Federal Reserve Bulletin, 1993-02

VOLUME 79 • NUMBER 2 • FEBRUARY 1993 FEDERAL RESERVE 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 77 RECENT DEVELOPMENTS IN THE Issuance of policy statement on the use MARKET FOR PRIVATELY PLACED DEBT of large-value fund transfers for money laundering. The market for privately placed debt has undergone major changes in the past three years. Reporting of deferred tax assets by bank hold- Life insurance companies, the principal buy- ing companies. ers of privately placed bonds, have signifi- Proposal to amend Regulation C; proposed cantly reduced their purchases of debt securiamendment to Regulation K. ties issued by below-investment-grade borrowers. In addition, the adoption of Rule Change in Board staff. 144A in 1990 by the Securities and Exchange Commission has spawned a new market for Publication of revised Bank Holding Comprivate debt that is very similar to the public pany Supervision Manual. corporate bond market. This article gives an overview of the private placement market and discusses these two developments. 100 RECORD OF POLICY ACTIONS OF THE FEDERAL OPEN MARKET COMMITTEE 93 INDUSTRIAL PRODUCTION AND At its meeting on November 17, 1992, the CAPACITY UTILIZATION Committee adopted a directive that called for maintaining the existing degree of pressure on Industrial production rose 0.4 percent in reserve positions and that included some bias November; with the increase of 0.5 percent in toward possible easing during the intermeet- October, the rise has more than offset the ing period. Accordingly, in the context of the declines of late summer. Total industrial Committee's long-run objectives for price stacapacity utilization rose another 0.2 percentbility and sustainable economic growth, and age point in November, to 78.9 percent. giving careful consideration to economic, financial, and monetary developments, slightly greater monetary restraint might be acceptable 96 ANNOUNCEMENTS or slightly lesser monetary restraint would be acceptable during the intermeeting period. Appointment of new members to the Thrift Two of the members expressed a strong pref- Institutions Advisory Council. erence for a symmetric directive with regard to possible intermeeting policy adjustments, Issuance of new Regulation F. while another was firmly persuaded of the Adoption of final amendments and guidelines desirability of an immediate increase in to Regulation H. reserve availability to strengthen the growth of M2. The reserve conditions contemplated Modifications of risk-based capital guidelines at this meeting were expected to be consistent on certain collateralized transactions. with growth in M2 and M3 at annual rates of about 3'/ and 1 percent respectively over the Amendment to risk-based capital guidelines 2 three-month period from September through for state member banks and bank holding December. companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

107 LEGAL DEVELOPMENTS A84 INDEX TO STATISTICAL TABLES Various bank holding company, bank service A86 BOARD OF GOVERNORS AND STAFF corporation, and bank merger orders; and pending cases. A88 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A1 FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of A90 FEDERAL RESERVE BOARD December 28, 1992. PUBLICATIONS A3 GUIDE TO TABULAR PRESENTATION A92 MAPS OF THE FEDERAL RESERVE SYSTEM A4 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A94 FEDERAL RESERVE BANKS, BRANCHES, A53 International Statistics AND OFFICES A69 GUIDE TO STATISTICAL RELEASES AND SPECIAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Market for Privately Placed Debt This article was prepared by Mark S. Carey, investment-grade borrowers have found the avail- Stephen D. Prowse, and John D. Rea, of the ability of funds in the private market to be sharply Board's Division of Research and Statistics, and reduced, as life insurance companies have confined Gregory F. Udell, who was a visiting economist in their acquisitions almost exclusively to investmentthe division and is now at the Stern School of grade bonds. This change in the composition of Business, New York University. Dana Cogswell and their purchases has occurred because of public William Gerhardt provided research assistance. concern about the quality of insurers' assets and because of a regulatory reclassification in 1990 of The market for privately placed debt has undergone many private placements from investment grade to major changes in the past three years. Life insur- speculative grade. The reluctance of insurance ance companies, the principal buyers of privately companies to lend to riskier borrowers, coupled placed bonds, have significantly reduced their pur- with the failure of other institutions to fill the void, chases of debt securities issued by below- has shut off many medium-sized companies' supinvestment-grade borrowers. In addition, the adop- ply of long-term debt financing. Because any sigtion of Rule 144A in 1990 by the Securities and nificant return of insurance companies to this seg- Exchange Commission has spawned a new market ment of the market depends on an improvement in for private debt that is similar to the public corpo- the quality of their other assets, the availability of rate bond market. credit in the below-investment-grade segment of These changes have focused attention on the private market may continue to be limited for a market that normally receives little publicity some time. because private issuers need not publicly disclose The change induced in the private market by information about themselves or their transactions. Rule 144 A has occurred during the same period but Private placements are securities that are exempt is much different in nature. Rule 144A allows from registration with the Securities and Exchange large, sophisticated institutions—defined as quali- Commission (SEC) by virtue of being issued in fied institutional buyers (QIBs)—to trade private transactions that involve no public offerings. placements freely among themselves. Relying on (Although "private placements" may be either debt the rule, securities firms have begun for the first or equity securities, in this article, the term refers time to underwrite some new issues, distributing only to privately placed debt.) In keeping with the them to QIBs. (Before the adoption of Rule 144A, absence of a public offering, private placements are the conditions under which private placements typically offered only to a limited number of well- could be resold effectively prevented the underwritinformed investors, usually institutions, which also ing of private securities.) The advent of underwritgenerally do not disclose information about their ten offerings has created a market segment that has transactions. many characteristics of the public corporate bond The private placement market has long been a market. This market segment differs significantly significant source of long-term, fixed-rate funds for from the traditional private market, and it has U.S. corporations. Since 1990, however, below- proved especially attractive to foreign corporations, which can avoid the disclosure requirements of a public offering while still enjoying many of the benefits of the public market. Though the 144A NOTE. This article is based on a forthcoming staff study by the market is still developing and small in size, it could same authors, "The Economics of the Private Placement Market." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • February 1993 be a major step toward the integration of U.S. and 1. Gross issuance of publicly offered and privately placed foreign bond markets. bonds by nonfinancial corporations, 1975-91 Billions of dollars A Public bonds / OVERVIEW OF THE PRIVATE DEBT MARKET / \ /— 100 75 The private placement market has characteristics in / / — common with both the bank loan and the public 50 / bond markets. All three markets are important / sources of funds for U.S. corporations. But, as in -Y Private placements — 25 the bank loan market, borrowers in the private placement market tend to be less well known com- 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 panies that require lenders to engage in extensive 1975 1980 1985 1990 due diligence and loan monitoring. As in the public SOURCE. Federal Reserve Board and IDD Information Services. bond market, private placements are securities, and their issuance is very often assisted by an agent, who provides many of the services performed by fell. The punitive prepayment penalties normally underwriters of public bonds. attached to privately placed debt make refinancing unattractive to issuers even when interest rates are falling. Comparisons of gross issuance of private place- Size of the Market ments and public bonds tend to overstate the relative importance of the private market as a source of The private placement market is an important corporate financing because private bonds genersource of credit market funds for U.S corporations. ally have shorter maturities than public bonds. The Between 1986 and 1991, for example, gross issumedian average life of private placements is ance of private placements by nonfinancial corporabetween six and seven years, whereas that of public tions averaged $65 billion per year, or nearly 75 percent of that in the public market (table l).1 In bonds is around ten years. Nonetheless, in terms of issues outstanding at year-end 1991, private place- 1988 and 1989, private issuance actually exceeded ments of nonfinancial corporations stood at public issuance, as the financing of acquisitions $250 billion. For comparison, outstandings of puband employee stock ownership plans boosted prilic bonds issued by nonfinancial corporations were vate offerings (chart 1). Public issuance surged $800 billion; bank loans to such corporations were in 1991, however, partly reflecting the refinancing $530 billion; and finance company loans to nonof outstanding debt, whereas private issuance financial corporations were $150 billion.2 1. Gross issuance of publicly offered and privately placed bonds by nonfinancial corporations, 1975—91 Borrowers Billions of dollars, annual rate Type of bonds 1975-80 1981-85 1986-91 The typical borrower in the private placement market is a medium-sized corporation. Large firms Public 222111...000 333555...666 888777...666 tend to issue in the public bond market, and small 111444...777 111999...888 666444...888 firms generally borrow only in the bank loan mar- SOURCE. Federal Reserve Board and IDD Information Services. 2. Outstandings of public bonds of nonfinancial corporations are 1. Data for gross issuance of private placements are from IDD the sum of bonds rated by Moody's Investors Service and publicly Information Services, which obtains the data from a survey of issued medium-term notes. Private placements are estimated by investment banks and commercial banks serving as agents in plac- subtracting the figure for public bonds from outstandings of all ing the securities. Data for private placements that do not involve corporate bonds reported in the flow of funds accounts. Data for an agent are not included. Consequently, reported totals probably bank loans and finance company loans are from the flow of funds understate gross issuance of private placements. accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Market for Privately Placed Debt 79 ket. For a sample of nonfinancial corporations, the are generally lower in the public market because median value of assets for those borrowing in the fixed costs are a smaller percentage of large issues. private market was $0.5 billion in 1989, whereas According to market participants, the break-even the median for those borrowing in the public mar- point between the two markets is at issue sizes ket was $1.5 billion. Because issuers are smaller in between $75 million and $100 million. the private market, issue sizes are also smaller on Issue size, however, is not the main reason that average than in the public market: Nearly two- medium-sized companies borrow in the private thirds of the number of all private placements in rather than in the public market. A more important 1989 were between $10 million and $100 million, reason is that lenders must perform extensive credit whereas more than 85 percent of the public issues evaluations of such companies before loans can be were in excess of $100 million (chart 2). For the extended to them. In any credit transaction, public same year, the median issue size of private place- or private, the lender must determine the financial ments was $34 million, and the median for public condition and prospects of the borrower. For large, bonds was $150 million. well-known companies, this task is facilitated by An interaction among issue size, issuing costs, the ready availability of information from many and yields is often thought to be the major reason sources. In contrast, for other, less well known that medium-sized firms tend to offer their securi- companies, a lender cannot obtain information as ties in the private rather than in the public market. easily and must collect the necessary information Issuance costs are lower for a private placement on its own. Moreover, the lender must continue in than for a public offering, in part because the issuer this effort after the credit is extended in order to does not have to incur the considerable expense of adequately monitor the borrower's ability to make registering the issue with the SEC. Also, most timely payments of interest and principal. Because private placements, especially the smaller issues, of the information problems that less well known are not underwritten and thus typically have lower companies present to lenders, they are sometimes distribution expenses than do public bonds, which referred to as information-problematic borrowers. are almost always underwritten. In contrast, for As a general rule, investors in securities sold in those few public and private issues that are of the public bond market are not staffed to analyze comparable size and quality, yields are generally information-problematic borrowers, whereas lendhigher on private placements than on public bonds. ers in the private placement market are capable of The total cost of borrowing for comparable performing this type of credit analysis. A negative medium-sized issues is thus generally lower in the correlation between company size and the degree private market because any higher coupon rate that of informational problems accounts for the differmust be paid there is offset by lower fixed costs of ences in the typical sizes of companies borrowing issuance. Total costs for comparable large issues in the private and public markets. Thus, even if total costs for small issues were not lower in the private market, most medium-sized companies 2. Distribution of private placements and public bonds would not have access to the public market because by size of issue, 1989 of the information problems they pose for lenders. Percent of number of issues Small firms are typically even more information- • problematic than medium-sized firms. Small firms • are seldom able to issue long-term, straight, unse- Private cured debt because the credit risk involved in lend- Public -— 50 ing to them cannot be reliably evaluated over a long term. They thus borrow mainly in shorterterm markets, principally the bank loan market, 1 * rather than in the private market. Because banks _ j1 ,1 J , are willing to lend to more information-problematic 1 ! — 1 • borrowers, their credit evaluation and monitoring Less than 1 1-10 10-100 100-250 More than 250 organizations are typically even more extensive Size of issue, millions of dollars than those of insurance companies. SOURCE. Federal Reserve Board and IDD Information Services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • February 1993 Issuance costs are also a factor tending to common a capacity to evaluate and monitor comexclude small businesses from the private debt plex credit transactions. These intermediaries can market. The fixed fees involved in placing debt provide borrowers in the private placement market privately make very small issues uneconomical, with more favorable terms than would be available especially in comparison to bank loans. Further- in the public market partly because of their expermore, most buyers of private placements have little tise and partly because they are large enough to interest in small issues. Consequently, few private buy significant fractions of any issue. If many placements are less than $10 million in size. investors each provided only a small part of each Although information-problematic borrowers are borrower's loan, as is typical in the public market, generally not large firms, many large corporations every investor would have to perform costly credit have issued in the private market. Such companies evaluations, and the costs would be passed on to normally issue straight debt in the public bond the borrowers. Total costs are reduced when only a market but turn to the private market for complex few intermediaries lend to information-problematic transactions. In these cases, the transactions them- borrowers because only a few must perform credit selves, rather than the borrowers, are difficult to evaluations. evaluate. Examples of such transactions are project The major investors in private placements are financings, capitalized equipment leases, joint ven- life insurance companies. At year-end 1991, they tures, and new forms of asset-backed securities. held $212 billion of private placements.3 Holdings Apart from information problems, other special are highly concentrated: The top five holders of circumstances can lead large corporations to use private placements have almost 40 percent of the the private market. A corporation may wish to industry total, and the top twenty hold nearly issue debt quickly or to maintain confidentiality by 70 percent.4 Life insurance companies invest priavoiding the disclosures required for a public offer- marily in unsecured, fixed-rate private placements; ing, or it may wish to include customized features, in keeping with the longer-term nature of their such as delayed disbursements of funds, in the liabilities, the average lives of private placements terms of the offering. they purchase are mainly between three and fifteen Besides being able to accommodate information- years (chart 3). Insurance companies prefer private problematic and specialized transactions, the pri- placements falling in the lower end of the vate placement market offers borrowers the oppor- investment-grade range of credit ratings (rated A tunity to establish relationships with lenders. The and BBB or the equivalent). For example, at the primary disadvantages of private placements in end of 1991, 37 percent of insurance companies' borrowers' eyes are the restrictive covenants and holdings were rated BBB (chart 4), and the majorstiff prepayment penalties typically found in pri- ity of the 46 percent carrying a higher rating vate debt contracts. These penalties effectively were rated A. Before 1990, insurance companies eliminate a borrower's option to cut interest costs also purchased substantial quantities of belowby refinancing debt when market interest rates otherwise would permit. 3. This figure includes private placements of both financial and nonfinancial corporations but only those held in the general Lenders accounts of insurance companies. No' estimate for those held in separate accounts is available. At year-end 1991, corporate and The major lenders in the private placement market government bonds in separate accounts totaled $67 billion. For comparison, corporate and government bonds in general accounts are among those financial intermediaries that spetotaled $810 billion at year-end 1991, of which $212 billion were cialize in lending to information-problematic bor- private placements. rowers. A financial intermediary is a financial insti- 4. The top five holders of private placements hold only 25 percent of the general account assets of all insurance companies, while tution that raises funds through the issuance of its the top twenty hold 49 percent of all general account assets. The own debt or equity and then reinvests the proceeds proportion of assets that are privately placed debt securities is in financial assets. The types of financial intermedi- naturally larger for these companies: The proportion of private placements in their general account assets is 25.4 percent for the aries and their specializations vary widely. Howtop five and 22.7 percent for the top twenty, but only 9.6 percent for ever, those in the private placement market have in the rest of the industry. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Market for Privately Placed Debt 81 3. Distribution of average lives of fixed-rate private 4. Distribution of credit ratings of private placements placement commitments measured as a percentage of the held by life insurance companies, 1991 total value of new private commitments by major life insurance companies, January 1990-July 1992 SOURCE. National Association of Insurance Commissioners. SOURCE. American Council of Life Insurance. security, or require immediate repayment of principal if the borrower is unable to remedy the violainvestment-grade private bonds, especially those tion. The restrictiveness of covenants is inversely BB-rated bonds falling just short of investment related to the credit quality of the borrower. There grade. can also be a trade-off between restrictiveness and Life insurance companies are drawn to private the yield on the security. Finally, covenants tend to placements by their favorable risk-return ratio. be more numerous and more restrictive in private Yields on private placements are generally higher placements than in public bonds, partly because of than those on comparable public bonds, the higher the information-problematic nature of borrowers in yield reflecting both the lack of liquidity of private the private market. The smaller number of invesbonds and a return to the more intensive credit tors in private placements also makes negotiation analysis required by investors in the private mar- after violations of covenants more manageable. ket.5 Credit risk is controlled through covenants Life insurance companies attempt to match the that may limit the operations of the borrowers. For duration of their investments in private placements example, covenants may restrict the incurrence of to the duration of their liabilities. Private placeadditional debt, require the maintenance of a mini- ments provide flexibility in this regard because mum level of net worth or a minimum ratio of maturities and sinking-fund provisions can be cash flow to interest expenses, limit cash payouts to tailored to meet specific needs. In addition, private shareholders, or restrict the sale of assets. Viola- placements are seldom prepaid because they have tions of covenants serve as a warning that the strong call protection. In 1991, for example, almost financial condition of the borrower may be deterio- 20 percent of the private bonds purchased by the rating.6 Depending on the circumstances of a cove- largest life companies were noncallable. Another nant violation, the lenders may either temporarily 70 percent had prepayment provisions that not waive a covenant, renegotiate the terms of the only enable the insurance companies to replace any redeemed bonds at no reduction in interest income but that also require issuers to pay a penalty in the event of prepayment. Consequently, the primary 5. The insurance companies are able to profit from any illi- reason a borrower prepays a private placement is to quidity premium because they hold most private placements to escape the confines of restrictive covenants. maturity. 6. Many violations of covenants are not associated with deterio- The most important investors in private placeration of financial condition. Often a borrower whose condition has ments other than insurance companies have been not deteriorated will wish to make investments or acquisitions that finance companies and pension funds. Finance are forbidden by covenants. In such circumstances, the borrower companies specialize in the highest-risk private will attempt to negotiate a waiver of the covenant by the lender. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • February 1993 placements and, consequently, usually require tors. In most cases, such direct placements are sold collateral and equity features such as warrants or to lenders with which the issuer has had a previous options to convert bonds to equity. Most invest- borrowing relationship, although a few insurance ments in private placements by finance companies companies also solicit and originate new business. are held by only about a half dozen large firms. One advantage of a direct placement is the saving Similarly, only a handful of pension funds are of the agent's fee. Also, if the direct placement active investors in private placements. Most pen- follows a previous transaction between the same sion funds are geared primarily toward investing in parties, investors may be able to offer better terms public bonds and have not built up staff to perform and faster execution. Nonetheless, even among the credit analysis and monitoring that is required repeat borrowers in the private market, direct placeof investors in private placements. ments constitute only a minority of offerings. Agents have better information than issuers about market conditions and investors' preferences, and Origination, Negotiation, and Distribution they are experienced negotiators. Issuers thus generally can achieve lower borrowing costs by using Most issuers of private placements enlist the ser- agents, even taking into account their fees. vices of an agent, typically an investment bank or commercial bank, for advice and assistance in selling the securities. Initially, the agent helps the Relationship to Other Markets issuer to prepare an offering memorandum, which contains information about the issuer's business, The private placement market is most frequently financial condition, and prospects, and a term sheet, compared with the public bond market, primarily which contains the proposed terms of the offering. because the debt instruments issued in both mar- Both are sent to prospective investors, which use kets are securities. Despite this similarity, the prithem to make a preliminary evaluation of the issu- vate placement market has much more in common er's credit quality and to negotiate the final terms with the bank loan market, even though their debt of the offering. Once the terms have been agreed instruments are different. Borrowers in both the upon, investors then verify the portrait of the issu- bank loan and private placement markets are er's business operations and financial condition information-problematic, and lenders in both marpainted by the offering memorandum. An inves- kets are financial intermediaries specializing in tor's analysis at this stage typically includes an credit evaluation and monitoring. Consequently, on-site visit to the company. From start to finish, the typical medium-sized borrower in the private a routine transaction takes four to six weeks to placement market generally views a bank loan as complete. the closest alternative to a private placement. In distributing the securities, agents typically A given borrower, however, would not find bank operate on a "best-efforts" basis. In contrast to an loans and private placements to be perfect substiunderwriter, an agent is under no obligation to tutes, because the characteristics of financings purchase the securities, so the issuer is not guaran- available in the two markets typically differ. Bank teed funds. The use of a best-efforts distribution loans have short and intermediate maturities, genermechanism reflects primarily the economics of ally of no more than seven years; in contrast, placing the debt of information-problematic bor- private placements are intermediate to long term in rowers: The risk associated with the failure to place maturity. Bank loans normally carry floating rates an issue is so great that such borrowers find bearing and can be prepaid at par, whereas private placeit themselves less costly than hiring an underwriter ments are usually fixed-rate securities with substanto bear it for them. Until the adoption of Rule tial prepayment penalties.7 The differences in matu- 144A, underwriting was also effectively precluded because an underwriting might constitute a public offering. 7. The significance of the difference in types of interest rates is lessened somewhat by the availability of interest rate swaps. Swaps Some issuers choose not to use an agent and are costly, however, especially for many information-problematic instead place their securities directly with inves- borrowers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Market for Privately Placed Debt 83 rities and types of rate prevalent in the two markets 2. Gross issuance of private placements by nonfinancial largely reflect differences in the duration of bank corporations, 1989-911 and life insurance company liabilities. Billions of dollars except as noted Because of the differences in maturities between Type of issuance 1989 1990 1991 bank loans and private placements, borrowers generally view the two forms of credit as competitive Below-investment-grade ... 5544 66 .. .. 77 66 4499 88 .. .. 99 11 4422 33 .. .. 99 88 only for maturities of three to seven years. A MEMO borrower planning to raise funds in this range Ratio of below-investmentgrade to total (percent) .. 1122..11 1166..22 88..99 of maturities will compare the total cost of bank loans and private placements and base its 1. Excludes restructuring-related issues in excess of $250 million and issues to finance employee stock ownership plans. decision on both the price and nonprice terms of SOURCE. IDD Information Services. the instruments.8 Differences in maturities across the bank loan and private placement markets also influence the Issuance and Yields characteristics of the average borrower and the terms of the average loan. As noted, it is difficult to Evidence of reduced credit availability can be evaluate the credit risk of very informationseen both in the volume of issuance of belowproblematic firms, which are typically small, over investment-grade private placements and in spreads the long term. Thus smaller, more-informationbetween yields on investment-grade and belowproblematic firms are much more frequently found investment-grade private bonds. Gross issuance by in the bank loan market. Because the average borbelow-investment-grade, nonfinancial corporations rower in the bank loan market is more informationfell more than 50 percent in 1991, a much steeper problematic, the average bank loan has more drop than that by investment-grade corporations and tighter covenants than the average private (table 2).9 As a percentage of gross offerings, placement. below-investment-grade issuance declined from 16 percent in 1990 to 9 percent in 1991. Although data for 1992 are not yet available, preliminary information suggests that the low volume of low- THE CREDIT CRUNCH grade issuance persisted last year. Since the middle of 1990, issuers of below- Information available since 1990 from a survey investment-grade securities have encountered a of major life insurance companies by the American sharp contraction in the availability of credit in the Council of Life Insurance (ACLI) confirms the private placement market. Interest rate spreads on decline in gross issuance of low-grade private these securities have risen significantly, indicating placements and points to a significant restructuring that the reduction in supply has been larger than in the composition of life insurers' holdings of any decline in credit demand associated with the private placements.10 Although total commitments weak economy. This situation has been termed a to purchase private placements remained roughly credit crunch because it has resulted mainly from a constant from early 1990 through mid-1992, greater reluctance of life insurance companies to the proportion of below-investment-grade issues assume below-investment-grade credit risk. The dropped sharply in the middle of 1990 and declined sources of this reluctance have been the threat of further in the second half of 1991 (chart 5). Over redemptions by liability holders (policyholders and others), asset-quality problems, and regulatory changes. 9. Gross issuance excludes offerings to finance employee stock ownership plans (ESOPs) and restructurings. Underlying developments are more evident with their exclusion, as both were heavy in 1989 but fell off sharply in 1990 and 1991. 8. This choice, as noted above, is relevant only for medium- 10. Respondents to the survey hold approximately two-thirds of sized firms. Small firms typically do not have access to the private all private placements in the general accounts of life insurance placement market because they are too information-problematic. companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 Federal Reserve Bulletin • February 1993 5. New commitments to purchase below-investment- 6. Yield spreads on privately placed corporate grade private placements as a percentage of total new bonds, 1990-92:Q2[ commitments by major life insurance companies, 1990-921 Percent Difference between BB spread and BBB spread 1990 1991 19922 250 1. Data are semiannual. 200 2. 1992:H2 is July at a semiannual rate. SOURCE. American Council of Life Insurance. 150 the entire period, the share of below-investment- 1. Data are quarterly weighted averages. grade securities in total commitments fell from SOURCE. American Council of Life Insurance. 15 percent to 3 percent. The reduced rate of gross purchases indicated by the survey is also evident in insurance companies' holdings of below-investment-grade securities. confirmed in the spreads reported in the ACLI Holdings of such securities at all life insurers survey (chart 6).11 During the first half of 1990, the fell 11 percent in 1991, while holdings of spread between yields on BB private placements investment-grade securities rose nearly 12 percent. and comparable Treasury securities was about 300 As a result, speculative-grade private bonds as a basis points, compared with 190 basis points on percentage of all private placements in insurance BBB private placements. From that point, the company portfolios declined from 19.8 percent in spread on BB bonds moved up to almost 425 basis 1990 to 16.4 percent in 1991. The low rates of points in the second quarter of 1991, although in commitments to purchase below-investment-grade the second quarter of 1992 it retreated to around private issues reported in the 1992 ACLI surveys 350 basis points. During the same period, the BBB suggest that the insurance industry pared holdings spread drifted down to 180 basis points. Similarly, further last year. Accompanying the decline in gross issuance and outstandings has been a sharp increase in yield spreads on below-investment-grade private placements. According to market reports, before 1990 11. Care must be used in interpreting the reported spreads. Although they are transaction prices, they do not reflect a standardthe difference between yields on BB (below investized security. The nonprice terms of private placements can differ ment grade) private placements and BBB (investwidely for bonds carrying the same credit rating, and the terms ment grade) private placements, otherwise having affect the yields. For example, in early 1992, the difference in comparable terms, was about 100 basis points; spreads between the highest-risk BB issue and the lowest-risk BB issue reportedly was as much as 150 basis points. Under normal since then, the difference has been as high as 250 circumstances, averaging spreads within a rating category produces basis points. Although data are unavailable for a representative spread for that rating. However, as most of the BB periods before 1990, the relative movement in bonds issued since mid-1990 probably were at the least risky end of that risk range, the increase in the BB spread shown in chart 6 yields on private bonds rated BB and BBB is likely understates the actual increase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Market for Privately Placed Debt 85 the spread on A-rated private placements varied because the decrease in credit is a normal response little over the past three years.12 of lenders to changing economic conditions.13 A credit crunch can occur for several reasons. It may result from actions taken by regulators that Sources of the Credit Crunch affect lenders' ability or incentive to assume certain risks. It may also result from internal develop- The combination of a decline in gross issuance of ments at lending institutions, such as unexpectedly below-investment-grade private placements and an large loan losses, that cause portfolio rebalancings increase in spreads over Treasuries since mid-1990 involving greater conservatism in lending. For is consistent with a decrease in the supply of loan- lenders that are financial intermediaries, a credit able funds to this sector. Although the demand for crunch may result from concerns of liability holdfunds surely declined with the falloff in general ers about the intermediaries' financial condition. economic activity during the period, the increase in The ability of intermediaries to raise funds to supspreads in this market segment indicates that a port their investment activity may be adversely much greater reduction occurred in the supply of affected in such circumstances, leading to their funds. adoption of more conservative investment strate- A contraction in supply, however, does not nec- gies to restore public confidence. essarily imply a credit crunch, as credit availability All these reasons appear to have played a role in can decrease and lending terms tighten for many the withdrawal of life insurance companies from reasons, sifch as an increase in the riskiness of the below-investment-grade sector of the private borrowers. In general, a credit crunch occurs when, placement market. The regulatory change, which for a given price of credit, lenders substantially was adopted by the National Association of Insurreduce the volume of credit provided to a group of ance Commissioners (NAIC) in June 1990 and borrowers whose risk is essentially unchanged. became effective at the end of that year, introduced That is, a credit crunch is caused by a reduction in finer distinctions in the NAIC's credit ratings of lenders' willingness to make risky investments or corporate bonds, including private placements. by a "flight to quality" by lenders. A credit crunch Under the old rating system, many securities, espealways involves a reduction in the supply of credit; cially public bonds, with credit quality equivalent it does not necessarily involve an increase in inter- to BB or B received an investment-grade rating. To est rates paid by borrowers, because a reduction in correct this shortcoming, the NAIC adopted a ratthe volume of lending may be accomplished by ing system with categories more closely aligned nonprice rationing. with those in the public market (table 3). Although This definition of a credit crunch does not insurers' actual holdings were probably little include a reduction in supply that is a response to a changed, the reclassification resulting from the recession or an economic slowdown. In such cir- new system caused insurers' reported holdings of cumstances, the riskiness of borrowers normally below-investment-grade bonds, both private and increases. Lenders demand compensation either in public, to rise from 15 percent of total bond holdthe form of higher interest rates or tighter nonprice ings to 21 percent between 1989 and 1990. The terms of loans. Although borrowers may character- level of reported holdings of high-yield bonds ize such a reduction in credit supply as a credit jumped more than 40 percent. crunch, such a characterization is not appropriate 13. Some economic theories and empirical studies suggest that a significant amount of nonprice rationing of credit occurs even during normal times and that this rationing becomes much more 12. In the public high-yield bond market, spreads increased extensive during economic downturns as borrower risk increases. sharply from mid-1989 through 1990 but have since fallen signifi- The increase in nonprice rationing is sometimes referred to as a cantly, although they remain above the levels that prevailed in early credit crunch. Such a mechanism may have operated to reduce 1989. Issuance of public junk bonds stopped almost completely credit availability in the private market during the period of interest during 1990 and most of 1991 but surged in 1992 to the second here, but it is different and probably less important in explaining highest level ever. Thus, experience in the public junk bond market recent experience in the below-investment-grade segment of the has been significantly different from that in the market for below- private market than the reduction in lenders' willingness to bear grade private debt. risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • February 1993 3. NAIC credit ratings another factor causing the reduced availability of credit to below-investment-grade borrowers. Com- Equivalent rating- NAIC rating designation agency designation mercial mortgages make up 25 percent of general account assets at the twenty largest insurance com- Old system1 Yes AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA tttttttttttooooooooooo BBBBBBBBBBB panies, which include most of the major partici- No* BBBBBBBBBBBBBBBBBBBBBB,,,,,,,,,,, BBBBBBBBBBB No** CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC ooooooooooorrrrrrrrrrr lllllllllllooooooooooowwwwwwwwwwweeeeeeeeeeerrrrrrrrrrr pants in the private placement market. Additional No IIIIIIIIIIInnnnnnnnnnn ooooooooooorrrrrrrrrrr nnnnnnnnnnneeeeeeeeeeeaaaaaaaaaaarrrrrrrrrrr dddddddddddeeeeeeeeeeefffffffffffaaaaaaaaaaauuuuuuuuuuulllllllllllttttttttttt exposure to commercial real estate risk comes from New system 2 direct real estate investments, which at many life 1 AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA tttttttttttooooooooooo AAAAAAAAAAA 2 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB insurance companies consist primarily of real 3 BBBBBBBBBBBBBBBBBBBBBB estate-related limited partnerships. Delinquency 4 BBBBBBBBBBB 5 CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC ooooooooooorrrrrrrrrrr lllllllllllooooooooooowwwwwwwwwwweeeeeeeeeeerrrrrrrrrrr and foreclosure rates on these commercial real 6 IIIIIIIIIIInnnnnnnnnnn ooooooooooorrrrrrrrrrr nnnnnnnnnnneeeeeeeeeeeaaaaaaaaaaarrrrrrrrrrr dddddddddddeeeeeeeeeeeaaaaaaaaaaafffffffffffuuuuuuuuuuulllllllllllttttttttttt estate investments have risen sharply over the past 1. The asterisks appended to the "No" ratings are part of the rating two years, as the press has widely reported. These designation. 2. Effective December 31, 1990. problems have further heightened public awareness SOURCE. Securities Valuation Office, National Association of Insurance of the financial problems of life insurance compa- Commissioners. nies and have thus added to the pressure on those The sudden appearance of a much increased with significant holdings of commercial real estate percentage of below-investment-grade securities on loans to shift out of all lower-quality assets. Also, the balance sheets of life insurance companies because even sound commercial real estate loans focused the attention of policyholders and other have turned out to be riskier than anticipated at the holders of insurance company liabilities on the time they were made, life insurance companies composition of insurers' bond holdings. As evi- have shifted investments toward high-quality dence of increased public sensitivity, a recent study assets. found that stock prices of insurance companies A final development pressuring insurance comwith high concentrations of junk bonds were panies to restrict purchases of below-investmentadversely affected in early 1990 by the publicity grade private placements has been the concern of surrounding the financial problems of First Execucredit rating agencies about the lack of liquidity of tive Corporation, whose insurance units subseprivate placements, especially below-investmentquently failed because of losses on junk bonds. In grade ones. This concern appears to be a consecontrast, stock prices of insurance companies with quence of the July 1991 collapse of Mutual Benefit little exposure to junk bonds were not affected.14 Life Insurance Company, which lacked the liquid- The public's greater sensitivity to the quality of life ity needed to meet heavy redemptions by policyinsurance companies' assets discouraged many inholders. Driven by a fear of being downgraded, surers from purchasing lower-quality private placeinsurance companies have sought more liquidity in ments out of fear that they might lose insurance their bond portfolios by concentrating on higherbusiness to competitors with lower proportions of grade credits, which are more readily sold in the below-investment-grade bonds in their portfolios.15 secondary market. High proportions of poorly performing commer- The individual importance of these three factors cial mortgages in insurance company portfolios are as causes of the credit crunch is hard to isolate, although all three certainly contributed. They are, however, interrelated. For example, the new NAIC 14. See George Fenn and Rebel Cole, "Announcement of Asset- Quality Problems and Stock Returns: The Case of Life Insurance rating system probably would have had a much Companies," in Proceedings of the 28th Annual Conference on smaller effect if insurance companies had not expe- Bank Structure and Competition (Federal Reserve Bank of Chirienced problems with commercial real estate cago, 1992), pp. 818-42. 15. Another regulatory change raised reserves held against some loans. Furthermore, the new rating system, combelow-investment-grade bonds and lowered reserves on bonds rated bined with the failure of First Executive, served to A or higher. Also, the time allowed to reach the mandatory reserve focus public attention on the potential riskiness of levels was shortened. Of the two regulatory changes, the new structure of ratings likely had the greater effect on insurance below-investment-grade private placements. In any companies' willingness to hold below-investment-grade bonds case, the main impetus behind the credit crunch has because many companies had sufficient reserves to meet the fully been a perception by life insurance companies that phased-in standards. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Market for Privately Placed Debt 87 liability holders might lose confidence in them and Despite the almost three-year absence of insurredeem insurance policies, annuities, and guaran- ance companies from the below-investment-grade teed investment contracts. sector and the persistence of high spreads, other institutions have not picked up much of the slack. New lenders must bear the costs of investment in credit analysis capabilities. Startup costs may Outlook and Alternative Sources of Credit account for the failure of pension funds to fill the As a group, life insurance companies are not likely gap, even though their demands for long-term, to resume investing in below-investment-grade fixed-rate investments appear to make them natural private placements at pre-1990 levels until their investors in private placements. Few funds curasset problems have improved and public concern rently have the staff of credit analysts needed about the health of the industry has diminished to support significant lending in the belowappreciably. As this improvement hinges mainly on investment-grade private market. Most pension a recovery of the commercial real estate market, funds also are reluctant to make long-term investmany analysts expect that insurers will remain ments in a market with which they are unfamiliar. reluctant to provide funds to the low-grade sector Another way for pension funds as well as others of the private market for the foreseeable future. not currently investing in private placements to This prospect has already led some insurers to enter the market is through managed investment cut staff and fo reduce resources devoted to credit funds. Although several funds have been formed in evaluation and monitoring. If the cutbacks become the past two years, they are not likely to expand to widespread, the long-run ability of the insurance a scale sufficient to fill the void left by the insurindustry to supply credit to medium-sized, below- ance companies, in part because pension fund maninvestment-grade companies could be severely agers are reportedly reluctant to invest even indiimpaired. rectly in a market with which they are unfamiliar. Risk-based capital standards, which become Insurance companies, which would be the primary effective at the end of 1993, could reinforce the source of the managerial resources necessary for reluctance of insurance companies to buy below- operation of managed private placement funds, investment-grade securities. The new standards are have thus far not set up funds on a large scale, even aimed at measuring the prudential adequacy of though some companies currently have excess insurers' capital as a means of distinguishing capacity to analyze and monitor lower-quality credbetween weakly capitalized and strongly capital- its. Some of them are unwilling to make a longized companies. To this end, insurance companies term commitment of resources to this effort will report the ratios of their book capital to levels because they expect to eventually resume investing of capital that are adjusted for risk. As an insurer's in below-investment-grade private placements for ratio falls progressively below one, successively their own accounts. Also, most institutional invesstronger regulatory actions will be triggered. tors expect insurance companies acting as invest- In the current environment, most insurers will ment managers to purchase some of the securities probably attempt to achieve ratios in excess of one. for their own accounts. Such a requirement lessens One way insurers can raise their risk-based capital the incentive to establish managed funds because ratios is to shift into low-risk assets. In this regard, of insurers' current aversion to purchasing belowbelow-investment-grade securities carry risk investment-grade bonds. weights much higher than those on investment- Nor have other institutions appreciably stepped grade bonds and even commercial mortgages. Over up their lending in the below-investment-grade sectime, however, as the financial condition of insur- tor of the private market. Finance companies' parance companies improves and public concern about ticipation has traditionally been in the highest-risk their health recedes, insurers will be more inclined segment of the market, a segment in which life to consider risk-adjusted returns in reaching invest- insurance companies are not generally active. ment decisions and thus may allocate a greater Insurers typically made unsecured loans, mainly to proportion of assets to higher-risk categories, such the highest-quality speculative-grade borrowers. In as below-investment-grade bonds. contrast, finance companies specialize in secured Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Federal Reserve Bulletin • February 1993 lending, normally with equity features attached. ing private placements must take steps to ensure Thus, the risk-return profile of the typical insurance that the sales do not indirectly constitute a public company borrower does not suit finance compa- offering, which would violate the basis for the nies, nor would such borrowers generally find exemption from registration with the SEC. Under finance companies' terms attractive. Rule 144A, QIBs are not viewed as being a part of Confronted with few opportunities to borrow in the public, and thus they can freely trade private the private market, below-investment-grade compa- placements among themselves. This treatment of nies have turned to various alternatives. Some have QIBs made it clear that securities firms could elected to borrow from banks, even though bank underwrite new issues of private placements, as loans are imperfect substitutes for private place- long as the securities were sold to QIBs. Before the ments because of their shorter maturities and float- adoption of Rule 144A, private placements were ing interest rates. By doing so, these companies not underwritten, as the underwriters' sales of the have forgone the opportunity to refinance shorter- securities to investors might have been interpreted term debt with longer-term private placements, and as a public distribution. some have also found that banks have significantly In the aftermath of Rule 144A, securities firms tightened terms. Other low-rated companies have have begun to underwrite private placements on a issued equity, taking advantage of favorable stock firm commitment basis, sparking the development market conditions in 1991 and early 1992. In some of the new 144A market. More specifically, the cases, the improved financial condition resulting ability to underwrite private placements means that from equity injections has raised issuers' credit for the first time debt can be distributed in the ratings to investment grade, giving them renewed private market much as it has been in the public access to the private bond market.16 The public market. Consequently, "public-like" borrowers junk bond market, despite its revival in the latter with a desire to avoid public registration now have half of 1991, has not been a source of funds for the an alternative to both the public market and the typical below-investment-grade private issuer, traditional private market. The emergence of the which is generally too small and too complex a 144A market thus bridges a gap between the public credit for the public market. and private markets, providing a more efficient means for large borrowers that do not have the informational problems of the typical issuer of EFFECT OF RULE 144A ON THE private debt to issue in the private market. PRIVATE PLACEMENT MARKET The SEC's purposes in adopting Rule 144A were twofold. One purpose was to increase market The adoption of Rule 144A by the SEC in April liquidity. The other was to draw more foreign issu- 1990 paved the way for the development of a new ers to the private placement market by increasing market for private debt that is much more like the liquidity and thus lowering the differential between public bond market than the older or traditional private and public interest rates. Foreign compaprivate placement market.17 Rule 144A permits nies had not been frequent issuers in public marunrestricted secondary trading of private place- kets primarily because they found the registration ments among sophisticated institutional investors, requirements expensive and burdensome, espedesignated in the rule as qualified institutional buy- cially the stipulation that financial statements be ers (QIBs). As a general matter, sellers of outstand- reconciled with generally accepted accounting principles in the United States.18 Although foreign companies have long been able to bypass these obstacles by issuing debt in the private market, 16. Some analysts have suggested that a new rating system for private placements recently introduced by Standard and Poor's (S&P) may permit some marginal companies to achieve an investment-grade rating. In contrast to many other rating schemes, 18. Despite appearances, the burden of registration and disclo- S&P's new system considers covenant protection in assigning a sure requirements may not be as great as perceived by many rating. potential foreign issuers. See Charles E. Engros, Jr., "United States 17. Rule 144A applies to both debt and equity securities; how- Private Placements," (client memorandum, Lord Day & Lord, ever, the discussion deals only with debt securities. Barrett Smith, New York, N.Y., January 1992), pp. 5-9. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Market for Privately Placed Debt 89 they had not done so to any great extent, in part Besides requiring that transactions be confined to because of the higher yields on private placements. QIBs, Rule 144A stipulates that three other condi- The negotiation of terms and frequent inclusion of tions must be met. First, to ensure the availability restrictive covenants in private debt also made the of a minimal amount of information, an issuer must private market unattractive to foreign companies. provide buyers with copies of its recent financial The SEC justified the removal of the resale statements and basic information about its busirestrictions on trades between QIBs on the grounds ness. Second, when issued, privately placed securithat the Congress had never considered sophisti- ties must not be of the same class as any of the cated, institutional investors to need the protection issuer's securities already traded on a U.S. stock offered by the registration of securities. Rather, the exchange or on the NASDAQ system. This requirepurpose of registration was to protect unsophisti- ment is intended to prevent the development of an cated, individual investors. The SEC therefore con- institutional market in publicly traded securities. cluded that if secondary transactions involved only Third, the seller of 144A securities must take "reasophisticated investors, such transactions would not sonable steps" to inform the buyer that the sale is constitute a public distribution and thus could be occurring pursuant to Rule 144A. carried out without restriction.19 As defined in Rule 144A, QIBs are financial institutions, corporations, and partnerships owning Size of the 144A Market and investing qn a discretionary basis at least $100 million in securities.20 The scope of this The 144A market is still developing and consedefinition is broad enough to include life insurance quently is small compared with the traditional pricompanies, pension funds, investment companies, vate market and, especially, the public bond marforeign and domestic banks, master and collective ket. In 1991, the first full year Rule 144A was in bank trusts, and savings and loan associations. place, gross issuance of 144A securities was Besides meeting the securities test, banks and sav- $17 billion, representing about 20 percent of the ings and loans must have net worth of at least volume in the traditional market (table 4).23 Offer- $25 million, a condition imposed by the SEC ings were up significantly from roughly $2 billion because it believed that securities holdings alone in 1990, but, of course, the rule was in effect only did not necessarily reflect the appropriate degree for part of that year, and time was required to bring of investor sophistication for institutions having issues to market after its adoption. Preliminary insured deposits.21 In contrast to other institutional press reports suggest that the volume of issuance investors, broker-dealers must own only $10 milperhaps doubled during the first half of 1992; in lion of securities to qualify as a QIB. The SEC contrast, non-144A issuance was down signifiopted for the lower level to avoid excluding a cantly during that period.24 significant number of broker-dealers that were actively participating in the private market.22 23. These data include all securities issued using the documentation for a financing pursuant to Rule 144A. As a consequence, both underwritten and non-underwritten private placements are included 19. U.S. Securities and Exchange Commission, SEC Docket, 42 in the data. Unfortunately, the two cannot be separated, although it (November 1988), pp. 97-102. is the underwritten securities that primarily constitute the new 20. Bank deposit notes and certificates of deposit, loan participa- 144A market. Market estimates of underwritten offerings for 1991 tions, repurchase agreements, and currency and interest rate swaps go as high as more than $3 billion. See Michael Vachon, "Underare excluded. When Rule 144A was adopted, the SEC also written Issues Could Spur Expansion of the Rule 144A Market," excluded U.S. government and agency securities, but amendments Investment Dealers' Digest, vol. 58 (January 6, 1992), pp. 13-14. to the rule in October 1992 removed this exclusion. The pace of underwritten offerings was reportedly much faster in 21. U.S. Securities and Exchange Commission, "Resale of 1992, with one estimate placing the volume during the first half of Restricted Securities; Changes to Method of Determining Holding 1992 at $2.5 billion. See Victoria Keefe, "Underwritten 144A Period of Restricted Securities under Rules 144 and 145: Final Deals Surge," Corporate Financing Week, vol. 18 (August 31, Rule, Rule Amendments and Solicitation of Comments" (April 23, 1992), pp. 1 and 10. 1990), pp. 17-20. 24. Michael Vachon, "Too Much Cash, Too Few Deals," Invest- 22. SEC, "Resale of Restricted Securities," p. 21. ment Dealers' Digest, vol. 58 (August 31, 1992), pp. 23-24. 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90 Federal Reserve Bulletin • February 1993 4. Gross issuance of debt in public and private markets, mium.26 In the first year of the market, the pre- 1989-91 mium was reported to be about the same as that on Billions of dollars traditional private placements. Recent reports sug- Market 1989 ,990 | ,991 gest, however, that the liquidity of 144A securities has increased and that the premium has decreased Rule 144A private placements .. 2 17 as major dealers have allocated capital and traders By foreign issuers * 6 to making markets for 144A securities.27 Traditional private placements .. 135 95 76 By foreign issuers 20 llipi ^ 16 13 Public bonds 189 204 307 9 15 20 Foreign Issuers * Less than $500 million. SOURCE. IDD Information Services. Thus far, foreign issuance has made up a much larger proportion of the 144A market than it has of either the traditional private or public bond mar- Characteristics of 144A Securities kets. Of the $16.7 billion of 144A offerings in 1991, foreign companies or their U.S. subsidiaries Underwritten offerings of 144A securities now were responsible for about one-third (table 4). In have many of the features of publicly offered contrast, foreign issuers placed only 16 percent of bonds. The terms and documents generally con- offerings in the traditional private market, and only form to the standards used in the public market; in 7 percent of public offerings were foreign related. particular, the bonds have "public style" cove- Preliminary data for the first half of 1992 suggest nants, which are fewer in number and considerably that foreign issuance likely made up an even larger less restrictive than those found in many traditional share of the 144A market last year.28 private placements. Many components of issuance Several factors appear to lie behind foreign use costs are the same as those in a public offering, of the 144A market. One is that the adoption of although the issuer does avoid the considerable Rule 144A itself served to publicize the already expense associated with public registration. Under- existing advantages of the private placement marwritten 144A securities also have two credit rat- ket to foreign companies. The effect of the rule has ings, are not highly structured, and are usually thus been to alter foreigners' perception that all transferred through the book-entry system operated offerings in the United States were subject to excesby the Depository Trust Company. In many sive regulatory burdens. Moreover, since adoption instances, offering memoranda have been styled to of the rule, investment banks have devoted more be similar to prospectuses used in public offerings. effort to bringing foreign issuers into the private This procedure has been followed primarily as a market. A second factor boosting foreign issuance part of the underwriters' efforts to market the pri- has been the low level of yields in the United States vate placements to traditional public-market inves- relative to European countries. The 1992 increase tors, such as mutual funds, pension funds, and in foreign issuance in the public bond market to a groups within insurance companies that invest in record level attests to the yield advantage of U.S. public bonds.25 The average size of underwritten private placements has been comparable to that of public offerings. Finally, the terms of the securities are not negotiated with investors but are set before 26. Some additional reasons for the premium are that lenders typically demand a slightly higher rate from foreign issuers and the offering. also from first-time issuers. Despite the similarity to public bonds, underwrit- 27. See Keefe, "Underwritten 144A Deals Surge," p. 10. 28. The foreign share of the 144A market could be higher than ten 144A securities as a group still differ from indicated because the data do not always list US. subsidiaries of public bonds, especially with regard to liquidity, foreign corporations as foreign issuers. Other sources of informaand thus their yields on average contain a pre- tion, in fact, give foreign issuers a larger share of the 144A market. See Moody's Investors Service, "Recent Developments in the 144A Private Placement Market: A Rating Agency Perspective," Moody's Special Comment (New York, N.Y., February 1992) and U.S. Securities and Exchange Commission, "Staff Report on Rule 25. See Vachon, "Too Much Cash," pp. 23-24. 144A" (September 30, 1991). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Developments in the Market for Privately Placed Debt 91 markets. A final factor is that the premium in yields mutual funds have reportedly invested more, on foreign bonds issued in the private market has whereas the share of life insurance companies has reportedly declined. diminished.30 The changing role of mutual funds and life insurance companies is consistent with press reports that Domestic Issuers buyers of 144A securities are increasingly those that have traditionally invested primarily in public Although foreign use of the 144A market has bonds, such as mutual funds and those groups in received considerable attention, domestic issuance insurance companies that specialize in purchasing has also been significant. In 1991, U.S. companies public bonds.31 The 144A market is attractive to accounted for about two-thirds of the volume, and public-market investors because it offers corporate they likely maintained their presence in 1992. bonds that are similar to public issues and because Domestic issuers in the 144A market typically it offers bonds issued by foreign corporations. In are larger companies with special circumstances addition, yields are higher on 144A private placethat preclude issuing in the public bond market. In ments than those on comparable public issues, some cases, the companies are not registered with although, as noted, this premium exists mainly to the SEC and do not want to incur the time and compensate investors for the lesser liquidity and expense required to register securities. Among other unique characteristics of private placements. these are private companies that, in the past, have Despite these favorable aspects of 144A securiborrowed in the traditional private market but now ties, pension funds, one of the largest groups of find more favorable pricing and terms in the 144A investors in public bonds, have not been significant market. Also included are unregistered subsidiaries buyers of 144A securities. Their absence from the of publicly registered parents that are issuing debt 144A market may result from restrictions on their in the subsidiaries' names. In other cases, compa- ability to purchase foreign securities, as well as nies with outstanding public securities have turned from the lack of familiarity of many fund managers to the 144A market to protect the confidentiality of with the private placement market and the signifithe specific circumstances leading to the borrow- cance of Rule 144A. Also, the SEC initially ing, or they have highly structured transactions that excluded bank trusts from its definition of qualified are more easily accommodated in the private mar- institutional buyers. In October 1992, however, the ket. As these examples imply, unless special cir- SEC amended the definition to include trusts mancumstances are involved, borrowing costs gener- aging employee benefit plans, which may increase ally are lower in the public bond market. the participation of pension funds. In contrast to the interest shown by publicmarket investors in the 144A market, buyers of Investors traditional private placements are unlikely to find this market attractive. The comparative advantage In the first year and a half after the adoption of of traditional investors is credit analysis and credit Rule 144A, life insurance companies made up the monitoring, neither of which are required to the largest single group of investors in 144A private same extent in the 144A market or in the public placements, purchasing nearly 75 percent of all market. Market liquidity is of less value to them nonconvertible debt, according to estimates com- because they are generally buy-and-hold investors. piled by the SEC. The second largest group of buyers during this period was mutual funds, accounting for a little more than 10 percent of the institutional buyer. Also, a fund's board of directors was permitted volume of nonconvertible debt.29 More recently, to determine whether 144A securities were liquid and thus not subject to the 10 percent limit on fund holdings of illiquid securities that was then in place. (The limit has since been raised to 15 percent.) Before this authorization, mutual funds were required 29. At the time Rule 144A was adopted, the SEC took deliberate to classify all private placements as illiquid securities. steps to foster the participation of mutual funds in the 144A market. 30. "Fund Managers Petition SEC for Share of the 144A One change permitted a family of mutual funds to aggregate the Wealth," Private Placement Reporter (August 10, 1992), p. 6. holdings of all its funds in determining its eligibility as a qualified 31. Vachon, "Too Much Cash," p. 23.stors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 Federal Reserve Bulletin • February 1993 Prospects ket will move to the 144A market. Such firms must borrow from a financial intermediary with the Further development and growth of the 144A mar- capacity to undertake substantial credit analysis. ket appear likely because it has filled a gap in U.S. Moreover, they may not want their issues to be capital markets. The public corporate bond market liquid because significant covenants are often serves large, well-known borrowers that do not included in traditional private placements, and issurequire lenders to perform extensive credit analy- ers prefer that such debt remain in the hands of the ses, whereas the traditional private market serves original lenders in case the covenants must be less well known, medium-sized borrowers that renegotiated. require extensive credit analysis. Before the adop- The greatest potential for the 144A market pertion of Rule 144A, no market was able to accom- haps lies in its use by foreign issuers inasmuch as modate large issuers wishing to avoid public regis- they represent the largest group of borrowers withtration but not requiring extensive credit analysis out any previous satisfactory alternative in the by lenders. These issuers, whether domestic or United States. If foreign issuance expands signififoreign, were left with no choice (in U.S. markets) cantly, then Rule 144A could prove instrumental in but to accept the terms of the private market, which further integrating world capital markets as well as included a relatively large yield premium over pub- in improving the competitive position of U.S. marlic bond rates. kets. Borrowing by large, domestic corporations The 144A market bridges the gap between the with specialized requirements seems to offer much public and traditional private markets and, in this less potential, as such situations are relatively rare sense, is a new bond market. Whether the need for for most large corporations. Nonetheless, some such a market extends much beyond current levels analysts expect that the public and 144A bond of activity is an open question. There is little markets will eventually converge, with yields and prospect that the medium-sized, information- terms being comparable in the two markets. • problematic firms that issue in the traditional mar- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

93 Industrial Production and Capacity Utilization Released for publication December 16 109.7 percent of its 1987 annual average, total industrial production in November was 1.5 percent Industrial production rose 0.4 percent in Novem- above its year-ago level. Total industrial capacity ber; with the increase of 0.5 percent in October, the utilization rose another 0.2 percentage point in rise has more than offset the declines of late sum- November, to 78.9 percent. mer. The most significant increases in the broadly When analyzed by market group, the data show based November advance were in nondurable mate- that the November rise in the output of durable rials and information processing equipment. At consumer goods, led by gains in motor vehicles Industrial production indexes Twelve-month percent change Twelve-month percent change 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 = 100 140 — Manufacturing 140 Capacity ' 120 120 100 100 = - 80 Production — 80 1 1 1 1 1 1 1 1 I 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing 90 90 Utilization Utilization 80 80 70 70 J I I I I 1 1 1 1 i i i i i i i i 1980 1982 1984 1986 1988 1990 1992 1980 1982 1984 1986 1988 1990 1992 All series are seasonally adjusted. Latest series, November. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 Federal Reserve Bulletin • February 1993 Industrial production and capacity utilization Industrial production, index, 1987=100' Percentage change CCaatteeggoorryy 11999922 19922 NNoovv.. 11999911 ttoo Aug/ Sept.r Oct.r NOV.P Aug.r Sept.r Oct.r NOV.P NNoovv.. 11999922 Total 109.1 108.8 109.3 109.7 -.2 -.3 .5 .4 1.5 Previous estimate 109.0 108.7 109.0 -.3 -.2 .3 Major market groups Products, total 109.8 109.3 110.1 110.4 .2 -.4 .7 .3 1.3 Consumer goods 110.8 110.3 111.0 111.3 .4 -.4 .6 .3 1.2 Business equipment 125.9 125.3 126.7 127.4 1.2 -.4 1.1 .6 4.6 Construction supplies 98.5 96.8 97.8 98.4 -.1 -1.8 1.1 .6 2.6 Materials 108.1 108.0 108.1 108.6 -.8 -.1 .1 .5 1.8 Major industry groups Manufacturing 110.1 109.7 110.3 110.8 -.1 -.4 .6 .5 2.0 Durable 109.2 108.2 109.2 109.7 .1 -.9 1.0 .4 1.8 Nondurable 111.3 111.6 111.6 112.2 -.4 .2 .0 .5 2.3 Mining 98.8 98.8 98.9 99.5 -1.7 .0 .1 .6 -.1 Utilities 108.8 109.1 108.6 107.9 -.5 .3 -.5 -.6 -2.8 Capacity utilization, percent MEMO Capacity, percentage 1991 1992 change, Average, Low, High, Nov. 1991 1967-91 1982 1988-89 Nov. Aug. Sept.' Oct.' NOV.P Nov. t o 1 992 Total 82.1 71.8 85.0 79.3 78.8 78.5 78.7 78.9 2.1 Manufacturing 81.4 70.0 85.1 78.2 77.9 77.4 77.7 77.9 2.4 Advanced processing 81.0 71.4 83.6 77.1 76.3 75.9 76.2 76.2 2.9 Primary processing . 82.3 66.8 89.0 80.8 81.7 81.3 81.6 82.4 1.1 Mining 87.4 80.6 87.2 86.8 86.1 86.1 86.2 86.7 .1 Utilities 86.7 76.2 92.3 85.9 83.6 83.8 83.3 82.8 1.0 1. Seasonally adjusted. r Revised, 2. Change from preceding month. p Preliminary. and furniture, was 0.3 percent; the increase in the cent, with notable gains in the output of paper, production of nondurable consumer goods was also textiles, and chemicals. 0.3 percent. The output of business equipment grew When analyzed by industry group, the data 0.6 percent in November. Within business equip- show that output in manufacturing increased ment, the production of information processing 0.5 percent in November; the October growth equipment rose nearly 1 percent, after an increase rate was 0.6 percent. Factory utilization rose of 1.7 percent in October, as the output of comput- 0.2 percentage point in November, to 77.9 percent, ers continued to climb. The manufacture of indus- a level about the same as the levels in the second trial equipment also posted noticeable gains in and third quarters. Gains in operating rates over the November, while the production of defense and past two months have been the strongest in prispace equipment continued to drop. The overall mary processing industries, where utilization has output of transit equipment fell; a continued decline increased more than 1 percentage point since in the production of commercial aircraft and equip- September. Utilization rates for lumber and prodment more than offset increases in the output of ucts, petroleum products, primary metals, rubber vehicles for business use. The production of con- and plastics products, fabricated metal products, struction supplies advanced again, a move partly and primary processing chemicals have all reflecting gains in the output of lumber. Materials increased nearly 1 percentage point or more. In the output grew 0.5 percent in November; the produc- past two months, utilization at advanced processing tion of nondurable goods materials jumped 1.6 per- industries has increased 0.3 percentage point: The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 95 rates for motor vehicles and parts, miscellaneous lishing and in the aerospace industry have fallen manufactures, nonelectrical machinery, furniture sharply. and fixtures, and advanced processing chemicals In November, output at mines, boosted by gains have posted gains of 1 percent or more since Sep- in oil and gas well drilling, rose 0.6 percent. Protember, but utilization rates in printing and pub- duction at utilities declined 0.6 percent. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 Announcements APPOINTMENT OF NEW MEMBERS TO THE Stephen W. Prough, President and CEO, Western THRIFT INSTITUTIONS ADVISORY COUNCIL Financial Savings Bank, Irvine, California. The Federal Reserve Board announced on Decem- The other members of the council are the ber 18, 1992, the names of eight new members of following: its Thrift Institutions Advisory Council (TIAC) and designated a new president of the council for 1993. Thomas J. Hughes, President, Navy Federal The council is an advisory group made up of Credit Union, Merrifield, Virginia twelve representatives from thrift institutions. The Thomas R. Ricketts, Chairman, President, and panel was established by the Board in 1980 and CEO, Standard Federal Bank, Troy, Michigan. includes representatives of savings and loan associations, savings banks, and credit unions. The council meets at least four times each year with the Board of Governors to discuss developments relat- ISSUANCE OF NEW REGULATION F ing to thrift institutions, the housing industry, mortgage finance, and certain regulatory issues. The Federal Reserve Board issued in final form on Daniel C. Arnold, Director of the Farm and December 17, 1992, a new Regulation F (Limita- Home Financial Corporation, Houston, Texas, tions on Interbank Liabilities). The final rule implewill serve as president for 1993, and Beatrice ments the interbank liability provisions under D'Agostino, Chairman, President, and CEO, New section 308 of the Federal Deposit Insurance Cor- Jersey Savings Bank, Somerville, New Jersey, will poration Improvement Act of 1991. serve as vice president. The final rule generally requires banks, savings The eight new members, named for two-year associations, and branches of foreign banks with terms that began January 1, 1993, are the deposits insured by the Federal Deposit Insurance following: Corporation to develop and implement prudential policies and procedures to evaluate and control William A. Cooper, Chairman, and CEO, TCF exposure to their correspondent banks. Bank Savings FSB, Minneapolis, Minnesota The rule also establishes a regulatory limit to Paul L. Eckert, Chairman and President, Citizens require that a bank ordinarily limit its overnight Federal Savings Bank, Davenport, Iowa credit exposure to an individual correspondent that George R. Gligorea, Chairman, President, and is less than "adequately capitalized" to not more CEO, First Federal Savings Bank, Sheridan, than 25 percent of the exposed bank's total capital. Wyoming No express regulatory limits are provided for credit Richard D. Jackson, Vice Chairman and CEO, exposure to correspondents that are at least "ade- Georgia Federal Bank FSB, Atlanta, Georgia quately capitalized," although such exposure is Kerry Killinger, Chairman, President, and subject to prudential policies and procedures. CEO, Washington Mutual Savings Bank, Seattle, The final rule provides for an extended transition Washington for implementation of the rule. The requirements Charles John Koch, President and CEO, Charter for prudential policies and procedures go into effect One Bank FSB, Cleveland, Ohio on June 19, 1993. The regulatory limit on credit Robert McCarter, Chairman and CEO, New exposure to an individual correspondent is phased Bedford Institution for Savings, New Bedford, in, with the limit set at 50 percent of the exposed Massachusetts banks's capital for a one-year period beginning on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

97 June 19, 1994, and reduced to 25 percent as of Development, including U.S. government agency June 19, 1995. securities, provided that the transactions meet spec- Additional information on the final rule, includ- ified criteria. ing a summary of comments, the Regulatory Flexi- The change is consistent with international bank bility Analysis, and the Competitive Impact Analy- capital standards. This rule was effective Decemsis, will be published in the Federal Register. ber 30, 1992. Copies of this material are available on request. AMENDMENT TO RISK-BASED CAPITAL ADOPTION OF FINAL AMENDMENTS AND GUIDELINES FOR STATE MEMBER BANKS GUIDELINES TO REGULATION H AND BANK HOLDING COMPANIES The Federal Reserve Board on December 23,1992, The Federal Reserve Board on December 23, 1992, announced adoption of final amendments and issued an interim rule amending the risk-based guidelines to Regulation H (Membership of State capital guidelines for state member banks and bank Banking Institutions in the Federal Reserve Sysholding companies to lower from 100 percent to tem) to implement uniform real estate lending stan- 50 percent the risk weight on loans to finance the dards as mandated by section 304 of the Federal construction of one-family to four-family resi- Deposit Insurance Corporation Improvement Act dences that have been presold. of 1991. The interim rule amends the Board's Regulation The amendments prescribe standards for exten- H (Membership of State Banking Institutions in the sions of credit secured by liens on real estate or Federal Reserve System) and Regulation Y (Bank made for the purpose of financing permanent Holding Companies and Change in Bank Control) improvements to real estate. and was effective December 29, 1992. The interim The standards were developed in consultation rule will be reviewed by the Board after the with the Office of the Comptroller of the Currency, receipt of public comments. Public comments were the Office of Thrift Supervision, and the Federal requested by January 27, 1993. Deposit Insurance Corporation. The interim rule implements section 618(a) of The uniform regulations become effective the Resolution Trust Corporation Refinancing, March 19, 1993. Restructuring, and Improvement Act of 1991. MODIFICATIONS OF RISK-BASED CAPITAL GUIDELINES ON CERTAIN COLLATERALIZED ISSUANCE OF POLICY STATEMENT ON THE TRANSACTIONS USE OF LARGE-VALUE FUND TRANSFERS FOR MONEY LAUNDERING The Federal Reserve Board on December 23, 1992, announced adoption of modifications to its risk- The Federal Reserve Board issued on Decembased capital guidelines affecting the treatment of ber 23, 1992, a policy statement to address the certain collateralized transactions. problem of the use of large-value fund transfers for The revised guidelines for state member banks money laundering. The statement encourages and bank holding companies lower the risk weight financial institutions to include, when possible, assigned to such transactions to a level more com- complete information on the sender and recipient mensurate with the minimal risks involved. of large payment orders, including those sent The revision lowers the risk weight from 20 per- through Fedwire, CHIPS, and SWIFT. cent to zero for certain transactions that are collat- Board action followed adoption of the statement eralized by cash and central government securities by the Federal Financial Institutions Examination of the Organisation for Economic Co-operation and Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 Federal Reserve Bulletin • February 1993 REPORTING OF DEFERRED TAX ASSETS BY quarter-end report date or 10 percent of tier 1 BANK HOLDING COMPANIES capital, whichever is less. 2. No limit for regulatory capital purposes The Federal Reserve Board announced on Decem- should be placed on deferred tax assets that can be ber 23, 1992, that, for regulatory purposes, bank realized from taxes paid in prior carryback years. holding companies should report deferred tax assets in accordance with Financial Accounting Standards The Board has under review a proposal of its Board Statement no. 109, "Accounting for Income staff to seek public comment on a limitation on Taxes" (FASB 109) beginning in the first quarter deferred tax assets for capital purposes for state of 1993.1 member banks and bank holding companies, as The Board also indicated that the application of recommended by the council. In view of this and FASB 109 will be permitted in regulatory reports the council's action, the Board strongly urges bank of bank holding companies for December 31,1992, holding companies to place the same limitation on subject to the guidance specified below. the amount of deferred tax assets recorded in their The Board intends to issue for public comment regulatory reports filed with the Federal Reserve in the near future proposed amendments to its for the December 31, 1992, reporting date, if they risk-based and leverage capital guidelines for choose the option of adopting FASB 109 for that state member banks and bank holding compa- period. nies that pertain to the treatment of deferred tax assets in computing the capital positions of these institutions. PROPOSED ACTIONS These actions are being taken by the Board to provide for the treatment of net deferred tax assets The Federal Reserve Board issued for public comfor bank holding companies consistent with proviment on December 28, 1992, a proposal to amend sions set forth by the Federal Financial Institutions Regulation C, which carries out the Home Mort- Examination Council for federally supervised gage Disclosure Act, to incorporate new statutory banks and thrift institutions (insured depositories). provisions. Comments on the proposal were On December 8, the council decided that insured requested by January 29, 1993. depositories should begin to follow FASB 109 in The Federal Reserve Board on December 31, 1993. In addition, the council stated that insured 1992, also issued for public comment a proposed depositories could adopt the standard for their amendment to its Regulation K (International December 1992 regulatory reports, subject to the Banking Operations) to implement section 202(a) limitation that the amount reported not exceed of the Foreign Bank Supervision Enhancement Act the limit for net deferred tax assets that it is of 1991. Comments should be received by recommending to the federal banking and thrift March 5, 1993. agencies to incorporate into their regulatory capital standards. The recommendations offered by the council to the agencies are the following: CHANGE IN BOARD STAFF 1. Net deferred tax assets that are dependent on The Board announced on January 4, 1993, the an institution's future taxable income should be appointment of Donald L. Robinson as Assistant limited for regulatory capital purposes to the Inspector General for Investigations in the Office amount that can be realized within one year of a of Inspector General. Mr. Robinson has been with the Federal Reserve's Office of Inspector General since 1987. He has had twenty years of experience as a trained 1. Deferred tax assets generally arise from temporary differ- criminal investigator and manager of investigative ences, that is, items that are reported differently for tax and finanfunctions. He holds a B.S. from the American cial statement purposes. A typical temporary difference arises from the treatment of loan losses. University and is a certified fraud examiner. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 99 PUBLICATION OF THE REVISED BANK from the Federal Deposit Insurance Corporation HOLDING COMPANY SUPERVISION MANUAL Improvement Act of 1991 and discussions of such new topics as environmental liability, options and A revised edition of the Bank Holding Company other derivative financial contracts, and the sale of Supervision Manual has been published by the uninsured annuities. Also included are interpreta- Board and is now available for purchase by the tions of and changes made to the risk-based capital public. The Manual has been prepared for use by guidelines, credit-supported and asset-backed com- Federal Reserve examiners in the supervision, reg- mercial paper, real estate appraisal and evaluation ulation, and inspection of bank holding companies programs, higher residual value leasing, fulland their subsidiaries. Copies are available to the service securities brokerage, and expanded finanpublic at a price of $50.00 each from Publications cial advisory nonbanking activities approved in Services, mail stop 138, Board of Governors of the 1992. Provided with the Manual is a detailed Federal Reserve System, Washington, DC 20551. description of these and other changes made to the This fee is applicable to both new and existing content and structure of it since the previous subscribers. There will be a separate charge for update. The Manual has also been reorganized and future updates. reduced to a six-by-nine-inch page format for ease The revised edition includes updates through of handling. It has been updated at various times December 1992. Included are changes resulting since its original publication in 1980. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

100 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON NOVEMBER 17, 1992 on a downward trend in October. Utilization of industrial capacity edged higher in October but was 1. Domestic Policy Directive still near its 1991 low. Retail sales increased appreciably in September The information reviewed at this meeting sug- and October, led by a substantial rise in sales at gested that economic activity had been expanding automotive dealers. Sales at general merchandisers, at a moderate pace. Consumer spending had picked apparel outlets, furniture and appliance stores, and up somewhat, business purchases of capital equip- building materials and supplies centers also were ment continued to rise at a brisk pace, and housing up noticeably over the two months. Housing starts demand had increased moderately since midyear. rose significantly in August and then edged up At the same time, part of these demands were being further in September to their highest level since met through higher imports, and recent gains in March. Sales of new homes had increased on balindustrial production and employment had been ance over recent months, and the inventory of new limited. Incoming data on wages and prices had homes for sale in September had reached its lowest been mixed but suggested on balance a continuing level since 1983. trend toward lower inflation. Real outlays for producers' durable equipment Total nonfarm payroll employment rose slightly posted another strong increase in the third quarter. in October after declining in August and Septem- A sharp advance in outlays for computing equipber. Substantial job gains were recorded in the ment outweighed a dropoff in aircraft purchases services industries, especially in health services from an unsustainably high level in the second and the cyclically sensitive business services, and quarter. Purchases of items other than aircraft and employment in construction rebounded from a Sep- computing equipment rose at a rapid rate in the tember decline. In manufacturing, the number of third quarter, and recent data on orders for such jobs declined further in October, although total goods pointed to additional growth in the near hours worked were unchanged as the drop in em- term. Expenditures for nonresidential construction, ployment was offset by an increase in overtime. which had fluctuated within a narrow range earlier Government employment continued to contract, in the year, dropped sharply in the third quarter. reflecting the end of a federally funded summer Office construction registered the largest decline, jobs program and early retirements by postal work- but other commercial and industrial building also ers. Initial claims fell somewhat during October, fell considerably. and the civilian unemployment rate edged down to Business inventories rose only slightly in Sep- 7.4 percent. tember, but over the third quarter as a whole stocks Industrial production rose somewhat further in grew at the same rate as in the second quarter. In October following a modest increase in the third manufacturing, stocks were drawn down in Sepquarter. Much of the October gain reflected a sharp tember, retracing a sizable portion of the runup that rise in light truck assemblies, but there was another had occurred in August. In most manufacturing sizable advance in the manufacture of office and industries, inventory-to-shipments ratios in Sepcomputing equipment. Elsewhere, the production tember were at or near the bottom of their recent of consumer goods other than motor vehicles and ranges. Wholesale inventories rose modestly in the parts had changed little in recent months, and the third quarter, and the stocks-to-sales ratio in Sepoutput of defense and space equipment remained tember was at the low end of the range posted over Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

101 the past year. At the retail level, inventories consideration to economic, financial, and monetary rebounded in September from an August decline, developments, slightly greater reserve restraint leaving the inventory-to-sales ratio for the retail might be acceptable or slightly lesser reserve sector unchanged from the second quarter. restraint would be acceptable during the intermeet- The nominal U.S. merchandise trade deficit wid- ing period. The contemplated reserve conditions ened sharply in August; for July and August com- were expected to be consistent with growth in M2 bined, the deficit was somewhat larger than its and M3 at annual rates of about 2 percent and average rate in the second quarter. The value of 1 percent respectively over the three-month period exports was little changed from the second quarter, from September through December. but the value of imports increased appreciably. Open market operations during the intermeeting Most of the increase in imports was in capital period were directed toward maintaining the existgoods, especially computers, and consumer goods. ing degree of pressure on reserve positions. The Recent indicators suggested that economic activity emergence of more favorable indications regarding in the major foreign industrial countries had the performance of the economy and the continued remained sluggish in the third quarter. A recovery more rapid expansion of money and credit were seemed to have gotten under way in Canada, but seen as obviating the need to implement an easing the economies of most European countries and in reserve conditions that had been contemplated as Japan evidenced little if any forward impetus, and a strong possibility under the directive issued at the downturn that began in western Germany in the the October 6 meeting. Several small technical second quarter appeared to have persisted into the decreases were made during the intermeeting third quarter. period to expected levels of adjustment plus sea- Producer prices of finished goods edged up in sonal borrowing to reflect the usual pattern of October, reflecting a slight increase in food prices diminishing needs for seasonal credit. Actual borand a further sharp advance in prices of energy rowing averaged close to expected levels over the products. Excluding the finished food and energy three reserve maintenance periods completed since components, producer prices declined slightly, and the October meeting. Early in the intermeeting for the twelve-month period ended in October, this period, the federal funds rate exhibited some of the measure of prices increased considerably less than firmness that had prevailed over most of the previit had in the comparable year-earlier period. At the ous period, but subsequently it averaged close to consumer level, prices of nonfood, non-energy expected levels. goods and services advanced more rapidly in Octo- Most other interest rates increased appreciably ber than in other any month since March. Over the over the intermeeting period. At the beginning of twelve months ended in October, however, the rise the period, rates generally incorporated an expected in this index of consumer prices was considerably near-term easing of monetary policy. Subsequently, smaller than that recorded in the year-earlier when an easing move was not forthcoming and period. Increases in labor costs, measured by the when concerns about fiscal stimulus increased amid total hourly compensation of private industry work- some signs of firmer economic activity and increasers, slowed further in the third quarter, and both the ing money and credit demands, market interest wage and benefits components of this index had rates rose for all maturities. The largest increases increased substantially less over the four quarters were in intermediate maturities, which were espethat ended in September than in the preceding four cially affected by expectations of additional federal quarters. borrowing and of a stronger economy that would At its meeting on October 6, the Committee stimulate rising private credit demands over the adopted a directive that called for maintaining the next few years. Expectations of firmer economic existing degree of pressure on reserve positions and growth also boosted stock prices appreciably over that included a marked bias toward possible easing the period. during the intermeeting period. Accordingly, the With interest rates rising in the United States and directive indicated that in the context of the Com- falling abroad, the trade-weighted value of the mittee's long-run objectives for price stability and dollar in terms of the other G-10 currencies rose sustainable economic growth, and giving careful very substantially over the intermeeting period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 Federal Reserve Bulletin • February 1993 Declines in interest rates in foreign countries were forecast horizon was expected to be associated with widespread, reflecting signs of greater economic additional progress in reducing inflation. weakness as well as actual or prospective easing in In the Committee's discussion of current and monetary policies abroad. The dollar was particu- prospective economic developments, the members larly robust against European currencies but indicated that they were encouraged by the someadvanced only moderately against the yen. what more positive tone in the latest economic M2 growth strengthened somewhat in October reports and by the signs of improving business and from its pace in the two previous months. The consumer confidence. The expansion appeared to acceleration of M2 growth reflected more rapid have gathered somewhat more upward momentum expansion of its transaction components that than many had anticipated earlier, though a number appeared to be associated in part with the lagged of members commented that relatively slow ecoeffect of earlier declines in market interest rates nomic growth was likely to persist over the nearer and opportunity costs and the heavy pace of mort- term. The outlook beyond the next quarter or two gage refinancing activity. M3 grew more slowly in was subject to considerable uncertainty and indeed October partly owing to reduced needs for man- to both upside and downside risks. The advent of a aged liabilities in conjunction with somewhat new Administration and a new Congress early next weaker expansion in bank credit. Through October, year made fiscal policy especially hard to predict. both broad aggregates were estimated to have Members observed that indications of some grown at rates a little below the lower ends of the improvement in overall domestic demands, should ranges established for the year by the Committee. they persist, might well generate considerable The staff projection prepared for this meeting strengthening in production activity as businesses suggested a continuing expansion in economic attempted to maintain or build up their currently activity. Growth was expected to pick up gradually lean inventories. On the other hand, the recent over 1993 to a rate that, although quite moderate by appreciation of the dollar and the signs of growing past cyclical standards, would be sufficient to weakness in major foreign economies could have reduce the margins of unemployed labor and capi- adverse implications for demands for goods protal resources. The recent backup in long-term duced in the United States. On balance, moderate interest rates and the appreciation of the dollar but sustained growth in overall economic activity in foreign exchange markets would exert some was seen as a likely prospect, though the gains restraining influence over the next several quarters. probably would be uneven both in terms of their Continuing cautiousness on the part of consumers timing and the sectors of the economy that would facing uncertain job and income prospects would be affected. Against this background, the members tend to hold down gains in consumption for some generally continued to view further progress toward period ahead. But, as further progress was made in price stability as a reasonable expectation and an improving household balance sheets and employ- important element in enabling the expansion to be ment growth gradually resumed, consumer spend- sustained. ing would strengthen. Additional gains in outlays In their review of developments in key sectors of for business equipment were expected over coming the economy, the members generally agreed that quarters as firms sought to meet increasing demand while the evidence of a strengthening business for goods and to respond to competitive pressures expansion was still quite limited and much of it by modernizing product lines and achieving labor- was still anecdotal, there were growing indications cost savings. The projection pointed to sluggish of improving business and consumer confidence. export demand in light of sustained economic Some members cautioned that changing attitudes weakness abroad. While recognizing the possibility alone could not be relied on as harbingers of a of a stimulative fiscal initiative in 1993, the staff more satisfactory economic performance, as experetained for this forecast the assumption employed rience in recent years made clear, but the improved in several previous forecasts that fiscal policy financial condition of many business firms, housewould remain mildly restrictive owing in large part holds, and lending institutions provided a further to a substantial decline in defense spending. The basis for optimism. A good deal of progress already persisting slack in resource utilization over the had been made toward reducing debt burdens, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 103 the retarding effects of balance sheet adjustments likely as major projects were completed. However, on current spending seemed likely to lessen over nonresidential construction was being maintained the forecast horizon. Moreover, despite many lin- or even trending higher in a few areas and appeared gering problems, the general health of the banking to have bottomed out in others. The rise in natural industry had improved markedly and there were gas prices had spurred drilling activity in recent spreading reports of greater efforts by banks to find months, but some members commented that the creditworthy borrowers. At the same time, the outlook for significant further gains in that industry members saw signs that demands for bank loans was not promising. might be picking up a bit from very depressed Many of the members stressed that the external levels. sector constituted a major source of downside risk The latest data on retail sales and anecdotal for the economy. The economic prospects for major reports from many parts of the country suggested foreign economies appeared to have deteriorated some improvement in consumer spending. There recently, and given the appreciation of the dollar, were widespread reports of increasing optimism net exports might well worsen further over the next among retailers regarding the outlook for sales several quarters. The possible failure of ongoing during the holiday season. Sales of automobiles trade negotiations would further dampen the outand trucks appeared to be rising. The members look for U.S. trade. For the present, anecdotal nonetheless generally continued to view the out- reports from around the country on export sales look for consumer spending with considerable were mixed, with such sales still well maintained in caution. Consumers remained concerned about job some industries and areas but slowing in others. prospects against the background of continuing The outlook for fiscal policy constituted a major downsizing and restructuring activities by many source of uncertainty; while the enactment of some business firms. Ongoing efforts to reduce debt bur- fiscal policy measures now appeared to be increasdens also seemed to be exerting a retarding effect ingly likely, there was no reliable way to predict on consumer spending. Against this background, their overall size, specific provisions, or the timing the upturn in consumer confidence indicated by a of their effects. For now, the downtrend in federal recent survey could prove to be relatively fragile government purchases of goods and services conand short-lived. On balance, a strengthening trend stituted a sizable negative in the forecast of aggrein consumer spending, though to a relatively mod- gate demands. In particular, the cutbacks in defense erate pace by past business recovery standards, was expenditures were having a major effect on local still expected to provide major support for a sus- economies in several parts of the country. Any new tained economic expansion. fiscal initiatives might well contain some stimula- Since the stimulus from the consumer sector tive elements designed to provide a boost to a coincided with relatively lean inventories, its relatively slow economic expansion. However, the effects might well be reinforced for a time by delays usually encountered in enacting such legislabusiness efforts to build their inventories. Business tion together with the subsequent lags before much spending for equipment also appeared likely to of the effects were felt in the economy implied remain fairly robust, given a moderate expansion in continued fiscal drag during the quarters immedisales and the improving financial condition of ately ahead; moreover, the propensity for financial many businesses. The housing sector was viewed markets to raise interest rates in anticipation of as another potential, though limited, source of stim- fiscal policy stimulus might also damp spending ulus over the forecast horizon. There were reports for some period. Some members saw a risk that of improving home sales and home construction much of the fiscal stimulus would be felt at a time activity in many parts of the country, including when economic activity might already be gaining some otherwise depressed areas, and many busi- considerable momentum. ness contacts also were seeing better demand for Turning to the outlook for inflation, members construction materials and home furnishings. On commented that despite a disappointing report on the negative side, nonresidential construction consumer prices for October, the disinflationary remained weak across much of the nation, and trend still appeared to be well established. In the further reductions in construction activity were view of most members, the outlook for relatively Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 Federal Reserve Bulletin • February 1993 subdued pressures on resources over the forecast Some noted that a lower range also would be seen horizon together with the slow growth over an as underscoring the desire of the Committee to extended period in broad measures of money avoid any pickup in inflation should the expansion augured well for further progress toward price sta- gain momentum and indeed as promoting further bility. Members were continuing to observe strong progress toward price stability, thereby establishing competitive pressures in local markets, and busi- a sounder basis for sustained growth in the econness contacts were still emphasizing the stout resis- omy at its highest potential. The ranges would tance that they encountered when they tried to raise be voted on in February before their scheduled prices to widen profit margins or to pass along announcement to the Congress, and by that time rising costs. Most businessmen currently saw and more information would be available to gauge the anticipated little or no inflation in their own indus- prospective behavior of M2 during 1993. tries. Consumers also remained highly price con- In the Committee's discussion of policy for the scious. At the same time, however, there seemed to intermeeting period ahead, a majority of the be a widespread view in the business community members indicated a preference for maintaining and among consumers that at some point the rate of unchanged conditions in reserve markets, but sevinflation was likely to rise appreciably from its eral others believed that some easing would be a recent level, and such expectations tended to have more appropriate policy. Members who supported adverse repercussions in long-term debt markets a steady policy course emphasized the growing and to create tensions in wage negotiations and if still tentative indications of a strengthening other price-setting activities. Members noted that economy—including the pickup in money and current inflationary expectations had been built up credit growth—and the apparent upturn in business over a period of many years and an extended and consumer confidence. Some also cited the period of reduced inflation probably would be increased prospects of fiscal policy measures that required before they disappeared. were likely to provide some net stimulus to the At this meeting, the Committee had a prelimi- economy over the intermediate term. Members who nary discussion of the ranges for monetary growth preferred to ease monetary policy at this time in 1993 that it had established on a tentative basis referred to what they viewed as an unsatisfactory at the meeting on June 30-July 1,1992. The ranges outlook for economic activity, and some stressed in question had been set at 2Vi to 6Vi percent for the desirability of taking prompt action to promote M2 and 1 to 5 percent for M3 and were unchanged sustained growth in the broader monetary aggrefrom those adopted for 1992. While there had been gates within the Committee's ranges. Members considerable sentiment at midyear in favor of low- who favored an immediate easing also endorsed ering the ranges, a majority of the members had coupling such a policy move with a reduction at concluded then that uncertainties about the pro- this time in the tentative M2 range for 1993 in spective relationship between the monetary aggre- order to emphasize the Committee's commitment gates and nominal spending argued for caution in to noninflationary economic growth. making any changes. The information since mid- In the course of the discussion, the members year had confirmed the persistence of sizable took account of a staff analysis that suggested some increases in the velocity of M2 and M3. A recent moderation in the growth of M2 over the remainder staff study had provided some reasons for this of the year, assuming unchanged conditions in unusual behavior, and staff analysis pointed to a reserve markets. While M2 growth on a quarterly strong probability that velocity would rise again average basis was expected to be stronger in the next year. current quarter than in the previous two quarters, During the discussion, the members generally expansion for the year as a whole was still proagreed that developments since mid-1992 had rein- jected to fall a little below the Committee's annual forced the case for some reduction in the 1993 range. Some members commented that an imporrange for M2, and they indicated that they probably tant policy objective would be to prevent M2 would support proposals for a lower range. Such a growth from faltering—such a development might reduction would be a technical adjustment intended parallel a similar pause in the economy—as it had to take account of the atypical strength in velocity. earlier in the current expansion. On the other hand, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the Federal Open Market Committee 105 some members noted the persisting increases in M2 increase in reserve availability to strengthen the velocity. They remarked that the level of short-term growth of M2. Accordingly, in the context of the interest rates together with the very rapid expan- Committee's long-run objectives for price stability sion in Ml and reserves pointed to an adequate and sustainable economic growth, and giving careavailability of liquidity in the economy and thus ful consideration to economic, financial, and monesuggested that current monetary policy already was tary developments, the Committee decided that appropriately stimulative and properly positioned slightly greater monetary restraint might be acceptto support the projected strengthening in economic able or slightly lesser monetary restraint would be activity. Indeed, in one view, continued rapid acceptable during the intermeeting period. The expansion in the narrrow measures of money and reserve conditions contemplated at this meeting reserves, if allowed to continue, would be a matter were expected to be consistent with growth in M2 of increasing concern with respect to the longer-run and M3 at annual rates of about V/2 and 1 percent implications for inflation. respectively over the three-month period from Sep- In the Committee's discussion of possible adjust- tember through December. ments to policy during the intermeeting period, At the conclusion of the meeting, the following many of the members expressed a preference for a domestic policy directive was issued to the Federal directive that did not bias potential adjustments in Reserve Bank of New York: either direction. In this view, the expansion was on a reasonably solid footing, the risks to the expan- The information reviewed at this meeting suggests sion were now fairly evenly balanced, and a steady that economic activity has been expanding at a moderate policy course should be maintained in the absence pace. Total nonfarm payroll employment was up slightly in October after declining in the previous two months, of unanticipated developments with significant and the civilian unemployment rate edged down to implications for the economic outlook. Other mem- 7.4 percent. Industrial production rose somewhat in bers, while encouraged by recent economic devel- October. Retail sales increased considerably in Septemopments, wanted to bias the directive toward ease, ber and October. There was some strengthening in resithough without the strong presumption of some dential construction activity over the summer months. Outlays for business equipment have continued to potential easing that had been associated with the increase, and recent data on orders for nondefense capiprevious directive. They observed that the econtal goods point to further growth in the near term; omy was still expanding at a relatively subdued expenditures for nonresidential construction have pace, inflation was on a downward track, and given remained weak. The nominal U.S. merchandise trade the earlier tendency for the recovery to weaken, deficit widened somewhat in July-August from its average rate in the second quarter. Recent data on wages and they believed that the Committee should react relaprices have been mixed but suggest on balance a contively promptly to indications, including any downtinuing trend toward lower inflation. turn in money growth, that the economy might Most interest rates have increased appreciably since again be falling short of a moderate growth path. the Committee meeting on October 6. In foreign Most of the members who preferred to ease imme- exchange markets, the trade-weighted value of the dollar diately indicated that they could accept an in terms of the other G-10 currencies rose very substantially over the intermeeting period. unchanged directive that was biased toward ease, M2 has expanded at a moderate pace since midsumand such a directive also was acceptable to many mer, with all of its growth stemming from its Ml compomembers who favored a symmetrical directive. nent, while M3 grew slowly. Through October, both At the conclusion of the Committee's discussion, aggregates were estimated to have grown at rates a little below the lower ends of the ranges established by the all but three of the members indicated their accep- Committee for the year. tance of a directive that called for maintaining the The Federal Open Market Committee seeks monetary existing degree of pressure on reserve positions and and financial conditions that will foster price stability that would include some bias toward possible eas- and promote sustainable growth in output. In furtherance ing during the intermeeting period. Two of the of these objectives, the Committee at its meeting on June 30-July 1 reaffirmed the ranges it had established members expressed a strong preference for a symin February for growth of M2 and M3 of 2Vi to 6V2 permetric directive with regard to possible intermeetcent and 1 to 5 percent respectively, measured from the ing policy adjustments, while another was firmly fourth quarter of 1991 to the fourth quarter of 1992. The persuaded of the desirability of an immediate Committee anticipated that developments contributing to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 Federal Reserve Bulletin • February 1993 unusual velocity increases could persist in the second time was needed to evaluate the effects of prior half of the year. The monitoring range for growth of total monetary policy actions, and they were concerned domestic nonfinancial debt also was maintained at AVi to that the adoption of a more stimulative policy over 8V2 percent for the year. For 1993, the Committee on a the near term might well establish a basis for tentative basis set the same ranges as in 1992 for growth of the monetary aggregates and debt, measured from the greater inflation later. Mr. Melzer was concerned fourth quarter of 1992 to the fourth quarter of 1993. The that rapid growth in total bank reserves, the monebehavior of the monetary aggregates will continue to be tary base, and Ml over the past two years might evaluated in the light of progress toward price level already have laid a foundation for accelerating stability, movements in their velocities, and developnominal GDP growth and a reversal of the disinflaments in the economy and financial markets. In the implementation of policy for the immediate tionary trend. In addition, he noted that policy future, the Committee seeks to maintain the existing errors can easily be made at this stage of the degree of pressure on reserve positions. In the context of business cycle. In an economic expansion, efforts the Committee's long-run objectives for price stability to resist increases in the federal funds rate through and sustainable economic growth, and giving careful large reserve injections eventually lead to higher consideration to economic, financial, and monetary developments, slightly greater reserve restraint might or inflation and higher nominal interest rates. slightly lesser reserve restraint would be acceptable in the intermeeting period. The contemplated reserve conditions are expected to be consistent with growth of M2 and M3 over the period from September through 2. Authorization for Domestic December at annual rates of about 3Vi and 1 percent, Open Market Operations respectively. The Committee approved a temporary increase of Votes for this action: Messrs. Greenspan, Corrigan, Angell, Hoenig, Kelley, Lindsey, Mullins, Ms. Phil- $3 billion, to a level of $11 billion, in the limit on lips, and Mr. Syron. Votes against this action: Messrs. changes between Committee meetings in System Jordan, LaWare, and Melzer. Account holdings of U.S. government and federal agency securities. The increase amended para- Mr. Jordan dissented because he preferred taking graph 1(a) of the Authorization for Domestic Open immediate action to increase the availability of Market Operations and was effective for the interbank reserves sufficiently to raise M2 growth to a meeting period ending with the close of business pace more consistent with the Committee's annual on December 22, 1992. range. Because desirable M2 expansion in line with the Committee's objectives would be likely to fall Votes for this action: Messrs. Greenspan, Corrigan, within a lower range next year, he would announce Angell, Hoenig, Jordan, Kelley, LaWare, Lindsey, concurrently a reduction in the 1993 range to make Melzer, Mullins, Ms. Phillips, and Mr. Syron. Votes clear that near-term action to increase M2 expan- against this action: None. sion was not an abandonment of the long-term objective of noninflationary monetary growth. The Manager of the System Open Market Messrs. LaWare and Melzer dissented because Account advised the Committee that the current they did not want to bias the directive toward leeway of $8 billion for changes in System Account possible easing during the intermeeting period. In holdings might not be sufficient to accommodate their view, recent developments pointed to a the potentially large need to add reserves over the strengthening economy, and they favored a steady intermeeting period ahead to meet an anticipated policy that was not predisposed to react to near- seasonal bulge in the demand for currency and term weakness in economic or monetary data. More required reserves. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

107 Legal Developments FINAL RULE—REGULATION F Part 206—Limitations on Interbank Liabilities The Board of Governors is publishing a new 12 C.F.R. Section 206.1—Authority, purpose, and scope. Part 206, its Regulation F (Interbank Liabilities). The Section 206.2—Definitions. final rule implements section 308 of the Federal De- Section 206.3—Prudential standards. posit Insurance Corporation Improvement Act of 1991 Section 206.4—Credit exposure. (FDICIA), which requires the Board to prescribe Section 206.5—Capital levels of correspondents. standards to limit the risks posed by exposure of Section 206.6—Waiver. insured depository institutions to other depository Section 206.7—Transition provisions. institutions. The final rule applies to banks, savings associations, and branches of foreign banks with de- Authority: Section 308 of Pub. L. 102-242, 105 Stat. posits insured by the Federal Deposit Insurance Cor- 2236, 12 U.S.C. 371b-2. poration (FDIC). The final rule generally requires insured banks, Section 206.1—Authority, purpose, and scope. savings associations, and branches of foreign banks, referred to collectively as "banks," to develop and (a) Authority and purpose. This part (Regulation F, implement internal prudential policies and procedures 12 C.F.R. Part 206) is issued by the Board of Goverto evaluate and control exposure to the depository nors of the Federal Reserve System (Board) to impleinstitutions with which they do business, referred to as ment section 308 of the Federal Deposit Insurance "correspondents.'' Corporation Improvements Act of 1991 (Act), The rule also establishes a general "limit" stated in 12 U.S.C. 371b-2. The purpose of this part is to limit terms of the exposed bank's capital, for overnight the risks that the failure of a depository institution "credit exposure" to an individual correspondent, as would pose to insured depository institutions. defined in the rule. Under the rule, a bank ordinarily (b) Scope. This part applies to all depository institushould limit its credit exposure to an individual corretions insured by the Federal Deposit Insurance Corspondent to an amount equal to not more than poration. 25 percent of the exposed bank's total capital, unless the bank can demonstrate that its correspondent is at Section 206.2—Definitions. least "adequately capitalized." No limit is specified by the rule for credit exposure to correspondents that are at least "adequately capitalized," but a bank is re- As used in this part, unless the context requires quired to establish and follow its own internal policies otherwise: and procedures with regard to exposure to all corre- (a) Bank means an insured depository institution, as spondents, regardless of capital level. defined in section 3 of the Federal Deposit Insurance The final rule provides for a thirty-month transition Act (12 U.S.C. 1813), and includes an insured national period after the effective date for full implementation bank, state bank, District bank, or savings association, of the rule. Banks must have in place the internal and an insured branch of a foreign bank. policies and procedures required by the rule on (b) Commonly-controlled correspondent means a cor- June 19, 1993. The regulatory limit on credit expo- respondent that is commonly controlled with the bank sure to correspondents that a bank cannot demon- and for which the bank is subject to liability under strate are at least "adequately capitalized" will be section 5(e) of the Federal Deposit Insurance Act. A phased in, with the limit set at 50 percent of the correspondent is considered to be commonly conexposed bank's capital for a one-year period begin- trolled with the bank if: ning on June 19, 1994, and reduced to 25 percent as (1) 25 percent or more of any class of voting secuof June 19, 1995. rities of the bank and the correspondent are owned, Effective December 19, 1992, 12 C.F.R. Part 206 is directly or indirectly, by the same depository instiadded to read as follows: tution or company; or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 Federal Reserve Bulletin • February 1993 (2) Either the bank or the correspondent owns 25 (2) Where exposure to a correspondent is signifipercent or more of any class of voting securities of cant, the policies and procedures shall require perithe other. odic reviews of the financial condition of the corre- (c) Correspondent means a U.S. depository institution spondent and shall take into account any or a foreign bank, as defined in this part, to which a deterioration in the correspondent's financial condibank has exposure, but does not include a commonly tion. Factors bearing on the financial condition of controlled correspondent. the correspondent include the capital level of the (d) Exposure means the potential that an obligation correspondent, level of nonaccrual and past due will not be paid in a timely manner or in full. "Expo- loans and leases, level of earnings, and other factors sure" includes credit and liquidity risks, including affecting the financial condition of the corresponoperational risks, related to intraday and interday dent. Where public information on the financial transactions. condition of the correspondent is available, a bank (e) Foreign bank means an institution that: may base its review of the financial condition of a (1) Is organized under the laws of a country other correspondent on such information, and is not rethan the United States; quired to obtain non-public information for its re- (2) Engages in the business of banking; view. However, for those foreign banks for which (3) Is recognized as a bank by the bank supervisory there is no public source of financial information, a or monetary authorities of the country of the bank's bank will be required to obtain non-public informaorganization; tion for its review. (4) Receives deposits to a substantial extent in the (3) A bank may rely on another party, such as a bank regular course of business; and rating agency or the bank's holding company, to (5) Has the power to accept demand deposits. assess the financial condition of or select a corre- (f) Primary federal supervisor has the same meaning as spondent, provided that the bank's board of directhe term "appropriate Federal banking agency" in tors has reviewed and approved the general assesssection 3(q) of the Federal Deposit Insurance Act ment or selection criteria used by that party. (12 U.S.C. 1813(q)). (c) Internal limits on exposure. (g) Total capital means the total of a bank's Tier 1 and (1) Where the financial condition of the correspon- Tier 2 capital under the risk-based capital guidelines dent and the form or maturity of the exposure create provided by the bank's primary federal supervisor. a significant risk that payments will not be made in For an insured branch of a foreign bank organized full or in a timely manner, a bank's policies and under the laws of a country that subscribes to the procedures shall limit the bank's exposure to the principles of the Basle Capital Accord, "total capital" correspondent, either by the establishment of intermeans total Tier 1 and Tier 2 capital as calculated nal limits or by other means. Limits shall be consisunder the standards of that country. For an insured tent with the risk undertaken, considering the finanbranch of a foreign bank organized under the laws of a cial condition and the form and maturity of exposure country that does not subscribe to the principles of to the correspondent. Limits may be fixed as to the Basle Capital Accord, "total capital" means total amount or flexible, based on such factors as the Tier 1 and Tier 2 capital as calculated under the monitoring of exposure and the financial condition provisions of the Accord. of the correspondent. Different limits may be set for (h) U.S. depository institution means a bank, as de- different forms of exposure, different products, and fined in section 206.2(a) of this part, other than an different maturities. insured branch of a foreign bank. (2) A bank shall structure transactions with a correspondent or monitor exposure to a correspondent, directly or through another party, to ensure that its Section 206.3—Prudential standards. exposure ordinarily does not exceed the bank's internal limits, including limits established for credit (a) General. A bank shall establish and maintain writ- exposure, except for occasional excesses resulting ten policies and procedures to prevent excessive ex- from unusual market disturbances, market moveposure to any individual correspondent in relation to ments favorable to the bank, increases in activity, the condition of the correspondent. operational problems, or other unusual circum- (b) Standards for selecting correspondents. stances. Generally, monitoring may be done on a (1) A bank shall establish policies and procedures retrospective basis. The level of monitoring required that take into account credit and liquidity risks, depends on: including operational risks, in selecting correspon- (i) The extent to which exposure approaches the dents and terminating those relationships. bank's internal limits; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 109 (ii) The volatility of the exposure; and able collateral, as defined in paragraph (f) of this (iii) The financial condition of the correspondent. section, based on the current market value of the (3) A bank shall establish appropriate procedures to collateral; address excesses over its internal limits. (2) The proceeds of checks and other cash items (d) Review by board of directors. The policies and deposited in an account at a correspondent that are procedures established under this section shall be not yet available for withdrawal; reviewed and approved by the bank's board of direc- (3) Quality assets, as defined in paragraph (f) of this tors at least annually. section, on which the correspondent is secondarily liable, or obligations of the correspondent on which Section 206.4—Credit exposure. a creditworthy obligor in addition to the correspondent is available, including but not limited to: (a) Limits on credit exposure. (i) Loans to third parties secured by stock or debt (1) The policies and procedures on exposure estab- obligations of the correspondent; lished by a bank under section 206.3(c) of this part (ii) Loans to third parties purchased from the shall limit a bank's interday credit exposure to an correspondent with recourse; individual correspondent to not more than 25 per- (iii) Loans or obligations of third parties backed cent of the bank's total capital, unless the bank can by stand-by letters of credit issued by the corredemonstrate that its correspondent is at least ade- spondent; or quately capitalized, as defined in section 206.5(a) of (iv) Obligations of the correspondent backed by this part. stand-by letters of credit issued by a creditworthy (2) Where a bank is no longer able to demonstrate third party ; that a correspondent is at least adequately capital- (4) Exposure that results from the merger with or ized for the purposes of section 206.4(a) of this part, acquisition of another bank for one year after that including where the bank cannot obtain adequate merger or acquisition is consummated; and information concerning the capital ratios of the (5) The portion of the bank's exposure to the correcorrespondent, the bank shall reduce its credit ex- spondent that is covered by federal deposit insurposure to comply with the requirements of section ance. 206.4(a)(1) of this part within 120 days after the date (e) Credit exposure of subsidiaries. In calculating when the current Report of Condition and Income or credit exposure to a correspondent under this part, a other relevant report normally would be available. bank shall include credit exposure to the correspon- (b) Calculation of credit exposure. Except as provided dent of any entity that the bank is required to consolin sections 206.4(c) and (d) of this part, the credit idate on its Report of Condition and Income or Thrift exposure of a bank to a correspondent shall consist of Financial Report. the bank's assets and off-balance sheet items that are (f) Definitions. As used in this section: subject to capital requirements under the capital ade- (1) Government securities means obligations of, or quacy guidelines of the bank's primary federal super- obligations fully guaranteed as to principal and visor, and that involve claims on the correspondent or interest by, the United States government or any capital instruments issued by the correspondent. For department, agency, bureau, board, commission, or this purpose, off-balance sheet items shall be valued establishment of the United States, or any corporaon the basis of current exposure. The term "credit tion wholly owned, directly or indirectly, by the exposure" does not include exposure related to the United States. settlement of transactions, intraday exposure, trans- (2) Readily marketable collateral means financial actions in an agency or similar capacity where losses instruments or bullion that may be sold in ordinary will be passed back to the principal or other party, or circumstances with reasonable promptness at a fair other sources of exposure that are not covered by the market value determined by quotations based on capital adequacy guidelines. actual transactions on an auction or a similarly (c) Netting. Transactions covered by netting agree- available daily bid- and ask-price market. ments that are valid and enforceable under all appli- (3) (i) Quality asset means an asset: cable laws may be netted in calculating credit expo- (A) That is not in a nonaccrual status; sure. (B) On which principal or interest is not more (d) Exclusions. A bank may exclude the following from than thirty days past due; and the calculation of credit exposure to a correspondent: (C) Whose terms have not been renegotiated or (1) Transactions, including reverse repurchase compromised due to the deteriorating financial agreements, to the extent that the transactions are condition of the additional obligor. secured by government securities or readily market- (ii) An asset is not considered a "quality asset" if Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 Federal Reserve Bulletin • February 1993 any other loans to the primary obligor on the asset (2) Tier 1 risk-based capital ratio means the ratio of have been classified as "substandard," "doubt- Tier 1 capital to weighted risk assets. ful," or "loss," or treated as "other loans spe- (3) Leverage ratio means the ratio of Tier 1 capital to cially mentioned" in the most recent report of average total consolidated assets, as calculated in examination or inspection of the bank or an accordance with the capital adequacy guidelines of affiliate prepared by either a federal or a state the correspondent's primary federal supervisor. supervisory agency. (f) Calculation of capital ratios. (1) For a correspondent that is a U.S. depository Section 206.5—Capital levels of institution, the ratios shall be calculated in accorcorrespondents. dance with the capital adequacy guidelines of the correspondent's primary Federal supervisor. (a) Adequately capitalized correspondents.l For the (2) For a correspondent that is a foreign bank purpose of this part, a correspondent is considered organized in a country that has adopted the riskadequately capitalized if the correspondent has: based framework of the Basle Capital Accord, the (1) A total risk-based capital ratio, as defined in ratios shall be calculated in accordance with the paragraph (e)(1) of this section, of 8.0 percent or capital adequacy guidelines of the appropriate sugreater; pervisory authority of the country in which the (2) A Tier 1 risk-based capital ratio, as defined in correspondent is chartered. paragraph (e)(2) of this section, of 4.0 percent or (3) For a correspondent that is a foreign bank greater; and organized in a country that has not adopted the (3) A leverage ratio, as defined in paragraph (e)(3) of risk-based framework of the Basle Capital Accord, this section, of 4.0 percent or greater. the ratios shall be calculated in accordance with the (b) Frequency of monitoring capital levels. A bank provisions of the Basle Capital Accord. shall obtain information to demonstrate that a correspondent is at least adequately capitalized on a quar- Section 206.6—Waiver. terly basis, either from the most recently available Report of Condition and Income, Thrift Financial The Board may waive the application of section Report, financial statement, or bank rating report for 206.4(a) of this part to a bank if the primary federal the correspondent. For a foreign bank correspondent supervisor of the bank advises the Board that the bank for which quarterly financial statements or reports are is not reasonably able to obtain necessary services, not available, a bank shall obtain such information on including payment-related services and placement of as frequent a basis as such information is available. funds, without incurring exposure to a correspondent Information obtained directly from a correspondent in excess of the otherwise applicable limit. for the purpose of this section should be based on the most recently available Report of Condition and In- Section 206.7—Transition provisions. come, Thrift Financial Report, or financial statement of the correspondent. (a) Beginning on June 19, 1993, a bank shall comply (c) Foreign banks. A correspondent that is a foreign with the prudential standards prescribed under section bank may be considered adequately capitalized under 206.3 of this part. this section without regard to the minimum leverage (b) Beginning on June 19, 1994, a bank shall comply ratio required under paragraph (a)(3) of this section. with the limit on credit exposure to an individual (d) Reliance on information. A bank may rely on correspondent required under section 206.4(a) of this information as to the capital levels of a correspondent part, but for a period of one year after this date the obtained from the correspondent, a bank rating limit shall be 50 percent of the bank's total capital. agency, or other party that it reasonably believes to be accurate. (e) Definitions. For the purposes of this section: FINAL RULE—AMENDMENTS TO REGULATIONS (1) Total risk-based capital ratio means the ratio of HAND Y qualifying total capital to weighted risk assets. The Board of Governors is amending 12 C.F.R. Parts 208 and 225, its Regulations H and Y (Capital and Capital Adequacy Guidelines), for state member banks 1. As used in this part, the term "adequately capitalized" is similar and bank holding companies to include the European but not identical to the definition of that term as used for the purposes Bank for Reconstruction and Development (EBRD), of the prompt corrective action standards. See, e.g., 12 C.F.R. Part 208, Subpart B. the International Finance Corporation (IFC), and the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 111 Nordic Investment Bank (NIB) in the list of named agencies and claims on, and the portions of claims multilateral lending institutions that are eligible for a guaranteed by, the International Bank for Recon- 20 percent risk weight. This modification would con- struction and Development (World Bank), the form the Board's risk-based capital guidelines more International Finance Corporation, the Interamerclosely to interpretive guidance adopted by the other ican Development Bank, the Asian Development G-10 countries that are signatories to the Basle Ac- Bank, the African Development Bank, the Eurocord. pean Investment Bank, the European Bank for Effective December 22, 1992, 12 C.F.R. Parts 208 Reconstruction and Development, the Nordic Inand 225 are amended as follows: vestment Bank, and other multilateral lending institutions or regional development banks in Part 208—Membership of State Banking which the U.S. government is a shareholder or Institutions in the Federal Reserve System contributing member.* * * 1. The authority citation for part 208 is revised to read as follows: Part 225—Bank Holding Companies and Authority: Sections 9, 11(a), 11(c), 19, 21, 25, and 25(a) Change in Bank Control of the Federal Reserve Act, as amended (12 U.S.C. 321-338, 248(a), 248(c), 461, 481-486, 601 and 611, 1. The authority citation for part 225 is revised to read respectively); sections 4, 13(j), and 18(o) of the Fed- as follows: eral Deposit Insurance Act, as amended (12 U.S.C. 1814, 1823(j), and 1828(o), respectively); section 7(a) Authority: 12 U.S.C. 1817(j) (13), 1818(b), 1828(o), of the International Banking Act of 1978 (12 U.S.C. 183li, 1843(c) (8), 1844(b), 1972(1), 3106, 3108, 3907, 3105); sections 907-910 of the International Lending 3909, 3310, 3331-3351, and section 306 of the Federal Supervision Act of 1983 (12 U.S.C. 3906-3909); sec- Deposit Insurance Corporation Improvement Act of tions 2, 12(b), 12(g), 12(i), 15B(c) (5), 17, 17A, and 23 1991 (Pub. L. 102-242, 105 Stat. 2236 (1991)). of the Securities Exchange Act of 1934 (15 U.S.C. 78b, 781(b), 781(g), 781(i), 78o-4(c) (5), 78q, 78q-l, and 2. Appendix A to part 225 is amended by revising the 78w, respectively); section 5155 of the Revised Stat- second sentence of the second paragraph in III.C.2 to utes (12 U.S.C. 36) as amended by the McFadden Act read as follows: of 1927; and sections 1101-1122 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3310 and 3331-3351). APPENDIX A TO PART 225—CAPITAL ADEQUACY GUIDELINES FOR BANK HOLDING 2. Appendix A to part 208 is amended by revising the COMPANIES: RISK-BASED MEASURE second sentence of the second paragraph in III.C.2 to read as follows: UJ * * * £ * * * 2. * * * In addition, this category also includes APPENDIX A TO PART 208—CAPITAL claims on, and the portions of claims that are ADEQUACY GUIDELINES FOR STATE MEMBER guaranteed by, U.S. government-sponsored35 BANKS: RISK-BASED MEASURE Uj * * * Home Loan Mortgage Corporation (FHLMC), the Federal National (2 * * * Mortgage Association (FNMA), the Farm Credit System, the Federal Home Loan Bank System, and the Student Loan Marketing Associ- 2. * * * In addition, this category also includes ation (SLMA). Claims on U.S. government-sponsored agencies inclaims on, and the portions of claims that are clude capital stock in a Federal Home Loan Bank that is held as a condition of membership in that Bank. guaranteed by, U.S. government-sponsored32 35. For this purpose, U.S. government-sponsored agencies are defined as agencies originally established or chartered by the federal government to serve public purposes specified by the U.S. Congress but whose obligations are not explicitly guaranteed by the full faith and 32. For this purpose, U.S. government-sponsored agencies are credit of the U.S. government. These agencies include the Federal defined as agencies originally established or chartered by the federal Home Loan Mortgage Corporation (FHLMC), the Federal National government to serve public purposes specified by the U.S. Congress Mortgage Association (FNMA), the Farm Credit System, the Federal but whose obligations are not explicitly guaranteed by the full faith and Home Loan Bank System, and the Student Loan Marketing Associcredit of the U.S. government. These agencies include the Federal ation (SLMA). Claims on U.S. government-sponsored agencies in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

112 Federal Reserve Bulletin • February 1993 agencies and claims on, and the portions of claims Section 215.2—Definitions guaranteed by, the International Bank for Reconstruction and Development (World Bank), the International Finance Corporation, the Interamer- (1)(1) Principal shareholder means a person (other than ican Development Bank, the Asian Development an insured bank) that directly or indirectly, or acting Bank, the African Development Bank, the Euro- through or in concert with one or more persons, pean Investment Bank, the European Bank for owns, controls, or has the power to vote more than Reconstruction and Development, the Nordic In- 10 percent of any class of voting securities of a vestment Bank, and other multilateral lending member bank or company. Shares owned or coninstitutions or regional development banks in trolled by a member of an individual's immediate which the U.S. government is a shareholder or family are considered to be held by the individual. contributing member.* * * (2) A principal shareholder of a member bank includes: (i) A principal shareholder of a company of which the member bank is a subsidiary, and (ii) A principal shareholder of any other subsid- FINAL RULE—AMENDMENT TO REGULATION O iary of that company. (3) A principal shareholder of a member bank does The Board of Governors is amending 12 C.F.R. Part not include a company of which a member bank is a 215, its Regulation O (Loans to Executive Officers, subsidiary. Directors, and Principal Shareholders of Member Banks; Loans to Holding Companies and Affiliates) to implement recent amendments to section 22(h) of the FINAL RULE—AMENDMENT TO REGULATION Y Federal Reserve Act, contained in the Housing and Community Development Act of 1992. The revision The Board of Governors is amending 12 C.F.R. Part will provide that loans to a holding company parent 225, its Regulation Y (Bank Holding Companies and and its affiliates are not subject to Regulation O Change in Bank Control) to implement certain regulainasmuch as these transactions are governed by sec- tory improvements contained in sections 202(d) and tion 23A of the Federal Reserve Act. 210 of the Federal Deposit Insurance Corporation Effective December 17, 1992, 12 C.F.R. Part 215 is Improvement Act of 1991 (FDICIA). The final rule amended as follows: specifies additional factors that the Federal Reserve System must consider in acting on applications by Part 215—Loans to Executive Officers, bank holding companies to acquire banks under sec- Directors, and Principal Shareholders of tion 3 of the Bank Holding Company Act. The in- Member Banks tended effect of the amendment is to conform the Board's regulations to the statutory changes. 1. The authority citation for part 215 is revised to read Effective February 4, 1993, 12 C.F.R. Part 225 is as follows: amended as follows: Authority: Sections ll(i), 22(g) and 22(h), Federal Part 225—Bank Holding Companies and Reserve Act (12 U.S.C. 248(i), 375a, 375b(7)), 12 Change in Bank Control U.S.C. 1817(k)(3) and 1972(2)(F)(vi), and section 955 of the Housing and Community Development Act of 1. Section 225.2 is amended by revising the text of 1992 (Pub. L. 102-550, 106 Stat. 3895 (1992)). paragraph (k) as follows: Subpart A—Loans by Member Banks to Their Section 225.2—Definitions. Executive Officers, Directors, and Principal Shareholders (k)(l) Controlling shareholder means a person that 2. Section 215.2 is amended by revising paragraph (1) owns or controls, directly or indirectly, 25 percent to read as follows: or more of any class of voting securities of a bank or other company. (2) Principal shareholder means a person that owns or controls, directly or indirectly, 10 percent or elude capital stock in a Federal Home Loan Bank that is lield as a condition of membership in that Bank. more of any class of voting securities of a bank or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 113 other company, or any person that the Board deter- conditions imposed by, the Board in connection mines has the power, directly or indirectly, to exer- with prior applications. cise a controlling influence over the management or policies of a bank or other company. 3. Section 225.31 is amended by revising paragraph (d)(2)(ii) to read as follows: 2. Section 225.13 is amended by revising paragraphs (a) and (b)(2) to read as follows: Section 225.31—Control proceedings. Section 225.13—Factors considered in acting on bank applications. (a) Prohibited anticompetitive transactions. As speci- * * * fied in section 3(c) of the BHC Act, the Board may not (2) * * * approve any application under this subpart if: (ii) Shares controlled by company and associated (1) The transaction would result in a monopoly or individuals. A company that, together with its would further any combination or conspiracy to management officials or controlling shareholders monopolize, or to attempt to monopolize, the busi- (including members of the immediate families of ness of banking in any part of the United States; either as defined in 12 C.F.R. 226.2(k)), owns, (2) The effect of the transaction may be substantially controls, or holds with power to vote 25 percent to lessen competition in any section of the country, or more of the outstanding shares of any class of tend to create a monopoly, or in any other manner voting securities of a bank or other company be in restraint of trade, unless the Board finds that controls the bank or other company, if the first the transaction's anticompetitive effects are clearly company owns, controls, or holds with power to outweighed by its probable effect in meeting the vote more than 5 percent of the outstanding convenience and needs of the community; shares of any class of voting securities of the bank (3) The applicant has failed to provide the Board or other company. with adequate assurances that it will make available such information on its operations or activities, and the operations or activities of any affiliate of the 4. Appendix B is amended by revising footnote 1 to applicant, that the Board deems appropriate to read as follows: determine and enforce compliance with the BHC Act and other applicable federal banking statutes, and any regulations thereunder; or (4) In the case of an application involving a foreign APPENDIX B TO PART 225—CAPITAL bank, the foreign bank is not subject to comprehen- ADEQUACY GUIDELINES FOR BANK HOLDING sive supervision or regulation on a consolidated COMPANIES AND STATE MEMBER BANKS: basis by the appropriate authorities in its home LEVERAGE MEASURE country, as provided in section 211.24(c)(l)(ii) of the Board's Regulation K (12 C.F.R. 211.24(c)(l)(ii)). (b) Other factors. In deciding applications under this The guidelines will apply to bank holding companies subpart, the Board also considers the following factors with less than $150 million in consolidated assets on a with respect to the applicant, its subsidiaries, any bank-only basis unless: banks related to the applicant through common own- (1) The holding company or any nonbank subsidiary ership or management, and the bank or banks to be is engaged directly or indirectly in any nonbank acquired: activity involving significant leverage, or (2) The holding company or any nonbank subsidiary has outstanding significant debt held by the general (2) Managerial resources. The competence, experi- public. ence, and integrity of the officers, directors, and Debt held by the general public is defined to mean debt principal shareholders of the applicant, its subsid- held by parties other than financial institutions, officiaries, and the banks and bank holding companies ers, directors, and controlling shareholders of the concerned; their record of compliance with laws and banking organization or their related interests. regulations; and the record of the applicant and its affiliates of fulfilling any commitments to, and any Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 Federal Reserve Bulletin • February 1993 FINAL RULE—AMENDMENT TO REGULA- Section 229.2—Definitions. TION CC The Board of Governors is amending 12 C.F.R. Part (bb) Qualified returned check. * * * 229, its Regulation CC (Availability of Funds and Collection of Checks) to conform the Uniform Commercial Code (UCC) citations in Regulation CC and A qualified returned check need not contain the eleits Commentary to the 1990 version of Articles 3 and ments of a check drawn on the depositary bank, such 4 of the UCC, as approved by the National Confer- as the name of the depositary bank. * * * ence of Commissioners on Uniform State Laws and the American Law Institute, and to a recent realignment in Federal Reserve check processing regions. 6. In Appendix E under the Commentary to section The amendments will provide updated cross-refer- 229.11, in the fourth sentence of the last paragraph of ences between Regulation CC and the latest version paragraph (b) under the heading " Time Period Adjustof the UCC and update the routing numbers in the ment for Withdrawing Cash", "U.C.C. 4-107" is appendices to the regulation. revised to read "UCC 4-108". Effective January 5, 1993, 12 C.F.R. Part 229 is 7. In Appendix E under the Commentary to paragraph amended as follows: (a) of section 229.14, in the fourth sentence of the first paragraph of footnote 3, "U.C.C. 4-211 and 4-213" is 1. The authority citation for part 229 continues to read revised to read "UCC 4-214 and 4-215". as follows: 8. In Appendix E under the Commentary to section Authority: 12 U.S.C. 4001 et seq. 229.19, in the last sentence of the last paragraph of paragraph (e), "U.C.C. 4-213(l)(a)" is revised to read 2. In section 229.2, in the second sentence of para- "UCC 4-215(a)(l)". graph (cc) "U.C.C. 4-202(2)" is revised to read "UCC 9. In Appendix E under the Commentary to section 4-202(b)". 229.30: 3. In Appendix A to part 229, under the heading a. In paragraph (a), the last two sentences of the "SECOND FEDERAL RESERVE DISTRICT," the seventh from the last paragraph are removed; two numbers appearing directly under the subheading new sentences are added to the end of the fifth from "Head Office" are transferred in numerical order the last paragraph as set out below; in footnote 4, under the subheading "Jericho Office" and the sub- "U.C.C. 4-202(3)" is revised to read "UCC heading "Head Office" is removed. 4-202(c)"; in the third sentence of the sixth from the last paragraph, "U.C.C. 3-418 and 4-213(1)" is 4. In Appendix B-2 to part 229, the headings "New revised to read "UCC 3-418(c) and 4-215(a)"; the York" and "Jericho" and their corresponding entries third from the last paragraph (numbered 1) is reare removed from the table. moved; the second from the last and the last para- 5. In Appendix E under the Commentary to section graphs (numbered 2 and 3) are redesignated as 1 and 229.2, in the first sentence of the second paragraph of 2, respectively; in newly-redesignated paragraph 1, paragraphs (f) and (g), "U.C.C. 4-104(l)(c)" is revised "Section 4-301(4)" is revised to read "Section to read "UCC 4-104(a)(3)"; in the second sentence of 4-301(d)"; and in newly-redesignated paragraph 2, paragraph (j), "U.S.C. 3-410, 3-411" is revised to "Section 4-301(1)" is revised to read "Section read "UCC 3-409"; in the first sentence of the third 4-301(a)"; paragraph of paragraph (k), "U.C.C. 3-120" is revised b. In paragraph (b), in the last sentence of the last to read "UCC 4-106(a)"; the first sentence of the last paragraph, "U.C.C. 4-207" is revised to read paragraph of paragraph (bb) is revised as set forth "UCC 4-208"; and below; and in the fourth sentence of paragraph (cc), c. In paragraph (f), in the first sentence of the second "U.C.C. 4-202(2)" is revised to read "UCC paragraph, "U.C.C. 4-301(1)" is revised to read 4-202(b)". "UCC 4-301(a)". APPENDIX E TO PART 229—[AMENDED] APPENDIX E TO PART 229—[AMENDED] Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 115 Section 229.30—Paying Bank's Responsibility second from the last paragraph (numbered 1), "Secfor Return of Checks tion 4-212(1)" is revised to read "Section 4-214(a)"; and the last paragraph (numbered 2) is revised as set out below; and * * * Also, a paying bank is not responsible for c. In paragraph (c), in the second sentence "U.C.C. failure to make expeditious return to a party that has 4-201(2)" is revised to read "UCC 4-201(b)". breached a presentment warranty under UCC 4-208, notwithstanding that the paying bank has returned the check. (See Commentary to section 229.33(a).) APPENDIX E TO PART 229—[AMENDED] 10. In Appendix E under the Commentary to section 229.31: Section 229.35—Indorsements a. In paragraph (a), in the second sentence of the fifth from the last paragraph, "U.C.C. 4-202(3)" is revised to read "UCC 4-202(c)"; the third from the (b) * * * last paragraph (numbered 1) is removed; the second 2. Section 3-415 and related provisions (such as from the last and the last paragraphs (numbered 2 section 3-503), in that such provisions would not apply and 3) are redesignated as 1 and 2, respectively; in as between banks, or as between the depositary bank newly-redesignated paragraph 1, "Section and its customer. 4-202(2)" is revised to read "Section 4-202(b)"; and in newly-redesignated paragraph 2, "Section 4-212(1)" is revised to read "Section 4-214(a)"; 14. In Appendix E under the Commentary to section b. In paragraph (b), in the first sentence of the third 229.36: paragraph, "U.C.C. 4-202(2)" is revised to read a. In paragraph (b), in the fourth sentence of the "UCC 4-202(b)"; and third paragraph (numbered 1), "U.C.C. 4-204(3)" is c. In paragraph (c), in the first sentence of the last revised to read "UCC 4-204(c)"; in the fourth paragraph, "U.C.C. 4-212(1)" is revised to read sentence of the seventh paragraph (numbered 3), "UCC 4-214(a)". "U.C.C. 3-504(2)" is revised to read "UCC 11. In Appendix E under the Commentary to section 3-111"; and in the last paragraph, "U.C.C. 229.32, in the fourth sentence of the first paragraph of 3-504(2)(c)" is revised to read "UCC 3-111"; paragraph (a), "U.C.C. 3-504(2)" is revised to read b. In paragraph (c), the third sentence is revised as "UCC 3-111"; and in the second sentence of the set out below; and second paragraph of paragraph (b), "U.C.C. 4-107" is c. In paragraph (d), in the fifth sentence, "U.C.C. revised to read "UCC 4-108". 4-213(b) or (d)" is revised to read "UCC 12. In Appendix E under the Commentary to section 4-215(a)(2) or (3)". 229.33, in the second from the last sentence of the last paragraph of paragraph (a), "U.C.C. 4-207(1)" is revised to read "UCC 4-208"; and in the last sentence APPENDIX E TO PART 229—[AMENDED] of the last paragraph, "U.C.C. 4-207(1) and 4-302" is revised to read "UCC 4-208 and 4-302". 13. In Appendix E under the Commentary to section 229.35: Section 229.36—Presentment and Issuance of a. In paragraph (a), the second sentence of the sixth Checks paragraph is revised to read "(See UCC 4-207(a) and 4-208(a).)"; b. In paragraph (b), in the seventh sentence of the (c) * * * This process has the potential to improve the fifth paragraph, "U.C.C. 4-213(1) and 4-302" is efficiency of check processing, and express provision revised to read "UCC 4-215(a) and 4-302"; in the for truncation and electronic presentment is made in eighth sentence of the fifth paragraph, "U.C.C. UCC 4-110 and 4-406(b). * * * 4-211(2) and (3) and 4-213(3)" is revised to read "UCC 4-213 and 4-215(d)"; in the tenth sentence of * * * ** the fifth paragraph, "U.C.C. 4-211, 4-212, and 15. In Appendix E under the Commentary to section 4-213" is revised to read "UCC 4-213, 4-214, and 229.37, before the parenthetical in the second sentence 4-215"; in the first and second sentences of the in the first paragraph, "U.C.C. 4-103(1)" is revised to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 Federal Reserve Bulletin • February 1993 read "UCC 4-103(a)"; and in the first sentence in the Capital is the 12th largest commercial banking orgasecond paragraph, "U.C.C. 4-103(2)" is revised to nization in Missouri, controlling deposits of $503.8 read "UCC 4-103(b)". million, representing less than 1 percent of the total 16. In Appendix E under the Commentary to section deposits in commercial banking organizations in the 229.38: state.1 Magna Bank is the 36th largest commercial a. In paragraph (a), in the third sentence in the banking organization in Missouri, controlling deposits second paragraph, "U.C.C. 4-103(5) and 4-202(3)" of $150.6 million, representing less than 1 percent of the is revised to read "UCC 4-103(e) and 4-202(c)"; total deposits in commercial banking organizations in b. In paragraph (b), in the last sentence "sections the state. Upon consummation of this proposal, Capital 4-213 and 4-302" is revised to read "sections 4-215 would become the ninth largest commercial banking and 4-302" ; and organization in Missouri, controlling deposits of $654.4 c. In paragraph (e), the second sentence is revised to million, representing approximately 1.24 percent of the read as follows: total deposits in commercial banking organizations in the state. Capital and Magna Bank do not compete directly in APPENDIX E TO PART 229—[AMENDED] any relevant banking market. Based on all the facts of record, the Board believes that consummation of this proposal would not result in any significantly adverse effects on competition in any relevant banking market. Section 229.38—Liability Considerations relating to the financial and managerial resources and future prospects of Capital and its subsidiary banks and Magna Bank, and other supervi- (e) * * * It adopts the standard of UCC 4-109(b). sory factors the Board is required to consider under section 3 of the BHC Act, also are consistent with approval of this application. 17. In Appendix E under the Commentary to section 229.39, in the introductory text "U.C.C. 4-214" is Convenience and Needs Considerations revised to read "UCC 4-216". In reviewing this application, the Board also is required to consider the convenience and needs of the ORDERS ISSUED UNDER BANK HOLDING community to be served and take into account the COMPANY ACT record of performance of Capital and its subsidiary banks, as well as Magna Bank, under the Community Orders Issued Under Section 3 of the Bank Reinvestment Act (12 U.S.C. § 2901 et seq.) Holding Company Act ("CRA").2 The Board notes that four of Capital's five subsidiary banks, representing approximately 87 per- Statement by the Board of Governors of the cent of Capital's assets, have received satisfactory Federal Reserve System Regarding the ratings from their primary regulators in their most Application by Capital Bancorporation, Inc. to recent examinations for CRA performance.3 Howacquire Magna Bank of Southern Missouri ever, one of Capital's subsidiary banks, Capital Bank By order dated November 30, 1992, the Board approved the application of Capital Bancorporation, 1. Deposit data are as of June 30, 1991. Inc., Cape Girardeau, Missouri ("Capital"), pursuant 2. The CRA requires the appropriate federal supervisory authority to section 3 of the Bank Holding Company Act ("BHC to "assess the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighbor- Act") (12 U.S.C.§ 1842) to acquire the voting shares hoods, consistent with the safe and sound operation of such instituof Magna Bank of Southern Missouri, Ozark, Missouri tion," and to take this record into account in its evaluation of bank ("Magna Bank"). holding company applications. 12 U.S.C. § 2903. 3. The following banks, including Capital's lead bank, all received Notice of the application, affording interested parsatisfactory ratings at their most recent examinations for CRA perforties an opportunity to submit comments, has been mance: Capital Bank of Cape Girardeau County, Cape Girardeau, published (57 Federal Register 28,871 (1992)). The Missouri (Federal Deposit Insurance Corporation ("FDIC") — July 26, 1991); Capital Bank of Columbia, Columbia, Missouri (FDIC — time for filing comments has expired, and the Board December 11, 1990); Capital Bank of Sikeston, Sikeston, Missouri has considered the application and all comments re- (FDIC — October 11, 1990); and Capital Bank of Perryville, N.A., ceived in light of the factors set forth in section 3(c) of Perryville, Missouri (Office of the Comptroller of the Currency — September 30, 1988). Magna Bank received a satisfactory rating for the BHC Act. CRA performance from the FDIC on December 14, 1991. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 117 and Trust Company of Clayton, Clayton, Missouri These steps include: ("Clayton Bank"), controlling approximately 13 per- (1) Hiring more personnel to administer CRA activcent of Capital's assets, received two consecutive less ities; than satisfactory examination ratings for CRA perfor- (2) Commencing a call program targeting small busmance in 1991 and 1992 from its primary regulator, the inesses in its delineated community; FDIC.4 (3) Implementing a home improvement loan pro- The Board has carefully reviewed these examina- gram and advertising this program in local newspations and the CRA performance of Capital and its pers; and subsidiary banks, as well as Magna Bank, in light of (4) Meeting with groups representing low- and the CRA, the Board's regulations, and the jointly moderate-income individuals in the bank's delinissued Statement of the Federal Financial Supervisory eated community. Agencies Regarding the Community Reinvestment Act ("Agency CRA Statement").5 The Board previously Clayton Bank also has committed to allocate a total has stated that applicants should address their CRA of $2 million over the next three years for loans to responsibilities and have the necessary policies in qualified low-and moderate-income borrowers. To implace and working well before they file an application.6 prove its system of tracking the geographic extension In this regard, actions taken by Capital and Clayton of credit applications, extensions and denials, the bank Bank to improve the CRA performance of Clayton replaced its system of geocoding this information by Bank have been carefully considered in this applica- zip code with a geocoding-by-census tract system. tion. Additionally, Clayton Bank has taken certain steps to In response to the 1991 examination, Clayton Bank increase its participation in community development initiated several measures to address the deficiencies activities, including purchasing $1 million of street in its CRA performance. Examiners found in the 1992 improvement bonds for the City of Brentwood, Misexamination that these steps resulted in improvement souri, a city located within Clayton Bank's revised in Clayton Bank's CRA program, and upgraded Clay- service area. ton Bank's CRA rating to a "needs to improve" The Board believes that, on balance, the initiatives record of meeting community credit needs. In assign- implemented by Capital and Clayton Bank since the ing this rating, the FDIC noted that the lack of 1991 and 1992 examinations, and the steps that these management and personnel resources and the limited organizations have committed to take, are sufficient to amount of time since the 1991 examination hindered address the weaknesses in Clayton Bank's record of the bank's ability to implement all needed improve- CRA performance. These steps were developed in ments. In this regard, the record in this case indicates consultation with FDIC examiners. The Board recogthat in the past few years, Clayton Bank has devoted nizes that the record compiled in this application significant resources to addressing financial problems points to areas that continue to require improvement identified by examiners. Although these efforts have in the CRA performance of Clayton Bank. Capital has resulted in improvement in the bank's financial condi- implemented effective CRA programs at its other tion, Bank management's emphasis on financial con- subsidiary banks, as reflected in the CRA examination cerns limited its ability to fully implement programs reports of these institutions, and the Board believes designed to strengthen the bank's CRA program. that Capital and Clayton Bank have taken strong steps In response to the 1992 examination, Capital's board to ensure that the deficiencies in Clayton Bank's of directors has approved various additional measures record of CRA performance will be redressed. The designed to improve its oversight of the CRA pro- Board expects Capital and Clayton Bank to implement grams of Clayton Bank and its other subsidiary banks. fully the CRA initiatives and commitments discussed Clayton Bank also has implemented, and has commit- in this Order and contained in its application. ted to implement, various measures to improve and Based on all of the facts of record, including the address identified weaknesses in its CRA program. commitments made by Capital and Clayton Bank in this case, the Board concludes that convenience and needs considerations, including the CRA performance records of Capital and its subsidiary banks and Magna Bank, are consistent with approval of this application. 4. Clayton Bank's CRA performance was rated "substantial non- Capital's progress in implementing these initiatives and compliance" by the FDIC as of May 1991, and "needs to improve" as commitments will be monitored by the Federal Reserve of April 1992. 5. 54 Federal Register 13,742 (1989). Bank of St. Louis and in connection with future appli- 6. First Interstate BancSystem of Montana, Inc., 77 Federal cations to expand its deposit-taking facilities. Reserve Bulletin 1007 (1991); Agency CRA Statement, 54 Federal Register at 13,743. Based on the foregoing and other facts of record, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 Federal Reserve Bulletin • February 1993 Board has determined that the application should be, an interim company, CB Charlevoix Corporation, that and hereby is, approved. The Board's approval of this will merge with and into FCC with FCC as the transaction is specifically conditioned upon compli- surviving company.1 ance with the commitments made by Capital and Notice of the application, affording interested per- Clayton Bank in connection with this application. The sons an opportunity to submit comments, has been commitments and conditions relied upon by the Board published (57 Federal Register 29,081 (1992)). The in reaching its decision are both considered commit- time for filing comments has expired, and the Board ments imposed in writing by the Board in connection has considered the application and all comments rewith its findings and decision and, as such, may be ceived in light of the factors set forth in section 3(c) of enforced in proceedings under applicable laws. This the BHC Act. approval is also conditioned upon Capital receiving all CB Financial is the 16th largest commercial banking necessary Federal and state approvals. organization in Michigan, controlling three subsidiary banks with total deposits of $535.1 million, represent- December 16, 1992 ing less than 1 percent of total deposits in commercial banking organizations in the state.2 FCC is the 107th largest commercial banking organization in Michigan, JENNIFER J. JOHNSON Associate Secretary of the Board controlling deposits of $39 million, representing less than 1 percent of total deposits in commercial banking Dissenting Statement of Governors Kelley and organizations in the state. Upon consummation of this LaWare proposal, CB Financial would remain the 16th largest banking organization in Michigan, controlling deposits of $574.1 million, representing less than 1 percent of The Board's precedent requires that the CRA policies total deposits in commercial banking organizations in of an applicant and its subsidiary banks must be in the state. place and working well when an application is considered. In this case, Clayton Bank's CRA policies and Definition of the Relevant Banking Market programs have been found to be unsatisfactory in the last two consecutive CRA performance examinations by its primary regulator. Although both Capital and The BHC Act provides that the Board may not ap- Clayton Bank have initiated policies and programs to prove a proposal submitted under section 3 of the address these deficiencies, several of these initiatives BHC Act if the proposal would result in a monopoly or were not put in place until well after this application the effect of the proposal may be substantially to had been filed, and the effect of these initiatives in lessen competition in any relevant market. In evaluatimproving Clayton Bank's CRA performance has not ing the competitive factors in this case, the Board has been adequately demonstrated on the record before carefully considered the comments of Resources Planthe Board. For these reasons, we do not believe that ning Corporation ("RPC").3 RPC argues that the the record of CRA performance at this time is suffi- relevant geographic market for analyzing the competcient to conclude that the policies of Capital and itive effects of this proposal should be limited to the Clayton Bank are working well, and on this basis, we City and Township of Charlevoix, Michigan would deny the application. ("Charlevoix"), and that consummation of this proposal would substantially lessen competition for banking services in Charlevoix.4 RPC relies principally on a December 16, 1992 CB Financial Corporation 1. Following this acquisition, CB Financial will seek the necessary Jackson, Michigan regulatory approval to merge FCC into CB Financial and thereafter to merge FCC's sole subsidiary, First State Bank of Charlevoix, Charlevoix, Michigan ("FSB"), into CB Financial's subsidiary bank, Order Approving Acquisition of a Bank Holding Charlevoix County State Bank, also in Charlevoix, Michigan Company ("CCSB"). 2. State banking data are as of June 30, 1992. 3. RPC has also sought to enjoin this proposal in state court under CB Financial Corporation, Jackson, Michigan ("CB the Michigan antitrust statutes. In this suit, RPC maintained that the Financial"), a bank holding company within the mean- relevant geographic market was Charlevoix, or in the alternative, Charlevoix County. The court dismissed RPC's claim, and RPC has ing of the Bank Holding Company Act ("BHC Act"), appealed this judgment. See Charlevoix Investment Company, et al. v. has applied under section 3(a)(3) of the BHC Act First of Charlevoix Corporation, Case No. 92-343-25-CK (May 29, (12 U.S.C. § 1842(a)(3)) to acquire First of Charlevoix 1992) (Circuit Court for Charlevoix County). 4. CCSB and FSB, subsidiary banks of CB Financial and FCC, Corporation, Charlevoix, Michigan ("FCC"), through respectively, are both located in Charlevoix, Michigan. RPC argues Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 119 consultant's study conducted during a two-day visit to of commercial advertising activities. The results of this the Charlevoix area in May 1992.5 This study con- investigation and other analysis indicate that the relecludes that Charlevoix's unique character as a summer vant geographic market for purposes of analyzing the resort divided by a drawbridge in the center of town, competitive effects of this proposal extends beyond and the distances between Charlevoix and surrounding the geographic boundaries of Charlevoix to include the population centers indicate that local customers have area defined above as the Petoskey banking market. no reasonable alternative for banking services except The Petoskey banking market is anchored by four depository institutions located in Charlevoix. small towns located in Charlevoix and Emmet Coun- The Board and the courts have found that the ties: Petoskey (population of 6,056), Charlevoix (poprelevant banking market for analyzing the competitive ulation of 3,116), East Jordan (population of 2,240), effect of a proposal must reflect commercial and bank- and Boyne City (population of 3,478).8 A number of ing realities and must consist of the local area where geographic and commercial factors tie these towns the banks involved offer their services and where local together with Charlevoix. For example, Charlevoix is customers can practicably turn for alternatives.6 The located only 16 miles from Petoskey, the largest pop- Board has considered all the facts in this case, includ- ulation center in the area, and is connected to Petosing the comments and information provided by RPC key by a major, well-maintained federal highway.9 The and other commenters7 and a study conducted by the Reserve Bank's study found that this highway pro- Federal Reserve Bank of Chicago ("Reserve Bank"), vided convenient access to Petoskey, with travel time and concludes that the relevant geographic market to averaging approximately 20 minutes and varying only evaluate the competitive effects of this proposal is slightly depending on the time of day. In addition, defined as: Charlevoix County; Emmet County (ex- local residents indicated that travel to Petoskey was cluding Bliss, Carp Lake, and Wawatam Townships); not unduly difficult even during the drawbridge's peak Burt, Mentor, Tuscarora, and Wilmot Townships in operating times during the summer vacation season Cheboygan County; and Banks Township in Antrim because the opening of the drawbridge is predictable County, all in Michigan (the "Petoskey banking mar- and avoidable.10 Moreover, residents commented that ket"). the peak tourist season in this area lasts only about two months and the bridge opens less frequently The Reserve Bank conducted an extensive investiduring the rest of the year.11 Travel time from gation of the Petoskey banking market including con- Charlevoix to Boyne City is approximately 25 minutes ducting telephone surveys of customers for banking and approximately 20 minutes from Petoskey to Boyne services, and reviewed data regarding commuting, City. East Jordan is even closer to Charlevoix, with traffic patterns, and banking transactions. In Septemtravel time of approximately 15 minutes. ber 1992, the Reserve Bank also conducted a four-day field study of the Charlevoix area. This study included Petoskey is the largest community in the banking trips to surrounding populations centers, interviews market and is the location of the area's two largest with local bankers and businessmen, and assessments employers, who employ more than 1800 workers,12 as well as numerous other relatively sizable employers. Data indicate that there is a considerable amount of commuting from Charlevoix County to places of emthat this proposal would permit CB Financial to own two of the four banks and savings associations (together "depository institutions") ployment in Emmet County.13 In addition, the largest located in Charlevoix and thereby control approximately 90 percent of the total deposits held by depository institutions in Charlevoix. 5. RPC has also provided statements from another consultant agreeing with the conclusion that the proposal would have a signifi- 8. Population data are based on 1990 Census Bureau information. cantly adverse effect on competition in Charlevoix and stating that any 9. Charlevoix is located between Lake Michigan to the northwest definition of the relevant geographic market as being larger than and Lake Charlevoix to the east. Petoskey is northeast of Charlevoix Charlevoix would not provide a realistic basis for assessing the and connected by federal highway U.S. 31, which has a posted speed competitive consequences of this proposal on small business lending limit of 55 miles per hour. in the market. For reasons explained in previous decisions, the Board 10. The drawbridge divides the town approximately in half and continues to believe that the competitive analysis of bank expansion primarily affects travel north to Petoskey by individuals in the proposals should be based on the availability of the cluster of banking southern part of Charlevoix. services to a range of customers in the local banking market. See, e.g., 11. During July and August, the population of Charlevoix increases First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). See also from 3,116 to over 20,000. United States v. Philadelphia National Bank, 374 U.S. 321 (1963). 12. Northern Michigan Hospital, with more than 1,200 employees, 6. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, 674 is one of two regional medical centers in Michigan. Boyne USA (1982). Resorts employs approximately 600 workers in Emmet County. 7. The Board received comments from individuals in the Charlevoix 13. Commuting data for 1980 indicate that 14.3 percent of the overall area who believe that the proposal would result in monopolistic labor force in Charlevoix County commutes to work in Emmet market power that would have the effect of increasing prices for County, and that 9.3 percent of these workers commute from banking services, decreasing hours of operation, reducing available Charlevoix to Emmet County. More than half of the Charlevoix banking services, and discouraging other competitors from entering workers commuting to Emmet County (4.9 percent) work in Petoskey. the market. Commuting data for 1990 reflect no significant change in these Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 Federal Reserve Bulletin • February 1993 employers in Charlevoix County are in East Jordan ties. In addition, the two telephone directories serving and Boyne City.14 the region include listings of all banks and their branch Data on traffic patterns collected by the Michigan locations identified in the Reserve Bank's study as Department of Transportation show a significant being in the Petoskey banking market. Information amount of road travel between Charlevoix and Petos- regarding banking services and prices is widely diskey, indicating accessibility and the economic integra- seminated throughout the market through these media tion between Charlevoix and Petoskey. Despite the outlets. fact that these two towns are small, traffic counts at Bankers interviewed by the Reserve Bank in Petothree locations between Charlevoix and Petoskey in- skey and surrounding towns, such as Boyne City, have dicate that approximately 10,000 vehicles pass daily confirmed that their institutions are in competition between these two towns. with banks in Charlevoix and attract customers from In addition, Petoskey has been designated as a Rand Charlevoix. For example, several Petoskey area bank- McNally Basic Trading Center for the area that in- ers stated that they regularly reviewed the loan and cludes Emmet, Charlevoix, Cheboygan, and Otsego deposit rates and operating hours of Charlevoix banks Counties, because Petoskey is a town which serves as for comparability. A survey conducted by the Reserve a center for shopping goods purchased by residents of Bank of banks in Petoskey, Charlevoix, and Boyne that area.15 This Trading Center designation is based City showed that banks generally have comparable on a determination that consumers in this area ordi- prices for their products and hours of operation.17 narily travel to Petoskey to purchase retail goods. Customers also have convenient access to a number of Banking data also confirm that consumers in banking services throughout the Petoskey banking Charlevoix regularly rely on providers of goods and market through extensive ATM networks. For examservices throughout the Petoskey banking market as ple, the two largest banking institutions in the market, reasonable alternatives to the providers in Charlevoix. NBD Bank and Old Kent Bank, are located in Petos- For example, check-clearing data from the subsidiary key and serve their Charlevoix customers through banks of CB Financial and FCC in Charlevoix show ATMs located in that town. Moreover, a banker in that a substantial number of checks cleared at both Boyne City stated that his bank is establishing a new banks were for transactions outside Charlevoix, with branch near Charlevoix to serve its Charlevoix cusnearly 20 percent of these transactions occurring in tomers more efficiently. Petoskey. Data on the deposit and loan customers of CCSB Residents of Charlevoix and surrounding areas also and FSB, the subsidiary banks of CB Financial and are well informed on the practicable alternatives for FCC, also indicate that these banks serve areas that banking services through commercial advertising. For extend beyond the boundaries of Charlevoix County. example, the area's only daily newspaper, the Petos- For example, data from CB Financial's subsidiary key News-Review, is located in Petoskey and is widely bank indicate that more than 30 percent of its loan and distributed throughout Emmet and Charlevoix Coun- deposit accounts are from areas outside Charlevoix, ties. This paper regularly carries advertisements for including Petoskey. Similar data for FCC's subsidiary banking services from all banking institutions in the bank indicate that approximately 25 percent of deposit area.16 Local radio stations in Petoskey, Charlevoix, accounts and over 13 percent of loan accounts are and Boyne City also broadcast banking advertise- derived from outside the immediate Charlevoix area. ments from banks throughout the Petoskey banking A telephone survey of consumers and small busimarket to consumers in Emmet and Charlevoix Coun- nesses in Charlevoix and Emmet Counties conducted by the Reserve Bank indicate that a number of customers live in one town and obtain banking services in commuting patterns. For example, 14.4 percent of the labor force in another town within the Petoskey banking market.18 Charlevoix County commuted to jobs in Emmet County in 1990. 14. East Jordan Iron Works (500 employees) and Dura Mechanical (300 employees) are located in East Jordan. Allied-Signal (486 employees) is located in Boyne City. 17. The survey reviewed a number of the products and the hours of 15. The Petoskey, Michigan Basic Trading Area is defined to operation for three banks in Petoskey, two banks in Charlevoix, and include Emmet, Charlevoix, Cheboygan and Otsego Counties. Basic one bank in Boyne City. All banks surveyed had comparable rates for Trading Centers such as Petoskey are also viewed as serving their time deposits, money market deposit accounts, and commercial loans. surrounding areas with various specialized services, such as medical In addition, all banks had extended hours on Friday and the same care, entertainment, higher education, and a daily newspaper. hours on Saturday. 16. Charlevoix County accounts for 38 percent of this publication's 18. This survey also indicated that individuals in Atwood (located in circulation, with 16 percent within the city boundaries of Charlevoix. Antrim County) frequently travel to Charlevoix and East Jordan, that Data from the Circulation Department of the Petoskey News-Review individuals in Burt Lake and Indian River (both located in Cheboygan indicate that the total circulation of the newspaper in Charlevoix, County) routinely travel to Petoskey for work and shopping, and that Boyne City, and East Jordan exceeds the estimated number of residents of Pellston (located in Emmet County) are drawn to Petoshouseholds in those cities. key for shopping more regularly than to the City of Cheboygan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 121 For example, survey data revealed consumers who and other facts of record, the Board concludes that live in Charlevoix and bank in Petoskey, and busi- consummation of the proposal is not likely to result in nesses which are located in the City of Charlevoix and any significantly adverse effect on competition in any use banks located in Emmet County. Moreover, a relevant banking market. The Board also concludes business respondent located in Petoskey had accounts that the financial and managerial resources, superviin a Charlevoix bank, and another business respondent sory factors, and future prospects of CB Financial and indicated that it would look to Petoskey for banking FCC are consistent with approval of this application. services if it became dissatisfied with the services provided by its Charlevoix bank. Convenience and Needs Considerations After review of these data and the other facts of record, the Board believes that the record indicates RPC has also alleged that this transaction is likely to that customers in Charlevoix reasonably can and do have an adverse effect on the convenience and needs turn to providers of banking services throughout the of the community, and has alleged that the perfor- Petoskey banking market. On this basis, the Board mance under the Community Reinvestment Act disagrees with the contention of RPC that the geo- (12 U.S.C. § 2901 et seq.) ("CRA") of CB Financial graphic market in this case should be limited to the and its subsidiary banks is deficient in a number of City and Township of Charlevoix. Instead, based on areas. Among its allegations, RPC raises concerns all of the facts of record, the Board finds that the regarding the adequacy of certain aspects of the CRA relevant geographic market in this case is the Petoskey program of CB Financial's lead bank, City Bank and banking market as defined above. Trust Company, Jackson, Michigan ("City Bank"), including allegations that CB Financial has not satis- Competitive Effects in the Petoskey Banking Market factorily addressed the higher denial rate of mortgage loans by City Bank for minorities as opposed to whites CB Financial is the fifth largest depository institution based on City Bank's 1991 Home Mortgage Disclosure in the market, controlling deposits of $45 million, Act ("HMDA") statements, and that the mortgage representing 7.9 percent of total deposits in depository lending record of City Bank does not compare satisinstitutions in the market.19 FCC is the sixth largest factorily with other banks in the community. RPC also depository institution in the market, controlling depos- challenges City Bank's methodology for defining its its of $36.3 million, representing 6.4 percent of total delineated community, and raises issues regarding deposits in depository institutions in the market. Upon City Bank's CRA compliance, and City Bank's corpoconsummation, CB Financial would become the fourth rate policies, including challenging the level of inlargest depository institution in the market, controlling volvement of City Bank's CRA officer. In addition, total deposits of $81.3 million, representing 14.3 per- RPC challenges City Bank's CRA self-assessment, cent of total deposits in depository institutions in the community outreach, and marketing efforts, and quesmarket. The Herfindahl-Hirschman Index ("HHI") tions whether the commitments made by CB Financial would increase 101 points to a level of 1786.20 Accord- are too broad and vague to serve as effective goals for ingly, in light of the small increase in concentration, improving CRA performance.21 the number of competitors remaining in the market, 21. RPC also contends in general that CB Financial's application 19. Market data are as of June 30, 1991. In this context, depository does not discuss in detail how convenience and needs considerations institutions include commercial banks and savings banks. Market would be addressed, and specifically claims that: share data are based on calculations in which the deposits of thrift (1) CCSB's CRA Statement has not been updated since 1989; institutions are included at 50 percent. The Board previously has (2) The public portion of CCSB's CRA file was not available for four indicated that thrift institutions have become, or have the potential to business days; become, major competitors of commercial banks. See Midwest Finan- (3) CCSB did not have available current or accurate literature cial Group, 75 Federal Reserve Bulletin 386 (1989); National City regarding its banking services in May 1992; and Corporation, 70 Federal Reserve Bulletin 743 (1984). (4) CCSB has not been evaluated for CRA compliance since 1990. 20. Under the revised Department of Justice Merger Guidelines, 49 Other commenters maintain that the proposal would result in the Federal Register 26,823 (June 29, 1984), a market in which the elimination of local ownership of the target bank and thereby have a post-merger HHI is between 1000 and 1800 is considered to be negative impact on the convenience and needs of customers in and moderately concentrated. The Department of Justice has informed the around Charlevoix. The record indicates that the board of the bank Board that a bank merger or acquisition generally will not be chal- resulting from the merger of CCSB and FSB will consist of persons lenged (in the absence of other factors indicating anticompetitive who are familiar with the Charlevoix area from their experience on the effects) unless the post-merger HHI is at least 1800 and the merger boards of CCSB and FSB. In addition, senior management of the increases the HHI by at least 200 points. The Justice Department has merged bank responsible for the day-to-day operations of the bank stated that the higher than normal HHI thresholds for screening bank will be made up of current officers of CCSB and FSB who would mergers and acquisitions for anticompetitive effects implicitly recog- continue to reside in the Charlevoix area. As a result, the Board nizes the competitive effect of limited-purpose lenders and other believes there would be no loss of expertise or knowledge of special non-depository financial entities. credit needs in the communities served. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 Federal Reserve Bulletin • February 1993 In considering the convenience and needs of the communities. For example, CCSB maintains membercommunities to be served by these institutions, the ship in the Charlevoix, Ellsworth and Central Lake Board has carefully reviewed the CRA performance Chambers of Commerce, and the Northern Lakes record of CB Financial's subsidiary banks and FSB, as Economic Alliance. CCSB also participates in various well as Protestants' comments and CB Financial's charitable and non-profit community organizations responses to those comments. The Board has consid- such as the local United Funds and Little Traverse ered the CRA performance in light of the CRA, the Conservancy, and officers and directors of CCSB are Board's regulations, and the Statement of the Federal involved in community service clubs such as the Financial Supervisory Agencies Regarding the Com- Lions, Rotary, and Kiwanis. munity Reinvestment Act ("Agency CRA State- City Bank's outreach efforts include a customer call ment").22 program in which bank officers contact area customers An important element of the analysis of CRA per- and non-customers to determine how the bank may formance is the rating received by the institution better serve the credit needs of the community. A following an examination of CRA performance and report of each call is prepared and delivered to the compliance by the institution's primary federal super- bank's business development officer, and the business visor. The Board notes that CB Financial's lead bank, development officer will refer the individual to the City Bank, received a satisfactory rating from its appropriate bank department.23 The business developprimary regulator, the Office of the Comptroller of the ment officer also discusses information from these Currency, at its most recent CRA examination as of contacts with City Bank's President or CRA Officer in February 1989. CCSB received a CRA rating of "out- order to improve the bank's efforts to assist in meeting standing" from the Federal Deposit Insurance Corpo- ascertained credit needs. To date, the bank made ration ("FDIC") as of May 1990, and City Bank, approximately 1,400 business development calls. City St. Johns, Michigan, received a CRA rating of "satis- Bank's ascertainment efforts also include memberfactory" from the FDIC as of February 1991. The ships in the Albion Alliance, Albion Civic Foundation, Agency CRA Statement provides that although CRA Chamber of Commerce, Jackson Human Relations examination reports do not provide conclusive evi- Commission, Jackson Venture Capital Forum, dence of an institution's CRA record, these reports NAACP, and the United Way. will be given great weight in the application process. In addition, City Bank's marketing activities include The record in this case also indicates that CB advertising in the Jackson Citizen Patriot, the area's Financial has in place the elements of an effective major newspaper, as well as the Blazer News and CRA program. CB Financial has assigned CRA com- Metroplex, two newspapers which target low-income pliance responsibilities to its Assistant Vice President and minority communities in the Jackson area. City and Legal Counsel, whose responsibility is to coordi- Bank also advertises in local shoppers' newspapers, nate and monitor CRA compliance activities at all of and has instituted a radio advertising program targeted CB Financial's subsidiary banks. This individual towards low- and moderate-income areas. serves as CRA consultant and advisor to CCSB and The 1991 HMDA data reported by City Bank indi- City Bank. The board of directors of CCSB and City cates disparities in rates of housing-related loan appli- Bank annually review and are responsible for approv- cations, and in approvals and denials that vary by ing the CRA Statement for their respective banks. racial or ethnic group and income levels. Because all The CRA Statements of CCSB and City Bank indi- banks are obligated to ensure that their lending praccate that, to assist in meeting the credit needs of the tices are based on criteria that assure not only safe and communities served, both banks offer a wide range of sound lending, but also assure equal access to credit lending programs such as: student loans; loans guar- by creditworthy applicants regardless of race, the anteed by the Small Business Administration and Board is concerned when the record of an institution other federal, state, and local agencies; residential indicates disparities in lending to minority and lowloans; and community development loans. Since 1989, and moderate-income applicants. The Board recog- City Bank has also offered rental rehabilitation loans, nizes, however, that HMDA data alone provide only a and loans under the Michigan State Housing Develop- limited measure of an institution's lending in its comment Authority, and the Michigan Credit Certification munity. The Board also recognizes that HMDA data Program to low- and moderate-income customers. have limitations that make the data inadequate bases, CCSB and City Bank employ various methods of absent other information, for conclusively determining outreach to ascertain the credit needs of their entire 23. All inquiries concerning credit needs which are expressed to bank tellers are referred to the branch manager or officer, who will 22. 54 Federal Register 13,742 (1989). contact the business development officer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 123 whether an institution has engaged in illegal discrimi- Commercial Revitalization Program. The bank also nation on the basis of race or ethnicity in making purchased a local financial development authority bond lending decisions. in the amount of $1.1 million to bring a new employer to The most recent examination for CRA compliance Jackson County and thereby create over 150 jobs. and performance conducted by the bank's primary City Bank is a founding member of the Jackson regulator found no evidence of illegal discrimination at Affordable Housing Corporation ("JAHC"), a local City Bank. HMDA data for 1991 also show that City non-profit organization designed to provide credit ed- Bank originated housing-related loans in 67 percent ucation and assistance to minority and low- and of the applications that it received from low- and moderate-income families that seek to qualify for moderate-income areas in Calhoun County, and in mortgage financing at a participating lending institu- 63 percent of the applications that it received from tion. In addition to being a participating lending instilow- and moderate-income areas in Jackson County. tution, City Bank has provided technical and financial In addition, the percentage of home mortgage loan assistance to the organization. Moreover, City Bank applications received by City Bank from minorities on has created a program entitled Credit Application average exceeds the percentage received by other Review Evaluation to provide credit counseling to low lenders in the Jackson market. The bank receives and moderate income groups. City Bank is also a twice as many mortgage loan applications as do other sponsor of, and participant in, the Southside Self-Help banking institutions in Jackson County.24 City Bank's Neighborhood Improvement Association's annual record for mortgage loan originations in low-income program, an event designed to provide credit and census tracts is also better than the average for other employment information to low- and moderate-income banking institutions in the Jackson market. The ratio individuals in Jackson. City Bank also has taken steps of City Bank's mortgage loans made in low-income to code its deposit and lending information by geocensus tracts to its mortgage loans in high-income graphic area to allow the bank to assess more accucensus tracts is higher than the comparable ratio for rately the effectiveness of its CRA policies and proother banking institutions in the Jackson market. grams, and expects to complete the project in early In order to monitor its lending activity to assure the 1993. uniform application of lending standards, monthly City Bank also provides basic checking services to lending reports from the mortgage and consumer lend- the community it serves, including free checking to ing areas are reviewed by the bank's CRA Officer. senior citizens, churches and church groups. In addi- These reports include information regarding applica- tion, the bank provides a reduced check cashing fee tion denials as well as loans originated.25 Periodically, for non-customers who cash Michigan Department of the CRA Officer reviews his assessments with the Social Services checks at the bank. bank's President and Chief Executive Officer. City Bank's delineated service area currently ex- The Board also notes that other facets of City Bank's tends well beyond the Jackson MSA and includes all of lending record reflect its commitment to serving low- Jackson County, 40 percent of Calhoun County and and moderate-income areas. For example, City Bank small portions of Eaton, Washtenaw, and Lenawee represents that its underwriting criteria are no more Counties. The Board notes that the bank's delineated stringent than standards employed by the Federal Na- community includes two minority and four low- to tional Mortgage Association or the Federal Home Loan moderate-income census tracts in Jackson County, Mortgage Corporation. In 1992, City Bank made eight and one minority census tract in Calhoun County. City rehabilitation loans totalling $69,000 through the Mich- Bank made a small addition to its delineated commuigan State Housing Development Authority in conjunc- nity in 1992 after assessing lending patterns on the tion with the Jackson Community Development pro- basis of the OCC's CRA regulations which permit a grams. City Bank presently has 26 loans outstanding bank to rely on existing boundaries, including standard totalling $9.2 million outstanding under the Economic MSA or counties where its offices are located, and its Development Bonds Program. In addition, City Bank effective lending area to delineate its service commuoriginates loans under Small Business Administration nity. On the basis of the facts of record, the Board programs, federal housing programs, and the Albion concludes that there is no evidence to suggest that City Bank's service area improperly excludes minority or low- and moderate-income census tracts. 24. City Bank receives 9 percent compared with 4.5 percent on RPC's allegations that the transaction will not result average for other lenders. in any defined improvement in services in the 25. These reports also cover information obtained from the two census tracts in Jackson County which have minority populations that Charlevoix area are not supported by the record. CB exceed 50 percent and the four census tracts in the county in which the Financial has informed the Board that FSB will offer median income is less than 80 percent of the median income for the City of Jackson. no-charge checking and home equity-line loans, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 Federal Reserve Bulletin • February 1993 will adopt a program to encourage direct deposit of nities to be served are consistent with approval of social security and/or pension benefits to address the this application. deposit and credit needs of senior citizens. CB Finan- Based on the foregoing and other facts of record, the cial will encourage FSB to evaluate and consider Board has determined that the application should be, offering programs and services to address the deposit and hereby is, approved.26 The Board's approval is and credit needs of the small business community, expressly conditioned upon compliance with all of the such as: public seminars and presentations, seasonal commitments made by CB Financial in connection lines of credit, short-term loans, revolving-credit ar- with this application. For the purpose of this action, rangements, SB A loans, community-revitalization these commitments and conditions will both be conloans, merchant-credit-card programs, night deposit sidered conditions imposed in writing and, as such, services, and expanded banking hours during the may be enforced in proceedings under applicable law. tourist season. This transaction shall not be consummated before CB Financial will also encourage FSB to consider the thirtieth calendar day following the effective date programs to address the deposit and credit needs of of this Order, or later than three months after the low- to moderate-income families, such as: waiving effective date of this Order, unless such period is service charges for the deposit of governmental extended for good cause by the Board or by the checks, reducing service charges for cashing govern- Federal Reserve Bank of Chicago, pursuant to delement checks, and making various home improvement gated authority. loans (including FHA Title I home improvement loans, By order of the Board of Governors, effective United Guaranty home improvement loans, neighbor- December 16, 1992. hood improvement loans, and rehabilitation loans on rental property). Moreover, CB Financial will encour- Voting for this action: Chairman Greenspan and Governors age FSB to continue to offer competitive home mort- Mullins, Angell, Kelley, La Ware, Lindsey, and Phillips. gage loans and loans through the Michigan Mortgage Credit Certificate Program and the State of Michigan JENNIFER J. JOHNSON Associate Secretary of the Board Housing Development Authority. The Board notes that upon consummation CB Fi- Old National Bancorp nancial intends to review the CRA plan of FSB and Evansville, Indiana integrate that plan with the CRA plan of CCSB. CB Financial also plans to ensure that the CRA program of Order Approving Acquisition of a Bank Holding FSB identifies the needs of the Charlevoix community Company by contacting governmental and community leaders, representatives of small businesses, low- and moder- Old National Bancorp, Evansville, Indiana ("Old Naate-income groups, senior citizen groups, and minority tional"), a bank holding company within the meaning organizations to survey the credit and deposit needs of of the Bank Holding Company Act ("BHC Act"), has the community. CB Financial intends for FSB to applied for the Board's approval under section 3 of the identify and participate in governmental programs BHC Act (12 U.S.C. § 1842) to acquire all of the available to help meet the deposit and credit needs of voting shares of City Financial Bancorp, Inc., Danthe community, encourage and solicit public CRA input, and develop educational programs to inform segments of the community such as senior citizens and low-income families of the deposit and credit programs 26. Several commenters have requested that the Board hold a public hearing to assess further facts surrounding the impact of this proposed offered by the bank. CB Financial also intends that acquisition on competition. The Board is not required under section 3 FSB implement regular education programs for bank of the BHC Act to hold a public hearing unless the primary regulator employees to inform them of the goals and require- for the bank to be acquired does not approve the proposal. In this case, the primary supervisor for the bank does not object to the ments of CRA compliance and to train them in adproposal. dressing the credit and deposit needs of specialized Generally, under the Board's rules, the Board may, in its discretion, groups such as small businesses, senior citizens, and hold a public hearing or meeting on an application to clarify factual issues related to the application and to provide an opportunity for low-income families. testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The On the basis of these and other facts of record, Board has carefully considered these requests. In the Board's view, including the satisfactory CRA performance records the parties have had ample opportunity to present submissions, and the Protestants have submitted substantial written comments that of the subsidiary banks of CB Financial and FSB, have been considered by the Board. In light of these facts, the Board and the size of City Bank and the community that it has determined that a public meeting or hearing is not necessary to clarify the factual record in this application, or otherwise warranted in serves, the Board concludes that considerations rethis case. Accordingly, the request for a public meeting or hearing on lating to the convenience and needs of the commu- this application is hereby denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 125 ville, Illinois ("City Financial"), and thereby acquire the Illinois interstate banking statute, and that Board City Financial's three subsidiary banks: The City approval of this proposal is not prohibited by the National Bank of Danville, Danville, Illinois; The City Douglas Amendment. Approval of this proposal is National Bank of Hoopeston, Hoopeston, Illinois; and conditioned upon Old National receiving all required City Potomac Bank, Potomac, Illinois. state regulatory approvals. Notice of the application, affording interested per- Old National and City Financial compete directly in sons an opportunity to submit comments, has been the Danville, Illinois, banking market.5 Old National is published (57 Federal Register 42,586 (1992)). The the largest commercial banking or thrift organization time for filing comments has expired, and the Board ("depository institution") in the market, controlling has considered the application and all comments re- deposits of $168.1 million, representing 24.6 percent of ceived in light of the factors set forth in section 3(c) of total deposits held by depository institutions in the the BHC Act. market.6 City Financial is the fourth largest depository Old National, with approximately $3.1 billion in institution in the market, controlling deposits of $36.9 consolidated assets, controls 17 banking subsidiaries million, representing 5.4 percent of total deposits held in Indiana, Kentucky and Illinois. In Illinois, Old by depository institutions in the market. Upon con- National is the 36th largest commercial banking orga- summation of this proposal, Old National would connization, controlling deposits of $479.6 million, repre- trol deposits of $205 million, representing 30 percent of senting less than 1 percent of the total deposits in deposits in the market. The Herfindahl-Hirschman commercial banking organizations in the state.1 City Index ("HHI") for the market would increase by 265 Financial is the 201st largest commercial banking points to 1866 upon consummation of the proposal.7 organization, controlling deposits of $84.6 million, A number of characteristics of the Danville banking representing less than 1 percent of the total deposits in market indicate that the increase in concentration commercial banking organizations in Illinois. Upon levels as measured by the HHI for this market overconsummation of the proposed transaction, Old Na- states the likely effect of this proposal on competition tional would become the 31st largest commercial bank- in this market. Upon consummation of this proposal, ing organization in the state, controlling $564.2 million 8 commercial banks and 4 thrifts would remain as in deposits, representing less than 1 percent of total competitors of Old National in the market. The market deposits in commercial banking organizations in the is also attractive for entry, ranking second in populastate. tion and fourth in total bank deposits among the 76 Section 3(d) of the BHC Act, the Douglas Amend- nonmetropolitan counties in Illinois. In addition, ment, prohibits the Board from approving an applica- credit unions actively compete in the market.8 After tion by a bank holding company to acquire any bank considering the competition offered by other deposilocated outside of the bank holding company's home tory institutions in the market, the number of competstate, unless such acquisition is "specifically autho- itors remaining in the market, the level of and the rized by the statute laws of the State in which such increase in market concentration, and other facts of bank is located, by language to that effect and not merely by implication."2 Old National, whose home state is Indiana for purposes of the Douglas Amend- 5. The Danville, Illinois, banking market is approximated by Vermillion County, Illinois, less Butler, Green and Sidell townships. ment,3 seeks to acquire a bank in Illinois. The Illinois 6. Market share data are based on calculations in which the deposits interstate banking statute expressly authorizes the of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potenacquisition by an out-of-state bank holding company tial to become, significant competitors of commercial banks. See of an Illinois bank, and the Board has previously Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); determined that the interstate banking statute of Illi- National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 7. Under the revised Department of Justice Merger Guidelines, 49 nois permits the acquisition of Illinois banking organi- Federal Register 26,823 (June 29, 1984), a market in which the zations by Indiana banking organizations.4 Based on post-merger HHI is above 1800 is considered to be highly concenall the facts of record, the Board concludes that Old trated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence National's acquisition of City Financial complies with of other factors indicating anticompetitive effects) unless the postmerger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticom- 1. State and market deposit data are as of June 30, 1991. petitive effects implicitly recognize the competitive effect of limited- 2. 12 U.S.C. § 1842(d). purpose lenders and other non-depository financial entities. 3. A bank holding company's home state is that state in which the 8. Credit unions in the Danville market control approximately operations of the bank holding company's banking subsidiaries were 12 percent of the deposits in commercial banks, thrifts, and credit principally conducted on July 1, 1966, or the date on which the unions in the market, which is well above the national average of company became a bank holding company, whichever is later. approximately 5 percent. Two credit unions appear to be open to all, 4. See 111. Ann. Stat. ch. 17, para. 2510.01; Old National Bancorp, or nearly all, residents of Vermillion County, and another is open to all 74 Federal Reserve Bulletin 398 (1988). residents of the city of Danville. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

126 Federal Reserve Bulletin • February 1993 record, the Board concludes that consummation of acquire their respective subsidiary banks ("Kansas this proposal would not have a significantly adverse Banks"): effect on competition or the concentration of banking (1) M-L Bancshares, Inc., Wichita, Kansas, and resources in the Danville banking market or in any thereby acquire Security State Bank of Great Bend, other relevant banking market. Great Bend, Kansas, and Russell State Bank, Rus- The financial and managerial resources and future sell, Kansas; prospects of Old National, City Financial, and their (2) Highland Bancshares, Inc., Topeka, Kansas, and respective subsidiaries are consistent with approval of thereby acquire Highland Park Bank and Trust, this proposal. Considerations relating to the conve- Topeka, Kansas; nience and needs of the communities to be served and (3) North Plaza Bancshares, Inc., Topeka, Kansas, the other factors the Board must consider under sec- and thereby acquire North Plaza Bank State Bank, tion 3 of the BHC Act are also consistent with ap- Topeka, Kansas; proval of this proposal. (4) Bellcorp, Inc., Manhattan, Kansas, and thereby Based on the foregoing and all the facts of record, acquire Citizens Bank and Trust Co., Manhattan, including the commitments made by Old National in Kansas; and connection with this application, the Board has deter- (5) NBA Bankshares, Inc., Salina, Kansas, and mined that the application should be, and hereby is, thereby acquire The National Bank of America at approved. The Board's approval of this proposal is Salina, Salina, Kansas. specifically conditioned on compliance with the commitments made by Old National in connection with Upon consummation of the proposal, United Missouri this application and with the conditions referenced in proposes to merge the Kansas BHCs into its newly this Order. These commitments and conditions are formed and wholly owned subsidiary, United Subsidboth conditions imposed in writing by the Board, and, iary, Inc., Kansas City, Missouri, which has applied as such, may be enforced in proceedings under appli- under section 3(a)(1) of the BHC Act to become a bank cable law. holding company. The acquisition shall not be consummated before Notice of the applications, affording interested perthe thirtieth calendar day after the effective date of this sons an opportunity to submit comments, has been Order, or later than three months after the effective published (57 Federal Register 32,219 (1992)). The date of this Order, unless such period is extended for time for filing comments has expired, and the Board good cause by the Board or by the Federal Reserve has considered the applications and all comments Bank of St. Louis, acting pursuant to delegated au- received in light of the factors set forth in section 3(c) thority. of the BHC Act. By order of the Board of Governors, effective United Missouri, with $5.3 billion in consolidated December 14, 1992. assets, controls 20 banks in Illinois, Missouri, Delaware, and Colorado.1 Upon consummation of the Voting for this action: Chairman Greenspan and Governors proposal, United Missouri would become the fifth Mullins, Angell, Kelley, LaWare, and Phillips. Absent and largest banking organization in Kansas, controlling not voting: Governor Lindsey. deposits of $453 million, representing approximately 1.75 percent of the deposits in all depository institu- JENNIFER J. JOHNSON tions in the state.2 Associate Secretary of the Board Douglas Amendment United Missouri Bancshares, Inc. Kansas City, Missouri Section 3(d) of the BHC Act, the Douglas Amendment, prohibits the Board from approving an applica- Order Approving Acquisition of Banks and tion by a bank holding company to acquire any bank Formation of a Bank Holding Company located outside the bank holding company's home United Missouri Bancshares, Inc., Kansas City, Missouri ("United Missouri"), a bank holding company 1. Asset data are as of June 30, 1992. within the meaning of the Bank Holding Company Act 2. Deposit and market data as of December 31, 1991. Market share data are based on calculations in which the deposits of thrift institu- ("BHC Act"), has applied under section 3(a)(3) of the tions are included at 50 percent. The Board previously has indicated BHC Act (12 U.S.C. § 1842(a)(3)) to acquire all of the that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial voting shares of the following unaffiliated bank holding Group, 75 Federal Reserve Bulletin 386 (1989); National City Corpocompanies ("Kansas BHCs"), and thereby indirectly ration, 70 Federal Reserve Bulletin 743 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 127 state, unless such acquisition is "specifically autho- Convenience and Needs Considerations rized by the statute laws of the State in which such bank is located, by language to that effect and not In considering this application, the Board is required merely by implication."3 For purposes of the Douglas to take into account under the CRA the records of Amendment, the home state of United Missouri is United Missouri, its subsidiary banks, the Kansas Missouri.4 The Kansas interstate banking statute ex- BHCs, and the Kansas Banks under the Community pressly authorizes the acquisition by an out-of-state Reinvestment Act (12 U.S.C. § 2901 et seq.) bank holding company, such as United Missouri, of ("CRA"). In this regard, the Board has received Kansas banks, subject to certain conditions.5 After comments from the Association of Community Orgacareful review of the relevant statutes, and in light of nizations for Reform Now ("Protestant") criticizing the facts of record, the Board concludes that United the CRA performance of United Missouri and its lead Missouri's acquisition of Kansas banks complies with bank, United Missouri Bank, N.A., Kansas City, the Kansas interstate banking statute, and that Board Missouri ("Bank"). Protestant asserts that a review of approval of this proposal is not prohibited by the the May 13, 1991, and September 8, 1992, CRA Douglas Amendment. Approval of this proposal is performance examinations conducted by Bank's priconditioned upon United Missouri's receiving all re- mary regulator, the Office of the Comptroller of the quired state regulatory approvals. Competitive, Finan- Currency ("OCC"), indicates that Bank's CRA percial, Managerial and Supervisory Considerations formance has been deficient. Protestant has challenged United Missouri does not operate a banking subsidiary the satisfactory CRA rating assigned to Bank by the in Kansas. Based on all of the facts of record in this OCC, because it believes that Bank's CRA program, case, the Board concludes that consummation of this when compared to those of several competing financial proposal would not have a significantly adverse effect institutions, should be stronger in light of Bank's size, on competition or the concentration of banking re- financial condition and market share. sources in any relevant banking market. The Board Protestant asserts that Bank's efforts to ascertain notes that United Missouri will raise additional capital community credit needs have been ineffective, that to finance this acquisition, and that, upon consumma- Bank does not have formal policies in place that would tion of the proposal, United Missouri's capital ratios enable Bank management to properly evaluate Bank's will be well above the regulatory minimums. Based on progress under the CRA, and that Bank's limited these and other facts of record, the Board concludes outreach efforts have not resulted in the development that the financial and managerial resources and future of new products and services to address identified prospects of United Missouri, its subsidiary banks, community credit needs. Protestant claims that an and the banks to be acquired under the proposal, and analysis of the types of credit Bank has offered and the other factors that the Board must consider under extended shows that Bank is not sufficiently meeting section 3 of the BHC Act, are consistent with approval identified credit needs, such as financing for singleof this proposal. and multi-family housing and agricultural uses. Although Protestant acknowledges that Bank has been active in home-improvement lending in low-income communities, Protestant asserts that Bank's lending patterns in a number of credit products are not com- 3. 12 U.S.C. § 1842(d). mensurate with Bank's market share in the low- and 4. A bank holding company's home state is that state in which the moderate-income and minority areas of East Kansas operations of the bank holding company's banking subsidiaries were principally conducted on July 1, 1966, or the date on which the City, Missouri. Protestant also has criticized Bank's company became a bank holding company, whichever is later. pattern of opening and closing branch offices.6 5. Under Kansas's interstate banking statute, a bank holding company located in any state contiguous to Kansas, which would Protestant believes that Bank does not have an include Missouri, may acquire a Kansas bank or bank holding adequate review process to ensure that its banking company if the laws of the state in which the acquiring bank holding practices, including Bank's loan underwriting criteria, company is located allow Kansas bank holding companies to acquire banks located in that state on terms that are substantially no more do not constitute discriminatory or other illegal credit restrictive than those established under Kansas's statute. Kan. Stat. practices. Protestant also asserts that Bank's partici- Ann. §§ 9-532, 9-535 (1991). Missouri has a comparable interstate banking statute. Mo. Ann. Stat. § 362.925 (Vernon Supp. 1992). Missouri and Kansas are signatories to a Cooperative Agreement dated May 4, 1992, stating that "the reciprocal provisions of the laws of Kansas and Missouri appear to be compatible and to permit 6. Protestant states that all the branches Bank has opened in its interstate acquisitions of banks and bank holding companies between service area over the last ten years have been in suburban or the two states." Under Kansas law, interstate bank acquisitions are high-income areas, and that, during this period, a need for branch limited to 12 percent of total state deposits in financial institutions. offices in low- and moderate-income and minority areas of East Kan. Stat. Ann. § 9-520 (1991). Under this proposal, United Missouri Kansas City has been exacerbated by the closing of other financial would acquire less than 2 percent of total deposits in Kansas. institutions that provided credit to consumers in this area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

128 Federal Reserve Bulletin • February 1993 pation in community-development activities has not connection with this examination, the OCC received helped it to address identified credit needs, including certain commitments by Bank to take specific steps to the need for financing for single- and multi-family address the areas noted in the examination that rehousing and financing for commercial ventures in the quired improvement. low-income and minority areas in Bank's service area. While Protestant disagrees with the conclusions and Based on these and other allegations, Protestant be- judgments reached by the OCC, Protestant has not lieves that the OCC should have assigned Bank a provided information that was unavailable to or not rating of "substantial noncompliance" in meeting considered by the OCC in this recent examination. community credit needs at its 1991 and 1992 CRA Thus, while Protestant and the OCC note weaknesses examinations. in Bank's CRA performance record, the Board believes that it must, in this case, give significant weight Record of Performance Under the CRA to the judgment of the Bank's primary supervisor that, in light of a full examination and the commitments A. CRA Performance Examination made by Bank to correct its CRA deficiencies, the overall CRA performance of Bank is satisfactory.10 The Community Reinvestment Act provides that "[i]n connection with its examination of a financial institu- B. Lending and Lending-Related Activities tion, the appropriate Federal financial supervisory agency shall . . . assess the institution's record of In Bank's most recent CRA examination, the OCC meeting the credit needs of its entire community, concluded that Bank's record of addressing commuincluding low- and moderate-income neighborhoods, nity credit needs is satisfactory, that Bank's lending consistent with the safe and sound operation of such levels reflect some responsiveness to those needs, and institution" and "take such record into account in its that a substantial portion of Bank's loans are made to evaluation of an application for a deposit facility by borrowers within Bank's community delineation. In such institution."7 The CRA and the Statement of the this regard, the OCC noted that Bank's management Federal Financial Supervisory Agencies Regarding the seeks to address identified community credit needs by Community Reinvestment Act ("Agency CRA State- offering and originating a variety of loans, including, in ment")8 indicate that a CRA examination is an impor- particular, small business loans, home-improvement tant and often controlling factor in the consideration of loans, and consumer loans. an institution's CRA record and that these reports will One of the pressing community credit needs at this be given great weight in the applications process.9 time is small business loans, and the record indicates The Board believes that the CRA examination that Bank is making small business credit available record of Bank is of particular importance in assessing throughout its communities. For example, Bank has Bank's record of CRA performance in this case, originated over $6 million in Small Business Adminisbecause the OCC conducted a full-scope examination tration-guaranteed loans to approximately 50 local of Bank's record of performance under the CRA during the pendency of this application. This examination was prompted in part by the allegations made 10. The remaining United Missouri banks, with two exceptions, by Protestant, and was conducted with the information received either "satisfactory" or "outstanding" ratings from their and allegations provided by Protestant. In addition, primary supervisors in the most recent examinations of their CRA performance. United Missouri Bank of Monett, Monett, Missouri the OCC considered the comments that Protestant ("UMB-Monett"), received a "needs to improve" rating from the made in connection with the 1991 CRA performance Federal Deposit Insurance Corporation ("FDIC") as of June 1990. examination of Bank, which also resulted in Bank The Board previously has determined that United Missouri is making satisfactory progress in improving the CRA performance of UMBachieving a satisfactory CRA performance rating. Monett. In addition, United Missouri Bank, USA ("UMB-USA"), a Bank's primary regulator, therefore, had the opportu- credit card bank in New Castle, Delaware, received a "needs to improve" rating from the FDIC as of February 1991. UMB-USA has nity to, and did, within the last 30 days, consider undertaken steps to improve this rating, including increased staff to Protestant's allegations in the context of a public, address CRA performance and more outreach efforts by the bank's on-site examination of Bank's CRA performance. The CRA officer. These two banks account for approximately 5 percent of the assets of United Missouri. All but one of the Kansas Banks to be OCC examination noted areas that require improveacquired by United Missouri received "satisfactory" CRA ratings at ment in Bank's CRA performance, but concluded that their most recent examinations. Security State Bank, Great Bend, Bank's overall CRA performance was satisfactory. In Kansas ("Security State"), representing less than 5 percent of United Missouri's pro forma assets, received a "needs to improve" rating from the FDIC as of February 14, 1991. Upon consummation of the proposed transaction, United Missouri has agreed to take certain 7. 12 U.S.C. § 2903. specific steps to improve the deficient areas of Security State's CRA 8. 54 Federal Register 13,742 (1989). program, and to implement the types of CRA programs that have been 9. Id. at 13,745. or will be implemented at United Missouri's other subsidiary banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 129 businesses since May 1991, with approximately one- ongoing contacts with, and receives referrals from, third of the dollar volume of those loans going to small business development centers located in its businesses in low- to moderate-income areas of the community. community. At present, Bank has a small business Bank markets its products and services through a loan portfolio of approximately $200 million. variety of advertising activities, including direct mail, With regard to home-improvement loans, the OCC statement stuffers, brochures, lobby signs, billboards, noted that Bank is actively involved in a Missouri neighborhood and regional newspapers, radio, and Housing Development Commission program to pro- television. Bank advertises in all of its delineated vide state-subsidized home-improvement loans. Bank communities, and advertises in both English and Spanalso participates in the Federal Housing Authority's ish. Loan personnel also meet with neighborhood Title I program to provide federally guaranteed home- associations and realtor groups to provide information improvement loans. Bank also originates subsidized to individuals regarding Bank's home-improvement home-improvement loans in connection with the Kan- and home loan programs. In Bank's most recent CRA sas City Power and Light Company's home weather- examination report, the OCC concluded that Bank has ization program. The OCC determined that approxi- implemented an effective marketing program that commately 12 percent of loans originated by Bank during municates credit programs to the entire community. 1992 have been for consumer purposes, including home-improvement loans. D. Corporate Policies The OCC found that Bank's lending levels for homepurchase loans have been satisfactory over the past Bank has in place some of the policies that contribute two years. With respect to residential mortgage loans, to an effective CRA program, as outlined in the the OCC noted that Bank's mortgage company affiliate Agency CRA Statement. For example, Bank's board participates in a program sponsored by the Rehabili- of directors has adopted a detailed CRA statement, tation Loan Corporation ("RLC") to provide afford- and Bank's board of directors has formed a committee able home loans to low- and moderate-income first- of bank and holding company officers who are respontime home buyers. Bank personnel also provide sible for consumer compliance matters, including CRA lending expertise to the RLC by prequalifying appli- compliance. Bank's CRA coordinator is responsible cants for these loans. The mortgage company affiliate for documenting the bank's CRA activities, providing also offers an affordable home loan program in part- regular reports to management on such activities, and nership with the City of Kansas City, Missouri. During disseminating information within the bank regarding the first three quarters of 1992, Bank's mortgage Bank's CRA responsibilities. company affiliate has originated home-purchase loans The Board also notes that, in connection with totalling approximately $4 million, with approximately Bank's most recent CRA examination by the OCC, 30 percent of these loans made to borrowers residing United Missouri has committed to take a number of in low- and moderate-income areas. significant steps to strengthen all aspects of Bank's CRA programs, including the implementation of a C. Ascertainment and Marketing more comprehensive CRA program. These commitments include the establishment of a board-level CRA Although the OCC found some areas for improvement committee, increased documentation for its CRA proin this aspect of Bank's CRA performance, the OCC gram, enhanced procedures for monitoring its marketexamination report noted that many of Bank's officers ing programs, procedures for CRA self-assessments, and employees are either active in or have regular and improved procedures for ensuring compliance contact with a large number of civic, neighborhood, with applicable CRA regulations. Compliance with religious, minority, fraternal, business, and real estate these commitments will be monitored through the groups throughout the metropolitan Kansas City area. OCC's examination process, and by the Board in its These groups represent different interests within the consideration of future applications, and Bank's progbank's delineated community. Bank's mortgage com- ress in complying with all commitments regarding pany affiliate also participates in the bank's ascertain- CRA performance will be carefully considered in ment efforts. Senior officers of the mortgage company connection with future applications by United Misregularly consult and work with local realtors and local souri to expand its deposit-taking facilities. community development corporations regarding housing and lending issues. Bank also has a business E. Branch Locations development group that calls on existing and prospective commercial businesses, focusing on small- to Bank has 25 branches located throughout Jackson, medium-sized businesses. In addition, the bank has Platte and Clay Counties in Missouri. The OCC found Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

130 Federal Reserve Bulletin • February 1993 that Bank's branches have convenient business hours the Board in connection with its findings and decision, and are reasonably accessible to all segments of its and may be enforced in proceedings under applicable delineated community. In addition, the closure of any laws. This approval is also conditioned upon United of Bank's branches is subject to a formal written policy Missouri's receiving all necessary Federal and state requiring certain steps be taken to assess and minimize approvals.12 the potential adverse impact of closing a branch. The transaction approved in this Order shall not be Bank's management has also committed to conduct consummated before the thirtieth calendar day followan annual review of the location and business hours of ing the effective date of this Order, or later than three its branches. This review will include an evaluation of months after the effective date of this Order, unless the appropriateness of services offered, and the acces- such period is extended for good cause by the Federal sibility of branch locations, to all segments of Bank's Reserve Bank of Kansas City, pursuant to delegated delineated community. authority. By order of the Board of Governors, effective F. Conclusion Regarding Convenience and December 22, 1992. Needs Factors Voting for this action: Chairman Greenspan and Governors The Board has carefully considered all of the facts of Mullins, Kelley, La Ware, and Phillips. Voting against this action: Governor Lindsey. Not participating in the considerrecord, including the comments filed in this case, in ation of this action: Governor Angell. reviewing Bank's CRA record under the BHC Act. Based on a review of the entire record of performance, JENNIFER J. JOHNSON including, in particular, the CRA performance exami- Associate Secretary of the Board nation of Bank recently concluded by the OCC, as well as the commitments provided by United Missouri and Dissenting Statement of Governor Lindsey Bank, the CRA performance examinations of the other relevant banks, and the information provided by Prot- The OCC's most recent CRA examination of United estant and United Missouri, the Board believes that the Missouri's lead bank noted a number of significant efforts of United Missouri, the Kansas BHCs, and their weaknesses in Bank's record of compliance. The OCC subsidiary banks to help meet the credit needs of all determined that the CRA performance record of Bank segments of the communities served by these banks, was nonetheless satisfactory, and received certain including low- and moderate-income areas, are, on commitments made by United Missouri to address balance, consistent with approval of these applicaeach of the noted deficiencies. I believe that the tions.11 deficiencies noted in the public CRA examination in Based on the foregoing, including the conditions and this case are significant, and that it is inappropriate for commitments described in this Order and those made the Board to rely so heavily, in the applications in these applications, and all of the facts of record, the process, on commitments regarding prospective be- Board has determined that the applications should be, havior. I believe commitments to improve Bank's and hereby are, approved. The Board's approval is CRA performance are particularly inappropriate in specifically conditioned upon compliance with all the this case because Bank has significant resources, commitments made by United Missouri in connection represents a substantial part of United Missouri's with these applications. All of the commitments and assets, and has a well-established retail banking netconditions relied upon by the Board in reaching its work in place. The Agency CRA Statement requires decision are both commitments imposed in writing by that the CRA policies of an applicant and its subsidiary banks should be in place and working well when an application is considered. In this case, I believe that 11. Protestants have requested that the Board hold a public meeting the record indicates that Bank's CRA policies are not or hearing on these applications. The Board is not required under the adequate. For these reasons, I would deny the appli- BHC Act to hold a public hearing or meeting in this case. Under the Board's rules, the Board may, in its discretion, hold a public hearing cation pending before the Board. or meeting on an application to clarify factual issues related to the application, and to provide an opportunity for testimony, if appropri- December 22, 1992 ate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully considered this request. In the Board's view, interested parties have had a sufficient opportunity to present written submissions, and have submitted substantial written comments that have been considered by 12. In this regard, the Board notes that, on August 17, 1992, the the Board. In light of this, the Board has determined that a public State of Kansas Banking Board approved the applications filed by meeting or hearing is not necessary to clarify the factual record in United Missouri under Kansas law to acquire the Kansas BHCs and these applications, or otherwise warranted in this case. Accordingly, thereby indirectly acquire the Kansas Banks. This state approval was the request for a public meeting or hearing on these applications is conditioned upon United Missouri's obtaining all necessary Federal hereby denied. approvals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 131 Orders Issued Under Section 4 of the Bank banks and engages directly and through subsidiaries, Holding Company Act including CIT, in a variety of nonbanking activities.3 The Board has previously determined by regulation The Dai-Ichi Kangyo Bank, Ltd. that the collection agency activities that Applicants Tokyo,Japan propose to conduct are closely related to banking for purposes of section 4(c)(8) of the BHC Act.4 Appli- Chemical Banking Corporation cants propose to conduct these activities through New York, New York Holdings in accordance with the Board's regulations. Accordingly, the Board concludes that the proposed Order Approving Application to Engage in collection agency activities are permissible for pur- Collection Agency Activities, and in Asset poses of section 4(c)(8) of the BHC Act and section Management, Servicing, and Collection Activities 225.25(b)(23) of the Board's Regulation Y. CIT will provide asset management services to the The Dai-Ichi Kangyo Bank, Ltd., Tokyo, Japan ("Dai- Resolution Trust Corporation ("RTC") and the Fed- Ichi"), and Chemical Banking Corporation, New eral Deposit Insurance Corporation ("FDIC").5 In York, New York ("Chemical") (collectively referred addition, CIT proposes to provide these services to to as "Applicants"), both bank holding companies unaffiliated third party investors that purchase pools of within the meaning of the Bank Holding Company Act assets assembled by the RTC or the FDIC from ("BHC Act"), have applied under section 4(c)(8) of troubled financial institutions, and generally to unaffilthe BHC Act (12 U.S.C. § 1843(c)(8)) and section iated financial and non-financial institutions with trou- 225.23(a)(3) of the Board's Regulation Y (12 C.F.R. bled assets. Under the proposal, neither Applicants 225.23(a)(3)), to engage de novo in collection agency nor CIT would acquire an ownership interest in the activities pursuant to section 225.25(b)(23) of the assets that they manage or in the institutions for which Board's Regulation Y through The CIT Group Hold- they provide asset management services. In addition, ings, Inc., New York, New York ("Holdings"), and in CIT would not engage in providing real property asset management, servicing, and collection activities management or real estate brokerage services as part through The CIT Group/Asset Management, Inc., of its proposed activities.6 Livingston, New Jersey ("CIT").1 The Board has previously determined that, within Notice of the applications, affording interested per- certain parameters, providing asset management sersons an opportunity to submit comments, has been vices for assets originated by financial institutions7 and published (57 Federal Register 7589 and 43,229 their bank holding company affiliates is an activity that (1992)). The time for filing comments has expired, and is closely related to banking for purposes of the BHC the Board has considered the application and all Act.8 Applicants have proposed to conduct all asset comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. Dai-Ichi, with total consolidated assets equivalent to 3. Data for Chemical are as of September 30, 1992. approximately $476.1 billion, is the largest banking 4. See 12 C.F.R. 225.25(b)(23). organization in the world.2 Dai-Ichi owns a bank 5. Asset management encompasses the liquidation (or other disposition) of loans and their underlying collateral, including real estate subsidiary in Los Angeles, California; operates and other assets acquired through foreclosure or in satisfaction of branches in Chicago, Illinois, and New York, New debts previously contracted ("DPC property"). Specific individual activities include: classifying and valuing loan portfolios; filing re- York; and operates agencies in Los Angeles, Califorviews of loan documentation; developing collection strategies; negonia; San Francisco, California; and Atlanta, Georgia. tiating renewals, extensions, and restructuring agreements; initiating Dai-Ichi also engages in various nonbanking activities foreclosure, bankruptcy, and other legal proceedings, where appropriate; and developing and implementing market strategies for the sale in the United States through a number of subsidiaries, or refinancing of individual loans and for the packaging and sale of including CIT. whole or securitized loan portfolios. In addition, Applicants would conduct and review (either directly or through independent contrac- Chemical, with total consolidated assets of tors) appraisals and environmental inspections; provide asset valua- $138.8 billion, is the third largest banking organization tions; perform cash-flow and asset-review analyses; contract with and in the United States. Chemical operates 25 subsidiary supervise independent property managers; and lease (either directly or through independent contractors) real estate and other DPC property. Applicants also would dispose of DPC property by developing and implementing marketing strategies for the sale of DPC property, either individually or packaged for investors or developers. 6. Applicants will contract with independent third parties to obtain 1. Holdings is a joint venture in which Dai-Ichi and Chemical own these services for assets under the management of CIT. 60 percent and 40 percent, respectively. CIT is a wholly owned 7. Financial institutions include banks, savings associations, and subsidiary of Holdings. credit unions. 2. Asset data are as of March 31, 1992. Ranking is as of Decem- 8. See First Interstate Bancorp, 11 Federal Reserve Bulletin 334 ber 31, 1991. (1991); Banc One Corporation, 11 Federal Reserve Bulletin 331 (1991); Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

132 Federal Reserve Bulletin • February 1993 management activities under the same terms, and Consummation of the proposal can reasonably be subject to the same conditions as in previous Board expected to result in public benefits. Applicants' pro- Orders regarding this activity.9 For example, Appli- posal would facilitate the disposal of assets of financial cants have committed that they will not own the stock institutions in receivership as well as financial and of, or be represented on the board of directors of, any non-financial institutions with troubled financial asunaffiliated institution for which CIT provides asset sets. Moreover, the efficient disposition of such assets management services. In addition, Applicants have can reasonably be expected to produce benefits to the committed that CIT will not establish policies or public. CIT will own no equity in the institutions for procedures of general applicability for the institutions which it provides asset management services or in the whose assets it manages, and that the services of CIT assets it manages. Applicants' de novo entry into the for unaffiliated institutions would be limited to asset market would increase competition for these services. management, servicing, and collection activities.10 Applicants have indicated that they may, in certain Applicants propose to engage in asset management instances, seek approval to acquire institutions whose activities for assets originated by non-financial institu- assets are being managed by CIT. In previous cases, tions as well as financial institutions.11 These assets, the Board expressed concern that a bank holding however, would be limited to the types of assets that a company might obtain confidential information in the financial institution would have the authority to origi- course of providing its asset management services that nate.12 Accordingly, the Board believes that Appli- would provide the bank holding company with a cants would have the expertise to engage in the competitive advantage over other institutions in the management of these types of assets, regardless of the bidding process for the failed institution under manoriginating entity, and that the proposal is within the agement.13 The Board also noted that such information scope of the asset management approval in the could give the managing bank holding company a Board's prior Orders. For these reasons, the Board competitive advantage over the ultimate acquiror of concludes that Applicants' proposed activities are the failed institution in markets where they both comclosely related to banking. pete. The Board is also required to determine whether the To address these concerns, Applicants have comperformance of the proposed activity by Applicants is mitted that they will establish and implement procea proper incident to banking—that is, whether the dures to preserve the confidentiality of information proposed activity "can reasonably be expected to obtained in the course of providing asset management produce benefits, such as greater convenience, in- services.14 These procedures will prevent the use of creased competition, or gains in efficiency, that out- information obtained by CIT through its asset manageweigh possible adverse effects, such as undue concen- ment activities in the course of preparing any bid that tration of resources, decreased or unfair competition, Applicants may prepare to acquire an institution manconflicts of interests, or unsound banking practices." aged by CIT, and will prevent Applicants from com- 12 U.S.C. § 1843(c)(8). peting unfairly against the winning bidder in the relevant market. There is no evidence in the record to indicate that consummation of these proposals is likely to result in NCNB Corporation, 11 Federal Reserve Bulletin 124 (1991); First Florida Banks, Inc., 14 Federal Reserve Bulletin 111 (1988). any significantly adverse effects, such as undue con- 9. Id. centration of resources, decreased or unfair competi- 10. Applicants also would provide these services for a limited period of time. The Board notes that, while Applicants would manage assets tion, conflicts of interests, or unsound banking pracon an ongoing basis, the owner of the assets would retain the right to tices. The financial and managerial resources of make all final decisions regarding asset dispositions and to terminate Applicants and their subsidiaries are also consistent Applicants as asset manager. 11. These assets include real estate; commercial, consumer and with approval. Accordingly, on the basis of all of the other loans; equipment leases; and extensions of credit. Non-financial facts of record and commitments made by Applicants, institutions include pension funds, leasing companies, finance compathe Board concludes that the public benefits that nies, and investment companies formed to engage in asset management activities. would result from approval of these applications out- 12. These assets would include: equipment leases that conform to weigh the potential adverse effects, and that the public section 225.25(b)(5) of the Board's Regulation Y (12 C.F.R. interest factors it must consider under section 4(c)(8) 225.25(b)(5)); loans secured by equipment and equipment acquired through foreclosure or in satisfaction of such leases and loans; of the BHC Act are consistent with approval. consumer loans financing manufactured housing, vessels, vehicles, and residences; asset-based commercial loans; factored accounts receivables; and collateral for the aforementioned types of loans acquired through foreclosure or in satisfaction of such loans. Prior 13. See, e.g., NCNB Corporation, 11 Federal Reserve Bulletin 124 approval of the Board would be required before providing asset (1991). management services in connection with pools of assets of the type 14. Applicants' procedures will be subject to review by the Federal impermissible for a financial institution to originate. Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 133 Based upon the foregoing and all of the other facts of would retain the shares of C.J. Lawrence, Inc. ("Comrecord, including commitments made by Applicants pany"), New York, New York, which engages in: and conditions in this Order, the Board has determined (i) Underwriting and dealing in all types of debt that these applications should be, and hereby are, and equity securities;1 approved. The Board's approval is expressly condi- (ii) Offering investment advice and securities brotioned upon compliance with all of the commitments kerage services, separately and on a combined made by Applicants in connection with these applica- basis; tions and the conditions referred to in this Order and (iii) Underwriting and dealing in securities which the above-referenced Orders. For the purpose of this may be underwritten and dealt in by state member action, all of these commitments and conditions will be banks; considered conditions imposed in writing and, as such, (iv) Offering financial advisory services; may be enforced in proceedings under applicable law. (v) Engaging in the private placement of all types The Board's determination is also subject to all of the of securities as agent; and conditions set forth in the Board's Regulation Y, (vi) Buying and selling all types of securities on including those in sections 225.4(d) and 225.23(b), and the order of investors as a "riskless principal." to the Board's authority to require modification or termination of the activities of a bank holding com- Applicant also proposes to retain indirectly Morgan pany or any of its subsidiaries as the Board finds Grenfell Finance, Incorporated ("Finance"), New necessary to assure compliance with, and to prevent York, New York, which acts as: evasion of, the provisions of the BHC Act and the (i) An originator and principal in interest rate Board's Regulations and Orders issued thereunder. swap transactions on a limited basis related to its These transactions shall not be consummated later own portfolio; than three months after the effective date of this (ii) An originator and principal with respect to Order, unless such period is extended for good cause certain interest rate risk-management products by the Board or by the Federal Reserve Bank of San such as caps, floors and collars, as well as options Francisco, acting pursuant to delegated authority. on swaps ("swap derivative products"); By order of the Board of Governors, effective (iii) A broker or agent with respect to the forego- December 21, 1992. ing transactions and instruments and currency swaps and currency swap derivative products; Voting for this action: Chairman Greenspan and Governors and Mullins, Angell, Kelley, La Ware, Lindsey, and Phillips. (iv) An advisor to institutional customers regarding financial strategies involving interest rate and JENNIFER J. JOHNSON currency swaps and swap derivative products. Associate Secretary of the Board Applicant also proposes that Finance purchase and Deutsche Bank AG sell gold bullion for Finance's own account.2 Applicant also has applied to retain indirectly Morgan Frankfurt, Federal Republic of Germany Grenfell Capital Management Incorporated, New York, New York, which engages in offering portfolio Order Approving Application to Retain the U.S investment advice.3 Subsidiaries of Morgan Grenfell pic, London, England, and Thereby to Engage in Securities-Related Activities and Other Nonbanking Activities 1. Applicant has not proposed to underwrite or deal in securities issued by open-end investment companies and accordingly, may not do so without further application under section 4(c)(8) of the BHC Deutsche Bank AG, Frankfurt, Federal Republic of Act. Germany ("Applicant"), a foreign bank subject to the 2. Applicant proposes that Finance purchase and sell options, Bank Holding Company Act (the "BHC Act"), has futures, and options on futures with respect to gold bullion in order to hedge its position in gold bullion in accordance with the Board's applied for the Board's approval under section 4(c)(8) Policy Statement, Statement of policy concerning bank holding comof the BHC Act (12 U.S.C. § 1843(c)(8)), to retain all panies engaging in futures, forward and options contracts on U.S. of the shares of Morgan Grenfell U.S. Holdings Incor- Government and agency securities and money market instruments, 12 C.F.R. 225.142. porated ("Holdings"). Holdings owns all of the shares 3. Company, Finance and Management are owned by Holdings. of the U.S. subsidiaries of Morgan Grenfell Group pic, Holdings also controls Cyrus J. Lawrence Capital Holdings, Inc., New York, New York, which purchases investments in companies in a merchant bank located in London, England. In accordance with the BHC Act. All of these entities are referred to proposing to retain all of Holdings' shares, Applicant collectively as "Companies." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

134 Federal Reserve Bulletin • February 1993 Notice of the application, affording interested per- the conduct of these securities underwriting and dealsons an opportunity to submit comments on the pro- ing activities is consistent with section 20 of the posal, has been duly published (55 Federal Register Glass-Steagall Act, provided that the underwriting 29,416 (1990)).4 The time for filing comments has and dealing subsidiary derives no more than 10 percent expired, and the Board has considered the application of its total gross revenue from underwriting and dealand all comments received in light of the public ing in bank-ineligible securities over any two-year interest factors set forth in section 4(c)(8) of the BHC period.6 Applicant has committed that Company will Act. conduct its underwriting and dealing activities with respect to bank-ineligible securities subject to the 10 Underwriting and Dealing in Bank-Ineligible percent revenue test established by the Board in its Securities previous orders, and to the prudential limitations established by the Board in its Canadian Imperial, The Board has determined that, subject to the pruden- et al. order.7 tial framework of limitations established in previous Applicant's proposal is broad enough to include decisions to address the potential for conflicts of underwriting and dealing in shares of closed-end ininterests, unsound banking practices, or other adverse vestment companies and unit investment trusts (but effects, the proposed underwriting and dealing activi- not open-end investment companies, i.e., mutual ties are so closely related to banking as to be proper funds).8 Underwriting or dealing activities involving incidents thereto within the meaning of section 4(c)(8) investment company securities under this Order must of the BHC Act.5 The Board has also determined that be conducted in accordance with the limitations contained in the existing provisions of Regulation Y authorizing bank holding companies to provide advis- 4. The Board received comments from the Investment Company ory activities to investment companies. In particular, Institute ("ICI"), a trade association representing the investment Regulation Y provides that a bank holding company company industry. The ICI has protested the application to the extent and its subsidiaries may not purchase for their own that it could be read to permit: (1) Sponsoring, organizing, and managing three open-end funds; account, or engage directly or indirectly in the sale or (2) Sponsoring, organizing, and managing closed-end funds, unless distribution of, the securities of any investment comthe fund is not "primarily or frequently engaged in the issuance, sale, and distribution of securities;" pany that the holding company advises or sponsors. (3) Private placement of securities issued by investment companies 12 C.F.R. 225.125(g)(1), (h). This regulation applies to that are advised or sponsored by Applicant or any of its bank or nonbank subsidiaries; (4) Providing discount or full service brokerage services with respect to securities issued by investment companies that are ered and approved applications by foreign banks to engage in underadvised or sponsored by Applicant or any of its bank or nonbank writing and dealing in all types of debt and equity securities. In that subsidiaries; order, the Board modified the prudential framework imposed in J.P. (5) Acting as riskless principal with respect to securities issued by Morgan & Company Incorporated, et al., to account for the fact that investment companies that are advised or sponsored by Applicant the applicants were foreign banks that operate predominately outside or any of its bank or nonbank subsidiaries; the United States. The Board determined in those decisions to adjust (6)(i) Privately placing, (ii) offering discount or full-service broker- the funding and certain operational requirements of the framework age, or (iii) acting as riskless principal with respect to securities previously established for those activities in order to take into account issued by investment companies that are advised or sponsored by principles of national treatment and the Board's policy not to extend Applicant's bank affiliates or subsidiaries of its bank affiliates; and U.S. bank supervisory standards extraterritorially. See also The (7) The acquisition of securities representing interests in unit Toronto-Dominion Bank, 76 Federal Reserve Bulletin 573 (1990); investment trusts sponsored by the Applicant or any of its bank or Canadian Imperial Bank of Commerce, 76 Federal Reserve Bulletin nonbank affiliates. 548 (1990). The Board hereby adopts and incorporates herein by As discussed throughout the Order, Applicant would conduct its reference the reasoning and analysis from the section 20 orders except activities involving investment companies in compliance with prior as that reasoning was specifically modified by the Canadian Imperial, Board orders. Accordingly, the ICI's comments do not warrant denial et al. order, as well as the reasoning and analysis contained in the of the proposal. Canadian Imperial, et al. order. 5. J.P. Morgan & Company Incorporated, The Chase Manhattan 6. Canadian Imperial, et al.; Modification Order; and J.P. Morgan Corporation, Bankers Trust New York Corporation, Citicorp, and & Company Incorporated, et al. Security Pacific Corporation, 75 Federal Reserve Bulletin 192 (1989) 1. Compliance with the revenue limits shall be calculated in the ("J.P. Morgan & Company Incorporated, et al.")', Chemical New manner set forth in J.P. Morgan & Company Incorporated, et al., 75 York Corporation, et ai, 73 Federal Reserve Bulletin 731 (1987); Federal Reserve Bulletin 192, 196-197 (1989). Citicorp, et ai, 73 Federal Reserve Bulletin 473 (1987), ajfd sub nom. 8. At the time Applicant acquired Company, pursuant to the Securities Industry Association v. Board of Governors of the Federal Board's grant of an exemption under section 4(c)(9) of the BHC Act, Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S. Company was involved in the distribution of open-end investment 1059 (1988); as modified by Order, dated September 21, 1989, companies. Company has ceased this activity. The ICI protested the 75 Federal Reserve Bulletin 751 (1989) ("Modification Order"), ajfd application to the extent that Company would sponsor, organize, or sub nom. Securities Industry Association v. Board of Governors of the martage closed-end investment companies, unless such investment Federal Reserve System, 900 F.2d 360 (D.C. Cir. 1990) (collectively, company was not "primarily or frequently engaged in the issuance, "section 20 orders"). sale, and distribution of securities." If an investment company were In Canadian Imperial Bank of Commerce, The Royal Bank of engaged in such activities, it would not be considered to be a Canada, Barclays PLC, and Barclays Bank PLC, 76 Federal Reserve "closed-end" investment company. Accordingly, Applicant has not Bulletin 158 (1990) ("Canadian Imperial, et al."), the Board consid- requested authority to engage in such activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 135 all types of investment companies, including unit decisions; and that the extensions of credit meet investment trusts. prudent and objective standards as well as the standards set out in section 23B of the Federal Reserve Private Placement and "Riskless Principal" Act.12 The Federal Reserve Bank of New York will Activities closely review loan documentation of Applicant's branches to ensure that an independent and thorough The Board has previously determined that, subject to credit evaluation has been undertaken with respect to certain prudential limitations established to address the participation of those institutions in these credit the potential for conflicts of interests, unsound bank- extensions to issuers of securities privately placed by ing practices or other adverse effects, the proposed an agent affiliated with those institutions. private placement and riskless principal activities are Applicant also has proposed to have Company place so closely related to banking as to be proper incidents securities with Applicant or its nonbank subsidiaries thereto within the meaning of section 4(c)(8) of the consistent with the Board's decision in J.P. Morgan. BHC Act.9 The Board has also previously determined In this regard, Applicant will establish both individual that acting as agent in the private placement of secu- and aggregate limits on the investment by affiliates of rities and purchasing and selling securities on the order Company and Finance in any particular issue of secuof investors as a "riskless principal" do not constitute rities that is placed by Company or Finance and will underwriting and dealing in securities for purposes of establish appropriate internal policies, procedures, section 20 of the Glass-Steagall Act, and that revenue and limitations regarding the amount of securities of derived from these activities is not subject to the 10 any particular issue placed by Company or Finance percent revenue limitation on ineligible securities un- that may be purchased by Applicant and each of its derwriting and dealing.10 Applicant has committed that nonbanking subsidiaries, individually and in the aggre- Company and Finance will conduct their private place- gate.13 These policies and procedures, as well as the ment and "riskless principal" activities using the same purchases themselves, will be reviewed by the Federal methods and procedures, and subject to the same Reserve Bank of New York. prudential limitations established by the Board in the Applicant has requested that Company be permitted Bankers Trust and the J.P. Morgan orders, as modito privately place unrated securities of affiliates or fied to reflect Applicant's status as a foreign bank, unrated securities representing assets of affiliates with except as noted below.11 individuals whose net worth exceeds $1 million. The Applicant has proposed to have its affiliated banks, Board has previously approved such placement with branches, and agencies extend credit to an issuer sophisticated institutions only. The Board believes whose debt securities have been placed by Company that this modification would not result in significant or Finance where the proceeds would be used to pay adverse effects since these customers would be finanthe principal amount of the debt securities at maturity. cially sophisticated with the expertise to evaluate Applicant has committed that these extensions of independently the merits of the securities.14 Accordcredit will conform to the limitations set forth in the ingly, Company may place unrated securities of affil- Board's decision in J.P. Morgan, including the re- iates with individuals who fall within the definition of quirement that a period of at least three years elapse "institutional investor" in Regulation Y, that is, indifrom the time of the placement of the securities to the viduals whose net worth (or net worth with a spouse) decision to extend credit; that Applicant maintain exceeds $1 million. 12 C.F.R. 225.2(g). adequate documentation of these transactions and The Board has previously determined by regulation that full-service brokerage activities are permissible for bank holding companies under section 4(c)(8) of 9. J.P. Morgan & Company Incorporated, 76 Federal Reserve Bulletin 26 (1990) ("J.P. Morgan"); Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust"). 10. Id. The ICI has objected to Applicant's proposal to the extent that it could be construed to seek approval for Company to privately place securities of investment companies sponsored or advised by 12. 12 U.S.C. § 371c-l. Applicant or its bank or nonbank affiliates. Applicant has not re- 13. The limit established shall not exceed 50 percent of the issue quested approval to place such securities. being placed. Additionally, in the development of these policies and In addition, the ICI objected to Applicant's proposal to the extent procedures, Company will incorporate, with respect to placements of that it could be construed to seek approval for Company to act as securities, the limitation established by the Board in condition 12 of its riskless principal with respect to securities of investment companies J.P. Morgan & Company Incorporated et al. order regarding aggresponsored or advised by Applicant or its bank or nonbank affiliates. gate exposure of the holding company on a consolidated basis to any Applicant has not requested approval to act as riskless principal with single customer whose securities are underwritten, dealt in, or placed respect to such securities. by Company. 11. See, e.g., The Toronto-Dominion Bank, 76 Federal Reserve 14. See, e.g., Banc One Corporation, 76 Federal Reserve Bulletin Bulletin 573 (1990). 756 (1990). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

136 Federal Reserve Bulletin • February 1993 the BHC Act.15 Applicant proposes that Company poses to conduct these activities in accordance with engage in these activities in accordance with all of the Regulation Y. 12 C.F.R. 225.25(b)(4)(vi). conditions set forth in Regulation Y.16 In addition, Company will provide discretionary investment man- Swap Activities agement services for institutional customers only, subject to the same terms and conditions as previously The Board has previously determined by order that the approved by the Board.17 proposed swaps and swap derivative products activities are closely related to banking and permissible for Financial Advisory Activities bank holding companies within the meaning of section 4(c)(8) of the BHC Act.19 The Board must also find Applicant has proposed that Company engage in the that the proposed activities "can reasonably be exfollowing advisory activities: pected to produce benefits to the public . . . that (1) Acting as a financial advisor by rendering advice outweigh possible adverse effects, such as undue with respect to arranging, structuring, financing, and concentration of resources, decreased or unfair comnegotiating domestic and international mergers, ac- petition, conflicts of interests, or unsound banking quisition, divestitures, recapitalizations, joint ven- practices." 12 U.S.C. § 1843(c)(8). tures, leveraged buyouts, financing transactions and Finance appears to be capable of managing the risks other corporate transactions for affiliated and unaf- associated with the proposed activities. Applicant's filiated financial and nonfinancial institutions and subsidiary, Morgan Grenfell pic, which has extensive high net worth individuals, and to provide ancillary experience in lending and financing services worldservices or functions incidental to these activities; wide, has undertaken to provide credit screening for (2) Providing valuation services in connection with all potential counterparties of Finance through its corporate transactions to affiliated and unaffiliated credit desk services in London. In appropriate cases, financial and nonfinancial institutions and high net Finance will obtain a letter of credit on behalf of, or worth individuals; collateral from, a counterparty.20 In addition, Finance (3) Providing fairness opinions in connection with will establish separate credit risk exposure limits for corporate transactions to affiliated and unaffiliated each swap counterparty. Finance will monitor this financial and nonfinancial institutions and high net exposure on an ongoing basis, in the aggregate and worth individuals; and with respect to each counterparty. Senior management (4) Providing financial feasibility studies,18 princi- will be periodically informed of the potential risk to pally in the context of determining the financial which Finance is exposed. attractiveness and feasibility of corporate transac- In order to manage the risk associated with adverse tions to corporations (collectively "financial advis- changes in interest rates ("price risk"), Finance will ory services"). match all the swaps and related instruments in which it is a principal and will hedge any unmatched positions The Board has previously approved these activities by pending a suitable match. Finance will not enter into regulation for bank holding companies. Applicant pro- unmatched or unhedged swaps for speculative purposes. Finance's management will set absolute limits on the level of risk to which its swap portfolio may be exposed. Finance's exposure to price risk will be 15. 12 C.F.R. 225.25(b)(4) and (15)(ii); 57 Federal Register 41,381 monitored by both business management and internal (1992). auditing personnel to guarantee compliance with the 16. When providing full-service brokerage with respect to ineligible risk limitations imposed by management. Auditing securities that it holds as principal, Company will provide customers with disclosure statements as previously approved by the Board. See personnel will report directly to senior management to PNC Financial Corporation, 75 Federal Reserve Bulletin 396, 397 ensure that any violations of portfolio risk limitations (1989). Specifically, Company will inform its customers at the comare reported and corrected. mencement of the relationship that, as a general matter, Company may be a principal or may be engaged in underwriting with respect to, With respect to the risk associated with the potential or may purchase from an affiliate, those securities for which brokerage for differences between the floating rate indices on two and advisory services are provided. At the time any brokerage order is taken, the customer will be informed (usually orally) whether matched or hedged swaps ("basis risk"), Finance's Company is acting as agent or principal with respect to a security. management will impose absolute limits on the aggre- Confirmations sent to customers also will state whether Company is acting as agent or principal. 17. See J.P. Morgan & Co. Incorporated, 73 Federal Reserve Bulletin 810 (1987). 19. The Sumitomo Bank, Limited, 75 Federal Reserve Bulletin 582 18. Feasibility studies do not include assisting management with (1989) ("Sumitomo Bank"). planning or marketing for a given project or providing general opera- 20. Applicant has indicated that Morgan Grenfell pic may be the tional or management advice. provider of the letter of credit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 137 gate basis risk to which Finance's swaps portfolio may Financial Factors, Managerial Resources and Other be exposed. If the level of risk threatens to exceed the Considerations limits at any time, Finance will actively seek to enter into matching transactions for its unmatched posi- In order to approve this application, the Board is tions. Finance's internal auditing staff, together with required to determine that the performance of the management, will monitor compliance with the man- proposed activities by Applicant "can reasonably be agement-imposed basis risk limits.21 expected to produce benefits to the public . . . that In order to minimize any possible conflicts of inter- outweigh possible adverse effects, such as undue est between Finance's role as a principal or broker in concentration of resources, decreased or unfair comswap transactions and its role as advisor to potential petition, conflicts of interests, or unsound banking counterparties, Finance will disclose to each customer practices." 12 U.S.C. § 1843(c)(8). the fact that Finance may have an interest as a The Board has reviewed the capitalization of both counterparty, principal, or broker in the course of Applicant and Company in accordance with the stanaction ultimately chosen by the customer. Also, in any dards set forth in the Canadian Imperial, et al. order,23 case in which Finance has an interest in a specific and finds the capitalization of each to be consistent transaction as an intermediary or principal, Finance with approval of the proposal. In this regard, the will advise its customer of that fact before recom- Board notes that Applicant's capital ratios, both bemending participation in that transaction.22 In addi- fore and after deduction of investments in and unsetion, Finance's advisory services will be offered only cured loans to Company, are well above the minimum to sophisticated customers who would be unlikely to levels established in the risk-based capital guidelines place undue reliance on investment advice received adopted by the Basle Committee on Banking Regulaand better able to detect investment advice motivated tion and Supervisory Practices, and that Applicant by self-interest. may be considered strongly capitalized.24 Applicant is In considering activities related to swap transac- in good standing with its home country supervisor and tions, the Board has expressed its concerns regarding the U.S. offices and subsidiaries of Applicant are in conflicts of interest and related adverse effects that, generally satisfactory condition. absent certain limitations, may be associated with With respect to the capitalization of Company, financial advisory activities. In order to address these approval of the requested activities is limited to a level potential adverse effects, Applicant has committed consistent with the projections of position size and that: types of securities contained in the application. The (i) Finance's financial advisory activities will not Board has also determined that all other financial and encompass the performance of routine tasks or managerial factors are consistent with the ability of operations for a client on a daily or continuous Applicant to remain a source of strength to its U.S. basis; banking operations. (ii) Disclosure will be made to each potential To approve the application, the Board must find that client of Finance that Finance is an affiliate of Applicant's performance of the activities would result Applicant; in public benefits that outweigh potential adverse (iii) Finance will not make available to Applicant effects. In making this evaluation, the Board considor any of Applicant's subsidiaries confidential ered that Applicant, through Deutsche Bank Capital information received from Finance's clients, ex- Corporation, New York, New York ("DBCC"), encept with the client's consent; and gages in securities activities in the United States that (iv) Advice rendered by Finance on an explicit fee are not permissible for U.S. bank holding compabasis will be without regard to correspondent balances maintained by a client of Finance at Applicant or any of Applicant's depository sub- 23. 76 Federal Reserve Bulletin at 161 (1990). sidiaries. 24. Consistent with the guidelines adopted in connection with the Report on Capital Equivalency, issued June 19, 1992, Applicant's capital was evaluated under the risk-based capital guidelines as administered by Applicant's home country, a signatory to the Basle Capital Accord. The Basle standard provides a common basis for evaluating the general equivalency of capital among banks from 21. In addition to rate and basis risk, the value of a swap option is various countries. As noted in the Study, however, simply meeting the subject to market expectations of the future direction and rate of minimum capital standards does not automatically imply that the change in interest rates, or volatility risk. Finance's management will financial condition of a foreign bank applicant is consistent with impose absolute limits on the level of volatility risk to which Finance's approval of a particular application. The capital ratio necessary to swap portfolio may be exposed. obtain approval for full underwriting and dealing authority will be 22. In any transaction in which Finance arranges a swap transaction higher than the ratio required to conduct a low-risk activity. As noted, between an affiliate and a third party, the third party will be informed in this case, Applicant's ratios are well above the Basle minimum that Finance is acting on behalf of an affiliate. standards and are equivalent to those required of domestic applicants. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

138 Federal Reserve Bulletin • February 1993 nies.25 As a result, Applicant could conceivably gain well as the prudential framework governing Company an unfair competitive advantage over domestic bank as a section 20 subsidiary and the applicable legal holding companies by combining grandfathered secu- restrictions under federal securities registration laws, rities and other activities with activities permissible the Board believes that Applicant would not gain an under section 4(c)(8) of the BHC Act. This could occur unfair competitive advantage in conducting the grandif the grandfathered activities were used to support or fathered activities, and that those activities would not enhance the section 4(c)(8) activities, or the 4(c)(8) give rise to conflicts of interest in connection with activities were used to support or enhance the grand- activities approved under section 4(c)(8) of the BHC fathered activities, thus allowing Applicant to offer a Act. wider array of services than is permissible for domes- The Board received a comment from Mr. Steven tic bank holding companies. Moreover, the combina- Mizel ("Protestant") alleging that Applicant's retention of the companies' underwriting, dealing, place- tion of the subsidiaries of Morgan Grenfell pic would ment, and advisory activities could give rise to not reasonably be expected to produce benefits to the conflicts of interest. public. Protestant bases his assertion on claims that Applicant has, however, committed that DBCC26 Applicant and Morgan Grenfell breached their fiduand the Companies will remain completely separate ciary duties and tortiously interfered with Protestant's and will not engage in any business with, or on behalf business. Protestant alleges that he had entered into an of, each other. Included within this commitment are a agreement with Company whereby they would offer series of individual commitments, set forth as Appen- financial advisory services to third parties. Protestant dix A to this order, designed to further the complete asserts that Applicant and its subsidiaries breached the separation of DBCC from the U.S. operations of contract, breached fiduciary duties, made fraudulent Morgan Grenfell.27 These commitments are consistent statements or were negligent in making statements, with representations made in connection with prior maliciously and wrongfully interfered with present and Board decisions concerning the approval of section prospective business relations, and that Applicant 4(c)(8) applications where the applicant also engaged aided and abetted the breach of fiduciary duties. There in grandfathered activities under the IBA.28 The com- is a continuing lawsuit between Applicant and its mitments have been modified and expanded to reflect subsidiaries and Protestant contesting the claims. the nature of the activities of the U.S. operations of Protestant has raised issues that the Board is not Morgan Grenfell. In light of these commitments, as permitted to consider under section 4(c)(8) of the BHC Act. The Board does not adjudicate private contractual claims between parties, and Protestant's asser- 25. DBCC is a registered broker-dealer that engages in underwriting tions will be considered in a court of law. Thus, and dealing in all types of securities and in various other financial Protestant has not raised any issue which would reactivities. Applicant has owned DBCC and has indirectly engaged in such activities since prior to July 26, 1978. Section 8(c)(1) of the quire denial of the application.29 International Banking Act of 1978 ("IBA") provides that any foreign Protestant also alleges that the Board should not bank that became subject to the IBA on its enactment may continue to engage in the United States in any activities in which it or an affiliate approve the application because competition in the was engaged on July 26,1978. 12 U.S.C. § 3106(c)(1). Thus, Applicant finance industry would be diminished. While the acis grandfathered under section 8(c)(1) of the IBA to retain its interest quisition does decrease the competition in the indusin DBCC and to continue to engage in securities activities, unless the Board, after notice and opportunity for a hearing, finds that the try, there will continue to be a large number of continuation of the activities would give rise to adverse effects, such competitors in the industry. Accordingly, the Board as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices in the United has determined that this comment does not require States. denial of the application. 26. For purposes of these commitments, "DBCC" refers to DBCC Protestant also alleges that the application is incomand any of its subsidiaries or affiliates operating in the United States under section 8(c)(1) of the IBA. plete because it does not reflect an agreement to 27. Applicant has proposed that a management official of its New provide financial advisory services with Eric York branch who is also a director of Company (as permitted pursuant Gleacher. The Board notes, however, that Applicant to condition 13 of the Canadian Imperial, et al. order) also serve as a director of Deutsche Bank North American Holding Corp., the parent has submitted a separate and independent application company of DBCC. The purpose of such interlock is to provide to perform financial advisory services in cooperation supervision and oversight in connection with Applicant's U.S. operwith Eric Gleacher & Co. Protestant further asserts ations. The official would have no day-to-day responsibilities for the operations of DBCC or Company. The Board believes that such oversight is prudent and has determined that the proposal would not result in any adverse effects in light of the framework of conditions applicable to Company as a section 20 company and the further 29. Protestant maintains that Company did not make disclosures commitments made by Applicant to maintain the separation of all required by the Board at the time Company was dealing with Protesbusiness of DBCC and Company. tant. At the time of the transactions, Company was not operating 28. Dresdner Bank AG, 75 Federal Reserve Bulletin 642 (1989); pursuant to section 4(c)(8) of the BHC Act, and thus not required to Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin 155 (1987). make the disclosures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 139 that the Applicant has not been candid in its represen- through Company in the requested activities is consistations concerning its control over Morgan Grenfell tent with the Glass-Steagall Act and is so closely and its subsidiaries, has requested that the Board related to banking as to be a proper incident thereto extend the time for comment and conduct a full within the meaning of section 4(c)(8) of the BHC Act, hearing into the facts, and require Applicant to amend provided Applicant limits Company's activities as the application.30 The Board believes that, because provided in the section 20 orders and in Canadian Applicant lawfully owns and controls the stock of Imperial, et al. Morgan Grenfell, having acquired such ownership The application is hereby approved, subject to all pursuant to authorization from the Board, Applicant the terms and conditions of those orders and this has the right to exercise control over its policies and order. The Board's approval of this proposal extends procedures, provided that the control does not violate only to activities conducted within the conditions of the law or commitments relied upon by the Board in those orders and this order, including the Board's permitting the acquisition. reservation of authority to establish additional limita- Under the framework established in this and prior tions to ensure that Company's activities are consisdecisions, approval of this proposal is not likely to tent with safety and soundness, conflict of interest, result in any significant adverse effects, such as undue and other relevant considerations under the BHC Act. concentration of resources, decreased or unfair com- Underwriting and dealing in any manner other than as petition, conflicts of interest, or unsound banking approved in those orders is not within the scope of the practices. Approval of the proposal would allow Ap- Board's approval and is not authorized for Company. plicant to continue to provide greater efficiencies and Company has established policies and procedures to convenience to its customers by permitting the contin- ensure compliance with the requirements of this order, uation of the provision of a wider range of services by including computer, audit and accounting systems, a single entity. Based on the foregoing and other facts internal risk management controls and the necessary of record, and subject to the commitments made by operational and managerial infrastructure to comply Applicant, the Board has determined that the perfor- with the requirements of this order. Accordingly, mance of the proposed activities by Applicant can Company may engage in the requested debt and equity reasonably be expected to produce public benefits that underwriting and dealing activities. would outweigh possible adverse effects under the The Board's determination is subject to all of the proper incident to banking standard of section 4(c)(8) conditions set forth in the Board's Regulation Y, of the BHC Act.3i including those in sections 225.4(d) and 225.23(b), and Accordingly, and for the reasons set forth in the to the Board's authority to require modification or section 20 orders and in Canadian Imperial, et al., the termination of the activities of a bank holding com- Board concludes that Applicant's proposal to engage pany or any of its subsidiaries as the Board finds necessary to assure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. 30. Protestant has requested that the Board hold a public hearing to assess further facts surrounding the application, and Applicant's By order of the Board of Governors, effective conduct. Generally under the Board's rules, the Board may, in its December 17, 1992. discretion, hold a public hearing or meeting on an application to clarify factual issues related to the application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). Voting for this action: Chairman Greenspan and Governors The Board has carefully considered this request. In the Board's Mullins, Angell, Kelley, La Ware, Lindsey, and Phillips. view, the parties have had ample opportunity to present submissions, and Protestant has submitted substantial written comments, some received after the close of the comment period, that have been JENNIFER J. JOHNSON considered by the Board. In light of these facts, the Board has Associate Secretary of the Board determined that a public meeting or hearing is not either necessary to clarify the factual record in these applications, or otherwise warranted in this case. Accordingly, the request for a public meeting or hearing Appendix A on this application and the request to extend formally the time for public comment are hereby denied. List of Commitments Separating the Operations of 31. Company may also purchase and sell for its own account futures, forwards, options, and options on futures contracts on DBCC and CJL Deutsche Bank commits that DBCC1 ineligible securities, as incidents to the proposed ineligible securities underwriting and dealing activities. Any activity conducted as a necessary incident to the ineligible securities underwriting and dealing activities must be treated as part of the ineligible securities activity unless Company has received specific approval under section 4(c)(8) of the BHC Act to conduct the activity independently. Until such 1. For purpose of these commitments, "DBCC" is deemed to mean approval is obtained, any revenues from the incidental activity must Deutsche Bank Capital Corporation and each of its subsidiaries and be counted as ineligible revenue subject to the 10 percent gross affiliates operating pursuant to section 8(c) of the International Bankrevenue limitation set forth in the Modification Order. ing Act of 1978, as amended. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

140 Federal Reserve Bulletin • February 1993 and the Company2 will remain completely separate (6) The Company will not engage in promotional and will not engage in any business with, or on behalf activities with respect to any distribution of securiof, each other. In addition and without limiting the ties being underwritten by DBCC. DBCC will not foregoing commitment, Deutsche Bank has made the engage in promotional activities with respect to any following specific commitments: distribution of securities being underwritten by (1) No director, officer or employee of DBCC will Company. serve as an officer, director or employee of the (7) DBCC will not distribute, within the United Company, except that Deutsche Bank, for adminis- States, shares of any investment company advised trative and supervisory purposes, may authorize by the Company. one person to serve as a director of CJL and the (8) DBCC will not sell or purchase securities or parent company of DBCC if the person is not assets, either as a principal or a broker, to, from, or involved in the day-to-day operations of the compa- for any investment company advised by the Comnies. pany, or otherwise perform for such an investment (2) DBCC will not enter into any joint marketing company any service that DBCC might have authorefforts with the Company and will not solicit cus- ity to provide under the IB A. tomers for the Company in the United States, nor (9) No employee of DBCC will serve as a portfolio will the Company solicit customers for DBCC in the manager of any investment company advised by the United States. Company. (3) The Company will not share fees, profits or (10) No officer, director or employee of DBCC will customer information with, will not make customer serve as a director of any open-end investment referrals to, and will not engage in cross marketing company advised by the Company. with, DBCC, nor will the Company and DBCC (11) DBCC will not acquire, either for its own share customer lists or nonpublic customer informa- account or as a fiduciary, any shares of any investtion.3 ment company advised by the Company. (4) The Company will not provide investment advice (12) Company, and its employees, officers, and on any securities issued by DBCC. directors, will abide by the commitments enumer- (5) The Company will not provide investment advice ated in numbers 7, 8, 9, 10, and 11, with respect to to a customer with respect to securities being under- investment companies advised by DBCC. written or privately placed by DBCC or in which (13) The Company will disclose its relationship with DBCC makes a market, unless the Company: DBCC and Applicant's subsidiaries and affiliates to (i) Has conducted an independent analysis of such each of the Company's customers to the full extent securities in the same manner and to the same required by the U.S. securities laws. extent as if the securities were not underwritten, (14) The Company will have no arrangement with placed, or dealt in by DBCC; any person involved in distributing securities with (ii) Discloses the fact of the affiliation to its regard to the Company's advice to its customers customer and the involvement of the affiliate with concerning such securities except, and only in the the securities, and; case of persons other than DBCC, to the extent such (iii) Obtains the customer's prior consent to the arrangements are permissible under U.S. securities purchase or sale of such securities, provided that laws and other applicable laws. in those cases where obtaining such prior consent (15) The Company will disclose to its customers is impractical (e.g., if the customer is located with discretionary accounts that its affiliates may outside the United States), the Company will make a market in securities that it will purchase and obtain such consent as soon as practicable after sell for those customers, account and will obtain a the purchase or sale. written consent from such customers to the pur- Further, DBCC will follow the above procedures chase or sale of securities from time to time by it for with respect to securities which are being underwrit- the portfolios of such customers to the extent reten or privately placed by Company, or in which quired by the U.S. securities laws and other appli- Company makes a market. cable laws such as ERISA. (16) Company will not participate in an underwriting or placement of securities if DBCC is participating 2. For purposes of these commitments, "Company" is deemed to in the underwriting or placement of the issuer's mean each of the U.S. subsidiaries of Morgan Grenfell. 3. DBCC and Company may exchange confidential customer infor- securities. mation upon the specific request of a client, provided that the (17) Company will not act as a market-maker, specustomer is informed, either orally or in writing, that Company and cialist, or perform similar activities with respect to DBCC may not engage in any joint undertakings on behalf of the client. securities which are being underwritten or dealt in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 141 by DBCC, and vice versa. Thus, Company will not (5) Providing investment advisory and financial adunderwrite the issuance of securities if DBCC is visory services pursuant to section 225.25(b)(4) of making a market in the securities, and vice versa. In the Board's Regulation Y (12 C.F.R. 225.25(b)(4)); addition, Company should not make a market in a and security for which DBCC served as a market-maker (6) Underwriting and dealing in government obligawithin the preceding twelve months, and vice versa. tions and money market instruments pursuant to (18) Company will not offer any services relating to section 225.25(b)(16) of the Board's Regulation Y interest rate and currency swaps and derivative (12 C.F.R. 225.25(b)(16)) (hereinafter "bank-eligible products if DBCC is a counterparty or agent, and securities"). vice versa. Company will not enter into swaps or derivative products with DBCC, nor would either Notice of the application, affording interested percompany utilize the services of the other when sons an opportunity to submit comments, has been providing services to third parties. published (57 Federal Register 57,233 (1992)). The (19) Company will not provide any financial advis- time for filing comments has expired, and the Board ory services to a customer if DBCC is also advising has considered the application and all comments rethe customer or a third party on the same or related ceived in light of the public interest factors set forth in manner. section 4(c)(8) of the BHC Act. (20) There will be no joint undertakings between Applicant, with total consolidated assets of $13.5 bil- DBCC and Company. lion, is the fourth largest commercial banking organization in Ohio.1 It operates eight banking subsidiaries in Ohio, Michigan, Indiana, Kentucky, and West Virginia, Huntington Bancshares Incorporated and engages in various nonbanking activities through Columbus, Ohio eight nonbanking subsidiaries. The Board has previously determined by regulation Order Approving Application to Engage De novo in that providing investment advisory and financial ad- Underwriting and Dealing in Certain Bank-Ineligible visory services, full service brokerage services, and Securities on a Limited Basis, and Other underwriting and dealing in government obligations Securities-Related Activities and money market instruments are activities that are closely related to banking for purposes of section Huntington Bancshares Incorporated, Columbus, 4(c)(8) of the BHC Act.2 Applicant proposes to con- Ohio ("Applicant"), a bank holding company within duct these activities through Company in accordance the meaning of the Bank Holding Company Act with the Board's regulations.3 ("BHC Act"), has applied pursuant to section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section Underwriting and Dealing in Bank-Ineligible 225.23(a)(3) of the Board's Regulation Y (12 C.F.R. Securities 225.23(a)(3)), for approval to engage de novo through its wholly owned subsidiary, The Huntington Com- The Board has determined that, subject to the prudenpany, Columbus, Ohio ("Company"), in the following tial framework of limitations established in previous activities: decisions to address the potential for conflicts of (1) Underwriting and dealing in municipal revenue interests, unsound banking practices, or other adverse bonds (including public ownership industrial devel- effects, the proposed underwriting and dealing activiopment bonds), mortgage-related securities, con- ties are so closely related to banking as to be proper sumer-receivable-related securities, and commercial paper (hereinafter "bank- ineligible securities"); (2) Acting as agent in the private placement of all 1. Data are as of September 30, 1992. 2. See 12 C.F.R. 225.25(b)(4), (b)(15), and (b)(16). types of securities, including providing related ad- 3. When providing full-service brokerage with respect to bankvisory services; ineligible securities that it holds as principal, Company will provide (3) Buying and selling securities on the order of customers with disclosure statements as previously approved by the Board. See PNC Financial Corporation, 75 Federal Reserve Bulletin investors as a "riskless principal"; 396, 397 (1989). Specifically, Company will inform its customers at the (4) Providing securities brokerage services to insti- commencement of the relationship that, as a general matter, Company tutional and retail customers, both separately and in may be a principal or may be engaged in underwriting with respect to, or may purchase from an affiliate, those securities for which brokerage combination with investment advisory services pur- and advisory services are provided. At the time any brokerage order suant to section 225.25(b)(15) of the Board's Regu- is taken, the customer will be informed (usually orally) whether Company is acting as agent or principal with respect to a security. lation Y (12 C.F.R. 225.25(b)(15)) (hereinafter "full- Confirmations sent to customers also will state whether Company is service brokerage"); acting as agent or principal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

142 Federal Reserve Bulletin • February 1993 incidents thereto within the meaning of section 4(c)(8) less principal" transactions are understood in the of the BHC Act. The Board also has determined that industry to include only transactions in the secondary the conduct of these securities underwriting and deal- market. Thus, Applicant proposes that Company ing activities is consistent with section 20 of the would not act as a "riskless principal" in selling Glass-Steagall Act, provided that the underwriting securities at the order of a customer that is the issuer and dealing subsidiary derives no more than 10 percent of the securities to be sold or in any transaction where of its total gross revenue from underwriting and deal- Company has a contractual agreement to place the ing in bank-ineligible securities over any two-year securities as agent of the issuer. Company also would period.4 Applicant has committed that Company will not act as a "riskless principal" in any transaction conduct its underwriting and dealing activities with involving a security for which it makes a market. respect to bank-ineligible securities subject to the 10 The Board previously has determined by Order that, percent revenue test established by the Board in subject to certain prudential limitations that address previous Orders.5 the potential for conflicts of interests, unsound banking practices, or other adverse effects, the proposed Private Placement and "Riskless Principal" private placement and riskless principal activities are Activities so closely related to banking as to be a proper incident thereto within the meaning of section 4(c)(8) of the Private placement involves the placement of new BHC Act.7 The Board also has previously determined securities with a limited number of sophisticated pur- that acting as agent in the private placement of secuchasers in a nonpublic offering. A financial intermedi- rities, and purchasing and selling securities on the ary in a private placement transaction acts solely as an order of investors as a "riskless principal" do not agent of the issuer in soliciting purchasers, and does constitute underwriting and dealing in securities for not purchase the securities and attempt to resell them. purposes of section 20 of the Glass-Steagall Act, and Securities that are privately placed are not subject to that revenue derived from these activities is not subthe registration requirements of the Securities Act of ject to the 10 percent revenue limitation on bank- 1933, and are offered only to financially sophisticated ineligible securities underwriting and dealing.8 Appliinstitutions and individuals and not the public. Appli- cant has committed that Company will conduct its cant will not privately place registered securities and private placement and "riskless principal" activities will only place securities with customers who qualify using the same methods and procedures, and subject as accredited investors. to the same prudential limitations established by the "Riskless principal" is the term used in the securi- Board in the Bankers Trust II Order and the J.P. ties business to refer to a transaction in which a Morgan II Order,9 including the comprehensive broker-dealer, after receiving an order to buy (or sell) a security from a customer, purchases (or sells) the security for its own account to offset a contemporane- 7. See Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) ("Bankers Trust II Order"). Applicant has also ous sale to (or purchase from) the customer.6 "Risk- proposed, consistent with J.P. Morgan <fe Company Incorporated, 76 Federal Reserve Bulletin 26 (1990) {"J.P. Morgan II Order"), and subject to the limitations contained in that Order, that: (1) Applicant's nonbank subsidiaries be permitted to purchase 4. See Citicorp, J.P. Morgan & Company Incorporated, and securities privately placed by Company, and Bankers Trust New York Corporation, 73 Federal Reserve Bulletin 473 (2) Applicant and its subsidiaries other than Company be permitted (1987) ("Citicorp/Morgan/Bankers Trust Order"), affd sub nom. to lend to an issuer for the purpose of repaying securities placed by Securities Industry Association v. Board of Governors of the Federal Company. Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S. 8. See Bankers Trust II Order. 1059 (1988), as modified by Order Approving Modifications to Section 9. See J.P. Morgan II Order, 76 Federal Reserve Bulletin at 26; 20 Orders, 75 Federal Reserve Bulletin 751 (1989) ("Modification Bankers Trust II Order, 75 Federal Reserve Bulletin at 829. Among the Order"). The 10 percent revenue limitation should be calculated in prudential limitations detailed more fully in those Orders are that accordance with the method stated in J.P. Morgan & Company Company will maintain specific records that will clearly identify all Incorporated, The Chase Manhattan Corporation, Bankers Trust "riskless principal" transactions, and Company will not engage in any New York Corporation, Citicorp, and Security Pacific Corporation, 75 "riskless principal" transactions for any securities carried in its Federal Reserve Bulletin 192, 196 (1989). inventory. When acting as a "riskless principal," Company will only 5. Company may also provide services that are necessary incidents engage in transactions in the secondary market, and not at the order of to these approved activities. Any activity conducted as a necessary a customer that is the issuer of the securities to be sold, will not act as incident to the bank-ineligible securities activity must be treated as "riskless principal" in any transaction involving a security for which part of the bank-ineligible securities activity unless Company has it makes a market, nor hold itself out as making a market in the received specific approval under section 4(c)(8) of the BHC Act to securities that it buys and sells as a "riskless principal." Moreover, conduct the activity independently. Until such approval is obtained, Company will not engage in "riskless principal" transactions on any revenues from the incidental activity must be counted as ineligible behalf of its foreign affiliates that engage in securities dealing activities revenue subject to the 10 percent gross revenue limit set forth in the outside the United States and will not act as "riskless principal" for CiticorplMorganlBankers Trust Order and the Modification Order. registered investment company securities. In addition, Company will 6. See Securities and Exchange Commission Rule 10b-10, 17 C.F.R. not act as a "riskless principal" with respect to any securities of 240.10b-10(a)(8)(i). investment companies that are advised by Applicant or any of its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 143 framework of restrictions designed to avoid potential application, as supplemented, and with the conditions conflicts of interest, unsound banking practices, and referenced in this Order. The Board's determination other adverse effects imposed by the Board in connec- also is subject to all of the conditions set forth in tion with underwriting and dealing in securities. Regulation Y, including those in sections 225.4(d) and 225.23(b), and to the Board's authority to require Financial Factors, Managerial Resources, and Other modification or termination of the activities of a bank Considerations holding company or any of its subsidiaries as the Board finds necessary to assure compliance with, and In every case involving a nonbanking acquisition by a to prevent evasion of, the provisions of the BHC Act bank holding company under section 4 of the BHC and the Board's regulations and Orders issued there- Act, the Board considers the financial condition and under. In approving this transaction, the Board has resources of the applicant and its subsidiaries and the relied upon all of the facts of record and all of the effect of the transaction on these resources.10 Based representations and commitments made by Applicant. on the facts of this case, the Board concludes that The Board's action is expressly conditioned upon financial considerations are consistent with approval compliance with all of the commitments made by of this application. The managerial resources of Ap- Applicant. For the purpose of this action, these complicant also are consistent with approval. mitments will be considered conditions imposed in In order to approve this application, the Board is writing and, as such, may be enforced in proceedings required to determine that the performance of the under applicable law. proposed activities by Applicant can reasonably be This transaction shall not be consummated later expected to produce public benefits that would out- than three months after the effective date of this weigh adverse effects under the proper incident to Order, unless such period is extended for good cause banking standard of section 4(c)(8) of the BHC Act. by the Board or by the Federal Reserve Bank of Under the framework established in this Order and Cleveland pursuant to delegated authority. prior decisions, consummation of this proposal is not By order of the Board of Governors, effective likely to result in any significant adverse effects, such December 21, 1992. as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound Voting for this action: Chairman Greenspan and Governors banking practices. Consummation of the proposal Mullins, Angell, Kelley, La Ware, Lindsey, and Phillips. would provide added convenience to Company's customers. In addition, the Board expects that the de JENNIFER J. JOHNSON novo entry of Company into the market for these Associate Secretary of the Board services would increase the level of competition among providers of these services. Accordingly, the Board has determined that the performance of the ORDERS ISSUED UNDER INTERNATIONAL proposed activities by Applicant can reasonably be BANKING ACT expected to produce public benefits that would outweigh possible adverse effects under the proper inci- TaipeiBank dent to banking standard of section 4(c)(8) of the BHC Taipei City, Taiwan Act. Based on all the facts of record, and subject to the Order Approving Establishment of a Branch commitments made by Applicant, as well as all of the terms and conditions set forth in this Order and in the TaipeiBank, Taipei, Taiwan ("Bank"), a foreign bank above-noted Board Orders, the Board has determined within the meaning of the International Banking Act that the application should be, and hereby is, ap- ("IB A"), has applied under section 7(d) of the IB A proved. Approval of this proposal is specifically con- (12 U.S.C. § 3105(d)) to establish a state-licensed ditioned on compliance by Applicant and Company branch in Los Angeles, California. A foreign bank with the commitments made in connection with its must obtain the approval of the Board to establish a branch, agency, commercial lending company, or representative office in the United States under the Foraffiliates. With regard to private placement activities, Company will eign Bank Supervision Enhancement Act of 1991 not privately place registered investment company securities. Fur- ("FBSEA"), which amended the IBA. ther, Company will not privately place any securities of investment companies that are advised by Applicant or any of its affiliates. Notice of the application, affording interested per- 10. See 12 C.F.R. 225.25. See also The Fuji Bank, Limited, 75 sons an opportunity to submit comments, has been Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin 155, 156 (1987). published in a newspaper of general circulation in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

144 Federal Reserve Bulletin • February 1993 Los Angeles, California (Los Angeles Daily Journal, Regulation K provides that a foreign bank will be May 11, 1992). The time for filing comments has considered to be subject to comprehensive supervision expired and no public comments were received. or regulation on a consolidated basis if the Board Bank was established in 1969 as a commercial bank determines that the bank is supervised and regulated in owned by the Taipei Municipal Government ("Munic- such a manner that its home country supervisor reipal Government").1 Bank is the eighth largest bank in ceives sufficient information on the worldwide opera- Taiwan in terms of total assets, which at year end 1991 tions of Bank, including the relationship of Bank to were $19.6 billion. Bank owns 30 percent of the shares any affiliate, to assess the overall financial condition of of one Taiwanese subsidiary which concentrates its Bank and its compliance with law and regulation activities in Taiwan, and has one office outside of (12 C.F.R. 211.25(c)(1)).4 In making its determination Taiwan, a state-licensed agency in New York, New under this standard on this application by Bank, the York. Bank does not engage, directly or indirectly, in Board considered the following information. any nonbanking activities in the United States. Bank The Ministry and the Central Bank obtain informawill remain a qualifying foreign banking organization tion on the condition of Bank, its subsidiary, and its under Regulation K after establishing the proposed foreign office through regular examinations and peribranch (12 C.F.R. 211.24(a)). odic financial reports. The Central Bank performs Under the IB A, in order to approve an application mandatory annual on-site head office examinations, by a foreign bank to establish a branch in the United periodic office examinations, and, if warranted, tar- States, the Board must determine that the foreign geted examinations of Bank. The Ministry coordinates bank: examinations and takes corrective measures based on (1) Engages directly in the business of banking the examination reports. The annual examination of outside of the United States; the head office of Bank specifically includes a review (2) Has furnished to the Board the information it of both the international department and the foreign needs to assess adequately the application; and operations or offices of Bank. The review of the (3) Is subject to comprehensive supervision or reg- activities of Bank's foreign office includes scrutiny of ulation on a consolidated basis by its home country host country examination reports, internal control and supervisor (12 U.S.C. § 3105(d)(2)). audit reports, and annual outside audit reports. The The Board may also take into account additional Ministry has also implemented annual on-site examinations of Bank's foreign office to supplement this standards as set forth in the IBA (12 U.S.C. § review. 3105(d)(3)-(4)) and Regulation K (12 C.F.R. 211.25(c)). Bank engages directly in the business of banking The Ministry and Central Bank obtain information outside of the United States through its extensive on the dealings and relationship between Bank and its commercial banking operations in Taiwan. Bank also subsidiary through reports to and examinations by the has provided the Board with the information necessary Central Bank and through the requirement that the to assess the application through submissions that Ministry approve investments in other companies. The address the relevant issues. Banking Law of Taiwan also imposes a prohibition on Bank is supervised and regulated by both the Min- certain unsecured lending to companies in which a istry of Finance of Taiwan ("Ministry") and the Cen- bank holds certain investments. Finally, if the Ministral Bank of China ("Central Bank"), which share responsibility for the supervision of Taiwanese banks. The Banking Law of Taiwan authorizes the Ministry to auditor of government agencies. This oversight is secondary to regulate and supervise commercial banks in Taiwan, supervision by the Ministry and the Central Bank. including Bank.2 The Ministry has delegated the au- 4. In assessing this standard, the Board considers, among other factors, the extent to which the home country supervisors: thority to the Central Bank to act as the primary (i) Ensure that the bank has adequate procedures for monitoring examiner of banks in Taiwan, in which capacity the and controlling its activities worldwide; (ii) Obtain information on the condition of the bank and its Central Bank conducts mandatory annual examinasubsidiaries and offices through regular examination reports, tions.3 audit reports, or otherwise; (iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated 1. The Municipal Government owns 99.9 percent of Bank's shares. on a worldwide basis, or comparable information that permits 2. With respect to banks, this authority permits the Ministry to, analysis of the bank's financial condition on a worldwide consolamong other things, issue licenses, limit activities and expansion, idated basis; conduct examinations, set minimum capital and liquidity ratios, limit (v) Evaluate prudential standards, such as capital adequacy and credit extensions, restrict director interlocks, define qualifications for risk asset exposure, on a worldwide basis. management, and take enforcement actions. These are indicia of comprehensive, consolidated supervision. No 3. Bank receives additional oversight by its owner, the Municipal single factor is essential and other elements may inform the Board's Government, and the Ministry of Audit of the Control Yuan, an determination. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 145 try or Central Bank determines that the subsidiary minimum standards and is equivalent to capital that poses an undue risk to Bank or is engaging in unsafe or would be required of a U.S. banking organization. improper activities, the Ministry may require Bank to Managerial and other financial resources of Bank are divest its interest in the subsidiary. Bank has no parent also considered consistent with approval. The proor sister affiliates. posed branch is Bank's second office in the United With respect to foreign offices, the Ministry must States, and Bank appears to have the experience and approve the establishment of such offices by Bank. capacity to support this additional office. In addition, The Ministry and the Central Bank have also required Bank has established controls and procedures for its Bank to establish procedures under which an foreign U.S. offices to ensure compliance with U.S. law. office must obtain head office approval of certain Under the IBA, the proposed state-licensed branch transactions, undergo an annual internal audit, and may not engage in any type of activity that is not document its transactions. The Central Bank evaluates permissible for a federally-licensed branch without the the adequacy of these procedures and the records of Board's approval. approved transactions during the annual examination Finally, Bank has committed that it will make availof Bank's head office. able to the Board such information on the operations The Ministry also requires approval of any invest- of Bank and any affiliate of Bank that the Board deems ment in a company, including Bank's minority share- necessary to determine and enforce compliance with holding in its subsidiary. The Ministry and the Central the IBA, the Bank Holding Company Act of 1956, as Bank also review financial information on the subsid- amended, and other applicable Federal law, to the iary that is incorporated in Bank's financial reports. extent permitted by law. The Board has reviewed Finally, the Ministry and Central Bank may review the relevant provisions of Taiwanese law and has commucorporate records of the subsidiary. nicated with the appropriate government authorities The Ministry and the Central Bank evaluate pruden- concerning access to information. Bank also has comtial standards, such as capital adequacy and risk asset mitted to cooperate with the Board to obtain any exposure, for Bank on a worldwide basis. The govern- approvals or consents that may be needed to gain ment of Taiwan incorporated the risk-based capital access to information that may be requested by the standards of the Basle Accord into its Banking Law in Board. In light of these commitments and other facts 1989, with variations that conform to local accounting of record, and subject to the condition described practices and that apply to government-controlled below, the Board concludes that Bank has provided banks.5 The Ministry implemented these standards to adequate assurances of access to any necessary inforrestrict all dividends and other distributions by any mation the Board may request. Taiwanese bank that has a risk-weighted capital ratio On the basis of all of the facts of record, and subject of less than 8 percent. to the commitments made by Bank, as well as the Based on all the facts of record, which include the terms and conditions set forth in this order, the Board information described above, the Board concludes has determined that Bank's application to establish a that Bank is subject to comprehensive supervision and branch should be, and hereby is, approved. The Board regulation on a consolidated basis. may revoke such approval should any restrictions on In considering this application, the Board has also access to information on the operations or activities of taken into account the additional standards set forth in Bank and any of its affiliates subsequently interfere section 7 of the IBA (12 U.S.C. § 3105(d)(3)-(4)). As with the Board's ability to determine the safety and noted above, Bank has received the consent of its soundness of Bank's U.S. operations or the complihome country authorities to establish the proposed ance by Bank or its affiliates with applicable Federal branch. In addition, the Ministry may share informa- banking statutes. Approval of this application is also tion on Bank's operations with other supervisors, specifically conditioned on compliance by Bank with including the Board. the commitments made in connection with this appli- As noted, under local regulation, Bank must comply cation, and with the conditions contained in this orwith the capital standards of the Basle Accord, as der.6 The commitments and conditions referred to implemented by Taiwan. Bank's capital exceeds the above are conditions imposed in writing by the Board 6. The Board's authority to approve the establishment of the 5. The Ministry has issued regulations that implement these stan- proposed branch parallels the continuing authority of the State of dards. Generally, these regulations fall within the parameters of the California to license offices of a foreign bank. The Board's approval of Basle Accord, with the exception of one equity adjustment item that this application does not supplant the authority of the State of applies only to government-owned banks. This factor is not significant California, and its agent, the California State Banking Department, to in this case, and Bank's capital can be considered equivalent to that license the proposed branch of Bank in accordance with any terms or required of a U.S. banking institution. conditions that California State Banking Department may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

146 Federal Reserve Bulletin • February 1993 in connection with its decision, and may be enforced in (2) Has furnished to the Board the information it proceedings under 12 U.S.C. § 1818 or 12 U.S.C. needs to assess adequately the application; and § 1847 against Bank, its office and its affiliates. (3) Is subject to comprehensive supervision or reg- By order of the Board of Governors, effective ulation on a consolidated basis by its home country December 18, 1992. supervisor (12 U.S.C. § 3105(d)(2)). The Board may also take into account additional Voting for this action: Chairman Greenspan and Governors standards as set forth in the IBA (12 U.S.C. Angell, Kelley, La Ware, Lindsey, and Phillips. Absent and § 3105(d)(3)-(4)) and Regulation K (12 C.F.R. not voting: Governor Mullins. 211.25(c)). Bank engages directly in the business of banking JENNIFER J. JOHNSON outside of the United States through its extensive Associate Secretary of the Board commercial banking operations in Taiwan. Bank also has provided the Board with the information necessary United World Chinese Commercial Bank to assess the application through submissions that Taipei, Taiwan address the relevant issues. Bank is supervised and regulated by both the Min- Order Approving Establishment of an Agency istry of Finance of Taiwan ("Ministry") and the Central Bank of China ("Central Bank"), which share United World Chinese Commercial Bank, Taipei, Tairesponsibility for the supervision of Taiwanese banks. wan ("Bank"), a foreign bank within the meaning of The Banking Law of Taiwan authorizes the Ministry to the International Banking Act ("IBA"), has applied regulate and supervise banks in Taiwan, including under section 7(d) of the IBA (12 U.S.C. § 3105(d)) to Bank.2 The Ministry has delegated to the Central Bank establish a state-licensed agency in Los Angeles, Calauthority to act as the primary examiner of banks in ifornia. A foreign bank must obtain the approval of the Taiwan, in which capacity the Central Bank conducts Board to establish a branch, agency, commercial lendmandatory annual examinations. ing company, or representative office in the United Regulation K provides that a foreign bank will be States under the Foreign Bank Supervision Enhanceconsidered to be subject to comprehensive supervision ment Act of 1991 ("FBSEA"), which amended the or regulation on a consolidated basis if the Board IBA. determines that the bank is supervised and regulated in Notice of the application, affording interested persuch a manner that its home country supervisor resons an opportunity to submit comments, has been ceives sufficient information on the worldwide operapublished in a newspaper of general circulation in Los tions of Bank, including the relationship of Bank to Angeles, California (Los Angeles Times, April 18, any affiliate, to assess the overall financial condition of 1992). The time for filing comments has expired and no Bank and its compliance with law and regulation public comments were received. (12 C.F.R. 211.25(c)(1)).3 In making its determination Bank is a privately owned commercial bank that was on this application, the Board considered the following established in 1975.1 Bank is the 11th largest bank in information. Taiwan, with assets of approximately $10 billion as of year end 1991. Upon establishment of the proposed 2. With respect to banks, under this authority the Ministry issues agency, Bank will be a qualifying foreign banking licenses, limits activities and expansion, conducts examinations, sets organization under Regulation K (12 C.F.R. minimum capital and liquidity ratios, limits credit extensions, restricts 211.24(a)). Bank owns three subsidiaries in Taiwan, director interlocks, defines qualifications for management, and takes enforcement actions. and currently has no offices outside of Taiwan. Bank 3. In assessing this standard, the Board considers, among other does not engage, directly or indirectly, in any banking factors, the extent to which the home country supervisors: (i) Ensure that the bank has adequate procedures for monitoring or nonbanking activities in the United States. and controlling its activities worldwide; Under the IBA, in order to approve an application (ii) Obtain information on the condition of the bank and its by a foreign bank to establish an agency in the United subsidiaries and offices through regular examination reports, audit reports, or otherwise; States, the Board must determine that the foreign (iii) Obtain information on the dealings with and relationship bank: between the bank and its affiliates, both foreign and domestic; (1) Engages directly in the business of banking (iv) Receive from the bank financial reports that are consolidated on a worldwide basis, or comparable information that permits outside of the United States; analysis of the bank's financial condition on a worldwide consolidated basis; (v) Evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. No 1. No one shareholder owns more than 10 percent of the shares of single factor is essential and other elements may inform the Board's Bank, and each shareholder holds its interest in its separate capacity. determination. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 147 The Ministry and the Central Bank obtain informa- Taiwanese bank that has a risk-weighted capital ratio tion on the condition of Bank and its subsidiaries and of less than 8 percent. Bank's accounting practices foreign offices through regular examinations and peri- require consolidation of its majority-owned subsidiarodic financial reports. The Central Bank performs ies, which is reflected in its risk-weight calculations. mandatory annual on-site head office examinations, Based on all the facts of record, the Board conbiannual office examinations, and, if warranted, tar- cludes that Bank is subject to comprehensive supervigeted examinations of Taiwanese banks, including sion and regulation on a consolidated basis. Bank. The Ministry coordinates these examinations In considering this application, the Board has also and takes corrective measures based on the examina- taken into account the additional standards set forth in tion reports. section 7 of the IBA (12 U.S.C. 3105(d)(3)-(4)). As The annual examination of the head office of Bank noted above, Bank has received the consent of its specifically includes a review of the international de- home country authorities to establish the proposed partment and the foreign operations or offices of Bank. agency. In addition, the Ministry may share informa- The review of foreign office activities of Bank includes tion on Bank's operations with other supervisors, scrutiny of host country examination reports, internal including the Board. control and audit reports, and annual outside audit As noted, under local regulation, Bank must comply reports. The Ministry also is implementing annual with the capital standards of the Basle Accord, as on-site examinations of foreign offices to supplement implemented by Taiwan. Bank's capital exceeds the this review. minimum standards and is equivalent to capital that The Ministry and Central Bank obtain information would be required of a U.S. banking organization. on the dealings and relationship between Bank and its Managerial and other financial resources of Bank are subsidiaries through reports to and examinations by also considered consistent with approval. Although the Central Bank and through the requirement that the the proposed agency would be Bank's first office Ministry approve investments in other companies. The outside its home country, the purpose of the office is Banking Law of Taiwan also imposes a prohibition on generally to serve the international banking needs of certain unsecured lending to companies in which a its customers, and Bank appears to have the experibank holds certain investments. In addition, if the ence and capacity to support this activity. Bank has examination indicates that a subsidiary poses an undue established controls and procedures for the proposed risk to Bank or is engaging in unsafe or improper agency to ensure compliance with U.S. law. Under the activities, the Ministry may compel divestiture of the IBA, the proposed state-licensed branch may not subsidiary. Bank has no parent or sister affiliates. engage in any type of activity that is not permissible With respect to foreign offices, the Ministry must for a federally-licensed branch without the Board's approve the establishment of such offices by Bank. approval. The Ministry and the Central Bank have also required Finally, Bank has committed that it will make avail- Bank to establish procedures under which a foreign able to the Board such information on the operations office must obtain head office approval of certain of Bank and any affiliate of Bank that the Board deems transactions and must undergo an annual internal necessary to determine and enforce compliance with audit. The Central Bank evaluates the adequacy of the IBA, the Bank Holding Company Act of 1956, as these procedures and the records of approved trans- amended, and other applicable Federal law, to the actions during the annual examination of Bank's head extent permitted by law. The Board has reviewed office. relevant provisions of Taiwanese law and has commu- With respect to subsidiaries of Bank, the Ministry nicated with the appropriate government authorities and the Central Bank ensure that Bank has adequate concerning access to information. Bank has commitoversight procedures through the annual head office ted to cooperate with the Board to obtain any approvexamination. Bank holds corporate records of its als or consents that are needed to gain access to subsidiaries, which include financial information, at its information that may be requested by the Board. In head office. Examiners review these records during light these commitments and other facts of record, and the annual examination. subject to the condition described below, the Board The Ministry and the Central Bank evaluate pruden- concludes that Bank has provided adequate assurtial standards, such as capital adequacy and risk asset ances of access to any necessary information the exposure, for Bank on a worldwide basis. The govern- Board may request. ment of Taiwan incorporated the risk-based capital On the basis of all of the facts of record, and subject standards of the Basle Accord into its Banking Law in to the commitments made by Bank, as well as the 1989. The Ministry implemented these standards to terms and conditions set forth in this order, the Board restrict all dividends and other distributions by any has determined that Bank's application to establish an Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

148 Federal Reserve Bulletin • February 1993 agency should be, and hereby is, approved. The Board BankAmerica has requested Board approval of this may revoke such approval should any restrictions on transaction pursuant to section 5(d)(3) of the Federal access to information on the operations or activities of Deposit Insurance Act (12 U.S.C. § 1815(d)(3) ("FDI Bank and any of its affiliates subsequently interfere Act")), as amended by the Federal Deposit Insurance with the Board's ability to determine the safety and Corporation Improvement Act of 1991 (Pub. L. 102soundness of Bank's U.S. operations or the compli- 242, § 501, 105 Stat. 2236, 2388-2392 (1991)). Section ance by Bank or its affiliates with applicable federal 5(d)(3) of the FDI Act requires the Board to follow the banking statutes. Approval of this application is spe- procedures and consider the factors set forth in the cifically conditioned on compliance by Bank with the Bank Merger Act (12 U.S.C. § 1828(c)). 12 U.S.C. commitments made in connection with this applica- § 1815(d)(3)(E).1 tion, and with the conditions contained in this order.4 BankAmerica is the seventh largest commercial The commitments and conditions referred to above are banking organization in Texas, controlling deposits of conditions imposed in writing by the Board in connec- $4.2 billion, representing 2.9 percent of total deposits tion with its decision, and may be enforced in proceed- in commercial banking organizations in the state. First ings under 12 U.S.C. § 1818 or 12 U.S.C. § 1847 Gibraltar is the largest thrift organization in Texas, against Bank, its office and its affiliates. controlling deposits of $6.2 billion, representing 16.6 By order of the Board of Governors, effective percent of total deposits in thrift institutions in the December 18, 1992. state. Upon consummation of the proposed transaction, BankAmerica would become the fourth largest Voting for this action: Chairman Greenspan and Governors commercial banking or thrift organization (together, Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and "depository institutions") in Texas, controlling deposnot voting: Governor Mullins. its of $10.6 billion, representing 6.9 percent of total deposits in depository institutions in the state. JENNIFER J. JOHNSON BankAmerica and First Gibraltar compete in the Associate Secretary of the Board Cooke, Corpus Christi, Dallas, Fort Worth, Houston, Killeen-Temple MSA, San Antonio, Sherman-Denison and Wichita banking markets, all in Texas. In the ACTIONS TAKEN UNDER THE FEDERAL DEPOSIT Cooke banking market,2 BankAmerica is the third INSURANCE CORPORATION IMPROVEMENT ACT largest of ten depository institutions, controlling deposits of $55.3 million, representing approximately By the Board 12.9 percent of total deposits in depository institutions in the market ("market deposits").3 First Gibraltar December 22, 1992 controls deposits of $89.0 million. With thrift deposits in the market weighted at 50 percent,4 First Gibraltar John H. Huffstutler, Esq. is the fifth largest depository institution in the market, Assistant General Counsel holding approximately 10.4 percent of market depos- BankAmerica Corporation its. Upon consummation of this proposal, BankAmer- Bank of America Center, Box 37,000 ica would control $144.3 million in deposits, represent- San Francisco, California 94137 ing approximately 30.5 percent of market deposits.5 Dear Mr. Huffstutler: BankAmerica Corporation, San Francisco, California, ("BankAmerica"), has proposed to purchase certain assets and assume certain liabilities of First Gibraltar 1. These factors include considerations relating to competition, financial and managerial resources, and future prospects of the Bank, FSB, Irving, Texas ("First Gibraltar"), through existing and proposed institutions, and the convenience and needs of BankAmerica's wholly owned bank subsidiary, Bank the communities to be served. 12 U.S.C. § 1828(c). 2. The Cooke banking market is approximated by Cooke County of America Texas, N.A., Houston, Texas, ("Bank"). and the northern portion of Denton County, including the towns of Aubrey, Pilot Point and Sanger, all in Texas. 3. Deposit data are as of June 30, 1991. 4. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52, 4. The Board's authority to approve the establishment of the 55 (1991); First Union Corporation, 76 Federal Reserve Bulletin 83,85 proposed agency parallels the continuing authority of the State of (1990). California to license offices of a foreign bank. The Board's approval of 5. Because the deposits of First Gibraltar would be transferred to a this application does not supplant the authority of the State of commercial bank under BankAmerica's proposal, those deposits are California, and its agent, the California State Banking Department, to included at 100 percent after Bank's assumption of these deposits. See license the proposed agency of Bank in accordance with any terms or First Banks, Inc., 76 Federal Reserve Bulletin 669 , 670 n.9 (1990); conditions that California State Banking Department may impose. Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992). 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Legal Developments 149 The Herfindahl-Hirschman Index ("HHI") for this The Board is also required under section 5(d)(3) of market would increase by 432 points to 1947.6 the FDI Act to consider the effect of the proposal on Seven commercial banking organizations, including the convenience and needs of the communities to be two other than Bank with market shares of over 20 served. In considering the convenience and needs percent, and two thrift institutions would continue to factor, the Board has considered all comments submitoperate in the Cooke banking market following con- ted to the Board in connection with this application, summation of the proposal. In addition, Bank's branch including comments submitted by the Association of in the Cooke banking market has suffered a substantial Community Organizations for Reform Now loss of deposits since Bank acquired the branch from ("ACORN"), Illinois chapter of ACORN, Michigan a troubled thrift institution.7 The Cooke banking mar- chapter of ACORN, City of West Hollywood, Comket also has a number of features that make it attrac- munities for Accountable Reinvestment, Rainbow tive to entry,8 and Texas allows interstate banking and Bridge and California Reinvestment Committee (colintrastate branching, providing for a large number of lectively, "Commenters"). Commenters generally alpotential entrants into the market. In light of the lege that the proposed transaction is inconsistent with number and size of competitors remaining in the a finding that BankAmerica is satisfactorily meeting Cooke banking market, the market's attractiveness to the convenience and needs of the communities it will entry, the number of potential entrants into the mar- serve because: ket, and other facts of record in this case, the Board (1) BankAmerica's lead bank, Bank of America concludes that consummation of this proposal would National Trust and Savings Association, San Frannot have a significantly adverse effect on competition cisco, California ("Bank of America"), controls or the concentration of banking resources in the Cooke Bank's lending decisions, originates many of its banking market. The Board also concludes that con- loans, and uses products that are not suited to lowsummation of this proposal would not have a signifi- and moderate-income communities outside of Calicantly adverse effect on competition in any of the fornia; other relevant banking markets.9 (2) BankAmerica will not continue certain of First Gibraltar's lending programs; (3) BankAmerica has not abided by certain commit- 6. Under the revised Department of Justice Merger Guidelines, 49 ments that it made to community groups in connec- Federal Register 26,823 (June 29, 1984), a market in which the tion with its recent application to acquire Security post-merger HHI is above 1800 is deemed to be highly concentrated. Pacific Corporation, San Francisco, California ("Se- In such markets, the Justice Department is likely to challenge a merger that increases the HHI by more than 50 points. However, the Justice curity Pacific");10 and Department has informed the Board that a bank merger or acquisition (4) BankAmerica discriminates11 on the basis of race generally will not be challenged (in the absence of other factors in its lending in Arizona and California,12 and has indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the higher-than-normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial institutions. 7. As of August 31, 1992, Bank's deposits in the Cooke banking holding 11.1 percent of market deposits, and the HHI would increase market were $37.1 million, a decline of 18.7 percent since March 31, by 22 points to 1103. In the Sherman-Denison banking market, 1992. BankAmerica would become the largest depository institution, hold- 8. Cooke County's population increased by 12.5 percent between ing 21.5 percent of market deposits, and the HHI would increase by 1980 and 1990 and is projected to grow 5.8 percent between 1990 and 205 points to 1130. BankAmerica would become the fourth largest 1995. In addition, Denton County, the northern portion of which is in depository institution in the Wichita banking market, holding the Cooke banking market, had a population increase of 98.1 percent 10.2 percent of market deposits, and the HHI would increase by 14 from 1980 to 1990 and is projected to grow 17.9 percent from 1990 to points to 1072. 1995. 10. See BankAmerica Corporation, 78 Federal Reserve Bulletin 338 9. In the Corpus Christi banking market, BankAmerica would (1992). become the third largest depository institution, holding 12.5 percent of 11. One Commenter stated that BankAmerica had an inadequate market deposits, and the HHI would increase by 48 points to 954. record of hiring black executives. The Board believes that the BankAmerica would become the third largest depository institution in adequacy of a group's representation at a bank is generally beyond the the Dallas banking market, holding 8.5 percent of market deposits, scope of factors that may be assessed by the Board under section and the HHI would increase by 2 points to 1123. In the Fort Worth 5(d)(3) of the FDI Act. banking market, BankAmerica would become the second largest 12. Commenters also allege that First Gibraltar discriminates on the depository institution, holding 12.8 percent of market deposits, and basis of race in its lending in Texas and that BankAmerica has failed the HHI would increase by 69 points to 774. BankAmerica would to provide data as required by the Home Mortgage Disclosure Act, become the sixth largest depository institution in the Houston banking 12 U.S.C. § 2801 ("HMDA"). BankAmerica has provided its 1991 market, holding 6.3 percent of market deposits, and the HHI would HMDA data and other relevant data to ACORN and other community decrease by 6 points to 762. In the Killeen-Temple MSA banking groups in a form required by the Board's regulations, 12 C.F.R. Part market, BankAmerica would become the tenth largest depository 203. Bank was not required to submit HMDA data for 1991, the last institution, holding 4.4 percent of market deposits, and the HHI would year for which HMDA data is available, because Bank was formed in decrease by 11 points to 906. BankAmerica would become the third May, 1991 through the acquisition of deposit accounts of failed thrifts. largest depository institution in the San Antonio banking market, BankAmerica's HMDA data for 1991 is now publicly available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

150 Federal Reserve Bulletin • February 1993 contributed to disinvestment in low- and moderate- bility for the Neighborhood Advantage Program to income communities in these states.13 Bank in mid-1993.15 In assessing the impact of this proposal on the Bank offers a low-cost checking account called convenience and needs of communities in Texas, the Limited Checking Account.16 Bank has also agreed, Board has also considered the programs that Bank- subject to satisfactory credit review, to deposit America has already put in place to serve community $100,000 in the credit union of Common Ground, needs in Texas, and the programs that BankAmerica Dallas, Texas, which serves low-income residents of proposes to implement in Texas in connection with West and South Dallas. Bank also makes grants, this acquisition. In addition, the Board has taken into through BankAmerica Foundation, to nonprofit orgaaccount the past record of performance of the Bank- nizations in Texas working to improve housing and America organization under the Community Reinvest- economic conditions in the communities Bank serves. ment Act ("CRA") and its proposal to implement Bank has represented that its strategy following the CRA programs at Bank. The Board notes that Bank- proposed transaction will be to focus primarily on America began operating in Texas in 1991 through the consumer and small business markets in Texas. In this acquisition of the assets and liabilities of a failed bank regard, Bank would acquire approximately $700 miland two failed savings associations. lion in Texas consumer loans from First Gibraltar. As a result of discussions with the Texas chapter of Following the proposed acquisition, BankAmerica will ACORN and other community groups, Bank is offer- bring other resources to the communities that First ing, through Bank of America, a special version of its Gibraltar currently serves. For example, Bank of Neighborhood Advantage Program called the Neigh- America State Bank, Concord, California ("BA State borhood Advantage Texas Homebuyer Program.14 To Bank"), is planning to open an office in Texas to begin immediate implementation of the Neighborhood service referrals from Bank for special affordable Advantage Texas Homebuyer Program, BankAmerica housing, SB A and economic development financing.17 has funded this program through extensions of credit Bank has announced that following the acquisition of by Bank of America using loan officers in Texas who First Gibraltar, Bank will have a 10-year, $1 billion accept and review residential real estate applications goal in CRA-related lending.18 in Texas. These local loan officers review the applica- The Board has also taken into account its recent tions under credit policies and procedures that take review of the CRA performance of BankAmerica and into account the characteristics of the Texas market. all of its subsidiary banks, including those banks in Credit review for loans in Texas includes a three-tier Texas, California and Arizona, in connection with process whereby any Neighborhood Advantage or BankAmerica's acquisition of Security Pacific, which BASIC loan application that is declined by the line was approved by the Board in March of this year. In underwriter is reviewed by the credit administrator at that case, the Board's review of the record of perforthe loan center. If the credit administrator also deter- mance of BankAmerica was supplemented by four mines not to grant the loan, the loan is reviewed by the public hearings that the Board held in California, real estate or consumer lending manager in Texas in consultation with Bank's chief credit officer. Bank- America intends to transfer funding and full responsi- 15. BankAmerica has indicated that it is providing mortgage loans to Bank's Texas community through its lead bank in California because Bank was only recently established in connection with the acquisition of deposits and branches of failed Texas financial institutions and does not yet have the infrastructure to make such loans. BankAmerica expects to transfer all of its mortgage lending in Texas to Bank soon. 13. Commenters also state that the proposal is not in the public 16. The account provides for a monthly service fee of $3.00, offers interest because BankAmerica will be taking advantage of prior 10 free checks a month, and may be opened with a minimum of $25.00. federal subsidies that First Gibraltar has received. The Board notes 17. Bank has also represented that under its Branch Consolidation, that the terms of the proposed purchase and assumption transaction Relocation and Closure Policy, it will not close a branch in a were negotiated on an arm's-length basis between two private parties low-income community if Bank is the only provider of financial and that BankAmerica is not receiving any federal assistance in services in the community. Customers of branches located in lowconnection with this proposal. income neighborhoods will receive at least 90 days advance notice of 14. Under this program, special features are available to loan branch consolidations and closures. applicants who complete a mandatory 6 to 8 hours of homebuyer 18. BankAmerica has indicated that Bank will not continue First education, including expanded debt ratios; a waiver of the traditional Gibraltar's Community Homebuyer Program and Affordable Housing two-month reserve for principal, interest, taxes and insurance; and Program, which were offered in connection with First Gibraltar's acceptance of "fair" appraisal ratings for properties that might not membership in the Federal Home Loan Bank System ("FHLBS"). otherwise qualify. Bank also offers a consumer loan program called Following the acquisition, BankAmerica will not be a member of the BASIC that provides for direct extensions of credit for the purchase of FHLBS. However, BankAmerica has already begun implementing its used and new automobiles by low-income households. Bank has also own programs to provide mortgage lending to low- and moderateindicated that it will provide a $5 million allocation for loans that do income communities in Texas, including the Neighborhood Advannot meet Neighborhood Advantage guidelines, including requiring no tage Program, and has committed to implement that program fully in private mortgage insurance on loans of up to 95 percent loan-to-value. Texas through Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 151 Washington and Arizona. The Board notes that Bank its loans in low- and moderate-income areas have of America has received an "outstanding" rating for increased.23 CRA performance from its primary regulator, the BankAmerica's banks in other states also have Office of the Comptroller of the Currency ("OCC"), taken steps to comply with their commitments. For in its most recent examination for CRA performance example, Bank of America Arizona, Phoenix, Arizona in October 1990. All of the other subsidiary banks of ("BA Arizona"), has made 265 loans totaling approx- BankAmerica, including its subsidiary in Arizona, imately $10.6 million to low-income individuals during have received at least a "satisfactory" rating from the first six months of 199224 and offers the Neighbortheir primary regulators in their most recent exami- hood Advantage Program in four different forms.25 In nations for CRA performance.19 First Gibraltar re- Washington state, Seattle-First National Bank, Seatceived an "outstanding" CRA rating from its pri- tle, Washington ("Seafirst"), has continued to support mary regulatory, the Office of Thrift Supervision, in the Washington Housing Finance Commission January 1991. In none of these examinations was any ("WHFC") for multi-family and special needs housing evidence of illegal discrimination found. BankAmer- loans by investing directly in tax credits through the ica has committed to implement its corporate CRA Low Income Housing Tax Credit Program.26 In Neprogram at Bank following consummation of this vada, Valley Bank of Nevada, Las Vegas, Nevada, proposal.20 has recently completed negotiations with Nevada Protestants have raised questions regarding community coalitions regarding the expansion of the whether BankAmerica has fully implemented com- Neighborhood Advantage Program in Nevada, and is mitments it made to the Board regarding its CRA continuing its efforts to establish a branch in West Las performance in connection with the acquisition Vegas, Nevada.27 earlier this year of Security Pacific. BankAmerica The Board believes that, during the eight months has taken a number of significant steps to comply since its acquisition of Security Pacific, BankAmerica with those commitments. For example, in Cali- has demonstrated steady progress in fulfilling the comfornia, Bank of America has established $90 million mitments it made to the Board in connection with its in special allocations for credit-worthy Neighbor- application to acquire Security Pacific. The Board exhood Advantage and/or minority applicants who do pects BankAmerica to fulfill all of the commitments it not meet the Neighborhood Advantage guidelines made to the Board including all of the steps and for mortgage loans. In addition, Bank of America programs that BankAmerica committed to implement in is now offering financial incentives for loan offi- connection with its acquisition of Security Pacific. The cers to originate loans to creditworthy minority Federal Reserve System will continue to monitor careand low-income applicants, and now requires a fully BankAmerica's efforts in this area. three-step review process for all declined minority and low-income census tract mortgage loan loans of up to $100,000 to merchants who suffered damages in the Los applications.21 Bank of America has represented Angeles disturbances of April 29 and 30, 1992. To date, 487 loans that as a result of these and other efforts,22 totaling $21.9 million have been committed. 23. During the first six months of 1992, Bank of America made $562 million in loans to all low-income census tracts in California, as 19. The OCC is currently conducting the first CRA examination of compared to $586 million for all of 1991, $482 million for 1989, and Bank. $165 million for 1988. 20. Under the program, Bank's CRA program would be coordinated 24. BankAmerica has represented that this figure does not include by its Community Development Officer. The Community Develop- loans made to middle- and upper-income loan applicants who reside in ment Officer supervises a team of six Neighborhood Development predominately low-income zip code areas. BA Arizona extended Officers ("NDOs") throughout Texas. Four of the NDOs are black, during the first six months of 1992 approximately $2.4 million in loans while two are Hispanic. With the guidance of the NDOs, district under the SBA and other special small business loan programs and managers, branch managers and other branch personnel make approximately $8.2 million in conventional small business loans of monthly calls to identified census tracts and neighborhoods to identify under $50,000. credit needs. This information is compiled and presented monthly to 25. These are: a geographically-based 90 percent loan-to-value loan senior management and quarterly to the board of directors. product, a geographically-based 95 percent loan-to-value loan prod- 21. Bank of America has also replaced Security Pacific's checking uct, an income-based product at both 90 percent and 95 percent account aimed at government assistance recipients with its own loan-to-value, and a downpayment assistance program. In addition, Limited Checking Account, available to all customers for $3.50 per BA Arizona has offered, as a special promotion of its Neighborhood month, and has represented that it stands ready to invest $200,000 in Advantage Program, to waive fees associated with the application, a new South Central Los Angeles Federal Community Development including credit report and appraisal fees, for loan applicants in Credit Union when it becomes operational. Bank of America has also low-income census tracts. increased its marketing to low- and moderate-income and minority 26. Seafirst has purchased $1.2 million in tax credits to date and has communities through a radio, newspaper and billboard campaign. also lent $4 million through the WHFC's House Key '92 program for Approximately one-third of Bank of America's branches are in first time home buyers. Seafirst has provided $1.1 million in funds low-income census tracts. through WHFC's Small Tax Exempt Purchase Program. Seafirst also 22. Bank of America has replaced Security Pacific's small business earlier this year announced a $2 million loan program for nonprofit lending program with a new product, Advantage Business Credit, organizations in the city of Tacoma. which includes loans and lines of credit of up to $50,000. In addition, 27. Valley Bank of Nevada has also expanded its Homeless Check Bank of America established a pool of $25.0 million for unsecured Cashing Program. 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152 Federal Reserve Bulletin • February 1993 Based on these and other facts of record, the Board Based on the foregoing and all of the facts of record, concludes that convenience and needs considerations, the Board has determined that this application should including the record of BankAmerica and Bank under be, and hereby is, approved.29 This approval is subject the CRA, are consistent with approval of this applica- to Bank obtaining the required approval of the approtion.28 priate Federal banking agency for the proposed merger The Board also concludes that the financial and under the Bank Merger Act. The Board's approval of managerial resources and future prospects of Bank- this application also is conditioned upon Bank- America and Bank are consistent with approval of this America's compliance with the commitments made in application. Moreover, the record in this case shows connection with this application. For purposes of this that: action, the commitments and conditions relied on in (1) The transaction will not result in the transfer of reaching this decision are both conditions imposed in any federally insured depository institution's federal writing by the Board and, as such, may be enforced in deposit insurance from one federal deposit insur- proceedings under applicable law. This approval is ance fund to the other; limited to the proposal presented to the Board by (2) BankAmerica and Bank currently meet, and BankAmerica, and may not be construed as applying upon consummation of the proposed transaction will to any other transaction. continue to meet, all applicable capital standards; This transaction may not be consummated before and the thirtieth calendar day after the effective date of this (3) Since Bank is in Texas and is acquiring certain letter, or later than three months after the effective assets and assuming certain liabilities of a Texas date of this letter, unless such period is extended by federal savings bank, the proposed transaction the Board or the Federal Reserve Bank of San Franwould comply with the Douglas Amendment if First cisco, acting pursuant to delegated authority. In con- Gibraltar were a state bank that BankAmerica was nection with this provision, advice of the fact of applying to acquire directly. See 12 U.S.C. consummation should be given in writing to the § 1815(d)(3). Reserve Bank. Very truly yours, 28. One Commenter requested that the Board reopen the public comment period to permit the consideration of Commenter's appeal JENNIFER J. JOHNSON under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, for Associate Secretary of the Board certain portions of the application that were withheld from Commenter as confidential under the FOIA. In light of the fact that the comment period was previously extended two weeks in order to give cc: Federal Reserve Bank of San Francisco Commenter an opportunity to submit comments, Commenter's delay Tom Hesselbrock, Federal Deposit Insurance in filing the appeal, and other facts of record, the Board has denied Corporation Commenter's request to reopen the public comment period. Commenters have requested that the Board hold a public hearing or Office of the Comptroller of the Currency meeting in this case. Neither section 5(d)(3) of the FDI Act nor the Department of Justice Bank Merger Act provide for or require the Board to hold a public meeting or public hearing on applications presented to the Board pursuant to these provisions. In evaluating this request, the Board has considered that Commenters have been provided an opportunity to submit written comments to the Board, and have in fact submitted substantial written comments. In addition, as noted above, the Board recently held four public meetings in California, Washington and Arizona to assess the performance of BankAmerica under the CRA. In light of these facts and all the facts of record, including relevant 29. Voting for this action: Chairman Greenspan and Governors examination information, the Board believes that a public hearing or Angell, Kelley, LaWare, Lindsey, and Phillips. Absent and not meeting is not warranted in this case, and has denied this request. voting: Governor Mullins. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 153 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. Acquired Surviving Approval Bank Holding Company Thrift Bank(s) Date AmSouth Bancorporation, Secor Bank, F.S.B., AmSouth Bank, December 17, 1992 Birmingham, Alabama Birmingham, Alabama N.A., Birmingham, Alabama Fifth Third Bancorp, Home Savings of Fifth Third Bank, December 8, 1992 Cincinnati, Ohio America, F.S.B., Cincinnati, Ohio Irwindale, California First of America Bank Champion Federal First of America December 4, 1992 Corporation, Savings and Loan Bank-McLean Kalamazoo, Michigan Association, County, N.A., Bloomington, Illinois Bloomington, Illinois First Union Corporation, Decatur Federal Savings First Union National December 2, 1992 Charlotte, North Carolina and Loan Association, Bank of Georgia, Decatur, Georgia Atlanta, Georgia Fishback Insurance Agency, Home Trust Savings and First National Bank December 18, 1992 Inc., Loan Association, in Brookings, Brookings, South Dakota Vermillion, South Brookings, South Dakota Dakota Stichting Prioriteit ABN AMRO LaSalle Talman Bank, LaSalle Bank December 22, 1992 Holding, Chicago, Illinois Northbrook, The Netherlands Northbrook, Illinois Stichting Administratiekantoor ABN AMRO Holding, The Netherlands ABN AMRO Holding, N.V., The Netherlands ABN AMRO Bank N.V., The Netherlands ABN AMRO North America, Inc., Chicago, Illinois LaSalle National Corporation, Chicago, Illinois Valley National Bancorp, Mayflower Savings Bank, Valley National December 23, 1992 Wayne, New Jersey SLA, Bank, Livingston, New Jersey Passaic, New Jersey Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

154 Federal Reserve Bulletin • February 1993 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Effective Applicant(s) Bank(s) Date KeyCorp, Puget Sound Bancorp, December 17, 1992 Albany, New York Tacoma, Washington Section 4 Effective Applicant(s) Bank(s) Date SouthTrust Corporation, Prime Bancshares, Inc., December 18, 1992 Birmingham, Alabama Decatur, Georgia Sections 3 and 4 Effective Applicant(s) Bank(s) Date Integra Financial Corporation, Equimark Corporation, December 1, 1992 Pittsburgh, Pennsylvania Pittsburgh, Pennsylvania 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 Banc West, Inc., Leedey Bancorporation, Kansas City December 4, 1992 Edmond, Oklahoma Inc., Leedey, Oklahoma Thomas Bancshares, Inc., Thomas, Oklahoma BOI Financial Corp., Bank of Illinois in Chicago December 18, 1992 Normal, Illinois Normal, Normal, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 155 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Button Gwinnett Bancorp, Inc., The Gwinnett Financial Atlanta December 15, 1992 Snellville, Georgia Corporation, Lawrenceville, Georgia CBI-Kansas, Inc., Union Financial Kansas City November 27, 1992 Kansas City, Missouri Corporation, Manhattan, Kansas Centennial Bank Holdings, Inc., Eaton Capital Kansas City December 21, 1992 Denver, Colorado Corporation, Eaton, Colorado Colorado Industrial Bank, Eaton, Colorado CNB Financial Corp., Central National Bank, New York December 1, 1992 Canajoharie, New York Canajoharie, Canajoharie, New York Comerica Incorporated, Sugar Creek National Chicago December 3, 1992 Detroit, Michigan Bank, Sugar Land, Texas Commerce Bancshares, Inc., Manufacturers Bancorp, Kansas City November 27, 1992 Kansas City, Missouri Inc., Leavenworth, Kansas First National Bank of Bonner Springs, Bonner Springs, Kansas Lenexa Bancorporation, Inc., Lenexa, Kansas Union Financial Corporation, Manhattan, Kansas El Paso Bancshares, Inc., Western Bank, Kansas City November 30, 1992 Monument, Colorado Taos, New Mexico Farmers National Bancshares, The Farmers National Kansas City December 1, 1992 Inc., Bank, Stafford, Kansas Stafford, Kansas First Busey Corporation, Empire Capital Chicago December 24, 1992 Urbana, Illinois Corporation, LeRoy, Illinois First Fabens Bancorporation, Bancshares of Ysleta, Dallas December 1, 1992 Inc., Inc., Fabens, Texas El Paso, Texas Bank of Ysleta, El Paso, Texas Fourth Financial Corporation, Southgate Banking Kansas City December 21, 1992 Wichita, Kansas Corporation, Prairie Village, Kansas Franklin Bancorp, Inc., Park Financial of Minneapolis December 24, 1992 Minneapolis, Minnesota St. Paul, Inc., St. Paul, Minnesota GAB Bancorp, Unibancorp, St. Louis December 24, 1992 Jasper, Indiana Loogootee, Indiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

156 Federal Reserve Bulletin • February 1993 Section 3—Continued Reserve Effective Applicant(s) Bank(s) Bank Date Harlingen Bancshares, Inc., Harlingen National Dallas December 3, 1992 Harlingen, Texas Bancshares, Inc., HN Bancshares of Delaware, Harlingen, Texas Inc., Harlingen National Bank, Wilmington, Delaware Harlingen, Texas Norwest Corporation, Merchants & Miners Minneapolis December 17, 1992 Minneapolis, Minnesota Bancshares, Inc., Hibbing, Minnesota Omnibank Corporation, Omnibank, Chicago December 3, 1992 River Rouge, Michigan River Rouge, Michigan Peoples Mid-Illinois Corporation, Lexington Bancshares, Chicago December 21, 1992 Bloomington, Illinois Inc., Lexington, Illinois PMI Acquisition Corporation, Lexington Bancshares, Chicago December 21, 1992 Bloomington, Illinois Inc., Lexington, Illinois Random Lake Bancorp., State Bank of Random Chicago December 18, 1992 Limited, Lake, Random Lake, Random Lake, Wisconsin Wisconsin U B & T Holding Co., United Bank & Trust, Dallas December 15, 1992 Abilene, Texas Abilene, Texas Union Planters Corporation, Bank of East Tennessee, St. Louis December 1, 1992 Memphis, Tennessee Knoxville, Tennessee VSB Bancorp, Valley Savings Bank, New York December 1, 1992 Inc., SLA, Closter, New Jersey Closter, New Jersey Section 4 Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date Banc One Corporation, Electronic Payments Cleveland November 30, 1992 Columbus, Ohio Services, Inc., PNC Financial Corp, Wilmington, Delaware Pittsburgh, Pennsylvania Society Corporation, Cleveland, Ohio Brooke Holdings, Inc., Mid Kansas Insurance Kansas City December 23, 1992 Jewell, Kansas Agency, Inc., Brooke Corporation, Wichita, Kansas Jewell, Kansas Consolidated Holding Company, Farmers Investment Minneapolis December 22, 1992 Oldham, South Dakota Company, Olkham, South Dakota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 157 Section 4—Continued Nonbanking Reserve Effective Applicant(s) Activity/ Company Bank Date CoreStates Financial Corp, Electronic Payment Philadelphia November 30, 1992 Philadelphia, Pennsylvania Services, Inc., Wilmington, Delaware Credit Commercial de France, CCF-Mellon Partners, New York December 11, 1992 Paris, France Pittsburgh, Mellon Bank Corporation, Pennsylvania Pittsburgh, Pennsylvania Credit Commercial de France Pilgrim Baxter Grieg New York December 18, 1992 S.A., Framlington & Paris, France Associates Ltd., Wayne, Pennsylvania The First National Bank of BancBoston Leasing Boston December 24, 1992 Boston, Services, Inc., Boston, Massachusetts Boston, Massachusetts First Tennessee National Home Financial St. Louis December 9, 1992 Corporation, Corporation, Memphis, Tennessee Johnson City, Tennessee First Union Corporation, DFSoutheastern, Inc., Richmond December 2, 1992 Charlotte, North Carolina Decatur, Georgia Mellon Bank Corporation, to engage in investment Cleveland December 11, 1992 Pittsburgh, Pennsylvania advisory activities Norwest Corporation, Comprehensive Computer Minneapolis December 17, 1992 Minneapolis, Minnesota Solutions, Inc., Spring Valley, New York Norwest Corporation, to engage de novo in Minneapolis December 17, 1992 Minneapolis, Minnesota community activities through its investment in limited partnerships that qualify for low-income tax credits under the Internal Revenue Code Peoples Financial Services, Inc., Citizens Federal Savings Atlanta December 17, 1992 Cookeville, Tennessee Bank, Rockwood, Tennessee Society Corporation, First Federal Savings and Cleveland November 25, 1992 Cleveland, Ohio Loan Association of Fort Myers, Fort Myers, Florida Southern Bank Group, Inc., Eastside Bank and Trust Atlanta December 18, 1992 Roswell, Georgia Company, Snellville, Georgia Union Planters Corporation, SaveTrust Federal St. Louis December 2, 1992 Memphis, Tennessee Savings Bank, Dyersburg, Tennessee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

158 Federal Reserve Bulletin • February 1993 Section 4—Continued Nonbanking Reserve Effective Applicant(s) Activity/Company Bank Date Union Planters Corporation, Security Trust Federal St. Louis December 2, 1992 Memphis, Tennessee Savings and Loan Association, Knoxville, Tennessee U.S. Trust Corporation, Campbell, Cowperthwaite New York December 1, 1992 New York , New York & Co., Inc., New York , New York Wishek Bancorporation, Inc. to engage in direct lending Minneapolis November 25, 1992 Wishek, North Dakota to nonshareholders and noninsiders up to an aggregate amount of $250,000 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 Bank of Neosho, Anderson State Bank, Kansas City December 16, 1992 Neosho, Missouri Anderson, Missouri Citizens State Bank, Granby, Missouri Belcaro Bank, Denver Tec Bank, Kansas City December 16, 1992 Glendale, Colorado Denver, Colorado The Professional Bank of Colorado, Englewood, Colorado Community Bank and Trust First National Bank of Philadelphia December 17, 1992 Company, Nicholson, Forest City, Pennsylvania Nicholson, Pennsylvania First United Bank, The Bank of Parker, Kansas City December 23, 1992 Aurora, Colorado Parker, Colorado Granby Bancshares, Inc., Anderson Bancshares, Kansas City December 16, 1992 Neosho, Missouri Inc., Neosho, Missouri Neosho Bancshares, Inc., Neosho, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 159 PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits 24, 1992). Petition for review of Board order returnagainst the Federal Reserve Banks in which the Board ing without action a bank holding company applicaof Governors is not named a party. tion to relocate its subsidiary bank from Washington to Idaho. The Board's brief was filed on June 29, CBC, Inc. v. Board of Governors, No. 92-9572 (10th 1992. Oral argument was held October 6, 1992. Cir., filed December 2, 1992). Petition for review of In re Subpoena Served on the Board of Governors, civil money penalty assessment against a bank hold- Nos. 91-5427, 91-5428 (D.C. Cir., filed December ing company and its officers, directors, and share- 27, 1991). Appeal of order of district court, dated holders, for failure to comply with reporting require- December 3, 1991, requiring the Board and the ments. Office of the Comptroller of the Currency to produce DLG Financial Corporation v. Board of Governors, confidential examination material to a private liti- No. 392 Civ. 2086-G (N.D. Texas, filed October 9, gant. On June 26, 1992, the court of appeals affirmed 1992). Action to enjoin the Board and the Federal the district court order in part, but held that the bank Reserve Bank of Dallas from taking certain enforce- examination privilege was not waived by the agenment actions, and seeking money damages on a cies' provision of examination materials to the exvariety of tort and contract theories. On October 9, amined institution, and remanded for further consid- 1992, the court denied plaintiffs' motion for a tem- eration of the privilege issue. porary restraining order. On November 20, 1992, First Interstate BancSystem of Montana, Inc. v. the Board filed a motion to dismiss. On Decem- Board of Governors, No. 91-1525 (D.C. Cir., filed ber 17, 1992, plaintiffs filed an amended complaint. November 1, 1991). Petition for review of Board's Castro v. Board of Governors, No. 92-1764 (D. Disorder denying on Community Reinvestment Act trict of Columbia, filed July 29, 1992). Freedom of grounds the petitioner's application under section 3 Information Act case. On November 30, 1992, the of the Bank Holding Company Act to merge with action was dismissed on plaintiff's motion. Commerce BancShares of Wyoming, Inc. On De- Board of Governors v. bin Mahfouz, No. 92-CIV-5096 cember 14, 1992, the court granted the parties' joint (S.D. New York, filed July 8, 1992). Action to freeze motion to dismiss the case. assets of individual pending administrative adjudi- Board of Governors v. Kemal Shoaib, No. CV 91-5152 cation of civil money penalty assessment by the (C.D. California, filed September 24, 1991). Action Board. On July 8, 1992, the court issued a temporary to freeze assets of individual pending administrative restraining order restraining the transfer or disposiadjudication of civil money penalty assessment by tion of the individual's assets. On October 30, the the Board. On October 15, 1991, the court issued a parties filed a stipulation of dismissal without prejpreliminary injunction restraining the transfer or udice. disposition of the individual's assets. Zemel v. Board of Governors, No. 92-1057 (D. District Board of Governors v. Ghaith R. Pharaon, No. 91of Columbia, filed May 4, 1992). Age Discrimination CIV-6250 (S.D. New York, filed September 17, in Employment Act case. 1991). Action to freeze assets of individual pending Fields v. Board of Governors, No. 92-3920 (6th Cir., administrative adjudication of civil money penalty filed September 14, 1992). Federal Tort Claims Act assessment by the Board. On September 17, 1991, complaint alleging misrepresentation during applicathe court issued an order temporarily restraining the tion process. The district court for the Northern transfer or disposition of the individual's assets. District of Ohio granted the Board's motion to dismiss on August 10, 1992. On September 14, 1992, Fields v. Board of Governors, No. 3:91CV069 (N.D. the plaintiff filed a notice of appeal. The action was Ohio, filed February 5, 1991). Appeal of denial of voluntarily dismissed by plaintiff/appellant on De- request for information under the Freedom of Inforcember 18, 1992. mation Act. The Board's motion for summary judg- State of Idaho, Department of Finance v. Board of ment was granted in part and its motion to dismiss Governors, No. 92-70107 (9th Cir., filed February was denied on June 23, 1992. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

160 Federal Reserve Bulletin • February 1993 FINAL ENFORCEMENT DECISION ISSUED BY THE financial distress" and was being sold for the benefit of BOARD OF GOVERNORS a creditor, that Respondents had not received pecuniary benefit from the violations, and that Hufnagle is United States of America unlikely to return to banking "soon", and therefore does not require a higher penalty to deter him from Before the Board of Governors of the Federal Reserve future violations. Recommended Decision ("RD") 15. System Respondents have filed no exceptions to the Recommended Decision, and are therefore deemed to have Washington, D.C. waived objection to the Recommended Decision, Findings and Conclusions. Enforcement Counsel, on the other hand, has excepted to the lower recom- In the Matter of mended penalty amounts, arguing that the initial higher penalty assessments were fully justified by the VIC SATHER & evidence produced at the hearing.1 ASSOCIATES, INC. Statutory and Regulatory Framework Docket Nos. and 91-017-CMP-HC The Bank Holding Company Act of 1956 (the "BHC 91-017-CMP-I PAUL C. HUFNAGLE, Act") charges the Board with exclusive authority to administer the BHC Act and to issue such orders and Respondents. regulations as may be necessary to enable the Board to carry out the purposes of the Act and to prevent evasions thereof. 12 U.S.C. § 1844(b). The BHC Act Final Decision and Order also specifically authorizes the Board to require reports under oath from time to time to monitor compli- This is an administrative civil money penalty action ance with the provisions of the BHC Act and its brought by the Board of Governors of the Federal implementing regulations and orders. 12 U.S.C. Reserve System (the "Board") against Respondents § 1844(c). The Board's Regulation Y implements this Vic Sather & Associates, Inc. ("VSA"), a bank hold- authorization by requiring that each bank holding ing company in Bloomington, Minnesota, and its sole company furnish, in the manner and form prescribed officer, sole director, and principal shareholder, Paul by the Board, an annual report of the company's C. Hufnagle. On May 31, 1991, under the authority of operations, and additional information and reports as 12 U.S.C. § 1847, the Board issued Notices of Assess- required by the Board. 12 C.F.R. 225.5(b). ment of Civil Money Penalties in the amounts of The instructions on Federal Reserve Form FR Y-6 $50,000 against Hufnagle and $25,000 against VSA, require each bank holding company to submit an alleging that the Respondents had repeatedly failed to annual report within 90 days of the end of the comfile with the Board timely or accurate regulatory pany's fiscal year (the "Y-6 Report"). The instrucreports required by statute and regulation. tions for Federal Reserve Form FR Y-9SP require that The Respondents requested a hearing, which was any bank holding company with only one subsidiary held before Administrative Law Judge Paul J. Clerman bank and consolidated assets of less than $150 million (the "ALJ") on December 3, 1991, in Minneapolis. file reports for the parent company on a semiannual Following the hearing and the filing of post-hearing basis, within 45 days of the last day of June and briefs by Respondents and by the Board's Enforce- December each year (the "Y-9 Report"). Exhibit 10 at ment Counsel, the ALJ issued a Recommended Deci- 1, 6. The instructions also require that the bank sion finding that the allegations in the Notices had holding company's financial records be maintained in been established and that Respondents had in fact such a manner and scope so as to ensure that the failed to file timely and accurate reports, that the reports can be prepared and filed in accordance with failures were not excused, and that the failures consti- the instructions and "reflect a fair presentation of the tuted violations of the Bank Holding Company Act bank holding company's financial condition and reand Regulation Y. The ALJ recommended, however, sults of operations." Exhibit 10 at 4. that the penalties be assessed, not in the amounts sought by Enforcement Counsel, but at the lower amounts of $5,000 against VSA and $15,000 against 1. Enforcement Counsel also excepts on technical grounds to Hufnagle. The ALJ based the lower recommended several details in the ALJ's recommended conclusions of law unrelated to the issue of the penalty amount. The Board adopts each of penalties upon his findings that VSA was in "extreme these exceptions as technical corrections. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 161 The BHC Act provides for civil money penalties of shareholder of VSA, and an officer and director of the up to $25,000 per day against any company which Bank. violates, and any individual who participates in a violation of any provision of the Act or of any regula- Violations of Reporting Requirements tion or order implementing the Act. 12 U.S.C. § 1847(b)(1). The term "violates" is defined to include The facts related to the violations are straightforward "any action, (alone or with another or others) for or and for the most part not in dispute. It is uncontested toward causing, bringing about, participating in, coun- that Hufnagle was responsible for VSA's compliance seling, or aiding and abetting a violation." 12 U.S.C. with reporting obligations and that, from 1986 until the § 1847(b)(5). The BHC Act also prescribes a separate initiation of this proceeding in 1991, VSA repeatedly schedule of penalties, ranging from $2,000 to $1 million failed to file required reports on time.3 As a predicate per day or one percent of the assets of the company for the penalties charged here, Enforcement Counsel (depending on the seriousness of the violation), for any emphasized the late filing of the Y-9 report for yearcompany that fails to make, submit, or publish timely end 1989 and both the Y-6 and the Y-9 reports for reports or information required by the Board, or which year-end 1990.4 submits or publishes any false or misleading report or Besides being late, VSA's Y-6 and Y-9 reports for information. 12 U.S.C. § 1847(d)(l)-(3).2 1989 contained a number of mutually contradictory In determining the amount of any civil money pen- entries that could not be reconciled, indicating that alty, the Board takes into account the appropriateness one or both reports were inaccurate. RD Appendix E of the penalty with respect to any of the statutorily- at 1. For example, short-term borrowing for the pespecified mitigating factors established by the record: riod, which should have been an identical entry on the size of financial resources and good faith of the both forms, was stated to be $395,000 on the Y-9 and company or person charged, the gravity of the viola- zero on the Y-6. Exhibits 5, 6; Transcript ("Tr"). tion, the history of previous violations, and such 1-65.5 At the hearing, Hufnagle conceded the inconother matters as justice may require. 12 U.S.C. sistencies, and could not identify which, if either, of §§ 1847(b)(2), (d)(4); 1818(i)(2)(G). the reports was accurate. Tr. 1-125.6 This pattern of reporting violations was the subject Findings of Fact and Conclusions of Law of repeated criticisms by the Federal Reserve. The May 15, 1986 Report of Inspection of VSA, which was Upon review of the administrative record, the Board sent to VSA and to Hufnagle, stated that VSA's hereby adopts such of the recommended findings and recordkeeping was poor and that its FR Y-6 Reports conclusions of the ALJ as are not specifically modified were consistently incomplete or inaccurate and noted herein as the final findings and conclusions of the this as a violation of Regulation Y. Exhibit 1 at 2-3. Board, together with the ALJ's reasoning and citations The Federal Reserve also sent a letter to Hufnagle on to the record. For the reasons stated below, the Board August 21, 1987, warning him that his habitual tardiadopts the ALJ's recommendations on the appropriate ness in submitting required reports, together with amount of the penalties, and assesses penalties in the other deficiencies, could result in the assessment of amount of $15,000 against Hufnagle, and $5,000 civil money penalties. Exhibit 2. A 1988 Report of against VSA. Inspection also criticized VSA's recordkeeping and VSA is a bank holding company, registered with the Board under the BHC Act, that owns 90 percent of the stock of one subsidiary bank, Franklin State Bank of 3. The Y-6 reports were filed late in each year from 1986 to 1990, and Franklin, Minnesota ("the Bank"). The consolidated the Y-9 reports were filed late for year-end 1986 through 1990 as well as for mid-year 1987. RD 3-4. asset size of VSA and the Bank totals about $8 million. 4. The Y-9 report for the period ending December 31, 1989, due At all times relevant to the proceeding, Hufnagle has February 14, 1990, was filed on March 12, 1990, 26 days past due. been the sole officer and director and the principal Exhibit 5. Neither the Y-6 report nor the Y-9 report for year-end 1990 had been filed at the time that this case was initiated on May 31, 1991; subsequently, the Y-6, due March 31,1991, was filed on June 13,1991, and the Y-9, due February 14, 1991, was filed on July 2, 1991. RD Appendix E at 2. 2. The ceiling for such violations is set at $2,000 per day for any 5. Other examples include the entry for "cash" held by VSA as of company which violates reporting requirements if the company can 12-31-89, listed as $1,000 on the Y-9 Report and $22,600 on the Y-6. establish that it "maintains procedures reasonably adapted to avoid Tr. 1-64. The Y-9 listed 447,000 in liabilities as long-term, while the any inadvertent error and, unintentionally and as a result of such an FR Y-6 stated that all of the borrowings were short-term. Tr. 1-65. error" commits the violation, or that the company "inadvertently There was no way for the Federal Reserve analysts to determine transmits or publishes any report which is minimally late." 12 U.S.C. which, if either, of these figures was accurate. Tr. 1-65. § 1847(d)(1). The company bears the burden of proving that an error 6. "Your Honor, we will not attempt to persuade the Court that was inadvertent or that a report was inadvertently transmitted or these Y-9s and Y-6s mesh, because they don't." Counsel for Responpublished late. Id. dents, Tr. 1-125. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

162 Federal Reserve Bulletin • February 1993 failure to comply with reporting requirements. Exhibit section 1847(b)(1) for their participation in reporting 3. Finally, a Federal Reserve letter of February 28, violations for which the companies are assessed under 1991, after the deadline for filing the 1990 Y-9 report Section 1847(d). The plain meaning of the text of had passed, again warned Hufnagle that his continued section 1847(b) authorizes penalties for any individual failure to file timely and accurate regulatory reports who "participates in" a statutory or regulatory violacould result in the assessment of civil money penalties. tion,9 and nothing in the text of section 1847(d) con- Exhibit 7. flicts with or restricts that general authority. While it is The record shows that, during this period, Hufnagle not apparent why Congress established a separate on occasion "refused" to file reports under the terms schedule of penalties applicable only to reporting required by the Board, including the use of accrual- violations by companies, it is clear that Congress did based accounting, and the exclusion of estimated data. not expressly withdraw the Board's section 1847(b) See, e.g., Exhibit 1 at 3; Exhibit 7. authority to penalize individuals for violations, including reporting violations. "[Legislative repeals by im- Hufnagle's Defenses7 plication will not be recognized insofar as two statutes are capable of co-existence 'absent a clearly expressed The ALJ correctly rejected Hufnagle's argument that congressional intention to the contrary.' " Astoria no penalty could be assessed against him as an indi- Federal Sav. & Loan Ass'n v. Solimino, 111 S.Ct. vidual on the ground that the BHC Act does not 2166, 2170 (1991) (quoting Morton v. Moncari, 417 authorize penalties for reporting violations against U.S. 535, 551 (1974)). Hufnagle has adduced no legisindividuals, but only against companies. Hufnagle's lative history to support his restrictive interpretation. argument was based on the disparate wording of two Accordingly, there is no basis for interpreting the BHC BHC Act penalty provisions: the general penalty pro- Act as establishing a safe harbor for individuals revision, which expressly covers violations by individu- sponsible for reporting violations. als, and a separate provision specifically for reporting The ALJ also properly rejected Hufnagle's arguviolations, which does not expressly address individ- ments that the lateness and inaccuracy of VSA's uals. The general civil money penalty provision autho- reports should be excused because they were not rizes a penalty of $25,000 per day against "[a]ny "intentional", because the Respondents did not profit company which violates, and any individual who par- from the violations, and because the reporting violaticipates in a violation of, any provision of [the Act], tions did not deceive the Board or otherwise hinder the or any regulation or order issued pursuant thereto." Board's regulatory function. Hufnagle Brief 3-6; RD 12 U.S.C. § 1847(b)(1) (emphasis added). A separate 13. The ALJ correctly concluded that none of these provision of the BHC Act added by 1989 legislation,8 arguments stated a cognizable legal defense to the entitled "Penalty for failure to make reports", estab- existence of violations. RD 13. Reporting requirelishes a schedule of penalties specifically for different ments are an affirmative obligation for bank holding degrees of reporting violations by companies, but, companies and affiliated individuals and a fundamental unlike the general penalty provision cited above, does aspect of the Board's responsibility for supervising not specifically address violations by individuals. bank holding companies. A failure to comply with 12 U.S.C. § 1847(d). Hufnagle argued that the more those requirements constitutes a violation of law, specific reporting penalty provision provides the ex- irrespective of the individual's state of mind, pecuniclusive penalty mechanism for reporting violations, so ary motive, or the relative harm caused to the Board.10 that he, as an individual, is immune from penalty for The ALJ also properly rejected Hufnagle's arguparticipation in VSA's reporting violations. Hufnagle ment that Federal Reserve staff had led him to believe Brief 6-8. Under Hufnagle's theory, VSA bore the that his reporting obligations would be satisfied by sole responsibility for filing reports and Hufnagle's "good faith best efforts" to comply. The ALJ corresponsibility for compliance runs only to VSA, and rectly ruled that the issue was immaterial, since the not to the Board. reporting requirements are not subject to informal The Board adopts the ALJ's rejection of this argument and finds that individuals may be penalized under 9. The reporting requirements are authorized by the BHC Act and implemented through Regulation Y and the Y-6 and Y-9 Forms and instructions that are adopted by Board order. Hufnagle controlled 7. While these defenses are technically not before the Board due to VSA's actions as the sole shareholder, officer, and director of VSA, the Respondents' failure to file exceptions, the Board has reviewed and the person who signed, and in some cases, prepared, VSA's the ALJ's rulings as to these arguments, and finds that the ALJ reports. Accordingly, Hufnagle plainly "participated in" a violation of correctly rejected each of them. statute, regulation, and order. 8. The "Financial Institutions Reform, Recovery, and Enforcement 10. The ALJ also correctly noted, however, that these issues might Act of 1989" ("FIRREA"), Pub. L. 101-73, 103 Stat. 183 (1989). be relevant to mitigating the size of the penalty. RD 13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 163 waiver by Federal Reserve staff. RD 14. Furthermore, (1) The size of the financial resources and good faith the ALJ found that no evidence supported Hufnagle's of the respondent; version of his interaction with Federal Reserve staff (2) The gravity of the violation; and that the Federal Reserve had repeatedly insisted in (3) The history of previous violations; and official communications that the reporting require- (4) Such other matters as justice may require. ments must be satisfied. RD 14.11 12 U.S.C. § 1818(i)(2)(G); § 1847(b)(2), (d)(4). A Amount of the Penalties weighing of these factors persuades the Board that the penalty amounts recommended by the ALJ are rea- The primary issue before the Board is Enforcement sonable. Counsel's exception to the amount of the penalties recommended by the ALJ, a reduction from $50,000 to Financial Resources $15,000 against Hufnagle and from $25,000 to $5,000 against VSA. Enforcement Counsel has identified no The evidence produced at the hearing as to VSA's and specific flaws in the Recommended Decision that Hufnagle's financial resources forms a reasonable bacontributed to what Enforcement Counsel views as sis for a downward adjustment of the original assessunduly low recommended penalty amounts. Upon ments against VSA and Hufnagle. The ALJ found that review, the Board denies Enforcement Counsel's ex- the financial evidence of record "leaves much to be ceptions and adopts the amounts recommended by the desired but there is enough to convince this Judge that ALJ. In so finding, however, the Board notes that the as a corporate entity [VSA] is in extreme financial pattern of violations established in this case might, in distress, and that Hufnagle's financial posture, visa case presenting a different record as to mitigating a-vis his ownership of and interest in the holding factors, justify a significantly higher penalty. company, is in a negative position." RD 15. The ALJ It is clear that the Board has statutory authority to also found that Hufnagle severed his relationships with assess penalties that exceed either the amounts set the Bank and with VSA shortly before the hearing and forth in the Notices of Assessment or the amounts had executed an agreement and power of attorney recommended by the ALJ. The BHC Act provides for empowering a creditor to sell VSA for the creditor's maximum penalties of $25,000 per day against Hufna- benefit. The ALJ found that VSA's sale "will likely gle, and of $20,000 per day against VSA, for reporting yield no dollars at all to Hufnagle." RD 15.14 violations of this degree.12 Here, the number of days As evidence of Hufnagle's overall financial rethat the violations were outstanding runs into the sources, Enforcement Counsel introduced a financial hundreds,13 so that the total amount that could be statement for Hufnagle as of December 21, 1988 that assessed under the law far exceeds the amounts in showed Hufnagle to have a net worth of $804,000. contention here. Exhibit 8. In response, Hufnagle produced at the The extremely large sums authorized by the BHC hearing another financial statement, prepared for the Act, however, may be ameliorated by the Act's re- hearing as of December 3, 1991, that purported to quirement that the Board consider the appropriateness show that Hufnagle had a negative net worth of of the penalty with respect to mitigating factors: $607,000. Exhibit 15. The ALJ found Hufnagle's statement unworthy of credence in several respects, finding that the status of Hufnagle's financial relationships with his father, and the valuation of his residence were 11. The ALJ also correctly dismissed as "meritless" Hufnagle's argument that the Board is precluded from assessing penalties now "far from clear".15 RD 10-11, 15. Accordingly, the because it did not do so earlier, and properly rejected the argument ALJ found that Hufnagle's overall financial condition that Hufnagle's service in the Minnesota legislature excused him from could not be accurately determined from the record. reporting requirements. RD 14. 12. There is no question that VSA did not establish its entitlement Id.16 to the lower $2000 per day penalty applicable to companies that commit inadvertent errors notwithstanding the maintenance of "procedures reasonably adapted to avoid any inadvertent error" or that is "minimally late" due to inadvertence. 12 U.S.C. § 1847(d)(1)(A),(B). 14. Indeed, since Hufnagle personally guaranteed VSA's loan, the Neither element is present here: The nonexistence of proper proce- creditor might be able to recover from Hufnagle any deficiency from dures was implicitly conceded by Hufnagle's argument that VSA the sale of VSA. Exhibit 12 at 1. lacked the resources to maintain proper reporting procedures; the 15. The ALJ noted that much of that negative net worth consisted of reporting delinquencies at issue here, extending into weeks and Hufnagle's debt to his father, which was never to be repaid but instead months, do not qualify as "minimally late". was to be deducted from Hufnagle's expected inheritance. RD 11. 13. The Y-9 for year-end 1989 was filed 26 days late, and the Y-6 and With that amount negated, and accepting Hufnagle's appraisal of his Y-9 for year-end 1990 were each not filed until after the initiation of house as worth $380,000, Hufnagle submitted that his negative net this proceeding, each month after deadline. Furthermore, the incon- worth was $77,000. RD 10-11. sistencies in the Y-6 and Y-9 filed in 1990 have never been corrected 16. Since financial resources are a mitigating factor under the and remain outstanding. statute, and since the evidence as to those resources is for the most Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

164 Federal Reserve Bulletin • February 1993 On this admittedly incomplete record,17 the Board rence) and acting as a warning to other similar bank finds that the evidence tends to demonstrate that the holding companies and individuals (general deter- Respondents' financial resources have declined so as to rence). RD 15. Since the ALJ found that Hufnagle's mitigate the original penalty amounts. While the ALJ negative experience with VSA made it unlikely that he was appropriately skeptical as to some of Hufnagle's would "soon" involve himself with another bank claimed financial reverses, the ALJ reasonably credited holding company, the ALJ found that even the lower other aspects of Hufnagle's straitened circumstances. recommended penalty amounts would suffice to deter The Board accordingly believes that the size of Respon- him from similar violations in the future. RD 15. dents' financial resources warrants a lowering of the The Board believes that the ALJ erred in finding that penalty amounts from those originally assessed. Hufnagle did not gain any pecuniary advantage from his past violations. RD 15. That finding overlooks Good Faith Hufnagle's argument that it was financially infeasible for VSA to employ the personnel necessary to achieve The ALJ concluded, even though he found the viola- compliance with the reporting requirements. Hufnagle tions unintentional and not a source of profit to respon- Brief at 4. It is therefore clear that, by failing to devote dents (see RD 13, 15), that ultimately the continuation the necessary resources to compliance, the Responof the violations displayed a lack of good faith. Recom- dents saved expenses and therefore realized a pecunimended Conclusions of Law, RD Appendix E at 4-5. ary benefit. In part because the amount of that benefit There is support for this conclusion in Hufnagle's cannot be determined on this record, the Board depattern of resistance to compliance with the reporting clines to revise the recommended penalty amounts.18 requirements. The Board expects, however, that where the record shows that reporting violations have resulted from Gravity of the Violations!Record of Previous avoidance of the costs of filing timely reports, the Violations amount of saved costs will be an important factor is assessing an appropriate penalty. See, e.g., In re CBC, Reporting requirements are a fundamental component Inc., No. 90-033-CMP, 79 Federal Reserve Bulletin of the Board's responsibility for supervising bank hold- , slip op. at 5-6 (Nov. 18, 1992). ing companies. The filing of a late or inaccurate regu- Upon consideration of all of the circumstances, latory report impairs and delays the Federal Reserve's especially including the Respondents' financial reability to assess accurately the condition of the bank sources, and the ALJ's findings as to penalty amounts holding company involved, and may affect the Board's sufficient to achieve the goals of deterrence, the Board ability to monitor the banking system generally. adopts the penalty amounts recommended by the ALJ. The pattern of violations in this case includes rela- NOW, THEREFORE, IT IS HEREBY ORtively minor violations that grew into a more serious DERED, pursuant to sections 8(b) and (d) of the Bank pattern of repeated and longer reporting delinquencies. Holding Company Act, as amended (12 U.S.C. The Respondents' violations also include more severe § 1847(b),(d)), that the below-named respondents are violations such as inaccurate reports and the failure to hereby assessed, and shall forfeit and pay as hereinafmaintain a recordkeeping system on which accurate ter provided, civil money penalties in the amounts reports could be based. The gravity and repetitive specified below: nature of these violations weigh in favor of significant 1. VIC SATHER & ASSOCIATES is hereby aspenalties. sessed and shall forfeit and pay a civil money penalty in the amount of Five Thousand Dollars ($5,000); and Other Factors Required by Justice 2. PAUL C. HUFNAGLE is hereby assessed and shall forfeit and pay a civil money penalty in the The ALJ observed that an assessment of a penalty amount of Fifteen Thousand Dollars ($15,000). under the BHC Act serves the purposes of deterring IT IS FURTHER ORDERED that payment of the repeat violations by the Respondents (specific deter- assessed penalties set forth herein shall be made on or before the sixtieth day following the effective date of this Order, payable in full to the order of the Board of part within the control of the respondent, the weakness of the record Governors of the Federal Reserve System, who shall in this regard is properly chargeable to the Respondents. See Stanley make remittance of the same to the Treasury of the v. Board of Governors, 940 F.2d 267, 274 (7th Cir. 1991) (Board does not bear full burden of proving financial resources). 17. The Board declines to remand the case for supplementation of the record in light of the difficulty of achieving precision on this issue, the absence of exceptions from the Respondents, and the absence of 18. As explained above, the Board does not find that a remand for any suggestion of the utility of a remand by Enforcement Counsel. supplementation of the record would be useful in this case. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 165 United States as required by statute. Payment of the One Security, Inc. assessed penalty shall be transmitted to: Kansas City, Kansas William W. Wiles, Secretary The Federal Reserve Board announced on Decem- Board of Governors of the Federal ber 21, 1992, the issuance of a Cease and Desist Order Reserve System against One Security, Inc., Kansas City, Kansas. 20th and C Streets, N.W. Washington, D.C. 20551 Sandquist Corporation Deer Lodge, Montana By order of the Board of Governors, effective this 14th day of December, 1992. The Federal Reserve Board announced on December 8, 1992, the issuance of Orders of Assessment of a WILLIAM W. WILES Civil Money Penalty against Sandquist Corporation, Secretary of the Board Deer Lodge, Montana, and Kirk Sandquist, an institution-affiliated party of Sandquist Corporation. FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD OF GOVERNORS Valley View Bancshares, Inc. Overland Park, Kansas The Blackshear Bank Blackshear, Georgia The Federal Reserve Board announced on Decem- The Federal Reserve Board announced on Decem- ber 21, 1992, the issuance of a Cease and Desist Order ber 29, 1992, the joint issuance of a Cease and Desist against Valley View Bancshares, Inc., Overland Park, Order against the Blackshear Bank, Blackshear, Geor- Kansas. gia, with the Department of Banking and Finance of the State of Georgia. WRITTEN AGREEMENTS APPROVED BY FEDERAL The Farmers and Merchants Bank of RESERVE BANKS Long Beach Long Beach, California First Bank of Berne The Federal Reserve Board announced on Decem- Berne, Indiana ber 29,1992, the issuance of an Order of Assessment of a Civil Money Penalty against the Farmers and Mer- The Federal Reserve Board announced on Decemchants Bank of Long Beach, Long Beach, California. ber 8, 1992, the execution of a Written Agreement between the Federal Reserve Bank of Chicago and the Greater Ohio River Company First Bank of Berne, Berne, Indiana. Columbus, Ohio Pitcairn Bancorp, Inc. The Federal Reserve Board announced on Decem- Jenkintown, Pennsylvania ber 23, 1992, the issuance of an Order of Assessment of a Civil Money Penalty against Greater Ohio River Company, Columbus, Ohio. The Federal Reserve Board announced on December 17, 1992, the execution of a Written Agreement Industrial Bancshares, Inc. between the Federal Reserve Bank of Philadelphia and Kansas City, Kansas Pitcairn Bancorp, Inc., and Pitcairn Private Bank, Jenkintown, Pennsylvania. The Federal Reserve Board announced on December 21, 1992, the issuance of a Cease and Desist Order against United Bank Corporation of New York Industrial Bancshares, Inc., Kansas City, Kansas. Downsville, New York Mission Bancshares, Inc. The Federal Reserve Board announced on Decem- Mission, Kansas ber 8, 1992, the execution of a Written Agreement The Federal Reserve Board announced on Decem- between the Federal Reserve Bank of New York and ber 21, 1992, the issuance of a Cease and Desist Order United Bank Corporation of New York, Downsville, against Mission Bancshares, Inc., Mission, Kansas. New York. 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 A21 All reporting banks A23 Branches and agencies of foreign banks Domestic Financial Statistics MONEY STOCK AND BANK CREDIT FINANCIAL MARKETS A4 Reserves, money stock, liquid assets, and debt A24 Commercial paper and bankers dollar measures acceptances outstanding A5 Reserves of depository institutions, Reserve Bank A24 Prime rate charged by banks on short-term credit business loans A6 Reserves and borrowings—Depository A25 Interest rates—money and capital markets institutions A26 Stock market—Selected statistics A7 Selected borrowings in immediately available A27 Selected financial institutions—Selected assets funds—Large member banks and liabilities POLICY INSTRUMENTS FEDERAL FINANCE A8 Federal Reserve Bank interest rates A27 Federal fiscal and financing operations A9 Reserve requirements of depository institutions A28 U.S. budget receipts and outlays A10 Federal Reserve open market transactions A29 Federal debt subject to statutory limitation A29 Gross public debt of U.S. Treasury—Types and ownership FEDERAL RESERVE BANKS A30 U.S. government securities dealers—Transactions All Condition and Federal Reserve note statements A31 U.S. government securities dealers—Positions A12 Maturity distribution of loan and security and financing holdings A3 2 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 A33 New security issues—State and local A17 Loans and securities—All commercial banks governments and corporations A34 Open-end investment companies—Net sales and asset position COMMERCIAL BANKING INSTITUTIONS A34 Corporate profits and their distribution A34 Total nonfarm business expenditures on new A18 Major nondeposit funds plant and equipment A19 Assets and liabilities, last-Wednesday-of-month A35 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 • February 1993 Domestic Financial Statistics—Continued A57 Selected U.S. liabilities to foreign official institutions REAL ESTATE REPORTED BY BANKS A36 Mortgage markets A37 Mortgage debt outstanding IN THE UNITED STATES A51 Liabilities to and claims on foreigners CONSUMER INSTALLMENT CREDIT A58 Liabilities to foreigners A60 Banks' own claims on foreigners A3 8 Total outstanding and net change A61 Banks' own and domestic customers' claims on A3 8 Terms foreigners A61 Banks' own claims on unaffiliated foreigners A62 Claims on foreign countries—Combined FLOW OF FUNDS domestic offices and foreign branches A39 Funds raised in U.S. credit markets A41 Summary of financial transactions REPORTED BYNONBANKING BUSINESS A42 Summary of credit market debt outstanding ENTERPRISES IN THE UNITED STATES A43 Summary of financial assets and liabilities A63 Liabilities to unaffiliated foreigners A64 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SELECTED MEASURES SECURITIES HOLDINGS AND TRANSACTIONS A44 Nonfinancial business activity—Selected A65 Foreign transactions in securities measures A66 Marketable U.S. Treasury bonds and A45 Labor force, employment, and unemployment notes—Foreign transactions A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value A49 Housing and construction INTEREST AND EXCHANGE RATES A50 Consumer and producer prices A67 Discount rates of foreign central banks A51 Gross domestic product and income A67 Foreign short-term interest rates A52 Personal income and saving A68 Foreign exchange rates A69 Guide to Statistical Releases and International Statistics Special Tables SUMMARY STATISTICS SPECIAL TABLES A53 U.S. international transactions—Summary A54 U.S. foreign trade A70 Assets and liabilities of commercial banks, A54 U.S. reserve assets September 30, 1992 A54 Foreign official assets held at Federal Reserve A76 Terms of lending at commercial banks, Banks November 1992 A55 Foreign branches of U.S. banks—Balance A80 Assets and liabilities of U.S. branches and agencies sheet data of foreign banks, September 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

A4 Domestic Financial Statistics • February 1993 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1991 1992 1992 MMoonneettaarryy aanndd ccrreeddiitt aaggggrreeggaattee Q4 Q1 Q2 Q3 July Aug. Sept. Oct. Nov. Reserves of depository institutions2 1 Total 15.2 23.4 14.9 9.3 6.2 20.2 24.4 42.0 20.8 2 Required 15.4 23.5 15.4 9.9 5.0 21.3 23.4 40.9 22.0 3 Nonborrowed 20.0 24.0 14.8 8.4 4.9 21.1 23.7 45.6 21.8 4 Monetary base3 8.2 9.2 7.1 10.5 9.5 16.6 16.7 14.3 8.7 Concepts of money, liquid assets, and debt4 5 Ml 11.1 16.5 9.8 10.3 11.1 15.7 19.1 22.6 14.1 6 M2 2.4 4.2 .4 .2' -.9 3.3 3.7' 5.2' 3.5 7 M3 1.0 2.2 — 1.3' -.1' -1.1 3.9* 2.0' .4' 1.8 8 L .2 1.5 .5 1.2 -1.8' 4.5' 4.5' 1.9 n.a. 9 Debt 3.9 4.3r 5.4' 4.2' 3.9* 3.9* 3.3' 2.7 n.a. Nontransaction components 10 In M2' -.6 -.1 -3.0 -3.6' -5.4' -1.4' -2.3' -1.7' -.8 11 In M3 only6 -5.4 -7.4 -9.3 -1.6' -2.2' 6.5' -6.6' -23.6' -6.6 Time and savings deposits Commercial banks 12 Savings, including MMDAs 16.0 19.1 12.0 10.0 9.5 13.4 16.7 14.7' 10.3 13 Small time -8.4 -18.9 -13.3 -16.7' -17.2' -19.4' -16.8' -IS.C -18.0 14 Large time • -14.4 -18.2 -14.8 -16.0 -23.6 -10.2 -16.7 -25.4 -9.4 Thrift institutions 15 Savings, including MMDAs 10.2 22.4 18.8 8.4 5.5 9.2 10.8 8.8 10.1 16 Small time -22.5 -24.3 -29.4 -17.7' -17.2' -17.2' -26.6' -20.2 17 Large time • -36.5 -29.7 -36.7 -17.1 -5.2 -22.4 -3.5 -1.8' -24.7 Money market mutual funds 18 General purpose and broker-dealer -4.0 -.3 --44..00'' -8.2' -12.2' -6.8' -17.2' 10.1' 3.8 19 Institution-only 37.2 26.9 20.0 40.0 48.1 54.9 .0 -64.1' -12.3 Debt components4 20 Federal 11.5 10.0 14.4' 10.8' 1100..00'' 9.7' 5.0 -1.4 n.a. 21 Nonfederal 1.5 2.5r 2.5' 1.7' 1.9 2.7' 4.1 n.a. 1. Unless otherwise noted, rates of change are calculated from average offices in the United Kingdom and Canada, and (3) balances in both taxable and amounts outstanding during preceding month or quarter. tax-exempt, institution-only money market funds. Excludes amounts held by 2. Figures incorporate adjustments for discontinuities, or "breaks," associ- depository institutions, the U.S. government, money market funds, and foreign ated with regulatory changes in reserve requirements. (See also table 1.20.) banks and official institutions. Also excluded is the estimated amount of overnight 3. Seasonally adjusted, break-adjusted monetary base consists of (1) season- RPs and Eurodollars held by institution-only money market funds. Seasonally ally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted M3 is computed by adjusting its non-M2 component as a whole and then adjusted currency component of the money stock, plus (3) (for all quarterly adding this result to seasonally adjusted M2. reporters on the "Report of Transaction Accounts, Other Deposits, and Vault L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Cash" and for all weekly reporters whose vault cash exceeds their required Treasury securities, commercial paper, and bankers acceptances, net of money reserves) the seasonally adjusted, break-adjusted difference between current vault market fund holdings of these assets. Seasonally adjusted L is computed by cash and the amount applied to satisfy current reserve requirements. summing U.S. savings bonds, short-term Treasury securities, commercial paper, 4. Composition of the money stock measures and debt is as follows: and bankers acceptances, each seasonally adjusted separately, and then adding Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults this result to M3. of depository institutions; (2) travelers checks of nonbank issuers; (3) demand Debt: Debt of domestic nonfinancial sectors consists of outstanding creditdeposits at all commercial banks other than those due to depository institutions, market debt of the U.S. government, state and local governments, and private the U.S. government, and foreign banks and official institutions, less cash items in nonfinancial sectors. Private debt consists of corporate bonds, mortgages, conthe process of collection and Federal Reserve float; and (4) other checkable sumer credit (including bank loans), other bank loans, commercial paper, bankers deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and acceptances, and other debt instruments. Data are derived from the Federal automatic transfer service (ATS) accounts at depository institutions, credit union Reserve Board's flow of funds accounts. Data on debt of domestic nonfinancial share draft accounts, and demand deposits at thrift institutions. Seasonally sectors are monthly averages, derived by averaging adjacent month-end levels. adjusted Ml is computed by summing currency, travelers checks, demand Growth rates for debt reflect adjustments for discontinuities over time in the levels deposits, and OCDs, each seasonally adjusted separately. of debt presented in other tables. M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements 5. Sum of (1) overnight RPs and Eurodollars, (2) money market fund balances (RPs) issued by all depository institutions and overnight Eurodollars issued to (general purpose and broker-dealer), (3) MMDAs, and (4) savings and small time U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (includ- deposits. ing MMDAs) and small time deposits (time deposits—including retail repurchase 6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. agreements (RPs)—in amounts of less than $100,000), and (3) balances in both residents, and (4) money market fund balances (institution-only), less (5) a taxable and tax-exempt general-purpose and broker-dealer money market funds. consolidation adjustment that represents the estimated amount of overnight RPs Excludes individual retirement accounts (IRAs) and Keogh balances at depository and Eurodollars held by institution-only money market funds. This sum is institutions and money market funds. Also excludes all balances held by U.S. seasonally adjusted as a whole. commercial banks, money market funds (general purpose and broker-dealer), 7. Small time deposits—including retail RPs—are those issued in amounts of foreign governments and commercial banks, and the U.S. government. Season- less than $100,000. All IRA and Keogh account balances at commercial banks and ally adjusted M2 is computed by adjusting its non-Mi component as a whole and thrift institutions are subtracted from small time deposits. then adding this result to seasonally adjusted Ml. 8. Large time deposits are those issued in amounts of $100,000 or more, M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of excluding those booked at international banking facilities. $100,000 or more) issued by all depository institutions, (2) term Eurodollars held 9. Large time deposits at commercial banks less those held by money market by U.S. residents at foreign branches of U.S. banks worldwide and at all banking funds, depository institutions, and foreign banks and official institutions. 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 Average of daily figures Average of daily figures for week ending on date indicated 1992 1992 Sept. Oct. Nov. Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 325,915 321,292r 327,922 323,092 321,295 320,855 323,446 326,698 327,866 329,972 U.S. government securities 2 Bought outright—System account 280,746 282,073 288,434 282,037 282,160 281,906 285,693 285,068 286,364 291,828 3 Held under repurchase agreements ... 6,452 858 2,640 1,924 361 1,147 0 4,306 4,402 2,092 Federal agency obligations 4 Bought outright 5,538 5,534 5,534 5,534 5,534 5,534 5,534 5,534 5,534 5,534 5 Held under repurchase agreements ... 293 69 145 153 29 78 0 288 177 122 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 94 29 81 58 9 37 21 5 49 153 8 Seasonal credit 192 115 39 127 103 86 63 43 39 34 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 541 572 574 994 948 2 935 295 624 333 11 Other Federal Reserve assets 32,059 32,041 30,475 32,265 32,152 32,066 31,200 31,160 30,677 29,876 12 Gold stock 11,059 11,059 11,059 11,060 11,059 11,059 11,060 11,059 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 21,324 21,380 21,441 21,370 21,384 21,398 21,412 21,426 21,440 21,454 ABSORBING RESERVE FUNDS 15 Currency in circulation 318,628 320,241 324,550 321,085 321,007 319,968 320,860 323,149 324,972 325,634 16 Treasury cash holdings 530 518 504 525 516 509 505 501 500 495 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 11,390 4,946 5,617 4,555 4,675 5,191 5,622 5,250 5,184 5,787 18 Foreign 309 330 284 293 271 402 457 382 247 199 19 Service-related balances and adjustments 5,773 5,782 5,898 5,703 5,742 5,832 6,039 5,729 6,006 5,756 20 Other 290 286 293 276 269 265 304 294 301 284 21 Other Federal Reserve liabilities and capital 8,507 8,108 7,834 8,180 8,132 8,242 7,435 7,533 7,887 8,177 22 Reserve balances with Federal Reserve Banks 22,890 23,540r 25,460 24,922 23,145 22,921 24,714 26,364 25,286 26,169 End-of-month figures Wednesday figures Sept. Oct. Nov. Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 336,583 320,055r 331,111 332,569 319,138 318,942 326,097 328,452 321,990 329,480 U.S. government securities 2 Bought outright—System account 279,712 282,877 292,696 281,313 281,314 282,004 288,095 285,564 286,719 292,340 3 Held under repurchase agreements ... 16,685 0 3,256 9,831 0 521 0 4,688 150 343 Federal agency obligations 4 Bought outright 5,534 5,534 5,534 5,534 5,534 5,534 5,534 5,534 5,534 5,534 5 Held under repurchase agreements ... 1,475 0 254 1,044 0 130 0 533 0 0 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 425 11 10 190 20 28 7 6 155 834 8 Seasonal credit 184 70 25 119 % 75 48 41 39 30 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float -227 500r -24 1,485 335 -1,505 1,108 605 100 707 11 Other Federal Reserve assets 32,796 31,064r 29,360 33,054 31,838 32,155 31,307 31,482 29,293 29,692 12 Gold stock 11,058 11,060 11,059 11,059 11,059 11,059 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 21,342 21,412 21,468 21,370 21,384 21,398 21,412 21,426 21,440 21,454 ABSORBING RESERVE FUNDS 15 Currency in circulation 317,923 320,398 327,315 321,611 320,503 320,237 321,861 324,384 325,155 327,020 16 Treasury cash holdings 527 505 525 517 510 505 501 501 490 525 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 24,586 4,413 6,985 4,342 5,692 5,028 6,940 5,388 6,504 6,074 18 Foreign 546 415 229 279 393 585 542 264 162 185 19 Service-related balances and adjustments 5,963 6,039"^ 6,066 5,703 5,742 5,832 6,039 5,729 6,006 5,756 20 Other 296 317 296 300 254 298 280 304 288 278 21 Other Federal Reserve liabilities and capital 8,024 7,271 7,759 8,097 7,916 8,081 7,329 7,645 7,903 8,088 22 Reserve balances with Federal Reserve Banks' 21,138 23,186r 24,479 34,168 20,590 20,851 25,094 26,738 17,998 24,084 1. For amounts of cash held as reserves, see table 1.12. 3. Excludes required clearing balances and adjustments to compensate for 2. Includes securities loaned—fully guaranteed by U.S. government securities float, pledged with Federal Reserve Banks—and excludes any securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • February 1993 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. May June July Aug. Sept. Oct.r Nov. 1 Reserve balances with Reserve Banks 35,436 30,237 26,659 21,071 21,223 21,206 21,272 22,627 23,626 25,459 2 Total vault cash 29,828 31,786 32,513 31,197 31,729 32,145 32,457 32,343 32,991 32,626 3 Applied vault cash , 27,374 28,884 28,872 27,754 28,273 28,617 28,890 28,894 29,510 29,205 4 Surplus vault cash 2,454 2,903 3,641 3,442 3,456 3,528 3,567 3,448 3,481 3,422 5 Total reserves6 62,810 59,120 55,532 48,825 49,4% 49,823 50,162 51,521 53,136 54,664 6 Required reserves 1... 61,887 57,456 54,553 47,825 48,584 48,857 49,227 50,527 52,062 53,620 7 Excess reserve balances at Reserve Banks ... 923 1,664 979 1,000 913 965 935 994 1,074 1,043 8 Total borrowings at Reserve Banks8 265 326 192 155 229 284 251 287 143 104 9 Seasonal borrowings 84 76 38 98 149 203 223 193 114 40 10 Extended credit 20 23 1 0 0 0 0 0 0 0 Biweekly averages of daily figures for weeks ending 1992 Aug. 5 Aug. 19 Sept. 2 Sept. 16 Sept. 30 Oct. 14 Oct. 28 Nov. llr Nov. 25 Dec. 9 1 Reserve balances with Reserve Banks2 21,264 21,515 20,991 23,439 22,048 23,810 23,031 25,535 25,730 24,533 2 Total vault cash3 31,613 32,687 32,541 31,625 33,033 32,929 33,333r 31,688 33,446 32,397 3 Applied vault cash , 28,105 29,166 28,896 28,438 29,351 29,438 29,790 28,539 29,117 30,917 4 Surplus vault cash 3,508 3,521 3,645 3,187 3,682 3,491 3,543r 3,150 4,329 1,480 5 Total reserves6 49,369 50,681 49,887 51,876 51,399 53,248 52,821 54,074 54,846 55,450 6 Required reserves 48,447 49,856 48,820 51,081 50,217 52,099 51,750 53,346 53,485 54,604 7 Excess reserve balances at Reserve Banks ... 922 825 1,067 795 1,182 1,149 1,071 728 1,361 845 8 Total borrowings at Reserve Banks 241 249 258 321 259 185 118 66 138 95 9 Seasonal borrowings 222 221 226 187 196 146 95 53 37 22 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical 5. Total vault cash (line 2) less applied vault cash (line 3). release. For ordering address, see inside front cover. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 2. Excludes required clearing balances and adjustments to compensate for float (line 3). and includes other off-balance-sheet "as-of' adjustments. 7. Total reserves (line 5) less required reserves (line 6). 3. Total "lagged" vault cash held by depository institutions subject to reserve 8. Also includes adjustment credit. requirements. Dates refer to the maintenance periods during which the vault cash 9. Consists of borrowing at the discount window under the terms and condican be used to satisfy reserve requirements. Under contemporaneous reserve tions established for the extended credit program to help depository institutions requirements, maintenance periods end thirty days after the lagged computation deal with sustained liquidity pressures. Because there is not the same need to periods during which the balances are held. repay such borrowing promptly as there is with traditional short-term adjustment 4. All vault cash held during the lagged computation period by "bound" credit, the money market impact of extended credit is similar to that of institutions (that is, those whose required reserves exceed their vault cash) plus nonborrowed reserves. the amount of vault cash applied during the maintenance period by "nonbound" institutions (that is, those whose vault cash exceeds their required reserves) to satisfy current reserve requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit Al 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Millions of dollars, averages of daily figures 1992, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Aug. 31 Sept. 7 Sept. 14 Sept. 21 Sept. 28 Oct. 5 Oct. 12 Oct. 19 Oct. 26 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 69,674 77,011 74,385 69,601r 64,186r 76,088 73,095 74,222 67,637 2 For all other maturities 15,512 14,365 14,605 13,869 1133,,991122rr 1133,,220077 1144,,223344 1144,,225544 1144,,779977 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 17,874 19,902 17,075 16, no1 18,852r 17,985 16,750 22,663 23,327 4 For all other maturities 19,493 20,735 21,184 20,791 21,305 19,541 18,368 17,428 18,688 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 15,305 14,459 14,299 12,182r 11,499" 11,433 11,333 14,483 13,088 6 For all other maturities 16,977 15,956 17,202 16,960 17,490 17,827 18,663 18,780 20,594 All other customers 7 For one day or under continuing contract 25,113 25,117 23,355 23,515r 23,437r 25,848 24,517 23,481 23,164 8 For all other maturities 12,483 12,542 12,198 12,972r 13,256r 12,250 12,631 12,159 12,719 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 41,511 42,828 41,225 44,476r 40,128r 47,192 40,377 41,392 37,812 10 To all other specified customers2 17,663 19,705 20,430 22,495r 21,141r 26,564 22,468 19,175 20,103 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.S (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 Domestic Financial Statistics • February 1993 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk . 12 O /3 n 1 /92 Effective date Previous rate 12/ O 31 n / 92 Effective date Previous rate 12/ O 3 n 1/ 92 Effective date Previous rate Boston 3 7/2/92 3.5 3.20 12/24/92 3.40 3.70 12/24/92 3.90 New York 7/2/92 12/24/92 12/24/92 Philadelphia , , 7/2/92 12/24/92 12/24/92 Cleveland 7/6/92 12/24/92 12/24/92 Richmond 7/2/92 12/24/92 12/24/92 Atlanta 7/2/92 12/24/92 12/24/92 Chicago 7/2/92 12/24/92 12/24/92 St. Louis 7/7/92 12/24/92 12/24/92 Minneapolis 7/2/92 12/24/92 12/24/92 Kansas City 7/2/92 12/24/92 12/24/92 Dallas 7/2/92 12/24/92 12/24/92 San Francisco ... 3 7/2/92 3.5 3.20 12/24/92 3.40 3.70 12/24/92 3.90 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o a f n k Effective A le l v l e F l) . — R. B o an f k Effective date A le l v l e F l) . — R. B o a f n k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 6 6 1981--May 5 13-14 14 1986—Aug. 21 5.5-6 5.5 14 14 22 5.5 5.5 1978—Jan. 9 6-6.5 6.5 Nov. ? 13-14 13 20 6.5 6.5 6 13 13 1987—Sept. 4 5.5-6 6 May 11 6.5-7 7 Dec. 4 12 12 11 6 6 12 7 7 July 3 7-7.25 7.25 1982---JJuullyy 70 11.5-12 11.5 1988—Aug. 9 6-6.5 6.5 10 7.25 7.25 73 11.5 11.5 11 Aug. 21 7.75 7.75 Aug. 7 11-11.5 11 Sept. 22 8 8 3 11 11 1989—Feb. 24 6.5-7 7 Oct. 16 8-8.5 8.5 16 10.5 10.5 27 7 7 20 8.5 8.5 77 10-10.5 10 Nov. 1 8.5-9.5 9.5 30 10 10 1990—Dec. 19 6.5 6.5 3 9.5 9.5 Oct. 1? 9.5-10 9.5 n 9.5 9.5 1991—Feb. 1 6.65 6 1979—July 20 10 10 Nov. 2? 9-9.5 9 4 6 6 Aug. 17 10-10.5 10.5 76 9 9 Apr. 30 5.5-6 5.5 20 10.5 10.5 Dec. 14 8.5-9 9 May 2 5.5 5.5 Sept. 19 10.5-11 11 15 8.5-9 8.5 Sept. 13 5-5.5 5 21 11 U 17 8.5 8.5 Sept. 17 5 5 Oct. 8 11-12 12 Nov. 6 4.5-5 4.5 10 12 12 1984-——AApprr.. 9 8.5-9 9 7 4.5 4.5 n 9 9 Dec. 20 3.5-4.5 3.5 1980—Feb. 15 12-13 13 Nov. 71 8.5-9 8.5 24 3.5 3.5 19 13 13 76 8.5 8.5 May 29 12-13 13 Dec. 74 8 8 1992—July 2 3-3.5 3 30 12 12 7 3 3 June 13 11-12 11 1985-——MMaayy 70 7.5-8 7.5 16 11 11 74 7.5 7.5 29 10 10 IInn eeffffeecctt DDeecc.. 3311,, 11999922 3 3 July 28 10-11 10 1986-—Mar. 7 7-7.5 7 Sept. 26 11 11 10 7 7 Nov. 17 12 12 Apr. 71 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 funds 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 subsequendy 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 Type of deposit2 Net transaction accounts 1 $0 million-$46.8 million... 12/15/92 2 More than $46.8 million .. 12/15/92 3 Nonpersonal time deposits; 12/27/90 4 Eurocurrency liabilities6 .. 12/27/90 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. 15, foreign banks, and Edge corporations. 1992, for institutions reporting quarterly, and Dec. 24, 1992, for institutions 2. The Garn-St Germain Depository Institutions Act of 1982 (Public Law reporting weekly, the amount was increased from $42.2 million to $46.8 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 lVz 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. 15, 1992, the exemption was raised from $3.6 to zero for the maintenance period that began Dec. 27, 1990. The reserve million to $3.8 million. The exemption applies in the following order: (1) net requirement on nonpersonal time deposits with an original maturity of 1 Vi 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 Vi 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 1 Vi years (see note 4). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • February 1993 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1992 TTyyppee ooff ttrraannssaaccttiioonn 11998899 11999900 11999911 Apr. May June July Aug. Sept. Oct. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 14,284 24,739 20,158 0 4,110 306 0 271 595 4,072 2 Gross sales 12,818 7,291 120 0 0 0 0 0 0 0 3 Exchanges 231,211 241,086 277,314 27,526 24,275 22,392 27,755 25,041 22,268 28,907 4 Redemptions 12,730 4,400 1,000 0 0 0 0 0 0 0 Others within one year 5 Gross purchases 327 425 3,043 0 0 0 0 0 550 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 '/ Maturity shifts 28,848 25,638 24,454 1,100 3,754 2,152 687 5,415 0 0 8 Exchanges -25,783 -27,424 -28,090 -1,863 -5,225 -1,854 -1,669 -4,617 0 0 y Redemptions 500 0 1,000 0 0 0 0 0 0 0 One to five years 10 Gross purchases 1,436 250 6,583 0 200 2,278 0 400 3,325 200 n Gross sales 490 200 0 0 0 0 0 0 0 0 12 Maturity shifts -25,534 -21,770 -21,211 -877 -2,113 -3,447 -216 -4,036 0 0 13 Exchanges 23,250 25,410 24,594 1,484 4,311 1,854 1,478 3,567 0 0 Five to ten years 14 Gross purchases 287 0 1,280 0 0 597 0 0 725 0 IS Gross sales 29 100 0 0 0 0 0 0 0 0 16 Maturity shifts -2,231 -2,186 -2,037 -223 -346 0 -471 -412 0 0 IV Exchanges 1,934 789 2,894 379 614 0 191 700 0 0 More than ten years 18 Gross purchases 284 0 375 0 0 655 0 195 731 0 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 0 300 0 0 350 0 0 All maturities 22 Gross purchases 16,617 25,414 31,439 0 4,310 3,836 0 866 5,927 4,272 23 Gross sales 13,337 7,591 120 0 0 0 0 0 0 0 24 Redemptions 13,230 4,400 1,000 0 0 0 0 0 0 0 Matched transactions 25 Gross sales 1,323,480 1,369,052 1,570,456 125,999 118,972 126,977 127,051 104,873 116,331 116,024 26 Gross purchases 1,326,542 1,363,434 1,571,534 128,149 117,524 129,216 126,137 102,575 115,579 114,917 Repurchase agreements2 21 Gross purchases 129,518 219,632 310,084 18,432 38,777 10,792 12,224 39,484 68,697 18,698 28 Gross sales 132,688 202,551 311,752 20,237 38,533 11,036 12,224 31,868 59,628 35,383 29 Net change in U.S. government securities -10,055 24,886 29,729 345 3,107 5,831 -914 6,184 14,244 -13,520 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 49 160 40 85 54 37 0 Repurchase agreements2 33 Gross purchases 38,835 41,836 22,807 224 1,281 402 94 601 3,222 1,778 34 Gross sales 40,411 40,461 23,595 224 1,281 402 94 548 1,800 3,253 35 Net change in federal agency obligations -2,018 1,192 -1,085 -49 -160 -40 -85 -1 1,385 -1,475 36 Total net change in System Open Market Account -12,073 26,078 28,644 295 2,946 5,791 -1,000 6,183 15,629 -14,995 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 A11 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 1992 1992 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 Sept. 30 Oct. 31 Nov. 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,059 11,059 11,060 11,059 11,059 11,058 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 517 515 511 517 495 501 519 491 Loans 4 To depository institutions 103 54 46 194 865 609 80 3355 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 5,534 5,534 5,534 5,534 5,534 5,534 5,534 55,,553344 8 Held under repurchase agreements 130 0 533 0 0 1,475 0 254 9 Total U.S. Treasury securities 282,525 288,095 290,252 286,869 292,683 296,397 282,877 295,952 10 Bought outright2 282,004 288,095 285,564 286,719 292,340 279,712 282,877 292,696 11 Bills 135,843 141,935 139,154 139,709 139,423 133,752 136,716 139,780 12 Notes 112,576 112,576 112,826 113,026 117,879 112,376 112,576 117,879 13 Bonds 33,584 33,584 33,584 33,984 35,037 33,584 33,584 35,037 14 Held under repurchase agreements 521 0 4,688 150 343 16,685 0 3,256 15 Total loans and securities 288,292 293,683 296,365 292,597 299,081 304,015 288,491 301,775 16 Items in process of collection 4,791 6,852 7,485 5,741 6,198 5,125 5,136 1,912 17 Bank premises 1,025 1,024 1,026 1,028 1,029 1,019 1,024 1,029 Other assets 18 Denominated in foreign currencies 24,065 23,078 23,109 23,133 22,739 24,432 23,067 22,150 19 All other4 6,949 7,288 7,464 5,235 6,063 7,423 7,020 6,245 20 Total assets 346,715 353,517 357,039 349,328 356,682 363,591 346,334 354,679 LIABILITIES 21 Federal Reserve notes 299,861 301,466 303,970 304,722 306,586 297,609 300,010 306,863 22 Total deposits 34,084 38,839 38,591 31,267 36,746 53,094 34,484 37,840 23 Depository institutions 28,161 31,077 32,634 24,312 30,208 27,665 29,339 30,348 24 U.S. Treasury—General account 5,028 6,940 5,388 6,504 6,074 24,586 4,413 6,985 25 Foreign—Official accounts 585 542 264 162 185 546 415 229 26 Other 298 280 304 288 278 296 317 2% 27 Deferred credit items 4,689 5,883 6,832 5,436 5,263 4,865 4,568 2,216 28 Other liabilities and accrued dividends 1,752 1,763 1,788 1,776 1,860 1,840 1,805 1,894 29 Total liabilities 340,386 347,950 351,182 343,201 350,455 357,408 340,868 348,814 CAPITAL ACCOUNTS 30 Capital paid in 3,006 3,040 3,021 3,022 3,028 2,977 3,040 3,028 31 Surplus 2,652 2,500 2,586 2,626 2,629 2,652 2,419 2,546 32 Other capital accounts 671 26 250 478 571 555 8 291 33 Total liabilities and capital accounts 346,715 353,517 357,039 349,328 356,682 363,591 346,334 354,679 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 284,546 292,965 297,628 292,312 285,278 283,556 293,014 285,765 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Bank) 357,787 357,439 357,775 358,494 359,211 357,496 357,540 359,274 36 LESS: Held by Federal Reserve Bank 57,926 55,974 53,805 53,772 52,626 59,887 57,530 52,410 37 Federal Reserve notes, net 299,861 301,466 303,970 304,722 306,586 297,609 300,010 306,863 Collateral held against notes, net: 38 Gold certificate account 11,059 11,059 11,060 11,059 11,059 11,058 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 278,784 280,389 282,893 283,645 285,509 276,532 278,933 285,787 42 Total collateral 299,861 301,466 303,970 304,722 306,586 297,609 300,010 306,863 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 Financial Statistics • February 1993 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 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 Sept. 30 Oct. 30 Nov. 30 1 Total loans 103 54 46 194 865 609 80 35 2 Within fifteen days 87 17 19 194 864 506 35 23 3 Sixteen days to ninety days 16 38 28 1 1 103 46 12 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 282,525 288,095 290,252 286,869 292,683 296,397 282,877r 295,952 10 Within fifteen days2 11,667 20,224 16,936 14,311 10,493 24,468 3,203r 8,620 11 Sixteen days to ninety days 67,250 61,392 66,809 69,135 69,694 67,062 73,197r 75,398 12 Ninety-one days to one year 90,336 93,864 93,643 91,877 95,504 91,423 93,205r 95,569 13 One year to five years 69,627 68,970 69,220 67,062 70,383 69,648 69,627r 69,757 14 Five years to ten years 17,014 17,014 17,014 17,627 18,803 17,165 17,014 18,803 15 More than ten years 26,631 26,631 26,631 26,858 27,805 26,631 26,631 27,805 16 Total federal agency obligations 5,664 5,534 6,067 5,534 5,534 7,009 5,534 5,788 17 Within fifteen days2 244 0 653 458 393 1,685 114 647 18 Sixteen days to ninety days 843 951 831 568 513 747 843 548 19 Ninety-one days to one year 1,198 1,204 1,204 1,129 1,129 1,221 1,198 1,109 20 One year to five years 2,503 2,503 2,503 2,503 2,622 2,465 2,503 2,608 21 Five years to ten years 722 722 722 722 723 737 722 722 22 More than ten years 154 154 154 154 154 154 154 154 1. Holdings under repurchase agreements are classified as maturing within fifteen 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 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 .. Apr. May June July Aug. Sept. Oct. Nov. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS22 11 TToottaall rreesseerrvveess33 40.47 40.56 41.83 45.60 49.00 49.49 49.23 49.49 50.32 51.35 53.14 54.07 22 NNoonnbboorrrroowweedd rreesseerrvveess 38.75 40.29 41.51 45.41 48.91 49.34 49.01 49.21 50.07 51.06 53.00 53.96 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt 40.00 40.31 41.53 45.41 48.91 49.34 49.01 49.21 50.07 51.06 53.00 53.96 44 RReeqquuiirreedd rreesseerrvveess 39.42 39.64 40.17 44.62 47.86 48.49 48.32 48.52 49.39 50.35 52.07 53.02 55 MMoonneettaarryy bbaassee 256.97 267.77 293.29 317.25 326.50 328.58 329.64 332.26 336.87 341.55 345.61r 348.11 Not seasonally adjusted 6 Total reserves 41.65 41.77 43.07 46.98 50.02 48.62 49.25 49.52 49.81 51.11 52.66 54.13 7 Nonborrowed reserves 39.93 41.51 42.74 46.78 49.93 48.47 49.02 49.24 49.56 50.83 52.52 54.03 8 Nonborrowed reserves plus extended credit 41.17 41.53 42.77 46.78 49.93 48.47 49.02 49.24 49.56 50.83 52.52 54.03 9 Required reserves 40.60 40.85 41.40 46.00 48.88 47.62 48.33 48.56 48.88 50.12 51.59 53.09 10 Monetary base 260.41 271.18 296.68 321.07 327.45 328.37 330.94 334.09 336.59 340.11 343.66r 347.93 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS 11 Total reserves11 63.75 62.81 59.12 55.53 50.46 48.83 49.50 49.82 50.16 51.52 53.14 54.66 12 Nonborrowed reserves ^ 62.03 62.54 58.80 55.34 50.37 48.67 49.27 49.54 49.91 51.23 52.99 54.56 13 Nonborrowed reserves plus extended credit 63.28 62.56 58.82 55.34 50.37 48.67 49.27 49.54 49.91 51.23 52.99 54.56 14 Required reserves 62.70 61.89 57.46 54.55 49.32 47.83 48.58 48.86 49.23 50.53 52.06 53.62 15 Monetary base 283.00 292.55 313.70 333.61 332.69 333.79 336.43 339.87 342.49 346.21 349.81r 354.26 16 Excess reserves 1.05 .92 1.66 .98 1.14 1.00 .91 .97 .94 .99 1.07 1.04 17 Borrowings from the Federal Reserve 1.72 .27 .33 .19 .09 .16 .23 .28 .25 .29 .14 .10 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) what required reserves would have been in past periods had current reserve weekly statistical release. Historical data and estimates of the impact on required requirements been in effect. Break-adjusted required reserves include required reserves of changes in reserve requirements are available from the Monetaiy and reserves against transactions deposits and nonpersonal time and savings deposits Reserves Projections Section, Division of Monetary Affairs, Board of Governors (but not reservable nondeposit liabilities). of the Federal Reserve System, Washington, DC 20551. 9. The break-adjusted monetary base equals (1) break-adjusted total reserves 2. Figures reflect adjustments for discontinuities, or "breaks," associated with (line 6), plus (2) the (unadjusted) currency component of the money stock, plus (3) regulatory changes in reserve requirements. (See also table 1.10) (for all quarterly reporters on the "Report of Transaction Accounts, Other 3. Seasonally adjusted, break-adjusted total reserves equal seasonally Deposits and Vault Cash" and for all weekly reporters whose vault cash exceeds adjusted, break-adjusted required reserves (line 4) plus excess reserves (line 16). their required reserves) the break-adjusted difference between current vault cash 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally and the amount applied to satisfy current reserve requirements. adjusted, break-adjusted total reserves (line 1) less total borrowings of depository 10. Reflects actual reserve requirements, including those on nondeposit liabilinstitutions from the Federal Reserve (line 17). ities, with no adjustments to eliminate the effects of discontinuities associated 5. Extended credit consists of borrowing at the discount window under with changes in reserve requirements. the terms and conditions established for the extended credit program to help 11. Reserve balances with Federal Reserve Banks plus vault cash used to depository institutions deal with sustained liquidity pressures. Because there is satisfy reserve requirements. not the same need to repay such borrowing promptly as there is with traditional 12. The monetary base, not break-adjusted and not seasonally adjusted, short-term adjustment credit, the money market impact of extended credit is consists of (1) total reserves (line 11), plus (2) required clearing balances and similar to that of nonborrowed reserves. adjustments to compensate for float at Federal Reserve Banks, plus (3) the 6. The seasonally adjusted, break-adjusted monetary base consists of (1) currency component of the money stock, plus (4) (for all quarterly reporters on seasonally adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all adjusted currency component of the money stock, plus (3) (for all quarterly those weekly reporters whose vault cash exceeds their required reserves) the reporters on the "Report of Transaction Accounts, Other Deposits and Vault difference between current vault cash and the amount applied to satisfy current Cash" and for all those weekly reporters whose vault cash exceeds their required reserve requirements. Since the introduction of changes in reserve requirements reserves) the seasonally adjusted, break-adjusted difference between current vault (CRR), currency and vault cash figures have been measured over the computation cash and the amount applied to satisfy current reserve requirements. periods ending on Mondays. 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). plus excess reserves (line 16). 8. To adjust required reserves for discontinuities that are due to regulatory changes in reserve requirements, a multiplicative procedure is used to estimate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • February 1993 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1992 IItteemm 1988 1989 1990 1991 Dec. Dec. Dec. Dec. Aug/ Sept. Oct/ Nov. Seasonally adjusted Measures 1 Ml 786.9 794.1 826.1 898.1 973.1 988.6 1,007.2 1.019.0 2 M2 3,071.1 3,227.3 3,339.0 3,439.8 3.471.2 3,481.9 3,497.0 3.507.1 3 M3 3,923.1 4,059.8 4,114.6 4.171.0 4.176.3 4,183.1r 4,184.4 4,190.7 4 L 4,677.1 4,890.6 4,965.2 4.988.1 5,024.8 5,043.8r 5,051.7 n.a. 5 Debt 9,326.3 10,076.7 10,751.3 11,201.3' 11,564.7 11,5%.5r 11,622.4 n.a. Ml components 6 7 T C r u a r v re e n le c r y s checks4 21 7 2 . . 5 3 22 7 2 . . 4 6 24 8 6 . . 3 8 26 8 7 . . 2 3 28 7 2 . . 9 3 28 8 6 . . 3 4 28 8 8 . . 6 4 28 8 9 . . 6 9 9 8 O D t e h m er a n c d h e d c e k p a o b s l i e t s deposits6 2 2 8 8 6 0 . . 5 6 2 2 7 8 9 5 . . 0 1 2 2 7 9 7 3 . . 1 9 2 3 8 3 9 3 . . 5 2 3 3 2 6 0 2 . . 6 2 3 3 2 6 7 6 . . 8 1 3 3 3 7 6 4 . . 2 0 3 3 3 8 9 1 . . 2 2 Nontrqnsaction components 10 In M2 2,284.2 2,433.2 2,512.9 2,541.7 2,498.1 2,493.3r 2,489.8 2,488.2 11 In M3 852.0 832.5 775.6 731.2 705.1 701.2r 687.4 683.6 Commercial banks 12 Savings deposits, including MMDAs 542.7 541.5 581.9 664.9 724.3 734.4 743.4 749.8 1 1 4 3 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 ' 0, 11 4 3 4 6 7 6 . . 0 9 5 3 3 9 1 8 . . 0 2 6 3 0 7 6 4 . . 4 0 5 3 9 5 8 4 . . 5 0 5 3 3 1 4 6 . . 8 4 5 31 2 2 7 . . 0 3 r 5 3 1 0 9 5 . . 4 4 5 30 1 3 1 . . 0 6 Thrift institutions 1 1 1 5 7 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 i o t o s s s , i i t t i s s n 9 1 c 0 luding MMDAs 5 3 1 8 8 7 5 3 4 . . . 9 5 3 6 3 1 1 4 6 7 9 1 . . . 7 5 1 5 3 1 6 3 2 2 8 0 . . . 3 9 8 4 3 8 6 7 3 4 7 . . . 1 5 7 4 3 6 9 2 8 3 1 . . . 1 2 3 3 4 6 8 2 8 7 5 . . . 0 1 9 r 4 3 6 2 7 7 8 9 . . . 9 2 3 4 3 6 3 7 6 1 2 . . . 5 8 9 Money market mutual funds 18 General purpose and broker-dealer . 241.9 316.3 348.9 360.5 349.7 344.7r 347.6 348.7 19 Institution-only 91.0 107.2 133.7 179.1 217.2 217.2 205.6 203.5 Debt components 20 Federal debt 2,101.5 2,249.5 2,493.4 2,764.8 2,992.4 3,004.8r 3,001.4 n.a. 21 Nonfederal debt 7,224.8 7,827.2 8,258.0 8,436.5r 8,572.3 8,591.7r 8,621.0 n.a. Not seasonally adjusted Measures2 22 Ml 804.1 811.9 844.1 917.3 970.6 983.0 1,001.2 1,021.9 23 M2 3,083.8 3,240.0 3,351.9 3.453.6 3,470.2 3,473.3 3,492.3 3,510.5 24 M3 3,934.7 4,070.3 4,124.7 4.181.7 4,179.0 4,174.2r 4,174.9 4,192.8 25 L 4,694.2 4,909.9 4,984.9 5,008.3 5,018.4 5,033.5r 5,040.5 n.a. 26 Debt 9,312.5 10,063.6 10,739.9 ll,191.4r 11,526.6 ll,569.0r 11,600.5 n.a. Ml components 2 2 2 3 7 8 9 0 T C D O r u e t a h m r v r e e e a r n l n c e c d h r y s e d c c e k h p a e o b c s l k i e t s s 4 d 5 eposits6 2 2 2 8 9 1 6 3 8 4 . . . . 9 5 9 8 2 2 2 8 9 2 6 8 1 5 . . . . 1 5 9 3 2 2 2 9 4 8 6 7 9 9 . . . . 9 5 8 9 2 3 33 7 0 7 6 0 3 . . . . 7 5 0 0 2 3 3 5 8 1 8 9 2 9 . . . . 7 8 9 2 3 2 3 6 2 8 8 5 4 4 . . . . 9 4 7 0 r 2 3 3 8 6 3 8 7 9 6 . . . . 7 0 5 0 3 2 3 8 9 4 0 8 0 3 . . . . 1 3 1 4 Nontrqnsaction components 3 3 1 2 I I n n M M 3 2 8 ; 2,2 8 7 5 9 0 . . 7 8 2,4 8 2 3 8 0 . . 1 3 2,5 7 0 7 7 2 . . 8 8 2,5 7 3 2 6 8 . . 3 0 2,4 7 9 0 9 8 . . 6 8 2, 7 4 0 90 0 . . 3 9 r 2,4 6 9 8 1 2 . . 1 7 2,4 6 8 8 8 2. . 3 6 Commercial banks 33 Savings deposits, including MMDAs 543.8 543.0 580.0 662.4 726.2 733.4 742.1 749.4 3 3 4 5 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 6 5 . . 0 9 5 3 2 9 9 7 . . 5 1 6 3 0 7 6 3 . . 3 0 5 3 9 5 8 2 . . 7 8 5 3 3 1 4 8 . . 5 0 5 31 2 3 7 . . 2 0 r 3 5 0 2 5 0 . . 4 4 5 3 1 0 2 2 . . 1 6 Thrift institutions 36 Savings deposits, including MMDAs 381.1 347.6 337.7 376.3 422.4 424.6r 427.5 431.6 37 Small time deposits 584.9 616.0 562.2 464.6 392.9 387.6r 380.1 373.2 38 Large time deposits10 175.2 162.0 120.6 82.8 68.6 68.3 67.9 66.4 Money market mutual funds 39 General purpose and broker-dealer 240.8 314.6 346.8 358.1 348.0 343.5r 345.9 347.6 40 Institution-only 91.4 107.8 134.4 180.3 213.8 210.0 199.8 202.2 Repurchase agreements and eurodollars 41 Overnight 83.2 77.5 74.7 76.2 75.8 74.2 75.0 74.6 42 Term 227.4 178.5 158.3 127.7 124.1 123.7r 125.3 127.9 Debt components 43 Federal debt 2,098.9 2,247.5 2,491.3 2,765.0 2,970.3 2,993.9 2,998.1 n.a. 44 Nonfederal debt 7,213.5 7,816.2 8,248.6 8,426.4r 8,556.3 8,575.0r 8,602.4 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) market fund holdings of these assets. Seasonally adjusted L is computed by weekly statistical release. Historical data are available from the Money and summing U.S. savings bonds, short-term Treasury securities, commercial paper, Reserves Projection Section, Division of Monetary Affairs, Board of Governors of and bankers acceptances, each seasonally adjusted separately, and then adding the Federal Reserve System, Washington, DC 20551. this result to M3. 2. Composition of the money stock measures and debt is as follows: Debt: Debt of domestic nonfinancial sectors consists of outstanding credit Ml: (1) currency outside the Treasury, Federal Reserve Banks, and the vaults market debt of the U.S. government, state and local governments, and private of depository institutions; (2) travelers checks of nonbank issuers; (3) demand nonfinancial sectors. Private debt consists of corporate bonds, mortgages, condeposits at all commercial banks other than those due to depository institutions, sumer credit (including bank loans), other bank loans, commercial paper, bankers the U.S. government, and foreign banks and official institutions, less cash items in acceptances, and other debt instruments. Data are derived from the Federal the process of collection and Federal Reserve float; and (4), other checkable Reserve Board's flow of funds accounts. Debt data are based on monthly deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and averages. This sum is seasonally adjusted as a whole. automatic transfer service (ATS) accounts at depository institutions, credit union 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of share draft accounts, and demand deposits at thrift institutions. Seasonally depository institutions. adjusted Ml is computed by summing currency, travelers checks, demand 4. Outstanding amount of U.S. dollar-denominated travelers checks of nondeposits, and OCDs, each seasonally adjusted separately. bank issuers. Travelers checks issued by depository institutions are included in M2: Ml plus (1) overnight (and continuing-contract) repurchase agreements demand deposits. (RPs) issued by all depository institutions and overnight Eurodollars issued to 5. Demand deposits at commercial banks and foreign-related institutions other U.S. residents by foreign branches of U.S. banks worldwide, (2) savings (includ- than those due to depository institutions, the U.S. government, and foreign banks ing MMDAs) and small time deposits (time deposits—including retail RPs—in and official institutions, less cash items in the process of collection and Federal amounts of less than $100,000), and (3) balances in both taxable and tax-exempt Reserve float. general purpose and broker-dealer money market funds. Excludes individual 6. Consists of NOW and ATS account balances at all depository institutions, retirement accounts (IRAs) and Keogh balances at depository institutions and credit union share draft account balances, and demand deposits at thrift institumoney market funds. Also excludes all balances held by U.S. commercial banks, tions. money market funds (general purpose and broker-dealer), foreign governments 7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund and commercial banks, and the U.S. government. Seasonally adjusted M2 is balances (general purpose and broker-dealer), (3) MMDAs, and (4) savings and computed by adjusting its non-Mi component as a whole and then adding this small time deposits. result to seasonally adjusted Ml. 8. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of residents, and (4) money market fund balances (institution-only), less a consoli- $100,000 or more) issued by all depository institutions, (2) term Eurodollars held dation adjustment that represents the estimated amount of overnight RPs and by U.S. residents at foreign branches of U.S. banks worldwide and at all banking Eurodollars held by institution-only money market funds. offices in the United Kingdom and Canada, and (3) balances in both taxable and 9. Small time deposits—including retail RPs—are those issued in amounts of tax-exempt, institution-only money market funds. Excludes amounts held by less than $100,000. All IRAs and Keogh accounts at commercial banks and thrift depository institutions, the U.S. government, money market funds, and foreign institutions are subtracted from small time deposits. banks and official institutions. Also excluded is the estimated amount of overnight 10. Large time deposits are those issued in amounts of $100,000 or more, RPs and Eurodollars held by institution-only money market funds. Seasonally excluding those booked at international banking facilities. adjusted M3 is computed by adjusting its non-M2 component as a whole and then 11. Large time deposits at commercial banks less those held by money market adding this result to seasonally adjusted M2. funds, depository institutions, and foreign banks and official institutions. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury securities, commercial paper, and bankers acceptances, net of money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • February 1993 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 1992 Bank group, or type of customer 19892 1990 2 1991 Apr. May June July Aug. Sept. Seasonally adjusted Demand deposits 1 All insured banks 256,150.4 277,916.3 281,050.1 315,651.2 292,177.4 302,259.2 336,868.4 298,612.4 340,723.8 2 Major New York City banks 129,319.9 131,784.0 140,905.5 167,177.5 154,225.3 149,743.3 179,593.4 154,231.2 184,557.7 3 Other banks 126,830.5 146,132.3 140,144.6 148,473.7 137,952.1 152,515.9 157,275.0 144,381.2 156,166.1 4 ATS-NOW accounts4 2,910.5 3,349.6 3,624.6 3,957.0 3,552.6 4,070.7 4,024.0 3,594.2 3,940.5 5 Savings deposits 547.5 558.8 1,377.4 3,356.5 3,241.4 3,838.9 3,724.9 2,995.9 3,274.9 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 735.1 800.6 817.6 857.4 771.2 814.2 910.5 779.4 880.7 7 Major New York City banks 3,421.5 3,804.1 4,391.9 5,029.1 4,438.0 4,470.1 5,425.1 4,445.7 5,350.4 8 Other banks 408.3 467.7 449.6 443.3 400.9 451.6 466.9 414.4 443.2 9 ATS-NOW accounts4 15.2 16.5 16.1 15.6 13.7 15.6 15.3 13.5 14.7 10 Savings deposits 3.0 2.9 3.3 4.7 4.4 5.1 5.0 4.1 4.6 DEBITS TO Not seasonally adjusted Demand deposits3 11 All insured banks 256,133.2 277,400.0 280,922.8 314,388.6 290,950.2 311,175.8 336,160.9 310,646.4 329,854.7 12 Major New York City banks 129,400.1 131,784.7 140,563.0 164,994.4 153,163.7 154,953.8 178,555.6 162,973.4 178,998.2 13 Other banks 126,733.0 145,615.3 140,359.7 149,394.3 137,786.5 156,222.0 157,605.3 147,673.1 150,856.4 14 ATS-NOW accounts4 2,910.7 3,342.2 3,622.4 4,104.5 3,515.5 4,032.5 3,925.6 3,669.6 3,938.9 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 3,459.2 3,031.2 3,472.9 3,461.5 3,110.6 3,317.2 DEPOSIT TURNOVER Demand deposits3 17 All insured banks 735.4 799.6 817.5 849.3 785.8 842.5 903.0 824.6 852.6 18 Major New York City banks 3,426.2 3,810.0 4,370.1 5,042.4 4,551.3 4,668.3 5,312.2 4,867.0 5,205.2 19 Other banks 408.0 466.3 450.6 442.7 409.3 464.7 465.4 430.2 428.0 20 ATS-NOW accounts4 15.2 16.4 16.1 15.7 13.7 15.6 15.2 14.0 14.9 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 4.9 4.3 4.9 4.8 4.3 4.6 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 1992 Dec. Ian.r Feb.r Mar.r Apr/ Mayr Juner Julyr Aug/ Sept/ Oct/ Nov. Seasonally adjusted 1 Total loans and securities1 2,838.7r 2,852.0 2,854.8 2,863.1 2,877.5 2,877.6 2,883.7 2,884.4 2,897.2 2,913.3 2,924.9 2,936.6 2 U.S. government securities 562.6 566.2 571.2 579.5 592.3 601.7 611.7 619.5 634.1 639.1 646.2 653.6 i Other securities 179.4r 179.7 180.5 178.1 178.5 177.1 175.5 177.8 178.1 178.0 178.9 177.9 4 Total loans and leases 2,096.6r 2,106.1 2,103.1 2,105.5 2,106.7 2,098.8 2,096.5 2,087.1 2,085.1 2,096.2 2,099.8 2,105.0 5 Commercial and industrial ..... 618.0r 617.3 613.2 610.9 609.2 607.3 604.7 603.1 600.7 602.9 603.3 606.0 6 Bankers acceptances held2... 7.3 7.2 7.2 6.9 6.5 6.6 6.1 6.7 6.5 6.3 7.3 7.7 7 Other commercial and industrial 610.7r 610.1 606.0 603.9 602.7 600.7 598.6 596.4 594.2 596.6 596.0 598.3 8 U.S. addressees3 603.3r 603.7 599.5 597.3 595.8 593.5 591.7 588.8 586.8 588.9 588.0 590.3 9 Non-U.S. addressees 7.4 6.5 6.5 6.7 6.9 7.1 7.0 7.6 7.4 7.6 8.1 8.0 10 Real estate 873.1 873.5 877.5 879.4 881.4 882.6 881.2 878.9 878.4 882.6 887.1 889.5 11 Individual 363.5 363.1 363.6 362.2 360.7 358.9 359.0 358.6 357.2 356.5 355.2 354.6 12 Security 54.5 59.4 57.1 60.4 64.9 61.6 63.9 60.7 62.5 66.2 65.7 64.4 13 Nonbank financial institutions 40.6 40.8 42.6 43.7 42.7 43.0 42.0 40.7 41.8 44.3 44.3 45.1 14 Agricultural 34.0 33.7 33.5 34.3 34.4 34.3 34.8 34.8 35.3 35.3 35.0 34.7 15 State and political subdivisions 29.1 28.0 28.1 28.0 27.7 27.2 26.8 26.4 26.0 26.0 25.5 25.2 lb Foreign banks 7.4 7.2 6.7 6.5 6.5 6.9 7.5 7.8 7.1 7.9 7.2 6.8 17 Foreign official institutions 2.4 2.3 2.1 2.1 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.5 18 Lease-financing receivables 31.7 31.5 31.6 31.5 31.6 31.7 32.0 31.0 30.7 30.8 30.6 30.5 19 All other loans 42.4 49.2 47.1 46.5 45.6 43.3 42.4 43.1 43.3 41.6 43.8 45.8 Not seasonally adjusted 20 Total loans and securities1 2,845.lr 2,848.8 2,857.4 2,864.0 2,876.6 2,873.1 2,884.6 2,876.7 2,893.7 2,912.5 2,927.4 2,942.2 21 U.S. government securities 558.6r 565.7 575.1 584.9 594.5 601.8 610.7 616.7 631.8 636.9 644.8 654.8 22 Other securities 179.7r 180.3 180.5 178.2 178.1 176.8 175.5 176.8 178.2 177.9 179.1 178.1 23 Total loans and leases' 2,106.8r 2,102.8 2,101.8 2,100.8 2,104.0 2,094.6 2,098.4 2,083.2 2,083.7 2,097.7 2,103.4 2,109.3 24 Commercial and industrial ..... 619.3r 614.2 612.4 613.5 612.1 609.6 606.7 602.9 599.0 600.1 601.8 604.7 25 Bankers acceptances held2... 7.6 7.2 7.4 6.9 6.3 6.6 6.2 6.3 6.3 6.3 7.3 7.9 26 Other commercial and industrial 611.7r 606.9 605.0 606.7 605.8 603.0 600.5 596.6 592.7 593.9 594.5 596.8 27 U.S. addressees 604.7r 600.0 598.1 599.8 598.6 595.9 593.2 589.0 585.3 586.4 587.0 589.4 28 Non-U.S. addressees 7.0 6.9 6.9 6.9 7.2 7.1 7.4 7.6 7.3 7.5 7.5 7.4 29 Real estate 873.4 872.9 874.5 875.9 880.2 883.2 881.6 880.1 880.4 883.5 888.5 890.9 30 Individual 368.1 367.4 363.6 359.7 358.1 357.3 356.9 355.9 356.2 357.9 356.1 356.1 31 Security 55.1 59.0 61.7 62.2 66.4 58.2 63.8 58.7 60.7 64.1 65.9 6655..00 32 Nonbank financial institutions 41.9 41.3 42.3 43.1 42.3 42.3 42.3 41.0 42.0 43.6 43.8 45.3 33 Agricultural 34.0 33.2 32.7 33.0 33.4 33.9 35.0 35.6 36.2 36.3 35.8 35.0 34 State and political subdivisions 29.0 28.4 28.2 28.0 27.6 27.3 26.8 26.2 25.9 25.9 25.5 25.2 35 Foreign banks 7.9 7.0 6.6 6.4 6.4 6.8 7.2 7.7 6.9 8.0 7.4 7.2 36 Foreign official institutions 2.4 2.3 2.1 2.1 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.5 37 Lease-financing receivables 31.7 31.8 31.7 31.7 31.6 31.7 31.7 30.8 30.6 30.7 30.7 30.6 38 All other loans 44.1 45.4 46.0 45.2 44.0 42.3 44.2 42.4 43.6 45.3 45.6 46.7 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 • February 1993 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Billions of dollars, monthly averages 1991 1992 SSoouurrccee ooff ffuunnddss Dec. Jan. Feb. Mar. Apr. May Juner Julyr Aug. Sept.r Oct.r Nov. Seasonally adjusted 11 TToottaall nnoonnddeeppoossiitt ffuunnddss22 281.4r 283. lr 286.8r 287.0* 290.0" 289.6* 292.0 292.4 297.8' 304.7 304.2 308.2 22 NNeett bbaallaanncceess dduuee ttoo rreellaatteedd ffoorreeiiggnn ooffffiicceess33 ...... 39.2 43.4 42.0 45.1 49.3 54.2 60.2 61.8 59.0r 61.9 65.4 68.7 33 BBoorrrroowwiinnggss ffrroomm ootthheerr tthhaann ccoommmmeerrcciiaall bbaannkkss iinn UUnniitteedd SSttaatteess44 242.3r 239.6r 244.8r 241.9* 240.7r 235.4r 231.9 230.6 238.9 242.8 238.7 239.5 44 DDoommeessttiiccaallllyy cchhaarrtteerreedd bbaannkkss 154.7r 156.5r 159.8r 155.8r 152.8r 147.6r 144.3 142.8 149.1 150.8 151.9 150.7 55 FFoorreeiiggnn--rreellaatteedd bbaannkkss 87.5 83.1 84.9 86.1 87.9 87.8 87.5 87.7 89.8 91.9 86.8 88.7 Not seasonally adjusted 6 Total nondeposit funds 279.7r 279.0" 287.4r 290.9* 287.2* 295.4* 293.5 288.9 294.9* 302.0 305.5 312.9 7 Net balances due to related foreign offices ... 42.7 44.1 42.2 45.5 47.8 56.7 59.8 58.3 57.4* 61.2 64.7 69.8 8 Domestically chartered banks -3.8 -4.6 -.7 -.7 -5.0 -4.3 -6.4 -7.0 -9.3 -11.0 -12.8 -11.7 9 Foreign-related banks 46.5 48.7 42.9 46.3 52.9 60.9 66.2 65.3 66.6* 72.3 77.5 81.4 10 Borrowings from other than commercial banks in United States 236.9r 234.9* 245.2r 245.4r 239.4* 238.8* 233.7 230.6 237.5* 240.8 240.8 243.1 11 Domestically chartered banks 153.4r 152.2* 160.3r 158.9* 150.8* 150.2* 144.5 141.4 147.4 149.8 152.9 155.2 12 Federal funds and security RP borrowings 150.3r 148.8r 156.8r 155.7* 147.4* 146.4* 140.4 137.2 143.5 146.0 149.4 151.1 1133 Other6 3.1 3.4 3.5 3.3 3.4 3.9 4.1 4.2 3.9 3.8 3.6 4.1 14 Foreign-related banks 83.5 82.7 84.9 86.5 88.5 88.5 89.2 89.2 90.2 91.0 87.9 87.9 MEMO Gross large time deposits1 15 Seasonally adjusted 423.9 416.0 413.7 406.9 399.9 396.7 392.4 386.1 384.6 381.2 373.3 370.0 16 Not seasonally adjusted 422.6 413.6 412.6 407.4 398.8 398.0 393.7 385.9 386.2 382.4 373.4 369.7 U.S. Treasury demand balances at commercial banks 17 Seasonally adjusted : 26.4 27.8 19.5 21.8 19.9 17.0 25.8 21.9 32.6 25.4 22.4 19.2 18 Not seasonally adjusted 25.4 33.1 25.2 20.1 17.7 21.0 25.2 19.7 22.4 28.7 21.9 16.3 1. Commercial banks are nationally and state-chartered banks in the fifty states borrowings from Federal Reserve Banks and from foreign banks, term federal and the District of Columbia, agencies and branches of foreign banks, New York funds, loan RPs, and sales of participations in pooled loans. investment companies majority owned by foreign banks, and Edge Act corpora- 5. Figures are based on averages of daily data reported weekly by approxitions owned by domestically chartered and foreign banks. mately 120 large banks and quarterly or annual data reported by other banks. Data in this table also appear in the Board's G.10 (411) release. For ordering 6. Figures are partly averages of daily data and partly averages of Wednesday address, see inside front cover. data. 2. Includes federal funds, repurchase agreements (RPs), and other borrowing 7. Time deposits in denominations of $100,000 or more. Estimated averages of from nonbanks and net balances due to related foreign offices. daily data. 3. Reflects net positions of U.S. chartered banks, Edge Act corporations, and 8. U.S. Treasury demand deposits and Treasury tax-and-loan notes at com- U.S. branches and agencies of foreign banks with related foreign offices plus net mercial banks. Averages of daily data. positions with own International Banking Facilities (IBFs). 4. Borrowings through any instrument, such as a promissory note or due bill, given for the purpose of borrowing money for the banking business. This includes Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A19 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Wednesday figures Millions of dollars 1992 AAccccoouunntt Sept. 30r Oct. 7r Oct. 14r Oct. 21r Oct. 28r Nov. 4 Nov. 11 Nov. 18 Nov. 25 ALL COMMERCIAL BANKING INSTITUTIONS2 Assets 1 Loans and securities 3,082,431 3,085,254 3,095,321 3,079,500 3,083,140 3,103,254 3,111,423 3,105,865 3,114,204 7 Investment securities 779,171 781,427 785,062 784,038 781,244 787,271 790,010 787,732 788,803 3 U.S. government securities 616,169 617,554 621,621 620,875 618,179 624,152 627,609 625,523 626,442 4 Other 163,001 163,873 163,442 163,163 163,065 163,118 162,401 162,209 162,361 Trading account assets 36,801 40,669 40,051 40,023 41,140 42,073 41,533 45,636 42,819 6 U.S. government securities 22,704 25,291 24,217 24,689 24,924 25,489 25,550 28,974 27,775 7 Other securities 2,823 3,205 3,394 3,292 3,592 3,375 3,299 3,097 2,727 8 Other trading account assets 11,274 12,174 12,441 12,043 12,624 13,209 12,683 13,566 12,317 9 Total loans 2,266,460 2,263,158 2,270,208 2,255,439 2,260,756 2,273,910 2,279,880 2,272,497 2,282,582 10 Interbank loans 162,545 161,551 167,425 151,975 157,129 165,527 172,922 166,106 171,587 11 Loans excluding interbank 2,103,915 2,101,607 2,102,783 2,103,464 2,103,627 2,108,383 2,106,959 2,106,391 2,110,995 17 Commercial and industrial 602,370 602,275 602,023 601,066 601,072 603,766 603,223 604,184 606,197 N Real estate 883,465 888,104 888,400 887,285 889,267 891,468 893,176 890,308 889,600 14 Revolving home equity 73,082 73,791 73,811 73,817 73,770 73,677 73,778 73,777 73,725 15 Other 810,383 814,313 814,589 813,469 815,496 817,792 819,398 816,531 815,875 16 Individual 357,296 355,288 355,432 356,727 356,737 356,376 355,066 355,879 356,134 17 All other 260,784 255,940 256,928 258,385 256,551 256,773 255,495 256,020 259,065 18 Total cash assets 210,743 198,246 241,223 199,319 203,675 211,216 223,869 207,948 221,399 19 Balances with Federal Reserve Banks 23,568 24,353 36,036 23,330 24,519 27,764 28,813 20,818 26,321 7.0 Cash in vault 31,069 29,551 31,915 31,326 31,658 28,919 30,963 32,578 31,198 71 Demand balances at U.S. depository institutions.. 27,387 28,111 33,801 29,036 29,978 30,220 32,517 29,314 32,291 77 Cash items 84,280 71,798 95,372 71,849 73,334 80,059 87,193 79,980 86,893 n Other cash assets 44,440 44,433 44,099 43,779 44,186 44,232 44,361 45,257 44,723 24 Other assets 285,895 289,218 291,071 286,597 287,048 300,123 297,892 291,631 286,843 25 Total assets 3,579,069 3,572,718 3,627,615 3,565,416 3,573,863 3,614,593 3,633,184 3,605,444 3,622,446 Liabilities 76 Total deposits 2,488,529 2,497,439 2,529,188 2,474,466 2,478,780 2,517,869 2,523,261 2,495,559 22,,551155,,227700 77 Transaction accounts 728,450 719,539 752,067 708,411 718,235 747,585 752,638 734,583 754,848 28 Demand, U.S. government 3,933 2,560 3,003 2,400 2,502 3,394 2,445 2,821 4,288 79 Demand, depository institutions 39,739 37,827 44,696 38,174 39,037 40,103 42,239 38,682 43,536 30 Other demand and all checkable deposits 684,778 679,153 704,368 667,838 676,6% 704,088 707,954 693,079 707,025 31 Savings deposits (excluding checkable) 729,024 740,630 743,210 738,886 738,839 747,952 751,315 744,349 743,563 37, Small time deposits 650,217 651,618 649,609 647,297 645,007 643,982 642,109 640,038 638,816 33 Time deposits over $100,000 380,838 385,652 384,302 379,872 376,699 378,349 377,199 376,590 378,044 34 Borrowings 498,834 484,893 508,243 496,316 491,593 499,145 513,754 500,918 491,657 35 Treasury tax and loan notes 34,143 19,423 14,469 15,880 16,221 8,097 18,701 6,924 6,964 36 Other 464,691 465,470 493,774 480,436 475,372 491,048 495,053 493,994 484,693 37 Other liabilities 329,238 326,467 325,993 331,072 339,965 332,668 331,197 344,768 350,016 38 Total liabilities 3,316,600 3,308,799 3,363,423 3,301,855 3,310,337 3,349,682 3,368,211 3,341,245 3,356,943 39 Residual (assets less liabilities)3 262,469 263,919 264,192 263,561 263,526 264,911 264,973 264,199 265,503 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • February 1993 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Wednesday figures—Continued Millions of dollars Account Sept. 30r Oct. T Oct. 14r Oct. 21r Oct. 28r Nov. 4 Nov. 11 Nov. 18 Nov. 25 DOMESTICALLY CHARTERED COMMERCIAL BANKS4 Assets 40 Loans and securities 2,731,481 2.743.145 2,746,792 2,728,854 2,733,532 2,754,932 2,756,749 2,750,033 2,754,546 41 Investment securities 718,699 720,952 723,802 722,834 721,480 726,237 727,887 726,243 726,755 42 U.S. government securities 577,310 579,060 582,118 581,117 580,034 584,583 586,516 584,664 585,404 43 Other 141,388 141,891 141,684 141,718 141,446 141,654 141,371 141,579 141,351 44 Trading account assets 36,801 40,669 40,051 40,023 41,140 42,073 41,533 45,636 42,819 45 U.S. government securities 22,704 25,291 24,217 24,689 24,924 25,489 25,550 28,974 27,775 46 Other securities 2,823 3,205 3,394 3,292 3,592 3,375 3,299 3,097 2,727 47 Other trading account assets 11,274 12,174 12,441 12,043 12,624 13,209 12,683 13,566 12,317 48 Total loans 1,975,981 1,981,524 1,982,939 1,965,997 1,970,912 1,986,623 1,987,329 1,978,154 1,984,972 49 Interbank loans 137,808 140,924 141,840 129,415 133,381 144,322 146,729 139,071 143,686 50 Loans excluding interbank 1,838,174 1,840,600 1,841,099 1,836,582 1,837,532 1,842,301 1,840,601 1,839,083 1,841,286 51 Commercial and industrial 441,132 440,666 440,356 439,367 439,259 441,480 440.761 440,321 441,699 52 Real estate 831,015 835,657 835,849 834,727 836,866 838,852 840,540 837,678 836,941 53 Revolving home equity 73,082 73,791 73,811 73,817 73,770 73,677 73,778 73,777 73,725 54 Other 757,933 761,866 762,038 760,910 763,0% 765,176 766.762 763,901 763,216 55 Individual 357,296 355,288 355,432 356,727 356,737 356,376 355,066 355,879 356,134 56 All other 208,730 208,990 209,462 205,760 204,669 205,593 204,234 205,205 206,512 57 Total cash assets 180,119 168,781 211,380 170,971 175,091 183,804 196,393 179,712 193,261 58 Balances with Federal Reserve Banks 22,501 23,946 35,060 22,900 23,783 27,364 28,021 20,345 25,643 59 Cash in vault 31,037 29,516 31,879 31,291 31,622 28,885 30,926 32,542 31,162 60 Demand balances at U.S. depository institutions 25,820 26,691 32,168 27,546 28,511 28,755 30,991 27,956 30,935 61 Cash items 81,901 69,402 92,883 69,487 70,801 77,884 84,884 77,686 84,582 62 Other cash assets 18,861 19,225 19,391 19,746 20,373 20,894 21,548 21,182 20,966 63 Other assets 176,162 171,221 175,588 168,941 171,364 177,747 177,004 169,115 168,802 64 Total assets 3,087,762 3.083.146 3,133,760 3,068,765 3,079,988 3,116,483 3,130,146 3,098,860 3,116,610 Liabilities 65 Total deposits 2,330,548 2,339,989 2,371,981 2,318,252 2,319,916 2,358,732 2,363,986 2,336,475 2,353,837 66 Transaction accounts 717,040 708,472 740,945 697,728 707,324 736,827 742,098 724,219 744,300 67 Demand, U.S. government 3,932 2,559 3,002 2,399 2,502 3,393 2,443 2,821 4,287 68 Demand, depository institutions 36,974 35,278 42,161 35,723 36,568 37,407 39,837 36,323 41,115 69 Other demand and all checkable deposits 676,135 670,635 695,782 659,606 668,254 696,027 699,817 685,075 698,898 70 Savings deposits (excluding checkable) 724,163 735,868 738,355 733,960 734,117 743,133 746,441 739,619 738,783 71 Small time deposits 647,564 648,968 646,956 644,656 642,382 641,368 639,499 637,451 636,225 72 Time deposits over $100,000 241,781 246,681 245,725 241,908 236,093 237,405 235,949 235,186 234,528 73 Borrowings 363,159 352,190 370,917 360,725 364,954 363,333 373.398 366,520 364,650 74 Treasury tax and loan notes 34,143 19,423 14,469 15,880 16,221 8,097 18,701 6,924 6,964 75 Other 329,016 332,767 356,448 344,845 348,733 355,236 354,697 359,5% 357,686 76 Other liabilities 135,159 130,621 130,244 129,800 135,166 133,080 131,362 135,239 136,193 77 Total liabilities 2,828,866 2,822,801 2,873,142 2,808,777 2,820,035 2,855,145 2,868,747 2,838,234 2,854,680 78 Residual (assets less liabilities)3 258,895 260,346 260,619 259,988 259,953 261,338 261.399 260,626 261,929 1. Excludes assets and liabilities of International Banking Facilities. 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 and domestic sample of weekly reporting banks and quarter-end condition reports. institutions and quarter-end condition reports. 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 Millions of dollars, Wednesday figures 1992 AAccccoouunntt Sept. 30 Oct. 7* Oct. 14* Oct. 21* Oct. 28* Nov. 4 Nov. 11 Nov. 18 Nov. 25 ASSETS 1 Cash and balances due from depository institutions 105,578r 97,992 130,352 99,768 103,566 108,701 115,382 105,484 114,899 2 U.S. Treasury and government securities 268,067r 267,039 266,938 267,738 267,627 271,276 272,236 274,025 273,052 3 Trading account 20,484 20,632 20,951 22,406 22,236 22,714 23,108 26,016 25,0% 4 Investment account 247,582r 246,408 245,987 245,332 245,390 248,562 249,128 248,008 247,955 5 Mortgage-backed securities1 79,193 78,910 78,787 79,957 80,587 81,130 81,048 79,697 82,286 All others, by maturity 6 One year or less 26,686 26,823 26,818 26,661 27,730 27,639 28,115 28,954 29,349 7 One year through five years 77,306* 77,130 79,491 78,587 77,608 76,981 77,436 78,006 76,134 8 More than five years 64,398r 63,546 60,891 60,127 59,466 62,811 62,528 61,351 60,186 9 Other securities 55,009 55,589 55,583 55,452 55,255 55,607 55,465 55,281 54,861 10 Trading account 2,717 3,097 3,287 3,185 3,485 3,270 3,1% 2,993 2,624 11 Investment account 52,292 52,492 52,2% 52,267 51,770 52,337 52,270 52,288 52,237 12 State and political subdivisions, by maturity 20,986 20,860 20,759 20,763 20,754 20,634 20,621 20,613 20,586 N One year or less 3,411 3,377 3,255 3,253 3,252 3,220 3,217 3,213 3,223 14 More than one year 17,576 17,483 17,504 17,510 17,503 17,414 17,405 17,399 17,364 15 Other bonds, corporate stocks, and securities 31,306 31,632 31,537 31,504 31,016 31,703 31,649 31,675 31,651 16 Other trading account assets 11,039 11,936 12,204 11,808 12,389 12,974 12,449 13,334 12,086 17 Federal funds sold2 83,827 87,255 89,053 78,155 80,197 82,011 84,964 79,924 82,073 18 To commercial banks in the United States 56,245 54,951 59,267 48,863 51,969 54,221 56,981 49,537 53,874 19 To nonbank brokers and dealers 24,064 26,651 24,323 24,679 23,394 22,699 22,805 25,468 23,919 20 To others3 3,518 5,653 5,462 4,613 4,833 55,,009911 5,179 4,919 4,281 21 Other loans and leases, gross 976,851r 974,798 978,595 973,352 976,168 998800,,008888 979,441 977,720 982,278 22 Commercial and industrial 277,980* 278,089 278,397 277,390 277,627 279,677 278,933 279,156 280,827 23 Bankers acceptances and commercial paper l,591r 1,586 1,778 1,885 1,895 2,146 2,328 2,349 2,649 24 All other 276,390* 276,503 276,619 275,505 275,732 277,530 276,605 276,807 278,178 25 U.S. addressees 274,521* 274,787 274,646 273,575 274,004 275,760 274,931 275,157 276,427 26 Non-U.S. addressees 1,869 1,716 1,973 1,930 1,728 1,771 1,673 1,650 1,751 27 Real estate loans 396,795* 400,006 399,303 397,838 399,505 400,995 402,766 400,746 399,698 28 Revolving, home equity 42,529* 43,056 43,081 43,015 43,020 42,975 43,144 43,118 43,061 29 All other 354,265* 356,950 356,222 354,822 356,486 358,020 359,622 357,628 356,636 30 To individuals for personal expenditures 176,826* 176,088 176,160 176,978 176,937 176,742 175,966 176,346 176,774 31 To financial institutions 38,281* 37,302 38,116 37,256 37,704 39,385 39,154 39,384 39,929 32 Commercial banks in the United States 13,600* 13,642 13,960 13,232 13,776 14,542 14,828 15,453 15,236 33 Banks in foreign countries 2,9%* 2,031 2,272 2,721 2,384 1,976 1,927 1,758 2,459 34 Nonbank financial institutions 21,685 21,629 21,884 21,302 21,544 22,866 22,399 22,173 22,234 35 For purchasing and carrying securities 15,937 14,602 17,369 15,677 16,228 14,492 14,818 14,056 16,323 36 To finance agricultural production 6,262 6,194 6,1% 6,152 6,121 6,116 6,015 5,957 5,901 37 To states and political subdivisions 15,616* 15,420 15,293 15,227 15,159 15,080 15,070 15,000 15,000 38 To foreign governments and official institutions 907 923 861 853 836 1,426 1,337 1,397 1,326 39 All other loans 23,950* 21,844 22,622 21,709 21,845 21,820 21,166 21,511 22,354 40 Lease-financing receivables 24,298* 24,332 24,280 24,273 24,205 24,355 24,217 24,168 24,148 41 LESS: Unearned income 2,668 2,693 2,685 2,686 2,685 2,647 2,638 2,363 2,329 42 Loan and lease reserve 36,985* 36,940 36,951 36,997 37,033 37,399 37,449 37,507 37,401 43 Other loans and leases, net 937,199* 935,165 938,959 933,669 936,449 940,042 939,354 937,851 942,548 44 Other assets 162,321* 157,466 160,098 155,735 157,676 163,695 163,139 157,612 157,347 45 Total assets l,623,040r 1,612,442 1,653,186 1,602,325 1,613,159 1,634,305 1,642,990 1,623,511 1,636,867 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Financial Statistics • February 1993 1.26 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1992 Account Sept. 30 Oct. 7r Oct. 14r Oct. 21r Oct. 28r Nov. 4 Nov. 11 Nov. 18 Nov. 25 LIABILITIES 46 Deposits 1,111,323r 1,116,133 1,139,363 1,100,247 1,102,562 1,123,989 1,126,347 1,109,473 1,123,883 47 Demand deposits 265,697r 254,295 279,313 249,898 255,454 264,307 268,261 260,881 275,826 48 Individuals, partnerships, and corporations 215,279r 208,837 226,091 203,142 206,645 214,955 219,426 212,106 221,763 49 Other holders 50,418 45,458 53,223 46,757 48,809 49,352 48,835 48,775 54,063 50 States and political subdivisions 8,484 7,786 8,215 8,320 8,245 9,032 8,406 8,481 9,867 51 U.S. government 2,359 1,564 1,801 1,439 1,471 2,070 1,471 1,703 2,677 52 Depository institutions in the United States ... 21,854 21,388 26,725 22,028 22,579 22,800 24,533 22,130 25,783 53 Banks in foreign countries 6,524 5,210 5,423 4,825 5,488 5,144 5,127 5,000 5,714 54 Foreign governments and official institutions .. 934 652 576 671 699 882 718 698 682 55 Certified and officers' checks 10,263 8,857 10,483 9,473 10,328 9,424 8,580 10,763 9,339 56 Transaction balances other than demand deposits4 . 106,683 108,737 107,208 106,781 110,515 116,118 114,698 113,443 113,745 57 Nontransaction balances 738,943r 753,101 752,841 743,567 736,594 743,564 743,389 735,149 734,312 58 Individuals, partnerships, and corporations 713,306r 726,715 726,144 716,930 710,087 716,627 716,508 708,176 707,490 59 Other holders 25,637r 26,386 26,698 26,637 26,507 26,936 26,880 26,973 26,822 60 States and political subdivisions 21,721r 22,139 22,373 22,282 22,189 22,236 22,136 22,279 22,065 61 U.S. government 1,787 2,135 2,137 2,139 2,133 2,355 2,363 2,385 2,354 62 Depository institutions in the United States ... 1,826 1,809 1,883 1,903 1,868 2,036 2,069 1,993 2,088 63 Foreign governments, official institutions, and banks . 304 303 304 314 318 310 312 316 316 64 Liabilities for borrowed money5 271,049r 260,794 278,714 267,409 271,319 271,436 278,776 272,522 271,604 65 Borrowings from Federal Reserve Banks 380 0 166 0 0 0 0 125 783 66 Treasury tax and loan notes 28,973 15,211 11,437 12,340 13,195 6,605 15,769 5,187 5,149 67 Other liabilities for borrowed money 241,696r 245,583 267,111 255,069 258,124 264,830 263,007 267,210 265,672 68 Other liabilities (including subordinated notes and debentures) 106,83 r 101,784 101,021 100,537 105,684 104,173 102,714 106,564 107,309 69 Total liabilities l,489,203r 1,478,711 1,519,097 1,468,193 1,479,565 1,499,597 1,507,837 1,488,559 1,502,796 70 Residual (total assets less total liabilities)7 133,837r 133,731 134,088 134,131 133,594 134,708 135,152 134,952 134,071 MEMO 71 Total loans and leases, gross, adjusted, plus securities' l,324,948r 1,328,023 1,329,144 1,324,409 1,325,890 1,333,193 1,332,746 1,335,294 1,335,241 72 Time deposits in amounts of $100,000 or more 126,501 131,101 130,302 126,954 121,524 123,005 121,893 121,532 121,719 73 Loans sold outright to affiliates9 1,056 1,060 1,034 1,031 1,023 1,061 1,060 1,040 1,014 74 Commercial and industrial 515 516 492 490 484 476 477 476 465 75 Other 541 544 542 541 539 585 583 563 549 76 Foreign branch credit extended to U.S. residents10... 24,834 24,815 24,683 24,945 25,033 24,887 24,919 24,670 25,001 77 Net due to related institutions abroad —11,33 lr -11,404 -14,370 -13,428 -9,651 -15,530 -14,202 -13,777 -10,893 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

Weekly Reporting Commercial Banks A23 1.30 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities1 Millions of dollars, Wednesday figures 1992 AAccccoouunntt Sept. 30" Oct. 7R Oct. 14R Oct. 21R Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 1 Cash and balances due from depository institutions 20,738 19,919 20,186 19,129 19,2% 18,468 18,513 19,050 18,980 2 U.S. Treasury and government agency securities 24,494 24,261 24,904 25,067 2244,,004400"" 24,947 25,916 25,767 25,882 3 Other securities 8,385 8,530 8,437 8,309 8,383R 8,307 8,130 7,%7 8,122 4 Federal funds sold 22,132 17,517 19,843 22,614 20,966 20,230 22,959 22,560 24,260 5 To commercial banks in the United States ... 6,828 4,557 7,197 5,419 5,632 4,647 7,089 7,484 7,%2 6 Toothers2 15,303 12,960 12,646 17,195 15,333 15,582 15,870 15,076 16,298 7 Other loans and leases, gross 161,434 160,177 161,588 160,338 162,213R 161,280 162,078 163,627 164,107 8 Commercial and industrial 97,032 97,264 97,299 97,318 97,390" 97,682 97,792 98,646 99,033 9 Bankers acceptances and commercial paper 2,666 3,230 3,068 2,904 2,813 2,650 2,749 2,837 2,695 10 All other 94,366 94,034 94,231 94,415 94,577R 95,032 95,043 95,808 %,338 11 U.S. addressees 91,372 91,099 91,321 91,521 91,643R 92,057 92,147 92,858 93,410 1? Non-U.S. addressees 2,994 2,934 2,910 2,894 2,934 2,975 2,8% 2,951 2,927 N Loans secured by real estate 34,725 34,730 34,799 34,804 34,699"" 34,882 34,895 34,891 34,910 14 To financial institutions 22,797 22,469 22,198 22,587 23,424R 22,880 23,358 23,686 23,877 IS Commercial banks in the United States.. 5,649 5,920 6,034 5,849 6,508R 6,046 6,276 6,435 6,320 16 Banks in foreign countries 2,604 2,262 2,178 2,174 2,216 2,225 2,122 2,079 2,266 17 Nonbank financial institutions 14,544 14,287 13,985 14,565 14,700" 14,609 14,960 15,172 15,291 18 For purchasing and carrying securities 4,629 3,405 4,952 3,387 4,409 3,355 3,509 3,816 3,829 19 To foreign governments and official institutions 377 371 374 378 374 363 353 354 356 20 All other 1,875 1,939 1,966 1,863 L,917R 2,118 2,171 2,234 2,102 21 Other assets (claims on nonrelated parties) .. 30,113 29,965 28,530 28,964 29,736R 31,908 31,852 30,885 30,505 22 Total assets3 304,501 303,387 306,117 307,930 306,147R 308,838 311,999 314,273 313,793 23 Deposits or credit balances due to other than directly related institutions 99,172 99,222 99,393 99,992 102,346 102,280 102,228 102,670 104,805 24 Demand deposits 4,397 3,928 3,741 3,606 3,705 3,614 3,689 3,658 3,817 25 Individuals, partnerships, and corporations 3,428 3,144 2,993 2,894 2,879 2,898 2,976 2,976 3,074 76 Other 969 784 748 712 826 716 713 681 743 27 Nontransaction accounts 94,775 95,294 95,652 96,386 98,641 98,666 98,539 99,012 100,988 28 Individuals, partnerships, and corporations 68,638 69,191 69,982 68,973 70,551 71,297 70,462 70,502 72,072 29 Other 26,136 26,103 25,670 27,413 28,090 27,370 28,077 28,511 28,916 30 Borrowings from other than directly related institutions 94,626 92,541 95,784 94,567 88,288 94,723 97,909 93,730 88,545 31 Federal funds purchased 48,022 49,771 52,039 45,579 41,264 46,807 48,966 44,681 41,874 32 From commercial banks in the United States 17,050 17,072 16,079 11,498 11,898 13,640 15,198 12,870 14,521 33 From others 30,972 32,699 35,960 34,081 29,366 33,167 33,768 31,811 27,353 34 Other liabilities for borrowed money 46,604 42,770 43,745 48,988 47,024 47,915 48,943 49,049 46,672 35 To commercial banks in the United States 9,811 9,327 10,106 9,958 10,67lr 9,537 9,552 10,683 10,272 36 To others 36,793 33,444 33,640 39,030 36,353R 38,378 39,391 38,367 36,399 37 Other liabilities to nonrelated parties 30,368 29,837 28,810 28,938 30,222R 30,917 32,258 30,303 30,874 38 Total liabilities6 304,501 303,387 306,117 307,930 306,147R 308,838 311,999 314,273 313,793 MEMO 39 Total loans (gross) and securities, adjusted .. 203,968 200,009 201,541 205,061 203,462R 204,071 205,718 206,002 208,088 40 Net due to related institutions abroad 43,131 38,769 39,502 40,925 43,778R 37,220 37,053 43,153 47,631 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

A24 Domestic Financial Statistics • February 1993 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1992 IItteemm 1987 1988 1989 1990 1991 May June July Aug. Sept. Oct. Commercial paper (seasonally adjusted unless noted otherwise) 1 AU issuers 358,997 458,464 525,831 561,142 530,300 533,719 542,205 547,242 545,801 549,731 558,468 Financial companies1 Dealer-placed paper 2 Total 102,742 159,777 183,622 221155,,112233 221144,,444455 222266,,555522 223344,,221122 222266,,994433 223311,,558866 223333,,997777 223311,,113322 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 paper 4 Total 174,332 194,931 210,930 199,835 183,195 116688,,991144 117711,,332211 117799,,772255 117733,,777722 117799,,773311 118822,,005599 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 81,923 103,756 131,279 146,184 132,660 138,253 136,672 140,574 140,443 136,023 145,277 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 70,565 66,631 62,972 54,771 43,770 38,384 37,767 37,733 37,090 37,814 37,599 Holder 8 Accepting banks 10,943 9,086 9,433 9,017 11,017 9,255 9,680 9,225 9,372 10,436 10,236 9 Own bills 9,464 8,022 8,510 7,930 9,347 7,954 8,129 7,808 7,927 9,073 8,764 10 Bills bought 1,479 1,064 924 1,087 1,670 11,,330011 11,,555511 11,,441177 11,,444466 11,,336633 11,,447722 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 1,477 1,338 1,269 1,851 1,803 1,204 13 Others 58,658 56,052 52,473 44,836 31,014 27,653 26,749 27,239 25,866 25,575 26,159 Basis 14 Imports into United States 16,483 14,984 15,651 13,095 12,843 11,893 11,569 11,825 11,600 12,227 12,116 15 Exports from United States 15,227 14,410 13,683 12,703 10,351 8,702 9,062 9,015 7,861 8,051 7,849 16 All other 38,854 37,237 33,638 28,973 20,577 17,790 17,135 16,893 17,628 17,536 17,633 1. Institutions engaged primarily in commercial, savings, and mortgage bank- 6. Data on bankers acceptances are gathered from institutions whose acceping; sales, personal, and mortgage financing; factoring, finance leasing, and other tances total $100 million or more annually. The reporting group is revised every business lending; insurance underwriting; and other investment activities. January. In January 1988, the group was reduced from 155 to 111 institutions. The 2. Includes all financial-company paper sold by dealers in the open market. current group, totaling approximately 100 institutions, accounts for more than 90 3. Bank-related series were discontinued in January 1989. percent of total acceptances activity. 4. As reported by financial companies that place their paper directly with investors. 5. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans1 Percent per year Date of change Rate Period Av r e a r t a e ge Period Av r e a r te a ge Period 1990— Jan. 1 10.50 1990 10.01 1991—Jan. ... 9.52 1992—Jan. ... 8 10.00 1991 8.46 Feb. .. 9.05 Feb. .. 1992 6.25 Mar. .. 9.00 Mar. .. 1991— Jan. 2 9.50 Apr. .. 9.00 Apr. .. Feb. 4 9.00 1990- -Jan. . 10.11 May ... 8.50 May ... May 1 8.50 Feb. 10.00 June .. 8.50 June .. Sept. 13 . 8.00 Mar. 10.00 July ... 8.50 July ... Nov. 6 7.50 Apr. 10.00 Aug. .. 8.50 Aug. .. Dec. 23 6.50 May . 10.00 Sept. .. 8.20 Sept. .. June 10.00 Oct. ... 8.00 Oct. ... 1992— July 2 6.00 July . 10.00 Nov. .. 7.58 Nov. .. Aug. 10.00 Dec. .. 7.21 Dec. .. Sept. 10.00 Oct. . 10.00 Nov. 10.00 Dec. 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

Financial Markets A25 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 Aug. Sept. Oct. Nov. Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 MONEY MARKET INSTRUMENTS 1 Federal funds1-2-3 9.21 8.10 5.69 3.30 3.22 3.10 3.09 2.96 3.07 2.91 2.97 3.10 2 Discount window borrowing ' 6.93 6.98 5.45 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Commercial paper3,5,6 3 1-month 9.11 8.15 5.89 3.38 3.25 3.22 3.25 3.26 3.25 3.28 3.25 3.22 4 3-month 8.99 8.06 5.87 3.38 3.24 3.33 3.66 3.47 3.48 3.59 3.76 3.79 5 6-month 8.80 7.95 5.85 3.44 3.26 3.33 3.67 3.48 3.49 3.60 3.76 3.79 Finance paper, directly placed3-5-7 6 1-month 8.99 8.00 5.73 3.28 3.13 3.14 3.20 3.21 3.20 3.21 3.20 3.19 7 3-month 8.72 7.87 5.71 3.27 3.08 3.24 3.59 3.38 3.44 3.54 3.67 3.70 8 6-month 8.16 7.53 5.60 3.29 3.11 3.23 3.56 3.35 3.43 3.53 3.63 3.64 Bankers acceptances*'5* 9 3-month 8.87 7.93 5.70 3.28 3.10 3.19 3.51 3.32 3.35 3.47 3.60 3.60 10 6-month 8.67 7.80 5.67 3.35 3.13 3.19 3.51 3.32 3.35 3.47 3.60 3.60 Certificates qf deposit, secondary marker9 11 1-month 9.11 8.15 5.82 3.29 3.14 3.11 3.23 3.16 3.15 3.15 3.15 3.33 12 3-month 9.09 8.15 5.83 3.31 3.13 3.26 3.58 3.39 3.42 3.52 3.68 3.67 13 6-month 9.08 8.17 5.91 3.40 3.17 3.27 3.60 3.41 3.44 3.53 3.69 3.69 14 Eurodollar deposits, 3-month3-10 9.16 8.16 5.86 3.33 3.15 3.30 3.67 3.46 3.46 3.61 3.79 3.78 U.S. Treasury bills Secondary market • 15 3-month 8.11 7.50 5.38 3.13 2.91 2.86 3.13 2.94 3.03 3.08 3.16 3.24 16 6-month 8.03 7.46 5.44 3.21 2.96 3.04 3.34 3.19 3.23 3.30 3.37 3.43 17 1-year 7.92 7.35 5.52 3.33 3.06 3.17 3.52 3.36 3.42 3.47 3.56 3.60 Auction average ' • 1 18 3-month 8.12 7.51 5.42 3.14 2.97 2.84 3.14 2.97 3.05 3.10 3.13 3.27 19 6-month 8.04 7.47 5.49 3.23 3.01 2.98 3.35 3.22 3.27 3.31 3.37 3.45 20 1-year 7.91 7.36 5.54 3.28 3.02 3.12 3.61 n.a. n.a. n.a. 3.61 n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 8.53 7.89 5.86 3.47 3.18 3.30 3.68 3.50 3.58 3.64 3.73 3.76 22 2-year 8.57 8.16 6.49 4.19 3.89 4.08 4.58 4.35 4.44 4.51 4.64 4.69 23 3-year 8.55 8.26 6.82 4.72 4.42 4.64 5.14 4.93 5.03 5.09 5.17 5.24 24 5-year 8.50 8.37 7.37 5.60 5.38 5.60 6.04 5.85 5.96 6.00 6.05 6.12 25 7-year 8.52 8.52 7.68 6.12 5.96 6.15 6.49 6.34 6.47 6.48 6.48 6.52 26 10-year 8.49 8.55 7.86 6.59 6.42 6.59 6.87 6.78 6.90 6.88 6.84 6.86 27 30-year 8.45 8.61 8.14 7.39 7.34 7.53 7.61 7.63 7.69 7.64 7.54 7.56 Composite 28 More than 10 years (long-term) 8.58 8.74 8.16 7.19 7.08 7.26 7.43 7.39 7.47 7.44 7.39 7.41 STATE AND LOCAL NOTES AND BONDS Moody's series13 29 7.00 6.% 6.56 5.67 5.92 6.10 6.05 6.21 6.13 6.08 6.05 6.05 30 Baa 7.40 7.29 6.99 6.03 6.27 6.51 6.46 6.64 6.56 6.49 6.46 6.46 31 Bond Buyer series 7.23 7.27 6.92 6.16 6.25 6.41 6.36 6.62 6.51 6.38 6.28 6.26 CORPORATE BONDS 32 Seasoned issues, all industries15 9.66 9.77 9.23 8.29 8.26 8.41 8.51 8.51 8.56 8.55 8.46 8.47 Rating group 33 Aaa 9.26 9.32 8.77 7.95 7.92 7.99 8.10 8.07 8.11 8.14 8.07 8.06 34 Aa 9.46 9.56 9.05 8.21 8.17 8.32 8.40 8.41 8.46 8.44 8.35 8.36 35 A 9.74 9.82 9.30 8.34 8.31 8.49 8.58 8.58 8.64 8.62 8.52 8.54 36 Baa 10.18 10.36 9.80 8.65 8.62 8.84 8.% 8.96 9.02 9.00 8.91 8.91 37 A-rated, recently offered utility bonds16 9.79 10.01 9.32 8.16 8.11 8.40 8.51 8.52 8.65 8.49 8.40 8.48 MEMO: Dividend-price ratio17 38 Preferred stocks 9.05 8.96 8.17 7.21 7.14 7.22 7.43 7.31 7.40 7.44 7.41 7.45 39 Common stocks 3.45 3.61 3.25 2.97 3.00 3.07 2.98 3.01 3.02 2.98 2.98 2.94 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. General obligations based on Thursday figures; Moody's Investors Service. of the current week; monthly figures include each calendar day in the month. 14. General obligations only, with twenty years to maturity, issued by twenty 3. Annualized using a 360-day year or bank interest. state and local governmental units of mixed quality. Based on figures for 4. Rate for the Federal Reserve Bank of New York. Thursday. 5. Quoted on a discount basis. 15. Daily figures from Moody's Investors Service. Based on yields to maturity 6. An average of offering rates on commercial paper placed by several leading on selected long-term bonds. dealers for firms whose bond rating is AA or the equivalent. 16. Compilation of the Federal Reserve. This series is an estimate of the yield 7. An average of offering rates on paper directly placed by finance companies. on recently offered, A-rated utility bonds with a thirty-year maturity and five 8. Representative closing yields for acceptances of the highest-rated money years of call protection. Weekly data are based on Friday quotations. center banks. 17. Standard and Poor's corporate series. Preferred stock ratio based on a 9. An average of dealer offering rates on nationally traded certificates of sample of ten issues: four public utilities, four industrials, one financial, and one deposit. transportation. Common stock ratios on the 500 stocks in the price index. 10. Bid rates for Eurodollar deposits at 11 a.m. London time. Data are for NOTE. These data also appear in the Board's H. 15 (519) and G.13 (415) releases. indication purposes only. For ordering address, see inside front cover. 11. Auction date for daily data; weekly and monthly averages computed on an issue-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics • February 1993 1.36 STOCK MARKET Selected Statistics 1992 IInnddiiccaattoorr 11998899 11999900 11999911 Mar. Apr. May June July Aug. Sept. Oct. Nov. Prices and trading volume (averages of daily figures) Common stock prices <indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 180.13 183.66 206.35 225.21 224.55 228.55 224.68 228.17 230.07 230.13 226.97 232.84 7 228.04 226.06 258.16 282.36 281.60 285.17 279.54 281.90 284.44 285.76 279.70 287.80 174.90 158.80 173.97 204.09 201.28 207.88 202.02 198.36 191.31 191.61 192.30 204.63 4 Utility 94.33 90.72 92.64 94.15 94.92 98.24 97.23 101.18 103.41 102.26 101.62 101.13 5 162.01 133.21 150.84 173.49 171.05 175.89 174.82 180.96 180.47 178.27 181.36 189.27 6 Standard & Poor's Corporation (1941-43 = 10)1 323.05 335.01 376.20 407.36 407.41 414.81 408.27 415.05 417.93 418.48 412.50 422.84 7 American Stock Exchange (Aug. 31, 1973 = 50? 356.67 338.32 360.32 404.09 388.06 392.63 385.56 384.07 385.80 382.67 371.27 387.75 Volume of trading (thousands of shares) 8 165,568 156,359 179,411 185,581 206,251 182,027 195,089 194,138 174,003 191,774 204,787 208,221 9 13,124 13,155 12,486 1155,,665544 1144,,009966 1133,,445555 1111,,221166 1100,,772222 1111,,887755 1111,,119988 1111,,996666 n.a. Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers 34,320 28,210 36,660 39,090 38,750 39,890 39,690 39,640 39,940 41,250 41,590 43,630 Free credit balances at brokers4 11 Margin accounts 7,040 8,050 8,290 7,350 8,780 7,700 7,780 7,920 8,060 8,060 8,355 8,500 12 Cash accounts 18,505 19,285 19,255 19,305 16,400 18,695 19,610 18,775 18,305 19,650 18,700 19,310 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 1133 MMaarrggiinn ssttoocckkss 70 80 65 55 65 50 1144 CCoonnvveerrttiibbllee bboonnddss 50 60 50 50 50 50 1155 SShhoorrtt ssaalleess 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 the exercise of subscription rights, corporate bonds, and Sept. 30, 1985, the Board changed the required initial margin, allowing it to be the government securities. Separate reporting of data for margin stocks, convertible same as the option maintenance margin required by the appropriate exchange or bonds, 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

Financial Markets All 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1991 1992 AAccccoouunntt 11998899 11999900 Dec. Jan. Feb. Mar. Apr. May June" July" Aug." Sept. SAIF-insured institutions 1 Assets 1,249,055 1,084,821 919,979 909,014 906,142 883,407 872,026 870,334 862,511 856,376 856,151 847,470 2 Mortgages 733,729 633,385 551,322 545,728 541,734 529,158 524,954r 521,911" 516,617 512,254 512,066 508,829 3 Mortgage-backed securities 170,532 155,228 129,461 127,371 127,766 125,272 124,763 124,225 123,454 123,363 120,421 120,204 4 Contra-assets to mortgage assets1 . 25,457 16,897 12,307 11,917 11,608 10,979 10,959" 11,120" 11,270 12,044 11,164 11,053 5 Commercial loans 32,150 24,125 17,139 16,827 16,050 15,400 15,073 14,607 14,017 13,930 13,520 n.a. 6 Consumer loans 58,685 48,753 41,775 40,857 39,908 38,717 37,999" 38,869" 37,403 37,241 37,114 36,742 7 Contra-assets to nonmortgage loans1.. 3,592 1,939 1,239 1,314 1,115 -1,008 980" 949 946 912 912 970 8 Cash and investment securities 166,053 146,644 120,077 118,610 121,969 119,543 116,462 120,763 119,384 120,220 124,140 120,249 9 Other2 116,955 95,522 73,751 72,653 71,637 67,387 64,711 63,030 62,845 62,319 60,960 60,044 10 Liabilities and net worth . 1,249,055 1,084,821 919,979 909,014 906,142 883,407 872,026 870,334 862,511 856,376 856,151 847,470 11 Savings capital 945,656 835,4% 731,937 721,099 717,026 703,811 689,777 688,199 682,535 676,140 672,354 667,009 12 Borrowed money 252,230 197,353 121,923 119,915 118,554 110,031 111,262 110,126 108,943 109,036 110,109 110,014 13 FHLBB 124,577 100,391 65,842 62,642 63,138 62,628 62,268 61,439 62,760 62,359 62,225 64,105 14 Other 127,653 %,%2 56,081 57,273 55,416 47,403 48,994 48,687 46,183 46,677 47,884 45,909 15 Other 27,556 21,332 17,560 18,941 21,329 18,295 18,883 19,626 17,751 18,569 20,522 18,083 16 Net worth 23,612 30,640 48,559 49,009 49,233 51,271 52,103" 52,383" 52,283 52,630 53,166 52,365 1. Contra-assets are credit-balance accounts that must be subtracted from the NOTE. Components do not sum to totals because of rounding. Data for credit corresponding gross asset categories to yield net asset levels. Contra-assets to unions and life insurance companies have been deleted from this table. Starting in mortgage assets, mortgage loans, contracts, and pass-through securities—include the December 1991 issue, data for life insurance companies are shown in a special loans in process, unearned discounts and deferred loan fees, valuation allowances table of quarterly data. for mortgages "held for sale," and specific reserves and other valuation allow- SOURCE. Savings Association Insurance Fund (SAIF)-insured institutions: ances. Contra-assets to nonmortgage loans include loans in process, unearned Estimates by the Office of Thrift Supervision (OTS) for all institutions insured by discounts and deferred loan fees, and specific reserves and valuation allowances. the SAIF and based on the OTS thrift institution Financial Report. 2. Includes holding of stock in Federal Home Loan Bank and finance leases plus interest. 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1992 11999900 11999911 11999922 June July Aug. Sept. Oct. Nov. U.S. budget1 1 Receipts, total 1,031,308 1,054,265 1,091,692 120,920 79,080 78,218 118,344 76,833 7744,,663355 2 On-budget 749,654 760,382 789,266 91,438 55,977 55,434 92,813 55,057 51,221 3 Off budget 281,654 293,883 302,426 29,482 23,103 22,784 25,531 21,776 23,414 4 Outlays, total 1,251,766 1,323,757 1,381,895 117,137 122,226 102,920 112,943 125,698 107,365 5 On-budget 1,026,701 1,082,072 1,129,337 102,329 99,935 79,128 86,709 103,858 83,446 6 Off budget 225,064 241,685 252,559 14,808 22,291 23,792 26,235 21,841 23,919 7 Surplus or deficit (-), total -220,458 -269,492 -290,204 3,783 -43,146 -24,702 5,400 -48,865 -32,730 8 On-budget -277,047 -321,690 -340,071 -10,891 -43,958 -23,694 6,104 -48,801 -32,225 9 Off budget 56,590 52,198 49,867 14,674 812 -1,008 -704 -65 -505 Source of financing (total) 10 Borrowing from the public 220,101 276,802 310,918 22,318 26,839 38,841 9,853 -1,552 6611,,996699 11 Operating cash (decrease, or increase (-)) ... 818 -1,329 -17,305 -26,919 9,542 1,523 -22,807 39,420 -7,346 12 Other 2 -461 -5,981 -3,409 818 6,765 -15,662 7,554 10,997 -21,893 MEMO 13 Treasury operating balance (level, end of period) 40,155 41,484 58,789 47,047 37,505 35,982 58,789 19,369 2266,,771155 14 Federal Reserve Banks 7,638 7,928 24,586 13,630 6,923 6,232 24,586 4,413 6,985 15 Tax and loan accounts 32,517 33,556 34,203 33,417 30,581 29,749 34,203 14,956 19,729 1. In accordance with the Balanced Budget and Emergency Deficit Control Act monetary assets; accrued interest payable to the public; allocations of SDRs; of 1985, all former off-budget entries are now presented on-budget. Federal deposit funds; miscellaneous liability (including checks outstanding) and asset Financing Bank (FFB) activities are now shown as separate accounts under the accounts; seigniorage; increment on gold; net gain or loss for U.S. currency agencies that use the FFB to finance their programs. The act also moved two valuation adjustment; net gain or loss for IMF loan-valuation adjustment; and social security trust funds (federal old-age survivors insurance and federal profit on sale of gold. disability insurance) off budget. The Postal Service is included as an off-budget SOURCES. Monthly Treasury Statement of Receipts and Outlays of the U.S. item in the Monthly Treasury Statement beginning in 1990. Government (MTS) and the Budget of the U.S. Government. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the International Monetary Fund (IMF); loans to the IMF; other cash and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • February 1993 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year Source or type 1990 1991 1992 1992 H2 HI H2 Sept. Oct. Nov. RECEIPTS 1 All sources 1,054,265 1,091,692 503,123 540,504 519,293 561,125 118,344 76,833 74,635 2 Individual income taxes, net 467,827 476,465 230,745 232,389 234,949 237,052 55,496 37,288 33,099 4 3 P W re it s h id h e e n ld t ial Election Campaign Fund . 404,15 3 2 2 408,35 3 2 0 207,469 3 193,4 3 4 1 0 210,552 1 198,86 1 8 9 33,1841 34,5150 33,0850 5 Nonwithheld 142,693 149,342 31,728 109,405 32,775r 112,328 24,161 3,583 1,775 6 Refunds 79,050 81,259 8,455 70,487 8,379" 74,163 1,850 809 1,760 Corporation income taxes 7 Gross receipts 113,599 117,951 54,044 58,903 54,016 61,681 21,365 4,291 2,312 8 Refunds 15,513 17,680 7,603 7,904 8,649 9,402 1,469 2,194 833 9 Social insurance taxes and contributions, net 3%,011 413,689 178,468 214,303 186,839 224,569 33,322 29,594 32,900 10 Employment taxes and contributions 370,526 385,491 167,224 199,727 175,802 208,110 32,597 28,135 30,264 11 Self-employment taxes and contributions 25,457 24,421 2,638 22,150 3,306 20,433 3,988 0 0 12 Unemployment insurance 20,922 23,410 8,996 12,296 8,721 14,070 316 1,034 2,270 13 Other net receipts 4,563 4,788 2,249 2,279 2,317 2,389 409 426 366 14 Excise taxes 42,430 45,570 17,535 20,703 24,428 22,389 4,093 3,670 4,082 15 Customs deposits 15,921 17,359 8,568 7,488 8,694 8,145 1,552 1,666 1,503 16 Estate and gift taxes 11,138 11,143 5,333 5,631 5,507 5,701 1,004 1,027 954 17 Miscellaneous receipts 22,852 27,195 16,032 8,991 13,508 10,992 2,980 1,491 618 OUTLAYS 18 All types 1,323,757 1,381,895 647,461 632,153 694,474 705,068 112,943 125,698 107,365 19 National defense 272,514 298,188 149,497 122,089 147,620" 146,963 25,842 27,412 20,819 20 International affairs 16,167 16,100 8,943 7,592 7,660" 8,464 1,727 2,126 4,018 21 General science, space, and technology . 15,946 16,234 8,081 7,496 8,472" 7,952 1,159 1,410 1,612 22 Energy 2,511 4,519 1,222 1,235 1,593" 1,442 665 607 529 23 Natural resources and environment 18,708 19,870 9,933 8,324 11,167" 8,625 1,742 3,341 1,801 24 Agriculture 14,864 14,968 6,878 7,684 7,388" 7,514 195 2,270 2,139 25 Commerce and housing credit 75,639 9,752 37,491 17,992 36,595" 15,583 585 -2,262 -2,417 26 Transportation 31,531 33,747 16,218 14,748 17,093" 15,681 3,618 2,933 2,981 27 Community and regional development .. 7,432 7,924 3,939 3,552 3,783" 3,901 764 1,028 728 28 Education, training, employment, and social services 41,479 43,586 18,988 21,234 21,113" 23,224 2,233 3,797 3,882 29 Health 71,183 89,571 31,424 35,608 41,459" 43,698 8,834 8,021 7,420 30 Social security and medicare 373,495 406,570 176,353 190,247 193,156 205,443 34,460 35,320 33,346 31 Income security 171,618 199,395 75,948 88,778 87,948" 105,911 15,173 18,300 14,188 32 Veterans benefits and services 31,344 33,973 15,479 14,326 17,425 15,597 3,213 4,078 1,743 33 Administration of justice 12,295 14,481 5,265 6,187 6,578" 7,438 1,277 1,121 1,277 34 General government 11,358 12,874 6,976 5,212 6,822" 5,538 1,869 2,529 106 35 Net interest6 195,012 199,422 94,650 98,556 99,144" 100,324 15,435 16,463 16,148 36 Undistributed offsetting receipts -39,356 -39,280 -19,829 -18,702 -20,435 -18,229 -5,847 -2,7% -2,954 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 1993. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1990 1991 1992 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 3,266 3,397 3,492 3,563 3,683 3,820 3,897 n.a. n.a. 2 Public debt securities 3,233 3,365 3,465 3,538 3,665 3,802 3,881 3,985 4,065 3 Held by public 2,438 2,537 2,598 2,643 2,746 2,833 2,918 n.a. n.a. 4 Held by agencies 796 828 867 895 920 969 964 n.a. n.a. 5 Agency securities 33 33 27 25 18 19 16 n.a. n.a. 6 Held by public 33 32 26 25 18 19 16 n.a. n.a. 7 Held by agencies 0 0 0 0 0 0 0 n.a. n.a. 8 Debt subject to statutory limit 3,161 3,282 3,377 3,450 3,569 3,707 3,784 3,891 3,973 9 Public debt securities 3,161 3,281 3,377 3,450 3,569 3,706 3,783 3,890 3,972 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 3,195 4,145 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 TTyyppee aanndd hhoollddeerr 11998888 11998899 11999900 11999911 Q4 Ql Q2 Q3 1 Total gross public debt 2,684.4 2,953.0 3,364.8 3,801.7 3,801.7 3,881.3 3,984.7 4,064.6 By type 2 Interest-bearing 2,663.1 2,931.8 3,362.0 3,798.9 3,798.9 3,878.5 3,981.8 4,061.8 3 Marketable 1,821.3 1,945.4 2,195.8 2,471.6 2,471.6 2,552.3 2,605.1 2,677.5 4 Bills 414.0 430.6 527.4 590.4 590.4 615.8 618.2 634.3 5 Notes 1,083.6 1,151.5 1,265.2 1,430.8 1,430.8 1,477.7 1,517.6 1,566.4 6 Bonds 308.9 348.2 388.2 435.5 435.5 443.8 454.3 461.8 7 Nonmarketable1 841.8 986.4 1,166.2 1,327.2 1,327.2 1,326.2 1,376.7 1,384.3 8 State and local government series 151.5 163.3 160.8 159.7 159.7 157.8 161.9 157.6 9 Foreign issues- 6.6 6.8 43.5 41.9 41.9 42.0 38.7 37.0 10 Government 6.6 6.8 43.5 41.9 41.9 42.0 38.7 37.0 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes 107.6 115.7 124.1 135.9 135.9 139.9 143.2 148.3 n Government account series 575.6 695.6 813.8 959.2 959.2 956.1 1,002.5 1,011.0 14 Non-interest-bearing 21.3 21.2 2.8 2.8 2.8 2.8 2.9 2.8 Bx holder 4 15 U.S. Treasury and other federal agencies and trust funds 589.2 707.8 828.3 968.7 968.7 963.7 16 Federal Reserve Banks 238.4 228.4 259.8 281.8 281.8 267.6 17 Private investors 1,858.5 2,015.8 2,288.3 2,563.2 2,563.2 2,664.0 18 Commercial banks 184.9 164.9 171.5 233.9 233.9 240.0 19 Money market funds 11.8 14.9 45.4 80.0 80.0 84.8 20 Insurance companies 118.6 125.1 142.0 172.9 172.9 175.0 n.a. n.a. 21 Other companies 87.1 93.4 108.9 150.8 150.8 166.0 7.7 State and local treasuries 471.6 487.5 490.4 498.8 498.8 500.0 Individuals 2,3 Savings bonds 109.6 117.7 126.2 138.1 138.1 142.0 74 Other securities 79.2 98.7 107.6 125.8 125.8 126.1 25 Foreign and international 362.2 392.9 421.7 453.4 453.4 468.0 26 Other miscellaneous investors6 433.0 520.7 674.5 709.5 709.5 762.1 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

A30 Domestic Financial Statistics • February 1993 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1992, week ending Aug. Sept. Oct Sept. 30 Oct. 7 Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Nov. 25 IMMEDIATE TRANSACTIONS2 By type of security U.S. Treasury securities 1 Bills 35,523 41,374 46,771r 44,531 53,581 43,627 51,994 40,457 38,757 43,157 48,055 Coupon securities, by maturity 2 Less than 3.5 years 45,248r 41,727 49,532 41,634 46,668 45,459 51,612 54,712 46,690 55,239 58,383 3 3.5 to 7.5 years 36,672 37,760 45,749 40,488 49,037 44,527 45,359 46,134 39,983 32,844 44,604 4 7.5 to 15 years 22,295r 20,476 20,425 20,177 22,875 20,041 22,779 17,469 16,570 21,160 21,250 5 15 years or more 16,539 14,240 14,672 13,329 15,904 14,548 16,667 12,291 12,805 14,747 19,200 Federal agency securities Debt, maturing in 6 Less than 3.5 years 4,343 4,979 4,824r 6,471 4,534 3,566 5,528 5,194 5,378 4,642 5,850 7 3.5 to 7.5 years 684 588 718 654 1,067 532 598 679 619 562 444 8 7.5 years or more 536 803 1,040 1,069 950 695 1,330 1,267 661 862 818 Mortgage-backed 9 Pass-throughs 12,787 13,673r 15,889" ll,374r 15,482 20,075 15,480 13,935 14,440 21,283 20,025 10 All othersT. 3,951 4,218r 3,232 5,014r 3,906 4,020 2,373 3,222 2,143 2,076 3,095 By type of counterparty Primary dealers and brokers 11 U.S. Treasury securities 99,904 115,212 101,875 118,979 109,286 126,365 111,066 100,125 104,753 119,618 Federal agency securities 12 Debt 1,016 1,371 1,697 1,732 1,856 1,026 2,094 1,877 1,201 1,057 1,415 13 Mortgage-backed 7,240 7,552 8,254r 5,568 7,611 9,511 7,850 8,370 8,069 11,515 10,563 Customers 14 U.S. Treasury securities 56,374r 56,893 61,936r 58,284 69,085 58,917 62,046 59,997 54,679 62,394 71,874 Federal agency securities 15 Debt 4,548 4,999 4,885r 6,463 4,696 3,767 5,362 5,263 5,457 5,009 5,6% 16 Mortgage-backed 9,498 10,339 10,867r 10,820 11,777 14,585 10,004 8,787 8,513 11,845 12,557 FUTURES AND FORWARD TRANSACTIONS4 By type of deliverable security U.S. Treasury securities 17 Bills 2,354 2,969 3,689 2,271 4,431 3,766 3,673 3,444 2,332 4,354 3,306 Coupon securities, by maturity 18 Less than 3.5 years 2,216 1,915 2,253 1,418 2,240 2,060 2,440 2,293 2,106 2,493 2,444 19 3.5 to 7.5 years 1,329 1,853 1,307 1,545 1,151 1,501 865 1,511 1,906 1,250 2,019 20 7.5 to 15 years 2,713 2,950 3,050 2,336 2,949 3,380 3,283 2,585 3,219 3,202 3,818 21 15 years or more 10,152 10,091 10,612 7,712 11,297 11,165 11,234 9,690 8,545 8,%3 10,917 Federal agency securities Debt, maturing in 22 Less than 3.5 years 81 67 59 52 151 50 32 65 201 185 23 3.5 to 7.5 years 147 66r 11 84 11 NA 68 127 102 50 24 7.5 years or more 44 20 6 7 19 21 32 20 23 11 Mortgage-backed 25 Pass-throughs 15,902 16,571 17,846r 17,327 18,013 22,966 16,206 15,725 16,5% 19,744 19,000 26 Others 2,832 2,476 1,772 2,920 2,218 1,862 1,754 1,363 1,541 691 1,899 OPTIONS TRANSACTIONS5 By type of underlying security U.S. Treasury, coupon securities, by maturity 27 Less than 3.5 years 1,431 1,084 1,317 1,287 1,259 1,569 1,388 1,047 1,452 2,582 1,549 28 3.5 to 7.5 years 433 618 837r 568 654 1,180 730 706 1,201 1,389 450 29 7.5 to 15 years 1,054 825 742r 436 787 515 834 751 827 664 561 30 15 years or more 2,795 2,009 l,623r 1,174 1,392 1,743 1,590 1,726 1,786 1,331 1,409 Federal agency, mortgagebacked securities 31 Pass-throughs 343 299 211 377 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

Federal Finance A31 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1992 1992, week ending IItteemm Aug. Sept. Oct. Sept. 30 Oct. 7 Oct. 14 Oct. 21 Oct. 28 Nov. 4 Nov. 11 Nov. 18 Positions2 NET IMMEDIATE POSITIONS3 By type of security U.S. Treasury securities 1 Bills 8,264 14,539 11,475 14,507 13,176 13,663 12,162 8,814 7,010 18,995 16,273 Coupon securities, by maturity 2 Less than 3.5 years -2,799 -1,572 804 2,004 4,193 -303 -1,491 2,610 -3,377 1,837 -36 3 3.5 to 7.5 years -10,045 -13,702r -13,685r -14,355 -15,049 -14,011 -15,442 -11,986 -9,605 -12,851 -15,583 4 7.5 to 15 years -6,464 -10,785 -13,207 -13,701 -14,535 -12,729 -11,429 -13,742 -14,128 -7,500 -9,597 5 15 years or more 5,204 5,795 6,617 6,647 6,%3 8,356 5,902 5,985 4,893 3,918 5,642 Federal agency securities Debt, maturing in 6 Less than 3.5 years 6,256 6,040 6,685 4,688 6,027 7,372 6,727 6,575 6,778 6,657 6,%3 7 3.5 to 7.5 years 3,194 3,033 2,955 3,102 3,074 3,069 2,865 2,858 2,850 3,115 3,262 8 7.5 years or more 4,233 4,284r 4,190 3,806" 4,361 4,305 4,191 4,071 3,795 3,363 3,406 Mortgage-backed 9 Pass-throughs 30,749 29,518 32,278 18,616 28,245 39,763 32,132 33,058 22,742 32,924 35,699 10 All others 23,366 27,455 26,559 31,859 26,362 26,100 25,901 27,055 28,469 27,048 24,480 Other money market instruments 11 Certificates of deposit 3,734 3,852 3,501r 3,943 4,216 3,530 2,924 3,582 2,922 3,309 2,883 12 Commercial paper 5,542 6,389 6,374 6,509 6,663 7,379 4,842 6,517 6,598 6,182 6,155 13 Bankers acceptances 978 1,053 790 1,338 708 640 685 1,055 955 1,036 825 FUTURES AND FORWARD POSITIONS5 By type of deliverable security U.S. Treasury securities 14 Bills -6,189 -5,557 -2,336" -2,894 -7,586 -4,607 1,221 259 861 1,760 3,670 Coupon securities, by maturity 15 Less than 3.5 years 1,543 1,448 731 309 711 291 261 1,140 1,950 2,894 1,683 16 3.5 to 7.5 years 3,030 2,078r 2,286 2,129 3,074 1,814 2,455 2,319 1,075 1,155 3,408 17 7.5 to 15 years 399 526 2,882 2,463 2,999 1,617 2,453 3,861 4,274 2,620 2,459 18 15 years or more -7,645 -4,380 -4,237 -4,025 -3,479 -4,468 -4,552 -4,668 -3,731 -2,929 -4,550 Federal agency securities Debt, maturing in 19 Less than 3.5 years 3 -10 134 -58 136 361 77 -1 47 -49 -77 20 3.5 to 7.5 years -2 -73 -21 -98 -69 -62 16 27 -15 53 36 21 7.5 years or more -20 -44 -1 -8 8 59 -44 -30 3 -60 20 Mortgage-backed 22 Pass-throughs -18,255 -13,731 -14,399 -1,599 -11,667 -23,833 -13,734 -13,037 -3,487 -13,725 -13,350 23 All others 5,955 6,241 5,757 4,272 6,120 6,299 6,162 5,716 2,7% 2,051 2,436 24 Certificates of deposit -251,401 -242,241 -172,555 -230,805 -203,358 -180,858 -159,387 -149,955 -164,770 -145,399 -119,575 Financing6 Reverse repurchase agreements 25 Overnight and continuing 218,808 209,905 214,066 202,009 214,339 223,501 210,604 207,058 215,839 215,108 220,611 26 Term 320,431 310,234 342,132 253,866 328,676 330,562 348,644 358,891 346,226 350,937 319,222 Repurchase agreements 27 Overnight and continuing 361,098 369,411 383,324 351,100 379,870 399,164 388,641 373,574 364,770 373,293 390,803 28 Term 300,209 285,332 317,708 234,258 299,232 303,155 322,762 343,621 322,515 324,063 299,795 Securities borrowed 29 Overnight and continuing 97,726 100,438 101,102 92,827 97,890 100,174 104,332 101,570 102,129 102,475 107,833 30 Term 40,171 42,957 44,528 40,774 43,698 43,066 44,878 47,240 42,728 44,206 42,295 Securities loaned 31 Overnight and continuing 5,144r 5,791r 6,186" 6,163" 5,742 6,852 6,321 6,115 5,519 5,692 4,561 32 Term 1,4% 850" 1,269 613 635 498 779 3,456 586 605 491 Collateralized loans 33 Overnight and continuing 19,635 17,750 17,160 18,419 17,536 16,833 16,527 18,243 15,992 15,387 16,502 MEMO: Matched book7 Reverse repurchase agreements 34 Overnight and continuing 151,137 144,415 146,398 138,317 147,193 152,355 141,889 143,319 148,347 151,507 158,088 35 Term 272,361 267,773 296,190 222,450 289,415 289,497 300,393 307,692 290,973 302,868 273,120 Repurchase agreements 36 Overnight and continuing 182,822 188,263 196,777 184,839 198,684 207,204 197,181 189,749 183,458 190,071 206,694 37 Term 229,511 215,9% 241,123 172,981 233,074 231,490 242,405 254,586 247,976 253,280 220,975 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 securities (IOs), numbers are not always equal because of the "matching" of securities of different and principal-only securities (POs). 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 Digitized fors pFecRifAy SdeElaRye d delivery. All futures positions are included regardless of time to activity. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics • February 1993 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1992 AAggeennccyy 11998888 11998899 11999900 11999911 May June July Aug. Sept. 1 Federal and federally sponsored agencies 381,498 411,805 434,668 442,772 449,787r 457,662r 457,369" 464,773" 475,606 2 Federal agencies 35,668 35,664 42,159 41,035 40,535 40,388 39,773 40,034 41,319 3 Defense Department' 8 7 7 7 7 7 7 7 7 4 Export-Import Bank2,3 11,033 10,985 11,376 9,809 8,644 8,156 8,156 8,156 7,698 5 Federal Housing Administration 150 328 393 397 427 432 194 229 301 6 Government National Mortgage Association certificates of participation 0 0 0 0 0 0 0 0 0 7 Postal Service 6,142 6,445 6,948 8,421 9,771 10,123 10,123 10,123 10,123 8 Tennessee Valley Authority 18,335 17,899 23,435 22,401 21,686 21,670 21,293 21,519 23,190 9 United States Railway Association6 0 0 0 0 0 0 0 0 0 10 Federally sponsored agencies7 345,832r 375,428r 392,509 401,737 409,252r 417,274r 417,596" 424,739" 434,287 11 Federal Home Loan Banks 135,836 136,108 117,895 107,543 106,368 106,050 107,343 108,564 110,830 12 Federal Home Loan Mortgage Corporation 22,797 26,148 30,941 30,262 27,612 32,479 33,959 34,295 36,750 13 Federal National Mortgage Association 105,459 116,064 123,403 133,937 144,655 149,013 147,377 150,280 155,232 14 Farm Credit Banks8 53,127 54,864 53,590 52,199 52,080 51,805 49,241 52,137 52,734 15 Student Loan Marketing Association 22,073 28,705 34,194 38,319 38,885 38,020 39,765 39,552 38,830 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 Corporation 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 29,9% 29,9% 29,9% 29,9% 29,9% 29,9% MEMO 19 Federal Financing Bank debt 142,850 134,873 179,083 185,576 179,617 180,848 177,700 174,003 164,422 Lending to federal and federally sponsored agencies 20 Export-Import Bank 11,027 10,979 11,370 9,803 8,638 8,150 88,,115500 88,,115500 77,,669922 21 Postal Service6 5,892 6,195 6,698 8,201 9,551 9,903 9,903 9,903 9,903 22 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 9,025 9,025 8,475 7,275 7,175 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 45,434 44,784 43,209 43,009 42,979 26 Rural Electrification Administration 19,246 19,265 18,890 18,562 18,473 18,199 18,227 18,238 18,143 27 26,324 23,724 70,896 84,931 83,676 85,%7 84,916 82,608 73,710 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 year 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 amounts guaranteed by any g. Excludes borrowing by the Farm Credit Financial Assistance Corporation, one agency generally being small. The Farmers Home Administration entry shown on line 17. consists exclusively of agency assets, while the Rural Electrification Administra- 9. Before late 1982, the Association obtained financing through the Federal tion entry 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

Securities Market and Corporate Finance A33 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1992 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11998899 11999900 11999911 Apr. May June July Aug. Sept. Oct. Nov. 1 All issues, new and refunding1 113,646 120,339 154,402 16,922r 16,93? 24,084r 17,386r 19,774r is, taw ii,wr 14,133 By type of issue 2 General obligation 35,774 39,610 55,100 5,251r 5,995r 8,806r 7,136r 7,005r 7,461r 7,733r 5,203 3 Revenue 77,873 81,295 99,302 ll,671r l O^ 15,278r lo^tr 12,769r ll,237r 13,359r 8,930 By type of issuer 4 State 11,819 15,149 24,939 575 1,165 2,063 2,836 2,933r 1,710 2,742 n.a. 5 Special district or statutory authority 71,022 72,661 80,614 ll,583r 11,03 lr 16,477r 10,040"^ ll,203r ll,054r 13,113r n.a. 6 Municipality, county, or township 30,805 32,510 48,849 4,764 4,739 5,544 4,510 n.a. 5,934 5,237 n.a. 7 Issues for new capital 84,062 103,235 116,953 9,020 9,259 14,096 7,565 11,993 10,496 13,760 8,028 By use of proceeds 8 Education 15,133 17,042 21,121 2,208 1,651 2,132 1,747 1,737 1,237 2,083 1,800 9 Transportation 6,870 11,650 13,395 921 1,669 2,618 571 2,130 1,977 1,364 531 10 Utilities and conservation 11,427 11,739 21,039 1,380 771 1,851 629 2,604 2,265 3,340 960 11 Social welfare 16,703 23,099 25,648 2,582 2,045 4,266 887 767 1,869 2,365 1,070 12 Industrial aid 5,036 6,117 8,376 558 133 724 91 503 1,176 367 581 13 Other purposes 28,894 34,607 30,275 1,371 2,990 2,505 3,640 4,252 1,972 4,241 3,086 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 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11998899 11999900 11999911 oorr iissssuueerr Mar. Apr. May June July Aug. Sept. Oct. 1 All issues1 377,836 339,052 465,389 38,303 28,948 44,947 47,985 46,170 36,855 42,917* 36,053 2 Bonds2 319,965 298,814 389,968 31,946 23,610 38,031 38,988 39,693 31,579 37,607* 29,087 By type of offering 3 Public, domestic 179,694 188,778 287,076 29,417 22,236 35,059 35,960 37,768 28,325r 36,300 31,500 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 27,962 2,529 1,373 2,972 3,027 1,924 3,254 l,347r 2,000 By industry group 6 Manufacturing 74,736 51,779 86,627 8,955 4,170 6,046 7,263 5,509 4,720 5,884r 7,634 7 Commercial and miscellaneous 50,268 40,719 36,681 3,670 2,351 2,472 1,630 3,476 2,230 2,386r 2,652 8 Transportation 10,221 12,776 13,598 641 140 621 899 766 393 677 290 9 Public utility 18,611 17,621 23,949 1,896 3,462 3,041 4,251 6,909 4,401 5,218 3,365 10 Communication 9,276 6,687 9,431 725 1,205 1,590 1,028 2,081 1,053 1,156 410 11 Real estate and financial 156,853 169,231 219,682 16,060 12,282 24,261 23,916 20,951 18,783 22,285r 14,735 12 Stocks2 57,870 40,165 75,467 6,357 5,338 6,916 8,997 6,477 5,276 5,310 6,966 By type of offering 13 Public preferred 6,194 3,998 17,408 625 334 1,552 2,916 2,413 1,148 1,233 22,,990011 14 Common 26,030 19,443 47,860 5,732 5,004 5,364 6,081 4,064 4,129 4,077 4,065 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 2,637 1,523 2,499 3,000 857 713 307 11,,777799 17 Commercial and miscellaneous 7,446 10,171 19,418 1,595 1,162 2,010 1,070 1,599 1,287 487 934 18 Transportation n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 19 Public utility 3,090 416 3,474 704 577 826 610 564 921 595 359 20 Communication n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 Real estate and financial 34,028 19,738 25,507 1,175 1,691 1,324 3,254 3,457 2,327 2,695 3,735 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

A34 Domestic Nonfinancial Statistics • February 1993 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets Millions of dollars 1992 IItteemm11 11999900 11999911 Mar. Apr. May June July Aug. Sept/ Oct. 1 Sales of own shares2 344,420 464,488 50,462 52,309 48,127 51,457 54,915 50,627 50,039 52,196 2 Redemptions of own shares 288,441 342,088 35,464 39,302 31,409 37,457 34,384 35,223 37,862 37,180 3 Net sales 55,979 122,400 14,998 13,007 16,718 14,000 20,703 15,404 12,177 15,016 4 Assets4 568,517 807,001 848,842 870,011 897,211 911,218 951,806 957,145 978,507 980,943 5 Cash5 48,638 60,937 64,216 67,632 67,270 69,508 72,732 77,245 76,498 75,702 6 Other 519,875 746,064 781,626 802,379 829,941 841,710 879,074 879,900 902,009 905,241 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. Excludes sales and redemptions resulting from transfers of shares into or out companies. 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 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3r 1 Profits with inventory valuation and capital consumption adjustment 362.8 361.7 346.3 344.0 349.6 347.3 341.2 347.1 384.0 388.4 374.1 2 Profits before taxes 342.9 355.4 334.7 354.7 337.6 332.3 336.7 332.3 366.1 376.8 354.1 3 Profits tax liability 141.3 136.7 124.0 133.7 121.3 122.9 127.0 125.0 136.4 144.1 131.8 4 Profits after taxes 201.6 218.7 210.7 221.0 216.3 209.4 209.6 207.4 229.7 232.7 222.2 5 Dividends 134.6 149.3 146.5 151.9 150.6 146.2 145.1 143.9 143.6 146.6 151.1 6 Undistributed profits 67.1 69.4 64.2 69.1 65.7 63.2 64.5 63.4 86.2 86.1 71.1 7 Inventory valuation -17.5 -14.2 3.1 -21.2 6.7 9.9 -4.8 .7 -5.4 -15.5 -9.7 8 Capital consumption adjustment 37.4 20.5 8.4 10.5 5.3 5.1 9.3 14.1 23.3 27.0 29.7 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.50 NONFARM BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1992 IInndduussttrryy 11999900 11999911 1199992211 Ql Q2 Q3 Q4 Ql Q2 Q3 Q41 1 Total nonfarm business 532.61 528.39 551.03 534.27 525.02 526.59 529.87 535.72 540.91 565.16 562.36 Manufacturing 2 Durable goods industries 82.58 77.64 75.70 80.99 79.31 74.94 76.40 74.19 74.26 76.10 78.25 3 Nondurable goods industries 110.04 105.17 101.72 109.84 107.20 102.55 102.66 99.79 97.52 106.69 102.86 Nonmanufacturing 4 Mining 9.88 10.02 9.21 9.94 10.08 10.09 9.99 8.87 9.18 9.76 9.01 Transportation 5 Railroad 6.40 5.95 6.74 5.68 6.25 6.32 5.44 6.65 6.50 7.08 6.74 6 Air 8.87 10.17 9.58 10.89 9.95 9.61 10.41 8.86 9.75 9.60 10.12 7 Other 6.20 6.54 7.34 6.41 6.67 6.63 6.45 6.37 7.27 7.77 7.95 Public utilities 8 Electric 44.10 43.76 48.85 43.62 43.09 43.27 44.75 46.06 48.45 50.16 50.74 9 Gas and other 23.11 22.82 23.85 23.40 22.00 23.25 22.67 22.75 24.19 24.37 24.11 10 Commercial and other2 241.43 246.32 268.05 243.51 240.46 249.94 251.11 262.17 263.80 273.62 272.59 1. Figures are amounts anticipated by business. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. "Other" consists of construction, wholesale and retail trade, finance and insurance, personal and business services, and communication. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A35 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period; not seasonally adjusted 1990 1991 1992 AAccccoouunntt 11998899 11999900 11999911 Q4 Ql Q2 Q3 Q4 Ql Q2 ASSETS 1 Accounts receivable, gross1 462.9 492.9 480.3 492.9 482.9 488.5 484.7 480.3 475.7 477.0 2 Consumer 138.9 133.9 121.9 133.9 127.1 127.5 125.3 121.9 118.4 116.7 3 Business 270.2 293.5 292.6 293.5 291.7 295.2 293.2 292.6 291.6 293.9 4 Real estate 53.8 65.5 65.8 65.5 64.1 65.7 66.2 65.8 65.8 66.4 5 LESS: Reserves for unearned income 54.7 57.6 55.1 57.6 57.2 58.0 57.6 55.1 53.6 51.2 6 Reserves for losses 8.4 9.6 12.9 9.6 10.7 11.1 13.1 12.9 13.0 12.3 7 Accounts receivable, net 399.8 425.7 412.3 425.7 415.0 419.3 414.1 412.3 409.1 413.6 8 All other 102.6 113.9 149.0 113.9 118.7 122.8 136.4 149.0 145.5 139.4 9 Total assets 502.4 539.6 561.2 539.6 533.7 542.1 550.5 561.2 554.6 553.0 LIABILITIES AND CAPITAL 10 Bank loans 27.0 31.0 42.3 31.0 35.6 36.9 39.6 42.3 38.0 37.8 11 Commercial paper 160.7 165.3 159.5 165.3 155.5 156.1 156.8 159.5 154.4 147.7 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 Owed to parent 35.2 37.5 34.5 37.5 32.4 34.2 36.5 34.5 34.5 34.8 15 Not elsewhere classified 162.7 178.2 191.3 178.2 182.4 184.5 185.0 191.3 189.8 191.9 16 All other liabilities 61.5 63.9 69.0 63.9 64.3 67.1 68.8 69.0 72.0 73.4 17 Capital, surplus, and undivided profits 55.2 63.7 64.8 63.7 63.4 63.3 63.8 64.8 66.0 67.1 18 Total liabilities and capital 502.4 539.6 561.2 539.6 533.7 542.1 550.5 561.2 554.6 548.4 1.52 DOMESTIC FINANCE COMPANIES Business Credit Outstanding1 Millions of dollars, end of period 1992 TTyyppee ooff ccrreeddiitt 11998899 11999900 May June July Aug. Sept/ Oct. Seasonally Adjusted 1 Total 481,436 523,023 519,573 519,668 520,804 522,834 528,117 527,858 525,241 2 Consumer 157,766 161,070 154,786 154,989 154,850 153,588 154,729 155,618 152,658 ,3 Real estate2 53,518 65,147 65,388 66,898 66,433 66,843 67,753 67,717 68,035 4 Business 270,152 296,807 299,400 297,781 299,521 302,403 305,634 304,523 304,549 Not Seasonally Adjusted 5 484,566 526,441 522,853 520,682 524,587 522,686 523,448 524,999 524,782 6 Consumer 158,542 161,965 155,677 154,414 154,859 154,099 155,529 156,416 153,650 7 Motor vehicles 84,126 75,045 63,413 59,399 60,056 60,400 60,393 59,806 59,290 8 Other consumer 54,732 58,818 58,488 56,740 56,634 56,568 56,782 56,808 55,412 9 Securitized motor vehicles 13,690 19,837 23,166 26,529 26,195 25,392 26,852 28,204 27,823 10 Securitized other consumer 5,994 8,265 10,610 11,746 11,974 11,739 11,503 11,598 11,124 11 Real estate 53,781 65,509 65,764 66,650 66,437 67,065 68,104 68,064 68,477 12 Business 272,243 298,967 301,412 299,618 303,291 301,522 299,815 300,519 302,656 13 Motor vehicles 90,416 92,072 90,319 88,585 90,075 87,686 85,745 85,261 86,747 14 Retail5. 29,505 26,401 22,507 20,143 20,674 21,086 20,743 20,407 20,763 15 Wholesale6 34,093 33,573 31,216 30,893 30,505 27,158 n.a. n.a. n.a. 16 Leasing 26,818 32,098 36,596 37,549 38,896 39,443 39,889 39,506 39,536 17 Equipment 122,246 137,654 141,399 143,431 145,994 145,787 145,790 147,319 147,146 18 Retail 29,828 31,968 30,962 31,569 32,610 32,370 32,250 31,571 31,475 19 Wholesale6 6,452 11,101 9,671 9,116 9,194 9,128 9,084 8,994 8,928 20 Leasing 85,966 94,585 100,766 102,746 104,190 104,289 104,455 106,754 106,743 21 Other business 57,560 63,774 60,887 59,291 57,586 59,099 59,013 58,493 58,661 22 Securitized business assets n.a. 5,467 8,807 8,311 9,636 8,951 9,268 9,447 10,101 23 Retail 710 667 576 196 178 170 158 152 634 24 Wholesale n.a. 3,281 5,285 5,147 5,231 4,649 5,193 5,378 5,593 25 Leasing 1,311 1,519 2,946 2,968 4,227 4,132 3,917 3,917 3,874 1. Includes finance company subsidiaries of bank holding companies but not of 5. Passenger car fleets and commercial land vehicles for which licenses are retailers and banks. Data are before deductions for unearned income and losses. required. Data in this table also appear in the Board's G.20 (422) monthly statistical release. 6. Credit arising from transactions between manufacturers and dealers, that is, For ordering address, see inside front cover. floor plan financing. 2. Includes all loans secured by liens on any type of real estate, for example, 7. includes loans on commercial accounts receivable, factored commercial first and junior mortgages and home equity loans. accounts, and receivable dealer capital; small loans used primarily for business or 3. Includes personal cash loans, mobile home loans, and loans to purchase other farm purposes; and wholesale and lease paper for mobile homes, campers, and types of consumer goods such as appliances, apparel, general merchandise, and travel trailers. recreation vehicles. Digitized for F4R. OAuStsEtaRnd ing balances of pools upon which securities have been issued; these http://fraser.bsatllaonuceiss faered .noo rlgon/ ger carried on the balance sheets of the loan originator. Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • February 1993 1.53 MORTGAGE MARKETS Conventional Mortgages on New Homes Millions of dollars except as noted 1992 IItteemm 11998899 11999900 11999911 May June July Aug. Sept. Oct. Nov. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 159.6 153.2 155.0 158.7 154.4 173.5 148.4 146.0 159.2 165.4 2 Amount of loan (thousands of dollars) 117.0 112.4 114.0 119.7 116.1 132.6 113.6 109.3 119.7 117.3 3 Loan-price ratio (percent) 74.5 74.8 75.0 77.3 77.3 77.5 78.7 77.0 77.3 75.3 4 Maturity (years) 28.1 27.3 26.8 26.4 25.0 26.4 24.8 25.7 25.2 24.9 5 Fees and charges (percent of loan amount) 2.06 1.93 1.71 1.69 1.57 1.19 1.62 1.52 1.42 1.54 6 Contract rate (percent per year) 9.76 9.68 9.02 8.30 8.15 7.81 7.72 7.68 7.65 7.81 Yield (percent per year) 7 OTS series .' 10.11 10.01 9.30 8.59 8.43 8.00 8.00 7.93 7.90 8.07 8 HUD series4 10.21 10.08 9.20 8.66 8.42 8.14 8.01 7.95 8.29 8.38 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (HUD series) 10.24 10.17 9.25 8.66 8.56 8.12 8.08 8.06 8.29 8.54 10 GNMA securities6 9.71 9.51 8.59 8.00 7.90 7.63 7.28 7.31 7.53 7.90 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 104,974 113,329 122,837 140,899 142,148 142,465 142,246 144,904 149,133 153,306 12 FHA/VA-insured 19,640 21,028 21,702 21,924 22,218 22,263 22,199 22,275 22,399 22,372 13 Conventional 85,335 92,302 101.135 118,975 119,930 120,202 120,047 122,629 126,734 130,934 Mortgage transactions (during period) 14 Purchases 22,518 23,959 37,202 5,576 5,809 4,191 3,651 6,779 8,380 7,980 Mortgage commitments (during period? 15 Issued8 n.a. 23,689 40,010 4,392 4,662 4,663 6,053 8,880 8,195 6,084 16 To sell9 n.a. 5,270 7,608 1,695 1,831 807 10 148 0 237 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)9 17 Total 20,105 20,419 24,131 28,710 28,621 28,510 29,367 31,629 32,995 n.a. 18 FHA/VA-insured 590 547 484 432 426 419 376 371 365 n.a. 19 Conventional 19,516 19,871 23,283 28,278 28,195 28,091 28,990 31,259 32,630 n.a. Mortgage transactions (during period) 20 Purchases 78,588 75,517 97,727 16,405 14,222 12,172 13,562 16,391 20,199 n.a. 21 Sales 73,446 73,817 92,478 17,214 13,740 11,849 12,314 14,267 18,771 18,782 Mortgage commitments (during period)10 22 Contracted 88,519 102,401 114,031 13,334 19,114 26,488 14,212 17,132 27,380 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

Real Estate A37 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1991 1992 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11998888 11998899 11999900 Q2 Q3 Q4 Ql Q2P 1 All holders 3,275,697 3,561,685 3,807,306 3,898,924 3,912,518 3,927,396 3,971,687 3,999,102 By type of property 2 One- to four-family residences 2,203,973 2,432,222 2,649,436 2,726,425 2,758,976 2,781,078 2,833,365 2,873,755 3 Multifamily residences 292,590 304,612 310,619 315,404 308,047 308,844 308,510 301,007 4 Commercial 693,888 740,826 763,281 773,315 762,330 754,300 746,902 740,760 5 Farm 85,247 84,025 83,969 83,779 83,165 83,173 82,910 83,579 By type of holder 6 Major financial institutions 1,831,472 1,931,537 1,914,315 1,898,492 1,860,710 1,846,910 1,825,983 1,807,045 7 Commercial banks 674,003 767,069 844,826 871,416 870,937 876,284 880,377 884,598 8 One- to four-family 334,367 389,632 455,931 476,363 478,851 486,572 492,910 496,518 9 Multifamily 33,912 38,876 37,015 37,564 36,398 37,424 37,710 38,314 10 Commercial 290,254 321,906 334,648 339,450 337,365 333,852 330,837 330,229 11 Farm 15,470 16,656 17,231 18,039 18,323 18,436 18,919 19,538 12 Savings institutions3 924,606 910,254 801,628 755,403 719,679 705,367 682,338 660,547 13 One- to four-family 671,722 669,220 600,154 570,015 547,799 538,358 524,536 509,397 14 Multifamily 110,775 106,014 91,806 86,483 81,883 79,881 77,166 74,837 15 Commercial 141,433 134,370 109,168 98,457 89,595 86,741 80,278 75,969 16 Farm 676 650 500 448 402 388 358 345 17 Life insurance companies 232,863 254,214 267,861 271,674 270,094 265,258 263,269 261,900 18 One- to four-family 11,164 12,231 13,005 11,743 11,720 11,547 11,214 11,087 19 Multifamily 24,560 26,907 28,979 30,006 29,962 29,562 29,693 29,745 20 Commercial 187,549 205,472 215,121 219,204 218,179 214,105 212,865 211,913 21 Farm 9,590 9,604 10,756 10,721 10,233 10,044 9,497 9,155 22 Finance companies4 37,846 45,476 48,777 48,972 50,658 51,567 50,573 55,933 23 Federal and related agencies 200,570 209,498 250,761 276,797 282,115 282,856 2%,664 297,618 24 Government National Mortgage Association 26 23 20 20 20 19 19 23 25 One- to four-family 26 23 20 20 20 19 19 23 26 Multifamily 0 0 0 0 0 0 0 0 27 Farmers Home Administration 42,018 41,176 41,439 41,430 41,566 41,713 41,791 41,628 28 One- to four-family 18.347 18,422 18,527 18,521 18,598 18,496 18,488 17,718 29 Multifamily 8,513 9,054 9,640 9,898 9,990 10,141 10,270 10,356 30 Commercial 5,343 4,443 4,690 4,750 4,829 4,905 4,961 4,998 31 Farm 9,815 9,257 8,582 8,261 8,149 8,171 8,072 8,557 32 Federal Housing and Veterans' Administrations 5,973 6,087 8,801 10,210 10,057 10,733 11,332 11,798 33 One- to four-family 2,672 2,875 3,593 3,729 3,649 4,036 4,254 4,124 34 Multifamily 3,301 3,212 5,208 6,480 6,408 6,697 7,078 7,674 35 Federal National Mortgage Association 103,013 110,721 116,628 122,806 125,451 128,983 136,506 142,148 36 One- to four-family 95,833 102,295 106,081 111,560 113,696 117,087 124,137 129,392 37 Multifamily 7,180 8,426 10,547 11,246 11,755 11,896 12,369 12,756 38 Federal Land Banks 32,115 29,640 29,416 29,152 29,053 28,777 28,776 28,775 39 One- to four-family 1,890 1,210 1,838 2,041 2,124 1,693 1,693 1,693 40 Farm 30,225 28,430 27,577 27,111 26,929 27,084 27,083 27,082 41 Federal Home Loan Mortgage Corporation 17,425 21,851 21,857 23,649 23,906 26,809 28,895 28,621 42 One- to four-family 15,077 18,248 19,185 21,120 21,489 24,125 26,182 26,001 43 Multifamily 2,348 3,603 2,672 2,529 2,417 2,684 2,713 2,620 44 Mortgage pools or trusts6 811,847 946,766 1,110,555 1,188,626 1,229,836 1,262,685 1,302,217 1,339,172 45 Government National Mortgage Association 340,527 368,367 403,613 416,082 422,500 425,295 421,977 422,922 46 One- to four-family 331,257 358,142 391,505 403,679 412,715 415,767 412,574 413,828 47 Multifamily 9,270 10,225 12,108 12,403 9,785 9,528 9,404 9,094 48 Federal Home Loan Mortgage Corporation 226,406 272,870 316,359 341,132 348,843 359,163 367,878 382,797 49 One- to four-family 219,988 266,060 308,369 332,624 341,183 351,906 360,887 376,177 50 Multifamily 6,418 6,810 7,990 8,509 7,660 7,257 6,991 6,620 51 Federal National Mortgage Association 178,250 228,232 299,833 331,089 351,917 371,984 389,853 413,226 52 One- to four-family 172,331 219,577 291,194 322,444 343,430 362,667 380,617 403,940 53 Multifamily , 5,919 8,655 8,639 8,645 8,487 9,317 9,236 9,286 54 Farmers Home Administration 104 80 66 55 52 47 43 43 55 One- to four-family 26 21 17 13 12 11 10 9 56 Multifamily 0 0 0 0 0 0 0 0 57 Commercial 38 26 24 21 20 19 18 18 58 Farm 40 33 26 21 20 17 16 15 59 Individuals and others7 431,808 473,884 531,674 535,009 539,858 534,945 546,823 555,267 60 One- to four-family 262,713 297,050 333,532 333,256 336,711 330,062 340,561 348,631 61 Multifamily 80,394 82,830 87,950 87,002 87,351 87,440 86,975 86,390 62 Commercial 69,270 74,609 90,894 95,573 96,687 98,409 100,321 101,358 63 Farm 19,431 19,395 19,298 19,178 19,109 19,034 18,966 18,887 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 Fanners 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

A38 Domestic NonfinancialS tatistics • February 1993 1.55 CONSUMER INSTALLMENT CREDIT Total Outstanding1 Millions of dollars, amounts outstanding, end of period 1992 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11998899 11999900 11999911 May June July Aug. Sept.r Oct. Seasonally adjusted 11 TToottaall 716,825 735,338 727,799 722,928 722,919 721,820 720,664 722,104 722,317 22 AAuuttoommoobbiillee 292,002 284,993 263,003 259,834 257,339 257.743 256,944 257,384 257,412 33 RReevvoollvviinngg 199,308 222,950 242,785 246,220 247,418 247,332 248,043 250,017 251,653 44 OOtthheerr 225,515 227,395 222,012 216,874 218,162 216.744 215,677 214,703 213,252 Not seasonally adjusted 5 Total 728,877 748,524 742,058 718,420 719,845 718,599 721,985 724,198 722,700 By major holder 6 Commercial banks 342,770 347,087 339,565 324,791 324,171 323,899 323,866 324,046 324,424 7 Finance companies 138,858 133,863 121,901 116,138 116,690 117,002 117,175 116,650 114,702 8 Credit unions 93,114 93,057 92,254 91,605 92,340 91,778 92,270 92,698 92,941 9 Retailers 44,154 44,822 44,030 37,824 37,438 37,219 38,791 38,778 39,299 10 Savings institutions 57,253 46,969 40,315 36,224 35,782 35,552 35,378 35,069 34,681 1 1 1 2 G Po a o so ls l i o n f e s c e o c m ur p it a i n z i e e d s assets2 . 48 3 , , 7 9 9 3 3 5 7 4 7 , , 8 9 2 0 2 4 9 4 9 , ,6 3 3 6 1 2 10 4 7 , , 1 6 9 4 3 5 10 4 9 , , 3 0 6 6 0 4 10 4 8 , , 5 6 0 4 6 3 10 4 9 , , 5 9 4 6 2 3 11 4 2 , , 4 4 9 5 9 8 11 4 2 , , 4 20 5 1 2 By major type of credit3 13 Automobile 292,060 285,050 263,108 258,665 257,442 258,104 259,128 260,395 259,626 14 Commercial banks 126,288 124,913 111,912 108,610 106,645 107,722 107,978 108,355 108,105 15 Finance companies 84,126 75,045 63,413 59,399 60,056 60,400 60,393 59,806 59,290 16 Pools of securitized assets' 18,185 24,428 28,057 31,406 31,024 30,454 30,826 31,971 31,757 17 Revolving 210,310 235,056 255,895 243,315 245,092 244,661 247,051 248,692 249,715 18 Commercial banks 130,811 133,385 137,968 128,013 127,925 127,476 126,922 127,234 127,263 19 Retailers 39,583 40,003 39,352 33,245 32,844 32,617 34,167 34,148 34,654 20 Gasoline companies 3,935 4,822 4,362 4,193 4,360 4,506 4,542 4,499 4,452 21 Pools of securitized assets' 23,477 44,335 60,139 63,801 65,784 65,791 66,985 68,252 68,699 22 Other 226,507 228,418 223,055 216,440 217,311 215,834 215,806 215,111 213,359 23 Commercial banks 85,671 88,789 89,685 88,168 89,601 88,701 88,966 88,457 89,056 24 Finance companies 54,732 58,818 58,488 56,739 56,634 56,602 56,782 56,844 55,412 2 2 5 6 R Po e o ta ls il e o r f s securitized assets2 4 7 , , 5 1 7 3 1 1 4 9, , 1 8 4 1 1 9 1 4 1 , , 6 4 7 3 8 5 1 4 2 , , 5 4 7 3 9 8 1 4 2 , , 5 2 9 5 4 6 1 4 2 , , 6 3 0 9 2 8 1 4 2 , , 6 1 2 5 4 2 1 4 2 , , 6 2 3 3 0 5 1 4 1 , , 6 7 4 4 5 5 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. 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent per year except as noted 1992 1990 Apr. May June July Aug. Sept. Oct INTEREST RATES Commercial banks2 1 48-month new car 12.07 11.78 11.14 n.a. 9.52 n.a. n.a. 9.15 n.a. 2 24-month personal ^ 15.44 15.46 15.18 n.a. 14.28 n.a. n.a. 13.94 n.a. 3 120-month mobile home 14.11 14.02 13.70 n.a. 12.82 n.a. n.a. 12.57 n.a. 4 Credit card 18.02 18.17 18.23 n.a. 17.97 n.a. n.a. 17.66 n.a. Auto finance companies 5 New car 12.62 12.54 12.41 10.84 10.67 10.24 9.94 8.65 6 Used car 16.18 15.99 15.60 14.14 14.01 13.89 13.67 13.49 13.44 OTHER TERMS4 Maturity (months) 7 New car 54.2 54.6 55.1 54.5 54.7 54.4 54.4 53.6 53.3 8 Used car 46.6 46.0 47.2 47.8 47.9 48.0 48.0 47.9 47.7 Loan-to-value ratio 9 New car 10 Used car Amount financed (dollars) 11 New car 12,001 12,071 12,494 13,208 13,373 13,369 13,570 13,745 13,889 12 Used car 7,954 8,289 8,905 9,247 9,201 9,293 9,238 8,402 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. Digitized for FRAS2. EDRat a are available for only the second month of each quarter. 4. At auto finance companies. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1991 1992 Ql Q2 Q3 Q4 Ql" Q2" Q3 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. 721.2 775.8 740.8 665.0 452.7r 455.4 543.3r 405.6" 406.3" 667.5 535.1 379.9 By sector and instrument 2 U.S. government 143.9 155.1 146.4 246.9 278.2 227.4 276.7 288.4 320.4 368.9 351.9 193.4 3 Treasury securities 142.4 137.7 144.7 238.7 292.0 251.4 282.9 317.2 316.6 380.1 351.5 184.4 4 Agency issues and mortgages 1.5 17.4 1.6 8.2 -13.8 -24.0 -6.2 -28.8 3.8 -11.2 .4 9.0 5 Private 577.3 620.7 594.4 418.2 174.4r 228.0 266.6r 117.2" 85.9" 298.6 183.2 186.5 By instrument 6 Debt capital instruments 487.2 474.1 441.8 342.3 254.6r 296. lr 329.9" 182.0" 210.6" 312.9 218.4 196.4 7 Tax-exempt obligations 83.5 53.7 65.0 51.2 45.8 35.6 48.5 53.5 45.5 52.0 73.0 52.3 8 Corporate bonds 78.8 103.1 73.8 47.1 78.8r 76.7 96.5 81.7 60.3" 76.3 77.5 61.3 9 Mortgages 325.0 317.3 303.0 244.0 130.0 183.8r 184.8r 46.8" 104.8 184.7 67.9 82.8 10 Home mortgages 235.3 241.8 245.3 219.4 142.2 153.0 158.1 122.4 135.1 209.6 121.6 147.2 11 Multifamily residential 24.4 16.7 16.4 3.7 -2.0 6.3r 12.5r -29.4" 2.7 -1.3 -31.6 -10.7 12 Commercial 71.6 60.8 42.7 21.0 -9.4 24.6r 14.9" -43.8" -33.1 -22.6 -24.9 -54.7 13 Farm -6.4 -2.1 -1.5 -.1 -.8 -.1 -.7 -2.5 .0 -1.1 2.7 1.1 14 Other debt instruments 90.1 146.6 152.6 75.8 -80.2 -68.0 -63.3 -64.8 -124.7 -14.4 -35.2 -10.0 15 Consumer credit 32.9 50.1 41.7 17.5 -12.5 -10.4 -7.8 -24.0 -8.0 3.1 -12.4 .4 16 Bank loans n.e.c 9.9 41.0 40.2 4.4 -33.4 -15.0 -34.5 -18.2 -66.1 -26.9 -21.5 -23.3 17 Open market paper 1.6 11.9 21.4 9.7 -18.4 -14.3 -15.9 -36.3 -7.0 12.6 -3.4 1.7 18 Other 45.7 43.6 49.3 44.2 -15.8 -28.3 -5.2 13.7 -43.6 -3.2 2.1 11.2 By borrowing sector 19 State and local government 83.0 48.9 63.2 48.3 38.5 36.0 38.6 37.6 41.9 46.1 63.4 50.0 20 Household 296.4 318.6 305.6 254.2 158.0 160.8 188.8 136.1 146.3 217.1 143.3 148.1 21 Nonfinancial business 197.8 253.1 225.6 115.6 -22. lr 31.2r 39.2r -56.5" -102.4" 35.4 -23.4 -11.7 22 Farm -10.6 -7.5 1.6 2.5 .9 3.9 2.1 -.3 -2.2 -1.6 7.1 2.4 23 Nonfarm noncorporate 65.3 61.8 50.4 26.7 -23.6 13.2 9.8 -65.9 -51.5 -20.7 -65.6 -51.4 24 Corporate 143.1 198.8 173.6 86.4 ,6r 14.0 27.2r 9.7" -48.7" 57.7 35.2 37.4 25 Foreign net borrowing in United States 6.2 6.4 10.2 23.9 14.1 63.1 -63.2 15.6 41.0 9.9 55.9 30.1 26 Bonds 7.4 6.9 4.9 21.4 14.9 11.1 10.6 15.5 22.3 4.9 22.8 23.2 27 Bank loans n.e.c -3.6 -1.8 -.1 -2.9 3.1 8.1 -3.5 1.4 6.5 1.5 14.1 3.4 28 Open market paper 3.8 8.7 13.1 12.3 6.4 46.7 -51.9 16.0 14.9 -7.8 27.7 12.8 29 U.S. government loans -1.4 -7.5 -7.6 -6.9 -10.2 -2.8 -18.3 -17.2 -2.7 11.4 -8.8 -9.3 30 Total domestic plus foreign 727.4 782.2 750.9 688.9 466.8r 518.5 480.1" 421.2" 447.3" 677.3 591.0 410.1 Financial sectors 31 Total net borrowing by financial sectors 259.0 211.4 220.1 187.1 139.2 108.9 104.0" 143.4" 200.5 108.9 218.4 246.2 By instrument 32 U.S. government-related 171.8 119.8 151.0 167.4 147.7 154.6 127.4 156.3 152.7 126.8 199.5 152.9 33 Sponsored-credit-agency securities 30.2 44.9 25.2 17.1 9.2 13.1 -29.7 20.6 32.6 11.5 48.3 62.3 34 Mortgage pool securities 142.3 74.9 125.8 150.3 138.6 141.5 157.1 135.8 120.1 115.3 151.2 90.6 35 Loans from U.S. government -.8 .0 .0 -.1 .0 .0 .0 .0 -.1 .0 .0 .0 36 Private 87.2 91.7 69.1 19.7 -8.6 -45.7 -23.4" -12.9" 47.8 -17.9 18.9 93.2 37 Corporate bonds 39.1 16.2 46.8 34.4 57.7 41.4 72.4" 29.5" 87.5 -25.1 25.5 54.5 38 Mortgages .4 .3 .0 .3 .6 • lr .9" -.2" 1.5 .9 .1 .1 39 Bank loans n.e.c -3.6 .6 1.9 1.2 3.2 1.0 -2.9 10.2 4.5 8.2 3.9 5.5 40 Open market paper 26.9 54.8 31.3 8.6 -32.0 -52.5 -46.0 -16.7 -12.7 7.6 -16.3 11.8 41 Loans from Federal Home Loan Banks 24.4 19.7 -11.0 -24.7 -38.0 -35.8 -47.7 -35.7 -33.0 -9.5 5.7 21.3 By borrowing sector 42 Sponsored credit agencies 29.5 44.9 25.2 17.0 9.1 13.1 -29.7 20.6 32.5 11.5 48.3 62.3 43 Mortgage pools 142.3 74.9 125.8 150.3 138.6 141.5 157.1 135.8 120.1 115.3 151.2 90.6 44 Private 87.2 91.7 69.1 19.7 -8.6 -45.7 -23.4" -12.9" 47.8 -17.9 18.9 93.2 45 Commercial banks 6.2 -3.0 -1.4 -1.1 -13.3 -18.4 -11.7 -9.2 -14.1 7.2 .8 1.6 46 Bank affiliates 14.3 5.2 6.2 -27.7 -2.5 -9.3 -3.5 -6.8 9.6 2.7 -8.2 2.2 47 Savings and loan associations 19.6 19.9 -14.1 -29.9 -39.5 -42.9 -48.7 -41.1 -25.1 -20.3 2.7 10.1 48 Mutual savings banks 8.1 1.9 -1.4 -.5 -3.5 2.0 -1.7 -5.5 -8.7 4.3 .3 8.3 49 Finance companies -.5 31.5 59.7 35.6 14.5 -10.3 3.4 12.2 52.9 -39.0 -20.9 34.6 50 Real estate investment trusts (REITs) .4 3.6 -1.9 -1.9 .0 .1 .1" -.9" .8 4.6 .9 -.7 51 Securitized credit obligation (SCO) issuers 39.1 32.5 22.0 45.2 35.6 33.2 38.7 38.5 32.3 22.5 43.2 37.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • February 1993 1.57—Continued 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998877 11998888 11998899 11999900 11999911 Ql Q2 Q3 Q4 Qlr Q2r Q3 All sectors 5522 TToottaall nneett bboorrrroowwiinngg,, aallll sseeccttoorrss 986.4 993.6 971.0 876.0 606.0r 627.4 584. lr 564.6r 647.7' 786.2 809.4 656.2 5533 UU..SS.. ggoovveerrnnmmeenntt sseeccuurriittiieess 316.4 274.9 297.3 414.4 426.0 382.0 404.1 444.8 473.2 495.7 551.4 346.4 5544 SSttaattee aanndd llooccaall oobblliiggaattiioonnss 83.5 53.7 65.0 51.2 45.8 35.6 48.5 53.5 45.5 52.0 73.0 52.3 5555 CCoorrppoorraattee aanndd ffoorreeiiggnn bboonnddss 125.2 126.3 125.5 102.9 151.4r 129.2 179.5r 126.6r 170. lr 56.0 125.9 139.0 5566 MMoorrttggaaggeess 325.4 317.5 303.0 244.3 130.6 183.9 185.8 46.5 106.2 185.6 67.9 82.9 5577 CCoonnssuummeerr ccrreeddiitt 32.9 50.1 41.7 17.5 -12.5 -10.4 -7.8 -24.0 -8.0 3.1 -12.4 .4 5588 BBaannkk llooaannss nn..ee..cc 2.7 39.9 41.9 2.8 -27.1 -5.9 -40.9 -6.7 -55.1 -17.2 -3.5 -14.3 5599 OOppeenn mmaarrkkeett ppaappeerr 32.3 75.4 65.9 30.7 -44.0 -20.2 -113.8 -37.0 -4.9 12.4 8.1 26.3 6600 OOtthheerr llooaannss 68.0 55.8 30.6 12.4 -64.2 -66.9 -71.2 -39.1 -79.3 -1.3 -1.0 23.3 External corporate equity funds raised in United States 61 Total net share issues 7.1 -118.4 -65.7 22.1 198.8 112.4 182.3r 231.8r 268.9 271.7 281.5 305.3 62 Mutual funds 70.2 6.1 38.5 67.9 150.5 98.1 125.6 182.5 195.9 189.8 223.3 249.2 63 All other -63.2 -124.5 -104.2 -45.8 48.3 14.3 56.7r 49.3r 72.9 81.9 58.2 56.2 64 Nonfinancial corporations -75.5 -129.5 -124.2 -63.0 18.3 -6.0 12.0 19.0 48.0 46.0 36.0 11.0 65 Financial corporations 14.5 4.1 2.7 9.8 -.1 -6.7 8.r -3.8r 2.0 6.0 9.7 9.2 66 Foreign shares purchased in United States -2.1 .9 17.2 7.4 30.2 27.0 36.6 34.1 22.9 29.9 12.5 36.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1991 1992 Transaction category or sector 11998877 11998888 11998899 11999900 11999911 Ql Q2 Q3 Q4 Ql* Q2* Q3 NET LENDING IN CREDIT MARKETS 1 Total net lending in credit markets 986.4 993.6 971.0 876.0 606.0* 627.4 584.1* 564.6* 647.7* 786.2 809.4 656.2 2 Private domestic nonfinancial sectors 237.4 226.2 209.6 203.8 21.6r 49.4* 190.5* -135.3* -18.2* 139.2 73.5 -252.7 3 Households 180.7 198.9 179.5 172.3 -13.7r 13.3* 174.1* -177.9* -64.4* 160.0 47.6 -276.4 4 Nonfarm noncorporate business -5.6 3.1 -.8 -1.4 -1.9* -1.8* -2.0 -1.6 -2.1 -1.9 -2.5 -1.9 5 Nonfinancial corporate business 18.5 5.7 12.9 6.6 2oy -7.6* 29.0 32.2 30.1 -2.9 21.4 38.0 6 State and local governments 43.9 18.6 17.9 26.2 16.3 45.4 -10.6 12.1 18.2 -16.1 7.1 -12.3 7 U.S. government -7.9 -10.6 -3.1 33.7 10.0 35.2 24.8 -2.1 -17.9 13.9 -25.1 -27.8 8 Foreign 61.8 96.3 74.1 58.4 44.7 19.1 51.4 37.3 71.0 88.4 142.5 58.4 9 Financial sectors 695.0 681.8 690.4 580.2 529.7 523.8* 317.4 664.7* 612.9 544.7 618.4 878.3 10 Sponsored credit agencies 27.0 37.1 -.5 16.4 14.2 27.4 -22.3 33.7 17.8 93.0 39.9 73.9 11 Mortgage pools 142.3 74.9 125.8 150.3 138.6 141.5 157.1 135.8 120.1 115.3 151.2 90.6 12 Monetary authority 24.7 10.5 -7.3 8.1 31.1 58.1 -4.0 48.1 22.3 33.2 9.8 10.8 13 Commercial banking 135.3 157.1 176.8 125.4 84.0 114.4 34.7 82.4 104.3 98.9 58.4 101.5 14 U.S. commercial banks 99.1 127.1 145.7 95.2 38.9 77.0 6.4 26.5 45.6 91.9 .5 105.2 15 Foreign banking offices 34.2 29.4 26.7 28.4 48.5 42.2 33.7 56.7 61.3 .6 58.6 -2.7 16 Bank affiliates 2.0 -.1 2.8 -2.8 -1.5 -4.7 -2.6 2.4 -1.1 6.4 -.6 -1.4 17 Banks in U.S. possession .1 .7 1.6 4.5 -1.9 -.1 -2.8 -3.3 -1.5 .0 -.1 .4 18 Private nonbank finance 365.8 402.2 395.7 279.9 261.8 182.3* 152.0 364.7* 348.3 204.4 359.2 601.5 19 Thrift institutions 136.9 119.0 -91.0 -151.9 -144.9 -188.3 -164.8 -176.8 -49.7 -113.3 -81.6 -21.8 20 Savings and loan associations 93.5 87.4 -93.9 -143.9 -140.9 -179.8 -144.0 -156.3 -83.3 -137.9 -92.4 -14.5 21 Mutual savings banks 25.6 15.3 -4.8 -16.5 -15.5 -11.7 -31.1 -30.8 11.5 7.6 -7.4 -17.5 22 Credit unions 17.8 16.3 7.7 8.5 11.5 3.3 10.2 10.3 22.2 17.0 18.3 10.2 23 Insurance 153.5 186.2 207.7 188.5 215.4 236.2 219.5 254.5 151.4 120.4 192.9 224.6 24 Life insurance companies 91.7 103.8 93.1 94.4 83.2 112.9 132.8 73.8 13.2 80.6 92.5 98.7 25 Other insurance companies 39.5 29.2 29.7 26.5 34.7 32.7 37.0 36.8 32.1 33.1 22.2 2.5 26 Private pension funds -4.7 18.1 36.2 16.6 60.6 42.1 .7 110.5 89.2 -22.5 51.9 88.7 27 State and local government retirement funds 27.0 35.1 48.7 51.0 37.0 48.5 49.0 33.4 17.0 29.2 26.3 34.7 28 Finance n.e.c 75.4 96.9 278.9 243.3 191.3 134.4* 97.4 287.0* 246.5 197.2 247.9 398.7 29 Finance companies 38.2 49.2 69.3 41.6 -13.1 -18.5 -14.5 -5.2 -14.1 .8 -23.0 18.9 30 Mutual funds 25.8 11.9 23.8 41.4 90.3 44.0 75.3 117.1 124.8 105.3 156.1 172.3 31 Money market funds 1.8 10.7 67.1 80.9 30.1 134.2 -68.9 1.1 53.9 61.8 -20.9 -16.3 32 Real estate investment trusts (REITs) 1.0 .9 .5 -.7 -.7 -1.6* -.1 -.3* -.9 -.7 2.6 2.6 33 Brokers and dealers -30.6 -8.2 96.3 34.9 49.0 -56.9 66.8 135.8 50.5 7.5 89.8 184.0 34 Securitized credit obligation (SCOs) issuers 39.1 32.5 22.0 45.2 35.6 33.2 38.7 38.5 32.3 22.5 43.2 37.1 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Net flows through credit markets 986.4 993.6 971.0 876.0 606.0* 627.4 584.1* 564.6* 647.7* 786.2 809.4 656.2 Other financial sources 36 Official foreign exchange -9.7 4.0 24.8 2.0 -5.9 1.5 -4.8 -15.5 -5.0 3.5 -6.5 2.5 37 Treasury currency and special drawing rights .5 .5 4.1 2.5 .0 -1.2 .4 .4 .5 .1 .3 .2 38 Life insurance reserves 26.0 25.3 28.8 25.7 22.0 27.9* 31.4* 19.4 9.2* 21.2 30.3 19.9 39 Pension fund reserves 104.5 193.6 221.4 186.8 263.5r 284.1 197.9* 339.6 232.5* 145.9 185.5 312.2 40 Interbank claims 34.8 2.9 -16.5 34.2 -5.0* -3.0* -79.8* 99.5* -36.8* 48.8 27.4 120.8 41 Deposits at financial institutions 141.1 259.9 290.0 96.8 6i.r 244.8 -75.4 27.3 47.8* 93.2 -47.4 191.7 42 Checkable deposits and currency 4.1r 43.2 6.1 44.2 75.8 76.2 7.9 104.5 114.4 89.0 93.2 202.2 43 Small time and savings deposits 76.3r 120.8 96.7 59.9 16.7 97.3 -1.1 -42.4 13.0 -27.7 -88.5 -73.3 44 Large time deposits 50.6 53.6 17.6 -66.7 -60.9 15.1 -63.0 -78.1 -117.4 -81.3 -106.0 -63.5 45 Money market fund shares 24.0 21.9 90.1 70.3 41.3 193.0 -58.7 4.0 26.8 106.1 -38.3 -13.0 46 Security repurchase agreements -10.9 23.5 78.3 -23.5 -16.4 -160.7 43.1 36.3 16.0 15.5 136.7 135.4 47 Foreign deposits -3.1 -3.1 1.1 12.6 4.6* 24.0 -3.6 3.0 -5.0* -8.3 -44.5 4.0 48 Mutual fund shares 70.2 6.1 38.5 67.9 150.5 98.1 125.6 182.5 195.9 189.8 223.3 249.2 49 Corporate equities -63.2 -124.5 -104.2 -45.8 48.3 14.3 56.7* 49.3* 72.9 81.9 58.2 56.2 50 Security credit -27.4 3.0 15.6 3.5 51.4 -17.5 20.1 82.4 120.7 -70.0 -4.3 73.6 51 Trade debt 57.7 89.2 60.0 44.1 10.3* -39.6* 41.1* 47.5* -7.7* 82.6 45.5 42.1 52 Taxes payable 5.4 5.3 2.0 -.5 -9.1 -34.8 -11.5 13.0 -3.3 -4.4 14.2 -4.3 53 Noncorporate proprietors' equity -60.9 -31.2 -32.5 -39.3 — 1.4r -21.5* -34.1 44.9 5.1 -24.6 12.5 1.1 54 Miscellaneous 241.2 222.3 269.9 120.5 145.0* 219.6* 65.0* 52.3* 243.2* 124.5 298.9 190.0 55 Total financial sources 1,506.7 1,650.2 1,772.7 1,374.3 1,336.8* 1,400.3* 916.7* 1,507.3* 1,522.9* 1,478.7 1,647.2 1,911.4 Floats not included in assets (-) 56 U.S. government checking deposits .0 1.6 8.4 3.3 -13.1 -18.8 15.6 23.9 -73.1 4.4 -11.7 .4 57 Other checkable deposits .4 .8 -3.2 2.5 2.0 13.3 3.0 -2.1 -6.1 -13.3 -17.5 -23.9 58 Trade credit -8.5 -.9 .6 21.5 18.3* 9.8* 40.5* 27.1* -4.0* 14.7 -12.1 -6.5 Liabilities not identified as assets (-) 59 Treasury currency -.1 -.1 -.2 .2 -.6 -1.9 -.3 -.2 -.1 -.4 -.1 -.3 60 Interbank claims -4.0 -3.0 -4.4 1.6 26.2 55.3 20.8 28.4 .2 13.4 -15.1 -8.4 61 Security repurchase agreements -21.2 -29.8 23.9 -34.8 10.4* -115.4 76.2 36.9 44.0* -41.1 101.5 67.7 62 Taxes payable 6.7 6.3 2.3 6.5 7.4 -14.4 2.0 23.4 18.5 -18.3 29.5 11.9 63 Miscellaneous 10.0 4.4 -95.6 -13.8 -29.9* -119.9* 9.3* -194.2* 185.0* -78.0 -64.4 36.3 64 Totals identified to sectors as assets 1,523.4 1,670.7 1,841.0 1,387.5 1,316.1* 1,592.2* 749.5* 1,564.2* 1,358.6* 1,597.2 1,637.2 1,834.3 I. Data in this table also appear in the Board's Z.l (780) quarterly statistical 2. Excludes corporate equities and mutual fund shares. release, tables F.6 and F.7. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic NonfinancialS tatistics • February 1993 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998888 11998899 11999900 11999911 Ql Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 9,316.3 10,087.1 10,760.8 11,210.8 10,832.3 10,960.3 11,082.5 11,210.8 11,336.7 11,464.8 11,583.6 By lending sector and instrument 2 U.S. government 2,104.9 2,251.2 2,498.1 2,776.4 2,548.8 2,591.9 2,687.2 2,776.4 2,859.7 2.923.3 2,998.9 3 Treasury securities 2,082.3 2,227.0 2,465.8 2,757.8 2,522.4 2,567.1 2,669.6 2,757.8 2,844.0 2.907.4 2,980.7 4 Agency issues and mortgages 22.6 24.2 32.4 18.6 26.4 24.8 17.6 18.6 15.8 15.9 18.1 5 Private 7,211.4 7,835.9 8,262.6 8,434.5 8,283.5 8,368.3 8,395.3 8,434.5 8,477.0 8,541.5 8,584.8 By instrument 6 Debt capital instruments 5,119.0 5,577.9 5,936.0 6,190.6 5.997.7 6,087.5 6.138.4 6,190.6 6,256.9 6,319.4 6,373.9 7 Tax-exempt obligations 939.4 1.004.4 1.055.6 1,101.4 1,061.5 1,072.5 1,089.3 1,101.4 1,111.5 1,128.6 1.145.6 8 Corporate bonds 852.2 926.1 973.2 1.052.0 992.3 1.016.5 1,036.9 1.052.0 1,071.0 1.090.4 1.105.7 9 Mortgages 3,327.3 3.647.5 3,907.3 4,037.3 3.943.8 3.998.6 4,012.2 4,037.3 4.074.4 4.100.5 4,122.6 10 Home mortgages 2,257.5 2,515.1 2,760.0 2.902.1 2.788.9 2,836.9 2.869.5 2.902.1 2.945.5 2.985.0 3,023.2 11 Multifamily residential 286.7 304.4 305.8 303.8 307.3 310.4 303.1 303.8 303.5 295.6 292.9 12 Commercial 696.4 742.6 757.6 748.2 763.7 767.4 756.5 748.2 742.6 736.4 722.7 13 Farm 86.8 85.3 84.0 83.2 83.9 83.8 83.1 83.2 82.9 83.6 83.8 14 Other debt instruments 2,092.5 2,258.0 2.326.7 2,243.9 2,285.8 2,280.8 2,256.9 2,243.9 2,220.0 2.222.1 2,210.9 15 Consumer credit 742.1 791.8 809.3 796.7 785.3 786.7 785.9 796.7 775.7 775.8 781.1 16 Bank loans n.e.c 710.6 760.7 758.0 724.6 748.3 742.0 734.1 724.6 712.5 709.4 699.6 17 Open market paper 85.7 107.1 116.9 98.5 120.8 119.4 107.0 98.5 110.3 111.7 108.3 18 Other 554.1 598.4 642.6 624.1 631.5 632.6 629.8 624.1 621.6 625.1 621.9 By borrowing sector 19 State and local government 752.5 815.7 864.0 902.5 870.1 878.5 891.4 902.5 911.3 925.9 942.3 20 Household 3,177.3 3.508.2 3,780.6 3,938.6 3,788.3 3,848.3 3,888.7 3,938.6 3.960.8 4,009.9 4,051.6 21 Nonfinancial business 3,281.6 3,512.0 3,618.0 3,593.3 3.625.2 3,641.5 3,615.3 3,593.3 3.604.9 3,605.8 3,590.9 22 Farm 137.6 139.2 140.5 138.8 136.8 139.6 140.4 138.8 136.3 140.2 141.7 23 Nonfarm noncorporate 1,127.1 1,177.5 1,204.2 1,180.6 1,207.1 1,210.8 1,191.0 1,180.6 1,174.9 1,160.0 1,144.0 24 Corporate 2,016.9 2.195.3 2,273.4 2,273.9 2.281.3 2,291.1 2,283.9 2,273.9 2,293.7 2,305.6 2,305.2 25 Foreign credit market debt held in United States 244.6 254.8 278.6 292.7 291.3 277.6 282.2 292.7 282.4 298.5 307.0 26 Bonds 83.1 88.0 109.4 124.2 112.1 114.8 118.6 124.2 125.4 131.1 137.0 27 Bank loans n.e.c 21.5 21.4 18.5 21.6 20.5 19.7 20.0 21.6 22.0 25.5 26.4 28 Open market paper 49.9 63.0 75.3 81.8 87.0 74.0 78.0 81.8 70.5 77.5 80.7 29 U.S. government loans 90.1 82.4 75.4 65.2 71.6 69.1 65.6 65.2 64.4 64.4 63.1 30 Total credit market debt owed by nonfinancial sectors, domestic and foreign 9,560.9 10,341.9 11,039.4 11,503.6 11,123.6 11,237.9 11,364.7 11,503.6 11,619.1 11,763.3 11,890.7 Financial sectors 31 Total credit market debt owed by financial sectors 2,082.9 2,333.0 2,524.2 2,667.8 2,546.3 2,571.4 2,608.2 2,667.8 2,686.9 2,739.9 2,802.6 By instrument 32 U.S. government-related 1,098.4 1,249.3 1,418.4 1,566.2 1,452.1 1,482.8 1,524.4 1,566.2 1,592.9 1,641.6 1,682.2 33 Sponsored credit-agency securities 348.1 373.3 393.7 402.9 397.0 389.6 394.7 402.9 405.7 417.8 433.4 34 Mortgage pool securities 745.3 871.0 1,019.9 1,158.5 1,050.3 1,088.4 1,124.8 1,158.5 1,182.4 1,219.0 1,244.0 35 Loans from U.S. government 5.0 5.0 4.9 4.8 4.9 4.9 4.9 4.8 4.8 4.8 4.8 36 Private 984.6 1,083.7 1,105.8 1,101.6 1,094.1 1,088.6 1,083.9 1,101.6 1,094.0 1,098.3 1,120.4 37 Corporate bonds 415.1 491.9 528.2 590.2 545.4 562.2 569.5 590.2 578.2 583.2 597.0 38 Mortgages 3.4 3.4 4.2 4.8 4.2 4.5 4.4 4.8 5.0 5.0 5.1 39 Bank loans n.e.c 35.6 37.5 38.6 41.8 36.5 37.0 39.0 41.8 41.6 43.7 44.5 40 Open market paper 377.7 409.1 417.7 385.7 400.9 390.1 387.0 385.7 392.9 389.5 393.7 41 Loans from Federal Home Loan Banks.., 152.8 141.8 117.1 79.1 107.0 94.7 83.9 79.1 76.3 76.9 80.2 By borrowing sector 42 Sponsored credit agencies 353.1 378.3 398.5 407.7 401.8 394.4 399.5 407.7 410.5 422.6 438.2 43 Mortgage pools 745.3 871.0 1,019.9 1,158.5 1,050.3 1,088.4 1,124.8 1,158.5 1,182.4 1,219.0 1,244.0 44 Private financial sectors 984.6 1,083.7 1.105.8 1,101.6 1,094.1 1,088.6 1,083.9 1,101.6 1,094.0 1,098.3 1,120.4 45 Commercial banks 78.8 77.4 76.3 63.0 68.1 65.9 64.6 63.0 60.8 61.7 63.3 46 Bank affiliates 136.2 142.5 114.8 112.3 114.4 113.3 110.6 112.3 115.0 112.7 112.3 47 Savings and loan associations 159.3 145.2 115.3 75.9 104.2 91.0 79.0 75.9 71.2 70.3 71.0 48 Mutual savings banks 18.6 17.2 16.7 13.2 16.4 16.6 15.2 13.2 13.5 14.3 16.2 49 Finance companies 444.6 504.2 539.8 557.9 539.6 540.4 543.7 557.9 547.1 541.8 550.8 50 Real estate investment trusts (REITs) 11.4 10.1 10.6 11.4 10.8 11.0 11.0 11.4 12.7 13.2 13.2 51 Securitized credit obligation (SCO) issuers 135.7 187.1 232.3 268.0 240.6 250.3 259.9 268.0 273.6 284.4 293.7 All sectors 52 Total credit market debt, domestic and foreign.. 11,643.9 12,674.9 13,563.6 14,171.3 13,669.9 13,809.2 13,973.0 14,171.3 14,306.0 14,503.3 14,693.3 53 U.S. government securities 3,198.3 3,495.6 3,911.7 4,337.7 3,996.1 4,069.8 4,206.7 4,337.7 4,447.8 4,560.1 4,676.2 54 State and local obligations 939.4 1,004.4 1,055.6 1,101.4 1,061.5 1,072.5 1,089.3 1,101.4 1,111.5 1,128.6 1,145.6 55 Corporate and foreign bonds 1,350.4 1,506.0 1,610.7 1,766.4 1,649.9 1,693.5 1,725.0 1,766.4 1,774.6 1,804.7 1,839.7 56 Mortgages 3,330.7 3,650.9 3,911.5 4,042.1 3,948.1 4,003.1 4,016.7 4,042.1 4,079.4 4,105.5 4,127.6 57 Consumer credit 742.1 791.8 809.3 796.7 785.3 786.7 785.9 796.7 775.7 775.8 781.1 58 Bank loans n.e.c 767.7 819.6 815.1 788.0 805.3 798.7 793.2 788.0 776.1 778.7 770.4 59 Open market paper 513.4 579.2 609.9 565.9 608.8 583.6 572.0 565.9 573.7 578.7 582.6 60 Other loans 801.9 827.5 839.9 773.2 814.9 801.4 784.2 773.2 767.1 771.2 770.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1991 1992 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11998888 11998899 11999900 11999911 Q1 Q2 Q3 Q4 Qlr Q2" Q3 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 11,643.9 12,674.9 13,563.6 14,171.3r 13,669.9 13,809.2" 13,973.0 14,171.3" 14,306.0 14,503.3 14,693.3 2 Private domestic nonfinancial sectors 2,185.5 2,440.5 2,644.2 2,490.8r 2,634.3" 2,653.8 2,648.2 2,490.8" 2,4%. 1 2,487.1 2,456.8 3 Households 1,485.1 1,710.1 1,882.3 1,693.6" 1,875.4" 1,882.1/ 1,875.5" 1,693.6" 1,716.6 1,690.9 1,665.7 4 Nonfarm noncorporate business 57.2 56.4 55.0 53. r 53.8" 53.3" 52.9 53.1" 51.9 51.3 50.8 5 Nonfinancial corporate business 167.4 180.3 186.9 207.9" 174.5" 189.7" 189.9" 207.9" 1%.2 210.7 211.0 6 State and local governments 475.8 493.7 519.9 536.2 530.6 528.8 530.0 536.2 531.4 534.2 529.4 7 U.S. government 213.2 205.1 238.7 246.2 245.5 252.9 252.0 246.2 250.2 245.2 237.8 8 Foreign 653.2 734.2 792.4 837.2" 797.1 810.0 819.3 837.2" 859.3 894.9 909.5 9 Financial sectors 8,592.0 9,295.1 9,888.3 10,597.2" 9,992.9" 10,092.6" 10,253.3 10,597.2" 10,700.4 10,876.1 11,089.1 10 Sponsored credit agencies 367.7 367.2 383.6 397.7 388.5 382.7 389.5 397.7 419.9 429.0 445.6 11 Mortgage pools 745.3 871.0 1,019.9 1,158.5 1,050.3 1,088.4 1,124.8 1,158.5 1,182.4 1,219.0 1,244.0 12 Monetary authority 240.6 233.3 241.4 272.5 247.3 253.7 264.7 272.5 271.8 282.6 285.2 13 Commercial banking 2,476.3 2,643.9 2,769.3 2,853.3 2,780.2 2,796.6 2,817.8 2,853.3 2,860.6 2,882.9 2,908.9 14 U.S. commercial banks 2,231.9 2,368.4 2,463.6 2,502.5 2,470.8 2,480.0 2,488.7 2,502.5 2,514.0 2,521.9 2,550.0 15 Foreign banking offices 215.6 242.3 270.8 319.2 275.6 284.4 297.5 319.2 313.3 328.2 326.6 16 Bank affiliates 13.4 16.2 13.4 11.9 12.3 11.3 11.6 11.9 13.6 13.1 12.5 17 Banks in U.S. possession 15.4 17.1 21.6 19.7 21.6 20.9 20.0 19.7 19.7 19.7 19.8 18 Private nonbank finance 4,762.1 5,179.7 5,474.1 5,915.1" 5,526./ 5,571.2" 5,656.5 5,915.1" 5,965.8 6,062.6 6,205.3 19 Thrift institutions 1,572.0 1,484.9 1,335.5 1,190.6 1,287.8 1,248.4 1,205.1 1,190.6 1,161.8 1,143.0 1,137.5 20 Savings and loan associations 1,184.2 1,088.9 945.1 804.2 901.3 866.3 826.1 804.2 771.1 748.8 743.2 21 Mutual savings banks 240.6 241.1 227.1 211.5 224.1 216.4 208.7 211.5 213.4 211.6 207.2 22 Credit unions 147.2 154.9 163.4 174.9 162.3 165.7 170.2 174.9 177.2 182.6 187.1 23 Insurance 1,932.6 2,140.3 2,329.1 2,723.8" 2,392.0 2,448.8 2,511.7 2,723.8" 2,750.5 2,801.0 2,856.2 24 Life insurance companies 920.0 1,013.1 1,116.5 1,199.6 1,148.5 1,183.7 1,201.4 1,199.6 1,224.3 1,249.8 1,273.5 25 Other insurance companies 287.9 317.5 344.0 378.7 352.2 361.4 370.7 378.7 387.0 392.5 393.1 26 Private pension funds 358.5 394.7 431.3 671.1" 441.8 442.0 469.6 671.1" 657.6 670.5 692.7 27 State and local government retirement funds. 366.2 414.9 437.4 474.3 449.5 461.7 470.1 474.3 481.6 488.2 4%.9 28 Finance n.e.c 1,257.5 1,554.5 1,809.4 2,000.7 1,846.9" 1,874.0" 1,939.7 2,000.7 2,053.6 2,118.6 2,211.6 29 Finance companies 559.2 617.1 658.7 645.6 649.4 651.7 647.4 645.6 641.0 641.6 642.5 30 Mutual funds 283.4 307.2 360.2 450.5 374.6 394.4 421.4 450.5 480.3 520.4 561.2 31 Money market funds 224.7 291.8 372.7 402.8 411.4 389.9 389.5 402.8 423.1 413.5 408.8 32 Real estate investment trusts (REITs) 7.8 8.4 7.7 7.0 7.3" 7.3" 7.2 7.0 6.8 7.5 8.1 33 Brokers and dealers 46.7 142.9 177.9 226.9 163.6 180.4 214.3 226.9 228.8 251.2 297.3 34 Securitized credit obligation (SCOs) issuers . 135.7 187.1 232.3 268.0 240.6 250.3 259.9 268.0 273.6 284.4 293.7 RELATION OF LIABILITIES TO FINANCIAL ASSETS 35 Total credit market debt 11,643.9 12,674.9 13,563.6 14,171.3" 13,669.9 13,809.2" 13,973.0 14,171.3" 14,306.0 14,503.3 14,693.3 Other liabilities 36 Official foreign exchange 27.1 53.6 61.3 55.4 56.6 53.6 52.9 55.4 52.7 54.4 55.4 37 Treasury currency and special drawing rights certificates 19.8 23.8 26.3 26.3 26.0 26.1 26.2 26.3 26.3 26.4 26.5 38 Life insurance reserves 325.5 354.3 380.0 402.0 385.0 392.3 397.2 402.0 407.3 414.9 419.8 39 Pension fund reserves 2,755.0 3,210.5 3,303.0 4,235.9" 3,520.6 3,555.8 3,720.8 4,235.9" 4,251.2 4,304.4 4,439.7 40 Interbank claims 46.9 32.4 64.0 63.9" 59.2" 35.8" 60.7" 63.9" 64.2 69.2 100.6 41 Deposits at financial institutions 4,354.7 4,644.6 4,741.4 4,802.5" 4,776.4 4,765.7 4,769.5 4,802.5" 4,801.4 4,797.5 4,841.7 42 Checkable deposits and currency 882.8 888.6 932.8 1,008.5 905.1 933.1 948.3 1,008.5 984.7 1,032.8 1,071.9 43 Small time and savings deposits 2,169.2 2,265.4 2,325.3 2,342.0 2,355.3 2,351.5 2,339.7 2,342.0 2,341.3 2,315.3 2,2%.4 44 Large time deposits 596.9 615.4 548.7 487.9 553.1 532.6 517.1 487.9 468.8 437.5 425.5 45 Money market fund shares 338.0 428.1 498.4 539.6 551.7 532.8 533.1 539.6 571.0 557.2 553.2 46 Security repurchase agreements 325.0 403.2 379.7 363.4 348.6 354.0 368.9 363.4 376.4 406.8 445.7 47 Foreign deposits 42.8 43.9 56.6 61.2" 62.6 61.7 62.4 61.2" 59.1 47.9 48.9 48 Mutual fund shares 478.3 566.2 602.1 812.4 661.6 683.7 744.2 812.4 859.3 936.7 1,013.4 49 Security credit 118.3 133.9 137.4 188.9 132.5 137.5 158.1 188.9 195.1 194.1 212.4 50 Trade debt 838.4 903.9 938.0 940.8" 903.5" 909.4" 935.3" 940.8" 942.6 949.4 976.2 51 Taxes payable 79.8 81.8 81.4 72.2 75.1 65.8 71.8 72.2 73.5 70.1 72.2 52 Miscellaneous 2,312.0 2,508.3 2,678.8 2,813.7" 2,688.6" 2,691.0" 2,729.0" 2,813.7" 2,816.2 2,870.5 2,929.0 53 Total liabilities 22,999.5 25,188.3 26,577.2 28,585.4" 26,954.9" 27,125.9" 27,638.6" 28,585.4" 28,795.8 29,190.9 29,780.2 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 40.0 40.3 41.3 41.6 40.7 40.7 41.1 41.6 41.3 41.5 23.2 55 Corporate equities 3,141.6 3,819.7 3,506.6 4,630.0 4,047.2 4,104.7 4,338.5 4,630.0 4,739.7 4,678.8 4,832.4 56 Household equity in noncorporate business 2,373.1 2,524.9 2,449.4 2,372.5" 2,478.4 2,509.4" 2,495.9" 2,372.5" 2,381.4 2,362.6 2,335.6 Floats not included in assets (-) 57 U.S. government checking deposits 5.9 6.1 15.0 3.8" 5.2 8.3 19.8 3.8" .9 1.4 4.1 58 Other checkable deposits 29.6 26.5 28.9 30.9 26.7 29.9 23.6 30.9 22.0 20.1 8.3 59 Trade credit -164.3 -159.7 -148.0 -134.1" -157.9" -157.7" -154.2" -134.1" -133.3 -148.6 -154.3 Liabilities not identified as assets (-) 60 Treasury currency -4.1 -4.3 -4.1 -4.8 -4.6 -4.7 -4.7 -4.8 -4.9 -4.9 -5.0 61 Interbank claims -28.5 -31.0 -32.0 -4.2 -15.5 -9.9 -4.7 -4.2 -1.8 -4.0 -7.4 62 Security repurchase agreements -12.4 11.5 -23.3 -12.9" -39.6 -25.8 -10.6 -12.9" -10.1 11.0 32.9 63 Taxes payable 21.4 20.6 21.8 18.8 21.4 11.7 17.5 18.8 16.6 12.4 9.4 64 Miscellaneous -134.6 -253.3 -249.7 -451.6" -262.4" -244.5" -303.2" -451.6" -441.1 -441.2 -467.8 65 Totals identified to sectors as assets 28,841.1 31,956.8 32,966.0 36,183.5" 33,947.9" 34,173.4" 34,930.5" 36,183.5" 36,510.0 36,827.5 37,551.1 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical 2. Excludes corporate equities and mutual fund shares, release, tables L.6 through L.7. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • February 1993 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, 1987= 100 except as noted 1992 MMeeaassuurree 11998899 11999900 11999911 Mar. Apr. May June July Aug." Sept." Oct." Nov. 1 Industrial production1 108.1 109.2 107.1 107.6 108.1 108.9 108.5 109.4 109.1 108.8 109.3 109.7 Market groupings 2 Products, total 108.6 110.1 108.1 108.5 109.0 109.7 109.0 109.6 109.8 109.3 110.1 110.4 3 Final, total 109.1 110.9 109.6 109.8 110.6 111.4 110.5 111.0 111.5 111.0 111.9 112.2 4 Consumer goods 106.7 107.3 107.5 109.3 110.1 110.8 109.6 110.4 110.8 110.3 111.0 111.3 5 Equipment 112.3 115.5 112.2 110.4 111.3 112.3 111.6 111.8 112.5 111.9 112.9 113.4 6 Intermediate 106.8 107.7 103.4 104.4 103.9 104.4 104.4 105.1 104.4 104.0 104.5 104.8 7 Materials 107.4 107.8 105.5 106.1 106.8 107.7 107.6 109.0 108.1 108.0 108.1 108.6 Industry groupings 8 Manufacturing 108.9 109.9 107.4 108.5 109.0 109.9 109.6 110.2 110.1 109.7 110.3 110.8 9 Capacity utilization, manufacturing (percent)2 83.9 82.3 78.2 77.5 77.7 78.2 77.8 78.1 77.9 77.4 77.7 77.9 10 Construction contracts3 105.2 95.3 89.6r 96.0 93.0 86.0 90.0 89.0 90.0 89.0 104.0 n.a. 11 Nonagricultural employment, total4 106.0 107.5 106.0 105.9 106.0 106.2 106.1 106.3 106.2 106.2 106.2 106.3 12 Goods-producing, total 102.5 101.0 96.4 95.2 95.2 95.3 95.0 94.9 94.6 94.3 94.1 94.2 13 Manufacturing, total 102.2 100.5 97.0 96.1 96.1 96.1 95.9 95.9 95.4 95.2 94.8 95.0 14 Manufacturing, production worker 102.3 100.1 96.1 95.7 95.7 95.7 95.4 95.5 94.9 94.6 94.3 94.6 15 Service-producing 107.1 109.5 109.0" 109.3 109.5 109.6 109.6 109.9 109.9 110.0 110.0 110.2 16 Personal income, total 115.2 122.7 127.0 131.8 131.9 132.4 132.5 132.7" 132.9 133.6 134.9 17 Wages and salary disbursements 114.4 121.3 124.4 128.0 127.8 128.6 128.5 128.6" 129.4 129.2 130.1 18 Manufacturing 110.6 113.5 113.6 114.6 115.0 115.5 115.1 115.3 115.0 115.0 116.0 n.a. 19 Disposable personal income 115.1 122.9 128.0 133.8 133.8 134.2 134.4 134.4" 134.5 135.2 136.6 n.a. 20 Retail sales6 113.5 118.7 119.8 123.1 123.5 124.1 124.0 125.4 125.5 126.5 128.8 129.3 Prices7 21 Consumer (1982-84= 100) 124.0 130.7 136.2 139.3 139.5 139.7 140.2 140.5 140.9 141.3 141.8 142.0 22 Producer finished goods (1982=100) 113.6 119.2 121.7 122.2 122.4 123.2 123.9 123.7 123.5 123.3 124.3 123.9 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 NOTE. Basic data (not indexes) for series mentioned in notes 4, 5,and 6, and Federal Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other indexes for series mentioned in notes 3 and 7 can also be found in the Survey of sources. Current Business. 3. Index of dollar value of total construction contracts, including residential, Figures for industrial production for the latest month are preliminary, and many nonresidential, and heavy engineering, from McGraw-Hill Information Systems figures for the three months preceding the latest month have been revised. See Co., F.W. Dodge Division. "Recent Developments in Industrial Capacity and Utilization," Federal Reserve 4. Based on data from U.S. Department of Labor, Employment and Earnings. Bulletin, vol. 76 (June 1990), pp. 411-35. Series covers employees only, excluding personnel in the armed forces. 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 1992 CCaatteeggoorryy 11998899 11999900 11999911 Apr. May June July Aug. Sept.r Oct/ Nov. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 188,601 190,216 191,883 193,168 193,295 193,431 193,588 193,749 193,893 194,051 194,210 2 Labor force (including Armed Forces)1 126,077 126,954 127,421 128,830 129,148 129,525 129,498 129,3% 129,219 128,879 129,132 3 Civilian labor force 123,869 112244,,778877 125,303 126,830 112277,,116600 127,549 112277,,553322 112277,,443377 112277,,227733 126,959 112277,,223388 Employment 4 Nonagncultural industries 114,142 114,728 114,644 114,465 114,478 114,322 114,568 114,519 114,459 114,465 114,834 5 Agriculture 3,199 3,186 3,233 3,209 3,178 3,252 33,,220044 33,,221188 3,242 3,160 3,211 Unemployment 6 Number 6,528 6,874 8,426 9,155 9,504 9,975 9,760 9,700 9,572 9,334 9,193 7 Rate (percent of civilian labor force) 5.3 5.5 6.7 7.2 7.5 7.8 7.7 7.6 7.5 7.4 7.2 8 Not in labor force 62,524 63,262 64,462 64,338 64,147 63,906 64,090 64,353 64,674 65,172 65,078 ESTABLISHMENT SURVEY DATA 9 Nonagncultural payroll employment3 108,329 109,872 108,310 108,377 108,496 108,423 108,594 108,485 108,497 108,531 108,636 10 Manufacturing 19,442 19,117 18,455 18,279 18,275 18,236 18,242 18,145 18,102 18,037 18,072 11 Mining 693 710 691 646 641 634 633 626 620 622 622 12 Contract construction 5,187 5,133 4,685 4,605 4,632 4,600 4,584 4,591 4,574 4,598 4,587 13 Transportation and public utilities 5,644 5,808 5,772 5,746 5,745 5,745 5,742 5,729 5,738 5,730 5,735 14 Trade 25,770 25,877 25,328 25,170 25,143 25,144 25,156 25,070 25,079 25,104 25,060 15 Finance 6,695 6,729 6,678 6,682 6,681 6,672 6,660 6,661 6,669 6,680 6,676 16 Service 27,120 28,130 28,323 28,707 28,833 28,854 28,971 28,981 29,065 29,142 29,206 17 Government 17,779 18,304 18,380 18,542 18,546 18,538 18,606 18,682 18,650 18,618 18,678 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 • February 1993 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1991 1992 1991 1992 1991 1992 Q4 Ql Q2 Q3r Q4 Ql Q2 Q3 Q4 Ql Q2 Q3r Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent) 1 Total industry 107.9 107.1 108.5 109.1 136.2 137.0 137.7 138.4 79.3 78.2 78.8 78.8 2 Manufacturing 108.6 108.0 109.5 110.0 138.9 139.7 140.6 141.4 78.2 77.3 77.9 77.8 3 Primary processing 104.1 104.0 105.4 106.4 128.8 129.3 129.6 129.9 80.8 80.5 81.3 81.9 4 Advanced processing 110.7 109.9 111.4 111.7 143.5 144.6 145.6 146.7 77.1 76.0 76.5 76.2 5 Durable goods 107.7 106.6 108.4 108.8 142.8 143.7 144.4 145.2 75.4 74.2 75.0 74.9 6 Lumber and products 95.1 98.5 96.7 98.3 125.7 125.9 126.1 126.3 75.7 78.2 76.7 77.9 7 Primary metals 102.5 102.2 101.7 104.0 129.3 129.1 128.3 127.5 79.2 79.2 79.2 81.5 8 Iron and steel 103.2 103.8 101.6 104.6 134.5 134.1 132.7 131.2 76.7 77.4 76.6 79.7 9 Nonferrous 101.4 100.0 101.7 103.1 121.9 122.1 122.2 122.3 83.2 81.9 83.3 84.3 10 Nonelectrical machinery 122.7 122.1 125.7 128.8 162.8 164.3 165.9 167.4 75.4 74.3 75.8 76.9 11 Electrical machinery 110.4 110.5 111.8 112.5 146.6 147.9 149.1 150.4 75.3 74.7 75.0 74.8 12 Motor vehicles and parts 97.0 91.7 100.5 98.1 135.6 136.2 136.7 137.2 71.5 6677..33 73.5 7711..55 13 Aerospace and miscellaneous transportation equipment 102.8 99.3 96.8 94.9 139.6 140.4 140.9 141.5 73.7 70.8 68.7 67.1 14 Nondurable goods 109.7 109.8 110.9 111.5 133.8 134.8 135.6 136.5 82.0 81.5 81.7 81.7 15 Textile mill products 104.1 104.3 106.2 106.4 118.3 118.8 119.2 119.7 88.0 87.9 89.0 88.9 16 Paper and products 107.4 105.8 106.7 108.2 118.7 119.3 119.9 120.5 90.5 88.7 89.0 89.8 17 Chemicals and products 113.0 113.6 116.8 117.9 142.3 143.4 144.3 145.1 79.4 79.2 81.0 81.2 18 Plastics materials 126.2 124.4 129.7 132.4 146.1 148.7 150.5 152.2 86.4 83.7 86.2 87.0 19 Petroleum products 107.1 107.7 109.2 106.9 121.4 121.4 121.5 121.6 88.2 88.7 89.9 87.9 20 Mining 99.7 97.9 98.9 99.4 114.7 114.7 114.7 114.8 87.0 85.3 86.2 86.6 21 Utilities 109.4 107.0 107.4 109.0 129.2 129.5 129.8 130.1 84.7 82.6 82.7 83.8 22 Electric 111.6 109.7 110.3 112.7 125.2 125.6 126.0 126.4 89.1 87.3 87.6 89.2 Previous cycle2 Latest cycle3 1991 1992 High Low High Low Nov. Apr. May June July Aug.r Sept.r Oct/ NOV.P Capacity utilization rate (percent) 1 Total industry 89.2 72.6 87.3 71.8 79.3 78.7 79.1 78.6 79.1 78.8 78.5 78.7 78.9 2 Manufacturing 88.9 70.8 87.3 70.0 78.2 77.7 78.2 77.8 78.1 77.9 77.4 77.7 77.9 3 Primary processing 92.2 68.9 89.7 66.8 80.8 81.1 81.5 81.4 82.7 81.7 81.3 81.6 82.4 4 Advanced processing 87.5 72.0 86.3 71.4 77.1 76.3 76.8 76.3 76.2 76.3 75.9 76.2 76.2 5 Durable goods 88.8 68.5 86.9 65.0 75.5 74.6 75.5 75.0 75.2 75.2 74.4 75.0 75.2 6 Lumber and products 90.1 62.2 87.6 60.9 76.7 77.1 77.2 75.6 79.1 78.3 76.2 77.7 80.0 7 Primary metals 100.6 66.2 102.4 46.8 80.0 78.5 79.5 79.7 82.6 81.8 80.2 82.4 82.7 8 Iron and steel 105.8 66.6 110.4 38.3 78.5 75.8 77.0 77.0 80.8 79.5 78.8 82.2 82.9 Y Nonferrous 92.9 61.3 90.5 62.2 82.5 82.6 83.3 83.9 85.4 85.2 82.3 82.8 82.3 10 Nonelectrical machinery 96.4 74.5 92.1 64.9 75.4 75.1 76.4 76.0 76.6 77.3 76.9 77.4 78.0 11 Electrical machinery 87.8 63.8 89.4 71.1 75.5 74.7 75.3 75.0 75.1 75.1 74.2 74.4 74.5 12 Motor vehicles and parts .... 93.4 51.1 93.0 44.5 70.7 72.2 75.1 73.3 71.3 72.5 7700..77 73.7 7744..11 13 Aerospace and miscellaneous transportation equipment. 77.0 66.6 81.1 66.9 73.9 69.2 68.7 68.2 67.7 67.0 66.4 66.1 65.0 14 Nondurable goods 87.9 71.8 87.0 76.9 81.9 81.8 81.8 81.6 82.0 81.6 81.6 81.4 81.7 15 Textile mill products 92.0 60.4 91.7 73.8 88.2 89.3 89.6 88.2 89.6 88.7 88.4 86.7 87.9 16 Paper and products 96.9 69.0 94.2 82.0 89.4 89.3 88.3 89.3 91.1 88.2 90.0 87.9 89.0 17 Chemicals and products 87.9 69.9 85.1 70.1 79.4 80.4 81.1 81.3 81.5 81.1 81.2 8811..33 8811..99 IK Plastics materials 102.0 50.6 90.9 63.4 87.2 85.4 87.3 85.9 89.8 86 0 85 1 19 Petroleum products 96.7 81.1 89.5 68.2 87.9 90.8 89.3 89.6 89.8 85.8 88.3 91.3 91.5 20 94.4 88.4 96.6 80.6 86.8 86.3 86.9 85.4 87.6 86.1 86.1 86.2 86.7 21 Utilities 95.6 82.5 88.3 76.2 85.9 83.4 82.7 82.1 84.1 83.6 83.8 83.3 82.8 22 Electric 99.0 82.7 88.3 78.7 90.0 88.2 87.5 87.0 89.5 89.2 88.7 88.3 87.6 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 GGrroouupp 1991 por- avg. tion Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug/ Sept/ Oct/ Nov." Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 107.1 108.1 107.4 106.6 107.2 107.6 108.1 108.9 108.5 109.4 109.1 108.8 109.3 109.7 2 Products 60.8 108.1 109.0 108.4 107.5 108.1 108.5 109.0 109.7 109.0 109.6 109.8 109.3 110.1 110.4 3 Final products 46.0 109.6 110.6 109.9 108.7 109.4 109.8 110.6 111.4 110.5 111.0 111.5 111.0 111.9 112.2 4 Consumer goods, total 26.0 107.5 110.0 109.1 108.1 108.8 109.3 110.1 110.8 109.6 110.4 110.8 110.3 111.0 111.3 5 Durable consumer goods 5.6 102.3 106.0 104.6 101.3 105.3 106.2 107.9 111.1 109.2 108.6 109.2 106.9 108.6 108.9 6 Automotive products 2.5 97.8 103.6 101.3 94.2 101.6 103.6 106.5 110.6 108.0 106.6 106.8 104.5 108.9 109.2 7 Autos and trucks 1.5 90.2 99.0 96.7 84.3 94.3 95.7 102.5 107.8 104.0 100.5 100.6 98.2 105.9 107.2 8 Autos, consumer .9 84.6 89.8 88.2 79.1 84.8 81.9 93.1 98.6 97.6 92.3 87.2 88.1 88.5 89.4 9 Trucks, consumer .6 99.6 114.5 111.0 93.0 110.2 118.8 118.3 123.3 114.8 114.3 123.1 115.1 135.1 137.1 10 Auto parts and allied goods... 1.0 109.3 110.5 108.2 109.1 112.6 115.5 112.5 114.8 114.0 115.7 116.2 114.1 113.4 112.1 11 Other 3.1 105.8 108.0 107.2 106.9 108.3 108.3 109.1 111.5 110.2 110.3 111.1 108.7 108.3 108.7 12 Appliances, A/C, and TV .8 99.5 102.3 98.9 99.6 102.9 103.5 103.4 107.4 106.2 102.3 110.6 108.3 103.8 103.5 13 Carpeting and furniture .9 99.4 101.6 101.5 101.1 102.4 102.5 104.4 105.9 103.2 103.8 103.6 99.9 100.9 102.2 14 Miscellaneous home goods ... 1.4 113.4 115.2 115.5 114.7 115.0 114.7 115.2 117.3 116.9 118.8 116.1 114.6 115.5 115.8 15 Nondurable consumer goods 20.4 109.0 111.1 110.3 110.0 109.8 110.2 110.7 110.7 109.7 110.8 111.2 111.3 111.7 112.0 16 Foods and tobacco 9.1 106.7 108.1 107.0 107.3 107.4 107.8 107.6 107.7 107.2 108.6 110.1 108.7 109.4 109.6 17 Clothing 2.6 93.5 96.5 96.2 95.0 95.2 95.1 95.3 96.4 95.5 96.8 95.0 95.4 94.2 94.9 18 Chemical products 3.5 115.8 117.9 118.0 118.1 118.3 119.4 120.8 121.4 121.6 121.5 122.0 123.8 124.8 126.2 19 Paper products 2.5 123.6 126.4 126.8 126.8 124.7 124.6 125.1 124.3 121.7 121.9 121.8 124.3 124.1 123.5 20 Energy 2.7 108.5 112.0 109.3 106.8 106.4 107.0 108.9 107.2 104.8 107.4 106.2 106.3 107.2 106.8 21 Fuels .7 103.5 103.6 104.3 103.8 103.5 103.7 105.1 104.0 104.4 105.3 99.0 103.5 108.4 107.9 22 Residential utilities 2.0 110.4 115.1 111.2 108.0 107.5 108.2 110.3 108.4 105.0 108.2 108.9 107.3 106.8 106.4 23 Equipment 20.0 112.2 111.4 110.9 109.4 110.2 110.4 111.3 112.3 111.6 111.8 112.5 111.9 112.9 113.4 24 Business equipment 13.9 121.5 121.8 121.4 119.9 121.0 121.5 123.0 124.5 124.1 124.4 125.9 125.3 126.7 127.4 25 Information processing and related .. 5.6 131.5 133.4 134.0 134.1 134.6 136.0 137.9 139.2 140.4 141.9 143.5 143.4 145.8 147.1 26 Office and computing 1.9 155.5 157.8 159.1 160.6 162.4 164.9 168.2 170.5 174.0 178.0 182.0 184.0 187.0 190.0 27 Industrial 4.0 108.0 104.2 102.3 100.7 101.3 101.3 101.7 103.4 102.9 103.4 102.7 101.9 102.2 102.9 28 Transit 2.5 126.8 130.5 129.5 124.2 129.2 128.9 131.7 133.3 131.8 128.7 132.6 130.3 132.2 131.5 29 Autos and trucks 1.2 88.6 96.5 96.1 84.9 94.7 95.0 101.3 105.6 101.7 98.1 101.3 99.1 105.6 107.7 30 Other 1.9 113.6 113.8 114.1 113.1 112.2 112.2 113.2 115.0 111.5 112.2 114.4 115.6 115.5 116.4 31 Defense and space equipment 5.4 91.1 88.8 88.1 86.7 86.2 85.6 84.7 84.2 83.6 82.7 81.8 81.0 80.5 79.7 32 Oil and gas well drilling .6 93.3 78.1 75.8 71.8 73.9 76.2 79.2 79.2 74.6 78.6 75.0 74.4 80.2 85.2 33 Manufactured homes .2 85.5 87.0 87.9 98.4 99.7 98.7 100.7 100.3 97.1 112.0 106.1 111.2 119.9 123.5 34 Intermediate products, total 14.7 103.4 103.9 103.8 103.9 104.0 104.4 103.9 104.4 104.4 105.1 104.4 104.0 104.5 104.8 35 Construction supplies 6.0 96.0 95.9 95.0 95.5 96.0 96.7 96.5 97.8 97.2 98.6 98.5 96.8 97.8 98.4 36 Business supplies 8.7 108.4 109.4 110.0 109.9 109.6 109.7 109.0 109.0 109.4 109.7 108.5 109.0 109.1 109.2 37 Materials 39.2 105.5 106.6 105.8 105.2 105.8 106.1 106.8 107.7 107.6 109.0 108.1 108.0 108.1 108.6 38 Durable goods materials 19.4 107.1 108.6 108.1 107.0 108.1 108.3 108.7 110.4 110.2 111.2 111.1 110.1 110.9 111.3 39 Durable consumer parts 4.2 96.4 100.5 97.0 95.3 97.1 97.9 99.3 102.5 102.9 101.8 103.9 102.2 102.7 103.1 40 Equipment parts 7.3 114.4 113.7 114.2 114.1 115.2 115.1 114.7 116.2 116.2 117.5 117.0 116.3 117.1 117.3 41 Other 7.9 106.0 108.3 108.4 106.7 107.5 107.5 108.1 109.2 108.7 110.2 109.5 108.5 109.6 110.1 42 Basic metal materials 2.8 106.0 108.1 108.1 105.1 107.3 106.3 106.3 108.3 107.7 111.5 110.9 108.8 110.0 110.1 43 Nondurable goods materials 9.0 105.9 107.7 107.1 107.3 107.1 108.9 109.4 109.7 110.4 111.7 110.3 110.5 110.1 111.8 44 Textile materials 1.2 97.0 99.9 98.5 98.9 101.5 102.0 103.2 102.9 102.3 103.9 102.9 103.9 102.5 105.4 45 Pulp and paper materials 1.9 106.9 108.6 109.6 107.4 106.8 107.8 109.2 107.8 110.8 111.8 108.9 112.7 109.6 112.0 46 Chemical materials 3.8 106.1 108.3 107.0 107.6 106.6 109.3 109.9 111.2 110.9 113.4 111.9 110.9 111.9 112.5 47 Other 2.1 109.7 110.1 109.7 111.2 111.2 112.7 112.2 112.4 113.4 112.8 112.6 111.5 111.6 114.0 48 Energy materials 10.9 102.3 102.2 100.4 100.4 100.5 100.1 101.3 101.3 100.6 102.9 100.9 102.2 101.3 101.1 49 Primary energy 7.2 102.4 100.9 100.4 100.5 100.6 98.2 99.8 99.7 99.6 102.3 101.4 100.5 99.6 99.8 50 Converted fuel materials 3.7 102.0 104.5 100.5 100.2 100.4 103.8 104.1 104.3 102.6 104.1 100.0 105.4 104.7 103.7 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.3 107.6 108.3 107.7 107.3 107.6 107.9 108.3 109.0 108.6 109.6 109.3 109.1 109.4 109.8 52 Total excluding motor vehicles and parts ... 95.3 107.9 108.7 108.0 107.6 107.8 108.2 108.6 109.2 108.8 109.9 109.6 109.4 109.7 110.1 53 Total excluding office and computing machines 97.5 105.8 106.8 106.1 105.3 105.8 106.1 106.6 107.4 106.8 107.6 107.3 106.9 107.3 107.7 54 Consumer goods excluding autos and trucks 24.5 108.6 110.7 109.8 109.6 109.7 110.2 110.6 110.9 109.9 111.0 111.4 111.1 111.3 111.6 55 Consumer goods excluding energy 23.3 107.4 109.8 109.1 108.3 109.1 109.6 110.3 111.2 110.1 110.7 111.3 110.8 111.5 111.9 56 Business equipment excluding autos and trucks 12.7 124.8 124.3 123.8 123.3 123.6 124.1 125.2 126.4 126.3 127.0 128.3 127.9 128.8 129.3 57 Business equipment excluding office and computing equipment 12.0 116.0 116.0 115.3 113.3 114.3 114.5 115.7 117.1 116.1 115.8 116.8 115.9 116.9 117.3 58 Materials excluding energy 28.4 106.7 108.3 107.8 107.1 107.8 108.5 108.9 110.2 110.3 111.3 110.8 110.2 110.7 111.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • February 1993 2.13—Continued „ 1987 1991 1992 roup SIC pro- 1991 code por- avg. tion Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug.r Sept.r Oct.r Nov.p Index (1987 = 100) MAJOR INDUSTRIES 1 Total index 100.0 107.1 108.1 107.4 106.6 107.2 107.6 108.1 108.9 108.S 109.4 109.1 108.8 109.3 109.7 2 Manufacturing 84.4 107.4 108.6 108.1 107.4 108.1 108.5 109.0 109.9 109.6 110.2 110.1 109.7 110.3 110.8 3 Primary processing 26.7 102.4 104.1 103.5 103.6 103.9 104.5 105.0 105.6 105.6 107.3 106.2 105.7 106.2 107.3 4 Advanced processing , 57.7 109.8 110.7 110.3 109.2 110.0 110.3 110.8 111.9 111.4 111.6 112.0 111.5 112.2 112.5 5 Durable goods 47.3 107.1 107.8 107.1 105.8 107.0 107.0 107.6 109.1 108.5 109.0 109.2 108.2 109.2 109.7 6 Lumber and products ... "24 2.0 94.2 96.4 95.2 97.4 98.8 99.2 97.2 97.4 95.4 99.8 98.9 96.3 98.2 101.2 7 Furniture and fixtures ... 25 1.4 99.1 99.9 100.6 98.7 98.1 98.6 101.1 103.3 100.3 101.0 101.7 110000..88 110011..44 110022..33 8 Clay, glass, and stone products 32 2.5 94.9 92.8 93.0 92.8 94.6 95.0 95.6 96.7 96.6 97.1 96.4 96.0 96.8 96.9 9 Primary metals 33 3.3 99.5 103.5 101.3 102.5 102.7 101.4 100.9 102.0 102.1 105.6 104.3 102.0 104.7 104.8 10 Iron and steel 331,2 1.9 98.0 105.6 101.7 105.0 103.7 102.5 100.9 102.2 101.8 106.4 104.4 103.0 107.1 107.6 11 Raw steel .1 97.3 99.1 97.6 103.3 102.7 98.8 99.9 98.5 101.5 105.3 101.9 99.8 101.7 103.4 12 Nonferrous 333-6,9 1.4 101.5 100.5 100.8 98.9 101.2 99.9 100.9 101.8 102.5 104.4 104.2 100.6 101.3 100.8 13 Fabricated metal products 34 5.4 100.4 101.8 101.2 99.7 100.5 100.0 100.6 102.2 102.2 102.6 102.5 101.4 102.0 102.9 14 Nonelectrical machinery. 35 8.6 123.5 122.8 121.9 121.4 121.9 122.9 124.1 126.7 126.4 127.8 112299..33 112299..11 113300..44 113311..77 15 Office and computing machines 357 2.5 155.5 157.8 159.1 160.5 162.4 164.9 168.2 170.5 174.0 178.0 182.0 184.0 187.0 190.0 16 Electrical machinery 36 8.6 110.1 110.7 110.6 110.0 110.7 110.9 111.0 112.3 112.2 112.6 113.0 111.9 111122..55 111133..00 17 Transportation equipment 37 9.8 98.6 99.7 98.0 93.8 96.8 96.5 98.0 99.6 98.2 96.7 9977..00 9955..66 9977..44 9966..99 18 Motor vehicles and parts 371 4.7 90.4 95.9 94.6 87.1 93.8 94.2 98.5 102.7 100.4 97.7 99.4 9977..22 110011..44 110022..11 19 Autos and light trucks 2.3 89.4 97.6 95.5 83.5 92.9 93.7 101.1 106.5 103.0 9999..33 9988..66 9966..77 110033..33 110044..66 20 Aerospace and miscellaneous transportation equipment.. 372 -6,9 5.1 106.0 103.1 101.2 99.8 99.6 98.6 97.4 96.8 96.3 95.7 94.9 94.1 93.8 92.3 2211 Instruments 38 3.3 118.2 118.7 119.0 118.3 118.6 118.6 119.0 119.8 118.5 118.5 118.2 117.9 117.8 117.3 22 Miscellaneous 39 1.2 119.3 120.7 121.0 121.2 120.0 120.0 118.9 118.4 117.8 120.4 118.2 118.6 119.1 121.2 23 Nondurable goods 37.2 107.9 109.6 109.5 109.5 109.6 110.4 110.7 110.9 111.0 111.7 111.3 111.6 111.6 112.2 24 Foods 20 8.8 108.6 110.1 109.6 109.2 109.6 110.2 109.6 109.3 109.0 109.8 110.6 110.0 110.9 111.2 25 Tobacco products 21 1.0 99.7 97.7 94.7 98.8 99.4 101.3 101.0 102.5 103.6 106.6 115.9 108.7 107.4 106.8 26 Textile null products 22 1.8 100.5 104.4 102.5 103.1 104.7 105.3 106.3 106.8 105.3 107.1 106.1 105.9 104.1 105.7 27 Apparel products 23 2.4 96.2 98.8 99.0 97.5 97.7 97.8 98.0 99.0 98.1 99.4 97.6 97.6 97.5 97.9 28 Paper and products ., 26 3.6 105.1 106.1 107.0 107.1 104.6 105.8 107.0 105.8 107.3 109.6 106.3 108.6 106.2 107.8 29 Printing and publishing .. 27 6.4 112.3 114.2 114.5 114.8 114.4 113.8 113.7 113.4 113.0 112.3 111.4 113.1 112.6 111.6 30 Chemicals and products . 28 8.6 110.9 113.0 112.6 112.7 113.4 114.8 115.8 117.0 117.5 118.0 117.6 118.1 118.4 119.6 31 Petroleum products 29 1.3 107.5 106.7 108.6 106.6 106.9 109.7 110.3 108.5 108.9 110099..11 110044..33 110077..44 111111..11 111111..44 32 Rubber and plastic products 30 3.0 110.0 112.6 113.0 113.2 114.0 115.4 116.5 117.1 117.3 118.5 119.0 117.6 118.6 119.7 33 Leather and products ... 31 .3 88.1 84.3 83.2 83.0 81.4 82.9 84.1 86.2 86.2 87.1 84.8 85.8 86.1 88.3 34 Mining 7.9 101.1 99.6 98.8 97.8 98.4 97.5 99.1 99.7 98.0 100.6 98.8 98.8 98.9 99.5 35 Metal "10 .3 150.2 151.5 154.0 144.2 152.9 155.8 154.2 166.4 154.0 163.7 165.6 164.6 165.2 165.8 36 Coal 11,12 1.2 109.2 108.4 107.6 107.3 107.9 103.0 104.0 107.6 98.6 112.0 107.5 103.7 102.8 105.0 37 Oil and gas extraction 13 5.7 95.8 94.1 93.0 92.4 92.7 91.9 94.2 93.4 93.9 94.0 92.4 93.3 93.7 94.0 38 Stone and earth minerals .. 14 .7 108.1 105.8 106.4 104.8 103.5 107.4 105.9 108.0 105.6 106.2 106.4 105.5 105.1 105.4 39 Utilities 7.6 109.2 111.0 107.9 106.8 106.4 107.7 108.2 107.3 106.7 109.3 108.8 109.1 108.6 107.9 40 Electric 49i,3PT 6.0 112.8 112.7 109.9 109.3 109.0 110.7 111.0 110.2 109.7 113.0 112.7 112.3 111.8 111.0 41 Gas 492,3PT 1.6 96.0 104.7 100.5 97.5 96.9 96.7 97.7 96.6 95.3 95.4 94.1 97.4 96.6 96.5 SPECIAL AGGREGATES 42 Manufacturing excluding motor vehicles and parts 79.8 108.4 109.3 108.9 108.6 108.9 109.3 109.6 110.3 110.1 110.9 111100..77 111100..44 111100..88 111111..33 43 Manufacturing excluding office and computing machines 82.0 106.0 107.1 106.6 105.8 106.5 106.8 107.2 108.1 107.6 108.2 108.0 107.4 108.0 108.4 Gross value (billions of 1982 dollars, annual rates) MAJOR MARKETS 44 Products, total 1,734.8 1,880.0 1,904.9 1,888.9 1,869.5 1,889.7 1,902.8 1,918.7 1,935.5 1,920.1 1,936.2 1,935.9 1,934.0 1,959.8 1,971.1 45 Final 1,350.9 1,481.8 1,504.1 1,488.0 1,468.7 1,490.8 1,501.5 1,518.2 1,532.1 1,519.1 1,530.4 1,532.8 1,532.7 1,556.8 1,565.8 46 Consumer goods 833.4 879.8 902.2 894.5 877.6 890.2 896.2 905.6 912.4 901.3 909.3 905.3 905.4 921.4 925.2 47 Equipment 517.5 602.0 601.8 593.5 591.1 600.6 605.3 612.7 619.7 617.8 621.0 627.5 627.3 635.4 640.5 48 Intermediate 384.0 398.2 400.8 401.0 400.7 398.9 401.2 400.5 403.4 401.1 405.8 403.1 401.3 403.0 405.4 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 1992 IItteemm 11998899 11999900 11999911 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,339 1,111 949 1,106 1,146 1,094 1,058 1,054 1,032 1,080 1,076 1,125 1,139 2 One-family 932 794 754 913 946 907 873 879 872 879 877 913 959 3 Two-or-more-family 407 317 195 193 200 187 185 175 160 201 199 212 180 4 Started 1,376 1,193 1,014 1,180 1,257 1,340 1,086 1,196 1,147 1,100 1,233 l,222r 1,224 5 One-family 1,003 895 840 989 1,109 1,068 933 1,019 999 956 1,042 l,051r 1,086 6 Two-or-more-family 373 298 174 191 148 272 153 177 148 144 191 I71r 138 7 Under construction at end of period1.. 850 711 606 640 629 657 655 653 643 628 633 638r 642 8 One-family 535 449 434 466 464 482 484 484 483 476 480 486r 493 9 Two-or-more-family 315 262 173 174 165 175 171 169 160 152 153 152 149 10 Completed 1,423 1,308 1,091 1,043 1,097 1,127 1,067 1,204 1,184 1,229 l,144r 1,121 1,161 11 One-family 1,026 966 838 838 908 975 889 1,011 982 1,019 955r 936 980 12 Two-or-more-family 396 342 253 205 189 152 178 193 202 210 189" 185 181 13 Mobile homes shipped 198 188 171 192 197 197 199 189 194 211 198 219 226 Merchant builder activity in one-family units 14 Number sold 650 535 507 667 627 555 546 554 583 616 625 669 600 15 Number for sale at end of period ... 365 321 283 281 269 277 274 272 272 271 270 268 267 Price of units Sj)ld (thousands 16 Median 120.4 122.3 120.0 120.0 117.2 120.0 120.0 113.0 124.5 118.0 123.0 119.0 125.0 17 Average 148.3 149.0 147.0 144.2 144.8 144.8 145.0 146.0 146.6 137.7 144.6 142.3 152.6 EXISTING UNITS (one-family) 18 Number sold 3,346 3,211 3,219 3,220 3,490 3,510 3,490 3,460 3,350 3,450 3,310 3,300 3,640 Price of units sold (thousands of dollarsr 19 Median 92.9 95.2 99.7 102.4 102.8 104.0 103.3 102.5 105.1 102.7 104.6 103.4 103.4 20 Average 118.0 118.3 127.4 130.5 128.8 130.2 130.6 130.6 133.7 132.2 132.2 131.0 129.4 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 443,401 442,066 400,955 407,121 411,767 421,512 427,585 427,980 426,730 427,670 417,554 424,983 429,295 22 Private 345,327 334,153 290,707 292,540 294,758 301,142 309,832 306,999 312,182 307,880 300,295 306,091 309,856 23 Residential 196,551 182,856 157,837 169,548 169,772 172,660 182,644 182,892 184,630 182,871 181,340 183,192 187,352 24 Nonresidential, total 148,776 151,297 132,870 122,992 124,986 128,482 127,188 124,107 127,552 125,009 118,955 122,899 122,504 25 Industrial buildings 20,412 23,849 22,281 21,258 21,651 23,721 21,335 21,008 20,285 20,513 17,845 18,947 18,258 26 Commercial buildings 65,496 62,866 48,482 41,196 41,591 42,108 40,712 39,643 43,310 39,847 37,057 39,271 39,338 27 Other buildings 19,683 21,591 20,797 19,751 20,630 21,479 21,409 21,993 21,991 22,290 21,521 22,038 22,197 28 Public utilities and other 43,185 42,991 41,310 40,787 41,114 41,174 43,732 41,463 41,966 42,359 42,532 42,643 42,711 29 Public 98,071 107,909 110,247 114,581 117,009 120,370 117,753 120,981 114,548 119,790 117,259 118,892 119,439 30 Military 3,520 2,664 1,837 2,039 2,206 2,548 2,329 2,668 2,503 2,275 2,153 2,477 2,071 31 Highway 28,837 31,154 29,918 30,221 32,744 30,895 31,447 32,633 31,496 32,605 33,292 34,313 31,931 32 Conservation and development... 5,009 4,607 4,958 5,480 5,283 6,197 5,818 5,767 5,889 5,829 5,302 6,350 7,611 33 Other 60,705 69,484 73,534 76,841 76,776 80,730 78,159 79,913 74,660 79,081 76,512 75,752 77,826 1. Not at annual rates. SOURCE. Census Bureau estimates for all series except (1) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing 3. 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 Census Bureau in its of existing units, which are published by the National Association of Realtors. All 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 Census 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 • February 1993 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 1991 1992 19921 lll NNN eeevvv ooo eee vvv lll ... ,,, 11999911 11999922 111999999222111 NNoovv.. NNoovv.. Dec. Mar. June Sept. July Aug. Sept. Oct. Nov. CONSUMER PRICES2 (1982-84= 100) 1 All items 3.0 3.0 3.2 3.5 2.6 2.6 .1 .3 .2 .4 .2 142.0 2 Food 1.6 1.5 2.7 1.5 -1.2 4.7 -.1 .9 .4 .0 .0 138.3 i Energy items -8.2 2.7 3.6 -6.9 12.5 .4 .3 -.2 .0 .5 .8 104.5 4 All items less food and energy 4.5 3.4 3.1 4.8 2.8 2.5 .2 .2 .2 .5 .3 149.3 5 Commodities 4.4 2.5 .6 5.3 2.1 2.1 .2 .2 .2 .3 .1 134.2 6 Services 4.5 3.9 4.3 4.8 2.9 2.6 .3 .3 .1 .6 .3 158.0 PRODUCER PRICES (1982=100) 7 Finished goods -.5 1.3 1.0 1.0 3.3 1.6 .0 .1 .3 .1 -.2 123.9 8 Consumer foods -1.6 .2 -1.0 .3 -1.0 3.6 -.2 .7 .4 .1 -.5 123.3 9 Consumer energy -12.7 .5 -.5 -7.0 17.9 -.5 — ,6r -,3r .8 1.4 -1.5 78.5 10 Other consumer goods 3.4 2.1 2.4 3.6 2.4 1.2 .2 -.1 .2 -.1 .2 138.2 11 Capital equipment 2.6 1.6 1.9 3.5 .9 .9 .R ,2r .0 -.2 .1 130.0 Intermediate materials 12 Excluding foods and feeds -3.5 1.1 -1.7 .0 5.4 .3 .R -.R .1 .0 -.2 115.4 14 Excluding energy -1.0 1.0 .0 1.7 1.7 1.0 .2r .R .0 -.2 .0 122.2 Crude materials 14 Foods -6.5 1.3 -4.9 11.8 1.9 -6.2 -1.8 -.4 .6 .6 -.6 102.8 15 Energy -22.0 2.6 5.3 -26.6 51.5 16.4 i.r 3.6 -.5 .6 83.3 16 Other -8.3 2.8 -5.9 15.0 4.8 2.5 .9" ,2r -.5 -1.3 -.9 126.8 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 1991 1992 AAccccoouunntt 11998899 11999900 11999911 Q3 Q4 Ql Q2 Q3r GROSS DOMESTIC PRODUCT 1 Total 5,250.8 5,522.2 5,677.5 5,713.1 5,753.3 5,840.2 5,902.2 5,982.5 By source 2 Personal consumption expenditures 3,523.1 3,748.4 3,887.7 3,914.2 3,942.9 4,022.8 4,057.1 4,108.1 3 Durable goods 459.4 464.3 446.1 453.0 450.4 469.4 470.6 482.7 4 Nondurable goods 1,149.5 1,224.5 1,251.5 1,255.3 1,251.4 1,274.1 1,277.5 1,293.0 5 Services 1,914.2 2,059.7 2,190.1 2,205.9 2,241.1 2,279.3 2,309.0 2,332.4 6 Gross private domestic investment 832.3 799.5 721.1 732.8 736.1 722.4 773.2 786.4 7 Fixed investment 798.9 793.2 731.3 732.6 726.9 738.2 765.1 765.3 8 Nonresidential 568.1 577.6 541.1 538.4 528.7 531.0 550.3 547.9 9 Structures 193.3 201.1 180.1 175.6 169.7 170.1 170.3 164.8 10 Producers' durable equipment 374.8 376.5 360.9 362.8 358.9 360.8 380.0 383.0 11 Residential structures 230.9 215.6 190.3 194.2 198.2 207.2 214.8 217.5 12 Change in business inventories 33.3 6.3 -10.2 .2 9.2 -15.8 8.1 21.1 13 Nonfarm 31.8 3.3 -10.3 -1.2 14.5 -13.3 6.4 15.8 14 Net exports of goods and services -79.7 -68.9 -21.8 -27.1 -16.0 -8.1 -37.1 -34.9 15 Exports 508.0 557.0 598.2 602.3 622.9 628.1 625.4 639.5 16 Imports 587.7 625.9 620.0 629.5 638.9 636.2 662.5 674.4 17 Government purchases of goods and services 975.2 1,043.2 1,090.5 1,093.3 1,090.3 1,103.1 1,109.1 1,122.9 18 Federal 401.6 426.4 447.3 447.2 440.8 445.0 444.8 454.1 19 State and local 573.6 616.8 643.2 646.0 649.5 658.0 664.3 668.8 Bx major type of product 20 Final sales, total 5,217.5 5,515.9 5,687.7 5,712.9 5,744.2 5,855.9 5,894.1 5,961.4 21 Goods 2,063.6 2,160.1 2,192.8 2,194.9 2,188.4 2,233.6 2,233.2 2,260.1 22 Durable 891.2 920.6 907.6 910.8 905.7 923.6 932.3 944.9 23 Nondurable 1,172.5 1,239.5 1,285.1 1,284.1 1,282.7 1,310.0 1,300.8 1,315.1 24 Services 2,642.2 2,846.4 3,030.3 3,053.6 3,090.3 3,142.2 3,173.4 3,214.8 25 Structures 511.7 509.4 464.7 464.4 465.5 480.1 487.6 486.5 26 Change in business inventories 33.3 6.3 -10.2 .2 9.2 -15.8 8.1 21.1 27 Durable goods 25.2 -.9 -19.3 -7.0 -8.1 -19.3 9.5 7.8 28 Nondurable goods 8.1 7.2 9.0 7.2 17.3 3.5 -1.4 13.3 MEMO 29 Total GDP in 1987 dollars 4,838.0 4,877.5 4,821.0 4,831.8 4,838.5 4,873.7 4,892.4 4,939.4 NATIONAL INCOME 30 Total 4,249.5 4,468.3 4,544.2 4,555.4 4,599.1 4,679.4 4,716.5 4,714.3 31 Compensation of employees 3,100.2 3,291.2 3,390.8 3,407.0 3,433.8 3,476.3 3,506.3 3,529.8 32 Wages and salaries 2,586.4 2,742.9 2,812.2 2,824.4 2,845.0 2,877.6 2,901.3 2,919.3 33 Government and government enterprises 478.5 514.8 543.5 544.3 546.4 554.6 561.4 564.0 34 Other 2,107.9 2,228.0 2,268.7 2,280.0 2,298.6 2,323.0 2,339.9 2,355.3 35 Supplement to wages and salaries 513.8 548.4 578.7 582.6 588.7 598.7 605.0 610.5 36 Employer contributions for social insurance 261.9 277.4 290.4 292.0 293.7 299.4 301.5 302.6 37 Other labor income 251.9 271.0 288.3 290.6 295.0 299.2 303.6 307.9 38 Proprietors' income1 347.3 366.9 368.0 367.1 377.9 393.6 398.4 397.6 39 Business and professional1 307.0 325.2 332.2 337.6 340.0 353.6 359.9 366.1 40 Farm1 40.2 41.7 35.8 29.5 37.9 40.1 38.5 31.5 41 Rental income of persons2 -13.5 -12.3 -10.4 -10.3 -6.6 -4.5 3.3 5.0 42 Corporate profits' 362.8 361.7 346.3 341.2 347.1 384.0 388.4 370.4 43 Profits before tax 342.9 355.4 334.7 336.7 332.3 366.1 376.8 350.5 44 Inventory valuation adjustment -17.5 -14.2 3.1 -4.8 .7 -5.4 -15.5 -9.8 45 Capital consumption adjustment 37.4 20.5 8.4 9.3 14.1 23.3 27.0 29.7 46 Net interest 452.7 460.7 449.5 450.5 446.9 430.0 420.0 411.5 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 • February 1993 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1991 1992 AAccccoouunntt 11998899 11999900 Q3 Q4 Ql Q2 Q3r PERSONAL INCOME AND SAVING I Total personal income 4,380.3 4,664.2 4,828.3 4,846.2 4,907.2 4,980.5 5,028.9 5,060.2 2 Wage and salary disbursements 2,586.4 2,742.8 2,812.2 2,824.4 2,845.0 2,877.6 2,901.3 2,919.3 3 Commodity-producing industries 724.2 745.6 737.4 738.8 741.5 736.8 743.1 741.3 4 Manufacturing 542.2 556.1 556.9 559.0 563.9 559.9 564.7 564.2 5 Distributive industries 607.0 634.6 647.4 651.1 652.9 660.9 662.9 666.9 6 Service industries 776.8 847.8 883.9 890.2 904.3 925.3 933.9 947.2 7 Government and government enterprises 478.5 514.8 543.6 544.3 546.4 554.6 561.4 564.0 8 Other labor income 251.9 271.0 288.3 290.6 295.0 299.2 303.6 307.9 9 Proprietors' income1 347.3 366.9 368.0 367.1 377.9 393.6 398.4 397.6 10 Business and professional 307.0 325.2 332.2 337.6 340.0 353.6 359.9 366.1 11 Farm1 40.2 41.7 35.8 29.5 37.9 40.1 38.5 31.5 12 Rental income of persons* -13.5 -12.3 -10.4 -10.3 -6.6 -4.5 3.3 5.0 126.5 140.3 137.0 135.6 134.3 133.9 136.6 141.0 14 Personal interest income 668.2 694.5 700.6 701.8 703.3 684.8 675.2 666.7 15 Transfer payments 625.0 685.8 771.1 777.1 799.8 842.7 859.7 873.9 16 Old-age survivors, disability, and health insurance benefits ... 325.1 352.0 382.0 384.2 390.6 405.7 412.1 417.1 17 LESS: Personal contributions for social insurance 211.4 224.8 238.4 240.1 241.5 246.8 249.3 251.2 18 EQUALS: Personal income 4,380.3 4,664.2 4,828.3 4,846.2 4,907.2 4,980.5 5,028.9 5,060.2 19 LESS: Personal tax and nontax payments 593.3 621.3 618.7 618.6 622.3 619.6 617.1 629.4 20 EQUALS: Disposable personal income 3,787.0 4,042.9 4,209.6 4,227.6 4,284.9 4,360.9 4,411.8 4,430.9 21 LESS: Personal outlays 3,634.9 3,867.3 4,009.9 4,036.6 4,065.5 4,146.3 4,179.5 4,229.9 22 EQUALS: Personal saving 152.1 175.6 199.6 191.0 219.4 214.6 232.3 201.0 MEMO Per c apita (1987 dollars) 23 Gross domestic product 19,555.6 19,513.0 19,077.1 19,094.0 19,066.0 19,158.5 1199,,118811..88 1199,,331100..77 24 Personal consumption expenditures 13,028.9 13,043.6 12,824.1 12,847.9 12,802.6 12,930.2 12,893.3 12,973.4 25 Disposable personal income 14,005.0 14,068.0 13,886.0 13,876.0 13,913.0 14,017.0 14,021.0 13,993.0 26 Saving rate (percent) 4.0 4.3 4.7 4.5 5.1 4.9 5.3 4.5 GROSS SAVING 741.8 718.0 708.2 679.4 698.2 677.5 682.9 669933..77 28 Gross private saving 819.4 854.1 901.5 884.9 934.8 950.1 968.1 986.5 29 Personal saving 152.1 175.6 199.6 191.0 219.4 214.6 232.3 201.0 30 Undistributed corporate profits 86.9 75.7 75.8 69.0 78.3 104.0 97.7 87.7 31 Corporate inventory valuation adjustment -17.5 -14.2 3.1 -4.8 .7 -5.4 -15.5 -9.8 Capital consumption allowances 352.4 368.3 383.0 383.5 386.3 338866..11 339911..22 440077..22 228.0 234.6 243.1 241.4 250.7 245.3 247.0 290.6 34 Government surplus, or deficit (-), national income and -77.5 -136.1 -193.3 -205.6 -236.6 -272.6 --228855..22 --229922..88 -122.3 -166.2 -210.4 -221.0 -258.7 -289.2 -302.9 -301.9 36 State and local 44.8 30.1 17.1 15.4 22.0 16.6 17.7 9.1 37 Gross investment 742.9 723.4 730.1 709.9 714.6 706.5 713.8 735.4 38 Gross private domestic 832.3 799.5 721.1 732.8 736.1 722.4 773.2 786.4 -89.3 -76.1 9.0 -22.9 -21.5 -16.0 -59.4 -51.1 40 Statistical discrepancy 1.1 5.4 21.9 30.5 16.4 29.0 30.9 41.7 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 Q3 Q4 Ql Q2r Q3P 1 Balance on current account . -101,142 -90,428 -3,682 -11,087 -7,218 -5,903 -17,802 -14,238 Merchandise trade balance -115,668 -108,853 -73,436 -20,174 -18,539 -17,222 -24,558 -26,538 Merchandise exports 361,697 388,705 415,%2 104,151 107,851 107,946 107,464 110,812 Merchandise imports -477,365 -497,558 -489,398 -124,325 -126,390 -125,168 -132,022 -137,350 Military transactions, net -6,837 -7,818 -5,524 -995 -540 -624 -623 -548 Other service transactions, net 32,604 39,873 50,821 13,018 13,676 14,468 13,261 16,173 Investment income, net 14,366 19,287 16,429 3,076 2,458 4,474 1,930 3,551 U.S. government grants -10,773 -17,597 24,487 -1,986 78 -2,620 -3,085 -2,490 U.S. government pensions and other transfers -2,517 -2,945 -3,462 -793 -1,080 -858 -1,146 -%9 Private remittances and other transfers -12,316 -12,374 -12,9% -3,233 -3,271 -3,521 -3,581 -3,417 11 Change in U.S. government assets other than official reserve assets, net (increase, -) 1,271 2,304 3,397 3,180 -437 -38 -277 -385 12 Change in U.S. official reserve assets (increase, —). -25,293 -2,158 5,763 3,877 1,225 -1,057 1,464 1,952 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -535 -192 -177 6 -23 -172 -168 -173 15 Reserve position in International Monetary Fund. 471 731 -367 -114 17 111 1 -118 16 Foreign currencies -25,229 -2,697 6,307 3,986 1,232 -9% 1,631 2,243 17 Change in U.S. private assets abroad (increase, -). -90,923 -56,467 -71,379 -17,426 -44,947 -3,155 -1,150 -21,724 18 Bank-reported claims3 -51,255 7,469 -4,753 2,403 -23,219 15,859 10,943 -440 19 Nonbank-reported claims 11,398 -2,477 5,526 -298 1,269 4,764 3,137 20 U.S. purchases of foreign securities, net -22,070 -28,765 -45,017 -12,403 -11,305 -8,703 -8,221 -i4,103 21 U.S. direct investments abroad, net -28,9% -32,694 -27,135 -7,128 -11,692 -15,075 -7,009 -7,181 22 Change in foreign official assets in United States (increase, +) 8,489 33,908 18,407 4,115 12,819 21,192 20,895 -7,738 23 U.S. Treasury securities 149 29,576 15,815 5,624 12,619 14,909 11,126 -323 24 Other U.S. government obligations 1,383 667 1,301 474 1,075 540 1,699 912 25 Orttthhoerr U1 .IS C. gfoivneurrnnmneunnt l lIia ib Qil Kitiie Ks l ^ 146 1,866 1,600 654 -344 % 598 875 26 Other U.S. liabilities reported by U.S. banks3 4,976 3,385 -1,668 -2,732 -914 5,534 7,547 -8,202 27 Other foreign official assets 1,835 -1,586 1,359 95 383 113 -75 -1,000 28 Change in foreign private assets in United States (increase, +).. 205,205 65,471 48,573 18,818 36,110 -2,629 26,520 25,024 29 U.S. bank-reported liabilities3 63,382 16,370 -13,677 8,508 23,465 -4,474 -551 19,945 30 U.S. nonbank-reported liabilities 5,565 4,906 -405 1,575 725 1,942 1,141 31 Foreign private purchases of U.S. Treasury securities, net 29,618 -2,534 16,241 -1,306 1,408 -828 10,286 5,364 32 Foreign purchases of other U.S. securities, net 38,767 1,592 34,918 10,012 4,832 4,551 10,333 3,076 33 Foreign direct investments in United States, net 67,873 45,137 11,498 29 5,680 -3,820 5,311 -3,361 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy 2,394 47,370 -1,078 -1,478 2,447 -8,410 -29,650 17,109 36 Due to seasonal adjustment -6,137 613 4,023 410 -7,680 37 Before seasonal adjustment 2,394 47,370 -1,078 4,659 1,835 -12,433 -30,060 24,789 MEMO Changes in official assets 38 U.S. official reserve assets (increase, -) -25,293 -2,158 5,763 3,877 1,225 -1,057 1,464 1,952 39 Foreign official assets in United States, excluding line 25 (increase, +) 8,343 32,042 16,807 3,461 13,163 21,0% 20,297 -8,613 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) -5,604 2,459 -2,125 3,061 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 • February 1993 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1992 IItteemm 11998899 11999900 11999911 Apr.r Mayr Juner Julyr Aug/ Sept/ Oct." 1 Exports of domestic and foreign merchandise, (F.A.S. value), excluding grant-aid shipments 363,812 393,592 421,730 36,406 35,718 38,165 37,806 35,799 3377,,888822 39,185 2 General imports (customs value), including merchandise for immediate consumption plus entries into bonded warehouses 473,211 495,311 448877,,112299 43,494 42,903 44,957 45,127 44,796 46,459 46,218 3 Trade balance -109,399 -101,718 -65,399 -7,088 -7,185 -6,792 -7,322 -8,997 -8,577 -7,032 1. The Census basis data differ from merchandise trade data shown in table Jan. 1, 1987, Census data have been released forty-five days after the end of the 3.10, lines 3-5, U.S. International Transactions Summary, because of coverage month; the previous month is revised to reflect late documents. Total exports and and timing. On the export side, the largest difference is the exclusion of military the trade balance reflect adjustments for undocumented exports to Canada. sales (which are combined with other military transactions and reported sepa- Components may not sum to totals because of rounding. rately in table 3.10, line 6). On the import side, this table includes imports of gold, SOURCE. FT900, Summary of U.S. Export and Import Merchandise Trade ship purchases, imports of electricity from Canada, and other transactions; (U.S. Department of Commerce, Bureau of the Census). military payments are excluded and shown separately in table 3.10, line 6. Since 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1992 AAsssseett 11998899 11999900 11999911 May June July Aug. Sept. Oct. Nov.p 1 Total 74,609 83,316 77,719 74,587 77,092 77,370 78,474 78,527 74,207 72,231 2 Gold stock, including Exchange Stabilization Fund1 11,059 11,058 11,057 11,057 11,059 11,059 11,059 11,059 11,060 11,059 3 Special drawing rights2,3 9,951 10,989 11,240 11,315 11,597 11,702 1122,,119933 1122,,111111 1111,,556611 1111,,449955 4 Reserve position in International Monetary Fund 9,048 9,076 9,488 9,175 9,381 9,625 9,762 9,778 9,261 8,781 5 Foreign currencies4 44,551 52,193 45,934 43,040 45,055 44,984 45,460 45,579 42,325 40,896 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 May June July Aug. Sept. Oct. Nov.p 1 Deposits 589 369 968 217 219 264 297 546 415 229 Held in custody 2 U.S. Treasury securities 224,911 278,499 281,107 307,562 307,337 316,431 318,328 306,971 311,538 308,959 3 Earmarked gold 13,456 13,387 13,303 13,295 13,268 13,261 13,261 13,241 13,201 13,192 1. Excludes deposits and U.S. Treasury securities held for international and 3. Held for foreign and international accounts and valued at $42.22 per fine regional organizations. troy ounce; not included in the gold stock of the United States. 2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury securities payable at face value in dollars or foreign currencies. 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 1992 Apr. May June July Aug. Sept. Oct. ASSETS All foreign countries 1 Total payable in any currency 545,366 556,925 548,901 549,858 564,816 564,466 537,529 544,815r 544,437" 553,564 2 Claims on United States 198,835 188,496 176,301 177,992 182,554 183,933 171,911 163,039" 167,258 174,921 3 Parent bank 157,092 148,837 137,509 143,790 145,974 147,626 136,287 128,267" 134,019 138,907 4 Other banks in United States 17,042 13,296 12,884 9,993 11,640 10,418 9,576 9,181 8,083 10,658 5 Nonbanks 24,701 26,363 25,908 24,209 24,940 25,889 26,048 25,591" 25,156 25,356 6 Claims on foreigners 300,575 312,449 303,934 302,916 314,569 311,990 311,578 321,631" 319,115" 318,833 7 Other branches of parent bank 113,810 135,003 111,729 111,140 115,407 115,398 112,177 116,674 118,105" 115,525 8 Banks 90,703 72,602 81,970 83,673 86,029 84,534 85,141 87,347" 83,912 86,820 9 Public borrowers 16,456 17,555 18,652 18,743 19,194 20,162 19,645 20,423 20,485 20,789 10 Nonbank foreigners 79,606 87,289 91,583 89,360 93,939 91,8% 94,615 97,187 %,613 95,699 11 Other assets 45,956 55,980 68,666 68,950 67,693 68,543 54,040 60,145" 58,064 59,810 12 Total payable in U.S. dollars 382,498 379,479 363,941 364,748 370,290 369,561 349,145 340,819" 346,633" 363,443 13 Claims on United States 191,184 180,174 169,662 173,337 177,311 177,638 166,507 157,405" 161,302 169,036 14 Parent bank 152,294 142,962 133,476 141,264 142,874 144,287 133,120 124,737" 130,346 135,954 15 Other banks in United States 16,386 12,513 12,025 9,255 11,012 10,016 9,135 8,876 7,476 9,335 16 Nonbanks 22,504 24,699 24,161 22,818 23,425 23,335 24,252 23,792" 23,480 23,747 17 Claims on foreigners 169,690 174,451 167,010 162,%7 167,054 168,586 162,843 161,500" 166,360" 173,246 18 Other branches of parent bank 82,949 95,298 78,114 75,177 76,949 76,700 72,250 70,693 72,116" 76,107 19 Banks 48,396 36,440 41,635 41,415 42,061 43,307 41,718 40,350" 42,281 45,401 20 Public borrowers 10,961 12,298 13,685 12,994 12,994 13,723 13,320 13,661 13,%5 14,221 21 Nonbank foreigners 27,384 30,415 33,576 33,381 35,050 34,856 35,555 36,7% 37,998 37,517 22 Other assets 21,624 24,854 27,269 28,444 25,925 23,337 19,795 21,914" 18,971 21,161 United Kingdom 23 Total payable in any currency 161,947 184,818 175,599 170,775 174,925 171,027 159,317 165,832 161,157 167,472 24 Claims on United States 39,212 45,560 35,257 35,451 37,369 38,0% 38,763 37,511 35,891 39,460 25 Parent bank 35,847 42,413 31,931 32,379 34,433 35,343 35,542 34,593 32,929 36,262 26 Other banks in United States 1,058 792 1,267 1,228 970 756 1,065 744 1,067 1,400 27 Nonbanks 2,307 2,355 2,059 1,844 1,966 1,997 2,156 2,174 1,895 1,798 28 Claims on foreigners 107,657 115,536 109,692 104,467 107,795 104,270 105,990 108,895 106,758 109,851 29 Other branches of parent bank 37,728 46,367 35,735 34,061 35,331 36,952 35,359 37,732 37,977 40,530 30 Banks 36,159 31,604 36,394 36,126 37,548 34,783 36,777 37,711 36,1% 37,121 31 Public borrowers 3,293 3,860 3,306 3,108 3,165 2,995 3,128 3,046 3,371 3,698 32 Nonbank foreigners 30,477 33,705 34,257 31,172 31,751 29,540 30,726 30,406 29,214 28,502 33 Other assets 15,078 23,722 30,650 30,857 29,761 28,661 14,564 19,426 18,508 18,161 34 Total payable in U.S. dollars 103,208 116,762 105,974 102,285 104,392 102,737 98,828 99,610 100,449 106,608 35 Claims on United States 36,404 41,259 32,418 33,298 35,185 35,376 36,133 34,948 33,618 37,072 36 Parent bank 34,329 39,609 30,370 31,022 33,059 33,751 33,936 32,786 31,578 34,979 37 Other banks in United States 843 334 822 853 677 627 785 625 711 769 38 Nonbanks 1,232 1,316 1,226 1,423 1,449 998 1,412 1,537 1,329 1,324 39 Claims on foreigners 59,062 63,701 58,791 54,129 56,615 56,888 56,264 55,812 59,099 61,489 40 Other branches of parent bank 29,872 37,142 28,667 25,922 27,482 28,541 26,751 26,825 27,986 30,218 41 Banks 16,579 13,135 15,219 14,829 15,348 15,380 15,930 15,565 16,808 17,394 42 Public borrowers 2,371 3,143 2,853 2,545 2,463 2,474 2,653 2,353 2,604 2,518 43 Nonbank foreigners 10,240 10,281 12,052 10,833 11,322 10,493 10,930 11,069 11,701 11,359 44 Other assets 7,742 11,802 14,765 14,858 12,592 10,473 6,431 8,850 7,732 8,047 Bahamas and Cayman Islands 45 Total payable in any currency 176,006 162,316 168,326 162,871 167,139 168,963 153,691 144,089 145,450 153,853 46 Claims on United States 124,205 112,989 115,244 112,080 115,633 114,467 102,850 94,595 %,750 102,619 47 Parent bank 87,882 77,873 81,520 82,823 84,041 83,316 72,107 64,454 68,209 72,185 48 Other banks in United States 15,071 11,869 10,907 8,115 9,729 9,118 8,045 8,060 6,562 8,174 49 Nonbanks 21,252 23,247 22,817 21,142 21,863 22,033 22,698 22,081 21,979 22,260 50 Claims on foreigners 44,168 41,356 45,229 41,929 42,828 45,600 41,886 41,315 41,712 42,514 51 Other branches of parent bank 11,309 13,416 11,098 10,156 9,311 9,392 8,678 8,5% 7,753 7,287 52 Banks 22,611 16,310 20,174 18,406 19,658 21,548 18,837 17,570 18,412 19,680 53 Public borrowers 5,217 5,807 7,161 6,332 6,459 7,084 6,728 7,125 7,102 7,120 54 Nonbank foreigners 5,031 5,823 6,7% 7,035 7,400 7,576 7,643 8,024 8,445 8,427 55 Other assets 7,633 7,971 7,853 8,862 8,678 8,8% 8,955 8,179 6,988 8,720 56 Total payable in U.S. dollars 170,780 158,390 163,771 158,196 162,066 163,313 147,905 138,348 139,769 148,865 1. Since June 1984, reported claims held by foreign branches have been million to $150 million equivalent in total assets, the threshold now applicable to reduced by an increase in the reporting threshold for "shell" branches from $50 all reporting branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • February 1993 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data1—Continued 1992 Account 1989 1990 1991 Apr. May July Aug. Sept. Oct. LIABILITIES All foreign countries 57 Total payable in any currency 545,366 556,925 548,901 549,858 564,816 564,466 537,529 544,815R 544,437* 553,564 58 Negotiable certificates of deposit (CDs) 23,500 18,060 16,284 12,757 14,010 13,040 12,758 14,246 12,389 12,054 59 To United States 197,239 189,412 198,121 196,635 198,897 204,929 192,087 179,246r 185,071* 188,549 60 Parent bank 138,412 138,748 136,431 138,273 136,195 143,474 133,051 126,825r 127,656 132,639 61 Other banks in United States 11,704 7,463 13,260 15,075 13,944 14,009 11,833 10,928r 12,303 12,254 62 Nonbanks 47,123 43,201 48,430 43,287 48,758 47,446 47,203 41,493 45,112* 43,656 63 To foreigners 296,850 311,668 288,254 2%,580 308,394 302,376 301,943 314,910* 311,539* 315,610 64 Other branches of parent bank ... 119,591 139,113 112,033 111,846 115,098 116,760 114,226 120,349* 119,634* 117,986 65 Banks 76,452 58,986 63,097 65,177 68,528 65,983 65,419 68,565* 68,537* 70,583 66 Official institutions 16,750 14,791 15,596 16,083 19,465 16,399 18,058 18,241 16,724* 20,564 67 Nonbank foreigners 84,057 98,778 97,528 103,474 105,303 103,234 104,240 107,755* 106,644 106,477 68 Other liabilities 27,777 37,785 46,242 43,886 43,515 44,121 30,741 36,413* 35,438* 37,351 69 Total payable in U.S. dollars 396,613 383,522 370,561 365,920 373,679 374,506 354,666 346,377* 346,344* 366,383 70 Negotiable CDs 19,619 14,094 11.909 8,470 9,643 8,475 8,531 8,755 7,628 6,709 71 To United States 187,286 175,654 185,286 185,533 187,438 192,792 179,395 166,377* 170,774* 175,561 72 Parent bank 132,563 130,510 129,669 131,844 130,007 136,273 125,647 119,370* 119,797 125,130 73 Other banks in United States 10,519 6,052 11,707 14,217 12,840 13,251 10,816 9,835 11,012 11,381 74 Nonbanks 44,204 39,092 43.910 39,472 44,591 43,268 42,932 37,172 39,965* 39,050 75 To foreigners 176,460 •179,002 158,993 157,139 162,011 158,532 155,352 157,475* 155,001* 167,698 76 Other branches of parent bank ... 87,636 98,128 76,601 75,772 76,973 77,604 73,699 74,037 72,947* 77,331 77 Banks 30,537 20,251 24,156 22,577 24,090 23,474 22,955 22,973 22,822* 26,320 78 Official institutions 9,873 7,921 10,304 10,413 13,102 10,119 11,543 10,713 9,939* 12,085 79 Nonbank foreigners 48,414 52,702 47,932 48,377 47,846 47,335 47,155 49,752* 49,293 51,962 80 Other liabilities 13,248 14,772 14,373 14,778 14,587 14,707 11,388 13,770* 12,941* 16,415 United Kingdom 81 Total payable in any currency .. 161,947 184,818 175,599 170,775 174,925 171,027 159,317 165,832 161,157 167,472 82 Negotiable CDs 20,056 14,256 11,333 7,324 8,458 7,612 7,731 8,083 7,266 6,062 83 To United States 36,036 39,928 37,720 36,610 33,236 36,660 37,164 35,527 35,885 35,431 84 Parent bank 29,726 31,806 29,834 29,317 25,637 28,201 29,104 27,695 27,528 27,430 85 Other banks in United States 1,256 1,505 1,438 2,011 1,638 1,326 1,315 1,632 1,670 1,342 86 Nonbanks 5,054 6,617 6,448 5,282 5,961 7,133 6,745 6,200 6,687 6,659 87 To foreigners 92,307 108,531 98,167 99,804 106,603 100,340 100,738 104,892 101,082 109,314 88 Other branches of parent bank 27,397 36,709 30,054 28,239 30,429 31,464 30,205 31,234 29,839 33,663 89 Banks 29,780 25,126 25,541 27,046 27,549 25,315 25,155 26,435 25,823 28,892 90 Official institutions 8,551 8,361 9,670 9,539 12,732 10,167 11,091 10,699 9,131 11,675 91 Nonbank foreigners 26,579 38,335 32,902 34,980 35,893 33,394 34,287 36,524 36,289 35,084 92 Other liabilities 13,548 22,103 28,379 27,037 26,628 26,415 13,684 17,330 16,924 16,665 93 Total payable in U.S. dollars ... 108,178 116,094 108,755 100,799 102,783 101,901 97,565 99,092 95,642 106,117 94 Negotiable CDs 18,143 12,710 10,076 6,136 6,967 5,750 6,139 5,890 5,689 4,212 95 To United States 33,056 34,697 33,003 32,510 28,936 32,300 32,178 30,357 30,330 31,279 % Parent bank 28,812 29,955 28,260 27,904 24,435 26,720 27,351 25,873 25,700 26,023 97 Other banks in United States 1,065 1,156 1,177 1,796 1,184 1,084 857 1,088 992 866 98 Nonbanks 3,179 3,586 3,566 2,810 3,317 4,496 3,970 3,3% 3,638 4,390 99 To foreigners 50,517 60,014 56,626 52,625 57,489 54,262 52,894 54,381 51,677 61,510 100 Other branches of parent bank 18,384 25,957 20,800 18,136 19,497 20,918 18,634 18,983 17,747 22,058 101 Banks 12,244 9,488 11,069 9,435 10,799 9,848 9,399 9,289 9,112 12,067 102 Official institutions 5,454 4,692 7,156 6,998 9,915 7,049 7,808 6,956 6,156 8,130 103 Nonbank foreigners 14,435 19,877 17,601 18,056 17,278 16,447 17,053 19,153 18,662 19,255 104 Other liabilities 6,462 8,673 9,050 9,528 9,391 9,589 6,354 8,464 7,946 9,116 Bahamas and Cayman Islands 105 Total payable in any currency .. 176,006 162,316 168,326 162,871 167,139 168,963 153,691 144,089 145,450 153,853 106 Negotiable CDs 678 646 1,173 1,546 1,646 1,894 1,330 1,814 872 1,394 107 To United States 124,859 114,738 129,872 124,605 128,891 130,815 115,589 105,816 108,983* 113,894 108 Parent bank 75,188 74,941 79,394 76,086 76,779 80,998 67,356 64,039 63,140 69,207 109 Other banks in United States 8,883 4,526 10,231 12,060 11,085 11,708 9,641 8,491 9,6% 10,275 110 Nonbanks 40,788 35,271 40,247 36,459 41,027 38,109 38,592 33,286 36,147* 34,412 111 To foreigners 47,382 44,444 35,200 34,899 35,021 34,637 35,136 34,878 34,037* 34,889 112 Other branches of parent bank 23,414 24,715 17,388 16,933 16,842 16,799 17,668 17,315 16,071 15,441 113 Banks 8,823 5,588 5,662 6,009 6,346 6,075 6,390 6,242 6,787 6,987 114 Official institutions 1,097 622 572 736 731 770 862 935 984* 1,058 115 Nonbank foreigners 14,048 13,519 11,578 11,221 11,102 10,993 10,216 10,386 10,195 11,403 116 Other liabilities 3,087 2,488 2,081 1,821 1,581 1,617 1,636 1,581 1,558* 3,676 117 Total payable in U.S. dollars 171,250 157,132 163,603 158,247 162,280 163,951 148,744 138,864 139,963 148,881 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 1992 IItteemm 11999900 11999911 Apr. May June July Aug. Sept. Oct.P 1 Total1 344,529 360,546 385,572 394,709 401,795 404,052 406,557r 393,644r 405,250 By type 2 Liabilities reported by banks in the United States 39,880 38,412 44,583 47,471 51,421 48,883 52,078r 43,675r 60,773 3 U.S. Treasury bills and certificates 79,424 92,692 102,968 111,224 109,278 114,781 113,307 113,634 104,2% U.S. Treasury bonds and notes 4 Marketable 202,487 203,677 210,754 208,069 213,363 212,5% 213,293 208,810 211,810 5 Nonmarketable 4,491 4,858 4,989 5,021 4,625 4,582 4,476 4,505 4,473 6 U.S. securities other than U.S. Treasury securities 18,247 20,907 22,278 22,924 23,108 23,210 23,403 23,020 23,898 By area 7 Western Europe1 167,191 168,365 179,239 185,416 191,214 194,351 195,947r 118866,,3322ffff 194,465 8 Canada 8,671 7,460 7,855 9,347 9,302 9,876 9,990 7,027 8,111 9 Latin America and Caribbean 21,184 33,554 39,130 39,732 39,433 39,146 38,356 37,703 38,465 10 Asia 138,0% 139,465 148,573 149,062 150,215 150,047 151,785r 151,667r 153,605 11 Africa , 1,434 2,092 2,392 2,792 3,265 3,218 2,860 3,360 3,481 12 Other countries 7,955 9,608 8,381 8,358 8,364 7,412 7,617r 7,565r 7,121 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government corporations and federally sponsored 2. Principally demand deposits, time deposits, bankers acceptances, commer- agencies, and U.S. corporate stocks and bonds. cial paper, negotiable time certificates of deposit, and borrowings under repur- 6. Includes countries in Oceania and Eastern Europe. chase agreements. SOURCE. Based on Treasury Department data and on data reported to the 3. Includes nonmarketable certificates of indebtedness (including those payable Treasury Department by banks (including Federal Reserve Banks) and securities in foreign currencies through 1974) and Treasury bills issued to official institutions dealers in the United States and on the 1984 benchmark survey of foreign portfolio of foreign countries. investment in the United States. 4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds and notes payable in foreign currencies; zero coupon bonds are included at current value. 3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States1 Payable in Foreign Currencies Millions of dollars, end of period 1991 1992 IItteemm 11998888 11998899 11999900 Dec. Mar. June Sept. 1 Banks' liabilities 74,980 67,835 70,477 75,129 67,874 70,764 85,166 2 Banks' claims 68,983 65,127 66,7% 73,318 60,844 58,968 73,185 3 Deposits 25,100 20,491 29,672 26,192 23,269 23,462 29,419 4 Other claims 43,884 44,636 37,124 47,126 37,575 35,506 43,766 5 Claims of banks' domestic customers 364 3,507 6,309 3,274 2,862 4,428 3,908 1. Data on claims exclude foreign currencies held by U.S. monetary States that represent claims on foreigners held by reporting banks for the accounts authorities. of the domestic customers. 2. Assets owned by customers of the reporting bank located in the United Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • February 1993 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States' Payable in U.S. dollars Millions of dollars, end of period 1989 Apr. May June July Aug. Sept.r Oct. HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 736,878 759,634 756,510 769,486 785,162 786,924 777,485 768,804r 779,399 2 Banks' own liabilities 577,498 577,229 575,232 578,651 583,786 587,581 571,410 563,760r 585,424 3 Demand deposits 22,032 21,723 20,321 19,043 19,606 20,931 19,739 21,698 22,474 4 Time deposits 168,780 168,017 159,649 153,383 150,373 152,185 148,664 144,119" 143,762 5 Other3 67,823 65,822 66,185 76,149 82,654 85,231 82,448 86,301r 82,119 6 Own foreign offices4 318,864 321,667 329,077 330,076 331,153 329,234 320,559 311,642 337,069 7 8 Ba U nk .S s . ' c T u r s e t a o s d u i r a y l l b i i a l b ls i l a it n i d es 5 c ertificates6 1 9 5 1 9 , , 1 3 0 8 0 0 1 % 82 , , 7 4 9 0 6 5 1 1 1 8 0 1 , , 7 2 3 7 4 8 1 1 9 2 0 0 , , 8 9 3 2 5 4 2 1 0 3 1 0 , , 3 3 7 9 6 2 1 1 9 2 9 8 , , 3 6 4 7 3 2 2 1 0 3 6 5 , , 0 5 7 7 5 9 2 1 0 3 5 5 , , 0 7 4 4 4 4 " 1 1 9 3 3 4 , , 9 8 7 9 5 4 9 Other negotiable and readily transferable instruments 19,526 17,578 18,664 17,797 18,995 18,020 19,339 18,541 18,814 10 Other 48,754 68,031 51,880 52,114 51,989 52,651 51,157 50,759" 40,267 11 Nonmonetary international and regional organizations8 4,894 5,918 8,981 10,291 11,313 12,771 11,281 12,584 10,554 1 1 2 3 Ba D n e k m s' a o n w d n d e li p a o b s il i i t t s i es 3,27 % 9 4,54 3 0 6 6,82 4 7 3 8,40 2 8 9 9,35 4 8 6 10,5 4 4 0 8 8,15 2 2 4 9,47 2 7 1 7,91 2 7 4 14 Time deposits" 927 1,050 2,714 1,819 2,520 3,788 3,008 2,630 2,521 15 Other3. 2,255 3,455 4,070 6,560 6,792 6,720 5,120 6,826 5,372 1 1 6 7 Ba U nk .S s . ' T cu r s e t a o s d u i r a y l l b i i a l b ls i li a t n ie d s 5 c ertificates6 1,6 1 1 9 6 7 1,3 3 7 6 8 4 2 1 , , 1 7 5 3 4 0 1 1 , , 8 44 8 2 3 1 1, , 4 9 6 5 1 5 2 1 , , 2 6 2 8 3 7 3 2, , 6 1 0 2 2 9 3 2, , 6 1 5 0 4 7 2 1 , , 6 9 3 9 7 1 18 Other negotiable and readily transferable instruments 1,417 1,014 424 441 494 534 527 453 646 19 Other 2 0 0 0 0 2 0 0 0 20 Official institutions9 113,481 119,303 131,104 147,551 158,695 160,699 163,664 165,385" 157,309 21 Banks' own liabilities 31,108 34,910 34,427 40.630 43,567 47,533 45,338 48,526" 40,524 22 Demand deposits 2,1% 1,924 2,642 1,360 1,320 1,631 1,372 1,676 1,761 2 2 3 4 T O i t m he e r3 d eposits 1 1 8 0 , , 4 4 1 9 7 5 1 18 4 , ,3 6 5 2 9 8 1 15 6 , , 2 5 8 0 1 4 2 1 0 8 , . 6 6 3 3 9 1 2 1 3 9 , , 1 0 8 6 1 6 2 1 8 7 , , 1 7 6 3 4 8 2 1 5 8 , , 5 3 8 8 4 2 2 1 8 8 , , 7 0 5 9 2 8 " " 2 1 2 6 , , 5 2 2 3 5 8 . 2 2 6 5 Ba U nk .S s . ' T cu r s e t a o s d u i r a y l b li i a ll b s i l a it n i d e s5 c ertificates6 8 76 2 , , 9 3 8 7 5 3 8 79 4 , , 4 3 2 9 4 3 % 92 , , 6 6 7 9 7 2 1 1 0 0 6 2 , , 9 9 2 6 1 8 1 11 1 1 5 , , 2 1 2 2 4 8 1 10 1 9 3 , , 2 1 7 6 8 6 1 1 1 1 4 8 , , 7 32 8 6 1 1 11 1 3 6 , , 3 8 0 5 7 9 1 1 1 1 3 6 , ,7 6 8 3 5 4 27 Other negotiable and readily transferable instruments 5,028 4,766 3,879 3,812 3,717 3,602 3,459 3,466 2,922 28 Other 361 203 106 141 187 286 86 86 229 29 Banks10 515,275 540,805 522,424 522,084 527,455 526,472 514,723 502,079" 523,255 30 Banks' own liabilities 454,273 458,470 459,177 456,309 460,919 459,710 448,111 435,126" 466,670 31 Unaffiliated foreign banks 135,409 136,802 130,100 126,233 129,766 130,476 127,552 123,484" 129,601 32 Demand deposits 10,279 10,053 8,632 8,753 9,229 9,705 8,442 9,851 10,443 3 3 3 3 4 5 Ow T O n i t m h f e e o r r 3 d e e ig p n o s o it f s f * ic es4 3 9 3 1 0 4 8 , , , 5 8 5 5 6 7 7 4 3 3 8 3 2 8 8 1 , , , 5 6 2 4 6 0 1 7 8 3 8 3 2 8 2 9 , , , 6 8 0 1 5 7 1 7 7 3 7 3 3 9 7 0 . , , 6 8 0 3 4 7 2 8 6 3 7 4 3 7 3 1 , , , 0 4 1 9 3 5 8 9 3 3 8 4 2 0 0 9 , , , 1 6 2 7 0 3 0 1 4 3 7 4 2 7 1 0 , , , 3 7 5 8 2 5 2 8 9 3 7 4 1 3 0 1 , , , 1 4 6 7 5 4 5 8 2 " " 3 7 4 3 4 4 7 , , , 4 7 0 4 1 6 7 1 9 3 3 6 7 Ba U nk .S s . ' T cu r s e t a o s d u i r a y l b li i a ll b s i l a it n i d es 5 c ertificates6 6 9 1, ,3 0 6 0 7 2 8 1 2 0 , , 3 6 3 6 5 9 63 7 , , 2 47 4 1 7 65 8 , , 7 4 7 1 5 0 66 8 , , 5 9 3 4 6 6 66 8 , , 7 9 6 2 2 7 66 9 , , 6 4 1 4 2 4 6 1 6 0 , , 9 4 5 2 3 9 5 1 6 0 , , 5 9 8 0 5 5 38 Other negotiable and readily transferable instruments 5,124 5,341 5,694 7,147 7,044 6,647 7,129 6,920 6,846 39 Other 46,510 66,325 50,082 50,218 50,546 51,188 50,039 49,604 38,834 40 Other foreigners 103,228 93,608 94,001 89,560 87,699 86,982 87,817 88,756" 88,281 41 Banks' own liabilities 88,839 79,309 74,801 73,304 69,942 69,790 69,809 70,631" 70,313 42 Demand deposits 9,460 9,711 9,004 8,901 9,011 9,555 9,901 10,150 10,246 4 4 3 4 T O i t m he e r3 d eposits" 6 1 6 2 , ,5 8 7 0 7 1 64 5 , , 0 5 6 3 7 0 57 8 , , 5 2 7 2 4 3 5 1 3 1 , , 3 1 0 02 1 51 9 , ,2 6 4 8 2 9 5 9 0 , , 7 4 4 8 6 9 4 1 9 0 , , 8 0 9 1 2 6 5 1 0 0 , , 2 2 1 6 6 5 " " 5 9 0 , , 5 5 1 5 1 6 4 4 6 5 Ba U nk .S s . ' T cu re st a o s d u i r a y l b li i a ll b s i l a it n i d e s5 c ertificates6 1 4 4 , , 5 3 5 8 1 9 1 6 4 , , 3 2 3 9 9 9 1 8 9 , , 8 2 4 0 1 0 1 8 6 , , 1 2 0 5 4 6 1 8 7 , , 7 7 6 5 1 7 1 8 7 , , 7 1 8 9 0 2 1 8 8 , , 7 0 5 0 2 8 1 9 8 , , 3 1 5 2 4 5 " 1 8 7 , , 3 % 6 8 4 47 Other negotiable and readily transferable instruments 7,958 6,457 8,667 6,397 7,740 7,237 8,224 7,702 8,400 48 Other 1,880 1,503 1,692 1,755 1,256 1,175 1,032 1,069" 1,204 MEMO: 49 Negotiable time certificates of deposit in custody for foreigners 7,203 7,073 7,456 7,624 7,642 7,351 6,976 7,279 6,964 1. Reporting banks include all types of depository institution, as well as some 6. Includes nonmarketable certificates of indebtedness and Treasury bills 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, the 4. For U.S. banks, includes amounts due to own foreign branches and foreign Inter-American Development Bank, and the Asian Development Bank. Excludes subsidiaries consolidated in Consolidated Report of Condition filed with bank "holdings of 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

Bank-Reported Data A59 3.17—Continued 1992 IItteemm 11998899 11999900 11999911 Apr. May June July Aug. Sept. Oct." AREA 1 Total, all foreigners 736,878 759,634 756,510 769,486 785,162 786,924 777,485 768,804r 779,399' 777,655 2 Foreign countries 731,984 753,716 747,529 759,195 773,849 774,153 766,204 756,220' 768,845' 767,018 3 Europe 237,501 254,452 249,067 262,246 273,436 279,521 283,109 289,388' 290,324' 306,073 4 Austria 1,233 1,229 1,193 1,219 1,337 1,490 1,445 1,427 1,456' 1,584 5 Belgium and Luxembourg 10,648 12,382 13,337 15,818 17,346 16,740 16,797 18,449 17,942 21,147 6 Denmark 1,415 1,399 937 961 1,331 1,263 1,348 1,329 1,760 1,788 7 Finland 570 602 1,341 1,005 764 843 720 976 685 949 8 France 26,903 30,946 31,808 27,667 27,005 30,132 28,900 29,456 32,153' 34,530 9 Germany 7,578 7,485 8,619 9,272 8,319 8,018 8,967 11,032' 14,739' 13,810 10 Greece 1,028 934 765 1,134 1,254 1,374 998 934 1,069 872 11 Italy 16,169 17,735 13,541 10,035 10,055 10,362 10,164 10,992 12,236 11,104 12 Netherlands 6,613 5,350 7,161 9,352 9,572 9,456 9,653 10,422 10,397 9,334 13 Norway 2,401 2,357 1,866 899 1,429 1,359 1,421 1,341 1,851 1,577 14 Portugal 2,418 2,958 2,184 2,217 2,391 2,530 2,659 2,664 2,245 2,258 15 Spain 4,364 7,544 11,391 14,435 14,316 15,844 15,313 14,904 15,589 14,602 16 Sweden 1,491 1,837 2,222 2,888 2,007 4,125 3,710 4,162 3,194' 5,323 17 Switzerland 34,496 36,690 37,238 33,604 36,663 35,987 39,568 40,569' 39,314' 38,117 18 Turkey 1,818 1,169 1,598 1,362 1,691 1,580 1,789 2,021 2,087 2,524 19 United Kingdom 102,362 109,555 100,262 108,023 112,828 111,712 111,878 111,521 115,727' 114,648 20 Yugoslavia 1,474 928 622 569 524 555 547 554 567 577 21 Others in Western Europe11 13,563 11,689 9,274 17,208 19,961 21,609 22,743 21,872' 12,867' 26,938 22 U.S.S.R 350 119 241 287 436 440 609 525 499 450 23 Other Eastern Europe 608 1,545 3,467 4,291 4,207 4,102 3,880 4,238 3,947 3,941 24 Canada 18,865 20,349 21,605 20,500 22,556 20,358 22,350 20,410 22,668 21,378 25 Latin America and Caribbean 311,028 332,997 346,025 341,925 339,862 339,517 325,910 311,265' 302,039' 295,080 26 Argentina 7,304 7,365 7,758 8,654 9,381 9,705 10,043 9,397' 9,065 9,487 27 Bahamas 99,341 107,386 100,597 98,530 100,025 101,702 92,536 82,561 69,073 77,517 28 Bermuda 2,884 2,822 3,178 3,368 3,009 3,598 4,848 4,782 4,255' 5,879 29 Brazil 6,351 5,834 5,942 5,752 5,399 5,612 5,522 5,283' 5,393 5,828 30 British West Indies 138,309 147,321 163,872 160,991 158,515 156,756 151,877 148,450 153,472 136,674 31 Chile 3,212 3,145 3,284 3,506 3,792 3,702 3,606 3,393' 3,440 3,253 32 Colombia 4,653 4,492 4,662 4,915 4,902 4,721 4,687 4,711 4,792' 4,767 33 Cuba 10 11 2 9 6 3 12 9 33' 11 34 Ecuador 1,391 1,379 1,232 1,128 1,150 1,137 1,074 1,214 1,073 1,026 35 Guatemala 1,312 1,541 1,594 1,489 1,438 1,447 1,420 1,432 1,416 1,376 36 Jamaica 209 257 231 234 242 309 271 272 309 274 37 Mexico 15,423 16,650 19,957 21,362 20,842 19,491 19,642 20,046 19,650 19,226 38 Netherlands Antilles 6,310 7,357 5,592 5,986 5,347 5,313 5,085 4,825 4,751 4,708 39 Panama 4,362 4,574 4,695 4,216 4,100 4,286 4,457 4,302 4,595 4,115 40 Peru 1,984 1,294 1,249 1,094 1,098 1,156 1,131 1,123 1,143 1,124 41 Uruguay 2,284 2,520 2,111 2,171 2,118 2,182 2,175 2,182' 2,019 2,086 42 Venezuela 9,482 12,271 13,181 11,874 11,705 11,448 11,080 10,802 11,101 11,470 43 Other 6,206 6,779 6,888 6,646 6,793 6,949 6,444 6,481' 6,459 6,259 44 Asia 156,201 136,844 120,440 125,187 128,083 124,549 124,894 125,214 144,134 134,241 China 45 People's Republic of China 1,773 2,421 2,626 2,753 2,364 2,378 2,292 2,508 2,480 2,582 46 Republic of China (Taiwan) 19,588 11,246 11,491 10,471 10,265 9,985 10,277 10,362 8,504 47 Hong Kong 12,416 12,754 14,269 16,125 17,885 16,980 16,840 17,775 17,991 17,486 48 India 780 1,233 2,418 1,792 1,671 1,715 1,567 1,480 1,372 1,234 49 Indonesia 1,281 1,238 1,463 1,109 1,133 1,387 1,256 958 1,507 1,315 50 Israel 1,243 2,767 2,015 3,791 3,432 2,976 2,850 2,620 2,613 2,208 51 Japan 81,184 67,076 47,047 47,337 46,183 44,265 45,815 45,682 64,64c 56,058 52 Korea (South) 3,215 2,287 2,587 3,016 3,132 2,839 3,288 3,644 3,672' 3,531 53 Philippines 1,766 1,585 2,449 2,266 1,630 1,813 1,994 1,920 2,028 2,275 54 Thailand 2,093 1,443 2,252 3,147 6,990 4,586 4,017 4,624 4,517 5,082 55 Middle Eastern oil-exporting countries 13,370 15,829 15,752 18,614 18,297 18,983 19,828 18,938 19,977 19,040 56 Other 17,491 16,965 16,071 14,766 15,101 16,642 14,870 14,703 13,907' 14,926 57 Africa 3,824 4,630 4,825 4,864 5,430 5,810 5,516 5,314 5,592 5,843 58 Egypt 686 1,425 1,621 1,610 2,001 2,540 2,324 2,143 2,243 2,598 59 Morocco 78 104 79 88 77 87 85 93 100 98 60 South Africa 206 228 228 188 399 248 269 275 190 240 61 Zaire 86 53 31 27 26 29 17 24 14 24 62 Oil-exporting countries 1,121 1,110 1,082 1,277 1,257 1,232 1,211 1,090 1,339 1,201 63 Other 1,648 1,710 1,784 1,674 1,670 1,674 1,610 1,689 1,706 1,682 64 Other 4,564 4,444 5,567 4,473 4,482 4,398 4,425 4,629 4,088 4,403 65 Australia 3,867 3,807 4,464 3,575 3,211 3,192 3,066 3,322 2,927 2,987 66 Other 697 637 1,103 898 1,271 1,206 1,359 1,307 1,161 1,416 67 Nonmonetary international and regional organizations 4,894 5,918 8,981 10,291 11,313 12,771 11,281 12,584 10,554' 10,637 68 International15 3,947 4,390 6,485 7,543 8,400 9,796 7,362 9,361 7,458' 7,590 69 Latin American regional 684 1,048 1,181 1,788 1,903 2,356 2,699 2,319 2,289' 2,139 70 Other regional 263 479 1,315 960 1,010 619 1,220 904 807 908 11. Includes the Bank for International Settlements and Eastern European 15. Principally the International Bank for Reconstruction and Development. countries not listed in line 23. Excludes "holdings of dollars" of the International Monetary Fund. 12. Comprises Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 17. Asian, African, Middle Eastern, and European regional organizations, United Arab Emirates (Trucial States). except the Bank for International Settlements, which is included in "Other 14. Comprises Algeria, Gabon, Libya, and Nigeria. Western Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • February 1993 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 Area and country 11998899 11999900 11999911 Apr. May June July Aug. Sept/ 1 Total, all foreigners 534,492 511,543 514,318 506,854 504,682 511,951 503,051 479,602r 485,199 2 Foreign countries 530,630 506,750 508,035 502,065 499,881 505,957 499,630 475,213r 481,028 3 Europe 119,025 113,093 114,355 123,696 120,739 126,207 124,473 119,071" 117,178 4 Austria 415 362 327 444 456 433 647 606 341 5 Belgium and Luxembourg 6,478 5,473 6,158 6,967 6,487 6,166 6,475 6,324 7,504 6 Denmark 582 497 686 871 994 1,436 951 901 1,007 7 Finland 1,027 1,047 1,912 1,475 1,536 1,516 1,269 1,081 1,299 8 France 16,146 14,468 15,112 13,685 14,031 14,440 14,154 13,011 15,004 9 Germany 2,865 3,343 3,371 3,117 4,044 3,311 3,863 4,707 4,074 10 Greece 788 727 553 567 492 506 590 619 606 11 Italy 6,662 6,052 8,242 9,835 10,282 10,619 10,507 9,876 9,487 12 Netherlands 1,904 1,761 2,546 2,688 2,642 2,267 2,041 2,075 1,980 13 Norway 609 782 669 567 731 722 731 707 639 14 Portugal 376 292 344 361 398 367 382 387 383 15 Spain 1,930 2,668 1,881 3,726 2,687 3,880 3,730 2,590 3,304 16 Sweden 1,773 2,094 2,335 3,062 3,007 6,745 5,982 6,567r 5,494 17 Switzerland 6,141 4,202 4,540 4,095 4,144 3,973 3,683 3,934 3,112 18 Turkey 1,071 1,405 1,063 927 1,130 976 1,173 l,002r 984 19 United Kingdom 65,527 65,151 60,435 66,365 62,509 63,932 62.815 58,826r 56,421 20 Yugoslavia 1,329 1,142 825 781 735 697 693 678 674 21 Others in Western Europe2 1,302 597 789 821 894 771 1,227 l,356r 1,216 22 U.S.S.R 1,179 530 1,970 2,824 2,948 3,035 3,153 3,280 3,199 23 Other Eastern Europe 921 499 597 518 592 415 407 544 450 24 Canada 15,451 16,091 15,094 15,121 16,460 16,401 17,438 15,151r 15,902 25 Latin America and Caribbean 230,438 231,506 246,064 239,307 238,502 243,532 234,119 217,549" 210,251 26 Argentina 9,270 6,967 5,869 5,949 5,956 5,3% 5,614 4,789 4,560 27 Bahamas 77,921 76,525 87,173 82,118 84,668 83,141 74.816 62,615 58,502 28 Bermuda 1,315 4,056 2,191 6,377 4,283 4,951 6,099 6,302 3,567 29 Brazil 23,749 17,995 11,845 12,321 12,183 12,020 12,186 12,286 11,308 30 British West Indies 68,749 88,565 107,866 100,777 100,352 106,676 104,188 99,765r 99,239 31 Chile 4,353 3,271 2,805 2,922 3,055 3,227 3,118 3,220" 3,320 32 Colombia 2,784 2,587 2,425 2,322 2,328 2,304 2,398 2,322 2,475 33 Cuba 1 0 0 2 0 0 0 0 0 34 Ecuador 1,688 1,387 1,053 986 939 936 950 949 920 35 Guatemala 197 191 228 216 171 173 167 189 237 36 Jamaica 297 238 158 150 143 150 151 150 160 37 Mexico 23,376 14,851 16,567 17,367 16,900 16,455 16,331 16,541" 17,290 38 Netherlands Antilles 1,921 7,998 1,207 1,265 904 920 941 966 1,045 39 Panama 1,740 1,471 1,560 1,834 1,926 2,199 2,025 2,053 1,945 40 Peru 771 663 739 715 666 719 708 708 732 41 Uruguay 929 786 599 685 717 765 749 799 921 42 Venezuela 9,652 2,571 2,516 2,010 2,046 2,215 2,360 2,585 2,654 43 Other 1,726 1,384 1,263 1,291 1,265 1,285 1,318 1,310" 1,376 44 Asia 157,474 138,722 125,288 116,770 117,259 112,406 115,961 116,494" 130,599 China 45 People's Republic of China 634 620 747 660 729 685 642 696 636 46 Republic of China (Taiwan) 2,776 1,952 2,087 2,008 1,808 1,778 1,965 1,983" 2.054 47 Hong Kong 11,128 10,648 9,617 8,520 9,127 8,272 9,103 8,010 10,082 48 India 621 655 441 504 475 458 512 528 499 49 Indonesia 651 933 952 1,055 1,132 11,,008855 1,090 1,108 1,089 50 Israel 813 774 860 837 874 888888 901 920 800 51 Japan 111,300 90,699 84,833 72,116 74,430 69,269 71,159 71,459" 83,191 52 Korea (South) 5,323 5,766 6,048 6,218 5,7% 5,927 6,063 6,201 6,247 53 Philippines 1,344 1,247 1,910 1,690 1,618 1,648 1,635 1,775 1,852 54 Thailand 1,140 1,573 1,713 1,618 1,703 1,756 1,705 1,691" 1,795 55 Middle Eastern oil-exporting countries 10,149 10,749 8,284 14,562 13,453 14,505 14,323 14,783 14,613 56 Other 11,594 13,106 7,796 6,982 6,114 6,135 6,863 7,340 7,741 57 Africa 5,890 5,445 4,928 4,818 4,582 4,548 4,452 4,455 4,333 58 Egypt 502 380 294 242 218 256 261 243 256 59 Morocco 559 513 575 547 529 527 496 483 467 60 South Africa 1,628 1,525 1,235 1,239 1,128 1,070 1,047 1,066 1.055 61 Zaire 16 16 4 4 4 4 4 4 4 62 Oil-exporting countries 1,648 1,486 1,298 1,160 1,162 1,159 1,157 1,130 1,067 63 Other 1,537 1,525 1,522 1,626 1,541 1,532 1,487 1,529 1,484 64 Other 2,354 1,892 2,306 2,353 2,339 2,863 3,187 2,493 2,765 65 Australia 1,781 1,413 1,665 1,424 1,197 1,725 1,937 1,463 1,765 66 Other 573 479 641 929 1,142 1,138 1,250 1,030 1,000 67 Nonmonetary international and regional organizations 3,862 4,793 6,283 4,789 4,801 5,994 3,421 4,389 4,171 1. Reporting banks include all types of depository institutions, as well as some 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 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 1992 CCllaaiimm 11998899 11999900 11999911 Apr. May June July Aug.r Sept.r Oct." 1 Total 555555599999993333333,,,,,,,000000088888887777777 555555577777779999999,,,,,,,000000044444444444444 555555577777779999999,,,,,,,666666622222222222222 555555566666665555555,,,,,,,555555599999997777777 555555555555551111111,,,,,,,999999988888885555555 22 BBaannkkss'' ccllaaiimmss 555555533333334444444,,,,,,,444444499999992222222 555555511111111111111,,,,,,,555555544444443333333 555555511111114444444,,,,,,,333333311111118888888 506,854 504,682 555555511111111111111,,,,,,,999999955555551111111 503,051 479,602 444444488888885555555,,,,,,,111111199999999999999 493,358 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 66666660000000,,,,,,,555555511111111111111 44444441111111,,,,,,,999999900000000000000 33333337777777,,,,,,,111111133333330000000 34,585 34,637 33333335555555,,,,,,,999999944444446666666 32,926 32,263 33333331111111,,,,,,,444444477777774444444 32,030 44 OOwwnn ffoorreeiiggnn ooffffiicceess 222222299999996666666,,,,,,,000000011111111111111 333333300000004444444,,,,,,,333333311111115555555 333333311111118888888,,,,,,,888888899999994444444 302,551 308,342 333333311111114444444,,,,,,,666666611111113333333 302,066 287,523 222222299999997777777,,,,,,,555555544444440000000 297,630 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 111111133333334444444,,,,,,,888888888888885555555 111111111111117777777,,,,,,,222222277777772222222 111111111111116666666,,,,,,,555555566666669999999 120,195 116,823 111111111111112222222,,,,,,,000000044444448888888 114,045 105,8% 111111100000005555555,,,,,,,6666666%%%%%%% 112,090 66 DDeeppoossiittss 77777778888888,,,,,,,111111188888885555555 66666665555555,,,,,,,222222255555553333333 66666669999999,,,,,,,111111166666668888888 70,703 70,205 66666663333333,,,,,,,666666677777778888888 63,004 56,294 55555554444444,,,,,,,333333322222221111111 60,881 77 OOtthheerr 55555556666666,,,,,,,777777700000000000000 55555552222222,,,,,,,000000011111119999999 44444447777777,,,,,,,444444400000001111111 49,492 46,618 44444448888888,,,,,,,333333377777770000000 51,041 49,602 55555551111111,,,,,,,333333377777775555555 51,209 88 AAllll ootthheerr ffoorreeiiggnneerrss 44444443333333,,,,,,,000000088888885555555 44444448888888,,,,,,,000000055555556666666 44444441111111,,,,,,,777777722222225555555 49,523 44,880 44444449999999,,,,,,,333333344444444444444 54,014 53,920 55555550000000,,,,,,,444444488888889999999 51,608 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss33...... 55555558888888,,,,,,,555555599999994444444 66666667777777,,,,,,,555555500000001111111 66666665555555,,,,,,,333333300000004444444 55555553333333,,,,,,,666666644444446666666 66666666666666,,,,,,,777777788888886666666 11111113333333,,,,,,,000000011111119999999 11111114444444,,,,,,,333333377777775555555 11111115555555,,,,,,,222222244444440000000 11111117777777,,,,,,,000000099999998888888 11111115555555,,,,,,,333333344444448888888 11 Negotiable and readily transferable 33333330000000,,,,,,,999999988888883333333 44444441111111,,,,,,,333333333333333333333 33333337777777,,,,,,,111111122222225555555 22222224444444,,,,,,,222222244444440000000 33333338888888,,,,,,,222222255555558888888 12 Outstanding collections and other 11111114444444,,,,,,,555555599999992222222 11111111111111,,,,,,,777777799999992222222 11111112222222,,,,,,,999999933333339999999 11111112222222,,,,,,,333333300000008888888 11111113333333,,,,,,,111111188888880000000 MEMO: 11111112222222,,,,,,,888888899999999999999 11111113333333,,,,,,,666666622222228888888 8888888,,,,,,,999999977777774444444 7777777,,,,,,,555555577777771111111 8888888,,,,,,,555555500000007777777 1144 DDoollllaarr ddeeppoossiittss iinn bbaannkkss aabbrrooaadd,, rreeppoorrtteedd bbyy nnoonnbbaannkkiinngg bbuussiinneessss eenntteerrpprriisseess iinn tthhee UUnniitteedd SSttaatteess ........ 45,767 44,638 38,888 34,255 32,963 33,100 . 34,283r 32,757 33,010 n.a. 1. For banks' claims, data are monthly; for claims of banks' domestic custom- foreign bank, and foreign branches, agencies, or wholly owned subsidiaries of ers, data are quarterly. head office or parent foreign bank. Reporting banks include all types of depository institution, as well as some 3. Assets held by reporting banks for the account of their domestic customers. brokers and dealers. 4. Principally negotiable time certificates of deposit and bankers acceptances. 2. For U.S. banks, includes amounts due from own foreign branches and 5. Includes demand and time deposits and negotiable and nonnegotiable foreign subsidiaries consolidated in Consolidated Report of Condition filed with certificates of deposit denominated in U.S. dollars issued by banks abroad. For bank regulatory agencies. For agencies, branches, and majority-owned subsidiar- description of changes in data reported by nonbanks, see Federal Reserve ies of foreign banks, consists principally of amounts due from head office or parent Bulletin, vol. 65 (July 1979), 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 Dec. Mar. June Sept.p 1 Total 233,184 238,123 206,903 195,187 194,219 1%,934 187,277 By borrower 2 Maturity of one year or less 172,634 178,346 165,985 162,515 161,266 162,473 155,022 3 Foreign public borrowers 26,562 23,916 19,305 21,047 20,241 20,491 17,786 4 All other foreigners 146,072 154,430 146,680 141,468 141,025 141,982 137,236 5 Maturity of more than one year 60,550 59,776 40,918 32,672 32,953 34,461 32,255 6 Foreign public borrowers 35,291 36,014 22,269 15,866 16,344 15,144 13,340 7 All other foreigners 25,259 23,762 18,649 16,806 16,609 19,317 18,915 By area n Maturity of one year or less* 8 Europe 55,909 53,913 49,184 51,875 52,608 54,977 55,785 9 Canada 6,282 5,910 5,450 6,474 6,926 7,946 5,973 10 Latin America and Caribbean 57,991 53,003 49,782 43,521 48,597 49,204 45,295 II Asia 46,224 57,755 53,258 51,007 43,605 41,386 40,699 17 Africa 3,337 3,225 3,040 2,549 2,486 2,142 2,199 13 All other3 2,891 4,541 5,272 7,089 7,044 6,818 5,071 Maturity of more than one year 14 Europe 4,666 4,121 3,859 3,883 4,355 6,786 6,663 15 Canada 1,922 2,353 3,290 3,546 3,250 3,173 3,243 16 Latin America and Caribbean 47,547 45,816 25,774 18,264 18,180 16,891 15,133 17 Asia 3,613 4,172 5,165 4,459 4,738 5,007 4,847 18 Africa 2,301 2,630 2,374 2,335 2,191 2,341 2,091 19 All other3 501 684 456 185 239 263 278 1. Reporting banks include all kinds of depository institutions besides commer- 2. Maturity is time remaining 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 • February 1993 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 AArreeaa oorr ccoouunnttrryy 11998888 11998899 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept." 1 Total 346.3 338.8 331.5 317.8 325.4 320.8 335.5 341.5 347.5 355.4 342.1 2 G-10 countries and Switzerland 152.7 152.9 143.6 132.1 129.9 130.1 134.0 137.3 130.4 135.6 136.4 3 Belgium and Luxembourg 9.0 6.3 6.5 5.9 6.2 6.1 5.8 6.0 5.3 6.2 6.2 4 France 10.5 11.7 11.1 10.4 9.7 10.5 11.1 11.0 10.0 11.9 15.5 5 Germany 10.3 10.5 11.1 10.6 8.8 8.3 9.7 8.3 8.4 8.7 10.9 6 Italy 6.8 7.4 4.4 5.0 4.0 3.6 4.5 5.6 5.4 8.0 6.4 1 Netherlands 2.7 3.1 3.8 3.0 3.3 3.3 3.0 4.7 4.3 3.3 3.7 8 Sweden 1.8 2.0 2.3 2.2 2.0 2.5 2.1 1.9 2.0 2.0 2.2 9 Switzerland 5.4 7.1 5.6 4.4 3.7 3.3 3.9 3.4 3.2 4.6 5.0 10 United Kingdom 66.2 67.2 62.6 60.8 62.2 59.8 64.9 68.5 64.6 65.9 61.6 11 Canada 5.0 5.4 5.0 5.9 6.8 8.2 5.9 5.9 6.6 6.7 6.7 12 Japan 34.9 32.2 31.3 23.9 23.2 24.6 23.2 22.2 20.7 18.3 18.3 13 Other industrialized countries 21.0 20.7 23.0 22.6 23.1 21.1 21.7 22.7 21.2 25.4 24.9 14 Austria 1.5 1.5 1.6 1.4 1.4 1.1 1.0 .6 ..88 .8 .7 15 Denmark 1.1 1.1 1.1 1.1 .9 1.2 .9 .9 ..88 11..33 1.5 lb Finland 1.1 1.0 .8 .7 1.0 .8 .7 .7 .8 ..88 1.0 11 Greece 1.8 2.5 2.8 2.7 2.5 2.4 2.3 2.6 2.3 2.8 3.0 18 Norway 1.8 1.4 1.6 1.6 1.5 1.5 1.4 1.4 1.5 1.7 1.6 19 Portugal .4 .4 .6 .6 .6 .6 .5 .6 .5 .5 .5 20 Spain 6.2 7.1 8.4 8.3 9.0 7.1 8.3 8.3 7.7 10.1 9.8 21 Turkey 1.5 1.2 1.6 1.7 1.7 1.9 1.6 1.4 1.2 1.5 1.5 22 Other Western Europe 1.3 .7 .7 .9 .8 .9 1.0 1.6 11..33 1.9 1.4 2 i South Africa 2.4 2.0 1.9 1.8 1.8 1.8 1.6 1.9 11..88 1.7 1.7 24 Australia 1.8 1.6 2.0 1.8 1.9 2.0 2.4 2.7 2.3 2.3 2.3 25 OPEC2 16.6 17.1 14.2 12.8 17.1 14.0 15.6 14.6 15.8 16.2 15.9 2b Ecuador 1.7 1.3 1.1 1.0 .9 .9 .8 .7 .7 .7 .7 2/ Venezuela 7.9 7.0 6.0 5.0 5.1 5.3 5.6 5.4 5.4 5.3 5.4 28 Indonesia 1.7 2.0 2.3 2.7 2.8 2.6 2.8 2.8 3.0 3.0 3.0 29 Middle East countries 3.4 5.0 3.1 2.5 6.6 3.7 5.0 4.2 5.3 5.9 5.4 30 African countries 1.9 1.7 1.7 1.7 1.6 1.5 1.5 1.5 1.4 1.4 1.4 31 Non-OPEC developing countries 85.3 77.5 67.1 65.4 66.4 65.0 65.0 64.3 70.6 68.8 73.8 Latin America 32 Argentina 9.0 6.3 5.0 5.0 4.7 4.6 4.5 4.8 5.0 5.1 6.2 33 Brazil 22.4 19.0 15.4 14.4 13.9 11.6 10.5 9.5 10.8 10.6 10.8 34 Chile 5.6 4.6 3.6 3.5 3.6 3.6 3.7 3.6 3.9 4.0 4.2 35 Colombia 2.1 1.8 1.8 1.8 1.7 1.6 1.6 1.7 1.6 1.6 1.7 36 Mexico 18.8 17.7 12.8 13.0 13.7 14.3 16.2 15.5 18.2 16.5 17.7 3/ Peru .8 .6 .5 .5 .5 .5 .4 .4 .4 .4 .5 38 Other 2.6 2.8 2.4 2.3 2.2 2.0 1.9 2.1 2.2 2.2 2.5 Asia China 39 Peoples Republic of China .3 .3 .2 .2 .4 .6 .4 .3 .3 .3 .3 40 Republic of China (Taiwan) 3.7 4.5 4.0 3.5 3.6 4.1 4.1 4.1 4.8 4.6 5.0 41 India 2.1 3.1 3.6 3.3 3.5 3.0 2.8 3.0 3.6 3.8 3.6 42 Israel 1.2 .7 .6 .5 .5 .5 .5 .5 .4 .4 .4 43 Korea (South) 6.1 5.9 6.2 6.2 6.8 6.9 6.5 6.8 6.9 6.9 7.4 44 Malaysia 1.6 1.7 1.8 1.9 2.0 2.1 2.3 2.3 2.5 2.7 3.0 45 Philippines 4.5 4.1 3.9 3.8 3.7 3.7 3.6 3.7 , 3.6 3.0 3.3 46 Thailand 1.1 1.3 1.5 1.5 1.6 1.7 1.9 1.7 1.7 1.9 2.2 4/ Other Asia3 .9 1.0 1.6 1.7 2.1 2.3 2.3 2.4 2.7 3.1 3.3 Africa 4488 Egypt .4 .4 .4 .4 .4 .4 .4 .4 .3 .5 .3 49 Morocco .9 .9 .9 .8 .8 .7 .7 .7 .7 .7 .6 50 Zaire .0 .0 .0 .0 .0 .0 ..00 .0 .0 .0 .0 51 Other Africa3 1.1 1.0 .8 1.0 .8 .8 ..88 .7 .7 .6 .9 52 Eastern Europe 3.6 3.5 2.7 2.3 2.1 2.1 1.8 2.4 2.9 3.0 3.1 53 U.S.S.R .7 .7 .4 .2 .3 .4 .4 .9 11..44 1.7 1.8 54 Yugoslavia 1.8 1.6 1.3 1.2 1.0 1.0 .8 .9 ..88 .7 .7 55 Other 1.1 1.3 1.1 .9 .8 .7 .7 .7 .6 .6 .7 56 Offshore banking centers 44.2 36.6 42.6 42.5 50.1 48.3 52.4 51.9 58.5 56.9 49.5 il Bahamas 11.0 5.5 8.9 2.8 8.4 6.8 6.7 12.0 14.1 12.1 7.5 58 Bermuda .9 1.7 4.5 4.4 4.4 4.2 7.1 2.2 3.9 5.1 3.8 59 Cayman Islands and other British West Indies 12.9 9.0 9.3 11.5 14.1 14.9 13.8 15.9 17.4 1188,,00 15.4 60 Netherlands Antilles 1.0 2.3 2.2 7.9 1.1 1.4 3.5 1.2 1.0 ..88 .7 61 Panama4 2.5 1.4 1.5 1.4 1.5 1.3 11..33 11..33 1.3 11..44 11..66 62 Lebanon .1 .1 .1 .1 .1 .1 ..11 ..11 .1 ..11 11 63 Hong Kong 9.6 9.7 8.7 7.7 11.6 12.4 12.1 12.2 12.2 13.0 12.9 64 Singapore 6.1 7.0 7.5 6.6 8.9 7.2 7.7 7.1 8.5 6.4 7.4 65 Other .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 66 Miscellaneous and unallocated6 22.6 30.3 38.1 39.8 36.4 39.9 44.6 48.2 48.0 49.1 38.3 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 1991 1992 Type and area or country 11998888 11998899 11999900 Mar. June Sept. Dec. Mar. June 1 Total 32,952 38,764 44,988 41,787 40,472 41,916 41,505 43,495 44,215" 2 Payable in dollars 27,335 33,973 39,791 37,211 36,003 37,210 36,225 38,174 37,522" 3 Payable in foreign currencies 5,617 4,791 5,197 4,576 4,469 4,706 5,280 5,321 6,693 By type 4 Financial liabilities 14,507 17,879 20,010 18,606 18,260 20,350 20,242 21,664 22,043" 5 Payable in dollars 10,608 14,035 15,984 15,266 14,947 16,675 16,242 17,566 16,799" 6 Payable in foreign currencies 3,900 3,844 4,026 3,340 3,313 3,675 4,000 4,098 5,244 7 Commercial liabilities 18,445 20,885 24,977 23,181 22,212 21,566 21,263 21,831 22,172 8 Trade payables 6,505 8,070 10,683 8,793 8,569 8,313 8,310 8,914 9,500 9 Advance receipts and other liabilities 11,940 12,815 14,294 14,388 13,644 13,253 12,953 12,917 12,672 10 Payable in dollars 16,727 19,938 23,807 21,945 21,056 20,535 19,983 20,608 20,723 11 Payable in foreign currencies 1,717 947 1,170 1,236 1,157 1,031 1,280 1,223 1,449 By area or country Financial liabilities 12 Europe 9,962 11,660 10,346 9,559 9,634 11,403 10,814 12,071 13,091" 13 Belgium and Luxembourg 289 340 394 335 355 397 217 174 194 14 France 359 258 700 632 556 1,747 1,593 1,997 2,324 15 Germany 699 464 621 561 658 652 649 636 836 16 Netherlands 880 941 1,081 1,036 1,026 1,050 1,056 1,025 979 17 Switzerland 1,033 541 516 517 484 468 360 355 490" 18 United Kingdom 6,533 8,818 6,395 5,810 5,932 6,521 6,294 6,977 7,392" 19 Canada 388 610 229 278 293 305 267 283 337 20 Latin America and Caribbean 839 1,357 4,153 4,255 3,808 3,883 4,307 4,047 3,308" 21 Bahamas 184 157 371 392 375 314 537 396 343 22 Bermuda 0 17 0 0 12 0 114 114 114 23 Brazil 0 0 0 0 0 6 6 8 10 24 British West Indies 645 724 3,160 3,293 2,816 2,961 3,047 2,915 2,167" 25 Mexico 1 6 5 6 6 6 7 7 8 26 Venezuela 0 0 4 4 4 4 4 4 4 27 Asia 3,312 4,151 4,872 4,510 4,515 4,755 4,796 5,168 5,218 28 Japan 2,563 3,299 3,637 3,432 3,339 3,605 3,557 3,906 4,122 29 Middle East oil-exporting countries 3 2 5 1 4 19 13 13 10 30 Africa 2 2 2 2 9 3 6 7 0 31 Oil-exporting countries3 0 0 0 0 7 2 4 6 0 4 100 409 2 2 1 52 88 89 32 All other4 Commercial liabilities 7,319 9,071 10,310 9,666 8,607 8,084 7,808 7,491 7,131 33 Europe 158 175 275 261 245 225 248 256 240 34 Belgium and Luxembourg 455 877 1,218 1,203 1,185 992 830 671 659 35 France 1,699 1,392 1,270 1,383 1,040 911 944 878 691 36 Germany 587 710 844 729 729 751 709 574 605 37 Netherlands 417 693 775 661 580 492 488 482 400 38 Switzerland 2,079 2,620 2,792 2,755 2,289 2,217 2,310 2,444 2,404 39 United Kingdom 40 Canada 1,217 1,124 1,261 1,251 1,208 1,011 990 1,094 1,077 41 Latin America and Caribbean 1,090 1,224 1,672 1,589 1,619 1,512 1,352 1,701 1,803 42 Bahamas 49 41 12 14 5 14 3 13 8 43 Bermuda 286 308 538 494 504 450 310 493 409 44 Brazil 95 100 145 216 180 211 219 230 212 45 British West Indies 34 27 30 35 49 46 107 108 73 46 Mexico 217 323 475 343 358 291 304 375 475 47 Venezuela 114 164 130 129 119 102 94 168 279 48 Asia 6,915 7,550 9,483 8,595 8,752 8,855 9,330 9,889 10,436 49 Japan 3,094 2,914 3,651 3,423 3,411 3,363 3,720 3,548 3,534 50 Middle Eastern oil-exporting countries • 1,385 1,632 2,016 1,543 1,657 1,780 1,498 1,591 1,778 51 Africa 576 886 844 617 596 836 713 644 775 52 Oil-exporting countries 202 339 422 211 226 357 327 253 389 53 Other4 1,328 1,030 1,406 1,464 1,431 1,268 1,070 1,012 950 1. For a description of the changes in the international statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. Federal Reserve Bulletin, vol. 65, (July 1979), 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 • February 1993 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1991 1992 Type, and area or country 11998899 11999900 Mar. June Sept. Dec. Mar. June 1 Total 33,805 33,173 35,365 35,578 37,124 38,345 42,386 41,746 41,659r 2 Payable in dollars 31,425 30,773 32,777 33,279 35,037 35,982 39,829 39,135 38,693r 3 Payable in foreign currencies 2,381 2,400 2,589 2,299 2,087 2,363 2,557 2,611 2,966r By type 4 Financial claims 21,640 19,297 19,891 19,746 20,904 22,566 25,320 25,029 24,606r 5 Deposits 15,643 12,353 13,727 13,115 12,576 16,227 17,177 16,819 15,138r 6 Payable in dollars 14,544 11,364 12,552 12,052 11,758 15,182 16,253 15,626 13,795r 7 Payable in foreign currencies 1,099 989 1,175 1,063 817 1,045 924 1,193 l,343r 8 Other financial claims 5,997 6,944 6,164 6,631 8,328 6,339 8,143 8,210 9,468r 9 Payable in dollars 5,220 6,190 5,297 5,960 7,656 5,641 7,322 7,521 8,799r 10 Payable in foreign currencies 777 754 866 671 673 698 821 689 669r 11 Commercial claims 12,166 13,876 15,475 15,832 16,220 15,779 17,066 16,717 17,053 12 Trade receivables 11,091 12,253 13,657 13,843 14,120 13,429 14,389 14,168 14,594 13 Advance payments and other claims 1,075 1,624 1,817 1,989 2,100 2,350 2,677 2,549 2,459 14 Payable in dollars 11,660 13,219 14,927 15,266 15,623 15,159 16,254 15,988 16,099 15 Payable in foreign currencies 505 657 548 566 597 620 812 729 954 By area or country Financial claims 16 Europe 10,278 8,463 9,651 10,640 11,875 13,131 13,523 14,083 13,173r 17 Belgium and Luxembourg 18 28 76 86 74 76 13 12 25 18 France 203 153 371 208 271 255 312 277 786 19 Germany 120 152 367 312 298 434 342 290 381 20 Netherlands 348 238 265 380 429 420 385 727 732 21 Switzerland 217 153 357 422 433 580 591 682 779 22 United Kingdom 9,039 7,4% 7,971 9,016 10,222 10,997 11,226 11,507 8,739* 23 Canada 2,325 1,904 2,934 1,929 2,017 2,172 2,674 2,744 2,534r 24 Latin America and Caribbean 8,160 8,020 6,201 6,278 5,926 6,289 7,793 6,836 7,260r 25 Bahamas 1,846 1,890 1,090 825 457 652 758 400 523 26 Bermuda 19 7 3 6 4 19 8 12 12 27 Brazil 47 224 68 68 127 137 192 191 181 28 British West Indies 5,763 5,486 4,635 4,949 4,957 5,106 6,300 5,748 6,018r 29 Mexico 151 94 177 179 161 176 321 318 343 30 Venezuela 21 20 25 28 29 32 40 34 32 31 Asia 623 590 860 568 747 619 %2 1,009 1,280 3 3 2 3 J M ap id a d n l e East oil-exporting countries2 .. 354 5 213 8 523 8 24 1 6 1 39 4 8 277 3 38 5 5 423 3 712 4 34 Africa 106 140 37 62 64 61 57 60 57 35 Oil-exporting countries3 10 12 0 3 1 1 1 0 0 36 All other4 148 180 207 269 275 294 311 297 302 Commercial claims 4 4 4 3 4 3 3 0 1 3 9 2 7 8 Eu G N U F B S ro r w e e n e a p l r t i i g n m h t e t e i z c e u d a e e r m n r l l a K y a n a n i d n n d s g d d L om ux embourg 5 1 , , 1 6 6 2 3 3 1 8 7 6 1 4 2 8 1 2 9 2 4 4 9 6 1 , , 6 4 2 9 2 3 5 % 7 0 6 4 1 7 9 9 4 2 3 5 7 1 1 , , , 0 8 5 2 2 3 7 4 0 5 4 1 7 0 4 7 5 0 2 5 1 7 1 1 , , , 0 6 2 8 3 2 6 6 0 7 2 2 7 3 0 4 4 5 7 3 9 7 1 1 , , , 4 9 7 2 4 2 8 6 0 5 % 0 2 1 4 7 8 2 0 7 6 1 1 , , , 8 8 6 3 2 8 1 4 8 5 3 5 0 9 1 4 8 0 8 7 0 2 7 1 , , , 8 0 9 6 2 5 1 6 3 4 7 9 3 9 5 4 3 8 5 9 2 2 7 1 , , , 0 9 6 8 5 3 1 4 2 5 6 0 2 8 5 9 2 9 9 7 1 8 2 1 , , , 9 6 1 0 5 2 3 6 0 6 5 2 5 9 1 5 0 1 7 2 9 44 Canada 983 1,091 1,074 1,213 1,241 1,232 1,169 1,167 1,122 45 Latin America and Caribbean 2,241 2,184 2,375 2,334 2,433 2,494 2,590 2,564 2,636 46 Bahamas 36 58 14 15 16 8 11 11 9 47 Bermuda 230 323 246 231 247 255 263 272 291 48 Brazil 299 297 326 327 309 385 418 361 431 49 British West Indies 22 36 40 49 43 37 41 45 32 50 Mexico 461 508 661 653 710 741 828 889 847 51 Venezuela 227 147 192 181 195 1% 202 206 248 52 Asia 2,993 3,570 4,127 4,357 4,201 4,282 4,552 4,326 4,433 53 Japan 946 1,199 1,460 1,816 1,645 1,808 1,861 1,770 1,778 54 Middle Eastern oil-exporting countries' 453 518 460 498 501 4% 622 636 606 5 5 5 6 Af O ri i c l a -e xporting countries3 4 1 3 2 5 2 4 1 2 0 9 8 48 6 8 7 3 6 9 8 4 42 6 8 3 43 8 1 0 41 9 8 5 41 7 7 5 41 7 9 0 57 Other4 333 393 367 474 454 456 472 434 416 1. For a description of the changes in the international statistics tables, see 3. Comprises Algeria, Gabon, Libya, and Nigeria. Federal Reserve Bulletin, vol. 65, (July 1979), 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 Transaction and area or country 1990 1991 Jan.- Apr. May June July Aug. Sept.r Oct." Oct. U.S. corporate securities STOCKS 1 Foreign purchases 173,293 211,204 180,615 17,536 18,664 16,525 18,547 13,174 13,884 18,697 2 Foreign sales 188,419 200,116 189,364 18,034 18,602 17,537 18,764 14,838 17,024 18,042 3 Net purchases or sales (—) -15,126 11,088 -8,749 -498 62 -1,012 -217 -1,664 -3,140 655 4 Foreign countries -15,197 10,520 -8,755 -531 27 -1,170 -234 -1,619 -3,049 658 5 Europe -8,479 50 -6,816 -730 278 -1,184 -964 -1,089 -1,675 62 6 France -1,234 9 -1,127 -217 -121 -148 10 -46 -234 -92 7 Germany -367 -63 -266 -48 149 -4 -14 -26 -105 -52 8 Netherlands -397 -227 -484 -38 76 -217 -14 -54 -107 -42 9 Switzerland -2,866 -131 -38 90 122 -10 -55 -150 -189 -124 10 United Kingdom -2,980 -354 -4,357 -334 -11 -691 -741 -652 -868 365 11 Canada 886 3,845 1,188 412 230 74 131 -59 -278 -226 12 Latin America and Caribbean -1,330 2,177 1,142 45 43 -109 -24 -24 -90 239 13 Middle East' -2,435 -134 66 -95 85 51 4 -11 136 -55 14 Other Asia -3,477 4,255 -4,422 -158 -557 141 373 -442 -1,062 779 15 Japan -2,891 1,179 -4,022 -318 -401 35 174 -301 -96 192 16 Africa -63 153 34 -1 20 -1 -7 -1 14 -22 17 Other countries -298 174 53 -4 -72 -142 253 7 -94 -119 18 Nonmonetary international and regional organizations 71 568 6 33 35 158 17 -45 -91 -3 BONDS2 19 Foreign purchases 118,764 153,096 176,593 16,722 17,539 16,691 18,343 19,785r 17,180 18,433 20 Foreign sales 102,047 125,634 142,821 11,666 13,222 12,407 16,311 16,620 14,465 14,591 21 Net purchases or sales (—) 16,717 27,462 33,772 5,056 4,317 4,284 2,032 3,165r 2,715 3,842 22 Foreign countries 17,187 27,592 33,363 4,861 4,388 4,205 2,153 3,150" 2,580 3,793 23 Europe 10,079 13,115 16,110 2,003 1,920 1,420 1,029 l,516r 1,825 1,481 24 France 373 847 1,019 363 -45 364 161 -5 161 -2 25 Germany -377 1,577 1,760 391 67 11 -37 -13 387 -33 26 Netherlands 172 482 339 -122 123 64 177 22 58 133 27 Switzerland 284 656 -358 -393 -40 -53 -13 -94 -51 -23 28 United Kingdom 10,383 8,933 11,884 1,543 1,496 847 760 l,447r 1,320 1,067 29 Canada 1,906 1,623 -7 87 -68 -111 67 -100 48 198 30 Latin America and Caribbean 4,328 2,672 7,823 572 1,022 619 676 878 548 885 31 Middle East' 3 1,787 2,332 338 455 376 239 284 -5 314 32 Other Asia 1,120 8,459 7,145 1,778 1,088 1,904 231 593r 171 967 33 Japan 727 5,767 -488 687 324 740 -710 —— 11,,222299"" -590 470 34 Africa 96 52 56 19 6 -6 22 11 -7 -50 35 Other countries -344 -116 -96 64 -35 3 -111 -22 0 -2 36 Nonmonetary international and regional organizations -471 -131 409 195 -71 79 -121 15 135 49 Foreign securities 37 Stocks, net purchases or sales (-) -9,205 -31,967 -23,968 -2,295 -913 72 -3,241 -2,921r -2,849 -4,144 38 Foreign purchases 122,641 120,598 125,208 11,336 13,871 14,604 13,485 9,759" 13,647 12,424 39 Foreign sales 131,846 152,565 149,176 13,631 14,784 14,532 16,726 12,680" 16,4% 16,568 40 Bonds, net purchases or sales (-) -22,412 -14,828 -16,808 -1,318 -2,767 -1,626 -4,747 275" -1,781 -3,389 41 Foreign purchases 314,645 330,311 413,540 30,421 33,109 40,145 43,226 45,929" 52,298 65,608 42 Foreign sales 337,057 345,139 430,348 31,739 35,876 41,771 47,973 45,654" 54,079 68,997 43 Net purchases or sales (-), of stocks and bonds -31,617 -46,795 -40,776 -3,613 -3,680 -1,554 -7,988 —2,646" -4,630 -7,533 44 Foreign countries -28,943 -46,711 -44,085 -4,768 -3,706 -1,938 -8,847 -2,733" -4,651 -7,560 45 Europe -8,443 -34,452 -29,374 -2,972 -163 -1,437 -5,790 -1,207" -3,273 -7,166 46 Canada -7,502 -7,004 -5,955 -904 -710 -852 -2,212 207" -142 -975 47 Latin America and Caribbean -8,854 759 -1,607 -845 -1,278 -556 1,622 -430" 82 387 48 -3,828 -7,350 -6,374 122 -1,235 372 -2,459 -1,375 -1,659 784 49 Africa -137 -9 -87 9 -99 7 14 11 -13 -2 50 Other countries -180 1,345 -688 -178 -221 528 -22 61" 354 -588 51 Nonmonetary international and regional organizations -2,673 -84 3,309 1,155 26 384 859 87 21 27 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, 3. In a July 1989 merger, the former stockholders of a U.S. company received Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). $5,453 million in shares of the new combined U.K. company. This transaction is 2. Includes state and local government securities and securities of U.S. not reflected in the data. government agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • February 1993 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions Millions of dollars 1992 Country or area 1990 1991 Jan.- Oct. Apr. May June July Aug. Sept. Oct." Transactions, net purchases or sales (-) during period1 1 Estimated total2 18,927 19,865 21,732 6,558 -7,924 14,448 -1,862 6,458r —6,042r 3,658 2 Foreign countries2 18,764 19,687 20,570 7,579 -6,945 11,758 -2,286 6,785r -6,251 4,465 3 Europe2 18,455 8,663 9,258 3,207 -7,302 3,828 -2,445 3,450" -4,703 4,777 4 Belgium ^nd Luxembourg 10 523 1,640 21 289 -49 331 80 -25 229 5 Germany" 5,880 -4,725 2,762 441 329 824 -829 255 900 -8 6 Netherlands 1,077 -3,735 -3,946 -219 -338 227 -1,046 367 -239 -40 7 Sweden 1,152 -663 -1,128 -123 -3 372 -26 -1,289 -843 202 8 Switzerland2 112 1,007 -952 10 -579 3 -703 -87 292 769 9 United Kingdom -1,259 6,218 14,196 2,820 -5,867 1,664 212 3,681r -32 4,170 10 Other Western Europe 11,463 10,024 -3,746 257 -1,099 587 -581 428 -4,761 -544 11 Eastern Europe 13 13 432 0 -34 200 197 15 5 -1 12 Canada -4,627 -3,019 1,748 185 2,627 47 2,520 900 -4,281 458 13 Latin America and Caribbean 14,734 10,285 -6,057 2,780 -320 3,589 -2,869 -1,563 -1,479 -2,002 14 Venezuela 33 10 501 -124 -196 -149 216 60 31 155 15 Other Latin America and Caribbean 3,943 4,179 -4,835 3,723 -2,472 1,795 -589 -758 -2,537 -3,315 16 Netherlands Antilles 10,757 6,097 -1,723 -819 2,348 1,943 -2,4% -865 1,027 1,158 17 Asia -10,952 3,367 18,445 1,363 -2,406 4,129 1,783 4,112r 4,005 1,522 18 Japan -14,785 -4,081 4,179 657 1,085 1,638 2,221 l,887r 2,448 -393 19 Africa 313 689 984 193 40 92 149 56 59 -37 20 Other 842 -298 -3,808 -149 416 73 -1,424 -170 148 -253 21 Nonmonetary international and regional organizations 163 178 1,162 -1,021 -979 2,690 424 -327r 209" -807 22 International 287 -358 980 -762 -747 2,421 365 — 133r -31" -903 23 Latin American regional -2 -72 465 74 -4 127 -68 —75 201 217 MEMO 24 Foreign countries" 18,764 19,687 20,570 7,579 -6,945 11,758 -2,286 6,785r -6,251 4,465 25 Official institutions 23,218 1,190 8,133 1,712 -2,685 5,294 -767 697 -4,483 3,000 26 Other foreign -4,453 18,496 12,437 5,867 -4,260 6,464 -1,519 6,088r -1,768 1,465 Oil-exportins countries 2277 Middle East3 -387 -6,822 3,607 556 -3,061 947 856 1,093 750 -69 28 Africa4 0 239 11 15 0 -56 0 0 4 0 1. Official and private transactions in marketable U.S. Treasury securities 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and having an original maturity of more than one year. Data are based on monthly United Arab Emirates (Trucial States). transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes 3. Comprises Algeria, Gabon, Libya, and Nigeria. held by official institutions of foreign countries. 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 BANKS1 Percent per year Rate on Dec. 31, 1992 Rate on Dec. 31, 1992 Rate on Dec. 31, 1992 Country Country Country Percent Month Percent Month Month effective effective effective Austria.. 8.0 Oct. 1992 Germany... 8.25 Sept. 1992 Norway 17.0 Nov. 1992 Belgium . 7.75 Oct. 1992 Italy 12.0 Dec. 1992 Switzerland 6.0 Sept. 1992 Canada.. 7.36 Dec. 1992 Japan 3.25 July 1992 United Kingdom 12.0 Sept. 1992 Denmark 9.5 Dec. 1991 Netherlands 7.75 Oct. 1992 France .. 9.0 Dec. 1992 1. Rates shown are mainly those at which the central bank either discounts or 2. Since Feb. 1981, the rate has been that at which the Bank of France makes advances against eligible commercial paper or government securities for discounts Treasury bills for seven to ten days. commercial banks or brokers. For countries with more than one rate applicable to such discounts or advances, the rate shown is the one at which it is understood that the central bank transacts the largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES1 Averages of daily figures, percent per year 1992 TTyyppee oorr ccoouunnttrryy 11999900 11999911 11999922 June July Aug. Sept. Oct. Nov. Dec. 1 8.16 5.86 3.71 3.87 3.40 3.33 3.15 3.30 3.67 3.51 "> 14.73 11.47 9.57 9.94 10.10 10.27 9.86 8.23 7.16 7.12 3 13.00 9.07 6.76 6.03 5.58 5.15 5.33 7.57 7.63 7.96 4 8.41 9.15 9.42 9.66 9.69 9.79 9.37 8.85 8.84 8.93 5 8.71 8.01 7.68 9.04 8.67 8.09 7.20 6.28 6.44 6.16 6 8.57 9.19 9.26 9.45 9.50 9.73 9.23 8.63 8.66 8.57 7 10.20 9.49 10.14 9.98 10.11 10.27 10.51 10.82 9.58 10.74 8 Italy 12.11 12.04 13.91 13.38 15.54 15.27 17.54 15.52 14.38 13.65 9 9.70 9.30 9.31 9.50 9.54 9.71 9.44 8.70 8.64 8.65 1100 7.75 7.33 4.39 4.60 4.32 3.87 3.89 3.85 3.77 3.76 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 • February 1993 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1992 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999900 11999911 11999922 July Aug. Sept. Oct. Nov. Dec. 1 Australia/dollar^ 78.069 77.872 73.540 74.507 72.479 72.255 71.481 68.984 68.974 2 Austria/schilling 11.331 11.686 10.990 10.500 10.199 10.214 10.436 11.168 11.130 3 Belgium/franc 33.424 34.195 32.143 30.717 29.824 29.917 30.581 32.661 32.545 4 Canada/dollar 1.1668 1.1460 1.2083 1.1924 1.1907 1.2225 1.2453 1.2674 1.2725 5 China, P.R./yuan 4.7921 5.3337 5.5195 5.4564 5.4417 5.5048 5.5486 5.6134 5.8106 6 Denmark/krone 6.1899 6.4038 6.0363 5.7409 5.5851 5.6203 5.7278 6.1166 6.1206 7 Finland/markka 3.8300 4.0521 4.4835 4.0803 3.9773 4.4764 4.7096 5.0615 5.1444 8 France/franc 5.4467 5.6468 5.2926 5.0321 4.9119 4.9378 5.0370 5.3706 5.3974 9 Germany/deutsche mark 1.6166 1.6610 1.5616 1.4914 1.4475 1.4514 1.4851 1.5875 1.5822 10 Greece/drachma 158.59 182.63 190.71 182.89 179.12 182.70 192.50 206.48 209.48 11 Hong Kong/dollar 7.7899 7.7712 7.7402 7.7341 7.7318 7.7298 7.7298 7.7348 7.7416 12 India/rupee 17.492 22.712 28.152 28.564 28.464 28.476 28.477 28.474 28.979 13 Ireland/pound 165.76 161.39 170.45 178.76 183.26 181.90 177.19 166.17 166.71 14 Italy/lira 1,198.27 1,241.28 1,231.20 1,129.83 1,100.00 1,176.21 1,309.64 1,364.45 1,412.38 15 Japan/yen 145.00 134.59 126.79 125.88 126.23 122.60 121.17 123.88 124.04 16 Malaysia/ringgit 2.7057 2.7503 2.5460 2.4999 2.4977 2.5029 2.5044 2.5227 2.5710 17 Netherlands/guilder 1.8215 1.8720 1.7584 1.6819 1.6322 1.6348 1.6717 1.7862 1.7788 18 New Zealand/dollar2 59.619 57.832 53.802 54.609 54.057 54.112 53.943 51.9% 51.570 19 Norway/krone 6.2541 6.4912 6.2112 5.8581 5.7120 5.8116 6.0562 6.4714 6.6804 20 Portugal/escudo 142.70 144.77 135.02 126.24 124.98 127.86 132.33 141.71 142.05 21 Singapore/dollar 1.8134 1.7283 1.6293 1.6142 1.6077 1.5988 1.6081 1.6338 1.6397 22 South Africa/rand 2.5885 2.7633 2.8516 2.7577 2.7629 2.8037 2.8923 2.9959 3.0140 23 South Korea/won 710.64 736.73 784.55 789.93 792.56 788.76 786.79 787.09 791.75 24 Spain/peseta 101.96 104.01 102.33 94.88 93.05 98.19 105.74 113.83 112.95 25 Sri Lanka/rupee 40.078 41.200 43.994 44.014 44.050 44.159 44.276 44.404 45.046 26 Sweden/krona 5.9231 6.0521 5.8208 5.4084 5.2745 5.3685 5.6006 6.2528 6.8903 27 Switzerland/franc 1.3901 1.4356 1.4061 1.3347 1.2966 1.2780 1.3176 1.4291 1.4219 28 Taiwan/dollar 26.918 26.759 25.159 24.783 25.120 25.227 25.278 25.405 25.452 29 Thailand/baht 25.609 25.528 25.410 25.293 25.265 25.209 25.253 25.462 25.488 30 United Kingdom/pound 178.41 176.74 176.73 191.77 194.34 184.65 165.29 152.68 155.10 MEMO 31 United States/dollar3 89.09 89.84 86.58 82.57 80.97 81.98 85.03 90.04 90.50 1. Averages of certified noon buying rates in New York for cable transfers. the 1972-76 average world trade of that country divided by the average world Data in this table also appear in the Board's G.5 (405) monthly statistical release. trade of all ten countries combined. Series revised as of August 1978 (see Federal For ordering address, see inside front cover. Reserve Bulletin, vol. 64, August 1978, p. 700). 2. Value in U.S. cents. 3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten industrial countries. The weight for each of the ten countries is 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 December 1992 A78 SPECIAL TABLES—Quarterly Data Published Irregularly, with Latest BULLETIN Reference Title and Date Issue Page Assets and liabilities of commercial banks December 31, 1991 May 1992 A70 March 31, 1992 August 1992 A70 June 30, 1992 November 1992 A70 September 30, 1992 February 1993 A70 Terms of lending at commercial banks February 1992 September 1992 A74 May 1992 September 1992 A78 August 1992 November 1992 A76 November 1992 February 1993 A76 Assets and liabilities of U.S. branches and agencies of foreign banks December 31, 1991 May 1992 A76 March 31, 1992 September 1992 A82 June 30, 1992 November 1992 A80 September 30, 1992 February 1993 A80 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 tables follow. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • February 1993 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities1 Consolidated Report of Condition, September 30, 1992 Millions of dollars except as noted Banks with foreign offices2 Bank o s f f w ic i e th s o d n o ly m estic IItteemm Total Total Foreign Domestic Over 100 Under 100 1 Total assets4 3,460,013 1,916,854 448,717 1,551,633 1,185,437 357,723 2 Cash and balances due from depository institutions 264,387 182,463 81,399 101,064 61,930 19,994 3 Cash items in process of collection, unposted debits, and currency and coin 4 75,014 1,885 73,128 33,306 4 4 5 C C a u s r h re i n t c e y m s a n i d n p co ro in c ess of collection and unposted debits T 1 n n . . a a . . n n . . a a . . 5 1 7 6 , , 1 0 0 2 6 3 2 1 1 1 , , 5 7 9 1 0 6 T 1 6 Balances due from depository institutions in the United States n.a. 26,341 17,723 8,619 16,234 n.a. 7 Balances due from banks in foreign countries and foreign central banks 1 66,177 61,536 4,641 2,045 i 8 Balances due from Federal Reserve Banks • 14,931 255 14,676 10,345 • MEMO 9 Non-interest-bearing balances due from commercial banks in the United States (included in balances due from depository institutions in the United States) n.a. n.a. n.a. 6,229 1122,,994433 77,,994466 10 Total securities, loans and lease financing receivables, net 2,873,676 1,487,255 n.a. n.a. 1,063,329 323,092 11 Total securities, book value 751,484 311,315 29,550 281,765 319,798 120,371 12 U.S. Treasury securities and U.S. government agency and corporation obligations 585,665 232,892 4,063 222288,,882299 225566,,332244 %%,,444499 13 U.S. Treasury securities n.a. 87,038 2,559 84,479 108,697 n.a. 14 U.S. government agency and corporation obligations n.a. 145,854 1,504 144,350 147,627 n.a. 15 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 154,346 75,618 1,198 74,420 5588,,889999 1199,,882299 16 All other n.a. 70,236 306 69,930 88,728 n.a. 17 Securities issued by states and political subdivisions in the United States 71,574 21,071 577 20,493 34,501 16,002 18 Other domestic debt securities n.a. 26,628 285 26,343 23,574 n.a. 19 All holdings of private certificates of participation in pools of residential mortgages 3,255 1,796 0 11,,779966 11,,330099 115500 20 All other domestic debt securities 53,355 24,832 285 24,547 22,264 6,259 21 Foreign debt securities n.a. 24,776 23,395 1,381 335 n.a. 22 Equity securities 12,524 5,947 1,230 4,718 5,065 1,511 23 Marketable 6,183 2,143 340 1,803 2,945 1,096 24 Investments in mutual funds 4,335 1,295 30 1,264 2,072 968 25 Other 1,907 851 310 542 902 154 26 LESS: Net unrealized loss 59 3 0 3 29 26 27 Other equity securities 6,341 3,805 890 2,915 2,120 415 28 Federal funds sold and securities purchased under agreements to resell 151,704 80,158 348 79,810 54,559 16,987 29 Federal funds sold 125,870 59,218 n.a. n.a. 49,839 16,813 30 Securities purchased under agreements to resell 25,834 20,940 n.a. n.a. 4,720 174 31 Total loans and lease financing receivables, gross 2,034,805 1,135,3% 212,997 922,399 708,%7 190,442 32 . LESS: Unearned income on loans 9,175 3,519 1,130 2,389 4,223 1,433 33 Total loans and leases (net of unearned income) 2,025,630 1,131,877 211,867 920,010 704,744 189,009 34 LESS: Allowance for loan and lease losses 54,831 35,785 n.a. n.a. 15,771 3,275 35 LESS: Allocated transfer risk reserves 311 311 n.a. n.a. 0 0 36 EQUALS: Total loans and leases, net 1,970,488 1,095,782 n.a. n.a. 688,972 185,734 Total loans, gross, by category 37 Loans secured by real estate 860,259 397,656 23,058 337744,,559999 335599,,559922 110033,,001111 38 Construction and land development 4 4 i 51,472 29,458 6,251 4 3 0 9 O Fa n r e m - l t a o n d fo ur-family residential properties T 1 T 1 T 1 20 2 2 , , 1 3 5 7 3 9 19 7 3 , , 1 2 9 0 5 3 5 1 6 0 , , 7 5 5 5 9 3 41 Revolving, open-end loans, extended under lines of credit n.a. n.a. n.a. 38,867 31,253 3,151 42 All other loans 1 1 1 163,513 161,950 53,608 4 4 3 4 M No u n lt f i a fa rm m il n y o n (f r i e v s e i d o e r n m tia o l r e p ) r o re p s e i r d t e ie n s t ial properties t 1 • 1 ? 1 1 1 0 2 6 , , 1 4 6 2 8 6 11 1 7 2 , , 0 6 8 4 7 9 2 2 7 , , 1 29 5 2 6 45 Loans to depository institutions 39,742 30,222 16,309 13,913 9,370 150 46 Commercial banks in the United States n.a. 10,746 728 10,017 8,675 n.a. 47 Other depository institutions in the United States n.a. 714 29 685 374 n.a. 48 Banks in foreign countries n.a. 18,763 15,552 3,211 321 n.a. 49 Loans to finance agricultural production and other loans to farmers 36,598 5,198 353 4,845 11,383 20,017 50 Commercial and industrial loans 536,367 377,267 98,207 279,060 127,201 31,899 51 U.S. addressees (domicile) n.a. 299,079 22,531 276,548 126,718 n.a. 52 Non-U.S. addressees (domicile) n.a. 78,189 75,676 2,513 484 n.a. 53 Acceptances of other banks 1,835 1,402 947 455 287 145 54 U.S. banks n.a. 374 7 367 n.a. n.a. 55 Foreign banks n.a. 1,028 940 88 n.a. n.a. 56 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 378,755 171,613 21,654 149,959 174,%7 3322,,117755 57 Credit cards and related plans 129,681 65,450 n.a. n.a. 62,3% 1,835 58 Other (includes single payment and installment) 249,074 106,163 n.a. n.a. 112,571 30,340 59 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 26,376 14,325 291 14,035 1100,,773322 11,,331188 60 Taxable 1,985 1,409 156 1,253 528 48 61 Tax-exempt 24,391 12,916 135 12,782 10,204 1,270 62 All other loans 119,788 109,106 48,103 61,003 9,409 1,273 63 Loans to foreign governments and official institutions n.a. 24,385 23,486 900 79 n.a. 64 Other loans n.a. 84,721 24,617 60,104 9,330 n.a. 65 Loans for purchasing and carrying securities n.a. n.a. n.a. 15,492 2,033 n.a. 66 All other loans n.a. n.a. n.a. 44,611 7,297 n.a. 67 Lease financing receivables 35,085 28,606 4,076 24,530 6,025 454 68 Assets held in trading accounts 88,610 86,668 48,498 38,049 1,785 157 69 Premises and fixed assets (including capitalized leases) 52,896 28,464 i n.a. 18,550 5,882 7 71 0 O In t v h e e s r tm re e a n l t e s s i t n a te u n o c w on n s e o d lidated subsidiaries and associated companies 28 3 , , 5 5 3 7 7 6 1 3 8 , , 0 0 7 3 8 3 T 1 n n . . a a . . 8,5 4 6 3 8 2 1,9 6 3 7 6 72 Customers' liability on acceptances outstanding 16,374 16,003 n.a. n.a. 354 17 73 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs n.a. n.a. 1 51,994 n.a. n.a. 74 Intangible assets 14,507 8,664 1 n.a. 5,427 416 75 Other assets j 117,450 86,227 • n.a. 25,061 6,162 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A71 4.20—Continued Banks with foreign offices2 Bank o s f f w ic i e th s o d n o l m y estic Total Total Foreign Domestic Over 100 Under 10C 76 Total liabilities, limited-life preferred stock and equity capital ,460,013 1,916,854 n.a. n.a. 1,185,437 357,723 77 Total liabilities5 ,204,377 1,791,578 448,711 1,426,363 1,089,031 323,768 78 Limited-life preferred stock 7 0 n.a. n.a. 5 2 79 Total deposits ,627,921 1,336,385 301,866 1,034,519 975,732 315,804 80 Individuals, partnerships, and corporations 188,954 955,917 911,437 290,934 8 8 1 2 S U t . a S t . e s g o a v nd e rn p m ol e it n ic t al subdivisions in the United States 1 ! i 1 3 4 3 , , 1 0 1 9 3 2 43 1 , , 5 7 7 1 7 0 19, 4 8 9 0 9 0 83 Commercial banks in the United States n.a. n.a. n.a. 20,345 8,054 1,269 8 8 4 5 O Ba th n e k r s d in e p f o o s r i e t i o g r n y c i o n u st n it t u ri t e i s o ns in the United States i I i I \I 6 3 , , 9 2 3 5 1 2 4,3 1 2 3 8 7 n 1 . , a 2 . 7 4 86 Foreign governments and official institutions 20,824 19,621 1,204 59 n.a. 87 Certified and official checks 19,197 10,782 1,117 9,665 6,429 1,985 88 Allother6 n.a. n.a. 92,175 n.a. n.a. 41 89 Total transaction accounts 349,225 278,846 87,677 90 Individuals, partnerships, and corporations 295,692 247,889 77,513 91 U.S. government 2,301 1,458 400 92 States and political subdivisions in the United States 12,846 15,666 6,989 93 Commercial banks in the United States 18,612 6,013 608 94 Other depository institutions in the United States 2,592 1,254 164 95 Banks in foreign countries 6,559 127 n.a. % Foreign governments and official institutions 957 11 n.a. 97 Certified and official checks 9,665 6,429 1,985 98 All other n.a. n.a. 18 99 Demand deposits (included in total transaction accounts) 253,719 157,324 41,847 100 Individuals, partnerships, and corporations 204,976 136,226 36,909 101 U.S. government 2,255 1,312 388 102 States and political subdivisions in the United States 8,107 6,007 1,783 103 Commercial banks in the United States 18,612 5,990 605 104 Other depository institutions in the United States n.a. n.a. n.a. 2,592 1,237 160 105 Banks in foreign countries 6,556 111 n.a. 106 Foreign governments and official institutions 956 11 n.a. 107 Certified and official checks 9,665 6,429 1,985 108 All other n.a. n.a. 17 109 Total nontransaction accounts 685,295 696,886 228,126 110 Individuals, partnerships, and corporations 660,225 663,548 213,422 111 U.S. government 1,811 252 99 112 States and political subdivisions in the United States 20,246 27,911 12,811 113 Commercial banks in the United States 1,733 2,041 661 114 U.S. branches and agencies of foreign banks 104 124 n.a. 115 Other commercial banks in the United States 1,629 1,917 n.a. 116 Other depository institutions in the United States 660 3,074 1,111 117 Banks in foreign countries 372 10 n.a. 118 Foreign branches of other U.S. banks 53 6 n.a. 119 Other banks in foreign countries 319 4 n.a. 120 Foreign governments and official institutions 247 49 n.a. 121 All other n.a. n.a. 24 122 Federal funds purchased and securities sold under agreements to repurchase — 249,032 181,121 418 180,704 64,647 3,264 123 Federal funds purchased 163,473 124,427 n.a. n.a. 37,474 1,572 124 Securities sold under agreements to repurchase 85,559 56,694 n.a. n.a. 27,174 1,692 125 Demand notes issued to the U.S. Treasury n.a. n.a. n.a. 27,470 6,185 387 126 Other borrowed money 136,386 111,029 47,062 63,968 24,183 1,173 127 Banks' liability on acceptances executed and outstanding 16,441 16,070 3,664 12,405 354 17 128 Notes and debentures subordinated to deposits 30,082 28,307 n.a. n.a. 1,686 89 129 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs n.a. n.a. n.a. 31,502 n.a. n.a. 130 All other liabilities 110,472 91,196 n.a. n.a. 16,242 3,034 131 Total equity capital7 255,629 125,275 n.a. n.a. 96,401 33,953 MEMO 132 Holdings of commercial paper included in total loans, gross 965 276 688 1,109 n.a. 133 Total individual retirement accounts (IRA) and Keogh plan accounts 64,275 65,593 18,470 134 Total brokered deposits 31,149 15,409 615 135 Total brokered retail deposits 21,331 12,963 577 136 Issued in denominations of $100,000 or less 1,004 2,194 507 137 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 20,327 10,769 71 138 Money market deposit accounts (savings deposits; MMDAs) 235,231 173,043 40,101 139 Other savings deposits (excluding MMDAs) 117,949 121,242 37,090 140 Total time deposits of less than $100,000 210,792 310 121,670 141 Time certificates of deposit of $100,000 or more 102,902 89,226 28,262 142 Open-account time deposits of $100,000 or more 18,421 3,168 1,003 143 AH negotiable order of withdrawal (NOW) accounts (including Super NOWs)... 94,736 119,542 44,485 144 Total time and savings deposits n a. n a. n a. 780,800 818,408 273,957 Quarterly averages 145 Total loans 895,924 695,298 186,387 146 Obligations (other than securities) of states and political subdivisions in the United States 14,407 10,564 n.a. 147 Transaction accounts in domestic offices (NOW accounts, automated transfer service (ATS) accounts, and telephone and preauthorized transfer accounts) 95,422 120,690 45,404 Nontransaction accounts in domestic offices 148 Money market deposit accounts 235,894 173,504 39,688 149 Other savings deposits 116,499 118,159 36,025 150 Time certificates of deposit of $100,000 or more 108,498 90,190 28,144 151 All other time deposits 240,893 320,473 123,957 152 Number of banks 11,562 215 n.a. n.a. 2,843 8,504 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • February 1993 4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or more or with foreign offices1 Consolidated Report of Condition, September 30, 1992 Millions of dollars except as noted Members NNoonn-- Item mmeemmbbeerrss Total National State 1 Total assets4 2,737,070 2,132,143 1,662,527 469,616 604,927 2 Cash and balances due from depository institutions 162,994 134,268 109,398 24,870 28,726 3 Cash items in process of collection and unposted debits 78,696 69,814 56,274 13,540 8,882 4 Currency and coin 27,738 22,639 18,637 4,002 5,099 5 Balances due from depository institutions in the United States 24,853 16,115 13,341 2,774 8,738 6 Balances due from banks in foreign countries and foreign central banks 6,686 5,524 4,741 783 1,163 7 Balances due from Federal Reserve Banks 25,021 20,177 16,406 3,771 4,844 8 Total securities, loans, and lease financing receivables, (net of unearned income) 2,360,685 1,814,821 1,432,025 382,7% 545,864 9 Total securities, book value 601,563 454,882 343,612 111,270 146,681 10 U.S. Treasury securities 193,176 142,177 110,276 31,901 50,998 11 U.S. government agency and corporation obligations 291,977 227,925 172,607 55,318 64,052 12 All holdings of U.S. government-issued or guaranteed certificates of participation in pools of residential mortgages 133,319 107,870 84,699 23,170 25,449 13 All other 158,658 120,055 87,908 32,147 38,603 14 Securities issued by states and political subdivisions in the United States 54,995 39,458 28,450 11,008 15,537 15 Other domestic debt securities 49,917 37,589 25,916 11,673 12,328 16 All holdings of private certificates of participation in pools of residential mortgages ... 3,105 2,586 2,241 345 519 17 Allother 46,812 35,003 23,674 11,328 11,809 18 Foreign debt securities 1,716 1,144 1,070 74 572 19 Equity securities 9,783 6,589 5,294 1,295 3,193 20 Marketable 4,747 2,246 1,843 403 2,501 21 Investments in mutual funds 3,337 1,630 1,374 256 1,707 22 Other 1,443 629 480 149 814 23 LESS: Net unrealized loss 33 13 11 2 20 24 Other equity securities 5,036 4,343 3,451 893 692 25 Federal funds sold and securities purchased under agreements to resell8 134,369 107,615 81,345 26,270 26,754 26 Federal funds sold 49,839 31,262 27,273 3,989 18,577 27 Securities purchased under agreements to resell 4,720 3,719 3,049 670 1,001 28 Total loans and lease financing receivables, gross 1,631,365 1,256,933 1,010,422 246,511 374,433 29 LESS: Unearned income on loans 6,612 4,609 3,354 1,254 2,003 30 Total loans and leases (net of unearned income) 1,624,754 1,252,324 1,007,068 245,256 372,430 Total loans, gross, by category 31 Loans secured by real estate 734,190 548,898 450,850 98,048 185,292 32 Construction and land development 80,930 61,692 51,362 10,330 19,238 33 Farmland 9,349 5,638 4,797 842 3,710 34 One- to four-family residential properties 395,582 300,760 247,183 53,577 94,822 35 Revolving, open-end and extended under lines of credit 70,120 53,653 44,034 9,619 16,467 36 All other loans 325,462 247,107 203,148 43,959 78,355 37 Multifamily (five or more) residential properties 24,817 17,241 13,782 3,459 7,576 38 Nonfarm nonresidential properties 223,513 163,567 133,726 29,841 59,946 39 Commercial banks in the United States 18,692 13,808 10,402 3,406 4,885 40 Other depository institutions in the United States 1,059 898 817 82 160 41 Banks in foreign countries 3,532 3,241 1,455 1,786 290 42 Finance agricultural production and other loans to farmers 16,228 10,824 9,711 1,113 5,404 43 Commercial and industrial loans 406,262 328,204 259,049 69,155 78,058 44 U.S. addressees (domicile) 403,265 325,568 257,089 68,479 77,697 45 Non-U.S. addressees (domicile) 2,9% 2,635 1,960 675 361 46 Acceptances of other banks9 742 584 400 184 159 47 U.S. banks 491 405 231 173 86 48 Foreign banks 131 113 111 3 18 49 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 324,927 239,741 197,798 41,943 85,186 50 Credit cards and related plans 62,3% 43,380 40,238 3,142 19,016 51 Other (includes single payment and installment) 112,571 69,723 5566,,778811 12,942 42,848 52 Loans to foreign governments and official institutions 978 946 880088 138 32 53 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 24,767 20,183 14,864 5,319 4,583 54 Taxable 1,781 1,485 1,228 257 2% 55 Tax-exempt 22,986 18,698 13,636 5,062 4,288 56 Other loans 69,434 64,200 43,642 20,557 5,234 57 Loans for purchasing and carrying securities 17,525 16,172 9,054 7,118 1,353 58 All other loans 51,908 48,027 34,588 13,439 3,881 59 Lease financing receivables 30,555 25,405 20,626 4,779 5,149 60 Customers' liability on acceptances outstanding 12,573 11,704 8,473 3,232 869 61 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 51,994 45,667 19,804 25,863 6,327 62 Remaining assets 200,817 171,349 112,631 58,718 29,468 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.20—Continued Members NNoonn-- IItteemm TToottaall mmeemmbbeerrss Total National State 63 Total liabilities and equity capital 2,737,070 2,132,143 1,662,527 469,616 604,927 64 Total liabilities3 2,515,394 1,962,218 1,531,326 430,892 553,176 65 Total deposits 2,010,251 1,543,738 1,237,575 306,163 466,513 66 Individuals, partnerships, and corporations 1,867,354 1,431,672 1,150,181 281,491 435,682 67 U.S. government 5,823 5,106 4,398 709 717 68 States and political subdivisions in the United States 76,669 56,050 45,610 10,440 20,620 69 Commercial banks in the United States 28,400 25,334 19,821 5,513 3,066 70 Other depository institutions in the United States 7,580 4,990 3,765 1,225 2,590 71 Banks in foreign countries 7,068 6,618 4,008 2,609 450 72 Foreign governments and official institutions 1,263 1,179 791 388 84 73 Certified and official checks 16,095 12,790 9,002 3,788 3,305 74 Total transaction accounts 628,071 498,736 397,866 100,870 129,335 75 Individuals, partnerships, and corporations 543,581 427,049 343,185 83,864 116,532 76 U.S. government 3,759 3,110 2,582 528 649 77 States and political subdivisions in the United States 28,512 22,452 18,251 4,200 6,060 78 Commercial banks in the United States 24,625 22,867 18,058 4,810 1,757 79 Other depository institutions in the United States 3,846 3,170 2,347 824 675 80 Banks in foreign countries 6,686 6,373 3,841 2,532 313 81 Foreign governments and official institutions 967 924 600 323 44 82 Certified and official checks 16,095 12,790 9,002 3,788 3,305 83 Demand deposits (included in total transaction accounts) 411,042 333,835 262,696 71,139 77,207 84 Individuals, partnerships, and corporations 341,202 272,956 216,942 56,014 68,246 85 U.S. government 3,567 2,942 2,428 514 625 86 States and political subdivisions in the United States 14,114 11,842 9,507 2,335 2,272 87 Commercial banks in the United States 24,602 22,866 18,057 4,809 1,736 88 Other depository institutions in the United States 3,829 3,158 2,334 824 671 89 Banks in foreign countries 6,667 6,357 3,825 2,532 310 90 Foreign governments and official institutions 966 924 600 323 43 91 Certified and official checks 16,095 12,790 9,002 3,788 3,305 92 Total nontransaction accounts 1,382,181 1,045,003 839,710 205,293 337,178 93 Individuals, partnerships, and corporations 1,323,773 1,004,623 806,996 197,627 319,150 94 U.S. government 2,064 1,996 1,816 181 68 95 States and political subdivisions in the United States 48,157 33,598 27,358 6,239 14,560 96 Commercial banks in the United States 3,775 2,466 1,763 703 1,308 97 U.S. branches and agencies of foreign banks 228 86 76 11 141 98 Other commercial banks in the United States 3,547 2,380 1,687 692 1,167 99 Other depository institutions in the United States 3,734 1,819 1,418 401 1,915 100 Banks in foreign countries 382 244 167 77 137 101 Foreign branches of other U.S. banks 59 58 56 2 11 102 Other banks in foreign countries 323 186 112 75 113377 103 Foreign governments and official institutions 2% 256 191 65 40 104 Federal funds purchased and securities sold under agreements to repurchase10 245,351 206,756 147,264 59,492 38,596 105 37,474 28,754 24,503 4,251 8,720 106 Securities sold under agreements to repurchase 27,174 16,567 13,693 2,874 10,606 107 Demand notes issued to the U.S. Treasury 33,656 30,761 20,339 10,422 2,895 108 88,151 63,253 44,139 19,114 24,898 109 Banks liability on acceptances executed and outstanding 12,759 11,890 8,621 3,270 869 no Notes and debentures subordinated to deposits 1,686 1,177 1,107 70 509 111 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 31,502 23,743 21,209 2,534 7,759 112 123,539 104,643 72,281 32,362 18,8% 113 Total equity capital7 221,675 169,925 131,200 38,724 51,751 MEMO 114 Holdings of commercial paper included in total loans, gross 1,797 550 550 00 11,,224477 115 Total individual retirement (IRA) and Keogh plan accounts 129,868 100,059 80,867 19,192 29,809 116 Total brokered deposits 46,558 33,820 28,030 5,790 12,738 117 Total brokered retail deposits 34,294 24,611 20,753 3,858 9,683 118 Issued in denominations of $100,000 or less 3,198 1,701 1,528 173 1,498 119 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 31,095 22,910 19,225 33,,668855 88,,118866 120 Money market deposit accounts (savings deposits; MMDAs) 408,274 323,581 259,670 63,911 84,693 121 Other savings accounts 239,191 181,711 135,169 46,543 57,480 12? Total time deposits of less than $100,000 520,999 384,870 317,134 67,736 136,129 173 Time certificates of deposit of $100,000 or more 192,128 137,588 116,514 21,074 54,539 124 Open-account time deposits of $100,000 or more 21,589 17,252 11,223 6,029 4,337 125 All negotiable order of withdrawal (NOW) accounts (including Super NOWs) 214,278 163,248 133,824 29,424 51,030 126 Total time and savings deposits 1,599,209 1,209,903 974,880 235,024 389,306 Quarterly averages 177 11,,559911,,222222 11,,222277,,005588 998899,,555555 223377,,550033 336644,,116644 128 Obligations (other than securities) of states and political subdivisions in the United States 24,971 20,429 14,947 5,482 4,542 179 Transaction accounts (NOW accounts, automated transfer service (ATS) accounts, and telephone preauthorized transfer accounts) 216,112 164,527 134,593 2299,,993344 5511,,558844 Nontransaction accounts 130 409,398 325,352 260,101 65,251 84,045 131 234,658 178,874 132,902 45,972 55,785 137 Time certificates of deposits of $100,000 or more 198,688 142,899 121,309 21,590 55,790 133 561,366 418,407 339,609 78,798 142,959 134 3,058 1,652 1,371 281 1,406 Footnotes appear at the end of table 4.22 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • February 1993 4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities1 Consolidated Report of Condition, September 30, 1992 Millions of dollars except as noted Members NNoonn-- IItteemm mmeemmbbeerrss Total National State 1 Total assets4 3,094,792 2,270,023 1,769,235 500,788 824,769 2 Cash and balances due from depository institutions 182,988 142,164 115,556 26,608 40,824 3 Currency and coin 31,142 23,958 19,672 4,285 7,184 4 Non-interest-bearing balances due from commercial banks 27,119 15,206 12,133 3,073 11,913 5 Other 124,728 103,001 83,751 19,250 21,727 6 Total securities, loans, and lease financing receivables (net of unearned income) 2,687,052 1,940,443 1,529,141 411,303 746,608 7 Total securities, book value 721,934 502,184 381,376 120,807 219,751 8 U.S. Treasury securities and U.S. government agency and corporation obligations 581,602 408,699 313,880 94,819 172,903 9 Securities issued by states and political subdivisions in the United States 70,997 45,126 32,814 12,312 25,871 10 Other debt securities 58,041 41,087 28,831 12,256 16,954 11 All holdings of private certificates of participation in pools of residential mortgages 3,255 2,639 2,279 360 616 12 All other 54,786 38,448 26,552 11,896 16,338 13 Equity securities 11,294 7,272 5,852 1,420 4,022 5,843 2,655 2,199 455 3,188 15 Investments in mutual funds 4,305 2,022 1,714 307 2,283 16 Other 1,597 655 504 151 942 17 LESS: Net unrealized loss 59 22 19 3 37 18 Other equity securities 5,451 4,617 3,653 964 834 19 Federal funds sold and securities purchased under agreements to resell 151,356 114,877 86,850 28,027 36,478 20 Federal funds sold 66,651 38,465 32,738 5,726 28,187 21 Securities purchased under agreements to resell 4,894 3,779 3,088 690 1,116 22 Total loans and lease financing receivables, gross 1,821,807 1,328,551 1,064,699 263,853 493,256 23 LESS: Unearned income on loans 8,045 5,169 3,784 1,385 2,876 24 Total loans and leases (net of unearned income) 1,813,762 1,323,383 1,060,914 262,468 490,380 Total loans, gross, by category 25 Loans secured by real estate 837,201 587,315 479,760 107,555 224499,,888866 26 Construction and land development 87,181 64,187 53,204 10,983 22,994 19,901 8,929 7,413 1,516 10,972 28 One- to four-family residential properties 452,341 322,176 263,114 59,062 130,164 29 Revolving, open-end loans, and extended under lines of credit 73,271 55,005 44,971 10,034 18,266 30 All other loans 379,070 267,172 218,143 49,029 111,898 31 Multifamily (five or more) residential properties 26,973 18,049 14,388 3,661 8,924 32 Nonfarm nonresidential properties 250,804 173,973 141,641 32,332 76,832 33 Loans to depository institutions 23,433 17,998 12,715 5,282 5,435 34 Loans to finance agricultural production and other loans to farmers 36,245 17,474 14,993 2,481 18,772 35 Commercial and industrial loans 438,160 341,111 268,605 72,506 97,049 36 Acceptances of other banks 888 633 438 195 255 37 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 357,101 252,175 207,401 44,774 110044,,992266 38 Credit cards and related plans 64,231 44,166 40,902 3,264 20,065 39 Other (includes single payment installment) 142,911 81,373 65,721 15,652 61,538 40 Obligations (other than securities) of states and political subdivisions in the United States 26,085 20,638 15,229 5,410 5,447 1,829 1,503 1,243 261 325 24,256 19,135 13,986 5,149 5,121 43 All other loans 71,685 65,638 44,790 20,848 6,047 44 Lease financing receivables 31,009 25,570 20,768 4,802 5,440 45 Customers' liability on acceptances outstanding 12,590 11,716 8,481 3,235 874 46 Net due from own foreign offices, Edge and agreement subsidiaries, and IBFs 51,994 45,667 19,804 25,863 6,327 47 Remaining assets 212,162 175,699 116,057 59,642 36,463 48 Total liabilities and equity capital 3,094,792 2,270,023 1,769,235 500,788 824,769 49 Total liabilities3 2,839,162 2,087,247 1,628,107 459,140 751,915 2,326,055 1,665,531 1,331,933 333,598 660,524 51 Individuals, partnerships, and corporations 2,158,288 1,544,117 1,237,402 306,715 614,171 6,322 5,303 4,551 752 1,019 53 States and political subdivisions in the United States 96,469 63,128 51,286 11,841 33,342 54 Commercial banks in the United States 29,669 26,111 20,150 5,961 3,558 55 Other depository institutions in the United States 8,854 5,436 4,097 1,339 3,418 56 Certified and official checks 18,080 13,627 9,644 3,983 4,453 57 All other 8,372 7,808 4,802 3,006 564 58 Total transaction accounts 715,748 533,889 425,410 108,479 181,859 59 Individuals, partnerships, and corporations 621,094 458,118 367,708 90,410 162,976 60 U.S. government 4,159 3,268 2,705 562 892 61 States and political subdivisions in the United States 35,501 24,905 20,283 4,622 10,596 62 Commercial banks in the United States 25,233 23,414 18,213 5,201 1,819 63 Other depository institutions in the United States 4,009 3,250 2,412 838 760 64 Certified and official checks 18,080 13,627 9,644 3,983 4,453 65 All other 7,671 7,308 4,444 2,864 363 66 Demand deposits (included in total transaction accounts) 452,889 351,292 276,073 75,219 101,597 67 Individuals, partnerships, and corporations 378,112 288,146 228,806 59,340 89,966 68 U.S. government 3,955 3,094 2,546 548 861 69 States and political subdivisions in the United States 15,897 12,487 10,039 2,448 3,410 70 Commercial banks in the United States 25,207 23,412 18,212 5,200 1,795 71 Other depository institutions in the United States 3,988 3,235 2,398 837 753 72 Certified and official checks 18,080 13,627 9,644 3,983 4,453 73 All other 7,650 7,291 4,427 2,863 359 74 Total nontransaction accounts 1,610,307 1,131,642 906,523 225,119 478,665 75 Individuals, partnerships, and corporations 1,537,195 1,086,000 869,694 216,306 451,195 76 U.S. government 2,162 2,036 1,846 190 127 77 States and political subdivisions in the United States 60,968 38,223 31,003 7,220 22,745 78 Commercial banks in the United States 4,436 2,697 1,937 760 1,739 79 Other depository institutions in the United States 4,845 2,187 1,685 501 2,658 80 All other 701 500 358 142 201 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A75 4.22—Continued Members IItteemm TToottaall mmee NN mm oo bb nn ee -- rrss Total National State 81 Federal funds purchased and securities sold under agreements to repurchase10 248,615 208,290 148,332 59,958 40,324 82 Federal funds purchased 39,046 29,585 25,032 4,553 9,460 83 Securities sold under agreements to repurchase 28,865 17,271 14,233 3,038 11,594 84 Demand notes issued to the U.S. Treasury 34,043 30,899 20,450 10,449 3,144 85 Other borrowed money 89,324 63,657 44,477 19,179 25,668 86 Banks liability on acceptances executed and outstanding 12,776 11,902 8,629 3,273 874 87 Notes and debentures subordinated to deposits 1,775 1,1% 1,118 78 579 88 Net due to own foreign offices, Edge and agreement subsidiaries, and IBFs 31,502 23,743 21,209 2,534 7,759 89 Remaining liabilities 126,573 105,772 73,168 32,604 20,802 90 Total equity capital7 255,630 182,776 141,128 41,648 72,854 MEMO 91 Assets held in trading accounts" 39,992 38,067 23,514 14,552 1,925 92 U.S. Treasury securities 20,865 20,543 11,899 8,643 322 93 U.S. government agency corporation obligations 3,442 2,936 2,592 344 506 94 Securities issued by states and political subdivisions in the United States 1,246 1,148 701 447 98 95 Other bonds, notes, and debentures 2,566 2,524 1,947 578 42 96 Certificates of deposit 781 731 683 48 50 97 Commercial paper 159 159 159 0 0 98 Bankers acceptances 3,089 2,933 2,030 903 156 99 Other 6,902 6,638 3,090 3,548 264 100 Total individual retirement (IRA) and Keogh plan accounts 148,338 106,875 86,175 20,699 41,464 101 Total brokered deposits 47,173 34,058 28,206 5,852 13,115 102 Total brokered retail deposits 34,871 24,829 20,911 3,918 10,042 103 Issued in denominations of $100,000 or less 3,705 1,890 1,670 220 1,815 104 Issued in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 31,166 22,939 19,241 3,698 8,227 Savings deposits 105 Money market deposit accounts (savings deposits; MMDAs) 448,375 340,114 272,468 67,646 108,261 106 Other savings deposits 276,281 1%,422 146,274 50,148 79,859 107 Total time deposits of less than $100,000 642,669 428,940 351,249 77,690 213,729 108 Time certificates of deposit of $100,000 or more 220,390 148,595 125,056 23,540 71,795 109 Open-account time deposits of $100,000 or more 22,592 17,571 11,476 6,094 5,021 110 All negotiable order of withdrawal (NOW) accounts (including Super NOWs) 258,763 180,475 147,646 32,829 78,287 Ill Total time and savings deposits 1,873,166 1,314,239 1,055,860 258,378 558,927 Quarterly averages 112 Total loans 11,,777777,,660099 11,,229977,,113322 11,,004422,,668899 225544,,444433 448800,,447788 113 Transaction accounts (NOW accounts, automated transfer service (ATS) accounts, and telephone and preauthorized transfer accounts) 261,516 182,098 148,672 33,426 79,418 Nontransaction accounts 114 Money market deposit accounts 449,085 341,724 272,809 68,915 107,362 115 Other savings deposits 270,683 193,137 143,732 49,405 77,546 116 Time certificates of deposit of $100,000 or more 226,832 153,870 129,836 24,034 72,%2 117 All other time deposits 685,323 463,255 374,351 88,904 222,068 118 Number of banks 11,562 4,615 3,649 966 6,947 1. Effective Mar. 31, 1984, the report of condition was substantially revised for calendar year, were $100 million or more. (These banks file the FFIEC 032 or commercial banks. Some of the changes are as follows: (1) Previously, banks with FFIEC 033 Call Report.) "Under 100" refers to banks whose assets, on June 30 international banking facilities (IBFs) that had no other foreign offices were of the preceding calendar year, were less than $100 million. (These banks filed the considered domestic reporters. Beginning with the March 31, 1984, Call Report FFIEC 034 Call Report.) these banks are considered foreign and domestic reporters and must file the 4. Because the domestic portion of allowances for loan and lease losses and foreign and domestic report of condition; (2) banks with assets of more than $1 allocated transfer risk reserve are not reported for banks with foreign offices, the billion report additional items; (3) the domestic offices of banks with foreign components of total assets (domestic) do not sum to the actual total (domestic). offices report far less detail; and (4) banks with assets of less than $25 million have 5. Because the foreign portion of demand notes issued to the U.S. Treasury is been excused from reporting certain detail items. not reported for banks with foreign offices, the components of total liabilities The "n.a." for some of the items is used to indicate the lesser detail available (foreign) will not sum to the actual total (foreign). from banks without foreign offices, the inapplicability of certain items to banks 6. The definition of "all other" varies by report form and therefore by column that have only domestic offices or the absence of detail on a fully consolidated in this table. basis for banks with foreign offices. 7. Equity capital is not allocated between the domestic and foreign offices of All transactions between domestic and foreign offices of a bank are reported in banks with foreign offices. "net due from" and "net due to." All other lines represent transactions with 8. Only the domestic portion of federal funds sold and securities purchased parties other than the domestic and foreign offices of each bank. Because these under agreements to resell are reported here; therefore, the components do not intraoffice transactions are nullified by consolidation, total assets and total sum to totals. liabilities for the entire bank may not equal the sum of assets and liabilities 9. "Acceptances of other banks" is not reported by domestic banks having less respectively of the domestic and foreign offices. than $300 million in total assets; therefore the components do not sum to totals. 2. Foreign offices include branches in foreign countries, Puerto Rico, and U.S. 10. Only the domestic portion of federal funds purchased and securities sold territories and possessions; subsidiaries in foreign countries; all offices of Edge are reported here; therefore the components do not sum to totals. Act and Agreement corporations wherever located and IBFs. 11. Components are reported only for banks with total assets of $1 billion or 3. The "over 100" refers to banks whose assets, on June 30 of the preceding more; therefore the components do not sum to totals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables • February 1993 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 2-6, 19921 A. Commercial and Industrial Loans Weighted Loan rate (percent) Loans Loans Amount of Average average secured made Partici- Characteristic ($ l 1 o , a 0 n 0 s 0 ) ($1 s , i 0 ze 0 0) maturity2 W av e e ig ra h g te e d Standard coll b a y te ral co u m m n e d m n e t i r t - (p p l e a o r t a c i n e o s n n t) Days effective3 (percent) (percent) ALL BANKS 1 Overnight6 11,489,659 7,587 3.85 .22 5.5 2 One month and under (excluding overnight) 7,142,624 886 19 4.45 37.1 83.4 14.4 3 Fixed rate 5,542,985 1,263 18 4.29 33.2 84.9 11.4 4 Floating rate 1,599,639 435 23 5.01 50.3 78.2 24.9 5 Over one month and under a year . 9,564,119 177 152 5.53 46.0 84.6 12.2 6 Fixed rate 2,918,977 142 127 5.02 43.3 71.7 9.6 7 Floating rate 6,645,142 197 163 5.76 47.2 90.3 13.3 8 Demand7 14,038,692 292 5.84 66.9 66.2 9.4 9 Fixed rate 2,321,049 576 4.39 37.1 70.6 17.5 10 Floating rate 11,717,643 266 6.13 72.8 65.3 7.8 11 Total short term 42,235,094 378 4.99 40.6 69.5 9.8 12 Fixed rate (thousands of dollars) .. 22,271,296 732 24 4.17 21.0 65.0 13 1-99 387,457 15 150 8.64 79.3 34.2 .4 14 100-499 326,703 200 94 6.27 59.3 54.1 8.4 15 500-999 414,140 673 113 4.67 37.5 64.7 8.8 16 1,000-4,999 3,836,634 2,304 48 4.58 30.1 73.2 10.3 17 5,000-9,999 3,989,303 6,695 20 4.12 15.8 65.7 12.6 18 10,000 and over 13,317,060 21,214 13 3.87 16.7 63.5 7.5 19 Floating rate (thousands of dollars) 19,963,798 245 136 5.91 62.5 74.7 11.0 20 1-99 1,587,803 26 163 7.53 83.7 85.8 2.4 21 100-499 3,179,932 206 182 7.06 79.3 85.6 8.2 22 500-999 1,516,843 655 157 6.71 72.9 93.3 14.8 23 1,000-4,999 4,271,573 1,950 157 6.37 57.8 82.3 13.0 24 5,000-9,999 1,815,392 6,783 131 5.44 45.7 73.8 11.0 25 10,000 and over 7,592,255 29,0% 99 4.79 55.6 59.9 12.1 Months 26 Total long term 4,575,958 178 6.36 62.6 74.4 27 Fixed rate (thousands of dollars) .. 1,364,100 108 5.97 57.2 72.3 5.1 28 1-99 187,779 16 9.28 91.3 21.9 .2 29 100-499 183,425 201 7.94 93.1 29.7 4.5 30 500-999 52,758 635 6.82 82.7 55.8 3.0 31 1,000 and over 940,138 6,244 4.88 41.9 91.6 6.4 32 Floating rate (thousands of dollars) 3,211,858 244 6.53 64.9 75.3 17.4 33 1-99 241,635 26 7.95 80.7 48.0 1.4 34 100-499 585,898 220 7.22 78.0 70.9 6.5 35 500-999 318,572 658 6.83 73.3 79.0 16.4 36 1,000 and over 2,065,753 3,731 6.12 58.1 79.1 22.5 Loan rate (percent) Days Effective3 Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 10,892,314 8,813 3.72 3.71 6.4 49.9 5.8 38 One month and under (excluding overnight) 6,358,035 3,548 18 4.09 4.07 33.9 84.2 14.4 39 Over one month and under a year 5,166,014 603 143 4.37 4.33 35.5 87.5 15.4 40 Demand7 5,355,249 2,528 3.85 3.81 58.7 43.2 13.3 41 Total short term 27,771,612 2,025 39 3.95 3.93 28.2 42 Fixed rate 20,283,305 2,510 22 3.89 3.87 18.6 63.8 9.2 43 Floating rate 7,488,307 1,330 118 4.12 4.08 54.2 62.5 15.8 44 Total long term 1,639,193 4.56 4.54 93.8 8.7 45 Fixed rate ... 843,036 562 4.47 4.46 36.5 93.4 4.6 46 Floating rate . 796,157 682 4.66 4.62 36.2 94.3 13.0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 4.23—Continued Characteristic A ( m $ l 1 o o , a u 0 n n 0 s t 0 ) o f A ($ v 1 s e i ,0 z ra e 0 g 0 e ) W m a a v e t e i u g r r h a i g t t e y e d 2 W av L e e i o g r a a h n g t e e r d a te (p S er ta ce n n d t a ) r d c s o L e l c l o b a u a y t r e n e r s d a l c L o u m m m n o a e d a m d n n e e t i r s t - (p P p l e a a o r r t a c t i i n e o c s n n i - t) Days effective3 (percent) (percent) LARGE BANKS 1 Overnight6 7,827,426 8,359 i.02 8.5 52.5 2 One month and under (excluding overnight) 5,435,273 3,694 18 4.24 37.7 90.4 9.4 3 Fixed rate 4,402,529 5,438 17 4.18 33.8 89.4 8.6 4 Floating rate 1,032,744 1,561 20 4.53 54.0 94.4 12.9 5 Over one month and under a year . 5,201,561 1,019 131 5.07 34.0 90.6 12.0 6 Fixed rate 1,668,877 1,845 103 4.66 40.6 80.1 10.8 7 Floating rate 3,532,684 841 144 5.26 30.9 95.5 12.6 8 Demand7 9,849,059 607 5.42 64.6 60.1 9.6 9 Fixed rate 1,885,100 1,910 4.24 39.5 65.2 18.5 10 Floating rate 7,963,959 523 5.70 70.5 58.9 7.5 11 Total short term 28,313,318 1,193 43 4.74 38.3 69.4 9.5 12 Fixed rate (thousands of dollars) .. 15,782,557 4,342 18 4.16 22.6 67.2 9.6 13 1-99 18,635 26 125 6.92 63.6 52.4 7.2 14 100-499 119,890 242 62 5.35 53.9 71.9 10.1 15 500-999 235,365 705 53 4.97 51.1 76.6 12.3 16 1,000-4,999 2,676,567 2,282 41 4.60 33.7 74.0 10.2 17 5,000-9,999 2,9%,221 6,539 18 4.16 18.5 63.3 13.0 18 10,000 and over 9,735,880 21,294 12 3.99 19.7 66.3 8.4 19 Floating rate (thousands of dollars) 12,530,761 624 116 5.48 58.0 72.2 9.4 20 1-99 386,244 32 161 7.22 82.2 90.3 2.0 21 100-499 1,175,624 213 161 6.90 73.3 91.7 5.1 22 500-999 723,652 663 167 6.69 67.8 92.1 8.9 23 1,000-4,999 2,155,153 2,076 143 6.12 56.6 82.0 11.8 24 5,000-9,999 1,412,821 6,824 133 5.69 55.9 73.3 10.7 25 10,000 and over 6,677,268 28,689 95 4.75 53.7 62.1 9.6 Months 26 Total long term 2,522,013 856 59.6 80.3 20.5 27 Fixed rate (thousands of dollars) .. 550,868 1,065 5.64 64.9 82.5 11.1 28 1-99 7,153 25 8.47 86.3 23.8 .0 29 100-499 30,815 256 7.08 79.1 56.6 6.6 30 500-999 21,723 701 5.88 65.5 71.6 7.1 31 1,000 and over 491,177 5,857 5.50 63.7 85.5 11.7 32 Floating rate (thousands of dollars) 1,971,144 811 6.21 58.1 79.7 23.2 33 1-99 32,889 37 7.21 76.8 75.1 5.9 34 100-499 208,706 233 6.95 71.5 79.1 6.0 35 500-999 195,531 679 6.73 65.2 78.6 12.9 36 1,000 and over 1,534,018 4,277 6.02 54.9 80.0 27.2 Loan rate (percent) Days Effective3 Nominal8 LOANS MADE BELOW PRIME 37 Overnight6 7,231,550 8,158 3.84 3.82 38 One month and under (excluding overnight) 5,102,905 6,200 17 4.09 4.08 36.0 90.5 8.5 39 Over one month and under a year 3,129,538 4,165 125 4.16 4.13 29.9 89.8 17.7 40 Demand7 4,679,703 4,716 3.78 3.74 63.6 35.1 12.3 41 Total short term 20,143,696 5,833 3.94 3.92 42 Fixed rate 14,423,269 5,691 18 3.94 3.93 21.3 64.4 10.0 43 Floating rate 5,720,427 6,226 103 3.92 3.89 58.3 57.5 12.9 Months 44 Total long term 878,046 2,987 4.31 34.8 95.8 14.3 45 Fixed rate .. 371,220 2,755 4.61 4.60 56.1 94.3 9.8 46 Floating rate 506,826 3,183 4.15 4.10 19.2 96.9 17.6 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Special Tables • February 1993 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 2-6, 1992'—Continued Commercial and industrial loans—Continued Weighted Loan rate (percent) Loans Loans Amount of Average average secured made Partici- Characteristic ($ l 1 o , a 0 n 0 s 0 ) ($1 si ,0 ze 0 0) ma D tu a r y i s t y2 W e a f v f e e e ig c r t a h i g t v e e e d 3 Standard c (p o e ll r b a c y t e e n ra t) l ( c p o u m e m n r e c d m n e e t n r i t t - ) (p p l e a o r t a c i n o e s n n t) OTHER BANKS 1 Overnight6 3,662,233 6,337 3.51 .26 2 One month and under (excluding overnight) 1,707,351 259 24 5.12 35.1 61.3 30.5 3 Fixed rate 1,140,456 319 22 4.73 30.9 67.6 22.5 4 Floating rate 566,895 188 28 5.89 43.5 48.6 46.7 5 Over one month and under a year . 4.362.558 89 177 6.09 60.4 77.5 12.4 6 Fixed rate 1,250,101 64 160 5.50 46.9 60.4 8.1 7 Floating rate 3,112,458 106 184 6.32 65.8 84.4 14.1 8 Demand7 4,189,633 132 6.82 72.4 80.4 9.0 9 Fixed rate 435,949 143 5.03 26.8 93.7 13.4 10 Floating rate 3,753,684 131 7.03 77.7 78.8 8.5 11 Total short term 13,921,776 158 84 5.51 45.3 69.8 10.5 12 Fixed rate (thousands of dollars) .. 6,488,739 242 38 4.21 16.9 59.4 6.7 13 1-99 368,821 15 151 8.73 80.1 33.3 .0 14 100-499 206,813 182 106 6.81 62.4 43.8 7.4 15 500-999 178,775 635 171 4.27 19.7 49.1 4.1 16 1,000-4,999 1,160,067 2,359 61 4.52 21.8 71.4 10.5 17 5,000-9,999 993,082 7,216 28 3.99 7.5 73.1 11.1 18 10,000 and over 3,581,180 20,998 13 3.55 8.6 55.9 5.0 19 Floating rate (thousands of dollars) 7,433,037 121 160 6.65 70.1 78.8 13.8 20 1-99 1.201.559 25 163 7.62 84.2 84.3 2.5 21 100-499 2,004,308 202 188 7.15 82.8 82.0 10.0 22 500-999 793,191 648 152 6.74 77.5 94.5 20.2 23 1,000-4,999 2,116,421 1,836 172 6.63 59.1 82.6 14.3 24 5,000-9,999 402,571 6,644 126 4.58 10.0 75.4 12.1 25 10,000 and over 914,987 32,454 114 5.12 69.2 44.2 30.8 Months 26 Total long term 2,053,945 90 6.71 66.4 67.1 5.4 27 Fixed rate (thousands of dollars) .. 813,232 67 6.19 52.0 65.3 1.1 28 1-99 180,626 16 9.31 91.5 21.9 .2 29 100-499 152,611 193 8.11 96.0 24.3 4.1 30 500-999 31,035 595 7.48 94.8 44.8 .0 31 1,000 and over 448,960 6,730 4.20 18.1 98.2 .6 32 Floating rate (thousands of dollars) 1,240,714 116 7.04 75.8 68.3 8.2 33 1-99 208,746 24 8.06 81.3 43.7 .6 34 100-499 377,192 213 7.37 81.5 66.4 6.7 35 50b-999 123,041 628 6.98 86.0 79.5 21.8 36 1,000 and over 531,735 2,727 6.42 67.3 76.8 9.1 Loan rate (percent) Days Effective3 Nominal8 LOANS MADE BELOW PRIME 37 Overnight6 3,660,764 10,472 3.51 1.0 38 One month and under (excluding overnight) 1,255,130 1,295 23 4.08 4.03 25.3 58.8 38.2 39 Over one month and under a year 2,036,476 261 170 4.69 4.65 44.2 84.1 11.9 40 Demand7 675,546 600 4.37 4.34 24.1 98.8 20.4 41 Total short term 7,627,916 744 55 3.99 3.96 18.6 11.5 42 Fixed rate 5,860,036 1,056 31 3.76 3.73 11.8 62.2 7.4 43 Floating rate 1,767,880 375 145 4.75 4.69 41.1 78.8 25.1 Months 44 Total long term 761,147 321 30 4.82 4.80 38.1 91.6 2.2 45 Fixed rate .. 471,816 346 4.37 4.35 21.0 92.8 .5 46 Floating rate 289,331 287 5.56 5.54 66.1 89.8 4.9 For notes see following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A79 NOTES TO TABLE 4.23 1. As of Sept. 30, 1990, assets of most of the large banks were at least $7.0 "basic" or "reference" rate); the federal funds rate; domestic money market billion. For all insured banks, total assets averaged $275 million. rates other than the federal funds rate; foreign money market rates; and other base 2. Average maturities are weighted by loan size and exclude demand loans. rates not included in the foregoing classifications. 3. Effective (compounded) annual interest rates are calculated from the stated 6. Overnight loans mature on the following business day. rate and other terms of the loans and weighted by loan size. 7. Demand loans have no stated date of maturity. 4. The chances are about two out of three that the average rate shown would 8. Nominal (not compounded) annual interest rates are calculated from the differ by less than this amount from the average rate that would be found by a stated rate and other terms of the loans and weighted by loan size. complete survey of lending at all banks. 9. The prime rate reported by each bank is weighted by the volume of loans 5. The most common base rate is that used to price the largest dollar volume of extended and then averaged. loans. Base pricing rates include the prime rate (sometimes referred to as a bank's 10. The proportion of loans made at rates below the prime may vary substantially from the proportion of such loans outstanding in banks' portfolios. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Special Tables • February 1993 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 19921 Millions of dollars All states New York California Illinois IItteemm inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s 1 Total assets4 697,952 292,061 525,316 232,626 79,302 33,687 56,747 17,569 2 Claims on nonrelated parties 605,746 186,894 446,673 155,197 73,853 13,836 56,536 13,799 3 Cash and balances due from depository institutions 139,621 109,734 111199,,554499 9911,,440088 66,,885500 66,,220066 1111,,996633 1111,,443388 4 Cash items in process of collection and unposted debits 2,310 0 2,169 0 15 0 8866 0 5 Currency and coin (U.S. and foreign) 23 n.a. 16 n.a. 2 n.a. 11 6 Balances with depository institutions in United States .. 8800,,226699 5555,,442233 6699,,999999 4466,,228855 44,,112244 33,,554444 55,,552222 55,,332233 / U.S. branches and agencies of other foreign banks (including IBFs) 74,924 53,334 65,580 4444,,449988 33,,880088 33,,553344 55,,110011 55,,004455 8 Other depository institutions in United States (including IBFs) 5,345 2,089 44,,442200 11,,778877 316 10 442211 227788 9 Balances with banks in foreign countries and with foreign central banks 56,083 54,311 46,536 45,123 2,665 2,662 6,340 6,115 10 Foreign branches of U.S. banks 1,600 1,564 11,,335577 11,,332222 159 115599 7799 7799 II Other banks in foreign countries and foreign central banks 54,483 52,747 45,179 43,801 2,506 2,503 6,261 6,036 12 Balances with Federal Reserve Banks 936 n.a. 829 n.a. 43 n.a. 15 n.a. 13 Total securities and loans 377,778 66,634 254,944 54,668 60,047 6,743 36,674 2,041 14 Total securities, book value 74,380 14,421 68,769 13,535 3,308 527 1,908 327 15 U.S. Treasury 24,631 n.a. 24,495 n.a. 52 n.a. 36 nn..aa.. 16 Obligations of U.S. government agencies and corporations 14,226 n.a. 13,737 n.a. 327 n.a. 110099 nn..aa.. 1177 Other bonds, notes, debentures, and corporate stock (including state and local securities) 35,524 14,421 30,537 13,535 2,929 527 1,764 327 18 Federal funds sold and securities purchased under agreements to resell 36,232 2,871 34,183 2,441 909 249 685 50 19 U.S. branches and agencies of other foreign banks 10,810 1,719 9,481 1,527 690 193 453 0 20 Commercial banks in United States 5,275 175 4,950 175 68 0 119 0 21 Other 20,146 977 19,752 740 152 57 113 50 22 Total loans, gross 303,535 52,221 186,262 41,141 56,762 66,,221188 34,787 1,715 23 Less: Unearned income on loans 137 9 87 7 23 11 21 0 24 Equals: Loans, net 303,398 52,213 186,175 41,134 56,739 6,217 34,765 1,714 Total loans, gross, by category 2255 Real estate loans 53,678 581 26,540 302 17,771 220 5,434 59 26 Loans to depository institutions 45,970 31,371 36,362 24,334 5,241 4,191 1,968 1,164 27 Commercial banks in United States (including IBFs) 21,943 11,452 16,865 8,504 3,299 2,254 1,355 573 28 U.S. branches and agencies of other foreign banks ... 18,958 10,472 14,636 77,,660066 3,131 2,178 924 568 29 Other commercial banks in United States 22,,998844 980 22,,222288 889988 116688 7766 443311 5 30 Other depository institutions in United States (including IBFs) 26 16 26 16 0 0 0 0 3311 Banks in foreign countries 24,001 19,902 19,472 15,813 1,942 1,937 613 591 32 Foreign branches of U.S. banks 528 368 428 273 95 95 0 0 33 Other banks in foreign countries 23,474 19,534 19,043 15,540 1,847 1,842 613 591 34 Other financial institutions 18,428 868 15,780 766 870 40 1,408 21 35 Commercial and industrial loans 167,252 13,421 92,912 10,631 31,663 1,549 25,029 337722 36 U.S. addressees (domicile) 144,815 535 75,827 401 29,290 107 24,424 88 3/ Non-U.S. addressees (domicile) 22,436 12,886 17,085 10,230 2,374 1,442 605 364 38 Acceptances of other banks 1,678 39 759 31 626 0 165 0 39 U.S. banks 940 0 330 0 555 0 2 0 40 Foreign banks 738 39 429 31 72 00 116644 00 41 Loans to foreign governments and official institutions (including foreign central banks) 7,444 5,661 5,672 44,,887700 279 184 442222 9999 42 Loans for purchasing or carrying securities (secured and unsecured) 5,180 100 4,998 66 133 34 49 0 43 AH other loans 3,905 182 3,238 140 180 0 312 0 44 All other assets 52,115 7,656 37,998 6,680 6,048 637 7,214 270 45 Customers' liability on acceptances outstanding 17,461 n.a. 11,940 n.a. 4,240 n.a. 969 46 U.S. addressees (domicile) 11,980 n.a. 7,304 n.a. 3,701 n.a. 867 4/ Non-U.S. addressees (domicile) 5,481 n.a. 4,636 n.a. 539 n.a. 110033 nn..aa.. 48 Other assets including other claims on nonrelated parties 34,654 7,656 26,058 6,680 1,808 637 6,244 270 49 Net due from related depository institutions5 92,206 105,167 78,642 7777,,442299 55,,444499 1199,,885511 221111 33,,777700 50 Net due from head office and other related depository institutions 92,206 n.a. 78,642 n.a. 55,,444499 n.a. 221111 nn..aa.. 51 Net due from establishing entity, head offices, and other related depository institutions n.a. 105,167 n.a. 77,429 n.a. 19,851 n.a. 3,770 52 Total liabilities4 697,952 292,061 525,316 232,626 79,302 33,687 56,747 17,569 53 Liabilities to nonrelated parties 585,091 254,552 470,752 204,664 65,195 32,889 30,951 9,912 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A81 4.30—Continued Millions of dollars All states New York California Illinois IItteemm ex T cl o u t d a i l n g IBFs ex T cl o u t d a i l n g IBFs ex T cl o u t d a i l ng IBFs ex T cl o u t d a i l ng IBFs IBFs only IBFs only IBFs only IBFs only 54 Total deposits and credit balances 150,449 186,148 129,000 167,764 4,772 7,974 8,094 4,012 55 Individuals, partnerships, and corporations 107,574 16,421 89,146 10,896 4,140 512 7,321 111 56 U.S. addressees (domicile) 92,020 3,059 79,672 3,009 2,320 0 6,266 50 57 Non-U.S. addressees (domicile) 15,554 13,362 9,474 7,887 1,820 512 1,054 61 58 Commercial banks in United States (including IBFs)... 30,292 53,587 28,589 48,295 363 3,072 732 1,733 59 U.S. branches and agencies of other foreign banks .. 12,976 48,381 12,411 43,553 104 2,794 315 1,608 60 Other commercial banks in United States 17,316 5,206 16,178 4,742 259 278 417 125 61 Banks in foreign countries 5,741 98,688 5,557 92,544 4 3,372 26 2,085 62 Foreign branches of U.S. banks 1,990 4,889 1,964 4,418 0 362 25 85 63 Other banks in foreign countries 3,751 93,799 3,593 88,126 4 3,010 1 2,000 64 Foreign governments and official institutions (including foreign central banks) 1,896 17,279 1,510 15,856 234 1,019 3 B3 65 All other deposits and credit balances 4,648 173 3,955 173 10 0 2 0 66 Certified and official checks 297 242 21 10 67 Transaction accounts and credit balances (excluding IBFs) 8,038 6,280 539 344 68 Individuals, partnerships, and corporations 5,792 4,592 218 329 69 U.S. addressees (domicile) 4,295 3,656 182 323 70 Non-U.S. addressees (domicile) 1,497 936 35 6 71 Commercial banks in United States (including IBFs)... 462 177 282 0 72 U.S. branches and agencies of other foreign banks .. 66 16 48 0 73 Other commercial banks in United States 396 160 234 0 74 Banks in foreign countries 1,069 947 4 1 75 Foreign branches of U.S. banks 2 1 0 0 76 Other banks in foreign countries 1,067 945 4 1 77 Foreign governments and official institutions (including foreign central banks) 319 243 4 2 78 All other deposits and credit balances 98 80 10 1 79 Certified and official checks 297 242 21 10 80 Demand deposits (included in transaction accounts and credit balances) 6,960 5,768 208 332 81 Individuals, partnerships, and corporations 5,408 4,461 178 317 82 U.S. addressees (domicile) 4,144 3,589 155 312 83 Non-U.S. addressees (domicile) 1,265 872 22 5 84 Commercial banks in United States (including IBF)s... 110 n.a. 106 n.a. 1 n.a. 0 n.a. 85 U.S. branches and agencies of other foreign banks .. 17 16 0 0 86 Other commercial banks in United States 92 90 0 0 87 Banks in foreign countries 841 724 4 1 88 Foreign branches of U.S. banks 2 1 0 0 89 Other banks in foreign countries 839 723 4 1 90 Foreign governments and official institutions (including foreign central banks) 242 180 4 2 91 All other deposits and credit balances 62 55 1 1 92 Certified and official checks 297 242 21 10 93 Non-transaction accounts (including MMDAs, excluding IBFs) 142,411 122,720 4,233 7,750 94 Individuals, partnerships, and corporations 101,782 84,554 3,923 6,992 95 U.S. addressees (domicile) 87,724 76,017 2,137 5,943 % Non-U.S. addressees (domicile) 14,057 8,537 1,785 1,049 97 Commercial banks in United States (including IBFs)... 29,830 28,413 81 732 98 U.S. branches and agencies of other foreign banks .. 12,910 12,395 56 315 99 Other commercial banks in United States 16,920 16,018 25 417 100 Banks in foreign countries 4,672 4,611 0 25 101 Foreign branches of U.S. banks 1,988 1,963 0 25 102 Other banks in foreign countries 2,684 2,648 0 0 103 Foreign governments and official institutions (including foreign central banks) 1,577 1,267 229 1 104 All other deposits and credit balances 4,550 3,876 0 1 105 IBF deposit liabilities 186,148 167,764 7,974 4,012 106 Individuals, partnerships, and corporations 16,421 10,896 512 111 107 U.S. addressees (domicile) 3,059 3,009 0 50 108 Non-U.S. addressees (domicile) 13,362 7,887 512 61 109 Commercial banks in United States (including IBFs)... 53,587 48,295 3,072 1,733 110 U.S. branches and agencies of other foreign banks .. n.a. 48,381 n.a. 43,553 n.a. 2,794 n.a. 1,608 111 Other commercial banks in United States 5,206 4,742 278 125 112 Banks in foreign countries 98,688 92,544 3,372 2,085 113 Foreign branches of U.S. banks 4,889 4,418 362 85 114 Other banks in foreign countries 93,799 88,126 3,010 2,000 115 Foreign governments and official institutions (including foreign central banks) 17,279 15,856 1,019 83 116 All other deposits and credit balances 173 173 0 0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Special Tables • February 1993 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1992'—Continued Millions of dollars All states New York California Illinois IItteemm inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 117 Federal funds purchased and securities sold under agreements to repurchase 79,205 13,219 66,376 10,175 8,848 1,543 3,638 1,459 118 U.S. branches and agencies of other foreign banks 14,247 2,146 10,316 1,003 2,974 855 864 288 119 Other commercial banks in United States 17,150 310 12,766 90 3,061 155 1,200 65 120 Other 47,809 10,764 43,294 9,082 2,812 533 1,575 1,106 121 Other borrowed money 118,585 49,200 70,378 21,457 3377,,554411 22.848 88,,666622 4,292 122 Owed to nonrelated commercial banks in United States (including IBFs) 41,024 18,465 17,921 4,170 18,121 12,380 3,539 1,594 123 Owed to U.S. offices of nonrelated U.S. banks 1133,,664499 2,063 88,,220000 703 33,,555544 1.215 11,,337788 85 124 Owed to U.S. branches and agencies of nonrelated foreign banks 27,375 16,403 9,721 3,467 14,567 11.165 2,161 1,509 125 Owed to nonrelated banks in foreign countries 29,809 27,952 16,447 14,775 10,484 10,368 2,533 2,533 126 Owed to foreign branches of nonrelated U.S. banks ... 1,987 1,845 788 666 1,035 1,035 129 129 127 Owed to foreign offices of nonrelated foreign banks 27,822 26,107 15,658 14,109 9,448 9,333 2,404 2,404 128 Owed to others 47,753 2,783 36,010 2,512 8,936 100 2,589 164 129 All other liabilities 50,703 5,985 37,234 5,268 66,,006600 524 66,,554444 149 130 Branch or agency liability on acceptances executed and outstanding 19,490 n.a. 13,926 n.a. 4,248 n.a. 720 n.a. 141 Other liabilities to nonrelated parties 31,214 5,985 23,308 5,268 1,812 524 5,824 149 132 Net due to related depository institutions5 112,861 37,509 54,564 27,962 1144,,110077 798 2255,,779966 7.657 143 Net due to head office and other related depository institutions 112,861 n.a. 54,564 n.a. 1144,,110077 n.a. 2255,,77%% n.a. 134 Net due to establishing entity, head office, and other related depository institutions n.a. 37,509 n.a. 27,962 n.a. 798 n.a. 7,657 MEMO 135 Non-interest bearing balances with commercial banks in United States 1,358 0 1,068 0 127 0 82 0 136 Holding of commercial paper included in total loans 1,532 1,345 136 27 137 Holding of own acceptances included in commercial and industrial loans 33,,669922 22,,771133 607 101 138 Commercial and industrial loans with remaining maturity of one year or less 99,165 52,422 19,703 15,465 149 Predetermined interest rates 61,221 n.a. 30,188 n.a. 12,585 n.a. 11,608 n.a. 140 Floating interest rates 37,944 22,234 77,,111188 33,,885577 141 Commercial and industrial loans with remaining maturity of more than one year 68,086 40,490 11,960 9,564 142 Predetermined interest rates 23,023 13,054 3,614 4,475 143 Floating interest rates 45,064 27,435 8,347 5,089 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A83 4.30—Continued Millions of dollars All states New York California Illinois IItteemm ex T c IB l o u t F d a s i l n g I o B n F ly s ex T c IB l o u t F d a s i l n g I o B n F ly s ex T c IB l o u t F d a s i l n g I o B n F ly s ex T c IB l o u t F d a s i l n g I o B n F ly s 111144444444 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss ooooffff nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnnaaaallll aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss 148,897 t 129,928 t 4,779 t 7,919 t 111144445555 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 111,809 97,293 2,715 6,069 111144446666 OOOOtttthhhheeeerrrr ttttiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 24,413 n.a. 21,617 n.a. 1,014 n.a. 1,431 n.a. 111144447777 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee * * 1 1 wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss ........ 12,675 11,018 1,050 419 All states2 New York California Illinois in T c I l B o u t F d a s i l n g I o B n F ly s in T c I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 111144448888 MMMMaaaarrrrkkkkeeeetttt vvvvaaaalllluuuueeee ooooffff sssseeeeccccuuuurrrriiiittttiiiieeeessss hhhheeeelllldddd 74,900 14,344 69,287 13,440 3,471 547 1,744 324 111144449999 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 77,120 n.a. 43,070 n.a. 27,468 n.a. 5,197 n.a. 111155550000 NNNNuuuummmmbbbbeeeerrrr ooooffff rrrreeeeppppoooorrrrttttssss ffffiiiilllleeeedddd6666 573 0 268 0 133 0 51 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, that no IBF data re reported for that item, either because the item is not an eligible "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign IBF asset or liability or because that level of detail is not reported for IBFs. From Banks." Details may not add to totals because of rounding. This form was first December 1981 through September 1985, IBF data were included in all applicable used for reporting data as of June 30, 1980, and was revised as of December 31, items reported. 1985. From November 1972 through May 1980, U.S. branches and agencies of 4. Total assets and total liabilities include net balances, if any, due from or due foreign banks had filed a monthly FR 886a report. Aggregate data from that report to related banking institutions in the United States and in foreign countries (see were available through the Federal Reserve statistical release G.ll, last issued on footnote 5). On the former monthly branch and agency report, available through July 10, 1980. Data in this table and in the G.l 1 tables are not strictly comparable the G.l 1 statistical release, gross balances were included in total assets and total because of differences in reporting panels and in definitions of balance sheet liabilities. Therefore, total asset and total liability figures in this table are not items. comparable to those in the G.ll tables. 2. Includes the District of Columbia. 5. "Related banking institutions" includes the foreign head office and other 3. Effective December 1981, the Federal Reserve Board amended Regulations U.S. and foreign branches and agencies of the bank, the bank's parent holding D and Q to permit banking offices located in the United States to operate company, and majority-owned banking subsidiaries of the bank and of its parent International Banking Facilities (IBFs). As of December 31, 1985 data for IBFs holding company (including subsidiaries owned both directly and indirectly). are reported in a separate column. These data are either included in or excluded 6. In some cases two or more offices of a foreign bank within the same from the total columns as indicated in the headings. The notation "n.a." indicates metropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Index to Statistical Tables References are to pages A3-A83 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 21, 22 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 23 Banks, by classes, 19-22 Turnover, 16 Domestic finance companies, 35 Depository institutions Federal Reserve Banks, 11 Reserve requirements, 9 Financial institutions, 27 Reserves and related items, 4, 5, 6, 13, 71, 73, 75 Foreign banks, U.S. branches and agencies, 23, 80-83 Deposits (See also specific types) Automobiles Banks, by classes, 4, 19-22, 23 Consumer installment credit, 38 Federal Reserve Banks, 5,11 Production, 47, 48 Turnover, 16 Discount rates at Reserve Banks and at foreign central banks and BANKERS acceptances, 10, 24, 25 foreign countries (See Interest rates) Bankers balances, 19-22, 80-83. (See also Foreigners) Discounts and advances by Reserve Banks (See Loans) Bonds (See also U.S. government securities) Dividends, corporate, 34 New issues, 34 Rates, 25 EMPLOYMENT, 45 Branch banks, 23, 55 Eurodollars, 25 Business activity, nonfinancial, 44 Business expenditures on new plant and equipment, 34 Business loans (See Commercial and industrial loans) FARM mortgage loans, 37 Federal agency obligations, 5, 10, 11, 12, 30, 31 CAPACITY utilization, 46 Federal credit agencies, 32 Capital accounts Federal finance Banks, by classes, 19, 71, 73, 75 Debt subject to statutory limitation, and types and ownership Federal Reserve Banks, 11 of gross debt, 29 Central banks, discount rates, 67 Receipts and outlays, 27, 28 Certificates of deposit, 25 Treasury financing of surplus, or deficit, 27 Commercial and industrial loans Treasury operating balance, 27 Commercial banks, 17, 21, 70, 72, 74,76-79 Federal Financing Bank, 27, 32 Weekly reporting banks, 21-23 Federal funds, 7, 18, 21, 22, 23, 25, 27 Commercial banks Federal Home Loan Banks, 32 Assets and liabilities, 19-22, 76-79 Federal Home Loan Mortgage Corporation, 32, 36, 37 Commercial and industrial loans, 17, 19, 20, 21, 22, 23 Federal Housing Administration, 32, 36, 37 Consumer loans held, by type and terms, 38, 70, 72, 74 Federal Land Banks, 37 Loans sold outright, 21 Federal National Mortgage Association, 32, 36, 37 Nondeposit funds, 18, 80-83 Federal Reserve Banks Number by classes, 71, 73, 75 Condition statement, 11 Real estate mortgages held, by holder and property, 37 Discount rates (See Interest rates) Terms of lending, 76-79 U.S. government securities held, 5, 11, 12, 29 Time and savings deposits, 4 Federal Reserve credit, 5, 6, 11, 12 Commercial paper, 24, 25, 35 Federal Reserve notes, 11 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 32 Construction, 44, 49 Finance companies Consumer installment credit, 38 Assets and liabilities, 35 Consumer prices, 44, 46 Business credit, 35 Consumption expenditures, 52, 53 Loans, 38 Corporations Paper, 24, 25 Nonfinancial, assets and liabilities, 34 Financial institutions Profits and their distribution, 34 Loans to, 21, 22, 23 Security issues, 33, 65 Selected assets and liabilities, 27 Cost of living (See Consumer prices) Float, 51 Credit unions, 38 Flow of funds, 39, 41, 42, 43 Currency and coin, 70, 72, 74 Foreign banks, assets and liabilities of U.S. branches and Currency in circulation, 5, 14 agencies, 22, 23, 80-83 Customer credit, stock market, 26 Foreign currency operations, 11 Foreign deposits in U.S. banks, 5, 11, 21, 22 DEBITS to deposit accounts, 16 Foreign exchange rates, 68 Debt (See specific types of debt or securities) Foreign trade, 54 Demand deposits Foreigners Banks, by classes, 19-23, 71, 73, 75 Claims on, 55, 57, 60, 61, 62, 64 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A85 Foreigners—Continued REAL estate loans Liabilities to, 22, 54, 55, 57, 58, 63, 65,66 Banks, by classes, 17, 21, 22, 37, 72 Financial institutions, 27 GOLD Terms, yields, and activity, 36 Certificate account, 11 Type of holder and property mortgaged, 37 Stock, 5, 54 Repurchase agreements, 7, 18, 21, 22, 23 Government National Mortgage Association, 32, 36, 37 Reserve requirements, 9 Gross domestic product, 51 Reserves Commercial banks, 19 HOUSING, new and existing units, 49 Depository institutions, 4, 5, 6, 13 Federal Reserve Banks, 11 INCOME, personal and national, 44, 51, 52 U.S. reserve assets, 54 Industrial production, 44, 47 Residential mortgage loans, 36 Installment loans, 38 Retail credit and retail sales, 38, 39, 44 Insurance companies, 29, 37 Interest rates SAVING Bonds, 25 Flow of funds, 39,41,42, 43 Commercial banks, 76-79 National income accounts, 51 Consumer installment credit, 38 Savings and loan associations, 37, 38, 39. (See also SAIF-insured Federal Reserve Banks, 8 institutions) Foreign central banks and foreign countries, 67 Savings Association Insurance Funds (SAIF) insured institutions, 27 Money and capital markets, 25 Savings banks, 27, 37, 38 Mortgages, 36 Savings deposits (See Time and savings deposits) Prime rate, 24 Securities (See also specific types) International capital transactions of United States, 53-67 Federal and federally sponsored credit agencies, 32 International organizations, 57, 58, 60, 63, 64 Foreign transactions, 65 Inventories, 51 New issues, 33 Investment companies, issues and assets, 34 Prices, 26 Investments (See also specific types) Special drawing rights, 5, 11, 53, 54 Banks, by classes, 19, 20, 21, 22, 23, 27 State and local governments Commercial banks, 4, 17, 19-22, 72 Deposits, 21, 22 Federal Reserve Banks, 11,12 Holdings of U.S. government securities, 29 Financial institutions, 37 New security issues, 33 Ownership of securities issued by, 21, 22 LABOR force, 45 Rates on securities, 25 Life insurance companies (See Insurance companies) Stock market, selected statistics, 26 Loans (See also specific types) Stocks (See also Securities) Banks, by classes, 19-22 New issues, 33 Commercial banks, 4, 17, 19-22, 70, 72, 74 Prices, 26 Federal Reserve Banks, 5, 6, 8, 11, 12 Financial institutions, 27, 37 Student Loan Marketing Association, 32 Insured or guaranteed by United States, 36, 37 TAX receipts, federal, 28 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, 23, 71, 73, 75 Margin requirements, 26 Trade, foreign, 54 Member banks (See also Depository institutions) Treasury cash, Treasury currency, 5 Federal funds and repurchase agreements, 7 Treasury deposits, 5, 11, 27 Reserve requirements, 9 Treasury operating balance, 27 Mining production, 48 UNEMPLOYMENT, 45 Mobile homes shipped, 49 U.S. government balances Monetary and credit aggregates, 4, 13 Commercial bank holdings, 19, 20, 21, 22 Money and capital market rates, 25 Treasury deposits at Reserve Banks, 5, 11, 27 Money stock measures and components, 4, 14 U.S. government securities Mortgages (See Real estate loans) Bank holdings, 19-22, 23, 29 Mutual funds, 34 Dealer transactions, positions, and financing, 31 Mutual savings banks (See Thrift institutions) Federal Reserve Bank holdings, 5, 11, 12, 29 Foreign and international holdings and NATIONAL defense outlays, 28 transactions, 11, 29, 66 National income, 51 Open market transactions, 10 Outstanding, by type and holder, 27, 29 OPEN market transactions, 10 Rates, 24 U.S. international transactions, 53-67 PERSONAL income, 52 Utilities, production, 48 Prices Consumer and producer, 44, 50 VETERANS Administration, 36, 37 Stock market, 26 Prime rate, 24 WEEKLY reporting banks, 21-23 Producer prices, 44, 50 Wholesale (producer) prices, 44, 50 Production, 44,47 Profits, corporate, 34 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 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 DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel 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 PETER A. TINSLEY, Deputy Associate Director WILLIAM W. WILES, Secretary JENNIFER J. JOHNSON, Associate Secretary MYRON L. KWAST, Assistant Director PATRICK M. PARKINSON, Assistant Director BARBARA R. LOWREY, Associate Secretary MARTHA S. SCANLON, Assistant Director ELLEN MALAND, Assistant Secretary JOYCE K. ZICKLER, Assistant Director DIVISION OF BANKING JOHN J. MINGO, Adviser 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 WILLIAM A. RYBACK, Associate Director DONALD L. KOHN, Director FREDERICK M. STRUBLE, Associate Director DAVID E. LINDSEY, Deputy Director HERBERT A. BIERN, Deputy Associate Director BRIAN F. MADIGAN, Assistant Director ROGER T. COLE, Deputy Associate Director RICHARD D. PORTER, Assistant Director JAMES I. GARNER, Deputy Associate Director NORMAND R. V. BERNARD, Special Assistant to the Board HOWARD A. AMER, Assistant Director DIVISION OF CONSUMER GERALD A. EDWARDS, JR., Assistant Director JAMES D. GOETZINGER, Assistant Director AND COMMUNITY AFFAIRS LAURA M. HOMER, Assistant Director GRIFFITH L. GARWOOD, Director JAMES V. HOUPT, Assistant Director GLENN E. LONEY, Associate Director JACK P. JENNINGS, Assistant Director DOLORES S. SMITH, Associate Director MICHAEL G. MARTINSON, Assistant Director MAUREEN P. ENGLISH, Assistant Director RHOGER H PUGH, Assistant Director IRENE SHAWN MCNULTY, Assistant Director SIDNEY M. SUSSAN, Assistant Director MOLLY S. WASSOM, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 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 CHARLES W. BENNETT, Assistant Director Programs Officer JACK DENNIS, JR., Assistant Director EARL G. HAMILTON, Assistant Director DIVISION OF HUMAN RESOURCES JEFFREY C. MARQUARDT, Assistant Director MANAGEMENT JOHN H. PARRISH, Assistant Director LOUISE L. ROSEMAN, Assistant Director DAVID L. SHANNON, Director IOHN R. WEIS, Associate Director FLORENCE M. YOUNG, Assistant Director ANTHONY V. DIGIOIA, Assistant Director OFFICE OF THE INSPECTOR GENERAL JOSEPH H. HAYES, JR., Assistant Director FRED HOROWITZ, Assistant Director BRENT L. BOWEN, Inspector General DONALD L. ROBINSON, Assistant 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 RICHARD C. STEVENS, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A88 Federal Reserve Bulletin • February 1993 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman E. GERALD CORRIGAN, Vice Chairman WAYNE D. ANGELL EDWARD W. KELLEY, JR. DAVID W. MULLINS, JR. EDWARD G. BOEHNE JOHN R LAWARE SUSAN M. PHILLIPS SILAS KEEHN LAWRENCE B. LINDSEY GARY H. STERN ROBERT D. MCTEER, JR. ALTERNATE MEMBERS J. ALFRED BROADDUS, JR. JERRY L. JORDAN ROBERT T. PARRY ROBERT P. FORRESTAL JAMES H. OLTMAN STAFF DONALD L. KOHN, Secretary and Economist RICHARD G. DAVIS, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary THOMAS E. DAVIS, Associate Economist JOSEPH R. COYNE, Assistant Secretary DAVID E. LINDSEY, Associate Economist GARY P. GILLUM, Assistant Secretary ALICIA H. MUNNELL, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel LARRY J. PROMISEL, Associate Economist ERNEST T. PATRIKIS, Deputy General Counsel CHARLES J. SIEGMAN, Associate Economist MICHAEL J. PRELL, Economist THOMAS D. SIMPSON, Associate Economist EDWIN M. TRUMAN, Economist DAVID J. STOCKTON, Associate Economist JOHN M. DAVIS, Associate Economist WILLIAM J. MCDONOUGH, Manager of the System Open Market Account MARGARET L. GREENE, Deputy Manager for Foreign Operations JOAN E. LOVETT, Deputy Manager for Domestic Operations FEDERAL ADVISORY COUNCIL MARSHALL N. CARTER, First District EUGENE A. MILLER, Seventh District CHARLES S. SANFORD, JR., Second District ANDREW B. CRAIG, III, Eighth District ANTHONY P. TERRACCIANO, Third District JOHN F. GRUNDHOFER, Ninth District JOHN B. MCCOY, Fourth District DAVID A. RISMILLER, Tenth District EDWARD E. CRUTCHFIELD, JR., Fifth District (Vacancy), 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

CONSUMER ADVISORY COUNCIL DENNY D. DUMLER, Denver, Colorado, Chairman JEAN POGGE, Chicago, Illinois, Vice Chairman BARRY A. ABBOTT, San Francisco, California BONNIE GUITON, Charlottesville, Virginia JOHN R. ADAMS, Philadelphia, Pennsylvania JOYCE HARRIS, Madison, Wisconsin JOHN A. BAKER, Atlanta, Georgia GARY S. HATTEM, New York, New York VERONICA E. BARELA, Denver, Colorado JULIA E. HILER, Marietta, Georgia MULUGETTA BIRRU, Pittsburgh, Pennsylvania RONALD HOMER, Boston, Massachusetts DOUGLAS D. BLANKE, St. Paul, Minnesota THOMAS L. HOUSTON, Dallas, Texas GENEVIEVE BROOKS, Bronx, New York HENRY JARAMILLO, Belen, New Mexico TOYE L. BROWN, Boston, Massachusetts EDMUND MIERZWINSKI, Washington, D.C. CATHY CLOUD, Washington, D.C. JOHN V. SKINNER, Irving, Texas MICHAEL D. EDWARDS, Yelm, Washington LOWELL N. SWANSON, Portland, Oregon MICHAEL FERRY, St. Louis, Missouri MICHAEL W. TIERNEY, Washington, D.C. NORMA L. FREIBERG, New Orleans, Louisiana GRACE W. WEINSTEIN, Englewood, New Jersey LORI GAY, Los Angeles, California JAMES L. WEST, Tijeras, New Mexico DONALD A. GLAS, Hutchinson, Minnesota ROBERT O. ZDENEK, Washington, D.C. THRIFT INSTITUTIONS ADVISORY COUNCIL DANIEL C. ARNOLD, Houston, Texas, President BEATRICE D'AGOSTINO, Somerville, New Jersey, Vice President WILLIAM A. COOPER, Minneapolis, Minnesota KERRY KILLINGER, Seattle, Washington PAUL L. ECKERT, Davenport, Iowa CHARLES JOHN KOCH, Cleveland, Ohio GEORGE R. GLIGOREA, Sheridan, Wyoming ROBERT MCCARTER, New Bedford, Massachusetts THOMAS J. HUGHES, Merrifield, Virginia STEPHEN W. PROUGH, Irvine, California RICHARD D. JACKSON, Atlanta, Georgia THOMAS R. RICKETTS, Troy, Michigan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A90 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, DC 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, 1991-92. COUNTRY MODEL, May 1984. 590 pp. $14.50 each. FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 each in the United States, its possessions, Canada, WELCOME TO THE FEDERAL RESERVE. March 1989. 14 pp. and Mexico. Elsewhere, $35.00 per year or $3.00 each. INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. 440 pp. $9.00 each. ANNUAL STATISTICAL DIGEST: period covered, release date, number of pages, and price. FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. December 1986. 264 pp. $10.00 each. 1981 October 1982 239 pp. $ 6.50 1982 December 1983 266 pp. $ 7.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1983 October 1984 264 pp. $11.50 1984 October 1985 254 pp. $12.50 1985 October 1986 231 pp. $15.00 1986 November 1987 288 pp. $15.00 CONSUMER EDUCATION PAMPHLETS 1987 October 1988 272 pp. $15.00 Short pamphlets suitable for classroom use. Multiple copies are 1988 November 1989 256 pp. $25.00 available without charge. 1980-89 March 1991 712 pp. $25.00 1990 November 1991 185 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1991 November 1992 215 pp. $25.00 Consumer Handbook to Credit Protection Laws SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES A Guide to Business Credit for Women, Minorities, and Small OF CHARTS. Weekly. $30.00 per year or $.70 each in the Businesses United States, its possessions, Canada, and Mexico. Else- How to File A Consumer Credit Complaint where, $35.00 per year or $.80 each. Series on the Structure of the Federal Reserve System THE FEDERAL RESERVE ACT and other statutory provisions The Board of Governors of the Federal Reserve System affecting the Federal Reserve System, as amended through The Federal Open Market Committee August 1990. 646 pp. $10.00. Federal Reserve Bank Board of Directors REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Federal Reserve Banks RESERVE SYSTEM. Organization and Advisory Committees ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Lock-Ins Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. A Consumer's Guide to Mortgage Settlement Costs Vol. II (Irregular Transactions). 1969. 116 pp. Each vol- A Consumer's Guide to Mortgage Refinancings ume $2.25; 10 or more of same volume to one address, Home Mortgages: Understanding the Process and Your Right $2.00 each. to Fair Lending Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; 10 or Making Deposits: When Will Your Money Be Available? more to one address, $1.25 each. When Your Home is on the Line: What You Should Know Federal Reserve Regulatory Service. Looseleaf; updated at About Home Equity Lines of Credit least monthly. (Requests must be prepaid.) Consumer and Community Affairs Handbook. $75.00 per year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A91 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. 21 pp. 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 Flint 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

A92 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

A93 1-A 2-B 3-C 4-D 5_3E Bakltim-ore^ NY ME - 1* /CT Pittsburjglr 1 < w Buffalo ^Jfr^ NJ NY 1 NEW YORK PHILADELPHIA WBfcinnati RICHMOND BOSTON CLEVELAND 6~F ^ Nashville 7-G 8-H Birmingham. \ • » ^^ JacicKMiville # New?Orleans ^ • ATLANTA CHICAGO ST. LOUIS MINNEAPOLIS ' Omaha* I-MO Okluhoma^City OK KANSAS ( ^ITY •• -- HHAAWWAANN VV DALLAS SSAANN FFRRAANNCCIISSCCOO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A94 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 Jerome H. Grossman Richard F. Syron To be announced Cathy E. Minehan NEW YORK* 10045 Ellen V. Futter E. Gerald Corrigan Maurice R. Greenberg James H. Oltman Buffalo 14240 Herbert L. Washington James O. Aston PHILADELPHIA 19105 Jane G. Pepper Edward G. Boehne James M. Mead William H. Stone, Jr. CLEVELAND* 44101 A. William Reynolds Jerry L. Jordan To be announced Sandra Pianalto Cincinnati 45201 Marvin Rosenberg Charles A. Cerino1 Pittsburgh 15230 Robert P. Bozzone Harold J. Swart1 RICHMOND* 23219 Anne Marie Whittemore J. Alfred Broaddus, Jr. Henry J. Faison Jimmie R. Monhollon Baltimore 21203 To be announced 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 Donald E. Boomershine Fred R. Herr1 Jacksonville 32231 Joan D. Ruffier James D. Hawkins1 Miami 33152 R. KirkLandon James T. Curry III Nashville 37203 James R. Tuerff Melvyn K. Purcell New Orleans 70161 Lucimarian Roberts Robert J. Musso CHICAGO* 60690 Richard G. Cline Silas Keehn Robert M. Healey William C. Conrad Detroit 48231 J. Michael Moore Roby L. Sloan1 ST. LOUIS 63166 Robert H. Quenon Thomas C. Melzer Janet McAfee Weakley James R. Bowen Little Rock 72203 To be announced Karl W. Ashman Louisville 40232 To be announced Howard Wells Memphis 38101 To be announced John P. Baumgartner MINNEAPOLIS 55480 Delbert W. Johnson Gary H. Stern Gerald A. Rauenhorst Thomas E. Gainor Helena 59601 James E. Jenks John D. Johnson KANSAS CITY 64198 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. Cece Smith Tony J. Salvaggio El Paso 79999 To be announced Sammie C. Clay Houston 77252 To be announced Robert Smith, III1 San Antonio 78295 To be announced Thomas H. Robertson SAN FRANCISCO 94120 James A. Vohs Robert T. Parry Judith M. Runstad Patrick K. Barron Los Angeles 90051 Donald G. Phelps John F. Moore1 Portland 97208 William A. Hilliard E. Ronald Liggett1 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 a tLewiston, 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

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBUCATIONS The Federal Reserve Board publishes a series of Three booklets on the mortgage process are also pamphlets covering individual credit laws and topics, available: A Consumer's Guide to Mortgage Lock-Ins, as pictured below. The series includes such subjects A Consumer's Guide to Mortgage Refinancings, and as how the Equal Credit Opportunity Act protects A Consumer's Guide to Mortgage Settlement Costs. women against discrimination in their credit dealings, These booklets were prepared in conjunction with the how to use a credit card, and how to resolve a billing Federal Home Loan Bank Board and in consultation error. with other federal agencies and trade and consumer The Board also publishes the Consumer Handbook groups. to Credit Protection Laws, a complete guide to con- Copies of consumer publications are available free sumer credit protections. This forty-four-page booklet of charge from Publications Services, mail stop 138, explains how to shop and obtain credit, how to main- Board of Governors of the Federal Reserve System, tain a good credit rating, and how to dispute unfair Washington, DC 20551. Multiple copies for classcredit transactions. room use are also available free of charge. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve scription. For further information regarding a System makes some of its statistical releases avail- subscription to the economic bulletin board, able to the public through the U.S. Department of please call 202-377-1986. The releases transmitted Commerce's economic bulletin board. Computer to the economic bulletin board, on a regular basis, access to the releases can be obtained by sub- are the following: Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z.7 Row of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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