Federal Reserve Bulletin, 1992-10

VOLUME 78 • NUMBER 10 • OCTOBER 1992 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 S. Ellen Dykes, 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 727 THE FEDERAL RESERVE BANKS 746 STATEMENT TO THE CONGRESS AS FISCAL AGENTS AND DEPOSITORIES Richard Spillenkothen, Director, Division of OF THE UNITED STATES Banking Supervision and Regulation, dis- The Federal Reserve, the nation's central cusses the impact of recent legislative and bank, is also the U.S. government's bank. As regulatory actions on credit availability and fiscal agents of the United States, the Reserve credit terms and says that the Board believes Banks provide debt-related services to the U.S. that prudent lending standards and effective Treasury—issuing, servicing, and redeeming and timely supervision should not inhibit Treasury securities and processing their resale banking organizations from playing an active in secondary market transactions initiated by role in meeting legitimate demands for credit, depository institutions. As depositories, the before the Subcommittee on General Over- Reserve Banks provide payment-related sight and Investigations of the House Commitservices—handling the government checking tee on Banking, Finance and Urban Affairs, account and the collection of taxes and fees. August 4, 1992. This article describes the nature of the principal fiscal and depository services required by 752 ANNOUNCEMENTS the U.S. Treasury; explains how the Federal Statement by Chairman Greenspan on the Reserve Banks meet those requirements; surdeath of William Taylor. veys other fiscal and depository services performed by the Reserve Banks; and discusses Streamlining of procedures for handling applithe direction of developments in certain ser- cations from state member banks and bank vice areas. holding companies. Amendments to Regulation D. 738 TREASURY AND FEDERAL RESERVE Amendment to Regulation Y. FOREIGN EXCHANGE OPERATIONS Amendments to Regulation CC. The dollar came under strong downward pres- Elimination of requirement regarding subordisure during the May-July period, declining nated debt. more than 10 percent against the German mark and most other European currencies, Proposal to amend Regulation C to expand the nearly 5 percent against the Japanese yen, and regulation's coverage of independent mortmore than 8 percent on a trade-weighted basis. gage companies; advance notice of proposed rulemaking in connection with a review of Regulation T. 743 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION Changes in Board staff. The index of industrial production rose 755 RECORD OF POLICY ACTIONS OF THE 0.4 percent in July, reversing the decline in FEDERAL OPEN MARKET COMMITTEE June. Total industrial capacity utilization increased 0.2 percentage point in July, to At its meeting on June 30-July 1, 1992, the 78.9 percent, but has changed little, on bal- Committee reaffirmed for 1992 the ranges that ance, since April. it had established in February for M2 growth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

of 2V2 to 6V2 percent and for M3 growth of A1 FINANCIAL AND BUSINESS STATISTICS 1 to 5 percent; the Committee also retained These tables reflect data available as of the range of AV2 to 8V2 percent for growth of August 27, 1992. nonfinancial debt in 1992. For 1993, the Committee on a tentative basis set the same ranges A3 GUIDE TO TABULAR PRESENTATION as in 1992 for growth of the monetary aggregates and debt. A4 Domestic Financial Statistics With regard to the implementation of policy A44 Domestic Nonfinancial Statistics for the period immediately ahead, the Com- A53 International Statistics mittee adopted a directive that called for maintaining the existing degree of pressure on A69 GUIDE TO STATISTICAL RELEASES AND reserve positions and that included a bias to- SPECIAL TABLES ward possible easing during the intermeeting period. Accordingly, the directive indicated A72 INDEX TO STATISTICAL TABLES that, in the context of the Committee's longrun objectives for price stability and sustain- A74 BOARD OF GOVERNORS AND STAFF able economic growth, and giving careful consideration to economic, financial, and A76 FEDERAL OPEN MARKET COMMITTEE monetary developments, slightly greater re- AND STAFF; ADVISORY COUNCILS serve restraint might be acceptable or slightly lesser reserve restraint would be acceptable A78 FEDERAL RESERVE BOARD during the intermeeting period. The reserve PUBLICATIONS conditions contemplated at this meeting were expected to be consistent with a resumption of A80 MAPS OF THE FEDERAL RESERVE growth in M2 and M3 at annual rates of about SYSTEM 2 percent and V2 percent respectively over the three-month period from June through A82 FEDERAL RESERVE BANKS, BRANCHES, September. AND OFFICES 765 LEGAL DEVELOPMENTS Various bank holding company, bank service corporation, and bank merger orders; and pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Federal Reserve Banks as Fiscal Agents and Depositories of the United States Gerald D. Manypenny and Michael L. Bermudez, HISTORICAL BACKGROUND of the Board's Division of Reserve Bank Operations and Payment Systems, prepared this The Federal Reserve Act of 1913, which created article. the Federal Reserve System, authorized the Federal Reserve Banks to provide fiscal agency and depository services to the Department of the Treasury. It The Federal Reserve, the nation's central bank, is was not until 1915, however, that Secretary of the also the U.S. government's bank. Its role in provid- Treasury W.G. McAdoo appointed the Federal ing banking services to the government is based on Reserve Banks to act on behalf of Treasury. To that the Federal Reserve Act, which provides that, when end, U.S. government funds on deposit with required by the Secretary of the Treasury, the Fed- national banks were transferred to Treasury's eral Reserve Banks shall act as "fiscal agents" and account at each Federal Reserve Bank. These "depositories" of the United States. As fiscal accounts established the Reserve Banks as Treaagents of the U.S. Treasury, the Reserve Banks sury's depository—the intermediary through which provide debt-related services—issuing, servicing, Treasury collects and disburses funds on behalf of and redeeming Treasury securities and processing the federal government; thus, the Federal Reserve secondary market transactions initiated by deposi- literally acquired the government's checking tory institutions. As depositories, the Reserve account. Banks provide payment-related services—handling Since then, many other services, both for Treathe government checking account and disburse- sury and for other agencies, have been added to the ments and collections. deposit services provided by the Reserve Banks. Today, the Federal Reserve Banks also provide The Reserve Banks' fiscal agency role dates from banking services on behalf of many domestic and May 1917, when they began the distribution, safeinternational government agencies, but the bulk of keeping, and redemption of the First Liberty Loan the activity is for the U.S. Treasury. The Treasury- Bonds, offered by the government to finance the related transactions are large: For example, the U.S. effort in World War I. The success of that Federal Reserve Banks on average process about offering, the effectiveness of the Reserve Banks $476 billion per business day in privately owned, in handling Treasury's accounts since 1915, and marketable Treasury securities transactions and the government's growing need to borrow influhandle $16 billion per year in sales and redemp- enced Treasury in 1921 to end its network of tions of U.S. savings bonds; and per average busi- Subtreasuries—field offices that gave Treasury ness day, they process about $6 billion in tax, fee, access to regional money centers—and to transfer and loan receipts and about 4 million disburse- to the Federal Reserve many of the operational ments by check and wire. functions related to financing the public debt. This article describes the nature of the principal The massive financing required to wage World fiscal and depository services required by the U.S. War II brought the next significant expansion in the Treasury; explains how the Federal Reserve Banks Banks' fiscal agency role, handling the series E meet those requirements; surveys other fiscal and savings bond introduced in 1941. In the late 1960s, depository services performed by the Reserve the Federal Reserve Banks began providing Banks; and discusses the direction of developments services—primarily securities-related—for other in certain service areas. U.S. government and international agencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

728 Federal Reserve Bulletin • October 1992 SERVICES ON BEHALF OF (TT&L) account, in which the institution may hold THE U.S. TREASURY the funds overnight without paying interest to Treasury. The Reserve Banks' fiscal agency and depository A depository institution with a TT&L account responsibilities to Treasury are authorized by stat- falls into one of two classes: "remittance-option ute, and the operating mechanisms are subject to banks" and "note-option banks." A remittance- Treasury regulations. In the main, Reserve Bank option bank agrees to remit its TT&L balances to services for Treasury involve the two entities com- the Federal Reserve the day after receipt. prising the Treasury Fiscal Service: the Financial A note-option bank chooses to accumulate the Management Service, for depository services, and daily tax payments it receives, up to a preapproved the Bureau of the Public Debt, for debt-related limit, by shifting them to another account; that is, operations. after the overnight, interest-free holding period in the TT&L account, the note-option bank moves tax receipts into an interest-bearing "note account" Depository Services that is still available to the Treasury on demand. As it transfers funds from the TT&L account to the The Reserve Banks' depository services to Trea- note account, the note-option bank updates the note sury are related to their involvement in the wider that Treasury holds as a claim on the note account. payments system. Since its inception, the Federal Note-option banks report the amounts they receive Reserve has had a major influence on the nation's in their TT&L accounts to a Federal Reserve office payments mechanism. The Reserve Banks provide as well as to the Internal Revenue Service. In 1991 payments services to depository institutions that the Reserve Banks processed 6.7 million advices of include check processing, funds transfers, and auto- credit, representing more than 80 million tax paymated clearinghouse (ACH) payments. These activ- ments. Businesses deposited about $838 billion in ities in the private sector give the Federal Reserve a tax payments to depository institutions in calendar base for providing similar services to Treasury and year 1991; about two-thirds went to note-option to assist Treasury with improvements and innova- banks and the remainder to remittance-option tions in those services. banks. As depositories of the United States, the Federal TT&L balances are counted by the Federal Reserve Banks maintain Treasury's checking Deposit Insurance Corporation (FDIC) as insurable account, clear checks drawn on that account, accept deposits; therefore up to $100,000 of such a baldeposits of federal taxes and fees, and make elec- ance at an institution is insured against loss by tronic payments on behalf of Treasury. In all these FDIC insurance. Amounts in the TT&L account in matters, the Reserve Banks serve Treasury's Finan- excess of $100,000 must be fully covered by collatcial Management Service, whose responsibilities eral in the form of Treasury-authorized securities include the government's systems for collections deposited by the TT&L institution at its Reserve and payments, central accounting and reporting, Bank. Note accounts are not insured by the FDIC and cash management. and therefore must have 100 percent of their balance covered by collateral. Reserve Banks monitor TT&L and note account balances against the value Handling Tax Payments and Loan Proceeds of the collateral and handle excess balances under rules prescribed by Treasury. Payroll and corporate income taxes reach the gov- To maximize interest earnings and still keep ernment through two channels: the Federal Reserve adequate funds to cover its payments, Treasury and depository institutions. Tax payments that are aims to maintain a closing balance of $5 billion in sent directly to a Reserve Bank are placed in a its Federal Reserve checking accounts each day; if Treasury checking account at that Bank. Tax pay- Treasury estimates that the balance will be signifiments that are sent to a depository institution are cantly in excess of that amount, the Reserve Banks placed by the institution in a Treasury demand will determine an amount to be placed, in a process deposit account called a Treasury tax and loan called direct investment, in the TT&L accounts of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Federal Reserve Banks as Fiscal Agents and Depositories of the United States 729 note-option banks with sufficient collateral. The lost, stolen, or forged Treasury checks. Through influx of funds to Treasury accounts at the Federal Treasury's Direct Deposit program, for example, Reserve and at depository institutions can be more than 23 million government workers and greater than expected because, say, of unusually benefits recipients have their pay or benefits deposheavy quarterly tax payments. At such times, find- ited directly into a checking or savings account via ing note-option banks with the capacity to receive the ACH. The number of government ACH paythe direct investment of Treasury funds that are ments has been growing and in 1991 exceeded for overflowing the Reserve Bank accounts can the first time the number of government payments become difficult. made by check (chart 1). On average, however, Treasury makes payments The government pays many of its vendors from its Federal Reserve checking accounts in through Vendor Express, another electronic payexcess of the taxes and fees received in those ment program that uses the ACH. More than thirtyaccounts.1 Therefore, it generally must draw down two federal agencies use Vendor Express, and for or "call" note-account funds to meet its cash needs. 1992 Treasury expects the program to process more Because the Federal Reserve Banks maintain than 3.7 million payments. accounts for many depository institutions, the Reserve Banks are able to serve as the vehicles through which Treasury calls note-account funds. Fiscal Agency Services Finally, because the government operates at a fiscal deficit, Treasury on average makes payments from The federal government creates debt to cover the its Federal Reserve checking accounts in excess of shortfall between receipts and expenditures and to all its tax and fee receipts and therefore must place refinance maturing debt. Most of the federal debt additional funds in its checking and note accounts consists of Treasury securities, with securities by issuing net new debt (see boxes, "Making Funds issued by other federal agencies accounting for the Available to Cover Social Security Payments" and rest. Managing this debt is one of the primary "A Day's Activity in the Government's Checking responsibilities of the Department of the Treasury. Account"). The size of marketable Treasury debt issues has grown approximately 11.5 percent per year over the past ten years, from about $600 billion in 1981 Payments via ACH to $1.7 trillion in 1991. The Federal Reserve Banks, as fiscal agents, The federal government disburses the majority of play an integral role in carrying out Treasury's its payments to the public from funds on deposit financing decisions. Treasury auctions, conducted with the Federal Reserve Banks. For recurring pay- by the Treasury through the Federal Reserve, determents such as social security benefits and salaries, mine the yield of securities being sold. To initiate the government uses the Federal Reserve's automated clearinghouse (ACH), an electronic network 1. Number of payments made by the U.S. government that allows the reserve account of a depository by check and through the automated clearinghouse, institution to be credited for payments from Treacalendar years 1987—91 sury's checking account on a specified settlement Millions of payments day. The ACH network eliminates problems with 1 1 550 Check ^ 1. Depository institutions and Reserve Banks also receive a ^ 500 wide variety of other deposits, including fees collected for use of National Park facilities, payments received from leases of mineral 450 rights on public lands, and personal checks sent to the IRS on April 15 by individuals whose employers did not withhold enough ^^^^Automated clearinghouse income tax. These receipts are deposited by the receiving agencies 400 in so-called Treasury General Accounts (TGA) at depository institutions and are swept the next day into the Treasury's Reserve i 1 1 I 1 Bank checking accounts. 1987 1988 1989 1990 1991 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

730 Federal Reserve Bulletin • October 1992 borrowing, Treasury announces the terms and conditions of the securities being offered, and invites Making Funds Available to Cover investors to submit tenders (offers to purchase Social Security Payments securities) to the Federal Reserve Banks and Branches and Treasury's Bureau of the Public Debt Treasury maintains its excess cash in interest- (BPD). bearing "note accounts" at depository institutions. This working capital is transferred periodically to sup- Typically, nearly 20,000 investors submit tenplement funds already in Treasury's checking accounts ders to the Reserve Banks and the BPD. Most of in the Reserve Banks and, over a several-day period, to the issue amount is purchased by about seventycover Reserve Bank payments of checks and direct five to eighty-five "competitive" bidders— deposits to social security recipients. investors who specify the rate or yield at which In the case of social security payments, Treasury they want to purchase the securities. The majority estimates its current receipts and payments due in its of the bidders are "noncompetitive," entering ten- Reserve Bank accounts once the amount of a monthly ders in amounts of $1 million or less for Treasury social security payment is known. It then instructs the bills and $5 million or less for Treasury notes and Reserve Banks to "call" (transfer) a portion of notebonds and agreeing to accept the weighted average account balances from institutions across the country to provide the estimated additional funds necessary to yield of accepted competitive bids. The Reserve cover the direct deposits and checks cashed over the Banks review the tenders they receive for accuracy, several days following the social security payment. completeness, and compliance with Treasury's Social security payments are covered from the assets rules and guidelines and refer any questionable of the social security trust fund. Treasury redeems— tenders to Treasury for a determination. At the that is, stops paying interest on—a portion of the conclusion of the review process, the Reserve fund's holdings of Treasury securities equal to the Banks compile auction summaries and forward amount of social security payments it estimates actuthem to the BPD.2 ally clears each day following the benefit payment. Once Treasury determines which tenders are to The Federal Reserve periodically conducts a nationbe accepted, it makes a public announcement of the wide statistical survey of patterns in social security check payments. The data from this survey are used by auction results, and the Reserve Banks issue the Treasury to determine the timing of redemptions of the securities in exchange for payment. These paytrust fund investments. ments are deposited to Treasury's account at the Reserve Banks on the day the securities are issued. Simultaneously, the Reserve Banks, still acting as fiscal agents of the United States, create "book- Commercial book entry. The commercial bookentry securities"—computer records of the entry system, initiated in 1967, facilitates the safesecurities—rather than issue paper certificates. keeping and transfer of large volumes of marketable Treasury securities through the substitution of computerized accounts for paper securities. It Marketable Book-Entry Securities thereby contributes to the efficiency and liquidity of the government securities market. Private own- Thirty-five Federal Reserve Banks and Branches, ers or custodians of commercial book-entry securias fiscal agents, maintain two marketable book- ties maintain them in accounts at depository instituentry securities systems for Treasury: commercial tions, which in turn maintain them in Reserve Bank and Treasury Direct.3 As the obligor of the securi- book-entry accounts. As fiscal agents, the Reserve ties, Treasury maintains accountability for the total Banks maintain the book-entry securities accounts, value of all marketable securities outstanding. reconcile activity in them, issue transaction advices and account statements, and credit interest and principal to the accounts of depository institutions. Through a process called delivery versus pay- 2. See Treasury Bulletin (December 1991), pp. 7-8. ment, the book-entry system provides for the elec- 3. The Helena Branch does not handle book-entry securities, tronic, integrated settlement of securities transfers and the El Paso Branch handles only Treasury Direct. Treasury Direct is a registered trademark of the Department of the Treasury. and corresponding funds transfers. That is, over Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Federal Reserve Banks as Fiscal Agents and Depositories of the United States 731 1. Number and value of government securities transferred through the commercial book-entry system, 1987-91 Value of transfers Number of transfers (millions of dollars) -- Total Per day1 Total Per transfer Per day1 1987 999999,,,,,,555555333333555555,,,,,,555555333333222222 333333888888,,,,,,111111444444222222 777777999999,,,,,,222222222222444444,,,,,,888888888888777777 888888......333333111111 333333111111666666,,,,,,999999666666111111 1988 111111000000,,,,,,333333111111777777,,,,,,222222555555999999 444444111111,,,,,,222222666666999999 999999111111,,,,,,888888999999888888,,,,,,555555222222000000 888888......999999111111 333333666666777777,,,,,,777777000000777777 1989 111111000000,,,,,,888888888888444444,,,,,,111111555555555555 444444333333,,,,,,555555333333777777 999999777777,,,,,,888888333333666666,,,,,,777777444444888888 888888......999999999999 333333999999111111,,,,,,333333999999444444 1990 111111000000,,,,,,888888777777777777,,,,,,444444111111333333 444444333333,,,,,,555555111111000000 111111000000111111,,,,,,222222666666222222,,,,,,222222555555999999 999999......333333111111 444444000000555555,,,,,,000000777777555555 1991 111111111111,,,,,,000000666666444444,,,,,,444444333333222222 444444444444,,,,,,222222555555888888 111111111111888888,,,,,,999999888888999999,,,,,,555555444444000000 111111000000......777777555555 444444777777555555,,,,,,777777777777111111 1. Assumes 250 business days. Fedwire (the Federal Reserve's system for electron- broad, easy access to the secondary securities marically transmitting funds and securities on its com- ket, it enhances the liquidity of government securimunications network), a depository institution can ties. On an average business day in 1991, deposiaccess its book-entry account at its Reserve Bank tory institutions originated more than 44,000 to transfer securities to any other domestic deposi- securities transfers valued at $476 billion, for an tory institution that has a Reserve Bank account. average value of $10.75 million per transfer Also on Fedwire, concurrently with the securities (table 1). transfer, the sender's Reserve Bank credits the sender's reserve account with payment for the Treasury Direct. In the mid-1980s Treasury security while the Reserve Bank of the receiving decided to eliminate use of marketable paper secuinstitution debits that amount from the account of rities for new offerings in favor of book-entry the receiver. This securities transfer and payment issuance. Depository institutions already relied primechanism is the heart of the secondary govern- marily on the commercial book-entry system for ment securities market. secondary market transactions; and individuals and The method by which depository institutions organizations that hold their securities through a access the Fedwire book-entry system generally fee-based account at a depository institution indidepends on their volume of use. Institutions with rectly participate in commercial book-entry. large volumes of securities transfers usually have a But commercial book-entry did not cover indicomputer-to-computer link with their Federal viduals for whom a direct relationship with Trea- Reserve Bank. Institutions with relatively low vol- sury was important and who therefore held paper umes are connected by telephone lines to their securities; and it did not cover the organizations, Reserve Banks via personal computer links that use typically small, that also chose not to hold their proprietary Federal Reserve software known as Treasury securities in a commercial bank account. Fedline.4 Treasury's decision meant that, to continue serving Through either type of link, instructions for secu- such investors directly, it would need to create a rities transfers flow automatically from an insti- special book-entry system suited to their needs. tution to the local Reserve Bank computer. The The proportion of marketable Treasury debt held message identifies the sending and receiving insti- by nondepository institutions and individuals is tutions, describes the securities issue and par less than 10 percent; but most of the 10 percent is amount to be transferred, and payment information. held to maturity and so is better suited to a custo- The computer edits the message for acceptability dial type of accounting system than to the transferand verifies that the sender has the securities in the oriented service provided to depository institutions designated account. When the transaction is com- by commercial book entry. plete, both institutions receive acknowledgements. The Federal Reserve Bank of Philadelphia was The commercial book-entry system has proved selected by Treasury to operate the new book-entry to be safe and reliable; and because it provides custodial system, called Treasury Direct. Treasury Direct maintains accounts primarily for individuals and nondepository institutions, credits payment on 4. Fedline is a registered trademark of the Federal Reserve them, and distributes investor information. System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

732 Federal Reserve Bulletin • October 1992 Treasury Direct is both highly successful as an "•-•'»''• • '^-^s'l-Lt'i'-* 4ii MaMj. MM./.. '•^jMj^BjSjSmm^ operating system and popular with investors. Not A Day's Activity in the Government's only has it eliminated the issue of physical, market- Checking Account able securities to individuals and nondepository Treasury's checking account actually consists of institutions, but it also has virtually ended all paper multiple checking accounts at the Reserve Banks and check payments to them; instead, interest payments Branches, the reconciliation of which is centralized at and redemption proceeds are deposited electronithe New York Reserve Bank. cally through ACH in an account designated by the Treasury's current cash-management objective is to investor. maintain a daily operating balance of $5 billion in its The value and number of accounts under Trea- checking account. In terms of flow, Treasury received sury Direct has grown strongly, and the system is an average of about $5 billion per day in taxes and fees handling transactions at a far lower cost than that during fiscal year 1991. The funds were placed in entailed by physical securities. At the end of June Treasury's Federal Reserve checking account or in 1992, there were 1.1 million investor accounts in interest-bearing "note accounts" at depository institu- Treasury Direct with par value of more than tions. Concurrently, Treasury disbursed on average about $6 billion per business day in fiscal 1991 (the $63.5 billion, compared with $22.6 billion in calculations are based on 250 business days per year). 392,000 accounts at the end of 1987. In 1985, the Hence, on average, for each business day in 1991, cost of a transaction involving a physical, marketthe government could cover all but about $1 billion of able Treasury security was about $20; in 1991, the its expenditures with taxes and fees received that day cost of completing a Treasury Direct transaction in the checking account or drawn down from the note was about $2.50. accounts. The daily average difference of roughly $1 billion had to be covered in the checking account Smart Exchange. Treasury recently initiated with net proceeds from debt offerings and, over the "Smart Exchange," a program to persuade inves- course of 250 business days, became the fiscal 1991 tors to convert their paper securities to book-entry deficit of $269 billion. form. The Reserve Banks are communicating with depository institutions on Treasury's behalf to enlist them in the effort to encourage customers to hold savings that, in addition, funds a portion of the convert their securities to the commercial book- federal deficit. entry system or to Treasury Direct. Conversion to Treasury's savings bond offerings today consist book entry enables customers to take advantage of of series EE bonds, the interest earnings on which better account maintenance, processing, and pay- accrue until the bond matures or is redeemed, and ment. Treasury hopes to eliminate all outstanding series HH bonds, which are obtained in exchange paper securities and move to total book entry by for series E or series EE bonds and pay interest the year 2000. twice per year, via ACH, to the owner's designated depository institution.6 The savings bond program Savings Bonds is a stable and sizable source of debt financing for the government. Since the introduction of the series The U.S. savings bond is a low-denomination, non- EE bond in 1980, more than 50 million investors marketable Treasury security that is easily pur- have purchased them. chased, liquid, and safe—its principal and interest are guaranteed by the U.S. government.5 The sav- 6. Other features of the current savings bond program are that ings bond is thus an important vehicle for house- series EE bonds earn interest on a fixed, graduated scale, rising from about 4 percent to the minimum 6 percent rate for bonds held between six months and five years. Between five years and the date 5. Depending on the series, the face values of savings bonds of redemption, the series EE bond yields the greater of 6 percent or range from $50 to $10,000, and the bonds are sold at 50 percent to 85 percent of the average return on all marketable Treasury securi- 100 percent of face value. Individuals can buy them through most ties with a remaining maturity of five years. At 6 percent, series EE depository institutions and by payroll deduction at many places of bonds reach face value in twelve years; unless redeemed, the bonds employment and can redeem them any time after six months of accrue interest for a total of thirty years. The interest on series EE ownership at most depository institutions or, depending on the bonds is exempt from federal tax if owners meeting certain condiseries, at Reserve Bank offices. tions redeem them for qualified educational expenses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Federal Reserve Banks as Fiscal Agents and Depositories of the United States 733 The savings bond services of the Reserve Banks Currently, the eleven Federal Reserve Districts include sale and delivery; automated issuance of with savings bond operations use two different payroll and promotional bonds; denominational ex- savings bond automation systems. As a result of a changes; exchanges of accrual bonds for income recent study, Treasury has decided to consolidate bonds; and reissuance, replacement, and redemp- Reserve Bank savings bond operations in five tion. The number of bonds issued by the Banks— Reserve Bank Districts and to develop in the next more than 36 million in 1991—has grown more few years a single automated application to support than 10 percent per year for the past five years. these functions. The Federal Reserve Banks work closely with Treasury to improve service and efficiency in savings bond operations. For example, with the sustained growth in the savings bond program, certain INNOVATIONS AND DEVELOPMENTS functions have been consolidated to enhance effec- IN SERVICES tiveness. The Federal Reserve Bank of Philadelphia is Treasury's central site for interest payments Notable developments have occurred in recent on the series H and HH current-income savings years in both depository and fiscal agency services. bonds. The Pittsburgh Branch of the Cleveland In the payments area, work is progressing toward Reserve Bank manages the original issue, reissue, automation of tax payments and letter-of-credit redemption, and account maintenance of the speoperations. In fiscal services, a system to speed the cial book-entry trustee accounts. The Pittsburgh clearing of paid savings bonds was adopted nation- Branch also warehouses unissued savings bond wide last year, after three years of testing; the stock received from the bond printer for distribu- Federal Reserve's PC-based Fedline system is tion to the other Federal Reserve offices and to about to be opened for use by institutional bidders companies and federal, state, and local government wishing to submit bids electronically in Treasury entities that issue bonds to employees through the securities auctions; a new Public Debt Accounting payroll savings plan. and Reporting System is being introduced; and a To improve the efficiency and reduce the cost of new commercial book-entry securities software issuing savings bonds, Treasury introduced the system is under development. Regional Delivery System (RDS) in 1989, after two years of pilot studies with the Federal Reserve. Before RDS, series EE savings bonds purchased "over the counter" from an issuing agent, such as a commercial bank, were conveyed directly to the Electronic Tax Collections buyer at the time of purchase. With RDS, investors submit an application to the issuing agent, who The Federal Reserve System is supporting Treaforwards the registration and delivery information sury's Federal Tax Deposit (FTD) Redesign, a joint to one of eleven Federal Reserve offices (the Kan- effort of the Financial Management Service and the sas City District serves itself and the San Francisco Internal Revenue Service to eliminate paper docu- District), which then issues and mails the bond. mentation, accelerate Treasury's receipt of funds, Treasury estimates that, by the end of 1992, when and enhance Treasury's cash management and tax RDS is fully implemented, the system will save payment information. U.S. taxpayers more than $10 million per year in As part of FTD Redesign, the Federal Reserve administrative costs and will facilitate further tech- Banks of Minneapolis and Atlanta, in their roles as nological innovations.7 depositories for Treasury, are conducting a test of an electronic system of tax payment for businesses called Taxlink-FRB. In the test, limited to business 7. The savings is the sum of (1) the reduction in agent fees because agents no longer issue the roughly 30 million bonds bought payments of federal taxes from Georgia, participatover the counter each year and (2) the savings of the cost of ing depository institutions electronically report fedconsigning stock to more than 40,000 issuing agents, less the eral tax deposit payments via touch-tone telephone increase in Reserve Bank operating costs associated with issuing the bonds, including postage. or PC to the Minneapolis Reserve Bank for TT&L Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

734 Federal Reserve Bulletin • October 1992 processing. Minneapolis electronically transmits clearing process, for crediting to their reserve the information to the IRS Taxlink system to accounts. With EZ Clear, paying agents process the update taxpayer accounts. savings bonds they redeem for their customers in the manner they use to process checks. In early 1991, EZ Clear became the exclusive method for Letters of Credit processing paid savings bonds.8 The savings bonds were redesigned to facilitate The Federal Reserve Banks, acting for Treasury, check-like processing by the depository institutions maintain and service letters of credit for the benefit and the Reserve Banks, with routing numbers of grantees of government funds, such as housing, printed in machine-readable magnetic ink, space health, and educational organizations and institu- for magnetic-ink printing of paid amounts, and an tions. The letters of credit issued by a federal endorsement area similar to that on Treasury agency for the benefit of these organizations checks. Depository institutions report that EZ Clear describe the funds available and conditions under reduced handling expenses for paid bonds, accelerwhich funds may be drawn down. ated credits, and streamlined internal accounting. Letter-of-credit operations, conducted in all Reserve Banks, are basically manual processes to account for balances, verify requests for payment, Fedline and verify the actual payments. To initiate a letter of credit, the federal agency, via the Financial A PC-based link to the Federal Reserve communi- Management Service, asks a Reserve Bank to cations network makes computer transactions more establish an account. When the recipient organiza- feasible for smaller banks. More than 8,000 depostion requests funds, its depository institution asks itory institutions, with electronic connections at that the Reserve Bank, as Treasury's depository, more than 10,000 locations throughout the country, credit its reserve account for the amount of the use the PC link, known as Fedline, to transfer request. If the payment request meets the terms of securities and funds, to originate and receive ACH the letter-of-credit, the Reserve Bank debits Trea- files, to transmit federal tax deposit advices to the sury's general account and credits the depository Reserve Banks, and to fulfill various other fiscal institution's reserve account. and depository needs. The Federal Reserve Banks processed 38,000 Earlier this year, Treasury's Bureau of the Public letter-of-credit transactions in 1991 involving more Debt announced its intention to make available than $133 billion. At the request of Treasury, the electronic access to Treasury security auctions via Federal Reserve Bank of Richmond is developing the Reserve Banks. At Treasury's direction, the a computerized application, which will replace Reserve Banks, through Fedline connections, will the present manual operations, to be operated at offer institutional bidders the means to submit bids a single Reserve Bank. Fedwire, the Federal electronically. Reserve's electronic transfer system for funds and securities, will be used both to request and to transfer payment. Public Debt Accounting and Reporting System EZ Clear Accounting for the public debt and the related interest cost is the responsibility of Treasury's In October 1988, Treasury, with the assistance of the Federal Reserve, implemented EZ Clear as an 8. EZ Clear permits depository institutions to submit paid bonds alternative to the increasingly costly traditional proeither as a separately sorted cash letter (that is, one containing only cedures for processing savings bonds paid by paid bonds) or as a mixed cash letter (along with other checks depository institution agents acting for Treasury. forwarded for collection). Agents presenting bonds under a separately sorted cash letter receive a fee from Treasury for performing Those procedures required paying agents to submit that service. Agents presenting bonds as part of a mixed cash letter paid bonds in special batches, apart from the check- receive no fee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Federal Reserve Banks as Fiscal Agents and Depositories of the United States 735 Bureau of the Public Debt. Daily financial reports agency and depository services for other domestic on transactions affecting the debt come to the BPD and international agencies. Depending on the from the Reserve Banks, which every day collect authority under which services are provided, the and pay funds for the issue and redemption of Reserve Banks may (1) maintain depository institu- Treasury securities. One of Treasury's primary tion accounts of agency book-entry securities strategic objectives is to improve current methods (which may be transferred over Fedwire), (2) profor reporting and reconcilement, which are costly vide custody services and maintain and update and cumbersome; they involve a great deal of balances of book-entry and definitive securities paper, prevent the BPD from reconciling debt outstanding, (3) maintain cash accounts, credit inaccounts quickly, and delay the verification to the terest and principal at maturity of securities, and Reserve Banks that the data submitted are accurate. perform various other securities servicing activities The Federal Reserve Bank of Cleveland, in con- after original issue.9 junction with the BPD, designed and created the The Federal Reserve Bank of New York is the Public Debt Accounting and Reporting System primary fiscal agent or depository of most non- (PARS) to meet Treasury's goal of strengthening Treasury domestic agencies and entities that use and streamlining the BPD accounting system. As the Federal Reserve. A list of selected nonimplemented in September 1992, PARS produces Treasury agencies and entities that currently timely reconciliation of accounting data and more receive fiscal and depository services directly from accurate financial statements, allowing adjustment Reserve Banks is in the appendix. of differences on line with the Reserve Banks and Branches. PAYMENT FOR SERVICES New Book-Entry Securities System In 1917, Treasury Secretary McAdoo initiated the practice of "reimbursing" the Reserve Banks for The Federal Reserve operates two commercial the cost of services they were providing on behalf book-entry software systems: One operates in ten of the government. Secretary McAdoo reasoned Federal Reserve Districts and the other in two that the performance of such services simply could Districts. To position the Reserve Banks to meet not be imposed by legislation; rather, the provision future needs of the book-entry business in general of such services by the Reserve Banks "could only and of fiscal principals in particular, the Federal be accomplished by negotiation and agreement, Reserve has decided to develop a new book-entry involving, necessarily, compensation for the serapplication for nationwide use. vices provided." A few years later, the Congress The new system will operate at a single site with enacted legislation that permitted the use of public one "electronic vault" for records of Treasury and monies to reimburse Reserve Banks for the costs agency book-entry securities. Furthermore, the sys- associated with their governmental services. tem will take advantage of technological advances Today, the Federal Reserve expects to be comthat will provide comprehensive contingency capa- pensated for the costs of the Reserve Banks' fiscal bilities as well as flexibility to address future busi- agency and depository services on behalf of Treaness needs, whether they come from the fiscal sury and other agencies (table 2). Treasury, howprincipals or result from policy decisions made by ever, has not been able to obtain congressional the Federal Reserve. funding sufficient to fully reimburse the Reserve Banks. Of the $212 million spent by the Reserve Banks on Treasury fiscal and depository services in SERVICES ON BEHALF OF OTHER calendar year 1991, the Federal Reserve requested GOVERNMENTAL ENTITIES When required to do so by the Secretary of the 9. Unlike Treasury securities, agency securities cannot be purchased directly from a Federal Reserve Bank. The issuers generally Treasury or when required or permitted to do so by rely on securities dealers, including some commercial banks, to federal statute, the Reserve Banks perform fiscal distribute original issues. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

736 Federal Reserve Bulletin • October 1992 2. Expenses of the Federal Reserve Banks for fiscal important discipline that is lost with respect to agency and depository services, 1991 fiscal agency and depository services unless the Millions of dollars entities receiving the services include the costs in their appropriations requests. Second, when ser- Agency and service vices are provided at no cost or are subsidized, they U.S. Treasury tend to be over-used and less efficient than if they Bureau of the Public Debt Savings bonds were obtained in a more market-oriented manner Treasury Direct Commercial book entry governed by cost and quality. In the case of func- Marketable Treasury issues Definitive securities tions performed by the Federal Reserve, the Total expense of full reimbursement would induce Trea- Financial Management Service sury and other agencies to compare the level and Automated clearinghouse Treasury tax and loan and other accounts quality of Reserve Bank services and costs with Government check processing those of commercial providers of similar services Total and to seek out the most efficient service pro- Other1 • vider. Ultimately, therefore, such comparison Total, Treasury would subject the government-mandated services Other agencies of the Reserve Banks to competition from private Securities Food coupons (Department of Agriculture) firms. Postal money orders (U.S. Postal Service) Other Total, other agencies THE FUTURE OF GOVERNMENTAL i FINANCIAL SERVICES 1. Includes foreign exchange transactions. The Reserve Banks' financial services to governreimbursement for $152 million in accordance with ment and their financial services supporting the Treasury directives; of the $152 million, Treasury general payments mechanism for depository instiactually paid $62 million, or about 30 percent of tutions gain efficiency from their joint use of Fedtotal expenses.10 The Reserve Banks received virtu- eral Reserve equipment, facilities, and personnel. ally full reimbursement from agencies other than These services will continue to be transformed by Treasury for the $41 million in expenses incurred technological change. Government payments sysin 1991 for fiscal and depository services provided tems are likely to be redesigned to take greater on their behalf. advantage of electronic mechanisms, and paper- In 1990, the Congress enacted "permanent, intensive activities will be further automated. More indefinite" appropriation legislation to provide services will be delivered electronically, and timemoney to reimburse the Reserve Banks for the critical operations ranging from auctions for Treapublic-debt-related operating expenses incurred on sury securities to the crediting of government benebehalf of the Bureau of the Public Debt, excluding fits will become more reliable, timely, and efficient the costs of start-up programs and other initiatives, as new capabilities are applied. beginning in fiscal year 1992. The technological evolution is well illustrated by Full reimbursement of expenses incurred as fis- a current pilot project that has advanced the proscal agents and depositories is an important public pect of purely electronic financial transactions policy concept for two reasons. First, congressional between the government and the public. In the oversight of agency program budgets provides an short run, a successful outcome to the experiment, which involves corporate taxpayers in Georgia, could mean that millions of paper advices now 10. Board of Governors of the Federal Reserve System, Annual submitted by taxpayers to depository institutions Report: Budget Review, 1991-92 (Washington, D.C.: Board of could be replaced by electronic messages that tax- Governors, 1992), p. 28, tables 3.8 and 3.9, and p. 62, table D.2. For an explanation of the calculation, see the Annual Report: payers initiate from a touch-tone telephone or com- Budget Review, 1987-88 (Board of Governors, 1988), p. 35, note 1. puter. All parties—taxpayers, depository institu- See also Board of Governors of the Federal Reserve System, 78th tions, Reserve Banks, and the IRS—would be Annual Report, 1991 (Board of Governors, 1992), p. 256. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Federal Reserve Banks as Fiscal Agents and Depositories of the United States 737 spared the effort of preparing and filing paper state- Farm Credit Administration ments, and Treasury's cash managers would be Farm Credit System Financial Assistance aware of receipts almost immediately. Corporation In the long run, the elaboration of electronic connections and accounts may permit all govern- Department of Education ment payments and collections to be initiated Federal Home Loan Banks by telephone or computer through the Reserve Banks, thereby eliminating paper checks as the Federal Home Loan Mortgage Corporation means of receiving money from, or paying, the Federal National Mortgage Association U.S. government. Financing Corporation Inter-American Development Bank APPENDIX: SELECTED NON-TREASURY AGENCIES REQUIRING FISCAL International Bank for Reconstruction AGENCY AND DEPOSITORY SERVICES and Development DIRECTLY FROM A RESERVE BANK International Finance Corporation African Development Bank Resolution Funding Corporation Asian Development Bank Resolution Trust Corporation Department of Agriculture Student Loan Marketing Association Commodity Credit Corporation Tennessee Valley Corporation Food and Nutrition Service U.S. Postal Service • Department of Housing and Urban Development Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

738 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report, covering the period May marks reinforced the other pressures weighing on through July 1992, provides information on the dollar. Treasury and System foreign exchange operations. Meanwhile, market participants became con- It was presented by William J. McDonough, Execu- vinced during the period that the Japanese authoritive Vice President in charge of the Financial Mar- ties were eager to see a further appreciation of the kets Group at the Federal Reserve Bank of New yen. This belief, supported by numerous official York and Manager of Foreign Operations for the statements from Japan, the United States, and System Open Market Account. Daniel H. Brotman Europe, and by rumors of central bank intervention was primarily responsible for preparation of the to support the yen, added periodically to the marreport.1 ket' s willingness to sell dollars. As the dollar rapidly approached historical lows, The dollar came under strong downward pressure a July summit meeting of the leaders of the Group during the May-July period, declining more than of Seven (G-7) nations heightened the market's 10 percent against the German mark and most focus on official policies toward exchange rates. other European currencies, nearly 5 percent against The absence of any reference to exchange rates in the Japanese yen, and more than 8 percent on a the summit's concluding communique, coupled trade-weighted basis.2 The dollar's decline was a with what appeared to be ambiguous official stateproduct of weaker-than-expected data on U.S. ments during and after the meetings, led some growth and employment and related declines in market participants to conclude that the G-7 was both short- and long-term dollar interest rates, unconcerned about the dollar. Shortly thereafter, which contrasted with an upward tendency in Euro- the German authorities announced an increase in pean interest rates. their discount rate. Although the increase in the Expectations mounted during the period that the German discount rate did not lead to a significant German authorities would engineer a further rise in rise in other mark interest rates, market participants short-term mark interest rates, thereby adding to saw the move as potentially opening the door to a the already impressive interest differential in favor further widening of interest rate differentials unfaof mark investments over their dollar counterparts. vorable to the dollar. At the same time, the defeat of a referendum in In this environment, market participants began to Denmark to ratify that country's participation in adopt large short-dollar positions on the premise European monetary and political union triggered that the dollar faced little risk of an appreciation large and occasionally destabilizing flows of funds but good prospects of a further decline. This perout of the higher-yielding European currencies and ception of the dollar as a one-way bet, coupled with into the mark. Although the effect of these flows the absence of any source of strong support for the was felt primarily within Europe, demand for dollar in the marketplace, caused the currency's decline to accelerate. Concerned with developments in the market, the US. monetary authorities in concert with several foreign central banks inter- 1. The charts for the report are available on request from Publi- vened on July 20, purchasing $170 million against cations Services, Board of Governors of the Federal Reserve Systhe mark. The concerted operation calmed the martem, mail stop 138, Washington, DC 20551. 2. The dollar's movements on a trade-weighted basis are mea- ket, and the dollar traded quietly through the sured using an index developed by the staff of the Board of remainder of the period. Governors of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

739 DOLLAR TRENDS LOWER IN MAY AMID nals from policymakers as evidence that the author- MIXED VIEWS ON U.S. ECONOMY ities sought, or would at least tolerate, further gains. For a time, this view provided underlying support Sentiment toward the dollar during the month of for the Japanese currency. May reflected the market's outlook toward the U.S. The mark, in contrast, appeared to be falling out economy—uncertain but hopeful. Earlier in the of favor among investors amid domestic political year, the dollar had risen sharply as market partici- uncertainty and labor strife. Although many market pants grew more confident about the strength and participants were wary of the risk of further monesustainability of the U.S. recovery. From lows of tary tightening in Germany, the view that German just above DM1.50 against the mark and ¥122 policies were not having their desired effect against the yen in January, the dollar climbed to weighed on the mark. Indeed, several countries in highs of around DM1.68 against the mark and ¥135 the European Monetary System (EMS) took advanagainst the yen in early spring. By April, however, tage of the mark's relative weakness to ease monedoubts about the durability of the recovery began tary conditions in the hope of stimulating economic to reemerge. Indeed, market participants viewed a activity at home. decline in the U.S. federal funds rate in April as a sign of renewed official concern over weaknesses in the U.S. economy, and the dollar opened the DANISH VOTE ON SINGLE EUROPEAN period at just below DM1.68 and just above ¥133. CURRENCY HEIGHTENS DEMAND FOR MARK Data on U.S. economic activity in May continued to paint a mixed picture of the recovery. The Investor sentiment toward the mark shifted abruptly April employment report, released on May 8, in early June with the defeat of a referendum in showed an unexpected pickup in payrolls and a Denmark on the Maastricht treaty—a treaty outlinslight drop in the unemployment rate to 7.2 percent ing steps toward European union, including ecofrom 7.3 percent in March. But other reports, in- nomic and monetary union and the creation of a cluding those on M2 money supply growth, rein- single European currency. Market participants forced the view that growth would be sluggish at viewed the Danish rejection as a blow to the prosbest. Meanwhile, press reports and market com- pects for a single European currency in the foreseementary suggested that the Federal Reserve had able future. In their view, abandonment of the shifted its policy from a bias toward easing to a agreed-upon timetable for monetary union would more neutral stance. As these developments proved loosen the tight discipline that the Maastricht treaty insufficient to sustain all of the market's hopes for had implied for European inflation rates and budget recovery, the dollar edged lower in relatively direc- deficits and thus raise doubts about the likelihood tionless markets. Having reached highs for the of continued convergence of European fiscal and period of DM1.6510 against the mark and ¥133.75 monetary policies. In this environment, funds that against the yen in early May, the dollar eased back had been invested in higher-yielding European curto end the month around DM1.60 and ¥128. rencies, such as the Italian lira, French franc, and In May, the dollar traded more softly against the Spanish peseta, were suddenly pulled out and reinyen than it did against the mark. This divergence vested in the mark. As the mark rose sharply within occurred against a backdrop of developments that the Exchange Rate Mechanism of the EMS, talk of appeared on balance to support the yen and to an imminent EMS realignment reemerged. weigh somewhat on the mark. With regard to the At the same time, expectations regarding Geryen, official statements and rumors of central bank man monetary policy began to shift. The concluintervention were seen as indicating general sup- sion of wage negotiations in Germany in mid-May port within the G-7 for Japan's stated preference left market participants wondering what the implifor a strong yen. Market participants recalled that cations of the wage settlements would be on Gerthe G-7, at its April meeting, had stated that "the man monetary policy and whether the Bundesbank decline of the yen . . . was not contributing to the would now begin to ease policy. Although few adjustment process." Although the yen had appre- observers expected an immediate decline in rates, ciated somewhat since then, the market read sig- many believed that easier policy would be forth- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

740 Federal Reserve Bulletin • October 1992 coming before the end of the year. In late May and concern over the potential implications of a threein June, however, a series of official statements out way presidential race. The possibility that elections of Germany appeared to quash these hopes. Point- in November would not result in a clear victory for ing to rapid money supply growth, high wage set- any candidate was enough, when combined with tlements, and persistently high inflation results, other factors weighing on the dollar, to discourage Bundesbank officials cautioned that German inter- inflows into U.S. stock and bond markets. est rates would remain high for the foreseeable future. CONCERNS ABOUT THE FRAGILITY OF THE JAPANESE ECONOMY AND STOCK MARKET DOLLAR'S DECLINE AGAINST THE MARK WEIGH ON THE YEN ACCELERATES IN JUNE AND JULY AMID WEAKER OUTLOOK FOR THE U.S. ECONOMY As the dollar began declining more rapidly against the mark and other European currencies, its decline Meanwhile, expectations began to build that mone- against the yen moderated somewhat. The dollar's tary policy in the United States would again be relative resilience against the yen occurred as Japaeased. Expectations of lower U.S. interest rates nese interest rates softened in response to evidence grew in tandem with mounting evidence that the of increasing weakness in the Japanese economy U.S. recovery was not gaining strength. In early and worries about the fragility of the Japanese June, the Labor Department reported a smaller- equity market. In mid-June, release of the Japanese than-expected gain in payroll employment and a central bank's quarterly survey of business condirise in the unemployment rate to 7.5 percent from tions reinforced these concerns. The report, long 7.2 percent. Subsequent data on both inflation and regarded as an important indicator of future growth, real economic activity reinforced the view that the showed an unexpectedly large decline in business authorities had room to guide short-term rates sentiment. Although the Japanese authorities lower. Notwithstanding these reports, market par- described the report as reflecting the economy's ticipants continued to believe that the Federal downward adjustment at its most severe point, the Reserve was reluctant to ease policy without con- Japanese stock market responded by tumbling to a clusive evidence of renewed weakness in the U.S. new five-and-a-half-year low, and short-term Japaeconomy. nese interest rates declined as market participants On July 2, with the release of yet another anticipated easier Japanese monetary policy. month's figures for employment, the market became convinced that conclusive evidence of weakness was at hand. A report of an unexpected decline G-7 SUMMIT SHARPENS FOCUS ON in payroll employment and large rise in the unem- OFFICIAL POLICY TOWARD EXCHANGE ployment rate to 7.8 percent triggered a sharp RATES decline in dollar exchange rates as dealers anticipated a policy response by the Federal Reserve. By early July, the dollar was trading below its level Within the hour, the Federal Reserve cut its dis- at the beginning of the year and within 5 percent of count rate Vi percentage point to 3 percent and its historical lows against the major currencies. relaxed reserve pressures to an extent consistent Official comments on exchange rates, when they with a reduction of about V2 percentage point in the occurred, appeared to express satisfaction with the federal funds rate. In response, dollar interest rates movement in exchange rates. Against this backbegan to soften, and interest rate differentials ground, the July 7-8 meeting of G-7 heads of state between the dollar and most major foreign curren- took on added importance in the market's view as cies moved further against the U.S. currency. participants sought clarification of the authorities' Uncertainty surrounding the U.S. presidential attitude toward the dollar. campaign reinforced, for a time, the market's nega- The prevailing view in the weeks leading up to tive sentiment toward the dollar. In June and early the meeting was that the authorities would call for July, foreign investors expressed confusion and a further appreciation of the yen to help resolve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 741 global trade imbalances. But, with the dollar near In these circumstances, the U.S. monetary all-time lows, some believed that the resulting com- authorities intervened on July 20 in concert with munique might in fact contain language supportive several foreign central banks to support the U.S. of the dollar. In the event, the communique con- currency. In several rounds of dollar buying, the tained no direct reference to exchange rates. Com- Foreign Desk of the Federal Reserve Bank of New ments by individual officials after the meeting, York purchased $170 million against marks. The including a statement by Secretary Brady that the intervention was financed equally by the Federal United States "is not seeking to depreciate the Reserve and the U.S. Treasury. Market participants dollar," did not entirely dispel the overall impres- responded strongly to the evidence of close coopersion that the G-7 authorities were unconcerned ation among U.S. and foreign monetary authorities, about the decline in the dollar. In this environment, and the dollar rose from its period low of the dollar began to decline sharply. DM1.4470 against the mark in the morning of Within days of the G-7 summit, market attention July 20 to DM1.48 later that day and to DM1.50 by shifted to a meeting of the Bundesbank Council in the end of that week. Pressures within the exchange Frankfurt on July 16. Expectations that the German rate mechanism of the EMS also eased somewhat authorities would announce a tightening of mone- after the concerted central bank initiative. tary policy escalated in the days leading up to the The dollar held steady against the mark during meeting. But the announcement of an increase of the remainder of the period and rose slightly 3A percentage point in the German discount rate— against the yen. Statements by German officials and subsequent increases in official rates in Italy, that the discount rate hike was not the first step of a the Netherlands, Austria, Belgium, and Spain— broader tightening of monetary policy and evinonetheless jolted the markets. Although the hike dence that the German authorities were operating in the discount rate did not spur significant gains in in their domestic markets to resist a rise in shortmoney market rates and the Bundesbank denied term mark interest rates, gradually dampened the that a Lombard rate increase would necessarily market's expectation of higher German interest follow, market participants believed that the move rates. Meanwhile, continued sharp declines in Japapaved the way for a subsequent rise in short-term nese stock prices fueled expectations of monetary mark rates. As a result, downward pressure built easing in Japan, and these expectations were realagainst the dollar and against the currencies of ized on July 27 with the announcement of a Vi persome EMS members. centage point cut in the Japanese discount rate. In this environment of steady to lower interest rates abroad, pressures on the dollar subsided. The dollar Federal Reserve reciprocal currency arrangements closed the three-month reporting period at Millions of dollars DM1.4745 against the mark and ¥127.10 against Amount of the yen. facility, July 31, 1992 In other operations during the period, the U.S. monetary authorities purchased a total of Austrian National Bank 250 National Bank of Belgium.. 1,000 $6,176.6 million against marks in a series of off- Bank of Canada 2,000 National Bank of Denmark 250 M market spot and forward transactions with the Bank of England 3,000 M Bank of France 2,000 Bundesbank. The arrangement with the Bundes- Deutsche Bundesbank 6,000 bank was similar to a transaction conducted last Bank of Italy 3,000 Bank of Japan 5,000 year. It followed an agreement between the US. and German authorities that their respective hold- Bank of Mexico 700 Netherlands Bank ... 500 ings of German marks and dollars were in excess Bank of Norway 250 Bank of Sweden 300 of current needs and that it was to their mutual Swiss National Bank 4,000 advantage to reduce those holdings. Sixty percent Bank for International Settlements of the marks were sold for the account of the Dollars against Swiss francs 600 Dollars against other authorized European Federal Reserve, and the remainder was sold for currencies 1,250 the account of the U.S. Treasury. A spot transaction Total 30,100 of $2,503.9 million settled on May 22 and a for- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

742 Federal Reserve Bulletin • October 1992 2. Net profits or losses (-) $114.4 million, including $101.2 million resulting on U.S. Treasury and Federal Reserve from settlements under that transaction. Cumulaforeign exchange operations1 tive bookkeeping or valuation gains on outstanding Millions of dollars foreign currency balances at the end of July were U.S. Treasury $4,536.7 million for the Federal Reserve and Federal Exchange Period and item Reserve Stabilization $2,503.9 million for the Exchange Stabilization Fund Fund (ESF). These valuation gains represent the Valuation profits and losses on increase in the dollar value of outstanding currency outstanding assets and liabilities as of April 30, 1992 2,653.1 1,039.5 assets valued at end-of-period exchange rates, com- Realized, April 30-July 31, 1992 336.2 114.4 pared with rates prevailing at the time the foreign Valuation profits and losses currencies were acquired. on outstanding assets and liabilities as of The Federal Reserve and the ESF regularly July 31, 1992 4,536.7 2,503.9 invest their foreign currency balances in a variety 1. Data are on a value-date basis. of instruments that yield market-related rates of return and that have a high degree of quality and ward transaction of $743.7 million settled on liquidity. A portion of the balances are invested in July 21. The remaining forward transactions are to securities issued by foreign governments. As of the be settled later in the 1992 calendar year. end of July, holdings of such securities by the During the May-July period, the Federal Reserve Federal Reserve amounted to the equivalent of realized profits of $336.2 million, of which $9,315.9 million, and holdings by the Treasury $316.5 million resulted from settlement of portions amounted to the equivalent of $9,213.6 million, of the previously mentioned off-market currency both valued at end-of-period exchange rates. • transaction. The U.S. Treasury realized profits of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

743 Industrial Production and Capacity Utilization Released for publication August 14 relatively weak in recent months, increased sharply. The output of motor vehicles fell again in July, but factory production in the other major sectors The index of industrial production rose 0.4 percent changed little overall in both June and July. At in July, reversing the decline in June. In July, the 108.9 percent of its 1987 annual average, total output of coal mining rebounded with the end of industrial production in July was 0.8 percent above the June rail strike, which had curtailed production; its year-ago level. Total industrial capacity utilizaand the output at electric utilities, which had been tion in July increased 0.2 percentage point, to Industrial production indexes Twelve-month percent change Twelve-month percent change Durable manufacturing 1987 1988 1989 1990 1991 1992 1987 1988 1989 1990 1991 1992 Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production = 100 — Total industry -— 140 — Manufacturing 140 Capacity Capacity . 120 120 100 100 —^ Production — 80 Production — 80 1 1 1 1 1 1 1 1 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing 90 90 Utilization Utilization — ^ 80 —^^ 80 70 70 I l 1 I l I I l I l l l 1 1 1 1 1 1 1 1 1 1 1 1 1980 1982 1984 1986 1988 1990 1992 1980 1982 1984 1986 1988 1990 1992 All series are seasonally adjusted. Latest series, July. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

744 Federal Reserve Bulletin • October 1992 Industrial production and capacity utilization Industrial production, index, 1987=100' Percentage change Category 1992 19922 July 1991 to Apr/ May.r Juner July" Apr.r Mayr Juner July July 1992 Total 108.1 108.9 108.5 108.9 .5 .7 -.4 .4 .8 Previous estimate 108.1 108.6 108.2 .5 .5 -.3 Major market groups Products, total 109.0 109.7 109.1 109.3 .5 .6 -.5 .1 .5 Consumer goods 110.1 110.6 110.0 110.2 .7 .4 -.5 .1 1.8 Business equipment 123.0 124.5 124.4 124.1 1.2 1.2 -.1 -.2 1.3 Construction supplies 96.5 97.9 97.0 97.3 -.2 1.4 -.9 .3 .4 Materials 106.8 107.7 107.5 108.4 .6 .9 -.2 .9 1.3 Major industry groups Manufacturing 109.0 109.8 109.6 109.5 .5 .7 -.2 .0 1.1 Durable 107.6 109.1 108.5 108.4 .6 1.4 -.6 .0 .3 Nondurable 110.7 110.7 111.0 110.9 .3 .0 .2 -.1 2.1 Mining 99.1 99.8 98.3 101.0 1.6 .8 -1.6 2.8 -1.6 Utilities 108.2 107.8 107.1 110.9 .4 -.3 -.7 3.5 .0 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1991 1992 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, JJJuuulllyyy 111999999111 11996677--9911 11998822 11998888--8899 July Apr.r May.1 Juner July? tttooo JJJuuulllyyy 111999999222 Total 82.1 71.8 85.0 80.0 78.7 79.1 78.7 78.9 2.3 Manufacturing 81.4 70.0 85.1 78.7 77.7 78.1 77.8 77.6 2.6 Advanced processing 81.0 71.4 83.6 77.8 76.3 76.8 76.3 75.9 3.0 Primary processing . 82.3 66.8 89.0 81.1 81.1 81.4 81.5 81.7 1.5 Mining 87.4 80.6 87.2 89.6 86.3 87.0 85.6 88.0 .2 Utilities 86.7 76.2 92.3 86.2 83.4 83.1 82.4 85.3 1.0 1. Seasonally adjusted. r Revised, 2. Change from preceding month to month indicated. p Preliminary. 78.9 percent, but has changed little, on balance, duction of materials increased nearly 1 percent in since April. July; gains in the energy category—coal and elec- When analyzed by market group, the data show tricity generation—accounted for most of the rise. that the output of consumer durable goods, which The output of durable materials was little changed includes motor vehicles and appliances, declined in June and July; last month, the production of for a second month in July but that the production basic metals, particularly steel, rose noticeably, but of nondurable goods, primarily electricity for resi- the output of parts for use by the motor vehicle dential use, turned up. The output of equipment fell industry declined. The production of nondurable again in July, mainly because of the curtailed pro- materials, which surged in June, edged up last duction of motor vehicles and a further drop in month. defense and space equipment. Among most other When analyzed by industry group, the data show major categories of business equipment, output re- that manufacturing output, which had risen signifimained weak, on balance. A notable exception was cantly in the spring, declined slightly in June and information-processing equipment, particularly was unchanged last month. Much of this weakness computers, where production rose sharply further is attributable to curtailed motor vehicle produclast month. tion, but output in some other major industries, The production of construction supplies posted a such as textiles, furniture, instruments, and electrismall increase in July but was only a bit above its cal machinery, also dropped back. In addition, the average level during the second quarter. The pro- output of aerospace and miscellaneous transporta- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 745 tion equipment, which has been weak for some operating rate fell about Vi percentage point in both time, fell further in June and July. The notable June and July. By contrast, the utilization rates for areas of strength in recent months have been paper, primary-processing industries rose, on balance, in steel, and chemicals. June and July, continuing the gradual upward trend In July, the utilization rate in total manufacturing that has been evident since early this year. decreased 0.2 percentage point, to 77.6 percent, The output at mines increased almost 3 percent, and was more than 1 percentage point below led by the rebound in coal. The production at its year-ago level. The recent weakness in manu- utilities also advanced sharply last month, but the facturing has been concentrated mainly among level of output was unchanged from that of a year advanced-processing industries, where the overall earlier. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

746 Statement to the Congress Statement by Richard Spillenkothen, Director, led real estate developers to believe that their Division of Banking Supervision and Regulation, properties would generate sufficient cash flow to before the Subcommittee on General Oversight service and repay underlying debt obligations. and Investigations of the Committee on Banking, Some banking organizations shared these expec- Finance and Urban Affairs, U.S. House of Rep- tations and, because they were facing increasing resentatives, August 4, 1992 competition in their traditional business lines, lowered their real estate lending standards. By I am pleased to be here today to discuss the accommodating credits they previously would impact of recent legislative and regulatory ac- have denied, banks hoped to capture a greater tions on credit availability and credit terms. The share of the real estate financing market as well Federal Reserve believes that regulatory and as to improve their earnings performance supervisory actions should be implemented in through attractive fees and high interest returns. ways that promote an appropriate balance be- The unfortunate results of this combination of tween adequate credit availability and the safety factors are well known. Excess building space and soundness of our financial system. I intend to was constructed that could not be leased or sold, begin by providing an overview of these matters. and some overextended borrowers were unable Thereafter, I will address the issues raised by the to service and repay their debt obligations. Consubcommittee in its July 8 letter of invitation. sequently, many financial institutions experienced mounting losses in their real estate loan portfolios, and, as a result, some of these insti- BACKGROUND tutions suffered severe deterioration in their condition. At the outset, I think it would be useful to review Problems in the economy and related strains the series of developments that have led to on banking and financial markets, of course, current concerns regarding the availability of have not been confined to the real estate sector. credit from depository institutions. Many of During the 1980s, many business firms were these developments can be traced to the real acquired on a highly leveraged basis on the estate sector. assumption that the various units of the organi- During the 1980s, various factors combined to zation could be sold separately at attractive promote a boom in real estate, particularly for prices with the proceeds used to repay the debt. commercial properties. At the beginning of the In all too many cases, such expectations were decade, for example, a relative shortage of resi- proved false. Also, over the decade, reliance on dential and commercial space and the enactment debt became widespread in other sectors of the of changes in the tax laws were favorable to the economy. Many businesses relied increasingly real estate industry. In addition, until late in the on debt to finance their activities, a propensity decade, expectations in many sections of the that was matched by many households, as evi- United States were sustained by the relatively denced by the rapid growth in credit card and strong economic growth that supported the view other consumer debt. When confronted with that demand for office space would continue to economic uncertainty or adversity, these borrise indefinitely. These expectations were fueled rowers, too, were forced to labor under the burden of heavy debt obligations, not always by the supposition that inflationary conditions successfully. would continue and by optimistic assumptions about future occupancy rates. All of these factors One important effect of these problems is that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 747 demand for credit at banks has dropped substan- standards that are so restrictive that even pertially. This decline reflects general economic forming loans could be subject to criticism. Alfactors as well as developments in particular though individual examiners in some instances sectors. Leveraged buyout activity has greatly may have adopted a more conservative approach diminished. And in the face of the huge oversup- to evaluating loans in reaction to problems they ply in real estate markets, demands for funds to have observed arising from lax lending practices, finance new construction have declined to mini- the banking agencies have not changed their mal levels. At the same time, many borrowers fundamental loan review standards or the guidhave been attempting to restructure and reduce ance for applying these standards. Thus, to comtheir debt burden. Business customers have been municate that point to bankers and to ensure that reducing inventories, enjoying improved internal our examiners accurately understand agency polcash flows, and raising substantial funds in equity icy, officials of the Federal Reserve and the other and bond markets, thus dampening their needs banking agencies have issued a series of policy for bank credit. Indeed, a substantial amount of statements and have met on numerous occasions funds raised in capital markets has been reported with bankers and bank examiners to communito be for the purpose of repaying bank loans. cate and clarify the agencies' supervisory poli- Meanwhile, households have been rechannelling cies. Statements were issued by the agencies in cash flows away from retail deposits to the March, July, and November 1991 emphasizing repayment of consumer debt. the importance of banks continuing to lend in a Although weak loan demand accounts for a manner consistent with sound banking practices major share of the slow credit growth, a more to creditworthy customers and encouraging conservative approach on the part of some banks banks to work in a prudent fashion with troubled and other depository institutions to extend credit borrowers. In assessing real estate loans, the has also played a role, particularly in sections of statements also reminded examiners to consider the United States that have been most affected the stabilized capacity of income-producing by the recession. Considering the heavy losses properties to service their related debt obligathat banks have experienced in their loan portfo- tions and not to base their evaluation of a real lios, it is not surprising that they have taken estate loan solely on the forced liquidation value decisive steps to reinstate more conservative of the collateral. lending policies. In addition, many institutions This year the Board has followed up with other that suffered losses have slowed their asset initiatives that should contribute to easing the growth in an effort to protect their capital ratios availability of bank credit. These efforts include or have reduced their lending activity pending the phasing out of the reporting of highly leverrestoration of their capital bases. aged transactions that increase the amount of A return to more prudent lending standards noncumulative perpetual preferred stock that and actions to strengthen capital positions must bank holding companies may include in tier 1 be considered salutary for the long-run health of capital and undertaking, in conjunction with the economy and the banking system. Unfortu- other federal bank and thrift regulatory agencies, nately, however, in some cases the process of the Regulatory Uniformity Project. This effort retrenchment in lending may have gone too far. has as its goal promoting consistency among the Some institutions appear to have adopted poli- banking agencies and reducing regulatory burden cies that constrain them from meeting the needs and costs without lessening the effectiveness of of creditworthy borrowers—borrowers seeking bank regulation. The Board also has utilized funds to finance new projects and activities as opportunities to reiterate to our examiners the well as borrowers seeking to renew or refinance basic principles of last year's credit availability existing debt. initiatives. A factor contributing to the tendency for lend- Having summarized what the Board has done ers to overreact in adjusting their lending policies to dispel misconceptions about our current polihas been a concern that developed later in the cies and procedures, let me turn briefly to the decade that examiners might apply classification general question of the potential impact of recent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

748 Federal Reserve Bulletin • October 1992 legislation, such as the Federal Deposit Insur- sive talks with industry representatives to solicit ance Corporation Improvement Act of 1991 their views on appropriate levels. In addition, to (FDICIA), on credit availability. Several provi- provide sufficient flexibility, the agencies have sions of this act and, perhaps most particularly, specified in the proposal that real estate loans, so prompt corrective action, offer the promise of as not to exceed a certain percentage of total improving the safety and soundness of banks capital, need not conform to the loan-to-value over time and of minimizing costs to the safety standards. Also, comment is requested on net. Nonetheless, several provisions of the act whether the proposed real estate lending stanappear to work in the direction of reinforcing dards will hamper programs that institutions tendencies to restrict credit availability. For ex- have established to fulfill their obligations under ample, provisions that mandate the specification the Community Reinvestment Act, particularly of standards for real estate lending and that call those programs designed to provide credit to for the agencies to establish operating and man- low- and moderate-income persons. In sum, the agerial standards, including those pertaining to agencies are paying close attention to the potenunderwriting standards, appear likely to have tial burden that the proposed alternatives may that effect. And, there are various other provi- place on financial institutions and their customsions of the act, including prompt corrective ers, including the possible impact on a bank's action, which, by providing incentives for banks flexibility in structuring loan terms to meet borto establish and maintain strong capital, may also rowers' needs and the effect that any loss in such work in that direction, at least over the near flexibility may have on credit availability. term. Let me conclude these general remarks by Of course, there is no way to avoid entirely the saying that the Board is sensitive to the potential dampening effects laws and regulations that are impact of supervisory policies and procedures on designed to constrain bank risktaking may have banks' willingness to lend to creditworthy boron the willingness of banks to lend. In taking rowers. Concerns over credit availability arise steps to adopt regulations to implement FDICIA from several factors that have caused lenders to and other banking legislation, however, the Fed- become decidedly more cautious in their lending eral Reserve has endeavored to structure regula- policies and practices. The regulatory agencies tions in ways that, while being consistent with have, as I have emphasized, implemented sevthe letter and spirit of the legislation, will work to eral steps designed to counteract these tendenavoid undue rigidity and inflexibility that could cies to the extent that they are traceable to any impair the ability of banks to service the needs of misperceptions about our policies. The Board their customers. also has been sensitive to the potential impact For example, in our recent efforts to imple- that FDICIA may be having on banks' willingment section 304 of FDICIA regarding the estab- ness to lend and, thus, in our efforts to adopt lishment of real estate lending standards, the regulations to implement this legislation, the regulatory agencies have carefully explored var- Board is endeavoring to structure these regulaious alternative approaches that might be tions in ways that will work to minimize any adopted to achieve the desired end but that adverse effects on credit availability. would, at the same time, minimize unneeded and unwarranted constraints on banks and their customers. The agencies are now soliciting public LOAN REVIEW FOR NEW, EXISTING, AND comment on two alternative approaches to estab- ROLLOVER CREDITS lishing standard loan-to-value ratios and also are seeking comment on whether some other ap- The first two issues listed in your letter pertain to proach to real estate lending standards would be the general standards and policies for regulatory more appropriate. Because most depository in- loan review and classification practices for new, stitutions have historically used a loan-to-value existing, and rollover business credits at deposiapproach to their real estate lending, the agencies tory institutions. I am addressing these issues proposed loan-to-value ratios only after extentogether because our policies with respect to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 749 loan review function and the classification of policies are properly understood has been to these loans are the same. Each credit, whether clarify that banks that do not meet the minimum new or seasoned, is to be individually evaluated capital standards are not necessarily required to based on its own merits. stop making sound loans to creditworthy borrow- As reiterated in the agencies' November 1991 ers, provided these banks have reasonable and policy statement on commercial real estate loans, effective plans in place to achieve adequate capthe focus of the examiner's review is on the ital levels. In addition, the agencies have stated ability of the loan to be repaid, and the evaluation that banks with concentrations in certain ecoof these repayment prospects determines nomic sectors need not automatically refuse to whether and how a loan should be classified. The make loans to creditworthy borrowers in these principal factors that bear on this analysis are the sectors as long as the bank's underwriting stancharacter, overall financial condition and re- dards are sound, prudent risk controls are in sources, and payment record of the borrower; place, and the bank has an adequate plan in place the prospects for support from any financially to reduce any concentrations over time. responsible guarantors; and the nature and degree of protection provided by the cash flow and value of the underlying collateral. The impor- SPECIFIC REGULATORY CRITERIA tance of the collateral's value in the analysis of ON LENDING the loan necessarily increases as the sources of repayment for a troubled loan become inade- Your letter of invitation also inquired about the quate over time. effectiveness and burden of specific regulatory I would like to emphasize that, although the criteria on particular types of loans in ensuring Board does not differentiate between new and the safety and soundness of institutions. I infer existing credits for loan review and classification that this question is directed to section 304 of purposes, one advantage a seasoned loan has in FDICIA, which calls for the specification of the assessment process is that the payment per- regulatory standards for real estate loans, the formance record of the borrower has been estab- only section of the act directly concerned with lished. Because new loans do not have an estab- setting standards for a particular category of lished payment record, the examiner must rely loans. I have, of course, already reviewed the instead on projections of future performance in basic approach the agencies have been taking in evaluating the credit quality of the loan. our preliminary efforts to implement this section. Regarding the regulatory loan review for roll- Let me, therefore, reemphasize that in strucover business credits, it has long been our belief turing the proposal on which the Board is seeking that the act of refinancing or renewing loans to comment, close attention was paid to the possisound borrowers should generally not be subject ble burden these alternatives may place on finanto supervisory criticism in the absence of well- cial institutions and their customers, including defined weaknesses that jeopardize the repay- the possible impact of a loss of flexibility in ment of the loan. This policy was reiterated in a structuring loan terms to meet borrowers' needs July 1991 examination circular discussing the and the effect that may have on credit availabilimportance of banks' refinancing or renewing ity. For example, in determining what range of loans to sound borrowers, especially those in the possible loan-to-value limits the agencies should real estate sector. This statement was issued to propose, current banking practices and tradiremind examiners that financial institutions may tional real estate lending rules of thumb were determine that the most desirable and prudent taken into account, and the agencies believe that course is to roll over or renew loans to those the ratios proposed for public comment are genborrowers who have demonstrated an ability to erally consistent with these standards. pay interest on their debts but who may not be in Of course, by requiring limits, whether they a position to obtain long-term financing. are to be established by the depository institution I would like to point out that one important under general regulatory guidance or to be specelement of our efforts to make certain that our ified directly by the regulatory agencies, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

750 Federal Reserve Bulletin • October 1992 agencies recognize that they restrict to some statement stated that, although the value of coldegree the flexibility of lending institutions to lateral is a relevant factor in the evaluation of a meet specific credit terms requested by their loan, supervisory policies do not require autocustomers and may be viewed as a deterrent to matic increases to the loan-loss reserve solely credit availability. To counteract at least a part of because the value of the collateral supporting a that effect, the proposal would permit each bank performing loan has declined to an amount less to extend a portion of its real estate loans, not to than the loan balance as long as there are no exceed a certain percentage of total capital, on weaknesses that jeopardize repayment of the terms that do not conform to the regulatory credit. standards as long as the bank can otherwise demonstrate the prudence and safety of the loan. The agencies hope that the comments received DIFFERENCES IN IMPLEMENTATION will help them to determine the appropriateness AMONG THE AGENCIES of using loan-to-value ratios, as well as the ratio limits, if any, that should be set. The Federal First, I should acknowledge that differences Reserve believes that supervisory guidance on among the individual regulatory agencies may these ratios should assist in protecting the safety stem from legislation and to a certain degree from and soundness of depository institutions by cur- their respective cultures that have developed tailing abusive real estate lending practices in the over the years. However, there are several form of unreasonably large loans relative to the mechanisms, both formal and informal, that are value of the underlying real estate collateral. used by the agencies to coordinate the develop- Also, the Board believes that such guidance, if ment and implementation of general supervisory properly structured, need not unduly limit the policies and procedures, and much has been availability of credit to prudent real estate devel- accomplished in this area. And, in particular, the opers. agencies' fundamental objectives and supervisory policies pertaining to credit availability are uniform. In this regard, I would like to emphasize LOAN-LOSS RESERVES that the March and November 1991 policy statements were issued on a joint intragency basis. It has always been, and remains, the responsibil- Considerable efforts have been, and are being, ity of the institution's management to establish taken to ensure that our supervisory policies and maintain loan-loss reserves at an appropriate continue to be consistent. In this process, the level. The methods used by management in ful- agencies are also seeking to assure themselves filling this responsibility are carefully reviewed that these policies are balanced, fair, and prudent by examiners to ensure that these methods have so that they will neither permit unsound lending adequately considered all factors relevant to the practices nor discourage banks from lending to collectibility of the portfolio. creditworthy borrowers. In evaluating the adequacy of a bank's loan- To foster the objectives I have just described, loss reserve, the examiner considers the level the four federal banking agencies jointly orgaand severity of loan classifications. As I have nized the National Examiners' Conference in previously mentioned, the classification process Baltimore in December 1991. In particular, the takes into account several factors including the purpose of the conference was to make sure that ability of the borrower to repay the loan out of senior examiners and their supervisors fully uncash flow generated from the project financed as derstood the substance and purpose of the agenwell as from other reliable sources and the pro- cies' initiatives. Furthermore, the Federal Retection provided by any collateral. The examiner serve has participated in numerous interagency assigns an appropriate classification based on the training efforts to provide uniform interpretations loan's identified weaknesses and the potential of these interagency policy statements. loss exposure to the bank. I would like to point In addition, the efforts of the recently anout that the November 1991 interagency policy nounced Regulatory Uniformity Project are de- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 751 signed to promote consistency among the agen- meet legitimate credit demands and that it is cies and to reduce regulatory burdens and costs doing all that it believes it can do at this time to without lessening the effectiveness of regulation increase the availability of credit to sound borand supervision of federally insured depository rowers in a prudent and responsible manner. The institutions. In particular, the project encourages intent of our efforts is to contribute to a climate in the development, to the extent possible, of com- which banks make loans, consistent with safe mon definitions, policies, and standards for the and sound banking practices, to creditworthy classification and valuation of assets. Further- borrowers and work constructively with borrowmore, the agencies are seeking to reduce or ers experiencing financial difficulties. In all these eliminate any differences or inconsistencies in efforts, the Board has been guided by the premise accounting issues and in certain other examina- that prudent lending standards and effective and tion areas. Another effort is to further standard- timely supervision should not inhibit banking ize examiner training, in part through conducting organizations from playing an active role in meetsuch training on an interagency basis. ing legitimate demands for credit. The Board looks forward to working with the subcommittee and the Congress in ensuring that SUMMARY sound borrowers have access to credit while at the same time maintaining a safe and sound I would like to assure the subcommittee that the financial system. • Federal Reserve recognizes the need for banks to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

752 Announcements STATEMENT BY CHAIRMAN GREENSPAN that are well capitalized and in satisfactory condition • Eliminate the stock redemption notice require- Chairman Alan Greenspan of the Federal Reserve ment for bank holding companies that are well Board issued the following statement on August capitalized and in satisfactory condition 20, 1992: • Expand the authority of Reserve Banks to pro- It was with deep regret that I learned this morning of the cess all applications that can be delegated without passing of Bill Taylor. He was an extraordinary person—a review by Board staff well respected and extremely capable public servant of • Modify the Board's delegation rules that perunquestioned integrity, a devoted husband and father, and a tain to competition and market concentration true personal friend. He will be missed not only by the • Reduce redundant processing of cases acted on regulatory community but also by the public at large. I extend my heartfelt sympathy to his wife, Sharon, and their by the Board. children. The Board welcomes comment on further steps that might be taken to improve efficiency in the applications process. STREAMLINING OF PROCEDURES FOR HANDLING APPLICATIONS FROM STATE MEMBER BANKS AND BANK HOLDING AMENDMENTS TO REGULATION D COMPANIES The Federal Reserve Board announced on The Federal Reserve Board has approved addi- August 17, 1992, the adoption of amendments to tional measures to reduce regulatory burden and Regulation D (Reserve Requirements of Deposifurther streamline the process of handling applica- tory Institutions) to change the way depository tions from state member banks and bank holding institutions compute and maintain their reserve companies. requirements. Last April, as part of its program to reduce The amendments will accomplish the following: regulatory burden, the Board directed its staff to review the processes used in handling applications • Shorten by two weeks the lag in counting vault to ensure greater efficiency. The review included cash toward required reserves to reduce the decline information required, timing, procedures for pre- in required reserve balances early in the year acceptance review, delegation, standardization of • Double the carryover allowance for reserve forms, and monitoring the status of cases. balances to the larger of $50,000 or 4 percent of Measures now approved by the Board will required reserves plus required clearing balances. accomplish the following: This increase will provide institutions with more flexibility in managing reserves from one mainte- • Limit extensions of the period for accepting nance period to another. applications from bank holding companies • Offer prospective applicants the opportunity to The reduction in the lag in application of vault submit a prefiling notice of intent to file a formal cash will be effective for the maintenance period application beginning November 12, 1992, for weekly report- • Establish a general consent limit for invest- ing institutions. Quarterly reporting institutions will ments in bank premises for state member banks be unaffected by the change. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

753 The carryover allowance will be effective in under certain conditions. Applications by bank the maintenance period beginning September 3, holding companies to engage in these activities 1992, for both weekly and quarterly reporting now may be processed by the Federal Reserve institutions. Banks under expedited procedures pursuant to The Federal Reserve Board announced on authority delegated by the Board. The amendment August 17, 1992, adoption of further amendments became effective September 4, 1992. to Regulation D to close loopholes some banking institutions have used to avoid proper maintenance AMENDMENTS TO REGULATION CC of reserve requirements. The amendments are designed to prevent erosion The Federal Reserve Board announced on of the reserve base for transaction accounts and August 7, 1992, adoption of final amendments to will accomplish the following: Regulation CC (Availability of Funds and Collection of Checks), which implement provisions in the 1. Treat certain so-called sweep accounts in- Federal Deposit Insurance Corporation Improvevolving commingled time deposits as reservable ment Act of 1991 (FDICIA) that amend several 2. Reclassify as reservable multiple savings provisions of the Expedited Funds Availability Act. accounts when the depository institution suggests, The amendments allow banks to extend holds, or otherwise promotes, multiple accounts to permit on an exception basis, to "next-day" and "secondtransfers in excess of the limits applicable to indiday" availability checks and allow one-term vidual savings accounts notices of exception holds in certain cases. 3. Prohibit the use of "due from" deductions by Also, the Board has made permanent the current which a large bank has moved funds to a smaller availability schedules for deposits at nonpropribank to take advantage of the lower reserve etary automated teller machines and has reaffirmed requirements imposed on small banks and has readministrative enforcement authority of federal ceived the funds back in a reserve-free transaction regulatory agencies over U.S. offices and branches 4. Treat previously nonreservable teller's checks of foreign banks. the same as reservable cashier's checks 5. Include bonds and coupons as "cash items in the process of collection" only if the bonds and ELIMINATION OF REQUIREMENT REGARDING coupons have matured or been called SUBORDINATED DEBT 6. Prohibit the netting of trust balances in a commingled transaction account held by the trust The Federal Reserve Board announced on department of a banking institution for various August 28, 1992, the approval of the elimination of trusts. the requirement that state member banks obtain the Board's prior approval before issuing subordinated Amendments 1, 2, and 3 were effective Septem- debt in order to treat that debt as capital rather than ber 29, 1992. Amendments 4, 5, and 6 will be as a deposit. effective December 22, 1992. Accordingly, the Board is issuing an interpretation of the capital adequacy appendixes to Regulations H (Membership Requirements for AMENDMENT TO REGULATION Y State-Chartered Banks) and Y (Bank Holding Companies), which provides general guidance on The Federal Reserve Board announced on the criteria that subordinated debt and mandatory August 31, 1992, that it had amended the Board's convertible debt issued by state member banks and Regulation Y (Bank Holding Companies) to permit bank holding companies must meet to be included the provision of financial advisory services to in capital. financial and nonfinancial institutions and to indi- In connection with this action, the Board also is viduals with high net worth under certain condi- making technical amendments to its Regulation D tions, and the offering of investment advisory and (Reserve Requirements) and its Rules Regarding securities brokerage services on a combined basis Delegation of Authority. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

754 Federal Reserve Bulletin • October 1992 These actions became effective September 4, lation are in need of updating and whether any 1992. substantive changes are necessary because of new products or developments in the securities markets. Comments should be received by October 16, PROPOSED ACTIONS 1992. The Federal Reserve Board issued for public comment on August 4, 1992, a proposal to amend its CHANGES IN BOARD STAFF Regulation C (Home Mortgage Disclosure) that will expand the regulation's coverage of indepen- The Board of Governors announced the retirement dent mortgage companies. Comment is requested of Robert S. Plotkin, Assistant Director in the by October 8. Division of Banking Supervision and Regulation, The Federal Reserve Board issued on August 13, effective at the end of September 1992, after 1992, an advance notice of proposed rulemaking twenty-eight years of service. and requested public comment in connection with The Board also announced the retirement of a review of Regulation T (Credit by Brokers and Robert J. Zemel, Senior Adviser in the Division of Dealers). This action is part of the Board's program Information Resources Management, effective Septo review periodically all regulations and will tember 30, 1992, after nearly twenty-three years of help determine whether any provisions of the regu- Board service. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

755 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON JUNE 30-JULY 1, 1992 average operating rate remained well below its July 1990 peak. The information reviewed at this meeting sug- After a surge early in the year, growth in real gested that economic activity was expanding at a personal consumption expenditures had slowed moderate pace. Employment and industrial output despite a strengthening in the demand for motor had continued to rise, but a sizable increase in the vehicles. In April and May, spending for goods labor force had lifted the unemployment rate to a other than motor vehicles was slightly below the cyclical high. Increased sales and production of average level for the first quarter, and outlays for motor vehicles were providing a boost to the econ- services increased only a little. Purchases of new omy, as was higher spending for capital equipment, single-family homes declined in May for a fourth especially computers. However, non-auto retail straight month. Starts of single-family housing sales and homebuying had slowed since earlier in units rebounded in May to a level close to the the year, and the latest data indicated some widen- first-quarter pace, while multifamily housing starts ing of the merchandise trade deficit. Incoming data remained depressed in reflection of historically on retail prices and labor costs suggested that infla- high vacancy rates for such housing. tion was slowing. Shipments of nondefense capital goods other Total nonfarm payroll employment increased for than aircraft over April and May were somewhat a fourth straight month in May, and aggregate above the first-quarter level, boosted mainly by hours worked by production or nonsupervisory further increases for office and computing equipworkers exceeded the average for the first quarter. ment. Business purchases of motor vehicles also The services industry recorded further sizable job were stronger. Recent data on orders pointed to a gains in May, while employment in retail trade fell further pickup in business outlays for durable considerably and had changed little on balance thus equipment over coming months. Outlays for nonfar this year. Hiring was off slightly in manufactur- residential structures continued to trend lower in ing, but further increases in overtime hours ele- May, but incoming information on contracts for vated the factory workweek to a little above its new construction suggested that nonresidential average level for the first half of 1990. The civilian building activity would decline more slowly in the unemployment rate rose sharply in May, to 7.5 per- months ahead. Although construction of office cent, reflecting a surge in the number of job seek- buildings continued to plummet in response to the ers. Substantial increases in the labor force since substantial overhang of vacant office space, spendlate last year had returned the labor-force participa- ing for other nonresidential structures had firmed tion rate to its average level for the first half of since the fourth quarter. 1990. Business inventories rose slightly further in Industrial production rose appreciably further in April. Stocks increased relatively sharply at the May, partly reflecting continued recovery in motor retail level, but about half the buildup was at autovehicle assemblies. Also contributing to the rise mobile dealerships, where the rise in inventories were large increases in the production of other appeared to be about in line with a recent pickup in consumer durables, notably household appliances sales of new vehicles. In manufacturing, invenand furniture, and of business equipment. The re- tories continued to decline; with factory shipments cent gains in production had raised the utilization rising, the ratio of stocks to shipments was at its of total industrial capacity considerably, but the lowest level in more than a decade. At wholesale Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

756 Federal Reserve Bulletin • October 1992 establishments, inventories were trimmed substan- with growth of M2 and M3 at annual rates of about tially further in April. However, inventory-sales 2V2 and IV2 percent respectively over the tworatios remained near the high end of the range that month period from April through June. had prevailed over the past several years. Open market operations during the intermeeting The nominal U.S. merchandise trade deficit wid- period were directed toward maintaining the existened in April and was substantially above its aver- ing degree of pressure on reserve positions. During age rate for the first quarter. The value of exports the period, several technical increases were made declined, largely because of a decline in exports of to expected levels of adjustment plus seasonal boraircraft. The value of imports increased further in rowing to reflect the rising demands for seasonal April; a rise in imports of capital goods more than credit. Actual levels of borrowing averaged about offset a small decline in imports of consumer $165 million over the three reserve maintenance goods. The available data on economic activity in periods completed during the intermeeting interthe major foreign industrial countries in the second val. The federal funds rate remained close to quarter were mixed. In Germany and Japan, growth 33/ percent. 4 during the first quarter had been boosted by transi- Most other interest rates changed little on baltory influences that appeared to be unwinding in ance over the intermeeting period. Rates moved the second quarter. By contrast, a moderate recov- higher in the days following the May meeting as ery in economic activity was continuing in Canada, widespread market expectations of a monetary easand there were some indications that economic ing action were not realized. Later in the period, recovery was getting under way in the United however, interest rates fell, especially at intermedi- Kingdom. ate maturities, as markets interpreted incoming data Producer prices of finished goods rose more on the economy and the monetary aggregates as rapidly in May; sizable increases in the prices indicating a sluggish recovery. Broad indexes of of energy and other goods outweighed a further stock prices declined over the period in response to decline in food prices. Apart from anomalous reductions in forecasts of corporate earnings. jumps in the prices of a few items, however, In foreign exchange markets, the trade-weighted increases in prices of nonfood, non-energy finished value of the dollar in terms of the other G-10 goods generally remained modest. Consumer prices currencies declined further over the intermeeting posted a small advance in May, despite a relatively period. The dollar rose initially in response to data large rise in energy costs. Excluding food and pointing to a somewhat stronger economic recovenergy items, consumer prices increased more ery in the United States but subsequently more than slowly in the first five months of this year than in retraced its gains as less positive economic data, 1991. Average hourly earnings for production or including a larger-than-expected trade deficit, were nonsupervisory workers were little changed over reported. April and May and also had risen more slowly thus M2 and M3 changed little in May and appeared far this year than in 1991. to have contracted in June; both retail and large- At its meeting on May 19, the Committee denomination time deposits continued to run off adopted a directive that called for maintaining the rapidly. Depository institutions, facing weak loan existing degree of pressure on reserve positions and demand and intent on further bolstering capital that did not include a presumption about the likely positions, had reduced rates on time deposits fairly direction of any adjustments to policy during the aggressively earlier in the year, and as a result these intermeeting period. Accordingly, the directive components of M2 and M3 had become less attracindicated that in the context of the Committee's tive relative to alternative investments or debt long-run objectives for price stability and sustain- repayment. In addition, Ml was unusually weak in able economic growth, and giving careful consider- June. Through June, expansion of the two broad ation to economic, financial, and monetary devel- aggregates was somewhat below the lower ends of opments, slightly greater or slightly lesser reserve the ranges established by the Committee for the restraint might be acceptable during the intermeet- year. Growth of nonfinancial debt was estimated to ing period. The reserve conditions contemplated be at the lower end of the Committee's monitoring under this directive were expected to be consistent range. Borrowing had been concentrated in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 757 capital markets, with beneficial effects in reducing gish growth of jobs and income, ongoing efforts to debt and debt-servicing burdens. strengthen balance sheets, and in the view of a The staff projection prepared for this meeting number of members the weakness in broad meapointed to a modest pickup in economic growth sures of money and credit suggested that the risks over the second half of the year and to some further to the economy were more heavily weighted to the acceleration in 1993. The forecast took into account downside. Others felt that the expansion was now the lagged effects on aggregate demand of earlier more firmly entrenched and that the risks were declines in interest rates and the progress that had more evenly balanced; some of these members been made by households and businesses in noted, however, that given the likely restrained strengthening their balance sheets. Nonetheless, pace of the expansion, a significant shortfall from financial strains were expected to continue to their current projections could have more worriprompt the diversion of some cash flows from some effects than the limited inflationary pressures business and consumer spending, though the mag- that might be fostered by a somewhat strongernitude of such adjustments was projected to lessen than-projected economy. With regard to the outover time. Partly as a consequence, moderate look for inflation, the members were encouraged growth well below that experienced during typical by indications of moderating price and labor cost cyclical upswings in the past was projected in pressures. Most believed that additional progress consumer spending and in business investment in toward price stability was likely over the next durable equipment. Economic expansion also several quarters in the context of some persisting would be restrained by further, though diminishing, slack in labor and other production resources and declines in business spending on nonresidential after an extended period of slow growth in key structures before a projected upturn in such spend- measures of money. ing began to materialize in the second half of next In keeping with the practice at meetings when year. Moreover, in the government sector, federal the Committee sets its long-run ranges for the purchases of goods and services were forecast to money and debt aggregates, the members of the decrease over the projection horizon, largely re- Committee and the Federal Reserve Bank presiflecting cutbacks in defense spending. At the state dents not currently serving as members provided and local government levels, continuing budget specific projections of the growth in nominal and problems were expected to result in a small decline real GDP, the rate of unemployment, and the rate of in real purchases during the quarters immediately inflation for the years 1992 and 1993. These projecahead and in only modest growth later. A persisting tions took account of the monetary growth ranges though decreasing margin of slack in resource utili- that the Committee reaffirmed at this meeting for zation was expected to be associated with further 1992 and established on a tentative basis for 1993; slowing in wage and price inflation. these ranges were expected to be consistent with In the Committee's discussion of economic and the Committee's goals of promoting a sustained financial developments and the outlook for the expansion in the economy and continued progress economy, the members agreed that a sustained toward price stability. The projections generally expansion at a moderate pace remained the most portrayed an economy performing in line with reasonable expectation and that such an expansion these objectives—that is, with expansion at a modwas likely to be associated with further easing of erate pace over the next one and one-half years inflation. They noted that considerable progress and inflation slowing gradually further. Forecasts had been made in correcting major structural im- of nominal GDP converged on growth ranges of balances and financial problems in various sectors 5'/ to 6 percent for 1992 as a whole and 5V2 to 4 of the economy and that business and consumer 6LA percent for 1993. With regard to the rate of confidence had improved appreciably since the turn expansion in real GDP, the projections had a cenof the year. However, the most recent information tral tendency of 2LA to 23A percent for 1992 and of suggested some weakening in the expansion, and a 23A to 3 percent for 1993, implying a gradual number of members expressed concern about the acceleration from the pace currently estimated for apparent absence of cumulating or self-reinforcing the first half of this year. The projected strengthenimprovement in overall economic activity. Slug- ing of the economy was associated with some Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

758 Federal Reserve Bulletin • October 1992 decline in the rate of civilian unemployment to a pickup in consumer spending from its recently consensus range of 6V2 to 7 percent by the fourth sluggish pace as a likely development that in turn quarter of 1993. Given the moderate expansion of would provide ongoing support to the expansion. the economy and the still relatively elevated level An essential element in sustaining consumer expenof the unemployment rate, the rate of inflation, as ditures, and thus the economy more generally, measured by the consumer price index, was pro- would be the growth in job opportunities and perjected to move somewhat lower; the central ten- sonal incomes. While heavy debt-service burdens dency of the range expected for 1993 was 23A to and reduced interest incomes, among other factors, 3LA percent. continued to curb the ability or willingness of Members observed that developments relating to many consumers to increase their spending, some the financial condition of households and busi- tentative indications of a firming trend in such nesses were likely to continue to have an important spending could be drawn from the signs of reviving influence on economic activity over the quarters consumer confidence and anecdotal reports sugahead. Widespread efforts to strengthen balance gesting that consumer spending was growing at sheets along with conservative lending policies at least modestly in many areas. In particular, definancial intermediaries had exerted a significantly mands for motor vehicles had strengthened, and the retarding effect on economic activity by diverting related step-up in the production of automotive cash flows from consumer and investment expendi- products had accounted for much of the growth in tures or limiting the availability of financing for industrial production over recent months. With current spending. However, while the process of regard to the outlook for housing, residential conadjusting balance sheets was still incomplete and struction had weakened in many parts of the counwas still restraining business and consumer spend- try, though it was holding up well in some areas. ing, the combination of greatly reduced interest The backup in mortgage rates earlier in the year rates and strengthened balance sheets pointed to had reinforced the more general cautionary factors subsiding constraints on expenditures from finan- that had tended to inhibit overall spending. Howcial factors. At the same time, lending institutions ever, mortgage rates had fallen substantially over now appeared to be in a better position to accom- the spring, and the members expected housing acmodate borrowers. Indeed, anecdotal reports from tivity to pick up somewhat over the quarters ahead. several parts of the country indicated that many Despite still cautious business attitudes, moderbanking institutions were intensifying their efforts ate growth in overall business fixed investment was to make loans, though loan demand remained quite anticipated over the forecast period. Spending limited. Members also observed that corporate cash could be buoyed by demands for business equipflows and profits were much improved. ment, much of which probably would be related to In their review of economic conditions and busi- efforts to modernize production facilities for comness and consumer attitudes in different regions, petitive reasons. Rising rates of capacity utilization members reported that gradual expansion charac- also could be expected to spur investment demand terized most parts of the nation, though they cited as time went on. The outlook for nonresidential some significant exceptions and also noted that on construction was more negative. Office constructhe whole recent indicators pointed to less strength tion appeared likely to remain severely depressed than early in the year. Business and consumer for an extended period as excess capacity was sentiment, while considerably improved since late absorbed in many parts of the country. On the more last year, nonetheless remained quite cautious and positive side, anecdotal impressions from several seemed vulnerable to adverse developments. Con- cities suggested that prices and lease terms of office sumers were still very concerned about employ- and other commercial structures were tending to ment opportunities, while business executives were stabilize, though the volume of actual transactions reluctant to make investment commitments or to remained quite limited. build inventories in the absence of firmer indica- The government and foreign trade sectors also tions of a significant pickup in demand. were not seen as likely to contribute significantly to With regard to developments in major sectors of the expansion. The widespread financial problems the economy, members generally viewed some of state and local governments pointed to quite Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 759 limited growth in spending, even though examples quarter of 1991 to the fourth quarter of 1992 of sizable expenditure programs, such as for high- included expansion of 2Vi to 6V2 percent for M2 way construction in some areas, could be cited. At and 1 to 5 percent for M3. The monitoring range the federal level, defense spending was on a clear for growth of total domestic nonfinancial debt had downtrend, and the persistence of large federal been set at 4Vi to 8V2 percent. deficits argued against sizable new initiatives for In the course of the Committee's discussion, all nondefense spending. With regard to the external of the members supported a proposal to retain sector, a number of members expressed the view the ranges established in February for this year. that the outlook for net exports had worsened Although the rates of M2 and M3 growth for the despite the weakening in the foreign exchange year through June were somewhat below the lower value of the dollar in recent months. The growth in ends of the Committee's ranges for both aggreexports appeared to be moderating, and it was gates, this outcome had not been associated with uncertain at this point to what extent economic unexpected weakness in nominal spending; the expansion abroad might strengthen and thereby expansion in nominal GDP over the first half of the produce increased demand for U.S. goods and ser- year currently was estimated to have been toward vices. At the same time, domestic expansion in line the upper end of the central tendency of the memwith the members' forecasts would add to the bers' earlier expectations. Instead, velocity had demand for imports. risen appreciably—a highly unusual occurrence Most members anticipated at least a limited following a period of sharp declines in interest decline in the core rate of inflation over the period rates. Among the developments helping to explain through the end of next year. In support of this the weakness in money and the rise in velocity view, some members emphasized the lagged effects were a variety of business and balance sheet presof the very restrained growth in money over a long sures that tended to reduce total borrowing and period while others gave more weight to the out- channel credit flows away from depository institulook for continuing if diminishing slack in labor tions, thereby lessening the need of those instituand other production inputs. In addition, business tions to increase their monetary liabilities. At the executives reported that strong competition still same time, business firms and households, in the was making it very difficult to raise prices and that course of their restructuring activities and delevercontinuing efforts were being made to improve aging of their balance sheets, had found that moneoperating efficiencies and hold down costs. At the tary assets had become less attractive relative to a same time, surveys of price expectations and con- variety of other financial assets or debt repayment. versations with business contacts suggested a view, It appeared that the balance sheet adjustments by rooted partly in concerns about the prospects for depository institutions and their customers that had and implications of further large federal deficits, contributed to velocity increases were well under that inflation ultimately would return to the 4 to way. However, the factors that were tending to 5 percent pace of the 1980s. These attitudes tended depress broad money growth in relation to meato underscore the need for a sound fiscal policy that sures of economic and price performance were in conjunction with the continued implementation likely to persist, and the extent and duration of of an anti-inflationary monetary policy would deviations from historic relationships were highly foster a reduction in inflationary expectations and uncertain. In these circumstances, while an arguwould facilitate the eventual achievement of price ment could be made that a somewhat lower M2 stability. range might more readily encompass the rate of In keeping with the requirements of the Full expansion in money needed for a satisfactory eco- Employment and Balanced Growth Act of 1978 nomic performance over the balance of the year, (the Humphrey-Hawkins Act), the Committee at the selection of a different range would imply this meeting reviewed the ranges for growth in the greater certainty about emerging relationships than monetary and debt aggregates that it had estab- was warranted. Instead, the current ranges should lished in February for 1992 and decided on tenta- be maintained, pending further developments and tive ranges for growth in those aggregates in 1993. the possible emergence of a more settled outlook The current ranges for the period from the fourth for money demand. Some members also com- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

760 Federal Reserve Bulletin • October 1992 mented that lowering the ranges could be miscon- 1993, or the range could be lowered even sooner if strued as an intention to tighten monetary policy at new information on the emerging relationship a time when relatively sluggish growth in the econ- between the monetary aggregates and nominal omy and weakness in the monetary aggregates spending allowed a determination of the appropriargued for a steady policy course or possibly for ate range to be made with more confidence. some easing. Members who preferred a somewhat lower M2 At the conclusion of this discussion, the Commit- range for 1993 acknowledged that substantial tee voted to reaffirm the 1992 ranges of Vh to uncertainties with regard to an appropriate rate 6V2 percent and 1 to 5 percent that it had estab- of M2 growth were likely to persist for some time, lished in February for growth of M2 and M3 but they felt that relatively subdued monetary respectively; the Committee also decided to retain expansion was likely to be consistent with an adethe range of 4V2 to 8V2 percent for growth of quate degree of liquidity and a satisfactory econonfinancial debt in 1992. The following statement nomic performance next year. Lowering the M2 was approved for inclusion in the Committee's range at this point would extend the series of domestic policy directive: gradual reductions in the ranges that had been implemented over the past five years or so and would have the important advantage of affirming The Federal Open Market Committee seeks monetary the Committee's commitment to price stability, and financial conditions that will foster price stability and promote sustainable growth in output. In furtherance with favorable implications for inflationary expecof these objectives, the Committee reaffirmed at this tations and in turn perhaps also for the strength and meeting the ranges it had established in February for sustainability of the expansion. A few members growth of M2 and M3 of 2Vi to 6V2 percent and 1 to favoring this option were also of the view that 5 percent, respectively, measured from the fourth quarter more weight ought to be placed on M2 as a guide of 1991 to the fourth quarter of 1992. The Committee anticipated that developments contributing to unusual to policy; this would have possible implications for velocity increases could persist in the second half of the actions to boost M2 growth in 1992 in addition to year. TTie monitoring range for growth of total domestic reducing the range for 1993 to promote long-run nonfinancial debt also was maintained at AV2 to 8V2 perdisinflation. All of the members agreed that regardcent for the year. less of the particulars of the decisions to be made at this meeting, it was vital for the Committee to Votes for this action: Messrs. Greenspan, Corrigan, reaffirm its commitment to the goal of achieving Angell, Hoenig, Jordan, Kelley, LaWare, Lindsey, Melzer, Mullins, Ms. Phillips, and Mr. Syron. Votes price stability. This outcome was the key contribuagainst this action: None. tion the Federal Reserve could make toward facilitating the highest possible growth of the economy With regard to the ranges for 1993 to be estab- over time; and maintaining the credibility of the System's anti-inflationary effort was the best means lished on a tentative basis at this meeting, a majoravailable to the Committee to minimize disrupity of the members endorsed an extension of the tions to the economy as it was moving toward its current ranges for another year, but some believed potential. that a somewhat lower range for M2 would be preferable. Members who wanted to retain the cur- At the conclusion of this discussion, the Commitrent ranges acknowledged that a lower M2 range tee approved provisional ranges for 1993 that were probably would be desirable at some point to be unchanged from those for 1992. The Committee consistent over time with the Committee's objec- voted to incorporate the following statement retive of achieving and maintaining reasonable price garding the 1993 ranges in its domestic policy stability. However, current uncertainties with re- directive: gard to how soon and to what extent various factors tending to inhibit the growth in M2 would dissipate For 1993, the Committee on a tentative basis set the same ranges as in 1992 for growth of the monetary argued for caution in making any change to the aggregates and debt, measured from the fourth quarter of range now. A reduction in the M2 range could be 1992 to the fourth quarter of 1993. The behavior of the considered next February when the Committee monetary aggregates will continue to be evaluated in the meets to set final ranges for money growth for light of progress toward price level stability, movements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 761 in their velocities, and developments in the economy and mutual funds—which while not in M2 seemed to financial markets. provide liquidity at least comparable to that of time deposits—suggested that monetary policy had been Votes for this action: Messrs. Greenspan, Corrigan, quite accommodative. Some members who sup- Angell, Hoenig, Kelley, LaWare, Lindsey, Melzer, Mullins, and Mr. Syron. Votes against this action: ported this view expressed concern that in the Mr. Jordan and Ms. Phillips. absence of more definitive indications of a softening economy or much greater weakness in the Mr. Jordan and Ms. Phillips dissented because monetary aggregates, any easing at this point would they believed that a somewhat lower M2 range for tend to erode the credibility of the Committee's 1993 would be more consistent with a policy of commitment to an anti-inflationary policy. The continuing progress toward price stability. They result might well be to put substantial and disruprecognized that the substantial uncertainties sur- tive downward pressure on the dollar in foreign rounding the outlook for M2 growth and its veloc- exchange markets and to arrest or reverse the tenity next year made it very difficult to determine an dency for domestic long-term interest rates to appropriate M2 range, but a lower range would be decline. needed eventually to achieve and sustain stable Most of the members who preferred an immediprices. In the interim, it was important for the ate easing of policy emphasized the risks of a System and the credibility of its anti-inflationary faltering economy in the period ahead, especially policy to continue the practice of gradually reduc- given the recent indications of some slowing in the ing the M2 range to be consistent with a noninfla- expansion and the already considerable slack in the tionary target. They would have coupled the economy. Their concerns were heightened by the decrease in the range for 1993 with actions to constraining effects of ongoing structural adjustexpand bank reserves immediately with the objec- ments in the economy, the weakness in various tive of boosting M2 growth to within its range for measures of money, and the limited expansion in 1992. Such a combination would make clear that total credit. A few of these members focused on the the decrease in the range for M2 growth in 1993 desirability of taking relatively prompt action to did not represent a monetary "tightening" in the foster growth in the broad measures of money conventional sense, but rather that it was a step within the Committee's ranges for the year. Some toward lasting reductions in inflation. members observed that under current circum- Turning to policy for the intermeeting period stances an easing action might have a relatively ahead, the members were divided between those limited effect in stimulating monetary growth over who supported an unchanged policy stance and the months ahead, but such a policy move would others who preferred to ease. A majority indicated, nonetheless tend to boost spending by reducing the however, that they could support an unchanged costs of borrowing. directive that incorporated a bias toward possible In their discussion, the members took account of easing. a staff analysis that suggested only modest growth Members who preferred not to change policy at in M2 and virtually none in M3 for the third quarter this point believed that the economy was on a on the assumption of an unchanged degree of remoderate growth path and that in any case the serve pressure. Relatively weak expansion in these forces restraining the expansion were not the result broad measures of money did not appear to have of inadequate liquidity or a restrictive monetary the usual implications for the economy, as evipolicy. While the outlook was clouded by unusual denced by experience over the first half of the year. forces acting on the economy, the available eco- The prospects were for continuing balance sheet nomic information remained consistent with con- and other adjustments that would tend to curb the tinuing expansion at a pace that offered favorable demand for money assets relative to spending and prospects for a gradual reduction of unemployment income. Many members nonetheless were conand abatement of inflation. The low level of real cerned about the possible persistence of the recent and nominal short-term interest rates, the decline in weakness in reserves and the longer-term sluggish the dollar, and the rapid growth of reserves and behavior of broad money, especially given the relanarrow money along with the expansion of bond tively subdued pace of the expansion. While mone- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

762 Federal Reserve Bulletin • October 1992 tary measures might well have lost some of their The information reviewed at this meeting continues to indicator and predictive properties, continued suggest that economic activity is expanding at a moderate pace. Total nonfarm payroll employment increased weakness in money might still be a signal that somewhat further in May, but a surge in job seekers led financial conditions were not yet conducive to fosto a sizable rise in the civilian unemployment rate to tering a sustained pickup in spending. 7.5 percent. Industrial production rose appreciably fur- The varying policy preferences expressed by the ther in May, partly reflecting continued recovery in members were reflected in differing views with motor vehicle assemblies. Growth in consumer spending has slackened after a sharp advance earlier this year. regard to possible adjustments to the degree of Although sales of new homes declined in May, singlereserve pressure in the intermeeting period ahead. family housing starts rebounded to a level close to the All of the members who favored some immediate first-quarter pace. Recent data on orders and shipments easing in policy indicated that they could support of nondefense capital goods indicate appreciable an unchanged directive that was tilted toward ease, increases in outlays for business equipment, and the and at least some of these members anticipated that trend of building contracts points to some slowing of the decline in nonresidential construction. The nominal U.S. developments over the near term were likely to merchandise trade deficit increased in April and was trigger an adjustment toward easing. Most of the substantially above its average rate in the first quarter. members who favored an unchanged policy stance Incoming data on retail prices and labor costs suggest at this point also indicated that they could accept a that inflation is slowing. bias toward ease in the directive, especially in light Most interest rates have changed little since the Comof current uncertainties and the potential problems mittee meeting on May 19. In foreign exchange markets, associated with any significant shortfall in the the trade-weighted value of the dollar in terms of the other G-10 currencies declined further over the interexpansion from current expectations. Other memmeeting period. bers who preferred a steady policy course believed M2 and M3 changed little in May and appear to have that it would be premature for the Committee to contracted in June; both retail and large-denomination signal any bias toward easing, given the relatively time deposits continued to run off rapidly. Through June, low probability that they assigned to the potential expansion of the two aggregates was somewhat below the lower ends of the ranges established by the Commitneed for such a move, and they believed that a tee for the year. return to an asymmetric directive after the move to The Federal Open Market Committee seeks monetary symmetry at the May meeting could have unfavorand financial conditions that will foster price stability able repercussions on the Committee's credibility. and promote sustainable growth in output. In furtherance At the conclusion of the Committee's discussion, of these objectives, the Committee reaffirmed at this meeting the ranges it had established in February for all but two of the members indicated that they growth of M2 and M3 of 2xh to 6V2 percent and 1 to favored or could accept a directive that called for 5 percent respectively, measured from the fourth quarter maintaining the existing degree of pressure on of 1991 to the fourth quarter of 1992. The Committee reserve positions and that included a bias toward anticipated that developments contributing to unusual possible easing during the intermeeting period. velocity increases could persist in the second half of the year. The monitoring range for growth of total domestic Accordingly, in the context of the Committee's nonfinancial debt also was maintained at Axh to 8V2 perlong-run objectives for price stability and sustaincent for the year. For 1993, the Committee on a tentative able economic growth, and giving careful consider- basis set the same ranges as in 1992 for growth of the ation to economic, financial, and monetary devel- monetary aggregates and debt, measured from the fourth opments, slightly greater reserve restraint might be quarter of 1992 to the fourth quarter of 1993. The acceptable or slightly lesser reserve restraint would behavior of the monetary aggregates will continue to be evaluated in the light of progress toward price level be acceptable during the intermeeting period. The stability, movements in their velocities, and developreserve conditions contemplated at this meeting ments in the economy and financial markets. were expected to be consistent with a resumption In the implementation of policy for the immediate of growth in M2 and M3 at annual rates of about future, the Committee seeks to maintain the existing 2 percent and Vi percent respectively over the degree of pressure on reserve positions. In the context of three-month period from June through September. the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful At the conclusion of the meeting the following consideration to economic, financial, and monetary domestic policy directive was issued to the Federal developments, slightly greater reserve restraint might or Reserve Bank of New York: slightly lesser reserve restraint would be acceptable in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 763 the intermeeting period. The contemplated reserve con- economy's long-run potential. In addition, a bias ditions are expected to be consistent with growth of M2 toward ease, especially in the context of the Comand M3 over the period from June through September at mittee's decision at the May meeting to adopt a annual rates of about 2 and V2 percent, respectively. symmetrical directive, suggested an excessive emphasis on short-term economic developments that Votes for short-run policy: Messrs. Greenspan, Corrimight undermine the credibility of the System's gan, Angell, Hoenig, Jordan, Kelley, Lindsey, Mullins, Ms. Phillips, and Mr. Syron. Votes against this long-run policies. They were concerned that such a action: Messrs. La Ware and Melzer. loss of credibility could have adverse effects on the dollar in foreign exchange markets and on long- Messrs. LaWare and Melzer dissented because term interest rates in domestic markets. Mr. Melzer they judged an asymmetric directive, with a bias also believed that, if additional easing were undertoward easing, as being inappropriate at this time. taken, a greater policy reversal ultimately would be In their view, the current stance of monetary policy necessary, making the attainment of sustainable was not impeding an expansion consistent with the economic growth more difficult in the long run. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

765 Legal Developments FINAL RULE—AMENDMENTS TO for any purpose, including payment for services, REGULATION D dividends or purchases. The Board of Governors is amending 12 C.F.R. Part 204, its Regulation D (Reserve Requirements of De- (b)(1) * * * pository Institutions). The amendments include adding (ii) certified, cashier's, teller's, and officer's "teller's checks" to the definition of "transaction checks (including such checks issued in payment account" and clarifying the definition of "cash items of dividends); in the process of collection." The Board is also adopting four interpretations concerning the definition of "transaction account" and arrangements used to 'f* ^ ^ avoid transaction account reserve requirements. (6) All deposits other than time and savings ac- Effective September 29, 1992, except for sections counts, including those accounts that are time and 204.2(a)(1), (b)(1), and (u) (teller's checks); section savings deposits in form but that the Board has 204.2(i) (cash items in the process of collection); and determined, by rule or order, to be transaction section 204.136 (netting of trust balances), which will accounts. be effective December 22, 1992, 12 C.F.R. Part 204 is ^ * * * amended as follows: Q) * * * Part 204—Reserve Requirements of Depository Institutions (iii) * * * (B) matured bonds and coupons (including 1. The authority citation for Part 204 continues to read bonds and coupons that have been called and as follows: are payable on presentation); Authority: Sections 11(a), 11(c), 19, 25, 25(a) of the Federal Reserve Act (12 U.S.C. 248(a), 248(c), 371a, (u) Teller's check means a check drawn by a deposi- 371b, 461, 601, 611); section 7 of the International tory institution on another depository institution, a Banking Act of 1978 (12 U.S.C. 3105); and section 411 Federal Reserve Bank, or a Federal Home Loan Bank, of the Garn-St Germain Depository Institutions Act of or payable at or through a depository institution, a 1982 (12 U.S.C. 461). Federal Reserve Bank, or a Federal Home Loan Bank, and which the drawing depository institution engages or is obliged to pay upon dishonor. 2. Section 204.2 is amended by revising paragraphs (a)(l)(iii), (b)(l)(ii), (e)(6), and (i)(l)(iii)(B), by remov- 3. Section 204.3 is amended by revising the second ing paragraph (b)(3)(iv), by redesignating paragraph sentences in paragraphs (a) and (g) to read as follows: (b)(3)(v) as (b)(3)(iv), and by adding paragraph (u), to read as follows: Section 204.3—Computation and maintenance. Section 204.2—Definitions. (a) * * * Reserve deficiency charges shall be assessed for deficiencies in required reserves in accordance * * * with the provisions of section 204.7. * * * (a)(1) * * * (iii) an outstanding teller's check, or an outstanding draft, certified check, cashier's check, money (g) * * * If a depository institution draws against items order, or officer's check drawn on the depository before that time, the charge will be made to its reserve institution, issued in the usual course of business account if the balance is sufficient to pay it; any Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

766 Federal Reserve Bulletin • October 1992 resulting impairment of reserve balances will be sub- to be transaction accounts. This determination applies ject to the penalties provided by law and to the reserve regardless of whether the deposits have entirely sepadeficiency charges provided by this part. * * * rate account numbers or are subsidiary accounts of a master deposit account. Multiple savings accounts, 4. Section 204.133 is added to read as follows: however, should not be considered to be transaction accounts if there is a legitimate purpose, other than Section 204.133—Multiple savings deposits increasing the number of transfers or withdrawals, for treated as a transaction account. opening more than one savings deposit, (a) Authority. Under section 19(a) of the Federal (d) Examples. The distinction between appropriate Reserve Act, the Board is authorized to define the and inappropriate uses of multiple accounts is illusterms used in section 19, and to prescribe regulations trated by the following examples: to implement and prevent evasions of the require- Example (1). (i) X wishes to open an account that ments of that section. Section 19(b) establishes general maximizes his interest earnings but also permits X reserve requirements on transaction accounts and to draw up to ten checks a month against the nonpersonal time deposits. Under section 19(b)(1)(F), account. X's Bank suggests an arrangement under the Board also is authorized to determine, by regula- which X establishes four savings deposits at tion or order, that an account or deposit is a transac- Bank. Under the arrangement, X deposits funds tion account if such account is used directly or indi- in the first account and then draws three checks rectly for the purpose of making payments to third against that account. X then instructs Bank to persons or others. This interpretation is adopted under transfer all funds in excess of the amount of the these authorities. three checks to the second account and draws an (b) Background. Under Regulation D, 12 C.F.R. Part additional three checks. Funds are continually 204 at 204.2(d)(2), the term "savings deposit" includes shifted between accounts when additional checks a deposit or an account that meets the requirements of are drawn so that no more than three checks are 204.2(d)(1) and from which, under the terms of the drawn against each account each month, deposit contract or by practice of the depository (ii) Suggesting the use of four savings accounts in institution, the depositor is permitted or authorized to the name of X in this example is designed solely to make up to six transfers or withdrawals per month or permit the customer to exceed the transfer limitastatement cycle of at least four weeks. The depository tions on savings accounts. Accordingly, the savinstitution may authorize up to three of these six ings accounts should be classified as transaction transfers to be made by check, draft, debit card, or accounts. similar order drawn by the depositor and payable to Example (2). (i) X is trustee of separate trusts for third parties. If more than six transfers (or more than each of his four children. X's Bank suggests that three third party transfers by check, etc.) are permit- X, as trustee, open a savings deposit in a deposted or authorized per month or statement cycle, the itory institution for each of his four children in depository institution may not classify the account as order to ensure an independent accounting of the a savings deposit. If the depositor, during the period, funds held by each trust. makes more than six transfers or withdrawals (or more (ii) X's Bank's suggestion to use four savings than three third party transfers by check, etc.), the deposits in the name of X in this example is depository institution may, depending upon the facts appropriate, and the third party transfers from and circumstances, be required by Regulation D one account should not be considered in deter- (Footnote 5 at 204.2(d)(2)) to reclassify or close the mining whether the transfer and withdrawal limit account. was exceeded on any other account. X estab- (c) Use of multiple savings deposits. Depository insti- lished a legitimate purpose, the segregation of the tutions have asked for guidance as to when a depositor trust assets, for each account separate from the may maintain more than one savings deposit and be need to make third party transfers. Furthermore, permitted to make all the transfers or withdrawals there is no indication, such as by the direct or authorized for savings deposits under Regulation D indirect transfer of funds from one account to from each savings deposit. The Board has determined another, that the accounts are being used for any that, if a depository institution suggests or otherwise purpose other than to make transfers to the appromotes the establishment of or operation of multiple propriate trust. savings accounts with transfer capabilities in order to Example (3). (i) X opens four savings accounts permit transfers and withdrawals in excess of those with Bank. X regularly draws up to three checks permitted by Regulation D for an individual savings against each account and transfers funds between account, the accounts generally should be considered the accounts in order to ensure that the checks on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 767 the separate accounts are covered. X's Bank did individual depositor's interest in time deposits may not suggest or otherwise promote the arrange- be identifiable, with an agreement by the depositors ment. that balances held in the arrangement may be used (ii) X's Bank may treat the multiple accounts as to pay checks drawn by other depositors participatsavings deposits for Regulation D purposes, even ing in the arrangement, or the depositor may have an if it discovers that X is using the accounts to undivided interest in a series of time deposits. increase the transfer limits applicable to savings (2) Each day funds from the maturing time deposits accounts because X's Bank did not suggest or are available to pay checks or other charges to the otherwise promote the establishment of or opera- depositor's transaction account. The depository intion of the arrangement. stitution's decision concerning whether to pay checks drawn on an individual depositor's transac- 5. Section 204.134 is added to read as follows: tion account is based on the aggregate amount of funds that the depositor has invested in the arrange- Section 204.134—Linked time deposits and ment, including any amount that may be invested in transaction accounts. unmatured time deposits. Only if checks drawn by all participants in the arrangement exceed the total balance of funds available that day (i.e. funds from (a) Authority. Under section 19(a) of the Federal the time deposit that has matured that day as well as Reserve Act, the Board is authorized to define the any deposits made to participating accounts during terms used in section 19, and to prescribe regulations the day) is a time deposit withdrawn prior to matuto implement and prevent evasions of the requirerity so as to incur an early withdrawal penalty. The ments of that section. Section 19(b)(2) establishes arrangement may be marketed as providing the general reserve requirements on transaction accounts customer unlimited access to its funds with a high and nonpersonal time deposits. Under section rate of interest, 19(b)(1)(F), the Board also is authorized to determine, (c) Determination. In these arrangements, the aggreby regulation or order, that an account or deposit is a gate deposit balances of all participants generally vary transaction account if such account is used directly or by a comparatively small amount, allowing the time indirectly for the purpose of making payments to third deposits maturing on any day safely to cover any persons or others. This interpretation is adopted under charges to the depositors' transaction accounts and these authorities. avoiding any early withdrawal penalties. Thus, this (b) Linked time deposits and transaction accounts. arrangement substitutes time deposit balances for Some depository institutions are offering or proposing transaction accounts balances with no practical reto offer account arrangements under which a group of strictions on the depositors' access to their funds, and participating depositors maintain transaction accounts serves no business purpose other than to allow the and time deposits with a depository institution in an payment of higher interest through the avoidance of arrangement under which each depositor may draw reserve requirements. As the time deposits may be checks up to the aggregate amount held by that deposused to provide funds indirectly for the purposes of itor in these accounts. Under this account arrangemaking payments or transfers to third persons, the ment, at the end of the day funds over a specified Board has determined that the time deposits should be balance in each depositor's transaction account are considered to be transaction accounts for the purposes swept from the transaction account into a commingled of Regulation D. time deposit. A separate time deposit is opened on each business day with the balance of deposits received that day, as well as the proceeds of any time 6. Section 204.135 is added to read as follows: deposit that has matured that day that are not used to pay checks or withdrawals from the transaction ac- Section 204.135—Shifting funds between counts. The time deposits, which generally have ma- depository institutions to make use of the low turities of seven days, are staggered so that one or reserve tranche. more time deposits mature each business day. Funds are apportioned among the various time deposits in a (a) Authority. Under section 19(a) of the Federal manner calculated to minimize the possibility that the Reserve Act (12 U.S.C. 461(a)) the Board is authofunds available on any given day would be insufficient rized to define terms used in Section 19, and to to pay all items presented. prescribe regulations to implement and to prevent (1) The time deposits involved in such an arrange- evasions of the requirements of that section. Section ment may be held directly by the depositor or 19(b)(2) establishes general reserve requirements on indirectly through a trust or other arrangement. The transaction accounts and nonpersonal time deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

768 Federal Reserve Bulletin • October 1992 In addition to its authority to define terms under the demand deposit. The larger depository institution Section 19(a), section 19(g) of the Federal Reserve Act then reduces its transaction account reserves by 10 also give the Board the specific authority to define percent of the deposited amount. The small depository terms relating to deductions allowed in reserve com- institution, because it is within the low reserve putation, including "balances due from other banks." tranche, must maintain transaction account reserves This interpretation is adopted under these authorities. of 3 percent on the funds deposited by the larger (b) Background. Currently, the Board requires re- depository institution. The small depository institution serves of zero, three, or ten percent on transaction then transfers all but 3 percent of the funds deposited accounts, depending upon the amount of transaction by the larger depository institution back to the larger deposits in the depository institution, and of zero depository institution in a transaction that qualifies as percent on nonpersonal time deposits. In determining a "fed funds" transaction. The 3 percent not transits reserve balance under Regulation D, a depository ferred to the larger depository institution is the amount institution may deduct the balances it maintains in of the larger depository institution's deposit that the another depository institution located in the United small depository institution must maintain as transac- States if those balances are subject to immediate tion account reserves. Because the larger depository withdrawal by the depositing depository institution institution books this second part of the transaction as (section 204.3(f))- This deduction is commonly known a "fed funds" transaction, the larger depository institution does not maintain reserves on the funds that it as the "due from" deduction. In addition, Regulation receives back from the small depository institution. As D at section 204.2(a)(l)(vii)(A) exempts from the defa consequence, the larger depository institution has inition of "deposit" any liability of a depository instiavailable for its use 97 percent of the amount transtution on a promissory note or similar obligation that is ferred to the small depository institution. Had the issued or undertaken and held for the account of an larger depository institution not entered into the transoffice located in the United States of another deposiaction, it would have maintained transaction account tory institution. Transactions falling within this exreserves of 10 percent on that amount, and would have emption from the definition of "deposit" include fedhad only 90 percent of that amount for use in its eral funds or "fed funds" transactions. business. Under section 19(b)(2) of the Federal Reserve Act (12 U.S.C. 461(b)(2)), the Board is required to impose (d) Determination. The Board believes that the pracreserves of three percent on total transaction deposits tice described above generally is a device to evade the at or below an amount determined under a formula. reserves imposed by Regulation D. Consequently, the Transaction deposits falling within this amount are in Board has determined that, in the circumstances dethe "low reserve tranche." Currently the low reserve scribed above, the larger depository institution depostranche runs up to $42.2 million. Under section iting funds in the smaller institution may not take a 19(b)(ll) of the Federal Reserve Act (12 U.S.C. "due from" deduction on account of the funds in the § 461(b)(ll)) the Board is also required to impose demand deposit account if, and to the extent that, reserves of zero percent on reservable liabilities at or funds flow back to the larger depository institution below an amount determined under a formula. Cur- from the small depository institution by means of a rently that amount is $3.6 million. transaction that is exempt from transaction account (c) Shifting funds between depository institutions. The reserve requirements. Board is aware that certain depository institutions with transaction account balances in an amount 7. Section 204.136 is added to read as follows: greater than the low reserve tranche have entered into transactions with affiliated depository institutions that Section 204.136—Treatment of trust overdrafts have transaction account balances below the maxi- for reserve requirement reporting purposes. mum low reserve tranche amount. These transactions are intended to lower the transaction reserves of the (a) Authority. Under section 19(a) of the Federal larger depository institution and leave the economic Reserve Act, the Board is authorized to define the position of the smaller depository institutions unaf- terms used in section 19, and to prescribe regulations fected, and have no apparent purpose other than to to implement and prevent evasions of the requirereduce required reserves of the larger institution. The ments of that section. Section 19(b) establishes general larger depository institution places funds in a demand reserve requirements on transaction accounts and deposit at a small domestic depository institution. The nonpersonal time deposits. Under section 19(b)(1)(F), larger depository institution considers those funds to the Board also is authorized to determine, by regulabe subject to the "due from" deduction, and accord- tion or order, that an account or deposit is a transacingly reduces its transaction reserves in the amount of tion account if such account is used directly or indi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 769 rectly for the purpose of making payments to third terminated, the broker returns the securities to the persons or others. This interpretation is adopted under lending trust account and the trust customer's account these authorities. is debited for the amount of the cash collateral that is (b) Netting of trust account balances. Not all deposi- returned by the depository institution to the broker. tory institutions have treated overdrafts in trust ac- The trust department, however, often does not liquicounts administered by a trust department in the same date the investment made with the cash collateral until manner when calculating the balance in a commingled the day after the loan terminates, a delay that normally transaction account in the depository institution for causes a one day overdraft in the trust account. the account of the trust department of the institution. Regulation D requires that, on the day the loan is In some cases, depository institutions carry the aggre- terminated, the depository institution regard the neggate of the positive balances in the individual trust ative balance in the customer's account as zero for accounts as the balance on which reserves are com- reserve requirement reporting purposes and not net puted for the commingled account. In other cases the overdraft against positive balances in other acdepository institutions net positive balances in some counts. trust accounts against negative balances in other trust (d) Procedures. In order to meet the requirements of accounts, thus reducing the balance in the commingled Regulation D, a depository institution must have proaccount and lowering the reserve requirements. Ex- cedures to determine the aggregate of trust department cept in limited circumstances, negative balances in transaction account balances for Regulation D on a individual trust accounts should not be netted against daily basis. The procedures must consider only the positive balances in other trust accounts when deter- positive balances in individual trust accounts without mining the balance in a trust department's commingled netting negative balances except: transaction account maintained in a depository insti- (1) in those limited circumstances where loans are tution's commercial department. The netting of posi- legally permitted from one trust to another, or where tive and negative balances has the effect of reducing offsetting is permitted pursuant to trust law or the aggregate of a commingled transaction account written agreement, or reported by the depository institution to the Federal (2) where the amount that caused the overdraft is Reserve and reduces the reserves the institution must still available in a settlement, suspense or other trust hold against transaction accounts under Regulation D. account within the trust department and may be Unless the governing trust agreement or state law used to offset the overdraft. authorizes the depository institution, as trustee, to lend money in one trust to another trust, the negative balances in effect, for purposes of Regulation D, FINAL RULE—AMENDMENTS TO represent a loan from the depository institution. Con- REGULATION D sequently, negative balances in individual trust accounts should not be netted against positive balances The Board of Governors is amending 12 C.F.R. Part in other individual trust accounts, and the balance in 204, its Regulation D (Reserve Requirements of Deany transaction account containing commingled trust pository Institutions) facilitate the computation and balances should reflect positive or zero balances for maintenance of reserves. The Board is reducing the lag each individual trust. in the application of vault cash to reserve requirements (c) Example. For example, where a trust department in order to damp the seasonal variations in required engages in securities lending activities for trust ac- reserve balances. Reducing the lag in application counts, overdrafts might occur because of the trust should decrease the probability that reserve balances department's attempt to "normalize" the effects of will drop seasonally to levels that would cause depostiming delays between the depository institution's itory institutions difficulty in managing their reserve receipt of the cash collateral from the broker and the balances. The Board is also increasing the amount of trust department's posting of the transaction to the excesses or deficiencies in reserve balances that may lending trust account. When securities are lent from a be carried over from one reserve maintenance period trust customer to a broker that pledges cash as collat- to the next from the greater of 2 percent or $25,000 to eral, the broker usually transfers the cash collateral to the greater of 4 percent or $50,000 to give depositories the depository institution on the day that the securities greater flexibility in managing reserve balances. are made available. While the institution has the use of The reduction in the lag in application of vault cash the funds from the time of the transfer, the trust will be effective for the maintenance period beginning department's normal posting procedures may not re- November 12, 1992 for weekly reporting institutions. flect receipt of the cash collateral by the individual Quarterly reporting institutions will be unaffected by account until the next day. On the day that the loan is the change. The increase in carryover of reserve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

770 Federal Reserve Bulletin • October 1992 deficiencies or surpluses will be effective for surpluses FINAL RULE—AMENDMENT TO REGULATION D or deficiencies in the maintenance period beginning September 3, 1992, for both weekly and quarterly The Board of Governors is amending 12 C.F.R. Parts reporting institutions. The Board is amending 204, 250, and 265, its Regulation D (Reserve Require- 12 C.F.R. Part 204 as follows: ments of Depository Institutions, Miscellaneous Interpretations), and its Rules Regarding Delegation of Authority. The Board is eliminating the requirement Part 204—Reserve Requirements of Depository that state member banks obtain the Board's prior Institutions approval before issuing subordinated debt in order to treat that debt as capital rather than as a deposit and is 1. The authority citation for part 204 continues to read issuing an interpretation of the capital adequacy apas follows: pendices to Regulations H and Y which provides general guidance on the criteria that subordinated debt Authority: Sections 11(a), 11(c), 19, 25, 25(a) of the and mandatory convertible debt must meet to be Federal Reserve Act (12 U.S.C. 248(a), 248(c), 371a, included in capital. The purpose of the interpretation is 371b, 461, 601, 611); section 7 of the International to clarify these criteria. Banking Act of 1978 (12 U.S.C. 3105); and section 411 The amendment to Regulation D conforms a referof the Garn-St Germain Depository Institutions Act of ence regarding the minimum maturity of subordinated 1982 (12 U.S.C. 461). debt to the minimum maturity set in the capital guidelines (changing "seven" to "five"). The amendment 2. Section 204.3 is amended by revising paragraphs to the Rules Regarding Delegation of Authority elimi- (c)(3) and (h) to read as follows: nates the authority of Reserve Banks to approve the issuance of subordinated debt and mandatory convertible debt as such approval is no longer required. The Section 204.3—Computation and maintenance, Board also is rescinding an interpretation of Regulation D concerning subordinated debt that is no longer necessary. (c) * * * Effective September 4, 1992, 12 C.F.R. Parts 204, 250, and 265 are amended as follows: (3) In determining the reserve balance that is required to be maintained with the Federal Reserve, Part 204—Reserve Requirements of Depository the daily average vault cash held during the compu- Institutions tation period that ended 3 days prior to the beginning of the maintenance period is deducted from the 1. The authority citation for Part 204 is revised to read amount of the institution's required reserves. as follows: * :(« Jfc * * (h) Carryover of excesses or deficiencies. Any excess Authority: Sections 9, 11(a), 11(c), 19, 21, 25, 25(a) of or deficiency in a depository institution's account that the Federal Reserve Act (12 U.S.C. 248(a), 248(c), is held directly or indirectly with a Federal Reserve 371a, 371b, 461, 601, 611); section 7 of the Interna- Bank shall be carried over and applied to that account tional Banking Act of 1978 (12 U.S.C. 3105); and in the next maintenance period as specified in this section 411 of the Garn-St Germain Depository Instiparagraph. The amount of any such excess or defi- tutions Act of 1982 (12 U.S.C. 461). ciency that is carried over shall not exceed the greater of: 2. Section 204.2(a)(l)(vii)(C) is amended by removing (1) the amount obtained by multiplying .04 times the the word "seven" and adding the word "five" in its sum of the depository institution's required reserves place. and the depository institution's required clearing balance, if any, and then subtracting from this 3. Section 204.129 is removed. product the depository institution's required clearing balance penalty-free band, if any; or Part 250—Miscellaneous Interpretations (2) $50,000, minus the depository institution's required clearing balance penalty-free band, if any. 1. The authority citation for part 250 continues to read as follows: Any carryover not offset during the next period may not be carried.over to subsequent periods. Authority: 12 U.S.C. 248(i). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 771 2. A new section 250.166 is added to read as follows: issued, subordinated debt that includes provisions permitting acceleration upon events other than Section 250.166—Treatment of mandatory bankruptcy or reorganization under Chapters 7 convertible debt and subordinated notes of (Liquidation) and 11 (Reorganization) of the state member banks and bank holding Bankruptcy Code, in the case of a bank holding companies as "capital". company, or insolvency — i.e., the appointment of a receiver — in the case of a state member (a) General. Under the Board's risk-based capital bank, does not qualify for inclusion in Tier 2 guidelines, state member banks and bank holding capital. companies may include in Tier 2 capital subordinated (ii) Further, subordinated debt whose terms prodebt and mandatory convertible debt that meets cer- vide for acceleration upon the occurrence of tain criteria. The purpose of this interpretation is to events other than bankruptcy or the appointment clarify these criteria. This interpretation should be of a receiver does not qualify as Tier 2 capital. For read with those guidelines, particularly with para- example, the terms of some subordinated debt graphs II.c. through II.e. of Appendix A of 12 C.F.R. issues would permit debtholders to accelerate part 208 if the issuer is a state member bank and with repayment if the issuer failed to pay principal or paragraphs II.A.2.C. and II.A.2.d. of Appendix A of interest on the subordinated debt issue when due 12 C.F.R. part 225 if the issuer is a bank holding (or within a certain timeframe after the due date), company. failed to make mandatory sinking fund deposits, (b) Criteria for subordinated debt included in capital. defaulted on any other debt, failed to honor (1) Characteristics. To be included in Tier 2 capital covenants, or if an institution affiliated with the under the Board's risk-based capital guidelines for issuer entered into bankruptcy or receivership. state member banks and bank holding companies, Some banking organizations have also issued, or subordinated debt must be subordinated in right of proposed to issue, subordinated debt that would payment to the claims of the issuer's general credi- allow debtholders to accelerate repayment if, for tors1 and, for banks, to the claims of depositors as example, the banking organization failed to mainwell; must be unsecured; must state clearly on its tain certain prescribed minimum capital ratios or face that it is not a deposit and is not insured by a rates of return, or if the amount of nonperforming federal agency; must have a minimum average ma- assets or charge-ofFs of the banking organization turity of five years;2 must not contain provisions exceeded a certain level. that permit debtholders to accelerate payment of (iii) These and other similar acceleration clauses principal prior to maturity except in the event of raise significant supervisory concerns because bankruptcy of or the appointment of a receiver for repayment of the debt could be accelerated at a the issuing organization; must not contain or be time when an organization may be experiencing covered by any covenants, terms, or restrictions financial difficulties. Acceleration of the debt that are inconsistent with safe and sound banking could restrict the ability of the organization to practice; and must not be credit sensitive. resolve its problems in the normal course of (2) Acceleration clauses. business and could cause the organization to (i) In order to be included in Tier 2 capital, the involuntarily enter into bankruptcy or receiverappendices provide that subordinated debt instru- ship. Furthermore, since such acceleration ments must have an original weighted average clauses could allow the holders of subordinated maturity of at least five years. For this purpose, debt to be paid ahead of general creditors or maturity is defined as the earliest possible date on depositors, their inclusion in a debt issue throws which the holder can put the instrument back to into question whether the debt is, in fact, suborthe issuing banking organization. Since accelera- dinated. tion clauses permit the holder to put the debt back (iv) Subordinated debt issues whose terms state upon the occurrence of certain events, which that the debtholders may accelerate the repaycould happen at any time after the instrument is ment of principal only in the event of bankruptcy or receivership of the issuer do not permit the holders of the debt to be paid before general 1. The risk-based capital guidelines for bank holding companies creditors or depositors and do not raise supervistate that bank holding company debt must be subordinated to all sory concerns because the acceleration does not senior indebtedness of the company. To meet this requirement, the debt should be subordinated to all general creditors. occur until the institution has failed. Accordingly, 2. The "average maturity" of an obligation or issue repayable in debt issues that permit acceleration of principal scheduled periodic payments shall be the weighted average of the only in the event of bankruptcy (liquidation or maturities of all such scheduled payments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

772 Federal Reserve Bulletin • October 1992 reorganization) in the case of bank holding com- (4) Credit sensitive features. Credit sensitive suborpanies and receivership in the case of banks are dinated debt (including mandatory convertible secugenerally acceptable within capital. rities) where payments are tied to the financial (3) Provisions inconsistent with safe and sound condition of the borrower generally do not qualify banking practices. for inclusion in capital. Interest rate payments may (i) The risk-based capital guidelines state that be linked to the financial condition of an institution instruments included in capital may not contain or through various ways, such as through an auction be covered by any covenants, terms, or restric- rate mechanism, a preset schedule that either mantions that are inconsistent with safe and sound dates interest rate increases as the credit rating of banking practice. As a general matter, capital the institution declines or automatically increases instruments should not contain terms that could them over the passage of time,4 or that raises the adversely affect liquidity or unduly restrict man- interest rate if payment is not made in a timely agement's flexibility to run the organization, par- fashion.5 As the financial condition of an organizaticularly in times of financial difficulty, or that tion declines, it is faced with higher and higher could limit the regulator's ability to resolve prob- payments on its credit sensitive subordinated debt at lem bank situations. For example, some subordi- a time when it most needs to conserve its resources. nated debt includes covenants that would not Thus, credit sensitive debt does not provide the allow the banking organization to make additional support expected of a capital instrument to an secured or senior borrowings. Other covenants institution whose financial condition is deterioratwould prohibit a banking organization from dis- ing; rather, the credit sensitive feature can accelerposing of a major subsidiary or undergoing a ate depletion of the institution's resources and inchange in control. Such covenants could restrict crease the likelihood of default on the debt. the banking organization's ability to raise funds to (c) Criteria for mandatory convertible debt included in meet its liquidity needs. In addition, such terms or capital. Mandatory convertible debt included in capiconditions limit the ability of bank supervisors to tal must meet all the criteria cited above for subordiresolve problem bank situations through a change nated debt with the exception of the minimum matuin control. rity requirement.6 Since mandatory convertible debt (ii) Certain other provisions found in subordinated eventually converts to an equity instrument, it has no debt may provide protection to investors in subor- minimum maturity requirement. Such debt, however, dinated debt without adversely affecting the over- is subject to a maximum maturity requirement of 12 all benefits of the instrument to the organization. years. For example, some instruments include covenants (d) Previously issued subordinated debt. Subordinated that may require the banking organization to: debt including mandatory convertible debt which has (A) maintain an office or agency where securi- been issued prior to the date of this interpretation and ties may be presented, which contains provisions permitting acceleration for (B) hold payments on the securities in trust, (C) preserve the rights and franchises of the company, with Federal Reserve staff about other subordinated debt provisions (D) pay taxes and assessments before they not specifically discussed above to determine whether such provisions become delinquent, are appropriate in a debt capital instrument. 4. Although payments on debt whose interest rate increases over (E) provide an annual statement of compliance time on the surface may not appear to be directly linked to the on whether the company has observed all con- financial condition of the issuing organization, such debt (sometimes ditions of the debt agreement, or referred to as expanding or exploding rate debt) has a strong potential to be credit sensitive in substance. Organizations whose financial (F) maintain its properties in good condition. condition has strengthened are more likely to be able to refinance the debt at a rate lower than that mandated by the preset increase, whereas institutions whose condition has deteriorated are less likely Such covenants, as long as they do not unduly to be able to do so. Moreover, just when these latter institutions would restrict the activity of the banking organization, gen- be in the most need of conserving capital, they would be under strong erally would be acceptable in qualifying subordinated pressure to redeem the debt as an alternative to paying higher rates and, thus, would accelerate depletion of their resources. debt, provided that failure to meet them does not give 5. While such terms may be acceptable in perpetual preferred stock the holders of the debt the right to accelerate the debt.3 qualifying as Tier 2 capital, it would be inconsistent with safe and sound banking practice to include debt with such terms in Tier 2 capital. The organization does not have the option, as it does with auction rate preferred stock issues, of eliminating the higher payments 3. This notice does not attempt to list or address all clauses included on the subordinated debt without going into default. in subordinated debt; rather, it is intended to give general supervisory 6. Mandatory convertible debt is subordinated debt that contains guidance regarding the types of clauses that could raise supervisory provisions committing the issuing organization to repay the principal concerns. Issuers of subordinated debt may need to consult further from the proceeds of future equity issues. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 773 reasons other than bankruptcy or receivership of the purpose. Thus, dedicated portions of mandatory issuing institution; includes other questionable terms convertible debt securities are subject, like other or conditions; or that is credit sensitive will not subordinated debt, to the 50 percent sublimit within automatically be excluded from capital. Rather, such Tier 2 capital, as well as to discounting in the last debt will be considered on a case-by-case basis to five years of life. Undedicated portions of mandadetermine whether they qualify in Tier 2 capital. As a tory convertible debt may be included in Tier 2 general matter, subordinated debt issued prior to the capital without any sublimit and are not subject to release of this interpretation and containing such pro- discounting. visions or features may qualify in Tier 2 capital so long (3) Treatment of debt with segregated funds. In as these terms: some cases, the provisions in mandatory convertible (1) have been commonly used by banking organiza- debt issues may require the issuing banking organitions, zation to set up a sinking fund, trust fund, or similar (2) do not provide an unreasonably high degree of segregated account to hold the proceeds from the protection to the holder in cases not involving sale of equity securities dedicated to pay off the bankruptcy or receivership, and principal of the mandatory convertible debt at ma- (3) do not effectively allow the holder to stand ahead turity. The portion of mandatory convertibles covof the general creditors of the issuing institution in ered by the amount of proceeds deposited in such a cases of bankruptcy or receivership. segregated fund is considered secured and, thus, may not be included in capital at all, let alone be Subordinated debt containing provisions that permit treated as subordinated debt that is subject to the 50 the holders of the debt to accelerate payment of percent sublimit within Tier 2 capital. The mainteprincipal when the banking organization begins to nance of such separate segregated funds for the experience difficulties, for example, when it fails to redemption of mandatory convertible debt exceeds meet certain financial ratios, such as capital ratios or the requirements of Appendix B to Regulation Y. rates of return, does not meet these three criteria. Accordingly, if a banking organization, with the Consequently, subordinated debt issued prior to the agreement of its debtholders, seeks Federal Reserve release of this interpretation containing such provi- approval to eliminate such a fund, approval norsions may not be included within Tier 2 capital, mally would be given unless supervisory concerns (e) Limitations on the amount of subordinated debt in warrant otherwise, capital. (f) Redemption of subordinated debt prior to maturity. (1) Basic limitation. The amount of subordinated (1) By state member banks. State member banks debt an institution may include in Tier 2 capital is must obtain approval from the appropriate Reserve limited to 50 percent of the amount of the institu- Bank prior to redeeming before maturity subordition's Tier 1 capital. The amount of a subordinated nated debt or mandatory convertible debt included debt issue that may be included in Tier 2 capital is in capital.7 A Reserve Bank will not approve such discounted as it approaches maturity; one-fifth of early redemption unless it is satisfied that the capital the original amount of the instrument, less any position of the bank will be adequate after the redemptions, is excluded each year from Tier 2 proposed redemption. capital during the last five years prior to maturity. If (2) By bank holding companies. While bank holding the instrument has a serial redemption feature such companies are not formally required to obtain apthat, for example, half matures in seven years and proval prior to redeeming subordinated debt, the half matures in ten years, the issuing organization risk-based capital guidelines state that bank holding should begin discounting the seven-year portion companies should consult with the Federal Reserve after two years and the ten-year portion after five before redeeming any capital instruments prior to years. stated maturity. This also applies to any redemption (2) Treatment of debt with dedicated proceeds. If a of mandatory convertible debt with proceeds of an banking organization has issued common or pre- equity issuance which were dedicated to the referred stock and dedicated the proceeds to the demption of that debt. Accordingly, a bank holding redemption of a mandatory convertible debt secu- company should consult with its Reserve Bank prior rity, that portion of the security covered by the amount of the proceeds so dedicated is considered to be ordinary subordinated debt for capital pur- 7. Some agreements governing mandatory convertible debt issued poses, provided the proceeds are not placed in a prior to the risk-based capital guidelines provide that the bank may redeem the notes if they no longer count as primary capital as defined sinking fund, trust fund, or similar segregated acin Appendix B to Regulation Y. Such a provision does not obviate the count or are not used in the interim for some other requirement to receive Federal Reserve approval prior to redemption. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

774 Federal Reserve Bulletin • October 1992 to redeeming subordinated debt or dedicated por- The Board has by order previously approved these tions of mandatory convertible debt included in activities. Applications by bank holding companies to capital. A Reserve Bank generally will not acquiesce engage in activities included on the Regulation Y list of to such a redemption unless it is satisfied that the permissible nonbanking activities may be processed capital position of the bank holding company would by the Reserve Banks under expedited procedures be adequate after the proposed redemption. pursuant to delegated authority. (3) Special concerns involving mandatory convert- Effective September 4, 1992, 12 C.F.R. Part 225 is ible debt. Consistent with Appendix B to Regulation amended as follows: Y, bank holding companies wishing to redeem before maturity undedicated portions of mandatory Part 225—Bank Holding Companies and convertible debt included in capital are required to Change in Bank Control receive prior Federal Reserve approval, unless the redemption is effected with the proceeds from the 1. The authority citation for Part 225 continues to read sale or common or perpetual preferred stock. An as follows: organization planning to effect such a redemption with the proceeds from the sale of common or Authority: 12 U.S.C. 1817(j)(13), 1818, 1831i, perpetual preferred stock is advised to consult in- 1843(c)(8), 1844(b), 3106, 3108, 3907, 3909, 3310, and formally with its Reserve Bank in order to avoid the 3331-3351. possibility of taking an action that could result in weakening its capital position. A Reserve Bank will 2. In Part 225, the footnotes are redesignated as shown not approve the redemption of mandatory convert- below: ible securities, or acquiesce in such a redemption effected with the sale of common or perpetual preferred stock, unless it is satisfied that the capital Current New position of the bank holding company will be satis- SSeeccttiioonn aanndd PPaarraaggrraapphh Footnote Footnote Number Number factory after the redemption.8 § 225.25 Part 265—Rules Regarding Delegation of (b)(5)(iii) 3 4 (b)(5)(iv) 4 5 Authority 5 6 (b)(5)(vi) 6 7 (b)(8)(i)(B) 7 8 1. The authority citation for part 265 is revised to read (b)(8)(ii) 8 9 (b)(8)(ii)(B) 9 10 as follows: (b)(8)(iv) 10 11 11 12 (b)(10)(ii) 12 13 Authority: 12 U.S.C. 248(i) and (k). (b)(ll) 13 14 (b)(ll)(iv) 14 15 2. In section 265.11, paragraph (e)(ll) is removed, and paragraph (e)(12) is redesignated as (e)(ll). 3. In section 225.2, paragraphs (g) through (o) are redesignated as paragraphs (h) through (p) and a new paragraph (g) is added to read as follows: FINAL RULE—AMENDMENT TO REGULATION Y Section 225.2—Definitions. The Board of Governors is amending 12 C.F.R. Part 225, its Regulation Y (Bank Holding Companies and Change in Bank Control) to augment the list of permissible nonbanking activities for bank holding com- (g) Institutional customer means: panies to include the provision of full service securities (1) A bank (acting in an individual or fiduciary brokerage under certain conditions; and the provision capacity); a savings and loan association; an insurof financial advisory services under certain conditions. ance company; an investment company registered under the Investment Company Act of 1940; or a corporation, partnership, proprietorship, organization, or institutional entity, with net worth exceed- 8. The guidance contained in this paragraph applies to mandatory convertible debt issued prior to the risk-based capital guidelines that ing $1,000,000; state that the banking organization may redeem the notes if they no (2) An employee benefit plan with assets exceeding longer count as primary capital as defined in Appendix B to Regulation $1,000,000, or whose investment decisions are made Y. Such provisions do not obviate the need to consult with, or obtain approval from, the Federal Reserve prior to redemption of the debt. by a bank, insurance company, or investment advi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 775 sor registered under the Investment Advisors Act of (C) Financial advisory activities under this sub- 1940; paragraph may not encompass the performance (3) A natural person whose individual net worth (or of routine tasks or operations for a customer on joint net worth with a spouse) at the time of receipt a daily or continuous basis, and the financial of the brokerage, advisory, or other relevant service advisor shall not make available to any of its exceeds $1,000,000; affiliates confidential information regarding a (4) A broker-dealer or option trader registered under party obtained in the course of providing any the Securities Exchange Act of 1934, or other secu- financial advisory services except as authorized rities, investment or banking professional; or by the party. (5) An entity all of the equity owners of which are institutional customers. (5) Securities brokerage. 4. In section 225.25, the word "and" is removed at the (i) Providing securities brokerage services, related end of paragraph (b)(4)(iv), paragraph (b)(4)(v) is re- securities credit activities pursuant to the Board's vised, a new paragraph (b)(4)(vi) is added, and para- Regulation T (12 C.F.R. 220), and incidental acgraph (b)(15) is revised to read as follows: tivities such as offering custodial services, individual retirement accounts, and cash management Section 225.25—List of permissible nonbanking services, if the securities brokerage services are activities. restricted to buying and selling securities solely as agent for the account of customers and do not include securities underwriting or dealing; and (b) * * * (ii) Providing securities brokerage services under ^ * * * paragraph (b)(15)(i) of this section in combination (v) Providing financial advice to state and local with investment advisory services permissible ungovernments and foreign governments (including der paragraph (b)(4) of this section2 subject to the foreign municipalities and agencies of foreign gov- following requirements: ernments), such as with respect to the issuance of (A) The company must prominently disclose in their securities; and writing3 to each customer before providing any (vi)(A)(7) Providing advice, including rendering brokerage or advisory services, and, in the case fairness opinions and providing valuation ser- of disclosures required under clause (1), again vices, in connection with mergers, acquisi- in each customer account statement, that: tions, divestitures, joint ventures, leveraged (1) The company is solely responsible for its conbuyouts, recapitalizations, capital structur- tractual obligations and commitments; ings, and financing transactions (including (2) The company is not a bank and is separate from private and public financings and loan syndi- any affiliated bank; and cations); and conducting financial feasibility (.3) The securities sold, offered, or recommended by studies;1 and, the company are not insured by the Federal Deposit (2) Providing financial and transaction advice Insurance Corporation, and are not obligations of, regarding the structuring and arranging of or endorsed or guaranteed in any way by, any bank, swaps, caps, and similar transactions relating unless this is the case; and to interest rates, currency exchange rates or (B) The company and its affiliates may not share prices, and economic and financial indices, any confidential information concerning their and similar transactions. respective customers without the consent of the (B) The financial advisory services described in customer. this subparagraph may be provided only to corporations, to financial and nonfinancial institutions, and to natural persons whose individual 2. Investment advisory services authorized under paragraph (b)(4) net worth (or joint net worth with a spouse) at include the exercise of discretion in buying and selling securities on behalf of a customer provided that investment discretion is exercised the time the service is provided exceeds only on behalf of institutional customers and only at the request of the $1,000,000. customer. A bank holding company or its subsidiary providing these discretionary investment management services must comply with applicable law, including fiduciary principles, and obtain the consent of its customer before engaging, as principal or as agent in a transaction in which an affiliate acts as principal, in securities transactions on 1. Feasibility studies do not include assisting management with the the customer's behalf. planning or marketing for a given project or providing general opera- 3. These disclosures may be made orally provided that a written tional or management advice. disclosure is provided to the customer immediately thereafter. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

776 Federal Reserve Bulletin • October 1992 FINAL RULE—AMENDMENT TO REGULATION CC (3) * * * (iii) The time period within which deposits subject The Board of Governors is amending 12 C.F.R. Part to the exception generally will be available for 229, its Regulation CC (Availability of Funds and withdrawal; and Collection of Checks), to allow banks to extend holds, on an exception basis, to "next-day" and "secondday" availability checks and allow one-time notices of exception holds in certain cases. Effective September 14, 1992, 12 C.F.R. Part 229 is APPENDIX E TO PART 229—[AMENDED] amended as follows: 4. Appendix E is amended as set forth below: Part 229—{AmendedJ a. In the Commentary to section 229.2(n), a new 1. The authority citation for part 229 is revised to read sentence is added after the first sentence and the last as follows: sentence is revised; b. In the Commentary to section 229.13, the term Authority: 12 U.S.C. 4001 et seq. ", 229.11" is removed in the first paragraph of paragraph (g) and the fifth paragraph of paragraph (h); in 2. In section 229.1, paragraph (a) is revised to read as paragraph (b), the last sentence of the second parafollows: graph is revised; in paragraph (d), the last paragraph is revised; in paragraph (e), the third sentence of the first Section 229.1—Authority and purpose; paragraph is revised; in paragraph (f), the fifth senorganization. tence is revised; in paragraph (g), the second sentence of the sixth paragraph, the first and last sentences of (a) Authority and purpose. This part (Regulation CC; the seventh paragraph, and the second sentence of the 12 C.F.R. Part 229) is issued by the Board of Gover- ninth paragraph are revised and two new sentences are nors of the Federal Reserve System ("Board") to added before the last sentence of the seventh paraimplement the Expedited Funds Availability Act graph; and in paragraph (h), a new sentence is added to ("Act") (title VI of Pub. L. 100-86), as amended by the end of the fourth paragraph; section 1001 of the Cranston-Gonzales National Af- c. In the Commentary to section 229.16(c), the last fordable Housing Act of 1990 (Pub. L. 101-625) and paragraph of paragraph (c)(1) is revised and a new sections 212(h), 225, and 227 of the Federal Deposit sentence is added to the end of paragraph (c)(3) as Insurance Corporation Improvement Act of 1991 (Pub. follows: L. 102-242). APPENDIX E—COMMENTARY 3. In section 229.13, the term ", 229.11" is removed in paragraphs (b), (c) introductory text, (d) introductory * * * ** text, (e)(1), (f) introductory text, (h)(1), and (h)(3); the Section 229.2—Definitions phrase "section 229.11 or" is removed in paragraph (h)(2); the word "in" is removed after the first occur- * * * ** rence of the word "under" in paragraph (h)(4); and (n) Consumer account. * * * An account that does not paragraphs (g)(2)(ii) and (g)(3)(iii) are revised as folmeet the definition of "consumer account" is a nonlows: consumer account. * * * Section 229.13(g)(2) (one-time exception notice) and section 229.19(d) (use of calcu- Section 229.13—Exceptions. lated availability) apply only to nonconsumer accounts. (g) Notice of exception. * * * (2) * * * Section 229.13—Exceptions (ii) The time period within which deposits subject to the exception generally will be available for withdrawal. (b) Large deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 53 matically by the depositary bank in accordance with * * * An additional $4,900 of the proceeds of the an agreement with the customer, rather than to all local check must be available for withdrawal on redeposited checks. In lieu of sending the one-time Wednesday in accordance with the local schedule, and notice, a depositary bank may send individual hold the remaining $4,000 may be held for an additional notices for each deposit subject to the large deposit or period of time under the large deposit exception. redeposited check exception in accordance with section 229.13(g)(1) (see Model Notice C-13). (d) Repeated Overdrafts. * * * Notices sent pursuant to paragraph (g)(3) must state the customer's account number, the fact the This exception applies to local and nonlocal checks, as exception was invoked under the repeated overdraft well as to checks that otherwise would be made exception, the time period within which deposits subavailable on the next (or second) business day after the ject to the exception will be made available for withday of deposit under section 229.10(c). When a bank drawal, and the time period during which the excepplaces or extends a hold under this exception, it need tion will apply (see Model Form C-13C). * * * not make the first $100 of a deposit available for withdrawal on the next business day, as otherwise would be required by section 229.10(c)(l)(vii). (h) Availability of deposits subject to exceptions. (e) Reasonable cause to doubt collectibility. * * * When a bank places or extends a hold under this * * * For example, if a customer deposits a $7,000 exception, it need not make the first $100 of a deposit cashier's check drawn on a nonlocal bank, and the available for withdrawal on the next business day, as depositary bank applies the large deposit exception to otherwise would be required by section that check, $5,000 must be available for withdrawal on 229.10(c)(l)(vii). * * * the next business day after the day of deposit and the remaining $2,000 must be available for withdrawal on the eleventh business day following the day of deposit (f) Emergency conditions. * * * When a bank places or (six business days added to the five-day schedule for extends a hold under this exception, it need not make nonlocal checks), unless the depositary bank estabthe first $100 of a deposit available for withdrawal on lishes that a longer hold is reasonable. the next business day, as otherwise would be required by section 229.10(c)(l)(vii). * * * (g) Notice of exception. Section 229.16—Specific Availability Policy * ^c * * * Disclosure * * * When paragraph (g)(2) or (g)(3) requires disclo- * afe # afe sfe sure of the time period within which deposits subject to the exception generally will be available for with- (c) Longer delays on a case-by-case basis.— drawal, the requirement may be satisfied if the one- (1) * * * time notice states when on us, local, and nonlocal A bank that imposes delays on a case-by-case basis is checks will be available for withdrawal if an exception still subject to the availability requirements of this is invoked. regulation. If the bank imposes a delay on a particular Under paragraph (g)(2), if a nonconsumer account deposit that is not longer than the availability required (see Commentary to section 229.2(n)) is subject to the by section 229.12 for local and nonlocal checks, the large deposit or redeposited check exception, the reason for the delay need not be based on the excepdepositary bank may give its customer a single notice tions provided in section 229.13. If the delay exceeds at or prior to the time notice must be provided under the time periods permitted under section 229.12, howparagraph (g)(1). * * * A one-time notice may state that ever, then it must be based on an exception provided the depositary bank will apply exception holds to in section 229.13, and the bank must comply with the certain subsets of deposits to which the large deposit section 229.13 notice requirements. A bank that imor redeposited check exception may apply, and the poses delays on a case-by-case basis may avail itself of notice should identify such subsets. For example, the the one-time notice provisions in section 229.13(g)(2) depositary bank may apply the redeposited check and (3) for deposits to which those provisions apply. $ $ $ exception only to checks that were redeposited auto- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

778 Federal Reserve Bulletin • October 1992 (3) * * * Paragraph (c)(3) applies when a bank provides a case-by-case notice in accordance with paragraph (c)(2) and does not apply if the bank has The terms used in paragraph (a)(1) of this section provided an exception hold notice in accordance that are not defined in this part or otherwise defined in with section 229.13. section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 1813(s» shall have the meaning given to * * * * * them in section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101). FINAL RULE—AMENDMENT TO REGULATION CC 3. In section 229.12, paragraph (a) is revised as follows, paragraphs (f)(l)(ii) and (f)(2) are removed, and The Board of Governors is amending 12 C.F.R. Part the designation "(l)(i)" in paragraph (f) is removed: 229, its Regulation CC (Availability of Funds and Collection of Checks), to conform to recent amendments to the Expedited Funds Availability Act. The amendments make permanent the current availability Section 229.12—Permanent availability schedules for deposits at nonproprietary automated schedule. teller machines and reaffirm the administrative enforcement authority of federal regulatory agencies over U.S. offices and branches of foreign banks. (a) Effective date. The permanent availability schedule Effective September 14, 1992, 12 C.F.R. is amended contained in this section is effective September 1, as follows: 1990. Part 229—[Amended] 1. The authority citation for part 229 is revised to read as follows: APPENDIX E TO PART 229—[AMENDED] Authority: 12 U.S.C. 4001 et seq. 4. Appendix E to part 229 is amended, in the Commentary under section 229.12, by removing the second 2. In section 229.3, paragraph (a)(1) is revised and and third sentences of paragraph (a) and revising concluding text to paragraph (a) is added after para- paragraph (f) to read as follows: graph (a)(3) to read as follows: Section 229.12—Permanent Availability Schedule Section 229.3—Administrative enforcement. (f) Deposits at nonproprietary ATMs. The Act and (1) Section 8 of the Federal Deposit Insurance Act regulation provide a special rule for deposits made at (12 U.S.C. 1818 et seq.) in the case of— nonproprietary ATMs. This paragraph does not apply (i) National banks, and Federal branches and to deposits made at proprietary ATMs. All deposits at Federal agencies of foreign banks, by the Office of a nonproprietary ATM must be made available for the Comptroller of the Currency; withdrawal by the fifth business day following the (ii) Member banks of the Federal Reserve System banking day of deposit. For example, a deposit made (other than national banks), and offices, branches, at a nonproprietary ATM on a Monday, including any and agencies of foreign banks located in the deposit by cash or checks that would otherwise be United States (other than Federal branches, Fed- subject to next-day (or second-day) availability, must eral agencies, and insured State branches of for- be made available for withdrawal not later than Moneign banks), by the Board; and day of the following week. The provisions of section (iii) Banks insured by the Federal Deposit Insurance 229.10(c)( 1 )(vii) requiring a depositary bank to make Corporation (other than members of the Federal up to $100 of an aggregate daily deposit available for Reserve System) and insured State branches of for- withdrawal on the next business day after the banking eign banks, by the Board of Directors of the Federal day of deposit do not apply to deposits at a nonpro- Deposit Insurance Corporation; prietary ATM. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 779 ORDERS ISSUED UNDER BANK HOLDING Douglas Amendment COMPANY ACT Section 3(d) of the BHC Act, the Douglas Amend- Orders Issued Under Section 3 of the Bank ment, prohibits the Board from approving an applica- Holding Company Act tion by a bank holding company to acquire control of any bank located outside of the bank holding com- CoreStates Financial Corp. pany's home state, unless such acquisition is "specif- Philadelphia, Pennsylvania ically authorized by the statute laws of the State in which such bank is located, by language to that effect Order Approving Acquisition of a Bank Holding and not merely by implication."3 CoreStates, which Company has Pennsylvania as its home state, proposes to acquire the New Jersey bank subsidiary of First Peo- CoreStates Financial Corp., Philadelphia, Pennsylva- ples.4 The Board previously has determined that the nia ("CoreStates"), a bank holding company within interstate banking statutes of New Jersey permit the the meaning of the Bank Holding Company Act acquisition of New Jersey banking organizations by ("BHC Act"), has applied under section 3 of the BHC Pennsylvania banking organizations.5 Act (12 U.S.C. § 1842) to acquire all of the voting shares of First Peoples Financial Corporation, Haddon Competitive, Financial, Managerial and Supervisory Township, New Jersey ("First Peoples"), and thereby Considerations to acquire indirectly First Peoples's subsidiary bank, First Peoples Bank of New Jersey, Westmont, New CoreStates and First Peoples compete directly in the Jersey ("Peoples Bank"). CoreStates also has applied Philadelphia/Trenton6 and the Vineland/Bridgton/Milto acquire 24.81 percent of the shares of First Bank of lville PMSA7 banking markets. The record shows that Philadelphia, Philadelphia, Pennsylvania ("First CoreStates and First Peoples control relatively small Bank"), which First Peoples currently holds as a shares of deposits held by depository institutions in passive investment.1 the market ("market deposits")8 and upon consumma- Notice of the applications, affording interested per- tion of the proposal, the Philadelphia/Trenton market sons an opportunity to submit comments, has been would remain unconcentrated and the Vineland/Bridgpublished (57 Federal Register 15,316 (1992)). The ton/Millville PMSA would remain moderately concentime for filing comments has expired, and the Board has considered the applications and all comments received in light of the factors set forth in section 3(c) 3. 12 U.S.C. § 1842(d). 4. A bank holding company's home state is that state in which the of the BHC Act. operations of the bank holding company's banking subsidiaries were CoreStates, with approximately $22.7 billion in con- principally conducted on July 1, 1966, or the date on which the solidated assets, controls four subsidiary banks lo- company became a bank holding company, whichever is later. 12 U.S.C. § 1842. cated in Pennsylvania, New Jersey and Delaware.2 5. CoreStates Financial Corporation, 72 Federal Reserve Bulletin First Peoples, with approximately $1.1 billion in con- 7% (1986). 6. The Philadelphia/Trenton banking market is approximated by solidated assets, controls one bank in New Jersey. Bucks, Chester, Delaware, Montgomery and Philadelphia Counties in Upon consummation of the transaction, CoreStates Pennsylvania; and Burlington, Camden, Gloucester and Mercer Counwould become the sixth largest commercial banking ties in New Jersey. 7. The Vineland/Bridgton/Millville PMSA banking market is aporganization in New Jersey, controlling deposits of proximated by Cumberland County, New Jersey. $3.8 billion, representing 4.8 percent of the deposits in 8. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously commercial banks in the state. has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 1. CoreStates proposes to retain the shares of First Bank as a Market deposit data are as of June 30, 1990. passive investment and has made a number of commitments that the In the Philadelphia/Trenton banking market, CoreStates is the Board has accepted in other cases to ensure that CoreStates will not largest depository institution in this market, controlling deposits of attempt to control or exert a controlling influence over the manage- $10.7 billion, representing approximately 14.4 percent of market ment or operations of First Bank. See First Peoples Financial deposits; and First Peoples is the 13th largest depository institution in Corporation, 74 Federal Reserve Bulletin 71 (1988); see also Summit the market, with deposits of $789.3 million, representing approxi- Bancorp, Inc., 77 Federal Reserve Bulletin 952 (1991). mately 1.2 percent of market deposits. In the Vineland/Bridgton/ In connection with this application, First Peoples has granted Millville PMSA banking market, CoreStates is the eighth largest CoreStates an option to purchase, under certain circumstances, up to depository institution in this market, controlling deposits of $38.7 approximately 19.9 percent of its voting shares. This option will million, representing approximately 3 percent of market deposits; and terminate upon consummation of the proposed acquisition of First First Peoples is the fifth largest depository institution in the market, Peoples. with deposits of $70.1 million, representing approximately 5.6 percent 2. Asset and state deposit data are as of December 31, 1991. of market deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

780 Federal Reserve Bulletin • October 1992 trated.9 After considering the competition offered by credit needs of the local communities in which they other depository institutions in the market, the number operate consistent with the safe and sound operation of competitors remaining in the market, the increase in of such institutions. To accomplish this end, the concentration as measured by the Herfindahl- CRA requires the appropriate federal supervisory Hirschman Index ("HHI"), and other facts of record, authority to "assess the institution's record of meetthe Board has concluded that consummation of the ing the credit needs of its entire community, includproposal would not result in a significantly adverse ing low- and moderate-income neighborhoods, coneffect on competition in the Philadelphia/Trenton,10 sistent with the safe and sound operation of such Vineland/Bridgton/Millville PMSA, or any other rele- institution," and to take that record into account vant banking markets.11 in its evaluation of bank holding company applica- The Board also concludes that the financial and tions.12 managerial resources and future prospects of Cor- The Board has received several comments regardeStates and First Peoples, and their subsidiary banks, ing the CRA performance records of CoreStates and and the other factors that the Board must consider First Peoples. Five commenters supported the CRA under section 3 of the BHC Act are also consistent record of CoreStates, noting that CoreStates and its with approval. subsidiaries have provided significant funding and technical assistance to small business and commu- Convenience and Needs Considerations nity economic development initiatives in the City of Camden, New Jersey ("Camden").13 In particular, In considering an application under section 3 of the the Director of Camden's Division of Economic BHC Act, the Board must consider the convenience Development stated in a published letter that and needs of the communities to be served and take CoreStates has been responsive to and supportive of into account the records of the relevant depository the Division's business lending programs, entrepreinstitutions under the Community Reinvestment Act neurship training, and economic development educa- (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA tional activities. requires the federal financial supervisory agencies to A commenter representing the Greater Camden encourage financial institutions to help meet the County Reinvestment Corporation and the Camden City Development Coalition ("Protestant"), has criticized the CRA performance records of CoreStates 9. Under the revised Department of Justice Merger Guidelines, 49 and First Peoples, alleging that they have not ade- Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is below 1000 is considered unconcentrated and a quately ascertained or met the community credit market in which the post-merger HHI is between 1000 and 1800 is needs of Camden and other low-income communities considered moderately concentrated. The Justice Department has or the needs of small and/or minority businesses.14 informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anti- In addition, Protestant alleges that both organicompetitive effects) unless the post-merger HHI is at least 1800 and zations have illegally discriminated in Camden the merger increases the HHI by 200 points. The Justice Department through "redlining," as demonstrated in lending data has stated that the higher than normal HHI thresholds for screening bank mergers for anti-competitive effects implicitly recognize the for these institutions, including data required to be competitive effect of limited-purpose lenders and other non-deposi- filed under the Home Mortgage Disclosure Act tory financial entities. ("HMDA"). 10. As previously discussed, CoreStates will acquire a passive investment in First Bank which also competes in the Philadelphia/ Trenton banking market. The Board has previously noted that an applicant need not acquire control of a bank in order to substantially lessen competition between them, and that the specific facts of each case will determine whether the minority investment in a company will be anticompetitive. See Summit Bancorp, Inc., supra. In this case, after considering all the facts of record, including the commit- 12. 12 U.S.C. § 2903. ments by CoreStates not to control First Bank without prior Board 13. These commenters include Delaware Valley Community Reinapproval, and the structure and size of the market, as well as market vestment Fund, Philadelphia, Pennsylvania; the City of Camden share and other information, the Board has determined that retention Division of Economic Development; Neighborhood Housing Services of the proposed investment in First Bank by CoreStates would not of Camden, Inc.; Cooperative Business Assistance Corporation; and have a substantially adverse effect on competition in any relevant Latin American Economic Development Association, Inc., all of banking market. Camden, New Jersey. 11. In the Philadelphia/Trenton banking market, CoreStates would 14. Protestant maintains that these institutions have failed to remain the largest banking organization in the market, with deposits of present evidence that they conduct formal credit needs analyses or $11.5 billion, representing approximately 15.6 percent of market geocode loans and have failed to take corrective action when predeposits upon consummation of this proposal. The HHI would in- sented with detailed evaluations of the housing and small business crease by 32 points to 743. In the Vineland/Bridgton/Millville PMSA needs in Camden. Protestant also charges that both institutions have banking market, CoreStates would become the fourth largest banking attempted to disguise their poor performance records with costly organization in the market upon consummation, with deposits of public relations materials which are only cosmetic, and that Peoples $108.8 million, representing approximately 8.6 percent of market Bank's representatives have been disrespectful in meetings with deposits. The HHI would increase by 34 points to 1356. Protestant. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 781 Record of Performance Under the CRA Committee to monitor existing compliance efforts as well as new initiatives. In addition to the CRA Officer, A. CRA Performance Examinations CoreStates's CRA Compliance Committee includes representatives of various corporate departments, in- The Board has carefully reviewed the CRA perfor- cluding Commercial Lending, Community Banking, mance records of CoreStates, First Peoples, and their Public Relations, and Public Responsibility. The Pubsubsidiary banks; the comments received and the lic Responsibility Department maintains contact with responses to those comments; and all of the other local agencies and community groups to help relevant facts, in light of the CRA, the Board's regu- CoreStates identify community needs, and has led lations, and the Statement of the Federal Financial CoreStates's participation in numerous community Supervisory Agencies Regarding the Community Re- development programs and projects. investment Act ("Agency CRA Statement").15 The New Jersey Bank has a formalized CRA program Agency CRA Statement indicates that decisions by monitored and directed by its Community Developagencies to allow financial institutions to expand will ment Committee ("Committee").18 The Committee be made pursuant to an analysis of the institution's meets three times a year to develop CRA initiatives, overall CRA performance and will be based on the and makes an annual presentation to the bank's board actual record of performance of the institution. The of directors. New Jersey Bank also has a Community Board has also reviewed the CRA examination records Development Department to implement the programs of these institutions.16 developed by the Committee, and a Community De- Initially, the Board notes that all the subsidiary velopment Loan Committee to evaluate the bank's banks of CoreStates and First Peoples have received funding of community development programs. The at least a "satisfactory" rating in their most recent Community Development Loan Committee was examinations for CRA performance.17 Additionally, formed to provide a case-by-case evaluation of re- New Jersey National Bank, Trenton, New Jersey quests to fund community development projects in ("New Jersey Bank"), the subsidiary of CoreStates recognition that many such projects do not otherwise meet the bank's standard loan underwriting criteria. that includes Camden in its delineated service area, New Jersey Bank also provides extensive CRA trainreceived an "outstanding" CRA performance rating ing to branch managers and personnel. from the Office of the Comptroller of the Currency ("OCC"), on September 4, 1991 ("1991 CRA Exami- First Peoples also has a corporate CRA program to nation"). CoreStates intends to merge New Jersey supervise and review the CRA programs of Peoples Bank with Peoples Bank and has committed to insti- Bank. Peoples Bank's CRA program is also monitored tute New Jersey Bank's CRA policies and plans after by its board of directors and senior management, who consummation. receive regularly scheduled progress reports of community reinvestment policies and activities. Addition- B. Corporate Policies ally, all employees, including officers, receive training on the bank's CRA policies and initiatives. CoreStates, First Peoples, and their subsidiary banks have in place the types of policies and procedures that C. Ascertainment and Marketing Efforts the Board and other federal bank supervisory agencies have indicated contribute to an effective CRA pro- New Jersey Bank has a formal outreach program gram. CoreStates has established a CRA program to designed to establish and maintain a line of communisupervise and review the CRA programs of its subsid- cation between the bank and its community regarding iary banks, and has established a CRA Compliance the need for credit products and services. New Jersey Bank ascertains credit needs through direct forms of community contact initiated by directors, manage- 15. 54 Federal Register 13,742 (1989). ment, and staff of the bank. For example, the Com- 16. The Agency CRA Statement provides that a CRA examination is an important and often controlling factor in the consideration of an munity Development Department has established an institution's CRA record and that these reports will be given great ongoing dialogue among bank management and civic weight in the applications process. 54 Federal Register 13,745 (1989). and non-profit groups, including Camden Cooperative 17. CoreStates Bank (Delaware), N.A., Wilmington, Delaware ("Delaware Bank"), received a "satisfactory" performance rating Business Assistance Corporation, Rural Opportunities from the OCC on September 30, 1991; CoreStates Bank, N.A., of Vineland, Non-profit Affordable Housing Network Philadelphia, Pennsylvania ("Pennsylvania Bank"), received an "outstanding" performance rating from the OCC on September 3, 1991; and Hamilton Bank, Lancaster, Pennsylvania ("Hamilton Bank"), received a "satisfactory" rating from the FDIC on August 1, 1988. 18. The Committee includes five senior officers of New Jersey Peoples Bank received an outstanding rating from the FDIC on Bank, including the CRA Officer, and representatives of each of New November 30, 1988. Jersey Bank's major divisions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

782 Federal Reserve Bulletin • October 1992 of New Jersey, and New Jersey Community Loan D. Lending and Other Activities Fund. New Jersey Bank's branch managers engage in a calling program and complete a monthly survey to The Board has reviewed the lending and other activiassist the bank in developing new products and ser- ties of New Jersey Bank and Peoples Bank in light of vices. the Protestant's comments about Camden. As a gen- Officers of Peoples Bank also are informed of eral matter, the Board notes that the 1991 CRA Excredit needs within their local communities through amination found that the geographic distribution of involvement with various civic and community New Jersey Bank's housing-related credit extensions, groups. Bank branch officers are required to com- applications, and denials demonstrated a reasonable plete surveys identifying their involvement in com- penetration into all segments of the bank's entire munity groups and organizations. Peoples Bank also delineated service area, and that New Jersey Bank's schedules open houses at branch offices, and engages branches are located throughout this area, providing in calling programs to ascertain community credit access to banking services to all segments of the needs. community. To supplement its outreach efforts, New Jersey New Jersey Bank maintains that its mortgage and Bank performs an annual geocoding analysis of its home improvement lending in Camden has been somebank's lending in cities and counties within its delin- what limited because its closest branch is two miles eated service area. This geocoding, conducted in con- from the city limits. New Jersey Bank has, however, junction with demographic studies undertaken by New provided assistance for the housing needs of low- and Jersey Bank, enables the bank to assess the level of its moderate-income individuals in Camden through other loan penetration throughout its service area, including means.20 For example, New Jersey Bank provided low- and moderate-income areas. New Jersey Bank $925,000 in construction financing as a participating uses the information it has gathered through its geo- bank in Camden's "Two-Fer" project, a joint venture coding and demographic analysis to formulate and providing 22 new units of affordable housing. In addirefine its marketing efforts and develop products to tion, New Jersey Bank is currently providing conaddress the needs of low- and moderate-income com- struction financing and technical assistance for St. munities. Joseph's West Wynn housing project, which will re- New Jersey Bank engages in several marketing habilitate a vacant building and several other sites to techniques to advertise its products and services to all create 20 units of affordable housing. New Jersey segments of its service area. Deposit and loan prod- Bank is also working with the Delaware Valley Comucts are marketed through radio commercials and munity Reinvestment Fund ("DVCRF"), to create a newspaper advertisements, including minority-ori- consortium that would create a loan pool for the ented and foreign-language newspapers. In addition, construction and renovation of affordable housing in affordable housing loan products and services are Camden.21 advertised in branches in low- and moderate-income New Jersey Bank also provides consumer and busareas. New Jersey Bank also has sought to market its iness credit in Camden. As of year-end 1991, New services and products to low- and moderate-income Jersey Bank had 115 consumer loans in Camden communities by participating in various conferences totalling $874,000. In addition, as of May, 1992, New and seminars, including the "Equal Housing Aware- Jersey Bank had 40 business loans in Camden totalling ness Campaign" and the Camden Urban Women's $9.4 million.22 New Jersey Bank is also the lead lender Centers Eastern Regional Urban Economic and Business Development Conference. Similarly, New Jersey Bank has participated in a consortium of banks that 20. CoreStates reports that for the period 1990-1992, New Jersey provide the Community Home Buyer's Counseling Bank originated 13 loans totalling $1.6 million for affordable housing Coalition seminars to educate potential buyers about or economic development purposes in Camden. New Jersey Bank also the home purchase process.19 participates in a variety of government-sponsored loan programs for housing including the New Jersey Urban Lending Partners, Trenton Mortgage Plan, New Jersey Department of Community Affairs Neighborhood Preservation Program, New Jersey Housing and Mortgage Finance Agency Programs, and Fannie Mae's Homeownership Opportunity Program. 21. DVCRF is a community development loan fund that provides loans and technical assistance to community-controlled housing, 19. Peoples Bank also engages in various marketing techniques to economic development, and social-service initiatives that benefit lowadvertise its products and services to all segments of its delineated and moderate-income individuals. CoreStates has supported DVCRF service area. The bank uses several media, including newspapers of in Philadelphia through grants, loan participations, loan refinancings, general circulation and community bulletins, and uses billboards at and it participates on DVCRF's board and loan committees. public transportation facilities to market its credit products and 22. The bank also participates in Small-Business-Administrationservices. guaranteed loans programs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 783 for the Camden Cooperative Business Assistance Cor- whether an institution has engaged in illegal discrimiporation ("CCBAC"), a private/public partnership in nation on the basis of race or ethnicity in making Camden providing small business financing and tech- lending decisions. In this regard, the most recent nical assistance. The bank participates in both the examinations for CRA performance conducted by commercial and real estate loan programs of bank supervisory agencies found no evidence of illegal CCBAC,23 and has made 10 loans for approximately discrimination or other illegal credit practices in the $600,000 as of January 1992. subsidiary banks of CoreStates and First Peoples. New Jersey Bank has supported community devel- CoreStates has taken various steps to improve its opment in Camden financially and with technical as- lending to minorities and low- and moderate-income sistance. These efforts are monitored through its Com- neighborhoods in Camden. For example, New Jersey munity Development Department.24 For example, Bank has committed to introduce in Camden the New Jersey Bank provided initial funding for the "Welcome Home Product," a public/private partner- Neighborhood Housing Services of Camden ("NHS") ship designed to assist low- and moderate-income and one of its vice presidents serves as a treasurer of borrowers in obtaining sufficient cash downpayments the NHS board.25 for mortgage loans. Under this program, a borrower would be required to provide a 3 percent downpay- E. HMDA Data and Lending Practices ment from the borrower's own funds, and may satisfy any remaining downpayment requirement from other The Board has reviewed the 1990 HMDA data re- sources, including grants and loans available from the ported by New Jersey Bank and Peoples Bank in light program to cover these costs and closing costs.26 of Protestant's comments. Due to recent amendments In addition, New Jersey Bank has recently develto the HMDA, these banks were required to report oped, in conjunction with a Camden-based community certain information on loan approvals and denials to group, mortgage and home-improvement loan prodthe banking agencies and the public. This information ucts designed specifically for low- and moderateincludes data on the race, gender and income of income communities in Camden. New Jersey Bank individual applicants, as well as the location of the also has employed a Camden resident who has been property securing the potential loan and the disposi- given the responsibility for marketing the bank's morttion of the application. gage and home improvement products to community Data cited by the Protestant show disparities in groups, realtors and Camden residents. In addition, housing-related loan applications, approvals, denials New Jersey Bank will acquire a Peoples Bank branch and withdrawals for applicants of different racial or that is located immediately adjacent to the Camden ethnic groups and income levels in Camden. Protes- city limits, and accordingly, New Jersey Bank should tant has alleged illegal discriminatory lending practices be able to provide greater access to its products and in Camden on the basis of these and other data. services to residents of Camden, including low- and Because all banks are obligated to ensure that their moderate-income communities. lending practices are based on criteria that assure not only safe and sound lending, but also assure equal F. Conclusion Regarding Convenience and access to credit by creditworthy applicants regardless Needs Factors of race, the Board is concerned when the record of an institution indicates disparities in lending to minority The Board has carefully considered the entire record applicants. The Board recognizes, however, that of this application, including the comments filed in this HMDA data alone provide only a limited measure of case, in reviewing the convenience and needs factor any given institution's lending in its community. The under the BHC Act. Protestant has raised both specific Board also recognizes that HMDA data have limita- and general concerns about the adequacy of the existtions that make the data an inadequate basis, absent ing CRA programs of CoreStates and First Peoples. other information, for conclusively determining Other comments have supported the proposal on the basis of CoreStates's record of CRA performance. Based on a review of the entire record of performance, including information provided by the commenters 23. New Jersey Bank is the only bank in the program that originates construction loans through the real estate program for the acquisition and the performance examinations by the banks' priand rehabilitation of vacant business properties. mary regulators, the Board believes that the efforts of 24. The Community Development Department coordinates and monitors the success of New Jersey Bank's activities. The bank also produces a bi-monthly internal newsletter to keep employees informed of community development products and activities. 26. New Jersey Bank will also conduct a credit seminar in Camden 25. Another New Jersey Bank officer serves on the NHS loan this Fall of 1992 to assist potential borrowers in understanding loan committee. applications and credit decisions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

784 Federal Reserve Bulletin • October 1992 CoreStates and First Peoples to help meet the credit ments and conditions relied upon by the Board in needs of all segments of the communities served by reaching its decision are commitments imposed in these banks, including low- and moderate-income writing by the Board in connection with its findings neighborhoods, are consistent with approval. and decision and may be enforced in proceedings The Board recognizes that the record compiled in under applicable laws. This approval is also condithis application points to areas for improvement in the tioned upon CoreStates receiving all necessary Fed- CRA performance of both institutions, particularly in eral and state approvals. The transaction approved in mortgage and home-improvement lending in Camden. this Order shall not be consummated before the thir- New Jersey Bank has initiated or has committed to tieth calendar day following the effective date of this initiate a number of steps designed to strengthen this Order, or later than three months after the effective area of the CRA performance. The 1991 CRA Exam- date of this Order, unless such period is extended for ination noted that the management of New Jersey good cause by the Federal Reserve Bank of Philadel- Bank has established a record of continuously re- phia, pursuant to delegated authority. sponding to ascertained credit needs, and the Board By order of the Board of Governors, effective believes that this and other facts of record reflect the August 4, 1992. bank's willingness to address promptly areas where improvements are needed. The Board believes that Voting for this action: Chairman Greenspan and Governors this record, and the initiatives proposed by New Mullins, Angell, Kelley, La Ware, Lindsey, and Phillips. Jersey Bank, should help improve its CRA performance and address weaknesses described by Protes- JENNIFER J. JOHNSON tant. Associate Secretary of the Board On the basis of all the facts of record, the Board Gore-Bronson Bancorp, Inc. concludes that convenience and needs considerations, Prospect Heights, Illinois including the CRA performance records of CoreStates and First Peoples, are consistent with approval of this Order Denying Acquisition of a Bank application. The Board expects CoreStates to implement fully the CRA initiatives and commitments dis- Gore-Bronson Bancorp, Inc., Prospect Heights, Illicussed in this Order and contained in its application. nois ("Gore-Bronson"), a bank holding company CoreStates's progress in implementing these initiawithin the meaning of the Bank Holding Company Act tives and commitments will be monitored by the ("BHC Act"), has applied for the Board's approval Federal Reserve Bank of Philadelphia and will be under section 3 of the BHC Act (12 U.S.C. § 1842) to assessed in connection with future applications to expand its deposit-taking facilities.27 acquire indirectly 96.3 percent of the voting shares of Water Tower Trust and Savings Bank ("Water Tower Based on the foregoing and other facts of record, the Bank"), from Water Tower Bancorporation ("Water Board has determined that the application should be, Tower"), both of Chicago, Illinois.1 and hereby is, approved. The Board's approval of this Notice of the applications, affording interested pertransaction is specifically conditioned upon complisons an opportunity to submit comments, has been ance with the commitments made by CoreStates in published (57 Federal Register 11,956 (1992)). The connection with this application. All of the committime for filing comments has expired, and the Board has considered the applications and all comments received in light of the factors set forth in section 3(c) 27. Protestant has requested that the Board hold a public hearing or meeting on this application. The Board is not required under section 3 of the BHC Act. of the BHC Act to hold a public meeting or hearing unless the primary Gore-Bronson is the 126th largest commercial banksupervisor for the bank to be acquired does not approve the proposal. ing organization in Illinois, controlling deposits of In this case, the primary supervisor for Peoples Bank has not objected to this proposal. $152.9 million, representing less than 1 percent of the Under its rules, the Board may, in its discretion, hold a public total deposits in commercial banking organizations in hearing or meeting on an application to clarify factual issues related to the application and to provide an opportunity for testimony, if the state.2 Water Tower is the 92nd largest commercial appropriate. 12 U.S.C. §§ 262.3(e) and 262.25(d). The Board has banking organization in Illinois, controlling deposits of carefully considered these requests. Protestant has submitted substan- $188 million, representing less than 1 percent of the tial written comments that have been considered by the Board. In the Board's view, interested parties have had an ample opportunity to present written submissions, and in light of these submissions and all the facts of record, the Board has determined that a public meeting or hearing is not necessary to clarify the factual record in these applica- 1. Gore-Bronson has also requested approval to establish WTB tions, or is otherwise warranted in this case. Accordingly, the request Holdings, Inc., Chicago, Illinois, an intermediate holding company, by Protestant for a public meeting or hearing on this application is for the purpose of acquiring the shares of Water Tower Bank. hereby denied. 2. State deposit data are as of June 30, 1990. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 785 total deposits in commercial banking organizations in Bronson controls two subsidiary banks, Irving Bank, the state. Chicago, Illinois ("Irving Bank"), and Bronson-Gore Bank in Prospect Heights, Prospect Heights, Illinois Convenience and Needs Considerations ("B-G Bank"). Irving Bank, Gore-Bronson's largest subsidiary bank, has received two consecutive less In acting on an application under section 3 of the BHC than satisfactory CRA performance ratings from its Act, the Board must consider the convenience and primary federal supervisor, the Federal Deposit Insurneeds of the communities to be served and take into ance Corporation ("FDIC"), since its acquisition by account the records of the relevant depository institu- Gore-Bronson.6 B-G Bank's CRA performance rating tions under the Community Reinvestment Act from the FDIC has declined since its acquisition by (12 U.S.C. § 2109 et seq.) ("CRA"). The CRA re- Gore-Bronson to less than satisfactory.7 Water Tower quires the federal financial supervisory agencies to Bank also received a less than satisfactory rating in its encourage financial institutions to help meet the credit most recent examination for CRA performance conneeds of the local communities in which they operate ducted by the FDIC.8 consistent with the safe and sound operation of such institutions. To accomplish this end, the CRA requires B. CRA Performance Records of the appropriate federal supervisory authority to "as- Gore-Bronson's Banks sess the institution's record of meeting the credit needs of its entire community, including low- and Irving Bank. The FDIC examination of Irving Bank's moderate-income neighborhoods, consistent with the CRA performance found that the bank does not have a safe and sound operation of such institution," and to fully implemented program to ascertain the credit take this record into account in its evaluation of bank needs of its community, and that only limited efforts holding company applications.3 are evident in ascertaining credit needs in low- and The Board has carefully reviewed the CRA perfor- moderate-income areas within its community. In addimance of Gore-Bronson, Water Tower, and their tion, Irving Bank's contact with community groups, subsidiary banks, in light of the CRA, the Board's civic officials and neighborhood organizations remain regulations, and the jointly issued Statement of the limited, though these types of contacts have increased Federal Financial Supervisory Agencies Regarding the since its last CRA evaluation. Community Reinvestment Act ("Agency CRA State- While noting some increase in marketing activities, ment").4 The Agency CRA Statement indicates that the FDIC examination concluded that the extent of decisions by agencies to allow financial institutions to advertising was limited and may not be effective in expand will be made pursuant to an analysis of the reaching the entire community, especially in some institution's overall CRA performance and will be low- and moderate-income areas. For example, adverbased on the actual record of performance of the tisements placed in church and community organizainstitution. tion publications promoted the image of the bank but did not promote loan or deposit services. In addition, Record of Performance under the CRA the examination found that, while the volume of bank officer calls had increased substantially, these calls are A. CRA Performance Examinations not evenly distributed throughout Irving Bank's delineated community. In the case of some of the bank's The Board has stated that a CRA examination is an low- and moderate-income communities, a limited important and often controlling factor in determining number or no calls were made. Overall, the FDIC whether convenience and needs factors are consistent examination characterized Irving Bank's record of with approval of an expansionary proposal.5 Gore- extending credit within its delineated community as poor, and the extent of bank's community development lending as minimal. 3. 12 U.S.C. § 2903. B-G Bank. The FDIC examination of B-G Bank's 4. 54 Federal Register 13,732 (1989). The Agency CRA Statement CRA performance also found weaknesses in its ascerprovides guidance regarding the types of policies and procedures that tainment efforts. In this regard, minutes of meetings the supervisory agencies believe financial institutions should have in place in order to fulfill their responsibilities under the CRA on an ongoing basis and the procedures that the supervisory agencies will use during the application process to review an institution's CRA compliance and performance. 6. Irving Bank's CRA performance was rated "needs to improve" 5. See First Interstate BancSystem of Montana, Inc., 11 Federal as of January 4, 1991, and again as of January 11, 1992. Reserve Bulletin 1007 (1991) ("First Interstate of Montana")-, Conti- 7. B-G Bank was rated "needs to improve" as of January 21, 1992. nental Bank Corporation, 75 Federal Reserve Bulletin 304 (1989); 8. Water Tower Bank was rated "needs to improve" as of June 6, Agency CRA Statement, 54 Federal Register 13,743 (1989). 1990. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

786 Federal Reserve Bulletin • October 1992 for B-G Bank's board do not indicate specific discus- of performance in place, and have had deficiencies in sions of ascertainment efforts for the community's CRA performance for some time. In the case of Irving credit needs or discussions of overall CRA perfor- Bank, these deficiencies have existed over a period of mance in terms of the types of credit extended. In time encompassing two CRA performance examinaaddition, the record does not indicate that B-G Bank's tions, and in the case of B-G Bank, its CRA perforboard has undertaken a review of demographic data or mance has declined under Gore-Bronson's ownership. geographic distribution of the bank's credit exten- Gore-Bronson has committed to take certain steps sions. Overall, only approximately 28 percent of the to address the CRA performance deficiencies of its bank's total loans were made within its delineated subsidiary banks. Over time, these steps have the community. potential to remedy many of the deficiencies in the B-G Bank's marketing efforts for consumer credit banks' CRA performance. Given the facts of this case, and home mortgage loans do not appear to target the however, the Board does not believe that it is approbank's entire delineated community, which includes priate to rely on the future expectations or commitresidents in low- and moderate-income areas.9 The ments for future action by Gore-Bronson. Accord- FDIC examination also found that B-G Bank was ingly, the Board does not believe that reliance on unable clearly to demonstrate reasonable efforts to commitments for future action is appropriate in this meet the consumer and residential credit needs of its case without a stronger showing of CRA performance. delineated community. The Board has carefully reviewed the CRA performance of Gore-Bronson, Water Tower, and their C. Additional CRA Considerations subsidiary banks in light of all the facts of record in this application. The Board notes that the FDIC, Gore-Bronson maintains that the issues raised by which is the primary federal supervisor for all the these CRA performance records have been addressed banks, has indicated its belief that the CRA records of by the steps initiated and to be initiated by B-G Bank B-G Bank and Irving Bank do not warrant approval of and Irving Bank to improve their CRA-related activi- this application. Based on the record, and for the ties. These steps include the introduction of VA and reasons discussed above, the Board concludes that FHA lending programs, increased business calling CRA performance records of B-G Bank, Irving Bank, programs and small business lending, increased con- and Water Tower Bank weigh against approval of this tacts with community groups and government officials, application. and more comprehensive advertising efforts to reach The Board has also considered Gore-Bronson's arlow- and moderate-income consumers. gument that the proposal will improve the financial The Board previously has stated that when a bank- condition of Water Tower Bank and consequently ing organization files an application to expand its result in significant public benefits to the community. deposit-taking facilities, the organization should ad- The Board notes, however, that Water Tower Bank dress its CRA responsibilities and have the necessary has recently taken steps to improve its capital position policies in place and working well.10 In addition, the and financial condition. In addition, as explained be- Board has found commitments for future action to low, the Board does not believe that financial factors address CRA concerns to be appropriate consider- in this case support Gore-Bronson's claim that the ations in the context of an application to expand proposal will substantially improve the financial condeposit-taking facilities only where the applicant oth- dition of Water Tower Bank and result in substantial erwise has a satisfactory CRA record, where the public benefits. Accordingly, the Board concludes that problems identified at the bank do not indicate chronic convenience and needs considerations are not consisinstitutional deficiencies or a pattern of CRA deficien- tent with approval of these applications at this time. cies, and where the applicant takes immediate and effective action to address identified deficiencies in the Other Considerations CRA performance of its banks. The record in this application indicates that Irving The Board is also required under section 3 of the BHC Bank and B-G Bank do not have a satisfactory record Act to consider the financial resources of the companies and banks involved and the effect of the proposed acquisition on the future prospects of the bank and 9. B-G Bank mailed questionnaires to its deposit customers in 1991 applicant organization. The Board believes that capital regarding bank services in general and offering to extend credit. Because a large portion of the bank's deposits were from businesses, adequacy is an important factor in the analysis of bank however, the FDIC examination concluded that this ascertainment holding company expansion proposals. effort may not have had the effect of reaching all levels of the In this regard, the Board has stated that it expects delineated community, including low- and moderate-income areas. 10. First Interstate of Montana at 1009. banking organizations contemplating expansion pro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 787 posals to maintain strong capital levels substantially Holding Company Act ("BHC Act"), has applied for above the minimum levels specified in the Board's approval from the Board of Governors of the Federal Capital Adequacy Guidelines.11 The Board also will Reserve System ("Board") under section 3(a)(3) of the consider a bank holding company's ability to serve as BHC Act (12 U.S.C. § 1842(a)(3)) to acquire aU the a source of financial and managerial strength to its voting shares of Farmers & Merchants National Bank subsidiary banks. of Merkel, Merkel, Texas ("Bank"). Upon consum- The Board has carefully analyzed the pro forma mation of the proposal, Security proposes to merge capital position and the risk profile of the resultant Bank into Security's subsidiary bank, Security State organization. Gore-Bronson's capital ratios would de- Bank, Abilene, Texas ("Security Bank").1 cline significantly as a result of this transaction. Gore- Notice of the application, affording interested per- Bronson has presented no plan to restore the resultant sons an opportunity to submit comments, has been organization to capital levels consistent with the published (57 Federal Register 27,977 (1992)). The Board's guidelines or its policy regarding source of time for filing comments has expired, and the Board strength, and no overriding public benefit is present in has considered the application and all comments rethe form of a substantial improvement to the overall ceived in light of the factors set forth in section 3(c) of financial condition of the bank. Based on all of the the BHC Act. facts of record in this case, including relevant exami- Security is the 302d largest commercial banking nation materials, the Board concludes that the finan- organization in Texas, controlling deposits of $72.3 cial and future prospects considerations regarding this million, representing less than 1 percent of total deproposal are not consistent with approval. posits in commercial banks in the state.2 Bank is the Based on the foregoing and other facts of record, the 711th largest banking organization in the state, con- Board concludes that adverse considerations relating trolling deposits of $25.8 million, representing less to convenience and needs factors and the financial than 1 percent of total deposits in commercial banks in resources and future prospects factors warrant a deci- the state. Upon consummation of the proposed transsion that the proposed acquisition should not be ap- action, Security would become the 22d largest comproved at this time. Considerations relating to compet- mercial banking organization in Texas, controlling itive, managerial resources,12 and other factors deposits of $97.8 million, representing less than 1 required by the Board to be considered under the BHC percent of total deposits in commercial banks in the Act do not lend sufficient weight to warrant approval state. of these applications. Accordingly, the Board has determined that these applications should be, and Convenience and Needs Considerations hereby are, denied. By order of the Board of Governors, effective In acting on an application under section 3 of the BHC August 13, 1992. Act, the Board is required to consider the effect of the proposal on the convenience and needs of the commu- Voting for this action: Chairman Greenspan and Governors nity to be served. The Board has received comments Mullins, Angell, Kelley, LaWare, Lindsey, and Phillips. opposing this proposal from a number of individuals, including shareholders, customers, and former em- JENNIFER J. JOHNSON ployees of Bank (collectively, "Protestants"), who Associate Secretary of the Board assert that the proposal would be detrimental to the convenience and needs of the Merkel community. Security Shares, Inc. These comments praise Bank's personal approach to Abilene, Texas its customers and generally question whether Security Bank will be responsive to local credit needs, includ- Order Approving Acquisition of a Bank ing those of small businesses, and to the need for banking services when Bank is converted from an Security Shares, Inc., Abilene, Texas ("Security"), a independent institution to a branch of an out-of-town bank holding company within the meaning of the Bank banking organization.3 11. Capital Adequacy Guidelines, 12 C.F.R. Part 225, Appendices 1. This merger is subject to review under the Bank Merger Act by A, B, C and D. See The Bank of New York Company, Inc., 76 Federal the Federal Deposit Insurance Corporation ("FDIC"), Security Reserve Bulletin 867, 868 (1990). Bank's primary federal regulator. 12. The Board has taken into account examination reports and other 2. State deposit date are as of March 31, 1992. Market deposit data information regarding compliance with consumer lending laws from are as of June 30, 1991. the FDIC and Gore-Bronson in reviewing considerations relating to 3. Protestants have raised issues regarding whether Security would the managerial resources factor. be permitted to close its branch in Merkel without federal regulatory Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

788 Federal Reserve Bulletin • October 1992 The Board has long held that an analysis of conve- and needs considerations in this case are consistent nience and needs considerations under the BHC Act with approval. includes a review of an institution's performance under the Community Reinvestment Act (12 U.S.C. Other Considerations § 2901 et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to encourage Bank and Security compete directly in the Abilene, financial institutions to help meet the credit needs of Texas, banking market ("Abilene banking market").6 the local communities in which they operate consistent Upon consummation of this proposal, Security would with the safe and sound operation of such institutions. become the sixth largest commercial banking or thrift The Board notes that Security Bank has a demon- organization (together "depository institutions") in strated record of responsiveness to local credit needs the Abilene banking market, controlling deposits of under the CRA, and that Security has committed to $82.6 million, representing approximately 7 percent of continue its responsiveness in Merkel following the total deposits in depository institutions in the market proposed acquisition. Security Bank received an "out- ("market deposits").7 After considering the number of standing" rating for CRA performance from the FDIC competitors remaining in the market, the relatively in its most recent examination as of March 1991. This small increase in concentration as measured by the examination found that Security Bank's efforts to Herfindahl-Hirschman Index ("HHI")8 and market ascertain the credit needs of its community were share, and other facts of record, the Board concludes strong and included continuous dialogue between Se- that consummation of the proposals would not result curity Bank's personnel at all levels (senior manage- in a significantly adverse effect on competition in the ment, lending officers and employees), community Abilene banking market or any other relevant banking leaders, and local government officials. Security market. Bank's efforts to help meet the credit needs of the The Board notes that Security Bank's proposal will small business community were also noted in the strengthen the financial condition of Bank. On the examination. Security Bank is an active SBA lender basis of this and other facts of record, the Board with loans of over $1 million. believes that the financial and managerial resources Security contends that Protestants' concerns re- and future prospects of Security, its subsidiaries and garding the out-of-town nature of this acquisition Bank, and all other factors the Board is required to should be mitigated by the close proximity of Security consider under section 3 of the BHC Act, also are Bank's main office in Abilene to Merkel.4 Management consistent with approval of this proposal. of Security Bank's main office contends that it has Based on the foregoing and other facts of record, the become familiar with the credit needs of the area and Board has determined that the application should be, will respond to those needs. Moreover, Security and hereby is, approved. This approval is specifically Bank's management intends to continue to operate the Merkel office as a full-service branch, to increase its service hours, increase credit card availability, and 6. The Abilene banking market is approximated by Taylor County offer more types of deposit accounts.5 and the part of the Abilene RMA that extends into Jones County. 7. Market deposit data are based on calculations in which the On the basis of these and the other facts of record, deposits of thrift institutions are included at 50 percent. The Board including comments received and relevant examina- previously has indicated that thrift institutions have become, or have tion reports, the Board concludes that convenience the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Security is the seventh largest depository institution in the Abilene banking market, controlling deposits of $56 million, representing approximately 5 percent of market deposits. Bank is the ninth largest approval. The Federal Deposit Insurance Corporation Improvement depository institution in the market, controlling deposits of $26.6 Act of 1991 requires the bank to provide its customers at least 30 days million, representing approximately 2 percent of market deposits. notice prior to closing any branch, and provide to a bank's primary 8. The HHI in this market would increase by 21 points to 2007. regulator 90-days' prior notice. 12 U.S.C. § 1831p. This provision Under the revised Department of Justice Merger Guidelines, 49 applies both to Security Bank and the proposed branch in Merkel. In Federal Register 26,823 (1984), a market in which the post-merger response to Protestants' concerns about the continuation of the HHI is above 1800 is considered to be highly concentrated. In such Merkel branch, Security has stated that the purpose of this proposal is markets, the Justice Department is likely to challenge a merger that to provide a full-service branch of Security in Merkel and that it does increases the HHI by more than 50 points. The Department of Justice not intend to close this branch. Security also notes that it has never has informed the Board that, as a general matter, a bank merger or closed a branch. acquisition will not be challenged, in the absence of other factors 4. Bank's office in Merkel is approximately 15 miles from Security indicating anticompetitive effects, unless the post-merger HHI is at Bank's main office in Abilene and these towns are joined by an least 1800 and the merger increases the HHI by 200 points. The Justice interstate highway. Department has stated that the higher-than-normal HHI thresholds for 5. Security has indicated that it may replace some executive officers screening bank mergers for anticompetitive effects implicitly recogby Security Bank's executive officers, and that additional manage- nize the competitive effect of limited-purpose lenders and other ment may be added. non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 789 conditioned upon compliance by Security and its sub- U.S. Bancorp, with $18.9 billion in consolidated sidiaries with the commitments made in connection assets,3 controls six subsidiary banks in Oregon, with this application. The commitments and condi- Washington, California, and Idaho, and one savings tions relied on in reaching this decision are conditions association in Washington. Upon consummation of imposed in writing by the Board in connection with its this acquisition and Bank's proposed merger transacfindings and decision and may be enforced in proceed- tion, U.S. Bancorp would become the fourth largest ings under applicable law. The acquisition shall not be banking organization in Nevada, controlling deposits consummated before the thirtieth calendar day follow- of $729.7 million, representing approximately 8.23 ing the effective date of this Order, or later than three percent of the deposits in commercial banking organimonths after the effective date of this Order, unless zations in the state.4 such period is extended for good cause by the Board or by the Federal Reserve Bank of Dallas, acting pursu- Douglas Amendment ant to delegated authority. By order of the Board of Governors, effective Section 3(d) of the BHC Act, the Douglas Amend- August 31, 1992. ment, prohibits the Board from approving an application by a bank holding company to acquire any bank Voting for this action: Vice Chairman Mullins and Gover- located outside of the bank holding company's home nors Kelley, LaWare, and Phillips. Absent and not voting: state, unless such acquisition is "specifically autho- Chairman Greenspan and Governors Angell and Lindsey. rized by the statute laws of the State in which such bank is located, by language to that effect and not JENNIFER J. JOHNSON merely by implication."5 U.S. Bancorp seeks to ac- Associate Secretary of the Board quire a bank in Nevada. For purposes of the Douglas Amendment, the home state of U.S. Bancorp is Ore- U.S. Bancorp gon.6 The Nevada interstate banking statute expressly Portland, Oregon authorizes the acquisition by an out-of-state bank holding company, such as U.S. Bancorp, of a Nevada Order Approving the Acquisition of a Bank bank, such as Bank, subject to certain conditions.7 After careful review of the relevant statutes, and in U.S. Bancorp, Portland, Oregon ("U.S. Bancorp"), a light of the facts of record, the Board concludes that bank holding company within the meaning of the Bank U.S. Bancorp's acquisition of Bank complies with the Holding Company Act (the "BHC Act"), has applied Nevada interstate banking statute, and that Board under section 3 of the BHC Act (12 U.S.C. § 1842) to approval of this proposal is not prohibited by the acquire Bank of America Nevada, Reno, Nevada Douglas Amendment. Approval of this proposal is ("Bank"), from BankAmerica Corporation, San Franconditioned upon U.S. Bancorp receiving all required cisco, California ("BankAmerica").1 state regulatory approvals. Notice of the application, affording interested persons an opportunity to submit comments, has been Convenience and Needs Considerations published (57 Federal Register 15,316 (1992)). The time for filing comments has expired, and the Board In acting on an application under section 3 of the BHC has considered the application and all comments re- Act, the Board must consider the convenience and ceived in light of the factors set forth in section 3(c) of the BHC Act.2 3. Asset data are as of March 31, 1992. 4. State deposit data are as of June 30, 1991. 5. 12 U.S.C. § 1842(d). 6. A bank holding company's home state is that state in which the 1. The Board has considered this application in light of a related operations of the bank holding company's banking subsidiaries were transaction in which Bank has applied to the Federal Deposit Insur- principally conducted on July 1, 1966, or the date on which the ance Corporation ("FDIC"), pursuant to the Bank Merger Act company became a bank holding company, whichever is later. (12 U.S.C. § 1828(c)), to acquire certain assets and assume certain 7. Under Nevada law, a "foreign depository institution" is defined liabilities of Security Pacific Bank Nevada, N.A., Las Vegas, Nevada as an institution whose home office is located in and whose operations ("SP Bank"). BankAmerica's acquisition of SP Bank was approved are principally conducted in another state. Nev. Rev. Stat. Ann. by the Board on March 23, 1992, as part of BankAmerica's merger § 666.255 (Michie 1992). The acquisition of or merger with a deposiwith Security Pacific Corporation. BankAmerica Corporation, 78 tory institution or holding company in Nevada by a foreign depository Federal Reserve Bulletin 338 (1992). institution or holding company is limited to the acquisition of those 2. The Board received comments filed after the close of the institutions operating on July 1, 1985. Nev. Rev. Stat. Ann. § 666.335 comment period. Under the Board's rules, the Board may in its (Michie 1992). Bank was organized on August 9, 1984, and was in discretion take into account the substance of such comments, and the operation on July 1, 1985. The Nevada Commissioner of Financial Board has considered these comments as part of the record in this Institutions has indicated preliminarily that this proposal meets the proposal. 12 C.F.R. 262.3(e). requirements of Nevada law. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

790 Federal Reserve Bulletin • October 1992 needs of the community to be served and take into Protestants also believe that U.S. Bancorp's commitment account the records of the relevant depository institu- to CRA performance in its home state of Oregon has not tions under the Community Reinvestment Act been matched by a similar commitment concerning its (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA re- out-of-state banking subsidiaries.11 In addition, Protesquires the federal financial supervisory agencies to tants have criticized Bank's CRA performance record in encourage financial institutions to help meet the credit Nevada in meeting the credit needs of low- and moderateneeds of the local communities in which they operate income individuals for mortgage loans, home improveconsistent with the safe and sound operation of such ment loans, consumer loans, low-cost banking services, institutions. To accomplish this end, the CRA requires government-insured loans such as FHA and VA prothe appropriate federal supervisory authority to "as- grams, mobile home financing, small business loans, and sess the institution's record of meeting the credit in providing branches for banking services.12 Protestants needs of its entire community, including low- and also believe that BankAmerica has not implemented in moderate-income neighborhoods, consistent with the Nevada CRA initiatives comparable to the initiatives in safe and sound operation of such institution", and to BankAmerica's home state of California or provided take that record into account in its evaluation of bank assistance for community redevelopment and affordable holding company applications. housing projects. The Board has received comments from several The Board has carefully reviewed the CRA perforcommunity organizations8 and the cities of North Las mance records of U.S. Bancorp, BankAmerica, and Vegas and Reno ("Protestants") that raise issues their subsidiary banks, as well as all comments reregarding the efforts by U.S. Bancorp and BankAmer- ceived, the responses to those comments, and all of ica to meet the credit needs of their entire communities the other relevant facts of record, in light of the CRA, in Nevada, including low- and moderate-income neigh- the Board's regulations, and the Statement of the borhoods. Specifically, Protestants contend that U.S. Federal Financial Supervisory Agencies Regarding the Bancorp has not: Community Reinvestment Act ("Agency CRA State- (1) specified the CRA program to be initiated at ment").13 The Agency CRA Statement provides guid- Bank; ance regarding the types of policies and procedures (2) met with Protestants and other community inter- that the supervisory agencies believe financial instituest groups; tions should have in place in order to fulfill their (3) made specific commitments to Protestants re- responsibilities under the CRA on an ongoing basis, garding CRA performance;9 or and the procedures that the supervisory agencies will (4) agreed to regular meetings with community use during the application process to review an instigroups to discuss community credit needs.10 tution's CRA compliance and performance. The 8. These groups include: (1) Southern Nevada Reinvestment and Affordable Housing Com- criticized by Protestants on the basis of 1990 data submitted under the mittee ("SNRAHC"), and Mobilehome Owners League of the Home Mortgage Disclosure Act ("HMDA"). The CRA requires the Silver State, Inc., both of Las Vegas, Nevada; and Board, in reviewing applications filed under the BHC Act, to review (2) Washoe Legal Services (on behalf of Fund Urban Northern the CRA records of performance of the insured depository institutions Nevada Development ("FUNND")), Nevada Hispanic Services, involved in the application. 12 U.S.C. §§ 2901, 2902(2); see also The and Truckee Meadows Fair Housing, all of Reno, Nevada. Mitsui Taiyo Kobe Bank, Limited, 76 Federal Reserve Bulletin 563 n.4 9. U.S. Bancorp has been asked by Protestants to commit to (1990). Lending companies that are not insured depository instituinitiating a number of activities in Nevada, including: tions, such as mortgage companies, are not subject to the require- (1) making available a loan officer in Las Vegas to provide technical ments of the CRA. In light of the other facts of record in this case, assistance and expertise to local non-profit groups supporting including the satisfactory records of performance of U.S. Bancorp's affordable housing; subsidiary banks — which are subject to the CRA — the Board (2) joining and providing financial support to the Nevada Commu- believes that the lending record of U.S. Bancorp Mortgage Company nity Reinvestment Corporation and a local affordable housing does not in this case indicate that Bank will fail to abide by its institution to be established in the fall of 1992; obligations under the CRA if it is acquired by U.S. Bancorp. (3) establishing lending goals based on the percentage of low- and 11. Protestants cite comments in the most recent examination for moderate-income individuals and minorities located in the service CRA performance by the Office of the Comptroller of the Currency area; ("OCC") for U.S. Bank of Washington, noting that this bank's ability (4) establishing additional review procedures for denials of loan to meet the credit needs of its delineated community was limited by applications from under-represented groups in the service area; the lack of offices operating within certain areas of its service (5) providing credit counseling and educational programs; community, and that the closing of the bank's Castle Rock branch (6) opening new branches and refraining from closing existing resulted in public criticism. The Board notes, however, that the branches in under-served areas; and OCC's examination found that this bank's delineation of its service (7) devising a methodology for calculating charitable grants. area is reasonable and does not exclude low- and moderate-income Protestants also have requested that the Board require, as a areas, and that the closing of the Castle Rock branch was justified. condition of approval of this application, that U.S. Bancorp make 12. Protestants maintain that these deficiencies in Bank's CRA commitments directly to community groups, including Protestants. performance are particularly evident in the western part of Las Vegas 10. The lending record in Nevada of U.S. Bancorp's nonbanking and the city of North Las Vegas. mortgage subsidiary, U.S. Bancorp Mortgage Company, has been 13. 54 Federal Register 13,742 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 791 Agency CRA Statement indicates that decisions by Responsibility Department, U.S. Bancorp monitors agencies to allow financial institutions to expand will the CRA programs of all subsidiary banks. In addition, be made pursuant to an analysis of the institution's U.S. Bancorp senior executives are apprised of the overall CRA performance and will be based on the CRA programs and progress of subsidiary banks actual record of performance of the institution.14 through a supervisory system that requires the CRA officers of each subsidiary bank to report to the Record of Performance under the CRA Corporate CRA Manager, a senior vice president. The Corporate CRA Manager heads the Community In- A. CRA Performance Examinations vestment Department and reports to U.S. Bancorp's Executive Vice President and Manager of the Commu- The federal banking agencies have indicated in the nity, Legal and Government Affairs Division. Agency CRA Statement that a CRA examination is an important, and often controlling, factor in the consid- C. Ascertainment and Marketing Efforts eration of an institution's CRA record.15 In this case, the Board notes that all of U.S. Bancorp's subsidiary Community credit needs are ascertained by U.S. Banbanks that have been examined for CRA performance corp subsidiaries through a multi-layered approach to have received "outstanding" or "satisfactory" ratings community outreach. CRA activity reports, which during the most recent examinations of their CRA record community contacts made by branch personnel performance.16 In particular, U.S. Bancorp's lead and identify unmet community credit needs, are comsubsidiary bank, U.S. National Bank of Oregon ("Or- piled by branch personnel and submitted to the Comegon Bank"), received an "outstanding" rating for munity Investment Department at the subsidiary bank. CRA performance from the OCC in January, 1992. These reports are then coded, entered into a database, Bank also received a satisfactory rating for CRA analyzed and summarized for presentation to bank performance in its most recent examination.17 management. U.S. Bancorp subsidiary banks use computer systems developed by the holding company B. Corporate Policies to gather demographic information and develop market research for the individual communities served by U.S. Bancorp has committed to implement at Bank the these banks. For example, in order to enable its corporate policies and programs currently in place at subsidiary banks to ascertain and address identified its subsidiary banks. In addition, U.S. Bancorp has community credit needs, U.S. Bancorp tracks the formalized a Community Reinvestment Action Plan geographic distribution of its subsidiary banks' credit for Bank ("CRA Plan"), that addresses issue specific applications, extensions, and denials, as well as the to its CRA performance in Nevada. use of other credit products within a community. U.S. Bancorp and its subsidiary banks have in place Representatives of U.S. Bancorp subsidiary banks the type of policies outlined in the Agency CRA participate regularly in community forums attended by Statement that contribute to an effective CRA pro- local leaders and civic and community groups to gram. For example, U.S. Bancorp has established a gather information on unmet community credit needs. CRA program to supervise and review the CRA pro- The findings from these community forums are pregrams of its subsidiary banks. Through its Community sented to the management and board of directors of Investment Department, in conjunction with its Social the subsidiary bank, and used to modify and develop credit products to address identified credit needs. U.S. Bancorp subsidiary banks also have several 14. 54 Federal Register at 13,745. marketing strategies to publicize their credit products 15. Id. 16. U.S. Bancorp's subsidiary banks have received the following and services to their delineated community. For exam- CRA ratings: U.S. Bank of California ("California Bank"), received ple, these banks use the Community Needs advertising an "outstanding" rating from the FDIC in July, 1991; U.S. Bank of program to specifically target small businesses, small Washington, N.A. ("Washington Bank"), received a "satisfactory" rating from the OCC in January, 1992; First National Bank of Spokane farmers and low- and moderate-income individuals ("Spokane Bank"), received a "satisfactory" rating from the OCC in through traditional media and through specifically tar- March, 1991; First National Bank of Oregon ("First National"), geted approaches developed in consultation with "foreceived a "satisfactory" rating from the OCC in March, 1991; and U.S. Bank of Southwest Washington ("Southwest Bank"), received a cus" groups. These focus groups, comprised primarily "satisfactory" rating from the FDIC in February, 1991. In addition, of low- and moderate-income individuals, minorities U.S. Bancorp's subsidiary thrift, U.S. Savings Bank of Washington, and small fanners, are conducted with the assistance of received a "satisfactory" rating from the Office of Thrift Supervision in March, 1990. a professional mediator to pre-test advertising concepts 17. Bank received this rating from the FDIC in 1988, prior to its and formulate strategies for marketing credit products acquisition by BankAmerica in 1989. SP Bank received a "satisfactoand services effectively to these groups. Other marketry" CRA performance rating from the OCC in May, 1989. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

792 Federal Reserve Bulletin • October 1992 ing techniques used by U.S. Bancorp subsidiaries in- available to small businesses and farmers through the clude direct sales calls, written sales materials, and U.S. Creditline Business Account.22 Other programs educational programs and seminars. have responded to the identified regional credit needs U.S. Bancorp has committed to implement these of low- and moderate-income individuals.23 ascertainment and marketing measures at Bank. In The CRA Plan provides that Bank will offer the addition, the CRA Plan for Bank provides that Bank HomePartners Program, the FNMA Community will ascertain community credit needs by participating Homebuyer's Program, the Opportunity Loan Proin community forums and joining the Nevada Commu- grams (commercial and consumer), and various govnity Reinvestment Corporation. Bank has committed ernment-sponsored or guaranteed loans, including to meet quarterly through 1993 with community SBA, VA, FMHA, and FHA loans. In addition, Bank groups, including with SNRAHC and FUNND, and to will provide several bank services and credit products continue regularly scheduled meetings thereafter on a designed to account for the diverse customer base in quarterly or other agreed-upon basis.18 The CRA Plan Nevada. These programs include: also provides that Bank will market its credit products (1) dual language automated teller machines and and services to low- and moderate-income and minor- customer service representatives; ity groups through various forms of electronic and (2) consumer banking and home-buying seminars;24 print media, including foreign-language publications. (3) low-cost checking and check-cashing services;25 (4) financing for manufactured housing; and D. Lending and Other Activities (5) small business and student loans. U.S. Bancorp's ascertainment efforts have resulted in Bank will also participate in consumer credit counselseveral programs that have assisted its subsidiary ing programs and institute a formal review procedure banks in meeting the credit needs of their communi- of mortgage loan applications that may be rejected.26 ties, including low- and moderate-income areas. In The CRA Plan provides that Bank will follow certain particular, the HomePartners Mortgage Loan Pro- procedures to implement the CRA programs used gram19 and the FNMA Community Homebuyer's Pro- throughout the U.S. Bancorp system, including hiring gram20 combine home ownership education with flex- a Community Investment Manager for Bank and trainible loan underwriting criteria, downpayment and ing employees on CRA policies and procedures. The closing costs assistance, and similar features to pro- CRA Plan further provides that Bank will share informote the availability of home ownership to low-in- mation with Nevada community groups relating to come individuals.21 successful affordable housing and community devel- The Opportunity Loan Program provides commer- opment programs at U.S. Bancorp affiliates, and that cial and consumer credit to low-income individuals and individuals without an established credit history at flexible terms to finance small businesses and consumer needs. In addition, revolving lines of credit are 22. These three programs are offered by Oregon Bank, Washington Bank and California Bank. 23. Among these programs is a loan program to provide financing for 18. Bank also has offered to meet with other community groups purchasers of mobile homes in northern California; the Kings County between its quarterly meetings with SNRAHC and FUNND. Rent-to-Own Program (allowing low- and moderate-income individu- 19. The HomePartners program is operated in conjunction with the als in Kings County, Washington, to accumulate a downpayment for U.S. Department of Housing and Urban Development to help low- home purchase through rent payments); and the Hood River Migrant and moderate-income individuals purchase homes by: Housing Program (a program developed with the State of Washington (1) providing downpayment assistance; to provide funding for rehabilitation of the extensive migrant housing (2) financing approximately half of the closing costs; in Hood River County, Oregon). (3) financing repairs and energy efficiency improvements; and 24. Bank proposes to work with community groups to offer basic (4) permitting applicants to establish credit histories through various banking seminars on a regular basis, and to work with other banks to means, including evidence of utility payments. offer quarterly seminars on homebuying for first-time and low-income 20. This program promotes home ownership by low- and moderate- purchasers. income individuals by: 25. Bank will offer the following checking accounts and check- (1) permitting low downpayments; cashing services: (2) waiving the traditional requirement that the purchaser have a (1) "U-Check Account," which is offered for a monthly fee of $3.00, two-month cash reserve on hand at closing; requires only a $1 minimum balance, and permits unlimited usage of (3) permitting borrowers to dedicate up to 33 percent of their income Bank's automated teller machines; to mortgage payments (as opposed to the traditional 28 percent); (2) free checking accounts for nonprofit organizations; and (3) free checking accounts for individuals 62 years of age or older; (4) permitting applicants to establish credit histories through various and means, including evidence of utility payments. (4) free check-cashing for customers and a $1 fee for noncustomers 21. Both programs are offered by Oregon Bank and Washington cashing government assistance checks. Bank, and the FNMA Community Homebuyer's Program is also 26. Under this procedure, any downpayment assistance loan denied offered by California Bank. by an underwriter will be subject to a three-tiered review. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 793 Bank will make corporate grants to entities that pro- the Board expects U.S. Bancorp, to fulfill its CRA mote affordable housing in Bank's community.27 responsibilities in Nevada. On the basis of all the facts of record, including E. Conclusion Regarding Convenience and information provided by Protestants and the CRA per- Needs Factors formance examinations by the banks' primary regulators, the Board concludes that convenience and needs The Board has carefully considered the entire record considerations, including the CRA performance recof this application, including the comments filed in this ords of the relevant banks, are consistent with approval case, in reviewing the convenience and needs factors of this application. The Board expects U.S. Bancorp to under the BHC Act. In this case, Protestants have implement fully at Bank the CRA initiatives and comraised concerns principally regarding Bank's current mitments discussed in this Order and contained in its record of CRA performance and U.S. Bancorp's ded- application. U.S. Bancorp's progress in implementing ication to meeting the credit needs of low- and mod- these initiatives and commitments will be monitored by erate-income neighborhoods in Nevada. the Federal Reserve Bank of San Francisco and will be The Board recognizes that the record compiled in assessed in connection with any future applications to this application points to areas for improvement in the expand its deposit-taking facilities.29 CRA performance of Bank, especially in housingrelated and consumer lending. In this regard, the Other Considerations Board notes that Bank has had several owners within the last few years and that BankAmerica had a rela- U.S. Bancorp does not operate a banking subsidiary in tively short period of time to strengthen the CRA any banking market in Nevada. Based on all of the performance of Bank before committing to divest facts of record in this case, the Board concludes that Bank as part of another transaction.28 The steps U.S. consummation of this proposal would not have a Bancorp has committed to take in this proposal to significantly adverse effect on competition or the conimprove Bank's CRA performance record are there- centration of banking resources in any relevant bankfore an important aspect of the Board's consideration ing market. The Board notes that U.S. Bancorp has of the convenience and needs factor. recently raised capital to finance this acquisition and, Many of these initiatives are modeled on programs upon consummation of this proposal, U.S. Bancorp's currently in place at U.S. Bancorp's subsidiary banks. capital ratio will be well above the regulatory mini- Protestants have noted various strengths in the CRA mums. Based on these and other facts of record, the performance record of Oregon Bank, and the Board Board concludes that the financial and managerial believes that the "outstanding" rating for CRA per- resources and future prospects of U.S. Bancorp, its formance afforded Oregon Bank reflects U.S. Ban- subsidiary banks, and Bank, and other factors required to be considered by the Board under the BHC corp's willingness to address promptly areas where Act also are consistent with approval of this proposal. improvements can be made to help meet community credit needs. U.S. Bancorp has committed to imple- Based on the foregoing and other facts of record, the ment at Bank the corporate policies and many of the Board has determined that the application should be, specific programs that are currently in place at Oregon and hereby is, approved. The Board's approval of this Bank, and to undertake initiatives in Nevada specifi- transaction is specifically conditioned upon complically designed to ascertain the credit needs of Nevada communities and to market products and services to low- and moderate-income areas in Nevada. 29. Protestants have requested that the Board hold a public hearing or meeting on this application. The Board is not required under section The CRA requires insured depository institutions in 3 of the BHC Act to hold a public meeting or hearing unless the a multi-state banking organization to meet their CRA primary supervisor for the bank to be acquired does not approve the responsibilities in every state in which the organiza- proposal. In this case, the primary supervisor for Bank has not objected to this proposal. tion operates an insured depository institution, not just Under its rules, the Board may, in its discretion, hold a public in the home state of the lead bank subsidiary. Accord- hearing or meeting on an application to clarify factual issues related to ingly, U.S. Bancorp has indicated that it intends, and the application and to provide an opportunity for testimony, if appropriate. 12 U.S.C. §§ 262.3(e) and 262.25(d). The Board has carefully considered these requests. Protestants have submitted substantial written comments that have been considered by the Board. In the Board's view, interested parties have had an ample opportunity to 27. Bank has committed to make initial corporate grants to Neigh- present written submissions, and in light of these submissions and all borhood Housing Services of North Las Vegas, and Affordable the facts of record, the Board has determined that a public meeting or Housing Shared Resource Program, an affordable housing program to hearing is not necessary to clarify the factual record in these applicabe formed in Reno. tions, nor is it otherwise warranted in this case. Accordingly, the 28. See BankAmerica Corporation, 78 Federal Reserve Bulletin 299 request by Protestants for a public meeting or hearing on this (1992). application is hereby denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

794 Federal Reserve Bulletin • October 1992 ance with the commitments made by U.S. Bancorp in tive date of this Order, unless such period is extended connection with this application. All of the commit- for good cause by the Federal Reserve Bank of San ments and conditions relied upon by the Board in Francisco, pursuant to delegated authority. reaching its decision are commitments imposed in By order of the Board of Governors, effective writing by the Board in connection with its findings August 10, 1992. and decision and may be enforced in proceedings under applicable laws. This approval is also condi- Voting for this action: Chairman Greenspan and Governors tioned upon U.S. Bancorp receiving all necessary Angell, Kelley, La Ware, Lindsey, and Phillips. Absent and Federal and state approvals. The transaction approved not voting: Governor Mullins. in this Order shall not be consummated before the thirtieth calendar day following the effective date of JENNIFER J. JOHNSON this Order, or later than three months after the effec- Associate Secretary of the Board ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991 By the Director of the Division of Banking Supervision and Regulation and the General Counsel of the Board 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. Surviving Approval Bank Holding Company Acquired Thrift Bank(s) Date ANB Corporation, American National Bank Muncie Federal August 25, 1992 Muncie, Indiana and Trust Company of Savings Bank, Muncie, Muncie, Indiana Muncie, Indiana Belmont Bancorp, Belmont National Bank, Diamond Savings and August 7, 1992 Bridgeport, Ohio St. Clairsville, Ohio Loan Company, Findlay, Ohio CNB, Inc., Community National Anchor Savings August 26, 1992 Lake City, Florida Bank, Bank, FSB, Lake City, Florida Hewlett, New York The Colonial BancGroup, Inc. Colonial Bank, Home Federal August 7, 1992 Montgomery, Alabama Montgomery, Alabama Savings Bank, LaFayette, Alabama First Banks, Inc., First Bank, A Savings First Bank of Illinois, August 12, 1992 Creve Coeur, Missouri Bank, O'Fallon, Illinois Clayton, Missouri Great Lakes Financial Republic Savings Bank, Great Lakes Financial August 5, 1992 Resources, Inc. Employee F.S.B., Resources, Inc., Stock Ownership Plan, Matte son, Illinois Homewood, Illinois Homewood, Illinois Puget Sound Bancorp, Olympic Savings Bank, Puget Sound Savings July 24, 1992 Tacoma, Washington Seattle, Washington Bank, Seattle, Washington SouthTrust Corporation, Citizens Savings Bank, SouthTrust Bank of August 27, 1992 Birmingham, Alabama Rocky Mount, North Raleigh, N.A., Carolina Raleigh, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 795 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) ^ Wachovia Corporation, Southeast Switch, Inc., August 11, 1992 Winston-Salem, North Carolina Maitland, Florida 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 Broadmoor Capital Corporation, The Bank at Broadmoor, Kansas City August 13, 1992 Colorado Springs, Colorado Colorado Springs, Colorado Carolina First BancShares, Inc., Cabarrus Bank of North Richmond August 19, 1992 Lincolnton, North Carolina Carolina, Inc., Concord, North Carolina Central Financial Corporation, Central Kansas Kansas City August 7, 1992 Hutchinson, Kansas Bankshares, Inc., Hutchinson, Kansas CS Bancshares, Inc., Ray County Bank, Kansas City August 7, 1992 Chillicothe, Missouri Richmond, Missouri First Community Bancshares, Inc., Bargersville Federal Chicago July 24, 1992 Bargersville, Indiana Savings Bank, Bargersville, Indiana First Fidelity Bancorp, Inc., City Bancorp of Norman, Kansas City August 7, 1992 Oklahoma City, Oklahoma Inc., Norman, Oklahoma First Financial Corporation, First Citizens of Paris, Inc., Chicago August 4, 1992 Terre Haute, Indiana Paris, Illinois First State Bancorp of Princeton, Security Chicago Chicago August 24, 1992 Illinois, Inc., Corporation, Princeton, Illinois Chicago, Illinois Ashton Bank and Trust Company, Ashton, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

796 Federal Reserve Bulletin • October 1992 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Fourth Financial Corporation, KNB Bancshares, Inc., Kansas City July 31, 1992 Wichita, Kansas Prairie Village, Kansas Mission Hills Bancshares, Inc., Mission Woods, Kansas F.S.B., Inc., First Formoso, Inc., Kansas City August 18, 1992 Superior, Nebraska Mankato, Kansas Marquette Bancshares, Inc., Monticello Bancshares, Minneapolis August 20, 1992 Minneapolis, Minnesota Inc., Monticello, Minnesota Hutchinson Bancorp, Inc., Minneapolis, Minnesota Lakeville Financial Services, Inc., Minneapolis, Minnesota McVille Financial Services, Inc. McVille State Bank, Minneapolis July 24, 1992 McVille, North Dakota McVille, North Dakota Mibank Corporation, Bank of Ypsilanti, Chicago July 31, 1992 Ypsilanti, Michigan Ypsilanti, Michigan NGLC, Inc., Peoples National Bank of Atlanta August 19, 1992 Miami, Florida Commerce, Miami, Florida P.N.B. Financial Corporation, Helena Bancshares, Inc., Kansas City August 26, 1992 Kingfisher, Oklahoma Helena, Oklahoma Rockwood Bancshares, Inc., Rockwood Bank, St. Louis August 4, 1992 Eureka, Missouri Eureka, Missouri Roscoe Financial Corporation, The Roscoe State Bank, Dallas July 24, 1992 Roscoe, Texas Roscoe, Texas Roscoe (Delaware), Inc., Wilmington, Delaware Roscoe (Delaware), Inc., The Roscoe State Bank, Dallas July 24, 1992 Wilmington, Delaware Roscoe, Texas Stockgrowers State Banc Stockgrowers State Bank, Kansas City August 11, 1992 Corporation, Ashland, Kansas Ashland, Kansas Summit Bancorp, Inc., The First National Bank Philadelphia July 30, 1992 Johnstown, Pennsylvania of Lilly, Lilly, Pennsylvania Sun Banc, Corp., Sun Banc Delaware Dallas August 17, 1992 Sunray, Texas Corp., Dover, Delaware Sunray State Bank, Sunray, Texas Union Planters Corporation, Bank of Commerce, St. Louis August 11, 1992 Memphis, Tennessee Woodbury, Tennessee USBANCORP, Inc., Community Bancorp, Inc., Philadelphia July 30, 1992 Johnstown, Pennsylvania Monroe ville, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 797 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Western Washington Bancorp, Washington State Bank, San Francisco August 20, 1992 Federal Way, Washington Federal Way, Washington Winton Jones Limited Anchor Bancorp, Inc., Minneapolis July 24, 1992 Partnership, Wayzata, Minnesota Wayzata, Minnesota Section 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date The Bank of New York limited partnership New York August 10, 1992 Company, Inc., interest in New York New York, New York Equity Fund 1992 Limited Partnership Brooke Holdings, Inc., First State Management Kansas City July 30, 1992 Jewell, Kansas Corporation, d/b/a First Insurance Service, Salina, Kansas Cardinal Bancshares, Inc., First Federal Savings Cleveland August 20, 1992 Lexington, Kentucky Bank, Pineville, Kentucky Central Bancshares, Inc., Emmett Insurance Kansas City August 12, 1992 Cambridge, Nebraska Agency, Arapahoe, Nebraska First Union Corporation, Southeast Switch, Inc., Richmond August 10, 1992 Charlotte, North Carolina Maitland, Florida PNC Financial Corp, Sunrise Bancorp, Inc., Cleveland July 29, 1992 Pittsburgh, Pennsylvania Fort Mitchell, Kentucky Sunrise Bank for Savings, F.S.B., Fort Mitchell, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

798 Federal Reserve Bulletin • October 1992 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 BancFirst, The First State Bank, Kansas City July 28, 1992 Oklahoma City, Oklahoma Stroud, Oklahoma City Center Bank of Colorado, Security Bank of Kansas City August 5, 1992 Aurora, Colorado Colorado, Aurora, Colorado Fleet Bank of New York, Fleet Bank of New York, New York August 21, 1992 Albany, New York N.A., Buffalo, New York PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits In re Subpoena Served on the Board of Governors, against the Federal Reserve Banks in which the Board Nos. 91-5427, 91-5428 (D.C. Cir., filed December of Governors is not named a party. 27, 1991). Appeal of order of district court, dated December 3, 1991, requiring the Board and the Castro v. Board of Governors, No. 92-1764 (D. Dis- Office of the Comptroller of the Currency to produce confidential examination material to a private lititrict of Columbia, filed July 29, 1992). Freedom of gant. On June 26, 1992, the court of appeals affirmed Information Act case. the district court order in part, but held that the bank Board of Governors v. bin Mahfouz, No. 92-CIV-5096 examination privilege was not waived by the agen- (S.D. New York, filed July 8, 1992). Action to freeze cies' provision of examination materials to the exassets of individual pending administrative adjudiamined institution, and remanded for further considcation of civil money penalty assessment by the eration of the privilege issue. Board. On July 8,1992, the court issued a temporary restraining order restraining the transfer or disposi- Greenberg v. Board of Governors, No. 91-4200 (2d tion of the individual's assets. On July 23, the court Cir., filed December 4, 1991). Petition for review of denied the individual's motion for expedited discov- orders of prohibition issued by the Board on Octoery on the ground that, as a fugitive from a criminal ber 28, 1991. The Board's orders were affirmed on indictment, he is disentitled from seeking relief from June 19, 1992. the court. First Interstate BancSystem of Montana, Inc. v. Zemel v. Board of Governors, No. 92-1057 (D. District Board of Governors, No. 91-1525 (D.C. Cir., filed of Columbia, filed May 4, 1992). Age Discrimination November 1, 1991). Petition for review of Board's in Employment Act case. order denying on Community Reinvestment Act Fields v. Board of Governors, No. 3:92CV7118 (N.D. grounds the petitioner's application under section 3 Ohio, filed March 3, 1992). Federal Tort Claims Act of the Bank Holding Company Act to merge with complaint alleging misrepresentation during application Commerce BancShares of Wyoming, Inc. On Auprocess. Motion to dismiss granted August 10, 1992. gust 19, 1992, the court granted petitioner First State of Idaho, Department of Finance v. Board of Interstate's motion for a stay of the proceedings. Governors, No. 92-70107 (9th Cir., filed February 24, Board of Governors v. KemalShoaib, No. CV 91-5152 1992). Petition for review of Board order returning (C.D. California, filed September 24, 1991). Action without action a bank holding company application to to freeze assets of individual pending administrative relocate its subsidiary bank from Washington to adjudication of civil money penalty assessment by Idaho. The Board's brief was filed on June 29, 1992. the Board. On October 15, 1991, the court issued a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 799 preliminary injunction restraining the transfer or Claudia Zeisberger disposition of the individual's assets. New York, New York Board of Governors v. Ghaith R. Pharaon, No. The Federal Reserve Board announced on August 25, 91-CIV-6250 (S.D. New York, filed September 17, 1992, the issuance of an Order of Prohibition against 1991). Action to freeze assets of individual pending Claudia Zeisberger, an institution-affiliated party of administrative adjudication of civil money penalty the Dresdner Bank, New York, New York. assessment by the Board. On September 17, 1991, the court issued an order temporarily restraining the transfer or disposition of the individual's assets. WRITTEN AGREEMENTS APPROVED BY FEDERAL In re Smouha, No. 91-B-13569 (Bkr. S.D. New York, RESERVE BANKS filed August 2, 1991). Ancillary proceeding under the U.S. Bankruptcy Code brought by provisional American Bank & Trust of Polk County liquidators of BCCI Holdings (Luxembourg) S.A. Lake Wales, Florida and affiliated companies. On August 15, 1991, the bankruptcy court issued a temporary restraining The Federal Reserve Board announced on August 14, order staying certain judicial and administrative 1992, the execution of a Written Agreement among the actions, which has been continued by consent. Federal Reserve Bank of Atlanta, the State Comptrol- Fields v. Board of Governors, No. 3:91CV069 (N.D. ler and Banking Commissioner of the State of Florida, Ohio, filed February 5, 1991). Appeal of denial of and the American Bank & Trust of Polk County, Lake request for information under the Freedom of Infor- Wales, Florida. mation Act. The Board's motion for summary judgment was granted in part and its motion to dismiss Baltimore Bancorp was denied on June 23, 1992. Baltimore, Maryland MCorp v. Board of Governors, No. CA3-88-2693 (N.D. Texas, filed October 10, 1988). Application The Federal Reserve Board announced on August 5, for injunction to set aside temporary cease and 1992, the execution of a Written Agreement among the desist orders. The case is pending. Federal Reserve Bank of Richmond, the Bank Commissioner of the State of Maryland, and Baltimore Bancorp, Baltimore, Maryland. FINAL ENFORCEMENT ORDERS ISSUED BY THE First American Bank BOARD OF GOVERNORS Rosemead, California The Buffalo Bank Eleanor, West Virginia The Federal Reserve Board announced on August 5, 1992, the execution of a Written Agreement between The Federal Reserve Board announced on August 14, the Federal Reserve Bank of San Francisco and the 1992, the issuance of a Cease and Desist Order against First American Bank, Rosemead, California. The Buffalo Bank, Eleanor, West Virginia. Home Port Bancorp, Inc. Marshall County Bankshares, Inc. Nantucket, Massachusetts Beattie, Kansas The Federal Reserve Board announced on August 6, The Federal Reserve Board announced on August 26, 1992, the execution of a Written Agreement between 1992, the issuance of a Cease and Desist Order against the Federal Reserve Bank of Boston and Home Port Marshall County Bankshares, Inc., Beattie, Kansas, Bancorp, Inc., Nantucket, Massachusetts. and Edwin L. Nutt, an institution-affiliated party of Marshall County Bankshares, Inc. UST Corp. Boston, Massachusetts Thirty Second Avenue Corporation Wheat Ridge, Colorado The Federal Reserve Board announced on August 6, The Federal Reserve Board announced on August 25, 1992, the execution of a Written Agreement among the 1992, the issuance of a Cease and Desist Order against Federal Reserve Bank of Boston, the Office of the Thirty Second Avenue Corporation, Wheat Ridge, Commissioner of Banks of the Commonwealth of Mas- Colorado. sachusetts and UST Corp., Boston, Massachusetts. 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 A3 Guide to Tabular Presentation A20 All reporting banks A22 Branches and agencies of foreign banks Domestic Financial Statistics MONEY STOCK AND BANK CREDIT FINANCIAL MARKETS A4 Reserves, money stock, liquid assets, and debt A23 Commercial paper and bankers dollar measures acceptances outstanding A5 Reserves of depository institutions, Reserve Bank A23 Prime rate charged by banks on short-term credit business loans A6 Reserves and borrowings—Depository A24 Interest rates—money and capital markets institutions A25 Stock market—Selected statistics A7 Selected borrowings in immediately available A26 Selected financial institutions—Selected assets funds—Large member banks and liabilities POLICY INSTRUMENTS FEDERAL FINANCE A8 Federal Reserve Bank interest rates A26 Federal fiscal and financing operations A9 Reserve requirements of depository institutions A27 U.S. budget receipts and outlays A10 Federal Reserve open market transactions A28 Federal debt subject to statutory limitation A28 Gross public debt of U.S. Treasury—Types and ownership FEDERAL RESERVE BANKS A29 U.S. government securities dealers—Transactions All Condition and Federal Reserve note statements A30 U.S. government securities dealers—Positions A12 Maturity distribution of loan and security and financing holdings A31 Federal and federally sponsored credit agencies—Debt outstanding MONETARY AND CREDIT AGGREGATES A13 Aggregate reserves of depository institutions SECURITIES MARKETS AND and monetary base CORPORATE FINANCE A14 Money stock, liquid assets, and debt measures A16 Bank debits and deposit turnover A32 New security issues—State and local A17 Loans and securities—All commercial banks governments and corporations A33 Open-end investment companies—Net sales and asset position COMMERCIAL BANKING INSTITUTIONS A33 Corporate profits and their distribution A33 Total nonfarm business expenditures on new A18 Major nondeposit funds plant and equipment A19 Assets and liabilities, last-Wednesday-of-month A34 Domestic finance companies—Assets and series liabilities and business credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • October 1992 Domestic Financial Statistics—Continued A55 Foreign branches of U.S. banks—Balance sheet data A57 Selected U.S. liabilities to foreign official REAL ESTATE institutions A35 Mortgage markets A36 Mortgage debt outstanding REPORTED BY BANKS IN THE UNITED STATES CONSUMER INSTALLMENT CREDIT A57 Liabilities to and claims on foreigners A3 7 Total outstanding and net change A58 Liabilities to foreigners A3 8 Terms A60 Banks' own claims on foreigners A61 Banks' own and domestic customers' claims on foreigners FLOW OF FUNDS A61 Banks' own claims on unaffiliated foreigners A39 Funds raised in U.S. credit markets A62 Claims on foreign countries—Combined A41 Direct and indirect sources of funds to credit domestic offices and foreign branches markets A42 Summary of credit market debt outstanding A43 Summary of credit market claims, by holder REPORTED BYNONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES Domestic Nonfinancial Statistics A63 Liabilities to unaffiliated foreigners A64 Claims on unaffiliated foreigners SELECTED MEASURES A44 Nonfinancial business activity—Selected SECURITIES HOLDINGS AND TRANSACTIONS measures A65 Foreign transactions in securities A45 Labor force, employment, and unemployment A66 Marketable U.S. Treasury bonds and A46 Output, capacity, and capacity utilization notes—Foreign transactions A47 Industrial production—Indexes and gross value A49 Housing and construction A50 Consumer and producer prices INTEREST AND EXCHANGE RATES A51 Gross domestic product and income A52 Personal income and saving A67 Discount rates of foreign central banks A67 Foreign short-term interest rates A68 Foreign exchange rates International Statistics A69 Guide to Statistical Releases and SUMMARY STATISTICS Special Tables A53 U.S. international transactions—Summary A54 U.S. foreign trade SPECIAL TABLE A54 U.S. reserve assets A54 Foreign official assets held at Federal Reserve A70 Pro forma balance sheet and income statements for Banks priced service operations, June 30, 1992 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected GNMA Government National Mortgage Association e Estimated GDP Gross domestic product n.a. Not available HUD Department of Housing and Urban n.e.c. Not elsewhere classified Development P Preliminary IMF International Monetary Fund r Revised (Notation appears on column heading IO Interest only when about half of the figures in that column IPCs Individuals, partnerships, and corporations are changed.) IRA Individual retirement account * Amounts insignificant in terms of the last decimal MMDA Money market deposit account place shown in the table (for example, less than NOW Negotiable order of withdrawal 500,000 when the smallest unit given is millions) OCD Other checkable deposit 0 Calculated to be zero OPEC Organization of Petroleum Exporting Countries Cell not applicable OTS Office of Thrift Supervision ATS Automatic transfer service PO Principal only CD Certificate of deposit REIT Real estate investment trust CMO Collateralized mortgage obligation REMIC Real estate mortgage investment conduit FFB Federal Financing Bank RP Repurchase agreement FHA Federal Housing Administration RTC Resolution Trust Corporation FHLBB Federal Home Loan Bank Board SAIF Savings Association Insurance Fund FHLMC Federal Home Loan Mortgage Corporation SCO Securitized credit obligation FmHA Farmers Home Administration SDR Special drawing right FNMA Federal National Mortgage Association SIC Standard Industrial Classification FSLIC Federal Savings and Loan Insurance Corporation SMSA Standard metropolitan statistical area G-7 Group of Seven VA Veterans Administration G-10 Group of Ten GENERAL INFORMATION In many of the tables, components do not sum to totals because include not fully guaranteed issues) as well as direct obligaof rounding. tions of the Treasury. "State and local government" also in- Minus signs are used to indicate (1) a decrease, (2) a negative cludes municipalities, special districts, and other political figure, or (3) an outflow. subdivisions. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Monthly averages of Weekly averages of daily figures for week ending daily figures Factor 1992 1992 May June July June 17 June 24 July 1 July 8 July 15 July 22 July 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 306,356 310,%lr 313,136 309,859 312,505 311,733 314,324 312,811 313,813 311,824 U.S. government securities 2 Bought outright—System account 267,310 274,177 274,511 274,103 274,553 274,905 273,040 275,054 275,186 274,415 3 Held under repurchase agreements ... 2,380 706 772 0 1,666 0 2,358 0 1,061 0 Federal agency obligations 4 Bought outright 5,879 5,717 5,677 5,719 5,719 5,710 5,710 5,701 5,683 5,625 5 Held under repurchase agreements ... 102 33 7 0 26 0 4 0 27 0 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 57 75 87 21 56 224 312 24 9 15 8 Seasonal credit 99 149 202 131 168 191 183 190 208 222 9 Extended credit 0 0 0 0 0 1 0 0 0 0 10 Float 356 387r 517 310 395 356 1,506 419 286 389 11 Other Federal Reserve assets 30,174 29,715r 31,362 29,576 29,922 30,346 31,212 31,423 31,352 31,157 12 Gold stock 11,057 11,058 11,060 11,057 11,059 11,060 11,060 11,060 11,060 11,059 13 Special drawing rights certificate account . 10,018 10,018 10,018 10,018 10,018 10,018 10,018 10,018 10,018 10,018 14 Treasury currency outstanding 21,191 21,241 21,302 21,238 21,252 21,266 21,280 21,294 21,308 21,322 ABSORBING RESERVE FUNDS 15 Currency in circulation 308,110 310,194 313,769 310,452 310,125 310,281 313,299 314,473 313,942 313,487 16 Treasury cash holdings 692 639 594 627 619 611 606 602 586 583 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,108 6,904 5,666 6,657 8,136 8,434 6,133 5,245 5,231 5,562 18 Foreign 212 216 236 228 200 207 253 209 264 226 19 Service-related balances and adjustments 5,249 5,282 5,534 5,299 5,311 5,330 5,399 5,404 5,933 5,446 20 Other 261 259 233 265 230 250 229 236 233 236 21 Other Federal Reserve liabilities and capital 8,227 8,361 8,493 8,226 8,209 8,482 9,218 8,289 8,185 8,178 22 Reserve balances with Federal Reserve Banks 20,764 21,423r 20,991 20,418 22,005 20,482 21,545 20,723 21,824 20,505 End-of-month figures Wednesday figures 1992 1992 May June July June 17 June 24 July 1 July 8 July 15 July 22 July 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 306,376 314,761 313,931 309,879 315,807 312,797 318,799 314,408 316,940 311,903 U.S. government securities Bought outright—System account ... 270,808 276,883 275,969 274,186 276,743 276,528 272,464 276,422 277,525 274,554 Held under repurchase agreements .. 244 0 0 0 2,453 0 6,950 0 1,840 0 Federal agency obligations Bought outright 5,750 5,710 5,625 5,719 5,719 5,710 5,710 5,690 5,675 5,625 Held under repurchase agreements .. 0 0 0 0 61 0 31 0 63 0 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions Adjustment credit 22 1,173 29 88 58 135 1,704 12 17 14 Seasonal credit 128 185 227 143 179 186 176 198 214 229 Extended credit 0 1 0 0 0 0 0 0 0 0 10 Float 376 -166r 305 65 469 -760 435 764 486 128 11 Other Federal Reserve assets 29,048 30,975 31,776 29,678 30,125 30,997 31,327 31,322 31,124 31,351 12 Gold stock 11,057 11,060 11,059 11,060 11,060 11,060 11,059 11,060 11,059 11,059 13 Special drawing rights certificate account 10,018 10,018 10,018 10,018 10,018 10,018 10,018 10,018 10,018 10,018 14 Treasury currency outstanding 21,210 21,257 21,286 21,233 21,245 21,257 21,263 21,268 21,274 21,280 ABSORBING RESERVE FUNDS 15 Currency in circulation 309,719 310,935 314,338 310,472 309,984 311,530 314,350 314,441 313,704 313,852 16 Treasury cash holdings 682 612 578 620 612 606 605 586 584 578 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,583 13,630 6,923 9,858 7,649 7,684 7,3% 4,708 5,041 5,365 18 Foreign 217 219 264 447 213 204 202 207 374 206 19 Service-related balances and adjustments 5,249 5,330" 5,473 5,299 5,311 5,330 5,399 5,404 5,933 5,446 20 Other 224 249 220 263 218 244 219 244 218 219 21 Other Federal Reserve liabilities and capital 8,716 9,415 8,846 8,025 8,034 9,089 8,101 8,059 8,003 8,047 22 Reserve balances with Federal Reserve Banks3 18,270 16,705r 19,651 17,206 26,108 20,443 24,865 23,105 25,439 20,546 1. For amounts of cash held as reserves, see table 1.12. scheduled to be bought back under matched sale-purchase transactions. 2. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • October 1992 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1989 1990 1991 1992 Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July 1 Reserve balances with Reserve Banks2 35,436 30,237 26,659 25,416 24,918 28,057 22,655 21,071 21,223r 21,203 2 Total vault cash3 29,828 31,786 32,513 34,135 34,218 31,647 31,071 31,197 31,729 32,145 3 Applied vault cash , 27,374 28,884 28,872 30,396 30,320 28,225 27,800 27,754 28,273 28,617 4 Surplus vault cash5 2,454 2,903 3,641 3,739 3,897 3,422 3,271 3,442 3,456 3,528 5 Total reserves 62,810 59,120 55,532 55,812 55,238 56,282 50,455 48,825 49,496 49,820 6 Required reserves 61,887 57,456 54,553 54,809 54,174 55,254 49,318 47,825 48,584 48,857 7 Excess reserve balances at Reserve Banks ... 923 1,664 979 1,003 1,065 1,028 1,137 1,000 913r 963 8 Total borrowings at Reserve Banks8 265 326 192 233 77 91 90 155 229 284 9 Seasonal borrowings 84 76 38 17 22 32 47 98 149 203 10 Extended credit9 20 23 1 1 2 2 2 0 0 0 Biweekly averages of daily figures for weeks ending 1992 Apr. 1 Apr. 15 Apr. 29 May 13 May 27 June 10 June 24 July 8r July 22 Aug. 5 1 Reserve balances with Reserve Banks2 27,578 22,885 22,137 21,746 20,356 21,374 21,205 21,014 21,277 21,255 2 Total vault cash3 32,414 30,456 31,643 30,346 32,069 30,909 31,946 32,589 32,233 31,613 3 Applied vault cash 28,826 27,353 28,225 27,091 28,418 27,591 28,487 28,910 28,779 28,106 4 Surplus vault cash 3,588 3,103 3,418 3,256 3,651 3,318 3,459 3,679 3,455 3,507 5 Total reserves6 56,403 50,238 50,362 48,836 48,774 48,965 49,692 49,924 50,056 49,361 6 Required reserves 54,788 49,174 49,150 48,209 47,277 48,492 48,521 48,884 49,106 48,447 7 Excess reserve balances at Reserve Banks 1,616 1,065 1,212 628 1,497 474 1,171 1,041 950 914 8 Total borrowings at Reserve Banks8 117 56 118 153 157 152 188 455 215 241 9 Seasonal borrowings 38 37 57 75 113 125 150 187 199 222 10 Extended credit9 1 1 4 0 0 0 0 1 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical satisfy current reserve requirements. release. For ordering address, see inside 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 depository institutions subject to reserve 7. Total reserves (line 5) less required reserves (line 6). requirements. Dates refer to the maintenance periods during which the vault cash 8. Also includes adjustment credit. can be used to satisfy reserve requirements. Under contemporaneous reserve 9. Consists of borrowing at the discount window under the terms and condirequirements, maintenance periods end thirty days after the lagged computation tions established for the extended credit program to help depository institutions periods during which the balances are held. deal with sustained liquidity pressures. Because there is not the same need to 4. All vault cash held during the lagged computation period by "bound" repay such borrowing promptly as there is with traditional short-term adjustment institutions (that is, those whose required reserves exceed their vault cash) plus credit, the money market impact of extended credit is similar to that of the amount of vault cash applied during the maintenance period by "nonbound" nonborrowed reserves. institutions (that is, those whose vault cash exceeds their required reserves) to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A7 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Millions of dollars, averages of daily figures 1992, week ending Monday SSoouurrccee aanndd mmaattuurriittyy May 4 May 11 May 18 May 25 June 1 June 8 June 15 June 22 June 29 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 77,493r 75,709r 76,762r 73,444r 78,200 83,382 81,370 75,529 69,203 2 For all other maturities 16,836r 16,794r 16,661r 17,020r 16,650 1166,,771188 1166,,883377 1166,,775533 16,565 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 21,470 17,550 16,367 18,994 19,084 16,666 18,482 17,430 17,993 4 For all other maturities 20,338 21,792 21,629 21,853 20,606 19,451 19,159 18,682 18,944 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 9,202r 8,897r 9,369r 8,482r 9,065 10,372 10,120 10,607 10,042 6 For all other maturities 17,546r 18,nc 17,151r 17,794r 17,176 1166,,444488 1177,,115500 1166,,776644 14,628 All other customers 7 For one day or under continuing contract 23,624 23,402 23,112 23,685 23,623 22,960 23,674 23,811 24,559 8 For all other maturities 12,515 12,791 12,9% 13,212 12,714 12,116 12,008 12,655 13,030 MEMO: Federal funds loans and resale agreements in immediately available funds in maturities of one day or under continuing contract 9 To commercial banks in the United States 45,909 42,793 49,154 43,918 49,117 48,667 46,630 44,892 44,267 10 To all other specified customers2 24,798 21,236 17,655 17,239 16,514 18,902 22,520 21,146 18,872 1. Banks with assets of $4 billion or more as of Dec. 31, 1988. 2. Brokers and nonbank dealers in securities, other depository institutions, Data in this table also appear in the Board's H.5 (507) weekly statistical release. foreign banks and official institutions, and U.S. government agencies. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 DomesticN onfinancial Statistics • October 1992 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 8/2 O 8 n /9 2 EfFective date Previous rate 8/2 O 8 n /9 2 Effective date Previous rate 8/2 O 8 n /9 2 Effective date Previous rate Boston 3 7/2/92 3.5 3.30 8/20/92 3.30 3.80 8/20/92 3.80 New York 7/2/92 8/20/92 8/20/92 Philadelphia 7/2/92 8/20/92 8/20/92 Cleveland 7/6/92 8/20/92 8/20/92 Richmond 7/2/92 8/20/92 8/20/92 Atlanta 7/2/92 8/20/92 8/20/92 Chicago 7/2/92 8/20/92 8/20/92 St. Louis 7/7/92 8/20/92 8/20/92 Minneapolis 7/2/92 8/20/92 8/20/92 Kansas City 7/2/92 8/20/92 8/20/92 Dallas 7/2/92 8/20/92 8/20/92 San Francisco ... 3 7/2/92 3.5 3.30 8/20/92 3.30 3.80 8/20/92 3.80 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. Banks N.Y. Banks N.Y. Banks In effect Dec. 31, 1977 1981—May 5 13-14 14 1986—Aug. 21 5.5-6 8 14 14 22 5.5 1978—Jan. 9 6-6.5 6.5 Nov. 2 13-14 13 20 6.5 6.5 6 13 13 1987—Sept. 4 5.5-6 May 11 6.5-7 7 Dec. 4 12 12 11 6 12 7 7 July 3 7-7.25 7.25 1982—July 20 11.5-12 11.5 1988—Aug. 9 10 7.25 7.25 23 11.5 11.5 11 Aug. 21 7.75 7.75 Aug. 2 11-11.5 11 Sept. 22 8 8 3 11 11 1989—Feb. 24 6.5-7 Oct. 16 8-8.5 8.5 16 10.5 10.5 7 20 8.5 8.5 27 10-10.5 10 27 Nov. 1 8.5-9.5 9.5 30 10 10 6.5 3 9.5 9.5 Oct. 12 9.5-10 9.5 1990—Dec. 19 13 9.5 9.5 6.65 1979—July 20 10 10 Nov. 22 9-9.5 9 1991—Feb. 1 6 Aug. 17 10-10.5 10.5 26 9 9 4 5.5-6 20 10.5 10.5 Dec. 14 8.5-9 9 Apr. 30 5.5 Sept. 19 10.5-11 11 15 8.5-9 8.5 May 2 5-5.5 21 11 11 17 8.5 8.5 Sept. 13 5 Oct. 8 11-12 12 Sept. 17 4.5-5 10 12 12 1984—Apr. 9 8.5-9 9 Nov. 6 4.5 13 9 9 7 3.5-4.5 1980—Feb. 15 12-13 13 Nov. 21 8.5-9 8.5 Dec. 20 3.5 19 13 13 26 8.5 8.5 24 May 29 12-13 13 Dec. 24 1992—July 2 3-3.5 30 12 12 7 3 June 13 11-12 11 1985—May 20 7.5-8 7.5 16 11 11 24 7.5 7.5 29 10 10 In effect Aug. 28, 1992 July 28 10-11 10 1986—Mar. 7 7-7.5 7 Sept. 26 11 11 10 7 7 Nov. 17 12 12 Apr. 21 6.5-7 6.5 Dec. 5 12-13 13 July 11 6 6 1. Available on a short-term basis to help depository institutions meet tempo- ordinarily is charged on extended-credit loans outstanding less than thirty days; rary needs for funds that cannot be met through reasonable alternative sources. however, at the discretion of the Federal Reserve Bank, this time period may be The highest rate established for loans to depository institutions may be charged on shortened. Beyond this initial period, a flexible rate somewhat above rates on adjustment-credit loans of unusual size that result from a major operating problem market sources of funds is charged. The rate ordinarily is reestablished on the first at the borrower's facility. business day of each two-week reserve maintenance period, but it is never less 2. Available to help relatively small depository institutions meet regular than the discount rate applicable to adjustment credit plus 50 basis points. seasonal needs for funds that arise from a clear pattern of intrayearly movements 4. For earlier data, see the following publications of the Board of Governors: in their deposits and loans and that cannot be met through special industry Banking and Monetary Statistics, 1914-1941, and 1941-1970; and the Annual lenders. The discount rate on seasonal credit takes into account rates on market Statistical Digest, 1970-1979. sources of fimds and ordinarily is reestablished on the first business day of each In 1980 and 1981, the Federal Reserve applied a surcharge to short-term two-week reserve maintenance period; however, it is never less than the discount adjustment-credit borrowings by institutions with deposits of $500 million or more rate applicable to adjustment credit. that had borrowed in successive weeks or in more than four weeks in a calendar 3. May be made available to depository institutions when similar assistance is quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, not reasonably available from other sources, including special industry lenders. 1980. A surcharge of 2 percent was reimposed on Nov. 17, 1980; the surcharge Such credit may be provided when exceptional circumstances (including sus- was subsequently raised to 3 percent on Dec. 5, 1980, and to 4 percent on May 5, tained deposit drains, impaired access to money market funds, or sudden 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, and to 2 deterioration in loan repayment performance) or practices involve only a partic- percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the ular institution, or to meet the needs of institutions experiencing difficulties surcharge was changed from a calendar quarter to a moving thirteen-week period. adjusting to changing market conditions over a longer period (particularly at times The surcharge was eliminated on Nov. 17, 1981. of deposit disintermediation). The discount rate applicable to adjustment credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirements TTyyppee ooff ddeeppoossiitt22 P d e e rc p e o n s t i ts o f Effective date Net transaction accounts3 1 $0 million-$42.2 million 33333 1111122222/////1111177777/////9999911111 2 More than $42.2 million4 1111100000 44444/////22222/////9999922222 00000 1111122222/////2222277777/////9999900000 00000 1111122222/////2222277777/////9999900000 1. Required reserves must be held in the form of deposits with Federal Reserve permit no more than six preauthorized, automatic, or other transfers per month, Banks or vault cash. Nonmember institutions may maintain reserve balances with of which no more than three may be checks, are not transaction accounts (such a Federal Reserve Bank indirectly on a pass-through basis with certain approved accounts are savings deposits). institutions. For previous reserve requirements, see earlier editions of the Annual The Monetary Control Act of 1980 requires that the amount of transaction Report or the Federal Reserve Bulletin. Under provisions of the Monetary accounts against which the 3 percent reserve requirement applies be modified Control Act, depository institutions include commercial banks, mutual savings annually by 80 percent of the percentage change in transaction accounts held by banks, savings and loan associations, credit unions, agencies and branches of all depository institutions, determined as of June 30 each year. Effective Dec. 17, foreign banks, and Edge corporations. 1991, for institutions reporting quarterly, and Dec. 24, 1991, for institutions 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law reporting weekly, the amount was increased from $41.1 million to $42.2 million. 97-320) requires that $2 million of reservable liabilities of each depository 4. The reserve requirement was reduced from 12 percent to 10 percent on Apr. institution be subject to a zero percent reserve requirement. The Board is to adjust 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions the amount of reservable liabilities subject to this zero percent reserve require- that report quarterly. ment each year for the succeeding calendar year by 80 percent of the percentage 5. For institutions that report weekly, the reserve requirement on nonpersonal increase in the total reservable liabilities of all depository institutions, measured time deposits with an original maturity of less than 1 Vi years was reduced from 3 on an annual basis as of June 30. No corresponding adjustment is to be made in percent to IVi percent for the maintenance period that began Dec. 13, 1990, and the event of a decrease. On Dec. 17, 1991, the exemption was raised from $3.4 to zero for the maintenance period that began Dec. 27, 1990. The reserve million to $3.6 million. The exemption applies in the following order: (1) net requirement on nonpersonal time deposits with an original maturity of 1 Yi years negotiable order of withdrawal (NOW) accounts (NOW accounts less allowable or more has been zero since Oct. 6, 1983. deductions); and (2) net other transaction accounts. The exemption applies only to For institutions that report quarterly, the reserve requirement on nonpersonal accounts that would be subject to a 3 percent reserve requirement. time deposits with an original maturity of less than 1 Yi years was reduced from 3 3. Include all deposits against which the account holder is permitted to make percent to zero on Jan. 17, 1991. withdrawals by negotiable or transferable instruments, payment orders of with- 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 drawal, and telephone and preauthorized transfers in excess of three per month percent to zero in the same manner and on the same dates as were the reserve for the purpose of making payments to third persons or others. However, money requirement on nonpersonal time deposits with an original maturity of less than market deposit accounts (MMDAs) and similar accounts subject to the rules that l'/2 years (see note 4). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 DomesticN onfinancial Statistics • October 1992 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1991 1992 TTyyppee ooff ttrraannssaaccttiioonn 11998899 11999900 11999911 Dec. Jan. Feb. Mar. Apr. May June U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 14,284 24,739 20,158 837 0 123 505 0 4,110 306 2 Gross sales 12,818 7,291 120 0 1,628 0 0 0 0 0 3 Exchanges 231,211 241,086 277,314 21,967 26,750 24,435 21,674 27,526 24,275 22,392 4 Redemptions 12,730 4,400 1,000 0 1,600 0 0 0 45 0 Others within one year 5 Gross purchases 327 425 3,043 0 0 0 0 0 0 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 28,848 25,638 24,454 1,570 1,298 6,020 2,552 1,100 3,754 2,152 8 Exchanges -25,783 -27,424 -28,090 -3,562 -989 -2,742 -2,512 -1,863 -5,225 -1,854 9 Redemptions 500 0 1,000 0 0 0 0 0 0 0 One to five years 10 Gross purchases 1,436 250 6,583 300 0 1,027 1,425 0 0 2,278 11 Gross sales 490 200 0 0 0 0 0 0 0 0 12 Maturity shifts -25,534 -21,770 -21,211 -1,570 -1,174 -6,020 -2,552 -877 -2,113 -3,447 13 Exchanges 23,250 25,410 24,594 3,562 539 2,292 2,512 1,484 4,311 1,854 Five to ten years 14 Gross purchases 287 0 1,280 0 0 0 0 0 0 597 15 Gross sales 29 100 0 0 0 0 0 0 0 0 16 Maturity shifts -2,231 -2,186 -2,037 0 -124 0 0 -223 -346 0 17 Exchanges 1,934 789 2,894 0 451 300 0 379 614 0 More than ten years 18 Gross purchases 284 0 375 0 0 0 0 0 0 655 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -1,086 -1,681 -1,209 0 0 0 0 0 0 0 21 Exchanges 600 1,226 600 0 0 150 0 0 300 0 All maturities 22 Gross purchases 16,617 25,414 31,439 1,137 0 1,150 1,930 0 4,310 3,836 23 Gross sales 13,337 7,591 120 0 1,628 0 0 0 0 0 24 Redemptions 13,230 4,400 1,000 0 1,600 0 0 0 45 0 Matched transactions 25 Gross sales 1,323,480 1,369,052 1,570,456 118,127 136,922 123,000 128,230 125,999 118,972 126,977 26 Gross purchases 1,326,542 1,363,434 1,571,534 118,263 136,282 124,654 126,673 128,149 117,524 129,216 Repurchase agreements2 27 Gross purchases 129,518 219,632 310,084 51,345 21,412 9,824 48,758 18,432 38,777 10,792 28 Gross sales 132,688 202,551 311,752 36,000 33,228 13,353 46,953 20,237 38,533 11,036 29 Net change in U.S. government securities -10,055 24,886 29,729 16,619 -15,684 -725 2,178 345 3,062 5,831 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 0 0 0 0 0 0 0 0 0 0 31 Gross sales 0 0 5 0 0 0 0 0 0 0 32 Redemptions 442 183 292 45 85 0 0 49 115 40 Repurchase agreements2 33 Gross purchases 38,835 41,836 22,807 1,744 390 571 1,640 224 1,281 402 34 Gross sales 40,411 40,461 23,595 1,191 808 706 1,640 224 1,281 402 35 Net change in federal agency obligations -2,018 1,192 -1,085 508 -503 -135 0 -49 -115 -40 36 Total net change in System Open Market Account -12,073 26,078 28,644 17,127 -16,186 -860 2,178 295 2,946 5,791 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. acceptances in repurchase agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of Month AAAccccccooouuunnnttt 1992 1992 July 1 July 8 July 15 July 22 July 29 May 31 June 30 July 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,060 11,059 11,060 11,059 11,059 11,057 11,060 11,059 2 Special drawing rights certificate account 10,018 10,018 10,018 10,018 10,018 10,018 10,018 10,018 3 Coin 487 471 470 469 478 492 482 477 Loans 4 To depository institutions 322 1,881 210 231 244 150 1,359 256 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Federal agency obligations 7 Bought outright 5,710 5,710 5,690 5,675 55,,662255 5,750 55,,771100 55,,662255 8 Held under repurchase agreements 0 31 0 63 0 0 0 0 9 Total U.S. Treasury securities 276,528 279,414 276,422 279,365 274,554 271,052 276,883 275,969 10 Bought outright2 276,528 272,464 276,422 277,525 274,554 270,808 276,883 275,969 11 Bills 136,494 132,430 136,388 137,492 134,520 134,304 136,849 135,935 12 Notes 106,974 106,974 106,974 106,974 106,974 104,160 106,974 106,974 13 Bonds 33,059 33,059 33,059 33,059 33,059 32,343 33,059 33,059 14 Held under repurchase agreements 0 6,950 0 1,840 0 244 0 0 15 Total loans and securities 282,560 287,036 282,322 285,335 280,422 276,952 283,952 281,849 16 Items in process of collection 6,153 5,192 6,246 5,213 5,056 4,754 7,216 4,428 17 Bank premises 1,026 1,028 1,029 1,028 1,028 1,021 1,026 1,014 Other assets 18 Denominated in foreign currencies3 24,489 24,524 24,576 24,074 24,105 23,099 24,487 24,734 19 All other 5,531 6,112 5,784 6,048 6,209 4,901 5,517 6,113 20 Total assets 341,323 345,440 341,504 343,245 338,375 332,293 343,757 339,692 LIABILITIES 21 Federal Reserve notes 291,367 294,164 294,228 293,483 293,627 289,684 290,772 294,107 22 Total deposits 35,126 38,101 33,790 43,139 32,152 29,527 36,839 40,270 23 Depository institutions 26,994 30,284 28,631 31,304 26,362 23,503 22,740 25,302 24 U.S. Treasury—General account 7,684 7,3% 4,708 5,041 5,365 5,583 13,630 6,923 25 Foreign—Official accounts 204 202 207 374 206 217 219 264 26 Other 244 219 244 218 219 224 249 220 27 Deferred credit items 5,741 5,074 5,426 -1,380 4,550 4,367 6,732 -3,531 28 Other liabilities and accrued dividends5 1,901 2,020 1,941 1,888 1,858 2,089 1,908 1,988 29 Total liabilities 334,135 339,359 335,386 337,130 332,187 325,667 336,251 332,834 CAPITAL ACCOUNTS 30 Capital paid in 2,849 2,876 2,885 2,908 2,930 2,813 2,832 2,931 31 Surplus 2,652 2,652 2,652 2,652 2,652 2,652 2,652 2,652 32 Other capital accounts 1,688 554 582 556 607 1,162 2,023 1,276 33 Total liabilities and capital accounts 341,323 345,440 341,504 343,245 338,375 332,293 343,757 339,692 34 MEMO: Marketable U.S. Treasury securities held in custody for foreign and international accounts 279,370 280,147 284,624 288,655 282,395 276,920 279,403 291,950 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Bank) 362,193 361,749 361,8% 361,476 361,148 360,%1 362,337 360,881 36 LESS: Held by Federal Reserve Bank 70,825 67,586 67,668 67,994 67,521 71,277 71,565 66,774 37 Federal Reserve notes, net 291,367 294,164 294,228 293,483 293,627 289,684 290,772 294,107 Collateral held against notes, net: 38 Gold certificate account 11,060 11,059 11,060 11,059 11,059 11,057 11,060 11,059 39 Special drawing rights certificate account 10,018 10,018 10,018 10,018 10,018 10,018 10,018 10,018 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 270,290 273,086 273,151 272,405 272,550 268,609 269,694 273,030 42 Total collateral 291,367 294,164 294,228 293,483 293,627 289,684 290,772 294,107 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly 3. Valued monthly at market exchange rates. statistical release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities in Treasury bills maturing within ninety days. pledged with Federal Reserve Banks—and excludes securities sold and scheduled 5. Includes exchange-translation account reflecting the monthly revaluation at to be bought back under matched sale-purchase transactions. market exchange rates of foreign-exchange commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • October 1992 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding 1 Millions of dollars Wednesday End of month TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnnggg 1992 1992 July 1 July 8 July 15 July 22 July 29 May 29 June 30 July 31 1 Total loans 322 1881 210 231 244 150 1,360 256 2 Within fifteen days 204 1757 65 210 207 104 1,277 125 3 Sixteen days to ninety days 118 124 145 21 37 47 82 131 4 Ninety-one days to one year 0 0 0 0 0 0 0 0 5 Total acceptances 0 0 0 0 0 0 0 0 6 Within fifteen days 0 0 0 0 0 0 0 0 7 Sixteen days to ninety days 0 0 0 0 0 0 0 0 8 Ninety-one days to one year 0 0 0 0 0 0 0 0 9 Total U.S. Treasury securities 276,528 279,414 276,422 279,365 274,554 270,808 276,883 275,969 10 Within fifteen days2 14,081 14,994 13,254 18,406 13,849 7,584 9,835 9,389 11 Sixteen days to ninety days 65,771 66,619 65,272 63,477 66,856 72,122 70,373 68,366 12 Ninety-one days to one year 88,814 89,939 90,141 89,727 86,095 85,703 88,814 89,667 13 One year to five years 66,100 66,100 66,273 66,273 66,273 64,889 66,100 67,064 14 Five years to ten years 16,212 16,212 15,932 15,932 15,932 15,615 16,212 15,932 15 More than ten years 25,549 25,549 25,549 25,549 25,549 24,894 25,549 25,549 16 Total federal agency obligations 5,710 5,741 5,690 5,738 5,625 5,750 5,710 5,625 17 Within fifteen days2 12 108 80 226 98 321 222 98 18 Sixteen days to ninety days 721 861 851 753 836 4% 721 836 19 Ninety-one days to one year 1,511 1,306 1,316 1,316 1,297 1,460 1,301 1,297 20 One year to five years 2,557 2,557 2,532 2,532 2,483 2,577 2,557 2,483 21 Five years to ten years 755 755 757 757 757 742 755 757 22 More than ten years 154 154 154 154 154 154 154 154 1. Holdings under repurchase agreements are classified as maturing within IS days in accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1991 1992 IItteemm DD 1199 ee 88 cc 88 .. DD 1199 ee 88 cc 99 .. DD 1199 ee 99 cc 00 .. DD 1199 ee 99 cc 11 .. Dec. Jan. Feb. Mar. Apr. May June July Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS22 11 TToottaall rreesseerrvveess33 40.47 40.56 41.83 45.60 45.60 46.19 47.75 48.48 49.00 49.49 49.23 49.49 22 NNoonnbboorrrroowweedd rreesseerrvveess44 38.75 40.29 41.51 45.41 45.41 45.95 47.67 48.38 48.91 49.34 49.00 49.20 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt55 40.00 40.31 41.53 45.41 45.41 45.95 47.67 48.39 48.91 49.34 49.00 49.20 44 RReeqquuiirreedd rreesseerrvveess 39.42 39.64 40.17 44.62 44.62 45.18 46.68 47.45 47.86 48.49 48.32 48.52 55 MMoonneettaarryy bbaassee66 256.97 267.77 293.29 317.25 317.25 319.70 323.41 324.51 326.50 328.58 329.64r 332.25 Not seasonally adjusted 6 Total reserves 41.65 41.77 43.07 46.97 46.97 47.35 46.85 47.69 50.01 48.62 49.25 49.52 7 Nonborrowed reserves .. 39.93 41.51 42.74 46.78 46.78 47.11 46.77 47.59 49.92 48.47 49.02 49.24 8 Nonborrowed reserves plus extended credit . 41.17 41.53 42.77 46.78 46.78 47.11 46.77 47.60 49.93 48.47 49.02 49.24 9 Required reserves 40.60 40.85 41.40 46.00 46.00 46.34 45.78 46.66 48.88 47.62 48.33 48.56 10 Monetary base 260.41 271.18 296.68 321.06 321.06 320.43 320.38 322.69 327.45 328.37 330.93r 334.09 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS' 11 Total reserves11 63.75 62.81 59.12 55.53 55.53 55.81 55.24 56.28 50.45 48.82 49.50 49.82 12 Nonborrowed reserves .. 62.03 62.54 58.79 55.34 55.34 55.58 55.16 56.19 50.36 48.67 49.27 49.54 13 Nonborrowed reserves plus extended credit . 63.27 62.56 58.82 55.34 55.34 55.58 55.16 56.19 50.37 48.67 49.27 49.54 14 Required reserves 62.70 61.89 57.46 54.55 54.55 54.81 54.17 55.25 49.32 47.82 48.58 48.86 15 Monetary base12 . 283.00 292.55 313.70 333.61 333.61 333.09 333.19 335.82 332.69 333.79 336.43r 339.86 16 Excess reserves 1.05 .92 1.66 .98 .98 1.00 1.06 1.03 1.14 1.00 .91 .96 17 Borrowings from the Federal Reserve 1.72 .27 .33 .19 .19 .23 .08 .09 .09 .15 .23 .28 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) changes in reserve requirements, a multiplicative procedure is used to estimate weekly statistical release. Historical data and estimates of the impact on required what required reserves would have been in past periods had current reserve reserves of changes in reserve requirements are available from the Monetary and requirements been in effect. Break-adjusted required reserves include required Reserves Projections Section, Division of Monetary Affairs, Board of Governors reserves against transactions deposits and nonpersonal time and savings deposits of the Federal Reserve System, Washington, DC 20551. (but not reservable nondeposit liabilities). 2. Figures reflect adjustments for discontinuities, or "breaks," associated with 9. The break-adjusted monetary base equals (1) break-adjusted total reserves regulatory changes in reserve requirements. (See also table 1.10) (line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3) 3. Seasonally adjusted, break-adjusted total reserves equal seasonally (for all quarterly reporters on the "Report of Transaction Accounts, Other adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16). Deposits and Vault Cash" and for all weekly reporters whose vault cash exceeds 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally their required reserves) the break-adjusted difference between current vault cash adjusted, break-adjusted total reserves (line 1) less total borrowings of depository and the amount applied to satisfy current reserve requirements. institutions from the Federal Reserve (line 17). 10. Reflects actual reserve requirements, including those on nondeposit liabil- 5. Extended credit consists of borrowing at the discount window under ities, with no adjustments to eliminate the effects of discontinuities associated the terms and conditions established for the extended credit program to help with changes in reserve requirements. depository institutions deal with sustained liquidity pressures. Because there is 11. Reserve balances with Federal Reserve Banks plus vault cash used to not the same need to repay such borrowing promptly as there is with traditional satisfy reserve requirements. short-term adjustment credit, the money market impact of extended credit is 12. The monetary base, not break-adjusted and not seasonally adjusted, similar to that of nonborrowed reserves. consists of (1) total reserves (line 11), plus (2) required clearing balances and 6. The seasonally adjusted, break-adjusted monetary base consists of (1) adjustments to compensate for float at Federal Reserve Banks, plus (3) the seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally currency component of the money stock, plus (4) (for all quarterly reporters on adjusted currency component of the money stock, plus (3) (for all quarterly the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all reporters on the "Report of Transaction Accounts, Other Deposits and Vault those weekly reporters whose vault cash exceeds their required reserves) the Cash" and for all those weekly reporters whose vault cash exceeds their required difference between current vault cash and the amount applied to satisfy current reserves) the seasonally adjusted, break-adjusted difference between current vault reserve requirements. Since the introduction of changes in reserve requirements cash and the amount applied to satisfy current reserve requirements. (CRR), currency and vault cash figures have been measured over the computation 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) periods ending on Mondays. plus excess reserves (line 16). 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). 8. To adjust required reserves for discontinuities that are due to regulatory Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • October 1992 ! 21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES! Billions of dollars, averages of daily figures 1992 IItteemm 1988 1989 1990 1991 Dec. Dec. Dec. Dec. Apr. Ma/ Juner July Seasonally adjusted Measures2 1 Ml 786.9 794.1 826.1 898.1 942.8 954.3 951.8 960.9 2 M2 3,071.1 3,227.3 3,339.0 3,439.9r 3,470.2 3,472.1 3,463.1 3,460.3 3 M3 3,923.1 4,059.8 4,114.6 4,171.0r 4,177.7 4,177.7 4,166.3 4,161.9 4 L 4,677.9 4,891.7 4,966.6 4,989.8r 5,012.2 5,005.0 5,018.3 n.a. 5 Debt 9,316.1 10,060.0 10,747.0 ll,203.7r 11,376.6 11,425.5 11,477.7 n.a. Ml components 6 Currency . 212.3 222.6 246.8 267.3 273.6 274.7 276.2 279.0 7 8 T D r e a m ve a l n e d r s d c e h p e o c s k it s s 3 28 7 6 . . 5 5 27 7 9 . . 4 0 277 8 . . 1 3 28 8 9 . . 2 5 31 8 1 . . 0 2 31 8 5 . . 0 1 31 7 1 . . 9 0 31 7 5 . . 8 6 9 Other checkable deposits 280.6 285.1 293.9 333.2 350.0 356.5 356.7 358.5 Nontransaction components 10 In M2 2,284.2 2,433.2 2,512.9 2,541.8r 2,527.4 2,517.8 2,511.3 2,499.5 11 In M3 852.0 832.5 775.6 731.lr 707.5 705.7 703.3 701.6 Commercial banks 12 Savings deposits, including MMDAs 542.7 541.4 581.9 664.9 703.2 707.9 710.7 716.3 1 1 3 4 S L m ar a g l e l t t i i m m e e d d e e p p o o s s i i t t s s 10, 11 4 3 4 6 7 6. . 9 0 5 39 3 8 1 . . 2 0 6 3 0 7 6 4 . . 4 0 5 3 9 5 8 4 . . 5 0 5 3 6 3 6 1 . . 0 9 5 3 5 2 8 9. . 7 1 5 3 5 2 1 5 . . 6 5 5 3 4 1 3 9 . . 8 1 Thrift institutions 1 1 1 7 5 6 L S S m a a v r a g i l n e l g t t s i i m m d e e e p d d o e e s p p it o o s s s , i i t t i s n s 9 1 c 0 l uding MMDAs 5 3 1 8 8 7 5 3 4 . . . 9 5 3 6 3 1 1 4 6 7 9 1 . . . 5 7 1 5 3 1 6 3 2 2 8 0 . . . 3 8 9 4 3 6 8 7 4 3 7 . . . 1 5 7 4 4 7 1 0 3 9 8 . . . 8 5 0 4 4 1 7 1 1 1 4 . . . 1 4 3 4 4 6 1 0 9 6 4 . . . 2 9 8 4 3 6 9 1 9 8 8 . . . 5 1 0 Money market mutual funds 18 General purpose and broker-dealer . 241.9 316.3 348.9 360.5 354.1 355.0 353.3 349.8 19 Institution-only 91.0 107.2 133.7 179.1 189.2 194.8 199.7 207.7 Debt components 20 Federal debt 2.101.5 2,249.8 2,493.6 2,767.2 2.863.2 2,893.4 2,929.9 n.a. 21 Nonfederal debt 7.214.6 7,810.2 8,253.3 8,436.5r 8.513.3 8,532.2 8,547.7 n.a. Not seasonally adjusted Measured 22 Ml 804.1 811.9 844.1 917.3 954.7 944.0 952.2 963.3 23 M2 3.083.8 3,240.0 3,351.9 3,453.7r 3,488.2 3,454.4 3,459.0 3,463.4 24 M3 3,934.7 4,070.3 4,124.7 4,181.7r 4,194.5 4,163.4 4,163.5 4,162.9 25 L 4.694.9 4,911.0 4,986.4 5,010. lr 5,027.1 4,988.4 5,005.4 n.a. 26 Debt 9,301.5 10,045.6 10,734.2 U,190.3r 11,339.7 11,381.3 11,430.1 n.a. Ml components 27 Currency3 . 214.8 225.3 249.5 270.0 273.4 275.7 277.3 280.8 3 2 2 0 8 9 O T D r t e a h m v e e a r n l c e d h r s e d c c e k h p a e o b c s l k i e t s s d 5 eposits6 2 2 8 9 6 3 8 . . . 9 5 9 2 2 8 9 6 8 1 . . . 9 1 5 2 2 9 8 7 6 9 . . . 9 8 9 3 33 0 7 6 3 . . . 7 5 0 3 3 6 1 7 0 2 . . . 8 6 9 3 3 5 0 7 3 7 . . . 1 7 5 3 3 5 1 8 6 0 . . . 1 2 6 3 3 5 1 8 6 7 . . . 6 7 2 Nontransaction components 31 In M2 2,279.7 2,428.1 2,507.8 2,536.5r 2,533.5 2,510.3 2,506.8 2,500.1 32 In M38 850.8 830.3 772.8 728.01 706.2 709.0 704.5 699.5 Commercial banks 33 Savings deposits, iircluding MMDAs 543.8 543.0 580.0 662.4 706.1 707.9 714.1 719.9 3 3 4 5 L Sm ar a g l e l t t i i m m e e d d e e p p o o s s i i t t s s 1 . • . .. 4 3 4 6 6 5. . 9 0 5 3 2 9 9 7 . . 5 1 6 3 0 7 6 3. . 0 3 5 3 9 5 8 2 . . 7 8 5 3 6 3 5 0 . . 5 9 5 3 5 3 6 0 . . 4 9 5 3 4 2 9 6 . . 6 9 5 3 4 1 3 8 . . 6 9 Thrift institutions 36 Savings deposits, including MMDAs 381.1 347.6 337.7 376.3 409.6 414.4 418.2 420.1 37 Small time deposits 584.9 616.0 562.2 464.6 419.1 409.8 403.4 397.9 38 Large time deposits 175.2 162.0 120.6 82.8 73.6 71.5 70.1 69.4 Money market mutual funds 39 General purpose and broker-dealer 240.8 314.6 346.8 358.1 360.4 352.3 348.9 345.4 40 Institution-only 91.4 107.8 134.4 180.3 190.9 195.5 195.7 202.2 Repurchase agreements and eurodollars 41 Overnight 83.2 77.5 74.7 76.3r 72.8 69.5 72.6 73.3 42 Term 227.4 178.5 158.3 127.7r 127.2 126.2 126.0 123.3 Debt components 43 Federal debt 2,098.9 2,247.5 2,491.3 2,765.0 2,863.5 2.884.1 2,912.2 n.a. 44 Nonfederal debt 7,202.5 7,798.1 8,242.9 8,425.3r 8,476.3 8.497.2 8,518.0 n.a. For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) Treasury securities, commercial paper, and bankers acceptances, net of money weekly statistical release. Historical data are available from the Money and market fund holdings of these assets. Seasonally adjusted L is computed by Reserves Projection Section, Division of Monetary Affairs, Board of Governors of summing U.S. savings bonds, short-term Treasury securities, commercial paper, the Federal Reserve System, Washington, DC 20551. and bankers acceptances, each seasonally adjusted separately, and then adding 2. Composition of the money stock measures and debt is as follows: this result to M3. Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults Debt: Debt of domestic nonfinancial sectors consists of outstanding credit of depository institutions; (2) travelers checks of nonbank issuers; (3) demand market debt of the U.S. government, state and local governments, and private deposits at ail commercial banks other than those due to depository institutions, nonfinancial sectors. Private debt consists of corporate bonds, mortgages, conthe U.S. government, and foreign banks and official institutions, less cash items in sumer credit (including bank loans), other bank loans, commercial paper, bankers the process of collection and Federal Reserve float; and (4), other checkable acceptances, and other debt instruments. Data are derived from the Federal deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and Reserve Board's flow of funds accounts. Debt data are based on monthly automatic transfer service (ATS) accounts at depository institutions, credit union averages. This sum is seasonally adjusted as a whole. share draft accounts, and demand deposits at thrift institutions. Seasonally 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of adjusted Ml is computed by summing currency, travelers checks, demand depository institutions. deposits, and OCDs, each seasonally adjusted separately. 4. Outstanding amount of U.S. dollar-denominated travelers checks of non- M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements bank issuers. Travelers checks issued by depository institutions are included in (RPs) issued by all depository institutions and overnight Eurodollars issued to demand deposits. U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (includ- 5. Demand deposits at commercial banks and foreign-related institutions other ing MMDAs) and small time deposits (time deposits—including retail RPs—in than those due to depository institutions, the U.S. government, and foreign banks amounts of less than $100,000), and (3) balances in both taxable and tax-exempt and official institutions, less cash items in the process of collection and Federal general purpose and broker-dealer money market funds. Excludes individual Reserve float. retirement accounts (IRAs) and Keogh balances at depository institutions and 6. Consists of NOW and ATS account balances at all depository institutions, money market funds. Also excludes all balances held by U.S. commercial banks, credit union share draft account balances, and demand deposits at thrift institumoney market funds (general purpose and broker-dealer), foreign governments tions. and commercial banks, and the U.S. government. Seasonally adjusted M2 is 7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund computed by adjusting its non-Mi component as a whole and then adding this balances (general purpose and broker-dealer), (3) MMDAs, and (4) savings and result to seasonally adjusted Ml. small time deposits. M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of 8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. $100,000 or more) issued by all depository institutions, (2) term Eurodollars held residents, and (4) money market fund balances (institution-only), less a consoliby U.S. residents at foreign branches of U.S. banks worldwide and at all banking dation adjustment that represents the estimated amount of overnight RPs and offices in the United Kingdom and Canada, and (3) balances in both taxable and Eurodollars held by institution-only money market funds. tax-exempt, institution-only money market funds. Excludes amounts held by 9. Small time deposits—including retail RPs—are those issued in amounts of depository institutions, the U.S. government, money market funds, and foreign less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift banks and official institutions. Also excluded is the estimated amount of overnight institutions are subtracted from small time deposits. RPs and Eurodollars held by institution-only money market funds. Seasonally 10. Large time deposits are those issued in amounts of $100,000 or more, adjusted M3 is computed by adjusting its non-M2 component as a whole and then excluding those booked at international banking facilities. adding this result to seasonally adjusted M2. 11. Large time deposits at commercial banks less those held by money market L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term funds, depository institutions, and foreign banks and official institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • October 1992 1.22 BANK DEBITS AND DEPOSIT TURNOVER1 Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates 1991 1992 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr Dec. Jan. Feb. Mar. Apr. May DEBITS TO Seasonally adjusted Demand deposits3 1 All insured banks 256,150.4 277,916.3 281,050.1 293,941.3 306,523.0 298,098.7 305,837.0 315,651.2 292,177.4 2 Major New York City banks 129,319.9 131,784.0 140,905.5 149,502.5 161,915.3 154,751.0 164,171.5 167,177.5 154,225.3 3 Other banks 126,830.5 146,132.3 140,144.6 144,438.8 144,607.7 143,347.7 141,665.5 148,473.7 137,952.1 4 ATS-NOW accounts4 2,910.5 3,349.6 3,624.6 3,786.5 3,719.4 3,787.2 3,670.2 3,957.0 3,552.6 5 Savings deposits 547.5 558.8 1,377.4 3,296.1 3,089.7 3,142.5 3,361.0 3,356.5 3,241.4 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 735.1 800.6 817.6 841.8 870.1 817.6 832.5 857.4 771.2 7 Major New York City banks 3,421.5 3,804.1 4,391.9 4,657.4 4,997.4 4,633.3 4,974.4 5,029.1 4,438.0 8 Other banks 408.3 467.7 449.6 453.9 452.1 432.8 423.7 443.3 400.9 9 ATS-NOW accounts4 15.2 16.5 16.1 15.7 15.1 15.1 14.5 15.6 13.7 10 Savings deposits 3.0 2.9 3.3 5.0 4.7 4.7 4.9 4.7 4.4 DEBITS TO Not seasonally adjusted Demand deposits3 11 All insured banks 256,133.2 277,400.0 280,922.8 301,642.6 306,706.9 276,158.6 313,513.5 314,388.6 290,950.2 12 Major New York City banks 129,400.1 131,784.7 140,563.0 153,462.8 158,932.3 143,476.0 168,122.2 164,994.4 153,163.7 13 Other banks 126,733.0 145,615.3 140,359.7 148,179.8 147,774.6 132,682.6 145,391.3 149,394.3 137,786.5 14 ATS-NOW accounts4 2,910.7 3,342.2 3,622.4 3,841.0 4,130.2 3,450.5 3,747.2 4,104.5 3,515.5 15 MMDAs6 2,677.1 2,923.8 n.a n.a n.a n.a n.a n.a n.a 16 Savings deposits 546.9 557.9 1,408.3 3,331.1 3,364.7 2,872.0 3,363.7 3,459.2 3,031.2 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 735.4 799.6 817.5 823.7 851.5 778.4 878.2 849.3 785.8 18 Major New York City banks 3,426.2 3,810.0 4,370.1 4,461.1 4,633.6 4,387.6 5,308.9 5,042.4 4,551.3 19 Other banks 408.0 466.3 450.6 445.1 453.6 412.0 446.9 442.7 409.3 20 ATS-NOW accounts4 15.2 16.4 16.1 15.7 16.4 13.7 14.7 15.7 13.7 21 MMDAs6 7.9 8.0 n.a n.a n.a n.a n.a n.a n.a 22 Savings deposits 2.9 2.9 3.4 5.1 5.1 4.2 4.9 4.9 4.3 1. Historical tables containing revised data for earlier periods can be obtained 3. Represents accounts of individuals, partnerships, and corporations and of from the Banking and Money Market Statistics Section, Division of Monetary states and political subdivisions. Affairs, Board of Governors of the Federal Reserve System, Washington, DC 4. Accounts authorized for negotiable orders of withdrawal (NOWs) and 20551. accounts authorized for automatic transfer to demand deposits (ATSs). Data in this table also appear on the Board's G.6 (406) monthly statistical 5. Excludes ATS and NOW accounts. release. For ordering address, see inside front cover. 6. Money market deposit accounts. 2. Annual averages of monthly figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A17 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars, averages of Wednesday figures 1991 1992r Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Seasonally adjusted 1 Total loans and securities1 2,776.9 2,789.1 2,805.5 2,822.8 2,838.4r 2,849.0 2,849.5 2,855.8 2,868.1 2,865.8 2,869.9 2,869.8 2 U.S. government securities 512.6 523.0 538.7 550.8 562.6r 565.7 570.4 578.5 590.5 599.0 607.8 615.1 3 Other securities 174.4 176.3 177.9 178.6 179.3 178.6 178.6 175.7 175.7 174.0 172.5 174.6 4 Total loans and leases' 2,089.9 2,089.8 2,088.9 2,093.2 2,096.5r 2,104.7 2,100.5 2,101.6 2,101.9 2,092.8 2,089.6 2,080.2 5 Commercial and industrial ..... 619.5 622.0 622.6 621.7 SY1.9 616.7 612.2 609.5 606.5 603.0 599.0 596.5 6 Bankers acceptances held2... 7.7 7.2 6.6 7.2 7.3 7.5 7.7 7.6 7.2 7.4 6.9 7.6 7 Other commercial and industrial 611.8 614.7 616.1 614.6 610.6r 609.2 604.5 602.0 599.3 595.6 592.0 588.8 8 U.S. addressees3 605.9 608.6 609.4 607.9 603.2r 602.8 598.2 595.5 592.7 588.8 585.4 581.8 9 Non-U.S. addressees3 5.9 6.1 6.7 6.7 7.4 6.4 6.3 6.4 6.6 6.8 6.6 7.0 10 Real estate 866.7 868.1 869.8 871.9 873.1 873.3 877.0 878.6 880.4 881.7 880.6 878.8 11 Individual 370.3 367.3 364.2 363.1 363.5 363.1 363.6 362.2 361.2 359.6 360.0 359.7 12 Security 48.4 50.0 51.1 53.5r 54.5 59.4 57.1 60.5 65.2 61.9 64.3 61.0 13 Nonbank financial institutions 36.9 37.1 37.2 37.8 40.6r 40.3 41.4 41.9 41.1 41.4 40.5 38.7 14 Agricultural 34.3 34.5 34.1 33.8 34.0 33.7 33.5 34.2 34.1 33.9 34.2 34.2 15 State and political subdivisions 30.6 30.3 29.7 29.4 29.1 28.1 28.2 28.2 28.0 27.7 27.4 26.9 16 Foreign banks 6.5 6.8 6.6 6.9 7.4 7.2 6.7 6.5 6.6 7.2 8.0 8.3 17 Foreign official institutions 2.2 2.3 2.4 2.5 2.4 2.3 2.2 2.2 2.1 2.1 2.1 2.2 18 Lease-financing receivables 31.9 31.8 31.6 31.5 31.7 31.5 31.6 31.6 31.5 31.4 31.6 30.5 19 All other loans 42.7 39.8 39.5 41.1 42.4 49.2 47.0 46.4 45.3 42.9 42.0 43.2 Not seasonally adjusted 20 Total loans and securities1 2,774.0 2,789.3 2,808.3 2,828.1 2,844.8r 2,845.7 2,852.1 2,856.6 2,867.2 2,861.4 2,870.8 2,862.4 21 U.S. government securities 511.1 521.6 537.6 551.7 558.5 565.2 574.3 583.9 592.7 599.1 606.9 612.4 22 Other securities 174.5 176.3 178.3 179.0 179.6 179.1 178.7 175.8 175.3 173.7 172.5 173.7 23 Total loans and leases' 2,088.4 2,091.4 2,092.4 2,097.4 2,106.7r 2,101.4 2,099.1 2,097.0 2,099.2 2,088.6 2,091.4 2,076.3 24 Commercial and industrial ..... 617.7 619.1 621.1 620.4 619.3r 613.5 611.4 612.2 609.4 605.3 600.9 596.3 25 Bankers acceptances held ... 7.5 7.2 6.6 7.3 7.6 7.5 7.8 7.5 7.0 7.4 7.0 7.2 26 Other commercial and industrial 610.1 611.9 614.5 613.1 611.6r 606.0 603.6 604.7 602.3 598.0 593.9 589.1 27 U.S. addressees3 604.3 605.9 608.3 606.9 604.6r 599.1 596.8 598.1 595.5 591.2 586.9 582.0 28 Non-U.S. addressees 5.8 6.0 6.2 6.2 7.0 6.8 6.8 6.6 6.8 6.8 7.0 7.1 29 Real estate 868.6 869.0 871.2 873.2 873.4 872.7 874.0 875.1 879.2 882.3 880.9 880.0 30 Individual 369.3 368.7 365.1 364.5 368.1 367.4 363.6 359.7 358.5 358.0 357.8 357.0 31 Security 47.3 48.6 50.8 53.5 55.1 59.0 61.6 62.3 66.7 58.5 64.1 58.9 32 Nonbank financial institutions 37.0 36.7 36.9 38.1 41.9r 40.7 41.0 41.3 40.6 40.8 40.8 39.0 33 Agricultural 35.2 35.5 35.0 34.1 34.0r 33.2 32.6 32.9 33.2 33.5 34.4 35.0 34 State and political subdivisions 30.5 30.2 29.8 29.4 29.0 28.5 28.3 28.2 27.9 27.7 27.4 26.7 35 Foreign banks 6.4 6.9 6.9 7.3 7.9 7.0 6.6 6.3 6.4 7.1 7.7 8.2 36 Foreign official institutions 2.2 2.3 2.4 2.5 2.4 2.3 2.2 2.2 2.1 2.1 2.1 2.2 37 Lease-financing receivables 31.7 31.7 31.8 31.6 31.7 31.8 31.8 31.7 31.5 31.4 31.3 30.3 38 All other loans 42.5 42.8 41.6 42.6 44.1 45.4 45.9 45.1 43.7 41.9 43.9 42.8 1. Adjusted to exclude loans to commercial banks in the United States. 3. United States includes the fifty states and the District of Columbia. 2. Includes nonfinancial commercial paper held. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • October 1992 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Billions of dollars, monthly averages 1991 1992 SSoouurrccee ooff ffuunnddss Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Seasonally adjusted 1 Total nondeposit funds 246.6 249.3 263.9 267.0 280.8 284.7r 289.0r 290.0r 292.7r 292.8 296.1 298.7 2 Net balances due to related foreign offices3 18.2 20.3 30.9 33.1 39.2 44.0r 42.9r 46.2r 50.5r 5555..33 6611..33 6633..33 i Borrowings from other than commercial banks in United States4 228.3 229.0 232.9 233.9 241.6 240.7 246.1 243.7 242.1 237.6 234.8 235.4 4 Domestically chartered banks 156.4 155.1 153.9 150.8 153.7 155.6 158.8 154.7r 151.7 148.5 147.0 147.4 S Foreign-related banks 72.0 74.0 79.1 83.1 87.8 85.1 87.3 89.1 90.4 89.1 87.8 88.0 Not seasonally adjusted 6 Total nondeposit ftinds2 243.3 246.7 265.1 271.3 279.0 280.6r 289.6r 293.9" 289.9" 298.6 297.6 295.1 ! Net balances due to related foreign offices3 16.4 19.5 30.5 34.0 42.7 44.6r 43. lr 46.6r 49. lr 57.7 60.9 59.7 8 Domestically chartered banks -7.2 -8.8 -7.2 -4.4 -3.8 -4.6r -,8r -,8r —4.9" -4.2 -6.3 -7.0 9 Foreign-related banks 23.6 28.3 37.7 38.5 46.5 49.3 43.9 47.5r 54. lr 6611..99 6677..33 6666..77 10 Borrowings from other than commercial banks in United States4 226.9 227.2 234.6 237.3 236.3 235.9 246.6 247.2 240.8 240.9 236.7 235.4 11 Domestically chartered banks 154.6 154.0 154.7 155.1 152.4 151.4 159.3 157.7 149.8 151.1 147.2 145.9 12 Federal funds and security RP borrowings 151.0 150.5 151.5 151.9 149.3 147.9 155.8 154.4 146.3 147.3 143.1 141.8 1133 Other6 3.7 3.5 3.2 3.2 3.1 3.4 3.5 3.3 3.4 3.9 4.1 4.2 14 Foreign-related banks6 72.3 73.2 79.9 82.2 83.8 84.6 87.2 89.5 91.0 89.8 89.5 89.5 MEMO Gross large time deposits1 IS Seasonally adjusted 438.2 436.0 429.5 426.1 423.9 416.0 413.7 406.9 399.9 396.7 392.4 385.8 16 Not seasonally adjusted 440.0 437.5 429.7 425.8 422.6 413.6 412.6 407.3 398.8 398.0 393.7 385.6 U.S. Treasury demand balances at commercial banks8 17 Seasonally adjusted 25.3 23.8 29.2 34.2 26.4 27.8 19.5 21.8 19.9 17.0 25.8 22.1 18 Not seasonally adjusted 17.2 26.9 28.7 28.5 25.4 33.1 25.2 20.1 17.7 21.0 25.2 19.8 1. Commercial banks are nationally and state-chartered banks in the fifty states given for the purpose of borrowing money for the banking business. This includes and the District of Columbia, agencies and branches of foreign banks, New York borrowings from Federal Reserve Banks and from foreign banks, term federal investment companies majority owned by foreign banks, and Edge Act corpora- funds, loan RPs, and sales of participations in pooled loans. tions owned by domestically chartered and foreign banks. 5. Figures are based on averages of daily data reported weekly by approxi- Data in this table also appear in the Board's G.10 (411) release. For ordering mately 120 large banks and quarterly or annual data reported by other bai&s. address, see inside front cover. 6. Figures are partly averages of daily data and partly averages of Wednesday 2. Includes federal funds, repurchase agreements (RPs), and other borrowing data. from nonbanks and net 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-Ioan notes at compositions with own International Banking Facilities (IBFs). mercial banks. Averages of daily data. 4. Borrowings through any instrument, such as a promissory note or due bill, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A19 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKS Last-Wednesday-of-Month Series1 Billions of dollars 1991 1992 AAccccoouunntt Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July ALL COMMERCIAL BANKING INSTITUTIONS2 1 Total assets 3,431.6 3,473.1 3,514.4 3,545.4 3,502.9 3,502.3 3,499.7 3,516.2 3,521.8 3,504.2 3,495.7 2 Loans and securities 2,952.1 2,982.7 3,005.3 3,026.9 3,019.0 3,019.4 3,023.0 3,025.8 3,019.7 3,018.0 3,006.7 3 Investment securities 663.4 687.3 696.7 705.5 706.2 712.1 720.8 725.1 732.4 745.2 752.2 4 U.S. government securities 500.0 522.6 530.7 538.0 541.2 548.7 558.6 564.2 572.8 587.4 591.9 5 Other 163.4 164.7 166.0 167.4 165.0 163.5 162.2 160.8 159.6 157.8 160.3 6 Trading account assets 32.3 35.3 36.4 33.8 38.0 37.7 39.2 37.7 36.6 34.9 36.5 7 Total loans 2,256.4 2,260.0 2,272.1 2,287.6 2,274.9 2,269.5 2,263.1 2,263.0 2,250.6 2,237.8 2,218.0 8 Interbank loans 163.3 169.5 173.6 175.1 177.6 175.5 170.2 166.7 168.9 154.4 150.4 9 Loans excluding interbank 2,093.1 2,090.5 2,098.5 2,112.5 2,097.3 2,094.1 2,092.9 2,096.2 2,081.7 2,083.5 2,067.6 10 Commercial and industrial 619.0 618.8 621.3 621.2 611.8 611.2 611.0 607.0 603.1 598.4 593.2 11 Real estate 867.9 872.6 872.8 873.1 873.1 872.2 873.7 881.1 879.9 879.0 879.8 12 Individual 368.8 365.4 363.6 369.6 366.8 362.4 359.5 359.5 358.2 358.8 357.7 13 All other 237.5 233.8 240.8 248.6 245.6 248.2 248.6 248.6 240.4 247.3 236.9 14 Total cash assets 203.7 206.0 224.2 229.2 201.6 204.8 203.7 208.3 222.4 202.9 203.9 15 Reserves with Federal Reserve Banks .. 26.1 25.9 24.7 29.2 23.7 27.4 28.5 23.7 28.6 28.8 23.5 16 Cash in vault 30.2 30.7 29.6 30.8 31.1 30.7 29.8 30.8 32.2 30.8 31.2 17 Cash items in process of collection ... 75.5 75.5 90.6 87.7 73.5 74.1 71.5 78.4 84.1 69.4 71.3 18 Demand balances at U.S. depository institutions 27.2 29.2 32.7 33.3 27.9 28.4 28.3 28.6 31.7 28.7 29.1 19 Other cash assets 44.7 44.7 46.5 48.3 45.4 44.2 45.6 46.7 45.9 45.2 48.8 20 Other assets 275.8 284.4 285.0 289.3 282.3 278.1 273.0 282.2 279.7 283.3 285.2 21 Total liabilities 3,194.5 3,236.6 3,276.9 3,305.7 3,260.1 3,258.8 3,255.4 3,269.1 3,272.0 3,249.9 3,239.5 22 Total deposits 2,436.5 2,450.7 2,492.7 2,498.5 2,451.7 2,458.4 2,465.5 2,464.2 2,475.4 2,442.1 2,453.1 23 Transaction accounts 614.4 629.7 672.2 685.4 646.1 654.8 665.9 676.1 686.8 665.6 677.7 24 Savings deposits 631.4 643.7 651.8 657.7 669.5 682.0 692.6 694.3 702.5 704.2 713.5 25 Time deposits 1,190.6 1,177.3 1,168.6 1,155.5 1,136.1 1,121.7 1,107.0 1,093.9 1,086.1 1,072.2 1,061.9 26 Borrowings 484.0 503.6 490.2 503.8 506.1 503.3 493.7 501.0 492.6 500.2 470.9 27 Other liabilities 274.0 282.3 294.0 303.3 302.3 297.0 296.2 303.8 303.9 307.7 315.4 28 Residual (assets less liabilities)3 237.2 236.5 237.6 239.7 242.8 243.5 244.3 247.2 249.8 254.3 256.3 DOMESTICALLY CHARTERED COMMERCIAL BANKS4 29 Total assets 3,002.4 3,027.7 3,055.2 3,072.0 3,032.3 3,031.6 3,034.9 3,050.3 3,053.4 3,033.9 3,020.1 30 Loans and securities 2,660.6 2,677.2 2,691.7 2,698.7 2,692.8 2,693.0 2,702.6 2,700.4 2,695.6 2,689.2 2,679.0 31 Investment securities 621.6 640.0 646.5 652.2 654.7 662.1 670.3 675.1 679.3 691.0 695.8 32 U.S. government securities 477.3 494.7 500.7 506.4 511.1 519.9 529.5 535.0 540.7 553.3 556.7 33 Other 144.3 145.3 145.8 145.8 143.6 142.2 140.8 140.0 138.6 137.7 139.1 34 Trading account assets 32.3 35.3 36.4 33.8 38.0 37.7 39.2 37.7 36.6 34.9 36.5 35 Total loans 2,006.7 2,001.9 2,008.8 2,012.8 2,000.1 1,993.1 1,993.1 1,987.6 1,979.8 1,963.2 1,946.8 36 Interbank loans 142.3 144.1 150.1 149.4 154.0 150.9 149.0 138.1 142.8 129.3 123.3 37 Loans excluding interbank 1,864.4 1,857.8 1,858.7 1,863.4 1,846.1 1,842.2 1,844.2 1,849.5 1,837.0 1,833.9 1,823.5 38 Commercial and industrial 473.0 471.2 468.8 464.5 455.8 455.5 455.8 454.4 450.6 446.4 441.0 39 Real estate 814.9 818.9 819.1 819.3 818.8 817.9 819.0 827.1 825.8 825.4 826.3 40 Revolving home equity 68.1 69.2 69.4 70.0 70.3 69.9 69.8 70.5 70.9 71.5 71.9 41 Other real estate 746.8 749.7 749.6 749.3 748.5 748.0 749.2 756.5 754.9 754.0 754.3 42 Individual 368.8 365.4 363.6 369.6 366.8 362.4 359.5 359.5 358.2 358.8 357.7 43 All other 207.7 202.4 207.3 209.9 204.8 206.4 209.8 208.5 202.4 203.4 198.5 44 Total cash assets 176.4 179.0 197.5 201.7 176.0 179.7 177.7 182.1 194.3 173.8 173.1 45 Reserves with Federal Reserve Banks. 24.9 25.1 24.0 28.5 23.3 26.8 28.0 23.0 26.9 28.0 22.9 46 Cash in vault 30.1 30.7 29.6 30.7 31.1 30.7 29.8 30.8 32.2 30.8 31.1 47 Cash items in process of collection ... 74.0 73.7 88.4 85.6 71.1 71.8 69.0 75.9 81.7 66.4 69.0 48 Demand balances at U.S. depository institutions 25.1 27.3 30.7 31.1 26.5 27.1 26.9 27.2 30.2 27.2 27.8 49 Other cash assets 22.3 22.3 24.8 25.8 24.0 23.3 24.1 25.2 23.3 21.5 22.3 50 Other assets 165.4 171.4 166.0 171.5 163.5 158.9 154.6 167.8 163.5 170.9 168.0 51 Total liabilities 2,769.4 2,795.4 2,821.8 2,836.5 2,793.7 2,792.3 2,794.7 2,807.3 2,807.8 2,783.8 2,768.1 52 Deposits 2,287.1 2,301.9 2,342.1 2,344.0 2,293.0 2,302.7 2,309.1 2,314.3 2,322.5 2,288.2 2,295.4 53 Transaction accounts 605.4 620.3 662.0 674.9 636.1 645.2 655.8 666.4 677.1 655.4 667.8 54 Savings deposits (excluding checkable) 627.6 639.9 647.9 653.7 665.4 678.0 688.6 690.2 698.3 699.7 708.8 55 Time deposits 1,054.1 1,041.7 1,032.0 1,015.4 991.5 979.5 964.8 957.7 947.0 933.1 918.8 56 Borrowings 355.2 361.5 345.7 355.5 365.2 359.3 354.3 367.3 360.3 367.4 341.0 57 Other liabilities 127.1 132.1 134.1 137.0 135.6 130.3 131.3 125.7 125.1 128.2 131.6 58 Residual (assets less liabilities)3 233.0 232.3 233.4 235.5 238.6 239.3 240.1 243.0 245.6 250.1 252.1 1. Data are partly estimated. They include all bank-premises subsidiaries and and quarter-end condition reports. other significant majority-owned domestic subsidiaries. 3. This balancing item is not intended as a measure of equity capital for use in 2. Includes insured domestically chartered commercial banks, agencies and capital adequacy analysis. branches of foreign banks, Edge Act and Agreement corporations, and New York 4. Includes all member banks and insured nonmember banks. Loans and State foreign investment corporations. Data are estimates for the last Wednesday securities data are estimates for the last Wednesday of the month based on a of the month based on a sample of weekly reporting foreign-related institutions sample of weekly reporting banks and quarter-end condition reports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • October 1992 1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS Millions of dollars, Wednesday figures 1992 Account June 3 June 10 June 17 June 24 July 1 July 8 July 15 July 22 July 29 ASSETS 1 Cash and balances due from depository institutions 104,885 99,994 99,754 101,908 138,966 100,605 116,528 102,929 2 U.S. Treasury and government securities 246,905 247,890 246,325 245,995 247,068 248,240 249,012 248,160 3 Trading account 20,933 20,316 19,542 19,106 16,838 17,597 18,608 18,505 4 Investment account 225,972 227,575 226,783 226,889 230,230 230,643 230,404 229,655 5 Mortgage-backed securities1 81,799 81,645 81,060 81,139 80,907 80,980 80,723 80,282 All others, by maturity 6 One year or less 24,402 24.831 25,163 25,123 25,748 25,059 24,292 24,324 7 One year through five years 67,259 68,952 66,760 66,632 67,469 67,827 68,721 69,226 8 More than five years 52,512 52,147 53,800 53,996 56,106 56,777 56,668 55,823 9 Other securities 53,209 53,025 52,870 52,791 53,487 52,883 53,690 54,072 10 Trading account 1,383 1,147 1,297 1,527 1,538 1,351 1,314 1,281 11 Investment account 51,826 51,878 51,573 51,263 51,949 51,533 52,376 52,791 12 State and political subdivisions, by maturity .. 21,470 21,446 21,422 21,453 21,175 21,056 21,281 21,474 13 One year or less 3,193 3,196 3,187 3,193 3,181 3,192 3,446 3,665 14 More than one year 18,277 18,250 18,235 18,260 17,994 17,864 17,835 17,809 1 1 5 6 Othe O r t t h ra e d r i b ng o n a d c s c , o c u o n r t p a o s r s a e te ts stocks, and securities , 3 1 0 1 , ,8 3 8 5 0 5 " 3 1 0 2 , . 4 8 3 3 2 2 3 1 0 2 , , 1 8 5 4 1 6 2 1 9 1 , , 8 9 1 3 0 0 3 1 0 2 , , 7 0 7 4 4 4 3 1 0 2 , , 4 4 7 0 7 6 3 1 1 2 , , 0 4 9 3 5 5 3 1 1 2 , , 3 01 1 1 7 17 Federal funds sold2 95,263 97,346 98,188 89,726 100,830 90,390 88,157 83,692 18 To commercial banks in the United States 62,841 62,019 60,431 59,192 65,628 60,034 59,867 55,765 19 To nonbank brokers and dealers 26,594 30,558 31,636 25,391 29,540 25,578 24,018 23,508 20 To others3 5,828 4,770 6,121 5,143 5,662 4,777 4,271 4,418 21 Other loans and leases, gross 988,456r 985,5401 987,370 979,155 984,332 979,367 975,647 970,705 22 Commercial and industrial 284,464r 281,840r 282,075r 280,459r 282,748 279,457 279,513 277,569 23 Bankers acceptances and commercial paper ... 1,661 1,572 1,557 1,495 1,459 1,655 1,753 1,699 24 All other 282,803r 280,268r 280,518r 278,964r 281,289 277,802 277,760 275,870 25 U.S. addressees 281,466r 278,976r 279,233r 277,733r 279,515 276,287 276,211 274,367 26 Non-U.S. addressees 1,337 1,292 1,285 1,231 1,775 1,515 1,549 1,503 27 Real estate loans 401,201r 402,350" 401,071r 399,388r 399,262 399,481 398,153 397,397 28 Revolving, home equity 41,239 41.444 41,531 41,848 41,866 41,858 41,837 41,873 29 All other 359,961r 360,906r 359,539" 357,541r 357,3% 357,623 356,316 355,524 30 To individuals for personal expenditures 178,191r 178,183 178,750" 179,038 177,431 176,988 177,337 177,249 31 To financial institutions 40,790r 40,489" 40,45 lr 36,353r 38,413 39,686 37,015 36,884 32 Commercial banks in the United States 16,432 16,676 16,817 13,475 13,998 15,511 13,986 13,742 33 Banks in foreign countries 1,967 1,781 1,967 2,202 2,925 2,655 2,419 3,039 34 Nonbank financial institutions 22,391r 22,032r 21,667r 20,676r 21,490 21,519 20,610 20,103 35 For purchasing and carrying securities 13,593r 13,004r 15,167r 14,205r 14,582 14,182 13,613 13,343 3 3 7 6 T T o o s fi t n a a te n s c e a n a d g r p ic o u li l t t i u c r a a l l s p u r b o d d i u v c is ti i o o n n s 1 5 6 , , 9 5 7 1 8 9 r 1 5 6 , . 9 4 9 4 4 5 " 1 6 6 , , 0 40 1 1 5 r 1 6 6 , , 0 2 0 8 8 6 r r 1 6 6 , , 0 0 6 5 0 3 1 6 5 , , 0 8 8 6 2 3 1 6 5 , , 1 8 2 2 4 3 1 6 5 , , 1 6 4 8 4 0 38 To foreign governments and official institutions . 954 994 950 911 1,017 1,392 884 906 39 All other loans4 21,336r 20,866r 21,097r 21,154r 23,730 21,342 23,002 21,517 40 Lease-financing receivables 25,430 25,375 25,392 25,352 25,036 24,894 24,185 24,016 41 LESS: Unearned income 2,781 2,775 2,774 2,769 2,771 2,764 2,753 2,719 42 Loan and lease reserve5 38,740 38,880 38,803 38,532 37,607 37,806 37,896 37,828 43 Other loans and leases, net 946,935r 943,885r 945,793 937,854 943,954 938,797 934,998 930,158 44 Other assets 155,1191 155,440" 157,415r 161,337r 169,502 159,491 160,400 157,983 45 Total assets l,614,195r l,610,412r 1,613,190*° 1,601,540*" 1,665,850 1,602,812 1,615,221 1,589,004 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A21 1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1992 AAccccoouunntt June 3 June 10 June 17 June 24 July 1 July 8 July 15 July 22 July 29 LIABILITIES 46 Deposits l,125,188r 1,118,811 1,116,735 1,094,926 1,159,355 1,113,618 1,133,763 1,097,372 1,096,872 47 Demand deposits 246,681r 241,455 246,995 235,905 295,007 244,212 266,717 237,300 240,652 48 Individuals, partnerships, and corporations 199,224r 196,827" 196,356" 187,226" 230,226 198,987 213,198 191,341 194,224 49 Other holders 47,457r 44,628" 50,640" 48,679" 64,781 45,224 53,519 45,959 46,428 50 States and political subdivisions 7,793 7,569 8,327 8,985 8,778 7,376 7,380 8,055 7,730 51 U.S. government 2,040 2,027 4,028 2,162 4,088 1,528 3,558 1,417 1,818 52 Depository institutions in the United States 22,184 20,453 21,425 21,222 32,114 20,458 26,730 20,657 20,722 53 Banks in foreign countries 5,249 4,911 5,387 5,128 6,679 5,864 5,067 5,642 5,244 54 Foreign governments and official institutions 646 760 755 575 696 1,166 651 642 593 55 Certified and officers' checks 9,544r 8,907" 10,718" 10,608" 12,427 8,832 10,132 9,546 10,321 56 Transaction balances other than demand deposits 107,151r 105,251 104,655 100,711 105,501 105,258 104,420 102,970 102,181 57 Nontransaction balances 771,356r 772,105 765,085" 758,310 758,847 764,149 762,626 757,101 754,040 58 Individuals, partnerships, and corporations 739,859r 740,918" 735,890" 729,842" 731,110 737,144 735,368 729,638 726,702 59 Other holders 31,497r 31,187" 29,195" 28,467" 27,737 27,005 27,259 27,463 27,338 60 States and political subdivisions 25,580" 25,271" 24,140" 23,620" 23,269 22,419 22,303 22,382 22,345 61 U.S. government 2,174 2,148 2,210 2,211 2,135 2,120 2,104 2,095 2,115 62 Depository institutions in the United States 3,426 3,427 2,528 2,319 2,061 2,194 2,583 2,716 2,611 63 Foreign governments, official institutions, and banks 316r 342 317 317 272 272 269 270 266 64 Liabilities for borrowed money3 266,869 270,351 274,348 280,486 276,598 259,795 252,476 264,265 252,594 65 Borrowings from Federal Reserve Banks 0 0 65 0 100 1,661 0 0 0 66 Treasury tax and loan notes , 10,544 6,034 27,038 26,904 18,306 6,241 6,219 12,620 14,740 67 Other liabilities for borrowed money 256,324 264,316 247,245 253,582 258,193 251,893 246,257 251,645 237,854 68 Other liabilities (including subordinated notes and debentures) 96,696" 95,881" 96,121" 99,861" 101,368 100,918 99,914 98,003 103,317 69 Total liabilities 1,488,752" 1,485,043" 1,487,204" 1,475,273" 1,537,321 1,474,332 1,486,153 1,459,640 1,452,784 70 Residual (total assets less total liabilities)7 125,442 125,369" 125,986" 126,267" 128,529 128,481 129,069 129,364 129,257 MEMO 71 Total loans and leases, gross, adjusted, plus securities .. 1,316,438 1,317,939" 1,320,351 1,306,930 1,318,134 1,307,742 1,305,088 1,299,133 1,299,9% 72 Time deposits in amounts of $100,000 or more 149,048" 148,044" 144,494" 142,916" 138,589 141,511 139,897 139,085 137,891 73 Loans sold outright to affiliates 1,170 1,172 1,173 1,159 1,094 1,109 1,111 1,096 1,098 74 Commercial and industrial 674 673 673 676 623 638 643 631 633 75 Other 496 499 500 483 471 471 468 465 465 76 Foreign branch credit extended to U.S. residents10 23,639 24,401 24,559 24,919 24,354 24,600 24,843 24,914 25,036 77 Net due to related institutions abroad -4,511 -5,993 -10,528 -9,421 -10,883 -4,791 -8,907 -8,214 -4,199 1. Includes certificates of participation, issued or guaranteed by agencies of the 9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank U.S. government, in pools of residential mortgages. affiliates of the bank, the bank's holding company (if not a bank), and noncon- 2. Includes securities purchased under agreements to resell. solidated nonbank subsidiaries of the holding company. 3. Includes allocated transfer risk reserve. 10. Credit extended by foreign branches of domestically chartered weekly 4. Includes negotiable order of withdrawal accounts (NOWs), automatic trans- reporting banks to nonbank U.S. residents. Consists mainly of commercial and fer service (ATS), and telephone and preauthorized transfers of savings deposits. industrial loans, but includes an unknown amount of credit extended to other than 5. Includes borrowings only from other than directly related institutions. nonfinancial businesses. 6. Includes federal funds purchased and securities sold under agreements to NOTE. Data that formerly appeared in table 1.28, Assets and Liabilities of Large repurchase. Weekly Reporting Commercial Banks in New York City, can be obtained from the 7. This balancing item is not intended as a measure of equity capital for use in Board's H.4.2 (504) weekly statistical release. For ordering address, see inside capital-adequacy analysis. front cover. 8. Excludes loans to and federal funds transactions with commercial banks in the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • October 1992 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities1 Millions of dollars, Wednesday figures 1992 Account June 3 June 10 June 17 June 24 July 1 July 8 July 15 July 22 July 29 1 Cash and balances due from depository institutions 17,655 18,696 18,300 19,020 19,281 19,825 19,940 20,439 20,125 2 U.S. Treasury and government agency securities 22,315 21,559 21,896 23,454 23,113 22,682 23,194 24,501 24,270 3 Other securities 8,462 8,284 7,936 8,071 8,217 8,430 8,457 8,408 8,519 4 Federal funds sold1 14,794r 16,181r 14,182" 15,891" 17,781 17,171 15,250 17,017 16,966 5 To commercial banks in the United States .. 4,852 5,515 3,182 4,222 7,023 6,102 4,251 5,730 5,719 6 To others 9,942r 10,666r 11,001" 11,670" 10,758 11,068 11,000 11,287 11,246 7 8 Ot C he o r m l m oa e n r s c i a a n l d a n l d ea i s n e d s u , s g t r r o ia s l s 1 9 6 6 2 , , 4 1 6 2 1 2 r r 1 9 6 6 0 , , 0 8 4 4 2 8 r r 1 9 61 6 , , 4 l 3 l 8 lr r 1 9 6 5 1 , , 6 50 8 7 5 " 1 9 6 6 4 , , 5 24 4 4 8 1 9 6 6 1 , , 0 6 5 9 8 5 1 9 6 6 1 , ,6 3 4 1 7 6 1 9 5 6 9 , , 0 5 3 6 3 6 1 9 5 5 8 , , 7 1 9 5 1 1 9 Bankers acceptances and commercial paper 2,466r 2,452r 2,491r 2,425 2,476 2,450 2,377 2,493 2,399 10 All other 93,995r 93,589* 93,620" 93,260 94,072 93,609 93,940 93,540 93,391 11 U.S. addressees 90,935r 90,532r 90,548" 90,216" 91,034 90,533 90,944 90,464 90,356 12 Non-U.S. addressees 3,060" 3,057r 3,072r 3,045" 3,038 3,075 2,996 3,076 3,035 13 Loans secured by real estate 36,643r 36,548r 36,368r 36,273" 36,317 36,219 36,354 36,290 36,275 14 To financial institutions 23,440" 23,303r 23,189" 24,073" 25,142 23,711 23,138 22,137 21,410 15 Commercial banks in the United States. 8,145 7,754 8,061 8,003" 9,192 8,081 7,564 6,984 7,421 16 Banks in foreign countries 2,041 2,264 1,955 2,254 2,178 2,227 2,197 2,232 2,240 17 Nonbank financial institutions 13,254r 13,284r 13,174r 13,816 13,772 13,403 13,377 12,921 11,748 18 For purchasing and carrying securities .., 3,061r 2,575r 3,372" 3,008" 3,682 3,273 3,306 2,541 2,307 19 To foreign governments and official institutions 310 281 262 360 348 353 342 333 354 20 All other 2,206 2,100 2,135 2,107 2,208 2,082 2,190 2,230 2,014 21 Other assets (claims on nonrelated parties) . 27,568r 26,799r 27,101" 26,695 26,923 27,352 26,910 26,900 26,998 22 Total assets3 296,711 295,546 291,387 292,103 300,766 297,516 298,860 298,894 295,514 23 Deposits or credit balances due to other than directly related institutions 97,271 95,914 95,993 95,436 93,902 94,733 95,264 96,704 99,474 24 Demand deposits4 3,146 3,332 3,412 3,789 3,650 3,422 3,401 3,766 3,539 25 Individuals, partnerships, and corporations 2,518 2,507 2,655 2,656 2,827 2,673 2,637 2,593 2,684 26 Other 628 825 758 1,133 823 749 763 1,173 856 27 Nontransaction accounts 94,125 92,582 92,580 91,646 90,253 91,311 91,863 92,938 95,935 28 Individuals, partnerships, and corporations 67,415 66,489 66,860 66,120 64,532 64,793 65,336 66,215 68,671 29 Other 26,710 26,093 25,721 25,526 25,721 26,518 26,528 26,723 27,264 30 Borrowings from other than directly related institutions 101,623r 99,741 96,421 93,606 103,794 100,740 102,196 98,344 91,584 31 Federal funds purchased 55,100 53,982 53,420 50,012 58,710 56,130 59,148 50,232 47,782 32 From commercial banks in the United States 17,945 17,395 16,506 12,323 20,879 20,446 19,588 13,522 14,356 33 From others 37,154 36,587 36,914 37,689 37,831 35,684 39,560 36,709 33,426 34 Other liabilities for borrowed money 46,523 45,759 43,001 43,594 45,084 44,610 43,048 48,112 43,802 35 To commercial banks in the United States 10,621 10,678 10,086 9,838 10,735 10,608 9,968 10,136 10,412 36 To others 35,901 35,081 32,914 33,755 34,349 34,002 33,080 37,976 33,390 37 Other liabilities to nonrelated parties 26,801 26,522 25,541 26,391 26,700 26,378 26,533 26,288 26,917 38 Total liabilities6 296,711 295,546 291,387 292,103 300,766 297,516 298,860 298,894 295,514 MEMO 39 Total loans (gross) and securities, adjusted7. 194,696r 193,604r 194,210" 196,699" 197,140 195,795 196,734 196,778 194,764 40 Net due to related institutions abroad 27,222 30,191 32,900 39,207 35,162 35,303 31,405 35,493 37,052 1. Includes securities purchased under agreements to resell. 5. Includes securities sold under agreements to repurchase. 2. Includes transactions with nonbank brokers and dealers in securities. 6. Includes net to related institutions abroad for U.S. branches and agencies of 3. Includes net due from related institutions abroad for U.S. branches and foreign banks having a net "due to" position. agencies of foreign banks having a net "due from" position. 7. Excludes loans to and federal funds transactions with commercial banks in 4. Includes other transaction deposits. the United States. 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 1992 IItteemm 1987 1988 1989 1990 1991 Dec. Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 358,997 458,464 525,831 561,142 530,300 533,342 527,941 539,749 537,020 533,719 542,205 Financial companies' Dealer-placed paper2 2 Total 102,742 159,777 183,622 215,123 214,445 222200,,220088 210,686 221199,,228877 222255,,998899 222266,,555522 223344,,221122 3 Bank-related (not seasonally adjusted) 1,428 1,248 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Directly placed paper4 4 Total 174,332 194,931 210,930 199,835 183,195 118800,,222244 117788,,999955 118811,,448855 117722,,113366 116688,,991144 117711,,332211 5 Bank-related (not seasonally adjusted) 43,173 43,155 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6 Nonfinancial companies5 81,923 103,756 131,279 146,184 132,660 132,910 138,260 138,977 138,895 138,253 136,672 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 70,565 66,631 62,972 54,771 43,770 43,112 41,375 39,309 39,335 38,384 37,767 Holder 8 Accepting banks 10,943 9,086 9,433 9,017 11,017 11,291 10,578 9,640 9,821 9,255r 9,737 9 Own bills 9,464 8,022 8,510 7,930 9,347 9,273 8,831 8,296 8,427 7,954r 8,186 10 Bills bought 1,479 1,064 924 11,,008877 11,,667700 22,,001188 11,,774477 11,,334444 11,,339944 ll,,330011rr 11,,555511 Federal Reserve Banks 11 Own account 0 0 0 0 0 0 0 0 0 0 0 12 Foreign correspondents 965 1,493 1,066 918 1,739 1,574 1,364 1,492 1,598 1,477 1,338 13 Others 58,658 56,052 52,473 44,836 31,014 30,247 29,423 28,177 27,915 27,653r 26,692 Basis 14 Imports into United States 16,483 14,984 15,651 13,096 12,843 12,995 12,853 11,569 12,045 11,893 11,569 15 Exports from United States 15,227 14,410 13,683 12,703 10,351 9,740 9,252 9,403 9,168 8,702 9,062 16 All other 38,855 37,237 33,638 28,973 20,577 20,377 19,269 18,337 18,121 17,790 17,135 1. Institutions engaged primarily in commercial, savings, and mortgage bank- communications, construction, manufacturing, mining, wholesale and retail trade, ing; sales, personal, and mortgage financing; factoring, finance leasing, and other transportation, and services. business lending; insurance underwriting; and other investment activities. 6. Data on bankers acceptances are gathered from institutions whose accep- 2. Includes all financial-company paper sold by dealers in the open market. tances total $100 million or more annually. The reporting group is revised every 3. Bank-related series were discontinued in January 1989. January. In January 1988, the group was reduced from 155 to 111 institutions. TTie 4. As reported by financial companies that place their paper directly with current group, totaling approximately 100 institutions, accounts for more than 90 investors. percent of total acceptances activity. 5. Includes public utilities and firms engaged primarily in such activities as 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans1 Percent per year Period Av r e a r t a e g e Period Av r e a r t a e g e 10.50 1989 10.87 1990-—Apr. .. 10.00 1991-—July ... 11.00 1990 10.01 10.00 Aug. .. 11.50 1991 8.46 10.00 Sept. .. 11.00 July ... 10.00 Oct. ... 10.50 1989—Jan. 10.50 Aug. .. 10.00 Nov. .. Feb. 10.93 Sept. .. 10.00 Dec. .. 10.00 Mar. 11.50 Oct. ... 10.00 Apr. 11.50 10.00 1992-—Jan. ... 9.50 May 11.50 Dec. .. 10.00 Feb. 9.00 June 11.07 Mar. .. 8.50 July 10.98 1991-—Jan. ... 9.52 Apr. .. 8.00 Aug. 10.50 Feb. .. 9.05 May ... 7.50 Sept. 10.50 9.00 June .. 6.50 Oct. 10.50 9.00 July ... Nov. 10.50 8.50 Aug. .. 6.00 Dec. 10.50 June 8.50 1990—Jan. 10.11 Feb. 10.00 Mar. 10.00 1. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415) monthly statistical releases. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • October 1992 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 1992 1992, week ending IItteemm 11998899 11999900 11999911 Apr. May June July July 3 July 10 July 17 July 24 July 31 MONEY MARKET INSTRUMENTS 1 Federal funds1'2 3 9.21 8.10 5.69 3.73 3.82 3.76 3.25 3.87 3.24 3.28 3.22 3.18 2 Discount window borrowing^4 6.93 6.98 5.45 3.50 3.50 3.50 3.02 3.50 3.00 3.00 3.00 3.00 Commercial paper3,5,6 3 1-month 9.11 8.15 5.89 4.02 3.87 3.91 3.43 3.80 3.45 3.42 3.40 3.36 4 3-month 8.99 8.06 5.87 4.04 3.88 3.92 3.44 3.80 3.46 3.43 3.40 3.38 5 6-month 8.80 7.95 5.85 4.13 3.97 3.99 3.53 3.87 3.55 3.51 3.49 3.48 Finance paper, directly placed3,5,7 6 1-month 8.99 8.00 5.73 3.89 3.76 3.81 3.33 3.68 3.33 3.31 3.29 3.28 7 3-month 8.72 7.87 5.71 3.91 3.77 3.82 3.33 3.67 3.33 3.31 3.30 3.29 8 6-month 8.16 7.53 5.60 3.89 3.77 3.80 3.35 3.64 3.39 3.33 3.30 3.29 Bankers acceptances3'5'8 9 3-month 8.87 7.93 5.70 3.92 3.76 3.80 3.32 3.66 3.33 3.28 3.29 3.29 10 6-month 8.67 7.80 5.67 3.99 3.85 3.88 3.42 3.72 3.43 3.39 3.39 3.40 Certificates of deposit, secondary market7,9 11 1-month 9.11 8.15 5.82 3.97 3.79 3.83 3.35 3.74 3.36 3.31 3.30 3.30 12 3-month 9.09 8.15 5.83 4.00 3.82 3.86 3.37 3.75 3.37 3.34 3.32 3.32 13 6-month 9.08 8.17 5.91 4.13 3.96 3.97 3.50 3.90 3.51 3.47 3.45 3.43 14 Eurodollar deposits, 3-month3,10 9.16 8.16 5.86 4.05 3.84 3.87 3.40 3.74 3.44 3.35 3.31 3.31 U.S. Treasury bills Secondary market3,5 15 3-month 8.11 7.50 5.38 3.75 3.63 3.66 3.21 3.48 3.22 3.19 3.17 3.18 16 6-month 8.03 7.46 5.44 3.87 3.75 3.77 3.28 3.57 3.28 3.24 3.24 3.27 17 1-year 7.92 7.35 5.52 4.09 3.99 3.98 3.45 3.79 3.48 3.38 3.38 3.43 Auction average • • 18 3-month 8.12 7.51 5.42 3.81 3.66 3.70 3.28 3.59 3.23 3.22 3.16 3.18 19 6-month 8.04 7.47 5.49 3.93 3.78 3.81 3.36 3.66 3.32 3.31 3.24 3.27 20 1-year 7.91 7.36 5.54 4.34 4.20 4.07 3.65 3.93 n.a. n.a. n.a. 3.37 U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 8.53 7.89 5.86 4.30 4.19 4.17 3.60 3.96 3.64 3.53 3.53 3.57 22 2-year 8.57 8.16 6.49 5.34 5.23 5.05 4.36 4.76 4.41 4.30 4.28 4.31 23 3-year 8.55 8.26 6.82 5.93 5.81 5.60 4.91 5.32 4.99 4.87 4.80 4.83 24 5-year 8.50 8.37 7.37 6.78 6.69 6.48 5.84 6.22 5.93 5.85 5.74 5.70 25 7-year 8.52 8.52 7.68 7.15 7.06 6.90 6.36 6.69 6.45 6.40 6.29 6.17 26 10-year 8.49 8.55 7.86 7.48 7.39 7.26 6.84 7.07 6.90 6.92 6.82 6.67 27 30-year 8.45 8.61 8.14 7.96 7.89 7.84 7.60 7.74 7.62 7.66 7.61 7.46 Composite13 28 Over 10 years (long-term) 8.58 8.74 8.16 7.88 7.80 7.72 7.40 7.58 7.45 7.47 7.39 7.23 STATE AND LOCAL NOTES AND BONDS Moody's seriesu 29 7.00 6.96 6.56 6.36 6.25 6.19 5.72 6.01 5.87 5.77 5.72 5.50 30 Baa 7.40 7.29 6.99 6.85 6.67 6.57 6.10 6.37 6.26 6.14 6.11 5.87 31 Bond Buyer series 7.23 7.27 6.92 6.67 6.57 6.49 6.13 6.38 6.17 6.16 6.05 5.89 CORPORATE BONDS 32 Seasoned issues, all industries16 9.66 9.77 9.23 8.77 8.71 8.63 8.44 8.56 8.49 8.47 8.43 8.34 Rating group 33 Aaa 9.26 9.32 8.77 8.33 8.28 8.22 8.07 8.16 8.08 8.09 8.06 8.01 34 Aa 9.46 9.56 9.05 8.69 8.63 8.56 8.37 8.51 8.44 8.39 8.35 8.24 35 A 9.74 9.82 9.30 8.87 8.81 8.70 8.49 8.60 8.53 8.50 8.49 8.39 36 Baa 10.18 10.36 9.80 9.21 9.13 9.05 8.84 8.98 8.89 8.87 8.82 8.71 37 A-rated, recently offered utility bonds17 9.79 10.01 9.32 8.82 8.70 8.62 8.38 8.44 8.41 8.44 8.32 8.22 MEMO: Dividend-price ratio18 38 Preferred stocks 9.05 8.96 8.17 7.75 7.61 7.53 7.47 7.53 7.56 7.50 7.42 7.33 39 Common stocks 3.45 3.61 3.25 3.02 2.99 3.06 3.00 3.01 3.03 2.98 3.03 2.93 1. The daily effective federal funds rate is a weighted average of rates on 12. Yields on actively traded issues adjusted to constant maturities. Source: trades through New York brokers. U.S. Treasury. 2. Weekly figures are averages of seven calendar days ending on Wednesday 13. Unweighted average of rates on all outstanding bonds neither due nor of the current week; monthly figures include each calendar day in the month. callable in less than ten years, including one low-yielding "flower" bond. 3. Annualized using a 360-day year or bank interest. 14. General obligations based on Thursday figures; Moody's Investors Service. 4. Rate for the Federal Reserve Bank of New York. 15. General obligations only, with twenty years to maturity, issued by twenty 5. Quoted on a discount basis. state and local governmental units of mixed quality. Based on figures for 6. An average of offering rates on commercial paper placed by several leading Thursday. dealers for firms whose bond rating is AA or the equivalent. 16. Daily figures from Moody's Investors Service. Based on yields to maturity 7. An average of offering rates on paper directly placed by finance companies. on selected long-term bonds. 8. Representative closing yields for acceptances of the highest rated money 17. Compilation of the Federal Reserve. This series is an estimate of the yield center banks. on recently offered, A-rated utility bonds with a thirty-year maturity and five 9. An average of dealer offering rates on nationally traded certificates of years of call protection. Weekly data are based on Friday quotations. deposit. 18. Standard and Poor's corporate series. Preferred stock ratio based on a 10. Bid rates for Eurodollar deposits at 11 a.m. London time. Data are for sample of ten issues: four public utilities, four industrials, one financial, and one indication purposes only. transportation. Common stock ratios on the 500 stocks in the price index. 11. Auction date for daily data; weekly and monthly averages computed on an NOTE. These data also appear in the Board's H. 15 (519) and G. 13 (415) releases. issue-date basis. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A25 1.36 STOCK MARKET Selected Statistics 1991 1992 IInnddiiccaattoorr 11998899 11999900 11999911 Nov. Dec. Jan. Feb. Mar. Apr. May June July Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 180.13 183.66 206.35 213.25 214.26 229.34 228.12 225.21 224.55 228.55 224.68 228.17 2 Industrial 228.04 226.06 258.16 264.89 266.01 286.62 286.09 282.36 281.60 285.17 279.54 281.90 3 Transportation 174.90 158.80 173.97 188.52 185.47 201.55 205.53 204.09 201.28 207.88 202.02 198.36 4 Utility 94.33 90.72 92.64 96.78 98.08 99.30 96.19 94.15 94.92 98.24 97.23 101.18 5 Finance 162.01 133.21 150.84 159.78 159.96 174.50 174.05 173.49 171.05 175.89 174.82 180.96 6 Standard & Poor's Corporation (1941-43 = 10)1 323.05 335.01 376.20 385.87 388.51 416.08 412.56 407.36 407.41 414.81 408.27 415.05 7 American Stock Exchange (Aug. 31, 1973 = 50p 356.67 338.32 360.32 382.38 373.08 409.08 413.74 404.09 388.06 392.63 385.56 384.07 Volume of trading (thousands of shares) 8 New York Stock Exchange 165,568 156,359 179,411 187,191 197,914 239,903 226,476 185,581 206,251 182,027 195,089 194,138 9 American Stock Exchange 13,124 13,155 12,486 14,487 17,475 20,444 18,126 15,654 14,096 13,455 11,216 10,749 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 34,320 28,210 36,660 34,840 36,660 36,350 38,200 39,090 38,750 39,890 39,690 39,640 Free credit balances at brokers4 11 Margin accounts 7,040 8,050 8,290 7,040 8,290 7,865 7,620 7,350 8,780 7,700 7,780 7,920 12 Cash accounts 18,505 19,285 19,255 17,780 19,255 19,990 20,370 19,305 16,400 18,695 19,610 18,775 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance on securities other than options are the difference between the market value (100 companies. With this change the index includes 400 industrial stocks (formerly percent) and the maximum loan value of collateral as prescribed by the Board. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, financial. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 2. On July 5, 1983, the American Stock Exchange rebased its index, effectively 1971. cutting previous readings in half. On Jan. 1, 1977, the Board of Governors for the first time established in 3. Since July 1983, under the revised Regulation T, margin credit at broker- Regulation T the initial margin required for writing options on securities, setting dealers has included credit extended against stocks, convertible bonds, stocks it at 30 percent of the current market value of the stock underlying the option. On acquired through exercise of subscription rights, corporate bonds, and govern- Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the ment securities. Separate reporting of data for margin stocks, convertible bonds, same as the option maintenance margin required by the appropriate exchange or and subscription issues was discontinued in April 1984. self-regulatory organization; such maintenance margin rules must be approved by 4. Free credit balances are amounts in accounts with no unfulfilled commit- the Securities and Exchange Commission. Effective Jan. 31, 1986, the SEC ments to brokers and are subject to withdrawal by customers on demand. approved new maintenance margin rules, permitting margins to be the price of the 5. New series since June 1984. option plus 15 percent of the market value of the stock underlying the option. 6. These requirements, stated in regulations adopted by the Board of Gover- Effective June 8, 1988, margins were set to be the price of the option plus 20 nors pursuant to the Securities Exchange Act of 1934, limit the amount of credit percent of the market value of the stock underlying the option (or 15 percent in the that can be used to purchase and carry "margin securities" (as defined in the case of stock-index options). regulations) when such credit is collateralized by securities. Margin requirements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • October 1992 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1991 1992 AAccccoouunntt 11998899 11999900 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May SAIF-insured institutions 1 Assets 1,249,055 1,084,821 972,521 949,006 937,787 934,539 919,979 909,090 906,219 883,528 872,105 870,409 2 Mortgages 733,729 633,385 578,294 566,419 561,152 557,513 551,322 545,653 541,658 529,121 524,804 521,790 3 Mortgage-backed securities 170,532 155,228 135,751 135,246 134,895 133,341 129,461 127,372 127,767 125,401 124,935 124,396 4 Contra-assets to mortgage assets1 25,457 16,897 14,037 13,128 12,445 12,303 12,307 11,914 11,614 10,919 10,972 11,107 5 Commercial loans 32,150 24,125 20,390 18,166 17,765 17,147 17,139 16,827 16,051 15,394 15,063 14,595 6 Consumer loans 58,685 48,753 43,258 42,422 43,064 42,763 41,775 40,940 39,991 38,783 38,071 37,824 7 Contra-assets to nonmortgage loans . 3,592 1,939 1,545 1,398 1,373 1,150 1,239 1,111 1,115 990 982 878 8 Cash and investment securities 166,053 146,644 132,009 125,911 120,824 123,380 120,077 118,614 121,973 119,413 116,298 120,587 9 Other2 116,955 95,522 78,403 75,368 73,905 73,849 73,751 72,708 71,508 67,324 64,888 63,201 10 Liabilities and net worth 1,249,055 1,084,821 972,521 949,006 937,787 934,539 919,979 909,090 906,219 883,528 872,105 870,409 11 Savings capital 945,656 835,496 763,751 749,376 741,360 737,555 731,937 721,099 717,026 703,827 689,777 688,201 12 Borrowed money 252,230 197,353 142,908 132,727 127,356 125,147 121,923 119,965 118,554 110,031 111,262 110,126 13 FHLBB 124,577 100,391 74,424 68,816 66,609 66,005 65,842 62,642 63,138 62,628 62,268 61,439 14 Other 127,653 96,962 68,484 63,911 60,747 59,142 56,081 57,323 55,416 47,403 48,994 48,687 15 Other 27,556 21,332 22,648 19,080 20,381 21,690 17,560 19,004 21,398 18,356 18,964 19,705 16 Net worth 23,612 30,640 43,214 47,824 48,690 50,148 48,559 49,022 49,242 51,314 52,101 52,377 1. Contra-assets are credit-balance accounts that must be subtracted from the plus interest. corresponding gross asset categories to yield net asset levels. Contra-assets to NOTE. Components do not sum to totals because of rounding. Data for credit mortgage assets, mortgage loans, contracts, and pass-through securities—include unions and life insurance companies have been deleted from this table. Starting in loans in process, unearned discounts and deferred loan fees, valuation allowances the December 1991 issue, data for life insurance companies are shown in a special for mortgages "held for sale," and specific reserves and other valuation allow- table of quarterly data. ances. Contra-assets to nonmortgage loans include loans in process, unearned SOURCE. Savings Association Insurance Fund (SAIF)-insured institutions: discounts and deferred loan fees, and specific reserves and valuation allowances. Estimates by the Office of Thrift Supervision (OTS) for all institutions insured by 2. Includes holding of stock in Federal Home Loan Bank and finance leases the SAIF and based on the OTS thrift institution Financial Report. 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Fiscal Fiscal Fiscal Type of account or operation year year year 1992 1989 1990 1991 Feb. Apr. May June U.S. budget1 1 Receipts, total 990,701 1,031,308 1,054,265 62,056 72,917 138,430 62,244 120,909 2 On-budget 727,037r 749,654r 760,382 38,290 46,353 103,405 36,867 91,427 3 Off-budget 263,664r 281,654r 293,883 23,766 26,564 35.025 25,377 29,482 4 Outlays, total 1,144,020 1,251,766 1,323,757 111,230 123,629 123,821 109,029 117,126 5 On-budget 933,109* l,026,701r 1,082,072 88,006 100,700 102,795 86,340 102,318 6 Off-budget 210,911 225,064r 241,685 23,224 22,929 21.026 22,690 14,807 7 Surplus or deficit (-), total -153,319 -220,458r -269,492 -49,174 -50,712 14,609 —46,786r 3,783 8 On-budget -206,072 -277,047r -321,690 -49,716 -54,347 610 -49,473 -10,891 9 Off-budget 52,753 56,590 52,198 542 3,635 13,999 2,687 14,675 Source of financing (total) 10 Borrowing from the public 141,806 220,101 276,802 20,938 50,138 6,292 33,840 22,318 11 Operating cash (decrease, or increase (-)) . 3,425 818 -1,329 30,975 -2,961 -21,262 20,977 -26,919 12 Other -451 -5,981 -2,739 3,535 361 -8,031 818 MEMO 13 Treasury operating balance (level, end of period) 40,973 40,155 41,484 16,882 19,843 41,105 20,128 47,047 14 Federal Reserve Banks 13,452 7,638 7,928 5,477 6,846 4,692 5,583 13,630 15 Tax and loan accounts 27,521 32,517 33,556 11,405 12,997 36,413 14,545 33,417 1. In accordance with the Balanced Budget and Emergency Deficit Control Act in the International Monetary Fund (IMF); loans to the IMF; other cash and of 1985, all former off-budget entries are now presented on-budget. Federal monetary assets; accrued interest payable to the public; allocations of SDRs; Financing Bank (FFB) activities are now shown as separate accounts under the deposit funds; miscellaneous liability (including checks outstanding) and asset agencies that use the FFB to finance their programs. The act also moved two accounts; seigniorage; increment on gold; net gain or loss for U.S. currency social security trust funds (federal old-age survivors insurance and federal valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and disability insurance trust fund) off-budget. The Postal Service is included as an profit on sale of gold. off-budget item in the Monthly Treasury Statement beginning in 1990. SOURCES. Monthly Treasury Statement of Receipts and Outlays of the U.S. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota Government (MTS) and the Budget of the U.S. Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Calendar year Fiscal Fiscal SSoouurrccee oorr ttyyppee year year 1990 1991 1992 1992 11999900 11999911 H2 HI H2 HI May June July RECEIPTS 1 All sources 1,031,308 1,054,265 503,123 540,504 519,293 560,647 62,244 120,909 79,074 2 Individual income taxes, net 466,884 467,827 230,745 232,389 233,983 235,244 12,012 53,072 35,098 3 Withheld 388,384 404,152 207,469 193,440 210,552 198,868 29,470 33,570 34,034 4 Presidential Election Campaign Fund 32 32 3 31 1 19 17 -4 1 5 Nonwithheld 151,285 142,693 31,728 109,405 33,2% 110,995 2,447 21,104 2,920 6 Refunds 72,817 79,050 8,455 70,487 9,867 74,639 19,922 1,599 1,857 Corporation income taxes 7 Gross receipts 110,017 113,599 54,044 58,903 54,016 61,681 3,606 21,631 33,,889900 8 Refunds 16,510 15,513 7,603 7,904 7,956 8,056 915 848 1,158 9 Social insurance taxes and contributions, net 380,047 396,011 178,468 214,303 186,839 224,554 40,362 38,380 31,722 10 Employment taxes and contributions 353,891 370,526 167,224 199,727 175,802 208,110 32,005 37,355 2299,,551144 11 Self-employment taxes and contributions3 21,795 25,457 2,638 22,150 3,306 20,433 1,472 4,409 0 12 Unemployment insurance 21,635 20,922 8,996 12,296 8,721 14,070 7,991 642 1,770 13 Other net receipts4 4,522 4,563 2,249 2,279 2,317 2,375 366 384 438 14 Excise taxes 35,345 42,430 17,535 20,703 24,690 22,358 3,440 4,226 3,704 15 Customs deposits 16,707 15,921 8,568 7,488 8,694 8,145 1,224 1,477 1,658 16 Estate and gift taxes 11,500 11,138 5,333 5,631 5,521 5,714 853 842 %2 17 Miscellaneous receipts5 27,316 22,852 16,032 8,991 13,508 11,005 1,662 2,127 3,198 OUTLAYS 18 All types 1,251,776 1,323,757 647,461 632,153 694,474 704,577 109,029 117,126 123,671 19 National defense 299,331 272,514 149,497 122,089 147,531 146,963 24,324 25,851 30,180 20 International affairs 13,762 16,167 8,943 7,592 7,651 8,464 369 930 684 21 General science, space, and technology — 14,444 15,946 8,081 7,4% 8,473 7,952 1,401 951 1,417 22 Energy 2,372 2,511 1,222 1,235 1,536 1,442 312 140 275 23 Natural resources and environment 17,067 18,708 9,933 8,324 11,221 8,625 1,460 1,626 1,677 24 Agriculture 11,958 14,864 6,878 7,684 7,335 7,514 1,629 678 468 25 Commerce and housing credit 67,160 75,639 37,491 17,992 36,579 15,583 -3,251 1,719 2,297 26 Transportation 29,485 31,531 16,218 14,748 17,094 15,681 2,747 3,352 3,144 27 Community and regional development 8,498 • 7,432 3,939 3,552 3,784 3,901 619 638 676 28 Education, training, employment, and social services 38,497 41,479 18,988 21,234 21,104 23,224 3,198 3,938 3,125 29 Health 57,716 71,183 31,424 35,608 41,458 43,698 6,684 8,635 7,164 30 Social security and medicare 346,383 373,495 176,353 190,247 193,156 205,443 33,808 37,446 35,553 31 Income security 147,314 171,618 75,948 88,778 87,923 105,435 17,158 13,565 18,300 32 Veterans benefits and services 29,112 31,344 15,479 14,326 17,425 15,597 2,704 2,527 4,010 33 Administration of justice 10,004 12,295 5,265 6,187 6,586 7,438 1,188 1,400 1,217 34 General government 10,724 11,358 6,976 5,212 6,821 5,525 387 1,456 411 35 Net interest6 184,221 195,012 94,650 98,556 99,405 100,324 17,080 15,447 16,670 36 Undistributed offsetting receipts' -36,615 -39,356 -19,829 -18,702 -20,435 -18,229 -2,787 -3,172 -3,597 1. Functional details do not sum to total outlays for calendar year data because 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. revisions to monthly totals have not been distributed among functions. Fiscal year 6. Includes interest received by trust funds. total for outlays does not correspond to calendar year data because revisions from 7. Consists of rents and royalties for the outer continental shelf and U.S. the Budget have not been fully distributed across months. government contributions for employee retirement. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of 3. Old-age, disability, and hospital insurance. Receipts and Outlays of the U.S. Government, and the U.S. Office of Manage- 4. Federal employee retirement contributions and civil service retirement and ment and Budget, Budget of the U.S. Government, Fiscal Year 1990. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 DomesticN onfinancial Statistics • October 1992 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1990 1991 1992 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 3,176 3,266 3,397 3,492 3,563 3,683 3,820 3,897 n.a. 2 Public debt securities 3,144 3,233 3,365 3,465 3,538 3,665 3,802 3,881 3,985 3 Held by public 2,369 2,438 2,537 2,598 2,643 2,746 2,833 2,918 n.a. 4 Held by agencies 775 796 828 867 895 920 969 964 n.a. 5 Agency securities 32 33 33 27 25 18 19 16 n.a. 6 Held by public 32 33 32 26 25 18 19 16 n.a. 7 Held by agencies 0 0 0 0 0 0 0 0 n.a. 8 Debt subject to statutory limit 3,077 3,161 3,282 3,377 3,450 3,569 3,707 3,784 3,891 9 Public debt securities 3,077 3,161 3,281 3,377 3,450 3,569 3,706 3,783 3,890 10 Other debt1 0 0 0 0 0 0 0 0 0 11 MEMO: Statutory debt limit 3,123 3,195 4,145 4,145 4,145 4,145 4,145 4,145 4,145 1. Consists of guaranteed debt of Treasury and other federal agencies, specified SOURCES. U.S. Treasury Department, Monthly Statement of the Public Debt of participation certificates, notes to international lending organizations, and District the United States and Treasury Bulletin. of Columbia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1991 1992 Type and holder 11998888 11998899 11999900 11999911 Q3 Q4 Q1 Q2 1 Total gross public debt 2,684.4 2,953.0 3,364.8 3,801.7 3,665.3 3,801.7 3,881.3 3,984.7 By type 2 Interest-bearing 2,663.1 2,931.8 3,362.0 3,798.9 3,662.8 3,798.9 3,878.5 3,981.8 3 Marketable 1,821.3 1,945.4 2,195.8 2,471.6 2,390.7 2,471.6 2,552.3 2,605.1 4 Bills 414.0 430.6 527.4 590.4 564.6 590.4 615.8 618.2 5 Notes 1,083.6 1,151.5 1,265.2 1,430.8 1,387.7 1,430.8 1,477.7 1,517.6 6 Bonds 308.9 348.2 388.2 435.5 423.4 435.5 443.8 454.3 7 Nonmarketable1 841.8 986.4 1,166.2 1,327.2 1,272.1 1,327.2 1,326.2 1,376.7 8 State and local government series 151.5 163.3 160.8 159.7 158.1 159.7 157.8 161.9 9 Foreign issues 6.6 6.8 43.5 41.9 41.6 41.9 42.0 38.7 10 Government 6.6 6.8 43.5 41.9 41.6 41.9 42.0 38.7 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes. 107.6 115.7 124.1 135.9 133.5 135.9 139.9 143.2 13 Government account series 575.6 695.6 813.8 959.2 908.4 959.2 956.1 1,002.5 14 Non-interest-bearing 21.3 21.2 2.8 2.8 2.5 2.8 2.8 2.9 By holder* 15 U.S. Treasury and other federal agencies and trust funds 589.2 707.8 828.3 968.7 919.6 968.7 963.7 16 Federal Reserve Banks 238.4 228.4 259.8 281.8 264.7 281.8 267.6 17 Private investors 1,858.5 2,015.8 2,288.3 2,563.2 2,489.4 2,563.2 2,664.0 18 Commercial banks 184.9 164.9 171.5 233.9 216.9 233.9 240.0 19 Money market funds 11.8 14.9 45.4 80.0 64.5 80.0 84.8 20 Insurance companies 118.6 125.1 142.0 172.9 162.9 172.9 175.0 21 Other companies 87.1 93.4 108.9 150.8 142.0 150.8 166.0 n.a. 22 State and local treasuries 471.6 487.5 490.4 498.8 491.4 498.8 500.0 Individuals 23 Savings bonds 109.6 117.7 126.2 138.1 135.4 138.1 142.0 24 Other securities 79.2 98.7 107.6 125.8 122.1 125.8 126.1 25 Foreign and international 362.2 392.9 421.7 453.4 439.4 453.4 468.0 26 Other miscellaneous investors 433.0 520.7 674.5 709.5 714.8 709.5 762.1 1. Includes (not shown separately) securities issued to the Rural Electrification 5. Consists of investments of foreign balances and international accounts in the Administration, depository bonds, retirement plan bonds, and individual retire- United States. ment bonds. 6. Includes savings and loan associations, nonprofit institutions, credit unions, 2. Nonmarketable series denominated in dollars, and series denominated in mutual savings banks, corporate pension trust funds, dealers and brokers, certain foreign currency held by foreigners. U.S. Treasury deposit accounts, and federally sponsored agencies. 3. Held almost entirely by U.S. Treasury and other federal agencies and trust SOURCES. U.S. Treasury Department, data by type of security, Monthly funds. Statement of the Public Debt of the United States; data by holder, the Treasury 4. Data for Federal Reserve Banks and U.S. government agencies and trust Bulletin. funds are actual holdings; data for other groups are Treasury estimates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages, par value 1992 1992, week ending item Apr. May June June 3 June 10 June 17 June 24 July 1 July 8 July 15 July 22 July 29 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills 40,313 41,651 39,314 42,345 35,994 38,907 35,890 45,977 49,046 39,343 34,783 38,145 Coupon securities, by maturity 2 Less than 3.5 years 45,264 50,118 3377,,887799rr 35,771 36,230 33,465 44,694 38,519 49,640 35,197 39,302 48,717 3 3.5 to 7.5 years 32,994 34,305 31,360* 31,317 25,053 28,140 36,188 37,266 46,878 38,142 40,842 50,409 4 7.5 to 15 years 13,123 18,162 13,912 13,966 11,871 14,149 14,481 15,414 20,540 17,951 16,097 23,474 5 15 years or more 11,899 14,862 11,926 11,682 11,545 11,570 13,419 11,163 18,470 14,853 14,071 18,447 Federal agency securities Debt, maturing in 6 Less than 3.5 years 4,518 3,977 4,461 4,192 3,523 3,958 4,513 6,398 4,753 3,950 3,942 4,264 7 3.5 to 7.5 years 712 539 513 578 496 618 449 433 643 723 530 752 8 7.5 years or more 600 514 553 538 508 585 620 494 986 445 521 783 Mortgage-backed 9 Pass-throughs 11,948 12,941 14,203r 12,955 14,661 16,354 13,902 12,255 14,966 17,221 13,067 11,837 10 Mothers1; 2,954 3,586 3,864r 3,006 3,522 3,980 4,213 4,356 3,165 4,156 3,637 5,673 By type of counterparty Primary dealers and brokers 11 U.S. Treasury securities 89,144 99,351 83,448 85,346 76,406 79,161 91,008 86,736 110,814 91,535 93,589 112,794 Federal agency securities 12 Debt 1,199 1,023 1,007 994 843 894 1,048 1,310 1,226 1,163 798 1,207 13 Mortgage-backed 6,681 7,308 8,382r 8,043 7,809 8,734 9,113 7,998 8,478 9,379 8,072 7,132 Customers 14 U.S. Treasury securities 54,448 59,747 50,942r 49,735 44,287 47,071 53,664 61,602 73,760 53,951 51,506 66,398 Federal agency securities 15 Debt 4,630 4,007 4,520 4,314 3,684 4,268 4,534 6,016 5,156 3,955 4,195 4,593 16 Mortgage-backed 8,222 9,219 9,686r 7,918 10,374 11,601 9,003 8,613 9,653 11,998 8,632 10,377 FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. Treasury securities 17 Bills 3,509 3,584 3,562r 4,379 2,374 3,918 4,650 2,629 5,153 2,895 3,878 3,435 Coupon securities, by maturity 18 Less than 3.5 years 1,710 2,327 1,715 2,164 2,042 1,445 1,352 1,760 2,206 1,480 1,272 2,015 19 3.5 to 7.5 years 876 1,362 1,469 1,881 1,114 1,412 1,258 1,938 1,129 1,224 1,173 1,663 20 7.5 to 15 years 900 1,281 1,319 1,722 929 1,096 1,261 1,854 1,746 1,523 1,713 2,244 21 15 years or more 6,333 8,763 6,576r 8,728 6,164 6,730 6,348 5,568 10,402 7,986 8,200 12,524 Federal agency securities Debt, maturing in 22 Less than 3.5 years 68 27 45 31 48 13 98 27 42 13 19 14 23 3.5 to 7.5 years 68 42 63 43 109 101 30 16 32 57 53 109 24 7.5 years or more 12 19 22 104 11 7 6 12 69 10 17 72 Mortgage-backed 25 Pass-throughs 12,638 13,257 12,873r 11,656 17,095 12,863 9,301 12,984 18,922 20,520 12,996 16,331 26 Others 2,311 2,441 2,657r 1,969 3,112 2,859 2,629 2,384 2,199 3,951 3,424 3,536 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 1,369 1,222 1,255 1,166 1,893 882 844 1,502 2,193 1,120 1,575 1,518 28 3.5 to 7.5 years 269 265 317 374 211 311 221 534 1,119 598 463 632 29 7.5 to 15 years 482 546 484 126 439 617 565 543 734 563 414 1,051 30 15 years or more 2,148 2,803 1,576 1,385 2,147 1,663 1,243 1,311 2,544 1,820 2,164 3,590 Federal agency, mortgagebacked securities 31 Pass-throughs 253 404 389" 418 248 324 434 570 713 447 227 716 1. Transactions are market purchases and sales of securities as reported to the 4. Futures transactions are standardized agreements arranged on an exchange. Federal Reserve Bank of New York by the U.S. government securities dealers on Forward transactions are agreements made in the over-the-counter market that its published list of primary dealers. Averages for transactions are based on the specify delayed delivery. All futures transactions are included regardless of time number of trading days in the period. Immediate, forward, and futures transac- to delivery. Forward contracts for U.S. Treasury securities and federal agency tions are reported at principal value, which does not include accrued interest; debt securities are included when the time to delivery is more than five business options transactions are reported at the face value of the underlying securities. days. Forward contracts for mortgage-backed agency securities are included Dealers report cumulative transactions for each week ending Wednesday. when the time to delivery is more than thirty days. 2. Transactions for immediate delivery include purchases or sales of securities 5. Options transactions are purchases or sales of put-and-call options, whether (other than mortgage-backed agency securities) for which delivery is scheduled in arranged on an organized exchange or in the over-the-counter market, and include five business days or less and "when-issued" securities that settle on the issue options on futures contracts on U.S. Treasury and federal agency securities. date of offering. Transactions for immediate delivery of mortgage-backed agency NOTE. In tables 1.42 and 1.43, "n.a." indicates that data are not published securities include purchases and sales for which delivery is scheduled in thirty days or because of insufficient activity. less. Stripped securities are reported at market value by maturity of coupon or corpus. Data formerly shown under options transactions for U.S. Treasury securities, 3. Includes such securities as collateralized mortgage obligations (CMOs), real bills; Federal agency securities, debt; and mortgage-backed securities, other than estate mortgage investment conduits (REMICs), interest only-securities (IOs), pass-throughs are no longer available because of insufficient activity. and principal-only securities (POs). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • October 1992 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1992 1992, week ending IItteemm Apr. May June June 3 June 10 June 17 June 24 July 1 July 8 July 15 July 22 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 10,753 9,333 9,816 11,507 9,067 5,457 7,877 17,190 15,914 9,161 7,095 Coupon securities, by maturity 2 Less than 3.5 years -2,263 -4,079 -7,838 -9,647 -8,961 -9,974 -6,573 -4,608 -7,164 -8,788 -11,293 3 3.5 to 7.5 years -4,372 -5,501 -6,907 -4,635 -6,542 -9,017 -5,522 -7,621 -3,168 -7,856 -12,078 4 7.5 to 15 years -7,111 -2,882 -3,706 -3,003 -3,176 -3,846 -4,678 -3,377 -4,242 -6,876 -7,473 5 15 years or more -2,205 -792 -177 -848 -1,222 915 431 -606 1,037 1,920 3,799 Federal agency securities Debt, maturing in 6 Less than 3.5 years 3,564 4,744 5,265 4,447 4,984 5,616 6,106 4,613 4,614 5,540 5,950 7 3.5 to 7.5 years 2,216 1,833 2,178 1,864 1,931 2,294 2,215 2,444 2,723 2,888 3,037 8 7.5 years or more 3,609 3,229 3,482 3,175 3,225 3,571 3,718 3,556 3,438 3,442 3,427 Mortgage-backed 9 Pass-throughs 32,097 29,282 31,088 24,347 32,402 38,915 33,759 20,679 30,097 31,907 32,937 10 All others 15,680 18,134 18,708 17,668 15,086 18,569 20,716 21,273 21,146 22,126 22,229 Other money market instruments 11 Certificates of deposit 2,882 3,093 2,796 3,147 2,310 2,479 2,792 3,560 2,494 2,999 2,153 12 Commercial paper 6,942 6,628 6,416 7,057 5,921 5,886 6,133 7,621 7,766 6,511 4,343 13 Bankers acceptances 960 1,222 1,045 1,237 1,092 1,012 1,076 896 1,272 1,378 1,010 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills -763 131 2,093 1,126 1,304 3,152 3,939 108 -6,664 -8,457 -7,339 Coupon securities, by maturity 15 Less than 3.5 years 996 2,291 2,178 2,342 2,071 1,779 2,642 2,146 2,021 2,426 2,417 16 3.5 to 7.5 years 3,852 4,256 3,201 3,175 3,851 3,177 2,717 3,047 2,440 2,739 4,004 17 7.5 to 15 years 831 814 -493 1,137 1,026 -352 -1,752 -1,774 -1,826 -567 -6 18 15 years or more -7,323 -7,131 -7,518 -7,350 -7,531 -8,134 -7,838 -6,495 -7,546 -7,570 -7,797 Federal agency securities Debt, maturing in 19 Less than 3.5 years -24 52 17 -7 26 12 45 -7 82 77 84 20 3.5 to 7.5 years 104 -46 -19 -47 65 -35 -101 10 -37 -69 -84 21 7.5 years or more 17 -3 -11 -60 -22 1 3 -6 4 22 100 Mortgage-backed 22 Pass-throughs -14,896 -18,064 -23,361 -17,503 -24,530 -30,474 -26,575 -12,879 -22,244 -23,070 -22,881 23 All others 1,659 948 2,486 1,415 2,384 1,603 3,687 2,771 3,665 4,680 6,636 24 Certificates of deposit -138,412 -195,169 -222,717 -232,008 -223,931 -214,525 -217,307 -232,523 -228,303 -222,017 -241,408 Financing6 Reverse repurchase agreements 25 Overnight and continuing 201,359 205,626 208,440 208,214 209,093 205,236 207,272 212,891 211,229 217,246 215,337 26 Term 289,867 295,243 297,759 285,150 312,009 314,980 302,698 261,585 300,931 304,005 324,976 Repurchase agreements 27 Overnight and continuing 328,181 336,107 339,382 334,%7 330,811 343,789 346,195 338,500 350,817 368,779 363,769 28 Term 257,388 261,671 266,179 244,653 271,529 285,818 283,674 227,376 261,637 271,877 299,783 Securities borrowed 29 Overnight and continuing 78,173 81,269 84,573 82,900 84,029 83,658 86,226 85,181 91,160 89,215 95,654 30 Term 30,570 31,415 35,187 32,433 34,242 35,655 36,763 35,283 37,669 37,355 37,908 Securities loaned 31 Overnight and continuing 7,424 7,746 7,627 7,241 7,100 7,693 8,375 7,487 7,422 6,868 9,246 32 Term 3,042 1,542 801 741 920 952 801 515 5% 554 756 Collateralized loans 33 Overnight and continuing 17,398 16,610 14,879 16,211 15,797 13,918 14,234 15,014 18,039 18,033 17,625 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 149,760 146,537 148,092 149,128 148,305 145,190 147,903 150,930 151,389 152,761 151,528 35 Term 245,889 250,339 255,829 240,437 265,047 269,188 263,940 227,724 258,795 262,161 278,373 Repurchase agreements 36 Overnight and continuing 178,680 186,552 187,957 184,588 187,153 188,118 188,506 189,749 193,057 1%,762 198,476 37 Term 197,3% 197,971 200,805 183,858 207,518 213,604 214,707 170,297 195,505 200,788 220,184 1. Data for positions and financing are obtained from reports submitted to the delivery. Forward contracts for U.S. Treasury securities and federal agency debt Federal Reserve Bank of New York by the U.S. government securities dealers on securities are included when the time to delivery is more than five business days. its published list of primary dealers. Weekly figures are close-of-business Wednes- Forward contracts for mortgage-backed agency securities are included when the day data; monthly figures are averages of weekly data. 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 that settle terminated without advance notice by either party; term agreements have a fixed on the issue date of offering. Net immediate positions of mortgage-backed agency maturity of more than one business day. securities include securities purchased or sold that have been delivered or are 7. Matched-book data reflect financial intermediation activity in which the scheduled to be delivered in thirty days or less. borrowing and lending transactions are matched. Matched-book data are included 4. Includes such securities as collateralized mortgage obligations (CMOs), real in the financing breakdowns given above. The reverse repurchase and repurchase estate mortgage investment conduits (REMICs), interest-only (10 securities), and numbers are not always equal because of the "matching" of securities of different principal-only (POs) securities. values or types of collateralization. 5. Futures positions are standardized contracts arranged on an exchange. NOTE. Data for futures and forward commercial paper and bankers acceptances and Forward positions reflect agreements made in the over-the-counter market that for term financing of collateralized loans are no longer available because of insufficient specify delayed delivery. All futures positions are included regardless of time to activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1992 AAggeennccyy 11998888 11998899 11999900 11999911 Jan. Feb. Mar. Apr. May 1 Federal and federally sponsored agencies 381,498 411,805 434,668 442,772 440,317 445,895 445,646 449,472 449,561 2 Federal agencies 35,668 35,664 42,159 41,035 42,872 40,791 41,322 40,788 40,535 3 Defense Department1 8 7 7 7 7 7 7 7 7 4 Export-Import Bank2,3 11,033 10,985 11,376 9,809 9,809 9,809 8,644 8,644 8,644 5 Federal Housing Administration 150 328 393 397 335 372 421 419 427 6 Government National Mortgage Association certificates of participation5 0 0 0 0 0 0 0 0 0 7 Postal Service6 6,142 6,445 6,948 8,421 8,421 8,421 9,771 9,771 9,771 8 Tennessee Valley Authority 18,335 17,899 23,435 22,401 24,300 22,182 22,479 21,947 21,686 9 United States Railway Association6 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 345,830 375,407 392,509 401,737 397,496 405,104 404,324 408,684 409,026 11 Federal Home Loan Banks 135,836 136,108 117,895 107,543 104,607 106,341 106,511 107,011 106,368 12 Federal Home Loan Mortgage Corporation 22,797 26,148 30,941 30,262 29,332 26,824 25,154 25,233 27,612 n Federal National Mortgage Association 105,459 116,064 123,403 133,937 133,988 141,315 141,315 145,856 144,655 14 Farm Credit Banks8 53,127 54,864 53,590 52,199 51,673 51,867 52,651 52,368 52,080 15 Student Loan Marketing Association 22,073 28,705 34,194 38,319 38,419 39,280 39,216 38,739 38,885 16 Financing Corporation10 5,850 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation11 690 847 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation 0 4,522 23,055 29,996 29,996 29,996 29,996 29,9% 29,9% MEMO 19 Federal Financing Bank debt13 142,850 134,873 179,083 185,576 183,098 182,737 185,849 186,879 179,617 Lending to federal and federally sponsored agencies 2.0 Export-Import Bank 11,027 10,979 11,370 9,803 9,803 9,803 8,638 88,,663388 88,,663388 21 Postal Service6 5,892 6,195 6,698 8,201 8,201 8,201 9,551 9,551 9,551 n Student Loan Marketing Association 4,910 4,880 4,850 4,820 4,820 4,820 4,820 4,820 4,820 23 Tennessee Valley Authority 16,955 16,519 14,055 10,725 10,725 10,025 10,025 9,325 9,025 24 United States Railway Association6 0 0 0 0 0 0 0 0 0 Other lending14 25 Farmers Home Administration 58,496 53,311 52,324 48,534 48,534 48,534 48,534 47,634 45,434 26 Rural Electrification Administration 19,246 19,265 18,890 18,562 18,534 18,494 18,424 18,440 18,473 27 Other 26,324 23,724 70,896 84,931 82,481 82,860 85,857 88,471 83,676 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. On-budget since Sept. 30, 1976. 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, the Department of Health, Education, and Welfare, the Department of 13. The FFB, which began operations in 1974, is authorized to purchase or sell Housing and Urban Development, the Small Business Administration, and the obligations issued, sold, or guaranteed by other federal agencies. Because FFB Veterans' Administration. incurs debt solely for the purpose of lending to other agencies, its debt is not 6. Off-budget. included in the main portion of the table in order to avoid double counting. 7. Includes outstanding noncontingent liabilities: notes, bonds, and deben- 14. Includes FFB purchases of agency assets and guaranteed loans; the latter tures. Some data are estimated. are loans guaranteed by numerous agencies, with the guarantees of any one 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, agency generally being small. The Farmers Home Administration entry consists shown in line 17. exclusively of agency assets, while the Rural Electrification Administration entry 9. Before late 1982, the Association obtained financing through the Federal consists of both agency assets and guaranteed loans. Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 DomesticN onfinancial Statistics • October 1992 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1991 1992 Type of issue or issuer, or use 1990 1991 Dec. Jan. Feb. Mar. Apr. May June July 1 All issues, new and refunding1 113,646 120,339 154,402 15,796 13,426 14,032 15,956 15,141 14,155 20,501 16,184 By type of issue 2 General obligation 35,774 39,610 55,100 5,871 4,937 6,102 6,212 4,455 5,429 7,213 6,808 3 Revenue 77,873 81,295 99,302 9,925 8,489 7,930 9,744 10,686 8,726 13,288 9,376 By type of issuer 4 State , 11,819 15,149 24,939 1,671 1,047 4,404 3,174 575 1,165 2,063 2,836 5 Special district or statutory authority' 71,022 72,661 80,614 9,435 8,537 6,605 7,511 9,802 8,251 12,894 8,838 6 Municipality, county, or township .. 30,805 32,510 48,849 4,690 3,842 4,404 5,271 4,764 4,739 5,544 4,510 7 Issues for new capital, total 84,062 103,235 116,953 12,020 7,941 9,467 10,637 9,020 9,259 14,096 7,565 By use of proceeds 8 Education 15,133 17,042 21,121r 1,924 2,139 2,604 1,075 2,208 1,651 2,132 1,747 9 Transportation 6,870 11,650 13,395 488 1,314 1,996 1,412 921 1,669 2,618 571 10 Utilities and conservation 11,427 11,739 21,039" 1,931 2,0% 800 2,104 1,380 771 1,851 629 11 Social welfare 16,703 23,099 25,648r 3,070 1,088 1,925 1,811 2,582 2,045 4,266 887 12 Industrial aid 5,036 6,117 8,376r 1,083 301 123 528 558 133 724 91 13 Other purposes 28,894 34,607 30,275 3,524 1,003 2,019 3,707 1,371 2,990 2,505 3,640 1. Par amounts of long-term issues based on date of sale. SOURCES. Investment Dealer's Digest beginning April 1990. Securities Data/ 2. Since 1986, has included school districts. Bond Buyer Municipal Data Base beginning 1986. Public Securities Association for earlier data. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 1992 Type of issue, offering, or issuer 1989 Nov. Dec. Feb. Apr. May June 1 All issues1 377,836 339,052 455,291 34,276' 32,391 45,037" 37,464" 38,303" 28,724" 45,286" 47,534 2 Bonds2 319,965 298,814 389,933 25,223r 24,871 38,353r 27,928" 31,946" 23,386" 38,370" 38,537 By type of offering 3 Public, domestic 179,694 188,778 287,041 23,154r 23,326 34,682" 26,301" 29,417" 22,012" 35,398" 35,784 4 Private placement, domestic . 117,420 86,982 74,930 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 22,851 23,054 27,%2 2,070 1,544 3,671 1,626 2,529 1,373" 2,972" 2,753 By industry group 6 Manufacturing 76,175 52,635 85,535 4,761 4,880" 7,229" 3,910 8,755 4,150" 6,236" 7,189 7 Commercial and miscellaneous 49,465 40,018 37,809 1,819 1,953 2,751" 1,664 3,870" 2,301" 2,472" 1,630 8 Transportation 10,032 12,711 13,628 180 150 455 1,004 641 190 621" 899 9 Public utility 18,656 17,621 23,994 3,063r 2,238 3,836" 3,569 1,8% 3,462" 3,041" 4,251 10 Communication 8,461 6,597 9,331 226 1,085 2,467 416 725 1,205" 1,590 1,028 11 Real estate and financial 157,176 169,231 219,637 15,175 14,564r 21,616" 17,364" 16,060" 12,078" 24,410" 23,539 12 Stocks2 57,870 40,165 75,467 9,053 7,520 6,684 9,536 6,357 5,338 6,916 8,997 By type of offering 13 Public preferred 6,194 3,998 17,408 3,240 2,771 739 4,306 625 334 1,552 2,916 14 Common 26,030 19,443 47,860 5,813 4,749 5,945 5,230 5,732 5,004 5,364 6,081 15 Private placement3 25,647 16,736 10,109 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 16 Manufacturing 9,308 5,649 24,154 4,054 2,684 2,098 2,541 2,637 1,523 2,499 3,000 1 1 7 8 C Tr o a m n m sp e o r r c t i a a t l i o a n n d miscellaneous 7 1 , , 4 9 4 2 6 9 10,1 3 7 6 1 9 1 2 9 , , 4 4 3 1 9 8 2,158 0 2,535 0 9 4 9 2 3 6 3,19 7 4 8 1,5 1 9 9 5 3 1 n , . 1 a 6 . 2 2,0 1 1 7 0 6 1 1 , , 0 0 7 6 0 4 19 Public utility 3,090 416 3,474 174 233 268 489 704 577 826 610 20 Communication 1,904 3,822 475 84 17 163 n.a. 53 333 12 n.a. 21 Real estate and financial 34,028 19,738 25,507 2,583 2,014 2,736 3,234 1,175 1,691 1,324 3,254 1. Figures represent gross proceeds of issues maturing in more than one year; 2. Monthly data cover only public offerings. they are the principal amount or number of units calculated by multiplying by the 3. Monthly data are not available. offering price. Figures exclude secondary offerings, employee stock plans, SOURCES. IDD Information Services, Inc., the Board of Governors of the investment companies other than closed-end, intracorporate transactions, equi- Federal Reserve System, and, before 1989, the U.S. Securities and Exchange ties sold abroad, and Yankee bonds. Stock data include ownership securities Commission. issued by limited partnerships. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Market and Corporate Finance A33 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets Millions of dollars 1991 1992 IItteemm11 11999900 11999911 Nov. Dec. Jan Feb. Mar. Apr. Mayr June 1 Sales of own shares2 344,420 464,488 41,365 51,018 66,048 48,015 50,462 52,309 48,127 51,457 288,441 342,088 28,454 39,050 41,917 30,869 35,464 39,302 31,409 37,457 3 Net sales3 55,979 122,400 12,911 11,968 24,131 17,146 14,998 13,007 16,718 14,000 4 Assets4 568,517 807,001 752,798 807,077 823,767 846,868 848,842 870,011 897,211 911,218 5 Cash5 48,638 60,937 59,689 60,292 62,289 64,022 64,216 67,632 67,270 69,508 6 Other 519,875 746,064 693,109 746,785 761,478 782,846 781,626 802,379 829,941 841,710 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 assets exclude both 5. Includes all U.S. Treasury securities and other short-term debt securities. money market mutual funds and limited-maturity municipal bond funds. SOURCE. Investment Company Institute. Data based on reports of membership, 2. Includes reinvestment of dividends. Excludes reinvestment of capital gains which comprises substantially all open-end investment companies registered with distributions. the Securities and Exchange Commission. Data reflect underwritings of new 3. Does not includes sales or redemptions resulting from transfers of shares companies. into or out of money market mutual funds within the same fund family. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1990 1991 1992 AAccccoouunntt 11998899 11999900 11999911 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 1 Profits with inventory valuation and capital consumption adjustment 362.8 361.7 346.3 351.4 344.0 349.6 347.3 341.2 347.1 384.0 390.6 2 Profits before taxes 342.9 355.4 334.7 367.0 354.7 337.6 332.3 336.7 332.3 366.1 379.1 3 Profits tax liability 141.3 136.7 124.0 143.0 133.7 121.3 122.9 127.0 125.0 136.4 144.5 4 Profits after taxes 201.6 218.7 210.7 224.0 221.0 216.3 209.4 209.6 207.4 229.7 234.6 5 Dividends 134.6 149.3 146.5 150.6 151.9 150.6 146.2 145.1 143.9 143.6 146.6 6 Undistributed profits 67.1 69.4 64.2 73.4 69.1 65.7 63.2 64.5 63.4 86.2 88.0 7 Inventory valuation -17.5 -14.2 3.1 -32.6 -21.2 6.7 9.9 -4.8 .7 -5.4 -15.9 8 Capital consumption adjustment 37.4 20.5 8.4 17.0 10.5 5.3 5.1 9.3 14.1 23.3 27.4 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.50 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data at seasonally adjusted annual rates 1990 1991 1992 IInndduussttrryy 11999900 11999911 1199992211 Q4 Ql Q2 Q3 Q4 Ql Q2 Q31 1 Total nonfarm business 532.61 529.20 553.86 530.13 535.50 524.57 527.86 528.88 536.49 558.50 557.55 Manufacturing 2 Durable goods industries 82.58 77.95 75.18 79.03 81.24 79.69 74.51 76.36 74.49 76.64 74.39 3 Nondurable goods industries 110.04 105.66 104.03 110.69 109.90 107.66 102.54 102.54 99.72 108.59 105.24 Nonmanufacturing 4 Mining 9.88 10.02 8.98 10.12 9.89 10.09 10.09 10.00 8.83 9.53 9.08 Transportation 5 Railroad 6.40 5.92 7.41 6.81 5.59 6.27 6.50 5.32 6.06 7.41 8.73 6 Air 8.87 10.22 10.00 7.54 11.18 10.10 9.81 9.79 9.12 10.68 10.13 7 Other 6.20 6.55 7.14 6.82 6.48 6.68 6.52 6.54 6.44 7.35 6.82 Public utilities 8 Electric 44.10 43.67 49.41 45.88 43.36 42.87 43.09 45.36 45.73 50.30 50.13 9 Gas and other 23.11 22.84 23.40 24.36 23.68 21.71 23.38 22.60 23.08 22.69 28.31 10 Commercial and other 241.43 246.37 268.31 238.87 244.19 239.50 251.42 250.37 263.02 265.31 269.21 1. Figures are amounts anticipated by business. insurance, personal and business services, and communication. 2. "Other" consists of construction, wholesale and retail trade, finance and SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • October 1992 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period; not seasonally adjusted 1990 1991 1992 AAccccoouunntt 11998888 11998899 11999900 Q3 Q4 Q1 Q2 Q3 Q4 Ql ASSETS 1 Accounts receivable, gross1 437.3 462.9 492.9 491.0 492.9 482.9 488.5 484.7 480.3 475.7 2 Consumer 144.7 138.9 133.9 138.9 133.9 127.1 127.5 125.3 121.9 118.4 3 Business 245.3 270.2 293.5 288.6 293.5 291.7 295.2 293.2 292.6 291.6 4 Real estate 47.3 53.8 65.5 63.6 65.5 64.1 65.7 66.2 65.8 65.8 5 LESS: Reserves for unearned income 52.4 54.7 57.6 57.9 57.6 57.2 58.0 57.6 55.1 53.6 6 Reserves for losses 7.8 8.4 9.6 9.4 9.6 10.7 11.1 13.1 12.9 13.0 7 Accounts receivable, net 377.1 399.8 425.7 423.8 425.7 415.0 419.3 414.1 412.3 409.1 8 All other 86.6 102.6 113.9 109.3 113.9 118.7 122.8 136.4 149.0 145.5 9 Total assets 463.7 502.4 539.6 533.1 539.6 533.7 542.1 550.5 561.2 554.6 LIABILITIES AND CAPITAL 10 Bank loans 23.9 27.0 31.0 27.0 31.0 35.6 36.9 39.6 42.3 38.0 11 Commercial paper 152.1 160.7 165.3 161.9 165.3 155.5 156.1 156.8 159.5 154.4 Debt 12 Other short-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 Long-term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 Due to parent 36.8 35.2 37.5 45.9 37.5 32.4 34.2 36.5 34.5 34.5 15 Not elsewhere classified 147.0 162.7 178.2 170.9 178.2 182.4 184.5 185.0 191.3 189.8 16 All other liabilities 60.0 61.5 63.9 66.2 63.9 64.3 67.1 68.8 69.0 72.0 17 Capital, surplus, and undivided profits 44.0 55.2 63.7 61.3 63.7 63.4 63.3 63.8 64.8 66.0 18 Total liabilities and capital 463.7 502.4 539.6 533.1 539.6 533.7 542.1 550.5 561.2 554.6 1. Excludes pools of securitized assets. 1.52 DOMESTIC FINANCE COMPANIES Business Credit Outstanding and Net Change1 Millions of dollars, end of period; seasonally adjusted, except as noted 1992 Type of credit 1989 1990 1991 Feb. Apr. May SEASONALLY ADJUSTED 1 Total 481,436 523,023 519,573 524,135 525,570 521,174 520,242 519,668 2 Consumer 157,766 161,070 154,786 155,388 157,226 157,106 156,103 154,989 3 Real estate2 53,518 65,147 65,388 66,169 66,267 66,323 67,032 66,898 4 Business 270,152 2%, 807 299,400 302,579 302,077 297,744 297,107 297,781 NOT SEASONALLY ADJUSTED 5 Total 483,537 526,404 522,853" 523,865r 522,984" 521,282" 522,017' 520,682 6 Consumer 162,961 167,489 155,677r 155,269" 155,469" 155,753" 155,106" 154,414 7 Motor vehicles 84,126 75,045 63,413 62,206 61,959 60,655 61,717 59,399 8 Other consumer3 26,053 29,116 29,483 28,280 27,901 27,517 26,477 26,074 9 Securitized motor vehicles4 13,690 19,837 23,166 24,879 24,016 25,723 24,697 26,529 1 1 1 0 Re S a e l c e u s r t i a t t i e z 2 e d other consumer4 53 5 , , 7 9 8 9 1 4 65 8 , , 5 2 0 6 9 5 6 1 5 0 , , 7 6 6 1 4 0 6 1 6 1 , , 1 1 1 82 8 6 1 5 1 , , 5 1 2 7 7 2 6 1 5 1 , , 7 6 5 7 2 8 6 1 6 2 , , 6 0 0 4 4 5 6 1 6 1 , , 6 7 5 4 0 6 12 Business 266,795 293,406 301,412r 302,478" 301,988" 299,777" 300,307 299,618 13 Motor vehicles 90,416 92,072 90,319 88,359 88,535 88,006 89,105 88,585 14 Retail5.... 29,505 26,401 22,507 21,896 21,745 20,688 20,842 20,143 15 Wholesale6 34,093 33,573 31,216 30,080 30,821 30,799 31,161 30,893 16 Leasing 26,818 32,098 36,596 36,383 35,969 36,519 37,102 37,549 17 Equipment 122,246 137,654 141,399 142,809 142,562 142,696 143,510 143,431 18 Retail..... 29,828 31,968 30,962 31,634 31,516 31,601 31,824 31,569 19 Wholesale6 6,452 11,101 9,671 9,552 9.646 9,265 9,217 9,116 20 Leasing 85,966 94,585 100,766 101,623 101,400 101,830 102,469 102,746 21 Other business 47,055 53,532 51,583 53,787 53,537 51,179 49,717 59,291 22 Securitized business assets n.a. 5,467 8,807 8,593 8,244 8,199 8,360 8,311 23 Retail 710 667 576 531 526 480 206 196 24 Wholesale n.a. 3,281 5,285 5,312 5,071 5,098 5,137 5,147 25 Leasing 1,311 1,519 2,946 2,750 2.647 2,621 2,776 2,968 1. Includes finance company subsidiaries of bank holding companies but not of balances are no longer carried on the balance sheets of the loan originator. retailers and banks. Data are before deductions for unearned income and losses. 5. Passenger car fleets and commercial land vehicles for which licenses are Data in this table also appear in the Board's G.20 (422) monthly statistical release. required. For ordering address, see inside front cover. 6. Credit arising from transactions between manufacturers and dealers, that is, 2. Includes all loans secured by liens on any type of real estate, for example, floor plan financing. first and junior mortgages and home equity loans. 7. includes loans on commercial accounts receivable, factored commercial 3. Includes personal cash loans, mobile home loans, and loans to purchase other accounts, and receivable dealer capital; small loans used primarily for business or types of consumer goods such as appliances, apparel, general merchandise, and farm purposes; and wholesale and lease paper for mobile homes, campers, and recreation vehicles. travel trailers. 4. Outstanding balances of pools upon which securities have been issued; these Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A35 1.53 MORTGAGE MARKETS Conventional Mortgages on New Homes Millions of dollars, except as noted 1992 IItteemm 11998899 11999900 11999911 Jan. Feb. Mar. Apr. May June July Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 159.6 153.2 155.0 153.9 154.7 167.0 162.5 158.7 154.4 173.5 2 Amount of loan (thousands of dollars) 117.0 112.4 114.0 114.9 110.2 123.2 122.7 119.7 116.1 132.6 3 Loan-price ratio (percent) 74.5 74.8 75.0 75.2 72.9 76.1 76.9 77.3 77.3 77.5 4 Maturity (years) 28.1 27.3 26.8 26.2 24.5 25.2 26.6 26.4 25.0 26.4 5 Fees and charges (percent of loan amount)2 2.06 1.93 1.71 1.85 1.84 1.75 1.88 1.69 1.57 1.19 6 Contract rate (percent per year) 9.76 9.68 9.02 8.17 8.29 8.21 8.26 8.30 8.15 7.81 Yield (percent per year) 7 OTS series3 10.11 10.01 9.30 8.49 8.65 8.51 8.58 8.59 8.43 8.00 8 HUD series4 10.21 10.08 9.20 8.69 8.74 8.91 8.78 8.66 8.42 8.14 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series)5 10.24 10.17 9.25 8.72 8.74 8.85 8.79 8.66 8.56 8.12 10 GNMA securities6 9.71 9.51 8.59 7.81 8.01 8.20 8.10 8.00 7.90 7.63 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 104,974 113,329 122,837 131,058 133,399 136,506 139,808 140,899 142,148 142,465 12 FH A/V A-insured 19,640 21,028 21,702 21,981 21,980 21,902 21,914 21,924 22,218 22,263 13 Conventional 85,335 92,302 101,135 109,077 111,419 114,604 117,894 118,975 119,930 120,202 Mortgage transactions (during period) 14 Purchases 22,518 23,959 37,202 4,809 5,358 7,282 7,258 5,576 5,809 4,191 Mortgage commitments (during period)1 15 Issued8 n.a. 23,689 40,010 7,129 6,589 6,738 5,400 4,392 4,662 4,663 16 To sell9 n.a. 5,270 7,608 249 343 1,143 2,219 1,695 1,831 807 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)9 17 Total 20,105 20,419 24,131 27,384 27,030 28,821 30,077 28,710 28,621 n.a. 18 FHA/V A-insured 590 547 484 456 450 446 438 432 426 n.a. 19 Conventional 19,516 19,871 23,283 26,928 26,580 28,376 29,639 28,278 28,195 n.a. Mortgage transactions (during period) 20 Purchases 78,588 75,517 97,727 11,475 12,190 16,001 18,109 16,405 14,222 n.a. 21 Sales 73,446 73,817 92,478 10,521 11,998 13,639 16,139 17,214 13,740 12,210 Mortgage commitments (during period)10 22 Contracted 88,519 102,401 114,031 15,683 23,278 19,098 23,748 13,334 19,114 n.a. 1. Weighted averages based on sample surveys of mortgages originated by Association (GNMA), assuming prepayment in twelve years on pools of thirtymajor institutional lender groups; compiled by the Federal Housing Finance year mortgages insured by the Federal Housing Administration or guaranteed by Board in cooperation with the Federal Deposit Insurance Corporation. the Department of Veterans Affairs carrying the prevailing ceiling rate. Monthly 2. Includes all fees, commissions, discounts, and "points" paid (by the figures are averages of Friday figures 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 one- to four-family loan commitments accepted in the Federal National the end of ten years; from Office of Thrift Supervision (OTS). Mortgage Association's (FNMA's) free market auction system, and through the 4. Average contract rates on new commitments for conventional first mort- FNMA-GNMA tandem plans. gages; from U.S. Department of Housing and Urban Development (HUD). 8. Does not include standby commitments issued, but includes standby 5. Average gross yields on thirty-year, minimum-downpayment, first mort- commitments converted. gages insured by the Federal Housing Administration (FHA) for immediate 9. Includes participation loans as well as whole loans. delivery in the private secondary market. Based on transactions on first day of 10. Includes conventional and government-underwritten loans. The Federal subsequent month. Large monthly movements of average yields may reflect Home Loan Mortgage Corporation's mortgage commitments and mortgage transmarket adjustments to changes in maximum permissible contract rates. actions include activity under mortgage securities swap programs, while the 6. Average net yields to investors on fully modified pass-through securities corresponding data for FNMA exclude swap activity. backed by mortgages and guaranteed by the Government National Mortgage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • October 1992 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1991 1992 Type of holder and property 11998888 11998899 11999900 QL Q2 Q3 Q4 1 All holders 3,270,118 3,676,616 3,912,587 3,948,048 3,999,815 4,015,902 4,049,054 By type of property 2 One- to four-family residences 2,201,231 2,549,935 2,765,344 2,790,897 2,838,164 2,870,066 2,905,401 3 Multifamily residences 291,405 303,416 307,077 310,757 311,820 307,615 309,291 4 Commercial 692,236 739,240 756,203 762,452 766,060 755,076 750,622 5 Farm 85,247 84,025 83,962 83,942 83,771 83,145 83,740 By type of holder 6 Major financial institutions 1,831,472 1,931,537 1,914,315 1,902,398 1,898,308 1,860,372 1,852,489 7 Commercial banks 674,003 767,069 844,826 856,848 871,416 870,938 876,282 8 One- to four-family 334,367 389,632 455,931 462,130 476,363 478,851 486,573 9 Multifamily 33,912 38,876 37,015 38,390 37,564 36,398 37,420 10 Commercial 290,254 321,906 334,648 338,821 339,450 337,365 333,853 11 Farm . 15,470 16,656 17,231 17,507 18,039 18,323 18,436 12 Savings institutions 924,606 910,254 801,628 776,551 755,219 719,341 705,249 13 One- to four-family 671,722 669,220 600,154 583,694 570,044 547,455 538,113 14 Multifamily 110,775 106,014 91,806 88,743 86,448 81,880 79,912 15 Commercial 141,433 134,370 109,168 103,647 98,280 89,603 86,836 16 Farm 676 650 500 468 447 402 388 17 Life insurance companies 232,863 254,214 267,861 269,000 271,674 270,094 270,958 18 One- to four-family 11,164 12,231 13,005 11,737 11,743 11,720 11,763 19 Multifamily 24,560 26,907 28,979 29,493 30,006 29,962 30,115 20 Commercial 187,549 205,472 215,121 216,768 219,204 218,179 218,111 21 Farm 9,590 9,604 10,756 11,001 10,721 10,233 10,968 22 Finance companies4 37,846 45,476 48,777 48,187 48,972 50,658 51,567 23 Federal and related agencies 200,570 209,498 250,761 264,189 276,798 282,500 283,375 24 Government National Mortgage Association 26 23 20 22 22 22 23 25 One- to four-family 26 23 20 22 22 22 23 26 Multifamily . 0 0 0 0 0 0 0 27 Farmers Home Administration 42,018 41,176 41,439 41,307 41,430 41,566 41,713 28 One- to four-family 18,347 18,422 18,527 18,522 18,521 18,598 18,4% 29 Multifamily 8,513 9,054 9,640 9,720 9,898 9,990 10,141 30 Commercial 5,343 4,443 4,690 4,715 4,750 4,829 4,905 31 Farm 9,815 9,257 8,582 8,350 8,261 8,149 8,171 32 Federal Housing and Veterans' Administrations 5,973 6,087 8,801 9,492 10,210 10,440 11,056 33 One- to four-family 2,672 2,875 3,593 3,600 3,729 3,740 4,056 34 Multifamily 3,301 3,212 5,208 5,891 6,480 6,700 7,000 35 Federal National Mortgage Association 103,013 110,721 116,628 119,196 122,806 125,451 128,983 36 One- to four-family 95,833 102,295 106,081 108,348 111,560 113,696 117,087 37 Multifamily 7,180 8,426 10,547 10,848 11,246 11,755 11,8% 38 Federal Land Banks 32,115 29,640 29,416 29,253 29,152 29,053 28,970 39 One- to four-family 1,890 1,210 1,838 1,884 2,041 2,124 2,225 40 Farm 30,225 28,430 27,577 27,368 27,111 26,929 26,745 41 Federal Home Loan Mortgage Corporation 17,425 21,851 21,857 23,221 23,649 23,906 26,809 42 One- to four-family 15,077 18,248 19,185 20,570 21,120 21,489 24,125 43 Multifamily 2,348 3,603 2,672 2,651 2,529 2,417 2,684 44 Mortgage pools or trusts6 811,847 946,766 1,110,555 1,144,876 1,186,251 1,228,788 1,264,935 45 Government National Mortgage Association 340,527 368,367 403,613 409,929 413,707 422,501 425,295 46 One- to four-family 331,257 358,142 391,505 397,631 401,304 409,826 412,536 47 Multifamily 9,270 10,225 12,108 12,298 12,403 12,675 12,759 48 Federal Home Loan Mortgage Corporation 226,406 272,870 316,359 328,215 341,132 348,843 359,163 49 One- to four-family 219,988 266,060 308,369 319,978 332,624 341,183 351,906 50 Multifamily 6,418 6,810 7,990 8,237 8,509 7,660 7,257 51 Federal National Mortgage Association 178,250 228,232 299,833 312,101 331,089 351,917 371,984 52 One- to four-family 172,331 219,577 291,194 303,554 322,444 343,430 362,667 5 5 3 4 Fa M rm u e lt r i s f a H m o il m y e Administration5 , 5,9 1 1 0 9 4 8,65 8 5 0 8,63 6 9 6 8,54 6 7 2 8,64 5 5 5 8,48 5 7 2 9,31 4 7 7 55 One- to four-family 26 21 17 14 13 12 11 56 Multifamily 0 0 0 0 0 0 0 57 Commercial 38 26 24 23 21 20 19 58 Farm 40 33 26 24 21 20 17 59 Individuals and others7 426,229 588,815 636,955 636,585 638,457 644,241 648,256 60 One- to four-family 259,971 414,763 449,440 447,344 447,339 451,988 454,841 61 Multifamily 79,209 81,634 84,408 84,227 83,452 83,740 83,772 62 Commercial 67,618 73,023 83,816 85,790 88,495 89,424 90,628 63 Farm 19,431 19,395 19,291 19,224 19,171 19,089 19,014 1. Based on data from various institutional and governmental sources; figures 4. Assumed to be entirely loans on one- to four-family residences. for some quarters estimated in part by the Federal Reserve. Multifamily debt 5. Securities guaranteed by the Farmers Home Administration (FmHA) sold to refers to loans on structures of five or more units. the Federal Financing Bank were reallocated from FmHA mortgage pools to 2. Includes loans held by nondeposit trust companies but not loans held by FmHA mortgage holdings in 1986:4 because of accounting changes by the FmHA. bank trust departments. 6. Outstanding principal balances of mortgage-backed securities insured or 3. Includes savings banks and savings and loan associations. Beginning 1987:1, guaranteed by the agency indicated. Includes private pools, which are not shown data reported by institutions insured by the Federal Savings and Loan Insurance as a separate line item. Corporation include loans in process and other contra-assets (credit balance 7. Other holders include mortgage companies, real estate investment trusts, accounts that must be subtracted from the corresponding gross asset categories to state and local credit agencies, state and local retirement funds, noninsured yield net asset levels). pension funds, credit unions, and other U.S. agencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Installment Credit A37 1.55 CONSUMER INSTALLMENT CREDIT Total Outstanding and Net Change1 Millions of dollars, amounts outstanding, end of period 1992 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11998888 11998899 11999900 Jan Feb. Mar. Apr. Mayr June Seasonally adjusted 11 TToottaall 662,553 716,825 735,338 728,618 728,395 727,404 723,821 722,928 721,909 22 AAuuttoommoobbiillee 285,364 292,002 284,993 263,134 261,659 262,125 260,376 259,834 257,036 33 RReevvoollvviinngg 174,269 199,308 222,950 244,288 245,974 245,259 245,905 246,220 247,075 44 OOtthheerr 202,921 225,515 227,395 221,196 220,762 220,020 217,541 216,874 217,798 Not seasonally adjusted 5 Total 673,320 728,877 748,524 733,294 725,882 721,091 718,676 718,420 718,840 By major holder 6 Commercial banks 324,792 342,770 347,087 335,320 330,464 327,697 326,205 324,791 323,847 7 Finance companies 144,677 138,858 133,863 119,206 120,280 118,353 118,364 116,138 116,690 8 Credit unions 88,340 93,114 93,057 91,894 91,469 91,164 91,339 91,605 91,823 9 Retailers 48,438 44,154 44,822 41,567 40,015 39,454 39,553 37,824 37,438 10 Savings institutions 63,399 57,253 46,969 39,448 38,479 37,142 36,499 36,224 35,618 11 Gasoline companies 3,674 3,935 4,822 4,377 4,151 3,988 4,094 4,193 4,360 12 Pools of securitized assets2 n.a. 48,793 77,904 101,482 101,024 103,293 102,622 107,645 109,064 By mqjor type of credit* n Automobile 285,421 292,060 285,050 261,871 259,723 259,530 258,449 258,665 225577,,113399 14 Commercial banks 123,392 126,288 124,913 110,707 110,077 110,047 109,056 108,610 106,667 15 Finance companies 98,338 84,126 75,045 62,204 61,957 60,655 61,717 59,399 60,056 16 Pools of securitized assets .. 0 18,185 24,428 29,460 28,480 29,942 28,679 31,406 31,024 17 Revolving 184,045 210,310 235,056 249,320 245,088 242,267 242,708 243,315 244,752 18 Commercial banks 123,020 130,811 133,385 133,839 130,848 128,550 128,506 128,013 127,654 19 Retailers 43,833 39,583 40,003 36,953 35,438 34,892 34,989 33,245 32,844 20 Gasoline companies 3,674 3,935 4,822 4,377 4,151 3,988 4,094 4,193 4,360 21 Pools of securitized assets .. n.a. 23,477 44,335 60,087 60,633 60,953 61,190 63,801 65,784 22 Other 203,854 226,507 228,418 222,103 221,071 219,294 217,519 216,440 216,949 23 Commercial banks 78,380 85,671 88,789 90,774 89,539 89,100 88,643 88,168 89,526 24 Finance companies 46,339 54,732 58,818 57,002 58,323 57,698 56,647 56,739 56,634 25 Retailers 4,605 4,571 4,819 4,614 4,577 4,562 4,564 4,579 4,594 26 Pools of securitized assets .. n.a. 7,131 9,141 11,935 11,911 12,398 12,753 12,438 12,256 1. The Board's series on amounts of credit covers most short- and intermedi- 2. Outstanding balances of pools upon which securities have been issued; these ate-term credit extended to individuals that is scheduled to be repaid (or has the balances are no longer carried on the balance sheets of the loan originator. option of repayment) in two or more installments. 3. Totals include estimates for certain holders for which only consumer credit Data in this table also appear in the Board's G.19 (421) monthly statistical totals are available. release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • October 1992 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent per year, except as noted 1991 1992 IItteemm 11998899 11999900 11999911 Dec. Jan. Feb. Mar. Apr. May June INTEREST RATES Commercial bankF2 1 48-month new car 12.07 11.78 11.14 n.a. n.a. 9.89 n.a. n.a. 9.52 n.a. 2 24-month personal ^ 15.44 15.46 15.18 n.a. n.a. 14.39 n.a. n.a. 14.28 n.a. 3 120-month mobile home 14.11 14.02 13.70 n.a. n.a. 12.93 n.a. n.a. 12.82 n.a. 4 Credit card 18.02 18.17 18.23 n.a. n.a. 18.09 n.a. n.a. 17.97 n.a. Auto finance companies New car 12.62 12.54 12.41 10.41 10.04 10.19 10.92 10.84 10.67 1100..2244 6 Used car 16.18 15.99 15.60 14.90 14.34 14.00 14.19 14.14 14.01 13.89 OTHER TERMS4 Maturity (months) '/ New car 54.2 54.6 55.1 53.7 53.5 53.8 ,54.3 54.5 54.7 54.4 8 Used car 46.6 46.0 47.2 46.9 48.4 48.0 48.0 47.8 47.9 48.0 Loan-to-value ratio 9 New car 91 87 88 88 89 89 89 89 89" 89 10 Used car 97 95 95 93 97 97 97 97 97r 97 Amount financed (dollars) 11 New car 12,001 12,071 12,494 13,476 13,135 13,340 13,137 13,208 13,373 13,369 12 Used car 7,954 8,289 8,884 9,105 9,007 8,912 8,908 8,905 9,247 9,201 1. Data in this table also appear in the Board's G.19 (421) monthly statistical 3. Before 1983 the maturity for new car loans was 36 months, and for mobile release. For ordering address, see inside front cover. home loans was 84 months. 2. Data are available for only the second month of each quarter. 4. At auto finance companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data at seasonally adjusted annual rates 1990 1991 1992 Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 722.8 767.2 714.7 643.9 445.7 592.7 479.4 438.0 512.4 463.4 368.7 569.9 By lending sector and instrument 2 U.S. government 143.9 155.1 146.4 246.9 278.2 242.3 271.5 199.2 269.1 365.5 279.0 316.5 3 Treasury securities 142.4 137.7 144.7 238.7 292.0 243.6 272.5 223.2 275.3 394.3 275.2 327.7 4 Agency issues and mortgages 1.5 17.4 1.6 8.2 -13.8 -1.3 -1.0 -24.0 -6.2 -28.8 3.8 -11.2 5 Private 578.9 612.1 568.4 397.1 167.4 350.5 208.0 238.8 243.3 97.9 89.7 253.4 By instrument 6 Debt capital instruments 487.1 463.5 414.9 328.3 246.3 276.9 251.1 282.1 310.0 168.8 224.3 268.7 7 Tax-exempt obligations 83.5 53.7 65.0 45.5 31.8 36.5 18.3 25.3 35.6 37.7 28.5 32.0 8 Corporate bonds 79.1 103.4 74.3 47.1 78.6 29.8 65.2 76.7 96.5 81.3 60.1 80.4 9 Mortgages 324.5 306.5 275.7 235.7 135.9 210.6 167.6 180.2 177.8 49.9 135.6 156.3 10 Home mortgages 234.9 231.0 218.0 215.4 140.1 187.6 159.2 140.4 161.3 114.1 144.4 171.8 11 Multifamily residential 24.4 16.7 16.4 3.6 2.0 17.0 3.7 14.7 4.3 -17.1 6.2 5.1 12 Commercial 71.6 60.8 42.7 16.8 -6.0 4.8 4.5 24.9 14.5 -44.5 -18.8 -21.7 13 Farm -6.4 -2.1 -1.5 -.1 -.2 1.3 .2 .2 -2.3 -2.6 3.8 1.1 14 Other debt instruments 91.8 148.6 153.5 68.8 -78.9 73.6 -43.2 -43.4 -66.7 -70.9 -134.6 -15.3 15 Consumer credit 33.5 50.4 43.1 14.3 -12.1 13.4 -4.2 -10.6 -16.0 -19.6 -2.3 1.7 16 Bank loans n.e.c 9.9 40.5 39.9 1.1 -32.6 -6.9 -22.1 .2 -37.2 -25.4 -68.1 -13.6 17 Open market paper 16 11.9 21.4 9.7 -18.4 19.3 -34.4 -6.9 -16.1 -42.4 -8.1 22.3 18 Other 46.8 45.8 49.1 43.7 -15.8 47.7 17.6 -26.0 2.6 16.5 -56.0 -25.6 By borrowing sector 19 State and local government 83.0 48.9 63.2 42.6 24.5 34.6 12.4 25.5 28.0 20.2 24.3 24.2 20 Household 302.2 315.8 287.3 257.6 157.1 223.8 165.0 177.2 176.4 115.6 159.4 196.5 21 Nonfinancial business 193.7 247.4 217.9 96.9 -14.2 92.0 30.6 36.1 38.9 -37.9 -94.0 32.7 22 Farm -10.6 -7.5 1.6 2.5 1.7 8.7 1.1 4.2 .1 .3 2.1 3.6 23 Nonfarm noncorporate 65.9 62.4 50.0 15.3 -23.4 11.2 4.8 11.4 2.5 -52.7 -54.6 -22.4 24 Corporate 138.5 192.5 166.3 79.0 7.5 72.1 24.6 20.5 36.3 14.6 -41.5 51.5 25 Foreign net borrowing in United States 6.2 6.4 10.6 23.5 15.1 26.2 19.0 62.8 -59.6 18.7 38.7 -32.1 26 Bonds 7.4 6.9 5.3 21.6 16.0 1.9 28.6 11.5 14.7 15.8 22.1 5.4 27 Bank loans n.e.c -3.6 -1.8 -.1 -2.9 3.1 2.0 -5.2 8.1 -3.5 1.4 6.5 -1.7 28 Open market paper 3.8 8.7 13.1 12.3 6.4 25.6 15.6 46.7 -51.9 16.0 14.9 -44.9 29 U.S. government loans -1.4 -7.5 -7.7 -7.5 -10.4 -3.3 -20.0 -3.5 -18.8 -14.5 -4.7 9.1 30 Total domestic plus foreign 729.0 773.6 725.3 667.4 460.8 618.9 498.4 500.8 452.8 482.1 407.5 537.8 Financial sectors 31 Total net borrowing by financial sectors 264.1 213.4 191.0 169.7 143.7 93.7 222.4 126.7 87.7 172.7 187.4 95.7 By instrument 32 U.S. government-related 171.8 119.8 151.0 167.4 147.8 146.2 185.6 149.6 118.1 172.9 150.7 123.2 33 Sponsored-credit-agency securities 30.2 44.9 25.2 17.1 9.2 13.7 37.1 13.1 -29.7 20.6 32.6 11.4 34 Mortgage pool securities 142.3 74.9 125.8 150.3 138.6 132.5 148.9 136.5 147.8 152.3 117.9 111.6 35 Loans from U.S. government -.8 .0 .0 -.1 .0 .0 -.5 .0 .0 .0 .2 .2 36 Private 92.4 93.7 40.0 2.3 -4.2 -52.5 36.8 -22.8 -30.4 -.2 36.7 -27.5 37 Corporate bonds 44.2 18.2 17.7 17.0 62.1 -62.4 26.5 63.5 67.4 41.7 75.6 -69.8 38 Mortgages .4 .3 .0 .3 .6 .1 .6 .1 -.1 .9 1.5 .0 39 Bank loans n.e.c -3.6 .6 1.9 1.2 3.2 2.0 1.1 1.3 -2.9 9.6 4.8 6.4 40 Open market paper 26.9 54.8 31.3 8.6 -32.0 35.1 24.2 -52.0 -46.3 -16.0 -13.7 45.4 41 Loans from Federal Home Loan Banks 24.4 19.7 -11.0 -24.7 -38.0 -27.3 -15.7 -35.8 -48.5 -36.4 -31.5 -9.5 By borrowing sector 42 Sponsored credit agencies 29.5 44.9 25.2 17.0 9.2 13.7 36.7 13.1 -29.7 20.6 32.8 11.5 43 Mortgage pools 142.3 74.9 125.8 150.3 138.6 132.5 148.9 136.5 147.8 152.3 117.9 111.6 44 Private 92.4 93.7 40.0 2.3 -4.2 -52.5 36.8 -22.8 -30.4 -.2 36.7 -27.5 45 Commercial banks 6.2 -3.0 -1.4 -1.1 -13.3 -5.8 14.2 -17.9 -11.9 -8.5 -15.0 7.9 46 Bank affiliates 14.3 5.2 6.2 -27.7 -2.8 -42.0 -30.8 -8.0 -3.3 -7.8 8.0 -.6 47 Savings and loan associations 19.6 19.9 -14.1 -29.7 -38.6 -29.2 -18.9 -42.0 -49.4 -39.6 -23.5 -17.2 48 Mutual savings banks 8.1 1.9 -1.4 -.5 -3.5 -2.7 1.3 1.9 -.9 -6.2 -8.7 5.6 49 Finance companies 4.7 33.5 31.1 23.2 23.4 1.1 25.1 10.8 7.3 22.0 53.6 -46.7 50 Real estate investment trusts (REITs) .4 3.6 -1.9 -1.9 -1.5 -1.4 .3 -.6 -.1 .0 -5.2 -1.2 51 Securitized credit obligation (SCO) issuers 39.1 32.5 21.4 40.1 32.1 27.5 45.6 32.9 28.0 40.0 27.6 24.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • October 1992 1.57—Continued 1990 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998877 11998888 11998899 11999900 11999911 Q3 Q4 Q1 Q2 Q3 Q4 Q1 All sectors 52 Total net borrowing, all sectors 993.1 987.0 916.3 837.1 604.4 712.7 720.8 627.5 540.5 654.8 594.9 633.4 53 U.S. government securities 316.4 274.9 297.3 414.4 426.0 388.5 457.5 348.8 387.3 538.4 429.5 439.5 54 State and local obligations 83.5 53.7 65.0 45.5 31.8 36.5 18.3 25.3 35.6 37.7 28.5 32.0 55 Corporate and foreign bonds 130.7 128.5 97.3 85.7 156.7 -30.7 120.4 151.7 178.7 138.8 157.9 16.0 56 Mortgages 324.9 306.7 275.7 236.0 136.5 210.7 168.2 180.3 177.7 50.8 137.1 156.3 57 Consumer credit 33.5 50.4 43.1 14.3 -12.1 13.4 -4.2 -10.6 -16.0 -19.6 -2.3 1.7 58 Bank loans n.e.c 2.7 39.3 41.6 -.6 -26.3 -2.8 -26.2 9.6 -43.6 -14.4 -56.9 -9.0 59 Open market paper 32.3 75.4 65.9 30.7 -44.0 79.9 5.4 -12.2 -114.3 -42.5 -6.9 22.7 60 Other loans 69.1 58.1 30.4 11.4 -64.1 17.1 -18.6 -65.3 -64.8 -34.4 -92.1 -25.8 61 MEMO: U.S. government, cash balance -7.9 10.4 -5.9 8.3 14.5 18.4 24.2 34.6 -35.8 -14.6 73.6 -79.7 Totals net of changes in U.S. government cash balances 62 Net borrowing by domestic nonfinancial sectors 730.7 756.8 720.6 635.6 431.2 574.3 455.2 403.4 548.2 478.1 295.1 649.6 63 Net borrowing by U.S. government 151.8 144.7 152.3 238.6 263.8 223.8 247.3 164.6 304.9 380.2 205.4 396.1 External corporate equity funds raised in United States 64 Total net share issues 7.1 -119.3 -65.4 15.8 199.7 -19.5 27.0 101.2 179.7 235.0 282.9 282.5 65 Mutual funds 70.2 6.1 38.5 65.7 150.6 45.9 83.7 97.6 125.2 178.1 201.3 191.5 66 All other -63.1 -125.4 -103.9 -50.0 49.1 -65.4 -56.7 3.7 54.5 56.9 81.5 91.0 67 Nonfinancial corporations -75.5 -129.5 -124.2 -63.0 17.5 -74.0 -61.0 -12.0 11.0 17.0 54.0 51.0 68 Financial corporations 14.5 3.2 3.0 6.1 1.4 6.5 2.8 -10.6 6.8 5.6 3.9 8.8 69 Foreign shares purchased in United States -2.1 .9 17.3 6.9 30.2 2.2 1.6 26.2 36.6 34.3 23.6 31.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; quarterly data at seasonally adjusted annual rates 1990 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998877 11998888 11998899 11999900 11999911 Q3 Q4 Q1 Q2 Q3 Q4 Q1 1 Total funds advanced in credit markets to domestic nonfinancial sectors 722.8 767.2 714.7 643.9 445.7 592.7 479.4 438.0 512.4 463.4 368.7 569.9 2 Total net advances by federal agencies and foreign sectors 248.0 208.1 188.1 261.7 244.4 347.4 190.8 289.8 212.2 285.4 190.3 330.2 By instrument 3 U.S. government securities 70.1 85.2 30.2 74.4 98.9 142.0 45.6 140.1 50.9 122.7 82.1 172.3 4 Residential mortgages 139.1 86.3 137.9 184.1 164.7 176.3 180.5 176.0 186.8 176.8 119.3 161.0 5 Federal Home Loan Bank advances to thrifts 24.4 19.7 -11.0 -24.7 -38.0 -27.3 -15.7 -35.8 -48.5 -36.4 -31.5 -9.5 6 Other loans and securities 14.3 16.8 31.0 21.9 18.8 56.4 -19.6 9.4 23.1 22.2 20.5 6.4 By lender 7 U.S. government -7.9 -9.4 -2.6 33.6 10.7 63.6 -3.7 35.0 27.3 .4 -20.0 10.5 8 Sponsored credit agencies and mortgage pools 169.3 112.0 125.3 166.7 152.9 182.4 141.9 164.0 124.1 185.0 138.5 204.4 9 Monetary authority 24.7 10.5 -7.3 8.1 31.1 26.2 -24.2 60.2 1.8 57.4 5.0 36.1 10 Foreign 61.8 95.0 72.7 53.2 49.8 75.1 76.8 30.6 59.1 42.5 66.8 79.2 Agency and foreign borrowing not included in line 1 11 Sponsored credit agencies and mortgage pools 171.8 119.8 151.0 167.4 147.8 146.2 185.6 149.6 118.1 172.9 150.7 123.2 12 Foreign 6.2 6.4 10.6 23.5 15.1 26.2 19.0 62.8 -59.6 18.7 38.7 -32.1 13 Total private domestic funds advanced 652.8 685.3 688.2 573.1 364.2 417.8 493.2 360.5 358.7 369.6 367.9 330.8 14 U.S. government securities 246.3 189.7 267.2 340.0 327.1 246.6 411.9 208.7 336.4 415.8 347.5 267.3 15 State and local obligations 83.5 53.7 65.0 45.5 31.8 36.5 18.3 25.3 35.6 37.7 28.5 32.0 16 Corporate and foreign bonds 67.5 94.4 65.5 62.8 75.6 26.6 95.1 66.5 89.3 77.2 69.5 61.6 17 Residential mortgages 120.2 161.3 96.5 34.8 -22.7 28.2 -17.7 -20.9 -21.2 -79.8 31.3 15.9 18 Other mortgages and loans 159.8 205.9 183.1 65.4 -85.7 52.6 -30.1 45.2 -130.0 -117.6 -140.4 -55.5 19 LESS: Federal Home Loan Bank advances 24.4 19.7 -11.0 -24.7 -38.0 -27.3 -15.7 -35.8 -48.5 -36.4 -31.5 -9.5 20 Total credit market funds advanced by private financial institutions 498.1 539.2 535.5 391.3 337.0 294.5 516.3 311.8 169.4 452.8 414.0 372.0 By lending institution 21 Commercial banks 135.3 157.0 177.0 121.2 83.4 107.6 61.8 123.3 30.1 77.5 102.8 109.2 22 Savings institutions 137.6 118.7 -90.2 -150.8 -144.9 -165.7 -174.0 -184.1 -167.9 -178.6 -49.0 -98.6 23 Insurance and pension funds 149.1 176.4 197.9 183.7 202.6 135.6 188.3 228.7 208.3 247.4 126.1 117.7 24 Other financial institutions 76.2 87.1 250.8 237.2 195.9 216.9 440.2 144.0 98.9 306.4 234.1 243.7 By source of funds 25 Private domestic deposits and repurchase agreements ... 173.8 229.6 209.5 53.4 -10.6 45.6 -22.7 240.9 -126.9 -49.0 -107.4 188.9 26 Credit market borrowing 92.4 93.7 40.0 2.3 -4.2 -52.5 36.8 -22.8 -30.4 -.2 36.7 -27.5 27 Other sources 231.9 216.0 286.0 335.6 351.8 301.5 502.2 93.8 326.7 502.0 484.7 210.7 28 Foreign funds 43.7 9.3 -9.9 24.0 -17.7 87.5 -28.5 9.4 -65.6 11.3 -25.8 -11.1 29 Treasury balances -5.8 7.3 -3.4 5.3 5.5 13.7 3.4 20.6 -22.3 5.7 17.9 -42.5 30 Insurance and pension reserves 94.9 174.1 192.0 164.1 219.6 128.3 222.1 287.9 171.3 277.4 141.6 99.9 31 Other, net 99.2 25.2 107.3 142. lr 144.4 72.0 305.2 -224.2 243.3 207.7 350.9 164.4 Private domestic nonfinancial investors 32 Direct lending in credit markets 247.1 239.8 192.7 184.2r 23.0 70.8 13.7 25.8 158.9 -83.4 -9.4 -68.8 33 U.S. government securities 99.4 134.5 125.5 126.4 26.8 133.9 -6.9 8.3 163.5 -21.9 -42.7 11.5 34 State and local obligations 96.1 57.3 62.7 24.9 7.8 7.6 -13.5 14.9 20.0 16.0 -19.6 8.4 35 Corporate and foreign bonds 6.7 -32.9 -27.1 -11.8 2.6 -109.4 -2.2 42.0 49.3 -106.8 26.0 -120.0 36 Open market paper 13.3 41.9 2.9 17.1 -33.4r 8.8 -4.6 -52.6 -96.6 14.0 1.4 .3 37 Other loans and mortgages 31.5 39.0 28.7 27.6 19.2 29.8 41.0 13.2 22.7 15.3 25.5 31.1 38 Deposits and currency 190.3 233.1 225.7 83.0 18.4 74.2 20.4 257.4 -103.4 -14.9 -65.3 210.7 39 Currency 19.0 14.7 11.7 22.6 19.8 30.9 16.9 38.7 6.0 8.0 26.6 5.9 40 Checkable deposits -.3 12.5 .6 .4 47.8 -3.6 -23.1 49.4 12.3 109.0 20.6 154.1 41 Small time and savings accounts 76.0 122.4 98.2 59.7 11.2 40.7 60.1 103.4 .1 -43.3 -15.3 -10.8 42 Money market fund shares 28.9 21.2 86.7 56.0 25.8 106.0 42.1 184.3 -71.8 -2.7 -6.6 101.4 43 Large time deposits 47.6 40.6 9.1 -42.2 -81.7 -71.0 -65.2 -48.3 -61.1 -100.0 -117.5 -65.0 44 Security repurchase agreements 21.6 32.9 14.9 -20.5 -13.7 -26.5 -36.6 -47.9 -6.4 -12.1 11.5 9.2 45 Deposits in foreign countries -2.5 -11.2 4.4 7.1 9.2 -2.2 26.3 -22.2 17.5 26.1 15.5 15.9 46 Total of credit market instruments, deposits, and currency 437.4 472.9 418.4 267.2 41.4 145.0 34.2 283.2 55.5 -98.3 -74.7 141.9 47 M Pu E b M li O c holdings as percent of total 34.4r 27.2r 25.6r 40.3r 52.7r 56.1 38.3 57.9 46.9 59.2 46.7 61.4 48 Private financial intermediation (percent) 76.2r 79.7r 77.2r 70.6r 92.2r 70.5 104.7 86.5 47.2 122.5 112.5 112.5 49 Total foreign funds 105.5 104.3 62.8 77.2 32.1 162.6 48.3 40.0 -6.5 53.8 41.0 68.1 Corporate equities not included above 50 Total net issues 7.1 -119.3 -65.4 15.8 199.7 -19.5 27.0 101.2 179.7 235.0 282.9 282.5 51 Mutual fund shares 70.2 6.1 38.5 65.7 150.6 45.9 83.7 97.6 125.2 178.1 201.3 191.5 52 Other equities -63.1 -125.4 -103.9 -50.0 49.1 -65.4 -56.7 3.7 54.5 56.9 81.5 91.0 53 Acquisitions by financial institutions 22.2 4.1 18.9 27.5 85.9 -44.4 53.2 81.7 74.3 106.4 81.0 101.6 54 Other net purchases -15.1 -123.3 -84.3 -11.7 113.8 24.9 -26.2 19.6 105.3 128.6 201.8 180.9 NOTES BY LINE NUMBER. 30. Excludes investment of these reserves in corporate equities. 1. Line 1 of table 1.57. 31. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 32. Line 13 less line 20 plus line 26. 6. Includes farm and commercial mortgages. 33-37. 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 37 includes mortgages. issues of federally related mortgage pool securities. 39. Mainly an offset to line 9. 13. Line 1 less line 2 plus lines 11 and 12. Also line 20 less line 26 plus line 32. 46. Sum of lines 32 and 38, or line 13 less line 27 plus lines 39 and 45. Also sum of lines 28 and 47 less lines 40 and 46. 47. Line 2 divided by line 1. 18. Includes farm and commercial mortgages. 48. Line 20 divided by line 13. 25. Line 38 less lines 39 and 45. 49. Sum of lines 10 and 28. 26. Excludes equity issues and investment company shares. Includes line 19. 50 and 52. Includes issues by financial institutions. 28. Foreign deposits at commercial banks, plus bank borrowings from foreign NOTE. Full statements for sectors and transaction types in flows and in amounts branches, plus liabilities of foreign banking agencies to foreign affiliates, less outstanding appear in the Board's Z.l (780) quarterly statistical release. For claims on foreign affiliates and deposits by banking institutions in foreign banks. ordering address, see inside front cover. Digitized for F29R. ADSemEaRnd deposits and note balances at commercial banks. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • October 1992 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING Billions of dollars, end of period 1990 1991 1992 11999911 Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 9,242.3 9,987.1 10,759.9 11,196.4 10,597.3 10,759.9 10,821.8 10,940.1 11,062.9 11,196.4 11,304.3 By lending sector and instrument 2 U.S. government 2,104.9 2,251.2 2,498.1 2,776.4 2,410.4 2,498.1 2,548.8 2,591.9 2,687.2 2,776.4 2,859.7 J Treasury securities 2,082.3 2,227.0 2,465.8 2,757.8 2,377.8 2,465.8 2,522.4 2,567.1 2,669.6 2,757.8 2,844.0 4 Agency issues and mortgages 22.6 24.2 32.4 18.6 32.6 32.4 26.4 24.8 17.6 18.6 15.8 5 Private 7,137.4 7,735.9 8,261.8 8,420.0 8,186.9 8,261.8 8,273.0 8,348.2 8,375.7 8,420.0 8,444.5 By instrument 6 Debt capital instruments 5,035.8 5,467.9 5,932.1 6,178.4 5,868.0 5,932.1 5,989.7 6,073.0 6,121.4 6,178.4 6,233.1 7 Tax-exempt obligations 939.4 1,004.4 1,049.8 1,081.6 1,043.0 1,049.8 1,052.8 1,060.1 1,072.3 1,081.6 1,086.2 8 Corporate bonds 852.6 926.9 974.0 1,052.6 957.7 974.0 993.1 1,017.2 1,037.6 1,052.6 1,072.7 9 Mortgages 3,243.8 3,536.6 3,908.4 4,044.3 3,867.3 3,908.4 3,943.8 3,995.6 4,011.5 4,044.3 4,074.3 10 Home mortgages 2,173.9 2,404.3 2,765.3 2,905.4 2,726.0 2,765.3 2,790.9 2,838.2 2,870.1 2,905.4 2,939.4 11 Multifamily residential 286.7 304.4 305.7 307.7 304.8 305.7 309.4 310.4 306.1 307.7 309.0 12 Commercial 696.4 742.6 753.4 747.4 752.3 753.4 759.6 763.2 752.1 747.4 742.0 13 Farm 86.8 85.3 84.0 83.7 84.3 84.0 83.9 83.8 83.1 83.7 83.9 14 Other debt instruments 2,101.6 2,268.0 2,329.6 2,241.6 2,318.9 2,329.6 2,283.3 2,275.2 2,254.3 2,241.6 2,211.4 15 Consumer credit 743.6 794.7 808.9 797.1 798.7 808.9 785.3 784.9 786.1 797.1 775.7 16 Bank loans n.e.c 710.0 759.8 753.8 724.2 750.5 753.8 747.8 739.9 733.2 724.2 712.1 17 Open market paper 85.7 107.1 116.9 98.5 131.8 116.9 120.8 119.4 107.0 98.5 110.3 18 Other 562.3 606.4 650.1 621.8 637.9 650.1 629.5 631.0 628.0 621.8 613.4 By borrowing sector 19 State and local government 752.5 815.7 858.3 882.8 852.9 858.3 861.3 866.7 874.6 882.8 885.4 20 Household 3,188.9 3,501.5 3,897.6 4,058.1 3,841.9 3,897.6 3,917.3 3,966.0 4,004.3 4,058.1 4,080.0 21 Nonfinancial business 3,196.0 3,418.7 3,505.9 3,479.2 3,492.0 3,505.9 3,494.4 3,515.4 3,496.8 3,479.2 3,479.1 22 Farm 137.6 139.2 140.5 139.6 141.6 140.5 136.8 139.6 140.4 139.6 138.3 23 Nonfarm noncorporate 1,130.5 1,180.5 1,194.3 1,163.5 1,195.1 1,194.3 1,191.8 1,192.7 1,175.9 1,163.5 1,150.4 24 Corporate 1,927.9 2,098.9 2,171.1 2,176.1 2,155.4 2,171.1 2,165.8 2,183.1 2,180.6 2,176.1 2,190.5 25 Foreign credit market debt held in United States 2SS.7 265.4 288.9 304.0 283.4 288.9 301.4 288.8 293.5 304.0 292.3 26 94.0 98.5 120.1 136.1 112.9 120.1 122.9 126.6 130.6 136.1 137.4 27 Bank loans n.e.c 21.5 21.4 18.5 21.6 19.8 18.5 20.5 19.7 20.0 21.6 21.2 28 Open market paper 49.9 63.0 75.3 81.8 71.5 75.3 87.0 74.0 78.0 81.8 70.5 29 U.S. government loans 90.2 82.5 75.0 64.6 79.3 75.0 70.9 68.4 64.9 64.6 63.2 30 Total credit market debt owed by nonfinancial sectors, domestic and foreign 9,498.0 10,252.5 11,048.8 11,500.4 10,880.7 11,048.8 11,123.2 11,228.8 11,356.4 11,500.4 11,596.6 Financial sectors 31 Total credit market debt owed by financial sectors 1,999.8 2,219.4 2,511.1 2,660.5 2,446.4 2,511.1 2,541.0 2,562.2 2,604.6 2,660.5 2,678.4 By instrument 32 U.S. government-related 1,098.4 1,249.3 1,418.4 1,566.2 1,367.9 1,418.4 1,452.1 1,480.4 1,524.4 1,566.2 1,593.7 33 Sponsored credit-agency securities 348.1 373.3 393.7 402.9 384.4 393.7 397.0 389.6 394.7 402.9 405.7 34 Mortgage pool securities 745.3 871.0 1,019.9 1,158.5 978.5 1,019.9 1,050.3 1,086.0 1,124.8 1,158.5 1,183.1 35 Loans from U.S. government 5.0 5.0 4.9 4.9 5.0 4.9 4.9 4.9 4.9 4.9 4.9 36 Private 901.4 970.0 1,092.6 1,094.3 1,078.5 1,092.6 1,088.8 1,081.9 1,080.3 1,094.3 1,084.7 37 Corporate bonds 331.9 378.2 515.0 582.9 510.2 515.0 540.1 555.8 565.9 582.9 569.6 38 Mortgages 3.4 3.4 4.2 4.8 4.1 4.2 4.2 4.2 4.4 4.8 4.8 39 Bank loans n.e.c 35.6 37.5 38.6 41.8 36.7 38.6 36.5 37.0 39.0 41.8 41.1 40 Open market paper 377.7 409.1 417.7 385.7 409.6 417.7 400.9 390.1 387.0 385.7 392.9 41 Loans from Federal Home Loan Banks 152.8 141.8 117.1 79.1 117.9 117.1 107.0 94.7 83.9 79.1 76.3 By borrowing sector 42 Sponsored credit agencies 353.1 378.3 398.5 407.7 389.4 398.5 401.8 394.4 399.5 407.7 410.6 43 Mortgage pools 745.3 871.0 1,019.9 1,158.5 978.5 1,019.9 1,050.3 1,086.0 1,124.8 1,158.5 1,183.1 44 Private financial sectors 901.4 970.0 1,092.6 1,094.3 1,078.5 1,092.6 1,088.8 1,081.9 1,080.3 1,094.3 1,084.7 45 Commercial banks 78.8 77.4 76.3 63.0 70.7 76.3 68.1 65.9 64.6 63.0 60.8 46 Bank affiliates 136.2 142.5 114.8 112.0 122.9 114.8 114.4 113.3 110.6 112.0 113.5 47 Savings and loan associations 159.3 145.2 113.1 74.5 114.9 113.1 102.2 89.3 77.6 74.5 70.6 48 Mutual savings banks 18.6 17.2 16.7 13.2 16.2 16.7 16.4 16.6 15.2 13.2 13.8 49 Finance companies 361.4 392.5 536.0 563.0 529.8 536.0 542.3 544.1 549.6 563.0 551.3 M) Real estate investment trusts (REITs) 11.4 10.1 10.6 9.9 10.3 10.6 10.6 10.8 11.0 9.9 9.8 51 Securitized credit obligation (SCO) issuers... 135.7 185.1 225.2 258.7 213.8 225.2 234.8 241.8 251.8 258.7 264.9 All sectors 52 Total credit market debt, domestic and foreign.. 11,497.8 12,471.9 13,559.8 14,160.9 13,327.1 13,559.8 13,664.2 13,791.1 13,961.0 14,160.9 14,275.0 53 U.S. government securities 3,198.3 3,495.6 3,911.7 4,337.7 3,773.4 3,911.7 3,996.1 4,067.5 4,206.7 4,337.7 4,448.5 54 State and local obligations 939.4 1,004.4 1,049.8 1,081.6 1,043.0 1,049.8 1,052.8 1,060.1 1,072.3 1,081.6 1,086.2 55 Corporate and foreign bonds 1,278.5 1,403.6 1,609.0 1,771.6 1,580.8 1,609.0 1,656.2 1,699.6 1,734.1 1,771.6 1,779.7 56 Mortgages 3,247.2 3,540.1 3,912.6 4,049.1 3,871.4 3,912.6 3,948.0 3,999.8 4,015.9 4,049.1 4,079.1 57 Consumer credit 743.6 794.7 808.9 797.1 798.7 808.9 785.3 784.9 786.1 797.1 775.7 58 Bank loans n.e.c 767.2 818.6 810.9 787.7 807.0 810.9 804.8 796.5 792.2 787.7 774.4 59 Open market paper 513.4 579.2 609.9 565.9 612.9 609.9 608.8 583.6 572.0 565.9 573.7 60 Other loans 810.2 835.7 847.0 770.3 840.0 847.0 812.2 799.0 781.7 770.3 757.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.60 SUMMARY OF CREDIT MARKET CLAIMS Billions of dollars, except as noted, end of period 1990 1992 Transaction category or sector 1989 1990 Q3 Q4 Q1 Q2 Q3 Q4 1 Total funds advanced in credit markets to domestic nonfinancial sectors 9,242.3 9,987.1 10,759.9 11,196.4 10,597.3 10,759.9 10,821.8 10,940.1 11,062.9 11,196.4 2 Total held by federal agencies and foreign sector .. 2,223.2 2,413.1 2,673.3 2,915.2 2,611.3 2,673.3 2,728.1 2,788.1 2,853.5 2,915.2 By instrument 3 U.S. government securities 651.5 688.9 763.3 862.2 745.6 763.3 789.5 808.7 835.7 862.2 4 Residential mortgages 900.4 1,038.4 1,221.0 1,385.8 1,171.8 1,221.0 1,261.4 1,306.8 1,351.7 1,385.8 5 Federal Home Loan Bank advances to thrifts 152.8 141.8 117.1 79.1 117.9 117.1 107.0 94.7 83.9 79.1 6 Other loans and securities 518.5 544.1 571.9 588.2 576.0 571.9 570.3 577.9 582.1 588.2 By type of lender 7 U.S. government 214.6 207.0 240.6 248.7 242.7 240.6 247.3 255.4 254.8 248.7 8 Sponsored credit agencies and mortgage pools ... 1,113.0 1,238.2 1,403.4 1,556.3 1,360.5 1,403.4 1,438.8 1,468.7 1,514.2 1,556.3 9 Monetary authority 240.6 233.3 241.4 272.5 240.8 241.4 247.3 253.7 264.7 272.5 10 Foreign 655.0 734.6 787.9 837.6 767.5 787.9 794.7 810.3 819.7 837.6 Agency and foreign debt not in line 1 11 Sponsored credit agencies and mortgage pools ... 1,098.4 1.249.3 1,418.4 1,566.2 1,367.9 1,418.4 1.452.1 1,480.4 1.524.4 1,566.2 12 Foreign 255.7 265.4 288.9 304.0 283.4 288.9 301.4 288.8 293.5 304.0 13 Total private domestic holdings 8,373.2 9,088.7 9,793.9 10,151.4 9.637.3 9,793.9 9.847.2 9,921.2 10,027.3 10,151.4 14 U.S. government securities 2,546.8 2,806.7 3,148.4 3.475.5 3,027.7 3,148.4 3,206.5 3,258.8 3.371.1 3.475.5 15 State and local obligations 939.4 1.004.4 1,049.8 1.081.6 1,043.0 1,049.8 1.052.8 1,060.1 1,072.3 1.081.6 16 Corporate and foreign bonds 744.8 809.8 872.6 948.3 850.0 872.6 890.0 911.6 932.1 948.3 17 Residential mortgages 1,560.2 1,670.4 1.850.0 1,827.4 1,859.0 1.850.0 1.838.9 1,841.8 1.824.5 1,827.4 18 Other mortgages and loans 2,734.7 2,939.2 2.990.1 2,897.8 2.975.4 2.990.1 2,965.9 2,943.6 2.911.2 2,897.8 19 LESS: Federal Home Loan Bank advances 152.8 141.8 117.1 79.1 117.9 117.1 107.0 94.7 83.9 79.1 20 Total credit market claims held by private financial institutions 7,056.8 7,605.0 8,119.5 8,552.5 7,982.4 8,119.5 8,280.0 8,333.3 8,441.7 8,552.5 By holding institution 21 Commercial banks 2,476.2 2,643.9 2,765.1 2.851.2 2,739.0 2,765.1 2,778.6 2,793.1 2,815.3 2.851.2 22 Savings institutions 1,566.7 1,480.4 1.332.1 1.187.3 1,378.3 1.332.1 1,285.5 1,245.6 1,202.1 1.187.3 23 Insurance and pension funds 1,836.1 2,034.0 2,218.1 2,522.7 2,173.8 2,218.1 2,381.8 2,434.0 2,494.2 2,522.7 24 Other finance 1,177.9 1,446.7 1.804.2 1,991.3 1,691.3 1.804.2 1,834.2 1,860.6 1,930.1 1,991.3 By source of funds 25 Private domestic deposits and repurchase agreements 3,581.3 3,790.4 3,843.8 3,811.3 3,812.2 3,843.8 3,858.2 3.818.7 3,800.7 3,811.3 26 Credit market debt 901.4 970.0 1.092.6 1,094.3 1.078.5 1.092.6 1,088.8 1,081.9 1,080.3 1,094.3 27 Other sources 2.574.1 2,844.6 3,183.1 3,646.9 3,091.7 3,183.1 3,333.0 3.432.8 3,560.7 3,646.9 28 Foreign funds 71.6 62.1 86.1 68.5 86.6 86.1 84.8 63.7 68.5 68.5 29 U.S. Treasury balances 29.0 25.6 30.9 36.4 36.6 30.9 26.3 36.0 38.5 36.4 30 Insurance and pension reserves 1.723.2 1,908.2 2.067.7 2,429.1 2.018.6 2.067.7 2,278.2 2,324.1 2,387.2 2,429.1 31 Other, net 750.4 848.8 998.3 1,112.8 949.9 998.3 943.7 1.008.9 1,066.5 1,112.8 Private domestic nonfinancial investors 32 Credit market claims 2,217.8 2,453.7 2.767.0 2,693.2 2,733.4 2.767.0 2,656.0 2,669.7 2,665.9 2,693.2 33 U.S. government securities 1,050.7 1,169.0 1.297.1 1,279.9 1,276.2 1.297.1 1,250.7 1,263.7 1,268.0 1,279.9 34 State and local obligations 486.7 549.4 574.2 581.9 573.8 574.2 568.0 576.0 583.1 581.9 35 Corporate and foreign bonds 50.9 62.5 185.0 144.8 186.8 185.0 155.7 163.8 139.7 144.8 36 Open market paper 243.0 245.9 266.9 225.7 267.4 266.9 243.1 222.3 224.6 225.7 37 Other loans and mortgages 386.5 427.0 443.8 461.0 429.2 443.8 438.6 443.9 450.4 461.0 38 Deposits and currency 3,814.5 4,039.7 4,122.8 4,119.4 4,076.1 4,122.8 4,134.4 4,107.0 4,094.2 4,119.4 39 Currency 220.1 231.8 254.4 274.2 247.2 254.4 262.0 265.9 264.8 274.2 40 Checkable deposits 532.9 532.9 533.2 579.6 503.4 533.2 512.3 520.6 538.2 579.6 41 Small time and savings accounts 2,156.2 2,254.7 2,314.0 2,325.2 2,297.0 2,314.0 2,343.0 2,339.0 2,327.4 2,325.2 42 Money market fund shares 318.9 405.6 461.6 487.4 452.1 461.6 512.9 490.9 490.1 487.4 43 Large time deposits 390.3 399.3 357.5 255.5 373.1 357.5 325.0 304.7 284.3 255.5 44 Security repurchase agreements 182.9 197.9 177.4 163.6 186.6 177.4 165.1 163.5 160.7 163.6 45 Deposits in foreign countries 13.1 17.6 24.6 33.9 16.8 24.6 14.3 22.5 28.7 33.9 46 Total of credit market instruments, deposits, and currency 6,032.3 6,493.5 6,889.8 6,812.6 6,809.5 6,889.8 6,790.4 6,776.7 6,760.0 6,812.6 MEMO 47 Public holdings as percent of total 23.4 23.5 24.2 25.3 24.0 24.2 24.5 24.8 25.1 25.3 48 Private financial intermediation (percent) 97.2 94.2 87.8 82.0 90.5 87.8 86.7 85.7 83.5 82.0 49 Total foreign funds 726.6 796.7 873.9 906.1 854.1 873.9 879.5 874.0 888.2 906.1 Corporate equities not included above 50 Total market value 3,619.8 4.374.8 4,084.6 5.210.3 3,824.0 4,084.6 4,631.4 4.665.6 4,932.5 5.210.3 51 Mutual fund shares 478.3 555.1 578.5 852.4 547.3 578.5 643.0 681.3 764.0 852.4 52 Other equities 3,141.6 3,819.7 3,506.2 4,358.0 3,276.8 3,506.2 3,988.4 3,984.3 4.168.4 4,358.0 53 Holdings by financial institutions 1,113.6 1.416.9 1,342.1 1,939.0 1,232.6 1,342.1 1,634.2 1.644.7 1.789.5 1,939.0 54 Other holdings 2,506.2 2,958.0 2,742.6 3.271.4 2,591.4 2,742.6 2,997.2 3,020.9 3,143.0 3.271.4 NOTES BY LINE NUMBER. 30. Excludes net investment of these reserves in corporate equities. 1. Line 1 of table 1.59. 31. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 32. Line 13 less line 20 plus line 26. 6. Includes farm and commercial mortgages. 33-37. Lines 14-18 less amounts acquired by private finance plus amounts 11. Credit market debt of federally sponsored agencies, and net issues of borrowed by private finance. Line 37 includes mortgages. federally related mortgage pool securities. 39. Mainly an offset to line 9. 13. Line 1 less line 2 plus lines 11 and 12. Also line 20 less line 26 plus line 32. 46. Sum of lines 32 and 38, or line 13 less line 27 plus lines 39 and 45. Also sum of lines 27 and 46 less lines 39 and 45. 47. Line 2 divided by lines 1 plus 12. 18. Includes farm and commercial mortgages. 48. Line 20 divided by line 13. 25. Line 38 less lines 39 and 45. 49. Sum of lines 10 and 28. 26. Excludes equity issues and investment company shares. Includes line 19. 50-52. Includes issues by financial institutions. 28. 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 appear in the Board's z.l (780) quarterly statistical release. For 29. Demand deposits and note balances at commercial banks. ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • October 1992 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, 1987=100, except as noted 1991 1992 MMeeaassuurree 11998899 11999900 11999911 Nov. Dec. Jan. Feb. Mar. Apr. May* June* July 1 Industrial production' 108.1 109.2 107.1 108.1 107.4 106.6 107.2 107.6 108.1 108.9 108.5 108.9 Market groupings 2 Products, total 108.6 110.1 108.1 109.0 108.4 107.5 108.1 108.5 109.0 109.7 109.1 109.3 i Final, total 109.1 110.9 109.6 110.6 109.9 108.7 109.4 109.8 110.6 111.3 110.8 110.7 4 Consumer goods 106.7 107.3 107.5 110.0 109.1 108.1 108.8 109.3 110.1 110.6 110.0 110.2 5 Equipment 112.3 115.5 112.2 111.4 110.9 109.4 110.2 110.4 111.3 112.2 111.8 111.4 6 Intermediate 106.8 107.7 103.4 103.9 103.8 103.9 104.0 104.4 103.9* 104.5 104.0 104.8 7 Materials 107.4 107.8 105.5 106.6 105.8 105.2 105.8 106.1 106.8r 107.7 107.5 108.4 Industry groupings 8 Manufacturing 108.9 109.9 107.4 108.6 108.1 107.4 108.1 108.5 109.0* 109.8 109.6 109.5 9 Capacity utilization, manufacturing (percent) 83.9 82.3 78.2 78.2 77.7 77.0 77.4 77.5 77.7 78.1 77.8 77.6 10 Construction contracts3 105.2 95.3 89.3 82.0 97.0 95.0 100.0 96.0 93.0 86.0 90.0 n.a. 11 Nonagricultural employment, total4 106.0 107.6 106.6 105.8 105.8 105.8 105.8 105.9 106.0 106.2 106.1 106.3 12 Goods-producing, total 102.5 101.0 96.4 95.6 95.5 95.2 95.2 95.2 95.2 95.3 95.0 94.9 13 Manufacturing, total 102.2 100.5 96.9 96.5 96.3 96.1 96.1 96.1 96.1 96.1 95.8 95.8 14 Manufacturing, production worker.... 102.3 100.0 96.0 95.8 95.6 95.5 95.6 95.7 95.7 95.7 95.4 95.5 15 Service-producing 107.1 109.7 109.9 109.1 109.1 109.1 109.2 109.3 109.5 109.6 109.7 109.9 16 Personal income, total 115.2 122.7r 127.0* 128.5r 130.1* 130.0r 131.2r 131.8r 131.8* 132.2 132.2 n.a. 17 Wages and salary disbursements 114.4 121.3r 124.4r 125.5r 126.5r 126.2r 127.6r 128.0r 127.8* 128.4 128.2 n.a. 18 Manufacturing 110.6 113.5r 113.6r 114.4r 115.4 113.7r 114.5r 114.6 115.0* 115.5 115.0 n.a. 19 Disposable personal income5 115. lr 122.9r 128.0r 129.7r 131.4r 131.4r 132.6r 133.8r 133.7* 134.1 134.0 n.a. 20 Retail sales6 113.5 118.7 119.8 120.2 120.3 123.1 124.6 123.1 123.5 124.1 123.7 124.4 Prices1 21 Consumer (1982-84= 100) 124.0 130.7 136.2 137.8 137.9 138.1 138.6 139.3 139.5 139.7 140.2 140.5 22 Producer finished goods (1982=100) 113.6 119.2 121.7 122.3 121.9 121.8 122.1 122.2r 122.2 123.1 123.7 123.7 1. A major revision of the industrial production index and the capacity 6. Based on data from U.S. Bureau of the Census, Survey of Current Business. utilization rates was released in April 1990. See "Industrial Production: 1989 7. Based on data not seasonally adjusted. Seasonally adjusted data for changes Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April in the price indexes can be obtained from the Bureau of Labor Statistics, U.S. 1990), pp. 187-204. Department of Labor, Monthly Labor Review. 2. Ratio of index of production to index of capacity. Based on data from the Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and sources. indexes for series mentioned in notes 3 and 7 can also be found in the Survey of 3. Index of dollar value of total construction contracts, including residential, Current Business. nonresidential, and heavy engineering, from McGraw-Hill Information Systems Figures for industrial production for the latest month are preliminary, and many Co., F.W. Dodge Division. figures for the three months preceding the latest month have been revised. See 4. Based on data from U.S. Department of Labor, Employment and Earnings. "Recent Developments in Industrial Capacity and Utilization," Federal Reserve Series covers employees only, excluding personnel in the armed forces. Bulletin, vol. 76 (June 1990), pp. 411-35. 5. Based on data from U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted 1991 1992 CCaatteeggoorryy 11998899 11999900 11999911 Dec. Jan. Feb. Mar. Apr. Mayr Juner July HOUSEHOLD SURVEY DATA 1 NoninstituUonal population1 188,601 190,216 191,883 192,661 192,796 192,906 193,036 193,168 193,295 193,431 193,588 2 Labor force (including Armed Forces)1 126,077 126,954 127,421 127,675 128,083 128,309 128,604 128,830 129,148 129,525 129,498 3 Civilian labor force 123,869 112244,,778877 112255,,330033 112255,,661199 112266,,004466 112266,,228877 112266,,559900 112266,,883300 112277,,116600 112277,,554499 112277,,553322 Employment 4 Nonagncultural industries 114,142 114,728 114,644 113,545 113,951 113,811 114,155 114,465 114,478 114,322 114,568 5 Agriculture 3,199 3,186 3,233 3,183 33,,116666 33,,223322 33,,119944 33,,220099 33,,117788 33,,225522 33,,220044 Unemployment 6 Number 6,528 6,874 8,426 8,891 8,929 9,244 9,242 9,155 9,504 9,975 9,760 7 Rate (percent of civilian labor force) 5.3 5.5 6.7 7.1 7.1 7.3 7.3 7.2 7.5 7.8 7.7 8 Not in labor force 62,524 63,262 64,462 64,986 64,713 64,597 64,432 64,338 64,147 63,906 64,090 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 108,329 109,971 108,975 108,154 108,100 108,142 108,200 108,377 108,496 108,433 108,631 10 Manufacturing 19,442 19,111 18,427 18,329 18,283 18,290 18,278 18,279 18,275 18,223 18,224 11 Mining 693 711 697 663 657 653 651 646 641 634 631 12 Contract construction 5,187 5,136 4,696 4,592 4,587 4,582 4,603 4,605 4,632 4,603 4,588 13 Transportation and public utilities 5,644 5,826 5,823 5,758 5,746 5,753 5,754 5,746 5,745 5,738 5,742 14 Trade 25,770 25,843 25,412 25,133 25,128 25,146 25,089 25,170 25,143 25,139 25,155 15 Finance 6,695 6,739 6,707 6,670 6,665 6,673 6,675 6,682 6,681 6,671 6,668 16 Service 27,120 28,240 28,778 28,559 28,577 28,584 28,643 28,707 28,833 28,860 28,970 17 Government 17,779 18,322 18,434 18,450 18,457 18,461 18,507 18,542 18,546 18,565 18,653 1. Persons sixteen years of age and older. Monthly figures are based on sample pay for, the pay period that includes the twelfth day of the month; excludes data collected during the calendar week that contains the twelfth day; annual data proprietors, self-employed persons, household and unpaid family workers, and are averages of monthly figures. By definition, seasonality does not exist in members of the armed forces. Data are adjusted to the March 1984 benchmark, population figures. and only seasonally adjusted data are available at this time. 2. Includes self-employed, unpaid family, and domestic service workers. SOURCE. Based on data from U.S. Department of Labor Employment and 3. Includes all full- and part-time employees who worked during, or received Earnings. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • October 1992 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1991 1992 1991 1992 1991 1992 Q3 Q4 Q1 Q2r Q3 Q4 Q1 Q2 Q3 Q4 Ql Q2r Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent) 1 Total industry 108.1 107.9 107.1 108.5 135.3 136.2 137.0 137.7 79.9 79.3 78.2 78.8 2 Manufacturing 108.5 108.6 108.0 109.5 137.9 138.9 139.7 140.6 78.7 78.2 77.3 77.9 3 Primary processing 104.1 104.1 104.0 105.4 128.1 128.8 129.3 129.6 81.2 80.8 80.5 81.3 4 Advanced processing 110.6 110.7 109.9 111.3 142.4 143.5 144.6 145.6 77.7 77.1 76.0 76.4 5 Durable goods 108.1 107.7 106.6 108.4 141.8 142.8 143.7 144.4 76.2 75.4 74.2 75.0 6 Lumber and products 95.1 95.1 98.5 96.6 125.4 125.7 125.9 126.1 75.8 75.7 78.2 76.6 7 Primary metals 102.0 102.5 102.2 101.6 129.0 129.3 129.1 128.3 79.1 79.2 79.2 79.1 8 Iron and steel 100.3 103.2 103.8 101.7 134.0 134.5 134.1 132.7 74.8 76.7 77.4 76.7 9 Nonferrous 104.5 101.4 100.0 101.3 121.7 121.9 122.1 122.2 85.8 83.2 81.9 82.9 10 Nonelectrical machinery 123.5 122.7 122.1 125.8 161.2 162.8 164.3 165.9 76.6 75.4 74.3 75.8 11 Electrical machinery 111.2 110.4 110.5 111.8 145.3 146.6 147.9 149.1 76.5 75.3 74.7 75.0 12 Motor vehicles and parts 95.9 97.0 91.7 100.5 134.9 135.6 136.2 136.7 71.1 71.5 67.3 7733..55 13 Aerospace and miscellaneous transportation equipment . 105.2 102.8 99.3 96.8 138.7 139.6 140.4 140.9 75.9 73.7 70.8 68.7 14 Nondurable goods 109.1 109.7 109.8 110.8 132.9 133.8 134.8 135.6 82.1 82.0 81.5 81.7 15 Textile mill products 104.1 104.1 104.3 105.6 118.0 118.3 118.8 119.2 88.2 88.0 87.9 88.5 16 Paper and products 107.6 107.4 105.8 106.7 117.9 118.7 119.3 119.9 91.2 90.5 88.7 89.0 17 Chemicals and products 112.1 113.0 113.6 116.9 141.0 142.3 143.4 144.3 79.5 79.4 79.2 81.0 18 Plastics materials 125.4 126.2 124.4 130.5 142.6 146.1 148.7 150.5 87.9 86.4 83.7 86.8 19 Petroleum products 108.1 107.1 107.7 109.4 121.4 121.4 121.4 121.5 89.0 88.2 88.7 90.0 20 Mining 101.8 99.7 97.9 99.1 114.6 114.7 114.7 114.7 88.9 87.0 85.3 86.3 21 Utilities 110.4 109.4 107.0 107.7 128.8 129.2 129.5 129.8 85.7 84.7 82.6 83.0 22 Electric 115.2 111.6 109.7 110.6 124.7 125.2 125.6 126.0 92.4 89.1 87.3 87.8 Previous cycle2 Latest cycle3 1991 1991 1992 High Low High Low July Dec. Jan. Feb. Mar. Apr.r Mayr Juner July" Capacity utilization rate (percent) 1 Total industry 89.2 72.6 87.3 71.8 80.0 78.7 78.0 78.3 78.4 78.7 79.1 78.7 78.9 2 Manufacturing 88.9 70.8 87.3 70.0 78.7 77.7 77.0 77.4 77.5 77.7 78.1 77.8 77.6 3 Primary processing 92.2 68.9 89.7 66.8 81.1 80.2 80.2 80.4 80.8 81.1 81.4 81.5 81.7 4 Advanced processing 87.5 72.0 86.3 71.4 77.8 76.6 75.7 76.1 76.1 76.3 76.8 76.3 75.9 5 Durable goods 88.8 68.5 86.9 65.0 76.4 74.8 73.8 74.5 74.3 74.6 75.5 75.0 74.8 6 Lumber and products 90.1 62.2 87.6 60.9 75.6 75.7 77.4 78.5 78.8 77.1 77.6 75.2 77.0 7 Primary metals 100.6 66.2 102.4 46.8 78.5 78.3 79.2 79.5 78.7 78.5 79.5 79.5 82.0 8 Iron and steel 105.8 66.6 110.4 38.3 74.3 75.5 78.1 77.4 76.7 75.8 77.1 77.1 80.8 9 Nonferrous 92.9 61.3 90.5 62.2 85.1 82.6 81.0 82.9 81.8 82.6 83.1 83.1 83.8 10 Nonelectrical machinery 96.4 74.5 92.1 64.9 77.2 74.7 74.1 74.2 74.5 75.1 76.4 76.1 76.5 11 Electrical machinery 87.8 63.8 89.4 71.1 76.6 75.2 74.6 74.8 74.8 74.7 75.3 74.9 74.4 12 Motor vehicles and parts .... 93.4 51.1 93.0 44.5 71.8 69.6 64.0 68.9 69.1 72.2 75.1 73.2 7700..77 13 Aerospace and miscellaneous transportation equipment. 77.0 66.6 81.1 66.9 76.1 72.3 71.2 70.9 70.2 69.2 68.6 68.1 67.4 14 Nondurable goods 87.9 71.8 87.0 76.9 82.0 81.6 81.4 81.3 81.7 81.8 81.6 81.6 81.4 15 Textile mill products 92.0 60.4 91.7 73.8 88.4 86.5 86.9 88.2 88.5 89.3 88.8 87.5 85.4 16 Paper and products 96.9 69.0 94.2 82.0 91.9 90.0 89.9 87.6 88.5 89.3 88.3 89.3 89.7 17 Chemicals and products 87.9 69.9 85.1 70.1 79.3 78.9 78.7 79.1 79.9 80.4 81.1 81.6 81.3 18 Plastics materials 102.0 50.6 90.9 63.4 89.6 82.5 83.1 83.0 85.0 85.4 87.3 87.5 87.0 19 Petroleum products 96.7 81.1 89.5 68.2 89.2 89.5 87.8 88.1 90.3 90.8 89.4 89.8 89.7 20 Mining 94.4 88.4 96.6 80.6 89.6 86.2 85.3 85.7 84.9 86.3 87.0 85.6 88.0 21 Utilities 95.6 82.5 88.3 76.2 86.2 83.4 82.6 82.2 83.1 83.4 83.1 82.4 85.3 22 Electric 99.0 82.7 88.3 78.7 93.6 87.7 87.1 86.8 88.1 88.2 88.0 87.3 91.0 1. Data in this table also appear in the Board's G.17 (419) monthly statistical 2. Monthly high, 1973; monthly low, 1975. release. For ordering address, see inside front cover. For a detailed description of 3. Monthly highs, 1978 through 1980; monthly lows, 1982. the series, see "Recent Developments in Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp. 411-35. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1987 1991 1992 1991 GGrroouupp por- avg. tion July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May r June r July p Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 107.1 108.1 108.0 108.4 108.4 108.1 107.4 106.6 107.2 107.6 108.1 108.9 108.5 108.9 2 Products 60.8 108.1 108.7 108.5 108.9 109.0 109.0 108.4 107.5 108.1 108.5 109.0 109.7 109.1 109.3 3 Final products 46.0 109.6 110.2 109.8 110.4 110.6 110.6 109.9 108.7 109.4 109.8 110.6 111.3 110.8 110.7 4 Consumer goods, total 26.0 107.5 108.3 108.4 109.4 109.7 110.0 109.1 108.1 108.8 109.3 110.1 110.6 110.0 110.2 5 Durable consumer goods 5.6 102.3 105.5 104.0 107.7 107.5 106.0 104.6 101.3 105.3 106.2 107.9 111.1 109.7 108.2 6 Automotive products 2.5 97.8 102.3 98.6 106.5 106.7 103.6 101.3 94.2 101.6 103.6 106.5 110.6 108.4 106.2 7 Autos and trucks 1.5 90.2 98.1 90.2 103.0 105.1 99.0 96.7 84.3 94.3 95.7 102.5 107.8 104.0 100.1 8 Autos, consumer .9 84.6 92.8 83.0 94.6 92.6 89.8 88.2 79.1 84.8 81.9 93.1 98.6 97.6 91.7 9 Trucks, consumer .6 99.6 106.9 102.2 117.1 126.1 114.5 111.0 93.0 110.2 118.8 118.3 123.3 114.7 114.3 10 Auto parts and allied goods... :.o 109.3 108.6 111.3 111.8 109.1 110.5 108.2 109.1 112.6 115.5 112.5 114.7 115.0 115.4 11 Other 3.1 105.8 108.1 108.3 108.7 108.1 108.0 107.2 106.9 108.3 108.3 109.1 111.5 110.8 109.7 12 Appliances, A/C, and TV .8 99.5 100.6 99.6 104.1 102.1 102.3 98.9 99.6 102.9 103.5 103.4 107.4 107.9 101.1 13 Carpeting and furniture .9 99.4 103.1 103.9 101.8 101.8 101.6 101.5 101.1 102.4 102.5 104.4 105.9 104.4 104.8 14 Miscellaneous home goods ... 1.4 113.4 115.5 115.9 115.6 115.6 115.2 115.5 114.7 115.0 114.7 115.2 117.3 116.5 117.6 15 Nondurable consumer goods 20.4 109.0 109.0 109.6 109.8 110.3 111.1 110.3 110.0 109.8 110.2 110.7 110.5 110.1 110.7 16 Foods and tobacco 9.1 106.7 106.9 107.1 107.8 107.8 108.1 107.0 107.3 107.4 107.8 107.6 107.2 107.0 107.2 17 Clothing 2.6 93.5 94.3 94.8 95.2 96.3 96.5 96.2 95.0 95.2 95.1 95.3 95.8 95.3 95.9 18 Chemical products 3.5 115.8 115.4 117.4 117.3 117.0 117.9 118.0 118.1 118.3 119.4 120.8 121.1 121.6 122.2 19 Paper products 2.5 123.6 122.1 122.6 124.8 125.6 126.4 126.8 126.8 124.7 124.6 125.1 124.2 122.7 121.9 20 Energy 2.7 108.5 109.4 109.5 106.7 108.5 112.0 109.3 106.8 106.4 107.0 108.9 108.6 107.6 110.9 21 Fuels .7 103.5 105.2 104.0 104.4 103.5 103.6 104.3 103.8 103.5 103.7 105.1 104.0 105.2 105.4 22 Residential utilities 2.0 110.4 110.9 111.5 107.6 110.3 115.1 111.2 108.0 107.5 108.2 110.3 110.3 108.5 113.0 23 Equipment 20.0 112.2 112.8 111.6 111.8 111.9 111.4 110.9 109.4 110.2 110.4 111.3 112.2 111.8 111.4 24 Business equipment 13.9 121.5 122.5 121.3 122.2 122.3 121.8 121.4 119.9 121.0 121.5 123.0 124.5 124.4 124.1 25 Information processing and related .. 5.6 131.5 131.1 130.3 130.3 131.7 133.4 134.0 134.1 134.6 136.0 137.9 139.1 140.3 141.7 26 Office and computing 1.9 155.5 156.0 153.1 152.2 156.0 157.8 159.1 160.6 162.4 164.9 168.2 170.5 174.0 178.0 27 Industrial 4.0 108.0 109.0 108.6 108.2 106.8 104.2 102.3 100.7 101.3 101.3 101.7 103.5 102.8 103.1 28 Transit 2.5 126.8 131.2 126.7 132.7 133.1 130.5 129.5 124.2 129.2 128.9 131.7 133.3 131.7 127.8 29 Autos and trucks 1.2 88.6 96.6 86.2 99.3 101.1 96.5 96.1 84.9 . 94.7 95.0 101.3 105.6 101.7 95.6 30 Other 1.9 113.6 114.0 114.8 114.2 113.6 113.8 114.1 113.1 112.2 112.2 113.2 114.7 113.8 112.1 31 Defense and space equipment 5.4 91.1 90.0 89.8 89.1 89.1 88.8 88.1 86.7 86.2 85.6 84.7 84.2 83.6 82.3 32 Oil and gas well drilling .6 93.3 97.8 86.7 80.1 79.0 78.1 75.8 71.8 73.9 76.2 79.2 79.2 74.5 78.6 33 Manufactured homes .2 85.5 86.5 90.3 86.2 86.3 87.0 87.9 98.4 99.7 98.7 100.7 100.3 97.1 100.0 34 Intermediate products, total 14.7 103.4 104.0 104.4 104.3 104.1 103.9 103.8 103.9 104.0 104.4 103.9 104.5 104.0 104.8 35 Construction supplies 6.0 96.0 96.9 96.7 96.5 95.4 95.9 95.0 95.5 96.0 96.7 96.5 97.9 97.0 97.3 36 Business supplies 8.7 108.4 109.0 109.7 109.7 110.1 109.4 110.0 109.9 109.6 109.7 109.0 109.2 108.8 110.1 37 Materials 39.2 105.5 107.0 107.2 107.5 107.4 106.6 105.8 105.2 105.8 106.1 106.8 107.7 107.5 108.4 38 Durable goods materials 19.4 107.1 108.2 109.1 109.3 108.8 108.6 108.1 107.0 108.1 108.3 108.7 110.3 110.1 110.2 39 Durable consumer parts 4.2 96.4 100.2 100.1 101.3 101.6 100.5 97.0 95.3 97.1 97.9 99.3 102.5 102.8 101.7 40 Equipment parts 7.3 114.4 113.5 114.3 113.9 113.6 113.7 114.2 114.1 115.2 115.1 114.7 116.3 115.6 116.4 41 Other 7.9 106.0 107.5 109.0 109.3 108.2 108.3 108.4 106.7 107.5 107.5 108.1 108.9 108.8 109.1 42 Basic metal materials 2.8 106.0 108.8 110.2 109.5 107.7 108.1 108.1 105.1 107.3 106.3 106.3 108.2 108.4 110.0 43 Nondurable goods materials 9.0 105.9 108.1 107.8 108.3 109.6 107.7 107.1 107.3 107.1 108.9 109.4 109.8 110.9 111.0 44 Textile materials 1.2 97.0 101.4 101.5 99.5 101.8 99.9 98.5 98.9 101.5 102.0 103.2 102.6 101.9 102.1 45 Pulp and paper materials 1.9 106.9 110.3 108.2 110.4 112.0 108.6 109.6 107.4 106.8 107.8 109.2 107.8 110.8 111.0 46 Chemical materials 3.8 106.1 107.7 107.9 108.2 109.9 108.3 107.0 107.6 106.6 109.3 109.9 111.3 112.5 112.8 47 Other 2.1 109.7 110.5 110.9 111.3 111.2 110.1 109.7 111.2 111.2 112.7 112.2 112.6 113.2 112.7 48 Energy materials 10.9 102.3 104.1 103.3 103.6 103.1 102.2 100.4 100.4 100.5 100.1 101.3 101.4 100.1 103.1 49 Primary energy 7.2 102.4 106.2 104.5 103.8 102.8 100.9 100.4 100.5 100.6 98.2 99.8 99.9 98.6 102.3 50 Converted fuel materials 3.7 102.0 100.1 101.0 103.4 103.8 104.5 100.5 100.2 100.4 103.8 104.1 104.3 102.9 104.7 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 107.6 108.4 108.5 108.6 108.5 108.3 107.7 107.3 107.6 107.9 108.3 109.0 108.7 109.2 52 Total excluding motor vehicles and parts... 95.3 107.9 108.6 108.8 108.8 108.8 108.7 108.0 107.6 107.8 108.2 108.6 109.2 108.9 109.5 53 Total excluding office and computing machines 97.5 105.8 106.9 106.8 107.3 107.2 106.8 106.1 105.3 105.8 106.1 106.6 107.4 106.8 107.2 54 Consumer goods excluding autos and trucks 24.5 108.6 108.9 109.5 109.8 109.9 110.7 109.8 109.6 109.7 110.2 110.6 110.8 110.4 110.8 55 Consumer goods excluding energy 23.3 107.4 108.1 108.3 109.7 109.8 109.8 109.1 108.3 109.1 109.6 110.3 110.8 110.3 110.1 56 Business equipment excluding autos and trucks 12.7 124.8 125.0 124.7 124.4 124.4 124.3 123.8 123.3 123.6 124.1 125.2 126.4 126.6 126.9 57 Business equipment excluding office and computing equipment 12.0 116.0 117.0 116.2 117.3 116.9 116.0 115.3 113.3 114.3 114.5 115.7 117.1 116.4 115.4 58 Materials excluding energy 28.4 106.7 108.2 108.7 109.0 109.1 108.3 107.8 107.1 107.8 108.5 108.9 110.1 110.3 110.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • October 1992 2.13—Continued 1987 1991 1992 GGrroouupp SIC pro- 1991 code por- avg. tion July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.r Mayr Juner Julyp Index (1987 = 100) MAJOR INDUSTRIES 1 Total index 100.0 107.1 108.1 108.0 108.4 108.4 108.1 107.4 106.6 107.2 107.6 108.1 108.9 108.5 108.9 2 Manufacturing 84.4 107.4 108.3 108.4 108.9 109.0 108.6 108.1 107.4 108.1 108.5 109.0 109.8 109.6 109.5 3 Primary processing 26.7 102.4 103.7 104.1 104.4 104.7 104.1 103.5 103.6 103.9 104.5 105.0 105.5 105.7 106.1 4 Advanced processing 57.7 109.8 110.5 110.3 111.0 111.0 110.7 110.3 109.2 110.0 110.3 110.8 111.8 111.3 111.1 5 Durable goods 47.3 107.1 108.1 107.8 108.4 108.2 107.8 107.1 105.8 107.0 107.0 107.6 109.1 108.5 108.4 6 Lumber and products ... "24 2.0 94.2 94.8 95.3 95.2 93.8 96.4 95.2 97.4 98.8 99.2 97.2 97.8 94.9 97.1 7 Furniture and fixtures ... 25 1.4 99.1 100.5 101.3 101.2 100.5 99.9 100.6 98.7 98.1 98.6 101.1 103.3 103.0 102.5 8 Clay, glass, and stone products 32 2.5 94.9 95.8 95.5 94.4 94.4 92.8 93.0 92.8 94.6 95.0 95.6 96.6 96.4 96.7 9 Primary metals 33 3.3 99.5 101.2 102.6 102.3 102.6 103.5 101.3 102.5 102.7 101.4 100.9 102.0 101.8 104.8 10 Iron and steel 331,2 1.9 98.0 99.5 100.6 100.8 102.4 105.6 101.7 105.0 103.7 102.5 100.9 102.3 102.0 106.4 11 Raw steel .1 97.3 102.6 102.4 100.9 101.3 99.1 97.6 103.3 102.7 98.8 99.9 98.5 101.5 107.4 12 Nonferrous 333-6,9 1.4 101.5 103.5 105.5 104.4 102.9 100.5 100.8 98.9 101.2 99.9 100.9 101.5 101.6 102.5 13 Fabricated metal products 34 5.4 100.4 100.9 101.4 101.9 101.9 101.8 101.2 99.7 100.5 100.0 100.6 102.2 102.2 102.4 14 Nonelectrical machinery. 35 8.6 123.5 123.9 123.3 123.1 123.5 122.8 121.9 121.4 121.9 122.9 124.1 126.7 126.6 127.7 15 Office and computing machines 357 2.5 155.5 156.0 153.0 152.2 155.9 157.8 159.1 160.5 162.4 164.9 168.2 170.5 174.0 178.0 16 Electrical machinery 36 8.6 110.1 111.0 111.5 111.0 109.8 110.7 110.6 110.0 110.7 110.9 111.0 112.4 112.1 111.6 17 Transportation equipment 37 9.8 98.6 101.3 99.0 102.2 102.4 99.7 98.0 93.8 96.8 96.5 98.0 99.6 98.0 96.0 18 Motor vehicles and parts 371 4.7 90.4 96.7 91.6 99.5 100.4 95.9 94.6 87.1 93.8 94.2 98.5 102.7 100.2 96.9 19 Autos and light trucks 2.3 89.4 97.3 89.1 101.8 103.2 97.6 95.5 83.5 92.9 93.7 101.1 106.5 103.0 98.9 20 Aerospace and miscellaneous transportation equipment.. 372-6,9 5.1 106.0 105.4 105.6 104.6 104.3 103.1 101.2 99.8 99.6 98.6 97.4 96.7 96.1 95.2 21 Instruments 38 3.3 118.2 116.5 116.9 118.1 118.2 118.7 119.0 118.3 118.6 118.6 119.0 119.6 118.4 117.8 22 Miscellaneous 39 1.2 119.3 121.6 123.2 121.5 120.6 120.7 121.0 121.2 120.0 120.0 118.9 118.4 117.5 118.5 23 Nondurable goods 37.2 107.9 108.6 109.0 109.6 110.1 109.6 109.5 109.5 109.6 110.4 110.7 110.7 111.0 110.9 24 Foods "20 8.8 108.6 108.3 108.7 109.5 109.4 110.1 109.6 109.2 109.6 110.2 109.6 109.1 109.1 109.4 25 Tobacco products 21 1.0 99.7 102.6 103.1 102.7 102.2 97.7 94.7 98.8 99.4 101.3 101.0 100.6 101.5 99.7 26 Textile mill products 22 1.8 100.5 104.2 104.7 103.2 105.5 104.4 102.5 103.1 104.7 105.3 106.3 105.9 104.5 102.1 27 Apparel products 23 2.4 96.2 97.8 98.3 98.1 98.7 98.8 99.0 97.5 97.7 97.8 98.0 99.0 98.4 99.0 28 Paper and products 26 3.6 105.1 108.1 106.5 108.0 109.0 106.1 107.0 107.1 104.6 105.8 107.0 105.8 107.3 107.9 29 Printing and publishing .. 27 6.4 112.3 111.9 112.3 113.3 114.4 114.2 114.5 114.8 114.4 113.8 113.7 113.6 112.6 112.8 30 Chemicals and products . 28 8.6 110.9 111.5 112.3 112.6 113.5 113.0 112.6 112.7 113.4 114.8 115.8 116.9 118.0 117.8 31 Petroleum products 29 1.3 107.5 108.3 107.3 108.6 106.0 106.7 108.6 106.6 106.9 109.7 110.3 108.7 109.1 109.1 32 Rubber and plastic products 30 3.0 110.0 110.1 112.6 113.8 113.2 112.6 113.0 113.2 114.0 115.4 116.5 116.6 117.3 116.7 33 Leather and products ... 31 .3 88.1 91.0 87.1 85.8 83.9 84.3 83.2 83.0 81.4 82.9 84.1 85.5 85.8 86.4 34 Mining 7.9 101.1 102.7 101.3 101.4 100.7 99.6 98.8 97.8 98.4 97.5 99.1 99.8 98.3 101.0 35 Metal "lO .3 150.2 153.0 155.5 153.1 146.5 151.5 154.0 144.2 152.9 155.8 154.2 166.4 163.0 162.4 36 Coal 11,12 1.2 109.2 116.0 110.8 110.1 107.9 108.4 107.6 107.3 107.9 103.0 104.0 107.6 98.6 114.9 37 Oil and gas extraction 13 5.7 95.8 96.4 95.7 96.0 96.0 94.1 93.0 92.4 92.7 91.9 94.2 93.6 93.7 94.1 38 Stone and earth minerals .. 14 .7 108.1 107.8 107.0 107.3 105.9 105.8 106.4 104.8 103.5 107.4 105.9 108.0 106.6 106.0 39 Utilities 7.6 109.2 110.9 110.7 109.7 109.4 111.0 107.9 106.8 106.4 107.7 108.2 107.8 107.1 110.9 40 Electric 491,3PT 6.0 112.8 116.6 115.6 113.4 112.2 112.7 109.9 109.3 109.0 110.7 111.0 110.8 110.1 114.9 41 Gas 492,3PT 1.6 96.0 89.7 92.4 95.8 98.9 104.7 100.5 97.5 96.9 96.7 97.7 96.6 96.1 96.0 SPECIAL AGGREGATES 42 Manufacturing excluding motor vehicles and parts 79.8 108.4 109.0 109.3 109.5 109.5 109.3 108.9 108.6 108.9 109.3 109.6 110.2 110.1 110.3 43 Manufacturing excluding office and computing machines 82.0 106.0 106.9 107.0 107.6 107.6 107.1 106.6 105.8 106.5 106.8 107.2 108.0 107.6 107.5 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKETS 44 Products, total 1,734.8 1,880.0 1,895.3 1,885.5 1,901.8 1,911.4 1,904.9 1,888.9 1,869.5 1,889.7 1,902.8 1,918.7 1,935.0 1,926.9 1,930.2 45 Final 1,350.9 1,481.8 1,496.1 1,484.5 1,501.5 1,510.0 1,504.1 1,488.0 1,468.7 1,490.8 1,501.5 1,518.2 1,531.1 1,525.9 1,525.4 46 Consumer goods 833.4 879.8 888.3 882.7 898.3 902.4 902.2 894.5 877.6 890.2 896.2 905.6 911.5 907.1 906.3 47 Equipment 517.5 602.0 607.8 601.8 603.3 607.6 601.8 593.5 591.1 600.6 605.3 612.7 619.6 618.8 619.2 48 Intermediate 384.0 398.2 399.2 401.0 400.3 401.4 400.8 401.0 400.7 398.9 401.2 400.5 403.9 401.0 404.8 1. Data in this table also appear in the Board's G.17 (419) monthly statistical Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April release. For ordering address, see inside front cover. 1990), pp. 187-204. A major revision of the industrial production index and the capacity 2. Standard industrial classification, utilization rates was released in April 1990. See "Industrial Production: 1989 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates, except as noted 1991 1992 IItteemm 11998899 11999900 11999911 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May June Private residential real estate activity (thousands of units, except as noted) NEW UNITS 1 Permits authorized 1,339 1,111 949 974 994 979 1,073 1,106 1,146 1,094 1,058 1,054 1,032 2 One-family 932 794 754 782 788 792 873 913 946 907 873 879 872 3 Two-or-more-family 407 317 195 192 206 187 200 193 200 187 185 175 160 4 Started 1,376 1,193 1,014 1,020 1,085 1,085 1,118 1,180 1,257 1,340 1,086 1,196 1,151 5 One-family 1,003 895 840 864 887 907 972 989 1,109 1,068 933 1,019 1,000 6 Two-or-more-family 373 298 174 156 198 178 146 191 148 272 153 177 151 7 Under construction at end of period .. 850 711 606 632 631 633 633 640 629 657 655 658 651 8 One-family 535 449 434 452 451 454 458 466 464 482 484 488 489 9 Two-or-more-family 315 262 173 180 180 179 175 174 165 175 171 170 162 10 Completed 1,423 1,308 1,091 1,193 1,073 1,021 1,021 1,043 1,097 1,127 1,067 1,204 1,165 11 One-family 1,026 966 838 870 879 824 851 838 908 975 889 1,014 966 12 Two-or-more-family 396 342 253 323 194 197 170 205 189 152 178 190 199 13 Mobile homes shipped 198 188 171 172 171 171 176 192 197 197 199 189 194 Merchant builder activity in one-family units 14 Number sold 650 535 507 499 526 578 578 667 627 555R 546 549 578 15 Number for sale at end of period ... 365 321 283 292 289 286 283 281 269 277 274 272 273 Price of units sold (thousands of dollars)2 16 Median 120.4 122.3 120.0 120.0 122.6 118.5 122.0 120.0 117.2 120.0 120.0 114.5 124.9 17 Average 148.3 149.0 147.0 147.3 147.4 141.7 143.0 144.2 144.8 144.8R 145.0 146.3 147.1 EXISTING UNITS (one-family) 18 Number sold 3,346 3,211 3,219 3,120 3,150 3,230 3,310 3,220 3,490 3,510 3,490 3,460 3,350 Price of units sold (thousands of dollars)2 19 Median 92.9 95.2 99.7 100.3 99.1 97.9 100.3 102.4 102.8 104.0 103.3 102.5 105.1 20 Average 118.0 118.3 127.4 127.8 126.4 124.9 127.3 130.5 128.8 130.2 130.6 130.6 133.7 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 443,401 442,066 400,955 406,048 406,114 401,247 398,736 407,121 411,767 421,512 423,104 426,049 424,416 22 Private 345,327 334,153 290,707 293,632 291,714 288,345 287,383 292,540 294,758 301,142 305,504 305,269 309,624 23 Residential 196,551 182,856 157,837 164,164 164,6% 164,491 164,133 169,548 169,772 172,660 178,897 181,795 182,650 24 Nonresidential, total 148,776 151,297 132,870 129,468 127,018 123,854 123,250 122,992 124,986 128,482 126,607 123,474 126,974 25 Industrial buildings 20,412 23,849 22,281 20,680 21,119 21,566 22,411 21,258 21,651 23,721 21,291 21,029 20,402 26 Commercial buildings 65,496 62,866 48,482 46,683 44,301 41,612 40,898 41,1% 41,591 42,108 40,731 39,638 43,208 27 Other buildings 19,683 21,591 20,797 20,719 21,162 20,114 20,480 19,751 20,630 21,479 21,380 21,993 22,054 28 Public utilities and other 43,185 42,991 41,310 41,386 40,436 40,562 39,461 40,787 41,114 41,174 43,205 40,814 41,310 29 Public 98,071 107,909 110,247 112,416 114,400 112,901 111,353 114,581 117,009 120,370 117,600 120,780 114,792 30 Military 3,520 2,664 1,837 2,681 1,141 1,790 2,633 2,039 2,206 2,548 2,329 2,668 2,503 31 Highway 28,837 31,154 29,918 29,416 30,098 29,594 29,562 30,221 32,744 30,895 31,407 32,571 31,372 32 Conservation and development... 5,009 4,607 4,958 4,433 6,068 6,611 5,363 5,480 5,283 6,197 5,909 5,820 5,929 33 Other....; 60,705 69,484 73,534 75,886 77,093 74,906 73,795 76,841 76,776 80,730 77,955 79,721 74,988 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, 2. Not seasonally adjusted. which are private, domestic shipments as reported by the Manufactured Housing 3. Recent data on value of new construction may not be strictly comparable Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices with data for previous periods because of changes by the Bureau of the Census in of existing units, which are published by the National Association of Realtors. All its estimating techniques. For a description of these changes, see Construction back and current figures are available from the originating agency. Permit Reports (C-30-76-5), issued by the Bureau in July 1976. authorizations are those reported to the Census Bureau from 17,000 jurisdictions beginning in 1984. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • October 1992 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier months earlier (annual rate) Change from 1 month earlier IIInnndddeeexxx IIIttteeemmm llleeevvveeelll,,, 1991 1992 1992 JJJuuulllyyy 11999911 11999922 111999999222111 JJuullyy JJuullyy Sept. Dec. Mar. June Mar. Apr. May June July CONSUMER PRICES2 (1982-84=100) 1 All items 4.4 3.2 3.0 3.2 3.5 2.6 .5 .2 .1 .3 .1 140.5 2 Food 2.9 .5 -2.3 2.7 1.5 -1.2 .5 -.1 -.4 .1 -.1 137.2 3 Energy items 3.8 3.2 1.2 3.6 -6.9 12.5 .6 .4 .6 2.0 .3 106.0 4 All items less food and energy 4.8 3.7 4.6 3.1 4.8 2.8 .5 .3 .2 .2 .2 147.3 5 Commodities 4.2 3.0 4.4 .6 5.3 2.1 .5 .2 .4 .0 .2 132.0 6 Services , 5.1 4.0 4.6 4.3 4.8 2.9 .5 .3 .1 .3 .3 156.1 PRODUCER PRICES (1982=100) 7 Finished goods 2.9 1.7 1.3 1.0 1.01 l.tf ,2r .lr .4 .2 .1 123.7 8 Consumer foods -.3 -1.3 -4.4 -1.0 .3r — 1.6r — .5r -,2r -.4 .2 .0 122.9 9 Consumer energy 13.8 3.6 3.7 -.5 -7.0 16.1 .5 .5 .9 2.3 -.4 80.3 10 Other consumer goods 3.6 2.9 3.6 2.4 3.6r 2.4r ,3r .2r .7 -.3 .2 137.6 11 Capital equipment 3.1 1.9 1.3 1.9 3.5r ,3r -,2r .5 -.1 .2 129.0 Intermediate materials 12 Excluding foods and feeds 1.1 1.2 .4 -1.7 .0 5.0 .2 .1 .4 .7 .1 115.6 13 Excluding energy .4 .8 -1.3 .0 1.7 1.3 .2 .0 .1 .2 .2 122.1 Crude materials 14 Foods -8.9 -.1 -6.6 -4.9 11.8r 1.5r -\Xf — 1.2r .9 .8 -1.7 105.0 15 Energy 12.3 2.3 -.5 5.3 —26.6r 44.8r -4.4r 4.6r 2.5 2.3 1.1 80.1 16 Other -8.9 3.4 -4.9 -5.9 15 .(f 3.5r 2.0r -,2r .9 .2 1.3 130.2 1. Not seasonally adjusted. SOURCE. Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A51 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars, except as noted; quarterly data at seasonally adjusted annual rates 1991R 1992 AAccccoouunntt 11998899 11999900 11999911RR QI Q2 Q3 Q4 QLR GROSS DOMESTIC PRODUCT 1 Total 5,250.8 5,522.2 5,677.5 5,585.8 5,657.6 5,713.1 5,753.3 5,840.2 By source 2 Personal consumption expenditures 3,523.1 3,748.4 3,887.7 3,821.7 3,871.9 3,914.2 3,942.9 4,022.8 3 Durable goods 459.4 464.3 446.1 439.5 441.4 453.0 450.4 469.4 4 Nondurable goods 1,149.5 1,224.5 1,251.5 1,245.0 1,254.2 1,255.3 1,251.4 1,274.1 5 Services 1,914.2 2,059.7 2,190.1 2,137.2 2,176.3 2,205.9 2,241.1 2,279.3 6 Gross private domestic investment 832.3 799.5 721.1 705.4 710.2 732.8 736.1 722.4 7 Fixed investment 798.9 793.2 731.3 733.9 732.0 732.6 726.9 738.2 8 Nonresidential 568.1 577.6 541.1 551.4 545.8 538.4 528.7 531.0 9 Structures 193.3 201.1 180.1 190.0 185.2 175.6 169.7 170.1 10 Producers' durable equipment 374.8 376.5 360.9 361.4 360.6 362.8 358.9 360.8 11 Residential structures 230.9 215.6 190.3 182.6 186.2 194.2 198.2 207.2 12 Change in business inventories 33.3 6.3 -10.2 -28.5 -21.8 .2 9.2 -15.8 13 Nonfarm 31.8 3.3 -10.3 -27.4 -27.0 -1.2 14.5 -13.3 14 Net exports of goods and services -79.7 -68.9 -21.8 -28.7 -15.3 -27.1 -16.0 -8.1 15 Exports 508.0 557.0 598.2 573.2 594.3 602.3 622.9 628.1 16 Imports 587.7 625.9 620.0 602.0 609.6 629.5 638.9 636.2 17 Government purchases of goods and services 975.2 1,043.2 1,090.5 1,087.5 1,090.8 1,093.3 1,090.3 1,103.1 18 Federal 401.6 426.4 447.3 451.3 449.9 447.2 440.8 445.0 19 State and local 573.6 616.8 643.2 636.3 640.8 646.0 649.5 658.0 By major type of product 20 Final sales, total 5,217.5 5,515.9 5,687.7 5,614.4 5,679.4 5,712.9 5,744.2 5,855.9 21 Goods 2,063.6 2,160.1 2,192.8 2,186.8 2,200.9 2,194.9 2,188.4 2,233.6 22 Durable 891.2 920.6 907.7 897.3 916.8 910.8 905.7 923.6 23 Nondurable 1,172.5 1,239.5 1,285.1 1,289.5 1,284.1 1,284.1 1,282.7 1,310.0 24 Services 2,642.2 2,846.4 3,030.3 2,963.3 3,013.8 3,053.6 3,090.3 3,142.2 25 Structures 511.7 509.4 464.7 464.3 464.7 464.4 465.5 480.1 26 Change in business inventories 33.3 6.3 -10.2 -28.5 -21.8 .2 9.2 -15.8 27 Durable goods 25.2 -.9 -19.3 -35.4 -26.5 -7.0 -8.1 -19.3 28 Nondurable goods 8.1 7.2 9.0 6.8 4.8 7.2 17.3 3.5 MEMO 29 Total GDP in 1987 dollars 4,838.0 4,877.5 4,821.0 4,796.7 4,817.1 4,831.8 4,838.5 4,873.7 NATIONAL INCOME 30 Total 4,249.5 4,468.3 4,544.2 4,493.0 4,529.2 4,555.4 4,599.1 4,679.4 31 Compensation of employees 3,100.2 3,291.2 3,390.8 3,343.0 3,379.6 3,407.0 3,433.8 3,476.3 32 Wages and salaries 2,586.4 2,742.9 2,812.2 2,774.9 2,804.3 2,824.4 2,845.0 2,877.6 33 Government and government enterprises 478.5 514.8 543.5 539.9 543.4 544.3 546.4 554.6 34 Other 2,107.9 2,228.0 2,268.7 2,235.0 2,260.9 2,280.0 2,298.6 2,323.0 35 Supplement to wages and salaries 513.8 548.4 578.7 568.1 575.2 582.6 588.7 598.7 36 Employer contributions for social insurance 261.9 277.4 290.4 286.6 289.1 292.0 293.7 299.4 37 Other labor income 251.9 271.0 288.3 281.5 286.1 290.6 295.0 299.2 38 Proprietors' income1 347.3 366.9 368.0 356.5 370.4 367.1 377.9 393.6 39 Business and professional 307.0 325.2 332.2 322.2 329.1 337.6 340.0 353.6 40 Farm1 40.2 41.7 35.8 34.3 41.3 29.5 37.9 40.1 41 Rental income of persons2 -13.5 -12.3 -10.4 -12.4 -12.3 -10.3 -6.6 -4.5 42 Corporate profits1 362.8 361.7 346.3 349.6 347.3 341.2 347.1 384.0 43 Profits before tax 342.9 355.4 334.7 337.6 332.3 336.7 332.3 366.1 44 Inventory valuation adjustment -17.5 -14.2 3.1 6.7 9.9 -4.8 .7 -5.4 45 Capital consumption adjustment 37.4 20.5 8.4 5.3 5.1 9.3 14.1 23.3 46 Net interest 452.7 460.7 449.5 456.2 444.4 450.5 446.9 430.0 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. U.S. Department of Commerce Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • October 1992 2.17 PERSONAL INCOME AND SAVING Billions of current dollars, except as noted; quarterly data at seasonally adjusted annual rates 1991r 1992 AAccccoouunntt 11998899** 11999900rr 11999911rr Ql Q2 Q3 Q4 Qlr PERSONAL INCOME AND SAVING 1 Total personal income 4,380.3 4,664.2 4,828.3 4,752.8 4,806.9 4,846.2 4,907.2 4,980.5 2 Wage and salary disbursements 2,586.4 2,742.8 2,812.2 2,774.7 2,804.7 2,824.4 2,845.0 2,877.6 3 Commodity-producing industries 724.2 745.6 737.4 734.6 734.6 738.8 741.5 736.8 4 Manufacturing 542.2 556.1 556.9 551.2 553.4 559.0 563.9 559.9 5 Distributive industries 607.0 634.6 647.4 638.6 647.0 651.1 652.9 660.9 6 Service industries 776.8 847.8 883.9 861.8 879.4 890.2 904.3 925.3 7 Government and government enterprises 478.5 514.8 543.6 539.7 543.8 544.3 546.4 554.6 8 Other labor income 251.9 271.0 288.3 281.5 286.1 290.6 295.0 299.2 9 Proprietors' income1 347.3 366.9 368.0 356.5 370.4 367.1 377.9 393.6 10 Business and professional 307.0 325.2 332.2 322.2 329.1 337.6 340.0 353.6 11 Farm1 40.2 41.7 35.8 34.3 41.3 29.5 37.9 40.1 12 Rental income of persons2 -13.5 -12.3 -10.4 -12.4 -12.3 -10.3 -6.6 -4.5 13 Dividends 126.5 140.3 137.0 141.3 136.7 135.6 134.3 133.9 14 Personal interest income 668.2 694.5 700.6 701.1 696.2 701.8 703.3 684.8 15 Transfer payments 625.0 685.8 771.1 744.9 762.4 777.1 799.8 842.7 16 Old-age survivors, disability, and health insurance benefits ... 325.1 352.0 382.0 374.2 378.9 384.2 390.6 405.7 17 LESS: Personal contributions for social insurance 211.4 224.8 238.4 234.9 237.4 240.1 241.5 246.8 18 EQUALS: Personal income 4,380.3 4,664.2 4,828.3 4,752.8 4,806.9 4,846.2 4,907.2 4,980.5 19 LESS: Personal tax and nontax payments 593.3 621.3 618.7 616.8 617.2 618.6 622.3 619.6 20 EQUALS: Disposable personal income 3,787.0 4,042.9 4,209.6 4,136.0 4,189.7 4,227.6 4,284.9 4,360.9 21 LESS: Personal outlays 3,634.9 3,867.3 4,009.9 3,943.2 3,994.4 4,036.6 4,065.5 4,146.3 22 EQUALS: Personal saving 152.1 175.6 199.6 192.8 195.3 191.0 219.4 214.6 MEMO Per capita (1987 dollars) 23 Gross domestic product 19,555.6 19,513.0 19,077.1 19,058.2 19,090.6 19,094.0 19,066.0 19,158.5 24 Personal consumption expenditures 13,028.9 13,043.6 12,824.1 12,807.6 12,837.6 12,847.9 12,802.6 12,930.2 25 Disposable personal income 14,005.0 14,068.0 13,886.0 13,861.0 13,891.0 13,876.0 13,913.0 14,017.0 26 Saving rate (percent) 4.0 4.3 4.7 4.7 4.7 4.5 5.1 4.9 GROSS SAVING 27 Gross saving 741.8 718.0 708.2 754.1 701.3 679.4 698.2 677.5 28 Gross private saving 819.4 854.1 901.5 889.4 896.9 884.9 934.8 950.1 29 Personal saving 152.1 175.6 199.6 192.8 195.3 191.0 219.4 214.6 30 Undistributed corporate profits1 86.9 75.7 75.8 77.7 78.1 69.0 78.3 104.0 31 Corporate inventory valuation adjustment -17.5 -14.2 3.1 6.7 9.9 -4.8 .7 -5.4 Capital consumption allowances 32 Corporate 352.4 368.3 383.0 379.7 382.5 383.5 386.3 386.1 33 Noncorporate 228.0 234.6 243.1 239.2 241.0 241.4 250.7 245.3 34 Government surplus, or deficit (-), national income and product accounts -77.5 -136.1 -193.3 -135.3 -195.6 -205.6 -236.6 -272.6 35 Federal -122.3 -166.2 -210.4 -149.9 -212.2 -221.0 -258.7 -289.2 36 State and local 44.8 30.1 17.1 14.6 16.5 15.4 22.0 16.6 37 Gross investment 742.9 723.4 730.1 767.5 728.4 709.9 714.6 706.5 38 Gross private domestic 832.3 799.5 721.1 705.4 710.2 732.8 736.1 722.4 39 Net foreign -89.3 -76.1 9.0 62.1 18.2 -22.9 -21.5 -16.0 40 Statistical discrepancy 1.1 5.4 21.9 13.4 27.1 30.5 16.4 29.0 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted, except as noted1 1991 1992 IItteemm 11998899 11999900 11999911 Ql Q2 Q3 04 Ql 1 Balance on current account -101,142 -90,428 -3,681 12,193 2,431 -11,087 -7,218 -5,303 2 Merchandise trade balance -115,668 -108,853 -73,436 -18,326 -16,397 -20,174 -18,539 -17,468 3 Merchandise exports 361,697 388,705 415,962 100,636 103,324 104,151 107,851 107,825 4 Merchandise imports -477,365 -497,558 -489,398 — 118,962 -119,721 -124,325 -126,390 -125,293 5 Military transactions, net -6,837 -7,818 -5,524 -2,564 -1,427 -995 -540 -228 6 Other service transactions, net 32,604 39,873 50,821 11,919 12,209 13,018 13,676 14,427 7 Investment income, net 14,366 19,287 16,430 6,%5 3,931 3,076 2,458 4,710 8 U.S. government grants -10,773 -17,597 24,487 18,181 8,214 -1,986 78 -2,490 9 U.S. government pensions and other transfers -2,517 -2,945 -3,462 -794 -7% -793 -1,080 -856 10 Private remittances and other transfers -12,316 -12,374 -12,9% -3,188 3,303 -3,233 -3,271 -3,398 11 Change in U.S. government assets other than official reserve assets, net (increase, -) 1,271 2,304 3,397 1,073 -420 3,180 -437 -112 12 Change in U.S. official reserve assets (increase, -) -25,293 -2,158 5,763 -353 1,014 3,878 1,226 -1,057 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -535 -192 -177 31 -190 6 -23 -172 15 Reserve position in International Monetary Fund 471 731 -367 -341 72 -114 17 111 16 Foreign currencies -25,229 -2,697 6,307 -43 1,132 3,986 1,232 -9% 17 Change in U.S. private assets abroad (increase, -) -90,923 -56,467 -71,378 -1,360 -7,644 -17,426 -44,947 1,724 18 Bank-reported claims -51,255 7,469 -4,753 17,909 -1,846 2,403 -23,219 21,708 19 Nonbank-reported claims 11,398 -2,477 5,526 2,251 2,304 -298 1,269 20 U.S. purchases of foreign securities, net -22,070 -28,765 -45,017 -9,526 -11,783 -12,403 -11,305 -8,679 21 U.S. direct investments abroad, net -28,9% -32,694 -27,134 -11,994 3,681 -7,128 -11,692 -11,305 22 Change in foreign official assets in United States (increase, +) ... 8,489 33,908 18,407 5,650 -4,178 4,115 12,819 20,747 23 U.S. Treasury securities 149 29,576 15,815 1,125 -3,553 5,624 12,619 14,631 24 Other U.S. government obligations 1,383 667 1,301 -29 -219 474 1,075 540 25 Other U.S. government liabilities 146 1,866 1,600 868 421 654 -344 -32 26 Other U.S. liabilities reported by U.S. banks 4,976 3,385 -1,668 2,920 -942 -2,732 -914 5,495 27 Other foreign official assets 1,835 -1,586 1,359 766 115 95 383 113 28 Change in foreign private assets in United States (increase, +)... 205,205 65,471 48,574 -13,490 7,137 18,818 36,110 -273 29 U.S. bank-reported liabilities 63,382 16,370 -13,678 -18,240 -27,411 8,508 23,465 -4,778 30 U.S. nonbank-reported liabilities 5,565 4,906 -405 -1,430 -1,275 1,575 725 31 Foreign private purchases of U.S. Treasury securities, net . 29,618 -2,534 16,241 2,850 13,289 -1,306 1,408 -649 32 Foreign purchases of other U.S. securities, net 38,767 1,592 34,918 4,862 15,212 10,012 4,832 4,459 33 Foreign direct investments in United States, net 67,873 45,137 11,498 -1,532 7,322 29 5,680 695 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy 2,394 47,370 -1,078 -3,713 1,660 -1,478 2,447 -15,726 36 Due to seasonal adjustment 4,636 883 -6,137 613 3,%7 37 Statistical discrepancy in recorded data before seasonal adjustment 2,394 47,370 -1,078 -8,349 777 4,659 1,835 -19,693 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -25,293 -2,158 5,763 -353 1,014 3,878 1,226 -1,057 39 Foreign official assets in United States excluding line 25 (increase, +) 8,343 32,042 16,807 4,782 -4,599 3,461 13,163 20,779 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 10,738 1,707 -5,604 660 -2,699 -4,288 1,023 2,452 1. Seasonal factors not calculated for lines 12-16, 18-20, 22-34, and 38-40. 4. Associated primarily with military sales contracts and other transactions 2. Data are on an international accounts basis. The data differ from the Census arranged with or through foreign official agencies. basis data, shown in table 3.11, for reasons of coverage and timing. Military 5. Consists of investments in U.S. corporate stocks and in debt securities of exports are excluded from merchandise trade data and are included in line 6. private corporations and state and local governments. 3. Reporting banks include all types of depository institution as well as some SOURCE. U.S. Department of Commerce Survey of Current Business. brokers and dealers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • October 1992 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1991 1992 IItteemm 11998899 11999900 11999911 Dec. Jan. Feb. Mar. Apr. May r June p 1 Exports of domestic and foreign merchandise, (F.A.S. value), excluding grant-aid shipments 333666333,,,888111222 333999333,,,555999222 444222111,,,777333000 333666,,,000555333 333555,,,444666777 333777,,,666555444 333777,,,000888555 333666,,,444000666 333555,,,777111888 333888,,,222888555 2 General imports (customs value), including merchandise for immediate consumption plus entries 444777333,,,222111111 444999555,,,333111111 444888777,,,111222999 444111,,,666777555 444111,,,222666666 444000,,,999444888 444222,,,666666888 444333,,,444666999 444222,,,888555999 444444,,,888777666 ---111000999,,,333999999 ---111000111,,,777111888 ---666555,,,333999999 ---555,,,666222222 ---555,,,777999999 ---333,,,222999444 ---555,,,555888444 ---777,,,000666333 ---777,,,111444111 ---666,,,555999111 1. The Census basis data differ from merchandise trade data shown in table 3.10, line 6. Since Jan. 1, 1987, Census data have been released forty-five days 3.10, lines 3-5, U.S. International Transactions Summary, because of coverage after the end of the month; the previous month is revised to reflect late documents. and timing. On the export side, the largest difference is the exclusion of military Total exports and the trade balance reflect adjustments for undocumented exports sales (which are combined with other militap' transactions and reported sepa- to Canada. Components may not sum to totals because of rounding. rately in the "service account" in table 3.10, line 6). On the import side, this table SOURCE. FT900, Summary of U.S. Export and Import Merchandise Trade includes imports of gold, ship purchases, imports of electricity from Canada, and (U.S. Department of Commerce, Bureau of the Census). other transactions; military payments are excluded and shown separately in table 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1992 Type Jan. Feb. Mar. Apr May June July1 1 Total 74,609 83,316 77,719 75,868 75,088 74,657 74,712 74,587 77,092 2 Gold stock, including Exchange Stabilization Fund 11,059 11,058 11,057 11,058 11,058 11,057 11,057 11,057 11,059 3 Special drawing rights ' 9,951 10,989 11,240 10,980 11,020 10,947 10,930 11,315 11,597 4 Reserve position in International Monetary Fund 9,048 9,076 9,488 9,113 8,996 8,994 8,968 9,175 9,381 5 Foreign currencies 44,551 52,193 45,934 44,717 44,014 43,659 43,757 43,040 45,055 1. Gold held "under earmark" at Federal Reserve Banks for foreign and 5 currencies have been used. U.S. SDR holdings and reserve positions in the IMF international accounts is not included in the gold stock of the United States; see also have been valued on this basis since July 1974. table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce. 3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 2. Special drawing rights (SDRs) are valued according to a technique adopted of the year indicated, as follows: 1970—$867 million; 1971—$717 million; 1972— by the International Monetary Fund (IMF) in July 1974. Values are based on a $710 million; 1979—$1,139 million; 1980—$1,152 million; 1981—$1,093 million; weighted average of exchange rates for the currencies of member countries. From plus net transactions in SDRs. July 1974 through December 1980, 16 currencies were used; since January 1981, 4. Valued at current market exchange rates. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 1992 AAsssseett 11998899 11999900 11999911 Jan. Feb. Mar. Apr. May June July p 1 Deposits 589 369 968 321 264 262 206 217 219 264 Held in custody 2 U.S. Treasury securities 224,911 278,499 281,107 293,958 297,834 300,277 303,413 307,562 307,337 316,431 3 Earmarked gold3 13,456 13,387 13,303 13,303 13,305 13,304 13,304 13,295 13,268 13,261 1. Excludes deposits and U.S. Treasury securities held for international and Treasury securities payable at face value in dollars or foreign currencies, regional organizations. 3. Held for foreign and international accounts and valued at $42.22 per fine 2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. troy ounce; not included in the gold stock of the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A55 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1 Millions of dollars, end of period 1991 1992 AAsssseettss Dec. Jan. Feb. Mar. Apr. May June All foreign countries 1 Total, all currencies 505,595 545,366 556,925 548,901 547,903r 550,520r 562,212' 549,858' 564,816' 564,466 2 Claims on United States 169,111 198,835 188,4% 176,301 180,25lr 178,188r 193,434' 177,992' 182,554' 183,933 3 Parent bank 129,856 157,092 148,837 137,509 142,476r 142,181r 157,129' 143,79c 145,974' 147,626 4 Other banks in United States 14,918 17,042 13,2% 12,884 11,675 10,837 11,612 9,993 11,640 10,418 5 Nonbanks 24,337 24,701 26,363 25,908 26,100 25,170 24,693 24,209 24,940 25,889 6 Claims on foreigners 299,728 300,575 312,449 303,934 297,400 301,900 299,890' 302,916' 314 311,990 7 Other branches of parent bank 107,179 113,810 135,003 111,729 103,456 108,052 112,190' 111,369 115,688 115,664 8 Banks 96,932 90,703 72,602 81,970 82,332 83,904 79,311 83,562' 85,923' 84,467 9 Public borrowers 17,163 16,456 17,555 18,652 18,223 18,421 18,328 18,743 19,194 20,162 10 Nonbank foreigners 78,454 79,606 87,289 91,583 93,389 91,523 90,061 89,242 93,764 91,697 11 Other assets 36,756 45,956 55,980 68,666 70,252 70,432 68,888 68,950 67,693' 68,543 12 Total payable in U.S. dollars 357,573 382,498 379,479 363,941 359,686r 365,162' 381,113' 364,748' 370,29c 369,561 13 Claims on United States 163,456 191,184 180,174 169,662 174,026r 172,539' 187,744' 173,337' 177,311' 177,638 14 Parent bank 126,929 152,294 142, %2 133,476 138,885r 138,916' 153,8591 141,264' 142,874' 144,287 15 Other banks in United States 14,167 16,386 12,513 12,025 10,924 10,006 10,956 9,255 11,012 10,016 16 Nonbanks 22,360 22,504 24,699 24,161 24,217 23,617 22,929 22,818 23,425 23,335 17 Claims on foreigners 177,685 169,690 174,451 167,010 157,338 163,623 163,877 162, %7' 167,054' 168,586 18 Other branches of parent bank 80,736 82,949 95,298 78,114 70,637 75,087 78,067 75,342 77,165 76,912 19 Banks 54,884 48,3% 36,440 41,635 39,964 42,488 39,671 41,250' 41,845' 43,095 20 Public borrowers 12,131 10,961 12,298 13,685 13,202 13,136 13,217 12,994 12,994 13,723 21 Nonbank foreigners 29,934 27,384 30,415 33,576 33,535 32,912 32,922 33,381 35,050 34,856 22 Other assets 16,432 21,624 24,854 27,269 28,322 29,000 29,492 28,444 25,925' 23,337 United Kingdom 23 Total, all currencies 156,835 161,947 184,818 175,599 174,467 172,479 169,139' 170,775 174,925' 171,027 24 Claims on United States 40,089 39,212 45,560 35,257 36,620 34,655 37,015 35,451 37,369 38,0% 25 Parent bank 34,243 35,847 42,413 31,931 32,765 31,302 34,048 32,379 34,433 35,343 26 Other banks in United States 1,123 1,058 792 1,267 1,392 1,211 1,158 1,228 970 756 27 Nonbanks 4,723 2,307 2,355 2,059 2,463 2,142 1,809 1,844 1,966 1,997 28 Claims on foreigners 106,388 107,657 115,536 109,692 108,046 107,645 101,491' 104,467 107,795 104,270 29 Other branches of parent bank 35,625 37,728 46,367 35,735 33,357 33,924 33,463' 34,061 35,331 36,952 30 Banks 36,765 36,159 31,604 36,394 36,537 37,349 33,499 36,126 37,548 34,783 31 Public borrowers 4,019 3,293 3,860 3,306 3,377 3,144 3,060 3,108 3,165 2,995 32 Nonbank foreigners 29,979 30,477 33,705 34,257 34,775 33,228 31,469 31,172 31,751 29,540 33 Other assets 10,358 15,078 23,722 30,650 29,801 30,179 30,633 30,857 29,761' 28,661 34 Total payable in U.S. dollars 103,503 103,208 116,762 105,974 103,833 102,341 102,283 102,285 104,392' 102,737 35 Claims on United States 38,012 36,404 41,259 32,418 33,801 31,788 34,464 33,298 35,185 35,376 36 Parent bank 33,252 34,329 39,609 30,370 31,239 29,724 32,645 31,022 33,059 33,751 37 Other banks in United States 964 843 334 822 901 678 725 853 677 627 38 Nonbanks 3,7% 1,232 1,316 1,226 1,661 1,386 1,094 1,423 1,449 998 39 Claims on foreigners 60,472 59,062 63,701 58,791 55,281 55,985 52,306 54,129 56,615 56,888 40 Other branches of parent bank 28,474 29,872 37,142 28,667 26,827 26,747 25,933 25,922 27,482 28,541 41 Banks 18,494 16,579 13,135 15,219 14,106 15,438 13,154 14,829 15,348 15,380 42 Public borrowers 2,840 2,371 3,143 2,853 2,707 2,657 2,623 2,545 2,463 2,474 43 Nonbank foreigners 10,664 10,240 10,281 12,052 11,641 11,143 10,5% 10,833 11,322 10,493 44 Other assets 5,019 7,742 11,802 14,765 14,751 14,568 15,513 14,858 12,592' 10,473 Bahamas and Cayman Islands 45 Total, all currencies 170,639 176,006 162,316 168,326 167,847' 169,134' 175,893' 162,871' 167,139' 168,963 46 Claims on United States 105,320 124,205 112,989 115,244 116,687r 115,562' 122,762' 112,08c 115,633' 114,467 47 Parent bank 73,409 87,882 77,873 81,520 84,705r 84,661' 91,549' 82,823' 84,041' 83,316 48 Other banks in United States 13,145 15,071 11,869 10,907 9,626 8,%9 9,809 8,115 9,729 9,118 49 Nonbanks 18,766 21,252 23,247 22,817 22,356 21,932 21,404 21,142 21,863 22,033 50 Claims on foreigners 58,393 44,168 41,356 45,229 42,866 44,033 44,285 41,929' 42,828' 45,600 51 Other branches of parent bank 17,954 11,309 13,416 11,098 10,549 11,528 11,278 10,156 9,311 9,392 52 Banks 28,268 22,611 16,310 20,174 18,998 19,311 19,645 18,406' 19,658' 21,548 53 Public borrowers 5,830 5,217 5,807 7,161 6,600 6,545 6,599 6,332 6,459 7,084 54 Nonbank foreigners 6,341 5,031 5,823 6,7% 6,719 6,649 6,763 7,035 7,400 7,576 55 Other assets 6,926 7,633 7,971 7,853 8,294 9,539 8,846 8,862 8,678r 8,8% 56 Total payable in U.S. dollars 163,518 170,780 158,390 163,771 163,277r 164,710' 171,320' 158,196' 162,066' 163,313 1. Since June 1984, reported claims held by foreign branches have been reduced by an increase in the reporting threshold for "shell" branches from $50 million to $150 million equivalent in total assets, the threshold now applicable to all reporting branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • October 1992 3.14—Continued 1991 1992 LLiiaabbiilliittiieess 11998888 11998899 11999900 Dec. Jan. Feb. Mar. Apr. May June All foreign countries 57 Total, all currencies 505,595 545,366 556,925 548,901 547,903R 550,520R 562,212R 549,858R 564,816' 564,466 58 Negotiable certificates of deposit (CDs) 28,511 23,500 18,060 16,284 16,156 15,988 14,498 12,757r 14,010r 13,040 59 To United States 185,577 197,239 189,412 198,121 189,282r 191,047r 210,357r l%,635r 198,897r 204,929 60 Parent bank 114,720 138,412 138,748 136,431 127,532 123,775 142,551 138,273r 136,195' 143,474 61 Other banks in United States 14,737 11,704 7,463 13,260 13,683 12,674 14,137 15,075 13,944 14,009 62 Nonbanks 56,120 47,123 43,201 48,430 48,067r 54,598r 53,669r 43,287r 48,758r 47,446 63 To foreigners 270,923 296,850 311,668 288,254 295,861 299,046 292,523r 2%,580 308,394 302,376 64 Other branches of parent bank ... 111,267 119,591 139,113 112,033 105,873 108,744 113,314 111,968 115,235 116,878 65 Banks 72,842 76,452 58,986 63,097 72,407 71,346 62,924r 65,055 68,391 65,865 66 Official institutions 15,183 16,750 14,791 15,5% 16,704 16,972 15,697 16,083 19,465 16,399 67 Nonbank foreigners 71,631 84,057 98,778 97,528 100,877 101,984 100,588 103,474 105,303 103,234 68 Other liabilities 20,584 27,777 37,785 46,242 46,604 44,439 44,834 43,886 43,515r 44,121 69 Total payable in U.S. dollars 367,483 396,613 383,522 370,561 360,521R 363,744R 380,384R 365,920' 373,679' 374,506 70 Negotiable CDs 24,045 19,619 14,094 11.909 11,442 11,515 10,278 8,470r 9,643r 8,475 71 To United States 173,190 187,286 175,654 185,286 176,834r 179,340r 198,349r 185,533r 187,438r 192,792 72 Parent bank 107,150 132,563 130,510 129,669 121,098 117,272 135,761 131,844r 130,007' 136,273 73 Other banks in United States 13,468 10,519 6,052 11,707 12,191 11,532 13,036 14,217 12,840 13,251 74 Nonbanks 52,572 44,204 39,092 43.910 43,545r 50,536r 49,552r 39,472r 44,591' 43,268 75 To foreigners 160,766 176,460 179,002 158,993 156,339 156,744 156,216 157,139 162,011 158,532 76 Other branches of parent bank ... 84,021 87,636 98,128 76,601 70,839 74,466 77,492 75,780 77,000 77,608 77 Banks 28,493 30,537 20,251 24,156 25,781 23,665 21,910 22,569 24,063 23,470 78 Official institutions 8,224 9,873 7,921 10,304 10,555 10,652 9,625 10,413 13,102 10,119 79 Nonbank foreigners 40,028 48,414 52,702 47,932 49,164 47,961 47,189 48,377 47,846 47,335 80 Other liabilities 9,482 13,248 14,772 14,373 15,906 16,145 15,541 14,778 14,587' 14,707 United Kingdom 81 Total, all currencies 156,835 161,947 184,818 175,599 174,467 172,479 169,139' 170,775 174,925' 171,027 82 Negotiable CDs 24,528 20,056 14,256 11,333 10,993 10,581 9,677 7,324 8,458 7,612 83 To United States 36,784 36,036 39,928 37,720 31,018 30,631 35,364 36,610 33,236 36,660 84 Parent bank 27,849 29,726 31,806 29,834 23,112 23,464 27,937 29,317 25,637 28,201 85 Other banks in United States . 2,037 1,256 1,505 1,438 2,325 1,891 1,201 2,011 1,638 1,326 86 Nonbanks 6,898 5,054 6,617 6,448 5,581 5,276 6,226 5,282 5,961 7,133 87 To foreigners 86,026 92,307 108,531 98,167 104,868 104,432 %,566r 99,804 106,603 100,340 88 Other branches of parent bank 26,812 27,397 36,709 30,054 27,561 27,864 27,937 28,239 30,429 31,464 89 Banks 30,609 29,780 25,126 25,541 31,929 30,686 25,88f 27,046 27,549 25,315 90 Official institutions 7,873 8,551 8,361 9,670 10,432 10,685 9,277 9,539 12,732 10,167 91 Nonbank foreigners 20,732 26,579 38,335 32,902 34,946 35,197 33,471 34,980 35,893 33,394 92 Other liabilities 9,497 13,548 22,103 28,379 27,588 26,835 27,532 27,037 26,628' 26,415 93 Total payable in U.S. dollars 105,907 108,178 116,094 108,755 103,232 100,882 101,602 100,799 102,783' 101,901 94 Negotiable CDs 22,063 18,143 12,710 10,076 9,236 9,061 8,562 6,136 6,%7 5,750 95 To United States 32,588 33,056 34,697 33,003 26,419 26,261 30,993 32,510 28,936 32,300 96 Parent bank 26,404 28,812 29,955 28,260 21,663 21,788 26,272 27,904 24,435 26,720 97 Other banks in United States . 1,752 1,065 1,156 1,177 1,954 1,639 1,032 1,796 1,184 1,084 98 Nonbanks 4,432 3,179 3,586 3,566 2,802 2,834 3,689 2,810 3,317 4,4% 99 To foreigners 47,083 50,517 60,014 56,626 57,522 55,216 52,059 52,625 57,489 54,262 100 Other branches of parent bank 18,561 18,384 25,957 20,800 18,498 18,863 18,792 18,136 19,497 20,918 101 Banks 13,407 12,244 9,488 11,069 13,061 11,188 9,861 9,435 10,799 9,848 102 Official institutions 4,348 5,454 4,692 7,156 7,580 7,698 6,628 6,998 9,915 7,049 103 Nonbank foreigners 10,767 14,435 19,877 17,601 18,383 17,467 16,778 18,056 17,278 16,447 104 Other liabilities 4,173 6,462 8,673 9,050 10,055 10,344 9,988 9,528 9,391' 9,589 Bahamas and Cayman Islands 105 Total, all currencies 170,639 176,006 162,316 168,326 167,847R 169,134R 175,893R 162,871' 167,139' 168,963 106 Negotiable CDs 953 678 646 1,173 1,382 1,709 932 l,546r 1,646' 1,894 107 To United States 122,332 124,859 114,738 129,872 130,484r 131,171r 139, l%r 124,605r 128,891' 130,815 108 Parent bank 62,894 75,188 74,941 79,394 79,585 73,744 82,050 76,086' 76,779' 80,998 109 Other banks in United States . 11,494 8,883 4,526 10,231 10,045 9,733 11,6% 12,060 11,085 11,708 110 Nonbanks 47,944 40,788 35,271 40,247 40,854r 47,694r 45,450r 36,459r 41,027' 38,109 111 To foreigners 45,161 47,382 44,444 35,200 34,106 34,425 34,002 34,899 35,021 34,637 112 Other branches of parent bank 23,686 23,414 24,715 17,388 16,590 17,050 17,100 16,933 16,842 16,799 113 Banks 8,336 8,823 5,588 5,662 5,497 5,054 5,139 6,009 6,346 6,075 114 Official institutions 1,074 1,097 622 572 450 490 536 736 731 770 115 Nonbank foreigners 12,065 14,048 13,519 11,578 11,569 11,831 11,227 11,221 11,102 10,993 116 Other liabilities 2,193 3,087 2,488 2,081 1,875 1,829 1,763 1,821 1,581 1,617 117 Total payable in U.S. dollars .... 162,950 171,250 157,132 163,603 162,836R 164,403R 171,255R 158,247' 162,280' 163,951 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A57 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1991 1992 IItteemm 11998899 11999900 Dec. Jan. Feb. Mar. Apr. Mayr Junep 1 Total1 312,477 344,529 360,495 372,277 375,249 381,589 385,595 394,604 402,155 By type 2 Liabilities reported by banks in the United States 36,4% 39,880 38,361 41,427 42,507 43,895 44,537 47,297 51,224 3 U.S. Treasury bills and certificates 76,985 79,424 92,692 92,711 94,731 102,143 102,968 111,224 109,278 U.S. Treasury bonds and notes 4 Marketable 179,269 202,487 203,677 212,364 212,171 209,035 210,747 208,062 213,416 5 Nonmarketable , 568 4,491 4,858 4,892 4,922 4,956 4,989 5,021 5,053 6 U.S. securities other than U.S. Treasury securities 19,159 18,247 20,907 20,883 20,918 21,560 22,354 23,000 23,184 By area 7 Western Europe 132,849 167,191 168,316 173,122 173,129 178,003 179,199 185,278 191,131 8 Canada 9,482 8,671 7,460 7,642 8,251 7,016 7,855 9,347 9,302 9 Latin America and Caribbean 9,313 21,184 33,554 34,659 35,658 38,015 39,130 39,743 39,840 10 153,338 138,0% 139,463 146,127 147,830 148,688 148,646 149,0% 150,256 11 1,030 1,434 2,092 2,409 2,408 2,011 2,392 2,792 3,266 12 Other countries 6,469 7,955 9,608 8,316 7,971 7,854 8,371 8,348 8,358 1. Includes the Bank for International Settlements. bonds and notes payable in foreign currencies; zero coupon bonds are included at 2. Principally demand deposits, time deposits, bankers acceptances, commer- current value. cial paper, negotiable time certificates of deposit, and borrowings under repur- 5. Debt securities of U.S. government corporations and federally sponsored chase agreements. agencies, and U.S. corporate stocks and bonds. 3. Includes nonmarketable certificates of indebtedness (including those payable 6. Includes countries in Oceania and Eastern Europe. in foreign currencies through 1974) and Treasury bills issued to official institutions SOURCE. Based on Treasury Department data and on data reported to the of foreign countries. Treasury Department by banks (including Federal Reserve Banks) and securities 4. Excludes notes issued to foreign official nonreserve agencies. Includes dealers in the United States and on the 1984 benchmark survey of foreign portfolio investment in the United States. 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 1991 1992 IItteemm 11998888 11998899 11999900 June Sept. Dec. Mar.r 74,980 67,835 70,477 59,269 63,130 74,921 67,702 68,983 65,127 66,796 60,472 63,479 73,065 60,704 25,100 20,491 29,672 27,720 29,567 26,201 23,130 43,884 44,636 37,124 32,751 33,912 46,864 37,574 364 3,507 66,,330099 11,,664488 22,,334488 33,,227744 2,862 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

A58 International Statistics • October 1992 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1991 1992 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11998899 11999900 11999911 Dec. Jan. Feb. Mar. Apr. May June p 1 All foreigners 736,878 759,634 755,673 755,673 751,877 755,059 773,100"' 769,065' 781,494' 781,198 2 Banks' own liabilities 577,498 577,229 574,395 574,395 571,682 574,213 582,113r 578,230' 582,292' 581,857 3 Demand deposits 22,032 21,723 20,320 20,320 19,309 18,906 19,286 19,045 19,608' 20,837 4 Time deposits2 168,780 168,017 159,844 159,844 148,133 145,836 147,86c 153,315' 149,672' 150,761 5 Other. 67,823 65,822 66,001 66,001 72,948 75,861 75,341r 75,956' 82,129' 81,527 6 Own foreign offices 318,864 321,667 328,230 328,230 331,292 333,610 339,626r 329,914' 330,883' 328,732 7 Banks' custody liabilities5 159,380 182,405 181,278 181,278 180,195 180,846 190,987 190,835 199,202 199,341 8 U.S. Treasury bills and certificates 91,100 96,796 110,734 110,734 110,000 112,172 119,882 120,924 129,312 128,674 9 Other negotiable and readily transferable instruments 19,526 17,578 18,664 18,664 17,745 16,894 18,429 17,797 17,901 18,022 10 Other 48,754 68,031 51,880 51,880 52,450 51,780 52,676 52,114 51,989 52,645 11 Nonmonetary international and regional organizations 4,894 5,918 8,947 8,947 9,895 10,615 10,469 9,947 10,146 8,341 12 Banks' own liabilities 3,279 4,540 6,793 6,793 8,112 8,879 8,567 8,064 8,191 6,118 13 Demand deposits % 36 43 43 39 35 144 29 46 40 14 Time deposits 927 1,050 2,764 2,764 2,049 2,058 1,442 1,642 1,831 2,329 15 Other. 2,255 3,455 3,986 3,986 6,024 6,786 6,981 6,393 6,314 3,749 16 Banks' custody liabilities5 1,616 1,378 2,154 2,154 1,783 1,736 1,902 1,883 1,955 2,223 17 U.S. Treasury bills and certificates 197 364 1,730 1,730 1,328 1,317 11,,222255 1,442 1,461 1,687 18 Other negotiable and readily transferable instruments7 1,417 1,014 424 424 455 417 637 441 494 534 19 Other 2 0 0 0 0 2 40 0 0 2 20 Official institutions9 113,481 119,303 131,053 131,053 134,138 137,238 146,038 147,505 158,521' 160,502 21 Banks' own liabilities 31,108 34,910 34,376 34,376 37,917 38,623 39,795 40,584 43,393' 47,336 22 Demand deposits 2,196 1,924 2,642 2,642 1,480 1,297 1,342 1,360 1,320' 1,634 23 Time deposits 10,495 14,359 16,474 16,474 16,307 14,655 17,667r 18,587' 18,983' 17,942 24 Other. 18,417 18,628 15,260 15,260 20,130 22,671 20,786r 20,637' 23,090' 27,760 25 Banks' custody liabilities5 82,373 84,393 96,677 96,677 96,221 98,615 106,243 106,921 115,128 113,166 26 U.S. Treasury bills and certificates 76,985 79,424 92,692 92,692 9922,,771111 94,731 110022,,114433 102,968 111,224 109,278 27 Other negotiable and readily transferable instruments 5,028 4,766 3,879 3,879 3,422 3,697 4,019 3,812 3,717 3,602 28 Other 361 203 106 106 88 187 81 141 187 286 29 Banks10 515,275 540,805 521,576 521,576 516,474 517,477 527,372R 521,926' 527,223' 525,912 30 Banks' own liabilities 454,273 458,470 458,329 458,329 451,905 453,730 461,186r 456,151' 460,687' 459,155 31 Unaffiliated foreign banks 135,409 136,802 130,099 130,099 120,613 120,120 121,56C 126,237 129,804' 130,423 32 Demand deposits 10,279 10,053 8,631 8,631 8,807 8,369 8,543 8,753 9,229' 9,728 33 Time deposits 90,557 88,541 82,936 82,936 73,938 74,535 74,246r 79,632' 77,082' 80,188 34 Other. 34,573 38,208 38,532 38,532 37,868 37,216 38,771 37,852' 43,493' 40,507 35 Own foreign offices 318,864 321,667 328,230 328,230 331,292 333,610 339,626r 329,914' 330,883' 328,732 36 Banks' custody liabilities5 61,002 82,335 63,247 63,247 64,569 63,747 66,186 65,775' 66,536' 66,757 37 U.S. Treasury bills and certificates6 9,367 10,669 7,471 7,471 7,713 7,733 88,,334444 8,410 8,946 8,927 38 Other negotiable and readily transferable instruments 5,124 5,341 5,694 5,694 5,853 5,999 6,733 7,147' 7,044' 6,647 39 Other 46,510 66,325 50,082 50,082 51,003 50,015 51,109 50,218 50,546 51,183 40 Other foreigners 103,228 93,608 94,097 94,097 91,370 89,729 89,221 89,687' 85,604' 86,443 41 Banks' own liabilities 88,839 79,309 74,897 74,897 73,748 72,981 72,565 73,431' 70,021 69,248 42 Demand deposits 9,460 9,711 9,004 9,004 8,983 9,205 9,257 8,903 9,013 9,435 43 Time deposits 66,801 64,067 57,670 57,670 55,839 54,588 54,505 53,454' 51,776 50,302 44 Other. 12,577 5,530 8,223 8,223 8,926 9,188 8,803 11,074 9,232 9,511 45 Banks' custody liabilities5 14,389 14,299 19,200 19,200 17,622 16,748 16,656 16,256' 15,583' 17,195 46 U.S. Treasury bills and certificates 4,551 6,339 8,841 8,841 8,248 8,391 8,170 8,104 7,681 8,782 47 Other negotiable and readily transferable instruments 7,958 6,457 8,667 8,667 8,015 6,781 7,040 6,397' 6,646' 7,239 48 Other 1,880 1,503 1,692 1,692 1,359 1,576 1,446 1,755 1,256 1,174 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 7,203 7,073 7,456 7,456 7,855 8,049 8,110 7,624 7,579 7,350 1. Reporting banks include all kinds of depository institutions besides commer- 6. Includes nonmarketable certificates of indebtedness and Treasury bills cial banks, as well as some brokers and dealers. issued to official institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in 7. Principally bankers acceptances, commercial paper, and negotiable time "Other negotiable and readily transferable instruments." certificates of deposit. 3. Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development and 4. For U.S. banks, includes amounts due to own foreign branches and foreign the Inter-American and Asian Development Banks. Data exclude "holdings of subsidiaries consolidated in "Consolidated Report of Condition" filed with bank dollars" of the International Monetary Fund. regulatory agencies. For agencies, branches, and majority-owned subsidiaries of 9. Foreign central banks, foreign central governments, and the Bank for foreign banks, consists principally of amounts due to head office or parent foreign International Settlements. bank, and foreign branches, agencies, or wholly owned subsidiaries of head office 10. Excludes central banks, which are included in "Official institutions." or parent foreign bank. 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.17—Continued 1991 1992 AArreeaa aanndd ccoouunnttrryy 11998899 11999900 11999911 Dec. Jan. Feb. Mar. Apr. May June p 1 Total 736,878 759,634 755,673 755,673 751,877 755,059 773,100" 769,065r 781,494r 781,198 2 Foreign countries 731,984 753,716 746,726 746,726 741,982 744,444 762,631r 759,118r 771,348r 772,857 3 Europe 237,501 254,452 249,010 249,010 244,530 246,160 255,965r 262,201r 271,119"" 279,377 4 Austria 1,233 1,229 1,193 1,193 1,041 1,030 1,230 1,219 1,337 1,510 5 Belgium-Luxembourg 10,648 12,382 13,337 13,337 13,348 15,156 16,253 15,818 17,346 16,719 6 Denmark 1,415 1,399 937 937 991 997 892 961 1,331 1,264 7 Finland 570 602 1,341 1,341 893 623 1,014 1,005 764 842 8 France 26,903 30,946 31,808 31,808 29,186 26,449 26,036r 27,667r 27,005r 30,094 9 Germany 7,578 7,485 8,619 8,619 7,859 9,514 9,556 9,272 8,319 8,017 10 Greece 1,028 934 765 765 873 895 1,058 1,134 1,254 1,370 11 Italy 16,169 17,735 13,541 13,541 10,798 9,554 9,915 10,035 10,055 10,359 12 Netherlands 6,613 5,350 7,161 7,161 7,965 7,322 9,250 9,352 9,572 9,474 13 Norway 2,401 2,357 1,866 1,866 1,922 1,398 1,286 899 1,429 1,359 14 Portugal 2,418 2,958 2,184 2,184 1,114 2,540 2,071 2,217 2,391 2,526 15 Spain 4,364 7,544 11,391 11,391 9,371 10,653 13,504 14,435 I4,316r 15,819 16 Sweden 1,491 1,837 2,222 2,222 1,887 2,544 2,106 2,888 2,007 4,124 17 Switzerland 34,496 36,690 37,236 37,236 35,658 34,709 37,103 33,603 36,662 36,037 18 Turkey 1,818 1,169 1,598 1,598 1,476 1,677 1,600 1,362 1,691 1,579 19 United Kingdom 102,362 109,555 100,257 100,257 102,334 102,160 103,319" 108,023r 110,654r 111,706 20 Yugoslavia 1,474 928 622 622 493 529 504 569 524 555 21 Other Western Europe11 13,563 11,689 9,224 9,224 13,764 14,017 15,410"^ 17,164r 19,819" 21,479 22 U.S.S.R 350 119 241 241 161 238 168 287 436r 442 23 Other Eastern Europe 608 1,545 3,467 3,467 3,396 4,155 3,690 4,291 4,207 4,102 24 Canada 18,865 20,349 21,581 21,581 18,665 20,456 20,929" 20,500" 22,556r 20,343 25 Latin America and Caribbean 311,028 332,997 345,253 345,253 349,731 348,552 350,883r 341,804r 339,588r 338,359 26 Argentina 7,304 7,365 7,758 7,758 7,899 7,878 8,310 8,654 9,381 9,665 27 Bahamas 99,341 107,386 100,743 100,743 101,291 99,736 102,118r 98,43 f 99,774r 101,300 28 Bermuda 2,884 2,822 3,178 3,178 3,658 3,478 3,364 3,368 3,009 3,268 29 Brazil 6,351 5,834 5,942 5,942 5,785 5,760 5,745 5,752 5,399 5,715 30 British West Indies 138,309 147,321 162,816 162,816 165,462 167,122 166,628r 160,954r 158,4691 156,507 31 Chile 3,212 3,145 3,284 3,284 3,322 3,408 3,623 3,506r 3,792 3,667 32 Colombia 4,653 4,492 4,662 4,662 4,627 4,713 4,972 4,915 4,902 4,715 33 Cuba 10 11 2 2 6 5 11 9 6 3 34 Ecuador 1,391 1,379 1,232 1,232 1,248 1,217 1,168 1,128 1,150 1,118 35 Guatemala 1,312 1,541 1,594 1,594 1,554 1,549 1,539 1,489 1,438 1,434 36 Jamaica 209 257 231 231 234 227 271 234 242 309 37 Mexico 15,423 16,650 19,957 19,957 20,372 20,319 21,540 21,362r 20,841 19,472 38 Netherlands Antilles 6,310 7,357 5,592 5,592 6,272 6,231 5,205 5,986 5,347 5,290 39 Panama 4,362 4,574 4,695 4,695 4,349 4,404 4,158 4,216 4,100 4,267 40 Peru 1,984 1,294 1,249 1,249 1,233 1,221 1,187 1,094 1,098 1,136 41 Uruguay 2,284 2,520 2,111 2,111 2,313 2,158 2,054 2,171 2,118r 2,163 42 Venezuela 9,482 12,271 13,181 13,181 13,520 12,424 12,190 11,874 ll,705r 11,381 43 Other 6,206 6,779 7,026 7,026 6,586 6,702 6,800" 6,661r 6,817r 6,949 44 156,201 136,844 120,491 120,491 119,173 120,104 125,745r 125,276r 128,173r 124,532 China 45 Mainland 1,773 2,421 2,625 2,625 2,739 2,607 2,677 2,751 2,363 2,422 46 Taiwan 19,588 11,246 11,500 11,500 10,955 10,594 10,602 lO^O1 10,274 9,977 47 Hong Kong 12,416 12,754 14,365 14,365 15,151 14,967 14,722 16,248 17,990 17,035 48 India 780 1,233 2,418 2,418 2,297 2,256 2,028 1,792 1,671 1,713 49 Indonesia 1,281 1,238 1,463 1,463 1,037 1,276 1,516 1,109 1,133 1,387 50 Israel 1,243 2,767 2,015 2,015 2,193 2,137 2,536 3,791r 3,432 2,975 51 Japan 81,184 67,076 47,041 47,041 46,076 44,771 49,528r 47,337r 46,183r 44,219 52 Korea 3,215 2,287 2,535 2,535 2,433 2,754 2,827 2,975 3,111 2,809 53 Philippines 1,766 1,585 2,449 2,449 2,256 2,462 2,638 2,266 1,629 1,792 54 Thailand 2,093 1,443 2,252 2,252 2,933 3,224 3,330 3,147 6,990 4,584 55 Middle-East oil-exporting countries 13,370 15,829 15,752 15,752 15,901 18,410 19,311 18,614 18,256 18,983 56 Other 17,491 16,965 16,076 16,076 15,202 14,646 14,030 14,766 15,141 16,636 57 3,824 4,630 4,824 4,824 5,042 4,919 4,886 4,864 5,430 5,850 58 Egypt 686 1,425 1,621 1,621 1,620 1,632 1,337 1,610 2,001 2,539 59 Morocco 78 104 79 79 86 82 90 88 77 87 60 South Africa 206 228 228 228 201 199 191 188 399 245 61 Zaire 86 53 31 31 28 30 35 27 26 29 62 Oil-exporting countries 1,121 1,110 1,082 1,082 1,204 1,214 1,428 1,277 1,257 1,232 63 Other 1,648 1,710 1,783 1,783 1,903 1,762 1,805 1,674 1,670 1,718 64 Other countries 4,564 4,444 5,567 5,567 4,841 4,253 4,223 4,473 4,482 4,396 65 Australia 3,867 3,807 4,464 4,464 3,619 3,065 3,100 3,575 3,211 3,192 66 All other 697 637 1,103 1,103 1,222 1,188 1,123 898 1,271 1,204 67 Nonmonetary international and regional organizations 4,894 5,918 8,947 8,947 9,895 10,615 10,469 9,947 10,146 8,341 68 International 3,947 4,390 6,451 6,451 7,439 8,292 8,063 7,199 7,233 5,622 69 Latin American regional 684 1,048 1,181 1,181 1,422 1,500 1,785 1,788 1,903 2,100 70 Other regional16 263 479 1,315 1,315 1,034 823 621 960 1,010 619 11. Includes the Bank for International Settlements and Eastern European 14. Comprises Algeria, Gabon, Libya, and Nigeria. countries not listed in line 23. 15. Excludes "holdings of dollars" of the International Monetary Fund. 12. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. 16. Asian, African, Middle Eastern, and European regional organizations, 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and except the Bank for International Settlements, which is included in "Other United Arab Emirates (Trucial States). Western Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • October 1992 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 1991 1992 Area and country 11998899 11999900 11999911 Dec. Jan. Feb. Mar. Apr. May r June" 1 Total 534,492 511,543 514,375 514,375 509,490 508,876 513,200r 507,181r 504,734 510,630 2 Foreign countries 530,630 506,750 508,002 508,002 504,884 502,336 506,737r 502,302r 499,843 505,084 3 Europe 119,025 113,093 114,310 114,310 112,655 110,850 112,752r 123,719" 120,742 125,861 4 Austria 415 362 327 327 211 447 375 444 456 433 5 Belgium-Luxembourg 6,478 5,473 6,158 6,158 6,724 7,451 7,005 6,967 6,487 6,166 6 Denmark 582 497 686 686 792 709 737 871 994 1,435 7 Finland 1,027 1,047 1,912 1,912 1,854 1,586 1,321 1,475 1,536 1,367 8 France 16,146 14,468 15,112 15,112 15,179 13,742 14,062 13,706 14,031 14,442 9 Germany 2,865 3,343 3,371 3,371 3,305 3,405 3,788 3,117 4,044 3,311 10 Greece 788 727 553 553 550 562 537 567 492 505 11 Italy 6,662 6,052 8,242 8,242 8,000 7,346 8,584 9,835 10,282 10,635 12 Netherlands 1,904 1,761 2,539 2,539 2,664 2,454 2,268r 2,688r 2,642 2,267 13 Norway 609 782 669 669 801 665 687 569 733 724 14 Portugal 376 292 344 344 360 350 368 361 398 369 15 Spain 1,930 2,668 1,844 1,844 2,487 2,120 3,310 3,726r 2,687 3,880 16 Sweden 1,773 2,094 2,335 2,335 2,756 2,928 2,636 3,062 3,007 6,759 17 Switzerland 6,141 4,202 4,540 4,540 4,497 3,921 3,375 4,095 4,144 3,922 18 Turkey 1,071 1,405 1,063 1,063 1,062 1,076 943 927 1,130 984 19 United Kingdom 65,527 65,151 60,435 60,435 56,624 57,082 5577,,992200rr 66,365r 62,509 63,744 20 Yugoslavia 1,329 1,142 824 824 822 810 880088rr 781r 736 697 21 Other Western Europe2 1,302 597 789 789 1,152 1,116 879 821 894 771 22 U.S.S.R , 1,179 530 1,970 1,970 2,331 2,491 2,659 2,824 2,948 3,035 23 Other Eastern Europe3 921 499 597 597 484 589 490 518 592 415 24 Canada 15,451 16,091 15,094 15,094 14,845 15,849 15,441 15,093r 16,432 16,360 25 Latin America and Caribbean 230,438 231,506 246,006 246,006 250,236 245,565 251,917r 239,573r 238,560 243,285 26 Argentina 9,270 6,967 5,869 5,869 5,823 5,834 5,788 5,949 5,956 5,3% 27 Bahamas 77,921 76,525 87,173 87,173 89,258 84,183 88,866r 82,118r 84,668 83,135 28 Bermuda 1,315 4,056 2,191 2,191 3,535 4,444 3,649 6,377r 4,283 4,685 29 Brazil 23,749 17,995 11,845 11,845 12,419 12,746 12,375r 12,321r 12,183 12,019 30 British West Indies 68,749 88,565 107,831 107,831 107,627 106,758 109,403 100,777r 100,352 106,622 31 Chile 4,353 3,271 2,805 2,805 2,817 2,746 2,779 2,922 3,055 3,247 32 Colombia 2,784 2,587 2,425 2,425 2,374 2,330 2,339 2,322 2,328 2,304 33 Cuba 1 0 0 0 0 0 0 2 0 0 34 Ecuador 1,688 1,387 1,053 1,053 1,044 1,034 993 986 939 935 35 Guatemala 197 191 228 228 214 230 233 216 171 174 36 Jamaica 297 238 158 158 157 158 152 150 143 150 37 Mexico 23,376 14,851 16,611 16,611 17,059 17,365 17,359r 17,41 lr 16,944 16,499 38 Netherlands Antilles 1,921 7,998 1,126 1,126 1,112 898 1,180" l,265r 904 917 39 Panama 1,740 1,471 1,563 1,563 1,651 1,662 1,707 1,837 1,929 2,187 40 Peru 771 663 739 739 735 669 644 715 666 731 41 Uruguay 929 786 599 599 546 604 604 685 717 775 42 Venezuela 9,652 2,571 2,527 2,527 2,610 2,611 2,406r 2,229r 2,057 2,209 43 Other 1,726 1,384 1,263 1,263 1,255 1,293 1,440 l,291r 1,265 1,300 44 Asia 157,474 138,722 125,358 125,358 119,7% 122,616 119,700 116,746r 117,191 112,348 China 45 Mainland 634 620 747 747 813 699 719 660 729 689 46 Taiwan 2,776 1,952 2,087 2,087 1,914 1,881 1,969 2,008 1,808 1,773 47 Hong Kong 11,128 10,648 9,715 9,715 9,852 9,721 10,582 8,520 9,127 8,389 48 India 621 655 441 441 445 418 518 504 475 478 49 Indonesia 651 933 952 952 1,012 1,043 1,079 l,045r 1,122 1,076 50 Israel 813 774 855 855 873 943 901 836 874 888 51 Japan 111,300 90,699 84,813 84,813 80,585 80,247 74,595 72,106 74,420 69,230 52 Korea 5,323 5,766 6,045 6,045 5,6% 6,292 6,420 6,220 5,798 5,892 53 Philippines 1,344 1,247 1,910 1,910 1,849 1,789 1,831 1,690 1,618 1,648 54 Thailand ,. 1,140 1,573 1,713 1,713 1,633 1,621 1,599 1,618 1,703 1,746 55 Middle East oil-exporting countries 10,149 10,749 8,284 8,284 8,073 10,976 12,284 14,557 13,400 14,4% 56 Other 11,594 13,106 7,796 7,7% 7,051 6,986 7,203 6,982 6,117 6,043 57 Africa 5,890 5,445 4,928 4,928 4,870 4,741 4,758 4,818 4,579 4,367 58 Egypt 502 380 294 294 255 223 271 242 218 256 59 Morocco 559 513 575 575 591 550 547 547 529 527 60 South Africa 1,628 1,525 1,235 1,235 1,217 1,189 1,176 1,239 1,128 1,070 61 Zaire < 16 16 4 4 4 4 4 4 4 4 62 Oil-exporting countries 1,648 1,486 1,298 1,298 1,116 1,112 1,164 1,160 1,162 1,159 63 Other 1,537 1,525 1,522 1,522 1,687 1,663 1,5% 1,626 1,538 1,351 64 Other countries 2,354 1,892 2,306 2,306 2,482 2,715 2,169 2,353 2,339 2,863 65 Australia 1,781 1,413 1,665 1,665 1,473 1,478 1,388 1,424 1,188 1,720 66 All other 573 479 641 641 1,009 1,237 781 929 1,151 1,143 67 Nonmonetary intepational and regional organizations6 3,862 4,793 6,373 6,373 4,606 6,540 6,463 4,879 4,891 5,546 1. Reporting banks include all kinds of depository institutions besides commer- 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and cial banks, as well as some brokers and dealers. United Arab Emirates (Trucial States). 2. Includes the Bank for International Settlements and Eastern European 5. Comprises Algeria, Gabon, Libya, and Nigeria. countries not listed in line 23. 6. Excludes the Bank for International Settlements, which is included in 3. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. "Other Western Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 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 1991 1992 TTyyppee ooff ccllaaiimm 11998899 11999900 11999911 Dec. Jan. Feb. Mar.r Apr/ Mayr June p 1 Total 555555599999993333333,,,,,,,000000088888887777777 555555577777779999999,,,,,,,000000044444444444444 555555577777779999999,,,,,,,666666677777779999999 555555577777779999999,,,,,,,666666677777779999999 555555577777776666666,,,,,,,555555555555554444444 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 555555533333334444444,,,,,,,444444499999992222222 555555511111111111111,,,,,,,555555544444443333333 555555511111114444444,,,,,,,333333377777775555555 555555511111114444444,,,,,,,333333377777775555555 509,490 508,876 555555511111113333333,,,,,,,222222200000000000000 507,181 504,734 510,630 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666660000000,,,,,,,555555511111111111111 44444441111111,,,,,,,999999900000000000000 33333337777777,,,,,,,222222244444447777777 33333337777777,,,,,,,222222244444447777777 35,582 38,614 33333337777777,,,,,,,222222211111112222222 34,908 34,709 35,382 44 OOwwnn ffoorreeiiggnn ooffffiicceess 2222222%%%%%%%,,,,,,,OOOOOOOiiiiiiilllllll 333333300000004444444,,,,,,,333333311111115555555 333333311111118888888,,,,,,,999999933333339999999 333333311111118888888,,,,,,,999999933333339999999 307,982 306,077 333333311111118888888,,,,,,,333333399999998888888 302,534 308,825 314,999 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111133333334444444,,,,,,,888888888888885555555 111111111111117777777,,,,,,,222222277777772222222 111111111111116666666,,,,,,,444444499999999999999 111111111111116666666,,,,,,,444444499999999999999 121,997 119,002 111111111111113333333,,,,,,,888888866666662222222 120,192 116,851 111,875 66 DDeeppoossiittss 77777778888888,,,,,,,111111188888885555555 66666665555555,,,,,,,222222255555553333333 66666669999999,,,,,,,111111122222225555555 66666669999999,,,,,,,111111122222225555555 71,929 70,806 66666666666666,,,,,,,999999988888889999999 70,519 70,167 63,486 77 OOtthheerr 55555556666666,,,,,,,777777700000000000000 55555552222222,,,,,,,000000011111119999999 44444447777777,,,,,,,333333377777774444444 44444447777777,,,,,,,333333377777774444444 50,068 48,196 44444446666666,,,,,,,888888877777773333333 49,673 46,684 48,389 88 AAllll ootthheerr ffoorreeiiggnneerrss 44444443333333,,,,,,,000000088888885555555 44444448888888,,,,,,,000000055555556666666 44444441111111,,,,,,,666666699999990000000 44444441111111,,,,,,,666666699999990000000 43,929 45,183 44444443333333,,,,,,,777777722222228888888 49,547 44,349 48,374 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 55555558888888,,,,,,,555555599999994444444 66666667777777,,,,,,,555555500000001111111 66666665555555,,,,,,,333333300000004444444 66666665555555,,,,,,,333333300000004444444 66666663333333,,,,,,,333333355555554444444 11111113333333,,,,,,,000000011111119999999 11111114444444,,,,,,,333333377777775555555 11111115555555,,,,,,,222222244444440000000 11111115555555,,,,,,,222222244444440000000 11111117777777,,,,,,,555555522222222222222 11 Negotiable and readily transferable 33333330000000,,,,,,,999999988888883333333 44444441111111,,,,,,,333333333333333333333 33333337777777,,,,,,,111111122222225555555 33333337777777,,,,,,,111111122222225555555 33333333333333,,,,,,,111111111111115555555 12 Outstanding collections and other 11111114444444,,,,,,,555555599999992222222 11111111111111,,,,,,,777777799999992222222 11111112222222,,,,,,,999999933333339999999 11111112222222,,,,,,,999999933333339999999 11111112222222,,,,,,,777777711111117777777 13 MEMO: Customer liability on 11111112222222,,,,,,,888888899999999999999 11111113333333,,,,,,,666666622222228888888 8888888,,,,,,,999999977777771111111 8888888,,,,,,,999999977777771111111 7777777,,,,,,,888888888888883333333 1144 DDoollllaarr ddeeppoossiittss iinn bbaannkkss aabbrrooaadd,, rreeppoorrtteedd bbyy nnoonnbbaannkkiinngg bbuussiinneessss eenntteerrpprriisseess iinn tthhee UUnniitteedd SSttaatteess 45,767 44,638 39,092 39,092 37,741 39,340 37,517 34,604 33,345 n.a. 1. Data for banks' own claims are given on a monthly basis, but the data for subsidiaries of head office or 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. For U.S. banks, includes amounts due from own foreign branches and 4. Principally negotiable time certificates of deposit and bankers acceptances. foreign subsidiaries consolidated in "Consolidated Report of Condition" filed 5. Includes demand and time deposits and negotiable and nonnegotiable with bank regulatory agencies. For agencies, branches, and majority-owned certificates of deposit denominated in U.S. dollars issued by banks abroad. For subsidiaries of foreign banks, consists principally of amounts due from head office description of changes in data reported by nonbanks, see July 1979 Bulletin, or parent foreign bank, and foreign branches, agencies, or wholly owned 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 1991 1992 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa 11998888 11998899 11999900 June Sept. Dec. Mar.r 1 Total 233,184 238,123 206,903 199,674 195,328 195,199 194,494 By borrower 2 Maturity of one year or less 172,634 178,346 165,985 160,347 160,343 162,435 161,450 3 Foreign public borrowers 26,562 23,916 19,305 19,467 17,651 21,108 20,485 4 All other foreigners 146,071 154,430 146,680 140,880 142,692 141,327 140,965 5 Maturity of more than one year 60,550 59,776 40,918 39,327 34,985 32,764 33,044 6 Foreign public borrowers 35,291 36,014 22,269 20,889 17,992 15,922 16,420 7 All other foreigners 25,259 23,762 18,649 18,438 16,993 16,842 16,624 By area Maturity of one year or less 8 Europe 55,909 53,913 49,184 50,393 51,207 51,868 52,638 9 Canada 6,282 5,910 5,450 7,278 5,682 6,474 6,907 10 Latin America and Caribbean 57,991 53,003 49,782 41,078 47,228 43,429 48,768 11 Asia 46,224 57,755 53,258 53,206 50,023 51,016 43,592 12 Africa 3,337 3,225 3,040 2,937 2,815 2,549 2,491 13 Mother3 2,891 4,541 5,272 5,455 3,388 7,099 7,054 Maturity of more than one year 14 Europe 4,666 4,121 3,859 3,832 3,732 3,882 4,348 15 Canada 1,922 2,353 3,290 3,884 3,706 3,546 3,242 16 Latin America and Caribbean 47,547 45,816 25,774 23,296 19,319 18,311 18,223 17 Asia 3,613 4,172 5,165 5,664 5,613 4,425 4,721 18 Africa 2,301 2,630 2,374 2,456 2,393 2,335 2,191 19 All other3 501 684 456 195 222 265 319 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

A62 International Statistics • October 1992 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1 Billions of dollars, end of period 1990 1991 1992 Area or country 1700 1707 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar. 1 Total 346.3 338.8 333.9 321.7 331.5 317.8 325.4 320.8 335.5 341.6 348.2r 2 G-10 countries and Switzerland 152.7 152.9 146.6 139.3 143.6 132.1 129.9 130.1 134.0 137.3 130.y 3 Belgium-Luxembourg 9.0 6.3 6.7 6.2 6.5 5.9 6.2 6.1 5.8 6.0 5.3 4 France 10.5 11.7 10.4 10.2 11.1 10.4 9.7 10.5 11.1 11.0 9.9 5 Germany 10.3 10.5 11.2 11.2 11.1 10.6 8.8 8.3 9.7 8.3 8.5 6 Italy 6.8 7.4 5.9 5.4 4.4 5.0 4.0 3.6 4.5 5.6 5.4 7 Netherlands 2.7 3.1 3.1 2.7 3.8 3.0 3.3 3.3 3.0 4.7 4.3 8 Sweden 1.8 2.0 2.1 2.3 2.3 2.2 2.0 2.5 2.1 1.9 2.0 9 Switzerland 5.4 7.1 6.2 6.3 5.6 4.4 3.7 3.3 3.9 3.4 3.2 10 United Kingdom 66.2 67.2 64.0 59.9 62.6 60.8 62.2 59.8 64.9 68.5 65.0 11 Canada 5.0 5.4 4.8 5.1 5.0 5.9 6.8 8.2 5.9 5.9 6.6 12 Japan 34.9 32.2 32.2 30.1 31.3 23.9 23.2 24.6 23.2 22.2 20.7 13 Other developed countries 21.0 20.7 23.0 22.4 23.0 22.6 23.1 21.1 21.7 22.6 21.2 14 Austria 1.5 1.5 1.5 1.5 1.6 1.4 1.4 1.1 1.0 .6 .8 15 Denmark 1.1 1.1 1.2 1.1 1.1 1.1 .9 1.2 .9 .9 .8 16 Finland 1.1 1.0 1.1 .9 .8 .7 1.0 .8 .7 .7 .8 17 Greece 1.8 2.5 2.6 2.7 2.8 2.7 2.5 2.4 2.3 2.6 2.3 18 Norway 1.8 1.4 1.7 1.4 1.6 1.6 1.5 1.5 1.4 1.4 1.5 19 Portugal .4 .4 .4 .8 .6 .6 .6 .6 .5 .6 .5 20 Spain 6.2 7.1 8.2 7.8 8.4 8.3 9.0 7.0 8.3 8.2 7.6 21 Turkey 1.5 1.2 1.3 1.4 1.6 1.7 1.7 1.9 1.6 1.4 1.2 22 Other Western Europe 1.3 .7 1.0 1.1 .7 .9 .8 .9 1.0 1.6 1.3 23 South Africa 2.4 2.0 2.0 1.9 1.9 1.8 1.8 1.8 1.6 1.9 1.8 24 Australia 1.8 1.6 2.1 1.8 2.0 1.8 1.9 2.0 2.4 2.7 2.3 25 OPEC countries2 16.6 17.1 15.5 15.3 14.2 12.8 17.1 14.0 15.6 14.6 16.0 26 Ecuador 1.7 1.3 1.2 1.1 1.1 1.0 .9 .9 .8 .7 .7 27 Venezuela 7.9 7.0 6.1 6.0 6.0 5.0 5.1 5.3 5.6 5.4 5.4 28 Indonesia 1.7 2.0 2.1 2.0 2.3 2.7 2.8 2.6 2.8 2.8 3.3 29 Middle East countries 3.4 5.0 4.3 4.4 3.1 2.5 6.6 3.7 5.0 4.2 5.3 30 African countries 1.9 1.7 1.8 1.8 1.7 1.7 1.6 1.5 1.5 1.5 1.4 31 Non-OPEC developing countries 85.3 77.5 68.8 66.7 67.1 65.4 66.4 65.0 65.0 64.3 70.5 Latin America 32 Argentina 9.0 6.3 5.6 5.2 5.0 5.0 4.7 4.6 4.5 4.8 5.0 33 Brazil 22.4 19.0 17.5 16.7 15.4 14.4 13.9 11.6 10.5 9.5 10.8 34 Chile 5.6 4.6 4.3 3.7 3.6 3.5 3.6 3.6 3.7 3.6 3.9 35 Colombia 2.1 1.8 1.8 1.7 1.8 1.8 1.7 1.6 1.6 1.7 1.6 36 Mexico 18.8 17.7 12.8 12.6 12.8 13.0 13.7 14.3 16.2 15.5 18.2 37 Peru .8 .6 .5 .5 .5 .5 .5 .5 .4 .4 .4 38 Other 2.6 2.8 2.8 2.3 2.4 2.3 2.2 2.0 1.9 2.1 2.2 Asia China 39 Mainland .3 .3 .3 .2 .2 .2 .4 .6 .4 .3 .3 40 Taiwan 3.7 4.5 3.8 3.6 4.0 3.5 3.6 4.1 4.1 4.1 4.7 41 India 2.1 3.1 3.5 3.6 3.6 3.3 3.5 3.0 2.8 3.0 3.6 42 Israel 1.2 .7 .6 .7 .6 .5 .5 .5 .5 .5 .4 43 Korea (South) 6.1 5.9 5.3 5.6 6.2 6.2 6.8 6.9 6.5 6.8 6.9 44 Malaysia 1.6 1.7 1.8 1.8 1.8 1.9 2.0 2.1 2.3 2.3 2.5 45 Philippines 4.5 4.1 3.7 3.9 3.9 3.8 3.7 3.7 3.6 3.7 3.6 4 4 6 7 T O h th ai e l r a n A d s ia3 1 . . 9 1 1 1 . . 3 0 1 1 . . 1 2 1 1 . . 3 1 1 1 . . 5 6 1 1 . . 5 7 2 1 . . 1 6 2 1 . . 3 7 2 1 . . 3 9 2 1 . . 4 7 2 1 . . 7 7 Africa 48 Egypt .4 .4 .4 .5 .4 .4 .4 .4 .4 .4 .3 49 Morocco .9 .9 .9 .9 .9 .8 .8 .7 .7 .7 .7 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 1.1 1.0 .9 .8 .8 1.0 .8 .8 .8 .7 .7 52 Eastern Europe 3.6 3.5 3.3 2.9 2.7 2.3 2.1 2.1 1.8 2.4 2.9 53 U.S.S.R .7 .7 .8 .4 .4 .2 .3 .4 .4 .9 1.4 54 Yugoslavia 1.8 1.6 1.4 1.4 1.3 1.2 1.0 1.0 .8 .9 .8 55 Other 1.1 1.3 1.2 1.1 1.1 .9 .8 .7 .7 .7 .6 56 Offshore banking centers 44.2 36.6 43.1 40.3 42.6 42.5 50.1 48.3 52.4 51.9 58.5 57 Bahamas 11.0 5.5 9.2 8.5 8.9 2.8 8.4 6.8 6.7 12.0 14.1r 58 Bermuda .9 1.7 1.2 2.5 4.5 4.4 4.4 4.2 7.1 2.2 3.9 59 Cayman Islands and other British West Indies 12.9 9.0 10.9 8.5 9.3 11.5 14.1 14.9 13.8 15.9 17.4 6 6 0 1 N Pa e n th a e m r a la 4 n ds Antilles 2 1 . . 5 0 2 1 . . 3 4 2 1 . . 6 3 2 1 . . 3 4 2 1 . . 2 5 7 1 . . 9 4 1 1 . . 5 1 1 1 . . 3 4 3 1 . . 5 3 1 1 . . 3 2 1 1 . . 3 0 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 9.6 9.7 9.8 10.0 8.7 7.7 11.6 12.4 12.1 12.2 12.2 6 6 4 5 S O i t n h g e a r p 5 ore 6. . 1 0 7. . 0 0 8. . 0 0 7. . 0 0 7. . 5 0 6. . 6 0 8. . 9 0 7. . 2 0 7. . 7 0 7. . 1 0 8. . 5 0 66 Miscellaneous and unallocated6 22.6 30.3 33.3 34.5 38.1 39.8 36.5 40.0 44.7 48.3 48.1 1. The banking offices covered by these data are the U.S. offices and foreign $150 million equivalent in total assets, the threshold now applicable to all branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. reporting branches. Offices not covered include (1) U.S. agencies and branches of foreign banks, and 2. Organization of Petroleum Exporting Countries, shown individually; other (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are members of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, adjusted to exclude the claims on foreign branches held by a U.S. office or another Saudi Arabia, and United Arab Emirates); and Bahrain and Oman (not formally foreign branch of the same banking institution. The data in this table combine members of OPEC). foreign branch claims in table 3.14 (the sum of lines 7 through 10) with the claims 3. Excludes Liberia. of U.S. offices in table 3.18 (excluding those held by agencies and branches of 4. Includes Canal Zone beginning December 1979. foreign banks and those constituting claims on own foreign branches). 5. Foreign branch claims only. Since June 1984, reported claims held by foreign branches have been reduced 6. Includes New Zealand, Liberia, and international and regional by an increase in the reporting threshold for "shell" branches from $50 million to organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A63 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1990 1991 1992 Type and area or country 11998888 11998899 11999900 Dec. Mar. June Sept. Dec. Mar. 1 Total 32,952 38,764 44,988 44,988 41,978 40,652 42,148 41,514 43,474 2 Payable in dollars 27,335 33,973 39,791 39,791 37,402 36,182 37,442 36,261 38,181 3 Payable in foreign currencies 5,617 4,791 5,197 5,197 4,576 4,469 4,706 5,253 5,293 By type 4 Financial liabilities 14,507 17,879 20,010 20,010 18,606 18,260 20,350 20,180 21,636 5 Payable in dollars 10,608 14,035 15,984 15,984 15,266 14,947 16,675 16,187 17,541 6 Payable in foreign currencies 3,900 3,844 4,026 4,026 3,340 3,313 3,675 3,993 4,095 7 Commercial liabilities 18,445 20,885 24,977 24,977 23,372 22,392 21,798 21,334 21,838 8 Trade payables 6,505 8,070 10,512 10,512 8,789 8,576 8,359 8,185 8,697 9 Advance receipts and other liabilities .. 11,940 12,815 14,465 14,465 14,583 13,815 13,439 13,149 13,141 10 Payable in dollars 16,727 19,938 23,807 23,807 22,135 21,235 20,767 20,074 20,640 11 Payable in foreign currencies 1,717 947 1,170 1,170 1,236 1,157 1,031 1,260 1,198 By area or country Financial liabilities 12 Europe 9,962 11,660 10,346 10,346 9,559 9,634 11,403 10,750 12,036 13 Belgium-Luxembourg 289 340 394 394 335 355 397 187 144 14 France 359 258 700 700 632 556 1,747 1,596 2,002 15 Germany 699 464 621 621 561 658 652 658 644 16 Netherlands 880 941 1,081 1,081 1,036 1,026 1,050 1,058 1,026 17 Switzerland 1,033 541 516 516 517 484 468 361 357 18 United Kingdom 6,533 8,818 6,395 6,395 5,810 5,932 6,521 6,260 6,955 19 Canada 388 610 229 229 278 293 305 268 289 20 Latin America and Caribbean 839 1,357 4,153 4,153 4,255 3,808 3,883 4,308 4,048 21 Bahamas 184 157 371 371 392 375 314 537 3% 22 Bermuda 0 17 0 0 0 12 0 114 114 23 Brazil 0 0 0 0 0 0 6 6 8 24 British West Indies 645 724 3,160 3,160 3,293 2,816 2,961 3,047 2,915 25 Mexico 1 6 5 5 6 6 6 8 8 26 Venezuela 0 0 4 4 4 4 4 4 4 27 Asia 3,312 4,151 4,872 4,872 4,510 4,515 4,755 4,796 5,168 28 Japan 2,563 3,299 3,637 3,637 3,432 3,339 3,605 3,557 3,906 29 Middle East oil-exporting countries2 . 3 2 5 5 1 4 19 13 13 30 Africa 2 2 2 2 2 9 3 6 7 0 0 0 0 0 7 2 4 6 31 Oil-exporting countries 32 All other4 4 100 409 409 2 2 1 52 88 Commercial liabilities 7,319 9,071 10,310 10,310 9,772 8,703 8,240 7,879 7,529 33 Europe 158 175 275 275 261 249 229 247 256 34 Belgium-Luxembourg 455 877 1,218 1,218 1,215 1,193 1,003 884 667 35 France 1,699 1,392 1,270 1,270 1,383 1,040 916 945 872 36 Germany 587 710 844 844 729 744 768 704 558 37 Netherlands 417 693 775 775 661 580 492 473 481 38 Switzerland 2,079 2,620 2,792 2,792 2,817 2,336 2,250 2,304 2,467 39 United Kingdom 40 Canada 1,217 1,124 1,261 1,261 1,251 1,208 1,018 992 1,090 41 Latin America and Caribbean 1,090 1,224 1,672 1,672 1,602 1,622 1,518 1,357 1,717 42 Bahamas 49 41 12 12 14 5 14 3 21 43 Bermuda 286 308 538 538 494 504 450 310 493 44 Brazil 95 100 145 145 216 180 211 219 230 45 British West Indies 34 27 30 30 35 49 46 107 108 46 Mexico 217 323 475 475 343 358 291 303 375 47 Venezuela 114 164 130 130 129 119 102 94 171 48 Asia 6,915 7,550 9,483 9,483 8,622 8,827 8,918 9,274 9,839 49 Japan 3,094 2,914 3,651 3,651 3,423 3,411 3,363 3,648 3,463 50 Middle East oil-exporting countries2'5 1,385 1,632 2,016 2,016 1,566 1,700 1,809 1,497 1,606 51 Africa 576 886 844 844 656 5% 836 762 646 52 Oil-exporting countries3 202 339 422 422 226 226 357 358 253 53 All other4 1,328 1,030 1,406 1,406 1,469 1,436 1,268 1,070 1,017 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

A64 International Statistics • October 1992 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1990 1991 1992 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11998888 11998899 11999900 Dec. Mar. June Sept. Dec. Mar. 1 Total 33,805 33,173 35,240 35,240 35,447 37,045 38,126 41,481 41,275r 2 Payable in dollars 31,425 30,773 32,652 32,652 33,148 34,958 35,788 39,000 38,700" 3 Payable in foreign currencies 2,381 2,400 2,589 2,589 2,299 2,087 2,338 2,481 2,575 By type 4 Financial claims 21,640 19,297 19,841 19,841 19,694 20,904 22,433 24,614 24,829" 5 Deposits 15,643 12,353 13,697 13,697 13,044 12,549 16,167 17,134 16,794r 6 Payable in dollars 14,544 11,364 12,552 12,552 12,012 11,758 15,147 16,283 15,612r 7 Payable in foreign currencies 1,099 989 1,145 1,145 1,032 790 1,020 851 1,182 8 Other financial claims 5,997 6,944 6,144 6,144 6,650 8,355 6,266 7,480 8,035r 9 Payable in dollars 5,220 6,190 5,247 5,247 5,948 7,656 5,568 6,660 7,371" 10 Payable in foreign currencies 777 754 896 896 702 700 698 820 664 11 Commercial claims 12,166 13,876 15,400 15,400 15,753 16,141 15,693 16,867 16,446r 12 Trade receivables 11,091 12,253 13,544 13,544 13,706 13,979 13,270 14,129 13,821" 13 Advance payments and other claims 1,075 1,624 1,856 1,856 2,047 2,163 2,423 2,738 2,625r 14 Payable in dollars 11,660 13,219 14,852 14,852 15,187 15,544 15,073 16,057 15,717r 15 Payable in foreign currencies 505 657 548 548 566 597 620 810 729 By area or country Financial claims 16 Europe 10,278 8,463 9,601 9,601 10,640 11,875 13,077 13,429 14,016r 17 Belgium-Luxembourg 18 28 76 76 86 74 76 13 12r 18 France 203 153 371 371 208 271 255 312 233 19 Germany 120 152 367 367 312 298 434 342 290" 20 Netherlands 348 238 265 265 380 429 420 385 72 r 21 Switzerland 217 153 357 357 422 433 580 591 682 22 United Kingdom 9,039 7,496 7,921 7,921 9,016 10,222 10,943 11,150 ll,484r 23 Canada 2,325 1,904 2,934 2,934 1,889 2,017 2,113 2,560 2,689" 24 Latin America and Caribbean 8,160 8,020 6,201 6,201 6,266 5,926 6,269 7,652 6,758r 25 Bahamas 1,846 1,890 1,090 1,090 825 457 652 775588 400 26 Bermuda 19 7 3 3 6 4 19 88 12 27 Brazil 47 224 68 68 68 127 124 115 173r 28 British West Indies 5,763 5,486 4,635 4,635 4,937 4,957 5,106 6,380 5,728r 29 Mexico 151 94 177 177 179 161 171 179 283r 30 Venezuela 21 20 25 25 28 29 32 40 34 31 Asia 623 590 860 860 568 747 619 605 1,009" 32 Japan 354 213 523 523 246 339988 277 343 423 33 Middle East oil-exporting countries2 5 8 8 8 11 44 3 5 3 34 Africa 106 140 37 37 62 64 61 57 60 35 Oil-exporting countries3 10 12 0 0 3 1 1 1 0 36 All other4 148 180 207 207 269 275 294 311 297 Commercial claims 37 Europe 5,181 6,209 7,038 7,038 7,051 7,456 6,878 7,817 7,567r 38 Belgium-Luxembourg 189 242 212 212 226 220 190 192 181r 39 France 672 964 1,240 1,240 1,273 1,402 1,330 1,538 l,547r 40 Germany 669 696 806 806 873 956 856 931 927r 41 Netherlands 212 479 555 555 604 707 641 637 645r 42 Switzerland 344 313 301 301 324 296 258 287 315r 43 United Kingdom 1,324 1,575 1,774 1,774 1,638 1,816 1,806 2,072 l,845r 44 Canada 983 1,091 1,073 1,073 1,212 1,240 1,231 1,141 l,167r 45 Latin America and Caribbean 2,241 2,184 2,371 2,371 2,331 2,429 22,,448899 2,561 2,532r 46 Bahamas 36 58 14 14 15 16 88 11 ir 47 Bermuda 230 323 246 246 231 245 255 263 264 48 Brazil 299 297 324 324 326 309 384 397 343r 49 British West Indies 22 36 40 40 49 43 37 41 45r 50 Mexico 461 508 661 661 653 710 740 827 889" 51 Venezuela 227 147 192 192 181 195 196 201 204r 52 Asia 2,993 3,570 4,064 4,064 4,292 4,137 4,210 4,468 4,326r 53 Japan 946 1,199 1,399 1,399 1,757 1,587 1,742 1,788 1,770" 54 Middle East oil-exporting countries 453 518 460 460 497 500 495 620 635" 55 Africa 435 429 488 488 394 428 431 417 417" 56 Oil-exporting countries3 122 108 67 67 68 63 80 95 75" 57 All other4 333 393 366 366 473 452 454 463 437" 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 A65 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1992 1991 1992 Transaction and area or country 1990 1991 J J a u n n . e - Dec. Jan. Feb. Mar. Apr/ May r June p U.S. corporate securities STOCKS 1 Foreign purchases 173,293 211,204 117,745 14,714 23,302 21,429 18,884 17,536 18,664 17,930 2 Foreign sales 188,419 200,116 121,692 17,440 25,900 21,193 19,457 18,034 18,602 18,506 3 Net purchases, or sales (—) -15,126 11,088 -3,947 -2,726 -2,598 236 -573 -498 62 -576 4 Foreign countries -15,197 10,520 -4,075 -2,709 -2,479 237 -595 -531 27 -734 5 Europe -8,479 50 -2,462 -1,888 -1,318 -105 -95 -730 278 -492 6 France -1,234 9 -72 -126 -28 -224 -27 -217 -121 545 7 Germany -367 -63 -76 45 -160 30 -45 -48 149 -2 8 Netherlands -397 -227 -266 -52 44 -114 -17 -38 76 -217 9 Switzerland -2,866 -131 487 -10 -286 304 261 90 122 -4 10 United Kingdom -2,980 -354 -2,467 -1,639 -882 -304 -236 -334 -11 -700 11 Canada 886 3,845 1,619 131 260 235 410 412 230 72 12 Latin America and Caribbean -1,330 2,177 787 -282 1,025 359 -322 45 43 -363 13 Middle East' -2,435 -134 -8 -36 -271 101 121 -95 85 51 14 Other Asia -3,477 4,255 -4,066 -666 -2,211 -3% -886 -158 -557 142 15 Japan -2,891 1,179 -3,988 -429 -2,194 -615 -4% -318 -401 36 16 Africa -63 153 50 7 13 15 4 -1 20 -1 17 Other countries -298 174 5 25 23 28 173 -4 -72 -143 18 Nonmonetary international and regional organizations 71 568 128 -17 -119 -1 22 33 35 158 BONDS2 19 Foreign purchases 118,764 152,821 102,833 15,061 16,498 18,045 17,338 16,722 17,539 16,691 20 Foreign sales 102,047 125,398 80,605 12,347 14,367 14,731 14,321 11,622 13,157 12,407 21 Net purchases, or sales (—) 16,717 27,422 22,228 2,714 2,131 3,314 3,017 5,100 4,382 4,284 22 Foreign countries 17,187 27,553 21,896 2,671 2,098 3,308 2,927 4,905 4,453 4,205 23 Europe 10,079 13,116 10,433 1,054 1,390 2,390 1,201 2,047 1,985 1,420 24 France 373 847 704 75 -2 58 -34 363 -45 364 25 Germany -377 1,577 1,462 113 594 277 122 391 67 11 26 Netherlands 172 482 -51 13 -113 12 -15 -122 123 64 27 Switzerland 284 656 -143 162 -67 252 124 -359 -40 -53 28 United Kingdom 10,383 8,935 7,415 95 905 1,801 758 1,543 1,561 847 29 Canada 1,906 1,623 -220 113 -153 97 -72 87 -68 -111 30 Latin America and Caribbean 4,291 2,468 5,165 625 506 768 1,456 612 1,103 720 31 Middle East' 76 2,185 836 253 -75 -71 257 258 293 174 32 Other Asia 1,083 8,224 5,553 543 339 101 121 1,818 1,169 2,005 33 Japan 727 5,732 1,571 149 257 -121 -316 687 324 740 34 Africa 96 52 90 11 28 15 28 19 6 -6 35 Other countries -344 -116 39 72 63 8 -64 64 -35 3 36 Nonmonetary international and regional organizations -471 -131 332 43 33 6 90 195 -71 79 Foreign securities 37 Stocks, net purchases, or sales (-) -9,205 -31,909 -11,392 -1,846 -2,551 -2,303 -2,944 -2,592 -913 -89 38 Foreign purchases 122,641 120,598 74,519 11,027 12,509 10,647 12,824 10,986 13,840 13,713 39 Foreign sales3 131,846 152,507 85,911 12,873 15,060 12,950 15,768 13,578 14,753 13,802 40 Bonds, net purchases, or sales (-) -22,412 -15,377 -6,619 -1,595 -1,316 418 -484 -1,429 -2,646 -1,162 41 Foreign purchases 314,645 325,133 203,206 26,2% 35,543 33,050 32,287 30,294 32,928 39,104 42 Foreign sales 337,057 340,510 209,825 27,891 36,859 32,632 32,771 31,723 35,574 40,266 43 Net purchases, or sales (-), of stocks and bonds -31,617 -47,286 -18,011 -3,441 -3,867 -1,885 -3,428 -4,021 -3,559 -1,251 44 Foreign countries -28,943 -47,202 -20,326 -3,811 -4,118 -2,050 -3,762 -5,176 -3,585 -1,635 45 Europe -8,443 -34,421 -12,388 -4,319 -4,507 -2,267 -730 -3,345 -191 -1,348 46 Canada -7,502 -7,578 -2,778 -4 -926 1,304 -653 -953 -661 -889 47 Latin America and Caribbean -8,854 811 -3,011 -463 -818 708 -479 -845 -1,278 -299 48 Asia -3,828 -7,350 -1,563 316 2,183 -1,513 --11,,558800 115 -1,135 367 49 Africa -137 -9 -97 159 -5 -10 11 9 -99 7 50 Other countries -180 1,345 -489 500 -45 -272 -321 -157 -221 527 51 Nonmonetary international and regional organizations -2,673 -84 2,315 370 251 165 334 1,155 26 384 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • October 1992 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1992 1991 1992 Country or area 1990 1991r J J a u n n . e - Dec. Jan. Feb. Mar. Apr.r May r June p Transactions, net purchases or sales (-) during period1 1 Estimated total2 18,927 18,359 18,118 4,483 10,621 3,175 -8,820 6,558 -7,924 14,508 2 Foreign countries2 18,764 18,181 16,423 3,774 9,864 3,558 -9,451 7,579 -6,945 11,818 3 Europe2 18,455 8,078 7,531 2,779 5,324 7,326 -4,903 3,207 -7,302 3,879 4 Belgium-Luxembourg 10 523 1,025 -21 559 296 -91 21 289 -49 5 Germany2 5,880 -4,725 2,329 -139 805 287 -313 441 329 780 6 Netherlands 1,077 -3,735 -2,988 -888 -1,936 -967 245 -219 -338 227 7 Sweden 1,152 -663 828 582 180 300 102 -123 -3 372 8 Switzerland 112 1,007 -1,223 -778 142 -388 -411 10 -579 3 9 United Kingdom -1,260 5,656 5,656 2,349 2,649 6,234 -1,844 2,820 -5,867 1,664 10 Other Western Europe 11,463 10,001 1,688 1,664 2,925 1,524 -2,601 257 -1,099 682 11 Eastern Europe 13 13 216 10 0 40 10 0 -34 200 12 Canada -4,627 -2,720 1,842 -1,841 962 -1,549 -430 185 2,627 47 13 Latin America and Caribbean 14,734 9,056 1,384 1,075 -2,920 -1,191 -554 2,780 -320 3,589 14 Venezuela 33 10 39 122 266 169 73 -124 -196 -149 15 Other Latin America and Caribbean 3,943 2,834 2,137 -1,065 -357 -444 -108 3,723 -2,472 1,795 16 Netherlands Antilles 10,757 6,213 -792 2,018 -2,829 -916 -519 -819 2,348 1,943 17 -10,952 3,376 7,018 864 7,675 -430 -3,322 1,363 -2,406 4,138 18 Japan -14,785 -4,034 -1,995 -1,332 -398 -1,933 -3,044 657 1,085 1,638 19 313 689 757 318 207 100 125 193 40 92 20 Mother 842 -298 -2,109 579 -1,384 -698 -367 -149 416 73 21 Nonmonetary international and regional organizations 163 178 1,695 709 • 757 -383 631 -1,021 -979 2,690 22 International 287 -358 1,682 786 197 -228 801 -762 -747 2,421 23 Latin American regional -2 -72 190 -156 -58 51 0 74 -4 127 MEMO 24 Foreign countries 18,764 18,181 16,423 3,774 9,864 3,558 -9,451 7,579 -6,945 11,818 25 Official institutions 23,218 1,190 9,739 2,521 8,687 -193 -3,136 1,712 -2,685 5,354 26 Other foreign -4,453 16,990 6,684 1,253 1,177 3,751 -6,315 5,867 -4,260 6,464 Oil-exportine countries 27 Middle EasP -387 -6,822 977 -163 623 1,679 233 556 -3,061 947 28 0 239 7 219 48 0 0 15 0 -56 1. Estimated official and private transactions in marketable U.S. Treasury 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and securities having an original maturity of more than one 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, denominated in foreign currencies, publicly issued to private foreign residents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest and Exchange Rates A67 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS' Percent per year Rate on Aug. 31, 1992 Rate on Aug. 31, 1992 Rate on Aug. 31, 1992 Country Country Country Month Month Month Percent effective effective effective Austria.. 8.0 Dec. 1991 Germany... 8.75 July 1992 Norway 10.50 July 1990 Belgium . 8.5 Dec. 1991 Italy 13.25 Aug. 1992 Switzerland 7.0 Aug. 1991 Canada.. 5.07 Aug. 1992 Japan 3.25 July 1992 United Kingdom3 Denmark 9.5 Dec. 1991 Netherlands 8.5 Dec. 1991 France .. 9.6 Dec. 1991 1. Rates shown are mainly those at which the central bank either discounts or that the central bank transacts the largest proportion of its credit operations. makes advances against eligible commercial paper or government securities for 2. Since Feb. 1981, the rate has been that at which the Bank of France commercial banks or brokers. For countries with more than one rate applicable to discounts Treasury bills for seven to ten days. such discounts or advances, the rate shown is the one at which it is understood 3. Minimum lending rate suspended as of Aug. 20, 1981. 3.27 FOREIGN SHORT-TERM INTEREST RATES1 Averages of daily figures, percent per year 1992 TTyyppee oorr ccoouunnttrryy 11998899 11999900 11999911 Feb. Mar. Apr. May June July Aug. 1 Eurodollars 9.16 8.16 5.86 4.05 4.26 4.05 3.84 3.87 3.40 3.33 7.U nited Kingdom 13.87 14.73 11.47 10.33 10.58 10.56 10.00 9.94 10.10 10.27 3 Canada 12.20 13.00 9.07 7.42 7.63 7.10 6.60 6.03 5.58 5.16 4 Germany 7.04 8.41 9.15 9.50r 9.59 9.63 9.70 9.66 9.69 9.79 5 Switzerland 6.83 8.71 8.01 7.28 8.16 8.48 8.77 9.04 8.67 8.11 6 Netherlands 7.28 8.57 9.19 9.52 9.52 9.42 9.43 9.45 9.50 9.73 7 France 9.27 10.20 9.49 9.93 9.99 9.92 9.83 9.98 10.11 10.26 8 Italy 12.44 12.11 12.04 12.17 12.25 12.38 12.39 13.38 15.54 15.20 9 Belgium 8.65 9.70 9.30 9.50 9.56 9.50 9.51 9.50 9.54 9.70 10 Japan 5.39 7.75 7.33 5.19 4.95 4.72 4.72 4.60 4.32 3.88 1. Rates are for three-month interbank loans, with the following exceptions: Canada, finance company paper; Belgium, three-month Treasury bills; and Japan, CD rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • October 1992 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar, except as noted Country/currency unit 1989 Mar. Apr. May June July Aug. 1 Australia/dollar2 79.186 78.069 77.872 75.865 76.241 75.587 75.561 74.507 72.479 2 Austria/schilling 13.236 11.331 11.686 11.693 11.620 11.422 11.068 10.500 10.199 3 Belgium/franc 39.409 33.424 34.195 34.189 33.927 33.386 32.362 30.717 29.824 4 Canada/dollar 1.1842 1.1668 1.1460 1.1928 1.1874 1.1991 1.1960 1.1924 1.1907 5 China, P.R./yuan 3.7673 4.7921 5.3337 5.4871 5.5098 5.5182 5.4893 5.4564 5.4417 6 Denmark/krone 7.3210 6.1899 6.4038 6.4462 6.3906 6.2678 6.0573 5.7409 5.5851 7 Finland/markka 4.2963 3.8300 4.0521 4.5325 4.5023 4.4075r 4.2846 4.0803 3.9773 8 France/franc 6.3802 5.4467 5.6468 5.6400 5.5773 5.4548 5.2940 5.0321 4.9119 9 Germany/deutsche mark 1.8808 1.6166 1.6610 1.6616 1.6493 1.6225 1.5726 1.4914 1.4475 10 Greece/drachma 162.60 158.59 182.63 192.26 192.83 192.09 190.69 182.89 179.12 11 Hong Kong/dollar 7.8008 7.7899 7.7712 7.7463 7.7404 7.7421 7.7343 7.7341 7.7318 12 Indiafrupee 16.213 17.492 22.712 28.378 28.8% 28.542 28.519 28.564 28.464 13 Ireland/pound2 141.80 165.76 161.39 160.50 161.65 164.62 169.80 178.76 183.26 14 Italy/lira 1,372.28 1,198.27 1,241.28 1,248.28 1,241.55 1,220.95 1,189.52 1,129.83 1,100.00 15 Japan/yen 138.07 145.00 134.59 132.86 133.54 130.77 126.84 125.88 126.23 16 Malaysia/ringgit 2.7079 2.7057 2.7503 2.5779 2.5521 2.5223 2.5187 2.4999 2.4977 17 Netherlands/guilder. — 2.1219 1.8215 1.8720 1.8706 1.8568 1.8268 1.7719 1.6819 1.6322 18 New Zealand/dollar — 59.793 59.619 57.832 54.790 54.138 53.514 54.201 54.609 54.057 19 Norway/krone 6.9131 6.2541 6.4912 6.5188 6.4606 6.3311 6.1493 5.8581 5.7120 20 Portugal/escudo 157.53 142.70 144.77 143.26 141.09 135.23 130.79 126.24 124.98 21 Singapore/dollar 1.9511 1.8134 1.7283 1.6601 1.6567 1.6408 1.6240 1.6142 1.6077 22 South Africa/rand 2.6214 2.5885 2.7633 2.8830 2.8783 2.8483 2.8077 2.7577 2.7629 23 South Korea/won 674.29 710.64 736.73 775.68 782.55 786.83 793.60 789.93 792.56 24 Spain/peseta 118.44 101.96 104.01 104.88 103.90 101.47 99.02 94.88 93.05 25 Sri Lanka/rupee 35.947 40.078 41.200 42.744 43.231 43.445 43.941 44.014 44.050 26 Sweden/krona 6.4559 5.9231 6.0521 6.0263 5.9667 5.8462 5.6792 5.4084 5.2745 27 Switzerland/franc 1.6369 1.3901 1.4356 1.5094 1.5194 1.4907 1.4250 1.3347 1.2966 28 Taiwan/dollar 26.407 26.918 26.759 25.407 25.308 25.016 24.770 24.783 25.120 29 Thailand/baht 25.725 25.609 25.528 25.637 25.644 25.550 25.400 25.293 25.265 30 United Kingdom/pound2 163.82 178.41 176.74 172.38 175.66 180.95 185.51 191.77 194.34 MEMO 31 United States/dollar 89.09 90.44 89.84 88.30 85.91 82.57 9.97 1. Averages of certified noon buying rates in New York for cable transfers. currencies of ten industrial countries. The weight for each of the ten countries is Data in this table also appear in the Board's G.5 (405) monthly statistical release. the 1972-76 average world trade of that country divided by the average world For ordering address, see inside front cover. trade of all ten countries combined. Series revised as of August 1978 (see Federal 2. Value in U.S. cents. Reserve Bulletin, vol. 64, August 1978, p. 700). 3. Index of weighted-average exchange value of U.S. dollar against the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest BULLETIN Reference Issue Page Anticipated schedule of release dates for periodic releases June 1992 A78 SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest BULLETIN Reference Title and Date Issue Page Assets and liabilities of commercial banks June 30, 1991 November 1991 A70 September 30, 1991 February 1992 A70 December 31, 1991 May 1992 A70 March 31, 1992 August 1992 A70 Terms of lending at commercial banks August 1991 December 1991 A70 November 1991 September 1992 A70 February 1992 September 1992 A74 May 1992 September 1992 A78 Assets and liabilities of U.S. branches and agencies of foreign banks June 30, 1991 December 1991 A74 September 30, 1991 February 1992 A80 December 31, 1991 May 1992 A76 March 31, 1992 September 1992 A82 Pro forma balance sheet and income statements for priced service operations June 30, 1991 November 1991 A80 September 30, 1991 January 1992 A70 March 30, 1992 August 1992 A80 June 30, 1992 October 1992 A70 Assets and liabilities of life insurance companies June 30, 1991 December 1991 A79 September 30, 1991 May 1992 A81 December 31, 1991 August 1992 A83 Special table follows. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • October 1992 4.31 Pro forma balance sheet for priced services of the Federal Reserve System1 Millions of dollars Item June 30, 1992 June 30, 1991 Short-term assets1 Imputed reserve requirement on clearing balances 504.0 370.9 Investment in marketable securities 4,536.0 2,720.1 Receivables 93.9 56.8 Materials and supplies 5.4 6.2 Prepaid expenses 14.4 16.3 Items in process of collection 3,545.6 2,864.4 Total short-term assets 8,699.2 6,034.6 Long-term assets3 Premises 379.0 340.5 Furniture and equipment 176.1 163.4 Leases and leasehold improvements 20.0 17.8 Prepaid pension costs 110.4 80.7 Total long-term assets 685.7 602.3 Total assets 9,384.7 6,636.9 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 5,255.6 3.505.6 Deferred availability items 3,330.0 2.449.7 Short-term debt 113.7 79.3 Total short-term liabilities 8,699.2 6,034.6 Long-term liabilities Obligations under capital leases 1.2 1.2 Long-term debt 182.5 165.5 Total long-term liabilities 183.7 166.7 Total liabilities 8,882.9 6,201.3 501.8 435.6 Total liabilities and equity4 9,384.7 6,636.9 1. Details may not sum to totals because of rounding. collected for government agencies; and items associated with providing fixed 2. The imputed reserve requirement on clearing balances and investment in availability or credit prior to receipt and processing of items. The cost base for marketable securities reflect the Federal Reserve's treatment of clearing balances providing services that must be recovered under the Monetary Control Act maintained on deposit with Reserve Banks by depository institutions. For includes the cost of float (the difference between the value of gross CIPC and the presentation of the balance sheet and the income statement, clearing balances are value of deferred availability items) incurred by the Federal Reserve during the reported in a manner comparable to the way correspondent banks report period, valued at the federal funds rate. The amount of float, or net CIPC, compensating balances held with them by respondent institutions. That is, represents the portion of gross CIPC that involves a financing cost. respondent balances held with a correspondent are subject to a reserve require- 3. Long-term assets on the balance sheet have been allocated to priced services ment established by the Federal Reserve. This reserve requirement must be with the direct determination method, which uses the Federal Reserve's Planning satisfied with either vault cash or with nonearning balances maintained at a and Control System (PACS) to ascertain directly the value of assets used solely in Reserve Bank. Following this model, clearing balances maintained with Reserve priced services operations and to apportion the value of jointly used assets Banks for priced service purposes are subjected to imputed reserve requirements. between priced services and nonpriced services. Also, long-term assets include an Therefore, a portion of the clearing balances held with the Federal Reserve is estimate of the assets of the Board of Governors directly involved in the classified on the asset side of the balance sheet as required reserves and is development of priced services. reflected in a manner similar to vault cash and due from bank balances normally Long-term assets include amounts for capital leases and leasehold improveshown on a correspondent bank's balance sheet. The remainder of clearing ments and for prepaid pension costs associated with priced services. Effective balances is assumed to be available for investment. For these purposes, the January 1, 1987, the Federal Reserve Banks implemented Financial Accounting Federal Reserve assumes that all such balances are invested in three-month Standards Board Statement No. 87, Employer's Accounting for Pensions. Treasury bills. 4. A matched-book capital structure has been used for those assets that are not The account "items in the process of collection" (CIPC) represents the gross "self-financing" in determining liability and equity amounts. Short-term assets amount of Federal Reserve CIPC as of the balance sheet date, stated on a basis are financed with short-term debt. Long-term assets are financed with long-term comparable with a commercial bank. Adjustments have been made for intra- debt and equity in a proportion equal to the ratio of long-term debt to equity for System items that would otherwise be double-counted on a consolidated Federal the bank holding companies used in the model for the private sector adjustment Reserve balance sheet; items associated with nonpriced items, such as items factor (PSAF). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Reported Data All 4.32 Pro forma income statement for priced services of the Federal Reserve System1 Millions of dollars Quarter ending June 30 IItteemm 1992 1991 Income services provided to depository institutions2 190.0 184.1 Production expenses3 155.6 152.5 Income from operations 34.4 31.6 Imputed costs4 Interest on float 2.8 3.1 Interest on debt 4.9 4.8 Sales taxes 2.2 2.6 FDIC insurance 4.0 13.9 2.3 12.8 Income from operations after imputed costs 20.5 18.8 Other income and expenses5 Investment income 46.7 43.9 Earnings credits 45.3 1.4 39.8 4.2 Income before income taxes 21.9 22.9 Imputed income taxes6 6.4 7.0 Net income 15.4 15.9 MEMO Targeted return on equity6 6.5 8.1 Six months ending June 30 1992 1991 Income services provided to depository institutions2 379.3 365.5 Production expenses3 307.4 302.2 Income from operations 71.9 63.3 Imputed costs4 Interest on float 7.5 9.2 Interest on debt 9.8 9.6 Sales taxes 4.5 5.0 FDIC insurance 7.9 29.7 4.3 28.1 Income from operations after imputed costs 42.2 35.1 Other income and expenses5 Investment income 90.5 85.4 Earnings credits 88.3 2.1 74.9 10.5 Income before income taxes 44.3 45.6 Imputed income taxes6 13.0 13.9 Net income 31.3 31.7 MEMO Targeted return on equity6 13.0 16.2 1. The income statement reflects income and expenses for priced services. Float recovered through per-item fees is valued at the federal funds rate and has Included in these amounts are the imputed costs of float, imputed financing costs, been added to the cost base subject to recovery in the second quarter of 1992 and the income related to clearing balances. Total float 498.6 Details may not add to totals because of rounding. Unrecovered float 38.3 2. Income represents charges to depository institutions for priced services. Float subject to recovery 460.3 This income is realized through one of two methods: direct charges to an Sources of float recovery institution's account or charges against accumulated earnings credits. Income Income on clearing balances 45.8 includes charges for per-item fees, fixed fees, package fees, explicitly priced float, As of adjustments 193.4 account maintenance fees, shipping and insurance fees, and surcharges. Direct charges 94.6 3. Production expenses include direct, indirect, and other general administra- Per-item fees 126.5 tive expenses of the Federal Reserve Banks for providing priced services. Also Also included in imputed costs is the interest on debt assumed necessary to included are the expenses of staff members of the Board of Governors working finance priced-service assets and the sales taxes and FDIC insurance assessment directly on the development of priced services, which amounted to $0.5 million in that the Federal Reserve would have paid had it been a private-sector firm. the second quarter and 1.0 million in the first six months for 1992 and 1991. Because of a change in the methodology for imputing PSAF costs approved in 4. Imputed float costs represent the value of float to be recovered, either 1989, FDIC insurance is now calculated on the basis of actual clearing balances explicitly or through per-item fees, during the period. Float costs include those for and credits that are deferred to depository institutions. Previously, the assessment checks, book-entry securities, noncash collection, ACH, and wire transfers. was calculated on the basis of available funds. The following table depicts the daily average recovery of float by the Federal 5. Other income and expenses consist of income on clearing balances and the Reserve Banks for the second quarter of 1992. In the table, unrecovered float cost of earnings credits granted to depository institutions on their clearing includes that generated by services to government agencies or by other central balances. Income on clearing balances represents the average coupon-equivalent bank services. yield on three-month Treasury bills applied to the total clearing balance main- Float recovered through income on clearing balances represents increased tained, adjusted for the effect of reserve requirements on clearing balances. investable clearing balances as a result of reducing imputed reserve requirements Expenses for earnings credits are derived by applying the average federal funds through the use of a deduction for float for cash items in process of collection rate to the required portion of the clearing balances, adjusted for the net effect of when calculating the reserve requirement. This income then reduces the float reserve requirements on clearing balances. required to be recovered through other means. 6. Imputed income taxes are calculated at the effective tax rate derived from a As-of adjustments and direct charges refer to midweek closing float and model consisting of the 50 largest bank holding companies. The targeted return on interterritory check float, which may be recovered from depositing institutions equity represents the after-tax rate of return on equity that the Federal Reserve through adjustments to the institution's reserve or clearing balance or by valuing would have earned had it been a private business firm, based on the bank holding the float at the federal funds rate and billing the institution directly. company model. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Index to Statistical Tables References are to pages A3-A71 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Depository institutions Agricultural loans, commercial banks, 20,21 Reserve requirements, 9 Assets and liabilities (See also Foreigners) Reserves and related items, 4, 5, 6, 13 Banks, by classes, 19-21 Deposits (See also specific types) Domestic finance companies, 34 Banks, by classes, 4,19-21, 22 Federal Reserve Banks, 11 Federal Reserve Banks, 5,11 Financial institutions, 26 Turnover, 16 Foreign banks, U.S. branches and agencies, 22 Discount rates at Reserve Banks and at foreign central banks and Automobiles foreign countries (See Interest rates) Consumer installment credit, 37, 38 Discounts and advances by Reserve Banks (See Loans) Production, 47,48 Dividends, corporate, 33 BANKERS acceptances, 10, 23, 24 EMPLOYMENT, 45 Bankers balances, 19-21. (See also Foreigners) Eurodollars, 24 Bonds (See also U.S. government securities) New issues, 33 Rates, 24 FARM mortgage loans, 36 Branch banks, 22, 55 Federal agency obligations, 5, 10, 11, 12, 29, 30 Business activity, nonfinancial, 44 Federal credit agencies, 31 Business expenditures on new plant and equipment, 33 Federal finance Business loans (See Commercial and industrial loans) Debt subject to statutory limitation, and types and ownership of gross debt, 28 CAPACITY utilization, 46 Receipts and outlays, 26, 27 Capital accounts Treasury financing of surplus, or deficit, 26 Banks, by classes, 19 Treasury operating balance, 26 Federal Reserve Banks, 11 Federal Financing Bank, 26, 31 Central banks, discount rates, 67 Federal funds, 7, 18, 20, 21, 22, 24, 26 Certificates of deposit, 24 Federal Home Loan Banks, 31 Commercial and industrial loans Federal Home Loan Mortgage Corporation, 31, 35, 36 Commercial banks, 17, 20 Federal Housing Administration, 31, 35, 36 Weekly reporting banks, 20-22 Federal Land Banks, 36 Commercial banks Federal National Mortgage Association, 31, 35, 36 Assets and liabilities, 19-21 Federal Reserve Banks Commercial and industrial loans, 17,19, 20, 21, 22 Condition statement, 11 Consumer loans held, by type and terms, 37, 38 Discount rates (See Interest rates) Loans sold outright, 20 U.S. government securities held, 5, 11, 12, 28 Nondeposit funds, 18 Federal Reserve credit, 5, 6, 11, 12 Real estate mortgages held, by holder and property, 36 Federal Reserve notes, 1 i Time and savings deposits, 4 Federal Reserve System Commercial paper, 23, 24, 34 Balance sheet for priced services, 70 Condition statements (See Assets and liabilities) Condition statement for priced services, 71 Construction, 44,49 Federally sponsored credit agencies, 31 Consumer installment credit, 37, 38 Finance companies Consumer prices, 44,46 Assets and liabilities, 34 Consumption expenditures, 52, 53 Business credit, 34 Corporations Loans, 37, 38 Nonfinancial, assets and liabilities, 33 Paper, 23, 24 Profits and their distribution, 33 Financial institutions Security issues, 32, 65 Loans to, 20, 21, 22 Cost of living (See Consumer prices) Selected assets and liabilities, 26 Credit unions, 37 Float, 51 Currency and coin, 19 Flow of funds, 39, 41, 42, 43 Currency in circulation, 5, 14 Foreign banks, assets and liabilities of U.S. branches and Customer credit, stock market, 25 agencies, 21, 22 Foreign currency operations, 11 DEBITS to deposit accounts, 16 Foreign deposits in U.S. banks, 5, 11, 20, 21 Debt (See specific types of debt or securities) Foreign exchange rates, 68 Demand deposits Foreign trade, 54 Banks, by classes, 19-22 Foreigners Ownership by individuals, partnerships, and corporations, 22 Claims on, 55, 57, 60, 61, 62, 64 Turnover, 16 Liabilities to, 21, 54, 55, 57, 58, 63, 65, 66 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 GOLD REAL estate loans Certificate account, 11 Banks, by classes, 17, 20, 21, 36 Stock, 5, 54 Financial institutions, 26 Government National Mortgage Association, 31, 35, 36 Terms, yields, and activity, 35 Gross domestic product, 51 Type of holder and property mortgaged, 36 Repurchase agreements, 7, 18, 20, 21, 22 Reserve requirements, 9 HOUSING, new and existing units, 49 Reserves Commercial banks, 19 INCOME and expenses, Federal Reserve System, 70-71 Depository institutions, 4, 5, 6, 13 Income, personal and national, 44, 51, 52 Federal Reserve Banks, 11 Industrial production, 44,47 U.S. reserve assets, 54 Installment loans, 37, 38 Residential mortgage loans, 35 Insurance companies, 28, 36 Retail credit and retail sales, 37, 38, 44 Interest rates Bonds, 24 SAVING Consumer installment credit, 38 Flow of funds, 39, 41, 42, 43 Federal Reserve Banks, 8 National income accounts, 51 Foreign central banks and foreign countries, 67 Savings and loan associations, 36, 37, 39. (See also SAIF-insured Money and capital markets, 24 institutions) Mortgages, 35 Savings Association Insurance Funds (SAIF) insured institutions, 26 Prime rate, 23 Savings banks, 26, 36, 37 International capital transactions of United States, 53-67 Savings deposits (See Time and savings deposits) International organizations, 57, 58, 60, 63, 64 Securities (See also specific types) Inventories, 51 Federal and federally sponsored credit agencies, 31 Investment companies, issues and assets, 33 Foreign transactions, 65 Investments (See also specific types) New issues, 32 Banks, by classes, 19, 20, 21, 22, 26 Prices, 25 Commercial banks, 4, 17, 19-21 Special drawing rights, 5, 11, 53, 54 Federal Reserve Banks, 11,12 State and local governments Financial institutions, 36 Deposits, 20, 21 Holdings of U.S. government securities, 28 LABOR force, 45 New security issues, 32 Life insurance companies (See Insurance companies) Ownership of securities issued by, 20, 21 Loans (See also specific types) Rates on securities, 24 Banks, by classes, 19—21 Stock market, selected statistics, 25 Commercial banks, 4, 17, 19-21 Stocks (See also Securities) Federal Reserve Banks, 5, 6, 8, 11, 12 New issues, 32 Federal Reserve System, 80-81 Prices, 25 Financial institutions, 26, 36 Insured or guaranteed by United States, 35, 36 Student Loan Marketing Association, 31 TAX receipts, federal, 27 MANUFACTURING Thrift institutions, 4. (See also Credit unions and Savings and Capacity utilization, 46 loan associations) Production, 46, 48 Time and savings deposits, 4, 14, 18, 19, 20, 21, 22 Margin requirements, 25 Trade, foreign, 54 Member banks (See also Depository institutions) Treasury cash, Treasury currency, 5 Federal funds and repurchase agreements, 7 Treasury deposits, 5, 11, 26 Reserve requirements, 9 Treasury operating balance, 26 Mining production, 48 Mobile homes shipped, 49 UNEMPLOYMENT, 45 Monetary and credit aggregates, 4, 13 U.S. government balances Money and capital market rates, 24 Commercial bank holdings, 19, 20, 21 Money stock measures and components, 4, 14 Treasury deposits at Reserve Banks, 5, 11, 26 Mortgages (See Real estate loans) U.S. government securities Mutual funds, 33 Bank holdings, 19-21, 22, 28 Mutual savings banks (See Thrift institutions) Dealer transactions, positions, and financing, 30 Federal Reserve Bank holdings, 5, 11, 12, 28 Foreign and international holdings and NATIONAL defense outlays, 27 transactions, 11, 28, 66 National income, 51 Open market transactions, 10 Outstanding, by type and holder, 26, 28 OPEN market transactions, 10 Rates, 23 U.S. international transactions, 53-67 PERSONAL income, 52 Utilities, production, 48 Prices Consumer and producer, 44, 50 VETERANS Administration, 35, 36 Stock market, 25 Prime rate, 23 WEEKLY reporting banks, 20-22 Producer prices, 44, 50 Wholesale (producer) prices, 44, 50 Production, 44, 47 Profits, corporate, 33 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman WAYNE D. ANGELL DAVID W. MULLINS, JR., Vice Chairman EDWARD W. KELLEY, JR. 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 THEODORE E. ALLISON, Assistant to the Board for Federal CHARLES J. SIEGMAN, Senior Associate Director Reserve System Affairs DALE W. HENDERSON, Associate Director LYNN S. FOX, Special Assistant to the Board DAVID H. HOWARD, Senior Adviser WINTHROP P. HAMBLEY, Special Assistant to the Board DONALD B. ADAMS, Assistant Director BOB STAHLY MOORE, Special Assistant to the Board PETER HOOPER III, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board KAREN H. JOHNSON, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION J. VIRGIL MATTINGLY, JR., General Counsel DIVISION OF RESEARCH AND STATISTICS SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel WILLIAM R. JONES, Associate Director KATHLEEN M. O'DAY, Associate General Counsel THOMAS D. SIMPSON, Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel LAWRENCE SLIFMAN, Associate Director DAVID J. STOCKTON, Associate Director OFFICE OF THE SECRETARY MARTHA BETHEA, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Associate Secretary MYRON L. KWAST, Assistant Director PATRICK M. PARKINSON, Assistant Director BARBARA R. LOWREY, Associate Secretary RICHARD C. STEVENS, Assistant Secretary1 MARTHA S. SCANLON, Assistant Director JOYCE K. ZICKLER, Assistant Director JOHN J. MINGO, Adviser DIVISION OF BANKING LEVON H. GARABEDIAN, Assistant Director SUPERVISION AND REGULATION (Administration ) RICHARD SPILLENKOTHEN, Director STEPHEN C. SCHEMERING, Deputy Director DIVISION OF MONETARY AFFAIRS DON E. KLINE, Associate Director DONALD L. KOHN, Director WILLIAM A. RYBACK, Associate Director DAVID E. LINDSEY, Deputy Director FREDERICK M. STRUBLE, Associate Director BRIAN F. MADIGAN, Assistant Director HERBERT A. BIERN, Deputy Associate Director RICHARD D. PORTER, Assistant Director ROGER T. COLE, Deputy Associate Director NORMAND R.V. BERNARD, Special Assistant to the Board JAMES I. GARNER, Deputy Associate Director HOWARD A. AMER, Assistant Director DIVISION OF CONSUMER GERALD A. EDWARDS, JR., Assistant Director AND COMMUNITY AFFAIRS JAMES D. GOETZINGER, Assistant Director LAURA M. HOMER, Assistant Director GRIFFITH L. GARWOOD, Director JAMES V. HOUPT, Assistant Director GLENN E. LONEY, Assistant Director JACK P. JENNINGS, Assistant Director ELLEN MALAND, Assistant Director MICHAEL G. MARTINSON, Assistant Director DOLORES S. SMITH, Assistant Director RHOGER H PUGH, Assistant Director SIDNEY M. SUSSAN, Assistant Director MOLLY S. WASSOM, Assistant Director 1. On loan from the Division of Information Resources Management. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 JOHN P. LAWARE SUSAN M. PHILLIPS LAWRENCE B. LINDSEY OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS S. DAVID FROST, Staff Director CLYDE H. FARNSWORTH, JR., Director WILLIAM SCHNEIDER, Special Assignment: DAVID L. ROBINSON, Deputy Director (Finance and Project Director, National Information Center Control) PORTIA W. THOMPSON, Equal Employment Opportunity BRUCE J. SUMMERS, Senior Adviser Programs Officer CHARLES W. BENNETT, Assistant Director JACK DENNIS, JR., Assistant Director DIVISION OF HUMAN RESOURCES EARL G. HAMILTON, Assistant Director MANAGEMENT JEFFREY C. MARQUARDT, Assistant Director JOHN H. PARRISH, Assistant Director DAVID L. SHANNON, Director LOUISE L. ROSEMAN, Assistant Director JOHN R. WEIS, Associate Director FLORENCE M. YOUNG, Assistant Director ANTHONY V. DIGIOIA, Assistant Director JOSEPH H. HAYES, JR., Assistant Director OFFICE OF THE INSPECTOR GENERAL FRED HOROWITZ, Assistant Director BRENT L. BOWEN, Inspector General OFFICE OF THE CONTROLLER BARRY R. SNYDER, Assistant Inspector General GEORGE E. LIVINGSTON, Controller STEPHEN J. CLARK, Assistant Controller (Programs and Budgets) DARRELL R. PAULEY, Assistant Controller (Finance) DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director DIVISION OF INFORMATION RESOURCES MANAGEMENT STEPHEN R. MALPHRUS, Director BRUCE M. BEARDSLEY, Deputy Director MARIANNE M. EMERSON, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director EDWARD T. MULRENIN, Assistant Director DAY W. RADEBAUGH, JR., Assistant Director ELIZABETH B. RIGGS, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • October 1992 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL JOHN P. LAWARE DAVID W. MULLINS, JR. THOMAS H. HOENIG LAWRENCE B. LINDSEY SUSAN M. PHILLIPS JERRY L. JORDAN THOMAS C. MELZER RICHARD E SYRON EDWARD W. KELLEY, JR. ALTERNATE MEMBERS EDWARD G. BOEHNE ROBERT D. MCTEER, JR. JAMES H. OLTMAN SILAS KEEHN GARY H. STERN STAFF DONALD L. KOHN, Secretary and Economist JOHN M. DAVIS, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary RICHARD G. DAVIS, Associate Economist JOSEPH R. COYNE, Assistant Secretary THOMAS E. DAVIS, Associate Economist GARY P. GILLUM, Assistant Secretary DAVID E. LINDSEY, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel ALICIA H. MUNNELL, Associate Economist ERNEST T. PATRIKIS, Deputy General Counsel LARRY J. PROMISEL, Associate Economist MICHAEL J. PRELL, Economist CHARLES J. SIEGMAN, Associate Economist EDWIN M. TRUMAN, Economist THOMAS D. SIMPSON, Associate Economist ANATOL B. BALBACH, Associate Economist DAVID J. STOCKTON, Associate Economist PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account WILLIAM J. MCDONOUGH, Manager for Foreign Operations, System Open Market Account FEDERAL ADVISORY COUNCIL RONALD G. STEINHART, President TERRENCE A. LARSEN, Vice President IRA STEPANIAN, First District EUGENE A. MILLER, Seventh District CHARLES S. SANFORD, JR., Second District DAN W. MITCHELL, Eighth District TERRENCE A. LARSEN, Third District JOHN F. GRUNDHOFER, Ninth District JOHN B. MCCOY, Fourth District DAVID A. RISMILLER, Tenth District EDWARD E. CRUTCHFIELD, JR., Fifth District RONALD G. STEINHART, Eleventh District E.B. ROBINSON, JR., Sixth District RICHARD M. ROSENBERG, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All CONSUMER ADVISORY COUNCIL COLLEEN D. HERNANDEZ, Kansas City, Missouri, Chairman DENNY D. DUMLER, Denver, Colorado, Vice Chairman BARRY A. ABBOTT, San Francisco, California JOYCE HARRIS, Madison, Wisconsin JOHN R. ADAMS, Philadelphia, Pennsylvania GARY S. HATTEM, New York, New York JOHN A. BAKER, Atlanta, Georgia JULIA E. HILER, Marietta, Georgia VERONICA E. BARELA, Denver, Colorado HENRY JARAMILLO, Belen, New Mexico MULUGETTA BIRRU, Pittsburgh, Pennsylvania KATHLEEN E. KEEST, Boston, Massachusetts GENEVIEVE BROOKS, Bronx, New York EDMUND MIERZWINSKI, Washington, D.C. TOYE L. BROWN, Boston, Massachusetts BERNARD F. PARKER, JR., Detroit, Michigan CATHY CLOUD, Washington, D.C. OTIS PITTS, JR., Miami, Florida MICHAEL D. EDWARDS, Yelm, Washington JEAN POGGE, Chicago, Illinois GEORGE C. GALSTER, Wooster, Ohio JOHN V. SKINNER, Irving, Texas E. THOMAS GARMAN, Blacksburg, Virginia NANCY HARVEY STEORTS, Dallas, Texas DONALD A. GLAS, Hutchinson, Minnesota LOWELL N. SWANSON, Portland, Oregon DEBORAH B. GOLDBERG, Washington, D.C. MICHAEL W. TIERNEY, Philadelphia, Pennsylvania MICHAEL M. GREENFIELD, St. Louis, Missouri THRIFT INSTITUTIONS ADVISORY COUNCIL LYNN W. HODGE, Greenwood, South Carolina, President DANIEL C. ARNOLD, Houston, Texas, Vice President JAMES L. BRYAN, Richardson, Texas PRESTON MARTIN, San Francisco, California VANCE W. CHEEK, Johnson City, Tennessee RICHARD D. PARSONS, New York, New York BEATRICE D'AGOSTINO, Somerville, New Jersey THOMAS R. RICKETTS, Troy, Michigan THOMAS J. HUGHES, Merrifield, Virginia EDMOND M. SHANAHAN, Chicago, Illinois RICHARD A. LARSON, West Bend, Wisconsin WOODBURY C. TITCOMB, Worcester, Massachusetts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, Monetary Policy and Reserve Requirements Handbook. MS-138, Board of Governors of the Federal Reserve System, $75.00 per year. Washington, D.C. 20551 or telephone (202) 452-3244 or FAX Securities Credit Transactions Handbook. $75.00 per year. (202) 728-5886. When a charge is indicated, payment should The Payment System Handbook. $75.00 per year. accompany request and be made payable to the Board of Federal Reserve Regulatory Service. 3 vols. (Contains all Governors of the Federal Reserve System. Payment from for- four Handbooks plus substantial additional material.) eign residents should be drawn on a U.S. bank. $200.00 per year. Rates for subscribers outside the United States are as follows and include additional air mail costs: THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. Federal Reserve Regulatory Service, $250.00 per year. 1984. 120 pp. Each Handbook, $90.00 per year. ANNUAL REPORT. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- ANNUAL REPORT: BUDGET REVIEW, 1990-91. COUNTRY MODEL, May 1984. 590 pp. $14.50 each. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. $2.50 each in the United States, its possessions, Canada, INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. and Mexico. Elsewhere, $35.00 per year or $3.00 each. 440 pp. $9.00 each. ANNUAL STATISTICAL DIGEST FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. 1981. 1982. 239 pp. $ 6.50 per copy. December 1986. 264 pp. $10.00 each. 1982. 1983. 266 pp. $ 7.50 per copy. FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1983. 1984. 264 pp. $11.50 per copy. SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1984. 1985. 254 pp. $12.50 per copy. 1985. 1986. 231 pp. $15.00 per copy. 1986. 1987. 288 pp. $15.00 per copy. 1987. 1988. 272 pp. $15.00 per copy. 1988. 1989. 256 pp. $25.00 per copy. CONSUMER EDUCATION PAMPHLETS 1980-89. 1991. 712 pp. $25.00 per copy. Short pamphlets suitable for classroom use. Multiple copies are 1990. 1991. 196 pp. $25.00 per copy. available without charge. SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF CHARTS. Weekly. $30.00 per year or $.70 each in the Consumer Handbook on Adjustable Rate Mortgages United States, its possessions, Canada, and Mexico. Else- Consumer Handbook to Credit Protection Laws where, $35.00 per year or $.80 each. A Guide to Business Credit for Women, Minorities, and Small THE FEDERAL RESERVE ACT and other statutory provisions Businesses affecting the Federal Reserve System, as amended through How to File A Consumer Credit Complaint August 1990. 646 pp. $10.00. Series on the Structure of the Federal Reserve System REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL The Board of Governors of the Federal Reserve System RESERVE SYSTEM. The Federal Open Market Committee ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Federal Reserve Bank Board of Directors Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Federal Reserve Banks Vol. II (Irregular Transactions). 1969. 116 pp. Each vol- Organization and Advisory Committees ume $2.25; 10 or more of same volume to one address, A Consumer's Guide to Mortgage Lock-Ins $2.00 each. A Consumer's Guide to Mortgage Settlement Costs Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; 10 or A Consumer's Guide to Mortgage Refinancings more to one address, $1.25 each. Home Mortgages: Understanding the Process and Your Right Federal Reserve Regulatory Service. Looseleaf; updated at to Fair Lending least monthly. (Requests must be prepaid.) Making Deposits: When Will Your Money Be Available? Consumer and Community Affairs Handbook. $75.00 per When Your Home is on the Line: What You Should Know year. About Home Equity Lines of Credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 STAFF STUDIES: Summaries Only Printed in the 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- Bulletin VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. September Studies and papers on economic and financial subjects that are 1990. 35 pp. of general interest. Requests to obtain single copies of the full 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, text or to be added to the mailing list for the series may be sent 1980-90, by Margaret Hastings Pickering. May 1991. to Publications Services. 21pp. 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM Staff Studies 1-145 are out of print. MORTGAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. 146. THE ROLE OF THE PRIME RATE IN THE PRICING OF 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- BUSINESS LOANS BY COMMERCIAL BANKS, 1977-84, by KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, Thomas F. Brady. November 1985. 25 pp. Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary 147. REVISIONS IN THE MONETARY SERVICES (DIVISIA) IN- Ann Taylor. March 1992. 37 pp. DEXES OF THE MONETARY AGGREGATES, by Helen T. Farr and Deborah Johnson. December 1985. 42 pp. 148. THE MACROECONOMIC AND SECTORAL EFFECTS OF THE REPRINTS OF SELECTED Bulletin ARTICLES ECONOMIC RECOVERY TAX ACT: SOME SIMULATION Some Bulletin articles are reprinted. The articles listed below RESULTS, by Hint Bray ton and Peter B. Clark. December are those for which reprints are available. Most of the articles 1985. 17 pp. reprinted do not exceed twelve pages. 149. THE OPERATING PERFORMANCE OF ACQUIRED FIRMS IN BANKING BEFORE AND AFTER ACQUISITION, by Stephen Limit of ten copies A. Rhoades. April 1986. 32 pp. 150. STATISTICAL COST ACCOUNTING MODELS IN BANKING: Recent Developments in the Bankers Acceptance Market. 1/86. A REEXAMINATION AND AN APPLICATION, by John T. The Use of Cash and Transaction Accounts by American Rose and John D. Wolken. May 1986.13 pp. Families. 2/86. 151. RESPONSES TO DEREGULATION: RETAIL DEPOSIT PRICING Financial Characteristics of High-Income Families. 3/86. FROM 1983 THROUGH 1985, by Patrick I. Mahoney, Alice Prices, Profit Margins, and Exchange Rates. 6/86. P. White, Paul F. O'Brien, and Mary M. McLaughlin. Agricultural Banks under Stress. 7/86. January 1987. 30 pp. Foreign Lending by Banks: A Guide to International and U.S. 152. DETERMINANTS OF CORPORATE MERGER ACTIVITY: A Statistics. 10/86. REVIEW OF THE LITERATURE, by Mark J. Warshawsky. Recent Developments in Corporate Finance. 11/86. April 1987. 18 pp. Measuring the Foreign-Exchange Value of the Dollar. 6/87. 153. STOCK MARKET VOLATILITY, by Carolyn D. Davis and Changes in Consumer Installment Debt: Evidence from the Alice P. White. September 1987. 14 pp. 1983 and 1986 Surveys of Consumer Finances. 10/87. 154. THE EFFECTS ON CONSUMERS AND CREDITORS OF Home Equity Lines of Credit. 6/88. PROPOSED CEILINGS ON CREDIT CARD INTEREST RATES, Mutual Recognition: Integration of the Financial Sector in the by Glenn B. Canner and James T. Fergus. October 1987. European Community. 9/89. 26 pp. The Activities of Japanese Banks in the United Kingdom and in 155. THE FUNDING OF PRIVATE PENSION PLANS, by Mark J. the United States, 1980-88. 2/90. Warshawsky. November 1987. 25 pp. Industrial Production: 1989 Developments and Historical 156. INTERNATIONAL TRENDS FOR U.S. BANKS AND BANKING Revision. 4/90. MARKETS, by James V. Houpt. May 1988. 47 pp. Recent Developments in Industrial Capacity and Utilization. 157. M2 PER UNIT OF POTENTIAL GNP AS AN ANCHOR FOR 6/90. THE PRICE LEVEL, by Jeffrey J. Hallman, Richard D. Developments Affecting the Profitability of Commercial Banks. Porter, and David H. Small. April 1989. 28 pp. 7/90. 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- Recent Developments in Corporate Finance. 8/90. MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE U.S. Exchange Rate Policy: Bretton Woods to Present. 11/90. PRODUCTS, by Mark J. Warshawsky with the assistance of The Transmission Channels of Monetary Policy: How Have Dietrich Earnhart. September 1989. 23 pp. They Changed? 12/90. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSID- Changes in Family Finances from 1983 to 1989: Evidence from IARIES OF BANK HOLDING COMPANIES, by Nellie Liang the Survey of Consumer Finances. 1/92. and Donald Savage. February 1990. 12 pp. U.S. International Transactions in 1991. 5/92. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Maps of the Federal Reserve System LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts Commonwealth of Puerto Rico and the U.S. Virgin by number and Reserve Bank city (shown on both Islands; the San Francisco Bank serves American pages) and by letter (shown on the facing page). Samoa, Guam, and the Commonwealth of the In the 12th District, the Seattle Branch serves Northern Mariana Islands. The Board of Governors Alaska, and the San Francisco Bank serves Hawaii. revised the branch boundaries of the System most The System serves commonwealths and terri- recently in December 1991. tories as follows: the New York Bank serves the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 1-A 2-B 3-C 4-D 5_E Baltimor Pittsburgh"! ME it PA /J m •Cincinnati Buffalo KT NJ NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H •tfastefflle Birmingham ATLANTA CHICAGO ST. LOUIS 9-1 MINNEAPOLIS 10-J 12-L } MO Oklahoma City KANSAS CITY 11-K HAWAH DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 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 Jerome H. Grossman Cathy E. Minehan NEW YORK* 10045 Ellen V. Futter E. Gerald Corrigan Maurice R. Greenberg James H. Oilman Buffalo 14240 Herbert L. Washington James O. Aston PHILADELPHIA 19105 Peter A. Benoliel Edward G. Boehne Jane G. Pepper William H. Stone, Jr. CLEVELAND* 44101 John R. Miller Jerry L. Jordan A. William Reynolds William H. Hendricks Cincinnati 45201 Marvin Rosenberg 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. Ronald B. Duncan1 Charlotte 28230 Anne M. Allen Walter A. Varvel1 Culpeper Communications John G. Stoides1 and Records Center 22701 ATLANTA 30303 Edwin A. Huston Robert P. Forrestal Leo Benatar Jack Guynn Donald E. Nelson1 Birmingham 35283 Nelda P. Stephenson Fred R. Herr1 Jacksonville 32231 Lana Jane Lewis-Brent James D. Hawkins1 Miami 33152 Michael T. Wilson James T. Curry III Nashville 37203 Harold A. Black Melvyn K. Purcell New Orleans 70161 Victor Bussie Robert J. Musso CHICAGO* 60690 Richard G. Cline Silas Keehn Robert M. Healey Daniel M. Doyle Detroit 48231 J. Michael Moore Roby L. Sloan1 ST. LOUIS 63166 H. Edwin Trusheim Thomas C. Melzer Robert H. Quenon James R. Bowen Little Rock 72203 James R. Rodgers Karl W. Ashman Louisville 40232 Daniel L. Ash Howard Wells Memphis 38101 Seymour B. Johnson Ray Laurence MINNEAPOLIS 55480 Delbert W. Johnson Gary H. Stern Gerald A. Rauenhorst Thomas E. Gainor Helena 59601 J. Frank Gardner John D. Johnson KANSAS CITY 64198 Burton A. Dole, Jr. Thomas M. Hoenig Herman Cain Henry R. Czerwinski Denver 80217 Barbara B. Grogan Kent M. Scott Oklahoma City 73125 Ernest L. Holloway David J. France Omaha 68102 Sheila Griffin Harold L. Shewmaker DALLAS 75201 Leo E. Linbeck, Jr. Robert D. McTeer, Jr. Vacancy Tony J. Salvaggio El Paso 79999 Alvin T. Johnson Sammie C.Clay Houston 77252 Judy Ley Allen Robert Smith, III1 San Antonio 78295 Roger R. Hemminghaus Thomas H. Robertson SAN FRANCISCO 94120 James A. Vohs Robert T. Parry Robert F. Erburu Patrick K. Barron Los Angeles 90051 Donald G. Phelps John F.Moore1 Portland 97208 William A. Hilliard Leslie R. Watters Salt Lake City 84125 Gary G. Michael Andrea P. Wolcott Seattle 98124 George F. Russell, Jr. Gordon Werkema1 •Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. 1. Senior Vice President. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis