 112244,,778844 Employment 4 Nonagricultural industries2 109,232 111,800 114,142 115,133 114,983 115,045 115,041 114,867 114,521 114,717 114,545 5 Agriculture 3,208 3,169 3,199 3,200 3,133 3,305 3,348 33,,008855 3,137 3,181 3,167 Unemployment 6 Number 7,425 6,701 6,528 6,495 6,770 6,653 6,447 6,814 7,003 7,069 7,073 7 Rate (percent of civilian labor force) 6.2 5.5 5.3 5.2 5.4 5.3 5.2 5.5 5.6 5.7 5.7 8 Not in labor force 62,888 62,944 62,524 62,700 62,783 62,824 63,141 63,369 63,601 63,434 63,741 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 102,200 105,584 108,573 110,122 110,177 110,617 110,829 110,740 110,613' 110,561' 110,493 10 Manufacturing 19,024 19,403 19,611 19,217 19,190 19,167 19,148 19,131 19,084' 19,017 18,956 11 Mining 717 721 722 729 734 738 744 745 735' 736' 735 12 Contract construction 4,967 5,125 5,302 5,313 5,256 5,286 5,270 5,229 5,194 5,183' 5,103 13 Transportation and public utilities 5,372 5,548 5,703 5,808 5,809 5,833 5,846 5,841 5,846' 5,868' 5,877 14 24,327 25,139 25,807 26,125 26,141 26,164 26,205 26,225 26,222' 26,199' 26,140 15 Finance 6,547 6,676 6,814 6,821 6,823 6,838 6,844 6,842 6,852' 6,852' 6,853 16 Service 24,236 25,600 26,889 27,950 27,969 28,094 28,225 28,287 28,387' 28,407 28,500 17 Government 17,010 17,372 17,726 18,159 18,255 18,497 18,547 18,440 18,293' 18,299' 18,329 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 • January 1991 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1989 1990 1989 1990 1989 1990 Q4 QL Q2 Q3R Q4 QL Q2 Q3 Q4 QL Q2 Q3R Output (1987 = 100) Capacity (percent of 1987 output) Utilization rate (percent) 1 Total industry 108.1 108.3 109.4 110.4 129.S 130.3 131.2 132.1 83.5 83.1 83.4 83.6 2 Manufacturing 108.7 109.2 110.2 111.1 131.1 132.1 133.2 134.2 82.9 82.6 82.8 82.8 3 Primary processing 106.1 106.4 106.3 107.6 123.4 124.2 124.9 125.7 85.9 85.7 85.1 85.6 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 81.5 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 6 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 7 Primary metals 105.3 106.1 107.4 112.6 126.9 127.2 127.3 127.4 83.0 83.4 84.3 88.3 8 Iron and steel 104.5 107.1 107.5 114.9 131.5 131.9 132.0 132.1 79.5 81.2 81.4 87.0 9 Nonferrous 106.4 104.6 107.1 109.2 120.2 120.4 120.6 120.9 88.5 86.9 88.8 90.4 10 Nonelectrical machinery 121.9 124.4 126.7 128.3 150.1 151.6 153.2 154.9 81.2 82.1 82.7 82.8 11 Electrical machinery 110.1 111.1 112.2 112.4 136.0 137.4 138.8 140.2 81.0 80.9 80.8 80.2 12 Motor vehicles and parts 99.1 91.5 102.6 104.1 132.0 132.5 133.5 134.5 75.1 69.0 76.9 77.5 13 Aerospace and miscellaneous transportation equipment 106.7 111.6 113.6 114.6 132.5 133.4 134.3 135.2 80.6 83.6 84.6 84.7 14 Nondurable 107.1 107.7 107.5 107.9 125.9 126.9 128.0 129.0 85.0 84.8 84.0 83.7 15 Textile mill products 100.3 101.1 102.4 100.5 115.5 116.0 116.6 117.1 86.9 87.2 87.9 85.8 16 Paper and products 104.2 103.9 104.5 107.3 113.3 113.9 114.7 115.5 92.0 91.2 91.1 92.9 17 Chemicals and products 108.9 109.9 109.9 110.7 132.1 133.4 134.7 135.9 82.5 82.4 81.6 81.4 18 106.2 111.7 116.3 123.7 126.1 128.4 85.8 88.6 90.6 19 Petroleum products 106.8 109.9 106.0 110.5 121.0 121.1 121.1 121.1 88.3 90.8 87.5 91.3 20 Mining 100.6 101.3 102.5 103.2 116.1 115.7 115.2 114.8 86.7 87.6 88.9 89.9 21 Utilities 110.6 105.7 107.8 111.0 125.7 126.0 126.4 126.7 88.0 83.9 85.3 87.5 22 Electric 111.8 108.4 111.0 113.7 120.8 121.1 121.6 122.1 92.6 89.5 91.3 93.1 Previous cycle2 Latest cycle3 1989 1990 High Low High Low Oct. Mar. Apr. May June Julyr Aug/ Sept/ Oct." Capacity utilization rate (percent) 23 TToottaall iinndduussttrryy 89.2 72.6 87.3 71.8 83.3 83.4 83.1 83.4 83.7 83.8 83.5 83.5 82.6 24 MMaannuuffaaccttuurriinngg 88.9 70.8 87.3 70.0 82.9 82.9 82.5 82.8 83.0 83.0 82.7 82.5 81.7 25 Primary processing 92.2 68.9 89.7 66.8 86.6 85.2 85.0 84.9 85.5 86.0 8855..88 8855..00 8844..22 26 Advanced processing 7,7 Durable 87.5 72.0 86.3 71.4 81.4 82.0 81.5 82.0 81.9 81.7 81.4 81.5 80.6 28 Lumber and products 88.8 68.5 86.9 65.0 81.1 81.9 81.2 82.1 82.4 82.2 82.0 82.1 80.8 29 Primary metals 90.1 62.2 87.6 60.9 84.6 85.0 83.4 81.9 82.0 83.1 80.4 79.0 77.7 30 Iron and steel 100.6 66.2 102.4 46.8 85.7 82.8 83.6 83.4 86.0 86.6 89.0 89.4 86.7 31 Nonferrous 105.8 66.6 110.4 38.3 83.2 80.4 80.8 79.9 83.6 83.7 88.0 89.3 86.4 32 Nonelectrical machinery 92.9 61.3 90.5 62.2 89.6 86.6 87.9 88.8 89.8 90.9 90.6 89.6 87.2 33 Electrical machinery 96.4 74.5 92.1 64.9 79.5 82.3 82.3 82.8 82.9 83.1 83.1 82.1 80.9 34 Motor vehicles and parts 87.8 63.8 89.4 71.1 81.2 81.5 80.5 81.0 81.0 80.3 80.3 80.0 79.1 35 Aerospace and miscellaneous 93.4 51.1 93.0 44.5 75.5 77.9 71.9 77.9 80.7 76.6 75.1 80.7 76.9 transportation equipment 77.0 66.6 81.1 66.9 79.0 83.7 84.6 84.5 84.5 85.4 84.4 84.4 84.0 36 Nondurable 87.9 71.8 87.0 76.9 85.4 84.2 84.2 83.9 83.8 84.0 83.7 83.2 82.8 37 Textile mill products 92.0 60.4 91.7 73.8 88.4 85.9 86.7 88.1 88.8 88.0 85.4 84.0 82.8 38 Paper and products 96.9 69.0 94.2 82.0 93.1 90.0 92.0 90.7 90.6 93.5 92.2 93.0 92.4 39 Chemicals and products 87.9 69.9 85.1 70.1 83.1 81.8 82.2 81.1 81.6 81.5 81.7 81.1 81.2 40 102.0 50.6 90.9 63.4 89.0 88.3 90.8 90.9 90.0 90.5 89.7 41 Petroleum products 96.7 81.1 89.5 68.2 88.4 90.1 88.2 86.4 87.9 91.3 91.0 91.6 90.3 42 Mining 94.4 88.4 96.6 80.6 86.5 87.5 89.2 88.7 88.8 90.5 89.2 90.0 89.7 43 Utilities 95.6 82.5 88.3 76.2 85.5 84.2 84.5 84.7 86.8 86.6 87.6 88.4 86.8 44 Electric 99.0 82.7 88.3 78.7 90.9 90.4 90.3 90.7 92.9 91.9 93.2 94.1 92.3 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 pro- 1989 Groups por- avg. tion Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July' Aug.' Sept.' Oct." Index (1987 = 100) MAJOR MARKET 1 Total index 100.0 108.1 107.7 108.1 108.6 107.5 108.5 108.9 108.8 109.4 110.1 110.4 110.4 110.5 109.6 2 Products 60.8 108.6 108.1 108.9 109.7 108.4 109.4 110.1 109.8 110.5 110.9 110.9 110.9 111.1 110.1 4 5 6 3 Fin C a o l D n p u s A r u r o a m u d b t e u o le r m c t g c s o o o t n o iv s d e u s m pr e o r d g u o c o ts d s 4 2 2 5 6 6 . . . . 5 6 0 0 1 1 1 1 0 0 0 0 6 7 9 6 . . . . 1 9 9 7 1 1 1 1 0 0 0 0 6 2 7 8 . . . . 8 9 3 5 1 1 1 1 0 0 0 0 5 2 9 7 . . . . 7 4 4 4 1 1 1 1 0 0 1 0 6 4 0 8 . . . . 8 5 3 3 1 1 9 8 0 0 9 5 8 6 . . . . 4 2 5 0 1 1 1 9 0 0 0 9 6 9 7 . . . . 3 2 7 0 1 1 1 1 0 1 0 1 9 0 7 0 . . . . 3 8 5 7 1 1 1 1 0 0 1 0 2 7 0 7 . . . . 4 3 4 2 1 1 1 1 0 0 1 0 9 7 1 7 . . . . 3 0 2 4 1 1 1 1 1 1 1 0 2 2 1 7 . . . . 1 2 7 8 1 1 1 1 0 0 0 1 6 8 7 1 . . . . 7 3 5 7 1 1 1 1 0 0 1 0 7 4 1 7 . . . . 3 6 8 8 1 1 1 1 1 1 1 0 0 2 2 8 . . . . 2 6 4 4 1 1 1 1 0 0 1 0 7 6 1 7 . . . . 4 7 4 2 7 Autos and trucks 1.5 105.7 99.7 98.4 100.1 66.3 92.7 107.7 95.8 105.6 112.9 104.8 101.5 115.2 107.2 8 Autos, consumer .9 101.2 100.7 92.8 92.6 62.1 86.9 100.5 87.7 96.8 103.8 98.0 97.2 115.1 104.3 9 Trucks, consumer .6 113.3 98.2 108.0 112.6 73.3 102.3 120.0 109.3 120.4 128.3 116.1 108.8 115.4 112.2 10 Auto parts and allied goods.. 1.0 108.7 107.6 108.2 111.2 113.6 109.4 111.6 112.2 108.9 111.2 109.5 109.3 108.6 107.7 11 Other 33..11 108.7 109.8 108.4 108.6 110.6 111.6 112.0 111.2 111.1 112.0 109.5 109.5 108.4 106.1 12 Appliances, A/C, and TV ..88 106.7 107.6 102.0 101.0 108.4 107.8 108.1 104.4 103.6 107.5 100.2 101.9 100.8 95.3 13 Carpeting and furniture .9 101.5 101.1 100.4 102.0 103.7 104.7 105.9 107.5 107.6 107.8 106.0 104.5 103.9 101.9 14 Miscellaneous home goods .. 1.4 114.5 116.6 117.1 117.1 116.2 118.2 118.0 117.3 117.5 117.2 116.9 116.9 115.5 114.8 15 Nondurable consumer goods 20.4 106.4 107.4 107.8 108.7 107.8 107.2 106.6 107.1 106.9 106.6 107.3 107.9 107.9 107.4 16 Foods and tobacco 9.1 104.2 105.6 105.8 106.4 105.5 106.2 105.8 105.6 105.2 104.4 105.1 105.7 104.8 104.8 17 Clothing 2.6 101.6 101.9 100.1 99.4 100.6 99.6 97.0 96.0 96.4 95.7 95.6 94.6 94.6 93.0 18 Chemical products 3.5 109.4 110.3 111.3 110.3 112.7 112.0 111.0 113.5 113.0 112.8 112.4 114.1 114.5 114.2 19 Paper products 2.5 114.3 117.2 118.1 116.9 116.2 117.6 116.4 118.1 118.6 118.3 120.3 120.1 121.6 121.3 20 Energy 2.7 106.7 106.0 108.0 115.2 107.9 101.5 103.1 104.1 104.1 105.3 106.7 108.6 109.4 107.5 21 Fuels .7 102.8 103.1 103.0 100.5 105.1 106.6 101.8 101.6 98.2 102.6 104.6 106.0 105.8 103.8 22 Residential utilities 2.0 108.1 107.0 109.8 120.7 109.0 99.6 103.6 105.0 106.3 106.3 107.5 109.6 110.7 108.9 23 Equipment, total 20.0 112.3 110.1 112.0 112.9 111.8 113.3 114.9 114.7 116.2 116.8 117.2 117.1 117.6 116.8 24 Business equipment 13.9 119.1 116.0 118.7 119.9 118.0 120.1 122.2 121.6 123.5 124.4 125.0 125.3 126.3 125.0 25 Information processing and related . 5.6 121.7 119.9 123.5 124.0 124.0 124.7 126.0 126.4 126.6 126.3 128.0 128.1 129.1 128.8 26 Office and computing 1.9 137.2 132.8 141.0 142.7 142.7 144.3 147.2 149.3 148.9 150.6 152.7 152.2 153.6 152.6 27 Industrial 4.0 113.8 112.4 113.4 112.8 113.5 113.4 113.9 114.2 115.8 116.0 117.2 117.9 116.9 115.8 28 Transit 2.5 123.8 112.9 117.0 123.4 111.4 122.7 130.6 126.2 132.5 137.4 135.5 135.4 141.6 137.4 29 Autos and trucks 1.2 103.9 97.6 98.0 97.6 69.6 91.7 104.5 95.2 105.7 112.2 103.1 101.5 112.9 106.3 3 3 1 0 De O fe t n he se r and space equipment 5 1 . . 4 9 1 9 1 7 6 . . 4 5 1 9 1 6 6 . . 6 3 1 9 1 6 7 . . 7 8 1 9 1 6 8 . . 6 5 1 9 1 7 8 . . 5 7 1 9 1 7 7 . . 6 4 1 9 1 7 7 . . 5 8 1 9 1 7 7 . . 3 6 1 9 1 7 9 . . 6 6 1 9 1 7 8 . . 6 5 1 9 1 7 7 . . 8 6 9X5 97^0 97 '.i 32 Oil and gas well drilling .6 93.7 97.3 99.9 100.3 98.3 100.1 106.0 114.3 118.6 119.5 116.2 106.9 107.4 107.1 33 Manufactured homes .2 92.3 87.9 89.4 91.6 91.6 94.3 92.9 89.7 91.3 92.8 90.0 93.4 91.8 89.8 34 Intermediate products, total 14.7 106.8 106.9 107.3 107.9 108.0 108.4 108.2 108.0 108.3 108.3 108.4 107.8 107.1 106.3 35 Construction supplies 6.0 106.1 106.3 107.0 107.4 107.9 108.2 107.3 106.4 105.5 106.0 106.7 105.2 103.8 102.3 36 Business supplies 8.7 107.3 107.3 107.5 108.2 108.0 108.5 108.9 109.1 110.2 109.8 109.5 109.6 109.4 109.1 37 Materials, total 39.2 107.4 107.1 107.0 106.9 106.2 107.1 107.1 107.3 107.7 108.8 109.6 109.6 109.7 108.8 38 Durable goods materials 19.4 111.6 110.8 110.8 110.4 109.4 110.8 110.9 110.9 112.5 113.8 114.0 114.6 114.2 112.8 39 Durable consumer parts 4.2 109.0 106.9 105.7 102.5 96.5 102.8 104.5 103.2 108.5 108.5 108.1 110.3 108.7 106.3 40 Equipment parts 7.3 114.7 114.4 115.3 115.8 116.5 117.6 117.6 117.4 118.1 119.1 119.2 119.2 119.9 119.2 41 Other 7.9 110.2 109.5 109.4 109.5 109.7 108.7 108.1 108.9 109.6 111.8 112.4 112.7 111.8 110.4 42 Basic metal materials 2.8 112.1 111.0 108.6 109.3 108.5 109.9 107.5 110.2 109.2 113.6 115.5 115.8 116.0 113.0 43 Nondurable goods materials 9.0 105.3 106.1 104.9 104.3 105.4 105.8 105.2 106.1 105.2 106.1 107.8 106.8 106.7 106.8 44 Textile materials 1.2 99.8 98.6 96.1 95.8 94.6 96.2 94.9 95.6 97.4 99.4 100.2 97.8 96.7 95.1 45 Pulp and paper materials 1.9 103.8 107.7 104.6 103.7 105.0 105.3 103.0 106.0 104.5 104.8 109.0 106.9 109.5 109.4 46 Chemical materials 3.8 106.4 106.8 105.8 103.8 105.8 107.3 107.5 107.4 105.4 107.3 108.5 108.2 106.7 107.9 47 Other 2.1 107.6 107.5 108.4 110.4 110.9 108.8 108.7 109.8 109.8 108.8 109.9 109.2 109.7 108.9 48 Energy materials 10.9 101.4 101.3 101.9 102.7 101.2 101.7 102.0 101.8 101.1 102.1 103.3 103.0 104.1 103.5 49 Primary energy 7.2 99.9 99.8 100.5 99.0 101.1 102.1 101.2 100.3 100.1 101.2 103.3 102.2 103.2 103.1 50 Converted fuel materials 3.7 104.3 104.2 104.5 110.0 101.4 100.9 103.4 104.6 102.9 103.9 103.4 104.5 105.8 104.1 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 108.2 108.0 108.4 108.9 108.6 108.9 109.0 109.2 109.5 110.0 110.6 110.6 110.4 109.7 52 Total excluding motor vehicles and parts.. 95.3 108.3 108.1 108.6 109.1 109.0 109.2 109.2 109.5 109.7 110.2 110.8 110.8 110.6 109.9 53 Total excluding office and computing machines 97.5 107.4 107.1 107.3 107.7 106.6 107.6 108.0 107.8 108.4 109.1 109.3 109.3 109.5 108.5 54 Consumer goods excluding autos and trucks 24.5 106.8 107.7 107.9 108.8 108.4 107.8 107.5 107.9 107.6 107.5 107.6 108.2 108.0 107.2 55 Consumer goods excluding energy 23.3 106.7 107.4 107.3 107.5 105.8 107.6 108.0 107.5 107.8 108.1 107.6 107.7 108.3 107.2 56 Business equipment excluding autos and trucks 12.7 120.6 117.8 120.7 122.1 122.8 122.9 124.0 124.2 125.3 125.6 127.2 127.6 127.6 126.8 57 Business equipment excluding office and computing equipment 12.0 116.2 113.3 115.0 116.2 114.0 116.2 118.2 117.2 119.4 120.2 120.5 120.9 121.8 120.5 58 Materials excluding energy 28.4 109.6 109.3 108.9 108.4 108.1 109.2 109.1 109.4 110.2 111.4 112.1 112.1 111.8 110.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • January 1991 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1987 1990 Groups SIC pro- 1989 code por- avg. tion Oct. Nov. Dec Jan. Feb. Mar. Apr. May June July' Aug/ Sept/ Oct. Index (1987 = 100) MAJOR INDUSTRY 1 Total index. 100.0 108.1 107.7 108.1 108.6 107.5 108.5 108.9 108.8 109.4 110.1 110.4 110.4 110.5 109.6 2 Manufacturing 84.4 108.9 108.4 108.9 108.8 108.1 109.6 109.8 109.5 110.3 110.8 111.1 111.1 111.1 110.2 3 Primary processing .. 26.7 106.4 106.6 106.2 105.3 106.2 106.9 106.0 105.9 106.1 107.0 107.9 107.8 107.1 106.3 4 Advanced processing 57.7 110.1 109.3 110.1 110.4 109.0 110.9 111.7 111.3 112.4 112.6 112.5 112.5 112.9 112.0 Durable 47.3 110.9 109.4 110.1 110.4 108.6 110.7 111.9 111.1 112.6 113.4 113.4 113.4 113.8 112.4 Lumber and products ... 24 2.0 103.0 103.2 104.8 106.4 106.0 104.3 105.0 103.3 101.7 102.0 103.6 100.5 99.0 97.6 Furniture and fixtures ... 25 1.4 105.3 105.6 104.4 105.1 105.1 104.8 105.9 107.6 108.0 108.7 108.0 106.5 105.4 104.1 Clay, glass, and stone products 32 2.5 108.0 107.7 108.2 108.6 110.0 108.0 107.7 105.1 106.4 106.1 106.0 106.7 106.6 104.7 Primary metals 33 3.3 109.2 108.6 104.8 102.6 105.0 107.9 105.4 106.4 106.2 109.5 110.3 113.5 114.0 110.6 Iron and steel 331,2 1.9 109.3 109.2 104.1 100.3 104.6 110.6 106.1 106.7 105.5 110.3 110.6 116.3 117.9 114.2 Raw steel .1 108.5 106.4 100.6 97.6 109.9 109.0 105.9 104.9 107.6 111.8 113.9 118.5 111.6 110.2 Nonferrous -6,9 1.4 109.0 107.6 105.8 105.8 105.6 104.0 104.3 105.9 107.1 108.3 109.8 109.5 108.4 105.5 Fabricated metal products 34 5.4 107.2 105.9 106.9 106.3 105.1 105.6 105.5 105.0 107.1 106.7 107.7 107.8 106.1 105.6 Nonelectrical machinery. 35 8.6 121.8 119.0 122.9 123.8 123.7 124.2 125.2 125.7 126.9 127.5 128.3 128.8 127.7 126.3 Office and computing machines 357 2.5 137.2 132.8 141.0 142.7 142.7 144.3 147.3 149.3 149.0 150.6 152.7 152.2 153.6 152.6 Electrical machinery 36 8.6 109.5 110.2 110.1 110.1 110.1 111.0 112.3 111.3 112.4 112.8 112.2 112.6 112.5 111.6 Transportation equipment 37 9.8 107.2 102.1 102.8 104.4 94.7 103.5 107.9 105.1 109.0 111.0 109.3 107.9 111.7 109.2 Motor vehicles and parts 371 4.7 104.9 99.7 99.0 98.7 76.8 94.1 103.5 95.8 104.0 108.0 102.7 101.0 108.7 103.8 Autos and light trucks. 2.3 105.0 99.9 97.6 99.0 65.7 91.8 106.7 94.6 104.3 111.6 103.8 100.9 115.2 106.8 Aerospace and miscellaneous transportation equipment.. -6,9 5.1 109.3 104.3 106.3 109.6 111.0 111.9 111.9 113.4 113.5 113.8 115.2 114.1 114.4 114.0 Instruments 38 3.3 116.4 116.1 115.6 114.8 116.0 116.2 115.7 115.8 116.5 115.0 116.9 117.3 118.3 118.3 Miscellaneous manufacturers 39 1.2 114.9 116.9 117.0 116.4 117.0 118.1 118.6 118.6 119.1 119.6 120.4 121.8 121.3 120.7 23 Nondurable 37.2 106.4 107.2 107.3 106.7 107.5 108.3 107.2 107.5 107.4 107.6 108.1 108.1 107.6 107.4 24 Foods 20 8.8 105.5 106.8 107.4 108.0 106.8 107.4 107.1 107.0 106.8 106.1 107.1 107.6 107.0 107.0 25 Tobacco products 21 1.0 99.7 99.7 98.8 98.5 101.3 102.3 100.0 98.8 97.2 95.6 98.5 96.3 94.1 92.5 26 Textile mill products ... 22 1.8 101.9 101.9 99.3 99.8 100.6 103.0 99.8 100.9 102.7 103.6 102.9 100.0 98.5 97.2 27 Apparel products 23 2.4 104.3 103.9 103.7 102.6 102.4 102.1 99.8 98.7 99.2 99.3 99.2 99.3 98.9 97.7 28 Paper and products 26 3.6 103.2 105.3 104.1 103.4 103.8 105.0 102.8 105.3 104.0 104.2 107.8 106.4 107.6 107.2 29 Printing and publishing . 27 6.4 108.5 109.3 109.6 109.6 110.7 112.1 111.4 112.0 112.8 112.0 111.4 111.3 111.1 111.1 30 Chemicals and products . 28 8.6 108.5 109.4 109.8 107.6 109.9 110.5 109.5 110.3 109.2 110.3 110.4 111.1 110.6 111.1 31 Petroleum products 29 1.3 106.1 106.9 109.3 104.3 108.6 112.0 109.1 106.8 104.6 106.5 110.5 110.2 110.9 109.3 32 Rubber and plastic products 30 3.0 108.9 108.8 109.1 110.1 110.7 109.1 109.8 109.0 110.9 112.8 110.9 111.7 110.1 109.4 33 Leather and products .. 31 .3 103.7 102.2 99.4 103.0 104.3 102.9 103.3 102.6 103.5 102.0 102.5 99.8 101.1 98.5 34 Mining 7.9 100.5 100.7 101.2 100.1 101.7 101.0 101.1 102.9 102.2 102.2 104.0 102.4 103.3 102.8 35 Metal 10 .3 141.4 143.2 145.9 155.5 144.8 143.4 141.4 152.7 148.7 156.7 164.8 155.7 156.2 151.1 36 Coal 11,12 1.2 105.7 109.9 108.1 103.5 114.1 111.9 112.9 114.2 110.0 113.5 118.5 110.2 116.8 117.8 37 Oil and gas extraction... 13 5.7 95.5 94.3 95.5 94.0 94.4 94.1 94.6 95.7 96.0 94.6 95.5 95.8 95.4 95.2 38 Stone and earth minerals 14 .7 113.9 118.0 115.8 119.7 121.2 120.0 116.5 120.2 119.9 121.1 121.8 119.8 120.3 118.0 39 Utilities... 7.6 107.1 107.4 108.3 116.1 106.8 104.0 106.2 106.7 107.1 109.7 109.7 111.1 112.1 110.3 40 Electric. ,3PT 6.0 108.1 109.7 109.5 116.3 108.3 107.1 109.7 109.7 110.3 113.1 112.1 113.8 115.1 113.0 41 Gas .... -,3PT 1.6 103.0 99.1 103.9 115.6 101.2 92.3 93.3 95.5 95.2 97.4 100.7 100.8 101.1 100.2 SPECIAL AGGREGATES 42 Manufacturing excluding motor vehicles and parts 79.8 109.2 108.9 109.4 109.3 109.9 110.5 110.2 110.3 110.7 111.0 111.6 111.6 111.2 110.6 43 Manufacturing excluding office and computing machines 8822..00 110088..11 110077..77 110077..99 110077..77 110077..11 110088..66 110088..77 110088..33 110099..11 110099..55 110099..55 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKET 44 Products, total 1,734.8 1,889.8 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 1,923.5 1,927.7 1,940.3 45 Final 1,350.9 1,480.1 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 1,508.7 1,516.5 1,530.0 46 Consumer goods 833.4 884.6 883.2 889.0 898.6 864.3 888.6 893.4 883.9 885.9 893.8 886.0 886.7 896.4 47 Equipment 517.5 595.5 582.4 593.8 594.0 583.6 599.8 614.1 610.0 620.1 629.6 622.7 629.9 633.6 48 Intermediate 384.0 409.7 412.7 414.1 413.0 415.7 415.0 415.1 412.3 416.2 413.6 414.9 411.2 410.2 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 Dec. Jan. Feb. Mar. Apr. May June July' Aug.' Sept. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,535 1,456 1,339 1,416 1,739 1,297 1,232 1,108 1,065 1,108 1,082 1,050 992 7 1-family 1,024 994 932 984 985 974 912 813 802 796 780 762 737 3 2-or-more-family 511 462 407 432 754 323 320 295 263 312 302 288 255 4 Started 1,621 1,488 1,376 1,273 1,568 1,488 1,307 1,216 1,206 1,189 1,153 1,131 1,107 5 1-family 1,146 1,081 1,003 931 1,099 1,154 996 898 897 889 875 836 863 6 2-or-more-family 474 407 373 342 469 334 311 318 309 300 278 295 244 7 Under construction, end of period1 . 987 919 850 886 892 900 887 876 857 849 833 818 798 8 1-family 591 570 535 567 571 575 567 559 546 540 529 518 507 9 2-or-more-family 397 350 315 319 321 325 320 317 311 309 304 300 291 10 Completed 1,669 1,530 1,423 1,302 1,443 1,351 1,378 1,295 1,363 1,295 1,300 1,311 1,326 11 1-family 1,123 1,085 1,026 933 1,031 1,041 1,037 942 1,008 946 981 958 981 12 2-or-more-family 546 445 396 369 412 310 341 353 355 349 319 353 345 13 Mobile homes shipped 233 218 198 189 195 200 193 189 191 191 184 195 181 Merchant builder activity in 1-family units 14 Number sold 672 675 650 633 613 606 558 533 536 550' 554455 553355 550033 15 Number for sale, end of period1 366 367 362 362 365 366 363 363 360 354 350 345 337 Price (thousands of dollars)2 Median 16 Units sold 104.7 113.3 120.4 125.2 125.0 126.9 119.4 130.0 125.0 125.0 111199..99 111188..44 111155..00 17 Units sold 127.9 139.0 148.3 154.3 151.7 150.9 144.6 153.4 150.6 150.4 149.7 144.6 142.3 EXISTING UNITS (1-family) 18 Number sold 3,530 3,594 3,439 3,560 3,520 3,400 3,400 3,330 3,300 3,330 3,330 3,500 3,170 Price of units sold (thousands of dollars) 19 85.6 89.2 93.0 92.5 96.3 9955..22 96.3 9955..66 9955..66 9977..55 9988..33 9977..11 9944..44 20 Average 106.2 112.5 118.0 118.1 120.0 118.3 119.5 117.8 118.7 121.1 122.0 120.5 116.7 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 410,209 422,076 432,068 431,995 445,959 455,571 457,272 444,737 443,805 441,088 441,313 441,113 428,678 7? 319,641 327,102 333,514 325,011 338,078 343,118 347,366 338,780 333,992 329,556 333,207 325,965 319,421 73 194,656 198,101 196,551 189,636 200,149 203,013 206,868 200,234 196,055 189,462 188,545 186,473 182,152 74 Nonresidential, total 124,985 129,001 136,963 135,375 137,929 140,105 140,498 138,546 137,937 140,094 144,662 139,492 137,269 Buildings ?s 13,707 14,931 18,506 18,863 19,680 21,072 21,086 21,039 20,847 20,405 23,680 20,334 20,217 76 55,448 58,104 59,389 57,090 57,376 58,748 57,210 55,765 54,698 56,581 57,117 55,408 53,138 77 Other 15,464 17,278 17,848 16,612 17,706 16,964 17,646 18,227 18,379 19,272 19,762 19,798 19,718 28 Public utilities and other 40,366 38,688 41,220 42,810 43,167 43,321 44,556 43,515 44,013 43,836 44,103 43,952 44,196 79 Public 90,566 94,971 98,551 106,984 107,881 112,453 109,906 105,957 109,813 111,532 108,106 115,148 109,257 30 Military 4,327 3,579 3,520 3,552 3,838 3,886 5,099 5,057 5,459 5,868 5,066 5,047 5,063 31 Highway 26,958 30,140 29,502 33,450 31,901 37,018 32,374 29,714 30,658 30,311 28,775 31,377 30,265 37 Conservation and development... 5,519 4,726 4,969 5,371 5,192 5,559 4,996 4,979 5,504 3,958 4,501 4,855 3,664 33 Other 53,762 56,526 60,560 64,611 66,950 65,990 67,437 66,207 68,192 71,395 69,764 73,869 70,265 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 • January 1991 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (at annual rate) IIInnndddeeexxx llleeevvveeelll IIIttteeemmm 1989 1990 1990 OOOcccttt... 11998899 11999900 111999999000 OOcctt.. OOcctt.. Dec. Mar. June Sept. June July Aug. Sept. Oct. CONSUMER PRICES2 (1982-84=100) 1 All items 4.5 6.3 4.9 8.5 3.5 7.9 .5 .4 .8 .8 .6 133.5 2 Food 5.2 5.6 5.5 11.4 2.1 3.7 .8 .4 .3 .2 .4 133.6 3 Energy items 5.2 17.8 3.9 14.8 -2.0 42.7 .6 -.7 4.3 5.6 4.5 111.4 4 All items less food and energy 4.3 5.3 4.7 7.5 3.9 5.7 .4 .6 .5 .3 .3 137.8 5 Commodities 2.7 3.4 3.4 7.8 .7 2.9 .1 .3 .0 .4 .2 125.3 6 Services 5.1 6.3 5.7 7.2 5.5 7.2 .6 .7 .8 .3 .3 145.1 PRODUCER PRICES (1982=100) 7 Finished goods 5.0 6.4 5.0 7.1 .3 11.7 .2 -.1 1.3 1.6 1.1 122.3 8 Consumer foods 4.3 4.3 12.4 10.6 -3.8' .6' -.4' .2' .8 -.9 .9 124.6 9 Consumer energy 12.1 33.9 -5.3 24.7 -14.3 137.4 -1.6 -.5 9.5 13.8 8.0 88.1 10 Other consumer goods 4.6 3.4 4.2 3.5 5.4' 2.2' .8' -.3' .2 .6 .0 130.3 11 Capital equipment 3.9 3.3 2.0 4.0 2.3' 5.3' .4' .2' .3 .8 -.2 124.5 12 Intermediate materials3 3.8 5.1 -.4 2.5 -,4r 13.4' -.1' -.3' 1.5 1.9 1.6 118.1 13 Excluding energy 2.6 1.5 -1.0 1.0 .7 4.0 -.1 .1 .3 .6 .4 122.1 Crude materials 14 Foods -3.6 2.8 19.2 9.1 -10.2' -7.9' .4' .6' -.9 -1.8 1.1 110.9 15 Energy 21.0 51.7 13.2 .5 -39.2' 296.0' -6.8' .0' 25.5 12.4 18.7 116.2 16 Other 3.1 .2 -15.3 4.0 13.2' 8.7' -.5' .4' 1.8 -.1 -1.7 137.9 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. rented 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 11998877 11998888 11998899 Q3 Q4 Ql Q2 Q3 GROSS NATIONAL PRODUCT 1 Total 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 444.9 488.4 511.9 518.1 511.8 523.1 516.5 530.1 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 12 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 20 Final sales, total 4.487.3 4.847.5 5,172.5 5,209.7 5,264.3 5,387.2 5,429.9 5,505.6 21 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 22 Durable 780.5 860.2 906.7 922.1 907.4 919.9 930.1 941.6 23 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 24 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 27 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 3,845.3 4,016.9 4,117.7 4,129.7 4,133.2 4,150.6 4,155.1 4,173.6 29 Total GNP in 1982 dollars NATIONAL INCOME 3,660.3 3,984.9 4,223.3 4,232.1 4,267.1 4,350.3 4,411.3 n.a. 30 Total 2,686.4 2,905.1 3,079.0 3,095.2 3.128.6 3.180.4 3.232.5 3,276.1 31 Compensation of employees 2,249.7 2,431.1 2,573.2 2.586.6 2.612.7 2,651.6 2,696.3 2,733.3 32 Wages and salaries 419.4 446.6 476.6 479.9 486.7 497.1 505.7 511.3 33 Government and government enterprises .. 1,830.3 1,984.5 2,096.6 2.106.7 2,126.0 2.154.5 2.190.6 2,222.0 34 Other 436.6 474.0 505.8 508.6 515.9 528.8 536.1 542.8 35 Supplement to wages and salaries 227.2 248.5 263.9 265.1 268.4 276.0 279.7 282.7 36 Employer contributions for social insurance 209.4 225.5 241.9 243.5 247.5 252.8 256.4 260.0 37 Other labor income 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 • January 1991 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 2 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 3 Commodity-producing industries 649.9 696.4 720.6 722.3 721.4 724.6 731.1 735.1 4 Manufacturing 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 Other labor income 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 professional1 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 12 Rental income of persons 13.7 16.3 8.2 5.8 4.1 5.5 4.3 7.6 13 Dividends 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 15 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) 23 Gross national product 15,759.4 16,302.4 16,550.2 1166,,557788..55 16,546.0 1166,,557755..99 1166,,555544..22 1166,,557755..11 24 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 555.5 656.1 691.5 692.4 674.8 664.8 679.3 n.a. 28 Gross private saving 662.6 751.3 779.3 776.0 786.4 795.0 806.7 n.a. 29 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 303.2 322.1 346.4 335511..66 335566..55 335566..77 335599..77 336655..22 183.8 192.2 208.0 215.9 216.0 210.3 211.4 213.6 34 Government surplus, or deficit (-), national income and -107.1 -95.3 -87.8 --8833..66 -111.6 --113300..22 --112277..33 n.a. -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 Net foreign -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 1987 1988 Q2 Q3 Q4 Ql Q2" 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 -114,864 -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 R U e .S m . i g tt o a v n e c r e n s m , p en e t n s g i r o a n n s t , s and other transfers -1 -4 0 , , 2 2 9 7 9 6 -1 -4 0 , , 2 7 6 4 1 4 -1 -3 0 , , 7 9 5 6 8 3 -2 - , 9 0 6 4 2 4 -2 - , 9 6 0 2 9 1 -3 - , 8 7 8 4 9 2 -2 - , 9 4 8 0 3 2 -3 - , 8 8 5 5 5 8 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 -5,996 -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-reportea claims3 -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 -7,496 -IO,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 liabilities4 -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 assets5 -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 liabilities" 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 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) 9,149 -3,912 -25,293 -12,095 -5,9% -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 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 • January 1991 3.11 U. S. FOREIGN TRADE1 Millions of dollars; monthly data are seasonally adjusted. 1990 IItteemm 11998877 11998888 11998899 Mar. Apr. May June July Aug/ Sept." 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments, f.a.s. value 254,073 322,427 363,812 33,266 32,058 32,774 34,221 32,125 32,549 31,840 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 2 Customs value 406,241 440,952 473,211 41,636 39,364 40,543 39,561 41,244 42,283 41,254 Trade balance 3 Customs value -152,169 -118,526 -109,399 -8,370 -7,306 -7,770 -5,340 -9,119 -9,734 -9,414 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 Apr. May June July Aug. Sept. Oct." 1 Total 45,798 47,802 74,609 76,283 77,028 77,298 77,906 78,909 80,024 82,852 2 Gold stock, including Exchange Stabilization Fund1 11,078 11,057 11,059 11,060 11,065 11,065 11,064 11,065 11,063 11,060 3 Special drawing rights2,3 10,283 9,637 9,951 10,103 10,396 10,490 10,699 10,780 10,666 10,876 4 Reserve position in International Monetary Fund 11,349 9,745 9,048 8,687 8,764 88,,444499 8,686 8,890 8,881 9,066 5 Foreign currencies4 13,088 17,363 44,551 46,433 46,803 47,294 47,457 48,174 49,414 51,850 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 BANKS1 Millions of dollars, end of period 1990 AAsssseettss 11998877 11998888 11998899 Apr. May June July Aug. Sept. Oct.P 1 Deposits 244 347 589 402 309 368 279 337 360 296 Assets held in custody 2 U.S. Treasury securities2 195,126 232,547 224,911 252,759 253,691 255,651 256,585 261,051 261,321 266,750 3 Earmarked gold3 13,919 13,636 13,456 13,458 13,460 13,433 13,422 13,412 13,419 13,415 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 11998888 11998899 Mar. Apr. May June July Aug. Sept. All foreign countries 1 Total, all currencies 518,618 505,595 545,366 535,059 535,886 541,439 524,010 531,418 551,238' 546,140 7 Claims on United States 138,034 169,111 198,835 176,096 177,104 182,224 179,258 174,583 178,236 182,555 105,845 129,856 157,092 135,172 133,573 140,751 138,384 133,682 137,558 140,865 4 Other banks in United States 16,416 14,918 17,042 15,511 17,965 15,647 15,166 15,239 14,500 14,157 5 Nonbanks 15,773 24,337 24,701 25,413 25,566 25,826 25,708 25,662 26,178 27,533 6 Claims on foreigners 342,520 299,728 300,575 308,117 307,470 306,058 293,730 305,005 313,914 311,254 7 Other branches of parent bank 122,155 107,179 113,810 120,488 118,835 116,640 108,464 115,353' 121,683' 123,359 8 Banks 108,859 96,932 90,703 89,837 90,812 90,422 85,780 85,91V 88,822 83,162 9 Public borrowers 21,832 17,163 16,456 15,973 16,217 16,172 16,323 16,595' 16,208 16,379 10 Nonbank foreigners 89,674 78,454 79,606 81,819 81,606 82,824 83,163 87,146' 87,201' 88,354 11 Other assets 38,064 36,756 45,956 50,846 51,312 53,157 51,022 51,830 59,088' 52,331 12 Total payable in U.S. dollars 350,107 357,573 382,717 358,543 360,224 363,128 350,310 346,515 358,038' 360,195 n Claims on United States 132,023 163,456 191,184 168,833 169,996 173,887 171,551 166,294 169,714 173,978 14 103,251 126,929 152,294 130,350 129,162 135,211 133,167 128,066 131,994 135,068 15 Other banks in United States 14,657 14,167 16,386 14,992 17,209 14,818 14,575 14,375 13,513 13,416 16 14,115 22,360 22,504 23,491 23,625 23,858 23,809 23,853 24,207 25,494 17 Claims on foreigners 202,428 177,685 169,690 167,616 168,419 167,630 158,652 158,090 163,270' 164,552 18 Other branches of parent bank 88,284 80,736 82,949 85,028 84,930 83,381 76,410 79,241' 82,539' 84,378 19 63,707 54,884 48,396 43,408 43,814 44,449 42,918 38,815' 40,725 40,172 ?0 Public borrowers 14,730 12,131 10,961 11,110 11,191 10,912 10,956 10,652 10,927 11,166 21 Nonbank foreigners 35,707 29,934 27,384 28,070 28,484 28,888 28,368 29,382' 29,079' 28,836 22 Other assets 15,656 16,432 21,843 22,094 21,809 21,611 20,107 22,131 25,054' 21,665 United Kingdom 23 Total, all currencies 158,695 156,835 161,947 167,162 173,127 177,947 167,885 175,254 184,933 178,484 74 Claims on United States 32,518 40,089 39,212 38,809 42,366 43,247 39,904 40,418 40,092 42,568 75 27,350 34,243 35,847 34,648 37,572 39,089 35,924 36,564 36,140 39,042 ?6 Other banks in United States 1,259 1,123 1,058 1,301 1,262 747 730 894 1,037 717 77 3,909 4,723 2,307 2,860 3,532 3,411 3,250 2,960 2,915 2,809 ?8 Claims on foreigners 115,700 106,388 107,657 109,227 111,175 114,800 108,080 114,254 118,423 114,869 79 Other branches of parent bank 39,903 35,625 37,728 39,636 41,613 43,358 38,068 41,181 43,581 44,408 30 36,735 36,765 36,159 34,803 35,224 35,730 34,194 35,085 37,623 34,094 31 4,752 4,019 3,293 3,857 3,980 3,943 3,740 3,619 3,757 3,639 32 Nonbank foreigners 34,310 29,979 30,477 30,931 30,358 31,769 32,078 34,369 33,462 32,728 33 Other assets 10,477 10,358 15,078 19,126 19,586 19,900 19,901 20,582 26,418 21 047 34 Total payable in U.S. dollars 100,574 103,503 103,427 101,024 107,483 110,186 100,887 103,047 107,192 107,117 35 30,439 38,012 36,404 35,752 39,091 39,374 36,158 36,230 35,979 37,991 36 26,304 33,252 34,329 32,697 35,663 36,712 33,509 33,716 33,585 36,024 37 Other banks in United States 1,044 964 843 1,122 1,041 521 552 681 721 460 38 3,091 3,796 1,232 1,933 2,387 2,141 2,097 1,833 1,673 1,507 39 64,560 60,472 59,062 57,166 60,165 63,025 57,802 58,278 60,390 60,570 40 Other branches of parent bank 28,635 28,474 29,872 30,421 32,885 34,441 30,050 31,220 32,976 33,990 41 19,188 18,494 16,579 13,748 14,141 14,635 14,625 13,621 14,570 13,965 4? 3,313 2,840 2,371 3,074 3,131 3,114 2,942 2,839 2,896 2,866 43 Nonbank foreigners 13,424 10,664 10,240 9,923 10,008 10,835 10,185 10,598 9,948 9,749 44 Other assets 5,575 5,019 7,961 8,106 8,227 7,787 6,927 8,539 10,823 8,556 Bahamas and Caymans 45 Total, all currencies 160,321 170,639 176,006 155,145 150,767 154,851 154,354 145,813 150,695' 153,234 46 Claims on United States 85,318 105,320 124,205 105,466 102,184 105,617 107,244 99,918 103,521 106,574 47 60,048 73,409 87,882 70,535 65,084 69,807 72,115 64,748 68,507 70,145 48 Other banks in United States 14,277 13,145 15,071 13,564 15,902 14,079 13,603 13,412 12,625 12,539 49 10,993 18,766 21,252 21,367 21,198 21,731 21,526 21,758 22,389 23,890 50 Claims on foreigners 70,162 58,393 44,168 42,393 41,467 42,147 39,812 38,393 39,595 39,573 51 Other branches of parent bank 21,277 17,954 11,309 13,171 13,306 12,917 11,906 11,785' 12,031' 11,638 57 33,751 28,268 22,611 19,370 18,499 19,947 18,492 16,761 17,543 18,076 53 Public borrowers 7,428 5,830 5,217 4,684 4,490 4,350 4,393 4,307 4,554 4,818 54 Nonbank foreigners 7,706 6,341 5,031 5,168 5,172 4,933 5,021 5,540' 5,467' 5,041 55 Other assets 4,841 6,926 7,633 7,286 7,116 7,087 7,298 7,502 7,579' 7,087 56 Total payable in U.S. dollars 151,434 163,518 170,780 150,061 145,994 149,467 149,943 140,966 146,103' 149,233 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 • January 1991 3.14—Continued 1990 Mar. Apr. May June July Aug. Sept. All foreign countries 57 Total, all currencies 518,618 505,595 545,366 535,059 535,886 541,439 524,010 531,418 551,238r 546,140 58 Negotiable CDs 30,929 28,511 23,500 21,767 24,113 25,452 23,504 21,805 22,917' 21,977 59 To United States 161,390 185,577 197,239 173,675 168,669 169,791 169,769 163,275r 167,410' 172,747 60 Parent bank 87,606 114,720 138,412 114,170 109,642 109,831 113,151 105,401r 109,818' 117,217 61 Other banks in United States 20,355 14,737 11,704 10,799 11,782 10,272 9,092 9,454 10,264 8,976 62 Nonbanks 53,429 56,120 47,123 48,706 47,245 49,688 47,526 48,420 47,328 46,554 63 To foreigners 304,803 270,923 296,850 309,756 313,446 315,058 299,951 314,503 321,277' 317,339 64 Other branches of parent bank 124,601 111,267 119,591 124,084 120,405 120,722 113,653 119,476 124,510 125,517 65 Banks 87,274 72,842 76,452 75,017 77,875 78,681 73,896 77,940 79,366 75,312 66 Official institutions 19,564 15,183 16,750 17,704 20,683 19,710 17,637 19,718 17,777 1177,,662222 67 Nonbank foreigners 73,364 71,631 84,057 92,951 94,483 95,945 94,765 97,369 99,624' 9988,,888888 68 Other liabilities 21,496 20,584 27,777 29,861 29,658 31,138 30,786 31,835r 39,634 34,077 69 Total payable m U.S. dollars 361,438 367,483 396,613 369,306 368,626 369,505 358,681 355,782 365,839' 364,940 70 Negotiable CDs 26,768 24,045 19,619 17,084 19,601 20,579 18,928 16,519 17,588' 17,219 71 To United States 148,442 173,190 187,286 162,606 157,579 157,851 158,173 150,943'' 155,171' 158,892 72 Parent bank 81,783 107,150 132,563 108,128 103,252 103,389 106,818 98,928' 103,355' 109,323 73 Other banks in United States 18,951 13,468 10,519 9,296 10,415 8,855 7,741 7,884 8,791 7,501 74 Nonbanks 47,708 52,572 44,204 45,182 43,912 45,607 43,614 44,131 43,025 42,068 75 To foreigners 177,711 160,766 176,460 176,939 178,035 177,888 168,642 174,616 177,411' 175,860 76 Other branches of parent bank 90,469 84,021 87,636 86,908 84,090 84,415 78,646 81,332 84,116' 85,438 77 Banks 35,065 28,493 30,537 27,639 29,207 28,265 27,434 28,045 29,000 26,576 78 Official institutions 12,409 8,224 9,873 9,248 11,909 11,480 9,066 10,613 9,669 9,346 79 Nonbank foreigners 39,768 40,028 48,414 53,144 52,829 53,728 53,496 54,626 54,626' 54,500 80 Other liabilities 8,517 9,482 13,248 12,677 13,411 13,187 12,938 13,704' 15,669 12,969 United Kingdom 81 Total, all currencies 158,695 156,835 161,947 167,162 173,127 177,947 167,885 175,254 184,933 178,484 82 Negotiable CDs 26,988 24,528 20,056 18,266 20,535 21,846 19,672 17,795 18,703' 17,542 83 To United States 23,470 36,784 36,036 32,780 33,931 33,755 32,291 32,320 33,365 35,483 84 Parent bank 13,223 27,849 29,726 22,970 23,339 23,179 23,158 21,952 23,399 25,461 85 Other banks in United States 1,536 2,037 1,256 1,827 1,841 1,847 1,615 1,626 1,535 1,765 86 Nonbanks 8,711 6,898 5,054 7,983 8,751 8,729 7,518 8,742 8,431 8,257 87 To foreigners 98,689 86,026 92,307 101,160 103,362 106,138 99,279 107,533 109,372' 106,4% 88 Other branches of parent bank 33,078 26,812 27,397 29,848 28,581 29,193 26,506 28,944 28,967 30,487 89 Banks 34,290 30,609 29,780 29,116 31,026 31,580 28,575 32,420 34,647 30,113 90 Official institutions 11,015 7,873 8,551 9,184 10,829 11,409 10,263 11,314 9,902 9,578 91 Nonbank foreigners 20,306 20,732 26,579 33,012 32,926 33,956 33,935 34,855 35,856' 36,318 92 Other liabilities 9,548 9,497 13,548 14,956 15,299 16,208 16,643 17,606 23,493 18,963 93 Total payable in U.S. dollars 102,550 105,907 108,178 103,544 109,708 110,595 101,530 104,372 108,532 107,216 94 Negotiable CDs 24,926 22,063 18,143 15,660 17,936 19,012 17,233 14,831 15,758' 15,502 95 To United States 17,752 32,588 33,056 29,383 30,386 29,666 28,160 27,967 28,779 30,368 % Parent bank 12,026 26,404 28,812 22,219 22,446 22,339 22,190 21,208 22,423 23,%3 97 Other banks in United States 1,308 1,752 1,065 1,552 1,553 1,456 1,325 1,175 1,228 1,471 98 Nonbanks 4,418 4,432 3,179 5,612 6,387 5,871 4,645 5,584 5,128 4,934 99 To foreigners 55,919 47,083 50,517 52,095 54,371 55,163 49,672 54,591 55,252' 54,679 100 Other branches of parent bank 22,334 18,561 18,384 19,182 18,799 18,589 16,199 17,408 17,347 18,560 101 Banks 15,580 13,407 12,244 9,976 11,233 11,007 9,911 11,251 13,042 11,116 102 Official institutions 7,530 4,348 5,454 5,192 6,703 7,264 5,305 6,515 5,463 5,324 103 Nonbank foreigners 10,475 10,767 14,435 17,745 17,636 18,303 18,257 19,417 19,400' 19,679 104 Other liabilities 3,953 4,173 6,462 6,406 7,015 6,754 6,465 6,983 8,743 6,667 Bahamas and Caymans 105 Total, all currencies 160,321 170,639 176,006 155,145 150,767 154,851 154,354 145,813 150,695' 153,234 106 Negotiable CDs 885 953 678 522 524 528 535 548 553 553 107 To United States 113,950 122,332 124,859 108,003 101,024 103,655 103,592 95,904' 100,622' 104,211 108 Parent bank 53,239 62,894 75,188 61,528 55,311 57,136 58,880 51,415' 56,092' 62,276 109 Other banks in United States 17,224 11,494 8,883 7,310 8,544 6,991 5,984 6,228 7,039 5,398 110 Nonbanks 43,487 47,944 40,788 39,165 37,169 39,528 38,728 38,261 37,491 36,537 111 To foreigners 43,815 45,161 47,382 44,314 46,741 48,410 47,613 47,010 46,922 46,237 112 Other branches of parent bank 19,185 23,686 23,414 20,778 22,446 25,535 24,184 24,560 24,965 24,781 113 Banks 10,769 8,336 8,823 7,983 8,617 8,154 8,969 8,120 7,469 7,519 114 Official institutions 1,504 1,074 1,097 1,078 1,247 962 960 999 943 731 115 Nonbank foreigners 12,357 12,065 14,048 14,475 14,431 13,759 13,500 13,331 13,545 13,206 116 Other liabilities 1,671 2,193 3,087 2,306 2,478 2,258 2,614 2,351' 2,598 2,233 117 Total payable in U.S. dollars 152,927 162,950 171,250 150,758 146,259 149,707 149,680 140,377 145,670' 148,589 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 11998899rr Mar. Apr. May June July Aug. Sept/ 1 Total1 304,132 312,457 302,096 307,820 308,397 309,541 312,309 321,420 322,951 By type 2 Liabilities reported by banks in the United States 31,519 36,481 35,553 36,642 36,747 37,471 38,604 40,503 39,009 3 U.S. Treasury bills and certificates 103,722 76,985 73,039 69,454 72,322 71,804 72,690 72,803 72,459 U.S. Treasury bonds and notes 4 Marketable 152,429 179,264 174,411 179,476 177,092 178,016 178,740 185,534 189,297 5 Nonmarketable 523 568 580 3,596 3,620 3,644 3,668 3,692 3,717 6 U.S. securities other than U.S. Treasury securities 15,939 19,159 18,513 18,652 18,616 18,606 18,607 18,888 18,469 By area 7 Western Europe 123,752 133,417 135,691 141,102 142,405 146,928 149,454 152,777 155,531 8 9,513 9,482 8,315 7,809 6,550 6,961 8,415 11,083 10,171 9 Latin America and Caribbean 10,030 8,740 9,151 9,066 9,147 10,200 9,972 11,192 11,426 10 151,887 153,338 141,068 142,899 141,490 136,325 135,705 137,008 136,383 11 Africa 1,403 1,030 936 895 1,074 946 917 1,697 1,383 12 Other countries6 7,548 6,453 6,936 6,047 7,731 8,183 7,848 7,665 8,058 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 68,086 2 Banks' own claims 26,180 51,271 68,983 70,328 65,127 60,999 66,652 3 Deposits 14,129 18,861 25,100 22,962 20,491 21,456 20,256 4 Other claims 12,052 32,410 43,884 47,366 44,636 39,543 46,396 5 Claims of banks' domestic customers2 2,507 551 364 3,044 3,507 1,190 1,501 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 • January 1991 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 Mar. Apr. May June July' Aug/ Sept.p 1 All foreigners 618,874 685,339 736,627 703,562 702,923 715,613 707,464 719,673 737,840 741,202 2 Banks' own liabilities 470,070 514,532 577,247 543,292 547,193 552,438 544,196 554,328 570,226 571,386 3 Demand deposits 22,383 21,863 22,080 20,474 21,096 20,578 20,365 19,723 20,706 22,259 4 Time deposits 148,374 152,164 168,735 154,865 148,984 151,063 151,525 154,590 156,747 158,958 5 Other. 51,677 51,366 67,650 60,658 65,990 65,367 64,646 66,157 74,260 65,721 6 Own foreign offices4 247,635 289,138 318,782 307,295 311,123 315,430 307,660 313,859 318,514 324,448 7 Banks' custody liabilities5 148,804 170,807 159,380 160,270 155,730 163,175 163,267 165,344 167,614 169,817 8 U.S. Treasury bills and certificates 101,743 115,056 91,100 88,015 83,649 88,908 90,082 91,883 93,038 91,394 9 Other negotiable and readily transferable instruments 16,776 16,426 19,526 18,809 18,132 18,531 17,865 17,599 16,983 17,144 10 Other 30,285 39,325 48,754 53,446 53,948 55,737 55,320 55,862 57,593 61,279 11 Nonmonetary international and regional organizations8 4,464 3,224 4,772 4,896 5,727 4,558 5,018 4,112 4,288 5,856 12 Banks' own liabilities 2,702 2,527 3,156 3,334 3,781 2,913 3,619 2,790 2,328 4,544 13 Demand deposits 124 71 96 156 52 28 29 46 244 142 14 Time deposits 1,538 1,183 927 1,137 2,025 773 1,416 1,038 1,303 1,165 15 Other3 1,040 1,272 2,133 2,041 1,704 2,112 2,174 1,707 781 3,238 16 Banks' custody liabilities5 1,761 698 1,616 1,562 1,947 1,645 1,399 1,322 1,959 1,311 17 U.S. Treasury bills and certificates6 265 57 197 191 190 174 147 148 1,095 479 18 Other negotiable and readily transferable instruments7 1,497 641 1,417 1,371 1,740 1,463 1,253 1,159 819 817 19 Other 0 0 2 0 17 8 0 15 45 15 20 Official institutions9 120,667 135,241 113,466 108,592 106,096 109,069 109,275 111,294 113,306 111,468 21 Banks' own liabilities 28,703 27,109 31,092 31,711 33,864 33,395 33,378 34,858 36,467 35,032 22 Demand deposits 1,757 1,917 2,196 1,826 2,066 1,644 1,613 1,516 1,914 2,503 23 Time deposits2 12,843 9,767 10,495 9,730 10,939 11,178 10,179 11,510 11,120 11,014 24 Other3 14,103 15,425 18,401 20,155 20,859 20,572 21,586 21,831 23,433 21,515 25 Banks' custody liabilities5 91,965 108,132 82,373 76,881 72,231 75,674 75,896 76,437 76,839 76,436 26 U.S. Treasury bills and certificates 88,829 103,722 76,985 73,039 69,454 72,322 71,804 72,690 72,803 72,459 27 Other negotiable and readily transferable instruments7 2,990 4,130 5,028 3,671 2,605 3,158 3,650 3,5% 3,685 3,676 28 Other 146 280 361 171 173 195 443 150 351 302 29 Banks10 414,280 459,523 514,721 489,851 492,708 503,137 496,903 507,154 524,048 528,784 30 Banks' own liabilities 371,665 409,501 454,206 423,858 426,048 432,438 424,810 433,739 449,031 450,734 31 Unaffiliated foreign banks 124,030 120,362 135,425 116,562 114,925 117,009 117,151 119,881 130,517 126,286 32 Demand deposits 10,898 9,948 10,325 9,625 9,864 9,673 9,503 9,224 9,793 10,415 33 Time deposits 79,717 80,189 90,557 75,389 68,703 71,159 73,243 74,888 77,982 80,885 14 Other3 33,415 30,226 34,543 31,548 36,357 36,177 34,405 35,770 42,742 34,987 35 Own foreign offices 247,635 289,138 318,782 307,295 311,123 315,430 307,660 313,859 318,514 324,448 36 Banks' custody liabilities5 42,615 50,022 60,514 65,993 66,660 70,699 72,093 73,415 75,017 78,050 37 U.S. Treasury bills and certificates6 9,134 7,602 9,367 9,359 9,374 11,578 13,502 13,964 13,855 13,009 38 Other negotiable and readily transferable instruments7 5,392 5,725 5,124 5,390 5,437 5,616 5,757 5,760 5,366 6,187 39 Other 28,089 36,694 46,023 51,244 51,850 53,504 52,833 53,690 55,797 58,855 40 Other foreigners 79,463 87,351 103,669 100,223 98,391 98,848 96,268 97,112 96,198 95,095 41 Banks' own liabilities 67,000 75,396 88,793 84,389 83,500 83,692 82,389 82,941 82,400 81,076 42 Demand deposits 9,604 9,928 9,463 8,867 9,114 9,232 9,220 8,937 8,755 9,200 43 Time deposits 54,277 61,025 66,757 68,608 67,318 67,953 66,687 67,155 66,341 65,895 44 Other 3,119 4,443 12,573 6,914 7,069 6,506 6,481 6,849 7,304 5,981 45 Banks' custody liabilities5 12,463 11,956 14,877 15,834 14,891 15,157 13,879 14,170 13,798 14,019 46 U.S. Treasury bills and certificates6 3,515 3,675 4,551 5,425 4,632 4,834 4,630 5,081 5,285 5,448 47 Other negotiable and readily transferable instruments7 6,898 5,929 7,958 8,378 8,350 8,293 7,205 7,083 7,113 6,464 48 Other 2,050 2,351 2,368 2,031 1,909 2,030 2,044 2,007 1,400 2,107 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 7,314 6,425 7,203 7,634 7,183 7,282 6,429 5,909 5,713 6,294 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 Mar. Apr. May June July' Aug/ Sept." 1 618,874 685,339 736,627 703,562 702,923 715,613 707,464 719,673 737,840 741,202 2 Foreign countries 614,411 682,115 731,855 698,666 697,195 711,055 702,446 715,560 733,552 735,347 3 Europe 234,641 231,912 237,453 225,210 229,675 236,551 234,112 235,872 244,759 241,015 4 Austria 920 1,155 1,233 1,493 1,549 1,373 1,531 1,498 1,544 1,397 Belgium-Luxembourg 9,347 10,022 10,611 12,319 10,128 9,507 10,047 10,564 11,503 11,972 6 Denmark 760 2,200 1,415 1,760 2,244 2,152 2,411 2,581 2,238 2,055 7 Finland 377 285 570 431 464 314 387 485 465 392 R France 29,835 24,777 26,903 21,900 24,263 23,103 23,566 23,111 24,199 29,191 9 Germany 7,022 6,772 7,578 7,488 8,798 8,030 8,076 7,580 7,595 7,837 10 Greece 689 672 1,028 906 879 860 833 877 940 1,454 11 Italy 12,073 14,599 16,169 12,728 14,138 16,347 16,779 17,114 17,117 16,351 1? Netherlands 5,014 5,316 6,613 9,454 7,731 8,166 7,617 5,968 6,201 5,381 13 Norway 1,362 1,559 2,401 2,619 1,454 1,582 2,420 1,793 2,192 1,951 14 Portugal 801 903 2,407 2,385 2,354 2,359 3,082 3,073 2,934 2,992 15 2,621 5,494 4,364 4,911 4,230 4,535 4,391 4,922 4,455 4,340 16 1,379 1,284 1,491 1,374 1,689 1,655 1,769 1,586 1,495 833 17 Switzerland 33,766 34,199 34,496 33,890 33,244 35,260 34,780 33,809 34,932 34,918 1ft Turkey 703 1,012 1,818 1,039 1,459 1,641 1,596 1,654 1,897 1,634 19 United Kingdom 116,852 111,811 102,362 96,966 99,376 104,624 98,530 100,861 107,602 102,339 70 Yugoslavia 710 529 1,474 1,613 1,599 1,934 2,169 2,436 2,272 2,043 71 Other Western Europe1 9,798 8,598 13,563 10,494 12,239 11,423 12,360 14,367 13,832 12,018 7? U.S.S.R , 32 138 350 141 446 158 75 257 56 250 23 Other Eastern Europe 582 591 608 1,299 1,392 1,529 1,695 1,335 1,291 1,669 24 Canada 30,095 21,062 18,865 18,538 19,485 19,900 19,956 20,056 21,122 20,796 75 Latin America and Caribbean 220,372 271,146 310,948 313,158 309,109 315,674 312,782 316,603 320,037 326,453 76 5,006 7,804 7,304 8,036 8,235 8,346 7,993 8,163 7,845 7,981 77 74,767 86,863 99,341 98,492 90,331 98,658 99,255 98,292 101,634 108,264 78 Bermuda 2,344 2,621 2,884 2,308 2,807 2,514 3,072 2,824 2,659 2,739 79 Brazil 4,005 5,314 6,334 7,281 6,729 6,088 6,110 6,083 6,884 6,468 30 British West Indies 81,494 113,840 138,263 139,120 143,264 142,129 137,069 142,702 141,383 140,571 31 Chile 2,210 2,936 3,212 3,261 3,418 3,517 3,449 3,540 3,550 3,135 3? Colombia 4,204 4,374 4,653 4,510 4,404 4,471 4,508 4,474 4,344 3,918 33 Cuba 12 10 10 9 9 10 11 15 11 10 34 Ecuador 1,082 1,379 1,391 1,337 1,334 1,367 1,368 1,349 1,348 1,348 35 Guatemala 1,082 1,195 1,312 1,403 1,451 1,473 1,473 1,523 1,498 1,517 36 Jamaica 160 269 209 245 224 215 224 221 213 217 37 Mexico 14,480 15,185 15,423 15,269 15,085 15,116 16,141 16,057 16,333 16,486 38 Netherlands Antilles 4,975 6,420 6,310 6,412 6,460 6,806 6,628 6,375 6,446 6,929 39 Panama 7,414 4,353 4,361 4,766 4,749 4,540 4,544 4,388 4,630 4,632 40 Peru 1,275 1,671 1,984 1,836 1,703 1,532 1,473 1,405 1,369 1,362 41 Uruguay 1,582 1,898 2,284 2,513 2,575 2,560 2,529 2,560 2,531 2,514 4? Venezuela 9,048 9,147 9,468 9,916 9,673 9,717 10,292 9,830 10,455 11,251 43 Other 5,234 5,868 6,206 6,446 6,659 6,614 6,645 6,803 6,905 7,110 44 121,288 147,838 156,201 133,230 131,027 129,147 126,265 134,138 137,766 137,241 China 45 1,162 1,895 1,773 1,578 1,844 1,785 1,871 1,890 2,319 22,,110055 46 Taiwan 21,503 26,058 19,588 15,579 15,440 15,174 11,006 12,611 12,639 12,467 47 Hong Kong 10,180 12,248 12,416 11,615 12,277 12,896 12,369 13,316 13,823 13,826 4ft 582 699 780 1,033 1,013 1,148 966 909 806 1,035 49 1,404 1,180 1,281 1,545 1,560 1,192 1,520 1,377 1,130 1,398 50 1,292 1,461 1,243 1,497 1,311 1,227 1,202 1,122 1,125 939 51 Japan 54,322 74,015 81,184 66,430 65,581 62,101 62,367 66,293 68,664 69,283 5? 1,637 2,541 3,215 2,331 2,120 2,049 2,121 2,157 2,316 2,567 53 Philippines 1,085 1,163 1,766 1,216 1,193 1,191 1,329 1,314 1,350 1,340 54 Thailand 1,345 1,236 2,093 1,930 1,595 1,973 2,125 2,745 2,233 1,626 55 Middle-East oil-exporting countries3 13,988 12,083 13,370 12,452 11,626 13,049 13,076 14,039 14,928 14,046 56 Other 12,788 13,260 17,491 16,024 15,466 15,362 16,313 16,366 16,433 16,609 57 3,945 3,991 3,823 3,644 3,722 3,778 3,650 3,412 5,064 5,002 58 1,151 911 686 601 595 646 592 583 1,505 970 59 Morocco 194 68 78 80 111 86 81 95 77 93 60 South Africa 202 437 205 277 236 241 318 239 332 393 61 67 85 86 74 70 66 41 38 43 44 67 Oil-exporting countries4 1,014 1,017 1,121 1,048 936 1,016 890 873 1,072 966 63 Other 1,316 1,474 1,648 1,564 1,775 1,722 1,728 1,584 2,035 2,537 64 4,070 6,165 4,564 4,887 4,176 6,005 5,680 5,480 4,803 4,840 65 3,327 5,293 3,867 3,994 3,469 5,250 5,052 4,892 4,122 4,109 66 All other 744 872 697 893 707 755 628 588 681 732 67 Nonmonetary international and regional organizations 4,464 3,224 4,772 4,896 5,727 4,558 5,018 44,,111122 44,,228888 55,,885566 68 International 2,830 2,503 3,825 3,634 4,147 3,393 3,883 2,981 3,150 4,632 69 Latin American regional 1,272 589 684 949 1,123 912 920 812 567 668 70 Other regional6 362 133 263 313 457 253 215 319 571 556 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 • January 1991 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1990 AArreeaa aanndd ccoouunnttrryy 11998877 11998888 11998899 Mar. Apr. May June July Aug.' Sept." 1 Total 459,877 491,165 533,992 487,989 488,844 489,028 489,245 488,294r 495,030 491,560 2 Foreign countries 456,472 489,094 530,553 484,036 484,452 484,443 485,050 484,019' 491,674 486,414 3 Europe 102,348 116,928 119,024 104,298 105,154 103,615 102,394 102,363' 106,687 105,146 4 Austria 793 483 415 500 592 420 337 399 287 413 5 Belgium-Luxembourg 9,397 8,515 6,478 6,361 6,330 6,765 5,611 6,744 6,671 5,577 6 Denmark 717 483 582 608 750 1,004 590 503 676 674 7 Finland 1,010 1,065 1,027 1,153 1,025 931 1,035 1,112 1,177 %2 8 France 13,548 13,243 16,146 15,631 16,087 16,224 14,794 13,746 14,288 14,485 9 Germany 2,039 2,329 2,865 2,783 2,476 3,045 2,870 2,595' 2,939 3,3% 10 Greece 462 433 788 664 622 597 514 529 610 686 11 Italy 7,460 7,936 6,662 5,050 4,230 4,758 5,133 4,615 4,500 4,537 12 Netherlands 2,619 2,541 1,904 2,11412 1 2,027 1,968 2,041 1,749' 1,647 2,193 13 Norway 934 455 609 918 761 745 692' 716 744 14 Portugal 477 261 376 273 381 407 540 543 411 412 15 Spain 1,853 1,823 1,930 2,241 1,726 1,897 2,084 2,125 2,107 2,312 16 Sweden 2,254 1,977 1,773 2,236 2,206 2,711 2,614 3,362' 3,384 2,395 17 Switzerland 2,718 3,895 6,141 5,056 4,826 4,999 5,249 4,297 3,736 3,970 18 Turkey 1,680 1,233 1,071 1,123 1,120 1,138 1,230 1,186 1,434 1,377 19 United Kingdom 50,823 65,706 65,527 53,100 55,604 52,333 53,577 54,804' 58,556 57,605 20 Yugoslavia 1,700 1,390 1,329 1,157 1,121 1,128 1,095 1,070 1,029 1,120 21 Other Western Europe 619 1,152 1,302 1,183 970 786 804 960 982 697 2 2 2 3 O U t . h S e .S r .R Ea stern Europe3 3 85 8 2 9 1,2 7 5 5 5 4 1, 9 1 2 7 1 9 1,3 9 5 0 6 4 1,3 8 2 2 2 0 9 8 4 0 5 0 71514 1 5 7 6 6 5 5 ' 6 91 2 3 4 9 65 4 2 0 24 Canada 25,368 18,889 15,450 15,081 15,234 16,355 16,492 16,391 15,431 15,393 25 Latin America and Caribbean 214,789 214,264 230,392 210,443 200,361 205,853 208,825 199,793' 204,015 211,028 26 Argentina 11,996 11,826 9,270 8,189 8,025 7,689 7,600 7,166 7,111 7,204 77 Bahamas 64,587 66,954 77,921 69,095 63,937 70,508 66,913 67,041' 67,865 71,421 78 Bermuda 471 483 1,315 425 443 774 1,830 1,988 2,443 3,741 79 Brazil 25,897 25,735 23,749 21,885 21,849 21,793 20,699 20,180' 18,906 18,645 30 British West Indies 50,042 55,888 68,709 72,412 67,706 67,564 74,590 66,428' 70,973 73,264 31 Chile 6,308 5,217 4,353 4,079 3,715 3,630 3,453 3,490' 3,430 3,276 32. Colombia 2,740 2,944 2,784 2,720 2,649 2,624 2,596 2,541 2,700 2,552 33 Cuba 1 1 1 0 0 0 0 1 2 0 34 Ecuador 2,286 2,075 1,688 1,536 1,527 1,503 1,523 1,515 1,507 1,498 35 Guatemala4 144 198 197 208 207 206 188 196 208 215 36 Jamaica4 188 212 297 265 260 260 258 262 258 260 37 Mexico 2299,,553322 24,637 23,376 14,268 14,734 14,529 14,665 14,689' 14,936 15,296 38 Netherlands Antilles 998800 1,306 1,921 1,692 1,759 1,630 1,722 1,873 1,633 1,847 39 Panama 4,744 2,521 1,740 1,722 1,733 1,643 1,598 1,491 1,507 1,558 40 Peru 1,329 1,013 771 733 721 679 683 661 631 649 41 Uruguay 963 910 928 926 886 876 842 843 834 796 47. Venezuela 10,843 10,733 9,647 8,528 8,405 8,251 8,136 8,064 7,652 7,274 43 Other Latin America and Caribbean 1,738 1,612 1,726 1,760 1,805 1,693 1,527 1,364' 1,420 1,533 44 106,096 130,881 157,444 145,906 155,553 150,172 148,963 158,028' 157,944 146,790 China Mainland 968 762 634 599 674 517 537 554 586 539 46 Taiwan 4,592 4,184 2,776 2,016 1,890 1,941 1,946 1,583 2,026 1,710 47 Hong Kong 8,218 10,143 11,128 7,418 8,965 9,563 9,271 9,434 9,473 9,026 48 India 510 560 621 721 588 579 802 852 628 867 49 Indonesia 580 674 651 604 560 599 81011 1 814 836 826 50 Israel 1,363 1,136 813 761 746 738 738 785 698 51 Japan 68,658 90,149 111,270 108,554 117,560 108,245 107,671 114,663' 114,973 105,727 52 Korea 5,148 5,213 5,323 5,042 5,011 5,186 5,128 5,515 5,614 5,679 53 Philippines 2,071 1,876 1,344 1,204 1,221 1,351 1,357 1,342 1,369 1,333 54 Thailand 496 848 1,140 992 1,073 1,202 1,279 1,242' 1,245 1,279 55 Middle East oil-exporting countries 4,858 6,213 10,149 8,929 8,376 9,577 10,816 12,318 10,657 10,433 56 Other Asia 8,635 9,122 11,594 9,066 8,891 10,674 8,576 8,971' 9,752 8,674 57 Africa 4,742 5,718 5,890 5,984 5,953 5,913 5,787 5,567' 5,659 5,765 58 Egypt 521 507 502 474 491 488 469 421 449 430 59 Morocco 542 511 559 581 596 587 565 544 539 542 60 South Africa 1,507 1,681 1,628 1,648 1,632 1,639 1,573 1,560 1,571 1,600 61 Zaire 15 17 16 25 19 20 21 20 19 20 62 Oil-exporting countries6 1,003 1,523 1,648 1,749 1,705 1,665 1,649 1,604 1,586 1,530 63 Other 1,153 1,479 1,537 1,507 1,509 1,515 1,511 1,418' 1,4% 1,644 64 Other countries 3,129 2,413 2,354 2,324 2,195 2,535 2,590 1,878 1,938 2,292 65 Australia 2,100 1,520 1,781 1,632 1,551 1,657 1,712 1,422 1,304 1,868 66 All other 1,029 894 573 692 644 878 878 456 634 424 67 Nonmonetary international and regional organizations7 3,404 2,071 3,439 3,954 4,393 4,585 4,195 4,275' 3,356 5,145 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 Mar. Apr. May June July' Aug/ Sept.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 444444488888887777777,,,,,,,999999988888889999999 488,844 489,028 444444488888889999999,,,,,,,222222244444445555555 488,294 495,030 491,560 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666664444444,,,,,,,666666600000005555555 66666662222222,,,,,,,666666655555558888888 66666660000000,,,,,,,000000077777773333333 55555551111111,,,,,,,777777755555555555555 51,355 50,804 44444449999999,,,,,,,111111133333339999999 47,570 46,578 48,073 44 OOwwnn ffoorreeiiggnn ooffffiicceess22 222222222222224444444,,,,,,,777777722222227777777 222222255555557777777,,,,,,,444444433333336666666 222222299999995555555,,,,,,,999999988888880000000 222222277777774444444,,,,,,,888888888888886666666 274,354 275,178 222222288888880000000,,,,,,,000000011111116666666 275,275 274,014 277,317 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111122222227777777,,,,,,,666666600000009999999 111111122222229999999,,,,,,,444444422222225555555 111111133333334444444,,,,,,,888888855555554444444 111111122222223333333,,,,,,,111111188888886666666 125,318 125,908 111111122222221111111,,,,,,,777777700000006666666 128,481 137,741 125,148 66 DDeeppoossiittss 66666660000000,,,,,,,666666688888887777777 66666665555555,,,,,,,888888899999998888888 77777778888888,,,,,,,111111188888884444444 77777770000000,,,,,,,555555555555551111111 72,633 72,566 66666668888888,,,,,,,333333300000009999999 73,114 79,793 71,783 77 OOtthheerr 66666666666666,,,,,,,999999922222222222222 66666663333333,,,,,,,555555522222227777777 55555556666666,,,,,,,666666677777770000000 55555552222222,,,,,,,666666633333335555555 52,685 53,342 55555553333333,,,,,,,333333399999997777777 55,367 57,948 53,366 88 AAllll ootthheerr ffoorreeiiggnneerrss 44444442222222,,,,,,,999999933333336666666 44444441111111,,,,,,,666666644444446666666 44444443333333,,,,,,,000000088888884444444 33333338888888.......111111166666662222222 37,818 37,138 33333338888888,,,,,,,333333388888884444444 36,969 36,697 41,022 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,,,,,,,999999933333330000000rrrrrrr Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 40,909 45,565 45,675 42,112 39,272 41,517 40,222' 40,837 44,139 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 232,295 235,130 233,184 234,112 237,648 213,670 208,862 By borrower 2 Maturity of 1 year or less2 160,555 163,997 172,634 170,682 177,896 160,087 159,150 3 Foreign public borrowers 24,842 25,889 26,562 24,102 23,483 22,725 20,371 4 All other foreigners 135,714 138,108 146,071 146,581 154,413 137,362 138,778 5 Maturity over 1 year 71,740 71,133 60,550 63,429 59,752 53,584 49,712 6 Foreign public borrowers 39,103 38,625 35,291 38,134 35,822 30,050 28,332 7 All other foreigners 32,637 32,507 25,259 25,295 23,931 23,533 21,380 By area Maturity of 1 year or less2 8 Europe 61,784 59,027 55,909 54,525 53,912 48,368 49,449 9 Canada 5,895 5,680 6,282 6,236 5,886 5,694 5,754 10 Latin America and Caribbean 56,271 56,535 57,991 52,227 52,989 46,719 44,336 11 Asia 29,457 35,919 46,224 50,445 57,766 51,744 51,182 12 Africa 2,882 2,833 3,337 3,514 3,225 3,165 2,991 13 All other3 4,267 4,003 2,891 3,735 4,118 4,396 5,437 Maturity of over 1 year 14 Europe 6,737 6,696 4,666 4,662 4,121 4,407 4,201 15 Canada 1,925 2,661 1,922 2,459 2,353 2,702 2,819 16 Latin America and Caribbean 56,719 53,817 47,547 49,046 45,818 37,668 33,623 17 Asia 4,043 3,830 3,613 4,203 4,142 5,479 5,866 18 Africa 1,539 1,747 2,301 2,475 2,633 2,764 2,739 19 All other3 777 2,381 501 584 684 564 464 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 • January 1991 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 Area or country iyob lyts / Sept. Dec. Mar. June Sept. Dec. Mar. June Sept." 1 Total 386.5 382.4 354.0 346.3 346.1 340.0 346.2 338.3 334.4 322.9 333.0 2 G-10 countries and Switzerland 156.6 159.7 148.7 152.7 145.4 145.1 146.4 152.9 147.1 140. r 144.3 3 Belgium-Luxembourg 8.4 10.0 9.5 9.0 8.6 7.8 6.9 6.3 6.6 6.2 6.5 4 France 13.6 13.7 10.3 10.5 11.2 10.8 11.1 11.7 10.5 10.3 11.1 5 Germany 11.6 12.6 9.2 10.3 10.2 10.6 10.4 10.5 11.2 11.2 11.2 6 Italy 9.0 7.5 5.6 6.8 5.2 6.1 6.8 7.4 6.0 5.5 4.5 7 Netherlands 4.6 4.1 2.9 2.7 2.8 2.8 2.4 3.1 3.1 2.7 3.7 8 Sweden 2.4 2.1 1.9 1.8 2.3 1.8 2.0 2.0 2.1 2.3 2.4 9 Switzerland 5.8 5.6 5.2 5.4 5.1 5.4 6.1 7.1 6.3 6.4 5.6 10 United Kingdom 70.9 68.8 67.6 66.2 65.6 64.5 63.7 67.2 64.0 59.9 62.1 11 Canada 5.2 5.5 4.9 5.0 4.0 5.1 5.9 5.4 4.8 5.2 5.1 12 Japan 25.1 29.8 31.6 34.9 30.5 30.2 31.0 32.2 32.6 30.4' 32.1 13 Other developed countries 26.1 26.4 23.0 21.0 21.1 21.2 21.0 20.7 23.1 22.6 23.0 14 Austria 1.7 1.9 1.6 1.5 1.4 1.7 1.5 1.5 1.5 1.5 1.6 15 Denmark 1.7 1.7 1.2 1.1 1.1 1.4 1.1 1.1 1.1 1.1 1.0 16 Finland 1.4 1.2 1.3 1.1 1.0 1.0 1.1 1.0 1.1 .9 .8 17 Greece 2.3 2.0 2.1 1.8 2.1 2.3 2.4 2.5 2.6 2.7 2.8 18 Norway 2.4 2.2 2.0 1.8 1.6 1.8 1.4 1.4 1.7 1.4 1.5 19 Portugal .9 .6 .4 .4 .4 .6 .4 .4 .4 .8 .6 20 Spain 5.8 8.0 6.3 6.2 6.6 6.2 6.9 7.1 8.3 7.9 8.5 21 Turkey 2.0 2.0 1.6 1.5 1.3 1.1 1.2 1.2 1.3 1.4 1.6 22 Other Western Europe 1.5 1.6 1.9 1.3 1.1 1.1 1.0 .7 1.0 1.1 .7 23 South Africa 3.0 2.9 2.7 2.4 2.2 2.1 2.1 2.0 2.0 1.9 1.9 24 Australia 3.4 2.4 1.8 1.8 2.4 1.9 2.1 1.6 2.1 1.9 2.0 25 OPEC countries3 19.4 17.4 17.9 16.6 16.2 16.1 16.2 17.1 15.5 15.4 14.4 26 Ecuador 2.2 1.9 1.8 1.7 1.6 1.5 1.5 1.3 1.2 1.2 1.1 27 Venezuela 8.7 8.1 7.9 7.9 7.9 7.5 7.4 7.0 6.1 6.0 6.0 28 Indonesia 2.5 1.9 1.8 1.7 1.7 1.9 2.0 2.0 2.1 2.0 2.3 29 Middle East countries 4.3 3.6 4.6 3.4 3.3 3.4 3.5 5.0 4.3 4.4 3.3 30 African countries 1.8 1.9 1.9 1.9 1.7 1.6 1.9 1.7 1.8 1.8 1.7 31 Non-OPEC developing countries 99.6 97.8 87.2 85.3 85.9 83.4 81.2 77.5 68.8 66.5' 66.3 Latin America 32 Argentina 9.5 9.5 9.3 9.0 8.5 7.9 7.6 6.3 5.5 5.1 4.9 33 Brazil 25.3 24.7 22.4 22.4 22.8 22.1 20.9 19.0 17.5 tt.O' 15.0 34 Chile 7.1 6.9 6.3 5.6 5.7 5.2 4.9 4.6 4.3 3.7 3.6 35 Colombia 2.1 2.0 2.1 2.1 1.9 1.7 1.6 1.8 1.8 1.7 1.8 36 Mexico 24.0 23.5 20.4 18.8 18.3 17.7 17.2 17.7 12.8 13.0 13.1 37 Peru 1.4 1.1 .8 .8 .7 .6 .6 .6 .5 .5 .5 38 Other Latin America 3.1 2.8 2.5 2.6 2.7 2.6 2.9 2.8 2.7 2.4 2.4 Asia China 39 Mainland .4 .3 .2 .3 .5 .3 .3 .3 .3 .2 .2 40 Taiwan 4.9 8.2 3.2 3.7 4.9 5.2 5.0 4.5 3.8 3.6 3.9 41 India 1.2 1.9 2.0 2.1 2.6 2.4 2.7 3.1 3.5 3.6 3.6 42 Israel 1.5 1.0 1.0 1.2 .9 .8 .7 .7 .6 .7' .6 43 Korea (South) 6.7 5.0 6.0 6.1 6.1 6.6 6.5 5.9 5.3 5.6 6.2 44 Malaysia 2.1 1.5 1.7 1.6 1.7 1.6 1.7 1.7 1.8 1.8 1.8 45 Philippines 5.4 5.2 4.7 4.5 4.4 4.4 4.0 4.1 3.7 3.9 3.9 46 Thailand .9 .7 1.2 1.1 1.0 1.0 1.3 1.3 1.1 1.3 1.5 47 Other Asia .7 .7 .8 .9 .8 .8 1.0 1.0 1.2 1.1 1.2 Africa 48 Egypt .7 .6 .5 .4 .5 .6 .5 .4 .4 .5 .4 49 Morocco .9 .9 .8 .9 .9 .9 .8 .9 .9 .9 .9 50 Zaire .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa4 1.6 1.3 1.2 1.1 1.1 1.1 1.0 1.0 .9 .9 .8 52 Eastern Europe 3.5 3.2 3.1 3.6 3.5 3.4 3.5 3.5 3.4 3.0 2.9 53 U.S.S.R .1 .3 .4 .7 .7 .6 .8 .7 .8 .4 .4 54 Yugoslavia 2.0 1.8 1.8 1.8 1.7 1.7 1.7 1.6 1.4 1.4 1.3 55 Other 1.4 1.1 1.0 1.1 1.1 1.1 1.1 1.3 1.3 1.2 1.2 56 Offshore banking centers 61.5 54.5 47.3 44.2 48.5 43.1 49.2 36.6 42.9 40.1' 41.8 57 Bahamas 22.4 17.3 12.9 11.0 15.8 11.0 11.4 5.5 9.3 8.5 8.8 58 Bermuda .6 .6 .9 .9 1.1 .7 1.3 1.7 .9 2.2 4.0 59 Cayman Islands and other British West Indies 12.3 13.5 11.9 12.9 12.0 10.8 15.3 8.9 10.9 8.5' 9.0 60 Netherlands Antilles 1.8 1.2 1.2 1.0 .9 1.0 1.1 2.3 2.6 2.3 2.2 6 6 1 2 L Pa e n b a a m no a n 4.0] 3.7 j 2.6 J 2.5 j 2.2 j 1.9 1.5 1 . . 4 1 1.3 J 1.4 1.5 63 Hong Kong 11! i 112 10^5 9.6 9.6 10^4 10> 9.7 9^8 io!o 9^0 64 Singapore 9.2 7.0 7.0 6.1 6.8 7.3 7.8 7.0 8.0 7.0 7.2 65 Others6 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated7 19.8 23.2 26.7 22.6 25.0 27.4 28.5 29.8 33.2 35.1' 40.0 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 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998866 11998877 11998888 Mar. June Sept. Dec. Mar. June 1 25,587 28,302 32,938 38,513 38,460 36,523 38,429 38,518 39,872 ? 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 4,800 By type 4 12,133 12,424 14,507 18,744 18,427 17,117 18,380 17,802 19,786 5 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 4,0% 3,875 3,829 3,902 3,213 3,689 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 1? 7,917 8,320 9,962 13,854 12,575 11,197 1111,,662222 1100,,992255 1122,,002266 13 Belgium-Luxembourg 270 213 289 320 357 308 340 333 347 14 661 382 359 224 257 242 258 217 156 15 368 551 699 561 618 590 523 482 601 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 399 360 388 616 626 575 573 476 345 70 Latin America and Caribbean 1,944 1,189 839 677 1,262 1,367 1,268 1,814 2,508 71 Bahamas 614 318 184 189 165 186 157 237 249 ?? 4 0 0 0 7 7 17 0 0 73 32 25 0 0 0 0 0 0 0 74 British West Indies 1,146 778 645 471 661 743 635 1,0% 1,717 75 Mexico 22 13 1 15 17 4 6 5 4 26 Venezuela 0 0 0 0 0 0 0 0 0 77 1,805 2,451 3,312 3,591 3,863 3,878 4,814 4,483 4,848 78 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 31 Oil-exporting countries 1 1 0 3 2 2 0 0 1 32 All other4 67 100 4 2 97 97 100 102 55 Commercial liabilities 33 4,446 5,516 7,305 7,834 7,778 8,319 88,,888833 99,,113333 88,,330044 34 Belgium-Luxembourg 101 132 158 122 114 137 178 233 295 35 352 426 455 552 535 806 871 881 928 36 Germany 715 909 1,699 1,373 1,190 1,183 1,362 1,143 959 37 424 423 587 667 688 548 699 668888 606 38 385 559 417 446 447 531 621 558833 607 39 United Kingdom 1,341 1,599 2,065 2,585 2,709 2,703 2,618 2,925 2,434 40 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 47 32 18 49 35 34 27 41 37 22 43 156 168 286 426 388 305 308 516 412 44 61 46 95 103 541 113 100 116 106 45 British West Indies 49 19 34 31 42 30 27 18 29 46 217 189 217 250 235 220 304 241 285 47 216 162 114 114 131 107 154 85 119 48 5,080 6,565 6,915 7,318 7,045 7,086 7,038 6,885 6,970 49 2,042 2,578 3,094 3,059 2,708 2,674 2,772 2,624 3,088 50 Middle East oil-exporting countries2,3 1,679 1,964 1,385 1,520 1,482 1,442 1,401 1,393 1,125 51 619 574 576 700 762 648 844 753 885 52 Oil-exporting countries3 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 • January 1991 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 34,088 31,738 31,085 29,488 31,077r 2 Payable in dollars 33,867 28,502 31,494 29,514 31,871 29,513 28,706 27,334 28,772' 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 17,521'" 5 Deposits 19,916 14,894 15,642 14,594 16,500 12,143 10,435 10,458 9,898' 6 Payable in dollars 19,331 13,765 14,543 13,680 15,581 11,278 9,460 9,564 8,801' 7 Payable in foreign currencies 585 1,128 1,099 914 919 866 975 893 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 55,,114400 6,929 10 Payable in foreign currencies 1,352 814 777 938 737 862 754 668888 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 11,039 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 22 133' 18 France 138 332 203 193 176 166 153 199 141' 19 Germany 116 102 120 112 149 120 195 507 93' 20 Netherlands 151 350 348 384 297 292 303 315 332 21 Switzerland 185 65 218 241 68 111 95 123 137' 22 United Kingdom 9,855 8,467 8,929 7,769 7,468 6,169 5,850 5,358 8,136' 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 5,431' 25 Bahamas 2,628 1,994 1,846 2,183 1,875 1,699 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 4,027' 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 164 133 212 164 413 396 478 450 475 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 3,38c 53 Japan 881 1,158 946 1,042 998 1,177 1,185 1,061 1,046 54 Middle East oil-exporting countries2 563 450 446 437 430 406 508 432 424' 55 Africa 500 401 434 394 407 398 418 425 391' 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.- Mar. Apr. May June July Aug/ Sept.p Sept. U.S. corporate securities STOCKS 1 Foreign purchases 181,185 213,535 135,454 16,430 11,457 15,231 18,211 17,447 20,653 8,812 183,185 203,537 144,945 19,117 12,356 17,717 18,584 16,080 21,950 11,318 2 Foreign sales -2,000 9,998 -9,491 -2,687 -899 -2,486 -372 1,367 -1,297 -2,506 3 Net purchases, or sales (-) ... -1,825 10,232 -9,600 -2,733 -937 -2,543 -336 1,315 -1,334 -2,452 4 Foreign countries -3,350 471 -6,170 -990 -666 -1,048 -590 -12 -1,379 -1,160 5 Europe -281 -708 -895 7 -85 -189 32 -25 -175 -148 6 France 218 -830 -125 105 6 -57 -66 -41 -119 2 7 Germany -535 167 -322 48 -25 -20 -83 -30 -107 -48 8 Netherlands -2,243 -3,274 -2,239 -441 -221 -347 -198 -170 -253 -126 9 Switzerland -954 3,729 -2,327 -720 -99 -200 -114 252' -637 -718 10 United Kingdom 1,087 -845 238 -163 -212 -101 88 174 330 210 11 Canada 1,238 3,089 -991 -208 -27 90 -14 -90 -234 -218 12 Latin America and Caribbean . -2,474 3,531 -1,207 -425 116 -593 -85 -36 187 -437 13 Middle East1 1,365 3,586 -1,161 -921 -55 -904 243 1,056 -69 -712 14 Other Asia 1,922 3,340 -1,195 -764 -92 -750 212 851 22 -737 15 Japan 188 131 -10 1 -2 0 -7 13 16 1 16 Africa 121 268 -299 -27 -91 13 30 211 -186 -135 17 Other countries 18 Nonmonetary international and regional organizations -176 -234 109 46 38 57 -37 52 37 -55 BONDS2 86,381 120,540 88,737 9,248 8,355 8,467 12,572 10,923 11,857 7,494 19 Foreign purchases 58,417 86,510 76,232 8,636 7,643 6,347 8,456 7,558' 12,359 9,364 20 Foreign sales 27,964 34,031 12,505 612 712 2,120 4,116 3,365R -503 -1,870 21 Net purchases, or sales (-) ... 22 Foreign countries 28,506 33,678 12,717 451 705 2,195 4,084 3,327' -472 -1,900 17,239 19,848 8,574 340 864 781 3,380 1,9% 820 -819 23 Europe 143 372 385 5 -58 108 293 54 -40 -103 24 France 1,344 -238 -170 -15 -40 -39 82 33 172 3 25 Germany 1,514 850 41 -11 -2 33 37 37 45 -71 26 Netherlands 505 -165 580 -185 59 83 186 570 -346 0 27 Switzerland 13,084 18,459 8,021 585 1,013 495 2,761 1,145 776 -275 28 United Kingdom 711 1,116 1,752 183 353 198 292 70 91 -87 29 Canada 1,931 3,686 3,148 313 411 508 578 273 -103 -208 30 Latin America and Caribbean . -178 -182 128 36 -2 251 -120 17 -176 -65 31 Middle East1 8,900 9,063 -733 -461 -993 440 11 999 -986 -692 32 Other Asia 7,686 6,331 -563 -419 -1,044 331 -131 930 -632 -871 33 Japan -8 56 87 -8 48 8 2 -4 -1 5 34 Africa -89 91 -241 48 24 9 -59 -24' -118 -34 35 Other countries 36 Nonmonetary international and regional organizations — -542 353 -212 160 6 -76 32 39 -31 30 Foreign securities 37 Stocks, net purchases, or sales (~)3 -1,959 -13,097 -7,158 -91 -869 -2,422 -2,756 -1,117 -90 397 38 Foreign purchases 75,356 109,789 95,640 11,775 8,368 9,785 11,027 11,376 12,373 7,468 39 Foreign sales 77,315 122,886 102,798 11,866 9,237 12,207 13,783 12,493 12,463 7,070 40 Bonds, net purchases, or sales (-) -7,434 -6,049 -15,600 -9,605 -1,830 -1,867 -2,030 —400' 54 -318 41 Foreign purchases 218,521 234,215 212,243 22,375 20,184 25,879 25,658 23,367' 29,818 25,779 42 Foreign sales 225,955 240,264 227,844 31,981 22,015 27,746 27,688 23,767 29,764 26,097 43 Net purchases, or sales (—), of stocks and bonds -9,393 -19,145 -22,758 -9,697 -2,699 -4,289 -4,786 -1,517' -37 79 44 Foreign countries -9,873 -19,178 -21,594 -8,096 -2,849 -4,085 -4,333 — L,547R -480 -196 45 Europe -7,864 -17,811 -7,836 -306 -666 -1,888 -3,646 -383 -1,254 135 46 Canada -3,747 -4,180 -4,382 -1,323 -1,797 -721 -219 -328 170 39 47 Latin America and Caribbean 1,384 426 -6,640 -6,648 -171 252 418 -222 -63 -401 48 Asia 979 2,540 -2,258 693 -341 -1,403 -1,073 -201' 608 -344 4 5 9 0 A O f t r h i e c r a countries -5 -5 7 4 1 -24 9 6 3 -3 -9 7 9 9 -5 - 1 1 1 - 1 2 5 8 4 -331 6 18 8 0 -3 -8 3 3 0 - 6 8 7 36 1 4 2 51 Nonmonetary international and regional organizations 480 33 -1,164 -1,601 150 -205 -453 30 444 275 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 • January 1991 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1990 1990 Country or area 1988 1989 J S a e n p . t - . Mar. Apr. May June July Aug/ Sept.'' Transactions, net purchases or sales (-) during period1 1 Estimated total2 48,832 54,269 8,640 -8,446 3,224 -2,744 3,554 5,488' 4,609 1,097 2 Foreign countries2 48,170 52,367 9,283 -8,251 4,215 -3,154 3,249 5,331' 3,968 1,454 3 Europe2 14,319 36,286 12,052 -2,361 6,150 -3,787 2,587 3,643' -2,128 5,182 4 Belgium-Luxembourg 923 1,048 85 -256 458 115 270 179' -395 -95 5 Germany -5,268 7,904 2,916 -475 633 306 -1,061 -1 1,424 633 6 Netherlands -356 -1,141 1,064 -411 749 -263 313 196 1,253 956 7 Sweden -323 693 148 39 264 -254 -34 133 -266 128 8 Switzerland2 -1,074 1,097 -703 -251 422 -189 -19 -799 -128 548 9 United Kingdom 9,640 20,198 953 -326 2,271 -3,545 1,894 1,051 -3,776 1,599 10 Other Western Europe 10,786 6,508 7,564 -684 1,344 43 1,223 2,884' -251 1,407 11 Eastern Europe -10 -21 17 0 6 0 0 0 11 0 12 Canada 3,761 701 -3,610 -1,383 110 -1,752 367 1,418 1,177 -868 13 Latin America and Caribbean 713 490 5,255 672 2,134 478 914 1,934 1,319 -1,953 14 Venezuela -109 311 -98 38 -49 71 48 -1 0 -49 15 Other Latin America and Caribbean 1,130 -297 2,342 270 -35 610 1,021 1,060 295 -1,157 16 Netherlands Antilles -308 475 3,012 365 2,218 -204 -154 874 1,023 -747 17 27,603 13,335 -4,863 -4,785 -3,880 2,026 -1,086 -1,672' 3,304 -1,751 18 Japan 21,750 1,719 -7,260 -5,351 -6,111 2,234 -469 161 2,376 -2,092 19 -13 116 244 -43 -4 -8 52 17 57 151 20 All other 1,786 1,439 205 -351 -294 -110 416 -9 239 692 21 Nonmonetary international and regional organizations 661 1,902 -643 -1% -991 410 305 158 641 -357 22 International 1,106 1,473 -137 -92 -528 403 462 -25 444 -154 23 Latin America regional -31 231 -35 -26 74 25 -109 25 25 -75 Memo 24 Foreign countries2 48,170 52,367 9,283 -8,251 4,215 -3,154 3,249 5,331' 3,968 1,454 25 Official institutions 26,624 26,835 10,034 -3,738 5,066 -2,384 924 724' 6,794 3,763 26 Other foreign2 21,546 25,532 -751 -4,512 -851 -770 2,325 4,607' -2,826 -2,310 Oil-exporting countries 27 Middle East3 11,,996633 8,148 728 1,020 668 -188 -439 -2,095 -365 241 28 Africa4 11 -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 Nov. 30, 1990 Rate on Nov. 30, 1990 Rate on Nov. 30, 1990 Country Country Percent e M ffe o c n t t i h ve e M ffe o c n t t i h ve Percent e M ffe o c n t t i h ve 6.5 Oct. 1989 France 9.25 Nov. 1990 Norway 8.0 June 1983 10.5 Nov. 1989 Germany, Fed. Rep. of. 6.0 Oct. 1989 Switzerland 6.0 Oct. 1989 12.26 Nov. 1990 Italy 12.5 May 1990 United Kingdom2 10.5 Oct. 1989 Japan 6.0 Aug. 1990 Netherlands 7.25 Nov. 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 May June July Aug. Sept. Oct. Nov. 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 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 • January 1991 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar 1990 CCoouunnttrryy//ccuurrrreennccyy 11998877 11998888 11998899 June Iuly Aug. Sept. Oct. Nov. 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 5 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 15 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 96.90 98.49 95.59 25 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 6.0896 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 June 30, 1989 January 1990 All September 30, 1989 February 1990 A72 December 31, 1989 June 1990 All March 31, 1990 January 1991 All Terms of lending at commercial banks November 1989 March 1990 A79 February 1990 September 1990 A73 May 1990 December 1990 A72 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 table follows. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • January 1991 4.20 DOMESTIC AND FOREIGN OFFICES, Insured Commercial Bank Assets and Liabilities1'2 Consolidated Report of Condition, March 31, 1990 Millions of dollars Banks with domestic Banks with foreign offices offices only IItteemm TToottaall Total Foreign Domestic Over 100 Under 100 1 3,300,548 1,901,097 443,865 1,515,973 1,026,054 373,397 2 Cash and balances due from depository institutions 318,977 230,018 111,229 118,788 63,372 25,587 3 Cash items in process of collection, unposted debits, and currency and coin 4 84,684 1,451 83,233 29,942 4 4 Cash items in process of collection and unposted debits T n.a. n.a. 71,023 21,605 I 5 Currency and coin n.a. n.a. 12,210 8,337 6 Balances due from depository institutions in the United States I 31,756 19,415 12,341 19,863 I 7 Balances due from banks in foreign countries and foreign central banks n.a. 92,911 89,936 2,975 2,251 n.a. 8 Balances due from Federal Reserve Banks 1 20,667 427 20,239 11,315 1 MEMO T 9 Noninterest-bearing balances due from commercial banks in the United States 1 (included in balances due from depository institutions in the United States) n.a. n.a. 7,744 13,461 8,982 10 Total securities, loans and lease financing receivables, net 2,722,971 1,474,479 n.a. n.a. 916,532 331,960 11 Total securities, book value 581,868 249,842 34,808 215,035 218,674 113,352 12 U.S. Treasury securities and U.S. government agency and corporation obligations 395,583 115533,,447799 22,,994477 150,532 115544,,662299 8877,,447755 13 U.S. Treasury securities n.a. 49,503 1,009 48,494 68,069 n.a. 14 U.S. government agency and corporation obligations n.a. 103,976 1,939 102,038 86,560 n.a. 15 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 128,206 72,248 1,510 70,738 3388,,338811 17,577 16 All other n.a. 31,728 429 31,299 48,179 n.a. 17 Securities issued by states and political subdivisions in the United States 90,727 35,198 1,587 33,611 38,463 17,065 18 Other domestic debt securities n.a. 27,821 1,911 25,909 21,428 n.a. 19 All holdings of private certificates of participation in pools of residential mortgages 4,283 22,,334444 192 22,,115533 11,,550066 443333 70 All other domestic debt securities 52,516 25,477 1,720 23,757 19,923 7,117 71 Foreign debt securities n.a. 29,503 27,508 1,994 500 n.a. 77 Equity securities 8,757 3,842 854 2,987 3,653 1,262 73 Marketable 4,221 1,156 279 877 2,119 946 74 Investments in mutual funds 1,901 122 15 106 893 886 75 Other 2,788 1,188 264 924 1,431 169 76 Less: Net unrealized loss 468 153 0 153 205 110 27 Other equity securities 4,536 2,685 575 2,110 1,535 316 28 Federal funds sold and securities purchased under agreements to resell 145,416 71,319 727 70,592 48,618 25,479 79 Federal funds sold 127,393 57,023 n.a. n.a. 45,147 25,223 30 Securities purchased under agreements to resell 18,022 14,295 n.a. n.a. 3,471 256 31 Total loans and lease financing receivables, gross 2,062,310 1,197,185 211,175 986,011 666,749 198,376 V. LESS: Unearned income on loans 14,145 6,023 1,590 4,433 6,109 2,014 33 Total loans and leases (net of unearned income) 2,048,165 1,191,162 209,585 981,578 660,641 196,362 34 LESS: Allowance for loan and lease losses 52,236 37,604 n.a. n.a. 11,400 3,233 35 LESS: Allocated transfer risk reserves 242 240 n.a. n.a. 1 1 36 EQUALS: Total loans and leases, net 1,995,687 1,153,318 n.a. n.a. 649,240 193,129 Total loans, gross, by category 37 774,478 338888,,119900 2233,,665566 336644,,553344 228888,,332299 9977,,996600 38 Construction and land development n.a. n.a. n.a. 88,400 39,748 7,457 39 4 4 2,107 5,247 9,416 40 1-4 family residential properties T T T 161,224 141,963 53,724 41 Revolving, open-end loans, extended under lines of credit n.a. n.a. n.a. 27,917 21,453 2,862 47 All other loans 1 1 1 133,307 120,511 50,861 43 Multifamily (5 or more) residential properties 1 1 1 11,734 7,489 1,814 44 Nonfarm nonresidential properties T T T 101,068 93,881 25,549 45 Loans to depository institutions 54,565 48,641 19,564 29,077 5,502 422 46 To commercial banks in the United States n.a. 24,741 1,259 23,482 4,944 n.a. 47 To other depository institutions in the United States n.a. 1,823 178 1,644 525 n.a. 48 To banks in foreign countries n.a. 22,077 18,126 3,950 33 n.a. 49 Loans to finance agricultural production and other loans to farmers 29,643 5,204 288 4,915 7,515 16,924 50 Commercial and industrial loans 620,231 435,337 104,805 330,532 145,524 39,370 51 To U.S. addressees (domicile) n.a. 351,737 23,259 328,478 145,200 n.a. 52 To non-U.S. addressees (domicile) n.a. 83,600 81,546 2,054 325 n.a. 53 Acceptances of other banks 3,440 1,131 638 493 1,222 1,087 54 U.S. banks n.a. 377 21 356 n.a. n.a. 55 n.a. 754 617 137 n.a. n.a. 56 Loans to individuals for household, family, and other personal expenditures (includes 387,539 159,055 14,800 144,255 189,855 38,630 57 Credit cards and related plans 122,821 45,421 n.a. n.a. 75,426 1,974 58 Other (includes single payment and installment) 264,718 113,634 n.a. n.a. 114,429 36,656 59 Obligations (other than securities) of states and political subdivisions in the U.S. (includes nonrated industrial development obligations) 39,741 24,246 254 23,992 13,936 1,559 60 Taxable 1,282 795 82 714 426 61 61 38,459 23,451 172 23,279 13,510 1,498 67 115,944 104,780 43,367 61,413 9,325 1,839 63 Loans to foreign governments and official institutions n.a. 27,080 25,537 1,543 123 n.a. 64 n.a. 77,700 17,830 59,870 9,201 n.a. 65 Loans for purchasing and carrying securities n.a. n.a. n.a. 15,920 1,488 n.a. 66 All other loans n.a. n.a. n.a. 43,950 7,713 n.a. 67 Lease financing receivables 36,729 30,602 3,802 26,800 5,541 586 68 Assets held in trading accounts 47,725 46,359 21,570 24,756 1,115 251 69 Premises and fixed assets (including capitalized leases) 48,465 26,110 i n.a. 15,984 6,371 70 Other real estate owned 14,173 6,955 T n.a. 4,863 2,355 71 Investments in unconsolidated subsidiaries and associated companies 3,276 2,469 1 n.a. 754 52 72 Customers' liability on acceptances outstanding 25,714 25,305 n.a. n.a. 392 17 73 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs n.a. n.a. 1 36,873 n.a. n.a. 74 Intangible assets 7,182 4,335 1 n.a. 2,638 209 75 Other assets 112,066 85,066 • n.a. 20,405 6,595 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.20—Continued Banks with domestic Banks with foreign offices offices only Item Total Foreign Domestic Over 100 Under 101 76 Total liabilities, limited-life preferred stock, and equity capital ,300,548 1,901,097 n.a. n.a. 1,026,054 373,397 77 Total liabilities7 ,089,976 1,799,309 443,834 1,414,215 950,797 339,871 78 Limited-life preferred stock 83 0 n.a. n.a. 82 1 79 Total deposits ,528,630 1,362,779 326,731 1,036,049 833,621 332,229 80 Individuals, partnerships, and corporations 191,897 948,538 769,202 304,560 81 U.S. government 2,436 1,495 489 82 States and political subdivisions in the United States 37,896 44,667 22,987 83 Commercial banks in the United States n.a. n.a. n.a. 23,186 9,381 1,315 84 Other depository institutions in the United States 5,118 2,569 809 85 Banks in foreign countries 7,218 127 n.a. 86 Foreign governments and official institutions 24,252 23,088 1,164 397 n.a. 87 Certified and official checks 19,179 11,366 873 10,493 5,784 2,029 88 All other8 n.a. n.a. 110,872 n.a. n.a. 42 89 Total transaction accounts 312,742 218,162 85,810 90 Individuals, partnerships, and corporations 263,322 192,832 76,480 91 U.S. government 1,468 1,155 382 92 States and political subdivisions in the United States 8,836 10,752 5,975 93 Commercial banks in the United States n a. n.a. n.a. 17,889 6,119 685 94 Other depository institutions in the United States 3,253 1,308 241 95 Banks in foreign countries 6,680 106 n.a. 96 Foreign governments and official institutions 801 106 n.a. 9 9 7 8 C A e ll r t o i t f h ie e d r and official checks 1 n 1 . 0 a , . 4 93 n. 5 a , . 7 84 2,02 1 9 8 99 Demand deposits (included in total transaction accounts) 233,519 132,995 44,489 100 Individuals, partnerships, and corporations 186,506 113,633 39,318 101 U.S. government 1,445 1,134 373 102 States and political subdivisions in the United States 6,459 4,825 1,837 103 Commercial banks in the United States 17,889 6,118 684 104 Other depository institutions in the United States 3,252 1,290 231 105 Banks in foreign countries 6,675 106 n.a. 106 Foreign governments and official institutions 799 106 n.a. 107 Certified and official checks 10,493 5,784 2,029 108 All other n.a. n.a. 18 109 Total nontransaction accounts 723,307 615,459 246,419 110 Individuals, partnerships, and corporations n.a. n a. n a. 685,215 576,370 228,080 111 U.S. government 968 340 106 112 States and political subdivisions in the United States 29,061 33,915 17,012 113 Commercial banks in the United States 5,297 3,262 630 H4 U.S. branches and agencies of foreign banks 673 217 n.a. 115 Other commercial banks in the United States 4,624 3,044 n.a. 116 Other depository institutions in the United States 1,865 1,260 568 117 Banks in foreign countries 538 21 n.a. 118 Foreign branches of other U.S. banks 3 17 n.a. 119 Other banks in foreign countries 535 5 n.a. 120 Foreign governments and official institutions 363 291 n.a. 121 All other n.a. n.a. 24 122 Federal funds purchased and securities sold under agreements to repurchase.. 279,586 214,958 792 214,166 62,078 2,549 123 Federal funds purchased 179,326 146,950 n.a. n.a. 31,446 930 124 Securities sold under agreements to repurchase 100,260 68,009 n.a. n.a. 30,632 1,619 125 Demand notes issued to the U.S. Treasury n a. n.a. n.a. 10,306 3,022 379 126 Other borrowed money 130,204 96,532 37,177 59,355 33,115 557 127 Banks liability on acceptances executed and outstanding 25,820 25,411 5,339 20,072 392 17 128 Notes and debentures subordinated to deposits 19,559 17,077 n. a. n.a. 2,356 126 129 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs... n.a. n.a. n a. 21,868 n.a. n.a. 130 All other liabilities 92,470 72,245 n a. n.a. 16,212 4,013 131 Total equity capital9 210,488 101,788 n. a. n.a. 75,176 33,525 MEMO 132 Holdings of commercial paper included in total loans, gross 964 715 249 1,370 n.a. 133 Total individual retirement accounts (IRA) and Keogh plan accounts 50,901 47,118 17,361 134 Total brokered deposits 46,576 18,923 953 135 Total brokered retail deposits 14,538 12,054 854 136 Issued in denominations of $100,000 or less 137 Issued in denominations greater than $100,000 and participated out by the 3,741 3,502 757 broker in shares of $100,000 or less Savings deposits 10,797 8,552 97 138 Money market deposit accounts (MMDAs) 194,015 129,992 37,752 139 Other savings deposits (excluding MMDAs) 84,931 77,668 28,773 140 Total time deposits of less than $100,000 224,265 277 138,252 141 Time certificates of deposit of $100,000 or more 187,294 126,668 40,229 142 Open-account time deposits of $100,000 or more n a. n.a. n. a. 32,802 4,544 1,414 143 All NOW accounts (including Super NOW) 77,758 82,951 39,831 144 Total time and savings deposits 802,530 700,626 287,740 Quarterly averages 145 Total loans 954,475 655,693 193,955 146 Obligations (other than securities) of states and political subdivisions in the United States 23,442 13,883 n.a. 147 Transaction accounts in domestic offices (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) 77,662 83,814 40,547 Nontransaction accounts in domestic offices 148 Money market deposit accounts (MMDAs) 191,045 128,557 37,297 149 Other savings deposits 81,791 75,990 27,969 150 Time certificates of deposit of $100,000 or more 186,387 127,220 39,359 151 All other time deposits 253,120 279,698 138,448 152 Number of banks 12,572 238 n.a. n.a. 2,661 9,673 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • January 1991 4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices1-2-6 Consolidated Report of Condition, March 31, 1990 Millions of dollars Members NNoonn-- Item TToottaall mmeemmbbeerrss Total National State 1 Total assets6 2,542,027 2,016,181 1,625,038 391,142 525,846 2 Cash and balances due from depository institutions 182,160 150,080 120,7% 29,284 32,080 3 Cash items in process of collection and unposted debits 92,628 83,110 68,257 14,853 9,518 4 Currency and coin 20,548 16,948 14,145 2,803 3,599 5 Balances due from depository institutions in the United States 32,204 20,548 16,454 4,094 11,656 6 Balances due from banks in foreign countries and foreign central banks 5,226 4,032 3,123 909 1,194 7 Balances due from Federal Reserve Banks 31,555 25,442 18,817 6,625 6,113 8 Total securities, loans and lease financing receivables, (net of unearned income) 2,195,136 1,725,904 1,402,417 323,486 469,233 9 Total securities, book value 433,709 325,950 251,391 74,559 107,759 10 U.S. Treasury securities 116,563 82,104 64,416 17,687 34,459 11 U.S. government agency and corporation obligations 188,598 148,955 116,453 32,502 39,643 12 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 109,119 92,812 72,954 19,858 16,308 13 Mother 79,479 56,143 43,499 12,644 23,335 14 Securities issued by states and political subdivisions in the United States 72,075 55,434 41,840 13,595 16,640 15 Other domestic debt securities 47,338 33,954 25,096 8,858 13,384 16 All holdings of private certificates of participation in pools of residential mortgages .. 3,658 2,736 2,326 410 922 17 All other 43,679 31,218 22,770 8,448 12,462 18 Foreign debt securities 2,494 2,123 891 1,233 371 19 Equity securities 6,641 3,380 2,695 684 3,261 20 Marketable 2,996 701 569 132 2,296 21 Investments in mutual funds 1,000 482 426 55 518 22 Other 2,355 305 202 102 2,050 23 Less: Net unrealized loss 358 86 60 26 273 24 Other equity securities 3,645 2,679 2,127 552 965 25 Federal funds sold and securities purchased under agreements to resell10 119,209 96,951 78,300 18,651 22,259 26 Federal funds sold 45,147 28,919 24,686 4,233 16,228 27 Securities purchased under agreements to resell 3,471 2,476 2,165 312 995 28 Total loans and lease financing receivables, gross 1,652,760 1,310,894 1,079,116 231,778 341,866 29 LESS: Unearned income on loans 10,542 7,891 6,390 1,501 2,651 30 Total loans and leases (net of unearned income) 1,642,218 1,303,003 1,072,726 230,277 339,215 Total loans, gross, by category 31 Loans secured by real estate 652,862 496,896 424,477 72,418 155,967 32 Construction and land development 128,149 102,786 86,126 16,660 25,362 33 Farmland 7,354 4,824 4,254 571 2,530 34 1-4 family residential properties 303,187 227,449 194,155 33,294 75,738 35 Revolving, open-end and extended under lines of credit 49,370 38,394 32,306 6,088 10,976 36 All other loans 253,817 189,055 161,849 27,207 64,762 37 Multifamily (5 or more) residential properties 19,223 15,027 13,164 1,863 4,196 38 Nonfarm nonresidential properties 194,949 146,809 126,779 20,030 48,140 39 Loans to commercial banks in the United States 28,426 24,902 18,308 6,594 3,524 40 Loans to other depository institutions in the United States 2,169 1,959 1,829 130 210 41 Loans to banks in foreign countries 3,983 3,797 1,605 2,192 186 42 Loans to finance agricultural production and other loans to farmers 12,430 9,360 8,416 943 3,071 43 Commercial and industrial loans 476,057 389,337 310,968 78,369 86,720 44 To U.S. addressees (domicile) 473,678 387,269 309,588 77,681 86,409 45 To non-U.S. addressees (domicile) 2,379 2,068 1,380 688 311 46 Acceptances of other banks11 1,715 987 855 131 728 47 Of U.S. banks 683 447 389 57 237 48 Of foreign banks 244 182 149 34 62 49 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 334,109 258,880 219,778 39,102 75,230 50 Credit cards and related plans 75,426 54,804 52,370 2,434 20,622 51 Other (includes single payment and installment) 114,429 70,672 59,332 11,340 43,756 52 Loans to foreign governments and official institutions 1,667 1,609 1,328 280 58 53 Obligations (other than securities) of states and political subdivisions in the United States 37,928 31,988 23,934 8,054 5,940 54 Taxable 1,140 937 682 255 203 55 Tax-exempt 36,788 31,052 23,252 7,799 5,737 56 Other loans 69,071 63,106 44,224 18,882 5,965 57 Loans for purchasing and carrying securities 17,408 15,993 10,175 5,818 1,415 58 All other loans 51,663 47,113 34,049 13,064 4,550 59 Lease financing receivables 32,341 28,075 23,394 4,681 4,267 60 Customers' liability on acceptances outstanding 19,999 18,762 14,520 4,243 1,236 61 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 36,873 31,896 18,753 13,144 4,976 62 Remaining assets 144,732 121,435 87,305 34,129 23,297 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.21—Continued Members Item Total National State 63 Total liabilities and equity capital 2,542,027 2,016,181 1,625,038 391,142 64 Total liabilities4 2,365,012 1,880,005 1,516,734 363,270 65 Total deposits 1,869,670 1,454,225 1,187,841 266,385 66 Individuals, partnerships, and corporations 1,717,739 1,332,652 1,092,775 239,877 67 U.S. government 3,931 3,301 2,855 445 68 States and political subdivisions in the United States 82,563 61,641 51,616 10,025 69 Commercial banks in the United States 32,567 29,214 22,395 6,819 70 Other depository institutions in the United States 7,687 6,047 5,222 826 71 Banks in foreign countries 7,345 6,739 3,455 3,284 72 Foreign governments and official institutions 1,561 1,473 1,029 443 73 Certified and official checks 16,277 13,159 8,494 4,665 74 Total transaction accounts 530,904 425,817 342,772 83,044 75 Individuals, partnerships, and corporations 456,154 361,584 295,352 66,232 76 U.S. government 2,623 2,132 1,807 324 77 States and political subdivisions in the United States 19,588 15,620 12,972 2,648 78 Commercial banks in the United States 24,008 22,227 17,257 4,969 79 Other depository institutions in the United States 4,561 3,743 3,076 667 80 Banks in foreign countries 6,786 6,480 3,293 3,187 81 Foreign governments and official institutions 906 873 522 352 82 Certified and official checks 16,277 13,159 8,494 4,665 83 Demand deposits (included in total transaction accounts) 366,514 299,474 236,281 63,193 84 Individuals, partnerships, and corporations 300,139 241,493 194,068 47,425 85 U.S. government 2,578 2,097 1,773 324 86 States and political subdivisions in the United States 11,284 9,415 7,810 1,606 87 Commercial banks in the United States 24,007 22,227 17,257 4,969 88 Other depository institutions in the United States 4,542 3,732 3,066 667 89 Banks in foreign countries 6,781 6,478 3,293 3,186 90 Foreign governments and official institutions 905 873 521 352 91 Certified and official checks 16,277 13,159 8,494 4,665 92 Total nontransaction accounts 1,338,766 1,028,409 845,068 183,340 93 Individuals, partnerships, and corporations 1,261,585 971,068 797,423 173,645 94 U.S. government 1,308 1,169 1,048 121 95 States and political subdivisions in the United States 62,975 46,021 38,644 7,377 96 Commercial banks in the United States 8,558 6,987 5,137 1,849 97 U.S. branches and agencies of foreign banks 890 535 385 150 98 Other commercial banks in the United States 7,668 6,452 4,752 1,700 99 Other depository institutions in the United States 3,125 2,304 2,146 158 100 Banks in foreign countries 559 259 162 98 101 Foreign branches of other U.S. banks 20 12 9 3 102 Other banks in foreign countries 539 247 153 94 103 Foreign governments and official institutions 654 599 507 92 104 Federal funds purchased and securities sold under agreements to repurchase12 276,244 241,014 181,342 59,672 105 Federal funds purchased 31,446 25,171 21,750 3,422 106 Securities sold under agreements to repurchase 30,632 16,007 13,332 2,674 107 Demand notes issued to the U.S. Treasury 13,328 11,949 9,479 2,470 108 Other borrowed money 92,470 71,685 60,342 11,343 109 Banks liability on acceptances executed and outstanding 20,464 19,224 14,937 4,287 110 Notes and debentures subordinated to deposits 2,356 1,850 1,779 71 111 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 21,868 20,290 18,490 1,800 112 Remaining liabilities 90,479 80,056 61,014 19,042 113 Total equity capital9 177,015 136,176 108,304 27,872 MEMO 114 Holdings of commercial paper included in total loans, gross 1,619 694 601 94 115 Total individual retirement accounts (IRA) and Keogh plan accounts 98,018 76,321 63,030 13,290 116 Total brokered deposits 65,500 48,659 41,503 7,156 117 Total brokered retail deposits 26,593 17,601 14,775 2,826 118 Issued in denominations of $100,000 or less 7,243 3,613 3,201 412 119 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 19,349 13,988 11,574 2,414 Savings deposits 120 Money market deposit accounts (MMDAs) 324,006 259,593 214,930 44,664 121 Other savings accounts 162,598 125,941 93,141 32,800 122 Total time deposits of less than $100,000 500,853 373,621 314,848 58,773 123 Time certificates of deposit of $100,000 or more 313,963 237,078 202,204 34,873 124 Open-account time deposits of $100,000 or more 37,346 32,176 19,946 12,230 125 All NOW accounts (including Super NOW accounts) 160,709 123,742 104,104 19,638 126 Total time and savings deposits 1,503,156 1,154,751 951,559 203,192 Quarterly averages 127 Total loans 1,610,168 1,277,620 1,053,744 223,876 128 Obligations (other than securities) of states and political subdivisions in the United States ... 37,325 31,440 23,212 8,227 129 Transaction accounts (NOW accounts, ATS accounts, and telephone preauthorized transfer accounts) 161,476 124,332 104,671 19,661 319,602 255,895 211,253 44,643 Nontransaction accounts 130 Money market deposit accounts (MMDAs) 131 Other savings deposits 157,781 121,872 90,672 31,200 132 Time certificates of deposits of $100,000 or more 313,607 236,004 200,730 35,274 133 All other time deposits 532,818 401,639 331,625 70,014 134 Number of banks 2,899 1,604 1,343 261 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables • January 1991 4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities1-2-6 Consolidated Report of Condition, March 31, 1990 Millions of dollars Members NNoonn-- TToottaall mmeemmbbeerrss Total National State 1 Total assets6 2,915,424 2,165,268 1,743,762 421,505 750,157 2 Cash and balances due from depository institutions 207,747 160,474 129,199 31,275 47,273 3 Currency and coin 23,684 18,218 15,169 3,050 5,466 4 Noninterest-bearing balances due from commercial banks 30,187 17,145 13,607 3,537 13,042 5 Other 153,876 125,111 100,423 24,689 28,765 6 Total securities, loans, and lease financing receivables (net of unearned income) 2,530,330 1,859,479 1,508,565 350,913 670,852 7 Total securities, book value 547,061 370,007 287,381 82,626 177,053 8 U.S. Treasury securities and U.S. government agency and corporation obligations 392,636 265,123 208,711 56,412 127,512 9 Securities issued by states and political subdivisions in the United States 89,140 61,805 46,991 14,814 27,335 10 Other debt securities 57,382 39,113 28,507 10,606 18,270 11 All holdings of private certificates of participation in pools of residential mortgages .. 4,092 2,941 2,460 481 1,152 12 All other 53,291 36,172 26,047 10,125 17,119 13 Equity securities 7,903 3,966 3,172 794 3,936 14 Marketable 3,942 1,049 862 187 2,893 15 Investments in mutual funds 1,886 833 722 110 1,053 16 Other 2,524 341 233 108 2,183 17 Less: Net unrealized loss 468 125 93 32 343 18 Other equity securities 3,961 2,918 2,310 607 1,043 19 Federal funds sold and securities purchased under agreements to resell 144,689 108,104 87,141 20,963 36,585 20 Federal funds sold 70,370 39,948 33,445 6,503 30,422 21 Securities purchased under agreements to resell 3,727 2,599 2,246 353 1,128 22 Total loans and lease financing receivables, gross 1,851,136 1,390,109 1,141,066 249,043 461,027 23 LESS: Unearned income on loans 12,555 8,742 7,023 1,719 3,813 24 Total loans and leases (net of unearned income) 1,838,580 1,381,367 1,134,043 247,324 457,213 Total loans, gross, by category 25 Loans secured by real estate 750,822 535,600 454,728 80,872 215,222 26 Construction and land development 135,606 105,936 88,516 17,421 29,669 27 Farmland 16,770 7,911 6,744 1,167 8,859 28 1-4 family residential properties 356,911 248,921 210,826 38,095 107,990 29 Revolving, open-end loans, and extended under lines of credit 52,232 39,625 33,234 6,392 12,607 30 All other loans 304,679 209,296 177,592 31,703 95,383 31 Multifamily (5 or more) residential properties 21,038 15,692 13,694 1,998 5,346 32 Nonfarm nonresidential properties 220,498 157,139 134,947 22,192 63,359 33 Loans to depository institutions 35,001 30,852 21,896 8,957 4,148 34 Loans to finance agricultural production and other loans to farmers 29,355 15,288 13,189 2,099 14,066 35 Commercial and industrial loans 515,426 405,897 323,704 82,193 109,529 36 Acceptances of other banks 2,802 1,449 1,269 181 1,353 37 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 372,739 274,721 232,245 42,476 98,018 38 Credit cards and related plans 77,400 55,770 53,231 2,539 21,631 39 Other (includes single payment installment) 151,085 85,548 70,939 14,610 65,536 40 Obligations (other than securities) of states and political subdivisions in the United States 39,487 32,560 24,406 8,154 6,927 41 Taxable 1,201 962 703 259 239 42 Tax-exempt 38,286 31,598 23,703 7,895 6,688 43 All other loans 72,576 65,466 46,090 19,376 7,111 44 Lease financing receivables 32,927 28,276 23,540 4,735 4,652 45 Customers' liability on acceptances outstanding 20,016 18,777 14,531 4,246 1,239 46 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 36,873 31,896 18,753 13,144 4,976 47 Remaining assets 157,331 126,538 91,467 35,071 30,793 48 Total liabilities and equity capital 2,915,424 2,165,268 1,743,762 421,505 750,157 49 Total liabilities4 2,704,883 2,016,013 1,625,171 390,842 688,870 50 Total deposits 2,201,900 1,586,880 1,293,694 293,186 615,020 51 Individuals, partnerships, and corporations 2,022,299 1,454,558 1,189,970 264,588 567,741 52 U.S. government 4,420 3,494 3,014 480 926 53 States and political subdivisions in the United States 105,550 70,107 58,573 11,534 35,443 54 Commercial banks in the United States 33,881 30,102 22,987 7,115 3,780 55 Other depository institutions in the United States 8,496 6,356 5,468 888 2,139 56 Certified and official checks 18,306 14,040 9,189 4,851 4,266 57 All other 8,947 8,222 4,492 3,730 725 58 Total transaction accounts 616,714 461,155 371,371 89,784 155,559 59 Individuals, partnerships, and corporations 532,634 392,989 320,831 72,157 139,646 60 U.S. government 3,006 2,288 1,934 353 718 61 States and political subdivisions in the United States 25,563 17,787 14,790 2,997 7,775 62 Commercial banks in the United States 24,693 22,838 17,640 5,199 1,855 63 Other depository institutions in the United States 4,803 3,855 3,168 686 948 64 Certified and official checks 18,306 14,040 9,189 4,851 4,266 65 All other 7,710 7,359 3,818 3,540 351 66 Demand deposits (included in total transaction accounts) 411,003 318,342 251,381 66,961 92,662 67 Individuals, partnerships, and corporations 339,457 257,946 207,322 50,623 81,511 68 U.S. government 2,952 2,250 1,898 352 701 69 States and political subdivisions in the United States 13,121 10,069 8,357 1,712 3,052 70 Commercial banks in the United States 24,691 22,838 17,640 5,199 1,853 71 Other depository institutions in the United States 4,774 3,842 3,157 684 932 72 Certified and official checks 18,306 14,040 9,189 4,851 4,266 73 All other 7,704 7,357 3,818 3,539 347 74 Total nontransaction accounts 1,585,185 1,125,725 922,323 203,402 459,461 75 Individuals, partnerships, and corporations 1,489,665 1,061,570 869,139 192,431 428,095 76 U.S. government 1,414 1,207 1,080 127 208 77 States and political subdivisions in the United States 79,988 52,320 43,783 8,537 27,668 78 Commercial banks in the United States 9,188 7,263 5,347 1,916 1,925 79 Other depository institutions in the United States 3,693 2,502 2,300 202 1,191 80 All other 1,237 864 674 189 374 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks All 4.22—Continued Members Item TToottaall mmee NN mm oo bb nn ee -- rrss Total National State 81 Federal funds purchased and securities sold under agreements to repurchase 278,793 242,361 182,308 60,053 36,432 82 Federal funas purchased 32,376 25,731 22,076 3,655 6,645 83 Securities sold under agreements to repurchase 32,251 16,795 13,972 2,823 15,457 84 Demand notes issued to the U.S. Treasury 13,707 12,115 9,609 2,506 1,593 85 Other borrowed money 93,027 71,905 60,527 11,378 21,122 86 Banks liability on acceptances executed and outstanding 20,481 19,239 14,949 4,290 1,243 87 Notes and debentures subordinated to deposits 2,482 1,883 1,806 77 600 88 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 21,868 20,290 18,490 1,800 1,578 89 Remaining liabilities 94,492 81,631 62,279 19,352 12,861 90 Total equity capital9 210,541 149,255 118,591 30,664 61,286 MEMO 91 Assets held in trading accounts13 26,122 24,498 14,680 9,818 1,624 92 U.S. Treasury securities 12,319 11,975 5,605 6,370 344 93 U.S. government agency corporation obligations 2,670 2,634 2,270 364 36 94 Securities issued by states and political subdivisions in the United States 850 832 651 182 17 95 Other bonds, notes, and debentures 65 30 28 2 35 96 Certificates of deposit 1,075 1,075 438 637 0 97 Commercial paper 30 30 30 0 0 98 Bankers acceptances 2,835 2,576 1,768 808 259 99 Other 5,288 4,983 3,547 1,436 306 100 Total individual retirement accounts (IRA) and Keogh plan accounts 115,380 83,015 68,393 14,622 32,365 101 Total brokered deposits 66,453 48,918 41,716 7,202 17,535 102 Total brokered retail deposits 27,447 17,835 14,969 2,866 9,612 103 Issued in denominations of $100,000 or less 8,001 3,844 3,393 451 4,156 104 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 19,446 13,991 11,576 2,415 5,455 Savings deposits 105 Money market deposit accounts (MMDAs) 361,758 275,865 227,930 47,935 85,893 106 Other savings deposits 191,372 137,521 102,312 35,208 53,851 107 Total time deposits of less than $100,000 639,105 425,888 356,302 69,586 213,217 108 Time certificates of deposit of $100,000 or more 354,191 253,778 215,426 38,352 100,413 109 Open-account time deposits of $100,000 or more 38,760 32,673 20,353 12,320 6,087 110 All NOW accounts (including Super NOW) 200,540 139,726 117,205 22,521 60,814 111 Total time and savings deposits 1,790,896 1,268,538 1,042,313 226,225 522,359 Quarterly averages 112 Total loans 1,804,123 1,355,130 1,114,488 240,642 448,993 113 Transaction accounts (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) 202,024 140,477 117,905 22,572 61,547 Nontransaction accounts 114 Money market deposit accounts (MMDAs) 356,899 271,960 224,108 47,851 84,939 115 Other savings deposits 185,750 133,142 99,607 33,535 52,608 116 Time certificates of deposit of $100,000 or more 352,966 252,441 213,739 38,702 100,525 117 All other time deposits 671,266 453,901 373,169 80,732 217,365 118 Number of banks 12,572 5,138 4,114 1,024 7,434 1. Effective Mar. 31, 1984, the report of condition was substantially revised for refers to those respondents whose assets, as of June 30 of the previous calendar commercial banks. Some of the changes are as follows: (1) Previously, banks with year, were less than $100 million. (These respondents filed the FFIEC 034 call international banking facilities (IBFs) that had no other foreign offices were report.) considered domestic reporters. Beginning with the Mar. 31, 1984 call report these 6. Since the domestic portion of allowances for loan and lease losses and banks are considered foreign and domestic reporters and must file the foreign and allocated transfer risk reserve are not reported for banks with foreign offices, the domestic report of condition; (2) banks with assets greater than $1 billion have components of total assets (domestic) will not add to the actual total (domestic). additional items reported; (3) the domestic office detail for banks with foreign 7. Since the foreign portion of demand notes issued to the U.S. Treasury is not offices has been reduced considerably; and (4) banks with assets under $25 million reported for banks with foreign offices, the components of total liabilities (foreign) have been excused from reporting certain detail items. will not add to the actual total (foreign). 2. The "n.a." for some of the items is used to indicate the lesser detail available 8. The definition of 'all other' varies by report form and therefore by column in from banks without foreign offices, the inapplicability of certain items to banks this table. See the instructions for more detail. that have only domestic offices and/or the absence of detail on a fully consolidated 9. Equity capital is not allocated between the domestic and foreign offices of basis for banks with foreign offices. banks with foreign offices. 3. All transactions between domestic and foreign offices of a bank are reported 10. Only the domestic portion of federal funds sold and securities purchased in "net due from" and "net due to." All other lines represent transactions with under agreements to resell are reported here, therefore, the components will not parties other than the domestic and foreign offices of each bank. Since these add to totals for this item. intraoffice transactions are nullified by consolidation, total assets and total 11. "Acceptances of other banks" is not reported by domestic respondents less liabilities for the entire bank may not equal the sum of assets and liabilities than $300 million in total assets, therefore the components will not add to totals for respectively, of the domestic and foreign offices. this item. 4. Foreign offices include branches in foreign countries, Puerto Rico, and in 12. Only the domestic portion of federal funds purchased and securities sold U.S. territories and possessions; subsidiaries in foreign countries; all offices of are reported here, therefore the components will not add to totals for this item. Edge act and agreement corporations wherever located and IBFs. 13. Components of assets held in trading accounts are only reported for banks 5. The 'over 100' column refers to those respondents whose assets, as of June with total assets of $1 billion or more; therefore the components will not add to the 30 of the previous calendar year, were equal to or exceeded $100 million. (These totals for this item. respondents file the FFIEC 032 or FFIEC 033 call report.) The 'under 100' column Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A7t and Official Staff EDWARD W. KELLEY, JR. DAVID W. MULLINS, JR. JOHN P. LA WARE OFFICE OF STAFF DIRECTOR FOR MANAGEMENT OFFICE OF STAFF DIRECTOR FOR FEDERAL RESERVE BANK ACTIVITIES S. DAVID FROST, Staff Director WILLIAM SCHNEIDER, Special Assignment: Project Director, National Information Center THEODORE E. ALLISON, Staff Director PORTIA W. THOMPSON, Equal Employment Opportunity Programs Officer DIVISION OF FEDERAL RESERVE BANK OPERATIONS AND PAYMENT SYSTEMS DIVISION OF HUMAN RESOURCES MANAGEMENT DAVID L. SHANNON, Director CLYDE H. FARNSWORTH, JR., Director JOHN R. WEIS, Associate Director DAVID L. ROBINSON, Deputy Director (Finance and ANTHONY V. DIGIOIA, Assistant Director Control) JOSEPH H. HAYES, JR., Assistant Director BRUCE J. SUMMERS, Deputy Director (Payments and FRED HOROWITZ , Assistant Director Automation) CHARLES W. BENNETT, Assistant Director OFFICE OF THE CONTROLLER JACK DENNIS, JR., Assistant Director EARL G. HAMILTON, Assistant Director GEORGE E. LIVINGSTON, Controller JOHN H. PARRISH, Assistant Director STEPHEN J. CLARK, Assistant Controller (Programs and LOUISE L. ROSEMAN, Assistant Director Budgets) FLORENCE M. YOUNG, Assistant Director 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

A80 Federal Reserve Bulletin • January 1991 Federal Open Market Committee FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL SILAS KEEHN DAVID W. MULLINS, JR. ROBERT P. BLACK EDWARD W. KELLEY, JR. ROBERT T. PARRY ROBERT P. FORRESTAL JOHN P. LA WARE MARTHA R. SEGER ALTERNATE MEMBERS ROGER GUFFEY THOMAS C. MELZER JAMES H. OLTMAN W. LEE HOSKINS RICHARD F. SYRON 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

A81 and Advisory Councils CONSUMER ADVISORY COUNCIL JAMES W. HEAD, Berkeley, California, Vice Chairman GEORGE H. BRAASCH, Oakbrook, Illinois KATHLEEN E. KEEST, Boston, Massachusetts CLIFF E. COOK, Tacoma, Washington COLLEEN D. MCCARTHY, Kansas City, Missouri R.B. (JOE) DEAN, JR., Columbia, South Carolina MICHELLE S. MEIER, Washington, D.C. WILLIAM C. DUNKELBERG, Philadelphia, Pennsylvania LINDA K. PAGE, Worthington, Ohio JAMES FLETCHER, Chicago, Illinois BERNARD F. PARKER, JR., Detroit, Michigan GEORGE C. GALSTER, Wooster, Ohio VINCENT P. QUAYLE, Baltimore, Maryland E. THOMAS GARMAN, Blacksburg, Virginia CLIFFORD N. ROSENTHAL, New York, New York DEBORAH B. GOLDBERG, Washington, D.C. ALAN M. SILBERSTEIN, New York, New York MICHAEL M. GREENFIELD, St. Louis, Missouri NANCY HARVEY STEORTS, Dallas, Texas BARBARA KAUFMAN, San Francisco, California DAVID P. WARD, Chester, New Jersey 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

A82 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 Mexico. Elsewhere, $35.00 per year or $3.00 each. CONSUMER EDUCATION PAMPHLETS BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint Short pamphlets suitable for classroom use. Multiple copies of Part I only) 1976. 682 pp. $5.00. are available without charge. ANNUAL STATISTICAL DIGEST 1974-78. 1980. 305 pp. $10.00 per copy. Consumer Handbook on Adjustable Rate Mortgages 1981. 1982. 239 pp. $ 6.50 per copy. Consumer Handbook to Credit Protection Laws 1982. 1983. 266 pp. $ 7.50 per copy. Federal Reserve Glossary 1983. 1984. 264 pp. $11.50 per copy. A Guide to Business Credit for Women, Minorities, and 1984. 1985. 254 pp. $12.50 per copy. Small Businesses 1985. 1986. 231 pp. $15.00 per copy. How to File A Consumer Credit Complaint 1986. 1987. 288 pp. $15.00 per copy. Series on the Structure of the Federal Reserve System 1987. 1988. 272 pp. $15.00 per copy. The Board of Governors of the Federal Reserve System 1988. 1989. 256 pp. $25.00 per copy. The Federal Open Market Committee Federal Reserve Bank Board of Directors SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- RIES OF CHARTS. Weekly. $30.00 per year or $.70 each in Federal Reserve Banks the United States, its possessions, Canada, and Mexico. Organization and Advisory Committees Elsewhere, $35.00 per year or $.80 each. A Consumer's Guide to Mortgage Lock-Ins THE FEDERAL RESERVE ACT and other statutory provisions A Consumer's Guide to Mortgage Settlement Costs affecting the Federal Reserve System, as amended A Consumer's Guide to Mortgage Refinancing through August 1990. 646 pp. $10.00. Home Mortgages: Understanding the Process and Your Rights REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- Making Deposits: When Will Your Money Be Available? ERAL RESERVE SYSTEM. ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— When Your Home is on the Line: What You Should Know Regulation Z) Vol. I (Regular Transactions). 1969. 100 About Home Equity Lines of Credit pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each volume $2.25; 10 or more of same volume to one address, $2.00 each. INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; PAMPHLETS FOR FINANCIAL INSTITUTIONS 10 or more to one address, $1.25 each. Short pamphlets on regulatory compliance, primarily suit- FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; up- able for banks, bank holding companies, and creditors. dated at least monthly. (Requests must be prepaid.) Consumer and Community Affairs Handbook. $75.00 per Limit of 50 copies year. Monetary Policy and Reserve Requirements Handbook. The Board of Directors' Opportunities in Community Rein- $75.00 per year. vestment Securities Credit Transactions Handbook. $75.00 per year. The Board of Directors' Role in Consumer Law Compliance The Payment System Handbook. $75.00 per year. Combined Construction/Permanent Loan Disclosure and Federal Reserve Regulatory Service. 3 vols. (Contains all Regulation Z three Handbooks plus substantial additional material.) Community Development Corporations and the Federal Re- $200.00 per year. serve Rates for subscribers outside the United States are as Construction Loan Disclosures and Regulation Z follows and include additional air mail costs: Finance Charges Under Regulation Z Federal Reserve Regulatory Service, $250.00 per year. How to Determine the Credit Needs of Your Community Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A83 Regulation Z: The Right of Rescission 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANK- The Right to Financial Privacy Act ING MARKETS, by James V. Houpt. May 1988. 47 pp. Signature Rules in Community Property States: Regulation B 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR Signature Rules: Regulation B THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. Timing Requirements for Adverse Action Notices: Regula- Porter, and David H. Small. April 1989. 28 pp. tion B 158. THE ADEQUACY AND CONSISTENCY OF MARGIN RE- What An Adverse Action Notice Must Contain: Regulation B QUIREMENTS IN THE MARKETS FOR STOCKS AND DERIV- Understanding Prepaid Finance Charges: Regulation Z ATIVE PRODUCTS, by Mark J. Warshawsky with the assistance of Dietrich Earnhart. September 1989. 23 pp. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUB- STAFF STUDIES: Summaries Only Printed in the SIDIARIES OF BANK HOLDING COMPANIES, by Nellie Bulletin Liang and Donald Savage. February 1990. 12 pp. Studies and papers on economic and financial subjects that 160. BANKING MARKETS AND THE USE OF FINANCIAL SERare of general interest. Requests to obtain single copies of VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. Septemthe full text or to be added to the mailing list for the series may be sent to Publications Services. ber 1990. 35 pp. Staff Studies 114-145 are out of print. REPRINTS OF Bulletin ARTICLES 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF Most of the articles reprinted do not exceed 12 pages. BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, by Thomas F. Brady. November 1985. 25 pp. Limit of 10 copies 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) IN- DEXES OF THE MONETARY AGGREGATES, by Helen T. 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

A84 Index to Statistical Tables References are to pages A3-A77 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 19, 20 Ownership by individuals, partnerships, and corpora- Assets and liabilities (See also Foreigners) tions, 22 Banks, by classes, 18-20, 72-77 Turnover, 15 Domestic finance companies, 36 Depository institutions Federal Reserve Banks, 10 Reserve requirements, 8 Financial institutions, 26 Reserves and related items, 3, 4, 5, 12 Foreign banks, U.S. branches and agencies, 21 Deposits (See also specific types) Automobiles Banks, by classes, 3, 18-20, 21, 73, 75, 77 Consumer installment credit, 39, 40 Federal Reserve Banks, 4, 10 Production, 49, 50 Turnover, 15 Discount rates at Reserve Banks and at foreign central BANKERS acceptances, 9, 23, 24 banks and foreign countries (See Interest rates) Bankers balances, 18-20, 72, 74, 76, (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 EMPLOYMENT, 47 Branch banks, 21, 57 Eurodollars, 24 Business activity, nonfinancial, 46 Business expenditures on new plant and equipment, 35 FARM mortgage loans, 38 Business loans (See Commercial and industrial loans) Federal agency obligations, 4, 9, 10, 11, 31, 32 Federal credit agencies, 33 CAPACITY utilization, 48 Federal finapce Capital accounts Debt subject to statutory limitation, and types and own- Banks, by classes, 18, 73, 75, 77 ership of gross debt, 30 Federal Reserve Banks, 10 Receipts and outlays, 28, 29 Central banks, discount rates, 69 Treasury financing of surplus, or deficit, 28 Certificates of deposit, 24 Treasury operating balance, 28 Commercial and industrial loans Federal Financing Bank, 28, 33 Commercial banks, 16, 19, 72, 74, 76 Federal funds, 6, 17, 19, 20, 21, 24, 28 Weekly reporting banks, 19-21 Federal Home Loan Banks, 33 Commercial banks Federal Home Loan Mortgage Corporation, 33, 37, 38 Assets and liabilities, 18-20 Federal Housing Administration, 33, 37, 38 Commercial and industrial loans, 16, 18, 19, 20, 21, 72, Federal Land Banks, 38 74, 76 Federal National Mortgage Association, 33, 37, 38 Consumer loans held, by type and terms, 39, 40 Federal Reserve Banks Loans sold outright, 19 Condition statement, 10 Nondeposit funds, 17 Discount rates (See Interest rates) Number by classes, 73, 75, 77 U.S. government securities held, 4, 10, 11, 30 Real estate mortgages held, by holder and property, 38 Federal Reserve credit, 4, 5, 10, 11 Time and savings deposits, 3 Federal Reserve notes, 10 Commercial paper, 23, 24, 36 Federal Savings and Loan Insurance Corporation insured Condition statements (See Assets and liabilities) institutions, 26 Construction, 46, 51 Federally sponsored credit agencies, 33 Consumer installment credit, 39, 40 Finance companies Consumer prices, 46, 48 Assets and liabilities, 36 Consumption expenditures, 53, 54 Business credit, 36 Corporations Loans, 39, 40 Nonfinancial, assets and liabilities, 35 Paper, 23, 24 Profits and their distribution, 35 Financial institutions Security issues, 34, 67 Loans to, 19, 20, 21 Cost of living (See Consumer prices) Selected assets and liabilities, 26 Credit unions, 27, 39. (See also Thrift institutions) Float, 4 Currency and coin, 18, 72, 74, 76 Flow of funds, 41, 43, 44, 45 Currency in circulation, 4, 13 Customer credit, stock market, 25 Foreign banks, assets and liabilities of U.S. branches and agencies, 21 Foreign currency operations, 10 DEBITS to deposit accounts, 15 Foreign deposits in U.S. banks, 4, 10, 19, 20 Debt (See specific types of debt or securities) Foreign exchange rates, 70 Demand deposits Foreign trade, 56 Banks, by classes, 18-21, 73, 75, 77 Foreigners Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A85 Claims on, 57, 59, 62, 63, 64, 66 Banks, by classes, 16, 19, 20, 38, 74 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 agreements, 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 Consumer installment credit, 40 Savings and loan associations, 26, 38, 39, 41. (See also Federal Reserve Banks, 7 Thrift institutions) Foreign central banks and foreign countries, 69 Savings banks, 26, 38, 39 Money and capital markets, 24 Savings deposits (See Time and savings deposits) Mortgages, 37 Securities (See also specific types) Prime rate, 23 Federal and federally sponsored credit agencies, 33 International capital transactions of United States, 55-69 Foreign transactions, 67 International organizations, 59, 60, 62, 65, 66 New issues, 34 Inventories, 53 Prices, 25 Investment companies, issues and assets, 35 Special drawing rights, 4, 10, 55, 56 Investments (See also specific types) State and local governments Banks, by classes, 18, 19, 20, 21, 26 Deposits, 19, 20 Commercial banks, 3, 16, 18-20, 38, 72 Holdings of U.S. government securities, 30 Federal Reserve Banks, 10, 11 New security issues, 34 Financial institutions, 26, 38 Ownership of securities issued by, 19, 20, 26 Rates on securities, 24 LABOR force, 47 Stock market, selected statistics, 25 Life insurance companies (See Insurance companies) Stocks (See also Securities) Loans (See also specific types) New issues, 34 Banks, by classes, 18—20 Prices, 25 Commercial banks, 3, 16, 18-20, 72, 74, 76 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, 73, 75, Production, 48, 50 77 Margin requirements, 25 Trade, foreign, 56 Member banks (See also Depository institutions) Treasury cash, Treasury currency, 4 Federal funds and repurchase agreements, 6 Treasury deposits, 4, 10, 28 Reserve requirements, 8 Treasury operating balance, 28 Mining production, 50 UNEMPLOYMENT, 47 Mobile homes shipped, 51 U.S. government balances Monetary and credit aggregates, 3, 12 Commercial bank holdings, 18, 19, 20 Money and capital market rates, 24 Treasury deposits at Reserve Banks, 4, 10, 28 Money stock measures and components, 3, 13 U.S. government securities Mortgages (See Real estate loans) Bank holdings, 18-20, 21, 30 Mutual funds, 35 Dealer transactions, positions, and financing, 32 Mutual savings banks (See Thrift institutions) Federal Reserve Bank holdings, 4, 10, 11, 30 Foreign and international holdings and transactions, 10, NATIONAL defense outlays, 29 30, 68 National income, 53 Open market transactions, 9 Outstanding, by type and holder, 26, 30 OPEN market transactions, 9 Rates, 24 U.S. international transactions, 55-69 PERSONAL income, 54 Utilities, production, 50 Prices Consumer and producer, 46, 52 VETERANS Administration, 37, 38 Stock market, 25 Prime rate, 23 WEEKLY reporting banks, 19-21 Producer prices, 46, 52 Wholesale (producer) prices, 46, 52 Production, 46, 49 Profits, corporate, 35 YIELDS (See Interest rates) REAL estate loans Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 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 Vacancy William H. Stone, Jr. CLEVELAND* 44101 John R. Miller W. Lee Hoskins To be announced William H. Hendricks Cincinnati 45201 Kate Ireland Charles A. Cerino1 Pittsburgh 15230 Robert P. Bozzone Harold J. Swart1 RICHMOND* 23219 Anne Marie Whittemore Robert P. Black Henry J. Faison Jimmie R. Monhollon Baltimore 21203 John R. Hardesty, Jr. Robert D. McTeer, Jr.1 Charlotte 28230 Anne M. Allen 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 Roy D. Terry Fred R. Herr1 Jacksonville 32231 Hugh M. Brown James D. Hawkins1 Miami 33152 Dorothy C. Weaver James T. Curry III Nashville 37203 Shirley A. Zeitlin Melvyn K. Purcell New Orleans 70161 James A. Hefner Robert J. Musso CHICAGO* 60690 Charles S. McNeer Silas Keehn Richard G. Cline 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 To be announced Karl W. Ashman Louisville 40232 To be announced Howard Wells Memphis 38101 To be announced Ray Laurence MINNEAPOLIS 55480 Delbert W. Johnson Gary H. Stern Gerald A. Rauenhorst Thomas E. Gainor Helena 59601 James E. Jenks 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 Ernest L. Holloway David J. France Omaha 68102 Herman Cain Harold L. Shewmaker DALLAS 75222 Hugh G. Robinson Robert H. Boykin Leo E. Linbeck, Jr. William H. Wallace Tony J. Salvaggio1 El Paso 79999 To be announced Sammie C. Clay Houston 77252 To be announced Robert Smith, III1 San Antonio 78295 To be announced Thomas H. Robertson SAN FRANCISCO 94120 Robert F. Erburu Robert T. Parry Carolyn S. Chambers Carl E. Powell Los Angeles 90051 Yvonne B. Burke Thomas C. Warren2 Portland 97208 William A. Hilliard Angelo S. Carella1 Salt Lake City 84125 D. N. Rose 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 060%; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. 1. Senior Vice President. Digitized for FRASER 2. Executive Vice President. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories '•nu A®/" Helena t vf Minneapolis^i-T" Jf /* X^i'g^Zf® I { ((7T)) 1t \\ DetroiQr Yyoorf** ®( —J- X r K s i ^ ^ ^ y T f f1 Kansas City "> I Sr. Louis \ )klakoma City "ge/es Dallas® \ } © "1 , HoustonI \ewOrltw San Antonio April19*4 t / / ALASKA t 1 i \ 1 • © / / so V •AN LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory ings, and staff opinions. Also included is the Board's functions, the Board publishes the Federal Reserve list of OTC margin stocks. Regulatory Service, a three-volume looseleaf service The Consumer and Community Affairs Handbook containing all Board regulations and related statutes, contains Regulations B, C, E, M, Z, AA, and BB, and interpretations, policy statements, rulings, and staff associated materials. opinions. For those with a more specialized interest in The Payment System Handbook deals with expethe Board's regulations, parts of this service are pub- dited funds availability, check collection, wire translished separately as handbooks pertaining to monetary fers, and risk-reduction policy. It includes Regulation policy, securities credit, consumer affairs, and the CC, Regulation J, the Expedited Funds Availability payment system. Act and related statutes, official Board commentary on These publications are designed to help those who Regulation CC, and policy statements on risk reducmust frequently refer to the Board's regulatory mate- tion in the payment system. rials. They are updated at least monthly, and each For domestic subscribers, the annual rate is $200 for contains citation indexes and a subject index. the Federal Reserve Regulatory Service and $75 for The Monetary Policy and Reserve Requirements each Handbook. For subscribers outside the United Handbook contains Regulations A, D, and Q, plus States, the price including additional air mail costs is related materials. For convenient reference, it also $250 for the Service and $90 for each Handbook. All contains the rules of the Depository Institutions De- subscription requests must be accompanied by a check regulation Committee. or money order payable to the Board of Governors of The Securities Credit Transactions Handbook con- the Federal Reserve System. Orders should be adtains Regulations G, T, U, and X, dealing with exten- dressed to Publications Services, mail stop 138, Board sions of credit for the purchase of securities, together of Governors of the Federal Reserve System, Washwith all related statutes, Board interpretations, rul- ington, D.C. 20551. U.S. MONETARY POLICY AND FINANCIAL MARKETS U.S. Monetary Policy and Financial Markets by Ann- context, examining first the evolution of Federal Re- Marie Meulendyke offers an in-depth description of serve monetary policy procedures from their beginthe way monetary policy is developed by the Federal nings in 1914 to the end of the 1980s. It indicates how Open Market Committee and the techniques employed policy operates most directly through the banking to implement policy at the Open Market Trading Desk. system and the financial markets and describes key Written from her perspective as a senior economist in features of both. Finally, the book turns its attention to the Open Market Function at the Federal Reserve the transmittal of monetary policy actions to the U.S. Bank of New York, Ann-Marie Meulendyke describes economy and throughout the world. the tools and the setting of policy, including many of The book is $5.00 a copy for U.S. purchasers and the complexities that differentiate the process from $10.00 for purchasers outside the United States. Copsimpler textbook models. Included is an account of a ies are available from the Public Information Departday at the Trading Desk, from morning information- ment, Federal Reserve Bank of New York, 33 Liberty gathering through daily decisionmaking and the exe- Street, New York, N.Y. 10045. Checks must accomcution of an open market operation. pany orders and should be payable to the Federal The book also places monetary policy in a broader Reserve Bank of New York in U.S. dollars. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis